{"id":43538,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/purchase-and-sale-agreement-republic-resources-inc-and-harken.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"purchase-and-sale-agreement-republic-resources-inc-and-harken","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/purchase-and-sale-agreement-republic-resources-inc-and-harken.html","title":{"rendered":"Purchase and Sale Agreement – Republic Resources Inc. and Harken Energy Corp."},"content":{"rendered":" PURCHASE AND SALE AGREEMENT\n\n dated\n\n January 31, 2002\n\n between\n\n REPUBLIC RESOURCES, INC.\n\n as\n\n Seller\n\n and\n\n HARKEN ENERGY CORPORATION\n\n as\n\n Buyer\n\n \n TABLE OF CONTENTS\n\n1. PURCHASE AND SALE........................................................ 1\n 1.1. PURCHASE AND SALE............................................. 1\n 1.2. INTERESTS..................................................... 1\n 1.3. RESERVED INTERESTS............................................ 2\n 1.4. EFFECTIVE TIME................................................ 2\n\n2. PURCHASE PRICE........................................................... 3\n 2.1. PURCHASE PRICE................................................ 3\n 2.2. ADJUSTMENTS TO PURCHASE PRICE................................. 3\n\n3. REPRESENTATIONS AND WARRANTIES........................................... 4\n 3.1. REPRESENTATIONS AND WARRANTIES OF SELLER...................... 4\n 3.2. REPRESENTATIONS AND WARRANTIES OF BUYER....................... 5\n\n4. COVENANTS AND AGREEMENTS................................................. 6\n 4.1. COVENANTS AND AGREEMENTS OF SELLER............................ 6\n 4.2. COVENANTS AND AGREEMENTS OF BUYER............................. 7\n\n5. TITLE MATTERS............................................................ 8\n 5.1. DEFENSIBLE TITLE.............................................. 8\n 5.2. TITLE DEFECT ADJUSTMENTS...................................... 9\n 5.3. CASUALTY LOSS................................................. 9\n 5.4. CONSENTS..................................................... 10\n\n6. ENVIRONMENTAL MATTERS................................................... 10\n\n7. TAX MATTERS............................................................. 11\n\n8. CONDITIONS TO CLOSING................................................... 11\n 8.1. SELLER'S CONDITIONS.......................................... 11\n 8.2. BUYER'S CONDITIONS........................................... 11\n\n9. CLOSING................................................................. 12\n 9.1. DATE OF CLOSING.............................................. 12\n 9.2. PLACE OF CLOSING............................................. 12\n 9.3. CLOSING OBLIGATIONS.......................................... 12\n\n10. OBLIGATIONS AFTER CLOSING............................................... 13\n 10.1. POST-CLOSING ADJUSTMENT PROCEDURE............................ 13\n 10.2. FILES AND RECORDS............................................ 14\n 10.3. FURTHER ASSURANCES........................................... 14\n 10.4. ASSUMPTION OF OBLIGATIONS.................................... 14\n 10.5. INDEMNIFICATION.............................................. 15\n\n \n11. TERMINATION OF AGREEMENT................................................ 15\n 11.1. TERMINATION................................................. 15\n 11.2. LIABILITIES UPON TERMINATION OR BREACH...................... 15\n\n12. MISCELLANEOUS........................................................... 16\n 12.1. EXHIBITS.................................................... 16\n 12.2. EXPENSES.................................................... 16\n 12.3. NOTICES..................................................... 16\n 12.4. WIRE TRANSFER INSTRUCTIONS.................................. 17\n 12.5. AMENDMENTS.................................................. 17\n 12.6. ASSIGNMENT.................................................. 17\n 12.7. CONDITIONS.................................................. 17\n 12.8. COUNTERPARTS................................................ 17\n 12.9. GOVERNING LAW............................................... 17\n 12.10. ENTIRE AGREEMENT............................................ 18\n 12.11. PARTIES IN INTEREST......................................... 18\n 12.12. SURVIVAL.................................................... 18\n 12.13. ARBITRATION................................................. 18\n\n EXHIBIT NO. DESCRIPTION\n ----------- -----------\n\n EXHIBIT A Description of Seller's oil and gas wells\n EXHIBIT B Seller's oil and gas leases\n EXHIBIT C Contracts and agreements\n EXHIBIT D Contingent Payment Agreement\n EXHIBIT E Form of assignment, conveyance and bill of sale\n EXHIBIT F Debenture Exchange Subscription Agreement\n EXHIBIT G Registration Rights Agreement\n\n (ii)\n\n \n PURCHASE AND SALE AGREEMENT\n\n This Purchase and Sale Agreement (the \"Agreement\"), dated January 31, 2002,\nis between Republic Resources, Inc. (\"Seller\"), a Nevada corporation and Harken\nEnergy Corporation (\"Buyer\"), a Delaware corporation, and is made with reference\nto the following agreed facts:\n\n A. Seller holds an undivided interest in various oil and natural gas\nproperties in the states of Texas and Louisiana in which there were, as of\nJanuary 1, 2002, estimated proved reserves of oil and natural gas totaling\napproximately 3.1 Bcfe.\n\n B. As of the date of this Agreement, there are outstanding $2,645,500 of\nSeller's 11% Convertible Debentures (\"Debentures\") and approximately $5.1\nmillion in Seller's Series C Redeemable Preferred Stock, including accrued but\nunpaid dividends (\"Series C Preferred\").\n\n C. Seller intends to sell and transfer to Buyer or Buyer's Subsidiary all\nof Seller's interests in certain oil and natural gas reserves in accordance with\nthe terms and conditions set forth below and to have the purchase price paid to\nthe holders of its outstanding Debentures and Series C Preferred.\n\n IN CONSIDERATION OF the mutual promises contained herein, the benefits to\nbe derived by each party hereunder and other good and valuable consideration,\nthe receipt and sufficiency of which are hereby acknowledged, Buyer and Seller\nagree as follows:\n\n 1. PURCHASE AND SALE.\n\n 1.1. PURCHASE AND SALE.\n\n Seller agrees to sell and convey and Buyer agrees to purchase and pay for\nthe all of Seller's right, title and interest in and to those certain oil and\nnatural gas properties (the \"Interests\" as defined in Section 1.2), subject to\nthe terms and conditions of this Agreement.\n\n 1.2. INTERESTS.\n\n Subject to the reservations set forth in Section 1.3, all of Seller's,\nright, title and interest in and to the following shall herein be called the\nInterests:\n\n (a) The oil and gas wells described in EXHIBIT A hereto (the \"Wells\"),\n ---------\n together with all oil, gas and mineral production from the Wells;\n\n (b) The leasehold estates created by the leases, licenses, permits and\n other agreements described in EXHIBIT B, (the \"Leases\"); together with all\n ---------\n overriding royalty interests, production payments and other payments out of\n or measured by the value of oil and gas production;\n\n (c) All oil, gas, casinghead gas, condensate, distillate, liquid\n hydrocarbons, gaseous hydrocarbons and all products refined therefrom,\n together with all minerals produced in association with these substances\n (collectively called the \"Hydrocarbons\") in and under and which may be\n produced and saved from or attributable to the Leases or Wells, and all\n rents, issues, profits, proceeds, products, revenues and other income from\n or attributable thereto;\n\n \n (d) All of the personal property, fixtures and improvements\n appurtenant to the Wells, or the Leases or used or obtained in connection\n with the operation of the Wells, or the Leases or with the production,\n treatment, sale or disposal of hydrocarbons or water produced therefrom or\n attributable thereto, including without limitation, pipelines, disposal\n systems, gathering systems and compression facilities (the \"Equipment\")\n appurtenant to or located upon the Leases; and\n\n (e) All the property, rights, privileges, benefits and appurtenances\n in any way belonging, incidental to, or pertaining to the property,\n interests and rights described in Sections 1.2(a) through 1.2(d) including\n the Wells, the Leases and reserves of unproduced oil and natural gas in\n place, including, to the extent transferable, all exploration agreements,\n letter agreements, product purchase and sale contracts, surface leases, gas\n gathering contracts, processing agreements, compression agreements,\n equipment leases, permits, gathering lines, rights-of-way, easements,\n licenses, farmouts and farmins, options, orders, pooling, spacing or\n consolidation agreements and operating agreements and all other agreements\n relating thereto, including those listed on EXHIBIT C (the \"Contracts\");\n ---------\n and\n\n (f) All of the files, records, data (including seismic data and\n related information) and other documentary information maintained in the\n normal course of business by Seller pertaining to the Wells, Leases,\n Equipment, Hydrocarbons and the Contracts (collectively, the \"Data\") in the\n format maintained by Seller. The Data shall not, however, include any\n information, which, if disclosed, would cause Seller to breach any contract\n or agreement. Seller will use reasonable efforts to obtain any required\n consent to disclose such information.\n\n 1.3. RESERVED INTERESTS.\n\n Seller shall reserve and except from the sale and conveyance of the\nInterests in favor of itself, its successors and assigns the following:\n\n (a) All accounts receivable attributable to the Interests that are, in\n accordance with generally accepted accounting principles, attributable to\n the period prior to the Effective Time;\n\n (b) All claims and rights relating to overpayments of costs and\n expenses attributable to periods prior to the Effective Time, including,\n without limitation, the right to initiate, prosecute or participate, at\n Seller's sole cost and expense, in all audits, audit claims and tax claims\n or proceedings relating to or including periods prior to the Effective\n Time, regardless of when commenced, arising under applicable law, operating\n or product sale agreements or otherwise, and to recover all costs and\n expenses claimed or shown by such audits or proceedings as owing to the\n owner of the Interests for periods prior to the Effective Time; and\n\n (c) All rights, if any, to recover additional production or proceeds\n or requirements to refund monies attributable to such production or\n proceeds therefrom attributable to the Interests for any production month\n prior to the Effective Time, resulting from any adjustment to the net\n revenue interest attributable to the Interests in the applicable division\n orders.\n\n 1.4. EFFECTIVE TIME.\n\n The purchase and sale of the Interests shall be deemed to be effective as\nof January 1, 2002 at 12:01 a.m. at the location of the Interests (the Effective\nTime).\n\n 2\n\n \n 2. PURCHASE PRICE.\n\n 2.1. PURCHASE PRICE.\n\n The purchase price (\"Purchase Price\") for the Interests shall consist of\nthe following:\n\n (a) A number of shares of Buyer's $0.01 par value common stock (the\n \"Common Stock\") determined by dividing $2,645,500 by the average reported\n closing price for Buyer's common stock for the 20 trading days ending on\n the day before the Closing Date of this Agreement (the \"Common Stock Value\n Per Share\"), provided that under no circumstances shall the Common Stock\n Value Per Share be less than $1.00, such that no more than a maximum of\n 2,645,500 shares of Buyer's common stock shall be issued;\n\n (b) The cash adjustment required for any adjustments described in\n Section 2.2(c) below (the \"Cash Adjustment\"); and\n\n (c) A \"Contingent Payment\" payable within 45 days of December 31, 2003\n which shall be made to holders of Seller's outstanding Series C Preferred .\n A description of the factors to be used to determine the amount of the\n Contingent Payment, the payees and other details concerning Buyer's\n obligation to pay the Contingent Payment are described in EXHIBIT D\n ---------\n attached hereto and incorporated herein by reference (the \"Contingent\n Payment Agreement\").\n\n 2.2. ADJUSTMENTS TO PURCHASE PRICE.\n\n The Cash Adjustment portion of the Purchase Price shall be adjusted at\nClosing as follows:\n\n (a) The Purchase Price shall be adjusted upward by the following:\n\n (1) the value of any oil in storage above the pipeline connection\n as of the Effective Time and not previously sold by Seller that is\n attributable to the Interests, such value to be the actual amount received\n by Seller.\n\n (2) the amount of all expenditures; rentals and other charges; ad\n valorem, property, production, excise, severance and similar taxes based\n upon or measured by the ownership of property or the production of\n hydrocarbons or the receipt of proceeds therefrom; expenses billed under\n applicable operating agreements and, in the absence of an operating\n agreement, expenses of the sort customarily billed under such agreements\n paid by the Seller in connection with the operation of the Interests,\n attributable to the period after the Effective Time and paid before\n Closing, which shall be evidenced by billings, statements or other like\n written evidence;\n\n (3) an amount equal to all prepaid expenses attributable to the\n Interests that are paid by or on behalf of Seller that are attributable to\n the period after the Effective Time and paid before Closing, including\n without limitation cash calls for wells to be drilled in accordance with\n the Contracts;\n\n (4) any other amount agreed upon by Seller and Buyer; and\n\n (b) The Purchase Price shall be adjusted downward by the following:\n\n 3\n\n \n (1) proceeds received by Seller before Closing attributable to\n the Interests that are attributable to production sold from and after the\n Effective Time and received by Seller before Closing;\n\n (2) an amount equal to the sum of all Title Defect adjustments;\n\n (3) any other amount agreed upon by Seller and Buyer.\n\n (c) In the event of Cash Adjustment of the purchase price required by\n Sections 2.2(a) or (b), the net amount of any such adjustments shall be\n determined and Buyer shall pay to Seller, or Seller shall pay to Buyer, as\n appropriate, the net amount of any Cash Adjustment, to be paid at the\n Closing or, as described in Sections 8.3(b) and 9.1 not later than 90 days\n from the Closing Date of this Agreement.\n\n 3. REPRESENTATIONS AND WARRANTIES.\n\n 3.1. REPRESENTATIONS AND WARRANTIES OF SELLER.\n\n Seller represents and warrants as of the date hereof and as of the Closing\nDate to Buyer as follows:\n\n (a) The consummation of the transactions contemplated by this\n Agreement will not violate, or be in conflict with any provision of any\n agreement or instrument to which Seller is a party or by which it is bound.\n\n (b) Seller is a corporation duly organized, validly existing and in\n good standing under the laws of the State of Nevada, and is duly qualified\n to carry on its business in each state where the Interests are located, or\n where the ownership of the Interests located in such state require Seller\n to be so qualified.\n\n (c) Seller has all requisite corporate power and authority to carry on\n its business as presently conducted, and to perform its obligations under\n this Agreement. The consummation of the transactions contemplated by this\n Agreement will not violate, or be in conflict with, (i) any provision of\n its articles of incorporation or bylaws; (ii) any provision of any\n agreement or instrument to which it is a party or by which it is bound,\n noncompliance with which would have a material adverse effect upon Buyer's\n ownership or operation of the Interests, or upon any of the transactions\n contemplated by this Agreement, and (iii) to its knowledge, any judgment,\n decree, order, statute, rule or regulation applicable to Seller.\n\n (d) This Agreement has been, subject to the receipt of approval of\n Seller's stockholders which will be received before Closing, duly\n authorized, executed and delivered on behalf of Seller and constitutes the\n legal, valid and binding obligation of Seller, enforceable in accordance\n with its terms, subject, however, to the effects of bankruptcy, insolvency,\n reorganization and other laws for the protection of creditors.\n\n (e) Seller has incurred no liability, contingent or otherwise, for\n brokers or finders fees relating to the transactions contemplated by this\n Agreement for which Buyer shall have any responsibility whatsoever.\n\n (f) There are no bankruptcy, reorganization or arrangement proceedings\n pending, being contemplated by or, to the knowledge of Seller, threatened\n against Seller.\n\n 4\n\n \n (g) Seller has, and shall deliver to Buyer at Closing, Defensible\n Title to the Interests as defined in Section 5 below.\n\n (h) Seller is in compliance in all material respects with all the\n Contracts and with all operating agreements, productions sales agreements,\n and other material contractual obligations and commitments which relate to\n the Interests.\n\n (i) The Seller has, and to the best of the Seller's information and\n belief each operator of the Interests has, complied with all rules,\n regulations, laws, judgments, orders, or other restrictions applicable to\n the Interests and in the operations thereon, including any environmental\n laws, rules or regulations. The Seller has received no notice or other\n information from any operator of any of the Interests or any other person\n that is contrary to the preceding sentence.