Document:

exv10w49

 

EXHIBIT 10.49

TEXAS EASTERN PRODUCTS PIPELINE COMPANY, LLC

2002 PHANTOM UNIT PLAN

Effective June 1, 2002

 

 

TEXAS EASTERN PRODUCTS PIPELINE COMPANY, LLC

2002 PHANTOM UNIT PLAN

     WHEREAS, Texas Eastern Products Pipeline Company, LLC, a Delaware
limited liability company (“TEPPCO”), desires to establish the Texas Eastern
Products Pipeline Company, LLC 2002 Phantom Unit Plan (the “Plan”) for certain
key employees so as to offer them a further incentive to increase the earnings
of TEPPCO Partners, L.P.;

     WHEREAS, it is intended that the Plan shall constitute a bonus program
within the meaning of Department of Labor Regulation section 2510.3-2(c) that
is exempt from coverage under the Employee Retirement Income Security Act of
1974, as amended;

     NOW, THEREFORE, TEPPCO adopts the Plan as follows:

 

 

TEXAS EASTERN PRODUCTS PIPELINE COMPANY, LLC

2002 PHANTOM UNIT PLAN

TABLE OF CONTENTS

	 	 	 	 	 	 
	 	 	 	Section
	 	 	 	

	ARTICLE I — PLAN PURPOSE AND TERM
	 	 	 	 
	 	Purpose
	 	 	1.1	 
	 	Effective Date of Plan
	 	 	1.2	 
	ARTICLE II — DEFINITIONS
	 	 	 	 
	 	Account
	 	 	2.1	 
	 	Affiliate
	 	 	2.2	 
	 	Award
	 	 	2.3	 
	 	Award Agreement
	 	 	2.4	 
	 	Board
	 	 	2.5	 
	 	Change in Control
	 	 	2.6	 
	 	Code
	 	 	2.7	 
	 	Committee
	 	 	2.8	 
	 	Employee
	 	 	2.9	 
	 	Fair Market Value
	 	 	2.10	 
	 	Grantee
	 	 	2.11	 
	 	Partnership
	 	 	2.12	 
	 	Phantom Unit
	 	 	2.13	 
	 	Plan
	 	 	2.14	 
	 	Separation From Service
	 	 	2.15	 
	 	TEPPCO
	 	 	2.16	 
	 	Unit
	 	 	2.17	 
	 	Vested Interest
	 	 	2.18	 
	 	Year of Service
	 	 	2.19	 
	ARTICLE III — AWARDS
	 	 	 	 
	 	Granting of Awards
	 	 	3.1	 
	 	Terms of Awards
	 	 	3.2	 
	 	Special Ledger
	 	 	3.3	 
	ARTICLE IV — CALCULATION AND PAYMENT OF BENEFITS
	 	 	 	 
	 	Periodic Payments
	 	 	4.1	 
	 	Terminal Value Payments
	 	 	4.2	 
	 	Form of Payment Under an Award
	 	 	4.3	 
	 	No Interest on Award
	 	 	4.4	 
	 	Adjustments Due to Changes in the Partnership’s Capital Structure
	 	 	4.5	 

-i-

 

	 	 	 	 	 	 
	ARTICLE V — VESTING OF AWARDS
	 	 	 	 
	ARTICLE VI — ADMINISTRATION
	 	 	 	 
	 	General
	 	 	6.1	 
	 	Powers of Committee
	 	 	6.2	 
	 	Committee Discretion
	 	 	6.3	 
	 	Disqualification of Committee Member
	 	 	6.4	 
	ARTICLE VII — AMENDMENT OR TERMINATION OF PLAN
	 	 	 	 
	ARTICLE VIII — FUNDING
	 	 	 	 
	 	Payments Under the Plan Are the Obligation of TEPPCO
	 	 	8.1	 
	 	Grantees Must Rely Solely on the General Credit of TEPPCO
	 	 	8.2	 
	 	Unfunded Arrangement
	 	 	8.3	 
	ARTICLE IV — MISCELLANEOUS
	 	 	 	 
	 	No Employment Obligation
	 	 	9.1	 
	 	Tax Withholding
	 	 	9.2	 
	 	Indemnification of the Committee
	 	 	9.3	 
	 	Gender and Number
	 	 	9.4	 
	 	Headings
	 	 	9.5	 
	 	Other Compensation Plans
	 	 	9.6	 
	 	Rights of Company and Affiliates
	 	 	9.7	 
	 	Nonalienation of Benefits
	 	 	9.8	 
	 	No Rights as an Owner
	 	 	9.9	 
	 	Governing Law
	 	 	9.10	 

-ii-

 

ARTICLE I

PLAN PURPOSE AND TERM

     1.1 Purpose. The Plan is intended to provide those persons who have
substantial responsibility for the management and growth of TEPPCO with
additional incentives to increase the earnings of TEPPCO Partners, L.P.

     1.2 Effective Date of Plan. The Plan is effective June 1, 2002.

I-1

 

ARTICLE II

DEFINITIONS

     The words and phrases defined in this Article shall have the meaning
set out in these definitions throughout the Plan, unless the context in which
any such word or phrase appears reasonably requires a broader, narrower, or
different meaning.

     2.1 “Account” means a bookkeeping ledger maintained by the Committee that
reflects the number of Phantom Units awarded to the Grantee which have not been
redeemed or forfeited.

     2.2 “Affiliate” means an entity that is treated as a single employer together
with TEPPCO for certain employee benefit purposes under section 414 of the
Code.

     2.3 “Award” means a bonus opportunity granted under the Plan.

     2.4 “Award Agreement” means the written agreement between TEPPCO and a
Grantee that sets forth the terms of an Award.

     2.5 “Board” means the board of directors of TEPPCO.

     2.6 “Change in Control” means

               (i)  any person becomes the beneficial owner, directly or in- directly, of
securities of the Partnership representing 66 percent or more of the
Partnership’s then outstanding Units; or

               (ii)  any person becomes the beneficial owner, directly or indirectly, of 50
percent or more of the Units and TEPPCO delivers notice of withdrawal or is
otherwise removed as the general partner of the Partnership; or

               (iii)  the merger or consolidation of the Partnership with one or more
corporations, business trusts, common law trusts or unincorporated businesses,
including, without limitation, a general partnership, a limited partnership or
a limited liability company, pursuant to a written agreement of merger or
consolidation in accordance with Article 16 of the Second Amended and Restated
Agreement of Limited Partnership of TEPPCO Partners, L.P., dated November 30,
1998, as it may be amended from time to time, and TEPPCO delivers notice of
withdrawal or is otherwise removed as the general partner of the Partnership;
or

               (iv)  any person is or becomes the beneficial owner, directly or indirectly, of
securities of TEPPCO representing more than 50 percent of the combined voting
power of TEPPCO’s then outstanding voting securities; or

II-1

 

               (v)  all or substantially all of the assets and business of TEPPCO, the
Partnership, TE Products Pipeline Company, Limited Partnership or TCTM, L.P.
are sold, transferred or assigned to, or otherwise acquired by, any person or
persons; or

               (vi)  the dissolution or liquidation of the Partnership, TE Products Pipeline
Company, Limited Partnership, TCTM, L.P. or TEPPCO; or

               (vii)  the adoption by the Board of a resolution to the effect that any person
has acquired effective control of the business and affairs of TEPPCO, the
Partnership or TE Products Pipeline Company, Limited Partnership or TCTM, L.P.

		
	 	For purposes of this definition, the term “beneficial owner” shall have the
meaning set forth in Section 13(d) of the Securities Exchange Act of 1934, as
amended, and in the regulations promulgated thereunder. The term “person” shall
mean an individual, corporation, partnership, trust, unincorporated
organization, association or other entity provided that the term “person” shall
not include (a) Duke Energy Corporation (“Duke”), (b) any affiliate of Duke, or
(c) any employee benefit plan maintained by Duke or any affiliate of Duke. For
purposes of this definition, the term “affiliate” or “affiliates” shall mean
when used with respect to a specified person or entity, any other person or
entity directly or indirectly controlled by, controlling, or under direct or
indirect common control with the specified person or entity. For the purpose
of this definition, “control” or “controlled” when used with respect to any
specified person or entity means the power to direct the management and
policies of that person or entity whether through the ownership of voting
securities, membership interest or by contract.

