exv10w7



 





Exhibit
10.7




SPECIFIC
TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL

TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL

HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,

AND THE REDACTED TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO
ASTERISKS (**).




FIRST AMENDMENT




of




COOPERATIVE AGREEMENT




          This FIRST AMENDMENT of COOPERATIVE AGREEMENT (this “Amendment”) is executed to be
effective as of October 21, 2005 between RESOLUTE ANETH, LLC (“Resolute”), a Delaware limited
liability company, and NAVAJO NATION OIL AND GAS COMPANY, INC. (“NNOG”), a Federal corporation.
Resolute and NNOG are sometimes referred to herein individually as a “Party” or together as the
“Parties.”



ARTICLE I.

GENERAL




     1.01 Resolute Natural Resources Company (“RNRC”), an affiliate of Resolute, and NNOG entered
into that certain Cooperative Agreement dated effective October 22, 2004 (as amended hereby, the
“Agreement”). RNRC has assigned all of its rights and obligations under the Agreement to Resolute.
The Agreement provides for certain cooperative arrangements between NNOG and Resolute concerning
oil and gas ownership and operations of jointly held assets in the Greater Aneth Field in southeast
Utah.



     1.02 This Amendment is entered into in order to (i) state the agreement of the Parties with
respect to the potential joint acquisition of assets in the Greater Aneth Field and Cortez,
Colorado, currently held by ExxonMobil and its affiliates (“Exxon”) and described in a Purchase and
Sale Agreement (the “PSA”) between Exxon and XTO Energy, Inc. (“XTO”) dated effective January 1,
2005 (the “Exxon Assets”), (ii) to amend and supplement the Agreement to apply to the Exxon Assets
and grant certain options to NNOG in regard to such assets and (iii) to amend the Agreement in
certain other respects. Except as amended hereby, the Agreement remains effective in accordance
with its terms.



     1.03 Capitalized terms used herein that are defined in the Agreement are used as so defined.
For convenience of reference, the Articles and Sections of this Amendment are organized to a
certain extent to be parallel to the Articles and Sections of the Agreement. No significance shall
be given to such arrangement and the provisions hereof amend and supplement the Agreement only as
expressly stated herein.



     1.04 The parties intend to acquire the Exxon Assets as successors or designated assignees of
the assets pursuant to the exercise by the Navajo Nation of its preferential purchase right set
forth in 18 N.N.C. § 605 (the “PPR”) or pursuant to a purchase and sale agreement with Exxon. It
is recognized that the PPR right of the Navajo Nation does not apply to all such assets, but it is
expected that the assets would be acquired in their entirety. Reference herein to the Exxon Assets
means such of the Exxon Assets that are acquired by the Navajo Nation or either of the Parties
whether through exercise of the PPR or otherwise. Any agreement between Exxon and the Parties or
the Navajo Nation and the Parties for the acquisition of the assets by the Parties is referred to
as the “Acquisition Agreement.”



 









 





     1.05 Resolute (or one or more of its subsidiaries or affiliates) will acquire 75% and NNOG
will acquire 25% of the Exxon Assets. Resolute and NNOG’s interests in the Exxon Assets shall be
several, not joint. Each Party shall use its best efforts to acquire the financial assets
necessary to acquire its share of such assets at the purchase price provided for in the PSA.



     1.06 The Parties acknowledge that the PSA appears on its face to be a valid and existing
contract between Exxon and XTO. Neither Party shall take any action to cause or encourage either
party to the PSA to breach its obligations thereunder.



ARTICLE II.

