{"id":43574,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/securities-purchase-agreement-harken-energy-corp-and-rgc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"securities-purchase-agreement-harken-energy-corp-and-rgc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/securities-purchase-agreement-harken-energy-corp-and-rgc.html","title":{"rendered":"Securities Purchase Agreement &#8211; Harken Energy Corp. and RGC International Investors LDC"},"content":{"rendered":"<pre>                         SECURITIES PURCHASE AGREEMENT\n\n         SECURITIES PURCHASE AGREEMENT (this 'AGREEMENT'), dated as of April 9,\n1998, by and among Harken Energy Corporation, a Delaware corporation, with\nheadquarters located at 5605 N. MacArthur Boulevard, Suite 400, Irving, Texas\n75038 ('COMPANY'), and RGC International Investors, LDC (the 'BUYER').\n\n         WHEREAS:\n\n         A.      The Company and the Buyer are executing and delivering this\nAgreement in reliance upon the exemption from securities registration afforded\nby Rule 506 under Regulation D ('REGULATION D') as promulgated by the United\nStates Securities and Exchange Commission (the 'SEC') under the Securities Act\nof 1933, as amended (the '1933 ACT');\n\n         B.      The Company has authorized a new series of preferred stock,\ndesignated as Series F Convertible Preferred Stock (the 'PREFERRED STOCK'),\nhaving the rights, preferences and privileges set forth in the Certificate of\nDesignations, Rights and Preferences attached hereto as EXHIBIT 'A' (the\n'CERTIFICATE OF DESIGNATION');\n\n         C.      The Preferred Stock is convertible into shares of common\nstock, $.01 par value per share, of the Company (the 'COMMON STOCK'), upon the\nterms and subject to the limitations and conditions set forth in the\nCertificate of Designation;\n\n         D.      The Buyer desires to purchase and the Company desires to issue\nand sell, upon the terms and conditions set forth in this Agreement, an\naggregate of Fifteen Thousand (15,000) shares of Preferred Stock, for an\naggregate purchase price of Fifteen Million Dollars ($15,000,000); and\n\n         E.      Contemporaneous with the execution and delivery of this\nAgreement, the parties hereto are executing and delivering a Registration\nRights Agreement, in the form attached hereto as EXHIBIT 'B' (the 'REGISTRATION\nRIGHTS AGREEMENT'), pursuant to which the Company has agreed to provide certain\nregistration rights under the 1933 Act and the rules and regulations\npromulgated thereunder, and applicable state securities laws; and\n\n         NOW, THEREFORE, the Company and the Buyer hereby agree as follows:\n\n                 1.       PURCHASE AND SALE OF PREFERRED SHARES.\n\n                          a.      Purchase of Preferred Shares.  Subject to the\nterms and conditions hereof, the Company shall issue and sell to the Buyer and\nthe Buyer agrees to purchase from the\n\n\n\n\n\nCompany 15,000 shares of Series F Convertible Preferred Stock (collectively,\ntogether with any Preferred Stock issued in replacement thereof or otherwise\nwith respect thereto in accordance with the terms thereof, the 'PREFERRED\nSHARES') for the aggregate purchase price of Fifteen Million United States\nDollars ($15,000,000) (the 'Purchase Price').\n\n                          b.      Form of Payment.  On the Closing Date (as\ndefined below), (i) the Buyer shall pay the Purchase Price for the Preferred\nShares to be issued and sold to it at the closing by wire transfer of\nimmediately available funds to the Company, in accordance with the Company's\nwritten wiring instructions, against delivery of duly executed certificates\nrepresenting such number of Preferred Shares which the Buyer is purchasing and\n(ii) the Company shall deliver such certificates duly executed on behalf of the\nCompany, to the Buyer, against delivery of such Purchase Price.\n\n                          c.      Closing Date.  Subject to the satisfaction\n(or waiver) of the conditions thereto set forth in Section 6 and Section 7\nbelow, the date and time of the issuance and sale of the Preferred Shares\npursuant to this Agreement (the 'CLOSING DATE') shall be 12:00 noon Eastern\nStandard Time on April 9, 1998, or such other mutually agreed upon time.  The\nclosing shall occur on the Closing Date at the offices of the Company, or at\nsuch other location as may be agreed to be the parties.\n\n                 2.       BUYER'S REPRESENTATIONS AND WARRANTIES.  The Buyer\nrepresents and warrants to the Company that:\n\n                          a.      Investment Purpose.  As of the date hereof,\nthe Buyer is purchasing the Preferred Shares, the Investment Options described\nin Section 4(e) below (the 'Investment Options') and the shares of Common Stock\n(i) issuable upon conversion of the Preferred Shares and (ii) issuable upon\nexercise of the Investment Options (collectively, the 'CONVERSION SHARES' and,\ntogether with the Preferred Shares and the Investment Options, the\n'SECURITIES') for its own account for investment only and not with a view\ntowards the public sale or distribution thereof, except pursuant to sales\nregistered or exempted from registration under the 1933 Act.\n\n                          b.      Accredited Investor Status.  The Buyer is an\n'accredited investor' as that term is defined in Rule 501(a) of Regulation D.\n\n                          c.      Reliance on Exemptions.  The Buyer\nunderstands that the Securities are being offered and sold to it in reliance\nupon specific exemptions from the registration requirements of United States\nfederal and state securities laws and that the Company is relying upon the\ntruth and accuracy of, and the Buyer's compliance with, the representations,\nwarranties, agreements, acknowledgments and understandings of the Buyer set\nforth herein in order to determine the availability of such exemptions and the\neligibility of the Buyer to acquire the Securities.\n\n\n\n\n\n                                       2\n\n\n\n\n\n\n                          d.      Information.  The Buyer and its advisors, if\nany, have been furnished with all materials relating to the business, finances\nand operations of the Company and materials relating to the offer and sale of\nthe Securities which have been requested by the Buyer or its advisors.  The\nBuyer and its advisors, if any, have been afforded the opportunity to ask\nquestions of the Company and have received what the Buyer believes to be\nsatisfactory answers to any such inquiries.  Neither such inquiries nor any\nother due diligence investigation conducted by Buyer or any of its advisors or\nrepresentatives shall modify, amend or affect Buyer's right to rely on the\nCompany's representations and warranties contained in Section 3 below.  The\nBuyer understands that its investment in the Securities involves a significant\ndegree of risk.\n\n                          e.      Governmental Review.  The Buyer understands\nthat no United States federal or state agency or any other government or\ngovernmental agency has passed upon or made any recommendation or endorsement\nof the Securities.\n\n                          f.      Transfer or Resale.  The Buyer understands\nthat (i) except as provided in the Registration Rights Agreement, the\nSecurities have not been and are not being registered under the 1933 Act or any\napplicable state securities laws, and may not be transferred unless (a)\nsubsequently included in an effective registration statement thereunder, (b)\nthe Buyer shall have delivered to the Company an opinion of counsel (which\nopinion shall be reasonably acceptable to the Company) to the effect that the\nSecurities to be sold or transferred may be sold or transferred pursuant to an\nexemption from such registration, or (c) sold pursuant to Rule 144 promulgated\nunder the 1933 Act (or a successor rule) ('RULE 144')); (ii) any sale of such\nSecurities made in reliance on Rule 144 may be made only in accordance with the\nterms of said Rule and further, if said Rule is not applicable, any resale of\nsuch Securities under circumstances in which the seller (or the person through\nwhom the sale is made) may be deemed to be an underwriter (as that term is\ndefined in the 1933 Act) may require compliance with some other exemption under\nthe 1933 Act or the rules and regulations of the SEC thereunder; and (iii)\nneither the Company nor any other person is under any obligation to register\nsuch Securities under the 1933 Act or any state securities laws or to comply\nwith the terms and conditions of any exemption thereunder (in each case, other\nthan pursuant to the Registration Rights Agreement).  