Document:

EXHIBIT-10.4
KINDER MORGAN/KN ENERGY

GAS PURCHASE CONTRACT

INCLUDING AMENDMENTS

S1_EX-76<PAGE>

GAS PURCHASE AGREEMENT
 

 This Gas Purchase Agreement ("Agreement") is entered into as of
the 1st day of December, 1994, by and between K N Gas Supply Services,
Inc., a Colorado Corporation (Buyer) and Unico, Inc., (Seller).

In consideration of the agreements and of the mutual covenant contained
herein, the parties agree as follows:

I. Term

1.0  This Agreement shall become effective on December 1, 1994,
and shall continue in full force and effect until November 30, 1995, and
on a month-to-month basis thereafter, unless and until terminated after
the initial term by either party y thirty (30) days written notice given
to the other party.

II. Commitment

2.0   Subject to all of the other terms and provisions herein
set forth, Seller hereby commits to the performance of this Agreement the
gas reserves attributable to Seller's interest in the wells described on
Exhibit "A".  Both  parties acknowledge that Gas Purchase Contract
dated January 29, 1987 (P-1103) was terminated effective December 1, 1994.

III. Operation of Properties

3.0   During the term of this Agreement, Seller will maintain
and operate or require the maintenance and operation of its wells in an
efficient manner and according to approved practices.

IV. Quantity

4.0   Seller shall deliver gas hereunder to Buyer in such
volumes and at such times as requested by Buyer, up to Seller's interest
in the delivery capacity of the wells described in Exhibit "A" attached
hereto; provided, however, that the wells under this Agreement shall not
be require to produce gas at a rate which in Seller's sole opinion would
be injurious to said wells.

4.1   Buyer shall use its reasonable efforts to purchase and
receive such volumes of gas, in excess of its requirements for its customers
on the Sunflower Pipeline, as Seller may make available to Buyer. 
Nothing herein shall be construed to impose upon either party an obligation
to deliver or receive any minimum quantities of natural gas.

 

S1_EX-77<PAGE>

V. Delivery Points(s)/ Passage of Title

5.0   The Delivery Point (s) for gas sold and purchased hereunder
shall be at or near the wellhead of each well described on the attached
Exhibit "A".  Title to all gas shall pass to Buyer at said Delivery
Point (s).  Gas will be delivered at a pressure which is sufficient
to effect delivery into Buyer's or any third-party transporter's facilities
at the Delivery Point(s); provided, however, that neither party shall be
obligated to install, operate or in any way provide compression facilities
to cause the delivery or receipt of gas hereunder.

VI. Price

6.0   Buyer shall pay Seller for gas purchased and received
a monthly price equal to:  The average of the index price as published
by McGraw Hill in the first of the month publication of  Inside F.E.R.C.
Gas Market Report under "Prices of Spot Gas Delivered to Pipelines" for
Colorado Interstate Gas Co. per MMBtu dry; plus $0.05 per MMBtu, minus
$0.295 per MMBtu gathering charge.  No fuel charge will be accessed.

6.1  If  Inside F.E.R. C. Gas Market Report ceases publication
or ceases to report such prices for the above designated pipeline(s) in
determining the Index MMBtu price in paragraph 6.0 above, then the parties
shall within sixty (60) days agree upon replacement indices that represent
the monthly spot market price for gas delivered into pipelines in the mid-continent
region.  In the event Buyer and Seller are unable to agree on replacement
indices within sixty (60) days, this Agreement may be terminated by either
party by forwarding a written notice of days from the date of the termination
notice.

VII. Transportation

7.0  Seller shall bear and be responsible for the payment of all
costs, fees and charges associated with delivering gas hereunder to the
Delivery Point(s), and Buyer shall bear and be responsible for the payment
of all costs, fees and charges incurred after delivery of the gas at the
Delivery Point(s).  A condition precedent to the sale and purchase
of gas hereunder shall be each party securing the necessary and acceptable
transportation and/or gathering arrangements with third party transporters,
and the availability of capacity on the system of such third party transporters.

7.1  In the event a party is required to pay a penalty imposed
by a transporting pipeline or pipelines in accordance with the provisions
of the pipeline's applicable Federal Energy Regulatory Commission ("FERC")
approved transportation tariff, or the applicable transportation tariff
filed with and approved by the State regulatory agency having jurisdiction,
and/or by a gatherer, as a result of the other party's failure to accept
or deliver the proper quantities of gas hereunder at the Point(s) of Delivery,
the non-complying party shall reimburse the penalized party for the amount
of such penalties (or the penalized party's share thereof), subject to
the receipt of an invoice detailing such penalties and documentation substantiating
the payment of the penalty by the penalized party.  The penalized
party shall be obligated, in good faith, to mitigate and to minimize the
amount of such penalties.

S1_EX-78<PAGE>

VIII. Notices

8.0  Except as otherwise provided herein, any notice which either
party desires to give to the other shall be in writing and shall be duly
delivered when mailed to the address of, or sent by telecopy to, the party
to be notified as follows.

Buyer:  KN GAS SUPPLY SERVICES, INC.                                 
Seller:  UNICO, INC.