PAYMENTS AND OBLIGATIONS

IN CONNECTION WITH THE ACQUISITION




     2.01 Prior to or contemporaneous with the closing of the Acquisition Agreement, Resolute will
pay $(**) to NNOG in consideration for NNOG’s services in connection with the acquisition of
the Exxon Assets. If the value of the Exxon Assets is reduced or diminished on account of title
failures, exercises of preferential purchase rights, exclusions, casualty losses or similar
changes, the $(**) payment will be reduced in proportion to the reduction in value of the
Exxon Assets. If for any reason (i) the closing of the Acquisition Agreement does not occur, or is
determined to be void, rescinded or otherwise not effective, (ii) the assignments of the Exxon
Assets to Resolute and NNOG do not receive the required Navajo Nation approvals or the Navajo
Nation denies such approvals or exercises its right of first refusal, or (iii) at any time NNOG or
the Navajo Nation disclaims the effectiveness of the Agreement including, without limitation, the
waivers and consents in Article X, NNOG shall refund such amount immediately to Resolute.



     2.02 At closing of the Acquisition Agreement, Resolute will pay 75% and NNOG will pay 25% of
the adjusted purchase price for the Exxon Assets as determined under the Acquisition Agreement.
The obligations and liabilities of the parties under the Acquisition Agreement shall be apportioned
severally 75% to Resolute and 25% to NNOG.



     2.03 NNOG agrees to use its best good faith efforts to obtain the support of the Navajo Nation
for the closing of the Acquisition Agreement, as well as support for the implementation of the
terms and provisions of this Amendment. In particular, without limitation, NNOG will work with the
Navajo Nation to obtain an expedited approval of the assignment of interests from Exxon or the
Navajo Nation to Resolute, or its designated subsidiary or affiliate, and NNOG.



ARTICLE III.

NNOG OPTIONS




     3.01 NNOG will have options with respect to the Exxon Assets with terms and conditions
identical to the terms and conditions stated in Agreement Article III except that (i) the
references to the “Aneth Assets” shall mean the Exxon Assets, (ii) the reference to the CVX
Agreement shall mean the Acquisition Agreement, (iii) the reference to the unit operating agreement
in Section 3.02(ii) shall mean the McElmo and Ratherford Unit Operating Agreements, as applicable,
(iv) the reference to the $(**) shall mean the payment of such amount under this Amendment.



2









 





     3.02 The NNOG options with respect to the Exxon Assets shall be independent of the NNOG
options with respect to the Aneth Assets. Payout with respect to the Exxon Assets shall be
determined independently of Payout with respect to the Aneth Assets.



     3.03





     (a) In the event that Resolute makes a partial sale or other conveyance of
interest in the Aneth Assets or the Exxon Assets to a party other than an affiliate
of Resolute, such that a Sale as defined in Section 4.01 of the Agreement (as
revised by Section 4.02 of this Amendment) has not occurred, then NNOG shall have
the option of considering as “revenue from production” for purposes of the
occurrence of Payout with respect to the Aneth Assets or Exxon Assets, as
applicable, (i) the net proceeds (after all costs of the transaction) from
Resolute’s sale or other conveyance of interests in the relevant assets (in which
case NNOG’s options shall terminate as to the assets so sold or conveyed), or (ii)
the continuing revenue from production of the assets so sold or otherwise conveyed,
(in which case NNOG’s option shall continue to burden the assets sold, revenue from
production of such assets shall mean the revenue received by the purchaser or
transferee, and the purchaser or transferee must agree in writing to comply with the
provisions of Articles III and IV of the Agreement and supply the information
required for the determination of Payout). If Resolute intends to undertake a
transaction that would give rise to the foregoing option of NNOG, Resolute shall
give NNOG a minimum of 30 days advance notice of such transaction and NNOG shall
have 30 days from receipt of such notice within which to elect its option by giving
written notice to Resolute of such election. If NNOG fails to make an election
within such time period, then the option set forth in 3.03(a)(i) shall apply. A
partial sale shall not include any transaction which is a bona fide financing
transaction, including but not limited to transactions involving a conveyance that
is limited to a volume of production, an amount of revenue received, net profits or
period of time or similar type of limitation (and the receipt of revenue from such
transaction shall not be deemed to be revenue for purposes of Payout until the
underlying production is produced and delivered into sales, and the price for such
production shall be the consideration received in the financing for such
production).