     2.7 “Code” means the Internal Revenue Code of 1986, as amended.

     2.8 “Committee” means members of the Compensation Committee of the Board.

     2.9 “Employee” means a person who is employed by TEPPCO as a common law
employee.

     2.10 “Fair Market Value” means the closing price of a Unit as reported on the
New York Stock Exchange, Inc. Composite Transactions Reporting System on the
applicable date, or if there have been no reported sales on such date, on the
last preceding date on which reported sales were effected.

     2.11 “Grantee” means an Employee who has been granted an Award under the Plan.

     2.12 “Partnership” means TEPPCO Partners, L.P., a Delaware limited partnership.

     2.13 “Phantom Units” means a conditional promise by TEPPCO to make payment to a
Grantee in cash, determined by reference to Units and in accordance with the
terms of the Plan and the applicable Award Agreement.

II-2

 

     2.14 “Plan” means the Texas Eastern Products Pipeline Company, LLC 2002 Phantom
Unit Plan, as set forth in this document and as it may be amended from time to
time.

     2.15 “Separation From Service” means the termination of the employment
relationship between the Grantee and TEPPCO and all Affiliates.

     2.16 “TEPPCO” means Texas Eastern Products Pipeline Company, LLC, a Delaware
limited liability company.

     2.17 “Unit” means a limited partnership unit in the Partnership.

     2.18 “Vested Interest” means a Grantee’s nonforfeitable interest in his or her
Award determined in accordance with Article V.

     2.18 “Year of Service” means a consecutive 12-month period that
commences on the date of grant of the applicable Award or an anniversary
thereof.

II-3

 

ARTICLE III

AWARDS

     3.1 Granting of Awards. The Committee may grant to those regular, full-time
salaried employees of TEPPCO as it shall determine Awards under the terms and
conditions of the Plan.

     3.2 Terms of Awards. The terms of each Award shall be specified in an Award
Agreement. An Award Agreement shall specify (a) the number of Phantom Units
subject to the Award, (b) the date on which the Award is granted, and (c) any
other provisions that the Committee deems appropriate which are not
inconsistent with the terms of the Plan.

     3.3 Special Ledger. The Committee shall establish or cause to be established
an appropriate record that will reflect the name of each Grantee and all other
information necessary to properly reflect each Grantee’s Awards made by the
Committee.

III-1

 

ARTICLE IV

CALCULATION AND PAYMENT OF BENEFITS

     4.1 Periodic Payments. Each time a quarterly cash distribution is paid to a
Unit owner, TEPPCO shall pay to the Grantee, an amount equal to the product of
the number of Phantom Units then credited to the Grantee’s Account and the
amount of the cash distribution paid per Unit by the Partnership.

     4.2 Redemption Payments. As soon as administratively practicable after the
Grantee attains a Vested Interest in a Phantom Unit, TEPPCO shall pay the
Grantee an amount equal to the Fair Market Value of a Unit determined as of the
date the Grantee attains a Vested Interest in the Phantom Unit. Upon the
redemption of the Phantom Unit the Phantom Unit shall no longer be credited to
the Grantee’s Account.

     4.3 Form of Payment Under an Award. All payments under Awards shall be in the
form of cash.

     4.4 No Interest on Award. No interest shall be credited with respect to any
Award or any payment under an Award.

     4.5 Adjustments Due to Changes in the Partnership’s Capital Structure. If the
Partnership shall effect a subdivision or consolidation of Units or other
capital readjustment, or other increase or reduction of the number of Units
outstanding, without receiving compensation for it in money, services or
property, then the number of Phantom Units subject to outstanding Awards under
the Plan shall be appropriately adjusted by the Committee in such a manner as
to entitle a Grantee to receive the equivalent compensation he or she would
have received under the Award had there been no event requiring the adjustment.

IV-1

 

ARTICLE V

VESTING OF AWARDS

     A Grantee shall have a Vested Interest in the following percentage of
the number of Phantom Units initially granted under his or her Award (as
adjusted pursuant to Section 4.5);

	 	 	 	 	 
	Number of Years of Service	 	Vested Percentage
	
	 	

	Less than one
	 	 	0	 
	One but less than two
	 	 	10	 
	Two but less than three
	 	 	20	 
	Three but less than four
	 	 	30	 
	Four but less than five
	 	 	40	 
	Five or more
	 	 	100	 

     Except as specified above, a Grantee has no Vested Interest in the Phantom
Units credited to his or her Account; [provided, however, that upon the
occurrence of a Change in Control prior to the Grantee’s Separation From
Service, the Grantee shall have a 100 percent Vested Interest in the Phantom
Units credited to his or her Account]. Upon a Grantee’s Separation From
Service, the Grantee shall not earn any additional Years of Service and to the
extent that the Grantee does not then have a Vested Interest in the Phantom
Units credited to his or her Account such Phantom Units shall be immediately
forfeited.

V-1

 

ARTICLE VI

ADMINISTRATION

     6.1 General. The Plan shall be administered by the Committee. All questions
of interpretation and application of the Plan and Awards shall be subject to
the determination of the Committee. A majority of the members of the Committee
shall constitute a quorum. All determinations of the Committee shall be made
by a majority of its members. Any decision or determination reduced to writing
and signed by a majority of the members shall be as effective as if it had been
made by a majority vote at a meeting properly called and held.

     6.2 Powers of Committee. The Committee shall have the exclusive
responsibility for the general administration of the Plan according to the
terms and provisions of the Plan and will have all the powers necessary to
accomplish those purposes, including but not by way of limitation the right,
power and authority:

                    (a)  to make rules, regulations and administrative guidelines for the
administration of the Plan;

                    (b)  to construe all terms, provisions, conditions and limitations of the Plan;

                    (c)  to correct any defect, supply any omission or reconcile any inconsistency
that may appear in the Plan in the manner and to the extent it deems expedient
to carry the Plan into effect for the greatest benefit of all parties at
interest;

                    (d)  to determine all controversies relating to the administration of the Plan,
including but not limited to:

                              (1)  differences of opinion arising between TEPPCO and a Grantee; and

                              (2)  any question it deems advisable to determine in order to promote the
uniform administration of the Plan for the benefit of all parties at interest;

                    (e)  to determine the Employees who shall participate in the Plan from time to
time;

                    (f)  to determine the number of Phantom Units to be awarded to each Grantee;
and

                    (g)  to determine the terms and conditions, if any, not inconsistent with the
terms of the Plan that are to be placed upon the Award or Awards given to a
particular Grantee.

     6.3 Committee Discretion. The Committee in exercising any power or authority
granted under the Plan or in making any determination under the Plan shall
perform or refrain

VI-1

 

from performing those acts in its sole discretion and
judgment. Any decision made by the Committee or any refraining to act or any
act taken by the Committee in good faith shall be final and binding on all
parties. The Committee’s decisions shall never be subject to de novo review,
but instead shall only be overturned if found to be arbitrary or capricious by
an arbitrator or a court of law.

     6.4 Disqualification of Committee Member. A member of the Committee shall not
vote or act on any Plan matter relating solely to himself.

VI-2

 

ARTICLE VII

AMENDMENT OR TERMINATION OF PLAN

     The Board may amend, terminate or suspend the Plan at any time, in its
sole and absolute discretion. However, no amendment or termination of the Plan
may, without the consent of a Grantee, reduce the Grantee’s right to a payment
under the Plan that he or she is entitled to receive under the terms of the
Plan in effect prior to the amendment or termination.