  P.O. Box 281304                                      
                                          
       
P.O. Box 35

  Lakewood, Colorado  80228-8304                                   
                         
Farmington, NM 87401

Attn: Vice President                                      
                                          
      
Attn: Rick L. Hurt

 Telephone #(303) 989-1999                                     
                                  
Telephone #(505) 326-2668

 Telecopier #(303) 763-3511                                    
                                   
Telecopier #(505) 326-2660

8.1  Either party may change its address and/or telephone and telecopier
numbers by giving advance notice to the other party.

IX. Quality

9.0  All natural gas delivered to Buyer shall be merchantable gas,
and conform to the quality specifications of any third-party transporter(s)
at the Delivery Point(s).  In the event that gas fails to meet these
minimum quality specifications, then Buyer may elect to either terminate
this Agreement or to suspend its purchase of gas hereunder until such time
that Seller brings such gas into conformance with these quality specifications.

X. Measurement

10.0  The unit of volume for the purpose of measurement of gas
delivered shall be a cubic foot of gas, and the  "cubic foot of gas"
shall be computed on a pressure base of  14.73 psia and at a temperature
base of sixty degrees (60°) Fahrenheit.  The gas delivered, as
measured at pipeline pressures, shall be corrected to the unit of measurement
in accordance with applicable provisions of the American Gas Association
"Gas Measurement Committee Report No. 3" including any amendments or superseding
standards agreeable to the parties.  The heating value of the gas
shall be determined on a "dry" basis at 14.73 psia.  The MMBtu of
gas delivered hereunder shall be determined by multiplying the total number
of cubic feet of gas delivered by the heating value of the gas per cubic
foot.

 

S1_EX-79<PAGE>

10.1 Deliveries of gas shall be calculated from the measurements taken
at the meter operated by Buyer or any third-party transporter(s) at the
Delivery Point(s), and from the heating value determined by the instruments
operated by Buyer or any third-party transporter.

XI. Title

11.0 Seller warrants generally the title to, and its right to sell,
all gas delivered hereunder, and warrants that such gas is free from liens
and adverse claims.  Seller agrees to indemnify Buyer from all suits,
actions, debts, accounts, damages, costs, losses and expenses, including,
but not limited to, all court costs and reasonable attorney's fees in connection
therewith, arising from or out of adverse claims of any and all persons
to said gas or to royalties or taxes or charges thereon.  In case
of any adverse claim or claims to the title or proceeds attributable to
any gas bought and sold hereunder, Buyer may, without otherwise affecting
this Agreement, retain the purchase price thereof, without interest, until
such claim or claims are finally determined or, at Buyer's option, until
Seller shall furnish Buyer a bond, in form and with sureties acceptable
to Buyer, conditioned to save Buyer harmless.

XII. Taxes/Royalties and Other Interests

12.0 All production, severance, excise, ad valorem, and other taxes,
imposed or levied by the state or any governmental agency on the gas produced,
sold or delivered hereunder, shall be paid by Seller.  Seller shall
notify Buyer in writing if Buyer is a first purchaser of the gas, or if
Buyer is required to remit any taxes which Seller is responsible for, or
both.  Under any law, rule or regulation, if Buyer is required to
remit to any authority any taxes or fees assessed to Seller, then Buyer
shall deduct the amount of the taxes or fees from any payments due Seller
and remit them to the respective authority, unless there are not any payments
due, in which case Seller shall immediately reimburse Buyer for the amounts
remitted.

12.1 Seller agrees to make, or cause to be made, payment of all royalties
and other payments for interest in production due the owners thereof in
accordance with the terms of the oil and gas leases ad other instruments
affecting production from the wells delivering gas to Buyer hereunder and
assumes full responsibility and liability for said payments, and Seller
agrees to indemnify, defend and save Buyer harmless from any and all liability
or loss or any kind or character, including, but not limited to, all court
costs and reasonable attorney's fees in connection therewith, incident
to the payment or non-payment of said royalties or other payments.

 

S1_EX-80<PAGE>

XIII. Statements

13.0 Buyer shall pay Seller by the thirty (30th) day of each month for
all gas delivered hereunder during the preceding month.  Any change
in the manner of payment to Seller shall be undertaken by Buyer only after
Seller gives Buyer notice by proper transfer order supported by satisfactory
evidence of the change.  Such change shall be effective the first
day of the month following Buyer's receipt of such notice.

13.1 Any errors in payment shall be corrected as soon as practicable,
and any payment due shall be without interest, so long as such payment
is made within thirty (30) days of the date of discovery of the error. 
Neither party shall be liable to the other for errors in payments, statements,
or invoices, unless questioned in writing within twenty-four (24) months
after the date of such payment, statement or invoice.

13.2  Each party shall have access to and the right to audit during
regular business hours all measurement, billing and payment records maintained
by the other party which relate to gas received under this Agreement. 
All records will be maintained for two (2) years after payment has been
made for the month to which the records pertain.

XIV. Assignment

14.0 This Agreement, and the parties' respective rights and obligations
hereunder, shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns; provided, however,
Buyer shall not be bound by any transfer of Seller's interest dedicated
hereunder until the first of the month following the date Buyer has been
furnished with the original or a certified copy of such transfer and suitable
evidence of transferee's interest.  This Agreement shall not be assigned
by either party without the express written consent of the other party;
provided, that said consent shall not be unreasonably withheld; and provided,
further, however, that Buyer may assign this agreement to any affiliate
or subsidiary without the prior consent of Seller.

