EXHIBIT 10.69
FINANCIAL ADVISORY AGREEMENT
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This FINANCIAL ADVISORY AGREEMENT, effective as of August 31, 1998 (this
"Agreement"), is made and entered into between Triton Energy Limited, a Cayman
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Islands company (the "Company"), and Xxxxx, Muse & Co. Partners, L.P., a Texas
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limited partnership (together with its successors, "HMCo").
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WHEREAS, simultaneously with the execution and delivery of this Agreement,
an affiliate of HMCo, HM 4 Triton, L.P., a Cayman Islands exempted limited
partnership ("Purchaser"), is entering into a Stock Purchase Agreement of even
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date herewith with the Company (the "Stock Purchase Agreement") pursuant to
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which Purchaser has agreed, subject to the terms and conditions of the Stock
Purchase Agreement, to purchase a portion of the share capital of the Company
(the "Acquisition");
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WHEREAS, the Company has requested that HMCo render, and HMCo has rendered,
financial advisory services to the Company and its Subsidiaries in connection
with the negotiation of the Acquisition; and
WHEREAS, the Company has requested that HMCo render financial advisory,
investment banking, and other similar services to the Company and its
Subsidiaries with respect to any future proposals for (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
Securities Exchange Act of 1934, as amended (the "Exchange Act"), of beneficial
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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 (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")
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entitled to vote in the election of directors sufficient to allow such 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
(as defined in the Stock Purchase Agreement) in excess of 50% of the market
value of the assets of the Company and its Subsidiaries as a whole (any one or
more of such transactions described in clause (a) or (b) above, a "Stock
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Transaction"; any one or more of such transactions described in clause (c)
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above, an "Asset Transaction" and any one or more of such transactions, a "Sale
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Transaction");
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WHEREAS, capitalized terms used but not defined herein and defined in the
Stock Purchase Agreement shall have the meanings ascribed to such terms in the
Stock Purchase Agreement;
NOW, THEREFORE, in consideration of the services rendered and to be
rendered by HMCo to the Company and its Subsidiaries and to evidence the
obligations of the Company to HMCo and the mutual covenants herein contained,
the Company and HMCo hereby agree as follows:
1. Retention.
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(a) The Company hereby acknowledges that it has retained HMCo for the
benefit of the Company and its Subsidiaries, and HMCo acknowledges that it has
acted, as financial advisor to the Company and its Subsidiaries in connection
with the Acquisition.
(b) The Company acknowledges that it has retained HMCo as its exclusive
financial advisor in connection with any Sale Transaction that may be
consummated from and after the First Closing during the term of this Agreement,
and that the Company will not, and will cause its Subsidiaries not to, retain
any other person or entity to provide such services in connection with any such
Sale Transaction unless the Chief Executive Officer of the Company (the "CEO")
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and HMCo mutually agree that the retention by the Company of a second financial
advisor in addition to HMCo would be appropriate with respect to a given Sale
Transaction; provided, however, that the Company, at the discretion of the CEO,
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may elect not to retain a financial advisor with respect to a particular Sale
Transaction and in such event HMCo shall not be entitled to receive the cash fee
set forth in Section 3(b) below. HMCo agrees that it shall provide such
financial advisory, investment banking, and other similar services in connection
with any such Sale Transaction as may be requested from time to time by the
board of directors of the Company.
2. Term.
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(a) The term of this Agreement shall continue until the earlier to
occur 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 Purchaser and its Affiliates cease to
own beneficially, directly or indirectly, at least 5% of the outstanding Common
Stock (determined after giving effect to the conversion of all 8% Preference
Shares of the Company held by Purchaser and its Affiliates at the conversion
rate thereof in effect as of any date of determination) (such date on which the
term of this Agreement terminates herein referred to as the "Termination Date").
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(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) if the Termination Date occurs prior to the First Closing,
the Acquisition Fee contemporaneously with the termination of this Agreement,
(B) on the fifteenth (15th) day following the Termination Date, amounts payable
to HMCo pursuant to Section 3(b) which have not been paid as of the Termination
Date and (C) 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.
3. Compensation.
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(a) As compensation for HMCo s services as financial advisor to the
Company and its Subsidiaries in connection with the Acquisition, the Company
hereby acknowledges that, upon the execution and delivery by HMCo of the Stock
Purchase Agreement and this Agreement, HMCo has earned a cash fee in the amount
of US$7,000,000 (the "Acquisition Fee") and irrevocably agrees to pay to HMCo a
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cash amount equal to the Acquisition Fee by wire transfer of immediately
available funds to the account designated on Schedule A hereto contemporaneously
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with the earlier to occur of (i) the First Closing or (ii) the termination of
the Stock Purchase Agreement.