\n\n (j) To the best of Seller's information and belief, all holders of\n Debentures qualify as Accredited Investors under Rule 501 of Regulation D\n adopted under the Securities Act of 1933, as amended (\"Securities Act\").\n\n 3.2. REPRESENTATIONS AND WARRANTIES OF BUYER.\n\n Buyer represents and warrants as of the date hereof and as of the Closing\nDate to Seller as follows:\n\n (a) The consummation of the transactions contemplated by this\n Agreement will not violate, or be in conflict with any provision of any\n agreement or instrument to which Buyer is a party or by which it is bound.\n\n (b) Buyer is a corporation duly organized, validly existing and in\n good standing under the laws of the State of Delaware, and is duly\n qualified to the extent legally necessary to carry on its business in each\n state where the Interests are located, or where the ownership of the\n Interests located in such state require Buyer to be so qualified.\n\n (c) Buyer has all requisite corporate power and authority to carry on\n its business as presently conducted, and to perform its obligations under\n this Agreement. The consummation of the transactions contemplated by this\n Agreement will not violate, or be in conflict with, (i) any provision of\n its articles of incorporation or bylaws; (ii) any provision of any\n agreement or instrument to which it is a party or by which it is bound,\n noncompliance with which would have a material adverse effect upon its\n ownership or operation of the Interests, or upon any of the transactions\n contemplated by this Agreement, and (iii) to its knowledge, any judgment,\n decree, order, statute, rule or regulation applicable to Buyer.\n\n (d) This Agreement constitutes the legal, valid and binding obligation\n of Buyer, enforceable in accordance with its terms, subject, however, to\n the effects of bankruptcy, insolvency, reorganization and other laws for\n the protection of creditors.\n\n (e) Buyer has incurred no liability, contingent or otherwise, for\n brokers or finders fees relating to the transactions contemplated by this\n Agreement for which Seller shall have any responsibility whatsoever.\n\n (f) The Interests to be acquired by Buyer pursuant to this Agreement\n are being acquired by it for its own account for investment purposes and\n not for distribution within the meaning of any securities law. In acquiring\n the Interests, it is acting in the conduct of its own business and not\n under\n\n 5\n\n \n any specific contractual commitment to any third party, or any specific\n nominee agreement with any third party, to transfer to, or to hold title on\n behalf of, such third party, with respect to all or any part of the\n Interests.\n\n (g) There are no bankruptcy, reorganization or arrangement proceedings\n pending, being contemplated by or, to the knowledge of Buyer, threatened\n against Buyer.\n\n (h) The Common Stock of Buyer to be issued as part of the Purchase\n Price, shall, at the time of Closing, be duly authorized by all necessary\n corporate action and such securities shall be validly issued such that the\n holders to whom the securities shall be issued shall have the rights set\n forth on the certificates delivered by Buyer at the Closing.\n\n 4. COVENANTS AND AGREEMENTS.\n\n 4.1. COVENANTS AND AGREEMENTS OF SELLER.\n\n Seller covenants and agrees with Buyer as follows:\n\n (a) Upon execution of this Agreement, Seller will make available to\n Buyer for examination at Seller's Grand Junction, Colorado office during\n normal business hours, all of Seller's title information, production\n information and other information relating to the Interests, including\n without limitation, accounting files, production files, land files, lease\n files, well files, division order files, contract files and marketing\n files, and, subject to the consent and cooperation of operators and other\n third parties, will cooperate with Buyer in Buyer's efforts to obtain, at\n Buyer's expense, such additional information relating to the Interests as\n Buyer may reasonably desire, to the extent in each case that Seller may do\n so without violating legal constraints or any obligation of confidence or\n other contractual commitment of Seller to a third party.\n\n (b) Seller shall use reasonable efforts to cause the operators of the\n Interests to permit Buyer's authorized representative to conduct, at\n Buyer's sole risk and expense, on-site inspections of the Interests. All\n such inspections shall be conducted at the sole risk, cost and expense of\n Buyer, and Buyer shall indemnify and defend Seller from and against any and\n all losses arising from such inspections.\n\n (c) During the period from the date of this Agreement to the Closing\n Date, Seller agrees, unless specifically waived by Buyer in writing, as\n follows:\n\n (1) Subject to the provisions of applicable operating and other\n agreements, Seller shall continue to administer the Interests in a good and\n workmanlike manner consistent with its past practices, and shall carry on\n its business with respect to the Interests in substantially the same manner\n as before execution of this Agreement.\n\n (2) Seller shall, except for emergency action taken in the face\n of risk to life, property or the environment, submit to Buyer for prior\n written approval, all requests for operating or capital expenditures and\n all proposed contracts and agreements relating to the Interests that\n involve individual commitments of more than $20,000.00 net to Seller's\n interest, or a cumulative total of $75,000 net to Seller's interest. Seller\n will timely notify Buyer of any and all such expenditures and commitments\n made which relate to the Interests.\n\n 6\n\n \n (3) Buyer acknowledges that Seller owns an undivided interest in\n all of the Interests, and Buyer agrees that the acts or omissions of the\n other working interest owners who are not affiliated with Seller shall not\n constitute a violation of the provisions of this Agreement, nor shall any\n action required by a vote of working interest owners constitute such a\n violation so long as Seller has voted its interest in a manner that\n complies with the provisions of this Section. To the extent that Seller is\n not the operator of any of the Interests, the obligations of Seller in this\n Agreement shall be construed to require that Seller use reasonable efforts\n (without being obligated to incur any expense or institute any cause of\n action) to cause the operator of such Interests to take such actions or\n render such performance within the constraints of the applicable operating\n agreements and other applicable agreements.\n\n 4.2. COVENANTS AND AGREEMENTS OF BUYER.\n\n Buyer covenants and agrees with Seller that:\n\n (a) Buyer shall use its best efforts to ensure that as of the Closing\n Date it will not be under any material legal or contractual restriction\n that would prohibit or delay the timely consummation of such transaction.\n\n (b) Buyer shall, subject to the applicable terms of existing operating\n agreements, become the working or other interest owner of the Interests as\n of 12:01 a.m. local time at the wellsites on the Closing Date, effective as\n of the Effective Time.\n\n (c) After this Agreement is signed, Buyer shall provide reasonable\n assistance to Seller to solicit from Seller's Debenture holders Debenture\n Exchange Subscription Agreements (in the form approved by both parties and\n attached hereto as EXHIBIT F, hereafter the \"Exchange Agreements\") pursuant\n ---------\n to which the holders shall agree to exchange the Debentures for Common\n Stock of Buyer (as described in Section 7.1(a) (2) below), subject to\n Closing of the Agreement in a manner which is intended to be exempt from\n registration under Rule 506 of Regulation D adopted under the Securities\n Act. Buyer shall prepare, with reasonable assistance from Seller, a\n disclosure document for delivery to the holders. Buyer and Seller shall\n take reasonable steps to comply with Regulation D; however Buyer shall have\n no obligation to Seller or to any such holder with respect to the number of\n holders who enter into the Exchange Agreements. At the Closing of the\n transaction, Buyer shall issue the appropriate number of shares of Buyer's\n Common Stock as determined under Section 2.1(a) above. Such shares shall be\n issued to Seller and the holders of Seller's Debentures, as directed in\n writing by Seller on or before the Closing Date.\n\n (d) Buyer shall cause the Common Stock of Buyer that is issued\n pursuant to this Agreement to be registered on Form S-3 (or other\n appropriate form) for resale by the holders of such stock within 60 days\n following the Closing Date. Buyer shall use reasonable commercial efforts\n to have the registration statement covering the Common Stock declared\n effective by the United States Securities and Exchange Commission within a\n reasonable time after filing such registration statement. The terms and\n conditions of the Registration Rights Agreement, attached hereto as EXHIBIT\n -------\n G, which shall run to the benefit of the former holders of the Debentures,\n -\n shall govern the obligations of the Buyer and the rights of the holders of\n the Common Stock.\n\n (e) If Buyer issues Common Stock to Seller under Section 11.2 of this\n Agreement, or in accordance with its obligations under the Contingent\n Payment Agreement, then in either such case, Buyer shall file a\n registration statement to register such shares for resale within three (3)\n months after\n\n 7\n\n \n issuance and the obligations of Buyer under the Registration Rights\n Agreement shall be deemed to be obligations of Buyer to the holders in any\n such registration.\n\n 5. TITLE MATTERS.\n\n 5.1. DEFENSIBLE TITLE.\n\n (a) The term Defensible Title shall mean, as to the Interests, such\n title, whether held by Seller or for the benefit of Seller, that, except\n for and subject to the Permitted Encumbrances (as defined in Section\n 5.1(b)): (i) entitles Seller to receive as to each Well set forth in\n EXHIBIT A not less than the Net Revenue Interest set forth in EXHIBIT A as\n --------- ---------\n to the oil, gas and associated liquid and gaseous hydrocarbons produced,\n saved and marketed therefrom as to its presently producing formations; (ii)\n obligates Seller to bear costs and expenses relating to the maintenance,\n development and operation of each Well or Lease in an amount not greater\n than the Working Interest set forth in EXHIBIT A without a proportionate\n ---------\n increase in the Net Revenue Interest, and (iii) is free and clear of liens\n and material encumbrances and defects.\n\n (b) The term Permitted Encumbrances, as used herein, shall mean, as\n follows:\n\n (1) lessors' royalties, overriding royalties, unitization and\n pooling designations and agreements, reversionary interests and similar\n burdens;\n\n (2) required third party consents to assignments, preferential\n rights to purchase, and similar agreements with respect to which prior to\n Closing (i) waivers or consents have been or will be obtained from the\n appropriate parties prior to the closing date, or (ii) the appropriate time\n period for asserting such rights has expired without an exercise of such\n rights;\n\n (3) all rights to consent by, required notices to, filings with,\n or other actions by governmental entities in connection with the sale or\n conveyance of oil and gas leases or interests therein if the same are\n customarily obtained subsequent to such sale or conveyance;\n\n (4) easements, rights-of-way, servitudes, permits, surface leases\n and other rights with respect to surface operations, pipelines, grazing,\n logging, canals, ditches, reservoirs or the like; conditions, covenants or\n other restrictions; and easements for streets, alleys, highways, pipelines,\n telephone lines, power lines, railways and other easements and\n rights-of-way, on, over or in respect of any of the Interests;\n\n (5) materialmen's, mechanics', repairmen's, employees',\n contractors', operators', tax and other similar liens or charges arising in\n the ordinary course of business incidental to construction, maintenance or\n operation of any of the Interests: (i) if they have not been filed pursuant\n to law, (ii) if filed, they have not yet become due and payable or payment\n is being withheld as provided by law, or (iii) if their validity is being\n contested in good faith in the ordinary course of business by appropriate\n action;\n\n (6) any other liens, charges, encumbrances, contracts,\n agreements, instruments, obligations, defects or irregularities of any kind\n whatsoever affecting the Interests that individually or in the aggregate\n are not such as to have a materially adverse effect, do not prevent Seller\n and after Closing will not prevent Buyer from receiving the proceeds of\n production and that do not and after Closing will not operate to (i) reduce\n the net revenue interest of Seller below that set forth on EXHIBIT A, or\n ---------\n (ii) increase the working interest above that set forth on EXHIBIT A\n ---------\n without a proportionate increase in the Net Revenue Interest; and\n\n 8\n\n \n (7) the limitations included in the contracts, agreements and\n other matters, if any, described on EXHIBIT C.\n ---------\n\n (c) The term Title Defect as used herein shall mean any material\n encumbrance or defect in Seller's title to the Interests (expressly\n excluding Permitted Encumbrances), that renders Seller's title to the\n Interests less than Defensible Title. The term Allocated Value as used\n herein means the value allocated to the Well as set forth in the\n Netherland, Sewell Reserve Report on the Interests as of the Effective\n Time, to be prepared after the date of this Agreement.\n\n 5.2. TITLE DEFECT ADJUSTMENTS.\n\n (a) No adjustment to the Purchase Price for Title Defects shall be\n made unless and until, and only to the extent that the individual value of\n each Title Defect exceeds $25,000 net to Seller's Working Interest in the\n Well or Lease affected by the Title Defect or exceeds $75,000 in the\n aggregate for all such Title Defects in all Wells or Leases.\n\n (b) Buyer shall give Seller written notice of Title Defects ten (10)\n days prior to the Closing Date. Such notice shall be in writing and shall\n include (i) a description of the Title Defect, and (ii) the amount by which\n Buyer believes the Value of such Well or Lease has been reduced because of\n such Title Defect. Buyer shall be deemed to have waived all Title Defects\n of which Seller has not been given timely notice by Buyer and all Title\n Defects that do not meet the thresholds for an adjustment set forth in\n Section 5.2(a).\n\n (c) Subject to the limitation contained in Section 5.2(a), a Title\n Defect of a Well and the Leases comprising the production unit or proration\n unit for the Well shall be cured to the reasonable satisfaction of Buyer\n before the Closing, provided that Seller may cure the Title Defect to\n Buyer's reasonable satisfaction within 30 days following Closing. If the\n Title Defect cannot be cured before the Closing or within the 30 day period\n following Closing to the reasonable satisfaction of Buyer, then the parties\n shall negociate a reduction of the Purchase Price to reflect the diminution\n of value due to the Title Defect in accordance with Section 2.2 unless\n prior to closing, (i) Buyer agrees to waive the relevant Title Defect and\n purchase the affected Interests notwithstanding the defect, or (ii) Seller\n agrees to indemnify Buyer against all losses, costs, expenses and\n liabilities with respect to such Title Defect.\n\n 5.3. CASUALTY LOSS.\n\n If subsequent to the date of this Agreement and, prior to the Closing, all\nor any material portion of the Interests to be conveyed to Buyer at the Closing\nis destroyed by fire or other casualty, is taken in condemnation or under the\nright of eminent domain or proceedings for such purposes are pending or\nthreatened, subject to the limitations set forth in Section 5.2, Buyer shall\npurchase such Interests notwithstanding any such destruction, taking or pending\nor threatened taking and the Purchase Price shall be adjusted in accordance with\nthe diminution in value. Seller shall, at the Closing, pay to Buyer all sums\npaid to Seller by third parties by reason of the destruction or taking of such\nInterests to be assigned to Buyer, and shall assign, transfer and set over unto\nBuyer all of the right, title and interest of Seller in and to any unpaid awards\nor other payments from third parties arising out of the destruction, taking or\npending or threatened taking as to such Interests to be conveyed to Buyer.\nSeller shall not voluntarily compromise, settle or adjust any material amounts\npayable by reason of any material destruction, taking or pending or threatened\ntaking as to the Interests to be conveyed to Buyer without first obtaining the\nwritten consent of Buyer.\n\n 9\n\n \n 5.4. CONSENTS.\n\n Some of the Leases are subject to consent of assignment by the Lessor.\nSeller will use its best efforts to obtain consents prior to Closing and will\nassist Buyer in obtaining any required consents after Closing. Any such consent\nnot obtained prior to Closing will be deemed to be a Title Defect under Section\n5.2 above, without need of further notice from Buyer. Seller shall have the\nright to cure Title Defects arising under this Section within the time limits\ndescribed in Section 5.2(c) above.\n\n 6. ENVIRONMENTAL MATTERS.