XV. Liability

15.0 Seller and Buyer each assumes full responsibility and liability
for the maintenance and operation of its respective property and shall
indemnify and save harmless the other party from all liability and expense
on account of any and all damages, claims or actions, including injury
to and death of persons, arising from any act or accident in connection
with the installation, presence, maintenance and operation of the property
and equipment of the indemnifying party.

S1_EX-81<PAGE>

XVI. Force Majeure

16.0 All obligations imposed by this Agreement on each party, except
for the payment of money for gas delivered hereunder, shall be suspended
while compliance is prevented or hindered, in whole or in part as a result
of the following:  Acts of God; strike; lockout; fire; war; acts of
the public enemy; riot; civil disturbance; explosion; break down or accident
to wells, machinery, lines or pipe or plants; freezing of wells or lines
of pipe; partial or whole failure of wells; regulation or order of a governmental
agency; inability to secure, or the delays in acquiring at reasonable costs,
materials, equipment, easements, right-of-way, grants, servitude, permits
or licenses; inability of a transporting pipeline to transport gas which
is excused by any event or occurrence of the character herein defined as
constituting force majeure; partial or entire failure of gas supply or
gas demand over which neither party has control; any act or omission (including
failure to take gas) of a purchaser of gas from Buyer which is excused
by any event or occurrence of the character herein defined as constituting
force majeure; inclement weather that necessitates extraordinary measures
and expense to construct facilities and/or maintain operations; or any
other cause or causes beyond reasonable control of the party, whether of
the kind herein enumerated or otherwise.  This Agreement shall not
be terminated by reasons of suspension due to any one or more of the causes
above set forth.

16.1  In order to suspend by reason of force majeure, the party
claiming must give notice in writing or by facsimile, or orally, confirmed
by writing or facsimile, or telecopy to the other party as soon as reasonably
possible after the occurrence of the cause relied on and such cause shall
be remedied with all reasonable dispatch.  No party shall be required
against it's will to adjust or settle any labor dispute.

XVII. Miscellaneous

17.0  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED, AS TO
INTERPRETATION AND P0ERFORMANCE, IN ACCORDANCE WITH THE LAWS OF THE STATE
OF COLORADO, EXCLUDING ANY CONFLICTS-OF-LAW, RULE, OR PRINCIPAL WHICH MIGHT
REFER SUCH CONSTRUCTION TO THE LAWS OF ANOTHER STATE.  SELLE AND BUYER
CONSENT TO AND AGREE THAT ANY ACTION AT LAW, SUIT IN EQUITY OR OTHER JUDICIAL
PROCEEDING BROUGHT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY PROVISION
THEREOF SHALL BE INSTITUTED ONLY IN THE COURTS LOCATED IN THE STATE OF
COLORADO, COUNTY OF JEFFERSON.

17.1  IN THE EVENT EITHER PARTY HAS TO INITIATE ANY ACTION TO ENFORCE
ITS RIGHTS HEREUNDER, THEN THE PREVAILING PARY SHALL BE ENTITLED TO RECOVER
ITS COSTS, INCLUDING, BUT NOT LIMITED TO, ITS COURT COSTS AND EXPENSES
AND REASONABLE ATTORNER'S FEES.

17.2 This Agreement contains the entire agreement between the parties
as to the subject matter hereof, and there are no prior or contemporaneous
agreements or representations affecting such subject matter.  Any
change to or modification of this Agreement shall be in writing. 
Course of dealing and/or course of performance between the parties, and/or
trade usage, shall not be considered in determining the meaning and intent
of the terms and conditions stated herein.

S1_EX-82<PAGE>

17.3 A waiver by either party of any one or more defaults by the other
in the performance of any provisions of this Agreement shall not operate
as a waiver of any future default, whether of alike or different character.

17.4  The descriptive headings for the articles, sections, and
paragraphs contained in this Agreement and Appendix were constructed and
arranged for convenience only and shall not be considered to affect the
meaning or interpretation of the provisions herein.

17.5 This Agreement is deemed to be drafted and prepared equally and
jointly, regardless of which party prepared or submitted the document to
the other, and shall not be construed against one party or the other as
a result of the preparation, submittal or execution.

17.6 Except for the parties, their successors and assigns, no person,
including without limitation any owner of a royalty interest, overriding
royalty interest or production right, shall have any rights as a third-party
beneficiary or otherwise under this Agreement.

17.7 This Agreement shall be subject to all applicable state and federal
laws, orders, directives, rules, and regulations of any federal or state
governmental agency having jurisdiction.

17.8 If any part of this Agreement is held to be void or unenforceable
by any court or under any law, that part shall be deemed stricken and all
remaining provisions shall be valid and binding upon the parties.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.

BUYER                                         
                                          
                   
SELLER

KN GAS SUPPLY SERVICE, INC.                                     
                      
UNCIO, INC.

By:      L. Wesley Haun                                  
                                          
   
By:William N. Hagler

Title:      Vice President                                 
                                          
     
Title:        President

S1_EX-83<PAGE>

AMENDMENT DATED APRIL 15, 1996
K N Gas Supply Services, Inc.

