SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 26, 1995
TRITON ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-7864 75-1151855
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
6688 N. Central Expressway
Suite 1400
Dallas, Texas 75206
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 691-5200
N/A
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
As reflected in the attached press release, on May 26, 1995, the Company
sold 10.4 million barrels of oil in a forward oil sale. Under the terms of
the sale, the Company has received approximately $87 million of the
approximately $124 million net proceeds, and is entitled to receive
substantially all of the remaining proceeds (now held in various
interest-bearing reserve accounts) when the Company's Cusiana and Cupiagua
fields project in Colombia becomes self-financing, which is expected in 1997,
and when certain other conditions are met. The barrels are to be delivered
during a five-year period beginning in June 1995.
The oil was purchased by a newly formed, special-purpose corporation
using funds provided by the sale to investors of the corporation's
investment-grade securities. The securities were privately placed by J.P.
Morgan Securities Inc. with several major U.S. institutional investors.
Morgan Guaranty Trust Company of New York has agreed to purchase the oil
delivered by Triton to the special-purpose corporation at a fixed price of
$15.87 per barrel.
In order to accommodate efficient marketing of the oil delivered by the
special-purpose corporation to Morgan Guaranty, the Company has agreed to
purchase such oil at a price per barrel equal to the then current market price
of West Texas Intermediate crude minus $2.50. The Company intends to resell
the oil purchased from Morgan Guaranty together with the Company's other
Colombian production.
Morgan Guaranty also agreed to purchase up to $40 million of additional
production on a forward sale basis in the event that the Company is otherwise
unable to meet its cash call obligations in respect of the Cusiana and
Cupiagua fields project. The number of barrels would be determined based on a
formula intended to reflect their fair market value. The Company does not
expect, however, to sell any production under this agreement.
The purchase prices and other terms of the transaction were determined by
arm's-length negotiations among the Company, J.P. Morgan Securities Inc.,
Morgan Guaranty Trust Company of New York and the purchasers of the
special-purpose corporation's debt. The prices reflect the various parties'
mutual agreement as to present fair market value of the barrels of oil to be
delivered, taking into account such factors as quality relative to West Texas
Intermediate crude, transportation costs and timing of deliveries.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Unaudited Pro Forma Consolidated Condensed Balance Sheet as of
March 31, 1995.
(c) Exhibits.
Exhibit No. Description
10.1 Triton Crude Purchase Agreement
10.2 Crude Oil Purchase Agreement
99.1 Press release
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
BASIS OF PRESENTATION
The accompanying unaudited Pro Forma Consolidated Condensed Balance Sheet
of the Company adjusts the March 31, 1995 historical consolidated condensed
balance sheet to give effect to the Colombian forward oil sale described in
Item 5 as though such transaction occurred on March 31, 1995.
Pro Forma Consolidated Condensed Statements of Operations for the year
ended May 31, 1994, the seven months ended December 31, 1994 and the three
months ended March 31, 1995 are not presented herein since the Company's
production in Colombia was not at commercial levels throughout most of this
time period. Had the Company been producing crude oil at commercial levels
during this period, the pro forma adjustments that would have been applied to
the consolidated condensed statements of operations would have (i) reduced
sales and other operating revenues by the difference in actual oil prices that
would have been received during the applicable reporting periods and the fixed
price received in the forward oil sale and (ii) reduced depletion expense due
to lower production volumes.
The Pro Forma Condensed Consolidated Balance Sheet should be read in
conjunction with the historical consolidated financial statements and the
related notes included in the Company's Transition Report on Form 10-K for the
seven months ended December 31, 1994. The pro forma information is not
necessarily indicative of the Company's financial position that might have
occurred had such transaction actually occurred on March 31, 1995.
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
MARCH 31, 1995
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
HISTORICAL ADJUSTMENTS PRO FORMA
ASSETS
Current assets:
Cash and equivalents $ 9,113 $ 86,610 (a) $ 95,723
Short-term marketable securities 22,482 22,482
Receivables 26,997 26,997
Inventories, prepaid expenses and other 3,958 3,958
Total current assets 62,550 86,610 149,160
Long-term marketable securities 21,007 21,007
Property and equipment, at cost, less accumulated
depreciation and depletion of $499,996 428,121 428,121
Investments and other 130,748 35,613 (b) 166,361
$ 642,426 $ 122,223 $ 764,649
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current
installments of long-term debt $ 7,279 $ $ 7,279
Accounts payable and accrued liabilities 23,962 9,069 (c) 33,031
Total current liabilities 31,241 9,069 40,310
Long-term debt, excluding current installments 349,852 349,852
Deferred income taxes 18,474 18,474
Deferred income and other 8,128 113,154 (d) 121,282
Shareholders' equity:
Preferred stock, no par value 17,976 17,976
Common stock, par value $1 35,578 35,578
Additional paid-in capital 504,956 504,956
Accumulated deficit (315,569) (315,569)
Foreign currency translation adjustment (6,958) (6,958)
Other (785) (785)
235,198 235,198
Less cost of common stock in treasury 467 467
Total shareholders' equity 234,731 234,731
Commitments and contingencies
$ 642,426 $ 122,223 $ 764,649
</TABLE>
The Company uses the full cost method to account for its oil and gas producing
activities.
See accompanying notes to pro forma consolidated condensed financial
statements.
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: The accompanying unaudited pro forma condensed consolidated
balance sheet adjusts the March 31, 1995 historical condensed consolidated
balance sheet to give effect to the Colombian forward oil sale as though such
transaction occurred on March 31, 1995.
Pro forma adjustments are made to reflect:
(a) the net proceeds received upon consummation of the sale;
(b) the long term receivable for the remaining proceeds to be
received when the Cusiana and Cupiagua fields project becomes self-financing,
which is expected in 1997, and when certain other conditions are met;
(c) the current portion of the unearned revenue liability and accrued
transaction costs; and
. (d) the long-term portion of the unearned revenue liability.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRITON ENERGY CORPORATION
Date: June 8, 1995 By: /s/Robert B. Holland, III
Robert B. Holland, III, Senior Vice
President and General Counsel
EXHIBIT 10.1
ASSIGNMENTS AND TRANSFERS OF
INTERESTS IN THIS AGREEMENT
ARE RESTRICTED AS PROVIDED
IN SECTION 12.17 HEREOF
____________________________________________
CRUDE OIL PURCHASE AND SALE AGREEMENT
____________________________________________
TRITON COLOMBIA, INC.
as seller
and
OIL CO. LTD.
as purchaser
____________________________________
Dated as of May 25, 1995
____________________________________
TABLE OF CONTENTS
Page No.
ARTICLE I
DEFINITIONS 1
1.1 Definitions. 1
ARTICLE II
SALE AND PURCHASE 10
2.1 Sale and Purchase 10
2.2 Delivery 12
2.3 Quality 15
2.4 Quantity. 15
2.5 Compliance with Delivery Schedule 15
2.6 True Up Payments and True Up Deliveries 17
ARTICLE III
TERM 19
3.1 Term 19
ARTICLE IV
AFFIRMATIVE COVENANTS OF TRITON 19
4.1 Performance 19
4.2 Information 19
4.3 Insurance 22
4.4 Compliance with Laws, Etc. 22
4.5 Taxes 22
4.6 Existence 23
4.7 Development of Cusiana Project 23
4.8 Crude Reserves 23
4.9 Reserved 23
4.10 U.S. Tax Matters 23
4.11 Delivery of Crude Oil 24
4.12 Audit 24
4.13 Proceeds 24
4.14 Nominated Amount 25
4.15 Additional Crude Purchase Agreement 25
4.16 Prepayment of Cash Calls 25
4.17 Conduct of Business 25
ARTICLE V
NEGATIVE COVENANTS OF TRITON 25
5.1 No Assignment or Amendment 25
5.2 Maintenance of Cusiana Interest Revenues and Reserves 26
5.3 Limitation on Liens on Sale, Lease or Conveyance of Assets 26
5.4 Manner of Forward Sales 27
ARTICLE VI
AFFIRMATIVE COVENANTS OF OIL CO. 28
6.1 Performance 28
ARTICLE VII
SPECIFIED EVENTS 28
7.1 Specified Events 28
7.2 Damages Payable Upon Occurrence of Specified Event 30
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES 31
8.1 Representations and Warranties of Triton 31
8.2 Representations and Warranties of Oil Co. 35
ARTICLE IX
CONDITIONS PRECEDENT 36
9.1 MGT Crude Purchase Agreement 36
9.2 Transaction Documents 36
9.3 Opinions and Certifications 36
9.4 Issuance of Notes and Certificates 36
ARTICLE X
FORCE MAJEURE 36
10.1 Excuse for Nonperformance 36
10.2 Definition 37
10.3 Notice and Cure 38
ARTICLE XI
RESERVED
38
ARTICLE XII
GENERAL PROVISIONS 38
12.1 Confidentiality 38
12.2 Survival of Representations and Warranties 39
12.3 Headings 39
12.4 Rights and Remedies Cumulative 40
12.5 Entire Agreement 40
12.6 Construction 40
12.7 Severability 40
12.8 Governing Law; Jurisdiction 40
12.9 Binding Agreement 41
12.10 JURY TRIAL 42
12.11 No Agency 42
12.12 No Third-Party Beneficiaries 42
12.13 Enforcement 42
12.14 Notice 42
12.15 No Waiver 44
12.16 Further Assurances 44
12.17 Assignability 44
12.18 Counterparts; Filing 45
12.19 Modification of Agreement 45
12.20 Purchase of Notes or Certificates 45
Schedule A. . . . Delivery Schedule
Schedule B. . . . Conditions of Sale
Schedule C. . . . Current Liens
Schedule D. . . . Litigation
Exhibit A. . . . Oil Co. Power of Attorney
Exhibit B. . . . Triton Power of Attorney
--
Triton Purchase Agreement
THIS AGREEMENT is made and entered into as of the 25th day of May,
1995, by and between TRITON COLOMBIA, INC., a Delaware corporation including a
branch located in the Republic of Columbia ("Triton"), with offices at Carrera
9A #99-02, Oficina 407, Apartado Aereo 30277, Santa Fe de Bogota, Colombia,
and OIL CO. LTD., a Cayman Islands company ("Oil Co."), c/o Caledonian Bank &
Trust Limited, Caledonian House, Mary Street, George Town, Cayman Islands,
B.W.I., Attention: David Sargison.
R E C I T A L S:
WHEREAS, Triton desires to sell, and Oil Co. desires to purchase,
Crude Oil (as hereinafter defined), subject to the terms and conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
promises herein contained, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used herein, the following terms shall have
the following means:
"Acceleration Expenses" shall be determined in accordance with
Section 12.13 hereof.
"Additional Crude Purchase Agreement" shall mean that additional
crude oil purchase and sale agreement dated as the date hereof by and between
MGT and Triton.
"Affiliate" shall mean, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any specified Person means the right or power to direct or
cause the direction of the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agreement" shall mean this Agreement and shall include all
amendments, modifications and supplements hereto as the same may be in effect
from time to time.
"Applicable Instruments" of any Person shall mean the Certificate or
Articles of Incorporation or the Certificate and Memorandum of Association,
by-laws and other corporate documents of such Person and all contracts,
indentures, agreements, instruments and documents to which such Person is a
party or by which such Person or any assets of such Person may be bound or
affected (it being understood that a Person shall be deemed to be affected by
a contract, indenture, agreement, document or instrument (collectively,
"instruments") without being a party to such instrument, if such instrument,
inter alia, directly or indirectly imposes a restriction or limitation on the
operations or affairs of such Person).
"Association Contract(s)" shall mean the Santiago de las Atalayas
Association Contract, the Tauramena Association Contract and/or the Rio
Chitamena Association Contract, including all amendments, modifications and
supplements thereto, which are defined in the recitals to the Joint Operating
Agreement.
"Bankruptcy Code" shall mean the United States Federal Bankruptcy
Code of 1978, as amended from time to time.
"Barrel" shall mean 42 U.S. gallons of 231 cubic inches each of
Crude Oil, adjusted for basic sediment and water, and corrected to sixty
degrees Fahrenheit (60F) and one (1) atmosphere of pressure.
"Benchmark Price" shall mean the arithmetic average (rounded to the
nearest tenth of a cent) of the official settlement prices of the first nearby
NYMEX light sweet crude oil futures contract (the "NYMEX Settlement Price"),
or if the NYMEX Settlement Price is not available for ten consecutive Business
Days, the Fallback Price, for each Trading Day during each calendar Month in
which a delivery of Crude Oil is scheduled to occur or occurs stated in U.S.
Dollars, minus $2.40 per Barrel.
"BL Date" shall mean, for a cargo of Crude Oil or Substitute Crude
Oil, the date of the bill of lading for that cargo.
"Brent" shall mean Brent Blend Crude Oil made available for loading
at the Sullum Voe terminal, United Kingdom.
"Business Day" shall mean any day other than Saturday, Sunday and
any day on which commercial banking institutions in New York City or Dallas,
Texas are authorized or obligated by law or executive order to close.
"Cash Call" shall mean a request for an Advance (as defined in Annex
A (General Provisions) of the Joint Operating Agreement) made by the operator
under such Joint Operating Agreement to Triton in connection with the
activities in the Contract Area.
"Cash Call Deficiency Account" shall mean the account established
pursuant to the terms of the Indenture and funded on the date hereof in an
amount equal to $30,000,000.
"Certificate Purchase Agreements" shall mean those certificate
purchase agreements dated as of May 25, 1995 by and between Oil Co. and each
Purchaser listed in Schedule I thereto (including any side letters delivered
pursuant thereto).
"Certificates" shall mean the 8.9% Certificates due 2000 issued
pursuant to the Trust Agreement.
"Colombia" shall mean the Republic of Colombia.
"Contract Area" shall mean the Santiago de las Atalayas Contract
Area, the Tauramena Contract Area and Rio Chitamena Contract Area covered by
the Association Contracts or all such portions thereof as may be held by any
of the parties to the Joint Operating Agreement under the terms of such Joint
Operating Agreement.
"Crude Oil" (when capitalized) shall mean (a) crude oil that is
allocable to Triton's Participating Interest in available crude oil under the
Joint Operating Agreement and (b) Substitute Crude Oil, if any, as provided
for under Section 2.5 hereof. "Crude oil" (when not capitalized) means crude
oil or other liquid hydrocarbons that do not satisfy one or more of the
characteristics of Crude Oil (the capitalized term).
"Cusiana Project" shall mean the activities jointly undertaken with
respect to the development of the Contract Area as contemplated by the Joint
Operating Agreement.
"Delivery Cycle" shall have the meaning specified in Section
2.5(a)(iii) hereof.
"Delivery Point" shall have the meaning specified in Section 2.2(c)
hereof.
"Delivery Requirement" shall mean the Barrels to be delivered each
Month, pursuant to Schedule A.
"Dollars" or "$" shall mean dollars of the United States of America.
"Fallback Price" shall mean the arithmetic average of the high and
low prices for prompt (also known as "first line") West Texas Intermediate
(WTI) crude oil delivered at Cushing, Oklahoma published in the issue of
Platt's Oilgram Price Report that reports prices effective on the relevant
Trading Day in each calendar Month in which a delivery of Crude Oil is
scheduled to occur or occurs.
"Financing Options" shall mean (i) a sale of property or assets
(subject to Article V hereof); (ii) a draw-down on letters of credit or other
credit facilities including bank loans or inter-company loans; (iii) an issue
of debt; and (iv) an issue of equity including, in the case of each of clause
(iii) and clause (iv), issues of Triton or its parent, TEC.
"Force Majeure" shall have the meaning assigned to such term in
Section 10.2 hereof.
"Forecast" shall mean a report to be delivered by Triton to Oil Co.
pursuant to Section 4.2(g) hereof.
"Forecast Shortfall" shall mean, for any period, a projection by
Triton that Triton shall not be able to deliver 100% of the Barrels in
fulfillment of the Delivery Requirement due for such period pursuant to
Section 2.4 hereof by the end of such period.
"Forties" shall mean Forties Blend Crude Oil which has been
transported through and stabilized at the Kerse of Kinneil and which is
suitable for loading into tankships.
"Forward Sales" shall mean sales of Crude Oil by Triton in which
payment for such Crude Oil is required to be received 30 days or more prior to
the BL Date for such Crude Oil.
"Government" shall mean the government of, or an agency, board,
bureau, commission, court, department, or instrumentality of, Colombia or of
any political subdivision of Colombia.
"Governmental Requirements" shall mean all judgments, orders, writs,
injunctions, decrees, awards, laws, ordinances, statutes, regulations, rules,
franchises, permits, certificates, licenses, authorizations and the like of
any government or any commission, board, court, agency, instrumentality or
political subdivision thereof (including, without limitation, the Government).
"Indebtedness" shall mean all items classified as liabilities for
money borrowed in accordance with U.S. generally accepted accounting
principles, and shall include capitalized leases and guarantees or
endorsements (other than of notes, bills and checks presented to banks for
collection or deposit in the ordinary course of business) of indebtedness of
others.
"Indenture" shall mean the Indenture entered into by Oil Co., First
Trust of New York, National Association, as Fiscal Agent, and the Indenture
Trustee on the date hereof providing for the issuance of the Notes.
"Indenture Trustee" shall mean the Indenture Trustee for the Notes
pursuant to the Indenture.