\n\n Buyer acknowledges that Seller is a non-operator of the Interests and has\nno direct control over any matter or circumstance relating to environmental\nlaws, environmental conditions or environmental claims, the release of materials\ninto the environment or protection of the environment or health. Buyer hereby\nagrees to assume the risk that the Interests may contain waste materials,\nincluding naturally occurring radioactive materials, or hazardous substances,\nthat adverse physical conditions, including the presence of unknown abandoned\noil and gas wells, water wells, sumps and pipelines may not have been revealed\nby Buyer's investigation, and that liabilities under environmental claims or\nenvironmental conditions or environmental laws could in the future be asserted\nagainst persons who hold working interests in any of the Interests. Seller shall\nprotect, release, defend and indemnify and hold Buyer free and harmless from and\nagainst any and all costs, expenses, claims, demands, litigation costs,\nattorneys' fees and causes of action of every kind and character which result,\nor may be claimed to result from, environmental claims, or environmental\nconditions or claimed breach of environmental laws or regulations which occurred\nor existed on or in connection with any of the Interests as of the Closing Date\nof this Agreement, provided, however, that this obligation of Seller to\nindemnify Buyer shall apply only to claims, demands, expenses or costs which are\nasserted by third parties on or before December 31, 2002.\n\n Except for Seller's obligation to indemnify and hold harmless the Buyer for\nliabilities associated with claims made on or before December 31, 2002 for\nclaims which arose or would be deemed to have arisen prior to the Closing Date,\nBuyer hereby releases and discharges, and shall be deemed to release Seller at\nClosing from and against, any and all other claims at law or in equity,\nincluding but not limited to environmental claims and environmental conditions,\nknown or unknown, whether now existing or arising in the future, contingent or\notherwise, against Seller with respect to any matter or circumstance relating to\nenvironmental laws, the release of materials into the environment or protection\nof the environment or health.\n\n Assuming the occurrence of Closing, Buyer hereby expressly agrees to\nprotect, release, defend, indemnify and hold Seller, its officers, directors,\nrepresentatives, agents and its employees free and harmless from and against any\nand all costs, expenses, claims, demands, litigation costs, attorneys fees, and\ncauses of action of every kind and character, including but not limited to\ninjuries or death to persons, damages to or loss of property, environmental\nclaims or environmental conditions, arising out of or in connection with the\nuse, operation, occupancy, occupation, resale or abandonment of the Interests to\nbe assigned to Buyer hereunder regardless of whether the claim is a result of an\nact or omission occurring or condition existing prior to or after the Closing\nDate, and from any violation of environmental laws, provided that Buyer has no\nobligation to Seller with respect to any liabilities for environmental claims,\nenvironmental conditions or alleged violation of environmental laws or\nregulations related to any of the Interests which are asserted against Buyer or\nSeller by any third party and which may have occurred prior to the Closing Date\nand are asserted on or before December 31, 2002. The parties acknowledge and\nagree that the indemnity provided for in this section complies with the express\nnegligence rule.\n\n 10\n\n \n Buyer represents that it has had an adequate opportunity to review the\nindemnity and waiver provisions contained in this Section including the\nopportunity to submit the same to legal counsel for review and comment, and\nunderstands the indemnity obligations contained herein. Buyer acknowledges that,\nexcept for Seller's representations and warranties expressly set forth in this\nAgreement, it accepts the Interests \"AS IS, WHERE IS\" with all faults and\nexisting conditions.\n\n 7. TAX MATTERS\n\n All ad valorem, severance, personal property taxes or any other taxes\nassessed against the Interests prior to the Effective Time shall be the\nobligation of Seller no matter when invoiced by the operator of any of the\nInterests. All ad valorem, severance, personal property taxes or any other taxes\nassessed against the Interests after the Effective Time shall be the obligation\nof Buyer.\n\n 8. CONDITIONS TO CLOSING.\n\n 8.1. SELLER'S CONDITIONS.\n\n The obligations of Seller at the Closing are subject to the satisfaction,\nat or prior to the Closing, of the following conditions:\n\n (a) Each of the following shall have occurred:\n\n (1) Holders of a majority of the outstanding voting common stock\n of the Seller shall have voted, at a special meeting of stockholders called\n for that purpose, to approve this Agreement and the transfer of the\n Interests by the Buyer to the Seller;\n\n (2) Holders of at least 90% of the outstanding principal amount\n of Seller's Debentures shall have conditionally agreed to exchange the\n Seller's Debentures held by them in exchange for the following: for each\n $10,000 in principal amount of the Debentures, the holder will receive at\n Closing of this Agreement, out of the Purchase Price, a number of shares of\n Buyer's Common Stock determined by dividing $10,000 by the Common Stock\n Value Per Share, and rounded to the nearest whole share; and\n\n (3) Holders of 100% of the outstanding Series C Preferred shall\n have voted or consented in writing to approve this transaction.\n\n (b) No order shall have been entered by any court or governmental\n agency having jurisdiction over the parties or the subject matter of this\n Agreement that restrains or prohibits the purchase and sale contemplated by\n this Agreement and which remains in effect at the time of such Closing; and\n\n (c) The aggregate sum of Title Defect adjustments, if any, shall not\n exceed $100,000.\n\n 8.2. BUYER'S CONDITIONS.\n\n The obligations of Buyer at the Closing are subject to the satisfaction at\nor prior to the Closing of the following conditions:\n\n 11\n\n \n (a) All representations of Seller contained in this Agreement shall be\n true in all material respects at and as of the Closing as if such\n representations were made at and as of the Closing, and Seller shall have\n performed and satisfied all material agreements in all material respects\n required by this Agreement to be performed and satisfied by Seller at or\n prior to the Closing;\n\n (b) No order shall have been entered by any court or governmental\n agency having jurisdiction over the parties or the subject matter of this\n Agreement that restrains or prohibits the purchase and sale contemplated by\n this Agreement and which remains in effect at the time of such Closing; and\n\n (c) The aggregate sum of Title Defect adjustments, if any, shall not\n exceed $100,000; and\n\n (d) Each of the following shall have occurred:\n\n (1) Holders of at least 90% of the outstanding principal amount\n of Seller's Debentures shall have conditionally agreed to exchange the\n Seller,s Debentures held by them in exchange for the following: for each\n $10,000 in principal amount of the Debentures, the holder will receive at\n Closing of this Agreement, out of the Purchase Price, a number of shares of\n Buyer's Common Stock determined by dividing $10,000 by the Common Stock\n Value Per Share, and rounded to the nearest whole share; and\n\n (2) Holders of 100% of the outstanding Series C Preferred shall\n have voted or consented in writing to approve this transaction.\n\n 9. CLOSING.\n\n 9.1. DATE OF CLOSING.\n\n Subject to the conditions stated in this Agreement, the consummation of the\ntransactions described herein (the \"Closing\") shall be held on the first\nbusiness day following the Seller's Stockholders meeting at which this agreement\nis approved or at such later date as may be agreed upon by the parties. The date\nthe Closing actually occurs is called the Closing Date.\n\n 9.2. PLACE OF CLOSING.\n\n The Closing shall be held at the offices of Buyer in Houston, Texas.\n\n 9.3. CLOSING OBLIGATIONS.\n\n At the Closing the following events shall occur, each being a condition\nprecedent to the others and each being deemed to have occurred simultaneously\nwith the others:\n\n (a) Seller and Buyer shall execute, acknowledge and deliver an\n assignment, bill of sale and conveyance (in sufficient counterparts to\n facilitate recording) in substantially the form of EXHIBIT E hereto\n ---------\n conveying to Buyer or Buyer's Subsidiary the Interests; and\n\n 12\n\n \n (b) Seller and Buyer shall execute and deliver a settlement statement,\n prepared in accordance with this Agreement (the \"Settlement Statement\")\n prepared by Seller that shall set forth any Cash Adjustments required under\n Section 2.2 then known to the parties and the means used to determine such\n amount. Seller shall provide Buyer with the preliminary Settlement\n Statement three business days prior to Closing for Buyer's review and\n approval, using for such adjustments the best information then available.\n\n (c) Buyer shall deliver to Seller, or if appropriate, Seller shall\n deliver to Buyer, the Cash Adjustments to Purchase Price, subject to any\n further amounts which may be later determined under Section 10.1 below.\n\n (d) Buyer shall issue the appropriate number of shares of Buyer's\n Common Stock determined in accordance with Section 2.1(a) above. The Common\n Stock shall be issued as designated by Seller to Buyer in writing at or\n prior to the Closing Date. At the written request of Seller, Buyer shall\n transmit certificates for the Common Stock to the appropriate holders of\n Seller's Debentures conditional upon Buyer having received a fully executed\n Debenture Exchange Subscription Agreement as set forth in EXHIBIT F.\n ---------\n\n (e) Buyer shall enter into the Contingent Payment Agreement EXHIBIT D\n ---------\n with each holder of Seller's Series C Preferred Stock, pursuant to written\n instructions from Seller to be delivered at or before the Closing Date.\n\n (f) Buyer shall deliver to Seller the balance of the Purchase Price\n not paid to holders of Seller's Debentures.\n\n (g) Seller and Buyer shall execute, acknowledge and deliver letters in\n lieu of transfer orders directing all purchasers of production to make\n payment to Buyer of proceeds attributable to production from the Interests\n assigned to Buyer after the Effective Time.\n\n (h) Seller shall prepare such notices to third-party operators of the\n change in ownership of the Interests from Seller to Buyer.\n\n 10. OBLIGATIONS AFTER CLOSING.\n\n 10.1. POST-CLOSING ADJUSTMENT PROCEDURE.\n\n As soon as practicable after the Closing Date, but no later than 90 days\nafter the Closing Date, Seller shall prepare and deliver to Buyer, in accordance\nwith this Agreement, a statement (the Final Settlement Statement) setting forth\neach adjustment or payment under Section 2.2 that was not finally determined as\nof the Closing Date and showing the calculation of such adjustments. Within\nfifteen days after receipt of the Final Settlement Statement, or if Seller fails\nto deliver a Final Settlement Statement, Buyer shall deliver to Seller a written\nreport containing any changes that Buyer proposes be made to the Final\nSettlement Statement. The parties shall undertake to agree with respect to the\namounts due pursuant to such post-closing adjustment no later than fifteen days\nafter Seller has received Buyer's proposed changes. The date upon which such\nagreement is reached or upon which the Final Purchase Price is established,\nshall be called the Final Settlement Date. In accordance with Section 2.1(d), if\n(i)Buyer owes a net amount to Seller, Buyer shall pay in immediately available\nfederal funds the amount of such difference to Seller or to Seller's account (as\ndesignated by Seller), or (ii) Seller owes a net amount to Buyer, Seller shall\npay in immediately available federal funds the amount of such difference to\nBuyer or to Buyer's account (as designated by Buyer). Payment by Buyer or Seller\nof this portion, if any, of the Cash Adjustment shall be made within five days\nafter the Final Settlement Date.\n\n 13\n\n \n 10.2. FILES AND RECORDS.\n\n Within thirty days after the Closing Date, Seller shall deliver to Buyer\noriginals of all of Seller's files and records relating to the Interests in the\nformat maintained by Seller, but excluding any records or data that cannot be\ntransferred because of prior contractual restrictions. Seller shall have the\nright to retain copies of any or all files and records delivered to Buyer. Buyer\nshall make available to Seller, in Buyer's office during normal hours, Buyer's\nfiles and records relating to the Interests so long as Buyer retains such files\nand records.\n\n 10.3. FURTHER ASSURANCES.\n\n After Closing, Seller and Buyer shall execute, acknowledge and deliver or\ncause to be executed, acknowledged and delivered such instruments, and shall\ntake such other action as may be necessary or advisable to carry out their\nobligations under this Agreement and under any document, certificate or other\ninstrument delivered pursuant hereto.\n\n 10.4. ASSUMPTION OF OBLIGATIONS.\n\n (a) Transfer and assignment of the Interests to Buyer or Buyer's\n Subsidiary shall constitute an express assumption by Buyer of, and Buyer\n expressly agrees to pay, perform, fulfill and discharge all claims, costs,\n expenses, liabilities and obligations (including but not limited to\n environmental claims and environmental conditions) accruing or relating to\n the owning, developing, exploring, operating and maintaining of the\n Interests conveyed to Buyer at the Closing, including without limitation,\n all violations of environmental law and all obligations arising under\n operating agreements, product sales agreements and the other agreements\n covering or relating to the Interests, except as specifically stated to the\n contrary in Section 6 above.\n\n (b) Buyer acknowledges that Seller has not made, and Seller hereby\n expressly disclaims and negates, any representation or warranty, express or\n implied, relating to the condition of any real or immovable property,\n personal or movable property, equipment, inventory, machinery and fixtures\n constituting part of the interests including, without limitation, (i) any\n implied or express warranty of merchantability, (ii) any implied or express\n warranty of fitness for a particular purpose, (iii) any implied or express\n warranty of conformity to models or samples of materials, (iv) any rights\n of Buyer under appropriate statutes to claim diminution of consideration or\n return of the Purchase Price, and (v) any implied or express warranty\n regarding environmental laws, the release of materials into the environment\n including naturally occurring radioactive material, or protection of the\n environment or health, it being the express intention of Buyer and Seller\n that the real or immovable property, personal or movable property,\n equipment, inventory, machinery and fixtures shall be conveyed to Buyer as\n is and in their present condition and state of repair. Buyer represents to\n Seller that Buyer has made or caused to be made such inspections with\n respect to the real or immovable property, personal or movable property,\n equipment, inventory, machinery and fixtures as Buyer deems appropriate and\n Buyer will accept the real or immovable property, personal or movable\n property, equipment, inventory, machinery and fixtures as is, in their\n present condition and state of repair.\n\n (c) Seller hereby expressly negates and disclaims, and Buyer hereby\n waives and acknowledges that Seller has not made, any representation or\n warranty, express or implied, relating to (i) the accuracy, completeness or\n materiality of any information, data or other materials (written or oral)\n furnished to Buyer by or on behalf of Seller or (ii) production rates,\n recompletion opportunities, decline rates, geological or geophysical data\n or interpretations, the quality, quantity, cost of recovery of any\n hydrocarbon reserves, any product pricing assumptions, or the ability to\n sell or market any hydrocarbons after Closing.\n\n 14\n\n \n (d) Buyer shall also indemnify Seller for all liabilities which are\n assessed against Seller for federal, state, or local taxes, (not including\n income taxes) together with penalties or interest thereon (provided the\n penalties and interest do not result from the negligence, late filing,\n fraud or other acts of malfeasance of Seller), which relate to all\n operations of the property transferred hereunder and which arise on or\n after the Effective Time.\n\n 10.5. INDEMNIFICATION.\n\n From and after the Closing date, Buyer and Seller shall indemnify each\nother as follows:\n\n (a) Seller shall defend, indemnify and save and hold harmless Buyer,\n its officers, directors, employees and agents, against all losses, damages,\n claims, demands, suits, costs, expenses, liabilities and sanctions of every\n kind and character, including without limitation reasonable attorneys'\n fees, court costs and costs of investigation, which arise from or in\n connection with any breach by Seller of this Agreement.\n\n (b) Buyer shall defend, indemnify and save and hold harmless Seller,\n its officers, directors, employees and agents against all losses, damages,\n claims, demands, suits, costs, expenses, liabilities and sanctions of every\n kind and character, including without limitation reasonable attorneys'\n fees, court costs and costs of investigation, which arise from or in\n connection with (i) any of the claims, costs, expenses, liabilities and\n obligations assumed by Buyer pursuant to Section 6 or (ii) any breach by\n Buyer of this Agreement.\n\n 11. TERMINATION OF AGREEMENT.\n\n 11.1. TERMINATION.\n\n This Agreement and the transactions contemplated hereby may be terminated\nin the following instances:\n\n (a) By Seller if any of the conditions set forth in Section 8.1 are\n not satisfied in all material respects or waived as of the Closing Date.