EXHIBIT 10.67
EXECUTION COPY
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
TRITON ENERGY LIMITED
AND
HM4 TRITON, L.P.
8% CONVERTIBLE PREFERENCE SHARES
(PAR VALUE $.01 PER SHARE)
AUGUST 31, 1998
ARTICLE I
DEFINITIONS
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Section 1.1 Definitions 1
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Section 1.2 References and Titles 10
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ARTICLE II
PURCHASE OF 8% PREFERENCE SHARES
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Section 2.1 Purchase of Shares 11
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
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Section 3.1 Representations and Warranties of the Company 12
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Section 3.2 Representations and Warranties of Purchaser 29
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ARTICLE IV
COVENANTS
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Section 4.1 Furnishing of Information 32
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Section 4.2 Rights Offering 32
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Section 4.3 Stock Exchange Listing 33
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Section 4.4 Registration Statement 33
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Section 4.5 Affirmative Covenants of the Company 34
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Section 4.6 Negative Covenants of the Company 35
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Section 4.7 Approvals 37
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Section 4.8 Shareholders Agreement 37
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Section 4.9 Preferred Stock Authorization 37
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Section 4.10 HSR Act Notification 37
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Section 4.11 Indemnification of Directors and Officers; Insurance 37
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Section 4.13 Notification of Certain Matters 40
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Section 4.14 Board of Directors 40
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Section 4.15 Financial Advisory Agreement; Commitment Fee 41
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ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
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Section 5.1 Conditions Precedent to Each Party's Obligation 41
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Section 5.2 Conditions Precedent to Obligation of Purchaser
at the First Closing 41
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Section 5.3 Conditions Precedent to Obligations of Company
at the First Closing 43
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Section 5.4 Conditions Precedent to Obligation of Purchaser
at the Second Closing 43
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Section 5.5 Conditions Precedent to Obligations of Company
at the Second Closing 45
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ARTICLE VI
CLOSINGS
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Section 6.1 Closings 46
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Section 6.2 Actions to Occur at the First Closing 46
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Section 6.3 Actions to Occur at the Second Closing 47
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ARTICLE VII
TERMINATION
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Section 7.1 Termination 48
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Section 7.2 Effect of Termination 50
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ARTICLE VIII
INDEMNIFICATION
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Section 8.1 Indemnification of Purchaser 50
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Section 8.2 Indemnification of Company 50
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Section 8.3 Defense of Third-Party Claims 50
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Section 8.4 Direct Claims 52
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Section 8.5 Special Provisions Regarding Indemnity 52
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Section 8.6 Tax Related Adjustments 52
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ARTICLE IX
MISCELLANEOUS
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Section 9.1 Survival of Provisions 53
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Section 9.2 No Waiver; Modification in Writing 53
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Section 9.3 Specific Performance 54
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Section 9.4 Severability 54
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Section 9.5 Fees and Expenses 54
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Section 9.6 Parties in Interest 56
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Section 9.7 Notices 56
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Section 9.8 Counterparts 57
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Section 9.9 Entire Agreement 57
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Section 9.10 Governing Law 57
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Section 9.11 Public Announcements 58
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Section 9.12 Assignment 58
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Section 9.13 Director and Officer Liability 58
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Section 9.14 Headings 58
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EXHIBITS
Exhibit A Form of Financial Advisory Agreement
Exhibit B Form of Monitoring and Oversight Agreement
Exhibit C Form of Preferred Stock Authorization
Exhibit D Form of Shareholders Agreement
Exhibit E Form of Indemnification Agreement
Exhibit F-1 Form of Legal Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, General Counsel
to the Company
Exhibit F-2 Form of Legal Opinion of ▇. ▇. ▇▇▇▇▇▇ & Co.
Exhibit F-3 Form of Legal Opinion of Hunter & Hunter
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of August 31, 1998, by and between
Triton Energy Limited, a Cayman Islands company (the "Company"), and HM4 Triton,
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L.P., a Cayman Islands exempted limited partnership (together with its permitted
assigns, "Purchaser").
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In consideration of the mutual covenants and agreements set forth herein
and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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Section 1.1 Definitions. As used in this Agreement,
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and unless the context requires a different meaning, the following terms have
the meanings indicated:
"5% Preference Shares" has the meaning set forth in Section 3.1(c)(i).
"5% Preference Shares Authorization" has the meaning set forth in Section
3.1(c)(iii).
"8% Preference Shares" means the Company's 8% Convertible Preference
Shares, par value $.01 per share.
"Additional D&O Policies" has the meaning set forth in Section 4.11(b).
"Affiliate" means, with respect to any Person, any other Person directly,
or indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person. For purposes of this definition and this
Agreement, the term "control" (and correlative terms) means the power, whether
by contract, equity ownership or otherwise, to direct the policies or management
of a Person.
"Agreement" means this Stock Purchase Agreement, as the same may be
amended, supplemented or modified from time to time in accordance with the terms
hereof.
"Approval" means any approval, authorization, grant of authority, consent,
order, qualification, permit, license, variance, exemption, franchise,
concession, certificate, filing or registration or any waiver of the foregoing,
or any notice, statement or other communication required to be filed with,
delivered to or obtained from any Governmental Entity or any other Person.
"Articles of Association" means the Company's Articles of Association, as
amended from time to time.
"Asset Value" shall mean the consideration to be paid for such asset by the
acquiring Person in a bona fide arms-length transaction with a non-Affiliate
third party, including all debt assumed as part of such transaction or to which
the assets subject to such transaction remain subject and which remains
outstanding immediately following such transaction; provided, however, that if
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the consideration is payable in whole or in part in property (which term shall
include the securities of any issuer other than the Company) other than cash,
the fair market value of such property shall be determined as follows: (i) if
such property consists of securities, such value shall be the Current Market
Price of such securities and (ii) such value of property other than securities
shall be determined by the Company and HMCo in good faith or, if the Company and
HMCo do not agree on the fair market value of such property within five (5)
Business Days after HMCo's receipt of a copy of the written offer to purchase
such assets describing and quantifying the non-cash consideration to be paid for
such assets, then the Company and HMCo shall select one nationally recognized
independent appraiser (with each of the Company and HMCo bearing one-half of the
expense of such appraiser) to determine the fair market value of that property
and the appraised fair market value of that property as determined by such
appraiser shall be deemed the fair market value of that property.
"Authorized Preferred Stock" has the meaning set forth in Section
3.1(c)(i).
"Benefit Plan" has the meaning set forth in Section 3.1(o).
"Board" means the Board of Directors of the Company.
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in New York, New
York or Dallas, Texas generally are authorized or required by law or other
government actions to close.
"Capital Stock" means (i) with respect to any Person that is a corporation
or company, any and all shares, interests, participations or other equivalents
(however designated) of capital or capital stock of such Person and (ii) with
respect to any Person that is not a corporation or company, any and all
partnership or other equity interests of such Person.
"Closings" has the meaning provided therefor in Section 6.1.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations thereunder as in effect on the date hereof.
"Common Stock" means the Company's ordinary shares, par value $.01 per
share, and any Capital Stock for or into which such Common Stock hereafter is
exchanged, converted, reclassified or recapitalized by the Company or pursuant
to an agreement to which the Company is a party.
"Company" has the meaning set forth in the introductory paragraph hereof.
"Company Disclosure Schedule" has the meaning set forth in Section 3.1.
"Company Indemnified Costs" means (i) any and all damages, losses, claims,
liabilities, demands, charges, suits, penalties, costs and expenses (including
court costs and reasonable legal fees and expenses incurred in investigating and
preparing for any litigation or proceeding) that any of the Company Indemnified
Parties incurs and that arise out of or result from any breach or default by
Purchaser of any of the representations or warranties under this Agreement or
any other Transaction Documents and (ii) any and all damages, losses, claims,
liabilities, demands, charges, suits, penalties, costs and expenses (including
court costs and reasonable legal fees and expenses incurred in investigating and
preparing for any litigation or proceeding) that any of the Company Indemnified
Parties incurs and that arise out of or result from any breach by Purchaser of
any of the covenants or agreements under this Agreement or any other Transaction
Documents.
"Company Interests" means:
(a) all rights, titles, interests, tenements, hereditaments,
appurtenances, benefits and privileges of the Company or any of its Subsidiaries
in, to and under the Concession Area, the Material Oil and Gas Contracts, the
other Contract Interests and all material personal property, improvements, lease
and well equipment, easements, permits, servitudes, rights of way and surface
rights associated therewith, if any; and
(b) all material files, records and data owned by, or in the actual or
constructive possession of, the Company or any of its Subsidiaries relating to
the Company, any of its Subsidiaries, the Concession Area, the Material Oil and
Gas Contracts, the Contract Interests or any other Company Interest, including
all material title records, geological, geophysical and seismic records, data
and information, production records, electric logs, core data, pressure data and
other related matters of a non-interpretive nature associated therewith.
"Company Options" has the meaning set forth in Section 3.1(c)(iv).
"Company SEC Documents" has the meaning set forth in Section 3.1(e)(i).
"Concession Area" means the geographic areas or regions covered by or
subject to the Material Oil and Gas Contracts.
"Contract Interests" means the Material Oil and Gas Contracts and any and
all existing oil and gas processing contracts, casinghead gas contracts, joint
venture agreements, seismic exploration agreements, area of mutual interest
agreements, saltwater disposal agreements, commingling agreements, sales
agreements, transportation agreements, pipeline agreements, and other contracts,
agreements and instruments (including the penalty provisions thereof and future
interests, reversionary rights and deferred interests) and orders relating
thereto, to which the Company or any Subsidiary is a party or otherwise bound
which relate to the Concession Area or to the exploration for or development,
production or transportation of oil, gas or petroleum from or attributable to
the Concession Area.
"Contracts" means all agreements, contracts, or other binding commitments,
arrangements or plans, written or oral (including any amendments and other
modifications thereto), to which the Company or any of its Subsidiaries is a
party or is otherwise bound.
"Credit Agreements" means, collectively, (i) that certain Credit Agreement
between the Company and Soci t G n rale, Southwest Agency, dated October 8,
1997, as amended, (ii) that certain Credit Agreement between the Company and
Barclays Bank PLC, dated November 26, 1997, as amended, (iii) that certain
Credit Agreement between the Company and Toronto Dominion (Texas), Inc., dated
November 26, 1997, as amended, (iv) that certain Credit Agreement between the
Company and Union Bank of California, N.A., dated December 31, 1997, as amended,
(v) that certain Credit Agreement between the Company and Credit Suisse First
Boston, dated February 9, 1998, as amended, and (vi) that certain Demand
Promissory Note with Banque Paribas dated September 15, 1997.
"Cure Period" has the meaning set forth in Section 7.1(b)(i).
"Current Market Price" of Common Stock or any other class of stock or other
security of the Company or any other issuer for any day shall mean the last
reported sales price, regular way on such day, or, if no sale takes place on
such day, the average of the reported closing bid and asked prices on such day,
regular way, in either case as reported on the New York Stock Exchange ("NYSE")
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or, if such security is not listed or admitted for trading on the NYSE, on the
principal national securities exchange on which such security is listed or
admitted for trading or, if not listed or admitted for trading on any national
securities exchange, on The Nasdaq Stock Market or, if such security is not
quoted on The Nasdaq Stock Market, the average of the closing bid and asked
prices on such day in the over-the-counter market as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
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or, if bid and asked prices for such security on such day shall not have been
reported through NASDAQ, the average of the bid and asked prices on such day as
furnished by any NYSE member firm regularly making a market in such security
selected for such purpose by the Board of Directors or, if no such market is
regularly made, as determined by a majority of the Board of Directors based on
advice of an independent appraiser selected by a majority of the Board of
Directors.
"Debt", without duplication, means (a) all indebtedness (including the
principal amount thereof or, if applicable, the accreted amount thereof and the
amount of accrued and unpaid interest thereon) of the Company or its
Subsidiaries, whether or not represented by bonds, debentures, notes or other
securities, for the repayment of money borrowed, (b) all deferred indebtedness
of the Company or its Subsidiaries for the payment of the purchase price of
property or assets purchased, (c) all obligations of the Company or its
Subsidiaries to pay rent or other payment amounts under a lease of real or
personal property which is required to be classified as a capital lease or a
liability on the face of a balance sheet prepared in accordance with GAAP, (d)
any outstanding reimbursement obligation of the Company or its Subsidiaries with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of the Company or its Subsidiaries, (e) any payment obligation
of the Company or its Subsidiaries under any interest rate swap agreement,
forward rate agreement, interest rate cap or collar agreement or other financial
agreement or arrangement entered into for the purpose of limiting or managing
interest rate risks, (f) all indebtedness for borrowed money secured by any Lien
existing on property owned by the Company or its Subsidiaries, whether or not
indebtedness secured thereby shall have been assumed, (g) all guaranties,
endorsements, assumptions and other contingent obligations of the Company or its
Subsidiaries in respect of, or to purchase or to otherwise acquire, indebtedness
for borrowed money of others, (h) all other short-term and long-term liabilities
of the Company or its Subsidiaries of any nature and (i) all premiums, penalties
and change of control payments required to be paid or offered in respect of any
of the foregoing as a result of the consummation of the transactions
contemplated by the Transaction Documents regardless if any of such are actually
paid.
"Environmental Laws" has the meaning set forth in Section 3.1(r)(A).
"ERISA" has the meaning set forth in Section 3.1(o).
"Excess Shares" has the meaning set forth in Section 4.2.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Financial Advisory Agreement" means that certain Financial Advisory
Agreement between the Company and HMCo in the form of Exhibit A hereto.
"First Closing" has the meaning set forth in Section 6.1.
"First Closing Date" has the meaning set forth in Section 6.1.
"GAAP" has the meaning set forth in Section 3.1(e)(ii).
"Governmental Entity" means any agency, bureau, commission, court,
authority, department, official, political subdivision, tribunal or other
instrumentality of any government, whether (i) regulatory, administrative or
otherwise, (ii) federal, state or local, or (iii) domestic or foreign.
"Hazardous Materials" has the meaning set forth in Section 3.1(r)(B).
"HMCo" has the meaning set forth in Section 4.16.
"HSR Act" has the meaning set forth in Section 3.1(d)(iii) of this
Agreement.
"Indemnification Agreement" has the meaning set forth in Section 4.11(a).
"Indemnified Parties" means the Purchaser Indemnified Parties or the
Company Indemnified Parties, as the case may be.
"Indemnifying Party" means any person who is obligated to provide
indemnification hereunder.
"Indenture" means that certain Amended and Restated Senior Indenture
between the Company and The Chase Manhattan Bank, as Trustee, dated as of July
25, 1997, together with the Amended and Restated First Supplemental Indenture,
dated as of July 25, 1997, with respect to $200,000,000 aggregate principal
amount of 8 % Senior Notes due 2002, and the Amended and Restated Second
Supplemental Indenture, dated as of July 25, 1997, with respect to $200,000,000
aggregate principal amount of 9 % Senior Notes due 2005.
"Initial Shares" means the 1,822,500 Shares to be purchased and sold at the
First Closing.
"Intangible Property" has the meaning set forth in Section 3.1(q).
"knowledge" has the meaning set forth in Section 3.1(j)(v).
"Law" means any constitutional provision, statute or other law, ordinance,
rule, regulation or interpretation of any thereof and any Order of any
Governmental Entity (including environmental laws).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
encumbrance, charge or security interest of any kind in or on such asset or the
revenues or income thereon or therefrom.
"Litigation" has the meaning set forth in Section 3.1(k).
"Material Adverse Effect" or "Material Adverse Change" means any effect,
change, event or occurrence that is materially adverse to the business,
operations, properties, condition (financial or otherwise), results of
operations, assets, liabilities or prospects of the Company and its Subsidiaries
taken as a whole , but excluding any such effect, change, event or occurrence
resulting from or relating to (i) changes in general economic conditions or (ii)
effects, changes, events or occurrences in the Company's industry generally
(including without limitation any regulatory changes or changes in prices for
oil or gas), in each case which do not have a materially disproportionate effect
on the business, operations or properties of the Company or its Subsidiaries as
compared to general economic conditions or the Company's industry as a whole,
respectively.
"Material Contracts" has the meaning given it in Section 3.1(l)(ii).
"Material Oil and Gas Contracts" means the following agreements as in
effect on the date hereof and as the same may hereafter be modified, amended,
supplemented or restated: (A) Contract for Exploration and Exploitation for
▇▇▇▇▇▇▇▇ de Atalayas I with an effective date of July 1, 1982, between Triton
Columbia, Inc. ("TCI") and Empressa Colombiana De Petroleos; (B) Contract for
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Exploration and Exploitation for Tauramena with an effective date of July 4,
1988, between TCI and Empressa Colombiana De Petroleos; (C) Rio Chitamena
Association Contract between Empressa Colombiana De Petroleos and Total
Exploration En Produktie Maatschappij B.V., dated December 3, 1990; (D) Contract
between Malaysia-Thailand Joint Authority and Petronas Carigali (JDA) SDN. BHD.
and Triton Oil Company of Thailand dated as of April 21, 1994, relating to
Exploration and Exploitation of Petroleum for ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇-▇▇; and (E) the joint operating agreements relating to
the foregoing (A) through (D).
"Memorandum of Association" means the Company's Memorandum of Association,
as amended from time to time.
"Monitoring Agreement" means that certain Monitoring and Oversight
Agreement to be entered into between the Company and HMCo in the form of Exhibit
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B hereto.
"NYSE" means the New York Stock Exchange.
"NYSE Approval" has the meaning set forth in Section 4.3.
"Oil and Gas Properties" means leasehold and other interests in oil, gas
and other mineral properties owned or otherwise held in the name of the Company
or any of its Subsidiaries.
"Order" means any decree, injunction, judgment, order, ruling, assessment
or writ.
"Permitted Liens" has the meaning set forth in Section 3.1(n).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, limited liability company, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Preferred Stock Authorization" means the unanimous written consent of the
Board creating, authorizing and providing for the issuance of the 8% Preference
Shares, in the form of Exhibit C.
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"Purchase Price" has the meaning set forth in Section 2.1(b).
"Purchaser" has the meaning set forth in the introductory paragraph hereto.