PO Box 281304

Lakewood, CO 80228

April 15, 1996

Unico, Inc.

Attn: Mr. William Hagler

PO Box 35

Farmington, NM 87499

Re:1996 Contract Pricing - Gas Purchase Contract #1103

Dear Bill:

Unico, Inc. ("Seller") and KN Gas Supply Services, Inc. ("Purchaser")
are parties to that certain Gas Purchase Agreement dated December 1, 1994
(the "Agreement"), as amended.  Seller and Purchaser now desire to
amend certain terms and conditions of the Agreement as follows:

Term - Paragraph 1.0

Beginning April 1, 1996 and continuing in full force and effect until
March 31, 1997, and on a month-to-month basis thereafter, unless and until
terminated after the initial term by either party by thirty (30) days written
notice given to the other party.

Pricing - Paragraph 6.0

Paragraph 6.0 (including subsection A and B) shall be deleted and replaced
with:

6.0 Buyer shall pay Seller for gas purchased and received a monthly
price equal to

 

A. Pricing for Months March through October of Each Year

The average of the index prices as published by McGraw Hill in the
first of the month publication of  Inside F.E.R.C. Gas Market Report
under "Prices of Spot Gas Delivered to Pipelines" for Panhandle Eastern
Pipeline (TX, OK) and Northern Natural Gas Co. (TX, OK, KS) per MMBtu dry;
minus applicable transport, gathering, ACA, GRI and fuel charges.
 

B. Pricing for Months November through February of Each Year

The average of the index prices as published by McGraw Hill in the
first of the month publication of  Inside F.E.R.C. Gas Market Report
under "Prices of Spot Gas Delivered to Pipelines" for Panhandle Eastern
Pipeline (TX, OK) and Northern Natural Gas Co. (TX, OK, KS) per MMBtu dry;
plus $0.02 per MMBtu, minus applicable transport, gathering, ACA, GRI and
fuel charges.

All other terms and conditions of the Agreement shall remain in full
force and effect, as amended.  Please signify your agreement with
the foregoing, in the space below.

 

Sincerely,

Tom Williams

Tom Williams

KN Gas Supply Services, Inc.

 

Agreed and accepted this 15th day of May , 1996.

Unico, Inc.

By William N. Hagler

Name William N. Hagler

Title President

S1_EX-84<PAGE>

AMENDMENT DATED JUNE 15, 1999

KN Gas Gathering, Inc.

PO Box 281304

Lakewood, CO 80228

15 June 1999

Rick Hurt

Intermountain Refining Co., Inc.

PO Box 35

Farmington, NM 87499

 

Re: Letter Amendment to Gas Purchase Contract Number 1103 between KN
Gas Gathering, Inc. and Intermountain Refining Co., Inc.

Dear Mr. Hurt:

 

Pursuant to our recent discussions, KN Gas Gathering, Inc. (KNGG) will
amend your Contract to reflect the following purchase terms.  The
effective term of the pricing conditions will be January 1, 1999 to December
31, 1999.

KNGG will purchase the gas dedicated under the Contract at the first
of the month index price for Panhandle Eastern Pipeline Co. (Texas, Oklahoma),
Prices of Spot Gas Delivered to Pipelines as published in Inside F.E.R.C.'s
Gas Market Report less $.15 per MMBtu, less gathering charges of $.2029
per MMBtu, and fuel, lost and unaccounted charges of eight tenths of one
percent (.8%) of gas received by Gatherer at Gatherer's receipt point 
The gathering rate will escalate annually each January 1, at the Gross
Domestic Product Implicit Price Deflator as published by the U.S. Department
of Commerce for the most recent twelve month period.  However, the
gathering rate shall never be lower than the original gathering rate of
$.2029 per MMBtu as set forth in this Letter Amendment.  All other
terms of the Contract shall remain the same.

Upon your acceptance of the new pricing terms, as indicated by the signature
of the authorized representative below, KNGG will adjust your payment terms
effective January 1, 1999.  Please execute both copies of the enclosed
Letter Amendment, and return one copy to me.

Sincerely,

Carter G. Mathies

Carter G. Mathies

Executive Vice President

 

AGREED TO AND ACCEPTED THE    19th    
DAY OF JUNE 1999.

BY:    Rick L. Hurt

NAME:   Rick L. Hurt

TITLE:   Secretary/Treasurer

S1_EX-85<PAGE>

AMENDMENT TO GAS PURCHASE AGREEMENT P-1103
 

This Amendment is made and entered into to be effective February 1,
2000, by and between KN GAS GATHERING, INC. ("Buyer") and INTERMOUNTAIN
REFINING CO., INC.  as successor in interest to Unico, Inc. ("Seller")

WITNEETH:

WHEREAS, Buyer and Seller entered into that certain Gas Purchase Agreement
dated December 1st, 1994, (the "Agreement"), Contract #1103, covering the
purchase of natural gas produced in Kansas; and

WHEREAS, Buyer and Seller desire to amend the Agreement hereinafter
provided;

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in the Agreement, the parties hereto amend the Agreement
as follows:

Effective February 1, 2000, Article I, Section 1.0 shall be deleted
in its entirety and replaced with the following:

1.0 This Agreement shall remain operative and in full force and effect
from February 1, 2000, for a primary term of five (5) years ("Primary Term"),
and thereafter shall continue from year-to-year unless and until either
party terminates the Agreement by providing written notice 60 days prior
to the expiration of the Primary Term or any anniversary of the expiration
of the Primary Term.  Notwithstanding anything contained in the Agreement
or this Amendment to the contrary, in the event that the purchase of gas
under the terms herein becomes uneconomic for whatever reason, in the sole
opinion of Buyer, Buyer shall have the option to terminate this Agreement
with thirty (30) days advance written notice to Seller.