Notwithstanding the\nforegoing or anything else contained herein to the contrary, the Securities may\nbe pledged as collateral in connection with a bona fide margin account or other\nlending arrangement, provided that such transaction complies with applicable\nsecurities laws.\n\n                          g.      Legends.  The Buyer understands that the\nPreferred Shares and, until such time as the Conversion Shares have been\nregistered under the 1933 Act as contemplated by the Registration Rights\nAgreement, the Conversion Shares, may bear a restrictive legend in\nsubstantially the following form (and a stop-transfer order may be placed\nagainst transfer of the certificates for such Securities):\n\n                 'The securities represented by this certificate have not been\n                 registered under the Securities Act of 1933, as amended.  The\n\n\n\n\n\n                                       3\n\n\n\n\n\n                 securities have been acquired for investment and may not be\n                 sold, transferred or assigned in the absence of an effective\n                 registration statement for the securities under said Act, or\n                 an opinion of counsel, in form, substance and scope reasonably\n                 acceptable to the Company, that registration is not required\n                 under said Act or unless sold pursuant to Rule 144 under said\n                 Act.'\n\n                 The legend set forth above shall be removed and the Company\nshall issue a certificate without such legend to the holder of any Security\nupon which it is stamped, if, unless otherwise required by applicable state\nsecurities laws, (a) such Security is registered for sale under an effective\nregistration statement filed under the 1933 Act, or (b) such holder provides\nthe Company with an opinion of counsel, in form, substance and scope reasonably\nacceptable to the Company, to the effect that a public sale or transfer of such\nSecurity may be made without registration under the 1933 Act and such sale or\ntransfer is effected or (c) such holder provides the Company with reasonable\nassurances that such Security can be sold pursuant to Rule 144 under the 1933\nAct (or a successor rule thereto) without any restriction as to the number of\nSecurities acquired as of a particular date that can then be immediately sold.\nThe Buyer agrees to sell all Securities, including those represented by a\ncertificate(s) from which the legend has been removed, in compliance with\napplicable prospectus delivery requirements, if any.\n\n                          h.      Authorization; Enforcement. This Agreement\nand the Registration Rights Agreement have been duly and validly authorized,\nexecuted and delivered on behalf of the Buyer and are valid and binding\nagreements of the Buyer enforceable in accordance with their terms.\n\n                          i.      Residency.  The Buyer is a resident of the\njurisdiction set forth immediately below such Buyer's name on the signature\npage hereto.\n\n                 3.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The\nCompany represents and warrants to each Buyer that, except as described in the\nSchedules hereto and except as set forth in any document filed by the Company\n(not including the exhibits thereto) with the SEC since March 31, 1997 pursuant\nto the reporting requirements of the Securities Exchange Act of 1934, as\namended (the '1934 ACT'):\n\n                          a.      Organization and Qualification.  The Company\nand each of its Subsidiaries (as defined below), if any, is a corporation duly\norganized, validly existing and in good standing under the laws of the\njurisdiction in which it is incorporated, with full power and authority\n(corporate and other) to own, lease, use and operate its properties and to\ncarry on its business as and where now owned, leased, used, operated and\nconducted.  SCHEDULE 3(A) sets forth a list of all of the Subsidiaries of the\nCompany and the jurisdiction in which each is incorporated.  The Company and\neach of its Subsidiaries is duly qualified as a foreign corporation to do\nbusiness and is in good standing in every jurisdiction in which the nature of\nthe business conducted by it\n\n\n\n\n\n                                       4\n\n\n\n\n\nmakes such qualification necessary except where the failure to be so qualified\nor in good standing could not reasonably be expected to have a Material Adverse\nEffect.  'MATERIAL ADVERSE EFFECT' means any material adverse effect on the\nbusiness, operations, assets, or financial condition of the Company and its\nSubsidiaries taken as a whole, or on the transactions contemplated hereby or by\nthe agreements or instruments to be entered into in connection herewith.\n'SUBSIDIARIES' means any corporation or other organization, whether\nincorporated or unincorporated, in which the Company owns, directly or\nindirectly, a majority equity or other ownership interest.\n\n                          b.      Authorization; Enforcement.  (i) The Company\nhas all requisite corporate power and authority to file and perform its\nobligations under the Certificate of Designation and to enter into and perform\nthis Agreement and the Registration Rights Agreement and to consummate the\ntransactions contemplated hereby and thereby and to issue the Securities, in\naccordance with the terms hereof and thereof, (ii) the execution and delivery\nof this Agreement and the Registration Rights Agreement by the Company and the\nconsummation by it of the transactions contemplated hereby and thereby\n(including without limitation, the issuance of the Preferred Shares and the\nissuance and reservation for issuance of the Conversion Shares issuable upon\nconversion thereof) have been duly authorized by the Company's Board of\nDirectors and no further consent or authorization of the Company, its Board of\nDirectors, or its shareholders is required (except for any shareholder approval\nthat may be required pursuant to Section 4(h) hereof), (iii) this Agreement has\nbeen duly executed and delivered and the Certificate of Designation has been\nduly filed by the Company, and (iv) this Agreement and the Certificate of\nDesignation constitutes, and upon execution and delivery by the Company of the\nRegistration Rights Agreement such instrument will constitute, a legal, valid\nand binding obligation of the Company enforceable against the Company in\naccordance with its terms.\n\n                          c.      Capitalization.  As of the date hereof, the\nauthorized capital stock of the Company consists of (i) 175,000,000 shares of\nCommon Stock of which 122,823,347 shares are issued and outstanding, 8,960,499\nshares are reserved for issuance pursuant to the Company's stock option plans,\n12,234,624 shares are reserved for issuance pursuant to securities (other than\nthe Preferred Shares) exercisable for, or convertible into or exchangeable for\nshares of Common Stock and 4,897,959 shares are reserved for issuance upon\nconversion of the Preferred Shares (subject to adjustment pursuant to the\nCompany's covenant set forth in Section 4(h) below) and exercise of the\nInvestment Options; and (ii) 10,000,000 shares of preferred stock, none of\nwhich shares are issued and outstanding.  All of such outstanding shares of\ncapital stock are, or upon issuance will be, duly authorized, validly issued,\nfully paid and nonassessable.  No shares of capital stock of the Company are\nsubject to preemptive rights or any other similar rights of the stockholders of\nthe Company or any liens or encumbrances imposed through the actions or failure\nto act of the Company.  Except as disclosed in SCHEDULE 3(C), as of the date of\nthis Agreement, (i) there are no outstanding options, warrants, scrip, rights\nto subscribe for, puts, calls, rights of first refusal, agreements,\nunderstandings, claims or other commitments or rights of any character\nwhatsoever relating to, or securities or rights convertible into or\nexchangeable for  any shares of capital stock of the Company or any of its\nSubsidiaries, or arrangements by which the Company\n\n\n\n\n\n                                       5\n\n\n\n\n\nor any of its Subsidiaries is or may become bound to issue additional shares of\ncapital stock of the Company or any of its Subsidiaries, and (ii) there are no\nagreements or arrangements under which the Company or any of its Subsidiaries\nis obligated to register the sale of any of its or their securities under the\n1933 Act (except the Registration Rights Agreement) and (iii) there are no\nanti-dilution or price adjustment provisions contained in any security issued\nby the Company (or in any agreement providing rights to security holders) that\nwill be triggered by the issuance of the Preferred Shares or the Conversion\nShares.  