AMENDED AND RESTATED MONITORING AGREEMENT
Exhibit
99.3
AMENDED
AND RESTATED
THIS AMENDED AND
RESTATED MONITORING AGREEMENT (this “Agreement”) is made and
entered into as of March 8, 2005 between Xxxxxxxx Xxxxx Co., a Utah corporation
(the “Company”), and Hampstead
Interests, LP, a Texas limited partnership (“HI”).
A. Knowledge Capital
Investment Group, a Texas general partnership related to HI (“Purchaser”), has entered
into that certain Preferred Stock Amendment and Warrant Issuance Agreement dated
November 29, 2004, between Purchaser and the Company (as amended from time to
time, the “Amendment
Agreement”);
B. HI, by and through
itself, its affiliates and their respective officers, employees and
representatives, has expertise in the areas of management, finance, strategy,
investment and acquisitions relating to the business of the Company;
C. The Company, to
avail itself of the expertise of HI in the aforesaid areas, entered into a
Monitoring Agreement dated as of June 2, 1999 with HI (the “Prior
Monitoring Agreement”);
D. The Prior
Monitoring Agreement may be amended by a writing signed by both parties thereto;
and
E. Pursuant to the
Amendment Agreement, the parties desire to amend and restate the Prior
Monitoring Agreement as set forth herein.
NOW, THEREFORE, in
consideration of the mutual promises and covenants set forth herein, the Company
and HI hereby agree that the Prior Monitoring Agreement is terminated and is
superceded and replaced in its entirety by this Agreement, and the parties
further agree as follows:
1. Monitoring
Services.
(a) HI will use
reasonable efforts to advise and assist the Company in connection with the
development of its strategic plan, including acquisitions, divestitures, new
development and financing matters. The precise nature of the services to be
performed hereunder by HI will be determined from time to time by the mutual
agreement of HI and the Company. The Company hereby acknowledges that the
persons performing the foregoing services are full-time employees of HI or other
entities and will not be expected to devote substantially all of their efforts
to the Company but rather only so much of their efforts as, from time to time,
HI determines in its sole discretion to be appropriate in the
circumstances.
(b) HI and the
individuals acting on its behalf that are actually providing the services
contemplated hereby will be independent contractors, rather than employees or
agents, and will have only such authority as is incident to the discharge of the
duties herein contemplated or specifically authorized from time to time by the
Board of Directors of the Company (the “Board”).
2. Consideration.
(a) In consideration
of the services to be provided by HI, the Company will pay to HI a quarterly
monitoring fee equal to (x) $100,000 multiplied by (y) a fraction, the numerator
of which is the number of shares of the Company’s Series A Preferred Stock (the
“Series A
Preferred”) held by
Purchaser as of the last day of the preceding fiscal quarter and the denominator
of which is 3,311,438 (the “Initial
Purchaser Shares”), giving effect
to any stock split, stock dividend or similar event, payable during the term of
this Agreement on the first day of each fiscal quarter of the Company (the
“Fee”).
(b)
HI’s
rights under this Section 2 will not be subject to offset or reduction by
reason of any obligation of the Company or any of its affiliates to pay any
other financial advisory fee or other compensation to any other person or
entity, including without limitation any entity affiliated with HI, and will not
limit such other rights and obligations to which the Company and HI or their
respective affiliates may from time to time agree in the future.
3. Reimbursements. In addition to
the Fee, the Company will pay directly or reimburse HI for its Out-of-Pocket
Expenses. Promptly following the Company’s request therefor, HI will provide
written substantiation in reasonable detail relating to any Out-of-Pocket
Expenses to be paid or reimbursed by the Company pursuant to this Agreement. For
purposes of this Agreement, the term “Out-of-Pocket Expenses” means the
reasonable out-of-pocket costs and expenses for travel that are actually and
reasonably incurred by HI or its affiliates in connection with the services
rendered hereunder. All reimbursements for Out-of-Pocket Expenses will be made
promptly upon or as soon as practicable after presentation by HI to the Company
of a written statement therefor.
