PURCHASE AND SALE AGREEMENT
----------------------------
This PURCHASE AND SALE AGREEMENT (the "Agreement") is entered into
as of the 21st day of July, 1995, by and among OPON DEVELOPMENT COMPANY,
a Colorado partnership ("ODC"), ALLIANCE PETROLEUM INTERNATIONAL CO., a
Texas corporation ("Alliance"), and HONDO MAGDALENA OIL & GAS LIMITED, a
Jersey, Channel Islands corporation ("Purchaser").
W I T N E S S E T H:
--------------------
WHEREAS, ODC is the record owner of a zero point eight eight eight
seven five percent (0.88875%) interest (the "Interest") in the OPON
Association Contract (the "OPON Contract") dated July 15, 1987 by and
between ODC and Empresa Colombiana de Petroleos ("ECOPETROL") (the
present calculation of the amount of the Interest being subject to the
right of ECOPETROL to reacquire a fifty percent (50%) interest in the
OPON Contract); and
WHEREAS, Alliance is the sole beneficial owner of the Interest
being held by ODC, under that certain Compensation/Settlement Agreement
dated October 17, 1990, by and among Purchaser, Hondo Oil & Gas Company,
a Delaware corporation ("Hondo"), Jim C. Roth ("Roth"), International
Exploration Advisors ("International"), Gary D. Bell ("Bell"), Alliance
and ODC and certain oral agreements between ODC and Alliance
(collectively, the "Compensation/Settlement Agreement"); and
WHEREAS, at the time of execution of the Compensation/Settlement
Agreement certain parties were listed collectively, without further
allocation among them, as co-recipients of the interests conveyed
pursuant to that agreement, including Roth, individually and as managing
partner of International, an entity described in the
Compensation/Settlement Agreement as a partnership, Bell, individually,
and Alliance Petroleum International, an entity described in the
Compensation/Settlement Agreement as a partnership and, subsequent to
the execution of that Compensation/Settlement Agreement, it was
clarified that International was never formally established and that
Alliance Petroleum International was actually formed as a Texas
corporation; and
WHEREAS, Roth and Bell acknowledge and represent that no portion of
the Interest was accepted or held by International at any time and that
any portions of the Interest to which Roth and Bell may have
individually been entitled to take ownership were transferred to and
held as assets of Alliance of which they were and are the sole
shareholders; and
WHEREAS, Purchaser separately owns an interest in the OPON Contract
and desires to increase its interest therein by acquiring the Interest
from ODC and Alliance; and
WHEREAS, Alliance desires to sell and assign its beneficial
interest to Purchaser and in connection therewith ODC desires to assign
the Interest to Purchaser, and Alliance desires to receive as
consideration therefore, freely trading common stock of Hondo; and
WHEREAS, Hondo is agreeable to the issuance of its common stock in
accordance with the terms and conditions hereof in order to facilitate
the acquisition of the Interest by Purchaser, which Hondo deems to be in
the best interests of Hondo.
NOW, THEREFORE, for Ten and No/100 Dollars (U.S. $10.00) and other
good and valuable consideration to be received by the parties hereunder,
the receipt and sufficiency of which are hereby acknowledged, and in
consideration of the mutual promises, covenants, representations, and
warranties herein contained, the parties hereto agree as follows:
ARTICLE I
THE INTEREST
--------------
1.1 Purchase and Delivery of the Interest. Upon the basis of the
representations and warranties and on the terms and subject to the
conditions set forth in this Agreement, Alliance hereby agrees to sell
to Purchaser, ODC hereby agrees to assign to Purchaser and Purchaser
hereby agrees to purchase from Alliance and receive from ODC, the
Interest at the Closing (as hereinafter defined).
1.2 Calculation of Interest. Each of the parties acknowledges and
agrees that the Interest is correctly calculated as of the date of this
Agreement as a zero point eight eight eight seven five percent
(0.88875%) interest in the OPON Contract.