VII-1

 

ARTICLE VIII

FUNDING

     8.1 Payments Under the Plan Are the Obligation of TEPPCO. Benefits due under
the Plan will be paid by TEPPCO.

     8.2 Grantees Must Rely Solely on the General Credit of TEPPCO. The Plan is
only a general corporate commitment of TEPPCO and each Grantee must rely solely
upon the general credit of TEPPCO for the fulfillment of its obligations
hereunder. Under all circumstances the rights of the Grantee to any asset held
by TEPPCO will be no greater than the rights expressed in the Plan. Nothing
contained in the Plan or an Award will constitute a guarantee by TEPPCO that
the assets of TEPPCO will be sufficient to pay any benefits under the Plan or
would place the Grantee in a secured position ahead of general creditors of
TEPPCO; the Grantees are only unsecured creditors of TEPPCO with respect to
their Plan benefits and the Plan constitutes a mere promise by TEPPCO to make
benefit payments in the future. No specific assets of TEPPCO have been or will
be set aside, or will be pledged in any way for the performance of TEPPCO’s
obligations under the Plan which would remove such assets from being subject to
the general creditors of TEPPCO.

     8.3 Unfunded Arrangement. It is intended that the Plan shall be unfunded for
tax purposes and for purposes of Title of the Employee Retirement Income
Security Act of 1974, as amended.

VIII-1

 

ARTICLE IX

MISCELLANEOUS

     9.1 No Employment Obligation. The granting of any Award shall not constitute
an employment contract, express or implied, nor impose upon TEPPCO or any
Affiliate any obligation to employ or continue to employ the Grantee. The
right of TEPPCO or any Affiliate to terminate the employment of any person
shall not be diminished or affected by reason of the fact that an Award has
been granted to him.

     9.2 Tax Withholding. TEPPCO shall be entitled to deduct from payments made
under an Award or other compensation payable to each Grantee any sums required
by federal, state, or local tax law to be withheld with respect to payments
under the Award.

     9.3 Indemnification of the Committee. TEPPCO shall indemnify each present and
future member of the Committee against, and each member of the Committee shall
be entitled without further act on his or her part to indemnity from TEPPCO
for, all expenses (including attorney’s fees, the amount of judgments and the
amount of approved settlements made with a view to the curtailment of costs of
litigation, other than amounts paid to TEPPCO itself) reasonably incurred by
him or her in connection with or arising out of any action, suit, or proceeding
in which he or she may be involved by reason of his or her being or having been
a member of the Committee, whether or not he or she continues to be a member of
the Committee at the time of incurring the expenses — including, without
limitation, matters as to which he or she shall be finally adjudged in any
action, suit or proceeding to have been found to have been negligent in the
performance of his or her duty as a member of the Committee. However, this
indemnity shall not include any expenses incurred by any member of the
Committee in respect of matters as to which he or she shall be finally adjudged
in any action, suit or proceeding to have been guilty of gross negligence or
willful misconduct in the performance of his or her duty as a member of the
Committee. In addition, no right of indemnification under the Plan shall be
available to or enforceable by any member of the Committee unless, within 60
days after institution of any action, suit or proceeding, he or she shall have
offered TEPPCO, in writing, the opportunity to handle and defend same at its
own expense. This right of indemnification shall inure to the benefit of the
heirs, executors or administrators of each member of the Committee and shall be
in addition to all other rights to which a member of the Committee may be
entitled as a matter of law, contract, or otherwise.

     9.4 Gender and Number. If the context requires, words of one gender when used
in the Plan shall include the other and words used in the singular or plural
shall include the other.

     9.5 Headings. Headings of Articles and Sections are included for convenience
of reference only and do not constitute part of the Plan and shall not be used
in construing the terms of the Plan.

     9.6 Other Compensation Plans. The adoption and maintenance of the Plan shall
not affect any other stock option, incentive or other compensation or benefit
plans in effect for TEPPCO or any Affiliate or preclude TEPPCO from
establishing any other forms of incentive or other compensation for employees
of TEPPCO or any Affiliate.

IX-1

 

     9.7 Rights of Company and Affiliates. The existence of Phantom Units shall
not affect in any way the right or power of TEPPCO or an Affiliate to (a) make
or authorize any or all adjustments, recapitalizations, reorganizations or
other changes in TEPPCO’s or an Affiliate’s structure or business, (b) approve
and consummate any merger or consolidation of TEPPCO or an Affiliate with or
into any entity, (c) issue any bonds, debentures or Company or Affiliate
interests of any nature whatsoever to any person, (d) approve and consummate
the dissolution or liquidation of TEPPCO or
an Affiliate or any sale or transfer of all or any part of TEPPCO’s or an
Affiliate’s assets or business or (e) approve and consummate any other act or
proceeding whether of a similar character or otherwise.

     9.8 Nonalienation of Benefits. No benefit provided under the Plan shall be
transferable by the Grantee except pursuant to a state domestic relations
order. No right or benefit under the Plan shall be subject to anticipation,
alienation, sale, assignment, pledge, encumbrance or charge. Any attempt to
anticipate, alienate, sell, assign, pledge, encumber or charge any right or
benefit under the Plan shall be void. No right or benefit under the Plan
shall, in any manner, be liable for or subject to any debts, contracts,
liabilities or torts of the person entitled to the right or benefit. If any
Grantee becomes bankrupt or attempts to anticipate, alienate, assign, pledge,
sell, encumber or charge any right or benefit under the Plan then the right or
benefit shall, in the discretion of the Committee, cease. In that event,
TEPPCO and/or one or more Affiliates may hold or apply the right or benefit or
any part of the right or benefit for the benefit of the Grantee, his or her
spouse, children or other dependents or any of them in the manner and in the
proportion that the Committee shall deem proper, in its sole discretion, but is
not required to do so. The restrictions in this Section 9.8 shall not apply to
state domestic relations orders.

     9.9 No Rights as an Owner. No Grantee shall have any rights as a Unit owner
as a result of his or her Award. No Award will permit any Grantee to exercise
any managerial rights or powers with respect to TEPPCO, the Partnership or any
Affiliate.

     9.10 Governing Law. The validity, interpretation, construction and
enforceability of the Plan shall be governed by the laws of the State of Texas.

IX-2

 

     IN WITNESS WHEREOF, TEPPCO has caused this Agreement to be executed by
its authorized officer on this 1st day of June, 2002, effective as of June 1,
2002.

	 	 	 	 	 
	 	 	TEXAS EASTERN PRODUCTS PIPELINE COMPANY, LLC
	 	 	 	 	 
	 	 	 	 	 
	 	 	
By:
	 	/s/ BARRY R. PEARL
	 	 	 	 	

	 	 	
Title:
	 	President and Chief Executive Officer<PAGE>
                                                                     EXHIBIT 4.8

                  WAIVER, AGREEMENT AND SUPPLEMENTAL INDENTURE

      This Waiver, Agreement and Supplemental Indenture (this "AGREEMENT") is
executed as of the 3rd day of July, 2002, by and among (i) Tri-Union Development
Corporation, a Texas corporation (the "COMPANY"), (ii) each of the Guarantors
under that certain Indenture (the "INDENTURE"), dated as of June 18, 2001, among
the Company, Tribo Petroleum Corporation, which merged into the Company on July
27, 2001, and U.S. Bank National Association, a national banking association
formerly known as Firstar Bank, National Association, as trustee (the
"TRUSTEE"), (iii) the Trustee, (iv) each of The Depository Trust Company's
participants as of May 15, 2002 in the Company's 12.5% Series B Senior Secured
Notes due 2006 (the "NOTES") issued pursuant to the Indenture, (v) Cohanzick
High Yield Partners, LP, (vi) J/Z CBO (DE), LLC, (vii) the undersigned holders
of beneficial interests in the Notes (together with the parties set forth in
clauses (iv) through (vi) and DTC's participants in the Notes, the "NOTEHOLDERS"
and individually, a "NOTEHOLDER") and (viii) Jefferies & Company, Inc.
("JEFCO"). The Noteholder record date for this Waiver, Agreement and
Supplemental Indenture is May 15, 2002.