4. Indemnification.
(a) The Company will
indemnify and hold harmless HI, its affiliates, including without limitation
Purchaser, and their respective partners (both general and limited), members
(both managing and otherwise), officers, directors, employees, agents and
representatives (each such person being an “Indemnified
Party”) from and
against any and all losses, claims, damages and liabilities, whether joint or
several (the “Indemnifiable
Losses”), related to,
arising out of or in connection with the services contemplated by this Agreement
or the engagement of HI pursuant to, and the performance by HI of the services
contemplated by, this Agreement, whether or not pending or threatened, whether
or not an Indemnified Party is a party and whether or not such action, claim,
suit, investigation or proceeding is initiated or brought by the Company
directly, derivatively or otherwise, including without limitation any action,
suit, proceeding or investigation arising out of any action or failure to take
action by the Company or any of its subsidiaries, whether or not based on a
theory of primary or secondary liability, and will reimburse any Indemnified
Party for all reasonable costs and expenses (including reasonable attorneys’
fees and expenses) as they are incurred in connection with investigating,
preparing, pursuing, defending or assisting in the defense of any action, claim,
suit, investigation or proceeding for which the Indemnified Party would be
entitled to indemnification under the terms of this sentence, or any action or
proceeding arising therefrom, whether or not such Indemnified Party is a party
thereto, provided, that, subject to
the following sentence, the Company, upon execution of a written undertaking
reasonably satisfactory to HI confirming the Company’s indemnity obligations
hereunder (without any reservation of rights) and expressly releasing all
Indemnified Parties from any and all liability related to the matter in question
(such undertaking, an “Indemnity
Undertaking”), will be
entitled to assume the defense thereof at its own expense, with counsel
satisfactory to such Indemnified Party in its reasonable judgment. Any
Indemnified Party may, at its own expense, retain separate counsel to
participate in such defense, and in any action, claim, suit, investigation or
proceeding in which both the Company and/or one or more of its subsidiaries, on
the one hand, and an Indemnified Party, on the other hand, is, or is reasonably
likely to become, a party, such Indemnified Party will have the right to employ
separate counsel at the expense of the Company and to control its own defense of
such action, suit, claim, investigation or proceeding if, in the reasonable
opinion of counsel to such Indemnified Party, a conflict or potential conflict
exists between the Company, on the one hand, and such Indemnified Party, on the
other hand, that would make such separate representation advisable. The Company
will not, without the prior written consent of the applicable Indemnified Party,
settle, compromise or consent to the entry of any judgment in any pending or
threatened claim, suit, investigation, action or proceeding relating to the
matters contemplated hereby, (if any Indemnified Party is a party thereto or has
been threatened to be made a party thereto) unless such settlement, compromise
or consent includes an unconditional release of the applicable Indemnified Party
and each other Indemnified Party from all liability arising or that may arise
out of such claim, suit, investigation, action or proceeding. Provided the
Company is not in breach of its indemnification obligations hereunder, no
Indemnified Party may settle or compromise any claim subject to indemnification
hereunder without the consent of the Company, provided, that prior
thereto such Indemnified Party has been furnished with an Indemnity
Undertaking.
(b) If any
indemnification sought by any Indemnified Party pursuant to this Section is
unavailable for any reason or is insufficient to hold the Indemnified Party
harmless against any Indemnifiable Losses referred to herein, then the Company
will contribute to the Indemnifiable Losses for which such indemnification is
held unavailable or insufficient in such proportion as is appropriate to reflect
the relative benefits received (or anticipated to be received) by the Company,
on the one hand, and HI, on the other hand, in connection with the transactions
which gave rise to such Indemnifiable Losses or, if such allocation is not
permitted by applicable law, not only such relative benefits but also the
relative faults of the Company, on the one hand, and HI, on the other hand, as
well as any other equitable considerations, subject to the limitation that in
any event the aggregate contribution by the Indemnified Parties to all
Indemnifiable Losses with respect to which contribution is available hereunder
will not exceed the Fees paid through the date on which (or, if more than one
date, the last date on which) the conduct occurred that gave rise to the
Indemnifiable Loss.
