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EXHIBIT 10.3
MONITORING AND OVERSIGHT AGREEMENT
This MONITORING AND OVERSIGHT AGREEMENT (this "Agreement") is made and
entered into effective as of September 30, 1998, among Triton Energy Limited, a
Cayman Islands company (the "Company"), and Xxxxx, Muse & Co. Partners, L.P., a
Texas limited partnership (together with its successors, "HMCo").
1. Retention; Defined Terms.
(a) The Company hereby acknowledges that it has retained
HMCo to provide, and HMCo acknowledges that, subject to reasonable advance
notice in order to accommodate scheduling, HMCo will provide, financial
oversight and monitoring services to the Company as requested by the Company
during the term of this Agreement.
(b) Capitalized terms used but not defined herein and
defined in the Stock Purchase Agreement dated August 31, 1998, between the
Company and HM4 Triton, L.P., a Cayman Islands exempted limited partnership
("Investor") (the "Stock Purchase Agreement"), shall have the meanings ascribed
to such terms in the Stock Purchase Agreement.
2. Term.
(a) The term of this Agreement shall continue until the
earlier of (i) the tenth anniversary of the date hereof, (ii) the date on which
the Stock Purchase Agreement is terminated if such date occurs prior to the
First Closing or (iii) the date on which Investor and its affiliates cease to
own beneficially, directly or indirectly, at least five percent of the Company's
outstanding ordinary shares (or any other securities into or for which such
shares may be converted or exchanged), determined after giving effect to the
conversion of all shares of 8% Preference Shares of the Company held by Investor
and its affiliates (such date on which the term of this Agreement terminates
herein referred to as the "Termination Date").
(b) Notwithstanding any termination of this Agreement, (i)
the rights of the Indemnified Persons (as defined in Section 5 hereof) under
Section 5 hereof shall survive any such termination of this Agreement, (ii) the
Company shall pay to HMCo (A) on the fifteenth (15th) day following the
Termination Date, amounts payable to HMCo as a Monitoring Fee for periods up to
and including the Termination Date which have not been paid as of the
Termination Date and (B) promptly (but not more than 10 days) after request by
or notice from HMCo, the Reimbursable Expenses for which HMCo has provided the
Company invoices or reasonably detailed descriptions relating to periods up to
and including the Termination Date which have not been paid as of the
Termination Date and (iii) the terms of this Agreement (including Section 7
hereof) shall survive any such termination for the purpose of enabling HMCo to
enforce its rights set forth in this Section 2(b) and Section 5.
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3. Compensation.
(a) As compensation for HMCo's services under this
Agreement, the Company shall pay to HMCo an annual fee of $500,000 (the
"Monitoring Fee"), which shall begin to accrue on the First Closing Date.
(b) The Monitoring Fee shall be payable, by wire transfer
of immediately available funds to the account described on Exhibit A hereto (or
such other account as HMCo may hereafter designate in writing), in quarterly
installments on the fifteenth (15th) day of each January, April, July and
October during the term of this Agreement (each a "Payment Date"), beginning
with the first Payment Date following the date hereof. The amount of each such
quarterly installment shall be the Monitoring Fee divided by 4 (the "Quarterly
Fee Amount"), prorated on a daily basis for any partial calendar quarter during
the term of this Agreement.
(c) All past due payments in respect of the Monitoring Fee
shall bear interest at the lesser of the highest rate of interest which may be
charged under applicable law or the prime commercial lending rate per annum of
Chase Manhattan Bank, N.A. or its successors (which rate is a reference rate and
is not necessarily its lowest or best rate of interest actually charged to any
customer) (the "Prime Rate") as in effect from time to time, plus 5%, from the
due date of such payment to and including the date on which payment is made to
HMCo in full, including such interest accrued thereon.
4. Reimbursement of Expenses. In addition to the compensation to
be paid pursuant to Section 3 hereof, the Company agrees to pay or reimburse
HMCo for all "Reimbursable Expenses," which shall consist of all reasonable
disbursements and out-of-pocket expenses (including without limitation costs of
travel, postage, deliveries, communications, etc.) incurred by HMCo or its
affiliates for the account of the Company or in connection with the performance
by HMCo of the services contemplated by Section 1 hereof. Promptly (but not more
than 10 days) after request by or notice from HMCo, the Company shall pay HMCo,
by wire transfer of immediately available funds to the account described on
Exhibit A hereto (or such other account as HMCo may hereafter designate in
writing), the Reimbursable Expenses for which HMCo has provided the Company
invoices or reasonably detailed descriptions. All past due payments in respect
of the Reimbursable Expenses shall bear interest at the lesser of the highest
rate of interest which may be charged under applicable law or the Prime Rate
plus 5% from the Payment Date to and including the date on which such
Reimbursable Expenses plus accrued interest thereon, are fully paid to HMCo.