"Purchaser Designees" has the meaning set forth in Section 4.11(a).
"Purchaser Indemnified Costs" means any and all damages, losses, claims,
liabilities, demands, charges, suits, penalties, costs and expenses (including
court costs and reasonable legal fees and expenses incurred in investigating and
preparing for any litigation or proceeding) that any of the Purchaser
Indemnified Parties incurs and that arise out of or result from (i) any breach
or default by the Company of any of the representations or warranties under this
Agreement or any other Transaction Documents, (ii) any breach by the Company of
any of the covenants or agreements (other than breaches of covenants to be
performed by the Company after the Closing) of the Company under this Agreement
or any other Transaction Documents or (iii) any litigation or proceedings
brought by any shareholder of the Company (whether such action is brought in
such shareholder's name or derivatively on behalf of the Company) in respect of
the transactions contemplated by this Agreement or any other Transaction
Documents.
"Purchaser Indemnified Parties" means Purchaser and each officer, director,
employee, stockholder, partner, member and Affiliate of Purchaser.
"Purchaser's Expenses" means all reasonable out-of-pocket fees, costs and
expenses incurred by Purchaser in connection with its due diligence efforts or
the transactions contemplated by this Agreement and the other Transaction
Documents, including (i) fees, costs and expenses of its accountants, counsel,
financial advisors and other similar advisors and (ii) fees paid to any
Governmental Entity but excluding any commitment, underwriting fee or similar
fees paid by Purchaser to any third party lender or underwriter in connection
with any debt financing obtained by Purchaser with respect to the transactions
contemplated by this Agreement.
"Registration Statement" has the meaning set forth in Section 4.4.
"Release" has the meaning set forth in Section 3.1(r)(C).
"Remaining Shares" means the Shares purchased and sold at the Second
Closing, including 8% Preference Shares purchased by Purchaser pursuant to
Rights held by Purchaser.
"Remedial Action" has the meaning set forth in Section 3.1(r)(D).
"Reserve Report" means the Appraisal Report as of December 31, 1997 on
Certain Properties owned by Triton Colombia Incorporated in Colombia prepared by
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ with respect to the Cusiana and Cupiagua Fields in
Colombia and the End-1997 Reserves Report of Carigali-Triton Operating Company
with respect to Block A-18 in the Malaysia-Thailand Joint Development Area
estimating the proved reserves attributable to the Cakirawala, Suriya, Bulan,
Bumi East, Senja, Samudra and Wira fields as of December 31, 1997 and described
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997.
"Rights" has the meaning set forth in Section 4.2(a).
"Rights Agreement" has the meaning set forth in Section 3.1(u).
"Rights Offering" has the meaning set forth in Section 4.2(a).
"Rights Offering Documents" has the meaning set forth in Section 4.2(b).
"Rule 144" means Rule 144 under the Securities Act of 1933, as amended, and
any successor rule thereto.
"Sale Transaction" means (a) the acquisition (by direct issuance from the
Company, from existing securityholders or otherwise) by any Person or group of
Persons deemed a "person" under Section 13(a)(3) of the Exchange Act of
beneficial ownership of securities representing a majority of the combined
voting power of the outstanding securities of the Company entitled to vote ,
generally or as a separate class or series or together with one or more class or
series of shares or stock, in the election of directors of the Company, the
result of which would result in such Person or Persons (or group) having the
ability to elect a majority of the Board of Directors, (b) a reorganization,
recapitalization, merger, consolidation or similar business combination or
transaction involving the Company (unless the holders of the outstanding
securities of the Company entitled to vote in the election of directors prior to
such transaction continue to own securities of the entity resulting from or
surviving such transaction (a "Surviving Entity") entitled to vote in the
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election of directors sufficient to allow holders to elect a majority of the
board of directors of the Surviving Entity upon the completion of such
transaction) or (c) a sale or other disposition (in a single transaction or a
series of related transactions) of assets with an Asset Value in excess of 50%
of the market value of the assets of the Company and its Subsidiaries as a
whole; provided, however, such term shall not include the transactions
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contemplated by this Agreement or any other Transaction Documents.
"SEC" means the Securities and Exchange Commission.
"Second Closing" has the meaning set forth in Section 6.1.
"Second Closing Date" has the meaning set forth in Section 6.1.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Senior Notes" means, collectively, (i) $200,000,000 in aggregate principal
amount of 8 % Senior Notes due 2002, and (ii) $200,000,000 in aggregate
principal amount of 9 % Senior Notes due 2005.
"Shareholder Litigation" means each of the pending class action proceedings
styled as Birdie Capital Corporation and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ v. Triton Energy,
Limited., et al., ▇▇▇ ▇▇▇▇▇▇▇ v. Triton Energy, Limited., et al., ▇. ▇. ▇▇▇, ▇▇.
v. Triton Energy, Limited, et al., North River Trading Co. L.L.C. v. Triton
Energy, Limited, et al., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ v. Triton Energy,
Limited., et al., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ v. Triton Energy, Limited., et al., and any
and all additional claims, actions, suits or proceedings relating to the same
set of facts or circumstances, or otherwise containing substantially the same
allegations, as such proceedings.
"Shareholders Agreement" means the Shareholders Agreement between the
Company and Purchaser, substantially in the form attached hereto as Exhibit D.
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"Shares" means the shares of 8% Preference Shares purchased by Purchaser
pursuant to this Agreement.
"Stock Plans" means the Company's (i) 1981 Employee Non-Qualified Stock
Option Plan, as amended, (ii) 1985 Stock Option Plan, as amended, (iii) 1988
Stock Appreciation Rights Plan, (iv) 1989 Stock Option Plan, as amended, (v)
Second Amended and Restated 1992 Stock Option Plan, (vi) Amended and Restated
1985 Restricted Stock Plan, as amended, (vii) 1997 Share Compensation Plan and
(viii) Triton Resources (UK) Limited Share Option Scheme.
"Subsidiary" means, (i) a corporation, a majority of whose stock with
voting power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by the Company, by a Subsidiary of the Company or
by the Company and another Subsidiary, or (ii) any other Person (other than a
corporation) in which the Company, a Subsidiary or the Company and a Subsidiary,
directly or indirectly, at the date of determination thereof has at least a
majority ownership interest. For purposes of this Agreement, Triton
International Oil Corporation shall be deemed a Subsidiary of the Company.
"Tax" or "Taxes" has the meaning set forth in Section 3.1(n).
"Tax Return" has the meaning set forth in Section 3.1(n) hereof.
"Termination Fee" has the meaning set forth in Section 9.5(c).
"Transaction Documents" means this Agreement, the Preferred Stock
Authorization, the Shareholders Agreement and any other documents executed in
connection herewith or therewith.
"Transfer" has the meaning set forth in Section 3.2(e).
"Underlying Shares" means the shares of Common Stock issuable upon
conversion or exchange of the Shares.
"Unsubscribed Shares" shall mean the number of shares of 8% Preference
Shares for which the holders of Rights shall not have subscribed, either
pursuant to their basic or oversubscription privileges, during the period of
time in which holders of Rights may exercise Rights to purchase 8% Preference
Shares in the Rights Offering.
Section 1.2 References and Titles.
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All references in this Agreement to Exhibits, Schedules, Articles, Sections,
subsections, and other subdivisions refer to the corresponding Exhibits,
Schedules, Articles, Sections, subsections, and other subdivisions of this
Agreement unless expressly provided otherwise. Titles appearing at the
beginning of any Articles, Sections, subsections, or other subdivisions of this
Agreement are for convenience only, do not constitute any part of such Articles,
Sections, subsections or other subdivisions, and shall be disregarded in
construing the language contained therein. The words "this Agreement,"
"herein," "hereby," "hereunder," and "hereof," and words of similar import,
refer to this Agreement as a whole and not to any particular subdivision unless
expressly so limited. The words "this Section," "this subsection," and words of
similar import, refer only to the Sections or subsections hereof in which such
words occur. The word "including" (in its various forms) means "including
without limitation." Pronouns in masculine, feminine, or neuter genders shall
be construed to state and include any other gender and words, terms, and titles
(including terms defined herein) in the singular form shall be construed to
include the plural and vice versa, unless the context otherwise expressly
requires. Unless the context otherwise requires, all defined terms contained
herein shall include the singular and plural and the conjunctive and disjunctive
forms of such defined terms.
ARTICLE II
PURCHASE OF 8% PREFERENCE SHARES
------------------------------------
Section 2.1 Purchase of Shares.
--------------------
(a) Subject to the terms and conditions herein set forth, the Company
will sell to Purchaser, and Purchaser will purchase from the Company, at the
times indicated below, a number of shares of 8% Preference Shares equal to the
sum of the following:
(i) at the First Closing, 1,822,500 Shares; and
(ii) at the Second Closing, a number of 8% Preference Shares equal to
the sum of (A) Purchaser's pro rata portion of 8% Preference Shares offered in
the Rights Offering and (B) all Unsubscribed Shares; provided that Purchaser
--------
shall not be required to purchase more than 3,177,500 8% Preference Shares at
the Second Closing.
(b) The aggregate purchase price payable for the 8% Preference Shares
at each Closing shall be equal to $70.00 multiplied by the total number of 8%
Preference Shares purchased by the Purchaser at such Closing (the "Purchase
--------
Price").
-----
(c) Delivery of the Shares shall be made at each Closing by delivery to
Purchaser, against payment of the Purchase Price therefor as provided herein, of
a share certificate representing the total number of Shares to be purchased at
such Closing by Purchaser hereunder.
(d) Payment of the Purchase Price for the Shares to be purchased
hereunder shall be made by or on behalf of Purchaser by wire transfer of
immediately available funds to an account of the Company (the number for which
account shall have been furnished to Purchaser at least two Business Days prior
to the applicable Closing Date).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
--------------------------------
Section 3.1 Representations and Warranties of the Company
--------------------------------------------------
The Company represents and warrants to Purchaser as follows (in each case as
qualified by matters reflected on the disclosure schedule dated as of the date
of this Agreement and delivered by the Company to Purchaser on or prior
to the date of this Agreement (the "Company Disclosure Schedule") and made
-----------------------------
a part hereof by reference):
(a) Organization, Standing and Power
-----------------------------------
Each of the Company and each of its Subsidiaries is a corporation or
other entity duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated or organized and has the
requisite corporate or other such entity power and authority to carry on its
business as now being conducted. Each of the Company and each of its
Subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed or to be in good standing, individually or in the aggregate, has not
had and could not reasonably be expected to have a Material Adverse Effect. The
Company has delivered (or, in the case of the Company's Subsidiaries, made
available) to Purchaser prior to the execution of this Agreement complete and
correct copies of its Memorandum of Association and Articles of Association, as
in effect on the date of this Agreement.
(b) Subsidiaries. Schedule 3.1(b)(i) of the Company Disclosure
------------ -------------------
Schedule sets forth a true and complete list, as of the date hereof, of each
Subsidiary of the Company, together with the jurisdiction of incorporation or
organization and the percentage of each Subsidiary's outstanding share capital
(or other voting or equity securities or interests, as applicable) owned by the
Company or another Subsidiary of the Company. Except as set forth in Schedule
--------
3.1(b)(ii) of the Company Disclosure Schedule, all the outstanding shares of
---------
share capital (or other voting or equity securities or interests, as applicable)
of each Subsidiary of the Company have been validly issued and (with respect to
corporate Subsidiaries) are fully paid and nonassessable and are owned directly
or indirectly by the Company, free and clear of all Liens except for Permitted
liens. Except for the shares or capital stock of its Subsidiaries and the
partnership interests listed in Schedule 3.1(b)(iii) of the Company Disclosure
--------------------
Schedule, as of the date hereof, the Company does not own, directly or
indirectly, any share or capital stock (or other voting or equity securities or
interests, as applicable) of any corporation, limited liability company,
partnership, joint venture or other entity which is material to the business of
the Company and its Subsidiaries taken as a whole.
(c) Capital Structure.
------------------
(i) The authorized shares of Company consists of 200,000,000 shares of
Common Stock and 20,000,000 shares of other classes to be determined upon the
creation thereof by the Board (the "Authorized Preferred Stock"), of which, as
--------------------------
of the date of this Agreement, (A) 36,636,452 shares of Common Stock are issued
and outstanding, (B0 420,000 shares of Authorized Preferred Stock are designated
as 5% Convertible Preference Shares, par value $.01 per share (the "5%
--
Preference Shares"), each of which is convertible into one share of Common
------------------
Stock, 209,639 shares of which are issued and outstanding, (C) 200,000 shares of
the Authorized Preferred Stock are designated as Series A Junior Participating
Preference Shares, no shares of which are issued and outstanding, (D) 91 shares
of Common Stock are held by the Company in its treasury and (E) no shares of
Common Stock are held by any of the Company's Subsidiaries. Except as described
above in this Section 3.1(c)(i), the Company has no authorized, issued or
outstanding shares or Capital Stock.
(ii) As of the date hereof, there are no bonds, debentures, notes or
other indebtedness issued or outstanding having the right to vote on any matters
on which holders of Common Stock or Authorized Preferred Stock may vote,
including without limitation the transactions contemplated by this Agreement and
the other Transaction Documents.
(iii) Giving effect to the applicable provisions of the Articles of
Association, the Preferred Stock Authorization, the unanimous written consent of
the Board authorizing the 5% Preference Shares (the "5% Preference Shares
--------------------
Authorization") and all other instruments affecting the rights of holders of
-------------
shares or capital stock of the Company to which the Company is a party or is
bound (which, if any, other than the Articles of Association, the Preferred
Stock Authorization. the 5% Preference Shares Authorization and the other
Transaction Documents, are set forth in Schedule 3.1(c)(iii) or Schedule
--------------------- --------
3.1(c)(vi) of the Company Disclosure Schedule), upon issuance each outstanding
----------
Share will be convertible into four shares of Common Stock; there are no
restrictions or limitations, contractual or otherwise, binding upon the Company
or to which the Company is subject that prohibit or limit the enforceability of
the terms and provisions of the Preferred Stock Authorization or, except as set
forth in the Preferred Stock Authorization, will prohibit or limit the right of
a holder of Shares to convert Shares into shares of Common Stock; and the
conversion of any Shares into shares of Common Stock will not violate or result
in or constitute a default under any loan or credit agreement, note, bond,
mortgage, indenture, lease, permit, concession, franchise, license or any other
contract, agreement, arrangement or understanding to which the Company is a
party or by which it or any of its properties or assets are bound;
(iv) There are no outstanding warrants, share or stock options, share
or stock appreciation rights or other rights to receive any shares or capital
stock of the Company or any of its Subsidiaries granted under the Stock Plans or
otherwise, except as set forth in Schedule 3.1(c)(iv) of the Company Disclosure
-------------------
Schedule (such warrants, share or stock options, shares or stock appreciation
rights or other rights disclosed thereon, collectively, the "Company Options").
---------------
Except for the Company Options and 5% Preference Shares (as to which no more
than 209,639 shares of Common Stock and no shares or stock of any other class or
series of the Company are issuable upon exercise or conversion thereof) and,
except as set forth above or in Schedule 3.1(c)(iv) of the Company Disclosure
-------------------
Schedule, there are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which the
Company or any of its Subsidiaries is a party or by which any of them is bound
obligating the Company or any of its Subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares or stock (or other
voting or equity securities or interests, as applicable) of the Company or of
any of its Subsidiaries or obligating the Company or any of its Subsidiaries to
issue, grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. Except as set forth
in the 5% Preference Shares Authorization and in Schedule 3.1(c)(iv) of the
-------------------
Company Disclosure Schedule, there are no outstanding contractual obligations of
the Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares or stock (or other voting or equity securities or interests,
as applicable) of the Company or any of its Subsidiaries.
(v) All outstanding shares (or other voting or equity securities or
interests, as applicable) of the Company and its Subsidiaries are, and all
shares which may be issued upon conversion of the 8% Preference Shares will be,
when issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive or similar rights.
(vi) Except as contemplated hereby or in the other Transaction
Documents or as set forth in Schedule 3.1(c)(vi) of the Company Disclosure
-------------------
Schedule, there are not as of the date hereof and there will not be at the time
of either Closing any shareholder agreements, voting agreements or trusts,
proxies or other agreements or contractual obligations to which the Company or
any Subsidiary is a party or bound with respect to the voting or disposition of
any shares or stock (or other voting or equity securities or interests, as
applicable) of the Company or any of its Subsidiaries and, to the Company's
knowledge, as of the date hereof, there are no other shareholder agreements,
voting agreements or trusts, proxies or other agreements or contractual
obligations among the shareholders of the Company with respect to the voting or
disposition of any shares or stock (or other voting or equity securities or
interests, as applicable) of the Company or any of its Subsidiaries.
(d) Authority; No Violations; Approvals
-------------------------------------
(i) The Board of Directors has approved this Agreement, the other
Transaction Documents and the transactions contemplated hereby and thereby, and
declared this Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby to be in the best interests of the Company. The
Company has all requisite corporate power and authority to enter into this
Agreement and each of the other Transaction Documents and to consummate each of
the transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and each of the other Transaction Documents and the consummation
of each of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the Company. This
Agreement and each of the other Transaction Documents has been duly executed and
delivered by the Company and the Preferred Stock Authorization has been duly
adopted by the Board of Directors in accordance with applicable law. Each of
the Preferred Stock Authorization and, assuming this Agreement and each of the
other Transaction Documents to which Purchaser is a party constitute the valid
and binding obligations of Purchaser, this Agreement and each of the other
Transaction Documents constitutes a valid and binding obligation of Company
enforceable in accordance with its terms, subject, as to enforceability, to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(ii) Except as set forth in Schedule 3.1(d)(ii) of the Company
--------------------
Disclosure Schedule, the execution and delivery of this Agreement and each of
the other Transaction Documents does not, and the consummation of the
transactions contemplated hereby and thereby and compliance with the provisions
hereof and thereof will not, conflict with, require the consent of any other
party to or result in any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any material obligation or to the loss of a
material benefit under, or give rise to a right of purchase under, result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its Subsidiaries under, or otherwise result in a material detriment to the
Company or any of its Subsidiaries under, any provision of (A) the Memorandum of
Association and Articles of Association or any provision of the comparable
charter or organizational documents of any of its Subsidiaries, (B) any loan or
credit agreement, note, bond, mortgage, indenture, lease, or other agreement
(including the Material Oil and Gas Contracts) to which the Company or any of
its Subsidiaries is a party or otherwise is bound or by which any of them or
their respective properties are bound or any Approval applicable to the Company
or any of its Subsidiaries, (C) any joint venture or other ownership arrangement
to which the Company or any of its Subsidiaries is a party or otherwise is bound
or by which any of them or their respective properties are bound or (D0 assuming
the Approvals referred to in Section 3.1(d)(iii) are duly and timely obtained or
made, any Law or Order applicable to the Company or any of its Subsidiaries or
any of their respective properties or assets, other than, in the case of clause
(B) (other than with respect to any material loan or credit agreement, note,
bond, mortgage or indenture or any Material Oil and Gas Contract), (C) or (D),
any such conflicts, violations, defaults, rights, Liens, detriments, Laws or
Orders that, individually or in the aggregate, (x) have not had and could not
reasonably be expected to have a Material Adverse Effect, (y) have not impaired
and could not reasonably be expected to impair the ability of the Company to
perform its obligations under any of the Transaction Documents in any material
respect, or (z) could not reasonably be expected to delay in any material
respect or prevent the consummation of any of the transactions contemplated by
any of the Transaction Documents.