                                    RECITALS:

      A. THE NOTES. The Company issued 130,000 units including $130,000,000 in
aggregate principal amount of its 12.5% Series A Senior Secured Notes due 2006
(the "SERIES A NOTES") on June 18, 2001, and it subsequently exchanged them for
an equal principal amount of Notes pursuant to the original Registration Rights
Agreement (as defined in the Indenture). On June 3, 2002, the Company timely
made the $20,000,000 aggregate principal payment due under the terms of the
Notes but did not make any of the $8,125,000 aggregate accrued cash interest
payment due on the Notes on June 3, 2002. Under the terms and provisions of the
Indenture, the failure by the Company to make the interest payment due on the
Notes on June 3, 2002 will constitute an Event of Default after the expiration
of a 30-day grace period.

      B. THE NEW NOTES. The Company has advised the Noteholders that it has
insufficient funds to make the June 3, 2002 interest payment, which will result
in an Event of Default under the Indenture on July 3, 2002. As a result, the
Company has requested that the Noteholders agree to permit the Company to make
the June 3, 2002 accrued cash interest payment due on the Notes, plus the
interest due on such interest, through the issuance of additional promissory
notes (the "NEW NOTES") with terms that are identical to the terms of the Series
A Notes except with respect to the issuance date, the aggregate principal amount
and CUSIP number. In addition, the New Notes will not immediately be registered
under the Securities Act of 1933 and shall not be freely tradable until such
time as a registration statement with respect to the New Notes has been declared
effective by the Securities and Exchange Commission. The New Notes will be
issued under the Indenture as Series A Notes and as Tack-On Senior Secured
Notes, and they will have an Accreted Value of $1,000 per Note.
<PAGE>
      C. THE CLASS A SHARES. The Company has agreed to issue an aggregate of
76,667 additional shares of its Class A Common Stock, par value $0.01 per share
(the "CLASS A SHARES"), to the Noteholders.

      D. REGISTRATION RIGHTS. The Company has agreed to provide the Noteholders
with registration rights in relation to the New Notes that are substantially the
same as those applicable to the Series A Notes under the Registration Rights
Agreement.

      E. THE LIMITED WAIVER. The Company defaulted on its obligation to make the
June 3, 2002 interest payment and, to induce the Noteholders to waive that
default (and any resulting Event of Default), the Company and the Guarantors
have agreed to enter into this Agreement (including the waivers and consents by
the Noteholders contained herein) and deliver the New Notes, the Class A Shares
and the other agreements required hereby. The Noteholders are willing to agree
to such a transaction subject to the terms and conditions of this Agreement.

      F. AMENDMENTS TO INDENTURE. The Indenture will be amended and
supplemented, effective as of the Effective Date, as provided in Section 7
hereof, and by their execution and delivery of this Agreement the Noteholders
consent to all such amendments and supplements.

                                   AGREEMENTS:

      NOW, THEREFORE, in consideration of the premises and the mutual covenants,
representations, warranties and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

      1.  DEFINITIONS. Capitalized terms used and not otherwise defined herein
shall have the same meanings as set forth in the Indenture. All references to
the Security Documents shall include the Additional Mortgage, all references to
the Indenture shall include the supplements and amendments to the Indenture
contained herein, and all references to the Notes in the Indenture shall include
the New Notes. In addition, the following terms, for the purposes of this
Agreement, shall have the following meanings:

          (a) "ADDITIONAL MORTGAGE" means the additional mortgage with respect
to the Company's interest in the Champion #1-H Well, Grimes County, Texas and
certain oil and gas leases located in Grimes County, Texas related thereto
substantially in the form of mortgages delivered in connection with the
Indenture.

          (b) "EFFECTIVE DATE" means the date of this Agreement.

          (c) "PURCHASE AGREEMENT" means that certain Purchase Agreement, dated
as of June 13, 2001, between the Company, Tri-Union Operating Company, Tribo
Petroleum Corporation and Jefferies & Company, Inc.

          (d) "TRIGGERING EVENT" means (a) the repayment, repurchase or
retirement of all of the Notes as set forth in clause (b)(i) of Article Four of
the Articles of Incorporation of the Company or (b) the required delivery of a
written consent if the Notes achieve a rating of B or better by Standard &
Poor's Ratings Services or B2 or better by Moody's Investors Services, Inc.

                                       2
<PAGE>
      2.  THE NEW NOTES. The Company and the Noteholders hereby agree that the
Company shall make the June 3, 2002 accrued cash interest payment due on the
Notes, plus the interest due on such interest, through the issuance to the
Noteholders of the New Notes on the Effective Date having an aggregate principal
amount equal to the amount of such interest payment ($8,125,000) and accruing
interest from June 3, 2002. The New Notes shall be issued under the Indenture as
Series A Notes and as Tack-On Senior Secured Notes and shall have terms that are
identical to the terms of the Series A Notes except with respect to the issuance
date, the aggregate principal amount and the CUSIP number. In addition, the New
Notes will not immediately be registered under the Securities Act of 1933 and
shall not be freely tradable until such time as a registration statement with
respect to the New Notes has been declared effective by the Securities and
Exchange Commission. The Company hereby agrees that, on the Effective Date, it
shall execute and deliver the New Notes.

      3.  THE CLASS A SHARES. The Company hereby agrees that, on the Effective
Date, it shall issue to the Noteholders pro rata in accordance with their
respective principal amounts of Notes held, an aggregate of 76,667 Class A
Shares.

      4.  REGISTRATION RIGHTS. The Company hereby agrees that, on the Effective
Date, the Noteholders shall have, in relation to the New Notes, all of rights
and remedies (including, without limitation, the right to receive Liquidated
Damages) conferred upon the holders of the Notes in the Registration Rights
Agreement in relation to the Series A Notes, it being understood, however, that
references in the Registration Rights Agreement to the Issue Date shall be
deemed to refer to the date that is eight months after the Effective Date.

      5.  LIMITED WAIVERS. Subject to the condition that the Company and the
Guarantors shall have complied with all of the terms and conditions of this
Agreement, each of the Noteholders hereby waives the requirement under the
Indenture and the Notes that the Company shall make the June 3, 2002 interest
payment in cash and each of the Noteholders hereby waives any Default or Event
of Default occurring as a result of the failure by the Company to pay the June
3, 2002 accrued interest payment in cash. Each of the Noteholders hereby waives
any of the conditions required by the Indenture for the issuance of the New
Notes and the Class A Shares and any limitations imposed by the Indenture on
such issuances, including, without limitation, Sections 4.09(a) and 4.16 of the
Indenture. Each of the Noteholders hereby agrees that the transactions described
herein shall not constitute a "Change of Control" under the Indenture.

      6.  (a) REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTORS.
To induce the Noteholders to enter into this Agreement, the Company and the
Guarantors hereby represent and warrant to each Noteholder that (i) the Company
and each of the Guarantors is duly organized, validly existing and in good
standing under the laws of the state of its incorporation or organization and
has the power and authority to perform its obligations under this Agreement;
(ii) the execution, delivery and performance of this Agreement, and the issuance
of the New Notes and the Class A Shares have been duly authorized by all
requisite action on the part of the Company and its shareholders and each of the
Guarantors and do not and will not violate the articles of incorporation,
bylaws, or other governance documents or agreements of the Company or any of the
Guarantors, or any other agreement to which the Company or any of the Guarantors
is a party, or any law, rule or regulation, or any order of any court,
governmental

                                       3
<PAGE>
authority or arbitrator by which the Company or any of the Guarantors or any of
their respective properties are bound; (iii) except as disclosed in the officers
certificate delivered pursuant to Section 8 hereof, each representation,
warranty and covenant of the Company or the Guarantors contained in the Purchase
Agreement, the Indenture, the Registration Rights Agreement, the Guaranty
Agreement and each of the Security Documents is true and correct on the date
hereof; (iv) the Company and the Guarantors have no defenses to payment,
counterclaim or rights of set-off with respect to the obligations evidenced by
the Notes and the New Notes existing on the date hereof; and (v) after giving
effect to the waivers and consents contained in this Agreement neither a Default
nor Event of Default has occurred which is continuing.