(b) As compensation for HMCo s financial advisory, investment banking,
and other similar services rendered in connection with any Sale Transaction
pursuant to Section 1(b) hereof consummated after the First Closing, the Company
shall pay to HMCo, at the closing of any such Sale Transaction, a fee payable in
cash in an amount equal to the lesser of (i) the amount of fees then charged by
first tier investment banking firms for similar advisory services rendered in
connection with transactions similar to such Sale Transaction or (ii) 1.5% of
the Transaction Value; provided, however, that (A) such fee shall be divided
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equally between HMCo and any additional financial advisor retained by the
Company with respect to such Sale Transaction as provided in the first sentence
of Section 1(b) and (B) HMCo shall not be entitled to a fee with respect to any
Sale Transaction for which the CEO elects not to retain a financial advisor.
(c) For purposes of this Agreement, the term "Transaction Value" means
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(i) in the case of a Stock Transaction, (A) the fair market value of the sum of
(1) all outstanding common equity securities of the Company immediately prior to
such Stock Transaction and (2) the aggregate amount of common equity securities
issuable upon the conversion, exercise or exchange of any securities convertible
into or exercisable or exchangeable for common equity securities of the Company
("Common Equity Equivalents") immediately prior to such Stock Transaction (minus
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the cash proceeds to be received by the Company upon the conversion, exercise or
exchange of such Common Equity Equivalents), (B) all cash, securities,
settlement or termination amounts, notes or other debt instruments, and other
consideration paid or to be paid, directly or indirectly, by the Company, the
acquiring Person, any Surviving Entity or their respective Affiliates pursuant
to or in connection with any consulting agreement, non-competition agreement,
confidentiality agreement, severance agreement, settlement agreement or release
agreement entered into, directly or indirectly, by the Company, the acquiring
Person, any Surviving Entity or their respective Affiliates as a part of or in
connection with the Stock Transaction (but excluding any fees payable pursuant
to Section 3(b)) and (C) the principal amount of any indebtedness and the
liquidation preference and accumulated and unpaid dividends of any preferred
stock or similar items of the Company immediately prior to such Stock
Transaction); provided, however, that if all or any part of such consideration
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referred to in clause (B) above 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: (x) if such property consists of securities, such value shall be the
last reported sales price, regular way on the day immediately preceding the
Stock Purchase, 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 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") 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 HMCo and approved by the Company (which
approval shall not be unreasonably withheld) or, if no such market is regularly
made, as provided in clause (y) and (y) such value of property other than
securities (or with respect to securities in which a market is not regularly
made) 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 written notice describing and
quantifying the non-cash consideration to be paid, then the Company and HMCo
shall select one 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 and (ii) in the case of an Asset Transaction, the Asset Value of such
Asset Transaction.
4. Reimbursement of Expenses. In addition to the compensation to be
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paid pursuant to Section 3 hereof, the Company agrees to reimburse HMCo,
promptly following demand therefor, together with invoices or reasonably
detailed descriptions thereof, for all reasonable disbursements and
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
incurred by HMCo (a) as financial advisor to the Company or any of its
Subsidiaries in connection with the Acquisition or (b) in connection with the
performance by HMCo of the services contemplated by Section 1(b) hereof
("Reimbursable Expenses").
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5. Indemnification. The Company shall indemnify and hold harmless each
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of HMCo, its affiliates, and their 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 Exchange Act), if any, agents and employees
(HMCo, its affiliates, and such other specified persons being collectively re-
ferred to as "Indemnified Persons" and individually as an "Indemnified Person")
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from and against any and all claims, liabilities, losses, damages and expenses
incurred by any Indemnified Person (including those resulting from the
negligence of the Indemnified Person and reasonable fees and 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 any
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 costs and expenses, including
reasonable fees 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 or any of its Subsidiaries for or in connection with such engagement
except for any claims, liabilities, losses, damages or expenses incurred by the
Company or any such Subsidiary to the extent the same have resulted from HMCo s
bad faith, gross negligence or willful misconduct. The Company further agrees
that it will not, and the Company will cause its Subsidiaries not to, 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 indemnification
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
created hereby or any termination of the engagement or this Agreement.
It is understood that, in connection with HMCo s engagement, HMCo may also
be engaged to act for the Company or any of its Subsidiaries 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 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 or any of its Subsidiaries a financial opinion letter or to act for the
Company or any such Subsidiary 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
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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) as a
financial advisor pursuant to this Agreement, unless the Company consents in
advance 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
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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
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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 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
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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 Understanding. All discussions, understandings, and
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agreements theretofore 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TRITON ENERGY LIMITED
By: /s/ Xxxxxx X. Xxxxxxx, III
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Xxxxxx X. Xxxxxxx, III
Interim Chief Executive Officer
and General Counsel
XXXXX, MUSE & CO. PARTNERS, L.P.
By: HM PARTNERS INC.,
its General Partner
By:_________________________
Name:_______________________
Title:______________________
SCHEDULE "A"
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Chase Bank of Texas
ABA #: 000000000
Account #: 08805113824
Credit: Xxxxx, Muse & Co. Partners, L.P.
Reference: Payment of Acquisition Fees or Expenses by
Triton Energy Limited