\n\n (b) By Buyer if any of the conditions set forth in Section 8.2 are not\n satisfied in all material respects or waived as of the Closing Date.\n\n (c) At any time by the mutual written agreement of Buyer and Seller.\n\n (d) By either party at its written election if the Closing Date has\n not occurred by April 15, 2002.\n\n 11.2. LIABILITIES UPON TERMINATION OR BREACH.\n\n In the event of the termination of this Agreement by Seller in accordance\nwith Section 11.1(a), Seller shall pay Buyer $25,000 cash as liquidated damages\nfor termination. If Buyer terminates this Agreement for any reason other than\nthose described in Section 11.1(b) above, it shall pay Seller $200,000 as\nliquidated damages for termination. Any obligation under this Section 11.2 shall\nbe payable immediately upon termination of this Agreement. In the event Buyer\nshall owe Seller liquidated damages under this Section, Buyer may at its sole\nelection pay up to one-half of such liquidated damages in shares of Buyer's\nCommon Stock\n\n 15\n\n \n 12. MISCELLANEOUS.\n\n 12.1. EXHIBITS.\n\n The Exhibits referred to in this Agreement are hereby incorporated in this\nAgreement by reference and constitute a part of this Agreement.\n\n 12.2. EXPENSES.\n\n Except as otherwise specifically provided, all fees, costs and expenses\nincurred by Buyer or Seller in negotiating this Agreement or in consummating the\ntransactions contemplated by this Agreement shall be paid by the party incurring\nthe same, including, without limitation, legal and accounting fees, costs and\nexpenses.\n\n 12.3. NOTICES.\n\n All notices and communications required or permitted under this Agreement\nshall be in writing and any communication or delivery hereunder shall be deemed\nto have been duly made when personally delivered to the individual indicated\nbelow, or if mailed, when received by the party charged with such notice and\naddressed as follows:\n\n IF TO SELLER:\n\n REPUBLIC RESOURCES, INC.\n 743 Horizon Court, Suite 333\n Grand Junction, Colorado 81506\n Attention: Patrick J. Duncan, President\n\n With a copy to:\n\n ALAN W. PERYAM, ESQ.\n 1120 Lincoln Street, Suite 1000\n Denver, Colorado 80203\n\n IF TO BUYER:\n\n HARKEN ENERGY CORPORATION\n 580 WestLake Park Boulevard, Suite 600\n Houston, Texas 77079\n Attention: Bruce N. Huff, President and Chief Operating Officer\n\n 16\n\n \n With a copy to:\n\n HARKEN ENERGY CORPORATION\n 580 WestLake Park Boulevard, Suite 600\n Houston, Texas 77079\n Attention: Larry E. Cummings, Vice President, General Counsel\n\n Any party may, by written notice so delivered to the other parties, change\nthe address or individual to which delivery shall thereafter be made.\n\n 12.4. WIRE TRANSFER INSTRUCTIONS.\n\n In the event a party is required to pay cash to the other party, payments\nshall be by wire transfer unless otherwise agreed by the parties at the time.\nWhen a wire transfer payment is required, the party to whom payment is to made\nshall furnish written wire transfer instructions to the other party.\n\n 12.5. AMENDMENTS.\n\n This Agreement may not be amended nor any rights hereunder waived except by\nan instrument in writing signed by the party to be charged with such amendment\nor waiver and delivered by such party to the party claiming the benefit of such\namendment or waiver.\n\n 12.6. ASSIGNMENT.\n\n Neither party may assign all or any portion of its rights or delegate all\nor any portion of its duties hereunder unless it continues to remain liable for\nthe performance of its obligations hereunder and obtains the prior written\nconsent of the other party, which consent shall not be unreasonably withheld.\n\n 12.7. CONDITIONS.\n\n The inclusion in this Agreement of conditions to Seller's and Buyer's\nobligations at the Closing shall not, in and of itself, constitute a covenant of\neither Seller or Buyer to satisfy the conditions to the other party's\nobligations at the Closing.\n\n 12.8. COUNTERPARTS.\n\n This Agreement may be executed by Buyer and Seller in any number of\ncounterparts, each of which shall be deemed an original instrument, but all of\nwhich together shall constitute but one and the same instrument.\n\n 12.9. GOVERNING LAW.\n\n This Agreement and the transactions contemplated hereby shall be construed\nand enforced in accordance with the laws of the state of Colorado, but without\nregard to laws or principles of conflicts of laws that would cause application\nof the laws of another jurisdiction. The parties hereby consent to the exclusive\nvenue of the proper state or federal court located in the Denver, Colorado, and\nhereby waive all other venues.\n\n 17\n\n \n 12.10. ENTIRE AGREEMENT.\n\n This Agreement (including the Exhibits hereto) constitutes the entire\nunderstanding among the parties with respect to the subject matter hereof,\nsuperseding all negotiations, prior discussions and prior agreements and\nunderstandings relating to such subject matter.\n\n 12.11. PARTIES IN INTEREST.\n\n This Agreement shall be binding upon, and shall inure to the benefit of,\nthe parties hereto, and their respective successors and assigns, and nothing\ncontained in this Agreement, express or implied, is intended to confer upon any\nother person or entity any benefits, rights or remedies.\n\n 12.12. SURVIVAL.\n\n The representations, warranties, covenants, agreements and indemnities\nprovided for in this Agreement shall survive the Closing and shall not be\nextinguished by the doctrine of merger by deed or any similar doctrine and no\nwaiver, release, or forbearance of the application of the provisions of those\nparagraphs in any given circumstance shall operate as a waiver, release, or\nforbearance of the provisions of the paragraphs as to any other circumstance.\n\n 12.13. ARBITRATION.\n\n All disputes arising out of or in connection with this agreement, or any\ndetermination required to be made by the parties as to which the parties are\nunable to agree (including, without limitation, the determination of Defects),\nshall be settled by arbitration in Denver, Colorado. Any matter to be submitted\nto arbitration hereunder may be submitted to arbitration by either party. Any\nmatter submitted to arbitration shall be conducted in accordance with the rules\nof the American Arbitration Association. Any award by the arbitrator(s) shall be\nfinal, binding and not appealable, and judgment may be entered thereon in any\ncourt of competent jurisdiction. Notwithstanding the above, neither Seller or\nBuyer shall be required to resolve any disputes relating to this Agreement\nthrough arbitration if an unrelated third party files suit against both Buyer\nand Seller relating to the interests conveyed pursuant to this Agreement, in\nsuch event, it being understood and agreed that Buyer and Seller may assert any\nclaims and\/or defenses arising out of this Agreement against each other in the\nlawsuit.\n\n 18\n\n \n Executed as of the date stated on the first page of this Agreement.\n\n SELLER:\n\n REPUBLIC RESOURCES, INC.\n\n\n By: \/s\/ Patrick J. Duncan\n ------------------------\n Patrick J. Duncan, President\n\n\n BUYER:\n\n\n HARKEN ENERGY CORPORATION\n\n\n By: \/s\/ Bruce N. Huff\n -----------------------\n Bruce N.Huff, President and\n Chief Operating Officer\n\n 19\n\n \n EXHIBIT A\n\n [Ommited]\n\n \n EXHIBIT B\n\n [Ommited]\n\n \n EXHIBIT C\n\n [Ommited]\n\n \n EXHIBIT D\n\n EXHIBIT D\n CONTINGENT PAYMENT AGREEMENT\n\n This Contingent Payment Agreement (this \"Agreement\") is made and entered\ninto as of the day of , 2002, by and between Republic\n ----------- -----------\nResources, Inc. (\"Republic\"), a Nevada corporation, and Harken Energy\nCorporation (\"Harken\"), a Delaware corporation.\n\n RECITALS\n\n A. Republic and Harken have entered into that certain Purchase and Sale\nAgreement (the \"Purchase Agreement\") dated January 31, 2002, pursuant to which\nRepublic is selling to Harken all of Republic's interest in and to certain oil\nand natural gas properties in the states of Texas and Louisiana, as further\ndescribed therein;\n\n B. Pursuant to Section 2.1 (c) of such Purchase Agreement, Harken is\nentering into this Agreement (which is attached as Exhibit D to the Purchase\nAgreement) to pay, subject to the terms and conditions herein, to Republic a\n\"Contingent Payment\" (as defined herein).\n\n AGREEMENT\n\n NOW, THEREFORE, for and in consideration of the foregoing Recitals and the\nmutual agreements contained herein, the sufficiency of which is hereby\nacknowledged and confirmed, the parties hereto, intending to be legally bound,\nhereby agree as follows:\n\nSection 1. Contingent Payment.\n ------------------\n\n (a) Subject to the terms and conditions of this Agreement, Harken hereby\ncovenants and agrees to pay, within forty five (45) days after December 31,\n2003, to Republic or its permitted assigns (as provided in Section 3 of this\nAgreement), the Contingent Payment (as hereinafter defined). The Contingent\nPayment may be payable in either cash, shares of Harken Common Stock, $.01 par\nvalue (the valuation of such shares as determined below), or any combination\nthereof, as Harken in its sole and absolute discretion determines. In the event\nsome or all of the Contingent Payment is made in the form of shares of Harken\nCommon Stock, the value per share of such shares shall be equal to the average\nreported closing price for Harken's Common Stock for the 20 trading days\nimmediately prior to the Valuation Date.\n\n (b) The Contingent Payment shall be determined as follows (all the amounts\nbelow will be determined or calculated either: a) as of December 31, 2003; or b)\nthrough December 31, 2003, as appropriate);\n\nRevenues XXX\nLess Costs (XXX)\n ----\nEquals the (Excess Cost)\n or the Excess Revenue (XXX) or XXX\nLess 15% of Excess Cost, if any (XXX)\nPlus: PV15 of the PDP Reserves XXX\n PV30 of the PDNP Reserves XXX\n PV50 of the PUD Reserves XXX\n ----\nSubtotal XXX\nTimes the Contingent Payment % 50%\n ----\n Equals the Contingent Payment XXX\n ====\n\n Should the above calculation result in a negative number for the Contingent\nPayment, there will be no liability by either Republic or Harken. In no event\nshall the Contingent Payment exceed $3,968,250.\n\n (c) In the event Harken elects to make any portion of the payment which may\nbecome due hereunder in the form of its shares of Common Stock, Harken shall\nexecute and deliver to Republic (or its permitted assigns) a Registration Rights\nAgreement in a form substantially similar to the Registration Rights Agreement\nentered into in connection with the Purchase Agreement, provided that Harken\nshall not be obligated to execute and deliver such Registration Rights Agreement\nunless and until the recipient of such Registration Rights Agreement agrees to\nexecute and be bound by the terms and provisions of such Registration Rights\nAgreement.\n\n \n (d) Notwithstanding anything in this Agreement, in no event shall Harken\nhave any duty, commitment or obligation to develop or participate in the\nProperties, and Harken may develop or participate in the Properties as it\ndetermines in its sole and absolute discretion (using such reasonable business\njudgment as Harken uses in connection with its other properties). In the event\nHarken determines in its sole and absolute discretion not to participate in\ndevelopment of the Properties, then the Proved Reserves Value will be calculated\non the non-consenting, reversionary or other retained interest (if any) held by\nHarken in such Properties. If the Proved Reserves Value after application of the\nAdjusted Costs is zero, then Harken shall not be obligated to make any\nContingent Payment hereunder.\n\nSection 2. Definitions and References.When used in this Agreement, the following\n --------------------------\nterms shall have the respective meanings assigned hereto:\n\n \"Lookback Properties\" shall mean Harken's right, title and interest in\n -------------------\n and to acquired pursuant to the Purchase Agreement: (i) the Wilcox\n Prospects located in Jackson County, Texas, currently known as the\n Matterhorn Prospect, the W1 and W2 prospects, the WR (Wilcox River)\n prospect, the W3 prospect, the W4 prospect, and the W5 prospect, and (ii)\n the Yegua Prospects located in Jackson County, Texas, currently known as\n the Yegua 17-C prospect, and the River prospect, all of these prospects and\n corresponding leases being more particularly described on Exhibit A\n attached hereto.\n\n \"Revenues\" shall mean any proceeds received or receivable by Harken\n --------\n from any production or sale of the Lookback Properties between January 1,\n 2002 and December 31, 2003.\n\n \"Costs\" shall mean any and all costs (including without limitation\n -----\n geophysical, geological and land costs), expenses, obligations,\n liabilities, and all other associated costs incurred by Harken relating to\n or incurred in connection with the development and production of the\n Lookback Properties between January 1, 2002 and December 31, 2003.\n\n \"Proved Reserves\" shall mean the estimated quantities of oil and\/or\n ---------------\n natural gas from of any interests held by Harken in the Lookback Properties\n that, with reasonable certainty, appear to be recoverable in the future\n under the economic and operating conditions as of December 31, 2003. The\n Parties agree that this estimate of proved reserves will be determined by\n either Netherland, Sewell and Associates or some other mutually agreeable\n petroleum engineering firm.\n\n \"Proved Reserves Value\" shall mean the undiscounted pre-tax value of\n ---------------------\n any interests held by Harken in the Proved Reserves as of the December 31,\n 2003. In determining the Proved Reserves Value, the oil and gas shall be\n priced by using the average of (x) the average strip price for the 12\n months immediately preceding the Valuation Date (as published in Inside\n ------\n FERC (or other publications acceptable to Harken and Republic) on the\n ----\n Valuation Date) and (y) the projected average strip price for the 12 months\n immediately following the Valuation Date (as published in The Wall Street\n ---------------\n Journal (or other publications acceptable to Harken and Republic) on the\n -------\n December 31, 2003). In addition, the Proved Reserve Values will be\n categorized between Proved Developed Producing (\"PDP\"), Proved Developed\n Non-producing (\"PDNP\"), and Proved Underdeveloped (\"PUD\") in accordance\n with generally accepted petroleum-engineering methods. The Parties agree\n that the estimate of Proved Reserves Value will be determined by the same\n petroleum-engineering firm that determines the Proved Reserves.\n\n \"PV15 of the PDP Reserves\" shall mean the value of the Proved\n ------------------------\n Developed Producing Reserve Value discounted on an annual basis at 15%.\n\n \"PV30 of the PDNP Reserves\" shall mean the value of the Proved\n -------------------------\n Developed Non-producing Reserve Value discounted on an annual basis at 30%.\n\n \"PV50 of the PUD Reserves\" shall mean the value of the Proved\n ------------------------\n Undeveloped Reserve Value discounted on an annual basis at 50%.\n\n \"Contingent Payment\" shall be the amount payable by Harken, as\n ------------------\n computed and described in Section 1 of this Agreement. In no event shall\n the Contingent Payment exceed $3,968,250.\n\n \"Valuation Date\" shall mean December 31, 2003.\n --------------\n\n 2\n\n \nSection 3. Miscellaneous.\n\n (a) Except as otherwise specifically provided, all fees, costs and expenses\nincurred by Republic or Harken in negotiating this Agreement or in consummating\nthe transactions contemplated by this Agreement shall be paid by the party\nincurring the same, including, without limitation, legal and accounting fees,\ncosts and expenses.\n\n (b) All notices and communications required or permitted under this\nAgreement shall be in writing and any communication or delivery hereunder shall\nbe deemed to have been duly made when personally delivered to the individual\nindicated below, or if mailed, when received by the party charged with such\nnotice and addressed as follows:\n\n IF TO REPUBLIC:\n\n REPUBLIC RESOUCES, INC.\n 743 Horizon Court, Suite 333\n Grand Junction, Colorado 81506\n Attention: Patrick J. Duncan, President\n\n With a copy to:\n\n ALAN W. PERYAM, ESQ.\n 1120 Lincoln Street, Suite 1000\n Denver, Colorado 80203\n\n IF TO HARKEN:\n\n HARKEN ENERGY CORPORATION\n 580 WestLake Park Boulevard, Suite 600\n Houston, Texas 77079\n Attention: Bruce N. Huff, President and Chief Operating Officer\n\n With a copy to:\n\n HARKEN ENERGY CORPORATION\n 580 WestLake Park Boulevard, Suite 600\n Houston, Texas 77079\n Attention: Larry E. Cummings, Vice President, General Counsel\n\n Any party may, by written notice so delivered to the other parties, change\nthe address or individual to which delivery shall thereafter be made.\n\n (c) This Agreement may not be amended nor any rights hereunder waived\nexcept by an instrument in writing signed by the party to be charged with such\namendment or waiver and delivered by such party to the party claiming the\nbenefit of such amendment or waiver.\n\n (d) Neither party may assign all or any portion of its rights or delegate\nall or any portion of its duties hereunder unless it continues to remain liable\nfor the performance of its obligations hereunder and obtains the prior written\nconsent of the other party, which consent shall not be unreasonably withheld.\nNotwithstanding the foregoing, Republic may assign this Agreement to the holders\nof its Series C Redeemable Preferred Stock (the \"Series C Preferred\"), provided\nthat Republic provides prior notice of such assignment and provided further that\nHarken receives prior to such assignment evidence to Harken's reasonable\nsatisfaction that the holders of such Series C Preferred are \"accredited\ninvestors\" as that term is defined in Regulation D promulgated under the\nSecurities Act of 1933 and such other evidence as Harken may reasonably require\nthat such assignment does not violate federal and state securities laws.