     (b) In the case of a partial sale covered by 3.03(a) above, if the sale
involves an interest that would leave Resolute with less that the total interest
necessary to honor the NNOG options, the NNOG options shall burden any interest
conveyed to the extent necessary to insure that NNOG’s options are not diminished.
Resolute shall give NNOG 30 days advance notice and either demonstrate that Resolute
will continue a sufficient interest to fully honor the NNOG options, or provide a
written agreement from the transferee of the partial interest acknowledging that
such transferred interest is burdened by the NNOG options and agreeing to fully
comply with the terms of Articles III and IV hereof in the event of the exercise of
the options.



3









 





ARTICLE IV.

TERMINATION UPON SALE, FIRST OPTION ACCELERATION,

AND FIRST RIGHT OF NEGOTIATION




     4.01 The provisions of Agreement Article IV shall apply independently to the NNOG options with
respect to the Exxon Assets, with references to the “Aneth Assets” meaning the Exxon Assets.



     4.02 The following language shall replace in its entirety the second sentence of Agreement
Section 4.01:




     (a) The occurrence of a Sale, as defined below, shall be determined
independently with respect to the Aneth Assets and the Exxon Assets and the
provisions of this Section 4.01 shall be so interpreted. A “Sale” for the purposes
of this Agreement is defined to include a sale other than to the party’s affiliates
of all or substantially all of a Party’s Aneth Assets or Exxon Assets, as
applicable, or the production or revenue from production from such assets, or a
change of control, direct or indirect, of the Resolute entity holding the assets in
question (the “Pertinent Entity”).




     (b) Subject to the exceptions stated below, a change of control with respect to
the Pertinent Entity shall be deemed to occur as a result of any transaction or
series of transactions whereby Resolute and its affiliates no longer own or control,
directly or indirectly, at least 50% of the voting control of the Pertinent Entity
(“Voting Control”). Notwithstanding the foregoing, no change of control shall occur
solely on account of any transaction (which includes a series of transactions) where
the following circumstances exist:




     (i) Immediately following such a transaction a majority of the
members of the senior management of Resolute, as constituted on the
date of this Amendment (which for clarity is Nick Sutton, Jim
Piccone, Ted Gazulis, Dale Cantwell, Janet Pasque, Jim Kincaid, Rick
Betz, Steve Malkewicz and Bret Siepman), but as such group of
members may be amended with the approval of NNOG, continue to have
and to exercise actual field operational control over the pertinent
assets and have no obligation to resign; and




     (ii) NNOG shall have been given at least 30 days’ notice of the
contemplated transaction and all of its materials terms; and either:




     (iii) the Board of Managers of Resolute Holdings, LLC as
constituted immediately prior to such transaction (which includes a
series of transactions) shall constitute at least a majority of the
board of managers or directors of the acquiring entity or entities
that have Voting Control immediately after the transaction occurs;
and such members of the Board of Managers of Resolute



4









 







Holdings, LLC who so serve on the board of managers or
directors of the acquiring entity or entities have no obligation to
resign, abstain or to exercise their authority in favor of any other
person or entity; or




     (iv) the transaction (which includes a series of transactions)
involves a sale or other offering or exchange of securities carrying
Voting Control (“Control Securities”) by Resolute or its affiliates
to one or more purchasers, and immediately after the closing of the
offering of such securities (a) Resolute and its affiliates own or
control at least 30% of the Control Securities and (b) no person,
entity or group owns or controls, or have a right to acquire or
control, a greater percentage of such Control Securities than the
percentage owned or controlled by Resolute and its affiliates, and
(c) Resolute and its affiliates hold the Control Securities without
any contractual or other obligation to exercise their voting rights
in favor of any other person, entity or group that would give such
other person, entity or group effective control of a greater
percentage of Control Securities than Resolute and its affiliates
own or control.