ARTICLE II
CONSIDERATION
--------------
As consideration of the sale by Alliance and the delivery of the
Interest to Purchaser by ODC as provided in Article I hereof, Purchaser
shall cause Hondo to issue to Alliance at the Closing, such number of
shares (the "Shares") of Common Stock, $1.00 par value in Hondo (the
"Hondo Stock") as shall be equivalent to EIGHT HUNDRED EIGHTY EIGHT
THOUSAND SEVEN HUNDRED FIFTY DOLLARS (U.S. $888,750) (the "Sales Price")
based upon the closing price on the American Stock Exchange ("AMEX") of
such Hondo Stock on the business day immediately prior to the later of
(i) the effective date (the "Effective Date") of the Registration
Statement (as hereinafter defined) as declared by The United States
Securities and Exchange Commission (the "Commission") or (ii) the date
(the "AMEX Approval Date") AMEX approves the listing of the Shares on
its exchange pursuant to an Additional Listing Application (the
"Additional Listing Application") to be filed by Hondo. Provided,
however, in no event shall the number of the Shares exceed (and in no
event shall Hondo be required to issue to Alliance more than) sixty-five
thousand (65,000) shares of Hondo Stock. In the event that upon the
later of the Effective Date of such Registration Statement or the AMEX
Approval Date, Hondo would otherwise be required to issue more than
sixty-five thousand (65,000) shares of Hondo Stock as the Shares in
order to satisfy the Sales Price, Alliance shall have the right, solely
and without the joinder of ODC, to (i) terminate this Agreement upon
written notice to Purchaser and ODC, whereupon the transactions
contemplated hereunder shall be void and of no further force and effect,
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or (ii) accept such sixty-five thousand (65,000) shares of Hondo Stock
as the Shares in full satisfaction of the Sales Price hereunder.
Provided, however, in the event that at any time after the date of this
Agreement and prior to the Closing, the closing price of the Hondo Stock
on AMEX is Thirteen and 625/1000 Dollars (U.S.$13.625) or less for five
(5) consecutive business days, then Alliance shall have the right to
terminate this Agreement upon written notice to Purchaser and the
transactions contemplated hereunder shall be void and of no further
force and effect. The Sales Price shall be paid in shares of Hondo
Stock only, in no event shall the Purchaser be obligated to pay the
Sales Price in cash or any other funds whatsoever. The parties
acknowledge and agree that no portion of the Sales Price shall be
payable to ODC.
ARTICLE III
REGISTRATION OF THE HONDO STOCK
-------------------------------
Upon execution of this Agreement, Purchaser shall be obligated to
cause Hondo to (i) prepare and file with the Commission a registration
statement on an appropriate form, together with all necessary amendments
thereto, with respect to the Shares (the "Registration Statement") as
soon as is reasonably possible; (ii) use its best efforts to cause such
Registration Statement to become effective as soon as is reasonably
possible and to remain effective; and (iii) perform such other actions
as shall be necessary to issue and deliver such Shares to Alliance,
including, but not limited to, preparing and delivering as soon as is
reasonably possible the Additional Listing Application to AMEX.
Purchaser shall provide Alliance courtesy copies of all materials that
are otherwise publicly available which relate to the Registration
Statement or the Additional Listing Application and which are filed with
the Commission and/or AMEX.
ARTICLE IV
CLOSING
-------
4.1 Closing. Subject to the terms and conditions of this
Agreement, the closing of the transactions contemplated hereby (the
"Closing") shall take place at the offices of WINSTEAD SECHREST & MINICK
P.C. in Houston, Texas, or such other mutually acceptable location in
Houston, Texas as shall be selected by the parties, within two (2) days
from the later of (i) the Effective Date of the Registration Statement
or (ii) the AMEX Approval Date. In the event that the Closing has not
occurred prior to seventy-five (75) days from the date of this
Agreement, then this Agreement shall be deemed terminated and the
transactions contemplated hereunder shall be void and of no further
force and effect without any further action on the part of the parties
whatsoever. The parties acknowledge and agree that the approval of
ECOPETROL to the transactions contemplated by this Agreement shall be
obtained by Purchaser and ODC following the Closing.
4.2 Purchaser's Obligations at Closing. At Closing, Purchaser
shall deliver to Alliance the Shares in payment of the Sales Price. The
Shares will be registered under the Securities Act of 1933, as amended,
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will bear no restrictive legends and will be freely transferable by
Alliance. At Closing, Purchaser shall reimburse Alliance for the amount
of any cash calls actually paid by Alliance that are made after the date
of this Agreement and prior to Closing by the operator, Amoco Colombia
Petroleum Company ("Amoco"), under that certain New Operating Agreement
dated as of August 9, 1993 by and among Amoco, Purchaser and ODC (the
"New Operating Agreement"). Such reimbursement shall be made by
Purchaser in cash or, if applicable, in the same form of payment made by
Alliance to Amoco. At Closing, Purchaser shall assume any debts, liens
or other obligations that burden the Interest and are created under that
certain Funding Agreement for Tier I Development Project dated as of May
5, 1995 by and among Amoco, Purchaser and ODC, if, as and when such
agreement becomes effective.