(iii) No Approval from any Governmental Entity is required by or with
respect to the Company or any of its Subsidiaries in connection with the
execution and delivery of this Agreement or any other Transaction Document by
the Company or the consummation by the Company of the transactions contemplated
hereby or thereby, except for: (A) if applicable, the filing of a notification
report by Company under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and the expiration or termination of the
--------
applicable waiting period with respect thereto; (B) the filing with the SEC of
(x) the Registration Statement and the declaration of the effectiveness of the
Registration Statement by the SEC, (y) such reports under Section 13(a) of the
Exchange Act and such other compliance with the Exchange Act and the rules and
regulations thereunder, as may be required in connection with this Agreement,
the other Transaction Documents and the transactions contemplated hereby and
thereby; (C) such Approvals as may be required by any applicable state
securities or "blue sky" laws; (D) such Approvals as may be required by any
foreign securities, corporate or other Laws; and (E) any such Approval the
failure of which to be made or obtained (1) has not had and could not reasonably
be expected to have a Material Adverse Effect, (2) has not impaired and could
not reasonably be expected to impair the ability of the Company to perform its
obligations under any of the Transaction Documents in any material respect and
(3) could not reasonably be expected to delay in any material respect or prevent
the consummation of any of the transactions contemplated by any of the
Transaction Documents.
(e) SEC Documents
--------------
(i) The Company has made available to Purchaser a true and complete
copy of each report, schedule, registration statement and definitive proxy
statement filed by the Company with the SEC since December 31, 1996 and prior to
or on the date of this Agreement (the "Company SEC Documents"), which are all
---------------------
the documents (other than preliminary materials) that the Company was required
to file with the SEC between December 31, 1996 and the date of this Agreement.
As of their respective dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Act, or the Exchange Act, as
the case may be, and the rules and regulations of the SEC thereunder applicable
to such Company SEC Documents, and none of the Company SEC Documents contained
when filed any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(ii) The financial statements of the Company included in the Company
SEC Documents, including the notes and schedules thereto, complied as to form in
all material respects with the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis during the
----
periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Rule 10-01 of Regulation S-X
of the SEC) and fairly present in accordance with applicable requirements of
GAAP (subject, in the case of the unaudited statements, to normal, recurring
adjustments, none of which are material) the consolidated financial position of
the Company and its consolidated Subsidiaries as of their respective dates and
the consolidated results of operations and the consolidated cash flows of the
Company and its consolidated Subsidiaries for the periods presented therein.
(iii) Except as disclosed in the Company SEC Documents, there are no
agreements, arrangements or understandings between the Company and any party who
is or was at any time prior to the date hereof but after December 31, 1996 an
Affiliate of the Company that are required to be disclosed in the Company SEC
Documents.
(f) Information Supplied. None of the
---------------------
information included or incorporated by reference in the Registration Statement
will, at the date such Registration Statement is declared effective by the SEC
or any time from and after such date through and including the date of the
Second Closing, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading. Notwithstanding the foregoing, no representation is made by the
Company in this Section 3.1(f) with respect to statements made or incorporated
by reference in the Registration Statement in conformity with information
supplied by or on behalf of Purchaser specifically for use in the Registration
Statement.
(g) Absence of Certain Changes or Events
--------------------------------------
(i) Except as disclosed in, or reflected in Schedule 3.1(g) or the
---------------
Company SEC Documents filed with the SEC after December 31, 1997, and prior to
the date of this Agreement, or except as contemplated by this Agreement, since
December 31, 1997, to the date of this Agreement each of the Company and its
Subsidiaries have conducted their business only in the ordinary course
consistent with past practice, and there has not been: (i any declaration,
setting aside or payment of any dividend or other distribution (whether in cash,
stock or property) with respect to any shares or stock (or other voting or
equity securities or interests, as applicable) of the Company or any of its
Subsidiaries (other than the declaration and payment of (A) regular cash
dividends with respect to the Company's first and third fiscal quarters at the
required annual 5% rate per share on the 5% Preferences Shares, with usual
record and payment dates and (B) any dividends or distributions by wholly owned
Subsidiaries); (ii) any split, combinations, reclassification or amendment of
any material term of any outstanding equity security of the Company or any
Subsidiary of the Company or (other than issuance of Common Stock upon the
exercise of any Company Options and/or issuances of Common Stock upon conversion
after the date hereof of 5% Preference Shares outstanding on December 31, 1997)
any issuance or the authorization of the issuance of any other securities in
respect of, or in lieu of or in substitution for shares or stock (or other
voting or equity securities or interests, as applicable) of the Company or any
of its Subsidiaries, other than in connection with the transactions contemplated
hereby; (iii) any repurchase, redemption or other acquisition by the Company or
any Subsidiary of the Company of any outstanding shares or stock (or other
voting or equity securities or interests, as applicable) of the Company or any
Subsidiary of the Company, except as contemplated by the Stock Plans; (iv) (A)
any granting by the Company or any of its Subsidiaries to any executive officer
of the Company or any of its Subsidiaries of any increase in compensation,
except for increases in the ordinary course of business consistent with past
practice or as required under employment or other agreements or benefit
arrangements in effect as of December 31, 1997, or (B) any granting by the
Company or any of its Subsidiaries to any such executive officer of any increase
in severance or termination pay, except as was required under any employment,
severance, termination or other agreements or benefit arrangements in effect as
of December 31, 1997; (v) except as required by a change in GAAP, any change in
accounting methods, principles or practices by the Company or any of its
Subsidiaries materially affecting its assets, liabilities or business; or (vi)
any material casualties affecting the Company and its Subsidiaries, taken as a
whole, or any material loss, damage or destruction to any of their properties or
assets, including the Company Interests (other than to the extent covered by
insurance, subject to applicable deductible thresholds).
(ii) Except as disclosed in, or reflected in Schedule 3.1(g) of the
---------------
Company Disclosure Schedule or the Company's consolidated financial statements
included in the Company's Quarterly Report on Form 10-Q for the six months ended
June 30, 1998, and the notes thereto, or except as contemplated by this
Agreement, since December 31, 1997, there has not been any event, circumstance
or fact that (x) has had or could reasonably be expected to have a Material
Adverse Effect, (y) has impaired or could reasonably be expected to impair the
ability of the Company to perform its obligations under any of the Transaction
Documents in any material respect, or (z) could reasonably be expected to delay
in any material respect or prevent the consummation of any of the transactions
contemplated by any of the Transaction Documents.
(h) No Undisclosed Material Liabilities
--------------------------------------
Except as disclosed in Schedule 3.1(h) of the Company Disclosure
---------------
Schedule or the Company's financial statements included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997, and the notes thereto,
there are no material liabilities or obligations of the Company or any of its
Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, other than: (i) liabilities adequately
provided for on the balance sheet of the Company dated as of June 30, 1998
(including the notes thereto) contained in the Company's Quarterly Report on
Form 10-Q for the six months ended June 30, 1998; (ii) liabilities incurred in
the ordinary course of business consistent with past practice since December 31,
1997, which liabilities, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect; (iii) liabilities arising under
or in connection with the Transaction Documents; (iv) liabilities reflected in
the pro forma financial statements included in the Company's Current Report on
Form 8-K dated August 17, 1998, and (v) liabilities not required by GAAP to be
recognized or disclosed on a consolidated balance sheet of the Company and its
consolidated Subsidiaries or in the notes thereto, which liabilities,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(i) No Default. Neither the Company nor any of its
-----------
Subsidiaries is in default or violation (and no event has occurred which, with
notice or the lapse of time or both, would constitute a default or violation) of
any term, condition or provision of (i) the Memorandum of Association or
Articles of Association of the Company or the comparable charter or
organizational documents of any of its Subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease, instrument, permit,
concession, franchise, license or any other contract, agreement, arrangement or
understanding to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any of their respective
properties or assets is bound, or (iii) any Order or Law applicable to the
Company or any of its Subsidiaries, except in the case of clause (ii) and (iii),
for violations or defaults that, individually or in the aggregate, (x) have not
had and could not reasonably be expected to have a Material Adverse Effect, (y)
have not impaired and could not reasonably be expected to impair the ability of
the Company to perform its obligations under any of the Transaction Documents in
any material respect, or (z) could not reasonably be expected to delay in any
material respect or prevent the consummation of any of the transactions
contemplated by any of the Transaction Documents. The Company (i) is not in
breach of or default under any financial covenant under the Credit Agreements,
the Indentures or the Senior Notes and (ii) except as disclosed in Schedule
--------
3.1(i) of the Company Disclosure Schedule, does not believe that it is
------
reasonably likely that it will be in breach of or default under any financial
covenant under the Credit Agreement or the Indentures as of the next date on
which the Company is required to be in compliance with any such financial
covenants.
(j) Compliance with Applicable Laws.
-------------------------------
(i) The Company and each of its Subsidiaries has in effect all
Approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses, and there has occurred no default or violation (and no
event has occurred which, with notice or the lapse of time or both, would
constitute a default or violation) under any such Approval, except for failures
to obtain, or for defaults or violations under, Approvals which failures,
defaults or violations, individually or in the aggregate, (i) have not had and
could not reasonably be expected to have a Material Adverse Effect, (ii) have
not impaired and could not reasonably be expected to impair the ability of the
Company to perform its obligations under any of the Transaction Documents in any
material respect, or (iii) could not reasonably be expected to delay in any
material respect or prevent the consummation of any of the transactions
contemplated by any of the Transaction Documents.
(ii) Except as disclosed in the Company SEC Documents, the businesses
of the Company and its Subsidiaries are in compliance with all applicable Laws
and Orders, except for possible noncompliance, which, individually or in the
aggregate, (i) have not had and could not reasonably be expected to have a
Material Adverse Effect, (ii) have not impaired and could not reasonably be
expected to impair the ability of the Company to perform its obligations under
any of the Transaction Documents in any material respect, or (iii) could not
reasonably be expected to delay in any material respect or prevent the
consummation of any of the transactions contemplated by any of the Transaction
Documents.
(iii) No investigation or review by any Governmental Entity with
respect to the Company, any of its Subsidiaries, the transactions contemplated
by this Agreement and the other Transaction Documents, or the Contract Interest,
to the knowledge of the Company, is pending or threatened, nor has any
Governmental Entity notified the Company or any of its Subsidiaries in writing
or, to the Company's knowledge, otherwise of any intention to conduct the same,
other than those the outcome of which, individually or in the aggregate, (i)
have not had and could not reasonably be expected to have a Material Adverse
Effect, (ii) have not impaired and could not reasonably be expected to impair
the ability of the Company to perform its obligations under any of the
Transaction Documents in any material respect, or (iii) could not reasonably be
expected to delay in any material respect or prevent the consummation of any of
the transactions contemplated by any of the Transaction Documents.
(iv) Each operator under the Material Oil and Gas Contracts which is
the Company or a Subsidiary of the Company, and, to the Company's knowledge,
each other operator under the Material Oil and Gas Contracts, has complied in
all material respects with any applicable Laws and Orders of Governmental
Entities in respect to its operation in the Concession Area and its performance
under the Material Oil and Gas Contracts.
(v) For purposes of this Agreement, the terms "knowledge of the
-----------------
Company," "to the Company's knowledge" and other references qualified by
------- -----------------------------
knowledge of the Company and/or its executive officers means the actual
knowledge of the executive officers and directors of the Company and each of the
individuals listed on Schedule 3.1(j)(v) of the Company Disclosure Schedule
-------------------
after reasonable inquiry.
(k) Litigation.
----------
(i) Except as disclosed in the Company SEC Documents or Schedule 3.1(k)
---------------
of the Company Disclosure Schedule, there is no suit, action, proceeding or
indemnification claim, at law or in equity, pending before any Governmental
Entity, or, to the knowledge of the Company, threatened, against or affecting
the Company, any Subsidiary of the Company, or the Contract Interests
("Litigation"), and the Company is not a party to any Litigation, and the
----------
Company and its Subsidiaries have no knowledge of any facts that could
reasonably be expected to give rise to any Litigation, that (in any case) (i)
has had or could reasonably be expected to have a Material Adverse Effect, (ii)
has impaired or reasonably could be expected to impair the ability of the
Company to perform its obligations under any of the Transaction Documents in any
material respect, or (iii) reasonably could be expected to delay in any material
respect or prevent the consummation of any of the transactions contemplated by
any of the Transaction Documents, nor is there any Order of any Governmental
Entity or arbitrator outstanding against or, to the Company's knowledge, binding
upon the Company, any Subsidiary of the Company or the Contract Interests which
(i) has had or could reasonably be expected to have a Material Adverse Effect,
(ii) has impaired or reasonably could be expected to impair the ability of the
Company to perform its obligations under any of the Transaction Documents in any
material respect, or (iii) reasonably could be expected to delay in any material
respect or prevent the consummation of any of the transactions contemplated by
any of the Transaction Documents.
(ii) Schedule 3.1(k) of the Company Disclosure Schedule contains an
----------------
accurate and complete list of all Orders restricting or limiting in any material
respect, the business or operations of the Company or any of its Subsidiaries,
in each case that is not disclosed in the Company SEC Documents, to which the
Company or any of its Subsidiaries is a party or, to the Company's knowledge, by
which the Company or any of its Subsidiaries or any of their respective assets
or properties are bound.
(l) Certain Agreements; Contract Interests.
-----------------------------------------
(i) Material Oil and Gas Contracts.
----------------------------------
(a) With respect to the Material Oil and Gas Contracts, (i) all such
Material Oil and Gas Contracts are in full force and effect and are the valid
and legally binding obligations of the Company and each of its Subsidiaries to
the extent a party thereto and, to the Company's knowledge, each other party
thereto and are enforceable in accordance with their respective terms; (ii)
neither the Company nor, to the knowledge of the Company, any other party to any
such Material Oil and Gas Contract is in material breach or default with respect
to its obligations thereunder; and (iii) no party to any such Material Oil and
Gas Contract has given notice of any action to terminate, cancel, rescind or
procure a judicial or arbitral reformation thereof.
(b) There are no material outstanding calls for payments by the Company
or any of its Subsidiaries under the Material Oil and Gas Contracts that are due
that have not been made, and all royalties, rentals and other payments due under
any of the Contract Interests or otherwise due and relating to any Material Oil
and Gas Contract have been paid to the proper person in the proper amount.
(c) Except for the Material Oil and Gas Contracts, there are no
Contract Interests to which the Company or any Subsidiary is a party pursuant to
which the Company and its Subsidiaries received or were entitled to receive
revenues of $1,000,000 or more in any one of the three years ending December 31,
1996, 1997 or 1998, or that otherwise is material to the business, operations or
financial condition of the Company and its Subsidiaries as a whole.
(ii) Except for the Material Oil and Gas Contracts and except as
disclosed in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, the Company's Quarterly Report on Form 10-Q for the six
months ended June 30, 1998 and Schedule 3.1(l)(ii) of the Company Disclosure
-------------------
Schedule, there are no (A) employment or consulting Contracts (unless such
employment or consulting Contracts are terminable without liability or penalty
on 30 days or less notice) under or pursuant to which the Company is obligated
to make payments in excess of $200,000 per annum, (B) other Contracts that are
material to the Company and its Subsidiaries, taken as a whole, or their
respective business, (C) Contracts relating to material leasehold interests or
(D) Contracts with Affiliates under or pursuant to which the Company is
obligated to make payments in excess of $60,000 per annum (excluding agreements
solely by and among the Company and one or more of its Subsidiaries), in any
such case, to which the Company or any Subsidiary is a party or to which the
Company or any Subsidiary or their respective assets is bound (such Contracts
disclosed or required to be disclosed, the "Material Contracts"). Each Material
------------------
Contract is a valid and binding obligation of the Company or one of its
Subsidiaries and, to the knowledge of the Company, of each party thereto other
than the Company or its respective Subsidiary and is in full force and effect.
(iii) The Company or the relevant Subsidiary and, to the knowledge of the
Company, each other party to the Material Contracts, has performed in all
material respects the obligations required to be performed by it under the
Material Contracts and is not (with or without lapse of time or the giving of
notice, or both) in breach or default thereunder.
(iv) A complete copy of each Material Oil and Gas Contract and each
written Material Contract and a written description of each oral Material
Contract has been made available to Purchaser prior to the date of this
Agreement.
(v) Except as disclosed in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, or in any other Company SEC Document filed
with the SEC after December 31, 1997, and prior to the date of this Agreement or
in Schedule 3.1(l)(v) of the Company Disclosure Schedule, none of the Company or
------------------
of its Subsidiaries is a party to any oral or written agreement, plan or
arrangement with any employee (whether an employee, consultant or an independent
contractor) of the Company or its Subsidiary (A) the benefits of which are
contingent, or the terms of which are materially altered, upon, or result from,
the occurrence of a transaction involving the Company or its Subsidiary of the
nature of any of the transactions contemplated by this Agreement or (B) any of
the benefits of which will be increased, or the vesting of benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or any other Transaction Documents or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement. Schedule 3.1(l)(v) of the Company Disclosure
Schedule lists each oral and written agreement, plan or arrangement with any
employee (whether an employee, consultant or an independent contractor) of the
Company or any of its Subsidiaries which provides for aggregate benefits or
other amounts payable by the Company or any of its Subsidiaries in excess of
$200,000 which are contingent upon, or will be accelerated by, or which
otherwise will become payable upon the termination of any such employee's
employment by or any other service with the Company or any of its Subsidiaries
after, the occurrence of the transactions contemplated by this Agreement or any
of the other Transaction Documents.