     (v) Resolute acknowledges that the rights of NNOG to exercise
its options and its right of first negotiation under Articles III
and IV, respectively, of the Agreement were and are significant and
material considerations for NNOG’s decision to enter into the
Agreement with Resolute, and that such terms are included in the
Agreement in part to reflect and advance the policies of the Navajo
Nation, NNOG’s sole shareholder. The intent of the Parties in
permitting the above exceptions to the definition of a change of
control is solely to grant Resolute added flexibility for the
capitalization and other financing of its operations. The Parties
do not intend by this Agreement to dilute the value or nature of or
quantum of interests available for acquisition by NNOG under, nor
limit NNOG’s right to exercise, its options under Articles III and
IV of this Agreement or its right of first negotiation under section
4.03 of this Agreement. NNOG has agreed to amend the original
Agreement to permit such transactions as an accommodation to
Resolute. Therefore, the Parties intend that this provision be
strictly construed in favor of NNOG.



ARTICLE V.

ASSISTANCE BETWEEN THE PARTIES




     5.01 Section 5.01 of the Agreement shall be amended and restated in its entirety as follows:




     For so long as Resolute, NNOG and their affiliates hold in the aggregate the
largest amount of working interest in any of the Aneth, McElmo or Ratherford



5









 







Units, and Resolute’s working interest in the unit in question is greater than
NNOG’s, NNOG shall use its best good faith efforts to cause Resolute (or an
affiliate of Resolute) to be elected and remain operator of the unit in question.
For so long as Resolute, NNOG and their affiliates hold in the aggregate the largest
amount of working interest in any non-unit oil and gas property in the Greater Aneth
Field and Resolute’s working interest in the property in question is greater than
NNOG’s, NNOG shall use its best good faith efforts to cause Resolute (or an
affiliate of Resolute) to be elected and remain operator of such property.



     5.02 Acknowledging that certain of the Exxon Assets will have value commensurate with the
purchase price only if significant development activity can take place on those assets, the Parties
each agree to fund their proportionate share of a mutually agreeable development plan involving
8/8ths investment over four years of approximately $150 Million. NNOG shall take the leading role
in gaining all Navajo Nation and Bureau of Indian Affairs approvals needed to execute such plan and
in overcoming any opposition to such development. Any moneys or other consideration that may be
involved in overcoming opposition, gaining surface access, addressing local or political concerns
or otherwise necessary to allow the implementation of the development plan would be paid by the
parties, and the other working interest owners as appropriate, in proportion to their ownership
interests. NNOG’s out-of-pocket expenses for travel and similar items would similarly be shared
proportionately by the Parties or, where appropriate, treated as a direct expense of the working
interest owners under the applicable operating agreement.



     5.03 If requested by NNOG, Resolute will use its best good faith reasonable efforts (without
the payment of consideration) to assist NNOG in its arranging acceptable financing for NNOG’s
purchase of its 25% initial interest in the Exxon Assets.



     5.04 The provisions of Agreement Article V, to the extent reference is made to the Aneth
Assets, shall apply to all assets owned jointly by the Parties in the Greater Aneth Field.



     5.05 The number of scholarships referred to in Agreement Section 5.05 shall be four instead of
two.



     5.06 The parties shall use their best efforts to cause NNOG to become the operator of the
Aneth gas gathering and compression facilities. NNOG shall hold any rights of way or other assets
associated with these facilities as nominee for the joint and pro rata use of the owners of the
Aneth gathering and compression facilities. To the extent Resolute is currently bearing an
economic loss as operator of such facilities, Resolute shall continue to bear such economic loss
until the relevant agreements among the owners can be amended to eliminate such loss. The Parties
shall use their best efforts to cause the owners of the Aneth gathering and compression facilities
to pay all of the costs associated with the ownership and operation of such facilities and to pay
NNOG a reasonable general and administrative fee (currently proposed as $1500 per month) as its
sole compensation for such ownership and operation. It is anticipated that the actual day-to-day
operation and accounting with respect to such facilities shall continue to be handled by a contract
operator and that the fees and costs associated with such contract operations will be paid by the
owners of the facilities. NNOG shall not be a trustee of the assets



6









 







with respect to the owners of the gathering and compression facilities, nor shall it have any
fiduciary obligation to such owners.



