EXHIBIT 10.64
XXXXXX XXXXXXXX FUND MANAGEMENT CO.
AMENDED AND RESTATED
INVESTMENT AGREEMENT
THE INVESTMENT AGREEMENT, dated as of May 17, 1996, made and entered into
by and between Xxxxxx Xxxxxxxx Fund Management Co. ("ABFM") and Heartland
Communications & Management, Inc. ("HCMI") is hereby amended and restated,
effective as of October 1, 1996.
HCMI and ABFM hereby agree as follows:
1. INVESTMENT.
A. ABFM UNITS
(i) HCMI agrees to acquire 7.5 Units of ABFM for a cash consideration
of Three-Hundred Eighty Thousand U.S. Dollars ($380,000.00). The $380,000
consideration shall be used for general corporate purposes including the
formation of a "hedge fund."
(ii) Each full Unit of ABFM shall consist of : (i) 140 shares of ABFM
nonvoting Class A, Series 1 Common Stock, par value $.01 and (ii) 20 shares
of ABFM nonvoting Class A 12% Cumulative Preferred Stock, par value $.01
(collectively "a Unit"). After acquisition of the 7.5 Units (the "Units"),
HCMI will hold 1050 shares of the nonvoting common stock and 150 shares of
the preferred stock in ABFM. At such time and after ABFM exercises its
call option with respect to the ABFM nonvoting common and preferred stock,
HCMI will own approximately 6.5% of the issued and outstanding stock in
ABFM.
(iii) The obligation to acquire the Units is contingent on HCMI
raising two million five hundred thousand dollars ($2,500,000) in an
initial public offering of its voting common stock.
(iv) As long as HCMI acquires the Units and holds at least 300
shares of the nonvoting common stock in ABFM, HCMI shall have the right to
nominate Xxxxxxx Xxxxx to the ABFM Board of Directors. Xxxxxx Xxxxxxxx
together with other shareholders of ABFM holding a sufficient number of
shares of ABFM stock necessary to elect such nominee to ABFM's Board shall
execute an agreement to vote their shares to elect HCMI's nominee to ABFM's
Board. In the event HCMI's nominee of right (named above) shall be unable
or declines to serve on ABFM's Board, subject to the approval of Xxxxxx
Xxxxxxxx or the affirmative disapproval of ABFM shareholders holding 33% or
more of ABFM's issued and outstanding voting common stock, HCMI may
substitute a member of
its Board of Directors for its nominee of right (named above). Xxxxxx
Xxxxxxxx may withhold said approval for any or no reason and the
shareholders constituting holders of 33% of the issued and outstanding
voting common stock need have no reason for disapproval. At such time as
ABFM is financially able to and in fact acquires director and officer
liability insurance, ABFM shall indemnify HCMI's Board representative for
his or her acts or omissions as an ABFM Board member to the full extent
of the state corporation law applicable to ABFM; provided however, said
indemnity shall not exceed the amount and type of the directors and
officers insurance coverage available to ABFM and other ABFM Board
members.
B. FUND VENTURE
(i) Management Fees. Subject to and conditioned on HCMI raising
seven million dollars ($7,000,000) from an initial public offering of its
voting common stock, HCMI agrees to provide one million one hundred
thousand dollars ($1,100,000) to ABFM to complete the cost and expense of
forming, marketing, distributing and managing an "inflation index fund" to
be formed by ABFM. ABFM shall provide investment advisory services to the
"inflation index fund" for which ABFM will receive management and incentive
fees. In exchange for said $1.1 million, ABFM agrees that HCMI shall be
entitled to and shall receive 50% of all management, incentive or other
allowable fees (the "Gross Fees") due ABFM from the "inflation index fund"
under any contract or agreement between ABFM and the "inflation index fund"
for management of or advisory services to such fund. ABFM and HCMI agree
to share equally those costs and expenses listed on Schedule A attached
hereto (the "Schedule A Expenses") in connection with the "inflation index
fund."
(ii) Timing. ABFM shall pay HCMI its 50% share of the Gross Fees due
from the "inflation index fund," net of HCMI's 50% share of Schedule A
Expenses, on or before the forty fifth (45th) day following the day on
which payment of any Gross Fees is due to be paid to ABFM by the "inflation
index fund."
(iii) Other Funds. ABFM agrees that in the event ABFM starts a
fund other than the "inflation index fund" (the "other fund") after the
"hedge fund" is started, HCMI shall have the option, but not the
obligation, to substitute the "inflation index fund" with that "other fund"
and HCMI shall be paid 50% of all fees ABFM receives for services rendered
to the "other fund," less costs and expenses specifically identified as
connected to the "other fund" and otherwise agreed to by the parties.
Provided, however, that if the funding requirements for the "other fund"
exceed $1.1 million, then HCMI's share of the ABFM fees (and costs and
expenses) shall be equal to 50% multiplied by the ratio of $1.1 million
over the total actual funding obtained to start said other fund. HCMI
shall have the right to contribute the difference between its $1.1 million
funding obligation and the actual funding need for the "other fund," in
which case HCMI
shall be due the 50% of fees (and obligated to pay 50% of costs and
expenses) specified above.
(iv) Right of First Refusal. In addition to the options outlined
in this Section B above, HCMI shall have the right of first refusal,
superior to any other investor, to invest in any future investment fund
developed by ABFM.
(v) Profits Preference. Notwithstanding the foregoing, any
investment funds contributed by HCMI for "inflation index fund," or "other
fund," shall be repaid out of the first profits earned by the inflation
index fund or "other fund", until such investment funds are repaid in full.