Except as hereby amended, all terms and conditions contained in the
Agreement shall remain in full force and effect.  All future references
to the Agreement shall be deemed to include this Amendment.

BUYER                                         
                                          
     
SELLER

KN GAS GATHERING, INC.                                      
               
INTERMOUNTAIN REFINING CO., INC.

BY: Carter G. Mathies                                      
                            
BY:  Rick L. Hurt

NAME:  Carter G. Mathies                                     
                     
NAME:  Rick L. Hurt

TITLE: President                                       
                                    
TITLE:  Treasurer

 

 

S1_EX-86<PAGE>Exhibit 10.5

Paramount Petroleum Contract
 

 

 

 

S1_EX-87<PAGE>

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT. (Agreement) by and between PARAMOUNT
PETROLEUM CORPORATION, a Delaware corporation, with its principal offices
located at 14700 Downey Avenue, Paramount, California 90723 (hereafter,
"Seller" or "PPC") and INTERMOUNTAIN REFINING COMPANY, a New Mexico corporation,
with its principal offices located at 1921 Bloomfield Boulevard, Farmington,
New Mexico  87401 (hereafter, "Buyer" or "IRC").

W I T N E S S E T H:

WHEREAS, IRC owns certain tanks, land, loading racks and associated
equipment usable in the manufacture, storage and shipment of asphalt cements,
asphalt emulsions and cutback asphalts, and operates an asphalt terminalling
facility located near the City of Fredonia, State of Arizona ("IRC's Terminal");
and

WHEREAS, Seller owns certain emulsion asphalt manufacturing equipment
and facilities (the "Equipment") which when combined with certain equipment
owned by IRC and assembled at IRC's Terminal is to be leased to Buyer pursuant
to that certain Lease Agreement ("the Lease") between PPC and IRC dated
November 29, 1999; and

WHEREAS, IRC desires to purchase and PPC desires to sell certain asphaltic
materials to IRC for the manufacture of emulsified and cut back asphalts
in accordance with PPC's specifications and the storage and re-delivery
of paving asphalts ("Asphalt Products"); and

WHEREAS, PPC desires to purchase and IRC desires to sell such Asphalt
Products to PPC; and

WHEREAS, IRC and PPC will each provide the other with stand-by irrevocable
letters of credit to ensure each party's performance in accordance with
the terms and conditions set for the herein:

NOW, THEREFORE, for and in consideration of the promises and the mutual
covenants and agreements contained herein, the parties hereto do hereby
agree as follows:

I.

AGREEMENT OF PARTIES

1.1 IRC hereby agrees that it will manufacture, store and re-deliver
Asphalt Products that meet the product specifications attached hereto as
"Exhibit A", and/or as provided by PPC from time to time.

 

S1_EX-88<PAGE>

1.2 PPC agrees to disclose its Product Specifications to those designated
personnel of IRC to permit IRC to manufacture asphalt products meeting
the product specifications designated in "Exhibit A".  The contents
of "Exhibit A", as well as any and all changes, modifications or corrections
to said Exhibits shall be the responsibility of PPC.  PPC represents
and warrants that the information and data contained in said Exhibits are
true and correct in all material respects.  PPC also agrees to provide
technical assistance and the performance at certain laboratory tests as
reasonably requested by IRC.

1.3  IRC shall treat all information received from PPC as confidential
except for that information specifically designated by PPC as non-confidential. 
IRC agrees to use the confidential information received from PPC only in
performance of activities pursuant to the rights granted by PPC under this
Agreement, and only during the term of this Agreement.

1.4 IRC agrees to lease from PPC the Equipment according to the terms
and conditions of that certain Equipment Lease Agreement between the parties
hereto dated November 29, 1999, and incorporated herein by this reference
and attached hereto as Exhibit "B".

1.5  IRC agrees to purchase such asphalt materials from PPC as
may be required to supply PPC's requirements for Asphalt Products in the
area served by IRC's terminal, f.o.b. IRC's Terminal, at a price based
upon the monthly average of high and low of Posted prices as published
by Poten & Partners for the Arizona/Utah (AZ/UT) area for the month
during which such asphalt is received by IRC.  The quantities of asphalt
purchased by IRC shall be determined by certified weights from a scale
at or near IRC's Terminal.  Title and risk of loss shall pass to IRC
at the unloading flange at IRC's Terminal.

1.6  The quantities of Asphalt Products sold and delivered by IRC
to PPC shall be determined by meter or by certified weights from a scale
located at or near IRC's Terminal.  Title and risk of loss shall pass
to PPC at IRC's loading flange.