(vi) The Company has made available to Purchaser (A) true and correct
copies of all material loan or credit agreements (including the Credit
Agreements), notes, bonds, mortgages, indentures and other agreements and
instruments pursuant to which any Debt of the Company or any of its Subsidiaries
is outstanding or may be incurred and (B) accurate information regarding the
respective principal amounts currently outstanding thereunder to the extent
materially different than as set forth in the financial statements included in
the Company's quarterly report on Form 10-Q for the six months ended June 30,
1998.
(m) Status of Shares. The issuance and sale of the Shares and the
------------------
reservation and issuance of the Underlying Shares have been duly authorized by
all necessary corporate action on the part of the Company and such Shares, when
delivered to Purchaser at the Closing against payment therefor as provided
herein, will be validly issued, fully paid and non-assessable and the issuance
and sale of the Shares and the issuance of the Underlying Shares is not and will
not be subject to preemptive rights of any other shareholder of the Company.
(n) Tax Returns and Tax Payments. The Company, each of its
--------------------------------
Subsidiaries and any affiliated, consolidated, combined, unitary or similar
group of which the Company or any of its Subsidiaries is or was a member has
timely filed all material returns, reports or statements required to be filed
with any Governmental Entity with respect to Taxes ("Tax Returns") required to
-----------
be filed by it, and all such Tax Returns are true, correct and complete in all
material respects, and all Taxes shown thereon to be due have been paid, except
where the failure to so have timely filed, to be true, correct or complete or to
have paid such Taxes has not had and could not reasonably be expected to have a
Material Adverse Effect. The Company has established reserves, to the extent
required by GAAP, with respect to the payment of all material Taxes not yet due
and payable with respect to the result of operations of the Company and its
Subsidiaries through the date hereof. No claim for unpaid Taxes has been
asserted in writing by a tax authority or has become a Lien (except for
Permitted Liens) against the property of the Company or any of its Subsidiaries,
which claim or Lien has had or reasonably could be expected to have a Material
Adverse Effect. No audit of any Tax Return of the Company or any of its
Subsidiaries or any affiliated, consolidated, combined, unitary or similar group
in which the Company or any of its Subsidiaries is or has been a member is being
conducted by a tax authority, which audit reasonably could be expected to have a
Material Adverse Effect, and no extension of the statute of limitations on the
assessment of any material Taxes has been granted by the Company or any of its
Subsidiaries and currently is in effect. Neither the Company nor any of its
Subsidiaries is a party to, is bound by, or has any obligation under any tax
sharing or allocation agreement or similar agreement or arrangement (other than
among the Company and its Subsidiaries). For purposes of this Agreement "Tax"
---
means any federal, state, local or foreign income, gross receipts, property,
sales, use, license, excise, franchise, employment, payroll, premium,
withholding, alternative or added minimum, ad valorem, transfer or excise tax,
or any other tax, custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or penalty, imposed by
any Governmental Entity. For purposes of this Agreement "Permitted Lien" means
--------------
(a) liens, pledges, security interests, claims or other encumbrances
("Encumbrances") securing Taxes, assessments, governmental charges or levies,
---
all of which are not yet due and payable or as to which adequate reserves have
been established in the Company's financial statements and that may thereafter
be paid without penalty, (b) mechanics', carriers', workmen's, repairmen's, and
other similar Encumbrances incurred in the ordinary course of business
consistent with past practice, or (c) such other liens which, individually and
in the aggregate, do not and will not materially detract from the value of any
of the property or assets of the Company or its Subsidiaries or materially
interfere with the use thereof.
(o) Employee Benefit Plans. All employee
-----------------------
benefit plans covering employees of the Company and its Subsidiaries
(collectively, the "Benefit Plans") are listed in the Company SEC Documents or
-------------
the Company Disclosure Schedule and complete copies of all material Benefit
Plans, including all amendments, have been made available to Purchaser. To the
extent applicable, the Benefit Plans comply, in all material respects, with the
requirements of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the Code, and any Benefit Plan intended to be qualified under
-----
Section 401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified and has not, since such determination, been amended or, to
the knowledge of the Company, operated in a way which would adversely affect
such qualified status. Other than the Triton Exploration Services, Inc.
Retirement Income Plan, neither the Company nor any corporation, trade, business
or entity under common control with the Company within the meaning of Section
414(b), (c) or (m) of the Code maintains, sponsors or contributes to or has,
within the six years prior to the First Closing Date, maintained, sponsored or
contributed to any employee benefit plan that is covered by Title IV of ERISA or
is subject to the funding requirements of Section 412 of the Code or Section 302
of ERISA, or a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA.
Neither a Benefit Plan nor the Company has incurred any liability or penalty
under Section 4975 of the Code or Section 502(i) of ERISA. Each Benefit Plan
has been maintained and administered in all material respects in compliance with
its terms and with ERISA and the Code to the extent applicable thereto. There
are no pending nor, to the knowledge of the executive officers of the Company,
any threatened material claims against or otherwise involving any Benefit Plan
and no suit, action or other litigation (excluding claims for benefits incurred
in the ordinary course of Benefit Plan activities) has been brought against or
with respect to any Benefit Plan. All contributions required to be made as of
the date hereof to the Benefit Plans have been made. No employees of the
Company or any of its Subsidiaries are covered by any severance plan or similar
arrangement, other than payments pursuant to foreign law. Except as disclosed
in Schedule 3.1(o) of the Company Disclosure Schedule, the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby will not (1) require the Company to make a larger contribution to, or pay
greater benefits under, any Benefit Plan than it otherwise would, (2) create or
give rise to additional vested rights or service credits under any Benefit Plan,
or (3) result in all or any part of any payments made, or that may become
payable as a result of the transactions contemplated by the Agreement, by the
Company not to be deductible by the payor under sections 280G or 162(m) of the
Code. Except as disclosed in Schedule 3.1(o) of the Company Disclosure
Schedule, no Benefit Plan provides retiree medical or retiree life insurance
benefits to any person and the Company is not contractually obligated to provide
any person with medical benefits or life insurance upon retirement or
termination of employment, except as required by sections 601 through 608 of
ERISA and section 4980B of the Code.
(p) Labor Matters. Except as set forth in Schedule
-------------- --------
3.1(p) of the Company Disclosure Schedule or in the Company SEC Documents:
-----
(i) there is no unfair labor practice charge or grievance arising out
of a collective bargaining agreement or other grievance procedure against the
Company or any of its Subsidiaries pending, or, to the knowledge of the Company
or any of its Subsidiaries, threatened, that, individually or in the aggregate,
has had or could reasonably be expected to have a Material Adverse Effect;
(ii) there is no strike, dispute, slowdown, work stoppage or lockout
pending, or, to the knowledge of the Company or any of its Subsidiaries,
threatened, against or involving the Company or any of its Subsidiaries that,
individually or in the aggregate, has had or could reasonably be expected to
have a Material Adverse Effect; or
(iii) To the knowledge of the Company, there is no proceeding, claim,
suit, action or governmental investigation pending or threatened, in respect to
which any current or former director, officer, employee or agent of the Company
or any of its Subsidiaries is or may be entitled to claim indemnification from
the Company or any of its Subsidiaries pursuant to (a) the Memorandum of
Association and Articles of Association of the Company, (b) any provision of the
comparable charter or organizational documents of any of its Subsidiaries, (c)
any indemnification agreement to which the Company or any Subsidiary of the
Company is a party or (d) applicable Law.
(q) Intangible Property. The Company and its
--------------------
Subsidiaries possess or have adequate rights to use all material trademarks,
trade names, patents, service marks, brand marks, brand names, computer
programs, databases, industrial designs and copyrights necessary for the
operation of the businesses of each of the Company and its Subsidiaries
(collectively, the "Intangible Property"), except where the failure to possess
-------------------
or have adequate rights to use such properties, individually or in the
aggregate, has not had and could not reasonably be expected to have a Material
Adverse Effect. All of the Intangible Property is owned or licensed by the
Company or its Subsidiaries free and clear of any and all Liens, except those
that, individually or in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect, and neither the Company nor any such
Subsidiary has forfeited or otherwise relinquished any Intangible Property which
forfeiture, individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect. To the knowledge of the Company,
the use of the Intangible Property by the Company or its Subsidiaries does not,
in any material respect, conflict with, infringe upon, violate or interfere with
or constitute an appropriation of any right, title, interest or goodwill,
including any intellectual property right, trademark, trade name, patent,
service ▇▇▇▇, brand ▇▇▇▇, brand name, computer program, database, industrial
design, copyright or any pending application therefor of any other person and
there have been no claims made and neither the Company nor any of its
Subsidiaries has received any notice of any claim or otherwise knows that any of
the Intangible Property is invalid or conflicts with the asserted rights of any
other person or has not been used or enforced or has failed to have been used or
enforced in a manner that would result in the abandonment, cancellation or
unenforceability of any of the Intangible Property, except for any such
conflict, infringement, violation, interference, claim, invalidity, abandonment,
cancellation or unenforceability that, individually or in the aggregate, has not
had and could not reasonably be expected to have a Material Adverse Effect.
(r) Environmental Matters.
----------------------
For purposes of this Agreement:
(A) "Environmental Laws" means all federal, state and local laws,
-------------------
rules, regulations, ordinances, orders and decrees of any Governmental Entity,
whether now in existence or hereafter enacted and in effect at the time of
either Closing, relating to pollution or the protection of human health, safety
or the environment of any jurisdiction in which the applicable party hereto owns
or operates assets or conducts business or owned or operated assets or conducted
business (whether or not through a predecessor entity) (including ambient air,
surface water, groundwater, land surface, subsurface strata, natural resources
or wildlife), including laws and regulations relating to Releases or threatened
Releases of Hazardous Materials or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of solid waste or Hazardous Materials, and any similar laws, rules,
regulations, ordinances, orders and decrees of any foreign jurisdiction in which
the applicable party hereto owns or operates assets or conducts business;
(B) "Hazardous Materials" means (x) any petroleum or petroleum
--------------------
products, radioactive materials (including naturally occurring radioactive
materials), asbestos in any form that is or could become friable, urea
formaldehyde foam insulation, polychlorinated biphenyls or transformers or other
equipment that contain dielectric fluid containing polychlorinated biphenyls,
(y) any chemicals, materials or substances which are now defined as or included
in the definition of "solid wastes," "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous substances," "restricted hazardous
wastes," "toxic substances" or "toxic pollutants," or words of similar import,
under any Environmental Law and (z) any other chemical, material, substance or
waste, exposure to which is now prohibited, limited or regulated under any
Environmental Law in a jurisdiction in which the Company or any of its
Subsidiaries operates (for purposes of this Section 3.1(t)).
(C) "Release" means any spill, effluent, emission, leaking, pumping,
-------
pouring, emptying, escaping, dumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor environment, or into
or out of any property owned, operated or leased by the Company or its
Subsidiaries; and
(D) "Remedial Action" means all actions, including any capital
----------------
expenditures, required by a Governmental Entity or required under any
Environmental Law, or voluntarily undertaken to (w) clean up, remove, treat, or
in any other way ameliorate or address any Hazardous Materials or other
substance in the indoor or outdoor environment; (x) prevent the Release or
threat of Release, or minimize the further Release of any Hazardous Material so
it does not endanger or threaten to endanger the public or employee health or
welfare of the indoor or outdoor environment; (y) perform pre-remedial studies
and investigations or post-remedial monitoring and care pertaining or relating
to a Release; or (z) bring the Company or its Subsidiaries into compliance with
any Environmental Law.
Except as disclosed in the Company SEC Documents or on Schedule 3.1(r) of
---------------
the Company Disclosure Schedule:
(i) The operations of the Company and its Subsidiaries have been
conducted are, and as of each Closing Date will be, in compliance with all
Environmental Laws, except where the failure to so comply, individually or in
the aggregate, has not had and could not reasonably be expected to have a
Material Adverse Effect;
(ii) Neither the Company nor any of its Subsidiaries has caused the
generation, treatment, manufacture, processing, distribution, use, storage,
discharge, Release, transport or handling of any Hazardous Materials at any of
its properties or facilities, except as has not had and could not reasonably be
expected to have a Material Adverse Effect;
(iii) Neither the Company nor any of its Subsidiaries has received any
written notice from any Governmental Entity or other third party alleging any
violation by the Company or any of its Subsidiaries of, or responsibility or
liability of the Company or any of its Subsidiaries under, any Environmental Law
or for personal injuries, Remedial Action or property damages, which has had or
could reasonably be expected to have a Material Adverse Effect;
(iv) The Company and its Subsidiaries are not subject to any
outstanding written orders issued by, or contracts with, any Governmental Entity
or other person respecting (A) Environmental Laws, (B) Remedial Action, (C) any
Release or threatened Release of a Hazardous Material or (D) an assumption of
responsibility for environmental liabilities of another person, except such
orders or contracts the compliance with which, individually or in the aggregate,
has not had and could not reasonably be expected to have a Material Adverse
Effect;
(v) Neither the Company nor any of its Subsidiaries has any contingent
liability in connection with the Release of any Hazardous Material into the
indoor or outdoor environment (whether on-site or off-site) or employee or third
party exposure to Hazardous Materials that, individually or in the aggregate,
has had or could reasonably be expected to have a Material Adverse Effect.
(s) Insurance. Schedule 3.1(s) of the Company Disclosure
--------- ---------------
Schedule sets forth an insurance schedule of the Company's and each of its
Subsidiaries' directors' and officers' liability insurance. The Company
maintains insurance in such amounts and covering such risks as are in accordance
with normal industry practice for companies engaged in businesses similar to
those of the Company and each of its Subsidiaries (taking into account the cost
and availability of such insurance).
(t) Vote. There are no approvals required of the holders of any class
----
or series of shares or stock of the Company necessary to approve this Agreement
or any other Transaction Documents and the transactions contemplated hereby or
thereby.
(u) Amendment to Rights Agreement. The Board has taken all necessary
-------------------------------
action to amend the Rights Agreement, dated as of March 25, 1996, as amended
(the "Rights Agreement"), between the Company and Chemical Bank, as Rights
-----------------
Agent, so that none of the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will cause (i) the rights
issued pursuant to the Rights Agreement to become exercisable under the Rights
Agreement or (ii) the distribution of Rights Certificates (as defined in the
Rights Agreement).
(v) Prepayments. Neither the Company nor any Subsidiary is obligated,
-----------
by virtue of a prepayment arrangement, make-up right under a production sales
Contract containing a "take or pay" or similar provision, production payment or
any other arrangement, to deliver hydrocarbons, or proceeds from the sale
thereof, attributable to any of its properties at some future time without then
or thereafter being entitled to received payment of the contract price therefor,
except where any such arrangement could not reasonably be expected to have a
Material Adverse Effect.
(w) Gas Imbalances. Except as disclosed in the Company SEC Documents,
---------------
neither the Company nor any Subsidiary has (i) any obligation to deliver gas
from the Oil and Gas Properties (or cash in lieu thereof) to other owners of
interests in those properties as a result of past production by the Company, any
Subsidiary or any of their predecessors in excess of the share to which they
were entitled nor (ii) any right to receive deliveries of gas from the Oil and
Gas Properties (or cash in lieu thereof) from other owners of interests in those
properties as a result of past production by the company, any Subsidiary or any
of their predecessors of less than the share to which they were entitled in
either case where any such gas imbalance could reasonably be expected to have a
Material Adverse Effect.
(x) Reserve Report. A true, correct and complete copy of the Reserve
---------------
Report has been provided to Purchaser. The Company's and each Subsidiary's
ownership of the Oil and Gas Properties described in the Reserve Report entitle
the respective owner to receive a percentage of the oil, gas and other
hydrocarbons produced from each well or unit equal to not less than the
percentage set forth in the Reserve Report as the "Net Revenue Interest" for
such well or unit and cause the respective owner to be obligated to bear a
percentage of the cost of operation of such well or unit not greater than the
percentage set forth in the Reserve Report as the "Working Interest" for such
well or unit, and to the extent such percentages of production which the
respective owner is entitled to receive, and shares of expenses which the
respective owner is obligate to bear, may change after the date of such report,
such changes were properly reflected (based on reasonable assumptions) in
preparing such report. The underlying historical information used for
preparation of the Reserve Report was, at the time of delivery, true and correct
in all material respects.
(y) Nonconsent Operations. Except as set forth in Schedule 3.1(y) of
---------------------- ---------------
the Company Disclosure Schedule, there are no operations on the Oil and Gas
Properties in which the Company's or any Subsidiary's commitment would have
exceeded $5,000,000, being conducted as of January 1, 1998, or any time
thereafter, in which the Company or any Subsidiary was entitled to participate
and did not participate.
(z) Information Provided. Neither this Agreement, the Schedules and
---------------------
Exhibits hereto, the other Transaction Documents, nor any other document
provided by the Company to Purchaser contain any untrue statement of a material
fact or omit any material fact necessary to make the statements herein or
therein, as the case may be, not misleading.
(aa) No Brokers or Finders. No agent, broker, finder or investment or
-----------------------
commercial banker, or other Person or firm engaged by or acting on behalf of the
Company or its Subsidiaries in connection with the negotiation, execution or
performance of this Agreement is or will be entitled to any brokerage or
finder's or similar fee or other commission as a result of this Agreement, the
other Transaction Documents or the transactions contemplated hereby or thereby,
other than any such fees or commissions that have been disclosed to Purchaser
and as to which the Company shall have full responsibility.
Section 3.2 Representations and Warranties of Purchaser.