"Joint Operating Agreement" shall mean the Joint Operating Agreement
for the Santiago de las Atalayas, Tauramena and Rio Chitamena Association
Contract Areas By and Among BP Exploration Company (Colombia) Limited, TOTAL
Exploratie En Produktie Mij B.V. and Triton Colombia, Inc. dated March 29,
1994, as amended and in effect from time to time, including annexes and
exhibits thereto.
"Letter of Indemnity" shall mean a letter of indemnity in a form
generally accepted by purchasers of Brent or Forties, as the case may be,
co-signed or guaranteed by a bank acceptable to Oil Co. or the Person who
purchases Crude Oil from Oil Co.
"Lien" shall mean, as applied to property or assets, real or
personal, tangible or intangible, any pledge, mortgage, lien, charge, security
interest or encumbrance of any kind thereon (including, without limitation,
any conditional sale or other title retention agreement, any lease in the
nature thereof or the interest of the lessor under any capitalized lease).
"MGT" shall mean Morgan Guaranty Trust Company of New York, a New
York banking corporation, its successors and permitted assigns.
"MGT Crude Purchase Agreement" shall mean that crude oil purchase
and sale agreement dated as of the date hereof by and between Oil Co. and MGT.
"Month" shall mean a calendar month beginning on the first day of
January, February, March, April, May, June, July, August, September, October,
November or December in any Year.
"Notes" shall mean the 8.9% Notes due 2000 issued by Oil Co.
pursuant to the Indenture.
"NYMEX" shall mean the New York Mercantile Exchange or its
successor.
"Oil Reserve Estimate" shall mean, on an after-tax basis, the
standardized measure of discounted future net cash inflows related to proved
oil reserves as calculated in accordance with Statement of Financial
Accounting Standards No. 69, as in effect on the date hereof, as adjusted for
any (i) back-in interests or interest equalization and unitization
arrangements with third parties and (ii) acquisitions, transfers or
dispositions of interests in such reserves since the date as of which such
standardized measure has been calculated (it being understood that in the case
of any acquisition the right to include such estimate shall be dependent upon
the availability of such estimate from a nationally recognized engineering
firm.)
"Participating Interest" shall mean at any particular time and in
relation to a party to the Joint Operating Agreement the undivided interest,
net of royalty interests as appropriate, expressed as a percentage which such
party has at that time pursuant to such Joint Operating Agreement.
"Permitted Lien" shall have the meaning specified in Section 5.3
hereof.
"Person" (whether or not capitalized) shall mean any individual,
corporation, company, partnership, joint venture, trust, estate,
unincorporated association, government or any commission, board, court,
agency, instrumentality or political subdivision thereof, any other entity or
any trustee, receiver, custodian or similar official.
"Pipeline" shall mean the Oleoducto Central, a crude oil pipeline
from the Cusiana and Cupiagua fields to the Port, owned and/or operated by
Oleoducto Central, S.A., its successors or assigns, as the same may be
upgraded or expanded from time to time.
"Pledge Agreement" shall mean that pledge agreement dated as of the
date hereof by and between Oil Co. and the Indenture Trustee.
"Port" shall mean the port of Coveas, Colombia.
"Prepaid Price" shall have the meaning specified in Section
2.1(a)(i) hereof.
"Purchase Price" shall have the meaning set forth in Section 2.1(a)
hereof.
"Remote Delivery Point" shall have the meaning specified in Section
2.2(c) hereof.
"Required Deliverable Barrels" shall mean, for each Month during the
term of this Agreement, two times the aggregate number of Barrels remaining to
be delivered under Schedule A for the period from such Month through and
including the last Month provided under Schedule A.
"Required Documents" shall have the meaning specified in Section
2.2(f) hereof.
"Schedule A" shall mean the schedule of delivery by Triton to Oil
Co. of Barrels attached hereto, as the same may be adjusted or amended from
time to time in accordance with the terms hereof.
"Self-Financing" shall mean the date (the "Certificate Date") on
which the following is true:
First:
1) For the six-Month period preceding the Month in which the Certificate Date
occurs (the "Actual Period"), (a) the difference of (i) the product of the
amount of Crude Oil actually produced from the Contract Area relating to
Triton's Participating Interest for the Actual Period, multiplied by the
invoice settlement prices received by Triton for the Crude Oil from the
Contract Area, minus (ii) the sum of the products of (x) the aggregate amount
of Crude Oil that has been delivered pursuant to Schedule A in the Actual
Period, multiplied by the Fixed Price per Barrel received by Triton under this
Agreement and (y) the aggregate amount of Crude Oil that has been delivered
under the Additional Crude Purchase Agreement in the Actual Period, multiplied
by the Fixed Price (as defined in the Additional Crude Purchase Agreement),
less (b) the sum of operating expenses and capital expenditures allocable to
Triton's Participating Interest actually incurred in the Actual Period in
connection with the operation and development of the Contract Area, is a
number greater than zero (such number being referred to herein as the "Actual
Period Cash Call Excess"); and 2) For the six-month period immediately
following the Actual Period (the "Projected Period"), the difference of (a)
the product of (i) the amount of Crude Oil projected to be produced from the
Contract Area relating to Triton's Participating Interest for the Projected
Period multiplied by (ii) the sum of (x) the arithmetic average (rounded to
the nearest tenth of a cent) of the official settlement price of the NYMEX
light sweet crude oil futures contract for delivery at Cushing, Oklahoma, in
each of the Months of the Projected Period as reported on the last Trading Day
of the Actual Period, stated in U.S. Dollars, plus (y) any premium or
deficiency with respect to the delivered price of Cusiana Crude Oil F.O.B. the
Port, which premium or deficiency shall be calculated as the average of the
difference between the arithmetic average of invoice settlement prices
received by Triton for Crude Oil from the Contract Area (exclusive of Crude
Oil to be delivered pursuant to Schedule A and the Additional Crude Purchase
Agreement) for the three Months preceding the Month in which the Certificate
Date occurs and the official settlement price of the NYMEX light sweet crude
futures contract for delivery at Cushing, Oklahoma in the Month corresponding
to the date of such invoice, or if there is more than one invoice date, the
average of such NYMEX settlement prices for delivery in the Months
corresponding to the dates of such invoices, minus (b) the sum of the products
of (x) the aggregate amount of Crude Oil that is to be delivered pursuant to
Schedule A in the Projected Period, multiplied by the Fixed Price per Barrel
received by Triton under this Agreement and (y) the aggregate amount of Crude
Oil that is to be delivered under the Additional Crude Purchase Agreement in
the Projected Period, multiplied by the Fixed Price (as defined in the
Additional Crude Purchase Agreement), less (c) the sum of projected operating
expenses and capital expenditures allocable to Triton's Participating Interest
to be incurred in connection with the operation and development of the
Contract Area during the Projected Period, is a number greater than zero (such
number being referred to herein as the "Projected Period Cash Call Excess");
and
Second: That the sum of the Actual Period Cash Call Excess and the Projected
Period Cash Call Excess is an amount equal to or greater than the aggregate
projected Cash Calls allocable to Triton's Participating Interest for the
six-Month period immediately following the Projected Period (net of any
prepaid capital expenditures made under Section 4.16 hereof); and
Third: The average number of Barrels per day produced from the Contract Area
for the 90 day period immediately preceding the Certificate Date was equal to
or greater than 200,000.
"Self-Financing Certificate" shall mean a certificate prepared and
signed by an executive officer of Triton stating that the Cusiana Project is
Self-Financing based upon a calculation and analysis set forth in reasonable
detail in such certificate, which calculation and analysis shall be consistent
with and supported by, documents containing the following information
(attached to the Self-Financing Certificate): (i) the most current full field
Contract Area development projections; (ii) the most current approved annual
budget for the Cusiana Project; (iii) the most current expected crude oil
production forecast for the relevant period corresponding to the
Self-Financing Certificate; and (iv) any invoices used to establish the price,
premium or deficiency described in the definition of Self-Financing, each
document described in clauses (i), (ii) and (iv) preceding prepared by the
operator under the Joint Operating Agreement and reviewed and analyzed by
Triton in connection with its preparation of the Self-Financing Certificate.
"Shortfall" shall mean, for any period, the failure of Triton to
deliver Barrels in accordance with the Delivery Requirement specified in
Schedule A hereof.
"Specified Event" shall have the meaning specified in Section 7.1
hereof.
"Subsidiary" shall mean any Person of which at least 50% of the
total voting power of outstanding shares of capital stock entitled (without
regard to the occurrence of any contingency which does or may suspend or
dilute the voting rights of such stock) to vote in the election of directors,
managers or trustees thereof is at such time owned or controlled, by any
person directly or through one or more of the other Subsidiaries of that
Person or a combination thereof.
"Substitute Crude Oil" shall mean Brent and Forties.
"TEC" shall mean Triton Energy Corporation, a Texas corporation,
with offices at 6688 North Central Expressway, Suite 1400, Dallas, Texas
75206, and its successors and assigns.
"Trading Day" shall mean any day on which NYMEX is open for
business; provided, however, that if the NYMEX Settlement Price is not
available for ten consecutive Business Days in a calendar Month, Trading Day
shall mean any day on which the NYMEX Settlement Price is not available and
for which Platt's Oilgram Price Report publishes effective prices for prompt
West Texas Intermediate (WTI) crude oil delivered at Cushing, Oklahoma.
"Transaction Documents" shall mean this Agreement, the MGT Crude
Purchase Agreement, the Trust Agreement, the Additional Crude Purchase
Agreement, the Indenture, the Certificate Purchase Agreements and the Pledge
Agreement.
"True Up Payment" and "True Up Delivery" shall have the respective
meanings specified in Section 2.6 hereof.
"Trust Accounts" shall mean the Interest Reserve Account, the
Collection Account, the Cash Call Deficiency Account, the Note Proceeds
Account, the Administrative Account, the Expense Reserve Account and the
Debt Service Account established pursuant to the terms of the Indenture.
"Trust Agreement" shall mean the Trust Agreement, dated as of May
25, 1995, between Oil Co. and First Trust of New York, National Association,
as Trustee.
"United States" shall mean the States, District of Columbia,
territories, possessions and territorial waters of the United States of
America.
"Year" shall mean a period of one year beginning on January 1 and
ending on December 31.
ARTICLE II
SALE AND PURCHASE
2.1 Sale and Purchase . During the term of this Agreement, and
subject to and upon the terms, provisions and conditions contained in this
Agreement:
(a) In consideration of the payment by Oil Co. to Triton of U.S.
$125,000,000 (the "Purchase Price"), Triton hereby sells and agrees to
deliver, or cause to be delivered, to Oil Co. at the Delivery Point in each
Month the Crude Oil produced from or allocable to Triton's Participating
Interest in fulfillment of the Delivery Requirement on the terms and
conditions set forth in this Agreement, and Oil Co. hereby purchases and
accepts or agrees to provide for acceptance of delivery of such Crude Oil on
the terms and conditions set forth in this Agreement. The Purchase Price will
be comprised of the following components:
(i) payment in immediately available funds by Oil Co. to Triton of
U.S. $86,609,569.44 (the "Prepaid Price") immediately following the execution
and delivery of this Agreement, receipt of which is hereby acknowledged by
Triton;
(ii) payment to Triton of deferred payments, if any, from Oil Co.
representing amounts released to Triton from the following Trust Accounts:
the Interest Reserve Account, the Expense Reserve Account and the Debt Service
Account, each as provided in the Indenture; and
(iii) upon delivery of a Self-Financing Certificate, if no Specified
Event has occurred and is continuing and absent any manifest error or
incompleteness in the preparation of the Self-Financing Certificate, payment
to Triton of the balance of any funds held in the Cash Call Deficiency Account
five Business Days following the date of delivery to Oil Co. of such
Self-Financing Certificate; provided, however, that regardless of whether the
Cusiana Project has become Self-Financing, at such time as the Delivery
Requirement and all other payment obligations under the terms of this
Agreement have been satisfied by Triton, any and all amounts remaining in the
Cash Call Deficiency Account at such time shall be payable to Triton;
provided, further, however, that at the time of the expiration of the term of
this Agreement and the delivery by Triton of all amounts of Crude Oil provided
on Schedule A, any amounts held in the Trust Accounts that are not required to
be distributed to the holders of Notes, the Indenture Trustee or to Oil Co.
for payment of certain costs and expenses, each as provided by the terms of
the Indenture, shall be payable to Triton except that a payment of $1,000
shall be made to Oil Co. from the moneys to be released from the Trust
Accounts prior to such release to Triton.
(b) Oil Co. acknowledges that it is the intent of Triton to satisfy its
obligations hereunder by the delivery of Crude Oil produced from or allocable
to Triton's Participating Interest subject to the provisions hereof relating
to the delivery by Triton of Substitute Crude Oil.
(c) Triton hereby agrees to indemnify Oil Co., its officers, directors,
employees, agents, representatives and insurers, and save each of them
harmless from all suits, actions, debts, accounts, damages, costs, losses and
expenses arising from or out of (i) Triton's breach of any of its
representations and warranties contained in Article VIII hereof, (ii) claims
for payment (whether in cash or kind) by any and all third parties in respect
of royalties, gross severance taxes, petroleum excise taxes or any other tax
whatsoever, license fees or charges which may be levied or assessed or
otherwise applicable upon the distribution, sale and transportation of any
Crude Oil delivered hereunder prior to its delivery to Oil Co., or (iii)
claims for payment by any and all third parties who purport to be entitled to
receive any portion of the proceeds from, or any payment relating to, the sale
of the Crude Oil to Oil Co. under this Agreement, with the exception of any
claims resulting solely from the action or inaction of Oil Co. Additionally,
Triton hereby agrees to indemnify Oil Co. and save it harmless from all
expenses arising from or out of any Colombian export, income or withholding
taxes which may be levied and assessed upon Oil Co., its employees or its
agents, in respect of any delivery or sale of Crude Oil to Oil Co. hereunder
or of Government Crude Oil to the Government or the resale of such Crude Oil
by Oil Co. at substantially the same delivery point that Oil Co. received such
Crude Oil. Triton will pay any such expenses directly to Oil Co. upon demand
by Oil Co. in immediately available funds.
(d) The Purchase Price shall be payable outside of the United States
by Oil Co. to Triton by credit for Triton to the account of Triton Colombia,
Inc., ABA 021000238, Account Number: 00150957, Account Number: Triton
Columbia, Inc. at Morgan Guaranty Trust Company of New York.
2.2 Delivery .
(a) Deliveries of Crude Oil hereunder shall be as follows: Triton
shall cause all deliveries of Crude Oil to be made on an F.O.B. basis at the
Delivery Point or the Remote Delivery Point with any transportation costs
incurred to the Delivery Point or Remote Delivery Point being for the account
of Triton.
(b) Title to, and all risk of loss, damage, contamination,
deterioration and evaporation of or by the Crude Oil delivered hereunder shall
pass to Oil Co. at each of the Delivery Points or Remote Delivery Points
specified in Section 2.2(c) when the relevant vessel containing all or any
portion of any cargo of Crude Oil delivered hereunder reaches the first point
beyond the territorial waters of Colombia or the Crude Oil enters the inlet
flange or other receiving equipment, as the case may be.
(c) The "Delivery Point" shall be the first point beyond the
territorial waters of Colombia reached by any vessel containing all or any
portion of any cargo of Crude Oil which was loaded at the Port. Triton may
elect that the Delivery Point shall be the connection of the inlet flange or
other receiving equipment of the vessel into which a delivery is being made at
the Port (it being understood that Triton shall notify Oil Co. of such request
at least fifteen days prior to the date on which the relevant delivery of
Crude Oil is to be made), provided that, (i) Triton shall have delivered an
opinion of counsel, rendered by an internationally-recognized Colombian law
firm, addressed to each holder of a Certificate, each holder of a Note, Oil
Co., MGT and the Indenture Trustee, opining that Triton's delivery of Crude
Oil to the connection of the inlet flange or other receiving equipment of the
vessel shall not result in the incurrence of any Colombian tax or any other
adverse tax consequence to Oil Co., MGT, the Indenture Trustee, the
Noteholders or the Certificateholders, which opinion shall be reasonably
satisfactory to MGT and the Majority Holders (as defined in the Indenture);
and (ii) the authentication by Colombian governmental authorities of the power
of attorney attached hereto as Exhibit A. A "Remote Delivery Point" shall be
that delivery point fixed from time to time in the event that Triton tenders
Substitute Crude Oil pursuant to Section 2.5 hereof. Notwithstanding the
foregoing, the Delivery Point and the Remote Delivery Point shall in no event
be a place located in the United States.
(d) Triton shall commence delivering Barrels to Oil Co. during the
first full Month following the date hereof and shall continue to make
deliveries of Barrels of Crude Oil in accordance with Schedule A attached
hereto.
(e) In the event a Specified Event occurs and upon the election of
Oil Co., the number of Barrels to be delivered in the Month in which the
election by Oil Co. occurs and in each Month thereafter shall be equal to the
sum of (i) the number of Barrels to be delivered for that Month as set forth
in Schedule A plus (ii) an additional number of Barrels equal to 50% of such
Barrels to be delivered in such related Month. In each Month, the delivery of
such additional number of Barrels shall be applied to reduce the amount of the
Delivery Requirement of the last Month listed for deliveries of Barrels on
Schedule A until such Delivery Requirement is reduced to zero and then shall
be applied to reduce the amount of the Delivery Requirement of the next to
last Month listed for deliveries of Barrels on Schedule A and so on in reverse
chronological order.