1.7  To secure payment to PPC by IRC for the purchase of asphaltic
materials, IRC agrees to provide PPC with a stand-by irrevocable letter
of credit acceptable to PPC's Chief Financial Officer, as well as any lenders
providing credit facilities on behalf of PPC, in amounts sufficient to
cover IRC's anticipated purchases.

1.8  PPC agrees to provide IRC with a stand-by irrevocable letter
of credit acceptable to IRC's Chief Financial Officer, as well as any lenders
providing credit facilities on behalf of IRC, in amounts sufficient to
meet the anticipated charges for Asphalt Products purchased by PPC hereunder.

 

 

S1_EX-89<PAGE>

II.

PRICING, PAYMENT AND COST REIMBURSEMENT

2.1  The amount paid to IRC by PPC for Asphalt Products purchased
hereunder shall be determined in accordance with the following formula:

 

P = 0.4 (TR-AM-C-CRC)
 

Where:

 

 P = Amount paid to IRC by PPC for Asphalt Products for any month.

 TR = PPC's total revenue from the sale of Asphalt Products net
of applicable taxes, discounts, penalties, other applicable contra charges,
etc., f.o.b. IRC's Terminal for any month.

 AM = The cost of asphaltic materials used in the Asphalt Products
delivered to PPC for any month as set forth in Paragraph 1.4.  In
determining such costs, FIFO accounting principals shall be employed.
 

 C = The sum of the following costs on a monthly basis attributable
to the operation of IRC's Terminal for the storage, manufacture and delivery
of Asphalt Products:
 

(a) Chemicals, additives, water and diluents

(b) Utilities, including fuel electric power and telephone

(c) Maintenance and repairs, (including contract maintenance) parts
and supplies

(d) Operating, maintenance and supervisory labor and payroll burden

(e) Insurance and taxes

(f) Equipment Lease

(g) General and administrative overhead

(h) Other applicable costs not specifically defined

 
CRC = A Capital recovery charge, which shall be computed on a monthly basis,
equal to 1/48 (0.020833...) of the total out of pocket capital costs expended
during the Primary Term of this Agreement.

 

2.2  The following procedure shall be applied to satisfy the payment
obligations of each party to the other:

 

 

 

S1_EX-90<PAGE>

(1) With respect to the payment for asphaltic materials purchased by
IRC from PPC (formula component AM in Paragraph 2.1), for each calendar
month during which Asphalt Product sales occur, PPC shall first determine
the cost of the asphaltic material component in such sales in accordance
with Paragraphs 1.4 and 2.1 and credit IRC's payment obligation to PPC
by the amount so determined.

(2) With respect to the payment or reimbursement of IRC's costs (formula
component C in paragraph 2.1), PPC shall next deduct IRC's costs for each
calendar month from amounts remaining (TR-AM) in Paragraph 2.1) and reimburse
IRC for such costs.  In the event the result of TR-AM is insufficient
to cover IRC's costs for any given month, or in the event TR=0, costs incurred
by IRC shall be "banked" for recovery and reimbursement in subsequent months. 
For any month in which IRC does not receive full recovery of its costs,
it may, at its sole option, call for a full or partial reimbursement of
its costs by PC.  In this event, such reimbursements or "advances"
will be banked for the account of PPC for recovery in subsequent months. 
All requests for reimbursement of costs incurred by IRC shall be supported
by appropriate documentation.

(3) With respect to PPC's recoupment of capital recovery charges (formula
component CRC in paragraph 2.1), during any month when the balance remaining
after deducting the cost for asphalt materials and IRC's costs from total
revenues (TR - AM -C) is insufficient to provide for the capital recovery
charge, any shortfall shall be "banked" for the account of PPC for recovery
in subsequent months.

(4) Neither party shall receive a payment under formula component P
in Paragraph 2.1 until the "banks" for IRC and PPC have zero or negative
balances.

 
2.2  Approved Costs incurred by IRC in assembling the Equipment will
be reimbursed by PPC upon the submission of appropriately documented invoices. 
For purposes of this Agreement, until the Equipment is fully assembled
and the parties mutually agree that the Equipment is operational all such
costs incurred hereunder will be deemed to be "capitalized" hereunder.

 

 

 

S1_EX-91<PAGE>

III.

TERM AND TERMINATION

 3.1  The term of this Agreement shall be four (4) years from
the date of the first delivery of Asphalt Products hereunder ("the Primary
Term") and shall continue from year to year thereafter unless terminated
by either party by written notice at least one hundred and eighty (180)
days prior to the end of the Primary Term or any annual extension thereof. 
The foregoing notwithstanding to the contrary, at anytime after the first
anniversary of the date of first delivery of Asphalt Product hereunder,
PPC may terminate this agreement by giving IRC no less than sixty (60)
days advanced written notice in the event that market conditions are such
that continuing with this Agreement becomes uneconomic in the sole judgment
of PPC, or in the event of unexpected competition for the products to be
manufactured, purchased, sold, stored, and redelivered hereunder.. 
Following the termination of the Agreement, PPC will remove its Equipment
in accordance with the terms of the Lease, and will at IRC's option purchase
IRC's inventory of asphaltic materials, Asphalt Products, and chemicals
and additives, if any, at IRC's cost.