          (b) REPRESENTATIONS AND WARRANTIES OF THE NOTEHOLDERS. Each of the
Noteholders hereby represents and warrants to the Company that: (i) it is an
institutional accredited investor; (ii) it understands and agrees that the
Company is not offering the New Notes or the Class A Shares in a public offering
within the meaning of the Securities Act of 1933, and that if it decides to
resell, pledge or otherwise transfer the New Notes or the Class A Shares, the
New Notes and the Class A Shares may be subject to the transfer restrictions
which limit who may purchase the New Notes or the Class A Shares and impose
notification requirements; (iii) it understands that a legend will be placed on
the New Notes and the Class A Shares describing the transfer restrictions
applicable to the New Notes and the Class A Shares; and (iv) it is not acquiring
the New Notes or the Class A Shares with a view to any distribution of the New
Notes or the Class A Shares in a transaction that would violate the Securities
Act of 1933 or the securities laws of any state of the United States or any
other applicable jurisdiction.

      7.  COVENANTS AND INDENTURE AMENDMENTS.

          (a) COMPLIANCE WITH THE INDENTURE, THE GUARANTY AGREEMENT, THE
SECURITY DOCUMENTS, THE REGISTRATION RIGHTS AGREEMENT AND THIS AGREEMENT.
Notwithstanding any provisions to the contrary contained in the Indenture, the
Company and each of the Guarantors hereby covenant and agree that for the
purposes of this Agreement, from and after the date hereof, they will perform,
observe and comply with each covenant, agreement and term contained in this
Agreement, the Indenture, the Guaranty Agreement, the Registration Rights
Agreement and any of the Security Documents to the extent such entity is party
thereto, as, and to the extent, modified hereby.

          (b) SUPPLEMENTS AND AMENDMENTS TO ARTICLE 4 OF INDENTURE. (i) Article
4 of the Indenture is hereby amended and supplemented, pursuant to Section 9.02
thereof, by adding new Sections 4.28, 4.29, 4.30, 4.31, 4.32 and 4.33 thereto as
follows:

          "SECTION 4.28.  MINIMUM EBITDA.

                The Company will not permit EBITDA, as adjusted to exclude the
          non-cash effects of any Oil and Gas Hedging Contracts, as of the end
          of the third fiscal quarter of 2002, to be less than $4,000,000 ("BASE
          EBITDA") and, as of the end of each fiscal quarter thereafter, to be
          less than 105% of Base EBITDA compounded by an additional 5% for each
          succeeding fiscal quarter.

                                       4
<PAGE>
          SECTION 4.29.  DAILY PRODUCTION.

                The Company will not permit volumes of average daily production
          of hydrocarbons (reported for each fiscal month) from the Oil and Gas
          Assets of the Company and/or the Restricted Subsidiaries that are
          subject to the Lien of the Indenture and the Security Documents or
          that are required to be made subject to the Indenture and the Security
          Documents pursuant to Section 4.23 hereof to be less than 28.5
          MMcfe/d. Such volumes of hydrocarbons will be measured after giving
          effect to any acquisition, sale, exchange or other disposition of Oil
          and Gas Assets by the Company and/or the Restricted Subsidiaries. No
          later than the 33rd Business Day after the end of each fiscal month
          the Company shall provide to the Trustee an Officers' Certificate
          certifying the volumes of average daily production of hydrocarbons for
          the immediately preceding fiscal month from such Oil and Gas Assets of
          the Company and/or the Restricted Subsidiaries. As used herein, the
          term "MMcfe/d" shall mean million cubic feet of natural gas equivalent
          per day, determined using the ratio of six thousand cubic feet of
          natural gas to one barrel of oil, condensate or natural gas liquids.

          SECTION 4.30. TITLE DEFECTS AND FAILURE TO INCLUDE OIL AND GAS ASSETS.

                (a) Notwithstanding any provision of this Indenture to the
          contrary, including, without limitation the provisions of Sections
          4.23 hereof, neither the Company nor the Restricted Subsidiaries shall
          at any time have failed to include any Oil and Gas Assets of the
          Company or the Restricted Subsidiaries (including, without limitation
          interests in a Permitted Joint Venture which shall have been acquired
          in exchange for a replacement of any Collateral) under the Lien of
          this Indenture and the Security Documents. The Company will not
          permit, nor will it allow the Restricted Subsidiaries to permit, any
          defect in title to any Oil and Gas Assets that are subject to the Lien
          of this Indenture and the Security Documents other than Permitted
          Liens. The Company shall provide to the Trustee no later than the
          third Business Day of each fiscal month an Officers' Certificate
          certifying that (i) the Company and/or a Restricted Subsidiary owns
          good and defensible title to the Oil and Gas Assets that are required
          to be subject to the Lien of this Indenture and the Security Documents
          free and clear of all Liens except for Permitted Liens and (ii)
          subject to the other provisions of this Indenture, each of such Oil
          and Gas Assets are, in fact, subject to the Liens of this Indenture
          and the Security Documents.

                (b) The Company shall subject the Company's entire interest in
          the Champion #1-H Well Grimes County, Texas and the Other Oil and Gas
          Assets related thereto to the Lien of this Indenture and the Security
          Documents no later than thirty days after the Effective Date, and
          shall use best its efforts to accomplish the foregoing as soon as
          possible, such efforts to include, without limitation, any and all
          actions necessary to obtain all assignments of title in and to said
          Champion #1-H Well Grimes County, Texas from AKG Oil Company, Atasca
          Resources Inc. and such other corrective action as may be necessary to
          obtain full title in and to the Company in order to subject such
          Champion #1-H

                                       5
<PAGE>
          Well Grimes County, Texas to the Lien of this Indenture and Security
          Documents including delivery of an opinion of counsel to the Company
          in form and substance satisfactory to counsel for Jefferies &
          Company, Inc.

          SECTION 4.31.  CERTAIN BUSINESS RELATIONSHIPS.

                On or before the Effective Date, the Company shall take any or
          all actions required to sever its business relationships with Richard
          Bowman, his Affiliates, and any entities owned or controlled by
          Richard Bowman or any of his Affiliates (the "BOWMAN RELATED
          PARTIES"), to the extent such severance can be accomplished in a
          manner that is not detrimental to the Company or its Subsidiaries. The
          Company or its directors, officers or employees on behalf of the
          Company shall not enter into any new transactions with Bowman Related
          Parties or make any payment in excess of $1,000 with respect to a
          single transaction, or in excess of $5,000 with respect to all
          transactions within a calendar month, to Bowman Related Parties
          without the approval of the Holders of at least 66-2/3% in principal
          amount of the then outstanding Notes. The Company shall review all
          amounts due from related parties and shall pursue within 60 days the
          collection of all outstanding receivables due from the Bowman Related
          Parties and the conveyance and recovery of any property or other
          assets that are held by Bowman Related Parties for other than fair
          value that should be held by the Company or a Related Subsidiary.
          Notwithstanding the foregoing, the Amended and Restated Lease
          Agreement between the Company and an affiliate of Richard Bowman shall
          be excluded from the restrictions contained in this Section 4.31.

          SECTION 4.32.  BOWMAN SEVERANCE.

                Richard Bowman is no longer an officer or employee of the
          Company. The Company shall not and shall not permit any Subsidiary to
          engage Richard Bowman to serve as an agent, independent contractor,
          employee or consultant to the Company or any Subsidiary. The Company
          shall use best efforts not to permit Richard Bowman to enter its
          offices, to the extent it can do so lawfully. The Company shall not
          enter into a severance agreement with or a release in favor of Richard
          Bowman without the approval of the Holders of at least 66-2/3% in
          principal amount of the then outstanding Notes.