(f) The parties agree to comply with the conditions of sale
(including, without limitation, those relating to measurement, sampling,
presentation of date range, nomination of vessels, berthing, loading and
damages for delay) that are generally observed from time to time by crude oil
market participants at and immediately prior to the Delivery Point or any
Remote Delivery Point, as the case may be, to the extent that such conditions
of sale are not inconsistent with the terms of this Agreement. The parties
agree that Schedule B contains the conditions of sale that, as of the
execution and delivery of this Agreement, are generally observed by crude oil
market participants at the Delivery Point and each Remote Delivery Point, and
such terms and conditions shall be observed by the parties, subject to the
terms and conditions of this Section 2.2(f). Without limitation of the
foregoing, for each delivery of Crude Oil made hereunder, Triton shall
promptly provide Oil Co. with originals of each of the following documents
relating to the Crude Oil to be delivered at the Delivery Point or a Remote
Delivery Point: (i) the duly endorsed clean bills of lading, (ii) invoices,
(iii) inspection reports, (iv) Certificates of Origin, (v) Certificates of
Quality and Quantity, and (vi) such other documents as are necessary or
customary in similar transactions. "Required Documents" shall mean
collectively those documents described in clauses (i) through (vi) immediately
preceding this sentence. It is understood and agreed that with respect to any
delivery of Substitute Crude Oil made by Triton hereunder, Triton shall, by
not later than the tenth (10th) day following the BL Date of a delivery of
Substitute Crude Oil, provide Oil Co. with either the Required Documents
relating to such Substitute Crude Oil or a Letter of Indemnity covering such
Required Documents. It is further understood that the delivery of such Letter
of Indemnity shall not relieve Triton of its obligation to deliver the
Required Documents relating to the Substitute Crude Oil so delivered as
promptly as practicable. In addition, at or prior to the execution and
delivery of this Agreement, (i) Oil Co. shall grant to Triton a power of
attorney, substantially in the form of Exhibit A hereto and (ii) Triton shall
grant to Oil Co. a power of attorney, substantially in the form of Exhibit B
hereto.
Each delivery of Crude Oil by Triton pursuant to the terms of this
Agreement shall not be deemed to be delivered to Oil Co. until such time as
MGT shall have received from Oil Co. or its agent the Required Documents
relating to the Barrels in such delivery.
(g) (i) Triton and Oil Co. acknowledge that the Government,
acting through the national oil company, Empresa Colombiana de Petroleos
("Ecopetrol"), has the right to purchase some or all Crude Oil under the
circumstances and at the price provided in Resolution 1770 of 1986, as
modified. Promptly upon learning of the Government's exercise of such right,
Triton shall notify Oil Co. Triton shall be deemed to fulfill its delivery
obligations hereunder with respect to such Government Crude Oil by:
(A) delivering such Crude Oil to the Government,
(B) accepting payment for the Government Crude Oil solely as agent to Oil Co.
(if for any reason such payment is not made directly by the Government to Oil
Co. in accordance with Section 2.2(g)(iii)) and
(C) promptly delivering the payment corresponding to the Government Crude Oil
to Oil Co.; provided, however, that in the event Oil Co., its agent or
assignee receives payment for Government Crude Oil (as defined below) at a
price less than the Benchmark Price for the relevant Delivery Cycle, such
price shall be treated as though it were the price received on resale under
Section 2.6(b) hereof and Triton shall make a True Up Delivery to Oil Co. as
provided in such Section 2.6(b). The Crude Oil purchased at any time by the
Government shall be referred to herein as the "Government Crude Oil".
(ii) The quantity of the Government Crude Oil for purposes of this
Agreement shall be the same quantity delivered to the Government, measured in
the same manner as that Crude Oil is measured. If the Government uses a
different unit of measure, that unit shall be converted to Barrels for
purposes of this Agreement, using standard conversion formulas.
(iii) At any time that the Government is purchasing Crude Oil as provided
in Section 2.2(g)(i), Triton will use its best efforts to cause the Government
to pay all amounts owing to Oil Co. in respect thereof directly to Oil Co. or
to its assignee. In furtherance of the foregoing Triton hereby irrevocably
and unconditionally assigns to Oil Co. the right to receive all such amounts.
If, notwithstanding the foregoing, Triton receives any such amounts, Triton
agrees to hold such funds in trust for Oil Co., segregate such amounts from
its funds and immediately pay such amount over to Oil Co.
2.3 Quality . Triton shall use its best efforts, to the extent
commercially reasonable, to ensure that the Crude Oil delivered hereunder
shall have such quality characteristics as will allow the Crude Oil delivered
in fulfillment of the Delivery Requirement to be resold by MGT at a price
equal to at least the Benchmark Price. If any Crude Oil delivered by Triton
under this Agreement is not resold by MGT at a price at least equal to the
Benchmark Price, Triton shall make a True Up Delivery to Oil Co. in accordance
with Section 2.6(b).
2.4 Quantity. The number of Barrels in fulfillment of the
Delivery Requirement to be delivered each Month during the term of this
Agreement shall be equal to the number of Barrels set forth in Schedule A, as
adjusted or amended from time to time pursuant to Sections 2.2(e) hereof.
2.5 Compliance with Delivery Schedule .
(a) In the event that a Forecast Shortfall is projected to occur
during any Month for any reason, Triton shall notify Oil Co., as soon as is
practicable but in any event before the end of the first day of the Month that
is the next to last Month of the Delivery Cycle in which the Forecast
Shortfall is projected to occur, that it will cure such Forecast Shortfall by
a combination of one or more of the following:
(i) delivering to Oil Co. during such Month of scheduled delivery Crude
Oil from Triton's Participating Interest; and/or
(ii) delivering to Oil Co. during such Month of scheduled delivery
Substitute Crude Oil of the quality as described in Section 2.3 hereof and
shall specify in its notice a detailed plan for delivery of such Substitute
Crude Oil (including, without limitation, the identification of the Remote
Delivery Point, the time of such delivery and type of such Substitute Crude
Oil); and/or
(iii) delivering to Oil Co. on or before the last day of the sixth month
of the Delivery Cycle (defined below) in which such Forecast Shortfall is
projected to occur a total quantity of Crude Oil that will at least equal the
sum of the Delivery Requirements for all of the Months in such Delivery Cycle.
The Crude Oil to be delivered in satisfaction of the requirements of this
clause (iii) shall be either (A) Crude Oil from Triton's Participating
Interest or (B) Substitute Crude Oil (with Triton providing such information
with respect to such Substitute Crude Oil as is contemplated by Section
2.5(a)(ii)). "Delivery Cycle" shall mean each six month period beginning on
October 1 and ending on March 31 and beginning on April 1 and ending on
September 30, respectively, in each year commencing in June 1995; provided,
that the first Delivery Cycle shall be the period beginning on June 1, 1995
and ending on September 30, 1995.
(b) On the last day of the last Month of a Delivery Cycle, if a
Shortfall occurs for any reason (including, without limitation, due to an
event of Force Majeure as invoked by Triton but excluding any event of Force
Majeure invoked by Oil Co.) and is not cured by one of the methods specified
in Section 2.5(a), Oil Co. shall have the right, but not the obligation, to
purchase Substitute Crude Oil in an amount equal to the Shortfall and Triton
shall be liable for the purchase price of such Substitute Crude Oil and any
reasonable costs incurred by Oil Co. in connection with such purchase. In the
event that MGT elects to purchase Substitute Crude Oil pursuant to the terms
of Section 2.6(b) of the MGT Crude Purchase Agreement, Oil Co. shall be deemed
to have elected to purchase Substitute Crude Oil pursuant to this Section
2.5(b). Triton shall pay all such amounts to Oil Co. within five Business
Days of receipt of an invoice from Oil Co., which receipt shall include
documentation evidencing such costs and expenses.
2.6 True Up Payments and True Up Deliveries . In the event that
any true up payment (each, when made in cash, a "True Up Payment" or when made
in Barrels, a "True Up Delivery") must be made as provided below, Triton shall
make such True Up Payment or True Up Delivery, as the case may be, by the
payment of cash in accordance with Section 2.6(a) or the delivery of
additional Barrels of Crude Oil in accordance with Section 2.6(b) to Oil Co.
as follows:
(a) True Up Payments for Failure to Make Timely Delivery. In the event
that a Shortfall occurs or a Forecast Shortfall occurs and Triton delivers
Crude Oil pursuant to Section 2.5(a)(iii) hereof, the following True Up
Payments shall be calculated and made by the parties hereto as described
below:
(i) If the Benchmark Price for the originally scheduled delivery
Month is greater than the Fixed Price (the "Fixed Price") listed on Schedule A
hereto: On the quantity of Barrels that Triton delivers to Oil Co. later than
as was provided on Schedule A hereto, Triton will pay to Oil Co. cash in an
amount equal to the difference between the Benchmark Price for the originally
scheduled delivery Month and the fixed price (the "Fixed Price") listed on
Schedule A five Business Days after the Month in which the delivery was
supposed to take place (in accordance with Schedule A) plus an "Additional
Amount" defined as the amount, if any, by which the Fixed Price exceeds the
Benchmark Price for the Month in which the delivery takes place (which amount
would be due to Oil Co.). The Additional Amount will be paid by Triton five
Business Days after the Month in which the delivery of Crude Oil actually
takes place.
(ii) If the Benchmark Price for the scheduled delivery Month is less
than the Fixed Price listed on Schedule A hereto: Triton will owe to Oil Co.
an amount (a "Further Amount") defined as the amount, if any, by which the
Benchmark Price for the originally scheduled Month of delivery exceeds the
Benchmark Price for the actual Month of delivery, multiplied by the number of
Barrels delivered (which amount would be due to Oil Co.). The Further Amount
will be paid by Triton five Business Days after the Month in which the
delivery of Crude Oil actually takes place.
(b) True Up Deliveries for Quality of Crude Oil. In the event that (i)
any Crude Oil that Oil Co. acquires under this Agreement is not resold by MGT
at a price per Barrel at least equal to the Benchmark Price that is applicable
to the Month in which Oil Co. receives such Crude Oil or (ii) the Government
purchases Crude Oil and pays a price less than the Benchmark Price as is
contemplated by Section 2.2(g)(i) above, Triton shall, after notice of such
deficiency from Oil Co., deliver additional Barrels to Oil Co., at no cost to
Oil Co., in the next Month, the number of such additional Barrels to be
determined by reference to the following formula:
AB = (BP - SP) x BBL / SP
where:
"AB" is the number of additional Barrels;
"BP" is the Benchmark Price that is applicable to the Month
in which the original Barrels were received;
"SP" is the price per Barrel received by MGT for the sale
of the original Barrels; and
"BBL" is the number of original Barrels.
If the price per Barrel received by MGT for the sale of any additional Barrels
that are delivered pursuant to this Section 2.6(b) is less than BP, the
process described in the first sentence of this Section 2.6(b) shall be
repeated one or more times, as promptly as is practicable and in an analogous
manner, until the total amount of funds received by MGT from the sale of the
additional Barrels is at least equal to the product of BBL and the difference
between BP and SP.
(c) Delivery of True Up Payments and True Up Deliveries. Any True Up
Payments payable to Oil Co. and made in cash shall be payable by Triton to Oil
Co. in immediately available funds by credit for Oil Co. to the account of Oil
Co., account number 96021716 designated as "Texas Commerce Bank National
Association as Indenture Trustee -- u/i/d May 25, 1995 made by Oil Co. Ltd. --
Administrative Account" at First Trust of New York, National Association, or
such other account as Oil Co. shall direct.
ARTICLE III
TERM
3.1 Term . Subject to Section 10.1 hereof, the term hereof shall
commence as of the date of this Agreement and shall expire at such time that
all deliveries of Crude Oil and payments have been made as provided under the
terms of this Agreement.
ARTICLE IV
AFFIRMATIVE COVENANTS OF TRITON
4.1 Performance . Triton shall unconditionally well and truly
perform and carry out all of its obligations under this Agreement and the
other Transaction Documents to which it is a party.
4.2 Information . Triton shall permit any representative of Oil
Co. or their agents or the Indenture Trustee to visit and inspect any of the
offices and properties of Triton, to examine books of account and documents
relating to Triton and the Cusiana Project, to make extracts therefrom or
copies thereof, and to discuss the affairs (including, without limitation,
relating to the Cusiana Project and the sale of Crude Oil hereunder), finances
and accounts of Triton with the officers and independent public accountants of
TEC, all at such reasonable times as Oil Co. may reasonably request.
Additionally, Triton shall deliver to Oil Co. the following:
(a) Within 90 Business Days after the close of each fiscal year of TEC,
the audited balance sheet of TEC as of the end of such year and the related
audited statement of income and statement of cash flows for such year of TEC,
all prepared in accordance with U.S. generally accepted accounting principles
and certified by the chief financial officer of TEC and the independent public
accountants of TEC as fairly presenting in all material respects the financial
condition of TEC as of the end of such fiscal year and the results of its
operations for such fiscal year;
(b) Within 45 Business Days after the close of each of the first three
fiscal quarters of each fiscal year of TEC, the balance sheet of TEC as of the
end of such quarter and the related statement of income and statement of cash
flows for such quarter of TEC, all prepared in accordance with U.S. generally
accepted accounting principles and certified by the chief financial officer of
TEC as fairly presenting in all material respects the financial condition of
TEC as of the end of such quarter and the results of its operations for such
quarter (subject to normal year-end audit adjustments);
(c) An annual written statement of an executive officer of Triton
certifying that as of the date of such statement, to the best of such
officer's knowledge, no Specified Event, and no event which, with the lapse of
time or the giving of notice or both, would constitute a Specified Event, has
occurred and is continuing, or if such Specified Event or such event has
occurred and is continuing, such statement shall describe such Specified Event
or event and the action, if any, which Triton has taken, is taking or proposes
to take with respect thereto;
(d) As soon as possible, and in any event within five Business Days
after an executive officer of Triton has obtained knowledge of the occurrence
of any Specified Event or any event which with notice or lapse of time or
both, would constitute a Specified Event, including, without limitation,
Triton's breach of its affirmative covenant provided in Section 4.8 hereof, a
certificate of an executive officer of Triton setting forth the details
thereof and the action, if any, which Triton has taken, is taking or proposes
to take with respect thereto;
(e) Promptly and in any event within 30 days after receipt thereof by
Triton, a copy of each notice received by Triton from the operator under the
Joint Operating Agreement regarding (i) any defaults under Article 8 of such
Joint Operating Agreement; (ii) any occurrence of a force majeure under
Article 18 of such Joint Operating Agreement; and (iii) resignation or removal
of the operator under Article 4 of such Joint Operating Agreement;
(f) Promptly and in any event within 10 Business Days after an executive
officer of Triton obtains knowledge, a notice of any material occurrence,
insurance claim, or dispute, or any other event which shall or is likely to
cause a Specified Event to occur or which shall or is likely to have any
material adverse effect on its ability to perform under this Agreement, the
Joint Operating Agreement or the Association Contracts;
(g) An annual forecast (each, a "Forecast") on or prior to the 15th day
of each December commencing in December 1995; provided, however, that Triton
initially shall deliver such report for the period from the date hereof until
December 31, 1995. Each Forecast shall set forth for the next succeeding 12
month period or, in the case of the initial Forecast, the period ending
December 31, 1995, (i) a projection of Barrels in fulfillment of the Delivery
Requirement as set forth in Schedule A, the general quality of Crude Oil
(including API gravity and sulfur content) to be delivered in fulfillment of
the Delivery Requirement, (ii) the total amount of Crude Oil capable of being
delivered to the Delivery Point attributable to Triton's Participating
Interest, (iii) the amount of any Forecast Shortfall and reasons therefor for
the applicable Month or Months of such Shortfall, and (iv) the amount of Crude
Oil which represents Triton's (A) nominated share of production, (B) its
supplemental nominated share of production and (C) any amount of its nominated
share of production which it is unable to lift as described in Section 9.4(a)
of the Joint Operating Agreement. In the event that a material change occurs
regarding the content of such Forecast, Triton shall deliver to Oil Co. an
updated report incorporating such additional or new information as is
necessary to reflect such material change (including, without limitation, any
change that is anticipated to interfere with Triton's ability to satisfy the
Delivery Requirement for any Month). The updated report shall be delivered by
Triton to Oil Co. within 10 Business Days of its acquiring knowledge of the
material change. In addition, if Oil Co. is requested by the Indenture
Trustee or by MGT to obtain additional information with respect to the
delivery of the Crude Oil, Oil Co. may contact Triton on a monthly basis to
request such information and documents and Triton, to the extent reasonably
available, will promptly provide such information to Oil Co. Notwithstanding
the foregoing, if MGT shall exercise its right under the MGT Crude Purchase
Agreement or the Additional Crude Purchase Agreement to obtain additional
information as it reasonably requests, correspondingly, Triton, to the extent
such information is reasonably available, shall promptly provide such
information to Oil Co. as it may reasonably request hereunder;
(h) Within 30 days after the end of each calendar quarter during the
term of this Agreement and any extensions thereof, Triton shall provide to Oil
Co. a quarterly report or reports by fax in a form substantially acceptable to
Oil Co. setting forth the quantities, types and specifications of Crude Oil
produced from or allocable to Triton's Participating Interest including the
following information: (i) the existence of projected operating revenues in
excess of projected Cash Calls for the calendar quarter in which the
information is provided; (ii) the fact that projected Cash Calls for the
calendar quarter in which the information is provided are expected to be
satisfied from projected operating revenues for such quarter; (iii) the extent
to which projected Cash Calls for the calendar quarter in which the
information is provided are expected to exceed projected operating revenues
for such quarter and a description of the Financing Options that Triton is
pursuing to address such anticipated shortfall; and (iv) reports of any sale
or transfer by Triton of any portion of its Participating Interest as is
permitted by Section 5.2 below.