\nFurther, notwithstanding the foregoing, Harken may assign this Agreement to any\nof its subsidiaries if Harken shall also assign the Properties under this\nAgreement to such subsidiairy. Harken shall provide notice of such assignment to\nRepublic following making of the same.\n\n (e) This Agreement may be executed by Republic and Harken in any number of\ncounterparts, each of which shall be deemed an original instrument, but all of\nwhich together shall constitute but one and the same instrument.\n\n 3\n\n \n (f) This Agreement and the transactions contemplated hereby shall be\nconstrued and enforced in accordance with the laws of the state of Colorado, but\nwithout regard to laws or principles of conflicts of laws that would cause\napplication of the laws of another jurisdiction. The parties hereby consent to\nthe exclusive venue of the proper state or federal court located in Denver,\nColorado, and hereby waive all other venues.\n\n (g) All disputes arising out of or in connection with this Agreement, or\nany determination required to be made by the parties as to which the parties are\nunable to agree, shall be settled by arbitration in Denver, Colorado. Any matter\nto be submitted to arbitration hereunder may be submitted to arbitration by\neither party. Any matter submitted to arbitration shall be conducted in\naccordance with the rules of the American Arbitration Association. Any award by\nthe arbitrator(s) shall be final, binding and not appealable, and judgment may\nbe entered thereon in any court of competent jurisdiction. In the event Republic\ninitiates such arbitration and it is determined in such arbitration that Harken\nhas failed to pay any amounts required to be paid under this Agreement to\nRepublic by an amount of 5% or more, then Harken shall be required to pay the\ncosts of the arbitrators.\n\n (h) Notwithstanding anything in this Agreement to the contrary, in no event\nshall Harken have any duty, commitment or obligation to develop or participate\nin the Properties, and Harken may develop or participate in the Properties as it\ndetermines in its sole and absolute discretion (using such reasonable business\njudgment as Harken uses in connection with its other properties).\n\n (i) All references in this Agreement to sections, subsections and other\nsubdivisions refer to corresponding sections, subsections and other subdivisions\nof this Agreement unless expressly provided otherwise. Titles appearing at the\nbeginning of any such subdivisions are for convenience only and shall not\nconstitute part of such subdivisions and shall be disregarded in construing the\nlanguage contained herein. Words in the singular form shall be construed to\ninclude the plural and vice versa, unless the context otherwise requires.\n ----------\n (j) Harken shall provide to Republic (or its permitted assigns)\nsemi-annually, on a calendar year basis, a status report on the current value of\nthe proved oil and natural gas reserves in the Properties (as of the date of\nsuch report), using the calculations as described herein to determine the Proved\nReserves Value and determining the value of such proved reserves as of the date\nof the report instead of the Valuation Date. Harken shall also include with such\nreport the assumptions used in calculating the Proved Reserves Value. Harken may\nbase such report upon its own internal reserve valuations if such report is\nprovided for any time other than as of a calendar year end. Any such report\nprovided as of a calendar year end will be based upon a third party outside\nengineering report.\n\n Executed as of the date stated on the first page of this Agreement.\n\n END OF EXHIBIT D\n\n 4\n\n \n EXHIBIT E\n ---------\n\n Form of Assignment, Conveyance and Bill of Sale\n -----------------------------------------------\n\nKNOW ALL MEN BY THESE PRESENTS:\n\n Republic Resources, Inc.,\n 743 Horizon Court, Suite 333\n Grand Junction, CO 81506-8715\n\n(hereinafter referred to as \"Assignor\") for and in consideration of the sum of\nTen Dollars ($10.00) and other valuable consideration, the receipt and\nsufficiency of which are hereby acknowledged, does hereby sell, assign, convey,\ntransfer, and set over, subject to the reservations herein set forth, unto\n\n Xplor Energy SPV-I, Inc.\n an Oklahoma corporation,\n 580 WestLake Park Boulevard, Suite 600\n Houston, TX 77079\n\n(hereinafter referred to as \"Assignee\") and subject to the following terms and\nprovisions, all of its right, title and interest in and to the \"Subject\nProperty\" described as follows:\n\n (a) The oil and gas wells described in EXHIBIT A hereto (the \"Wells\"),\n ---------\ntogether with all oil, gas and mineral production from the Wells;\n\n (b) The leasehold estates created by the leases, licenses, permits and\nother agreements described in EXHIBIT B, (the \"Leases\"); together with all\n ---------\noverriding royalty interests, production payments and other payments out of or\nmeasured by the value of oil and gas production;\n\n (c) All oil, gas, casinghead gas, condensate, distillate, liquid\nhydrocarbons, gaseous hydrocarbons and all products refined therefrom, together\nwith all minerals produced in association with these substances (collectively\ncalled the \"Hydrocarbons\") in and under and which may be produced and saved from\nor attributable to the Leases or Wells, and all rents, issues, profits,\nproceeds, products, revenues and other income from or attributable thereto;\n\n (d) All of the personal property, fixtures and improvements appurtenant to\nthe Wells, or the Leases or used or obtained in connection with the operation of\nthe Wells, or the Leases or with the production, treatment, sale or disposal of\nhydrocarbons or water produced therefrom or attributable thereto, including\nwithout limitation, pipelines, disposal systems, gathering systems and\ncompression facilities (the \"Equipment\") appurtenant to or located upon the\nLeases; and\n\n (e) All the property, rights, privileges, benefits and appurtenances in any\nway belonging, incidental to, or pertaining to the property, interests and\nrights described in(a) through (d) including the Wells, the Leases and reserves\nof unproduced oil and natural gas in place, including, to the extent\ntransferable, all exploration agreements, letter agreements, product purchase\nand sale contracts, surface leases, gas gathering contracts, processing\nagreements, compression agreements, equipment leases, permits, gathering lines,\nrights-of-way, easements, licenses, farmouts and farmins, options, orders,\npooling, spacing or consolidation agreements and operating agreements and all\nother agreements relating thereto, including those listed on EXHIBIT C (the\n ---------\n\"Contracts\");\n\n (f) All of the files, records, data (including seismic data and related\ninformation) and other documentary information maintained in the normal course\nof business by Seller pertaining to the Wells, Leases, Equipment, Hydrocarbons\nand the Contracts (collectively, the \"Data\") in the format maintained by\nAssignor. The Data shall not, however, include any information, which, if\ndisclosed, would cause Seller to breach any contract or agreement. Assignor will\nuse reasonable efforts to obtain any required consent to disclose such\ninformation; and\n\n \n (g) All other rights and interests in, to or under or derived from the\nSubject Property, even though improperly described in the Exhibits. It is the\nexpressed intent of the parties that all of Assignor's right, title and interest\nin any and all of the Subject Property, whether or not the same may be correctly\ndescribed on the Exhibits hereto be assigned to Assignee hereunder.\n\n This Assignment, Conveyance and Bill of Sale is made subject to the\nfollowing terms and provisions:\n\n (a) NOTWITHSTANDING ANY PROVISION IN THIS ASSIGNMENT, CONVEYANCE AND BILL\nOF SALE OR ANY DOCUMENT DELIVERED IN CONNECTION HEREWITH TO THE CONTRARY, THE\nSUBJECT PROPERTY AND ANY OTHER PROPERTY OR RIGHTS CONVEYED HEREUNDER ARE\nCONVEYED \"AS IS, WHERE IS,\" \"WITH ALL FAULTS,\" AND IN THEIR PRESENT CONDITION\nAND STATE OF REPAIR, AND WITHOUT WARRANTY, EITHER EXPRESS OR IMPLIED (EXCEPT\nWARRANTY OF TITLE BY, THROUGH OR UNDER ASSIGNOR, BUT NOT OTHERWISE) INCLUDING\nWARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER\nSORT OF WARRANTY. ASSIGNEE HAS INSPECTED, OR HAS HAD THE OPPORTUNITY TO INSPECT,\nTHE ASSIGNED PREMISES FOR ALL PURPOSES.\n\n (b) Assignor reserves from this Assignment, Conveyance and Bill of Sale in\nfavor of itself the following:\n\n (i) All accounts receivable attributable to the Subject Property that\n are attributable to the period prior the Effective Time;\n\n (ii) All claims and rights relating to overpayments of costs and\n expenses attributable to period prior to the Effective Time,\n including, without limitation, the right to initiate, prosecute\n or participate, at Assignor's sole cost and expense, in all\n audits, audit claims and tax claims or proceedings relating to or\n including periods prior to the Effective Time, regardless of when\n commenced, arising under applicable law, operating or product\n sale agreements or otherwise, and to recover all costs and\n expenses claimed or shown by such audits or proceedings as owing\n to the owner of the Subject Property for periods prior to the\n Effective Time; and\n\n (iii)All rights, if any, to recover additional production or proceeds\n or requirements to refund monies attributable to such production\n or proceeds therefrom attributable to the Subject Property for\n any production month prior to the Effective Time, resulting from\n any adjustment to the net revenue interest attributable to the\n Subject Property in the applicable division orders.\n\n Assignee, its successors and assignees, shall observe, perform and comply\nwith the terms, provisions, covenants and conditions, express or implied, of the\noil and gas leases described on EXHIBIT B, together with any related contracts,\n ---------\nand all laws, rules, regulations and orders, both state and federal, applicable\nto the ownership and enjoyment of the rights herein assigned.\n\n Effective from and after the Effective Time of this instrument, Assignee\nhereby agrees to assume and shall assume, pay and perform all liabilities and\nobligations arising in connection with the ownership or operations of the\nSubject Property. Commencing from and after the Effective Time of this\ninstrument, Assignee shall indemnify and hold harmless Assignor against and from\nany and all loss, cost, expense, liability or damage (including fees and\nexpenses of attorneys, technical experts and expert witnesses) incurred or\nsuffered by Assignor arising out of or relating to Assignee's failure to\ndischarge any such liabilities and obligations.\n\n All saleable gas, oil and\/or condensate at the Effective Time of this\ninstrument is owned by the Assignor and is not to be considered a part of this\nsale.\n\n This Assignment, Conveyance and Bill of Sale is to be treated as an\noccasional sale, and no sales tax is being collected from Assignee. If however,\nthis transaction is later deemed to be subject to sales or use tax, Assignee\nagrees to be solely responsible for any and all sales or use taxes due on\nequipment, material and property hereby assigned and sold, and Assignee shall\nremit such taxes to the proper taxing authority.\n\n 2\n\n \n This Assignment, Conveyance and Bill of Sale is subject to the terms and\nprovisions of that certain Purchase and Sale Agreement dated January 31, 2002 by\nand between Assignor and Assignee.\n\n This instrument shall be binding upon and inure to the benefit of Assignor\nand Assignee, their personal representatives, executors, successors and assigns.\nThe provisions hereof shall be covenants running with the lands and leases\nassigned.\n\n EXECUTED this day of , 2002, but effective\n --------- ---------------------\nfor all purposes as of January 1, 2002, at 12:01 A.M. at the location of the\nSubject Property (\"Effective Time\").\n\nASSIGNOR:\n\nAttest: REPUBLIC RESOURCES, INC.\n\n\nBy: By:\n ----------------------------- ----------------------------\n Marilyn L. Adams, Secretary Patrick J. Duncan, President\n\n\nASSIGNEE:\n\nAttest: Xplor Energy SPV-I, Inc.\n an Oklahoma corporation,\n\n\nBy: By:\n ----------------------------- ------------------------\n\nACKNOWLEDGMENTS\n\nSTATE OF COLORADO)\n )ss\nCOUNTY OF MESA)\n\n This instrument was acknowledged before me, a Notary Public, by Patrick J.\nDuncan, President of Republic Resources, Inc., a Nevada corporation, on behalf\nof said corporation.\n\n Witness my hand and official seal this day of , 2002.\n -------- -------\n\nMy Commission Expires:\n\n---------------------------------------------------------------------\n\n------------------------------\n Notary Public in and for the State of\n--------------\n\nSTATE OF TEXAS)\n )ss\nCOUNTY OF)\n\n This instrument was acknowledged before me, a Notary Public, by\n\n----------------- , President of Xplor Energy SPV-I, Inc., an Oklahoma\ncorporation, on behalf of said corporation.\n\n Witness my hand and official seal this day of , 2002.\n --------- --------\n\nMy Commission Expires:\n\n---------------------------------------------------------------------\n\n------------------------------\n Notary Public in and for the State of\n--------------\n\n END OF EXHIBIT E\n\n 3\n\n \n EXHIBIT F\n ---------\n\n Debenture Exchange Subscription Agreement\n\n ------------------------------\n Name of Debenture Holder\n\n ------------------------------\n Principal Amount\n\n DEBENTURE EXCHANGE SUBSCRIPTION AGREEMENT\n\n This Debenture Exchange Subscription Agreement (the \"Agreement\") is between\nthe debenture holder identified on the signature page of this Agreement\n(\"Subscriber\"), Republic Resources, Inc. (\"Republic\") and Harken Energy\nCorporation (\"Harken\") and is made with reference to the following agreed facts:\n\n A. The undersigned Subscriber is the holder of a 11% Convertible Debenture,\ndue April 15, 2003 (the \"Debenture\") of Republic (formerly Pease Oil and Gas\nCompany) in the principal amount set forth on the signature page of this\nAgreement.\n\n B. There are outstanding $2,645,500 of the Debentures held by Subscriber\nand other holders of the Debentures.\n\n C. Republic has agreed to sell to Harken, pursuant to a Purchase and Sale\nAgreement dated January 31, 2002 (the \"Asset Sale Agreement\"), all of Republic's\ninterests in its oil and natural gas properties located in the states of\nLouisiana and Texas that have \"proved reserves\" as of January 1, 2002. The\nproperties to be sold include all of Republic's income-producing assets as of\nJanuary 1, 2002. In exchange for these assets, Harken will deliver at closing up\nto 2,645,500 shares of Harken common stock that will be distributed to the\nSubscriber and other holders of the Debentures on a pro-rata basis in full\nsatisfaction of Republic's principal obligation under the outstanding\nDebentures.\n\n D. The number of shares of Harken Common Stock to be issued at the closing\nof the Asset Sale Agreement will be determined by dividing the total principal\namount of Republic's outstanding Debentures by the average reported closing\nprice for Harken's Common Stock for the 20 trading days ending on the day before\nthe Closing of the Asset Sale Agreement (hereafter the \"Common Stock Value Per\nShare\"). However, under no circumstances shall the Common Stock Value Per Share\nbe less than $1.00.\n\n E. The completion of the sale of the Republic assets to Harken is\ncontingent upon: (i) the approval of the Asset Sale Agreement by stockholders of\nRepublic at a special meeting of stockholders to be called for that purpose, and\n(ii) acceptance of the exchange offer described in this Agreement by the holders\nof substantially all of the outstanding Debentures.\n\n F. The parties intend that this Agreement shall be irrevocable by\nSubscriber unless the Asset Sale Agreement is not closed by at least June 1,\n2002.\n\n G. In addition to the proved oil and gas properties, Republic will also\nconvey to Harken the Company's interest in certain exploratory prospects in\nJackson County, Texas that have not been given any initial value in the\ncontemplated transaction. These exploratory prospects will be evaluated for\nadditional value at the end of 2003 using a \"Lookback\" formula as defined in the\nP&S Agreement, and a future \"Lookback Payment\" may be made in early 2004. The\namount of any \"Lookback Payment\" will be contingent on, among other things,\nfuture exploratory successes in the Jackson County prospects, of which there can\nbe no assurance. In addition, there can be no assurance that the operators of\nthose prospects will actually drill any wells on the prospects by the end of the\nLookback period (which is at the end of 2003) and if so whether Harken will\nagree to participate in exploration of the prospects since it will be under no\nobligation to do so. Accordingly, the amount of any \"Lookback Payment\", if any,\ncannot be reasonablely determined at this time. In any case, Republic\nanticipates that the contingent Lookback Payment ultimately will be assigned to\nthe holders of its Series C Redeemable Preferred Stock in connection with a\nrestructuring of that security. It is expressly understood that neither the\nSubscriber nor any other holder of the Debentures will haveany right, title or\ninterest in the contingent Lookback Payment regardless of its ultimate value, if\nany, and regardless of whether it is ultimately assigned to the Series C\nPreferred stockholders or retained by Republic.