(vi) Noncompete Agreement. ABFM and Xxxxxx Xxxxxxxx hereby agree
not to compete with the "inflation index fund" or any "other funds"
(collectively, the "Funds") funded or financed by HCMI and ABFM.
Furthermore, Xxxxxx Xxxxxxxx shall execute a separate, detailed non-compete
agreement satisfactory to HCMI prior to and effective upon HCMI's funding
of the first Fund. HCMI's funding of any Fund is contingent upon Xxxxxx
Xxxxxxxx'x execution of a satisfactory non-compete agreement.
(viii) Best Efforts. ABFM will exercise its best efforts to ensure
that, in the event that Mutual Benefit Life Insurance Company does not fund
the All City Trust fund, but HCMI elects to fund the All City Trust fund
and Mutual Benefit agrees to sell its 21.4% interest in ABFM or the All
City Trust fund, Mutual Benefit's 21.4% net income participation interest
in All City will be funded and shared equally by ABFM and HCMI. HCMI
agrees to provide a promissory note in an amount not exceeding $100,000.00
at the time such note becomes necessary for this purpose.
(ix) Accounting; Right To Inspect.
a. Accounting. ABFM shall maintain records, which are audited
at least annually by a certified public accountant, in sufficient detail
for purposes of determining the amount of the fee due HCMI. ABFM shall
provide to HCMI a written accounting that sets forth the manner in which
the fee was calculated with each fee payment and a year end summary
statement, which shall be audited by a certified public accountant.
b. Right to Inspect. HCMI, or HCMI's agent, shall have the
right to inspect ABFM's records for the limited purpose of verifying the
calculation of the fee, subject to such restrictions as ABFM may reasonably
impose to protect the confidentiality of the records. Such inspections
shall be made during reasonable business hours as may be set by ABFM.
(x) Relationship of Parties. Nothing in this Agreement shall be
understood as establishing Xxxxxx Xxxxxxxx or ABFM as a registered
representative or a broker/dealer for the purposes of this Agreement.
There has been no selling agreement executed among the above parties.
2. TERM. This Agreement shall be effective until May 31, 1997.
Notwithstanding the immediately foregoing sentence, after May 31, 1997 this
Agreement and HCMI's right to exercise its rights under paragraph 1 above
shall continue until thirty days after ABFM gives HCMI notice that it has
received a bona fide offer from a third party for any of the investment
opportunities specified in paragraph 1 above and HCMI shall have thirty
days from said notice to exercise its investment option and make its
required cash investment.
3. NOTICES. Notices required or permitted to be given hereunder
shall be in writing and shall be deemed to be given when personally
delivered (including delivery by an express or overnight delivery service),
when received by facsimile transmission or when sent by registered mail,
return receipt requested, addressed, if to ABFM, at the address appearing
on the signature page hereof, and if to the HCMI: Heartland Communications
& Management, Inc. 0000 Xxx Xxxxx Xxxxxx Xxxx, Xxxxx 000, XxXxxx, Xxxxxxxx
00000 or to such other address as may be furnished from time to time by
notice given in accordance with this Section.
4. WAIVER. Failure of either party to exercise any right or remedy
under this Agreement, or delay by a party in exercising same, will not
operate as a waiver thereof. No waiver by a party will be effective unless
and until it is in writing and signed by the party affected.
5. GOVERNING LAW; SEVERABILITY. This Agreement shall be enforced,
governed and construed in accordance with the laws of the State of Missouri
without regard to its conflict of laws principles or rules. In the event
that any term or provision of this Agreement is invalid or enforceable
under any applicable statute or rule of law, then such term or provision
shall be deemed inoperative to the extent that it may conflict therewith
and shall be deemed modified to conform with such statute or rule of law.
Any term or provision hereof which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other term
or provision hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth below.
HEARTLAND COMMUNICATIONS & MANAGEMENT, INC.
0000 Xxx Xxxxx Xxxxxx Xxxx, Xxxxx 000
XxXxxx, XX 00000
By: /s/ Xxxxxxx Foudly
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XXXXXX XXXXXXXX FUND MANAGEMENT CO.
0000 Xxxxxxxx Xxxxxx - Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
By: /s/ Xxxxxx X Xxxxxxxx
---------------------------
Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx Fund Management Company
Investment agreement dated as of May 17, 1996
SCHEDULE A OF EXPENSES
All direct or third party costs including but not limited to:
Distribution/Broker-dealer expenses
Shareholder servicing expenses
Transfer agency/custodian expenses
Sub-advisory expenses
Expense CAP overage expenses
Possible carried interest of Mutual Benefit Life
for All City Trust
Plus all indirect or reasonably allocable operational or apportionable costs
including but not limited to:
Employee compensation and benefits
Rent, equipment, furniture, leases
Travel
Phone
Legal and accounting
General administration
The basis for allocation should be subject to the mutual agreement of the
parties. If the parties cannot agree to the allocation, a mutually agreeable
CPA firm should be hired to resolve the allocation issue.
XXXXXX XXXXXXXX FUND HEARTLAND COMMUNICATIONS &
MANAGEMENT CO. MANAGEMENT, INC.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000 0000 Xxx Xxxxx Xxxxxx Xx., Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000 XxXxxx, XX 00000
By: /s/ Xxxxxx X Xxxxxxxx By: /s/ Xxxxxxx Foudly
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Date: 11/13/96 Date: 11/17/96
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