     5.07 NNOG has acquired from Western Gas Resources the return processed gas pipeline known as
the Red Pepper Pipeline. NNOG shall hold and operate this line for the joint pro rata use of the
owners of the Aneth gathering and compression facilities. The Parties shall use their best efforts
to cause the owners of the Aneth gathering and compression facilities and the other purchasers of
gas transported through this pipeline to pay, through a transportation fee or otherwise, all of the
costs associated with the ownership and operation of such pipeline so that NNOG bears no economic
loss and receives a reasonable general and administrative fee (currently proposed as $1500 per
month) as its sole compensation for such ownership and operation. It is anticipated that the
actual day-to-day operation with respect to such facilities shall continue to be handled by Western
Gas Resources and that the fees and costs associated with such contract operations will be passed
through to the parties using the gas transported through the pipeline. NNOG shall not be a trustee
of the Red Pepper Pipeline with respect to the owners of the gathering and compression facilities,
nor shall it have any fiduciary obligation to such owners.



ARTICLE VI.

TAX MATTERS




     6.01 With respect to the reference to “Payout” in Agreement Section 6.01, the net cash tax
savings of any tax benefits allocated to Resolute shall be allocated as revenue to the Payout
account with respect to the Aneth Assets or the Exxon Assets to the extent the tax benefits in
question relate to such respective assets, and otherwise shall be allocated equally to each Payout
account.



     6.02 Resolute has again, through Resolute NAD, LLC, submitted an application for an allocation
of New Markets Tax Credits (“NMTC”) under Section 45 D of the Internal Revenue Code and the
Community Development Financial Institutions Fund program for energy investments on Native American
lands. The provisions of Agreement Section 6.02 shall apply to such application. The reverence in
Agreement Section 6.02 to Aneth Assets shall be a reference to all jointly owned properties in the
Aneth, McElmo and Ratherford Units and associated properties



     6.03 NNOG is no longer considered the “controlling entity” with respect to Resolute NAD, LLC
and, therefore, the provisions of Agreement Section 6.03 no longer apply.



     6.04 The structure of a transaction designed to utilize the NMTC has been revised as set forth
in the September 2005 NMTC application of Resolute NAD, LLC. Therefore, the provisions of
Agreement Section 6.04 and Agreement Exhibit B no longer apply. In their place the provisions of
the September 2005 application shall be incorporated by reference as the description of the
intended structure of a transaction involving NMTC.



7









 





ARTICLE VII.

AREA OF MUTUAL INTEREST




     7.01 The Aneth, McElmo and Ratherford Units shall constitute an Area of Mutual Interest in
accordance with the provisions of Agreement Section 7.02, and shall be referred to as the Aneth
AMI. The provisions of Agreement Section 7.01, will apply the remainder of the Greater Aneth
Field, which shall be referred to as the Greater AMI.



ARTICLE VIII.

REPRESENTATIONS AND WARRANTIES OF RESOLUTE




     8.01 Resolute represents and warrants to NNOG as follows:




     (a) Resolute is a limited liability company duly organized, validly existing
and in good standing under the laws of Delaware and has the requisite legal power to
carry on its business as it is now being conducted. Resolute is duly qualified or
licensed to do business, and is in good standing, in each jurisdiction, in which the
character of the property or assets owned, leased or operated by it, or the nature
of the business conducted by it, makes such qualification or licensing necessary and
the failure to so qualify or be licensed would have a material adverse effect on the
transactions or performance contemplated under this Amendment.