The Company has furnished or made available to the Buyer true and\ncorrect copies of the Company's Certificate of Incorporation as in effect on\nthe date hereof ('CERTIFICATE OF INCORPORATION'), the Company's By-laws, as in\neffect on the date hereof (the 'BY-LAWS'), and the terms of all securities\nconvertible into or exercisable for Common Stock of the Company and the\nmaterial rights of the holders thereof in respect thereto.\n\n                          d.      Issuance of Shares.  The Preferred Shares and\nConversion Shares are duly authorized and, upon issuance in accordance with the\nterms of this Agreement (including the issuance of the Conversion Shares upon\n(i) conversion of the Preferred Shares in accordance with the Certificate of\nDesignation and (ii) exercise of the Investment Options in accordance with\nSection 4(e) of this Agreement) will be validly issued, fully paid and non-\nassessable, and free from all taxes, liens and charges with respect to the\nissue thereof and shall not be subject to preemptive rights or other similar\nrights of stockholders of the Company (provided that the Company may be\nrequired to obtain shareholder approval to authorize additional shares pursuant\nto Section 4(h) hereof).  The term Conversion Shares includes the shares of\nCommon Stock issuable upon conversion of the Preferred Shares, including\nwithout limitation, such additional shares, if any, as are issuable pursuant to\nthe Certificate of Designation.  The Company understands and acknowledges the\npotentially dilutive effect to the Common Stock upon the issuance of the\nConversion Shares upon conversion of the Preferred Shares and exercise of the\nInvestment Options.  The Company further acknowledges that its obligation to\nissue Conversion Shares upon conversion of the Preferred Shares and exercise of\nthe Investment Options in accordance with this Agreement and the Certificate of\nDesignation is absolute and unconditional regardless of the dilutive effect\nthat such issuance may have on the ownership interests of other stockholders of\nthe Company.\n\n                          e.      No Conflicts.  The execution, delivery and\nperformance of this Agreement and the Registration Rights Agreement by the\nCompany and the consummation by the Company of the transactions contemplated\nhereby and thereby (including, without limitation, the filing of the\nCertificate of Designation and the issuance and reservation for issuance of the\nConversion Shares; provided that the Company may be required to obtain\nshareholder approval to authorize additional shares pursuant to Section 4(h)\nhereof) will not (i) conflict with or result in a violation of any provision of\nthe Certificate of Incorporation or By-laws or (ii) violate or conflict with,\nor result in a breach of any provision of, or constitute a default (or an event\nwhich with notice or lapse of time or both could become a default) under, or\ngive to others any rights of termination, amendment, acceleration or\ncancellation of, any agreement, indenture or instrument to which the Company or\nany of its Subsidiaries is a party, or result in a violation of any law, rule,\n\n\n\n\n\n                                       6\n\n\n\n\n\nregulation, order, judgment or decree (including federal and state securities\nlaws and regulations) applicable to the Company or any of its Subsidiaries or\nby which any property or asset of the Company or any of its Subsidiaries is\nbound or affected (except for such conflicts, defaults, terminations,\namendments, accelerations, cancellations and violations as could not reasonably\nbe expected to, individually or in the aggregate, have a Material Adverse\nEffect).  Neither the Company nor any of its Subsidiaries is in violation of\nits Certificate of Incorporation, By-laws or other organizational documents and\nneither the Company nor any of its Subsidiaries is in default (and no event has\noccurred which with notice or lapse of time or both could put the Company or\nany of its Subsidiaries in default) under, and neither the Company nor any of\nits Subsidiaries has taken any action or failed to take any action that would\ngive to others any rights of termination, amendment, acceleration or\ncancellation of, any agreement, indenture or instrument to which the Company or\nany of its Subsidiaries is a party or by which any property or assets of the\nCompany or any of its Subsidiaries is bound or affected, except for possible\ndefaults and rights as could not reasonably be expected to, individually or in\nthe aggregate, have a Material Adverse Effect. The businesses of the Company\nand its Subsidiaries, if any, are not being conducted, and shall not be\nconducted so long as the Buyer owns any of the Preferred Shares, in violation\nof any law, ordinance or regulation of any governmental entity, except as could\nnot reasonably be expected to have a Material Adverse Effect.  Except as\nspecifically contemplated by this Agreement and as required under the 1933 Act\nand any applicable state securities laws, the Company is not required to obtain\nany consent, authorization or order of, or make any filing or registration\nwith, any court or governmental agency or any regulatory or self regulatory\nagency in order for it to execute, deliver or perform any of its obligations\nunder this Agreement or the Registration Rights Agreement in accordance with\nthe terms hereof or thereof.  Except as disclosed in SCHEDULE 3(E), all\nconsents, authorizations, orders, filings and registrations which the Company\nis required to obtain pursuant to the preceding sentence have been obtained or\neffected on or prior to the date hereof.  The Company is not in violation of\nthe listing requirements of the American Stock Exchange (the 'AMEX') and does\nnot reasonably anticipate that the Common Stock will be delisted by the AMEX in\nthe foreseeable future.  The Company and its Subsidiaries are unaware of any\nfacts or circumstances which might give rise to any of the foregoing.\n\n                          f.      SEC Documents, Financial Statements.  Since\nDecember 31, 1994, the Company has timely filed all reports, schedules, forms,\nstatements and other documents required to be filed by it with the SEC pursuant\nto the reporting requirements of the 1934 Act (all of the foregoing filed prior\nto the date hereof and all exhibits included therein and financial statements\nand schedules thereto and documents (other than exhibits) incorporated by\nreference therein, being hereinafter referred to herein as the 'SEC\nDOCUMENTS').  The Company has delivered or made available to the Buyer true and\ncomplete copies of the SEC Documents.  As of their respective dates, the SEC\nDocuments complied in all material respects with the requirements of the 1934\nAct and the rules and regulations of the SEC promulgated thereunder applicable\nto the SEC Documents, and none of the SEC Documents, at the time they were\nfiled with the SEC, contained any untrue statement of a material fact or\nomitted to state a material fact required to be stated therein or necessary in\norder to make the statements therein, in light of the circumstances\n\n\n\n\n\n                                       7\n\n\n\n\n\nunder which they were made, not misleading.  As of their respective dates, the\nfinancial statements of the Company included in the SEC Documents complied as\nto form in all material respects with applicable accounting requirements and\nthe published rules and regulations of the SEC with respect thereto.  Such\nfinancial statements have been prepared in accordance with generally accepted\naccounting principles, consistently applied, during the periods involved\n(except (i) as may be otherwise indicated in such financial statements or the\nnotes thereto, or (ii) in the case of unaudited interim statements, to the\nextent they may not include footnotes or may be condensed or summary\nstatements) and fairly present in all material respects the consolidated\nfinancial position of the Company and its consolidated Subsidiaries as of the\ndates thereof and the consolidated results of their operations and cash flows\nfor the periods then ended (subject, in the case of unaudited statements, to\nnormal year-end audit adjustments).  Except as set forth in the financial\nstatements of the Company included in the SEC Documents, the Company has no\nliabilities, contingent or otherwise, other than (i) liabilities incurred in\nthe ordinary course of business subsequent to December 31, 1996 and (ii)\nobligations under contracts and commitments incurred in the ordinary course of\nbusiness and not required under generally accepted accounting principles to be\nreflected in such financial statements, which, individually or in the\naggregate, are not material to the financial condition or operating results of\nthe Company.