4.3 Insurance . Triton shall carry and maintain in full force and
effect at all times with financially sound and reputable insurers insurance
against such risks as is customary for projects of the nature of the Cusiana
Project and use its best efforts to apply or have applied, reinvest, or have
reinvested all insurance proceeds received under such contracts to or in the
Cusiana Project. Without limiting the foregoing, Triton hereby acknowledges
that Oil Co. is an additional insured under its general liability insurance
maintained in respect of the Cusiana Project, and Triton agrees to maintain in
force during the term of this Agreement at least the same amount of such
insurance and casualty insurance as it maintains on the date hereof and agrees
to continue the designation of Oil Co. as an additional insured under such
liability insurance at all times for the term of this Agreement.
4.4 Compliance with Laws, Etc. Triton shall comply in all
material respects with all Governmental Requirements applicable to Triton and
its properties, including its Participating Interest in the Cusiana Project.
Triton shall comply in all material respects with the Applicable Instruments
of Triton.
4.5 Taxes . Triton shall duly pay and discharge, or cause to be
paid or discharged, all taxes, assessments and other governmental charges
imposed upon it, its properties, specifically including any Crude Oil, or any
part thereof or upon the income or profits therefrom, except such items as are
being contested in good faith by appropriate proceedings and for which
adequate reserves have been established to the extent required by generally
accepted accounting principles, and for any non-payment or non-compliance as
would not reasonably be expected to have a material adverse effect on its
Participating Interest in the Cusiana Project or its ability to perform under
this Agreement, the Joint Operating Agreement, the Association Contracts or
the other Transaction Documents to which it is a party.
4.6 Existence . Triton shall preserve and keep in force and effect
its corporate existence and all licenses and permits necessary to conduct
properly its business or own its properties, except where failure to do so
would not have a material adverse affect on the Cusiana Project or its ability
to perform under this Agreement, the Joint Operating Agreement and the
Association Contracts or the other Transaction Documents to which it is a
party.
4.7 Development of Cusiana Project . Triton shall use its best
efforts to ensure that the Cusiana Project is developed, maintained and
operated in accordance with (i) the Joint Operating Agreement, (ii) the
Association Contracts, (iii) the development plan, (iv) all Governmental
Requirements and (v) good oil field practice, in a manner which is prudent and
commercially reasonable. In regard to the development of the Cusiana Project,
Triton shall:
(a) Comply with the terms of the Joint Operating Agreement and the
Association Contracts in all material respects;
(b) Not agree to any change being made to any of the plans for
developing or exploiting the Cusiana Project which could have a material
adverse effect on its ability to perform its obligations under this Agreement;
and
(c) Not abandon or agree to abandonment of the Cusiana Project without
the written consent of Oil Co.
4.8 Crude Reserves . Triton shall maintain at all times for so
long as this Agreement is in effect an unencumbered ownership interest in
proved oil reserves (net of royalty interests and any Forward Sales) for
deliverable crude oil in an amount not less than the Required Deliverable
Barrels.
4.9 Reserved .
4.10 U.S. Tax Matters . Triton shall meet the 80-percent foreign
business requirements of section 861(c)(1) of the Internal Revenue Code
throughout the term of this Agreement. Triton shall include the earnings
received by Oil Co. from the Interest Reserve Account, the Cash Call
Deficiency Account and the Debt Service Account in its gross income for United
States federal income tax purposes and will file its tax returns accordingly.
4.11 Delivery of Crude Oil . (a) Subject to Section 10.1 hereof,
Triton shall duly and punctually deliver or cause to be delivered in
accordance with the manner provided in this Agreement all Barrels of Crude Oil
required to be delivered under this Agreement on the dates and at the Delivery
Points provided in this Agreement. Triton shall at all times have the
obligation to make settlements for all royalties and payments to mineral and
royalty owners and all other persons having an ownership or other interest in
the Crude Oil delivered by Triton to Oil Co., with the exception of any such
payments resulting solely from the actions or inaction of Oil Co. following
the delivery of Crude Oil to Oil Co. pursuant to the terms of this Agreement,
in fulfillment of the Delivery Requirement.
(b) Subject to Section 2.2(g) hereof, Triton shall ensure that
delivery of Crude Oil in satisfaction of each Delivery Requirement pursuant to
the terms of this Agreement and the delivery of Barrels of Crude Oil pursuant
to the terms of the Additional Crude Purchase Agreement shall be made by
Triton on a pari passu basis, in each Month that Triton makes any delivery of
crude oil from the Pipeline, with the first Barrels to be received out of the
Pipeline allocable to Triton's Participating Interest, and such Delivery
Requirement and additional Barrels shall be delivered prior to any other crude
oil deliveries to be made by Triton to any other purchasers.
4.12 Audit . Triton shall maintain, preserve and provide, and
shall cause any operator of the Contract Area to maintain, preserve and
provide Oil Co. and its duly authorized representatives access to its
accounting records, test data, measurement charts and other documents
maintained by Triton which relate to Crude Oil delivered hereunder and Oil Co.
shall have the right upon its reasonable request to audit such records during
normal business hours during the term of this Agreement and for a period of
two months after termination of this Agreement; provided, however, that access
shall be provided thereafter for audits necessary for Oil Co. to comply with
Governmental Requirements, including but not limited to tax audits. All costs
and expenses associated with any audit performed in connection with the
occurrence of a Specified Event hereunder that is not cured within the
applicable cure period shall be borne by Triton.
4.13 Proceeds . None of the proceeds of the Purchase Price shall
be used in any manner which would constitute or result in a violation of any
Governmental Requirement or Applicable Instruments of Triton.
4.14 Nominated Amount . Each Month, Triton shall take all
reasonable steps necessary under Article 9 of the Joint Operating Agreement
and under the applicable agreements relating to the Pipeline to ensure its
rights to receive and transport such portion of its nominated share necessary
to fulfill the Delivery Requirement for such Month.
4.15 Additional Crude Purchase Agreement . Triton hereby agrees,
for the benefit of Oil Co., its successors and assigns, (i) to perform
pursuant to and enforce the terms of the Additional Crude Purchase Agreement
and (ii) not to amend such Agreement or waive any term thereof without the
prior written consent of Oil Co. Triton shall use its best efforts to satisfy
each of the conditions precedent in Article VIII thereof.
4.16 Prepayment of Cash Calls . If Triton fails to meet a Cash
Call and fails to satisfy such Cash Call obligation within the applicable cure
period, or if Triton exercises its rights to sell oil forward under the
Additional Crude Purchase Agreement or draws from funds available in the Cash
Call Deficiency Account, Triton agrees that it will thereafter (at least once
a Month) prepay to the operator under the Joint Operating Agreement on account
of projected Cash Calls the amount of its gross revenues for such month in
excess of its projected working capital requirements (excluding projected Cash
Calls) for the Cusiana Project until such time as the accumulated amount of
such prepayment is at least equal to the higher of (a) the amount of Cash
Calls projected for the next succeeding six months or (b) the excess of the
amount of Cash Calls projected by Triton prior to the projected time of
Self-Financing over the sum of (x) the amount in the Cash Call Deficiency
Account and (y) any amounts prepaid to the operator under the Joint Operating
Agreement on the account of projected Cash Calls pursuant to the Additional
Crude Purchase Agreement ((y) does not include any amounts paid pursuant to
the Additional Crude Purchase Agreement and applied to current Cash Calls).
4.17 Conduct of Business . Triton shall at all times engage solely
in the business of oil and gas exploration, development, production and sale
and owning interests in oil and gas producing properties located in the
Contract Area.
ARTICLE V
NEGATIVE COVENANTS OF TRITON
5.1 No Assignment or Amendment . So long as this Agreement is in
effect, and without the prior written consent of Oil Co., Triton shall not (a)
assign or transfer its rights or delegate its obligations under any of the
Transaction Documents to which it is a party, the Joint Operating Agreement or
any of the Association Contracts (except as contemplated by the second
sentence of Section 5.2 hereof) or (b) agree to amend or modify the Joint
Operating Agreement, any of the Transaction Documents to which it is a party,
or any of the Association Contracts (except for amendments or modifications
which do not have a material adverse effect on Triton's ability to perform
under this Agreement and the other Transaction Documents to which it is a
party).
5.2 Maintenance of Cusiana Interest Revenues and Reserves . So
long as this Agreement is in effect, Triton shall not permit its interest nor
any of its rights in and to its Cusiana Project assets, the Joint Operating
Agreement, the Association Contracts and its Cusiana Project operations
generally to lapse or be adversely affected by any actions taken by Triton or
any Affiliate of Triton in such a way that is reasonably expected to have a
material adverse effect on Triton's ability to perform under this Agreement.
Triton shall not sell, lease, convey or otherwise dispose of, directly or
indirectly, any of its Participating Interest in any transaction or
transactions the cumulative effect of which is to reduce the Oil Reserve
Estimate of Triton's Participating Interest by 50% or more (which value shall
be determined by reference to the most recently available Oil Reserve
Estimate, or by any subsequent estimate prepared by a nationally recognized
petroleum engineering firm), provided that the foregoing shall not prevent
Triton from conveying all or substantially all of its assets to any Person or
from merging with any Person if, in the case of such merger, Triton (or TEC)
shall be the survivor or, if not the survivor, then the successor corporation
or if the Person acquiring all or substantially all of such assets shall
expressly assume all obligations of Triton under this Agreement, the Joint
Operating Agreement, the Association Contracts and all other Transaction
Documents to which it is a party; provided, however, that following such
event, no Specified Event shall have occurred and be continuing.
5.3 Limitation on Liens on Sale, Lease or Conveyance of Assets .
So long as this Agreement is in effect, Triton shall not permit and shall not
permit any of its Subsidiaries, if any, to create or suffer to exist any Lien
upon any of its property or assets relating to the Cusiana Project, and
Cusiana Project operations generally, whether now existing or hereafter
acquired, to secure any Indebtedness; provided, however, that notwithstanding
the foregoing, Triton may create or suffer to exist such Liens if, after
giving effect thereto, the amount of unencumbered proved oil reserves (net of
royalty interests paid in oil and any Forward Sales) allocated to Triton under
the Joint Operating Agreement and available for delivery under this Agreement
equals or exceeds the Required Deliverable Barrels, as evidenced in a written
report of an independent third party consultant, which consultant and report
shall be satisfactory in all respects to Oil Co.; provided, further, however,
that any Liens described in the preceding proviso must be expressly
subordinate to (i) the rights of Oil Co. in the Barrels to be delivered
pursuant to the terms of this Agreement and (ii) the rights of MGT in the
Barrels to be delivered pursuant to the terms of the Additional Crude Purchase
Agreement.
The foregoing provisions of this negative covenant shall not apply
with respect to the Liens set forth below (the "Permitted Liens"):
(a) Liens in existence on or prior to the date hereof and disclosed on
Schedule C hereto;
(b) Liens arising pursuant to the terms of the Joint Operating
Agreement;
(c) Liens arising by operation of law or in the ordinary course of
business of Triton;
(d) Liens securing any asset acquired by Triton after the date hereof
for the sole purpose of financing or refinancing or securing the cost of the
acquisition of that asset (provided that any such Lien (i) is created or
assumed within 180 Business Days after such acquisition or lease and (ii)
attaches only to such asset) so long as the principal amount thereby secured
does not exceed the cost of that acquisition;
(e) any extensions, renewal or replacement (or successive extensions,
renewals, or replacements), as a whole or in part, of any Liens referred to in
clause (a), (b) and (c) of this negative covenant; provided that such
extension, renewal or replacement Lien is limited to all or a part of the same
assets that secured the Lien extended, renewed or replaced (plus improvements
on such assets); and
(f) Liens in favor of Triton.
5.4 Manner of Forward Sales . It is expressly acknowledged and
agreed that in satisfaction of its obligation to deliver Crude Oil under this
Agreement and under the Additional Crude Purchase Agreement, Triton shall take
all action necessary to designate and specify the first Barrels of Crude Oil
lifted during any scheduled delivery Month as being allocable to Oil Co. and
MGT in accordance with this Agreement and the Additional Crude Purchase
Agreement. In the event Triton shall enter into or become bound by any
agreements with respect to Forward Sales of Crude Oil which obligate Triton to
deliver Crude Oil on a fixed or floating price basis, Triton shall enter such
agreements in compliance with Section 4.8 hereof and this Section 5.4 and
shall obtain a form of written acknowledgement from each purchaser under any
such Forward Sales agreement that such purchaser's right to receive Crude Oil
from Triton shall be subordinate to the right of Oil Co. to receive Barrels
under this Agreement and MGT to receive Barrels under the Additional Crude
Purchase Agreement. Triton shall promptly forward a copy of each such written
acknowledgement to Oil Co.
ARTICLE VI
AFFIRMATIVE COVENANTS OF OIL CO.
6.1 Performance . Oil Co. shall unconditionally well and truly
perform and carry out all of its covenants under the Indenture with respect to
the allocation of funds held and, on certain specified occasions, released
from the Trust Accounts and distributed to either Triton, the operator under
the Joint Operating Agreement or either of their assignees, all as more fully
described in the Indenture.
ARTICLE VII
SPECIFIED EVENTS
7.1 Specified Events . Each of the following shall constitute a
Specified Event for all purposes of this Agreement:
(a) Failure by Triton duly to observe or to perform any of its
agreements, obligations or covenants under this Agreement, the other
Transaction Documents to which it is a party or the Joint Operating Agreement,
which failure (i) materially and adversely affects its ability to perform its
obligations hereunder or under the Joint Operating Agreement and the other
Transaction Documents to which it is a party and (ii) continues unremedied for
a period of 30 Business Days after the earlier of (x) a responsible officer of
Triton becoming aware of such default and (y) the giving of written notice of
such failure by the Indenture Trustee to Triton or by 51% (by outstanding
principal balance) of Certificates, pursuant to the terms of the Trust
Agreement, to the Indenture Trustee.
(b) Failure of Triton to make a Cash Call payment to the operator under
the Joint Operating Agreement when due or the failure of Triton to deliver in
any Delivery Cycle a total quantity of Crude Oil that is at least equal to the
sum of the Delivery Requirements for all of the Months in such Delivery Cycle.
(c) Any representation, warranty, certification or statement made by
Triton in this Agreement or in any certificate, financial statement (made by
TEC for financial statements) or other document delivered pursuant to this
Agreement (as specified herein) shall prove to have been incorrect in any
material respect when made (or deemed made).
(d) Any Indebtedness of Triton having a principal amount of
$10,000,000 (or the equivalent thereof in any other currency or currencies) or
more shall become due and payable prior to or at such Indebtedness' specified
maturity as a result of a payment default thereunder continuing beyond any
applicable grace period.
(e) Any event specified in any note, agreement, indenture or other
document evidencing or relating to any Indebtedness of Triton having a
principal amount of $10,000,000 (or the equivalent thereof in any other
currency or currencies) or more shall occur if the effect of such event is to
cause, or (with the giving of any notice or the lapse of time or both) to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such Indebtedness to become due,
or to be prepaid in full (whether by redemption, purchase, offer to purchase
or otherwise), prior to its stated maturity.
(f) Triton (or any of its Subsidiaries, if any) shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency, suspension of payments, or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
"sindico", custodian or other similar official of it or any substantial part
of its property, or shall consent to any such relief or to the appointment
of or taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing.
(g) An involuntary case or other proceeding shall be commenced
against Triton (or any of its Subsidiaries, if any) seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, "sindico",
custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief shall
be entered against Triton (or any of its Subsidiaries, if any) or TEC under
any bankruptcy or insolvency laws as now or hereafter in effect.
(h) A distress, execution or seizure in connection with the
enforcement of a judgment by or on behalf of any creditor being levied or
enforced upon or sued out against all or a substantial part of the assets of
Triton (or any of its Subsidiaries, if any) and not being discharged within 45
days thereof. For the purposes of this clause (h) a "substantial part" means
a part the value of which amounts to $5,000,000 or more.
(i) TEC shall fail to own at least 51% of Triton at all times during the
term of this Agreement.
(j) A Force Majeure applicable to Triton shall have occurred and be
continuing for 180 consecutive days.
7.2 Damages Payable Upon Occurrence of Specified Event . If any
Specified Event referred to in Section 7.1 hereof shall have occurred and be
continuing, and without prejudice to any of its rights at law and in equity,
Oil Co. may by notice to Triton elect to accelerate the number of Barrels to
be delivered in the Month in which the acceleration occurs and in each Month
thereafter such that the number of Barrels to be delivered in any such Month
is equal to the number provided in Section 2.2(e) hereof. Upon such election,
Triton shall upon demand pay to Oil Co., in immediately available funds, any
and all amounts described in Section 12.13 hereof.