5. Indemnification. The Company shall indemnify and hold harmless
each of HMCo, its affiliates, and the respective directors, officers, partners,
members, controlling persons (within the meaning of Section 15 of the Securities
Act of 1933 or Section 20(a) of the Securities Exchange Act of 1934), if any,
agents and employees of HMCo and/or any of its affiliates (HMCo, its affiliates,
and such other specified persons being collectively referred to as "Indemnified
Persons" and individually as an "Indemnified Person") from and against any and
all claims, liabilities, losses, damages and expenses incurred by any
Indemnified Person (including reasonable fees and
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disbursements of the respective Indemnified Person's counsel) which (A) are
related to or caused by or arise out of (i) actions taken or omitted to be taken
(including any untrue statements made or any statements omitted to be made) by
the Company or any of its Subsidiaries or (ii) actions taken or omitted to be
taken by an Indemnified Person with the consent of the Company or any of its
Subsidiaries, or in conformity with instructions of the Company or any of its
Subsidiaries or actions or omissions of the Company or any of its Subsidiaries
or (B) are otherwise related to or arise out of HMCo's engagement hereunder, and
will reimburse each Indemnified Person for all reasonable costs and expenses,
including fees and disbursements of any Indemnified Person's counsel, as they
are incurred, in connection with investigating, preparing for, defending, or
appealing any action, formal or informal claim, investigation, inquiry or other
proceeding, whether or not in connection with pending or threatened litigation,
caused by or arising out of or in connection with HMCo's acting pursuant to the
engagement, whether or not any Indemnified Person is named as a party thereto
and whether or not any liability results therefrom. The Company will not,
however be responsible for any claims, liabilities, losses, damages, or expenses
pursuant to clause (B) of the preceding sentence that have resulted primarily
from HMCo's bad faith, gross negligence or willful misconduct. The Company also
agrees that neither HMCo nor any other Indemnified Person shall have any
liability to the Company for or in connection with such engagement except for
any such liability for claims, liabilities, losses, damages, or expenses
incurred by the Company that have resulted primarily from HMCo's bad faith,
gross negligence or willful misconduct. The Company further agrees that it will
not, without the prior written consent of HMCo, such consent not to be
unreasonably withheld, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnifications may be sought hereunder (whether or not any
Indemnified Person is an actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of HMCo and each other Indemnified Person hereunder from
all liability arising out of such claim, action, suit or proceeding. THE COMPANY
HEREBY ACKNOWLEDGES THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ANY
CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE
ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR
CONCURRENT ORDINARY NEGLIGENCE OF HMCo OR ANY OTHER INDEMNIFIED PERSON.
The foregoing right to indemnity shall be in addition to any rights
that HMCo and/or any other Indemnified Person may have at common law or
otherwise and shall remain in full force and effect following the completion of
the engagement or any termination of the engagement or this Agreement as
provided in Section 2(b).
It is understood that, in connection with HMCo's engagement, HMCo may
also be engaged to act for the Company in one or more additional capacities, and
that the terms of this engagement or any such additional engagement may be
embodied in one or more separate written agreements. This indemnification shall
apply to the engagement specified in Section 1 hereof as well as to any such
additional engagement(s) (whether written or oral) and any modification of said
engagement
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or such additional engagement(s) and shall remain in full force and effect
following the completion or termination of said engagement or such additional
engagements.
The Company further understands that if HMCo is asked to furnish the
Company a financial opinion letter or act for the Company in any other formal
capacity, such further action may be subject to a separate agreement containing
provisions and terms to be mutually agreed upon.
6. Confidential Information. In connection with the performance
of the services hereunder, HMCo agrees not to, and to use commercially
reasonable efforts to cause its officers, directors, employees, agents and
representatives acting on behalf of HMCo pursuant to this Agreement not to,
divulge any confidential information, secret processes or trade secrets
disclosed by the Company or any of its Subsidiaries to HMCo or any such person
in connection with the providing of services by HMCo (or any such person on
HMCo's behalf) solely in its capacity as a financial advisor pursuant to this
Agreement, unless the Company consents to the divulging thereof or such
information, secret processes, or trade secrets are publicly available or
otherwise available to HMCo without restriction or breach of any confidentiality
agreement or unless required by any governmental authority or in response to any
valid legal process (in which case HMCo will use commercially reasonable efforts
to provide the Company with as much advance notice as is reasonably
practicable).
7. Governing Law; Jurisdiction and Venue. This Agreement shall be
construed, interpreted, and enforced in accordance with the laws of the State of
Texas, excluding any choice-of- law provisions thereof. 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 by any Indemnified Persons for indemnity pursuant to
Section 5 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 7 shall affect or limit any right to serve process in any other
manner permitted by law.
8. Assignment. This Agreement and all provisions contained herein
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, neither this Agreement nor
any of the rights, interests, or obligations hereunder shall be assigned (other
than with respect to the rights and obligations of HMCo, which may be
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assigned to any one or more of its principals or Affiliates) by any of the
parties without the prior written consent of the other parties.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and the signature of any
party to any counterpart shall be deemed a signature to, and may be appended to,
any other counterpart.
10. Other Understandings. All discussions, understandings, and
agreements heretofore made between any of the parties hereto with respect to the
subject matter hereof are merged in this Agreement, which alone fully and
completely expresses the Agreement of the parties hereto. All calculations of
the Monitoring Fee and Reimbursable Expenses shall be made by HMCo and, in the
absence of mathematical error, shall be final and conclusive. All references to
"$" or dollar amounts will be to lawful currency of the United States of
America. All fees, expenses and other amounts payable to HMCo hereunder shall be
(i) payable in U.S. dollars and if such amounts were originally expressed in any
other currency, then unless otherwise provided herein such amounts shall be
converted to U.S. dollars at the official exchange rate published by the
government of such country to which such currency relates on the date of payment
or, if such government does not have a published exchange rate on the date of
payment, the applicable New York foreign exchange selling rate as published in
The Wall Street Journal on the date of payment or, if not published on the date
of payment, on the most recent previously published rate, (ii) grossed-up to
cover any withholding, value-added or other similar taxes, and (iii) paid by
wire transfer of immediately available funds to the account described on Exhibit
A hereto (or such other account as HMCo may hereafter designate in writing).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
XXXXX, MUSE & CO. PARTNERS, L.P.
By: HM PARTNERS, INC.,
its General Partner
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Senior Vice President
TRITON ENERGY LIMITED
By: /s/ Xxxxxx X. Xxxxxxx, III
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Xxxxxx X. Xxxxxxx, III
Chief Executive Officer, General Counsel
and Secretary
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