     (b) Resolute has all requisite legal power and authority to execute and deliver
this Amendment and to perform its obligations under the Agreement as amended hereby.
The execution, delivery and performance of this Amendment and the transactions
contemplated hereby have been duly and validly authorized by all requisite legal
action on the part of Resolute.




     (c) Neither the execution and delivery of this Amendment nor the consummation
of the transactions and performance of the terms and conditions contemplated hereby
by Resolute will:




     (i) conflict with or result in any breach of any provision of
the governing documents of Resolute; or




     (ii) assuming that all required governmental approvals are
obtained, be rendered void or ineffective by or under the terms,
conditions or provisions of any agreement, instrument or obligation
to which Resolute is a party or is subject or by which any of its
properties or assets are bound.




     (d) Subject to applying for and obtaining all required governmental approvals,
no consent, approval, authorization or permit of, or filing with or notification to,
any person is required for or in connection with the execution and delivery of this
Amendment by Resolute or for or in connection with the consummation of the
transactions and performance of the terms and conditions contemplated hereby by
Resolute.



8









 






     (e) There are no actions, claims, suits, arbitration proceedings, inquiries,
proceedings, investigation or audit by or before any court or arbitration panel or
any governmental authority pending or, to the knowledge of Resolute, threatened
against Resolute that could have a material adverse effect on the transactions or
performance contemplated under this Amendment.




     (f) Resolute has not received any notice of any violation or default or alleged
violation or default (or of any fact or circumstance which with notice or the
passage of time or both would constitute a violation or default) of or under any
applicable governmental law or regulation which would have a material adverse
effect on the transactions or performance contemplated under this Amendment.




     (g) There are no bankruptcy, reorganization, arrangement, liquidation or
similar proceedings pending against, being contemplated by, or, to the knowledge of
Resolute, threatened against Resolute.




     (h) This Amendment constitutes a valid and binding agreement of Resolute
enforceable against it in accordance with its terms, subject to:




     (i) applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general application with
respect to creditors;




     (ii) general principles of equity; and




     (iii) the power of a court to deny enforcement of remedies
generally based on public policy.




     (i) The representations and warranties of Resolute are limited to those set
forth in this Section and those previously given by RNRC in the Agreement, and NNOG
acknowledges that there are no other representations or warranties of Resolute,
either express or implied, any rule of law or legislation to the contrary.



ARTICLE IX.

REPRESENTATIONS AND WARRANTIES OF NNOG




     9.01 NNOG represents and warrants to Resolute as follows:




     (a) NNOG is a corporation organized under Section 17 of the Indian
Reorganization Act, as amended, 25 U.S.C. § 477, validly existing and in good
standing under such Act and has the requisite corporate power to carry on its
business as it is now being conducted. NNOG is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction, in which the character of
the property or assets owned, leased or operated by it, or the nature of the
business conducted by it, makes such qualification or licensing necessary and the
failure to so qualify or be licensed would have a material adverse effect on the
transactions or performance contemplated under this Amendment.



9









 






     (b) NNOG has all requisite corporate power and authority to execute and deliver
this Amendment and to perform its obligations under the Agreement as amended hereby.
The execution, delivery and performance of this Amendment and the transactions
contemplated hereby have been duly and validly authorized by all requisite corporate
action on the part of NNOG.




     (c) Neither the execution and delivery of this Amendment nor the consummation
of the transactions and performance of the terms and conditions contemplated hereby
by NNOG will:




     (i) conflict with or result in any breach of any provision of
the certificate of incorporation or bylaws (or other similar
governing documents) of NNOG; or




     (ii) be rendered void or ineffective by or under the terms,
conditions or provisions of any agreement, instrument or obligation
to which NNOG is a party or is subject or by which any of its
properties or assets are bound.




     (d) Subject to applying for and obtaining all required governmental approvals,
no consent, approval, authorization or permit of, or filing with or notification to,
any person is required for or in connection with the execution and delivery of this
Amendment by NNOG or for or in connection with the consummation of the transactions
and performance of the terms and conditions contemplated hereby by NNOG.