7.3 No Penalty. The parties hereto agree that the Acceleration
Expenses described in Article XI of the MGT Crude Purchase Agreement are a
reasonable pre-estimate of loss and not a penalty. Such amount is payable for
the loss of the bargain and the loss of protection against future risks, and
except as otherwise provided in this Agreement, no party will be entitled to
recover any additional damages as a consequence of such losses. In addition,
Triton hereby acknowledges that its agreement to pay the Acceleration Expenses
to Oil Co. is in consideration of the payment by Oil Co. of the Prepaid Price
on the date hereof and acknowledges the absence of damages to Triton resulting
from a Specified Event given the absence of any executory obligation of Oil
Co. after the payment of Prepaid Price other than the release of Trust
Accounts by the Indenture Trustee, which release is blocked upon the
occurrence of a Specified Event. It is understood that payment of such
Acceleration Expenses shall not relieve Triton of its obligations to make
deliveries of Crude Oil and payments pursuant to the terms of this Agreement.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.1 Representations and Warranties of Triton . Triton hereby
expressly represents and warrants to Oil Co. as follows:
(a) Organization. Triton is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own its properties, to conduct
its business as conducted at present and to execute, deliver and perform this
Agreement, the other Transaction Documents to which it is a party, the Joint
Operating Agreement and the Association Contracts. Triton is duly qualified
to do business as a foreign corporation and is in good standing under the laws
of all jurisdictions in which the failure to be so qualified could have a
material adverse effect on Triton.
(b) Power and Authority. The execution, delivery and performance by
Triton of this Agreement, the Joint Operating Agreement, the other Transaction
Documents to which it is a party, and the Association Contracts and the
consummation of the transactions contemplated herein and therein are within
Triton's corporate power and authority and have been duly authorized by all
necessary corporate action.
(c) Consents, Approvals, Etc. No authorization, consent or approval of,
or other action by, or notice to or filing with, any governmental authority,
regulatory body or any other person is required for the due authorization,
execution, delivery or performance by Triton of this Agreement, the other
Transaction Documents to which it is a party, the Joint Operating Agreement
and the Association Contracts or the consummation of the transactions
contemplated by this Agreement, the other Transaction Documents to which it is
a party, the Joint Operating Agreement and the Association Contracts, except
those approvals which have been obtained, and those notices and filings which
have been made, copies of all of which have been delivered to Oil Co. and
except for those approvals the failure of which to obtain could not reasonably
be expected to have a material adverse effect on Triton's ability to perform
under this Agreement, the other Transaction Documents to which it is a party,
the Joint Operating Agreement and the Association Contracts.
(d) Execution and Delivery. Each of this Agreement, the other
Transaction Documents to which it is a party, the Joint Operating Agreement
and the Association Contracts has been duly executed and delivered by Triton
and is the legal, valid and binding obligation of Triton enforceable against
Triton in accordance with its terms, except that enforceability may be subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors generally and by general
equitable principles (whether enforcement is sought by proceedings in equity
or at law).
(e) Financial Statements. The balance sheet of TEC as at December
31, 1994, and the related statements of income and cash flows of TEC for the
period ended, a copy of which have been delivered to Oil Co., have been
reported on by Price Waterhouse and present fairly in all material respects
the financial position of TEC as at such date and the results of its
operations and cash flows for the year then ended, all in accordance with
relevant accounting practices and, otherwise, in accordance with U.S.
generally accepted accounting principles. On the date of this Agreement,
Triton did not have any liabilities, contingent or otherwise, which were
material in the aggregate, which were not reflected on such financial
statements. On the date of this Agreement, no Liens exist on any property or
asset of Triton, except (i) Liens which are disclosed in such financial
statements, (ii) Liens which secure liabilities, contingent or otherwise,
which are not material in the aggregate, and (iii) Liens which are Permitted
Liens hereunder.
(f) Compliance with Laws, Etc. Neither the execution, delivery and
performance by Triton of this Agreement and the other Transaction Documents to
which it is a party nor the consummation of the transactions contemplated by
this Agreement and the other Transaction Documents to which it is a party (1)
does or shall violate any provision of the Joint Operating Agreement, Triton's
Applicable Instruments, the Association Contracts, the other Transaction
Documents to which Triton is a party or any other material contracts to which
Triton is a party or by which any of its property or assets are bound or any
provision of any existing law or regulation or order or judgment of any court
or (2) does or shall result in or require the creation or imposition of any
Lien on any properties, assets or revenues of Triton. Triton is in compliance
in all material respects with this Agreement, the other Transaction Documents
to which Triton is a party (including its obligations to insure the Cusiana
Project and its interests hereunder), the Joint Operating Agreement (including
its obligations to meet Cash Calls thereunder) and the Association Contracts
and the provisions of any existing law or regulation applicable to Triton.
(g) Litigation. Except as set forth in Schedule D hereto there is no
pending or, to the best knowledge of Triton, threatened, suit, claim, action,
investigation or proceeding affecting Triton or any properties or assets of
Triton before any court, governmental agency or arbitrator, which could
reasonably be expected to materially adversely affect the consolidated
business, financial condition, operations or prospects of Triton or its
interest in the Cusiana Project or which purport to affect the legality,
validity or enforceability of this Agreement, the other Transaction Documents
to which Triton is a party, the Joint Operating Agreement or any of the
Association Contracts.
(h) Tax and Labor Claims. There is no existing tax or labor claim which
could reasonably be expected to have a material adverse effect on Triton's
Participating Interest in the Cusiana Project or its ability to perform under
this Agreement, the other Transaction Documents to which it is a party, the
Joint Operating Agreement or the Association Contracts.
(i) Payment of Taxes. Triton has paid all taxes which it is required to
have paid, except for any tax the payment of which is being contested in good
faith by appropriate proceedings and for which adequate reserves have been
established to the extent required by generally accepted accounting principles
and for any non-payment or non-compliance as would not reasonably be expected
to have a material adverse effect on its Participating Interest in the Cusiana
Project or its ability to perform under this Agreement, the Joint Operating
Agreement, the Association Contracts or the other Transaction Documents to
which it is a party.
(j) Governmental Authority. Triton has all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except where the failure to have such licenses,
authorizations, consents and approvals would not have a material adverse
effect on its Participating Interest in the Cusiana Project or its ability to
perform under this Agreement, the other Transaction Documents to which it is a
party, the Joint Operating Agreement or the Association Contracts.
(k) Investment Company. Triton is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(l) Public Utility Holding Company. Triton is not a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate"
of a "holding company", as such terms are used in the Public Utility Holding
Company Act of 1935, as amended, or pursuant to such Act or the rules and
regulations promulgated thereunder or any order or interpretation of the
Securities and Exchange Commission or its staff issued pursuant thereto, and
Triton is not subject to any obligations, duties or liabilities thereunder.
(m) Environmental Matters. Triton is in compliance with all
environmental laws presently in effect in Colombia, except as such
non-compliance as would not have a material adverse effect on its involvement
in the Cusiana Project or its ability to perform under this Agreement, the
other Transaction Documents to which it is a party, the Joint Operating
Agreement and the Association Contracts.
(n) Ownership of Crude Oil. The Crude Oil to be delivered by Triton to
Oil Co. in fulfillment of the Delivery Requirement hereunder shall be
delivered to Oil Co. with good and marketable title thereto, free and clear of
all Liens or any other adverse claims whatsoever, including taxes and
royalties for which Triton is responsible under Section 2.1. There are no
Liens of any kind affecting Triton's title to the Crude Oil to be delivered
hereunder or Triton's Cusiana Project assets (except Permitted Liens) or
rights under the Joint Operating Agreements and the Association Contracts
(except as described in Article V above). The Crude Oil to be delivered in
fulfillment of the Delivery Requirement hereunder had been produced, handled
and transported and is being delivered in accordance with all Governmental
Requirements (including, without limitation, environmental laws).
(o) No Offer. Neither Triton nor anyone acting on its behalf has
offered any of the Notes or the Certificates or any similar security of Oil
Co. to, or solicited any offers to purchase the same from, or otherwise
approached or negotiated with respect thereto with, anyone other than the
offer of the Certificates to approximately 50 institutional investors, each of
which was offered a portion of the Certificates for purposes of investment and
not for distribution, or has taken any other action which would require the
registration of the Notes or the Certificates under the Securities Act of
1933, as amended, or any securities or blue sky law of any applicable
jurisdiction.
(p) Existing Liens. As of the date hereof, the aggregate amount of all
Liens (other than Permitted Liens) on property of Triton securing any
obligation did not exceed $5,000,000.
(q) Additional Crude Purchase Agreement. Triton has delivered to Oil
Co. a copy of the Additional Crude Purchase Agreement, which is in full force
and effect as of the date hereof.
8.2 Representations and Warranties of Oil Co. Oil Co. hereby
expressly represents and warrants to Triton as follows:
(a) Organization. Oil Co. is a company duly incorporated, validly
existing and in good standing under the laws of the Cayman Islands and has all
requisite corporate power and authority to own its properties, to conduct its
business as conducted at present and to execute, deliver and perform this
Agreement.
(b) Power and Authority. The execution, delivery and performance by Oil
Co. of this Agreement and the consummation of the transactions contemplated
herein are within Oil Co.'s corporate power and authority and have been duly
authorized by all necessary corporate action.
(c) Consents, Approvals, Etc. No authorization, consent or approval of,
or other action by, or notice to or filing with, any governmental authority,
regulatory body or any other Person in or of the Cayman Islands is required
for the due authorization, execution, delivery or performance by Oil Co. of
this Agreement, or the consummation of the transactions contemplated by this
Agreement, except those approvals which have been obtained, and those notices
and filings which have been made, copies of all of which have been delivered
to Triton.
(d) Execution and Delivery. This Agreement has been duly executed
and delivered to Triton by Oil Co. and is the legal, valid and binding
obligation of Oil Co. enforceable against Oil Co. in accordance with its
terms, except that enforceability may be subject to applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the rights of
creditors generally and by general equitable principles (whether enforcement
is sought by proceedings in equity or at law).
ARTICLE IX
CONDITIONS PRECEDENT
The obligations of Oil Co. under this Agreement shall be subject to
the fulfillment, at or prior to the execution and delivery by the parties of
this Agreement, of each of the following conditions:
9.1 MGT Crude Purchase Agreement . Execution and delivery by Oil
Co. of the MGT Crude Purchase Agreement dated of even date herewith by and
between Oil Co. and MGT regarding the purchase and sale of Crude Oil as
described therein.
9.2 Transaction Documents . Execution and delivery by Triton of
all other Transaction Documents to which it is a party.
9.3 Opinions and Certifications . Triton shall deliver or shall
cause to be delivered to Oil Co. such opinions of counsel to Triton
(including, without limitation, opinions regarding authority to export Crude
Oil under Colombian law) in form(s) agreed to on or prior to the date hereof
and such other opinions, certificates, letters and documents as Oil Co. may
reasonably request.
9.4 Issuance of Notes and Certificates . Execution and delivery by
Oil Co. of the Indenture dated of even date herewith, the delivery of the
Notes thereunder and the sale and delivery of the Certificates.
ARTICLE X
FORCE MAJEURE
10.1 Excuse for Nonperformance . Subject to the other provisions
of this Article, the obligations of a party under this Agreement, except the
obligation to pay money to the other party, may be suspended for a reasonable
period for Force Majeure, to the extent that nonperformance is caused by Force
Majeure, and the affected party shall be relieved of liability for failing to
perform from the inception of such event and during the continuance thereof
and the time of any such event and the time of any such suspension of
obligations shall be added to the term of this Agreement.
10.2 Definition . "Force Majeure" means a fact, event, or
circumstance beyond the reasonable control of the affected party that directly
or indirectly hinders or prevents performance or observance by that party of
any obligation or condition under this Agreement, including the following:
(a) acts of God;
(b) fire, explosion, and collision;
(c) accidents, epidemics and breakdowns;
(d) earthquake, flood, washouts, landslides, hurricane, tornado,
lightning, or adverse weather conditions;
(e) war, insurrection, economic embargo, civil or public disturbances,
riot, sabotage, or armed conflict;
(f) partial or complete failure or refusal of the Pipeline, the Port, or
a cargo vessel to receive, load, transport, store, deliver, or unload Crude
Oil;
(g) an act of nationalization by the Government; the imposition of
confiscatory taxes, royalties, fees, duties, or other payments; the Government
mobilization of men or material; restrictions or restraints imposed by
Government; or any other act or omission of the Government that materially
hinders or prevents the production, transportation, storage, transfer, sale,
or resale of the Crude Oil; or
(h) a strike, lockout, slowdown, differences with workers, or other
labor disturbance that stops or interferes with operations.
For the avoidance of doubt, Force Majeure may be invoked by a party, even if
the Force Majeure directly affects a third party (e.g., the operator of the
fields where the Crude Oil is produced or the operator of the Pipeline), but
only indirectly affects the invoking party (e.g., by causing the operator of
the fields to cease Crude Oil production or the operator of the Pipeline to
cease transportation of Crude Oil, thereby preventing Triton from delivering
and Oil Co. from receiving Crude Oil). Neither economic impracticality nor
the inability of either party to perform, in whole or in part, for economic
reasons shall constitute an event of Force Majeure.
10.3 Notice and Cure . A party affected by Force Majeure shall, as
a condition to invoking Force Majeure as an excuse for nonperformance under
this Agreement, (a) promptly give notice of the occurrence of the Force
Majeure to the other party, with reasonably detailed information about the
event of the Force Majeure and the effect it has had, and is anticipated to
have, on the performance of the invoking party, and shall confirm such notice
in writing no later than 2 Business Days after the occurrence of such event of
Force Majeure and (b) use its best efforts to cure the Force Majeure and its
consequences and resume performance. No party is obligated to settle a strike
or other labor disturbance, however, except on terms that are agreeable to
that party. During any extension periods, Triton shall deliver to Oil Co.
Barrels in fulfillment of the Delivery Requirement which it was required to
deliver during the Month in which the event of Force Majeure was invoked which
it could not otherwise deliver to Oil Co. because of the occurrence of such
event of Force Majeure. Notwithstanding the provisions of Section 10.1, in no
event shall the occurrence of an event of Force Majeure serve to excuse in any
way the obligation of Triton to deliver to Oil Co., or Oil Co.'s obligation to
accept delivery, of the aggregate number of Barrels, if any, although such
Force Majeure event may affect the Schedule of delivery set forth in Schedule
A.
ARTICLE XI
RESERVED
ARTICLE XII
GENERAL PROVISIONS
12.1 Confidentiality . The parties hereto agree that the terms of
this Agreement or any financial or technical information furnished or
disclosed to a party hereunder shall not be disclosed or made available to any
other person without the prior written consent of the other party other than
as contemplated hereunder; provided that nothing herein shall limit the
disclosure of any such information (i) as contemplated hereby and in the MGT
Crude Purchase Agreement, (ii) to the extent required by statute, rule,
regulation or judicial process, (iii) to counsel for Triton and Oil Co., (iv)
to auditors or accountants, (v) in connection with any litigation to which
Triton or Oil Co. is a party, (vi) to a Subsidiary or Affiliate of Triton or
Oil Co. or (vii) to the extent necessary to comply with the request of, or as
otherwise customarily disclosed to, any bank or insurance company regulatory
body (including, without limitation, the United States National Association of
Insurance Commissioners or any successor thereto) or representatives thereof
or any rating agency that issued a rating for the Certificates; provided,
further, that unless specifically prohibited by applicable law or court order,
each of Triton and Oil Co. shall, prior to disclosure thereof, notify the
other party of any request for disclosure of any such nonpublic information
(A) by any governmental agency or representative thereof or (B) pursuant to
legal process. Moreover, each party hereto agrees to restrict dissemination
of particular confidential information only to those persons in their
respective organizations and their authorized agents and representatives who
must have access to such information in order to perform their obligations
under this Agreement. Notwithstanding the above restrictions, neither party
shall have any obligation for any disclosure of confidential information which
is, or becomes, generally known to the public without breach of the terms of
this Agreement, or if any disclosure of confidential information is required
by court order or by order of any governmental or administrative tribunal
having jurisdiction over the parties. The parties hereto expressly
acknowledge and agree that each communication that Oil Co. receives from
Triton hereunder shall be forwarded by it to the Indenture Trustee. The
confidentiality obligations in this Section shall survive termination of this
Agreement for an additional calendar year. The parties expressly acknowledge
and agree that it is their mutual intent that this Agreement be treated as an
agreement governing the sale of a cash commodity for deferred shipment or
delivery for purposes of Sections 1a(11) and 2(a)(1)(A) of the Commodity
Exchange Act and the regulations and interpretations of the Commodity Futures
Trading Commission thereunder and a "forward contract" for purposes of the
Bankruptcy Code.
12.2 Survival of Representations and Warranties . Notwithstanding
anything to the contrary herein, all representations and warranties provided
by Triton in Article VIII hereof shall survive the termination of this
Agreement.
12.3 Headings . The headings, captions and arrangements contained
in this Agreement have been inserted for convenience only and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions hereof.