3.2  In the event of the termination of this Agreement for any
reason, IRC shall promptly return to PPC any confidential information in
its possession and make no further use of the same.

3.3  Neither IRC nor PPC shall, by reason of the termination of
this Agreement, be liable to the other for compensation, reimbursement
or damages of any kind on account of the loss of prospective profits on
anticipated sales or on account of expenditures, investments, or commitments
in connection with the business or good will of IRC or PPC or otherwise,
except for payments for asphaltic materials, IRC's costs and IRC's price
for Asphalt Products, if any, as set forth herein.

IV.

INSURANCE AND INDEMNITIES

4.1  IRC shall maintain its Terminal in such a manner that it will
be able to produce Asphalt Products which meet the specifications shown
on "Exhibit A", or as provided by PPC from time to time.

4.2  The persons executing this Agreement have the authority to
bind the entity for which they are signing.  If reasonably requested,
either party hereto shall provide proof of that authority through the certified
and sealed corporate resolution that confirms such authority.

 

 

S1_EX-92<PAGE>

4.3  Each party hereto agrees that during the term of this Agreement,
they will maintain worker's compensation insurance coverage in amounts
required by law.  Each party will also maintain property or covered
peril insurance coverage in amounts sufficient to cover any damage to the
Equipment, asphaltic materials, and asphaltic products, in amounts that
are mutually agreeable to the parties hereto, as well as commercial general
liability coverage, product liability coverage, which coverage will include
pollution endorsements, if reasonably available and which names the other
party as an additional insured.  Certificates of insurance to be provided
upon execution of this Agreement.

4.4  IRC agrees to defend, indemnify and hold harmless PPC, its
officers, directors, shareholders, employees, agents, representatives and
independent contractors for any and all liability for personal injuries
and any property damage which arises out of the duties and obligations
arising out of this Agreement, and its performance under this Agreement
except if such liability arises from PPC'' gross negligence or willful
misconduct.  IRC further agrees to indemnify, defend, and save PPC
harmless from any expense or liability whatsoever arising out of any and
all claims, demands or causes of action that may be asserted against PPC
on account of injuries to or deaths of persons, damage to property, or
injuries to the environment, occurring as a result of or in any way related
to the storage, manufacture, receipt, redelivery and handling of any of
the Products covered by this Agreement.  However, this duty to indemnify
does not cover any incidental, consequential of special damages of any
kind whatsoever.

4.5  PPC agrees to defend, indemnify and hold harmless IRC, its
officers, directors, shareholders, employees, agents, representatives and
independent contractors for any and all liability for personal injuries
and any property damage which arises out of its performance under this
Agreement, except if such liability arises from IRC's gross negligence
or willful misconduct.  PPC further agrees to indemnity, defend and
save IRC harmless from any expense or liability whatsoever arising out
of any and all claims, demands or causes of action that may be asserted
against IRC on account of injuries to or deaths of persons, damage to property,
or injuries to the environment, occurring as a result of or in any way
related to the transportation, supply and resale of any of the Products
covered by this Agreement.  However, this duty to indemnify does not
cover any incidental, consequential or special damages of any kind whatsoever.

V.

REPORTS AND PAYMENTS

5.1  IRC shall provide PPC documents evidencing asphaltic materials
received by IRC, inventories of asphaltic materials and Asphalt Products
on hand and Asphalt Products delivered to PPC on a daily basis, except
Saturdays and Sundays.

 

S1_EX-93<PAGE>

5.2  No later than the seventh (7th) working day of each month
IRC shall provide PPC documents evidencing IRC's cost for the previous
month, as defined in Paragraph 2.1 of this Agreement.

 

5.3  No later than the twentieth (20th) day of each month, PPC
shall provide IRC an accounting of the previous month's business results
which essentially follows the formula and procedures described in Paragraphs
2.1 and 2.2 of this Agreement.  Such accounting shall also show the
balances in IRC's and PPC's "banks".

5.4  Any payments required under this Agreement shall be due and
receivable in the offices of the invoicing party five (5) business days
after receipt of a documented invoice by the invoiced party.  Any
payment due and not received by the due date shall accrue  interest
at the rate of one and one-half percent (1.5%) per month until paid; provided,
however, that the interest rate charged shall not exceed the maximum rate
permitted by law.

VI.

NOTICE

6.1  Any notice, demand, report r other communication by PPC hereunder
shall be sufficiently given if delivered to IRC at the following address:

 

TO IRC:   Mr. William Hagler

    President

    INTERMOUNTAIN REFINING CO., INC.

    1921 Bloomfield Blvd.

    Farmington, NM  87401

 
And by IRC if delivered to PPC at the following address:

 

TO PPC:   William L. Thorpe, Jr.

    Senior Vice President

    PARAMOUNT PETROLEUM CORPORATION

    14700 Downey Avenue

    Paramount, California  90723

With a Copy to:  Steven D. Farkas, Esq.

    Vice President & General Counsel

    PARAMOUNT PETROLEUM CORPORATION

    14700 Downey Avenue

    Paramount, California  90723
S1_EX-94<PAGE>

Subsequent to the execution of this Agreement, either party hereto
may change the location of where notices hereunder are to be sent by providing
a written notice to the other party as provided herein.