\n\n IN CONSIDERATION, of the covenants and agreements of the parties and other\ngood and valuable consideration, the receipt and sufficiency of which is hereby\nacknowledged, the parties agree as follows:\n\n \n 1. Agreement to Exchange. Subscriber hereby agrees to exchange and\nsurrender the Debenture held by Subscriber effective on the day of Closing of\nthe Asset Sale Agreement. In exchange for surrender and cancellation of\nSubscriber's Debenture, Subscriber shall receive the following:\n\n (a) Payment of all unpaid interest on Subscriber's Debenture through\n the date of the Closing, to be paid by Republic at such time as\n Subscriber's Debenture certificate is delivered to Republic for\n cancellation; and\n\n (b) An amount of common stock of Harken determined by dividing the\n principal amount of Subscriber's Debenture by the \"Common Stock\n Value Per Share\" determined as described above. The shares of\n Harken Common Stock shall be issued effective as of the closing\n of the Asset Sale Agreement and shall be delivered to Subscriber\n at such time as Subscriber's Debenture certificate is delivered\n to Republic for cancellation.\n\nRepublic shall pay the interest to Subscriber through the date of the Closing of\nthe Asset Sale Agreement and Subscriber's Debenture shall be deemed surrendered\nand canceled as of such date, subject only to delivery to Subscriber of the\nHarken Common Stock in exchange for surrender of Subscriber's Debenture\ncertificate.\n\n 2. Irrevocable Subscription; Acceptance. Subscriber understands and\nacknowledges that this subscription to exchange Subscriber's Debenture in the\nmanner described in this Agreement is irrevocable by Subscriber unless Republic\nand Harken have not closed the Asset Sale Agreement by June 1, 2002. Acceptance\nof this subscription by Republic and Harken is subject to: (i) approval of the\nAsset Sale Agreement by Republic stockholders, (ii) receipt of Debenture\nExchange Subscriptions from holders of at least 90% of the outstanding principal\namount of Republic's Debentures (provided that Harken and Republic may, in their\ndiscretion, waive this condition), and (iii) Closing of the Asset Sale\nAgreement. Until and unless the foregoing conditions are satisfied, Subscriber's\nDebenture shall continue to earn interest and to represent an obligation of\nRepublic to Subscriber as described in the Debenture.\n\n 3. Acknowledgment of Disclosure. Subscriber acknowledges the receipt of\nHarken's Disclosure Memorandum, dated January 31, 2002, including Harken's\nAnnual Report on Form 10-KSB for the fiscal year ended December 31, 2001, and\nQuarterly Report on Form 10-QSB for the quarter ended September 30, 2001, which\nare the last publicly-filed reports of Harken. Subscriber acknowledges receipt\nfrom Republic of Republic's letter dated January 11, 2002, together with copies\nof Republic's Quarterly Report on Form 10-QSB for the quarter ended September\n30, 2001 and Form 8-K dated February , 2002, the most recent public reports\n --\nfiled by Republic. Subscriber has also been given access to full and complete\ninformation regarding Republic and Harken and has utilized such access to the\nSubscriber's satisfaction for the purpose of obtaining such information\nregarding Republic and Harken as the Subscriber has reasonably requested; and,\nparticularly, Subscriber has been given reasonable opportunity to ask questions\nof, and receive answers from, representatives of Republic and Harken concerning\nthe terms and conditions of the exchange offer described in this Agreement, the\nbusiness and affairs of Republic and of Harken and all additional information\nrequested by Subscriber to the extent it would be reasonably available.\n\n 4. Investment Intent. Subscriber represents and warrants that the common\nstock of Harken which will be issued upon completion fo the exchange described\nin this Agreement will be held for the Subscriber's own account and for\ninvestment purposes only, and without the intention of reselling or\nredistributing the same except as may be effected in compliance with the\nregistration requirements of the Securities Act of 1933, as amended (\"Securities\nAct\"); Subscriber has made no agreement with others regarding any of the\nsecurities to be obtained in the exchange and Subscriber's financial condition\nis such that it is not likely that it will be necessary for Subscriber to\ndispose of any of such securities in the foreseeable future. Subscriber further\nrepresents and agrees that if, contrary to the foregoing intentions, Subscriber\nshould later desire to dispose of or transfer any of the Harken Common Stock\nreceived by Subscriber in the exchange in any manner, Subscriber shall not do so\nunless and until (i) such securities have been registered under the Securities\nAct and all applicable securities laws; or (ii) Subscriber shall first deliver\nto Harken a written notice declaring such holders's intention to effect such\ntransfer and describe in sufficient detail the manner and circumstances of the\nproposed transfer, which notice shall be accompanied either by: (A) written\nopinion of legal counsel who shall be reasonably satisfactory to Harken, which\nopinion shall be addressed to Harken and reasonably satisfactory in form and\nsubstance to Harken's counsel, to the effect that the proposed sale or transfer\nis exempt from the registration provisions of the Securities Act and all\napplicable state securities laws, or (B) a \"no-action letter\" from the\nSecurities and Exchange Commission to the effect that the transfer of the Harken\nCommon Stock without registration would not result in a recommendation by the\nstaff of the Commission that action be taken with respect thereto.\n\n 5. Residence of Subscriber. Subscriber represents and warrants that\nSubscriber is a bona fide resident of, is domiciled in, and received the\nexchange offer and made the decision to exchange securities in the state of\nresidence set out on the signature page of this Agreement.\n\n 6. Subscriber is Accredited Investor. Subscriber acknowledges that at the\ntime the Debenture was initially acquired, and at the time that Republic and\nSubscriber agreed to extend the maturity and otherwise modify the terms of the\nDebentures in March 2001, Subscriber qualified as a Accredited Investor as\ndescribed in Rule 501 of Regulation D adopted by the United States Securities\nand Exchange Commission under the Securities Act. Subscriber represents to\nRepublic and Harken that as of the date of this Agreement set forth on the\nsignature page below, Subscriber continues to qualify as an Accredited Investor.\n\n 2\n\n \n 7. Acknowledgment of Certain Risks. Subscriber acknowledges that upon\nClosing of the Asset Sale Agreement, Subscriber shall have exchanged the\nRepublic Debenture now held, a debt security of Republic, for Harken Common\nStock, an equity security in a different entity. Following the exchange Republic\nshall have no obligation to Subscriber and Subscriber will, instead, hold an\nequity investment in Harken with no assurance that he will be able to liquidate\nthe investment and no right to receive the existing principal amount of the\nDebenture. Subscriber acknowledges that holding the Harken Common Stock involves\ncertain risks, some of which are summarized or referred to in the Harken\nDisclosure Memorandum. Likewise, Subscriber acknowledges that continuing to hold\nthe Republic Debenture would involve risk to Subscriber and other holders of the\nDebentures, some of which are summarized in the information furnished to\nSubscriber as summarized or described above. Subscriber is accepting the\nexchange offer described in this Agreement notwithstanding such risks.\n\n 8. No Tax Advice. Subscriber acknowledges that an exchange of Subscriber's\nDebenture for Harken Common Stock as described in this Agreement is likely to be\ndeemed to be a taxable transaction to Subscriber. Subscriber is likely to have\ntaxable gain or loss equal to the difference between Subscriber's tax basis in\nthe Debenture and the fair market value of the Harken Common Stock to be\nreceived in the exchange. While it is expected that the fair market value of the\nHarken Common Stock is likely to be approximately equal to the principal balance\nof the Debenture, Republic and Harken have made no representations to Subscriber\nas to the tax implications to Subscriber from the exchange described in this\nAgreement and Subscriber has been advised to seek his own tax counsel regarding\nthe exchange. Subscriber has received, from Subscriber's own tax or other\nadvisors, all information Subscriber requires concerning the tax consequences of\nthe exchange described in this Agreement and has not, and does not, rely upon\nRepublic or Harken with respect to tax implications of the exchange.\n\n 9. No Transfer or Assignment. Neither this Agreement nor any of the rights\nof Subscriber, Republic or Harken may be transferred or assigned by any party.\nThis Agreement shall survive the death or disability of Subscriber and shall be\nbinding upon Subscriber's heirs, executors, administrators, successors and\nattempted assigns.\n\n 10. Arbitration of Disputes. In the event that a dispute arises between\nSubscriber and Republic or Harken arising out of or in connection with exchange\nby Subscriber of the Debenture for Harken Common Stock, Subscriber, Republic and\nHarken hereby expressly agree that such dispute shall be resolved through\narbitration rather than litigation. The undersigned hereby agrees to submit the\ndispute to binding arbitration through the American Arbitration Association\n(\"AAA\") in Denver, Colorado, to be conducted in accordance with the rules of\ncommercial arbitration adopted by AAA. Such a dispute shall be submitted to\narbitration by any party by filing a written request for arbitration with AAA.\nSubscriber, Republic and Harken agree that the Federal Arbitration Act shall\ngovern the disposition of all issues raised in the arbitration proceeding. A\ndecision in the arbitration proceeding shall be final and binding on the\nparties.\n\n 11. Notices. All notices or other communications required under this\nAgreement shall be in writing and shall be deemed to have been duly given if\ndelivered personally or mailed by certified or registered mail, return receipt\nrequested, postage prepaid as follows: if to Subscriber, to the address set\nforth on the signature page to this Agreement; and if to Republic or Harken to\ntheir address as set forth in the Harken Disclosure Memorandum.\n\n [The balance of this page is blank]\n\n 3\n\n \n SIGNATURE PAGE TO\n DEBENTURE EXCHANGE SUBSCRIPTION AGREEMENT\n -----------------------------------------\n\n By signing this Agreement in the place indicated below, Subscriber\nrepresents to Republic and Harken that Subscriber has read this entire\nAgreement, that the information set forth below is accurate, and that Subscriber\nagrees to exchange his or her Debenture for Harken Common Stock as described in\nthis Agreement.\n\n INDIVIDUAL\n ----------\n<\/pre>\n
\n <\/p>\n—————————————– Address to Which Correspondence
\nName of Registered Owner of Should be Directed
\nDebenture (“Subscriber”)
\n ——————————————-<\/p>\n
——————————————-<\/p>\n
—————————————– ——————————————-
\nSignature (Individual) City, State, and Zip Code<\/p>\n
—————————————– ——————————————–
\nSignature (Second Signature if Joint Owner) Tax Identification or Social Security Number<\/p>\n
—————————————– ——————————————–
\nName Typed or Printed Second Name Type or Printed<\/p>\n
( ) ( )
\n—————————————– ——————————————–
\nFax Number Telephone Number<\/p>\n
$
\n—————————————– ——————————————-
\nDate Principal Amount of Debenture
\n<\/c><\/s><\/table>\n
ACCEPTANCE
\n ———-<\/p>\n
This Debenture Exchange Subscription Agreement is accepted as of
\n ———–
\n, 2002 (the date of Closing of the Purchase and Sale Agreement dated
\nJanuary 31, 2002).<\/p>\n
REPUBLIC RESOURCES, INC. HARKEN ENERGY CORPORATION<\/p>\n
By By
\n —————————— ———————————
\n Patrick J. Duncan, President Bruce N. Huff, President<\/p>\n
4<\/p>\n
SIGNATURES
\n ———-<\/p>\n
By signing this Agreement in the place indicated below, Subscriber
\nrepresents to Republic and Harken that Subscriber has read this entire
\nAgreement, that the information set forth below is accurate, and that Subscriber
\nagrees to exchange his or her Debenture for Harken Common Stock as described in
\nthis Agreement.<\/p>\n
CORPORATION, PARTNERSHIP, TRUST OR OTHER ENTITY
\n ———————————————–<\/p>\n
\n <\/p>\n Address to Which Correspondence
\n—————————————– Should be Directed
\nName of Registered Owner of
\nDebenture (“Subscriber”)
\n ——————————————-<\/p>\n
——————————————-<\/p>\n
—————————————– ——————————————-
\nSignature (Individual) City, State, and Zip Code<\/p>\n
—————————————– ——————————————–
\nSignature (Second Signature if Joint Owner) Tax Identification or Social Security Number
\n—————————————– ——————————————–
\nName Typed or Printed Second Name Type or Printed<\/p>\n
( ) ( )
\n—————————————– ——————————————–
\nFax Number Telephone Number<\/p>\n
$
\n—————————————– ——————————————-
\nDate Principal Amount of Debenture
\n<\/c><\/s><\/table>\n
*The Certificate of Signatory must also be completed.<\/p>\n
CERTIFICATE OF SIGNATORY
\n ————————
\n To be completed if the Debentures are owned by an entity
\n ——————————————————–<\/p>\n
I, , am the of
\n ————————————– ——————
\n [Name printed]
\n (the “Entity”)
\n——————————————————————<\/p>\n
I certify that I am empowered and duly authorized by the Entity to execute
\nanc carry out the terms of this Agreement and to exchange the Debentures as
\ndescribed in this Agreement, and certify that this Agreement has been duly and
\nvalidly executed on behalf of the Entity and constitutes a legal and binding
\nobligation of the Entity.<\/p>\n
IN WITNESS WHEREOF, I have hereto set my hand this day of
\n —–
\n , 200 .
\n——– —<\/p>\n
——————————————–
\n Signature<\/p>\n
ACCEPTANCE
\n ———-<\/p>\n
This Debenture Exchange Subscription Agreement is accepted as of
\n , 2002 (the date of Closing of the Purchase and Sale Agreement dated
\n———–
\nJanuary 31, 2002).<\/p>\n
REPUBLIC RESOURCES, INC. HARKEN ENERGY CORPORATION<\/p>\n
By By
\n ———————————— ——————————–
\n Patrick J. Duncan, President Bruce N. Huff, President<\/p>\n
5<\/p>\n
EXHIBIT G
\n ———<\/p>\n
REGISTRATION RIGHTS AGREEMENT<\/p>\n
THIS REGISTRATION RIGHTS AGREEMENT (“Agreement”) is made and entered into as of
\nthe day of , 2002, by and among Harken Energy Corporation, a
\n —- ————–
\nDelaware corporation (“Harken”), and Republic Resources, Inc., a Nevada
\ncorporation (“Republic”).<\/p>\n
RECITALS:
\n ———<\/p>\n
A. Reference is hereby made to that certain Purchase and Sale Agreement dated
\n as of the date hereof (the “Purchase Agreement”) by and among Harken and
\n Republic pursuant to which Republic will upon Closing, receive a certain
\n number of Shares of Harken Common Stock, which Shares are the subject of
\n this Agreement.<\/p>\n
B. Pursuant to the terms of the Agreement, Harken has agree to provide
\n Republic and the holders of the Registrable Securities (as defined herein)
\n with the registration rights set forth herein.<\/p>\n
AGREEMENT:
\n ———-<\/p>\n
NOW, THEREFORE, for and in consideration of the foregoing Recitals and the
\nmutual agreements contained herein, the sufficiency of which is hereby
\nacknowledged and confirmed, the parties hereto, intending to be legally bound,
\nagree as follows:<\/p>\n
Section 1. Definitions and References.
\n ————————–<\/p>\n
(1) When used in this Agreement, the following terms shall have the respective
\n meanings assigned to them in this Section 1 or in the Sections referred to
\n below:<\/p>\n
“Agreement” shall mean this Registration Rights Agreement, as
\n hereafter amended or modified in accordance with the terms hereof.<\/p>\n
“Commission” shall mean the Securities and Exchange Commission (or any
\n successor body thereto).<\/p>\n
“Common Stock” shall mean the common stock, par value $0.01 per share,
\n of Harken.<\/p>\n
“Purchase Agreement” shall mean the Purchase and Sale Agreement dated
\n as of the date hereof between Harken and Republic.<\/p>\n
“Exchange Act” shall mean the Securities Exchange Act of 1934, as
\n amended, and all rules and regulations promulgated under such Act.<\/p>\n
“Harken” shall have the meaning assigned to it in the preamble to this
\n Agreement.<\/p>\n
“Harken Indemnified Parties” shall have the meaning assigned to it in
\n Section 5(b).<\/p>\n
“Holder” shall mean any Person that holds Registrable Securities.<\/p>\n
“Holder Indemnified Parties” shall have the meaning assigned to it in
\n Section 5(a).<\/p>\n
“Republic” shall have the meaning assigned to it in the preamble to
\n this Agreement.<\/p>\n
“Person” shall mean any individual, corporation, partnership, joint
\n venture, limited partnership, limited liability company, trust,
\n unincorporated organization, government or any agency or political
\n subdivision thereof or other entity.<\/p>\n
“Prospectus” shall mean the prospectus included in any Registration
\n Statement (including, without limitation, a prospectus that discloses
\n information previously omitted from a prospectus filed as part of an
\n effective registration statement in reliance upon Rule 430A
\n promulgated pursuant to the Securities Act), as amended or
\n supplemented by any prospectus supplement, with respect to the terms
\n of the offering of any portion of the Registrable Securities covered
\n by such Registration Statement, and all other amendments and
\n supplements to any such prospectus, including post-effective
\n amendments, and all material incorporated by reference or deemed to be
\n incorporated by reference, if any, in such prospectus.<\/p>\n
“Registrable Securities” shall mean the Shares issued to Republic
\n under the Purchase Agreement or pursuant to that certain Contingent
\n Payment Agreement attached as EXHIBIT D to the Purchase Agreement.