\n\n                          g.      Absence of Certain Changes.  Since December\n31, 1997 (the date of the Company's last audited financial statements), there\nhas been no material adverse change and no material adverse development in the\nassets, liabilities, business, properties, operations, financial condition or\nresults of operations of the Company or any of its Subsidiaries.\n\n                          h.      Absence of Litigation.  There is no action,\nsuit, claim, proceeding, inquiry or investigation before or by any court,\npublic board, government agency, self-regulatory organization or body pending\nor, to the knowledge of the Company or any of its Subsidiaries, threatened\nagainst or affecting the Company or any of its Subsidiaries that could\nreasonably be expected to have a Material Adverse Effect.  SCHEDULE 3(H)\ncontains a complete list and summary description of any pending or threatened\nproceeding against or affecting the Company or any of its Subsidiaries, without\nregard to whether it would have a Material Adverse Effect.  The Company and its\nSubsidiaries are unaware of any facts or circumstances which might give rise to\nany of the foregoing.\n\n                          i.      Patents, Copyrights, etc.  The Company and\neach of its Subsidiaries owns or possesses the requisite licenses or rights to\nuse all patents, patent rights, inventions, know-how, trade secrets,\ntrademarks, service marks, service names, trade names and copyrights\n('INTELLECTUAL PROPERTY') necessary to enable it to conduct its business as now\noperated (and, except as set forth in SCHEDULE 3(I) hereof, to the best of the\nCompany's knowledge, as presently contemplated to be operated in the future);\nthere is no claim or action by any person pertaining to, or proceeding pending,\nor to the Company's knowledge threatened which challenges the right of the\nCompany or of a Subsidiary with respect to any Intellectual Property necessary\nto enable it to conduct its business as now operated (and, except as set forth\nin SCHEDULE 3(I) hereof, to the\n\n\n\n\n\n                                       8\n\n\n\n\n\nbest of the Company's knowledge, as presently contemplated to be operated in\nthe future); to the best of the Company's knowledge, the Company's or its\nSubsidiaries, current and intended products, services and processes do not\ninfringe on any Intellectual Property or other rights held by any person; and\nthe Company is unaware of any facts or circumstances which might give rise to\nany of the foregoing.  The Company and each of its Subsidiaries have taken\nreasonable security measures to protect the secrecy, confidentiality and value\nof their Intellectual Property.\n\n                          j.      [Intentionally Omitted]\n\n\n                          k.      Tax Status.  Except as set forth on SCHEDULE\n3(K), the Company and each of its Subsidiaries has made or filed all federal\nand state income and all other tax returns, reports and declarations required\nby any jurisdiction to which it is subject (unless and only to the extent that\nthe Company and each of its Subsidiaries has set aside on its books provisions\nreasonably adequate for the payment of all unpaid and unreported taxes) and has\npaid all taxes and other governmental assessments and charges that are material\nin amount, shown or determined to be due on such returns, reports and\ndeclarations, except those being contested in good faith and has set aside on\nits books provisions reasonably adequate for the payment of all taxes for\nperiods subsequent to the periods to which such returns, reports or\ndeclarations apply, except for filings and payments that could not reasonably\nbe expected to have a Material Adverse Effect.  There are no unpaid taxes in\nany material amount claimed to be due by the taxing authority of any\njurisdiction, and the officers of the Company know of no basis for any such\nclaim.\n\n                          l.      Certain Transactions.  Except as set forth on\nSCHEDULE 3(L) and except for arm's length transactions pursuant to which the\nCompany or any of its Subsidiaries makes payments in the ordinary course of\nbusiness upon terms no less favorable than the Company or any of its\nSubsidiaries could obtain from third parties and other than the grant of stock\noptions disclosed on SCHEDULE 3(C), none of the officers or directors of the\nCompany is presently a party to any transaction or transactions (which are,\nindividually or in the aggregate, material to the Company) with the Company or\nany of its Subsidiaries (other than for services as employees, officers and\ndirectors), including any contract, agreement or other arrangement providing\nfor the furnishing of services to or by, providing for rental of real or\npersonal property to or from, or otherwise requiring payments to or from any\nofficer, director or such employee or, to the knowledge of the Company, any\ncorporation, partnership, trust or other entity in which any officer or\ndirector has a substantial interest or is an officer, director, trustee or\npartner.\n\n                          m.      Disclosure.  All information relating to or\nconcerning the Company or any of its Subsidiaries set forth in this Agreement\nand provided to the Buyer pursuant to Section 2(d) hereof and otherwise in\nconnection with the transactions contemplated hereby is true and correct in all\nmaterial respects and the Company has not omitted to state any material fact\nnecessary in order to make the statements made herein or therein, in light of\nthe circumstances under which they were made, not misleading.  No event or\ncircumstance has occurred or exists\n\n\n\n\n\n                                       9\n\n\n\n\n\nwith respect to the Company or any of its Subsidiaries or its or their\nbusiness, properties, operations or financial conditions, which, under\napplicable law, rule or regulation, requires public disclosure or announcement\nby the Company on or before the date hereof but which has not been so publicly\nannounced or disclosed (assuming for this purpose that the Company's reports\nfiled under the 1934 Act are being incorporated into an effective registration\nstatement filed by the Company under the 1933 Act).\n\n                          n.      Acknowledgment Regarding Buyer's Purchase of\nSecurities.  The Company acknowledges and agrees that the Buyer is acting\nsolely in the capacity of an arm's length purchaser with respect to this\nAgreement and the transactions contemplated hereby.  The Company further\nacknowledges that the Buyer is not acting as a financial advisor or fiduciary\nof the Company (or in any similar capacity) with respect to this Agreement and\nthe transactions contemplated hereby and any advice given by the Buyer or any\nof its respective representatives or agents in connection with this Agreement\nand the transactions contemplated hereby is merely incidental to the Buyer's\npurchase of the Securities.  The Company further represents to the Buyer that\nthe Company's decision to enter into this Agreement has been based solely on\nthe independent evaluation by the Company and its representatives.\n\n                          o.      No Integrated Offering.  Neither the Company,\nnor any of its affiliates, nor any person acting on its or their behalf, has\ndirectly or indirectly made any offers or sales in any security or solicited\nany offers to buy any security under circumstances that would require\nregistration under the 1933 Act of the issuance of the Securities to the Buyer.\nThe issuance of the Securities to the Buyer will not be integrated with any\nother issuance of the Company's securities (past, current or future) which\nrequires stockholder approval under the rules of the AMEX.\n\n                          p.      No Brokers.  The Company has taken no action\nwhich would give rise to any claim by any person for brokerage commissions,\nfinder's fees or similar payments relating to this Agreement or the\ntransactions contemplated hereby, except for dealings with Shimono Group\nIncorporated, whose commissions and fees will be paid for by the Company.\n\n                          q.      Permits; Compliance.  