12.4 Rights and Remedies Cumulative . The rights and remedies of
each of Oil Co. and Triton under this Agreement shall be cumulative and
non-exclusive of any other rights or remedies which each such party may have
under any other agreement or instrument, by operation of law or otherwise.
12.5 Entire Agreement . This Agreement and all Schedules and
Exhibits annexed hereto embodies the final, entire agreement between the
parties hereto and supersedes any and all prior commitments, agreements,
representations, and understandings, whether written or oral, relating to the
subject matter hereof.
12.6 Construction . Triton and Oil Co. acknowledge that each of
them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and
that this Agreement shall be construed as if jointly drafted by Triton and Oil
Co.
12.7 Severability . Any section or clause, subsection, sentence,
paragraph, provision, or portion thereof of this Agreement held by a court of
competent jurisdiction to be invalid, illegal, or ineffective shall not
impair, invalidate, or nullify the remainder of this Agreement, but the effect
thereof shall be confined to the section or clause, subsection, sentence,
paragraph or provision, or portion thereof, so held invalid, illegal, or
ineffective.
12.8 Governing Law; Jurisdiction . (a) THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF). Each of the
parties hereto hereby submits to the jurisdiction of the United States
District Court for the Southern District of New York, of any New York State
court sitting in New York City, and of the courts of its own corporate
domicile with respect to actions brought against it as a defendant, for
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby, provided, that nothing herein shall
be deemed to limit the ability of any party to this Agreement to bring suit
against any other party to this Agreement in any other jurisdiction. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court, any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum
and any objection based on place of residence or domicile.
(b) Oil Co. irrevocably appoints CT Corporation, with offices at
the date of this Agreement at 1633 Broadway, New York, New York, United
States, as its authorized agent on which any and all legal process may be
served in any such action, suit or proceeding brought in the United States
District Court for the Southern District of New York or any New York State
court sitting in New York City. Oil Co. agrees that service of process in
respect of it upon such agent, together with written notice of such service
given to it in the manner provided in Section 12.14 hereof, shall be deemed to
be effective service of process upon it in any such action, suit or
proceeding. Oil Co. agrees that the failure of such agent to give notice to
it of any such service shall not impair or affect the validity of such service
or any judgment rendered in any action, suit or proceeding based thereon. If
for any reason such agent shall cease to be available to act as such, Oil Co.
agrees to designate a new agent in New York City, on the terms and for the
purposes of this Section 12.8. Nothing herein shall in any way be deemed to
limit the ability of Triton to serve any such legal process in any other
manner permitted by Governmental Requirements or to obtain jurisdiction over
Oil Co. or bring actions, suits or proceedings against it in such other
jurisdictions, and in such manner, as may be permitted by Governmental
Requirements.
(c) To the extent that either of Triton or Oil Co. has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service of notice, attachment prior to
judgment, attachment in aid of execution or execution, on the ground of
sovereignty or otherwise) with respect to itself or its property, it hereby
irrevocably waives, to the fullest extent permitted by Governmental
Requirements, such immunity in respect of its obligations under this
Agreement.
(d) Triton irrevocably waives, to the fullest extent permitted by
Governmental Requirements, any claim that any action or proceeding commenced
by Oil Co. relating in any way to this Agreement should be dismissed or stayed
by reason, or pending the resolution, of any action or proceeding commenced by
Triton relating in any way to this Agreement whether or not commenced earlier.
To the fullest extent permitted by Governmental Requirements, Triton shall
take all measures necessary for any such action or proceeding commenced by Oil
Co. to proceed to judgment prior to the entry of judgment in any such action
or proceeding commenced by Triton.
12.9 Binding Agreement . This Agreement is entered into for the
benefit of the parties hereto and their permitted successors and assigns. It
shall be binding upon and shall inure to the benefit of such parties and their
successors and assigns.
12.10 JURY TRIAL . THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY PROCEEDING ENFORCING OR DEFENDING ANY RIGHTS UNDER THIS AGREEMENT
OR RELATING THERETO.
12.11 No Agency . It is expressly agreed and understood that
nothing herein shall serve to create any agency, employment or other master
and servant relationship or partnership or joint venture between Triton and
Oil Co., Indenture Trustee, their Affiliates or any officer, director,
employee or agent thereof.
12.12 No Third-Party Beneficiaries . The benefits of this
Agreement shall not inure to any third party other than MGT, the Indenture
Trustee, the holders of Notes issued pursuant to the terms of the Indenture
and the holders of Certificates issued pursuant to the terms of the Trust
Agreement.
12.13 Enforcement . Upon the occurrence of a Specified Event,
Triton shall pay all reasonable expenses incurred by Oil Co., directly and
indirectly, including, without limitation, all expenses incurred in connection
with (i) the termination or amendment of any financing by Oil Co. of its
rights hereunder, (ii) any collection, bankruptcy, insolvency and other
enforcement proceedings resulting from the occurrence of such Specified Event
and (iii) upon acceleration under Section 2.2(e) hereof the Acceleration
Expenses payable by Oil Co. to MGT pursuant to Article XI of the MGT Crude
Purchase Agreement.
12.14 Notice . Any notice, demand or document which a party is
required or may desire to give hereunder shall be in writing and, except to
the extent provided in the other provisions of this Agreement, shall be given
by messenger, telecopy or other electronic transmission, or registered or
certified mail, postage prepaid, return receipt requested, addressed to such
party at its address, telecopy number shown below, or at such other address as
either party shall have furnished to the other by notice given in accordance
with this provision. Any notice delivered or made by messenger, telecopy, or
mail shall be deemed be given on the date of actual delivery as shown by
messenger receipt, the addressor's telecopy machine confirmation or other
verifiable electronic receipt, or the registry or certification receipt.
If to Oil Co.:
Oil Co. Ltd.
c/o Caledonian Bank & Trust Limited
P. O. Box 1043
Caledonian House
Mary Street
George Town, Cayman Islands
B.W.I.
Attention: David Sargison
Telephone: (809) 949-0050
Telecopy: (809) 949-8062
With copies to: Texas Commerce Bank
National Association
600 Travis, 8th Floor
Houston, Texas 77002
Attention: Corporate Trust
Department
Telephone: (713) 216-4181
Facsimile: (713) 216-2101
Chemical Bank & Trust (Bahamas)
Limited
Claughton House
Shirley Street
P.O. Box N-4723
Nassau, Bahamas
Attn: Michael Ranson
Telephone: (809) 322-8134
Telecopy: (809) 326-7339
If to Triton:
Triton Colombia, Inc.
Carrera 9A #99-02, Oficina 407
Apartado Aereo 30277
Santa Fe de Bogota, Colombia
Attn: President
Telephone: 011 571 618 2411
Telecopy: 011 571 618 2553
With copies to:
Simpson Thacher & Bartlett
425 Lexington Avenue
27th Floor
New York, New York 10017-3954
Attn: David Eisenberg
Telephone: (212) 455-7103
Telecopy: (212) 455-2502
Triton Energy Corporation
6688 North Central Expressway
Suite 1400
Dallas, Texas 75206
Attn: Peter Rugg,
Robert B. Holland, III
Telephone: (214) 696-5200
Telecopy: (214) 696-0597
Oil Co. need not delay action on notice transmitted orally until receipt of
written confirmation of such notice. In the event that a discrepancy exists
between the notice received by Oil Co. orally and the written confirmation, or
in the absence of a written confirmation, the oral notice, as understood by
Oil Co. shall be deemed the controlling and proper notice.
12.15 No Waiver . Neither the failure nor any delay on the part of
any party hereto to exercise any right, remedy, power, privilege or option
under this Agreement shall operate as a waiver of such or any other right,
remedy, power, privilege or option. No single or partial exercise of any
right, remedy, power, privilege or option under this Agreement shall preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power, privilege or option. No waiver of any right, remedy, power,
privilege or option with respect to any occurrence shall be construed as a
waiver of such right, remedy, power, privilege or option with respect to any
subsequent or other occurrence. No waiver whatever shall be valid unless in
writing and signed by an officer of the party to whom such waiver applies and
then only to the extent therein set forth.
12.16 Further Assurances . From time to time after the date
hereof, Triton agrees to execute and deliver or cause to be executed and
delivered, such reasonable documents and instruments, and take such other
reasonable and lawful action as Oil Co. shall deem necessary or desirable to
perfect or evidence perfection of its security interest, to enforce its
obligations hereunder or to otherwise effectuate the purposes of this
Agreement.
12.17 Assignability . Except as contemplated under Section 5.2
hereof, Triton shall not, during the term of this Agreement or any extensions
thereof assign, transfer or otherwise dispose of any of its rights or
obligations hereunder without the prior written consent of Oil Co. At Oil
Co.'s sole discretion, Oil Co. may assign any or all of its rights and
obligations hereunder at any time to the Indenture Trustee and any successor
in interest thereto. Any assignments or transfers by Triton or Oil Co. in
violation of the foregoing shall be null and void. Triton consents to the
provisions of the assignment to the Indenture Trustee and agrees to perform
any provisions of the Indenture applicable to Triton (including the obligation
to notify the Indenture Trustee of the amount and source of any payments it
makes to the Indenture Trustee for the account of Oil Co. as contemplated by
Sections 5.03 and 7.07 of the Indenture). Triton acknowledges that Oil Co. is
assigning all of its right, title and interest in, to and under this Agreement
to the Indenture Trustee for the benefit of the Noteholders and Triton agrees
that all of the representations, covenants and agreements made by Triton in
this Agreement are also for the benefit of the Indenture Trustee and the
Noteholders. Triton further agrees and consents to the provisions of Section
5.10 of the Pledge Agreement as such are applicable to Triton. In furtherance
of the foregoing and in recognition of the provisions of Section 9.05 of the
Indenture and Section 5.02 of the Pledge Agreement, Triton shall not consent
to any further assignment or other transfer by Oil Co. of any interest in this
Agreement without the prior written consent of the Indenture Trustee.
12.18 Counterparts; Filing . This Agreement may be executed in any
number of counterparts, and each counterpart hereof shall be deemed to be an
original instrument, but all such counterparts shall constitute but one
Agreement.
12.19 Modification of Agreement . All modifications, consents,
amendments or waivers of any provision of this Agreement shall be effective
only if the same shall be in writing and concurred with by Triton, the
Indenture Trustee (who shall act according to the direction of the Majority
Holders (as defined in the Indenture) of the Notes) and Oil Co. or their
permitted assigns and then shall be effective only in the specific instance
and for the purpose for which given.
12.20 Purchase of Notes or Certificates. Triton will not, and will
not permit any Affiliate which it directly or indirectly controls to, acquire
directly or indirectly (by purchase, participation, prepayment or otherwise)
any of the outstandi ng Notes or Certificates except by way of payment or
prepayment in accordance with the provisions of the Notes or the Certificates
and the Indenture or the Trust Agreement, respectively.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date and year first above written.
TRITON COLOMBIA, INC.
By /s/Ivan Farjardo
Name: Ivan Farjardo
Title: President and Legal
Representative
OIL CO. LTD.
By /s/David Sargison
Name: David Sargison
Title: Director
SCHEDULE A
Delivery
Date Number of Barrels Fixed Price Per Barrel
June 1995 58,425 $15.868 (for all
July 1995 58,425 deliveries under
August 1995 58,425 Schedule A)
September 1995 58,425
October 1995 58,425
November 1995 58,425
December 1995 58,425
January 1996 58,425
February 1996 58,425
March 1996 58,425
April 1996 58,425
May 1996 58,425
June 1996 58,425
July 1996 58,425
August 1996 58,425
September 1996 58,425
October 1996 58,425
November 1996 58,425
December 1996 58,425
January 1997 58,425
February 1997 58,425
March 1997 58,425
April 1997 254,136
May 1997 254,136
June 1997 254,136
July 1997 254,136
August 1997 254,136
September 1997 254,136
October 1997 254,136
November 1997 254,136
December 1997 254,l36
January 1998 254,136
February 1998 254,136
March 1998 254,136
April 1998 254,136
May 1998 254,136
June 1998 254,136
July 1998 254,136
August 1998 254,136
September 1998 254,136
October 1998 254,136
November 1998 254,136
December 1998 254,136
January 1999 254,136
February 1999 254,136
Date Number of Barrels Fixed Price Per Barrel
March 1999 254,136 $15.868 (for all
April 1999 254,136 deliveries under
May 1999 254,136 Schedule A)
June 1999 254,136
July 1999 254,136
August 1999 254,136
September 1999 254,136
October 1999 254,136
November 1999 254,136
December 1999 254,136
January 2000 254,136
February 2000 254,136
March 2000 254,136
Schedule B
Terms and Conditions Applicable to Purchases, Sales and
Deliveries of Crude Oil at the Port:
The following provisions of the Operating Agreement Covering Transfer
through Offshore Facilities and Storage at the Covenas Onshore Terminal shall
be observed by the parties in accordance with Section 2.2 (f):
Clause Twenty-first
Clause Twenty-second
Clause Twenty-three
Clause Twenty-four
Clause Twenty-sixth
and the definitions relating to the above referenced Clauses
as set forth in Clause Second.
Terms and Conditions Applicable to Purchases, Sales and
Deliveries of Brent:
The following provisions of the Agreement for the Sale of Brent Blend
Crude Oil on 15 Day Terms, General Conditions, Shell U.K. Limited, July 1990,
shall be observed by the parties in accordance with Secton 2.2 (f):
Section 2
Section 3
Section 7
Section 8
Section 9
Section 10
Section 13
and the definitions relating to the above referenced
Sections as set forth in Section 1.
Terms and Conditions Applicable to Purchases, Sales and
Deliveries of Forties:
The following provisions of the BP Oil International Limited Conditions
of Sale for Forties Blend Crude Oil on 18 Day Terms, November 1994 Edition,
shall be observed by the parties in accordance with Section 2.2 (f):
Section 5
Section 7.1.1
Section 9
Section 10
Section 13
and the definitions relating to the above-referenced
Sections as set forth in Section 2.
<PAGE>
SCHEDULE C
Current Liens
None
<PAGE>
SCHEDULE D
Litigation
None
<PAGE>
EXHIBIT A
OIL CO. LTD.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Oil Co. Ltd., a Cayman Islands
company, hereby makes, constitutes, and appoints Triton Colombia, Inc., a
Delaware corporation, or any officer, director, employee or agent of Triton
Colombia, Inc., to act as Oil Co. Ltd.s true and lawful representative and
attorney-in-fact, with full power of substitution, for and in Oil Co. Ltd.s
name, place and stead: (a) to endorse, to or to the order of Morgan Guaranty
Trust Company of New York, its successors and assigns (MGT), each of the
following documents: bills of lading in respect of crude oil delivered by
Triton Colombia, Inc. or any designee of Triton Colombia, Inc. to Oil Co.
Ltd., and such other documents as are necessary or customary in similar
transactions to fully vest in MGT title to such crude oil and to deliver such
bills of lading, other documents and all related invoices, inspection reports,
certificates of origin, and certificates of quantity and quality directly to
MGT or its order; and (b) otherwise to take any such further action as may be
necessary in connection with any of the foregoing, by giving to said
attorney-in-fact full power and authority to do and perform each and every act
and thing whatsoever requisite and necessary to be done in and about the
foregoing as fully to all intents and purposes as Oil Co. Ltd. might or could
do if personally present, and hereby ratifying and confirming all that said
attorney-in-fact shall lawfully do or cause to be done by virtue hereof.
The foregoing power of attorney: (i) may not be changed orally; and (ii)
shall be governed by and construed in accordance with the laws of the State of
New York (without regard to the conflict of laws provisions thereof).
TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, OIL CO. LTD. HEREBY AGREES
THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS
INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL
BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR
KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH
THIRD PARTY.
<PAGE>
IN WITNESS WHEREOF, Oil Co. Ltd. has hereunto signed its name and seal
this 25th day of May, 1995.
OIL CO., LTD.
/s/ David Sargison
By: David Sargison
Title: Director
SUBSCRIBED AND SWORN to
before me this 25th day
of May, 1995
/s/
Notary
My Commission Expires:
31st January 1996
<PAGE>
EXHIBIT B
TRITON COLOMBIA, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Triton Colombia, Inc. a Delaware
corporation, hereby makes, constitutes, and appoints Oil Co. Ltd., a Cayman
Islands company, or any officer, director, employee or agent of Oil Co. Ltd.,
to act as Triton Colombia, Inc.s true and lawful representative and
attorney-in-fact, with full power of substitution, for and in Triton Colombia
Inc.s name, place and stead: (a) to issue instructions to the operator of the
Port of Covenas , Colombia at the point of delivery of the crude oil or a
vessel operator to the extent necessary to facilitate the disposition of crude
oil delivered by Triton Colombia, Inc. to Oil Co. Ltd.; (b) to issue
instructions to the operator of the port of terminal at any delivery point
other than the Port of Covenas or a vessel operator to the extent necessary to
facilitate the disposition of crude oil delivered by Triton Colombia, Inc. to
Oil Co. Ltd. at a location other than the Port of Covenas; and (c) otherwise
to take any such further action as may be necessary in connection with any of
the foregoing, by giving to said attorney-in-fact full power and authority to
do and perform each and every act and thing whatsoever requisite and necessary
to be done in and about the foregoing as fully to all intents and purposes as
Triton Colombia, Inc. might or could do if personally present, and hereby
ratifying and confirming all that said attorney-in-fact shall lawfully do or
cause to be done by virtue hereof.