4.3 Alliance's Obligations at Closing. At Closing, Alliance shall
execute and deliver or cause to be executed and delivered such
additional mutually acceptable documentation as shall be necessary to
effect the assignment of the beneficial interest in the Interest to
Purchaser.
4.4 ODC's Obligations at Closing. At Closing, ODC shall execute
and deliver an assignment in recordable form (in Colombia) or other
suitable documentation in the form substantially similar to that
attached to this Agreement as Exhibit "A", reflecting the assignment of
the Interest to Purchaser. In addition, ODC shall certify to Purchaser,
through such reasonably acceptable documentation as Purchaser shall
request, that all joint account or other equivalent billings for the
Interest are or shall be current as of the date of the Closing.
4.5 Mutual Release and Termination Agreement. In addition, at the
Closing, as additional consideration for the obligations of the parties
hereunder, each of the parties shall execute and deliver a mutual
release and termination agreement in the form attached to this Agreement
as Exhibit "B."
4.6 Taxes. Alliance and Purchaser shall be responsible for their
respective income or other taxes due in any taxing jurisdiction (foreign
or domestic) on account of the transactions contemplated by this
Agreement. In no event shall ODC bear any responsibility for any taxes
imposed as a result of the transactions contemplated by this Agreement.
Alliance or Purchaser, as applicable, shall be entitled to any benefits
or credits resulting from the payment of any such taxes by Alliance or
Purchaser, respectively.
4.7 Condition to Closing. Notwithstanding anything to the
contrary set forth herein, to the extent deemed necessary by Purchaser,
the Closing shall be expressly subject to and contingent upon Purchaser
obtaining a written waiver acceptable to Purchaser by Amoco of certain
preferential purchase rights which Amoco may have pursuant to that
certain Farmout Agreement dated as of August 9, 1993 by and between
Amoco, ODC and Purchaser (the "Farmout Agreement"). Purchaser shall
notify Amoco of the transaction contemplated by this Agreement and
request Amoco to provide a waiver of such preferential purchase rights
within fourteen (14) days from the date of this Agreement or the
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contingency in this Paragraph 4.7 to Closing shall be deemed waived by
Purchaser.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ALLIANCE
-------------------------------------------
Alliance and its individual shareholders, Roth and Bell, hereby
represent and warrant to Purchaser and ODC, each of which
representations and warranties is hereby deemed material, as follows:
5.1 Title to Interest. Alliance owns one hundred percent (100%)
of the beneficial interest in the Interest. Alliance has not created,
and will not prior to Closing create any restrictions or conditions to
transfer or assignment, rights of first refusal, preferential purchase
rights, pending litigation, mortgages, liens, pledges, charges,
encumbrances, equities, claims, covenants, conditions, restrictions or
other limitations upon title of any nature whatsoever affecting the
Interest.
5.2 Consents and Approvals. Except with respect to the
Registration Statement, the Additional Listing Application and the
waiver of Amoco referenced in Section 4.7, no consent, approval or
authorization of, or filing or registration with any national or foreign
governmental authority or any other party whatsoever is required to be
made or obtained by Alliance in connection with the execution, delivery
or performance of this Agreement by Alliance or the consummation by
Alliance of the transactions contemplated hereby.
5.3 Validity of Representations. No representation by Alliance,
nor any agreement or other document furnished or to be furnished by
Alliance to Purchaser pursuant to this Agreement, or in connection with
the transactions contemplated herein, contains or will contain any
untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained therein not
misleading.
5.4 Broker's or Finder's Fees. Alliance has not incurred any
obligation or liability, contingent or otherwise, for any broker's or
finder's fees in connection with the transactions contemplated by this
Agreement.