The Company and each of\nits Subsidiaries is in possession of all franchises, grants, authorizations,\nlicenses, permits, easements, variances, exemptions, consents, certificates,\napprovals and orders necessary to own, lease and operate its properties and to\ncarry on its business as it is now being conducted (collectively, the 'COMPANY\nPERMITS'), and there is no action pending or, to the knowledge of the Company,\nthreatened regarding suspension or cancellation of any of the Company Permits,\nexcept such Company Permits and actions which could not reasonably be expected\nto have a Material Adverse Effect.  Neither the Company nor any of its\nSubsidiaries is in conflict with, or in default or violation of, any of the\nCompany Permits, except for any such conflicts, defaults or violations which,\nindividually or in the aggregate, would not reasonably be expected to have a\nMaterial Adverse Effect.  Since December 31, 1997, neither the Company nor any\nof its Subsidiaries has received\n\n\n\n\n\n                                       10\n\n\n\n\n\nany notification with respect to possible conflicts, defaults or violations of\napplicable laws, except for notices relating to possible conflicts, defaults or\nviolations, which conflicts, defaults or violations could not reasonably be\nexpected to have a Material Adverse Effect.\n\n                          r.      Environmental Matters.\n\n                                  (i)      Except as set forth in SCHEDULE\n3(R), there are, to the Company's knowledge, with respect to the Company or any\nof its Subsidiaries or any predecessor of the Company, no past or present\nviolations of Environmental Laws (as defined below), releases of any material\ninto the environment, actions, activities, circumstances, conditions, events,\nincidents, or contractual obligations which may give rise to any common law\nenvironmental liability or any liability under the Comprehensive Environmental\nResponse, Compensation and Liability Act of 1980 or similar federal, state,\nlocal or foreign laws and neither the Company nor any of its Subsidiaries has\nreceived any notice with respect to any of the foregoing, nor is any action\npending or, to the Company's knowledge, threatened in connection with any of\nthe foregoing except, in each case, as could not reasonably be expected to have\na Material Adverse Effect.  The term 'ENVIRONMENTAL LAWS' means all federal,\nstate, local or foreign laws relating to pollution or protection of human\nhealth or the environment (including, without limitation, ambient air, surface\nwater, groundwater, land surface or subsurface strata), including, without\nlimitation, laws relating to emissions, discharges, releases or threatened\nreleases of chemicals, pollutants contaminants, or toxic or hazardous\nsubstances or wastes (collectively, 'HAZARDOUS MATERIALS') into the\nenvironment, or otherwise relating to the manufacture, processing,\ndistribution, use, treatment, storage, disposal, transport or handling of\nHazardous Materials, as well as all authorizations, codes, decrees, demands or\ndemand letters, injunctions, judgments, licenses, notices or notice letters,\norders, permits, plans or regulations issued, entered, promulgated or approved\nthereunder.\n\n                                  (ii)     Other than those that are or were\nstored, used or disposed of in compliance with applicable law, no Hazardous\nMaterials are contained on or about any real property currently owned, leased\nor used by the Company or any of its Subsidiaries, and no Hazardous Materials\nwere released on or about any real property previously owned, leased or used by\nthe Company or any of its Subsidiaries during the period the property was\nowned, leased or used by the Company or any of its Subsidiaries, except in the\nnormal course of the Company's or any of its Subsidiaries' business or could\nnot reasonably be expected to have a Material Adverse Effect.\n\n                                  (iii)    Except as set forth in SCHEDULE\n3(R), there are no underground storage tanks on or under any real property\nowned, leased or used by the Company or any of its Subsidiaries that are not in\ncompliance with applicable law.\n\n                          s.      Title to Property.  The Company and its\nSubsidiaries have marketable title to all real property and good and marketable\ntitle to all personal property owned\n\n\n\n\n\n                                       11\n\n\n\n\n\nby them which is material to the business of the Company and its Subsidiaries,\nin each case free and clear of all liens, encumbrances and defects except such\nas are described in SCHEDULE 3(S) or such as would not have a Material Adverse\nEffect (it being understood that marketable title as used herein shall mean\nsuch title to real property as is customarily held in the oil and gas\nbusiness).  Any real property and facilities held under lease by the Company\nand its Subsidiaries are held by them under valid, subsisting and enforceable\nleases with such exceptions as would not have a Material Adverse Effect.\n\n                          t.      Insurance.  The Company and each of its\nSubsidiaries are insured by insurers of recognized financial responsibility\nagainst such losses and risks and in such amounts as management of the Company\nbelieves to be prudent and customary in the businesses in which the Company and\nits Subsidiaries are engaged.  Neither the Company nor any such Subsidiary has\nany reason to believe that it will not be able to renew its existing insurance\ncoverage as and when such coverage expires or to obtain similar coverage from\nsimilar insurers as may be necessary to continue its business at a cost that\nwould not have a Material Adverse Effect.\n\n                          u.      Internal Accounting Controls.  The Company\nand each of its Subsidiaries maintain a system of internal accounting controls\nsufficient, in the judgment of the Company's board of directors, to provide\nreasonable assurance that (i) transactions are executed in accordance with\nmanagement's general or specific authorizations, (ii) transactions are recorded\nas necessary to permit preparation of financial statements in conformity with\ngenerally accepted accounting principles and to maintain asset accountability,\n(iii) access to assets is permitted only in accordance with management's\ngeneral or specific authorization and (iv) the recorded accountability for\nassets is compared with the existing assets at reasonable intervals and\nappropriate action is taken with respect to any differences.\n\n                          v.      Foreign Corrupt Practices.  Since December\n31, 1994, neither the Company, nor any of its Subsidiaries, nor any director,\nofficer, agent, employee or other person acting on behalf of the Company or any\nSubsidiary has, in the course of his actions for, or on behalf of, the Company,\nused any corporate funds for any unlawful contribution, gift, entertainment or\nother unlawful expenses relating to political activity; made any direct or\nindirect unlawful payment to any foreign or domestic government official or\nemployee from corporate funds; violated or is in violation of any provision of\nthe U.S. Foreign Corrupt Practices Act of 1977; or made any bribe, rebate,\npayoff, influence payment, kickback or other unlawful payment to any foreign or\ndomestic government official or employee.\n\n                 4.       COVENANTS.\n\n                          a.      Best Efforts.  The parties shall use their\nbest efforts to satisfy timely each of the conditions described in Section 6\nand 7 of this Agreement.\n\n\n\n\n\n                                       12\n\n\n\n\n\n\n                          b.      Form D; Blue Sky Laws.  The Company agrees to\nfile a Form D with respect to the Securities as required under Regulation D and\nto provide a copy thereof to each Buyer promptly after such filing.  The\nCompany shall, on or before the Closing Date, take such action as the Company\nshall reasonably determine is necessary to qualify the Securities for sale to\nthe Buyer at the applicable closing pursuant to this Agreement under applicable\nsecurities or 'blue sky' laws of the states of the United States (or to obtain\nan exemption from such qualification), and shall provide evidence of any such\naction so taken to each Buyer on or prior to the Closing Date.\n\n                          c.      Reporting Status; Eligibility to Use Form\nS-3.  The Company's Common Stock is registered under Section 12(b) of the 1934\nAct.  So long as any Buyer beneficially owns any of the Securities, the Company\nshall timely file all reports required to be filed with the SEC pursuant to the\n1934 Act, and the Company shall not terminate its status as an issuer required\nto file reports under the 1934 Act even if the 1934 Act or the rules and\nregulations thereunder would permit such termination.  