The foregoing power of attorney: (i) is a special power of attorney
coupled with an interest and is irrevocable; (ii) may not be changed orally;
and (iii) shall be governed by and construed in accordance with the laws of
the State of New York (without regard to the conflict of laws provisions
thereof).
TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, TRITON COLOMBIA, INC. HEREBY
AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF
THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT TERMINATION HEREOF SHALL BE
INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE
OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD
PARTY.
<PAGE>
IN WITNESS WHEREOF, Triton Colombia, Inc. has hereunto signed its name
and seal this 25th day of May, 1995.
TRITON COLOMBIA, INC.
/s/ Robert B. Holland III
By: Robert B. Holland III
Title: Vice President
SUBSCRIBED AND SWORN to
before me this 25th day
of May, 1995
/s/
Notary
My Commission Expires:
31st January 1996
EXHIBIT 10.2
Crude Oil Agreement
THIS CRUDE OIL AGREEMENT (this Agreement), dated as of May 25, 1995, is
made by Morgan Guaranty Trust Company of New York, a New York banking
corporation (Owner), with an office at 60 Wall Street, New York, New York
10260, Attention: Commodity Swaps Trading, Tel: (212) 648-2385, Fax: (212)
648-5168, and Telex: 662647 MGTGLD, and Triton Oil & Gas Corp., a Delaware
corporation (Buyer), with an office at 6688 North Central Expressway, Suite
1400, Dallas, Texas 75206, Attention: Director of Petroleum Marketing, Tel:
(214) 691-5200, Fax: (214) 691-0340.
Recitals
Owner has purchased and may purchase certain Crude Oil (defined below).
Owner wishes to sell, and Buyer wishes to buy, the Crude Oil on the terms of
this Agreement.
Agreements
FOR THE REASONS recited above and for the mutual benefits to be obtained
under this Agreement, Owner and Buyer agree as follows:
Article 1/Definitions
In this Agreement, the following terms have the following meanings.
1.1 Agreement is defined in the Preamble, and includes all
amendments, exhibits, schedules, and attachments to this Agreement.
1.2 Agreed Interest Rate means the overnight London Interbank Bid
Rate.
1.3 Barrel means forty-two (42) U.S. gallons of 231 cubic inches
each, adjusted for basic sediment and water, and corrected to sixty degrees
Fahrenheit (60F) and one (1) atmosphere of pressure.
1.4 Business Day means any day other than a Saturday, Sunday, and
any day on which commercial banking institutions in the City of New York or
Dallas, Texas, are authorized or obligated by law or executive order to close.
1.5 Buyer is defined in the Preamble. The term includes Buyers
permitted successors and assigns.
1.6 Cargo Vessel means an marine vessel outfitted to transport
crude oil.
1.7 Contract A and Contract B are defined in the definition of
Upstream Contracts.
1.8 Crude Market Participants is defined in the definition of
Delivery Terms.
1.9 Crude Oil (when capitalized) means crude oil that is
transported through the Pipeline, purchased by Owner under the Upstream
Contracts, and tendered for delivery to Buyer at the Delivery Point; crude oil
(when not capitalized) means crude oil or other liquid hydrocarbons that do
not satisfy one or more of the characteristics of Crude Oil (the capitalized
term).
1.10 Default is defined in Section 5.2.
1.11 Defaulting Party is defined in Section 5.2.
1.12 Delivery Month means, (i) with respect to any delivery of an
amount of Crude Oil for loading into a Cargo Vessel, the calendar month in
which the bill of lading is dated, and (ii) with respect to any other
continuous delivery of an amount of Crude Oil, the calendar month in which
such delivery occurs.
1.13 Delivery Point is defined in Section 3.1.
1.14 Delivery Terms means the general terms and conditions
governing the physical delivery and receipt of crude oil at a Delivery Point
generally observed by the operator of the facilities at the Delivery Point
(including any Port), the shippers transporting crude oil on the Pipeline to
which the Delivery Point is connected, and those Third Parties receiving such
crude oil (such operator, shippers, and Third Parties being referred to
collectively as Crude Market Participants) (including those terms relating to
measurement and sampling of crude oil and, if applicable, the nomination,
presentation date range, berthing, and loading of Cargo Vessels), as in effect
from time to time and not inconsistent with the terms of this Agreement.
1.15 Dollar means and $ refers to a dollar of the United States of
America. All references to prices and payments in this Agreement are
denominated, and shall be paid, in Dollars.
1.16 Estimated Payment Amount is defined in Section 2.2.
1.17 Estimated Payment Date means, with respect to a delivery of an
amount of Crude Oil, the Business Day immediately following the Estimated
Pricing Date for such amount.
1.18 Estimated Pricing Date means, (i) with respect to any delivery
of an amount of Crude Oil for loading into a Cargo Vessel, the date which is
the later of (x) the twentieth (20th) day of the calendar month immediately
preceding the Delivery Month or, if such day is not a Trading Day, the
immediately preceding Trading Day, or (y) eleven (11) Business Days before the
first date of the lay date range or presentation date range communicated on a
preliminary basis by the operator of the Port during which that cargo is to be
loaded pursuant to the applicable Delivery Terms; and (ii) with respect to any
other continuous delivery of an amount of Crude Oil, the twentieth (20th) day
of the calendar month immediately preceding the Delivery Month.
1.19 Fallback Price means the arithmetic average of the high and
low prices for West Texas Intermediate (WTI) crude oil delivered at Cushing,
Oklahoma, published under the heading Spot Crude Price Assessments: U.S.: WTI
for the relevant month in the issue of Platt's Oilgram Price Report that
reports prices effective on the applicable Trading Date, stated in Dollars per
barrel. Relevant month refers to the month mentioned in parentheses for the
price quotations and means the same calendar month covered by the first nearby
or second nearby NYMEX light sweet crude oil futures contract for which it is
being substituted under this Agreement.
1.20 Final Payment Amount is defined in Section 2.4.
1.21 Force Majeure is defined in Section 7.2.
1.22 Non-Defaulting Party is defined in Section 5.2.
1.23 Notice (whether or not capitalized) means a notice,
communication, request, invoice, demand, or order required or permitted by
this Agreement.
1.24 NYMEX means the New York Mercantile Exchange or its successor.
1.25 NYMEX Settlement Price means the official settlement price in
Dollars per Barrel reported on a Trading Day for the NYMEX light sweet crude
oil futures contract.
1.26 Owner is defined in the Preamble. The term includes Owners
permitted successors and assigns.
1.27 Payment Default is defined in Section 5.2(d).
1.28 Party means Owner or Buyer.
1.29 Person (whether or not capitalized) means an individual,
cor-poration, company, partnership, joint venture, trust, estate,
unincorporated association, government or any commission, board, court,
agency, instrumentality or political subdivision thereof, or any other entity
or any trustee, receiver, custodian, or similar official.
1.30 Pipeline means the crude oil pipelines delivering Crude Oil to
the Delivery Points, including the pipeline from the Cusiana and Cupiagua
Fields to the port of Covenas, owned and/or operated by Oleoducto Central S.A.
and Oleoducto de Colombia S. A.
1.31 Port means the ports where Crude Oil is delivered into Cargo
Vessels, including the port of Covenas, Republic of Colombia.
1.32 Preamble means the first grammatical paragraph of this
Agreement.
1.33 Rebate Amount is defined in Section 2.3.
1.34 Resale Date is definted in Section 2.6.
1.35 Resale Purchaser is defined in Section 2.8.
1.36 Rollover Date means, for each Delivery Month, the last day
during such Delivery Month on which the NYMEX light sweet crude oil futures
contracts for delivery in the calendar month immediately following such
Delivery Month are traded on the NYMEX.
1.37 Third Party (whether or not capitalized) means a Person other
than a Party.
1.38 Trading Day means a day in a calendar month on which either a
NYMEX Settlement Price or Fallback Price has been reported or on which either
a NYMEX Settlement Price or Fallback Price will be reported in the ordinary
course.
1.39 Upstream Contracts means the Crude Oil Purchase and Sale
Agreement between Owner and Oil Co., Ltd. dated as of May 25, 1995 (Contract
A), and the Additional Crude Oil Purchase and Sale Agreement between Owner and
Triton Colombia, Inc., dated as of May 25, 1995 (Contract B), each as amended
and in effect from time to time.
Article 2/Agreement to Purchase and Sell
2.1 The Agreement. Subject to and upon the terms of this
Agreement, Owner shall sell and deliver, and Buyer shall purchase and receive,
on an F.O.B. basis at a Delivery Point, all Crude Oil tendered by Owner to
Buyer at such Delivery Point. Notwithstanding any contrary provision of this
Agreement, Owner shall not be required to tender any delivery of Crude Oil to
Buyer if a Default exists with respect to Buyer. Owner shall be obligated to
tender all Crude Oil acquired by Owner under the Upstream Contracts,but only
to the extent that such Crude Oil is actually received by Owner under such
contracts. Acting in good faith, Owner shall, from time to time, notify Buyer
of the expected Delivery Month in which Owner expects to tender an amount of
Crude Oil to Buyer, and any change in such schedule. Buyer acknowledges that
no such notice may be given by Owner prior to Owner's receipt of the related
notice of a Delivery Month under the Upstream Contracts.
2.2 Buyers Estimate. Buyer shall estimate the total payment
due for each discrete delivery of Crude Oil that is to be sold and purchased
under this Agreement (an Estimated Payment Amount) as of the Estimated Pricing
Date (as determined by Buyer in good faith consistent with the Delivery
Terms), defined as the product obtained by multiplying:
(a) the quantity of Crude Oil to be delivered, as estimated by Buyer
in good faith consistent with the Delivery Terms; times
(b) an estimated purchase price, determined as follows:
(1) if the Estimated Pricing Date is in the calendar month
prior to the Delivery Month, the estimated purchase price (EPP), expressed in
Dollars per Barrel, shall be determined by reference to the following
formula:
EPP = [((2 x FP1) + SP1) / 3] -$2.40
where:
FP1 is the NYMEX Settlement Price reported on the Estimated
Pricing Date for the first nearby light sweet crude oil futures contract; and
SP1 is the NYMEX Settlement Price reported on the Estimated
Pricing Date for the second nearby light sweet crude oil futures contract.
(2) if the Estimated Pricing Date is in the Delivery Month
and on or before the Rollover Date, the estimated purchase price shall be
determined by reference to the following formula:
EPP = [(AP2 + FP2 + SP2) / TD2] - $2.40
where:
AP2" is the sum of NYMEX Settlement Prices reported each Trading
Day for the first nearby sweet light crude oil futures contract from and
including the first day of the Delivery Month to and excluding the Estimated
Pricing Date;
FP2" is the product obtained by multiplying (x) the NYMEX
Settlement Price for the first nearby light sweet crude oil futures contract
reported on the Estimated Pricing Date, times (y) the number of Trading Days
from and including the Estimated Pricing Date to and including the Rollover
Date;
SP2" is the product obtained by multiplying (x) the NYMEX
Settlement Price for the second nearby light sweet crude oil futures contract
reported on the Estimated Pricing Date, times (y) the number of Trading Days
from and excluding the Rollover Date to and including the last day of the
Delivery Month; and
TD2" is the number of Trading Days in the
Delivery Month.
(3) if the Estimated Pricing Date is in the Delivery Month
and after the Rollover Date, the estimated purchase price shall be determined
by reference to the following formula:
EPP = [(AP3 + SP3) / TD3] - $2.40
where:
AP3" is the sum of NYMEX Settlement Price for the first nearby
light sweet crude oil futures contract reported each Trading Day from and
including the first day of the Delivery Month to and excluding the Estimated
Pricing Date for first nearby contracts;
SP3" is the product obtained by multiplying (x) the NYMEX
Settlement Price reported on the Estimated Pricing Date for first nearby
light sweet crude oil futures contract, times (y) the number of Trading Days
from and including the Estimated Pricing Date to and including the last day
of the Delivery Month; and
TD3" is the number of Trading Days in the
Delivery Month.
The Fallback Price shall be substituted for the NYMEX Settlement Price in the
applicable formulae of (b) (1), (2), or (3) above if the NYMEX Settlement
Price is not reported on a Trading Day in the Delivery Month.
2.3 Rebate. Owner shall owe to Buyer a rebate on the amount of Crude
Oil delivered by Owner to Buyer equal to the product obtained by multiplying
$0.10 per Barrel times the number of Barrels of Crude Oil delivered (the
Rebate Amount). Such rebate amount shall be paid or credited as provided in
Section 2.5(b).
2.4 Final Calculation. Buyer shall calculate the actual total
payment due for each partial cargo of Crude Oil loaded in a Delivery Month
(the Final Payment Amount), based on:
(a) the actual quantity of Crude Oil tendered by Owner to Buyer at
the Delivery Point; and
(b) a final purchase price equal to the arithmetic average (rounded
to the nearest tenth of a cent) of (i) the NYMEX Settlement Price reported
each Trading Day in the Delivery Month for the first nearby light sweet crude
oil futures contract, or (ii) if the NYMEX Settlement Price is not reported
for ten consecutive Business Days in such Delivery Month, the NYMEX Settlement
Price for the first nearby light sweet crude oil futures contract for those
Trading Days when such price is reported, and the Fallback Price for those
Trading Days when the NYMEX Settlement Price is not reported, minus (iii)
$2.40.
2.5 Time and Place of Payment.
(a) On or before the Estimated Payment Date, Buyer shall either
(1) pay the Estimated Payment Amount by a wire transfer in immediately
available funds to the account designated by Owner or (2) deliver to
Owner a documentary letter of credit in the amount equal to the Estimated
Payment Amount, issued in favor of Owner by a bank acceptable to Owner, and
containing draw and other provisions substantially as indicated on Schedule
2.5(a) attached hereto. Owner shall immediately notify Buyer if any such
letter of credit tendered by Buyer is not acceptable and the reasons for such
non-acceptance. Any letter of credit tendered by Buyer and not rejected by
Owner within twenty-four (24) hours after delivery shall be deemed to have
been accepted (an Accepted L.C.).
(b) On or before the third (3rd) Business day after the Delivery
Month, Owner shall determine and notify Buyer of (a) the sum of the Estimated
Payment Amount (paid by Buyer in accordance with Section 2.5(a)) and the
Rebate Amount (together) minus (b) the Final Payment Amount. If such sum is a
positive number, Owner shall pay such amount by wire transfer in immediately
available fund on the fifth (5th) Business Day of the calendar month
immediately following the applicable Delivery Month to the account designated
by Buyer. If such sum is a negative number, Buyer shall pay the absolute value
of such amount by wire transfer in immediately available funds on the fifth
(5th) Business Day of the calendar month immediately following the applicable
Delivery Month to the account designated by Owner.
2.6 Interest.
(a) This Section 2.6(a) applies to deliveries by Owner of Crude
Oil acquired by Owner under Contract A. Interest shall accrue at the Agreed
Interest Rate on each Estimated Payment Amount paid by Buyer for such Crude
Oil under Section 2.5(a) (it being understood that no interest shall accrue on
an Accepted L.C.) for the number of days from and including the date Owner
receives the Estimated Payment Amount to, but excluding, the date Owner pays
the Third-Party seller of the relevant Crude Oil. Such interest shall be paid
by Owner by wire transfer to the account designated by Buyer in immediately
available funds on the same date that Owner pays the Third-Party seller. In
addition, interest shall accrue at the Agreed Interest Rate on all amounts
owed by Owner to Buyer under Section 2.5(b) for the number of days from, and
including, the date Owner pays the Third-Party seller (as described above) to,
but exluding, the fifth (5th) Business Day of the calendar month immediately
following the applicable Delivery Month. In no event, however, shall Owner owe
Buyer interest under the preceding sentence that duplicates interest under the
second sentence of this Section 2.6(a).
(b) This Section 2.6(b) applies to deliveries by Owner of Crude Oil
acquired by Owner under Contract A. Interest shall accrue at the Agreed
Interest Rate on each Estimated Payment Amount paid by Buyer under Section
2.5(a) (it being understood that no interest shall accrue on an Accepted L.C.)
for the number of days (i) from, and including, the date Owner receives such
Estimated Payment (ii) to, but excluding, the earlier of (A) the date Buyer
receives payment from the relevant Resale Purchaser (as defined in Section
2.8) or (B) the date twenty (20) days after the BL Date or other delivery date
for the relevant Crude Oil (in either case, the Resale Date). Buyer shall
notify Owner of the Resale Date as promptly as reasonably practicable. Such
interest amount shall be paid by Owner by wire transfer to the account
designated by Buyer in immediately available funds on the second (2nd)
Business Day after the Resale Date. In addition, interest shall accrue at the
Agreed Interest Rate on all amounts owed by Owner to Buyer under Section
2.5(b) for the number of days from, and including, the Resale Date to, but
excluding, the fifth (5th) Business Day of the calendar month immediately
following the applicable Delivery Month. In no event, however, shall Owner owe
Buyer interest under the preceding sentence that duplicates interest due under
the second sentence of this Section 2.6(b).
2.7 Quarterly Reports. Within sixty (60) days after the end of each
calendar quarter during the term of this Agreement, Buyer shall prepare and
deliver to Owner a reasonably detailed statement identifying all Crude Oil
sold by Buyer during that calendar quarter and, for each such sale, disclosing
the quantity of Crude Oil, the purchase price, the ultimate point at which
Buyer sold the Crude Oil, and the total consideration received by Buyer from
the sale of the Crude Oil.