          SECTION 4.33.  MONTHLY SUMMARY FINANCIAL REPORTS.

                The Company will provide to the Trustee within thirty days after
          each fiscal month, a Summary Financial Report of the Company and the
          Subsidiaries setting forth (a) the consolidated revenues, EBITDA,
          average realized price, oil and gas production on an equivalent basis
          and ending cash balance for such period and for the period beginning
          with the respective fiscal year to the end of such period and setting
          forth in each case in comparative form the corresponding figures for
          the corresponding period in the preceding fiscal year and (b) a
          description of any sales, dispositions or acquisitions of any property
          (other than

                                       6
<PAGE>
          hydrocarbons in the ordinary course of business) of or by the Company
          or Subsidiaries during such fiscal month including a description of
          the properties sold or acquired and the consideration received or
          paid therefor."

          (ii) Article 4 of the Indenture is hereby further amended and
     supplemented pursuant to Section 9.02 thereof by replacing Section 4.04(c)
     with the following:

                "(c) The Company shall, so long as any of the Notes are
          outstanding, deliver to the Trustee, within five days after any
          Officer becoming aware of any Default or Event of Default, an
          Officers' Certificate specifying such Default or Event of Default,
          their status and what action the Company is taking or proposes to take
          with respect thereto."

          (c) SUPPLEMENTS AND AMENDMENTS TO ARTICLE 6 OF THE INDENTURE. (i)
Article 6 of the Indenture is hereby amended and supplemented pursuant to
Section 9.02 thereof by replacing Sections 6.01(f) and (g) with the following:

                "(f) a default occurs under any mortgage, indenture or
          instrument under which there may be issued or by which there may be
          secured or evidenced any Indebtedness for money borrowed by the
          Company or any Restricted Subsidiary (or the payment of which is
          guaranteed by the Company or any Restricted Subsidiary), whether such
          Indebtedness or guarantee now exists, or is created after the date of
          this Indenture, which default (i) is caused by a failure to pay
          principal of or premium or interest on such Indebtedness prior to the
          expiration of any grace period provided in such Indebtedness including
          any extension thereof (a "PAYMENT DEFAULT") or (ii) results in the
          acceleration of such Indebtedness prior to its express maturity and,
          in each case, the principal amount of any such Indebtedness, together
          with the principal amount of any other such Indebtedness under which
          there has been a Payment Default or the maturity of which has been so
          accelerated, aggregates in excess of $50,000 and provided further,
          that if such default is cured or waived or any such acceleration
          rescinded, or such Indebtedness is repaid within any applicable grace
          period, an Event of Default and any consequential acceleration of the
          Notes shall be automatically rescinded so long as such rescission does
          not conflict with any judgment or decree;

                (g) a judgment or award for the payment of money in excess of
          $100,000 in the aggregate shall be rendered by a court or arbitrator
          against the Company or any Restricted Subsidiary";

                (ii) Article 6 of the Indenture is further amended and
     supplemented in accordance with the provisions of Section 9.02 thereof by
     adding the following clause to the end of Section 6.01(d):

                ", or the Company or any Restricted Subsidiary fails to comply,
          after notice from the Holders of at least 66-2/3% in principal amount
          of the Notes, with any of the provisions of Section 4.28, 4.29, 4.30,
          4.31, 4.32 or 4.33 hereof."

                                       7
<PAGE>

      8.  CLOSING DELIVERIES. Unless otherwise provided herein, simultaneously
with the execution and delivery hereof, and as a condition to the effectiveness
hereof, the Company and the Guarantors shall deliver (or deposit with), or cause
the delivery to (or deposit with) the Noteholders: (a) a certificate
representing the New Notes, (b) a global certificate representing the 76,667
shares of Class A Common Stock, (c) such certificates of duly authorized
officers of the Company (which shall be rendered to the best of their
knowledge), certificates of governmental authorities, certified copies of
resolutions of the Board of Directors of the Company, and such other documents,
instruments and agreements as any Noteholder or the Trustee shall require to
evidence the valid existence and authority to conduct business of the Company,
the due authorization, execution and delivery of this Agreement, the New Notes
and the Class A Shares, the accuracy of all representations and warranties made
by the Company and the Guarantors in this Agreement, and the compliance by the
Company and the Guarantors with all covenants made by them in this Agreement,
(d) an opinion of counsel to the Company in form and substance reasonably
satisfactory to counsel for Jefferies & Company, Inc. and (e) all reasonable
fees and expenses of Vinson & Elkins L.L.P., counsel to Jefferies & Company,
Inc., in connection with the preparation, negotiation and execution of this
Agreement, all related documents and the transactions contemplated hereby and
thereby.

      9.  TRANSACTION FEES. In addition to the fees and expenses of counsel to
Jefferies & Company Inc. referred to in Section 8 of this Agreement, the Company
shall promptly pay or reimburse the Noteholders for (a) all reasonable fees and
expenses of the accountants engaged by the Noteholders to audit the Company's
books and records, (b) all reasonable fees and expenses of the reserve engineers
engaged by the Noteholders to review the Company's reserves, (c) all reasonable
fees and expenses of counsel to the Noteholders or special committees of the
Noteholders employed in connection with this Agreement, (d) all reasonable fees
and expenses of one counsel to a special committee of the Noteholders, if any,
not to exceed $100,000 and (e) all other reasonable out-of-pocket expenses
incurred by the Noteholders in connection with the transactions contemplated
hereby.

      10.  SECURITY DOCUMENTS/COLLATERAL/GUARANTY AGREEMENT. The Company and
each of the Guarantors hereby acknowledge, ratify, reaffirm and agree that the
Notes, the New Notes, the Indenture, the Guaranty Agreement, each of the
Security Documents and the first priority, perfected liens and security
interests created thereby in favor of the Trustee and the Approved Hedge
Counterparties in the Collateral, are and shall remain in full force and effect
and binding on the Company and the Guarantors party thereto, and are enforceable
in accordance with their respective terms and applicable law. The Company hereby
grants to the Trustee (for the ratable benefit of the Noteholders) liens and
security interests in the Collateral, and the Company and the Guarantors hereby
acknowledge, ratify, and reaffirm all of the terms and provisions of the Notes,
the New Notes, the Indenture, the Guaranty Agreement, the Registration Rights
Agreement and the Security Documents to the extent each such entity is a party
thereto, except as modified herein, which are incorporated by reference as of
the date hereof as if set forth herein including, without limitation, all
promises, agreements, warranties, representations, covenants, releases, and
indemnifications contained therein.

      11. CLASS B COMMON STOCK. (a) The Company hereby agrees that it shall use
its best efforts (i) to seek approval of the shareholders of the Company of an
amendment of the Articles of Incorporation of the Company to increase the
authorized number of shares of Class A

                                       8
<PAGE>
Common Stock by a sufficient number of shares to permit the conversion of the
Class B Common Stock into shares of Class A Common Stock and (ii) to file
Articles of Amendment to the Company's Articles of Incorporation with the
Secretary of State of the State of Texas providing for such increase in the
number of authorized shares of Class A Common Stock. During such time as the
Company does not have a sufficient number of authorized but unissued shares of
Class A Common Stock into which to convert the shares of Class B Common Stock,
JEFCO hereby agrees that it shall not (i) dispose of beneficial ownership of the
shares of Class B Common Stock other than to an affiliate or (ii) deliver to the
Company a written consent that is not required to be delivered under clause
(b)(iii) of the Company's Articles of Incorporation with respect to the
conversion of the Class B Common Stock. JEFCO hereby further agrees that if a
Triggering Event shall occur and the Company does not at such time have a
sufficient number of authorized but unissued shares of Class A Common Stock into
which to convert the shares of Class B Common Stock, JEFCO shall transfer to the
Company for $0.01 per share such number of shares of Class B Common Stock as to
which there are insufficient shares of Class A Common Stock for conversion.