-----------------------------------------------
(a) Organization, Standing and Power. Purchaser is a Cayman Islands
-----------------------------------
exempted limited partnership duly organized, validly existing, and in good
standing under the laws of the Cayman Islands and has all requisite partnership
power and authority to own, lease, and operate its properties and to carry on
its business as now being conducted and to execute and deliver this Agreement
and the other Transaction Documents to which Purchaser is a party and consummate
the transactions contemplated hereby and thereby.
(b) Authority; Approvals.
---------------------
(i) Purchaser represents and warrants to the Company that (a) the
execution and delivery of this Agreement and the other Transaction Documents to
which it is a party and the purchase of the Shares to be purchased by it have
been duly and properly authorized, (b) this Agreement and the other Transaction
Documents to which it is a party have been duly executed and delivered by it or
on its behalf and, assuming the accuracy of the representations and warranties
of the Company in Section 3.1(d) hereof, constitute the valid and legally
binding obligations of Purchaser, enforceable against it in accordance with
their respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights generally and to general principles of equity;
(c) the purchase of the Shares to be purchased by it does not conflict with or
violate (1) its partnership agreement or (2) any law applicable to it in a
manner that could materially hinder or impair the completion of any of the
transactions contemplated hereby; and (d) the purchase of Shares to be purchased
by it does not impose any penalty or other onerous condition on Purchaser that
could materially hinder or impact the completion of any of the transactions
contemplated hereby.
(ii) No Approval from any Governmental Entity is required by or with
respect to Purchaser in connection with the execution and delivery by Purchaser
of this Agreement or any other Transaction Document to which it is a party or
the consummation by Purchaser of the transactions contemplated hereby or
thereby, except for: (C) if applicable, the filing of a notification report by
Purchaser under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and the expiration or termination of the applicable
--------
waiting period with respect thereto; (D) such Approvals as may be required by
any foreign securities, corporate or other Laws; and (E) any such Approval the
failure of which to be made or obtained (1) has not impaired and could not
reasonably be expected to impair the ability of Purchaser to perform its
obligations under any of the Transaction Documents in any material respect or
(2) could not reasonably be expected to delay in any material respect or prevent
the consummation of any of the transactions contemplated by any of the
Transaction Documents.
(c) Litigation. As of the time of execution of this Agreement, there
----------
is no claim, action, suit, inquiry, judicial or administrative proceeding
pending or, to the knowledge of Purchaser, threatened against it relating to any
of the transactions contemplated by this Agreement or any other Transaction
Document.
(d) Investment Intent. Purchaser represents and warrants to the
------------------
Company that the Shares to be acquired by it hereunder and any Underlying Shares
to be acquired upon the conversion or exchange of such Shares are being acquired
for its own account for investment and with no intention of distributing or
reselling such Shares or Underlying Shares or any part thereof or interest
therein in any transaction which would be in violation of the securities Laws of
the United States of America or any state or any foreign country or
jurisdiction.
(e) Transfer Restrictions. If Purchaser should decide to dispose of
----------------------
any of the Shares to be purchased by it or any Underlying Shares to be issued to
it upon the conversion or exchange of such Shares, Purchaser understands and
agrees that it may do so only subject to the transfer restrictions set forth in
the Shareholders Agreement and pursuant to an effective registration statement
under the Securities Act or pursuant to an exemption from registration under the
Securities Act. In connection with any offer, resale, pledge or other transfer
(individually and collectively, a "Transfer") of any Shares or Underlying Shares
--------
other than pursuant to an effective registration statement, the Company may
require that the transferor of such Shares or Underlying Shares provide to the
Company an opinion of counsel which opinion shall be reasonably satisfactory in
form and substance to the Company, to the effect that such Transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and any State or foreign
securities Laws. Purchaser agrees to the imprinting, so long as appropriate, of
substantially the following legend on certificates representing the Shares and
any Underlying Shares:
THE [8% CONVERTIBLE PREFERENCE SHARES/ORDINARY SHARES] (THE "SHARES")
------
EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
---------------
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER AGREES THAT IT WILL NOT OFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER
(INDIVIDUALLY AND COLLECTIVELY, A "TRANSFER") THE SHARES EVIDENCED HEREBY,
--------
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
SUCH AS THE EXEMPTION SET FORTH IN RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE). IF THE PROPOSED TRANSFER IS TO BE MADE OTHER THAN PURSUANT TO
CLAUSE (A) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
COMPANY AND THE TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR ANY STATE OR FOREIGN
SECURITIES LAW.
THE SHARES EVIDENCED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF A
SHAREHOLDERS AGREEMENT DATED _______________, 1998, WHICH CONTAINS CERTAIN
RESTRICTIONS ON THE TRANSFER OF THE SHARES. A COPY OF THE SHAREHOLDERS
AGREEMENT IS AVAILABLE AT THE REGISTERED OFFICE OF THE COMPANY.
The legends set forth above may be removed if and when the Shares or
Underlying Shares, as the case may be, represented by such certificate are no
longer subject to the transfer restrictions set forth in the Shareholders
Agreement and are disposed of pursuant to an effective registration statement
under the Securities Act or the opinion of counsel referred to above has been
provided to the Company. The share certificates shall also bear any additional
legends required by applicable federal, state or foreign securities Laws, which
legends may be removed when, in the opinion of counsel to the Company, the same
are no longer required under the Memorandum of Association, the Articles of
Association or the applicable requirements of such securities Laws. Purchaser
agrees that, in connection with any Transfer of Shares by it pursuant to an
effective registration statement under the Securities Act, Purchaser will comply
with all prospectus delivery requirements of the Securities Act. The Company
makes no representation, warranty or agreement as to the availability of any
exemption from registration under the Securities Act with respect to any resale
of Shares or Underlying Shares.
(f) Purchaser Status. Purchaser represents and warrants to, and
-----------------
covenants and agrees with the Company that (i) at the time it was offered the
Shares, it was, (ii) at the date hereof, it is, and (iii) at each Closing Date,
it will be, an accredited investor as defined in Rule 501(a) under the
Securities Act, and has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the Company and
an investment in the Shares, and is able to bear the economic risk of such
investment.
(g) Information Supplied. None of the information, if any, supplied by
--------------------
or on behalf of Purchaser specifically for inclusion in the Registration
Statement and which is included or incorporated by reference in the Registration
Statement will, at the date such Registration Statement is declared effective by
the SEC or any time from and after such date through and including the date of
the Second Closing, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. No representation is made by Purchaser in connection with
any of the foregoing except with respect to statements made or incorporated by
reference in the Registration Statement in conformity with information supplied
by or on behalf of Purchaser specifically for use in the Registration Statement.
(h) No Brokers or Finders. No agent, broker, finder or investment or
-----------------------
commercial banker, or other Person or firm engaged by or acting on behalf of
Purchaser in connection with the negotiation, execution or performance of this
Agreement is or will be entitled to any brokerage or finder's or similar fee or
other commission as a result of this Agreement, other than any such fees or
commissions that have been disclosed to the Company and as to which Purchaser
shall have full responsibility.
(i) Ownership of Shares. Neither the Purchaser nor any of its
---------------------
Affiliates is the beneficial owner of any shares of or stock of the Company.
(j) Financing. Upon the terms and subject to the conditions of this
---------
Agreement, the Purchaser has available to it and at the Closings will have all
funds necessary to satisfy its obligations to purchase Shares hereunder.
ARTICLE IV
COVENANTS
---------
Section 4.1 Furnishing of Information.
--------------------------
As long as Purchaser owns Shares or Underlying Shares representing
at least 5% of the aggregate number of shares of Common Stock then outstanding
(determined after giving effect to the full conversion of all outstanding Shares
owned by Purchaser at the conversion price then in effect), from and after the
First Closing Date the Company will promptly furnish to Purchaser all reports
filed by it pursuant to Section 13(a) or 15(d) of the Exchange Act (or if the
Company is not at the time required to file reports pursuant to said Section
13(a) or 15(d), annual and quarterly reports comparable to those required by
Sections 13(a) or 15(d) of the Exchange Act).
Section 4.2 Rights Offering.
----------------
(a) Promptly following the First Closing, the Company shall conduct a
distribution to each record holder of Common Stock, 5% Preference Shares and 8%
Preference Shares, as of a record date after the First Closing to be set by the
Company, of the transferable right (the "Rights") to purchase, at $70.00 per
------
share, a pro-rata portion (with the pro rata portion relating to outstanding 5%
Preference Shares and 8% Preference Shares determined based on the number of
shares of Common Stock into which such shares are convertible as of such record
date) of 3,177,500 shares (subject to rounding as set forth below) of 8%
Preference Shares (the "Rights Offering"). Based on the current outstanding
----------------
shares of the Company, in the Rights Offering (i) the Company will distribute
.072 transferrable Rights with respect to each share of Common Stock and 5%
Preference Shares and .288 transferable Rights with respect to each 8%
Preference Share outstanding as of the record date for the Rights Offering, at
no cost to the record holders; (ii) one Right plus $70.00 in cash will entitle
the holder to purchase one share of 8% Preference Shares; (iii) the Rights will
be evidenced by transferable subscription certificates; (iv) no fractional
Rights or cash in lieu thereof will be issued or paid, and the number of Rights
distributed to each holder of Common Stock, 5% Preference Shares and 8%
Preference Shares will be rounded up to the nearest whole number of Rights; (v)
brokers, dealers and other nominees holding shares of Common Stock, 5%
Preference Shares or 8% Preference Shares on the record date for more than one
beneficial owner will be entitled to obtain separate subscription certificates
for their beneficial owners so that they may each receive the benefit of
rounding; and (vi) each Right will also carry the right to subscribe at the
$70.00 subscription price for additional shares of 8% Preference Shares for
which the other holders of Rights did not subscribe through the exercise of the
basic subscription privileges (the "Excess Shares"), provided that (A) only
--------------
Rights holders who exercise their basic subscription privilege in full will be
entitled to exercise the oversubscription privilege, (B) if the Excess Shares
are not sufficient to satisfy all oversubscriptions, the Excess Shares will be
allocated pro rata (subject to the elimination of fractional shares) among those
Rights holders exercising the oversubscription privilege and (C) Purchaser shall
not purchase any 8% Preference Shares pursuant to its oversubscription privilege
under Rights held by Purchaser.
(b) The Company shall promptly prepare and submit to Purchaser for
review, a form of subscription agreement, subscription certificate and all other
documents and instruments required in connection with the Rights Offering, all
of which shall be in form and substance reasonably satisfactory to Purchaser
(the "Rights Offering Documents"). The Rights Offering Documents shall provide,
-------------------------
among other things, that the Rights Offering shall be generally conducted in the
manner described in Section 4.2(a).
Section 4.3 Stock Exchange Listing.
-----------------------
The Company shall submit a listing application to the NYSE with respect to the
8% Preference Shares, the Underlying Shares and the Rights within ten business
days after the date hereof and Purchaser shall be entitled to review and
reasonably comment on such listing application and the submission of any other
materials to the NYSE in connection with the listing of the 8% Preference
Shares, the Underlying Shares and the Rights. The Company shall use all
commercially reasonable efforts to cause, prior to the First Closing Date, the
8% Preference Shares, the Underlying Shares and the Rights to be approved for
listing on the NYSE, subject to official notice of issuance, upon issuance in
accordance with the terms of this Agreement (including as provided in Section
2.1(a)) and the Rights Offering Documents (and, in the case of the 8% Preference
Shares, generally, satisfactory distribution and, in the case of the Rights, the
8% Preference Shares to be issued in the Rights Offering and the Underlying
Shares to be issued pursuant to such 8% Preference Shares, the effectiveness of
the Registration Statement) (collectively, the "NYSE Approval").
--------------
Section 4.4 Registration Statement.
----------------------
As promptly as practicable after the date hereof, the Company shall prepare and
file with the SEC a registration statement on Form S-3, or shall file a
post-effective amendment to an existing shelf registration statement of the
Company currently effective under the Securities Act and in proper form to
effect the Rights Offering (including the issuance of the 8% Preference Shares
to be issued pursuant thereto and the Underlying Shares to be issued upon
conversion of such 8% Preference Shares), for the purpose of registering under
the Securities Act the offering, sale and delivery of the securities issuable in
the Rights Offering, including the Underlying Shares with respect to the shares
of 8% Preference Shares offered thereby. The term "Registration Statement," as
----------------------
used herein, means such registration statement and all amendments and
supplements thereto, if any. The Company shall use all commercially reasonable
efforts to have the Registration Statement declared effective under the
Securities Act as promptly as practicable after the First Closing. The Company
shall notify Purchaser promptly of the receipt of any comments on, or any
requests for amendments or supplements to, the Registration Statement by the
SEC, and the Company shall supply Purchaser with copies of all correspondence
between it and its representatives, on the one hand, and the SEC or members of
its staff, on the other, with respect to the Registration Statement. The
Company, after consultation with Purchaser, shall use commercially reasonable
efforts to respond promptly to any comments made by the SEC with respect to the
Registration Statement. The Company and Purchaser each agrees promptly to
correct any information provided by it for use in the Registration Statement if
and to the extent that such information shall have become false or misleading in
any material respect, and the Company further agrees to take all steps necessary
to cause the Registration Statement (or the prospectus contained therein) as so
corrected to be filed with the SEC and to be disseminated to the extent required
by applicable Law. The Company shall also take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified) reasonably required to be taken under any applicable state securities
Laws in connection with the issuance of securities pursuant to the Registration
Statement.
Section 4.5 Affirmative Covenants of the Company.
-------------------------------------
The Company hereby covenants and agrees that, until
the earlier of the Second Closing or the termination of this Agreement, unless
otherwise expressly contemplated by this Agreement or consented to in writing by
Purchaser (such consent not to be unreasonably withheld), the Company will and
will cause each of its Subsidiaries to:
(a) operate its business in the usual and ordinary course consistent
with past practices except as contemplated by this Agreement or as provided in
or contemplated by the Company Disclosure Schedule, consistent with the
Company's restructuring as announced or disclosed in the Company SEC Documents
filed prior to the date of this Agreement or disclosed in press releases
released prior to the date of this Agreement (the "Announced Restructuring");
-----------------------
(b) use commercially reasonable efforts to maintain and keep its
properties and assets in as good a repair and condition as at present, ordinary
wear and tear excepted; and
(c) use all reasonable efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to that currently
maintained, consistent with the Announced Restructuring.
Section 4.6 Negative Covenants of the Company.
-------------------------------------
(a) Except as expressly contemplated by this Agreement or otherwise
consented to in writing by Purchaser, from the date of this Agreement until
earlier of the First Closing or the termination of this Agreement, the Company
shall not do, and shall not permit any of its Subsidiaries to do, any of the
following:
(i) except as set forth in Schedule 4.6(a)(i) of the Company Disclosure
------------------
Schedule, acquire or agree to acquire (whether pursuant to a definitive
agreement, a non-binding letter of intent or otherwise), by merging or
consolidating with, by purchasing an equity interest in or a portion of the
assets of (including by a "farm-in" of any properties or interests), or by any
other manner, any business or any corporation, partnership, association or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets of any other Person (other than from a Subsidiary of the
Company or the purchase of assets from suppliers or vendors in the ordinary
course of business and other than assets which, individually or in the
aggregate, are not material to the business or operations of the Company or any
of its Subsidiaries);
(ii) except as set forth in Schedule 4.6(a)(ii) of the Company
--------------------
Disclosure Schedule or as permitted under Section 4.12, sell, lease, exchange,
mortgage, pledge, transfer or otherwise dispose of, or agree to sell, lease,
exchange, mortgage, pledge, transfer or otherwise dispose of (including by a
"farm-out" of any properties or interests), any of its assets or any assets of
any of its Subsidiaries, except for pledges or dispositions of assets in the
ordinary course of business or consistent with the Announced Restructuring and
except for assets which, individually or in the aggregate, are not material to
the business or operations of the Company or any of its Subsidiaries;
(iii) except as set forth in Schedule 4.6(a)(iii) of the Company
---------------------
Disclosure Schedule, adopt or propose to adopt any amendments to the Company's
Memorandum of Association or Articles of Association or similar charter
documents; other than transactions between the Company and one or more of its
Subsidiaries or among one or more of its Subsidiaries, adopt resolutions
authorizing a liquidation, dissolution, merger, consolidation, restructuring,
recapitalization, or other reorganization of the Company or any Subsidiary; or
make any other material changes in the Company's capital structure;
(iv) (i) except as set forth in Schedule 4.7(a)(iv) of the Company
-------------------
Disclosure Schedule change any of its significant accounting methods,
principles, practices or policies or (ii) make or rescind any express or deemed
election relating to Taxes, settle or compromise any claim, action, suit,
Litigation, audit or controversy relating to Taxes, or change any of its methods
of reporting income or deductions for federal or other income Tax purposes from
those employed in the preparation of the federal or other income Tax Returns or
other Tax Returns for the taxable year ending December 31, 1997, except, in the
case of either clause (i) or clause (ii), as may be required by Law or GAAP;
(v) other than borrowings in the ordinary course under the Credit
Facilities, incur any obligation for borrowed money or purchase money
indebtedness, whether or not evidenced by a note, bond, debenture or similar
instrument or under any financing lease, whether pursuant to a
sale-and-leaseback transaction or otherwise;
(vi) except as set forth in Schedule 4.6(a)(vi) of the Company
--------------------
Disclosure Schedule, make any loans or advances to any Person, other than (i)
advances to employees in the ordinary and usual course of business and (ii)
transactions among or between the Company and its Subsidiaries in the ordinary
and usual course of the Company's business;
(vii) declare or pay any dividend or make any other distribution with
respect to its shares or capital stock, other than dividends paid by any
Subsidiary to the Company or another Subsidiary in the ordinary and usual course
of the Company's business and regular dividends on the 5% Preference Shares in
accordance with the terms as in effect on the date hereof;
(viii) except as set forth in Schedule 4.6(a)(viii) of the Company
---------------------
Disclosure Schedule, enter into, adopt, or (except as may be required by law)
amend or terminate any Benefit Plan; approve or implement any employment
severance arrangements (other than payments made under the Company's severance
policy in accordance with past practice) or discharge or, except to replace any
officer or executive management personnel who have departed on substantially the
same or lesser terms as the departed Person, hire any officers or executive
management personnel; authorize or enter into any employment, severance,
consulting services or other agreement with any officers or executive management
personnel; or except as set forth in Section 4.6(a)(viii) of the Company
Disclosure Schedule, change the compensation or benefits provided to any
director, officer, or employee as of June 30, 1998; or
(ix) agree in writing or otherwise to do any of the foregoing.