The Company currently\nmeets, and will use its commercially reasonable best efforts to continue to\nmeet, the 'registrant eligibility' requirements set forth in the general\ninstructions to Form S-3.\n\n                          d.      Use of Proceeds.  The Company shall use the\nproceeds from the sale of the Preferred Shares and the shares of Common Stock\nissued pursuant to the Investment Options (as defined below) in the manner set\nforth in SCHEDULE 4(D) attached hereto and made a part hereof and shall not,\ndirectly or indirectly, use such proceeds for any loan to or investment in any\nother corporation, partnership, enterprise or other person (except in\nconnection with its currently existing direct or indirect Subsidiaries).\n\n                          e.      Investment Options.  At the time of each\nconversion of Preferred Stock by Buyer, Buyer shall have the option (the\n'Investment Options') to purchase one additional share of Common Stock for\nevery share of Common Stock issuable as a result of such conversion of the\nPreferred Stock (not including shares of Common Stock issuable as a result of\nthe Premium Amount (as defined in the Certificate of Designation)) on the\napplicable Conversion Date (as defined in the Certificate of Designation), at a\npurchase price equal to the applicable Conversion Price (as defined in the\nCertificate of Designation).  In order to exercise the Investment Option that\narises on a Conversion Date, the Buyer must make the appropriate election\nincluded on the Notice of Conversion (as defined in the Certificate of\nDesignation) in respect of such Conversion Date and pay to the Company, in\nimmediately available funds, on or within one business day following the\nConversion Date, the aggregate purchase price for the shares of Common Stock\nissuable as a result of the exercise of such Investment Option.  Failure to\nmake such election or payment in accordance with the immediately preceding\nsentence will result in expiration of the Investment Option in respect of such\nConversion Date.\n\n                          Notwithstanding anything in this Section 4(e) to the\ncontrary, unless the Buyer delivers a waiver in accordance with the immediately\nfollowing sentence, in no event (other than pursuant to the Automatic\nConversion (as defined in the Certificate of Designation)) shall the\n\n\n\n\n\n                                       13\n\n\n\n\n\nBuyer be entitled to exercise a number of Investment Options (or portions\nthereof) in excess of the number of Investment Options (or portions thereof)\nupon exercise of which the sum of (i) the number of shares of Common Stock\nbeneficially owned by the Buyer and its affiliates (other than shares of Common\nStock which may be deemed beneficially owned through the ownership of the\nunexercised Investment Options and unconverted Preferred Shares) and (ii) the\nnumber of shares of Common Stock issuable upon exercise of the Investment\nOptions (or portions thereof) with respect to which the determination described\nherein is being made, would result in beneficial ownership by the Buyer and its\naffiliates of more than 4.9% of the outstanding shares of Common Stock.  For\npurposes of the immediately preceding sentence, beneficial ownership shall be\ndetermined in accordance with Section 13(d) of the 1934 Act, and Regulation\n13D-G thereunder, except as otherwise provided in clause (i) hereof and the\nBuyer may waive the limitations set forth therein by written notice to the\nCompany upon not less than sixty-one (61) days prior written notice (with such\nwaiver taking effect only upon the expiration of such sixty-one (61) day notice\nperiod).\n\n                          f.      Expenses.  At the closing, the Company shall\npay to Rose Glen Capital Management, L.P.  ('RGC') a nonaccountable expense\nallowance equal to Thirty Thousand Dollars ($30,000).\n\n                          g.      Financial Information.  The Company agrees to\nsend the following reports to each Buyer until such Buyer transfers, assigns,\nor sells all of the Securities: (i) within ten (10) days after the filing with\nthe SEC, a copy of its Annual Report on Form 10-K, its Quarterly Reports on\nForm 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after\nrelease, copies of all press releases issued by the Company or any of its\nSubsidiaries; and (iii) contemporaneously with the making available or giving\nto the stockholders of the Company, copies of any notices or other information\nthe Company makes available or gives to such stockholders.\n\n                          h.      Reservation of Shares.  The Company shall not\nreduce the number of shares of Common Stock reserved for issuance upon\nconversion of Preferred Shares without the consent of each Buyer.  The Company\nshall use its best efforts at all times to maintain the number of shares of\nCommon Stock so reserved for issuance at no less than the full number that is\nthen actually issuable upon full conversion of the Preferred Shares (based on\nthe Conversion Price of the Preferred Shares in effect from time to time) and\nthe full exercise of the Investment Options.  If at any time the number of\nshares of Common Stock authorized and remaining reserved for issuance is below\nthe number of Conversion Shares issuable upon conversion of the Preferred\nShares and exercise of the Investment Options (based on the Conversion Price of\nthe Preferred Shares then in effect), the Company will promptly take all\ncorporate action necessary to authorize and reserve a sufficient number of\nshares, including, without limitation, calling a special meeting of\nshareholders to authorize additional shares to meet the Company's obligations\nunder this Section 4(h), in the case of an insufficient number of authorized\nshares, and using its best efforts to obtain shareholder approval of an\nincrease in such authorized number of shares.\n\n\n\n\n\n                                       14\n\n\n\n\n\n\n                          i.      Listing.  The Company shall promptly secure\nthe listing of the Conversion Shares upon each national securities exchange or\nautomated quotation system, if any, upon which shares of Common Stock are then\nlisted (subject to official notice of issuance) and shall maintain, so long as\nany other shares of Common Stock shall be so listed, such listing of all\nConversion Shares from time to time issuable upon conversion of the Preferred\nShares and the exercise of the Investment Options.  The Company will obtain and\nmaintain the listing and trading of its Common Stock on the AMEX, the Nasdaq\nNational Market ('NASDAQ'), the Nasdaq SmallCap Market ('NASDAQ SMALLCAP') or\nthe New York Stock Exchange ('NYSE'), and will comply in all respects with the\nCompany's reporting, filing and other obligations under the bylaws or rules of\nthe National Association of Securities Dealers ('NASD') and such exchanges, as\napplicable.  The Company shall promptly provide to each Buyer copies of any\nnotices it receives from the AMEX and any other exchanges or quotation systems\non which the Common Stock is then listed regarding the continued eligibility of\nthe Common Stock for listing on such exchanges and quotation systems.\n\n                          j.      Corporate Existence.  So long as a Buyer\nbeneficially owns any Preferred Shares, the Company shall maintain its\ncorporate existence and shall not sell all or substantially all of the\nCompany's assets, except in the event of a merger or consolidation or sale of\nall or substantially all of the Company's assets, where the surviving or\nsuccessor entity in such transaction (i) assumes the Company's obligations\nhereunder and under the agreements and instruments entered into in connection\nherewith and (ii) is a publicly traded corporation whose Common Stock is listed\nfor trading on the AMEX, Nasdaq or NYSE.\n\n                          k.      No Integration.  The Company will not conduct\nany future offering that will be integrated with the issuance of the Securities\nsolely for purposes of Rule 713 of the AMEX.\n\n                          l.      Solvency.  The Company (both before and after\ngiving effect to the transactions contemplated by this Agreement) is solvent\n(i.e., its assets have a fair market value in excess of the amount required to\npay its probable liabilities on its existing debts as they become absolute and\nmatured) and currently the Company has no information that would lead it to\nreasonably conclude that the Company would not have, nor does it intend to take\nany action that would impair, its ability to pay its debts from time to time\nincurred in connection therewith as such debts mature.  