\n ———<\/p>\n
“Registration Expenses” shall mean all fees and expenses incident to
\n Harken’s performance of or compliance with the registration rights
\n granted hereunder, including (without limitation) all registration and
\n filing fees, fees and expenses of compliance with securities and blue
\n sky laws, printing and engraving expenses, messenger, telephone and
\n delivery expenses, fees and disbursements of counsel for Harken, and
\n fees and disbursements of all independent certified public accountants
\n and underwriters (excluding discounts and commissions); provided,
\n however, that Registration Expenses shall not include any Selling
\n Expenses.<\/p>\n
“Registration Statement” shall mean any registration statement of
\n Harken that covers any of the Registrable Securities pursuant to this
\n Agreement, including the Prospectus, amendments and supplements to
\n such registration statement or Prospectus, including pre- and
\n post-effective amendments, all exhibits thereto, and all material
\n incorporated by reference or deemed to be incorporated by reference,
\n if any, in such registration statement.<\/p>\n
“Securities Act” shall mean the Securities Act of 1933, as amended,
\n and all rules and regulations promulgated under such Act.<\/p>\n
“Selling Expenses” shall mean underwriting discounts or commissions,
\n any selling commissions and stock transfer taxes attributable to sales
\n of Registrable Securities and the fees and expenses of counsel for any
\n Holder.<\/p>\n
(2) All references in this Agreement to sections, subsection and other
\n subdivisions refer to corresponding sections, subsections and other
\n subdivisions of this Agreement unless expressly provided otherwise. Titles
\n appearing at the beginning of any such subdivisions are for convenience
\n only and shall not constitute part of such subdivisions and shall be
\n disregarded in construing the language contained herein. The words “this
\n Agreement”, “this instrument”, “herein”, “hereof”, “hereby”, “hereunder”
\n and words of similar import refer to this Agreement as a whole and not to
\n any particular subdivision unless expressly so limited. Words in the
\n singular form shall be construed to include the plural and vice versa,
\n ———-
\n unless the context otherwise requires.<\/p>\n
Section 2. Registration Shares.
\n ——————-<\/p>\n
Harken shall prepare and file with the Commission as soon as reasonably
\npracticable and in any event no later than sixty (60) days after Closing the
\nPurchase Agreement and the issuance contemplated thereunder to Republic of the
\nShares, a registration statement on Form S-3 or other appropriate form pursuant
\nto Rule 415 under the Securities Act covering the sale by Republic of such
\nRegistrable Securities. Harken shall use its reasonable best efforts to cause
\neach such Registration Statement to be declared effective as soon as reasonably
\npracticable after the filing thereof and to keep each such Registration
\nStatement effective for no less than the later of 365 days or the expiration of
\nthe Selling Period (as defined in the Exchange Agreement) applicable to the
\nRegistrable Securities covered thereby.<\/p>\n
Section 3. Registration Procedures.
\n ———————–<\/p>\n
(a) In connection with Harken’s registration obligations hereunder, Harken
\n will use its reasonable best efforts to effect the registration of the
\n Registrable Securities in accordance with the intended methods of
\n disposition thereof as quickly as practicable, and pursuant thereto
\n Harken will a expeditiously as possible:<\/p>\n
(1) prepare and file with the Commission not later than the time
\n specified in this Agreement, a Registration Statement on the
\n appropriate form with respect to the Registrable Securities and
\n use its reasonable best efforts to cause such Registration
\n Statement to become effective as soon as reasonably practicabl
\n after the filing thereof (provided, that before filing a
\n Registration Statement or Prospectus or any amendments or
\n supplements thereto, Harke will furnish copies of all such
\n documents proposed to be file to all Holders of Registrable
\n Securities covered by such Registration Statement);<\/p>\n
2<\/p>\n
(2) prepare and file with the Commission such amendments an
\n supplements to such Registration Statement and the Prospectus
\n used in connection therewith as may be necessary to keep such
\n Registration Statement effective for a period of not less than
\n the period set fort in this Agreement or such shorter period
\n which will terminate when all Registrable Securities covered by
\n such Registration Statement have been sold (but not before the
\n expiration of the applicable Prospectus deliver period) and
\n comply with the provisions of the Securities Act with respect to
\n the disposition of all Registrabl Securities covered by such
\n Registration Statement during such period in accordance with the
\n intended methods of disposition by the Holders thereof set forth
\n in such Registration Statement:<\/p>\n
(3) furnish to each Holder of Registrable Securities such number of
\n copies of such Registration Statement, each amendment and
\n supplement thereto, the Prospectus included in such Registration
\n Statement (including, without limitation, each preliminary
\n prospectus) and such other documents as such Holde may reasonably
\n request in order to facilitate the disposition of the Registrable
\n Securities owned by such Holder.<\/p>\n
(4) use its reasonable best efforts to register or qualif such
\n Registrable Securities under such other securities or blue sky
\n laws of such jurisdictions within the United States as any Holder
\n reasonably requests and do an and all other acts and things which
\n may be reasonably necessary or advisable to enable such Holder to
\n consummate the disposition in such jurisdictions of the
\n Registrable Securities owned by such Holder (provided that Harken
\n will not be required to qualify generally to do business or
\n subject itself to any general service of process in any
\n jurisdiction where it is otherwise not the so subject);<\/p>\n
(5) notify each Holder of such Registrable Securities, at an time
\n when a Prospectus relating thereto is required to be delivered
\n under the Securitie Act, of the happening of any event which
\n requires the making of any change in the Prospectus included in
\n such Registration Statement so that such document will not
\n contain an untrue statement of a materia fact or omit to state
\n any material fact required to be stated therein or necessary to
\n make the statements therein not misleading, and, at the request
\n of any such Holder, Harken will prepare a supplement or amendment
\n to such Prospectus so that such Prospectus will not contain a
\n untrue statement of a materia fact or omit to state any material
\n fact required to be stated therein or necessary to make the
\n statements therein not misleading;<\/p>\n
(6) use its reasonable best efforts to cause all such Registrable
\n Securities to be listed on each securities exchange or exchanges,
\n automated quotatio system or over-the-counter market upon which
\n securities of Harken of the same class are then listed;<\/p>\n
(7) enter into such customary agreements (including, withou
\n limitation, underwriting agreements in customary form, substance
\n and scope) and take all such other actions as the Holders of a
\n majority of the Registrable Securities being sold or the
\n underwriters, if any, reasonably request in order to expedite or
\n facilitate the disposition of such Registrable Securities;<\/p>\n
(8) otherwise use its reasonable best efforts to comply with all
\n applicable rules and regulations of the Commission, and make
\n generally available to its security holders an earnings statement
\n no later than ninety (90) day after the end of the 12-month
\n period beginning with the first day of Harken’s first full
\n calendar quarter after the effective date of the Registration
\n Statement, which earnings statement shall satisfy the provisions
\n of Section 11(a) o the Securities Act and Rule 158 thereunder;<\/p>\n
(9) in the event of the issuance or threatened issuance of any stop
\n order suspending the effectiveness of a Registration Statement,
\n or an order suspending or preventin the use of any related
\n Prospectus or suspending the qualification of any Registrable
\n Securities included in such Registration Statemen for sale in any
\n jurisdiction, promptly notify each Holder o Registrable
\n Securities of the issuance or threatened issuance of such order
\n and us its reasonable best efforts promptly to prevent the entry
\n of such order or obtain the withdrawal of such order if issued;<\/p>\n
(10) use its reasonable best efforts to cause such Registrable
\n Securities covere by such Registration Statement to be registered
\n with or approved by such other governmental agencies or
\n authorities as may be necessary to enable the Holders thereof to
\n consummate the disposition of such Registrable Securities;<\/p>\n
3<\/p>\n
(11) make available at all reasonable times and in a reasonable manner
\n for inspection by any Holder of Registrable Securities, any
\n underwriter participating in any disposition pursuant to such
\n Registration Statement, and any attorney, accountant or other
\n agent retained by an such Holder or underwriter (collectively,
\n the “Inspecto”, all fi records, corporate documents and
\n properties of Harken (collectively, the “Records”) and cause the
\n officers, directors and employees of Harken to supply all
\n information reasonably requested by any such Inspector in
\n connection with such Registration Statement prior to its
\n effectiveness, in each case to the extent that such Records and
\n information are pertinent to the information disclosed in the
\n Registration Statement; provided, that eac such Inspector shall
\n execute and deliver to Harken a Confidentiality Agreement in the
\n form attached hereto as EXHIBIT A. Records which Harken
\n ———
\n determines, in good faith, to be confidential and which Harken
\n notifies the Inspectors are confidential shall not be disclosed
\n by the Inspectors unless (i) the disclosure of such Records is
\n necessary to avoid or correct a misstatement or omission in the
\n Registration Statement or (ii the release of such Records i
\n ordered pursuant to a subpoen or other order from a court of
\n competent jurisdiction; each Holder of Registrable Securities
\n agrees that it will, upon learning that disclosure of such
\n Records is sought in a court of competent jurisdiction, give
\n notice to Harken and allow Harken, at Harken’s expense, to
\n undertake appropriate action to prevent disclosure of the Records
\n deemed confidential; and<\/p>\n
(12) use its reasonable best efforts to obtain, if require by said
\n underwriters in connection with an underwritten offering, a
\n comfort letter from Harken’s independent public accountant in
\n customary form and covering such matters of the type customarily
\n covered by comfor letters with respect to offerings of the type
\n being made pursuant to the Registration Statement as the Holders
\n of the Registrable Securities reasonably request<\/p>\n
(b) In connection with each Registration Statement, Republic agrees and
\n each Holder of Registrable Securities (including Registrable
\n Securities in any Registration Statement filed pursuant to this
\n Agreement) will be deemed to have agreed, as follows:<\/p>\n
(1) upon receipt of any notice from Harken of the happening of any
\n event of the kind described in Section 3(a)(5) or the issuance of
\n any order of the kind described in Section 3(a 9), the Holders of
\n Registrable Securities covered by such Registration Statement
\n will forthwith discontinue disposition of such Registrable
\n Securities until the Holders of Registrable Securities receive
\n copies of the supplemented or amended Prospectus contemplated by
\n Section 3(a)(5), or until the are advised in writing by Harken
\n that the use of the applicable Prospectus may be resumed, an they
\n have received copies of any additional or supplementa filings
\n that are incorporated or deemed to be incorporated by reference
\n in such Prospectus (it being the agreement of the parties hereto,
\n however, that the obligation of Harken with respect to
\n maintaining the subject Registration Statement curren and
\n effective, and the Sellin Period (as defined in the Exchange
\n Agreement) with respect to such Registrable Securities, shall be
\n extended by a number of trading days equal to the period the
\n Holders of Registrable Securities are required by this Section
\n 3(b)(1) to discontinue disposition of such Registrable
\n Securities; and<\/p>\n
(2) furnish to Harken such information regarding each Holder, the
\n Registrable Securities held by such Holder and the intended
\n method of disposition thereof as Harken shall reasonably request
\n and as shall be reasonably required in connection with the
\n preparation of the applicable Registration Statement and other
\n actions taken by Harken under this Agreement, and it shall be a
\n condition precedent to the obligation of Harken to take any
\n action pursuant to this Agreement in respect of the Registrable
\n Securities that such information has been furnished to Harken by
\n the Holders of Registrable Securities.<\/p>\n
Section 4. Expenses. Harken shall pay all Registration Expenses whether or not
\n ——–
\nany Registration Statement is filed or becomes effective and whether or not any
\nsecurities are sold pursuant to any Registration Statement and, in any event,
\nshall pay its internal expenses (including, without limitation, all salaries and
\nexpenses of its officers and employees performing legal and accounting duties),
\nthe expense of any annual audit and the fees and expenses incurred in connection
\nwith the listing of the securities to be registered on each securities exchange
\non which similar securities of Harken are then listed. All Selling Expenses
\nincurred in connection with a registration effected pursuant to the terms hereof
\nshall be borne by the seller or sellers of Registrable Securities pro rata based
\nupon the number of Registrable Securities included in such registration.<\/p>\n
4<\/p>\n
Section 5. Indemnification.