     (e) There are no actions, claims, suits, arbitration proceedings, inquiries,
proceedings, investigation or audit by or before any court or arbitration panel or
any governmental authority pending or, to the knowledge of NNOG, threatened against
NNOG that could have a material adverse effect on the transactions or performance
contemplated under this Amendment.




     (f) NNOG has not received any notice of any violation or default or alleged
violation or default (or of any fact or circumstance which with notice or the
passage of time or both would constitute a violation or default) of or under any
applicable governmental law or regulation which would have a material adverse effect
on the transactions or performance contemplated under this Amendment.




     (g) There are no bankruptcy, reorganization, arrangement, liquidation or
similar proceedings pending against, being contemplated by, or, to the knowledge of
NNOG, threatened against NNOG.




     (h) This Amendment constitutes a valid and binding agreement of NNOG
enforceable against it in accordance with its terms, subject to:



10









 






     (i) applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general application with
respect to creditors;




     (ii) general principles of equity; and




     (iii) the power of a court to deny enforcement of remedies
generally based on public policy.




     (i) NNOG has given all prior notices required under Article XVI of the charter
of NNOG in order to make the provisions of Article X hereof fully effective and
binding on NNOG and the Navajo Nation as of the date of this Amendment. Copies of
all such notices have been provided to Resolute. NNOG has not withdrawn, rescinded
or taken any other action that would affect the validity of such notices and such
provisions. NNOG has received no objection or other indication from any party that
would call into question the efficacy of the notices or the provisions of Article X
hereof.




     (j) The representations and warranties of NNOG are limited to those set forth
in this Section and those previously given in the Agreement, and Resolute
acknowledges that there are no other representations or warranties of NNOG, either
express or implied, any rule of law or legislation to the contrary.



ARTICLE X.

DISPUTE RESOLUTION; GOVERNING LAW





     (a) The provisions of Agreement Article X shall govern all disputes under the
Agreement as amended hereby.



ARTICLE XI.

TERM




     11.01 The provisions of the Agreement as amended hereby creating rights or obligations that
terminate upon the occurrence of certain events shall so terminate. Subject to Section 4.02, the
remaining terms of the Agreement shall terminate with respect to the Aneth Assets or the Exxon
Assets if and when there occurs a Sale of such assets, as defined herein, with respect to either
Resolute or NNOG.



     11.02 If the parties are not successful in acquiring the Exxon Assets within one year from the
effective date of this Amendment, a Party who has used its best good faith efforts to satisfy its
obligations with respect to effecting such acquisition, may terminate any obligation to pursue such
transaction pursuant to this Amendment by giving 30 day prior notice of such termination to the
other Party.



ARTICLE XII.

GENERAL




     12.01 The provisions of Agreement Article XII shall apply to the Agreement as amended hereby
except as provided in the following provision.




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     IN WITNESS WHEREOF, the parties
have caused their duly authorized signatories to execute and
deliver this Amendment on the dates set out opposite their signatures below to be effective as of
the Effective Time.



	 	 	 	 	 	 	 	 	 	 	 
	   Date:	 	11/23/05 	 	 	 	RESOLUTE ANETH, LLC	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	/s/ Nicholas J. Sutton 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	Nicholas J. Sutton 	 	 
	 

	 	 	 	 	 	Title:	 	Chief Executive Officer 	 	 








	 	 	 	 	 	 	 	 	 	 	 
	   Date:	 	12/3/05 	 	 	 	NAVAJO NATION OIL AND GAS COMPANY, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	/s/ Manual Morgan 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	Manual Morgan 	 	 
	 

	 	 	 	 	 	Title:	 	Chairman 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	/s/ Wilson Groen 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	Wilson Groen 	 	 
	 

	 	 	 	 	 	Title:	 	Chief Executive Officer 	 	 







12