The Company did not\nreceive a qualified opinion from its auditors with respect to its most recent\nfiscal year end and does not anticipate or know of any basis upon which its\nauditors might issue a qualified opinion in respect of its current fiscal year.\n\n                 5.       TRANSFER AGENT INSTRUCTIONS.      The Company shall\nissue irrevocable instructions to its transfer agent to issue certificates,\nregistered in the name of the Buyer or, after registration of the Conversion\nShares under the 1933 Act, its nominee, for the Conversion Shares in such\namounts as specified from time to time by the Buyer to the Company upon\nconversion of the Preferred Shares in accordance with the terms thereof upon\nreceipt by the Company of a properly completed and executed notice of\nconversion in accordance with the\n\n\n\n\n\n                                       15\n\n\n\n\n\nCertificate of Designation (the 'IRREVOCABLE TRANSFER AGENT INSTRUCTIONS').\nPrior to registration of the Conversion Shares under the 1933 Act, all such\ncertificates shall bear the restrictive legend specified in Section 2(g) of\nthis Agreement.  The Company warrants that no instruction other than the\nIrrevocable Transfer Agent Instructions referred to in this Section 5, and stop\ntransfer instructions to give effect to Section 2(f) hereof (in the case of the\nConversion Shares, prior to registration of the Conversion Shares under the\n1933 Act), will be given by the Company to its transfer agent and that the\nSecurities shall otherwise be freely transferable on the books and records of\nthe Company as and to the extent provided in this Agreement and the\nRegistration Rights Agreement.  Nothing in this Section shall affect in any way\nthe Buyer's obligations and agreement set forth in Section 2(g) hereof to\ncomply with all applicable prospectus delivery requirements, if any, upon\nresale of the Securities.  If the Buyer provides the Company with an opinion of\ncounsel, reasonably satisfactory to the Company in form, substance and scope,\nthat registration of a resale by the Buyer of any of the Securities is not\nrequired under the 1933 Act, the Company shall permit the transfer, and, in the\ncase of the Conversion Shares, promptly instruct its transfer agent to issue\none or more certificates in such name and in such denominations as specified by\nthe Buyer.  The Company acknowledges that a breach by it of its obligations\nhereunder will cause irreparable harm to the Buyer, by vitiating the intent and\npurpose of the transaction contemplated hereby.  Accordingly, the Company\nacknowledges that the remedy at law for a breach of its obligations under this\nSection 5 will be inadequate and agrees, in the event of a breach or threatened\nbreach by the Company of the provisions of this Section, that the Buyer shall\nbe entitled, in addition to all other available remedies, to an injunction\nrestraining any breach and requiring immediate transfer, without the necessity\nof showing economic loss and without any bond or other security being required.\n\n                 6.       CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.  The\nobligation of the Company hereunder to issue and sell the Preferred Shares to\nthe Buyer at the closing is subject to the satisfaction, at or before the\nClosing Date, of each of the following conditions thereto, provided that these\nconditions are for the Company's sole benefit and may be waived by the Company\nat any time in its sole discretion:\n\n                          a.      The Buyer shall have executed this Agreement\nand the Registration Rights Agreement, and delivered the same to the Company.\n\n                          b.      The Buyer shall have delivered the Purchase\nPrice in accordance with Section 1(b) above.\n\n                          c.      The Certificate of Designation shall have\nbeen accepted for filing with the Secretary of State of the State of Delaware.\n\n                          d.      The representations and warranties of the\nBuyer shall be true and correct in all material respects as of the date when\nmade and as of the Closing Date as though made at that time (except for\nrepresentations and warranties that speak as of a specific date), and the Buyer\nshall have performed, satisfied and complied in all material respects with the\ncovenants,\n\n\n\n\n\n                                       16\n\n\n\n\n\nagreements and conditions required by this Agreement to be performed, satisfied\nor complied with by the Buyer at or prior to the Closing Date.\n\n                          e.      No litigation, statute, rule, regulation,\nexecutive order, decree, ruling or injunction shall have been enacted, entered,\npromulgated or endorsed by or in any court or governmental authority of\ncompetent jurisdiction or any self-regulatory organization having authority\nover the matters contemplated hereby which prohibits the consummation of any of\nthe transactions contemplated by this Agreement.\n\n                 7.       CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.\nThe obligation of the Buyer hereunder to purchase the Preferred Shares at the\nclosing is subject to the satisfaction, at or before the Closing Date, of each\nof the following conditions, provided that these conditions are for such\nBuyer's sole benefit and may be waived by the Buyer at any time in its sole\ndiscretion:\n\n                          a.      The Company shall have executed this\nAgreement and the Registration Rights Agreement, and delivered the same to the\nBuyer.\n\n                          b.      The Company shall have delivered to the Buyer\nduly executed certificates (in such denominations as the Buyer shall request)\nrepresenting the Preferred Shares in accordance with Section 1(b) above.\n\n                          c.      The Certificate of Designation shall have\nbeen accepted for filing with the Secretary of Sate of the State of Delaware,\nand a copy thereof certified by such Secretary of State shall have been\ndelivered to the Buyer.\n\n                          d.      The Irrevocable Transfer Agent Instructions,\nin form and substance satisfactory to the Buyer, shall have been delivered to\nand acknowledged in writing by the Company's Transfer Agent.\n\n                          e.      The representations and warranties of the\nCompany shall be true and correct in all material respects as of the date when\nmade and as of the Closing Date as though made at such time (except for\nrepresentations and warranties that speak as of a specific date) and the\nCompany shall have performed, satisfied and complied in all material respects\nwith the covenants, agreements and conditions required by this Agreement to be\nperformed, satisfied or complied with by the Company at or prior to the Closing\nDate.  The Buyer shall have received a certificate or certificates, executed by\nthe chief executive officer of the Company, dated as of the Closing Date, to\nthe foregoing effect and as to such other matters as may be reasonably\nrequested by the Buyer including, but not limited to certificates with respect\nto the Company's Certificate of Incorporation, By-laws and Board of Directors'\nresolutions relating to the transactions contemplated hereby.\n\n\n\n\n\n                                       17\n\n\n\n\n\n\n                          f.      No litigation, statute, rule, regulation,\nexecutive order, decree, ruling or injunction shall have been enacted, entered,\npromulgated or endorsed by or in any court or governmental authority of\ncompetent jurisdiction or any self-regulatory organization having authority\nover the matters contemplated hereby which prohibits the consummation of any of\nthe transactions contemplated by this Agreement.\n\n                          g.      Trading in the Common Stock on the AMEX shall\nnot have been suspended by the SEC or the AMEX.\n\n                          h.      The Buyer shall have received an opinion of\nthe Company's general counsel, dated as of the Closing Date, in form, scope and\nsubstance reasonably satisfactory to the Buyer and in substantially the same\nform as EXHIBIT 'C' attached hereto.\n\n                 8.       GOVERNING LAW; MISCELLANEOUS.\n\n                          a.      Governing Law.  This Agreement shall be\ngoverned by and interpreted in accordance with the laws of the State of\nDelaware without regard to the principles of conflict of laws.  The parties\nhereto hereby submit to the exclusive jurisdiction of the United States Federal\nCourts located in Delaware with respect to any dispute arising under this\nAgreement, the agreements entered into in connection herewith or the\ntransactions contemplated hereby or thereby.