          (b) Each of the Noteholders hereby agrees that if JEFCO shall have
transferred any of its shares of Class B Common Stock to the Company for $0.01
per share in connection with a Triggering Event as described in the last
sentence of clause (a) above, then JEFCO shall have the option to acquire from
such Noteholders all of the shares of Class A Common Stock issued to such
Noteholders in connection with this Agreement (or such lesser number as shall
equal the number of shares of Class B Common Stock transferred by JEFCO to the
Company as aforesaid), upon written notice to the Noteholders and payment by
JEFCO of $0.01 per share of Class A Common Stock.

      12. RELEASE AND COVENANT NOT TO SUE. THE COMPANY AND EACH OF THE
GUARANTORS (IN THEIR OWN RIGHT AND ON BEHALF OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES, INDEPENDENT CONTRACTORS AND ATTORNEYS) (THE "RELEASING
PARTIES") JOINTLY AND SEVERALLY RELEASE, ACQUIT, AND FOREVER DISCHARGE THE
TRUSTEE AND EACH NOTEHOLDER (INCLUDING IN THEIR CAPACITY AS AGENTS, CUSTODIANS
OR OTHERWISE), AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
TRUSTEES, CUSTODIANS, INDEPENDENT CONTRACTORS AND ATTORNEYS, (COLLECTIVELY, THE
"RELEASED PARTIES"), TO THE FULLEST EXTENT PERMITTED BY APPLICABLE STATE AND
FEDERAL LAW, FROM ANY AND ALL ACTS AND OMISSIONS OF THE RELEASED PARTIES, AND
FROM ANY AND ALL CLAIMS, CAUSES OF ACTION, COUNTERCLAIMS, DEMANDS,
CONTROVERSIES, COSTS, DEBTS, SUMS OF MONEY, ACCOUNTS, RECKONINGS, BONDS, BILLS,
DAMAGES, OBLIGATIONS, LIABILITIES, OBJECTIONS, AND EXECUTIONS OF ANY NATURE,
TYPE, OR DESCRIPTION WHICH ANY OF THE RELEASING PARTIES HAVE AGAINST ANY OF THE
RELEASED PARTIES, INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE, GROSS NEGLIGENCE,
USURY, FRAUD, DECEIT, MISREPRESENTATION, CONSPIRACY, UNCONSCIONABILITY, DURESS,
ECONOMIC DURESS, DEFAMATION, CONTROL, INTERFERENCE WITH CONTRACTUAL AND BUSINESS
RELATIONSHIPS, CONFLICTS OF INTEREST, MISUSE OF INSIDER INFORMATION,
CONCEALMENT, DISCLOSURE, SECRECY, MISUSE OF

                                       9
<PAGE>
COLLATERAL, WRONGFUL RELEASE OF COLLATERAL, FAILURE TO INSPECT, ENVIRONMENTAL
DUE DILIGENCE, NEGLIGENT LOAN PROCESSING AND ADMINISTRATION, WRONGFUL SETOFF,
VIOLATIONS OF STATUTES AND REGULATIONS OF GOVERNMENTAL ENTITIES,
INSTRUMENTALITIES AND AGENCIES (BOTH CIVIL AND CRIMINAL), RACKETEERING
ACTIVITIES, SECURITIES AND ANTITRUST LAWS VIOLATIONS, TYING ARRANGEMENTS,
DECEPTIVE TRADE PRACTICES, BREACH OR ABUSE OF ANY ALLEGED FIDUCIARY DUTY, BREACH
OF ANY ALLEGED SPECIAL RELATIONSHIP, COURSE OF CONDUCT OR DEALING, ALLEGED
OBLIGATION OF FAIR DEALING, ALLEGED OBLIGATION OF GOOD FAITH, AND ALLEGED
OBLIGATION OF GOOD FAITH AND FAIR DEALING, WHETHER OR NOT IN CONNECTION WITH OR
RELATED TO THE THIS AGREEMENT, THE INDENTURE, THE NOTES, THE NEW NOTES, THE
GUARANTY AGREEMENT, THE REGISTRATION RIGHTS AGREEMENT OR THE SECURITY DOCUMENTS,
AT LAW OR IN EQUITY, IN CONTRACT IN TORT, OR OTHERWISE, KNOWN OR UNKNOWN,
SUSPECTED OR UNSUSPECTED (COLLECTIVELY, THE "RELEASED CLAIMS"). THE RELEASING
PARTIES FURTHER JOINTLY AND SEVERALLY AGREE TO LIMIT ANY DAMAGES THEY MAY SEEK
IN CONNECTION WITH ANY CLAIM OR CAUSE OF ACTION, IF ANY, TO EXCLUDE ALL PUNITIVE
AND EXEMPLARY DAMAGES, DAMAGES ATTRIBUTABLE TO LOST PROFITS OR OPPORTUNITY,
DAMAGES ATTRIBUTABLE TO MENTAL ANGUISH, AND DAMAGES ATTRIBUTABLE TO PAIN AND
SUFFERING, AND THE RELEASING PARTIES DO HEREBY JOINTLY AND SEVERALLY WAIVE AND
RELEASE ALL SUCH DAMAGES WITH RESPECT TO ANY AND ALL CLAIMS OR CAUSES OF ACTION
WHICH MAY ARISE AT ANY TIME AGAINST ANY OF THE RELEASED PARTIES. THE RELEASING
PARTIES REPRESENT AND WARRANT THAT NO FACTS EXIST WHICH COULD PRESENTLY SUPPORT
THE ASSERTION OF ANY OF THE RELEASED CLAIMS AGAINST ANY OF THE RELEASED PARTIES.
THE RELEASING PARTIES FURTHER COVENANT NOT TO SUE THE RELEASED PARTIES ON
ACCOUNT OF ANY OF THE RELEASED CLAIMS, AND EXPRESSLY WAIVE ANY AND ALL DEFENSES
THEY MAY HAVE IN CONNECTION WITH THEIR DEBTS AND OBLIGATIONS UNDER THE
INDENTURE, THE NOTES, THE NEW NOTES, THE GUARANTY AGREEMENT, THE REGISTRATION
RIGHTS AGREEMENT, ANY OF THE SECURITY DOCUMENTS AND THIS AGREEMENT. THIS SECTION
12 IS IN ADDITION TO AND SHALL NOT IN ANY WAY LIMIT ANY OTHER RELEASE, COVENANT
NOT TO SUE, OR WAIVER BY THE RELEASING PARTIES IN FAVOR OF THE RELEASED PARTIES.
NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT OR THE INDENTURE, THE NOTES, THE
NEW NOTES, THE GUARANTY AGREEMENT, THE REGISTRATION RIGHTS AGREEMENT OR ANY OF
THE SECURITY DOCUMENTS, THIS SECTION 12 SHALL REMAIN IN FULL FORCE AND EFFECT
AND SHALL SURVIVE THE DELIVERY AND PAYMENT ON THE OBLIGATIONS UNDER THE NOTES,
THE NEW NOTES, THIS AGREEMENT, THE INDENTURE, THE GUARANTY AGREEMENT, THE
REGISTRATION RIGHTS AGREEMENT AND THE SECURITY DOCUMENTS.

                                       10
<PAGE>

      13. NO IMPLIED WAIVERS. No failure or delay on the part of the Trustee or
any Noteholder in exercising, and no course of dealing with respect to, any
right, power or privilege under this Agreement, the Indenture, the Notes, the
New Notes, the Guaranty Agreement, the Registration Rights Agreement or any of
the Security Documents shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or privilege under this Agreement, the
Indenture, the Notes, the New Notes, the Registration Rights Agreement or any of
the Security Documents preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.