5.5 Capacity; Validity of Agreement. Alliance has the capacity,
authority and legal right to execute, deliver and perform its
obligations under this Agreement. This Agreement, upon due execution by
the parties hereto, will constitute a legal, valid and binding
obligation of Alliance, enforceable in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency or other
laws relating to or affecting the enforcement of creditors rights
generally and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
5.6 Disclosure. Alliance has provided to Purchaser any and all
material documentation related to the Interest and the ownership thereof
and disposition hereunder by Alliance. Alliance is experienced and
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knowledgeable in business and financial matters in general and in the
industry in which the parties are involved in particular, and is capable
of evaluating the transactions provided for herein. Furthermore,
Alliance has sought and obtained such independent advice and counsel as
it deems appropriate with respect to the transactions contemplated
hereby. Alliance acknowledges and agrees that Purchaser and ODC have
provided Alliance with any and all information deemed to be material by
Alliance with respect to the Hondo Stock, the Interest, and the
acquisition of the Interest hereunder by Purchaser. Alliance
acknowledges and agrees that it has been given an opportunity to make
inquiries and receive answers of Purchaser and ODC with regard to the
Hondo Stock, the Interest and the acquisition of the Interest hereunder
by Purchaser and to obtain any such information from Purchaser and ODC
that is necessary to clarify the accuracy of the information provided by
Purchaser or ODC.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF ODC
-------------------------------------
ODC hereby represents and warrants to Purchaser and Alliance, each
of which representations and warranties is hereby deemed material, as
follows:
6.1 Title to Interest. ODC holds one hundred percent (100%) of
the Interest as nominee for purposes of holding record title for
Alliance. ODC has not created, and will not prior to Closing create,
any restrictions or conditions to transfer or assignment, mortgages,
liens, pledges, charges, encumbrances or other limitations upon title of
any nature whatsoever affecting the Interest, except any such matters
created in agreements among ODC, Purchaser and Amoco, or any two (2) of
them.
6.2 Broker's or Finder's Fees. ODC has not incurred any
obligation or liability, contingent or otherwise, for any broker's or
finder's fees in connection with the transactions contemplated by this
Agreement.
6.3 Capacity; Validity of Agreement. ODC has the capacity,
authority and legal right to execute, deliver and perform its
obligations under this Agreement. This Agreement, upon due execution by
the parties hereto, will constitute a legal, valid and binding
obligation of ODC, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency or other
laws relating to or affecting the enforcement of creditors rights
generally and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Purchaser hereby represents and warrants to Alliance and ODC, each
of which representations and warranties is hereby deemed material, as
follows:
7.1 Consents and Approvals. Except with respect to the
Registration Statement, the Additional Listing Application and the
waiver of Amoco referenced in Section 4.7, no consent, approval or
authorization of, or filing or registration with any national or foreign
governmental authority or any other party whatsoever is required to be
made or obtained by Purchaser in connection with the execution, delivery
or performance of this Agreement by Purchaser or the consummation by
Purchaser of the transactions contemplated hereby.
7.2 Broker's or Finder's Fees. Purchaser has not incurred any
obligation or liability, contingent or otherwise, for any broker's or
finder's fees in connection with the transactions contemplated by this
Agreement.
7.3 Validity of Representations. No representation or warranty of
Purchaser contained herein, nor any agreement or other document
furnished or to be furnished to Alliance pursuant hereto or in
connection with the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact, or omits or will omit
to state a material fact necessary to make the statements contained
therein not misleading.
7.4 Capacity; Validity of Agreement. Purchaser has the
capacity, authority and legal right to execute, deliver and perform its
obligations under this Agreement. This Agreement, upon due execution by
the parties hereto, will constitute a legal, valid and binding
obligation of Purchaser, enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency
or other laws relating to or affecting the enforcement of creditors
rights generally and general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
7.5 Disclosure. Purchaser has delivered to Alliance the following
documents filed by Hondo pursuant to the Securities Exchange Act of
1934, as amended; Annual Report on Form 10-K for the fiscal year ended
September 30, 1994; Proxy Statement dated January 30, 1995; Quarterly
Reports on Form 10-Q for the quarters ended December 31, 1994 and
March 31, 1995; and Current Reports on Form 8-K dated November 29, 1994
and March 3, 1995.