\n\n                          b.      Counterparts; Signatures by Facsimile.  This\nAgreement may be executed in two or more counterparts, all of which shall be\nconsidered one and the same agreement and shall become effective when\ncounterparts have been signed by each party and delivered to the other party.\nThis Agreement, once executed by a party, may be delivered to the other party\nhereto by facsimile transmission of a copy of this Agreement bearing the\nsignature of the party so delivering this Agreement.\n\n                          c.      Headings.  The headings of this Agreement are\nfor convenience of reference and shall not form part of, or affect the\ninterpretation of, this Agreement.\n\n                          d.      Severability.  If any provision of this\nAgreement shall be invalid or unenforceable in any jurisdiction, such\ninvalidity or unenforceability shall not affect the validity or enforceability\nof the remainder of this Agreement or the validity or enforceability of this\nAgreement in any other jurisdiction.\n\n                          e.      Entire Agreement; Amendments.  This Agreement\nand the instruments referenced herein contain the entire understanding of the\nparties with respect to the matters covered herein and therein and, except as\nspecifically set forth herein or therein, neither the Company nor the Buyer\nmakes any representation, warranty, covenant or undertaking with respect to\nsuch matters.  No provision of this Agreement may be waived or amended other\nthan by an instrument in writing signed by the party to be charged with\nenforcement.\n\n\n\n\n\n                                       18\n\n\n\n\n\n\n                          f.      Notices.  Any notices required or permitted\nto be given under the terms of this Agreement shall be sent by certified or\nregistered mail (return receipt requested) or delivered personally or by\ncourier (including a recognized overnight delivery service) or by facsimile and\nshall be effective five days after being placed in the mail, if mailed by\nregular U.S. mail, or upon receipt, if delivered personally or by courier\n(including a recognized overnight delivery service) or upon telephone\nconfirmation of receipt by the addressee if by facsimile, in each case\naddressed to a party.  The addresses for such communications shall be:\n\n\n\n                          If to the Company:\n\n                                  Harken Energy Corporation\n                                  5605 N. MacArthur Boulevard\n                                  Suite 400\n                                  Irving, Texas  75038\n                                  Attention:  Mikel D. Faulkner\n                                  Facsimile:  (972) 753-6944\n\n                          With copy to:\n\n                                  Harken Energy Corporation\n                                  5605 N. MacArthur Boulevard\n                                  Suite 400\n                                  Irving, Texas  75038\n                                  Attention:  Larry E. Cummings\n                                  Facsimile:  (972) 753-6963\n\n\n                 If to the Buyer:  To the address set forth immediately below\nthe Buyer's name on the signature pages hereto.\n\n                 Each party shall provide notice to the other party of any\nchange in address.\n\n                          g.      Successors and Assigns.  This Agreement shall\nbe binding upon and inure to the benefit of the parties and their successors\nand permitted assigns.  Neither the Company nor the Buyer shall assign this\nAgreement or any rights or obligations hereunder without the prior written\nconsent of the other, which consent will not be unreasonably withheld; provided\nthat, in the event of a proposed assignment to a competitor of the Company or\nto a purchaser seeking to acquire control of the Company without the consent of\nthe Board of Directors of the Company, such consent may be withheld for any\nreason or for no reason.  Notwithstanding the foregoing, subject to Section\n2(f), the Buyer may assign its rights hereunder to any holder of an interest in\nthe Buyer upon a liquidation of the Buyer's assets in accordance with its\ngoverning documents or to any of its 'affiliates,' as that term is defined\nunder the 1934 Act, without the consent of the Company.\n\n\n\n\n\n                                       19\n\n\n\n\n\n\n                          h.      Third Party Beneficiaries.  This Agreement is\nintended for the benefit of the parties hereto and their respective permitted\nsuccessors and assigns, and is not for the benefit of, nor may any provision\nhereof be enforced by, any other person.\n\n                          i.      Survival.  The representations and warranties\nof the Company and the Buyer and the agreements and covenants set forth in\nSections 2, 3, 4, 5 and 8 shall survive the closing hereunder for two (2) years\nnotwithstanding any due diligence investigation conducted by or on behalf of\nthe other party.  The Company agrees to indemnify and hold harmless the Buyer\nand all their officers, directors, employees and agents for loss or damage\narising as a result of or related to any material breach by the Company of any\nof its representations, warranties and covenants set forth in Sections 3 and 4\nhereof or any of its covenants and obligations under this Agreement or the\nRegistration Rights Agreement, including advancement of expenses as they are\nincurred.\n\n                          j.      Publicity.  The Company and the Buyer shall\nhave the right to review a reasonable period of time before issuance of any\npress releases, SEC, the AMEX or NASD filings, or any other public statements\nwith respect to the transactions contemplated hereby; provided, however, that\nthe Company shall be entitled, without the prior approval of the Buyer, to make\nany press release or SEC, the AMEX or NASD filings with respect to such\ntransactions as is required by applicable law and regulations.\n\n                          k.      Further Assurances.  Each party shall do and\nperform, or cause to be done and performed, all such further acts and things,\nand shall execute and deliver all such other agreements, certificates,\ninstruments and documents, as the other party may reasonably request in order\nto carry out the intent and accomplish the purposes of this Agreement and the\nconsummation of the transactions contemplated hereby.\n\n                          l.      No Strict Construction.  The language used in\nthis Agreement will be deemed to be the language chosen by the parties to\nexpress their mutual intent, and no rules of strict construction will be\napplied against any party.\n\n\n\n\n\n                                       20\n\n\n\n\n\n                 IN WITNESS WHEREOF, the Buyer and the Company have caused this\nAgreement to be duly executed as of the date first above written.\n\n\nHARKEN ENERGY CORPORATION\n\n\nBy:      \/s\/ Larry E. Cummings                     \n   ------------------------------------------------\n         Larry E. Cummings\n         Vice President and Secretary\n\n\nRGC INTERNATIONAL INVESTORS, LDC\n\nBy:      Rose Glen Capital Management, L.P., Investment Manager\n         By:     RGC General Partner Corp., as General Partner\n\n\nBy:      \/s\/ Wayne D. Bloch                                 \n   ------------------------------------------------\n         Wayne D. Bloch\n         Managing Director\n\nRESIDENCE:   Cayman Islands\n\nADDRESS:\n\n         c\/o Rose Glen Capital Management, L.P.\n         3 Bala Plaza East, Suite 200\n         251 St. Asaphs Road\n         Bala Cynwyd, PA  19004\n         Facsimile:       (610) 617-0570\n         Telephone:       (610) 617-5900\n\n\nAGGREGATE SUBSCRIPTION AMOUNT:\n\n         Number of Shares of Preferred Stock:                             15,000\n         Aggregate Purchase Price:                                   $15,000,000\n\n\n\n\n\n                                       21\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7721],"corporate_contracts_industries":[9409],"corporate_contracts_types":[9622,9627],"class_list":["post-43574","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-harken-oil---gas-inc","corporate_contracts_industries-energy__exploration","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43574","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43574"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43574"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43574"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43574"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}