      14. INDEMNIFICATION. IN ADDITION TO, AND WITHOUT LIMITATION OF, ANY AND
ALL INDEMNITIES PROVIDED IN THE INDENTURE, THE GUARANTY AGREEMENT, THE
REGISTRATION RIGHTS AGREEMENT AND ANY OF THE SECURITY DOCUMENTS, THE COMPANY AND
THE GUARANTORS SHALL AND DO HEREBY INDEMNIFY AND HOLD THE TRUSTEE AND EACH
NOTEHOLDER AND THEIR RESPECTIVE EMPLOYEES, INDEPENDENT CONTRACTORS, ATTORNEYS,
OFFICERS, AND DIRECTORS HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITY,
LOSSES, DAMAGES, CAUSES OF ACTION, SUITS, JUDGMENTS, COSTS, AND EXPENSES,
INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND COSTS, ARISING OUT
OF OR FROM OR RELATED TO THE INDENTURE, THE NOTES, THE NEW NOTES, THE GUARANTY
AGREEMENT, THE REGISTRATION RIGHTS AGREEMENT OR ANY OF THE SECURITY DOCUMENTS.
IF ANY ACTION, SUIT, OR PROCEEDING IS BROUGHT AGAINST THE TRUSTEE OR ANY
NOTEHOLDER OR THEIR RESPECTIVE EMPLOYEES, INDEPENDENT CONTRACTORS, ATTORNEYS,
OFFICERS, AND DIRECTORS, THE COMPANY AND THE GUARANTORS SHALL, AT THE TRUSTEE'S
OR THE NOTEHOLDER'S REQUEST, DEFEND THE SAME AT THE COMPANY'S SOLE COST AND
EXPENSE. NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT, THE INDENTURE, THE
GUARANTY AGREEMENT, THE REGISTRATION RIGHTS AGREEMENT OR ANY OF THE SECURITY
DOCUMENTS, THIS SECTION 14 SHALL REMAIN IN FULL FORCE AND EFFECT AND SHALL
SURVIVE THE DELIVERY AND PAYMENT ON THE OBLIGATIONS UNDER THE NOTES, THE NEW
NOTES, THIS AGREEMENT, THE INDENTURE, THE GUARANTY AGREEMENT, THE REGISTRATION
RIGHTS AGREEMENT AND ANY OF THE SECURITY DOCUMENTS.

      15. REVIEW AND CONSTRUCTION OF DOCUMENTS. The Company and each of the
Guarantors hereby acknowledge, and represent and warrant to each Noteholder,
that (a) the Company and the Guarantors have had the opportunity to consult with
legal counsel of their own choice and have been afforded an opportunity to
review this Agreement and the Exhibits with their legal counsel, (b) the Company
and the Guarantors have reviewed this Agreement and the Exhibits and fully
understand the effects thereof and all terms and provisions contained herein and
therein, (c) the Company and the Guarantors have executed this Agreement and
each of the other documents and agreements described in Section 8 hereof of
their own free will and volition, and (d) this Agreement and the Exhibits shall
be construed as if jointly drafted by the Company, the Guarantors and the
Noteholders. The recitals contained in this Agreement shall be construed to be
part of the operative terms and provisions of this Agreement. The supplement to
the Indenture contained herein constitutes an integral part of the Indenture.

                                       11
<PAGE>
      16. ENTIRE AGREEMENT; AMENDMENT. THIS AGREEMENT EMBODIES THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO REGARDING THE NOTEHOLDERS' LIMITED WAIVER
WITH RESPECT TO THEIR RIGHTS AND REMEDIES ARISING AS A RESULT OF THE JUNE 3,
2002 ACCRUED CASH INTEREST PAYMENT AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
The provisions of this Agreement may be amended or waived only by an instrument
in writing signed by the Company, the Guarantors and the Noteholders. The Notes,
the Indenture, the Guaranty Agreement and the Security Documents, in each case
to the extent modified by this Agreement, continue to evidence the agreement of
the parties with respect to the subject matter thereof.

      17. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective heirs,
legal representatives, successors and assigns, provided that the Company and the
Guarantors may not assign any rights or obligations under this Agreement without
the prior written consent of all Noteholders.

      18. ARMS-LENGTH/GOOD FAITH. This Agreement has been negotiated at
arms-length and in good faith by the parties hereto.

      19. GOVERNING LAW/VENUE. The provisions contained in Section 11.14 of the
Indenture are fully enforceable and operative in accordance with their terms,
and are incorporated herein by reference. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York and
applicable laws of the United States of America.

      20. INTERPRETATION. Wherever the context hereof shall so require, the
singular shall include the plural, the masculine gender shall include the
feminine gender and the neuter and vice versa. The headings, captions and
arrangements used in this Agreement are for convenience only and shall not
affect the interpretation of this Agreement.

      21. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein.

      22. COUNTERPARTS. This Agreement may be executed and delivered in any
number of counterparts, and by different parties hereto on separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which counterparts taken together shall constitute one
and the same instrument; provided, however, no party shall be bound by this
Agreement until each of the parties has executed a counterpart hereof. Execution
of this Agreement via facsimile shall be effective, and signatures received via
facsimile shall be binding upon the parties hereto and shall be effective as
originals.

                                       12
<PAGE>
      23. FURTHER ASSURANCES. The Company and the Guarantors hereby agree to
execute, acknowledge, deliver, file and record such further certificates,
instruments and documents, and to do all other acts and things, as may be
requested by the Trustee or any Noteholder as necessary or advisable to carry
out the intents and purposes of this Agreement.

      24. WAIVER OF JURY TRIAL. THE COMPANY AND THE GUARANTORS HEREBY WAIVE
THEIR RESPECTIVE RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THE INDENTURE, THE NOTES, THE NEW
NOTES, THE GUARANTY AGREEMENT, THE REGISTRATION RIGHTS AGREEMENT OR ANY OF THE
SECURITY DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, THE
COMPANY AND THE GUARANTORS HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO CLAIM OR
RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. THE COMPANY AND THE GUARANTORS (I) CERTIFY THAT NO
REPRESENTATIVE OR ATTORNEY OF ANY NOTEHOLDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH NOTEHOLDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS AND (II) ACKNOWLEDGE THAT THE NOTEHOLDERS HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS
AND CERTIFICATIONS CONTAINED HEREIN.

      25. BENEFITS OF INDENTURE. Nothing in this Waiver, Agreement and
Supplemental Indenture or in the New Notes, express or implied, shall give to
any Person (other than the parties hereto, any Paying Agent, any Registrar and
their successors hereunder, and the Holders) any benefit or any legal or
equitable right, remedy or claim under the Indenture.

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

                            [Signature Pages Follow]

                                       13
<PAGE>
                                 SIGNATURE PAGE
                                       TO
                  WAIVER, AGREEMENT AND SUPPLEMENTAL INDENTURE
                                  BY AND AMONG
                       TRI-UNION DEVELOPMENT CORPORATION,
                          THE GUARANTORS, THE TRUSTEE,
                 EACH OF THE NOTEHOLDERS PARTY THERETO AND JEFCO

                                          TRI-UNION DEVELOPMENT CORPORATION

                                          By:    /s/ Suzanne R. Ambrose
                                             -----------------------------------
                                          Name:  Suzanne R. Ambrose
                                               ---------------------------------
                                          Title: Interim Co-Chief Operating
                                                 Officer
                                                --------------------------------

                                          TRI-UNION OPERATING COMPANY,
                                               as Guarantor

                                          By:    /s/ Suzanne R. Ambrose
                                             -----------------------------------
                                          Name:  Suzanne R. Ambrose
                                               ---------------------------------
                                          Title: Interim Co-Chief Operating
                                                 Officer
                                                --------------------------------

ACKNOWLEDGED:

U.S. BANK NATIONAL ASSOCIATION,
     as Trustee under the Indenture

By:    /s/ Frank P. Leslie
   -----------------------------------
Name:  Frank P. Leslie
     ---------------------------------
Title: Vice President
      --------------------------------

                                [Signature Page]

The Confidential portion of this Exhibit 4.8 has been omitted and filed under
seperate cover with the Securities and Exchange Commission.

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