\n —————<\/p>\n
(a) Harken shall indemnify and hold harmless, with respect to any and all
\n Registration Statements, each Holder of Registrable Securities covered
\n by such Registration Statement, and each other Person, if any, who
\n controls such Holder within the meaning of Section 15 of the
\n Securities Act (collectively, “Holder Indemnified Parties”), against
\n all losses, claims, damages, liabilities and expenses, joint or
\n several, to which any such Holder Indemnified Party may become subject
\n under the Securities Act, the Exchange Act, at common law or
\n otherwise, insofar as such losses, claims, damages, liabilities or
\n expenses (or actions or proceedings, whether commenced or threatened,
\n in respect thereof) arise out of or are based upon (i) any untrue
\n statement or alleged untrue statement of a material fact contained in
\n any Registration Statement in which such Registrable Securities were
\n included or any omission or alleged omission to state therein a
\n material fact required to be stated therein or necessary to make the
\n statements therein not misleading, (ii) any untrue statement or
\n alleged untrue statement of a material fact contained in any
\n preliminary, final or summary Prospectus, together with the documents
\n incorporated by reference therein (as amended or supplemented if
\n Harken shall have filed with the Commission any amendment thereof or
\n supplement thereto), or any omission or alleged omission to state
\n therein a material fact required to be stated therein or necessary in
\n order to make the statements therein, in the light of the
\n circumstances under which they were made, not misleading, or (iii) any
\n violation by Harken of any federal, state or common law rule or
\n regulation applicable to Harken and relating to action of or inaction
\n by Harken in connection with any such registration; and in each such
\n case, Harken shall reimburse each such Holder Indemnified Party for
\n any reasonable legal or other expenses incurred by any of them in
\n connection with investigating or defending any such loss, claim,
\n damage, liability, expense, action or proceeding; provided, however,
\n that Harken shall not be liable to any such Holder Indemnified Party
\n in any such case to the extent that any such loss, claim, damage,
\n liability or expense (or action or proceeding, whether commenced or
\n threatened, in respect thereof) arises out of or is based upon any
\n untrue statement or alleged untrue statement or omission or alleged
\n omission made in such Registration Statement or amendment thereof or
\n supplement thereto or in any such preliminary, final or summary
\n Prospectus in reliance upon and in conformity with written information
\n furnished to Harken by or on behalf of any such Holder Indemnified
\n Party for use in the preparation thereof. Such indemnity and
\n reimbursement of expenses and other obligations shall remain in full
\n force and effect regardless of any investigation made by or on behalf
\n of the Holder Indemnified Parties and shall survive the transfer of
\n such securities by such Holder Indemnified Parties.<\/p>\n
(b) Each Holder of Registrable Securities participating in any
\n registration hereunder shall severally (and not jointly or jointly and
\n severally) indemnify and hold harmless Harken, its directors,
\n officers, employees and agents, and each Person who controls Harken
\n (within the meaning of Section 15 of the Securities Act)
\n (collectively, “Harken Indemnified Parties”) against all losses,
\n claims, damages, liabilities and expenses to which any Harken
\n Indemnified Party may become subject under the Securities Act, the
\n Exchange Act, at common law or otherwise, insofar as such losses,
\n claims, damages, liabilities or expenses (or actions or proceedings,
\n whether commenced or threatened, in respect thereof) arise out of or
\n are based upon (i) any untrue statement or alleged untrue statement of
\n a material fact contained in any Registration Statement in which such
\n Holder’s Registrable Securities were included or the omission or
\n alleged omission to state therein a material fact required to be
\n stated therein or necessary to make the statements therein not
\n misleading, (ii) any untrue statement or alleged untrue statement of a
\n material fact contained in any preliminary, final or summary
\n Prospectus, together with the documents incorporated by reference
\n therein ( as amended or supplemented if Harken shall have filed with
\n the Commission any amendment thereof or supplement thereto), or the
\n omission or alleged omission to state therein a material fact required
\n to be stated therein or necessary in order to make the statements
\n therein, in the light of the circumstances under which they were made,
\n not misleading, to the extent, in the cases described in clauses (i)
\n and (ii), that such untrue statement or omission was furnished in
\n writing by such Holder for use in the preparation thereof, or (iii)
\n any violation by such Holder of any federal, state or common law rule
\n or regulation applicable to such Holder and relating to action of or
\n inaction by such Holder in connection with any such registration. Such
\n indemnity obligation shall remain in full force and effect regardless
\n of any investigation made by or on behalf of the Harken Indemnified
\n Parties (except as provided above) and shall survive the transfer of
\n such securities by such Holder.<\/p>\n
(c) Promptly after receipt by an indemnified party under subsection 5(a)
\n or (b) of written notice of the commencement of any action, suit,
\n proceeding, investigation or threat thereof made in writing with
\n respect to which a claim for indemnification may be made pursuant to
\n this Section 5, such indemnified party shall, if a claim in respect
\n thereof is to be made against an indemnifying party, give written
\n notice to the indemnifying party of the threat or commencement
\n thereof; provided, however, that the failure to so notify the
\n indemnifying party shall not relieve it from any liability which it
\n may have to any indemnified party except to the extent that the
\n indemnifying party is actually prejudiced by such failure to give
\n notice. If any such claim or action referred to under subsection (a)
\n or (b) is brought against any indemnified party and it then notifies
\n the indemnifying party of the threat or commencement thereof, the
\n indemnifying party shall be entitled to participate therein and, to
\n the extent that it wishes, jointly with any other indemnifying party
\n similarly notified, to assume the defense thereof with counsel
\n reasonably satisfactory to such indemnified party. After notice from
\n the indemnifying party to such indemnified party of its election so to
\n assume the defense of any such claim or action, the indemnifying party
\n shall not be liable to such indemnified party under this Section 5 for
\n any legal expenses of counsel or any other expenses subsequently
\n incurred by such indemnified party in connection with the defense
\n thereof other than reasonable costs of investigation unless the
\n indemnifying party has failed to assume the defense of such claim or
\n action or to employ counsel reasonably satisfactory to such
\n indemnified party. Under no circumstances will the indemnifying party
\n be obligated to pay the fees and expenses of more than one law firm
\n for all indemnified parties. The indemnifying party shall not be
\n required to indemnify the indemnified party with respect to any
\n amounts paid in settlement of any action, proceeding or investigation
\n entered into without the written consent of the indemnifying party,
\n which consent shall not be unreasonably withheld. No indemnifying
\n party shall consent to the entry of any judgment or enter into any
\n settlement without the consent of the indemnified party unless (i)
\n such judgment or settlement does not impose any obligation or
\n liability upon the indemnified party other than the execution,
\n delivery or approval thereof, and (ii) such judgment or settlement
\n includes as an unconditional term thereof the giving by the claimant
\n or plaintiff to such indemnified party of a full release and discharge
\n from all liability in respect of such claim for all persons that may
\n be entitled to or obligated to provide indemnification or contribution
\n under this Section 5.<\/p>\n
5<\/p>\n
(d) Indemnification similar to that specified in the preceding subsections
\n of this Section 5 (with appropriate modifications) is hereby given by
\n Harken and each Holder of Registrable Securities with respect to any
\n required registration or qualification of securities under any state
\n securities or blue sky laws.<\/p>\n
(e) If the indemnification provided for in this Section 5 is unavailable
\n to or insufficient to hold harmless an indemnified party under
\n subsection (a) or (b), then each indemnifying party shall contribute
\n to the amount paid or payable by such indemnified party as a result of
\n the losses, claims, damages, liabilities or expenses (or actions or
\n proceedings in respect thereof) referred to in subsection (a) or (b)
\n in such proportion as is appropriate to reflect the relative fault of
\n the indemnifying party on the one hand and the indemnified party on
\n the other in connection with the statements, omissions, actions or
\n inactions which resulted in such losses, claims, damages, liabilities
\n or expenses as well as any other relevant equitable considerations.
\n The relative fault of the indemnifying party and the indemnified party
\n shall be determined by reference to, among other things, whether the
\n untrue or alleged untrue statement of a material fact or the omission
\n or alleged omission to state a material fact relates to information
\n supplied by the indemnifying party or the indemnified party, any
\n action or inaction by any such party, and the parties’ relative
\n intent, knowledge, access to information and opportunity to correct or
\n prevent such statement, omission, action or inaction. The amount paid
\n or payable by an indemnified party as a result of the losses, claims,
\n damages, liabilities or expenses (or actions or proceedings in respect
\n thereof) pursuant to this subsection (e) shall be deemed to include,
\n without limitation, any reasonable legal or other expenses incurred by
\n such indemnified party in connection with investigating or defending
\n any such action or claim (which shall be limited as provided in
\n subsection (c) if the indemnifying party has assumed the defense of
\n any such action in accordance with the provisions thereof) which is
\n the subject of this subsection (e). No person guilty of fraudulent
\n misrepresentation (within the meaning of Section 11(f) of the
\n Securities Act) shall be entitled to contribution from any person who
\n was not guilty of such fraudulent misrepresentation. Promptly after
\n receipt by an indemnified party under this subsection (e) of written
\n notice of the commencement of any action, suit, proceeding,
\n investigation or threat thereof made in writing with respect to which
\n a claim for contribution may be made against an indemnifying party
\n under this subsection (e), such indemnified party shall, if a claim
\n for contribution in respect thereof is to be made against an
\n indemnifying party, give written notice to the indemnifying party in
\n writing of the commencement thereof (if the notice specified in
\n subsection (c) has not been given with respect to such action);
\n provided, however, that the failure to so notify the indemnifying
\n party shall not relieve it from any obligation to provide contribution
\n which it may have to any indemnified party under this subsection (e)
\n except to the extent that the indemnifying party is actually
\n prejudiced by the failure to give notice.<\/p>\n
The parties hereto agree that it would not be just and equitable if
\n contribution pursuant to this paragraph were determined by pro rata
\n allocation or by any other method of allocation which does not take
\n account the equitable considerations referred to in the immediately
\n preceding paragraph.<\/p>\n
6<\/p>\n
If indemnification is available under Section 5, the indemnifying
\n parties shall indemnify each indemnified party to the fullest extent
\n provided in subsections (a) or (b), without regard to the relative
\n fault of said indemnifying party or any other equitable consideration
\n provided for in this paragraph. The provisions of this paragraph
\n shall be in addition to any other rights to indemnification or
\n contribution which any indemnified party may have pursuant to law or
\n contract, shall remain in full force and effect regardless of any
\n investigation made by or on behalf of any indemnified party, and
\n shall survive the transfer of securities by any such party.<\/p>\n
(f) In connection with any underwritten offering contemplated by this
\n Agreement which includes Registrable Securities, Harken and all
\n Holders of Registrable Securities included in any Registration
\n Statement shall agree to customary provisions for indemnification and
\n contribution (consistent with the other provisions of this Section 5)
\n in respect of losses, claims, damages, liabilities and expenses of the
\n underwriters of such offering.<\/p>\n
(g) The indemnification obligations hereunder with respect to any
\n Registration Statement shall terminate three (3) years after the
\n termination of the offering of Registrable Securities covered by such
\n Registration Statement.<\/p>\n
Section 6. Selection of Underwriters. The Holders of Registrable Securities
\n ————————-
\nshall have the right to elect that the offering of Registrable Securities
\npursuant to a Registration Statement filed under this Agreement be in the form
\nof an underwritten offering or a best efforts offering. If any registration
\nhereunder is an underwritten offering or a best efforts offering, the investment
\nbanker or investment bankers and manager or managers that will administer the
\noffering shall be selected by Harken; provided, that such investment bankers and
\nmanagers must be reasonably satisfactory to the Holders of a majority of the
\nRegistrable Securities to be registered in such registration.<\/p>\n
Section 7. Rule 144. Harken covenants to each Holder that, to the extent that
\n ——–
\nHarken shall be required to do so under the Exchange Act, Harken shall (a)
\ntimely file the reports required to be filed by it under the Exchange Act or the
\nSecurities Act (including, but not limited to, the reports under Sections 13 and
\n15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted
\nby the Commission under the Securities Act) and the rules and regulations
\nadopted by the Commission thereunder, and (b) take such further action as any
\nHolder may reasonably request, all to the extent required from time to time to
\nenable such Holder to sell Registrable Securities without registration under the
\nSecurities Act within the limitations of the exemption provided by Rule 144
\nunder the Securities Act, as such Rule may be amended from time to time, or any
\nsimilar rule or regulation hereafter adopted by the Commission. Upon the request
\nof any Holder, Harken shall deliver to such Holder a written statement as to
\nwhether it has complied with such requirements.<\/p>\n
Section 8. Transferability. Republic may transfer any or all of the Registrable
\n —————
\nSecurities issued under the Purchase Agreement to other parties who are Holders
\nof Republic’s outstanding Debentures (“Debenture Holder”), and Republic may
\ntransfer any or all of the Registrable Securities issued under the Contingent
\nPayment Agreement (attached as EXHIBIT D to the Purchase Agreement) to the
\n ———
\nholders of Republic’s Series C Redeemable Preferred Stock (the “Preferred
\nHolders”), provided such Debenture Holder or Preferred Holder, as the case may
\nbe, first provides to Harken written representation that such party constitutes
\nan Accredited Investor as such term is defined in the Securities Act. To the
\nextent Republic does transfer any or all of the Registrable Securities to one or
\nmore Debenture Holders or Preferred Holders in accordance with this Section 8,
\nthen such Debenture Holders or Preferred Holders shall accrue the rights,
\nbenefits and obligations of this Agreement to the same extent as if they had
\noriginally been signature parties hereto.<\/p>\n
Republic agrees and warrants to Harken that any and all transfers of Registrable
\nSecurities to Debenture Holders and Preferred Holders will be expressly made
\nsubject to the terms of this Agreement.<\/p>\n
Transfers of any or all of the Registrable Securities except to Debenture
\nHolders or Preferred Holders as provided in this Section 8, or under an
\neffective registration as provided under this Agreement, may only be made with
\nHarken’s prior written consent, for which consent Harken my require
\nrepresentations, indemnifications and warranties regarding the proposed party to
\nwhom such transfer is requested.<\/p>\n
Section 9. Miscellaneous.
\n ————-<\/p>\n
(1) >From and after the date of this Agreement, Harken will not, without
\n the prior written consent of the Holders of a majority of the
\n Registrable Securities then outstanding, enter into any agreement with
\n respect to its securities which is inconsistent with or violates the
\n rights granted to the Holders of Registrable Securities in this
\n Agreement.<\/p>\n
7<\/p>\n
(2) Investors agree, and each other Holder of Registrable Securities
\n (including Registrable Securities in any Registration Statement filed
\n pursuant to this Agreement) will be deemed to have agreed, as follows:<\/p>\n
(1) if any Registrable Securities are being registered in any
\n registration pursuant to this Agreement, the Holder thereof will
\n comply with all anti-stabilization, manipulation and similar
\n provisions of Section 10 of the Exchange Act, and any rules
\n promulgated thereunder by the Commission, and, at the request of
\n Harken, will execute and deliver to Harken and to any underwriter
\n participating in such offering, an appropriate agreement to such
\n effect; and<\/p>\n
(2) at the end of any period during which Harken is obligated to keep
\n a Registration Statement current and effective as described
\n herein, the Holders of Registrable Securities included in this
\n Registration Statement shall discontinue sales thereof pursuant
\n to such Registration Statement.<\/p>\n
(3) All questions concerning the construction, validity and interpretation
\n of this Agreement and all actions, proceedings and matters arising out
\n of this Agreement shall be governed by the internal law, and not the
\n law of conflicts, of the State of Texas.<\/p>\n
(4) All covenants and agreements in this Agreement by or on behalf of any
\n of the parties hereto will bind and inure to the benefit of the
\n respective successors and assigns of the parties hereto whether
\n expressed or not.<\/p>\n
(5) This Agreement is intended by the parties as a final expression of
\n their agreement and intended to be a complete and exclusive statement
\n of the agreement and understanding of the parties hereto in respect of
\n the subject matter herein contained. There are no restrictions,
\n promises, warranties or undertakings, other than those set forth or
\n referred to herein, with respect to the registration rights granted by
\n Harken to the Holders of the Registrable Securities. This Agreement
\n supersedes all prior agreements and understandings between the parties
\n with respect to such subject matter.<\/p>\n
(6) All notices, demands or other communications to be given or delivered
\n under or by reason of the provisions of this Agreement shall be in
\n writing and shall be deemed to have been given when delivered
\n personally or sent by reputable express courier service (charges
\n prepaid), or mailed to the recipient by certified or registered mail,
\n return receipt requested and potage prepaid, or sent by telefax, to
\n the parties at the following address (or to such other address or to
\n the attention of such other person as the recipient party has
\n specified by prior like notice to the sending party):<\/p>\n
If to Harken:
\n————<\/p>\n
Harken Energy Corporation
\n 580 WestLake Park Blvd., Suite 600
\n Houston, Texas 77079
\n Telecopier No.: (281) 504-4110
\n Attention: Bruce N. Huff President and
\n Larry E. Cummings, General Counsel<\/p>\n
If to Republic:
\n————–<\/p>\n
Republic Resources, Inc.
\n 743 Horizon Ct., Suite 333
\n Grand Junction, Colorado 81506-8715
\n Tel: (970) 245-5917
\n Telecopier No.: (970) 243-8840
\n Attention: Patrick J. Duncan, President<\/p>\n
8<\/p>\n
With a copy to:
\n————–<\/p>\n
Alan W. Peryam, Esq.
\n 1120 Lincoln Street, Suite 1000
\n Denver, Colorado 80203
\n Tel: (303) 866-0900
\n Telecopier No.: (303) 866-0999<\/p>\n
(7) If any provision of this Agreement is held to be unenforceable, this
\n Agreement shall be considered divisible and such provision shall be
\n deemed inoperative to the extent it is deemed unenforceable, and in
\n all other respects of this Agreement shall remain in full force and
\n effect; provided, however, that if any such provision may be made
\n enforceable by limitation thereof, then such provision shall be deemed
\n to be so limited and shall be enforceable to the maximum extent
\n permitted by applicable law.<\/p>\n
(9) This Agreement may be executed by the parties hereto in any number of
\n counterparts, each of which shall be deemed an original, but all of
\n which shall constitute one and the same agreement. Each counterpart
\n may consist of a number of copies hereof each signed by less than all,
\n but together signed by all, the parties hereto.<\/p>\n
(9) Each Holder of Registrable Securities, in addition to being entitled
\n to exercise all rights granted by law, including recovery of damages,
\n will be entitled to specific performance of its rights under this
\n Agreement. Harken agrees that monetary damages would not be adequate
\n compensation for any loss incurred by reason of breach by it of the
\n provisions of this Agreement and hereby agree to waive (to the extent
\n permitted by law) the defense in any action for specific performance
\n that a remedy of law would be adequate.<\/p>\n
(10) In any action or proceeding brought to enforce any provision of this
\n Agreement, or where any provision hereof is validly asserted as a
\n defense, the successful party shall be entitled to recover reasonable
\n attorney’s fees in addition to any other available remedy.<\/p>\n
(11) Harken agrees to remove any legends on certificates representing
\n Registrable Securities describing transfer restrictions applicable to
\n such securities upon the sale of such securities (i) pursuant to an
\n effective Registration Statement under the Securities Act or (ii) in
\n accordance with the provisions of Rule 144 under the Securities Act.<\/p>\n
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
\nfirst written above.<\/p>\n
HARKEN ENERGY CORPORATION<\/p>\n
By:
\n ————————–
\n Name: Bruce N. Huff
\n Title: President<\/p>\n
REPUBLIC RESOURCES, INC.<\/p>\n
By:
\n ————————–
\n Name: Patrick. J. Duncan
\n Title: President<\/p>\n
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