(b) Except as expressly contemplated by this Agreement or otherwise
consented to in writing by Purchaser, from the date of this Agreement until
earlier of the Second Closing or the termination of this Agreement, the Company
shall not do, and shall not permit any of its Subsidiaries to do, any of the
following:
(i) materially amend, terminate or fail to use all commercially
reasonable efforts to maintain in full force and effect and, if applicable,
renew any Material Oil and Gas Contract or any Material Contract (provided that
the Company and its Subsidiaries shall not be required to renew any Material
Contract on terms that are less favorable to the Company or its Subsidiaries),
or fail to use all commercially reasonable efforts to prevent a default in any
material respect (or take or omit to take any action that, with or without the
giving of notice or passage of time, would constitute a material default) under
any Material Oil and Gas Contract or any Material Contract;
(ii) split, combine, reclassify or amend any term of any of its shares
or capital stock; or
(iii) Except as set forth in Schedule 4.6(b)(iii) of the Company
---------------------
Disclosure Schedule, (A) issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to purchase,
or otherwise) any of its shares or capital stock or other securities other than
(1) as contemplated herein or (2) pursuant to awards issued and outstanding as
of the date hereof under the Stock Plans or as required under the terms of any
other security of the Company outstanding as in effect as of the date of this
Agreement, or (B) purchase or otherwise acquire any of its shares or capital
stock, employee or director stock options, warrants or other equity securities
or debt securities other than pursuant to the terms thereof as in effect as of
the date of this Agreement.
Section 4.7 Approvals. The Company and Purchaser
---------
each agree to cooperate and use all commercially reasonable efforts to obtain
(and will promptly prepare all registrations, filings and applications, requests
and notices preliminary to all) Approvals that may be necessary or which may be
reasonably requested by the Company or Purchaser to consummate the transactions
contemplated by this Agreement and the other Transaction Documents.
Section 4.8 Shareholders Agreement.
-----------------------
On or before the First Closing Date, the Company and Purchaser shall enter into
the Shareholders Agreement.
Section 4.9 Preferred Stock Authorization.
-------------------------------
On or before the First Closing Date, the Company shall take, or
cause to be taken, all action necessary to authorize and approve the Preferred
Stock Authorization in accordance with the relevant provisions of the Companies
Law of the Cayman Islands.
Section 4.10 HSR Act Notification.
---------------------
To the extent the HSR Act will be applicable to the acquisition of the Shares by
Purchaser, each of the parties hereto shall (a) file or cause to be filed, as
promptly as practicable after the execution and delivery of this Agreement and
in no event later than ten Business Days after the date of this Agreement, with
the Federal Trade Commission and the United States Department of Justice, all
reports and other documents required to be filed by such party under the HSR Act
concerning the transactions contemplated hereby and (b) promptly comply with or
cause to be complied with any requests by the Federal Trade Commission or the
United States Department of Justice for additional information concerning the
Transaction, in each case so that the waiting period applicable to this
Agreement and the Transaction contemplated hereby under the HSR Act shall expire
as soon as practicable after the execution and delivery of this Agreement. Each
party hereto agrees to request, and to cooperate with the other party or parties
in requesting, early termination of any applicable waiting period under the HSR
Act.
Section 4.11 Indemnification of Directors and Officers; Insurance.
----------------------------------------------------
(a) At the later of (i) the First Closing or (ii) such date on which
such individuals are elected to the Board of Directors, the Company shall enter
into indemnification agreements with each of the directors designated by the
Purchaser pursuant to the Shareholders Agreement ("Purchaser Designees")
--------------------
substantially in the form of Exhibit E hereto with such changes thereto as may
---------
be agreed upon by Purchaser and the Company (each an "Indemnification
---------------
Agreement").
---------
(b) At or prior to the First Closing Date, the Company shall obtain
directors' and officers' liability insurance policies providing an aggregate of
$25,000,000 in additional coverage to the coverage provided by the Company's
current directors' and officers' insurance policy (the "Additional D&O
---------------
Policies"). The Company shall use all commercially reasonable efforts to ensure
--------
that the Additional D&O Policies shall, in addition to customary coverage,
provide coverage for Purchaser and any of its Affiliates with respect to any
claims brought against Purchaser or any of its Affiliates arising out of or
relating to any act or omission of any director of the Company in his or her
capacity as a director of the Company; provided, however, that in the event the
-------- -------
Additional D&O Policies are not available to provide coverage as described in
this sentence, the Company shall use commercially reasonable efforts to obtain a
separate insurance policy (the "Alternative Policy") providing such coverage in
------------------
such amounts as can be obtained by the Company upon the payment of annual
premiums that, when aggregated with the annual premiums paid for the Additional
D&O Policies, do not exceed 200% of the annual premiums related to the Company's
existing director and officer liability policies aggregating $30,000,000 in
coverage. The Company shall maintain in effect the Additional D&O Policies and
the Alternative Policy for so long as Purchaser is entitled to nominate members
to the Board of Directors pursuant to the Shareholders Agreement.
(c) The Company shall, from and after the date of this Agreement and
until the later of (i) four years from the First Closing Date or (ii) the final
resolution of all Shareholder Litigation, maintain in effect the current
directors' and officers' liability insurance policies maintained by the Company
(provided that the Company may substitute therefor policies no less favorable in
terms and amounts of coverage so long as substitution does not result in gaps of
lapses in coverage) with respect to matters occurring prior to the Second
Closing Date; provided, however, that in no event shall the Company be required
to expend pursuant to this Section more than an amount per year equal to 150% of
current annual premiums paid by the Company for such insurance.
(d) The Company shall amend its existing insurance coverage under the
Company's current policies of directors' and officers' liability insurance, or
obtain comparable replacement policies on terms no less favorable in terms of
coverage and amounts than those in effect on the date hereof, so that
Purchaser's purchase of the Shares pursuant to this Agreement shall not
constitute a "change of control" of the Company or otherwise cause any of the
Purchaser Designees or any of persons who become officers, directors or
employees of the Company on or after the First Closing Date to be excluded from
the coverage provided by such insurance policies.
(e) In the event the Company or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
Person, then, and in each such case, proper provision shall be made so that the
successors and assigns of the Company shall assume the obligations set forth in
this Section 4.11. The provisions of this Section are intended to be for the
benefit of, and shall be enforceable by, the parties hereto and each person
entitled to indemnification or insurance coverage pursuant to this Section, his
heirs, and his representatives. The rights provided such persons under this
Section shall be in addition to, and not in lieu of, any rights to indemnity
that such persons may have under the Articles of Association of the Company or
any other provisions herein or in other agreements.
Section 4.12 No Solicitation.
----------------
(a) From and after the date hereof until the earlier of the Second
Closing Date or the termination of this Agreement, neither the Company nor any
of its Subsidiaries, nor any of their respective officers, directors,
representatives, agents or Affiliates (including, without limitation, any
investment banker, attorney or accountant retained by the Company or any of its
Subsidiaries) (collectively, "Representatives") will, and the Company will cause
---------------
the employees and Representatives of the Company and its Subsidiaries not to,
directly or indirectly, (i) solicit, initiate or encourage the submission of any
proposal for a Sale Transaction, (ii) enter into any agreement with respect to
any Sale Transaction or give any approval with respect to any Sale Transaction,
(iii) participate in any discussions or negotiations regarding, or furnish to
any Person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Sale Transaction or any proposal for a
Sale Transaction or (iv) release any third party from its obligations under any
existing standstill agreement or arrangement relating to a proposed Sale
Transaction or otherwise under any confidentiality or other similar agreement
relating to information material to the Company or any of its Subsidiaries;
provided, however, that if at any time prior to the First Closing, the Board of
-------- -------
Directors of the Company determines in good faith, based on the advice of
outside counsel, that it is necessary to do so in order to comply with its
fiduciary duties to the Company's shareholders under applicable law, the Company
(and its Representatives) may, in response to a proposal for a Sale Transaction
not solicited on or after the date hereof, subject to compliance with Section
4.12(c), (x) furnish information with respect to the Company pursuant to a
customary confidentiality agreement to any Person making such proposal and (y)
participate in negotiations regarding such proposal. The Company shall
immediately cease and cause to be terminated any existing solicitation,
initiation, encouragement, activity, discussion or negotiation with any parties
conducted heretofore by the Company or any Representatives with respect to any
Sale Transaction existing on the date hereof. Without limiting the foregoing,
it is understood that any violation of the restrictions set forth in the
preceding sentence by any Representative of the Company or any of its
Subsidiaries, whether or not such Person is purporting to act on behalf of the
Company or any of its Subsidiaries or otherwise, shall be deemed to be a breach
of this Section 4.12(a) by the Company.
(b) Neither the Board of Directors of the Company nor any committee
thereof shall (x) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Purchaser, the approval (including, without limitation, the
Board of Directors' resolution providing for such approval) of this Agreement,
the Preference Share Authorization or the transactions contemplated hereby or
thereby or (y) approve or recommend, or propose to approve or recommend, any
Sale Transaction, except in the case of clause (x) or (y), if the Board of
Directors of the Company determines in good faith, based on the advice of
outside counsel, that it is necessary to do so in order to comply with its
fiduciary duties under applicable law and then only at or after the termination
of this Agreement pursuant to Section 7.1(c).
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 4.12, the Company promptly shall advise
Purchaser orally and in writing of any request for information or of any
proposed Sale Transaction or any inquiry with respect to or which could
reasonably be expected to lead to any proposed Sale Transaction, the identity of
the Person making any such request, proposed Sale Transaction or inquiry and all
the terms and conditions thereof. The Company will keep Purchaser fully informed
of the status and details (including amendments or proposed amendments) of any
such request, proposed Sale Transaction or inquiry, and Purchaser shall keep
confidential such information provided to it by the Company pursuant to this
Section 4.12(c), subject to any judicial or other legal order, directions or
obligation to disclose such information.
(d) Nothing contained in this Section 4.12 shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by Rule
14d-9 or Rule 14e-2 promulgated under the Exchange Act; provided, however,
neither the Company nor its Board of Directors nor any committee thereof shall,
except as permitted by Section 4.12(b), withdraw or modify, or propose to
withdraw or modify, its approval or recommendation with respect to this
Agreement, the Preference Share Authorization or the transactions contemplated
hereby or thereby (including, without limitation, the Board of Directors'
resolution providing for such approval) or approve or recommend, or propose to
approve or recommend, a Sale Transaction.
Section 4.13 Notification of Certain Matters.
----------------------------------
The Company shall give prompt notice to
Purchaser, and Purchaser shall give prompt notice to the Company, of (a) the
occurrence, or failure to occur, of any event that causes any representation or
warranty contained in any Transaction Document to be untrue or inaccurate in any
material respect at any time from the date of this Agreement to either Closing
Date and (b) any failure of the Company or Purchaser to comply with or satisfy,
in any material respect, any covenant, condition or agreement to be complied
with or satisfied by it under any Transaction Document.
Section 4.14 Board of Directors.
--------------------
The Company shall take, or cause to be taken, such action as may be necessary
or advisable to ensure that simultaneously with the First Closing the Board
shall consist of ten directorships, six of which shall be held by the
individuals listed in Schedule 4.14 of the Company's Disclosure Schedule and
-------------
four of which shall be vacant pending designation by Purchaser of four
individuals to serve as members of the Board of Directors pursuant to the
Shareholders Agreement and, as of the First Closing Date, the Company will
comply with its obligations under Section 4.1 of the Shareholders Agreement.
The Company shall take, or cause to be taken, such action as may be
necessary or advisable to ensure that simultaneously with the First
Closing each of the audit and compensation committees and the executive
committee, if any, of the Board of Directors shall include one of the directors
designated by Purchaser. The right of Purchaser to continue to designate
nominees for election to the Board of Directors shall be subject to the
conditions set forth in the Shareholders Agreement.
Section 4.15 Financial Advisory Agreement; Commitment Fee.
-----------------------------------------------
Simultaneously with the
execution and delivery of this Agreement by the parties hereto, the Company
shall execute and deliver to ▇▇▇▇▇, Muse & Co. Partners, L.P. ("HMCo")
----
counterparts of the Financial Advisory Agreement and Purchaser shall cause HMCo
to execute and deliver to the Company counterparts of the Financial Advisory
Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
----------------------------------
Section 5.1 Conditions Precedent to Each Party's Obligation.
----------------------------------------------------
The respective obligations of Purchaser and the Company to effect the
transactions contemplated hereby are subject to the satisfaction on or
prior to each Closing Date of the following conditions:
(a) Approvals. All Approvals of, or expirations of waiting periods
---------
imposed by, any Governmental Entity necessary for the consummation of the
transactions contemplated by this Agreement shall have been filed, occurred, or
been obtained, including the expiration or termination of any applicable waiting
period under the HSR Act.
(b) No Injunctions or Restraints. No temporary restraining order,
-------------------------------
preliminary or permanent injunction, or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the transactions contemplated hereby shall be in effect.
(c) No Action. No action shall have been taken nor any statute, rule,
----------
or regulation shall have been enacted by any Governmental Entity that makes the
consummation of the transactions contemplated hereby illegal.
(d) NYSE Listing. The Company shall have obtained the NYSE Approval.
-------------
Section 5.2 Conditions Precedent to Obligation of Purchaser at the
----------------------------------------------------------
First Closing. The obligation of Purchaser to effect the transactions
--------------
contemplated by this Agreement to be consummated at the First Closing is subject
to the satisfaction of the following conditions unless waived, in whole or in
part, by Purchaser:
(a) Representations and Warranties. The representations and warranties
------------------------------
of the Company set forth in this Agreement shall be true and correct in all
respects (provided that, for purposes of this Section 5.2(a), any representation
or warranty of the Company contained herein that is qualified by a materiality
standard or a Material Adverse Effect qualification shall be read without regard
to any such qualifications as if such qualifications were not contained therein)
as of the date of this Agreement and as of the First Closing Date as though made
on and as of the First Closing Date except for such failures which, individually
or in the aggregate, have not had and could not reasonably be expected to have a
Material Adverse Effect, and Purchaser shall have received a certificate to the
foregoing effect signed on behalf of the Company and its Subsidiaries by the
chief executive officer or by the chief financial officer of the Company.
(b) Performance of Obligations. The
----------------------------
Company shall have performed in all respects (provided that, for purposes of
this Section 5.2(b), any covenant or agreement that is qualified by a
materiality standard or Material Adverse Effect qualification shall be read
without regard to any such qualification as if such qualification was not
contained therein) all obligations required to be performed by it or them under
this Agreement prior to the First Closing Date (it being understood that the
Registration Statement need not have become effective as of such date) except
for such failures which, individually or in the aggregate, have not had and
could not reasonably be expected to have a Material Adverse Effect, and
Purchaser shall have received a certificate to such effect signed on behalf of
the Company and its Subsidiaries by the chief executive officer or by the chief
financial officer of the Company.
(c) Consents Under Agreements. Purchaser shall have been furnished
---------------------------
with evidence of (i) the consent or approval of each person that is a party to a
Material Oil and Gas Contract (including evidence of the payment or any required
payment) and whose consent or approval shall be required in order to permit the
consummation of each of the transactions contemplated by this Agreement or to
prevent a breach of such Contract or the creation of a right to terminate such
Contract, (ii) all consents or approvals required under the Credit Agreements,
the Indenture and the Senior Notes with respect to the consummation of each of
the transactions contemplated by this Agreement or necessary to prevent a breach
of any such Contracts or instruments and (iii) all other consents or approvals
required to be obtained by the Company or any of its Subsidiaries with respect
to the consummation of each of the transactions contemplated by this Agreement
the failure of which to obtain reasonably could be expected to result in a
Material Adverse Effect, and each such consent or approval shall be
unconditioned.
(d) Legal Opinions. Purchaser shall have received (i) from ▇▇▇▇▇▇
---------------
Holland, general counsel of the Company and its Subsidiaries, an opinion dated
the First Closing Date, in substantially the form attached as Exhibit F-1
-----------
hereto, (ii) from ▇. ▇. ▇▇▇▇▇▇ & Co., Cayman counsel to the Company and its
Subsidiaries, or other counsel to the Company and its Subsidiaries reasonably
acceptable to Purchaser an opinion dated the First Closing Date, in
substantially the form attached as Exhibit F-2 hereto, (iii) from ▇▇▇▇▇▇ &
------------
▇▇▇▇▇▇ L.L.P., corporate counsel to the Purchaser, or other counsel to Purchaser
reasonably acceptable to Purchaser an opinion dated the First Closing Date, as
to the enforceability of this Agreement and the Shareholders Agreement, in form
and substance reasonably satisfactory to Purchaser and (iv) from Hunter &
Hunter, Cayman counsel to Purchaser, an opinion dated the First Closing Date, in
substantially the form attached as Exhibit F-3 hereto, each of which opinions,
-----------
if requested by Purchaser, shall expressly provide that they may be relied upon
by Purchaser's lenders, underwriters, or other sources of financing with respect
to the transactions contemplated hereby.
(e) Closing Deliveries. All documents, instruments, certificates or
-------------------
other items required to be delivered by the Company pursuant to Section 6.2(b)
shall have been delivered.
(f) No Issuance of Securities. The Company shall have complied in all
--------------------------
respects with the covenants set forth in Section 4.6(b)(iii).
(g) Preferred Stock Authorization. The Board shall have adopted and
-------------------------------
approved the Preferred Stock Authorization in accordance with the Companies Laws
of the Cayman Islands.