2.8 Nonperformance. If Owner tenders Crude Oil for delivery under
this Agreement and Buyer fails to pay the Estimated Purchase Amount or deliver
an Accepted L.C. on the Estimated Payment Date, as required by Section 2.2,
Owner may (but is not obligated to) notify any Third Party to whom Buyer has
agreed to resell such Crude Oil (a "Resale Purchaser") that such Crude Oil
remains the property of Owner and that such sale shall be consummated as
agreed for the sole account and benefit of OwnerBuyer shall provide Owner with
such information about the Resale Purchaser as Owner may reasonably request.
Buyer hereby grants Owner an irrevocable power of attorney to issue
instructions to the operator of the terminal at the Delivery Point, the Cargo
Vessel, and the Resale Purchaser in Buyers name for the purpose of causing the
Crude Oil to be handled at the Delivery Point and delivered into the Cargo
Vessel pursuant to Buyer's agreement with the Resale Purchaser.
Article 3/Procedures
3.1 Delivery Point. The Delivery Point for each delivery of
Crude Oil under this Agreement shall be the point at which Owner acquires
title to such Crude Oil under the relevant Upstream Contract.
3.2 Deliveries. A delivery of Crude Oil under this Agreement
by Owner to Buyer shall be deemed to have occurred when the Crude Oil passes
the Delivery Point.
3.3 Title and Custody. Title to, and all risk of loss,
damage, contamination, deterioration, and evaporation of or by the Crude Oil
delivered hereunder shall pass to the Buyer at the Delivery Point.
3.4 Warranties. Owner represents and warrants to Buyer,
effective on delivery of each barrel of Crude Oil, that:
(a) Owner has not taken any action, or failed to take any action,
that would alter the warranties received by Owner under the Upstream
Contracts, or that would create or suffer to be created by, through, or under
Owner any lien, claim, or encumbrance or any kind or character burdening the
Crude Oil delivered hereunder; and
(b) Owner has full corporate authority to sell and deliver the Crude
Oil to Buyer.
3.5 Indemnity. Owner shall indemnify, defend, protect, and
hold Buyer harmless from and against all actions, claims, costs (including
reasonable attorneys fees), liabilities, losses, and obligations arising from
or related to a breach of the foregoing representations and warranties.
Article 4/Deliveries
4.1 Delivery Terms. The Parties agree that the Delivery
Terms in effect from time to time at a Delivery Point shall apply, to the
extent not inconsistent with the terms in the main body of this Agreement, to
the deliveries and sales of Crude Oil made hereunder. Attached to this
Agreement as Schedule 4.1 is a recitation of what the Parties agree are the
Delivery Terms that, at the time of the execution and delivery of this
Agreement, are generally observed by Crude Market Participants at each
relevant Delivery Point and a list of which provisions of such Delivery Terms
shall apply to deliveries and purchases of Crude Oil under this Agreement
(until such provisions cease to be generally observed by Crude Market
Participants at the relevant Delivery Points. Buyer shall provide to Owner
copies of any additional or different Delivery Terms for the same or other
Delivery Points as soon as practicable after such terms are effective and
applicable hereunder after the date hereof.
4.2 Delivery Documents. For each delivery of Crude Oil made
hereunder, Owner shall, after receipt of any related Estimated Payment Amount,
provide Buyer with originals of each of the following documents relating to
the Crude Oil that is delivered: (i) the duly endorsed clean Bills of Lading
(or, for Delivery Points where Bills of Lading are not customarily used or are
not immediately available, a letter of indemnity in a form generally accepted
by Crude Oil Participants at the relevant Delivery Point), (ii) invoices,
(iii) inspection reports, (iv) Certificates of Origin, (v) Certificates of
quality and quantity, and (vi) such other documents as are necessary or
customary in similar transactions.
Article 5/Term and Default
5.1 The Term. Unless sooner terminated in accordance with
its terms, the term of this Agreement commences with the execution and
delivery of this Agreement by the Parties and terminates on any date on which
no Upstream Contract is any longer in full force and effect. The termination
of this Agreement will not relieve either Party of any outstanding obligation
under this Agreement, and the provisions of this Agreement necessary to
enforce either Party's rights with respect to any such outstanding obligation
by the other Party shall be deemed to survive such termination.
5.2 Termination by Either Party. Upon the occurrence of any
of the following events (each a Default), the Party not affected by such
Default (the Non-Defaulting Party) may, upon notice to the other Party (the
Defaulting Party) terminate all future payment and delivery obligations of the
Parties under this Agreement:
(a) the Defaulting Party commences a voluntary case or other
proceeding seeking, liquidation, reorganization or other relief with respect
to itself or its debts under any bankruptcy, insolvency, suspension of
payments, or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing;
(b) an involuntary case or other proceeding is commenced against the
Defaulting Party seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of thirty (30)
days after it is filed; or an order for relief shall be entered against such
other Party under any bankruptcy or insolvency laws as now or hereafter in
effect;
(c) the Defaulting Party becomes generally unable to pay its
creditors;
(d) the Defaulting Party defaults in the payment when due of any
amount due under this Agreement and fails to remedy the Default within one (1)
Business Day (a Payment Default);
(e) any warranty or representation given by the Defaulting Party
proves to be incorrect in any material respect as of the date when made or
deemed to have been made and adversely affects the Non-Defaulting Party; or
(f) the Defaulting Party defaults in the due observance or
performance of any covenant or agreement made by that Party in this Agreement,
other than a Payment Default, and fails to remedy the Default within thirty
(30) days after notice of the Default.
5.3 Damages and Expenses. After the occurrence of a Default,
the Defaulting Party shall be responsible for all direct damages, costs and
expenses incurred by the Non-Defaulting Party as result of such Default
(including, without limitation, reasonable attorneys fees and disbursements,
and, for a delivery default by Owner, damages measured by the difference
between the value of the undelivered Crude Oil at the Delivery Point and the
Final Payment Amount that would have been due for that Crude Oil) but in no
event shall the Defaulting Party be liable for any indirect, consequential
incidental, special, or punitive damages, including loss-of-profits or the
cost of replacement or substitute contracts. The termination of this
Agreement pursuant to this Article 5 shall not relieve the Defaulting Party of
any obligations or liabilities accrued prior to such termination.
5.4 Default Interest. If any amounts due under this
Agreement are not paid when due (including amounts due at termination), such
overdue amounts shall bear interest for each day until paid in full at two
percent (2%) over the Agreed Interest Rate, as determined by the Party
receiving payment. Such interest shall be calculated on the basis of the
actual number of days elapsed over a year of 360 days. The obligation to pay
interest under this Section shall survive termination of this Agreement.
5.5 Additional Termination Event. If, as a result of a
Default where Buyer is the Defaulting Party, Owner does not tender Crude Oil
to Buyer for a period greater than sixty (60) consecutive days, Buyer may
terminate this Agreement and all future payment and delivery obligations of
the Parties under this Agreement.
Article 6/Representations and Warranties
6.1 Representations and Warranties. Each Party hereby
represents and warrants to the other Party as follows:
(a) The execution, delivery, and performance by the warranting Party
of this Agreement and the consummation of the transactions contemplated by
this Agreement are within the warranting Party's corporate power and authority
and have been duly authorized by all necessary corporate action.
(b) No authorization, consent, or approval of, or other action by, or
notice to, or filing with, any governmental authority, regulatory body, or
any other Person is required for the due authorization, execution, delivery,
or performance by the warranting Party of this Agreement, to the consummation
of the transactions contemplated by this Agreement, except those approvals
that have been obtained and notices and filings that have been made, and
except for approvals the failure of which to obtain could not reasonably be
expected to have a material adverse effect on the warranting Party's ability to
perform under this Agreement.
(c) This Agreement has been duly executed and delivered by the
warranting Party to the other Party and is the legal, valid, and binding
obligation of the warranting Party, except that enforceability may be subject
to applicable bankruptcy, insolvency, reorganization, and other similar laws
affecting the rights of creditors generally.
6.2 Disclaimers. Except as set out in Section 3.4 (for
Owner) and Section 6.1 (for both Parties), EACH PARTY MAKES NO OTHER
WARRANTIES, EXPRESS OR IMPLIED, AND HEREBY EXPRESSLY DISCLAIMS ANY SUCH
WARRANTIES, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE.
Article 7/Force Majeure
7.1 Excuse for Nonperformance. Subject to the other
provisions of this Article, the obligations of a Party under this Agreement,
except the obligation to pay money to the other Party, may be excused for a
reasonable period for Force Majeure, to the extent that nonperformance is
caused by Force Majeure, and the affected Party shall be relieve of liability
for failing to perform during that period.
7.2 Definition. Force Majeure means a fact, event, or
circumstance beyond the reasonable control of the affected Party that
directly or indirectly hinders or prevents performance or observance by that
Party of any obligation or condition under this Agreement, including the
following:
(a) Acts of God;
(b) fire, explosion, and collision;
(c) accidents and breakdowns;
(d) earthquake, flood, hurricane, tornado, washout, landslide, or adverse
weather conditions;
(e) war, insurrection, economic embargo, civil or public
disturbances, riot, sabotage, or armed conflict;
(f) partial or complete failure or refusal of Pipeline, Port, or
Cargo Vessel to receive, load, transport, store, deliver, or unload Crude
Oil;
(g) an act of nationalization by the Government; the imposition of
confiscatory taxes, royalties, fees, duties, or other payments; the Government
mobilization of men or material; restrictions or restraints imposed by
Government; or any other act or omission of the Government that materially
hinders, prevents, or renders uneconomic the production, transportation,
storage, transfer, sale, or resale of the Crude Oil; or
(h) a strike, lockout, slowdown, differences with workers, or other
labor disturbance that stops or interferes with operations.
For the avoidance of doubt, Force Majeure may be invoked by a Party, even if
the Force Majeure directly affects a Third Party (e.g., the operator of the
fields where the Crude Oil is produced or the operator of the Pipeline), but
only indirectly affects the invoking Party (e.g., by causing the operator of
the fields to cease Crude Oil production or the operator of the Pipeline to
cease transportation of the Crude Oil, thereby preventing Owner from
delivering and Buyer from receiving the Crude Oil).
7.3 Notice and Cure. A Party affected by Force Majeure
shall, as a condition to invoking Force Majeure as an excuse for
nonperformance under this Agreement, (a) promptly give notice of the
occurrence of the Force Majeure to the other Party, with reasonably detailed
information about the event of Force Majeure and the effect it has had, and is
anticipated to have, on the performance of the invoking Party, and (b)
diligently attempt to cure the Force Majeure and its consequences and resume
performance. No Party is obligated to settle a strike or other labor
disturbance, however, except on terms that are agreeable to that Party. The
term of this Agreement will not be extended on account of Force Majeure.
Article 8/Notice
8.1 Requirements. Except as otherwise permitted by this
Agreement, each Notice, to be effective, must (a) be in writing, (b) be
properly addressed to the intended recipient, and (c) have all postage and
other charges paid by the Party giving Notice. In addition, all required
copies, if any, must be dispatched at the same time and by the same method.
8.2 Methods of Giving Notice. Notice may be given by any
reasonable means, including United States mail, telephone (promptly confirmed
in writing), courier service, hand delivery, telex, and telecopier.
8.3 Effective Date. A Notice shall be effective when
physically received by the addressee.
8.4 Addresses. The addresses, telephone numbers, telecopier
numbers, and telex numbers of the Parties for purposes of Notice are stated in
the Preamble. On ten (10) days Notice, a Party may change its address,
telephone number, telecopier number, or telex number to another place in the
continental United States, designate a reasonable number of additional Persons
to receive copies of Notices, or designate a reasonable number of different
addresses, telephone numbers, telecopier numbers, and telex numbers for
different kinds of Notices.
Article 9/Other Provisions
9.1 CHOICE OF LAW; JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF. EACH OF THE
PARTIES HERETO SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
COURT SITTING IN NEW YORK CITY, FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
9.2 Assignment. This Agreement may not be assigned by either
Party without the prior written consent of the other Party, not to be
unreasonably withheld, except that Buyer may assign this Agreement to a direct
or indirect wholly owned subidiary of Triton Energy Corporation without such
consent; provided, however, if such assignee is an entity incorporated or
organized under the laws of a jurisdiction outside the United States, Buyer
shall, before making the assignment, provide Owner with an opinion from
counsel satisfactory to Owner with respect to this Agreement and its continued
enforceability under the laws of such jurisdiction after the assignment, and
the assignee shall appoint for the benefit of Owner an agent for service of
process in the State of New York. Any other purported assignment without such
consent is void. Subject to this limitation, the Agreement binds and inures to
the benefit of the Parties and their respective successors and assigns.
9.3 No Partnership. This Agreement does not create a
partnership, association for profit, or other legal Person or a legal
relationship that makes one Party responsible for the acts or omissions of the
other Party.
9.4 Integrated Agreement. This Agreement is the final,
complete, and exclusive expression of the agreements of the Parties with
respect to the matters covered by this Agreement.
9.5 Amendment. This Agreement may not be amended,
supplemented, extended, or otherwise changed, except by a writing that
refers to this Agreement and is executed by the Parties.
9.6 Third-Party Beneficiaries. No Third Party is a
beneficiary of this Agreement. Nothing in this Agreement confers any right,
privilege, or remedy on any Person, other than the Parties and their heirs,
successors, assigns, and legal representatives.
9.7 Cumulative Rights. Except as otherwise provided in this
Agreement, the rights of a Party under this Agreement are cumulative of all
other rights, privileges, and remedies available to that Party at law, in
equity, or otherwise.
9.8 Waivers. No Party shall be deemed to have waived any
right under this Agreement, unless that waiver is in writing, refers to
this Agreement, and is executed by that Party. If a Party fails to insist on
the strict performance or observance by another Party of a provision of
this Agreement, that failure shall not be construed as a waiver by that Party
of any right under this Agreement. If a Party waives a right under this
Agreement, that Party is not bound in the future to waive any other right,
whether similar or dissimilar to the right that was waived or relinquished.
9.9 Construction. In construing this Agreement, the
following rules shall be followed:
(a) Except for the boldfaced defined terms in Article 1, no
consideration shall be given to the captions of the Articles, Sections,
Subsections, or Clauses of this Agreement, which are inserted for
convenience in locating the provisions of this Agreement and not as an aid
in its construction.
(b) No consideration shall be given to the fact or presumption that
one Party had a greater or lesser hand in drafting this Agreement.
(c) Examples shall not be construed to limit, expressly or by
implication, the matter they illustrate.
(d) The word include and its syntactical variants mean include, but
are not limited to, and corresponding syntactical variants.
(e) A defined term has its defined meaning throughout this
Agreement, regardless of whether the term appears before or after the place
in this Agreement where the term is defined.
(f) The plural shall be deemed to include the singular, and vice
versa.
(g) Each gender shall be deemed to include the other genders.
(h) Each exhibit, attachment, and schedule to this Agreement is a
part of this Agreement. If there is any conflict or inconsistency between the
main body of this Agreement and any exhibit, attachment, or schedule,
however, the provisions of the main body of this Agreement shall prevail.
(i) If any provision of this Agreement is determined to be
invalid, illegal, or unenforceable, the other provisions of this Agreement
shall never the less remain in effect and be enforced, to the extent
possible.
9.10 Further Assurances. Each Party shall, on reasonable
request by another Party, (a) execute, acknowledge, and deliver such
instruments, agreements, and other documents and (b) do such other acts, as
are reasonably necessary or desirable to effect or to evidence the
transactions contemplated by this Agreement.
9.11 Counterpart Execution. This Agreement may be executed in
any number of counterparts. Each executed counterpart is an original, but
all executed counterparts are one agreement.
EXECUTED as of the date and year first above written.
OWNER BUYER
MORGAN GUARANTY TRUST TRITON OIL & GAS CORP.
COMPANY OF NEW YORK
By /s/ By /s/
Name John J. Coulter Name Robert B. Holland III
Title Vice President Title Vice President and
Secretary
EXHIBIT 99.1
TRITON COMPLETES FORWARD OIL SALE
DALLAS--May 30, 1995 - Triton Energy Corporation has completed a $125 million
forward oil sale involving 10.4 million barrels of oil from the Cusiana and
Cupiagua fields in Colombia.
Under the terms of the sale, Triton has received approximately $87 million of
the proceeds, and is entitled to receive substantially all of the remaining
proceeds when the Company's Cusiana and Cupiagua fields project becomes
self-financing, which is expected in 1997, and when certain other conditions
are met. The barrels are to be delivered during a five-year period beginning
in June 1995.
"This sale is the cornerstone of our 1995 financing program," said Peter
Rugg, Triton Senior Vice President and Chief Financial Officer.
The oil was purchased by a newly formed, special-purpose corporation using
funds provided by the sale of its investment-grade securities. The securities
were privately placed by J.P. Morgan Securities Inc. with several major U.S.
institutional investors.
Dallas-based Triton Energy Corporation (NYSE: OIL) is an international oil and
gas exploration company primarily focused on high-potential prospects around
the world.
###
Contact: W. Greg Dunlevy or Crystal C. Bell, both of Triton, (214) 691-5200.