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ARTICLE VIII
INDEMNIFICATION
---------------
8.1 Indemnification by Alliance. Alliance hereby agrees to
indemnify, reimburse and hold Purchaser (and with respect to
Subsection A, Purchaser and ODC) harmless from and against:
A. All losses, expenses, damages and liabilities suffered or
incurred by such indemnified party as a result of the
untruth or breach of any representation or warranty by
Alliance, or the failure of Alliance to perform any
agreement or obligation of Alliance, contained in this
Agreement or in any agreement or other document furnished
or to be furnished by Alliance pursuant to this Agreement
or in connection with the transactions contemplated by
this Agreement;
B. Any and all losses, expenses, damages, liabilities,
claims, demands and judgments arising from the ownership
of the Interest prior to the Closing, but only to the
extent that they arise out of or result from any
transaction not otherwise giving rise to a right of
indemnification of Alliance hereunder; and
C. Any and all losses, expenses, damages, liabilities,
suits, demands, exceptions, judgments, costs and expenses
incident to any of the foregoing matters described in
this Section.
8.2 Indemnification by Purchaser. Purchaser hereby agrees to
indemnify, reimburse and hold harmless Alliance from and against:
A. All losses, expenses, damages and liabilities suffered or
incurred by Alliance as a result of the untruth or breach
of any representation or warranty by Purchaser, or the
failure of Purchaser to perform any agreement or
obligation of Purchaser, contained in this Agreement or
in any agreement or other document furnished or to be
furnished by such Purchaser pursuant to this Agreement or
in connection with the transactions contemplated by this
Agreement;
B. Any and all losses, expenses, damages, liabilities,
claims, demands and judgments arising from the ownership
of the Interest following the Closing, but only to the
extent that they arise out of or result from any
transaction not otherwise giving rise to a right of
indemnification of Purchaser hereunder; and
C. Any and all losses, expenses, damages, liabilities,
suits, demands, exceptions, judgments, costs and expenses
incident to any of the foregoing matters described in
this Section.
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8.3 Cooperation of Parties. The parties hereto shall
reasonably, diligently, and in good faith, cooperate with each other in
connection with the investigation, accounting, disposition, or payment
of any matter reasonably believed to give rise to a right of
indemnification under Section 8.1 or 8.2 of this Agreement.
ARTICLE IX
MISCELLANEOUS
-------------
9.1 Expenses. Each of the parties shall pay its own costs and
expenses, including attorney's and accounting fees, incurred by such
party or for such party s benefit in connection with the negotiation,
preparation, consummation and performance of this Agreement and the
transactions provided for herein. Alliance shall continue to be
responsible for all billings and administrative expenses related to the
Interest due to ODC with respect to periods or actions prior to the
Closing. Alliance shall pay at or prior to the Closing, any and all
outstanding administrative expenses or other obligations related to the
Interest which are otherwise due to ODC in connection with the ownership
of the Interest prior to the Closing subject to normal industry auditing
procedures.
9.2 Survival of Representations. Notwithstanding any
investigation made by or on behalf of a party or parties, all
representations, warranties, and covenants made by the parties each to
the other in this Agreement or pursuant hereto shall survive the Closing
and the consummation of the transactions contemplated by this Agreement.
9.3 No Assignment. This Agreement shall not be assigned by any
party hereunder, the parties' intention hereunder being to reflect that
the Purchaser's obligation to cause the Hondo Stock to be delivered to
Alliance shall be personal to Alliance only and that Alliance's and
ODC's obligation to assign and deliver the Interest hereunder shall be
personal to the Purchaser only. Accordingly, neither ODC nor Alliance
shall assign or deliver the Interest (or any portion thereof) to any
party other than Purchaser prior to the Closing or earlier termination
of this Agreement.
9.4 Entire Agreement. This Agreement and any documents executed
or delivered by the parties pursuant to this Agreement, constitute the
entire understanding and agreement of the parties hereto and supersede
all other prior agreements and understandings, written or oral, between
the parties.
9.5 Further Instruments. The parties hereto will, upon execution
of the Agreement or any time thereafter, deliver and/or execute such
further instruments as may reasonably be requested by the other party
which are necessary or appropriate with respect to the consummation of
the transactions contemplated by this Agreement. None of the documents
or instruments requested hereunder shall contain an undertaking or
representation inconsistent with the undertakings and representations
contained in this Agreement.
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9.6 Notices. All notices, requests, demands, and other
communications hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed certified or registered
mail, return receipt requested, with first class postage prepaid or by
facsimile:
(a) If to Alliance:Alliance Petroleum International Co.