Section 5.3 Conditions Precedent to Obligations of Company at the First
-----------------------------------------------------------
Closing. The obligation of the Company to effect the transactions contemplated
-------
by this Agreement to be consummated at the First Closing is subject to the
satisfaction of the following conditions unless waived, in whole or in part, by
the Company:
(a) Representations and Warranties. The representations and warranties
------------------------------
of Purchaser set forth in this Agreement shall be true and correct in all
respects (provided that, for purposes of this Section 5.3(a), any representation
or warranty of Purchaser contained herein that is qualified by a materiality
standard or a Material Adverse Effect qualification shall be read without regard
to any such qualifications as if such qualifications were not contained therein)
as of the date of this Agreement and as of the First Closing Date as though made
on and as of the First Closing Date except for such failures which, individually
or in the aggregate, have not had and could not reasonably be expected to have a
Material Adverse Effect, and the Company shall have received a certificate to
the foregoing effect signed on behalf of Purchaser by the chief executive
officer or by the chief financial officer of Purchaser.
(b) Performance of Obligations of Purchaser.
-------------------------------------------
Purchaser shall have performed in all respects
(provided that, for purposes of this Section 5.3(b), any covenant or agreement
that is qualified by a materiality standard shall be read without regard to any
such qualification as if such qualification was not contained therein) the
obligations required to be performed by it under this Agreement prior to the
First Closing Date except for such failures which, individually or in the
aggregate, have not had and could not reasonably be expected to have a Material
Adverse Effect, and the Company shall have received a certificate to such effect
signed on behalf of Purchaser by the chief executive officer or by the chief
financial officer of Purchaser.
(c) Closing Deliveries. All documents, instruments, certificates or
-------------------
other items required to be delivered by Purchaser pursuant to Section 6.2(a)
shall have been delivered.
Section 5.4 Conditions Precedent to Obligation of Purchaser at the
----------------------------------------------------------
Second Closing. The obligation of Purchaser to effect the transaction
---------------
contemplated by this Agreement to be consummated at the Second Closing is
subject to the following conditions unless waived, in whole or in part, by
Purchaser:
(a) Consummation of First Closing. The First Closing shall have
--------------------------------
occurred prior to the Second Closing Date.
(b) Completion of Rights Offering. The Rights Offering shall have
--------------------------------
commenced and the time periods for basic and oversubscription rights shall have
expired and the number of Unsubscribed Shares shall have been determined.
(c) Representations and Warranties. The representations and warranties
------------------------------
of the Company set forth in this Agreement shall be true and correct in all
respects (provided that, for purposes of this Section 5.4(c), any representation
or warranty of the Company contained herein that is qualified by a materiality
standard or a Material Adverse Effect qualification shall be read without regard
to any such qualifications as if such qualifications were not contained therein)
as of the date of this Agreement and as of the Second Closing Date as though
made on and as of the Second Closing Date except for such failures which,
individually or in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect, and Purchaser shall have received a
certificate to the foregoing effect signed on behalf of the Company and its
Subsidiaries by the chief executive officer or by the chief financial officer of
the Company.
(d) Performance of Obligations.
----------------------------
The Company shall have performed in all respects (provided that, for purposes of
this Section 5.4(d), any covenant or agreement that is qualified by a
materiality standard or Material Adverse Effect qualification shall be read
without regard to any such qualification as if such qualification was not
contained therein) all obligations required to be performed by it or them under
this Agreement prior to the Second Closing Date except for such failures which,
individually or in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect, and Purchaser shall have received a
certificate to such effect signed on behalf of the Company and its Subsidiaries
by the chief executive officer or by the chief financial officer of the Company.
(e) Legal Opinions. Purchaser shall have received (i) from ▇▇▇▇▇▇
---------------
Holland, general counsel of the Company and its Subsidiaries, an opinion dated
the Second Closing Date, in substantially the form attached as Exhibit F-1
-----------
hereto and (ii) from ▇. ▇. ▇▇▇▇▇▇ & Co., Cayman counsel to the Company and its
Subsidiaries, or other counsel to the Company reasonably acceptable to
Purchaser, an opinion dated the Second Closing Date, in substantially the form
attached as Exhibit F-2 hereto, (iii) from ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., corporate
------------
counsel to the Company, or other counsel to Purchaser reasonably acceptable to
Purchaser, an opinion dated the Second Closing Date, as to the enforceability of
this Agreement and the Shareholders Agreement, in form and substance reasonably
satisfactory to Purchaser and (iv) from Hunter & Hunter, Cayman counsel to
Purchaser, an opinion dated the Second Closing Date, in substantially the form
attached as Exhibit F-3 hereto, each of which opinions, if requested by
------------
Purchaser, shall expressly provide that they may be relied upon by Purchaser's
lenders, underwriters, or other sources of financing with respect to the
transactions contemplated hereby.
(f) Closing Deliveries. All documents, instruments, certificates or
-------------------
other items required to be delivered by the Company pursuant to Section 6.3(b)
shall have been delivered.
(g) Board Designees. Four individuals designated by Purchaser pursuant
---------------
to Section 4.1 of the Shareholders Agreement to serve as members of the Board of
Directors shall have been duly elected or appointed to the Board of Directors
and shall not have been removed other than at the direction of Purchaser.
Section 5.5 Conditions Precedent to Obligations of Company at the
----------------------------------------------------------
Second Closing. The obligation of the Company to effect the transactions
---------------
contemplated by this Agreement to be consummated at the Second Closing is
subject to the satisfaction of the following conditions unless waived, in whole
or in part, by the Company.
(a) Consummation of First Closing. The First Closing shall have
--------------------------------
occurred prior to the Second Closing Date.
(b) Completion of Rights Offering. The Rights Offering shall have
--------------------------------
commenced and expired and the number of Unsubscribed Shares shall have been
determined.
(c) Representations and Warranties. The representations and warranties
------------------------------
of Purchaser set forth in this Agreement shall be true and correct in all
material respects (provided that, for purposes of this Section 5.5(c), any
representation or warranty of Purchaser contained herein that is qualified by a
materiality standard or a Material Adverse Effect qualification shall be read
without regard to any such qualification as if such qualifications were not
contained therein) as of the date of this Agreement and as of the Second Closing
Date as though made on and as of the Second Closing Date except for such
failures which, individually or in the aggregate, have not had and could not
reasonably be expected to have a Material Adverse Effect, and the Company shall
have received a certificate to the foregoing effect signed on behalf of
Purchaser by the chief executive officer or by the chief financial officer of
Purchaser.
(d) Performance of Obligations of Purchaser.
-------------------------------------------
Purchaser shall have performed in all material
respects (provided that, for purposes of this Section 5.5(d), any covenant or
agreement that is qualified by a materiality standard shall be read without
regard to any such qualifications as if such qualification was not contained
therein) the obligations required to be performed by it under this Agreement
prior to the Second Closing Date except for such failures which, individually or
in the aggregate, have not had and could not reasonably be expected to have a
Material Adverse Effect, and the Company shall have received a certificate to
such effect signed on behalf of Purchaser by the chief executive officer or by
the chief financial officer of Purchaser.
(e) Closing Deliveries. All documents, instruments, certificates or
-------------------
other items required to be delivered by Purchaser pursuant to Section 6.3(a)
shall have been delivered.
ARTICLE VI
CLOSINGS
--------
Section 6.1 Closings. Subject to the satisfaction or
--------
waiver of the conditions set forth in Article V, the purchase and sale of the
Shares to be purchased by Purchaser hereunder will take place at two closings
(the "Closings"). The closing of the purchase and sale of the Initial Shares
--------
pursuant to Section 2.1(a)(i) (the "First Closing") and the closing of the
--------------
purchase and sale of the Remaining Shares pursuant to Section 2.1(a)(ii) and the
Rights Offering (the "Second Closing") shall occur (a) at the offices of ▇▇▇▇▇▇
--------------
& ▇▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, at 10:00
a.m., local time, on the third Business Day following the satisfaction or waiver
(subject to applicable Law) of each of the conditions to the obligations of the
parties to effect the transactions to occur at each such Closing as set forth in
Sections 5.1, 5.2, 5.3, 5.4 and 5.5, respectively; provided that Purchaser may,
--------
at Purchaser's option, extend either of the Closing Dates up to thirteen (13)
Business Days after such date or (b) at such other location and time as may be
mutually agreed upon by the parties hereto. The date on which the First Closing
is required to take place is herein referred to as the "First Closing Date" and
------------------
the date on which the Second Closing is required to take place is herein
referred to as the "Second Closing Date." All closing transactions at the First
-------------------
Closing shall be deemed to have occurred simultaneously, and all closing
transactions at the Second Closing shall be deemed to have occurred
simultaneously.
Section 6.2 Actions to Occur at the First Closing.
--------------------------------------
(a) At the First Closing, Purchaser shall deliver to the Company the
following:
(i) Purchase Price. An amount equal to the Purchase Price for the
---------------
Initial Shares in accordance with Article II hereof;
(ii) Shareholders Agreement. Counterparts of the Shareholders
-----------------------
Agreement executed by Purchaser;
(iii) Monitoring Agreement. Counterparts of the Monitoring Agreement
---------------------
executed by HMCo; and
(iv) Certificates. The certificates described in Sections 5.3(a) and
------------
5.3(b).
(b) At the First Closing, the Company shall pay to HMCo the amount of
$7,000,000 payable pursuant to the Financial Advisory Agreement as referred to
in Section 9.5(d) and shall deliver to Purchaser (or to its designee as
indicated otherwise) the following:
(i) Share Certificates. Certificates representing the Initial Shares,
-------------------
duly endorsed in blank or accompanied by stock powers duly endorsed in blank,
and otherwise in proper form for transfer;
(ii) Shareholders Agreement. Counterparts of the Shareholders
-----------------------
Agreement executed by the Company;
(iii) Monitoring Agreement. Counterparts of the Monitoring Agreement
---------------------
executed by the Company;
(iv) Funding Fee. The amount of $2,551,500 payable pursuant to Section
-----------
9.5(d), paid to HMCo by wire transfer of immediately available funds to an
account of HMCo (the number for which account shall have been furnished to the
Company at least two Business Days prior to the Closing Date);
(v) Purchaser's Expenses. An amount equal to Purchaser's Expenses
---------------------
incurred through the First Closing Date in connection with the transactions
contemplated hereby as provided in Section 9.5(a), by wire transfer of
immediately available funds to an account of Purchaser (the amount of such costs
and expenses and the number for which account shall have been furnished to the
Company at least two Business Days prior to the Closing Date);
(vi) Certificates. The certificates described in Sections 5.2(a) and
------------
5.2(b);
(vii) Consents Under Agreements. The original of each consent or
---------------------------
approval, if any, pursuant to Section 5.2(c); and
(viii) Legal Opinions. The opinions of counsel referred to in Section
---------------
5.2(d).
Section 6.3 Actions to Occur at the Second Closing.
--------------------------------------
(a) At the Second Closing, Purchaser shall deliver to the Company the
following:
(i) Purchase Price. An amount equal to the Purchase Price for the
---------------
Remaining Shares in accordance with Article II hereof; and
(ii) Certificates. The certificates described in Sections 5.5(a) and
------------
5.5(b).
(b) At the Second Closing, the Company shall deliver to Purchaser (or
to its designee as indicated otherwise) the following:
(i) Share Certificates. Certificates representing the Remaining
-------------------
Shares, duly endorsed in blank or accompanied by stock powers duly endorsed in
blank, and otherwise in proper form for transfer;
(ii) Funding Fee. The amount of 2% multiplied by the product of (A)
------------
$70.00 and (B) the number of Remaining Shares, as provided in Section 9.5(d),
paid to HMCo by wire transfer of immediately available funds to an account of
HMCo (the number for which account shall have been furnished to the Company at
least two Business Days prior to the Closing Date);
(iii) Purchaser's Expenses. An amount equal to Purchaser's Expenses
---------------------
incurred between the First Closing Date and the Second Closing Date as provided
in Section 9.5(a), by wire transfer of immediately available funds to an account
of Purchaser (the amount of such costs and expenses and the number for which
account shall have been furnished to the Company at least two Business Days
prior to the Closing Date);
(iv) Certificates. The certificates described in Sections 5.4(c) and
------------
5.4(d); and
(v) Legal Opinions. The opinions of counsel referred to in Section
---------------
5.4(e).
ARTICLE VII
TERMINATION
-----------
Section 7.1 Termination. This Agreement may be
-----------
terminated prior to either Closing:
(a) by mutual consent of Purchaser and the Company;
(b) by either Purchaser or the Company:
(i) in the event of a breach by the other party of any representation,
warranty, covenant or agreement contained in this Agreement which (A) would give
rise to the failure of a condition set forth in Section 5.2(a) or 5.2(b), with
respect to the First Closing, or Section 5.3(a) or 5.3(b), with respect to the
Second Closing, as applicable, and (B) cannot be cured or, if curable, has not
been cured within 20 days (the "Cure Period") following receipt by the breaching
-----------
party of written notice of such breach (it being acknowledged and agreed that
there shall not be a Cure Period for breaches of the covenants set forth in
Section 4.12);
(ii) if a court of competent jurisdiction or other Governmental Entity
shall have issued an order, decree, or ruling or taken any other action (which
order, decree, or ruling Purchaser and the Company shall use all commercially
reasonable efforts to lift), in each case permanently restraining, enjoining, or
otherwise prohibiting the transactions contemplated by this Agreement, and such
order, decree, ruling, or other action shall have become final and
nonappealable; provided, however, that the right to terminate this Agreement
-------- -------
under this clause (ii) shall not be available to any party whose breach of this
Agreement has been the cause of, or resulted in, such order, decree, ruling or
other action;
(iii) if the First Closing shall not have occurred by the later of (A)
October 31, 1998, as such date may be extended by Purchaser pursuant to Section
6.1(a), and (B) the date to which the First Closing Date is extended pursuant to
Section 6.1(b); provided, however, that the right to terminate this Agreement
under this clause (iii) shall not be available to any party whose breach of this
Agreement has been the cause of, or resulted in, the failure of the First
Closing to occur on or before such date; or
(iv) if the Second Closing shall not have occurred by the later of (A)
50 Business Days after the date on which the Registration Statement is declared
effective under the Securities Act, but in no event later than February 1, 1999,
as such date may be extended by Purchaser pursuant to Section 6.1(a), and (B)
the date to which the Second Closing Date is extended pursuant to Section 6.1;
provided, however, that the right to terminate this Agreement under this clause
(iv) shall not be available to any party whose breach of this Agreement has been
the cause of, or resulted in, the failure of the Second Closing to occur on or
before such date;
(c) by the Company if (i) the Board of Directors of the Company shall
have determined in good faith, based on the advice of outside counsel, that it
is necessary, in order to comply with its fiduciary duties to the Company's
shareholders under applicable law, to terminate this Agreement and to enter into
an agreement with respect to or to consummate a transaction constituting a Sale
Transaction, and (ii) the Company shall have given at least five Business Days
prior written notice to Purchaser advising Purchaser that the Company has
received a bona fide proposal for a Sale Transaction from a third party,
specifying the material terms and conditions of such proposal (including the
identity of the third party) and the material terms and conditions of any
agreements or arrangements to be entered into in connection with a Sale
Transaction and that the Company intends to terminate this Agreement in
accordance with this Section 7.1(c); provided that the Company may not effect
--------
such termination pursuant to this Section 7.1(c) unless (i) the Company shall
not have breached Section 4.12 and (ii) the Company has contemporaneously with
such termination tendered payment to Purchaser, or its designee, of the
Termination Fee and the reimbursement of Purchaser's Expenses (if and to the
extent that Purchaser has provided to the Company documentation reasonably
acceptable to the Company in support of the amounts claimed) that is due
Purchaser or its designee pursuant to Section 9.5; or
(d) by Purchaser if:
(i) the Board shall have recommended to the shareholders of the Company
any Sale Transaction, other than a proposal or offer by Purchaser or any of its
Affiliates, or shall have resolved to do so; or
(ii) a tender offer or exchange offer for 50% or more of the
outstanding shares of Common Stock or voting securities representing 50% or more
of the voting power of the outstanding capital stock of the Company (giving
effect to the conversion of outstanding 8% Preference Shares to Common Stock at
the rate which the 8% Preference Shares are then convertible into shares of
Common Stock) is commenced (other than by the Company or its Affiliates) and the
Board of Directors of the Company fails to timely recommend against the
stockholders of the Company tendering their shares into such tender offer or
exchange offer.
provided that Purchaser in exercising its termination rights hereunder may
condition the effectiveness of such termination upon receipt of the Termination
Fee and reimbursement of Purchaser's Expenses (if and to the extent that
Purchaser has provided to the Company documentation reasonably acceptable to the
Company in support of the amounts claimed) that are due Purchaser or its
designee pursuant to Section 9.5.
The right of any party hereto to terminate this Agreement pursuant to this
Section 7.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers, directors,
employees, accountants, consultants, legal counsel, agents, or other
representatives whether prior to or after the execution of this Agreement.
Section 7.2 Effect of Termination.
---------------------
In the event of the termination of this Agreement, written notice thereof shall
forthwith be given to the other party specifying the provision hereof pursuant
to which such termination is made, and this Agreement (except for the provisions
of this Section 7.2, Article VIII and Sections 9.4, 9.5, 9.6, 9.9, 9.10, 9.12
and 9.13, which shall survive such termination) shall forthwith become null and
void. Subject to the provisions of Section 9.5, in the event of a termination
of this Agreement by either the Company or Purchaser as provided above, there
shall be no liability on the part of the Company or Purchaser, except for
liability arising out of a wilful breach of, or misrepresentation under, this
Agreement (but in no event shall any party hereto be entitled to recover
punitive damages).
ARTICLE VIII
INDEMNIFICATION
---------------
Section 8.1 Indemnification of Purchaser.
----------------------------
Subject to the provisions of this Article VIII, from and after the First Closing
Date the Company agrees to indemnify and hold harmless the Purchaser Indemnified
Parties from and against any and all Purchaser Indemnified Costs.
Section 8.2 Indemnification of Company.
----------------------------
Subject to the provisions of this Article VIII, from and after the First Closing
Date Purchaser agrees to indemnify and hold harmless the Company from and
against any and all Company Indemnified Costs.
Section 8.3 Defense of Third-Party Claims.