VII.

INTERPRETATION AND APPLICABLE LAW

7.1  This Agreement supersedes all prior discussions, negotiations
and agreements between the parties and may not be amended except by agreement
in writing signed by all parties.

7.2  This Agreement shall be governed by and interpreted in accordance
with the laws of the State of California, and should any clause, sentence,
or paragraph hereof  be judicially decided to be invalid, unenforceable
or void, such decision shall not have the effect of invalidating or voiding
the remainder of this Agreement, and the parties agree that such portion
or portions shall be deemed to have been stricken here from and the remainder
shall have the same force and effectiveness as if such portion or portions
had never been included herein.

VIII.

WAIVER

8.1  The failure of any party at any time to require performance
of any provision hereof shall not effect such party's right to enforce
the same at any late time.  No waiver of any provision or breach by
any party will be deemed a further or continuing waiver of breach of any
such provision or of any other provision hereof.

IX.

ENFORCEMENT

9.1  Should litigation be instituted to enforce any portion of
this Agreement, the prevailing party shall be reimbursed all of its costs
and expenses, including reasonable attorney's fees, expert witness fees
and court costs, in enforcing the same, upon the entry of a final and unappealable
decision of any court of competent jurisdiction.

X.

ASSIGNABILITY

10.1  This Agreement shall be personal to and not assignable by
IRC without the prior to written approval of PPC, and such approval shall
not be unreasonably.

S1_EX-95<PAGE>

XI.

ENVIRONMENTAL INDEMNITY

11.1 IRC acknowledges that its Terminal may contain environmental contamination. 
IRC agrees to indemnify and hold harmless PPC for any and all claims or
causes of action, whether brought by a governmental agency or a third party,
which in any way relates to the environmental condition of the property,
or off-site impacts caused or allegedly caused by the condition of 
IRC's property or facility.

XII.

FORCE MAJEURE

12.1  Neither party shall be deemed to be in default or liable
to the other party for failure or delay in making or accepting deliveries
hereunder to the extent that such failure or delay is due to compliance
with unexpected legislation, acts, rules, orders, regulations, directives
or requests of any federal, state or local civilian or military authority,
or as a result of insurrection, wars, rebellions, riots, embargoes, strikes
or other labor difficulties, fire, explosions, floods, or actions of the
elements, acts of God, disruption or breakdown of production.  The
party claiming occurrence of a force majeure event must provide the other
party written notice of such event as soon as possible following the event,
but in no event later than seven (7) days from the date of the event. 
This provision shall not apply to payment of any sums due to either PPC
or IRC for asphaltic materials, or Asphalt Products and IRC's costs respectively.

XIII.

INSPECTION OF BOOKS AND RECORDS

13.1  Each party hereto shall have the right as its own expense,
during reasonable business hours, to examine, audit and/or photocopy the
books, the records, invoices, gauging and weighing charts of the other,
to the extent necessary to verify the accuracy of any invoice, statement,
charge, computation or demand made under or pursuant to any of the provisions
of this Agreement.  Any inaccuracy will be promptly corrected when
discovered; provided however, that neither party shall be required to maintain
books, records, invoices or charts for a period of more than three (3)
years following the termination of this Agreement.  Neither party
shall have any right to question or contest any charge or credit if the
matter is not called to the attention of the other party in writing within
three (3) years of the termination of this Agreement.

 

 

 

 

S1_EX-96<PAGE>

XIV.

REPRESENTATIONS AND WARRANTIES

14.1  Each party hereto hereby represents, warrants and covenants
to the other that the following matters are true and correct as of the
execution of this Agreement and will also be true and correct as of the
effective date of this transaction.

(a) This Agreement, the accompanying Lease Agreement, and all other
documents and items to be executed and delivered by each party to the other
pursuant to the other pursuant to the terms of this Agreement, (i) have
been or will be duly authorized, executed and delivered by the party, (ii)
are or will be legal, valid and binding obligations of that party as of
the date of their respective executions, (iii) are or will be enforceable
in accordance with their respective terms, and (iv) do not and will not,
at the date of execution of this Agreement and the attached Equipment Lease
Agreement, violate any provisions of any agreement to which Buyer or Seller
is a party.

(b) To the actual Knowledge of each party, no attachments, execution
proceedings, assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings are pending or threatened against that
either Buyer or Seller nor are any of such proceedings contemplated by
either Buyer or Seller.

XV.

BANKRUPTCY

15.1  In the event that either party hereunder files for relief
under the Bankruptcy laws of the United States, institutes proceedings
for the benefits of creditors, applies for any form or reorganization,
or threatens any such proceedings, this Agreement and the Lease Agreement
shall become immediately terminable by the other party, any executory lease
benefits will immediately terminate, and any leased equipment may be removed
by the owner of that equipment.

ACCEPTED at Paramount, California, as set out below.

PPC:                                         
                                          
       
IRC:

WILLIAM L. THORPE, JR.                                      
                 
WILLIAM N. HAGLER

BY: William L. Thorpe, Jr.                                     
                       
BY: William N. Hager

 

ITS:  Senior Vice President                                    
                       
ITS: President

DATE:  11/30/99                                      
                                   
DATE:   11/30/99

S1_EX-97<PAGE>

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