11711 Memorial Drive, Suite 260
Houston, Texas 77024
Facsimile: (713) 975-6088
Attn: Jim C. Roth
(b) If to Purchaser:Hondo Magdalena Oil & Gas Limited
410 East College Boulevard
Roswell, New Mexico 88201
Facsimile: (505) 625-6829
Attn: C. B. McDaniel,
Assistant Secretary
with a copy to: Douglas S. Craig, Jr., Esquire
Winstead Sechrest & Minick P.C.
910 Travis Building, Suite 1700
Houston, Texas 77002-5895
Facsimile: (713) 951-3800
(c) If to ODC: OPON Development Company
1675 Broadway Suite 1050
Denver, Colorado 80202
Facsimile: (303) 629-6233
Attn:Douglas L. Childs
or such other persons or addresses of which the parties shall give
notice in accordance with this Section.
9.7 Headings. The headings of the sections of this Agreement are
inserted for convenience only and shall not constitute a part hereof.
9.8 Governing Law. This Agreement shall be governed by, construed
and interpreted according to, the laws of the state of Texas, U.S.A.
without regard to the conflicts of laws principles thereof and venue for
any matter shall lie exclusively in the courts of Harris County, Texas,
U.S.A. This Agreement calls for performance and shall be performable in
Harris County, Texas, U.S.A.
9.9 Waiver. No term, provision, or condition of this Agreement
shall be waived except in a writing signed by the party waiving
compliance and any such written waiver in any one or more instances
shall not be deemed to be a further continuing waiver of any such term,
provision, or condition of this Agreement.
9.10 Counterparts. This Agreement may be executed simultaneously
in counterparts, each of which shall be deemed an original, but all of
which together constitute one and the same instrument.
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9.11 Amendments and Modifications. Any and all amendments and
modifications of this Agreement must be in writing signed by each of the
parties hereto.
9.12 Arbitration. Any dispute or controversy arising hereunder or
in connection with this Agreement (other than disputes or controversies
involving injunctive relief) shall be settled exclusively by
arbitration, conducted before a panel of three (3) arbitrators in
Houston, Texas, U.S.A. in accordance with the rules of the American
Arbitration Association then in effect.
9.13 Non-Disclosure. From the date of this Agreement through such
date as is thirty (30) days from the date of the Closing, no disclosure
of the terms of this Agreement, the subject matter hereof, nor any
confirmation or other information regarding this Agreement shall be made
by any party hereto to any party whatsoever (excluding any disclosure
required by any governmental authorities, disclosure to such parties'
legal and financial advisors or lenders any disclosure to Amoco and,
with respect to Purchaser or Hondo on Purchaser's behalf, any public
announcement in connection with the Registration Statement or the
Additional Listing Application or to comply with the disclosure
requirements of U.S. securities laws and AMEX's listing requirements)
without the express prior written consent of the other parties hereto,
which consent shall not be unreasonably withheld or delayed.
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IN WITNESS WHEREOF, the parties hereto hereby execute this
Agreement as of the day and year first written above.
NOTICE OF INDEMNIFICATION: THE PARTIES TO THIS AGREEMENT HEREBY
ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT CONTAINS INDEMNIFICATION
PROVISIONS IN ARTICLE VIII.
ALLIANCE:
ALLIANCE PETROLEUM INTERNATIONAL CO.,
a Texas corporation
By: /s/ Gary D. Bell
---------------------------
Name: Gary D. Bell
---------------------------
Title: President
---------------------------
Roth and Bell hereby execute this Agreement in their individual
capacities for the limited purpose of evidencing their acknowledgment
and agreement to the terms of the second, third and fourth recitals on
the first page, Section 4.5 and Article V hereof.
ROTH: /s/ Jim C. Roth
---------------------------
JIM C. ROTH
BELL: /s/ Gary D. Bell
---------------------------
GARY D. BELL
PURCHASER:
HONDO MAGDALENA OIL & GAS LIMITED,
a Jersey, Channel Islands corporation
By: /s/ C. B. McDaniel
---------------------------
Name: C.B. McDaniel
---------------------------
Title: Assistant Secretary
---------------------------
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ODC:
OPON DEVELOPMENT COMPANY,
a Colorado partnership
By: CHASE OPON, LTD.,
a Colorado limited part-
nership, its managing
general partner
By: CHASE PETROLEUM, LTD.,
a Colorado limited part-
nership, its sole general
partner
By: CHILDS PETROLEUM
CORPORATION,
a Colorado corporation,
its sole general partner
By: /s/ Douglas K. Childs
---------------------
Douglas K. Childs,
President
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