-------------------------------
An Indemnified Party shall give prompt written notice to any person who
is obligated to provide indemnification hereunder (an "Indemnifying Party") of
the commencement or assertion of any action, proceeding, demand, or claim by a
third party (collectively, a "third-party action") in respect of which such
Indemnified Party shall seek indemnification hereunder. Any failure so to
notify an Indemnifying Party shall not relieve such Indemnifying Party from any
liability that it, he, or she may have to such Indemnified Party under this
Section 8.3 unless the failure to give such notice materially and adversely
prejudices such Indemnifying Party. The Indemnifying Party shall have the right
to assume control of the defense of, settle, or otherwise dispose of such
third-party action on such terms as it deems appropriate; provided, however,
that:
(a) The Indemnified Party shall be entitled, at its own expense, to
participate in the defense of such third-party action (provided, however, that
the Indemnifying Party shall pay the attorneys' fees of one counsel (provided
that if any such third-party action is brought in a jurisdiction other than
Texas, the Indemnifying Party shall also pay the attorney's fees of one local
counsel) to the Indemnified Party if (i) the employment of separate counsel
shall have been authorized in writing by any such Indemnifying Party in
connection with the defense of such third-party action, (ii) the Indemnifying
Parties shall not have employed counsel reasonably satisfactory to the
Indemnified Party to have charge of such third-party action, (iii) counsel to
the Indemnified Party shall have advised the Indemnified Party that there are
defenses available to the Indemnified Party that are different from or
additional to those available to the Indemnifying Party and that it is advisable
to have those defenses asserted on behalf of Indemnified Party by separate
counsel, (iv) counsel to the Indemnified Party and the Indemnifying Party shall
have advised their respective clients in writing, with a copy delivered to the
other party, that there is a conflict of interest that could make it
inappropriate under applicable standards of professional conduct to have common
counsel), or (v) the third-party action is a proceeding brought by a shareholder
of the Company (in such shareholder's name or derivatively on behalf of the
Company) in respect of the transactions contemplated by this Agreement;
(b) The Indemnifying Party shall obtain the prior written approval of
the Indemnified Party (not to be unreasonably withheld) before entering into or
making any settlement, compromise, admission, or acknowledgment of the validity
of such third-party action or any liability in respect thereof if, pursuant to
or as a result of such settlement, compromise, admission, or acknowledgment,
injunctive or other equitable relief would be imposed against the Indemnified
Party or if, in the reasonable opinion of the Indemnified Party, such
settlement, compromise, admission, or acknowledgment could reasonably be
expected to have a material adverse effect on its business;
(c) No Indemnifying Party shall, without the consent of each
Indemnified Party (which consent shall not be unreasonably withheld), consent to
the entry of any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by each claimant or plaintiff to each
Indemnified Party of a release from all liability in respect of such third-party
action; and
(d) The Indemnifying Party shall not be entitled to control (but shall
be entitled to participate at its own expense in the defense of), and the
Indemnified Party shall be entitled to have sole control over, the defense or
settlement, compromise, admission, or acknowledgment of any third-party action
(i) as to which the Indemnifying Party fails to assume the defense within a
reasonable length of time; or (ii) to the extent the third-party action seeks an
order, injunction, or other equitable relief against the Indemnified Party which
could reasonably be expected to materially adversely affect the business,
operations, assets, or financial condition of the Indemnified Party; provided,
however, that the Indemnified Party shall make no settlement, compromise,
admission, or acknowledgment that would give rise to liability on the part of
any Indemnifying Party without the prior written consent of such Indemnifying
Party.
The parties hereto shall extend reasonable cooperation in connection with the
defense of any third-party action pursuant to this Article VIII and, in
connection therewith, shall furnish such records, information, and testimony and
attend such conferences, discovery proceedings, hearings, trials, and appeals as
may be reasonably requested.
Section 8.4 Direct Claims. In any case in which an
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Indemnified Party seeks indemnification hereunder which is not subject to
Section 8.3 because no third-party action is involved, the Indemnified Party
shall notify the Indemnifying Party in writing of any Indemnified Costs which
such Indemnified Party claims are subject to indemnification under the terms
hereof. The failure of the Indemnified Party to exercise promptness in such
notification shall not amount to a waiver of such claim unless the resulting
delay materially prejudices the position of the Indemnifying Party with respect
to such claim.
Section 8.5 Special provisions Regarding Indemnity. Notwithstanding
-----------------------------------------
the other terms of this Agreement:
(a) Purchaser shall not be entitled to recover any Purchaser
Indemnified Costs and the Company shall not be entitled to recover any Company
Indemnified Costs as a result of any breach of any representation or warranty by
the other party unless, in either such case, the aggregate amount thereof
exceeds $2,500,000, in which event the party entitled to indemnification with
respect thereto shall be entitled to recover only the amount in excess of
$2,500,000; and provided, however, that the limitations of this Section 8.5(a)
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shall not apply to any Purchaser Indemnified Cost resulting from or relating to
(i) any misrepresentation or breach of the representations and warranties
contained in Section 3.1(c) or (ii) the Company's knowing or willful
misrepresentations or breaches of representations or warranties made as a part
of or contained in this Agreement.
(b) For purposes of determining if there has been any inaccuracy or
breach of a representation or warranty for purposes of calculating Purchaser
Indemnified Costs or Company Indemnified Costs, the representations and
warranties contained herein that are qualified by a materiality standard or a
Material Adverse Effect or Material Adverse Change qualification shall be read
without regard to any such qualifications as if such qualifications were not
contained therein.
(c) The Company's maximum liability for Purchaser Indemnified Costs
shall be the Purchase Price
Section 8.6 Tax Related Adjustments.
-----------------------
The Company and Purchaser agree that any payment of Indemnified Costs made
hereunder will be treated by the parties on their Tax Returns as an
adjustment to the Purchase Price. If, notwithstanding such treatment by the
parties, any payment of Indemnified Costs is determined to be taxable income
rather than adjustment to Purchase Price, then the Indemnifying Party shall
indemnify the Indemnified Party for any Taxes payable by the Indemnified Party
or any subsidiary by reason of the receipt of such payment (including any
payments under this Section 8.5), determined at an assumed marginal tax
rate equal to the highest marginal tax rate then in effect for corporate
taxpayers in the relevant jurisdiction.
ARTICLE IX
MISCELLANEOUS
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Section 9.1 Survival of Provisions.
-----------------------
(a) The representations and warranties of the Company and Purchaser
made herein or in any other Transaction Document and the covenants of the
Company and Purchaser to be complied with on or prior to either Closing Date
shall remain operative and in full force and effect pursuant to their terms,
regardless of (x) any investigation made by or on behalf of Purchaser or the
Company, as the case may be, or (y) acceptance of any of the Shares and payment
by Purchaser therefor, until the first anniversary of the Second Closing Date.
(b) The covenants and agreements of the Company and Purchaser contained
in this Agreement to the extent that, by their terms, they are to be performed
or complied with after either of the Closing Dates, including without limitation
the Indemnification Agreement set forth in Article VIII hereof, will survive
until the later of (i) the first anniversary of the Second Closing Date or (ii)
the expiration of all applicable statute of limitations (including all periods
of extension, whether automatic or permissive) affecting or applicable to any
such covenant or agreement.
(c) Any claim for indemnification for a breach of a representation,
warranty or covenant hereunder shall be brought within the applicable survival
period specified in Section 9.1(a) or Section 9.1(b) hereof. If a claim for
indemnification is made in accordance with Article VIII hereof before the
expiration of the applicable survival period set forth in Section 9.1(a) or
Section 9.1(b), as applicable, then (not withstanding such survival period) the
representation, warranty, covenant or agreement applicable to such claim will
survive for purposes of such claim until the resolution of such claim by final,
nonappealable judgment or settlement, but only with respect to such claim.
Section 9.2 No Waiver; Modification in Writing.
--------------------------------------
No failure or delay on the part of the Company or a
Purchaser in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. Without limiting the rights that any party
may have for fraud under common law, the remedies provided for herein are
cumulative and are the exclusive remedies available to the Company or Purchaser
at law or in equity. The provisions of this Agreement, including the provisions
of this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given without the
written consent of the Company, on the one hand, and Purchaser or its permitted
assigns, on the other hand, provided that notice of any such waiver shall be
given to each party hereto as set forth below. Any amendment, supplement or
modification of or to any provision of this Agreement, or any waiver of any
provision of this Agreement, shall be effective only in the specific instance
and for the specific purpose for which made or given. Except where notice is
specifically required by this Agreement, no notice to or demand on any party
hereto in any case shall entitle the other party to any other or further notice
or demand in similar or other circumstances.
Section 9.3 Specific Performance.
---------------------
The parties recognize that in the event the Company should refuse to perform
under the provisions of this Agreement or any other Transaction Document,
monetary damages alone will not be adequate. Purchaser shall therefore be
entitled, in addition to any other remedies which may be available, including
money damages, to obtain specific performance of the terms of this Agreement.
In the event of any action to enforce this Agreement or any other
Transaction Document specifically, the Company hereby waive the defense
that there is an adequate remedy at law.
Section 9.4 Severability. If any term or other
------------
provision of this Agreement is invalid, illegal, or incapable of being enforced
by any rule of applicable law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
herein are not affected in any manner materially adverse to any party. Upon
such determination that any term or other provision is invalid, illegal, or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated herein are consummated as originally contemplated to
the fullest extent possible.
Section 9.5 Fees and Expenses.
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(a) At each Closing pursuant to Sections 6.2(b)(v) and 6.3(b)(iii), the
Company shall pay to Purchaser an amount equal to the Purchaser's Expenses
through the applicable Closing Date in connection with the transactions
contemplated by this Agreement.
(b) Concurrently with a termination of this Agreement by the Company or
Purchaser pursuant to Sections 7.1(b)(ii), 7.1(b)(iii) or 7.1(b)(iv) (and as a
condition to any such termination by the Company), by the Company pursuant to
Section 7.1(c) (and as a condition to any such termination by the Company) or by
Purchaser pursuant to Section 7.1(b)(i) or 7.1(d), the Company shall pay to
Purchaser by wire transfer of immediately available funds an amount equal to the
Purchaser's Expenses. If the Company terminates this Agreement pursuant to
Section 7.1(b)(i), then Purchaser shall not be entitled to reimbursement of the
Purchaser's Expenses. The payment of Purchasers Expenses pursuant to this
Section 9.5(b) shall not in any way limit Purchasers rights against the Company
as permitted under Section 7.2 of this Agreement.
(c) Concurrently with a termination of this Agreement by the Company
pursuant to Section 7.1(c), the Company shall pay to Purchaser by wire transfer
of immediately available funds an amount equal to $30,000,000 (the "Termination
-----------
Fee").
---
(d) If this Agreement is terminated by the Company or Purchaser
pursuant to Sections 7.1(b)(ii), 7.1(b)(iii) or 7.1(b)(iv) or by Purchaser
pursuant to Section 7.1(b)(i) as a result of non-willful breach of this
Agreement by the Company or pursuant to Section 7.1(d), and within one year
after such termination date (i) definitive documentation with respect to a Sale
Transaction has been entered into or (ii) 50% or more of the outstanding Common
Stock or voting securities representing 50% or more of the voting power of the
outstanding capital stock of the Company (giving effect to the conversion of
outstanding 8% Preference Shares to Common Stock at the rate at which the 8%
Preference Shares are then convertible into shares of Common Stock) has been
acquired pursuant to a tender or exchange offer in connection with a proposed
Sale Transaction or, if a tender or exchange offer in connection with a proposed
Sale Transaction has been commenced prior to but has not expired as of such date
that is one year after such termination of this Agreement, 50% or more of the
outstanding Common Stock or voting securities representing 50% or more of the
voting power of the outstanding capital stock of the Company (giving effect to
the conversion of outstanding 8% Preference Shares to Common Stock at the rate
at which the 8% Preference Shares are then convertible into shares of Common
Stock) is acquired pursuant to such tender or exchange offer, then the Company
shall pay or shall cause to be paid, contemporaneously with the consummation of
such Sale Transaction, to Purchaser, or its designee, an amount equal to the
Termination Fee by wire transfer of immediately available funds.
Notwithstanding the forgoing, Purchaser shall not be entitled to the Termination
Fee pursuant to this Section 9.5(d) if this Agreement is terminated pursuant to
Section 7.1(b)(iii) and the sole unsatisfied condition to Purchaser's obligation
to close shall have been the failure of the condition in Section 5.1(a) to have
been satisfied as a result of the failure to obtain approval under the HSR Act
or the failure of the expiration or termination of any applicable waiting period
under the HSR Act to have expired.
(e) Pursuant to the terms of the Financial Advisory Agreement, the
Company will pay to HMCo a transaction fee equal to $7,000,000 by wire transfer
of immediately available funds contemporaneously with the earlier to occur of
(i) the First Closing Date or (ii) the termination of this Agreement for any
reason. At the First Closing, the Company also shall pay to HMCo a transaction
fee in the amount of $2,551,500 by wire transfer of immediately available funds.
In addition, at the Second Closing, the Company shall pay HMCo a transaction fee
equal to two percent of the Purchase Price paid by Purchaser at such Second
Closing, including the Purchase Price paid by Purchaser for any Shares purchased
in the Rights Offering.
(f) The payment of Purchaser's Expenses and the Termination Fee shall
be paid by the Company without reservation of rights or protests and the Company
upon making such payment shall be deemed to have released and waived any and all
rights that it may have to recover such amounts. Nothing contained in this
Section 9.5 shall limit Purchasers rights against the Company in the event of
the termination of this Agreement by Purchaser pursuant to Section 7.1(b)(i) as
a result of a willful breach by the Company of this Agreement.
Section 9.6 Parties in Interest.
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This Agreement shall be binding upon and, except as provided below, inure solely
to the benefit of each party hereto and their successors and assigns, and
nothing in this Agreement, except as set forth in Section 4.11 (which is
expressly intended for the benefit of the parties specified therein and shall be
enforceable by any of such parties or any of their respective heirs and
representatives) and Article VIII (which is intended for the benefit of all
Indemnified Parties), express or implied, is intended to confer upon any other
person any rights or remedies of any nature whatsoever under or by reason of
this Agreement.
Section 9.7 Notices. All notices and other
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communications hereunder shall be in writing and shall be deemed given if
delivered personally or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(a) If to Purchaser, to:
HM 4 Triton, L.P.
c/o Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Company, to:
Triton Energy Limited
c/o Triton Exploration Services, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered, on the date of receipt, if telecopied, three Business Days
after the date of mailing, if mailed by registered or certified mail, return
receipt requested, and one Business Day after the date of sending, if sent by
Federal Express or other recognized overnight courier.
Section 9.8 Counterparts. This Agreement may be
------------
executed and delivered (including by facsimile transmission) in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 9.9 Entire Agreement. This Agreement
----------------
(which term shall be deemed to include the Exhibits and Schedules hereto and the
other certificates, documents and instruments delivered hereunder) and the other
Transaction Documents constitute the entire agreement of the parties hereto and
supersede all prior agreements, letters of intent and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
There are no representations or warranties, agreements, or covenants other than
those expressly set forth in this Agreement and the other Transaction Documents.
Section 9.10 Governing Law. THIS AGREEMENT
--------------
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS, WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAW PROVISIONS. Each of the
parties hereby (a) irrevocably submits to the exclusive jurisdiction of the
United States Federal District Court for the Northern District of Texas, sitting
in Dallas County, Texas, the United States of America, in the event such court
has jurisdiction or, if such court does not have jurisdiction, to any district
court sitting in Dallas County, Texas, the United States of America, for the
purposes of any suit, action or proceeding arising out of or relating to this
Agreement, including any claims for indemnity pursuant to Article VIII hereof,
(b) waives, and agrees not to assert in any such suit, acting or proceeding, any
claim that (i) it is not personally subject to the jurisdiction of such court or
of any other court to which proceedings in such court may be appealed, (ii) such
suit, action or proceeding is brought in an inconvenient forum or (iii) the
venue of such suit, action or proceeding is improper and (c) expressly waives
any requirement for the posting of a bond by the party bringing such suit,
action or proceeding. Each of the parties consents to process being served in
any such suit, action or proceeding by mailing, certified mail, return receipt
requested, a copy thereof to such party at the address in effect for notices
hereunder, and agrees that such services shall constitute good and sufficient
service of process and notice thereof. Nothing in this Section 9.10 shall
affect or limit any right to serve process in any other manner permitted by law.
Section 9.11 Public Announcements.
--------------------
The Company, on the one hand,and Purchaser, on the other, shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or the transactions contemplated
hereby, except for statements required by Law or by any listing agreements with
or rules of any national securities exchange or the National Association of
Securities Dealers, Inc., or made in disclosures reasonably determined as
required to be filed pursuant to the Securities Act of 1933 or the Securities
Exchange Act of 1934.
Section 9.12 Assignment. Neither this Agreement
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nor any of the rights, interests, or obligations hereunder shall be assigned by
any of the parties hereto, whether by operation of Law or otherwise; provided,
however, that upon notice to the Company, (a) Purchaser may assign or delegate
any or all of its rights or obligations under this Agreement to any Affiliate
thereof and (b) nothing in this Agreement shall limit Purchaser's ability to
make a collateral assignment of its rights under this Agreement to any
institutional lender that provides funds to Purchaser without the consent of the
Company. The Company shall execute an acknowledgment of such collateral
assignments in such forms as Purchaser's lenders may from time to time
reasonably request; provided, however, that unless written notice is given to
the Company that any such collateral assignment has been foreclosed upon, the
Company shall be entitled to deal exclusively with Purchaser as to any matters
arising under this Agreement or any of the other agreements delivered pursuant
hereto. In the event of such an assignment, the provisions of this Agreement
shall inure to the benefit of and be binding on Purchaser's assigns. Any
attempted assignment in violation of this Section shall be null and void.
Section 9.13 Director and Officer Liability.
---------------------------------
The directors, officers, partners, members and stockholders
of Purchaser, the Company and their respective Affiliates shall not have any
personal liability or obligation arising under this Agreement (including any
claims that the Company or Purchaser may assert) other than as an assignee of
this Agreement.
Section 9.14 Headings. The headings of this Agreement are for
--------
convenience of reference only and are not part of the substance of
this Agreement.
[The remainder of this page is intentionally left blank.]
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officer as of the date first written above.
TRITON ENERGY LIMITED
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Interim Chief Executive Officer
and General Counsel
HM4 TRITON, L.P.
By: HM Triton G.P., LLC
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President