(c) Notwithstanding
any other provision hereof, none of HI nor any employee, officer, director or
other related person or entity will have any liability or obligation by reason
of this Agreement for performance or nonperformance of services contemplated
hereby except and solely to the extent that it is judicially determined by a
court of competent jurisdiction that such person intentionally breached or
caused to be breached a material provision of this Agreement. The parties hereto
hereby expressly disclaim any liability or obligation of HI and its affiliates
or any of their respective employees, officers, directors and other related
persons or entities for actual or alleged negligence of any character in
connection with the services contemplated by this Agreement.
(d) The provisions of
this Section 4 will be in addition to and in no manner limit or otherwise affect
any other right that HI or any other Indemnified Party may have, whether by
contract, or arising as a matter of law or the constituent documents of any
other entity.
5. Term. This Agreement
will become effective on the date first written above and will continue until
such date on which Purchaser and its affiliates together own less than 880,000
of the Initial Purchaser Shares, giving effect to any stock split, stock
dividend or similar event. Notwithstanding any other provision hereof, HI may
terminate its obligations under Section 1 with or without cause on 60
calendar days prior written notice to the Company. The termination or expiration
of the term of this Agreement (i) will not affect HI’s rights under
Sections 3 or 4 hereof (which will survive any termination or expiration of
this Agreement) and (ii) will terminate HI’s rights under Section 2
hereof (except that for the period during which such expiration or termination
occurs the quarterly fee will be prorated based on the number of days in such
quarter prior to such termination or expiration divided by 90).
6. Miscellaneous.
(a) No amendment or
waiver of any provision of this Agreement, or consent to any departure by either
party hereto from any such provision, shall be effective unless the same shall
be in writing and signed by each of the parties hereto. Any amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. The waiver by any party of any breach of this Agreement
shall not operate as or be construed to be a waiver by such party of any
subsequent breach.
(b) Any notices or
other communications required or permitted hereunder shall be sufficiently given
if delivered personally or sent by facsimile, Federal Express or other overnight
courier, addressed as follows or to such other address of which the parties may
have given notice:
| If to HI: | Hampstead Interests, LP | |
| 0000 XxXxxxxx Xxxxxx | ||
| Xxxxx 000 | ||
| Xxxxxx, Xxxxx 00000 | ||
| Attention: Xxxxxx X. XxXxxxxx | ||
| Fax: (000) 000-0000 |
| If to the Company: | Xxxxxxxx Xxxxx Co. | |
| 0000 Xxxx Xxxxxxx Xxxxxxxxx | ||
| Xxxx Xxxx Xxxx, XX 00000-0000 | ||
| Attention: Xxx X. Xxxxxxxxxxx | ||
| Fax: (000) 000-0000 | ||
Unless otherwise
specified herein, such notices or other communications shall be deemed received
(i) on the date delivered, if delivered personally or sent by facsimile,
and (ii) one business day after being sent by Federal Express or other
overnight courier.
(c) This Agreement
shall be governed by, and construed and interpreted in accordance with, the laws
of the State of Utah. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors and assigns.
The provisions of Section 4 shall inure to the benefit of each Indemnified
Party.
(d) This Agreement may
be executed by one or more parties to this Agreement on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) The waiver by any
party of any breach of this Agreement shall not operate as or be construed to be
a waiver by such party of any subsequent breach.
(f) Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
(g) For purposes of
this Agreement, (i) “affiliate” of any person
means another person that directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with such
first person and (ii) “person” means an
individual, corporation, partnership, limited liability company, joint venture,
association, trust, unincorporated organization or other entity.
(h) When a reference
is made in this Agreement to an Article, Section, Exhibit or Schedule, such
reference is to a Section of this Agreement unless otherwise indicated. Whenever
the words “include,” “includes” or “including” are used in this
Agreement, they will be deemed to be followed by the words “without
limitation.” The words
“hereof,” “herein” and
“hereunder” and words of
similar import when used in this Agreement will refer to this Agreement as a
whole and not to any particular provision of this Agreement. All terms defined
in this Agreement will have the defined meanings when used in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such term. References to a person are
also to its permitted successors and assigns.
(i) This Agreement
(including the documents and instruments referred to herein)
(i) constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement and (ii) except for the provisions of
Section 4, are not intended to confer upon any person other than the
parties any rights or remedies.
(j) Neither this
Agreement nor any of the rights, interests or obligations under this Agreement
may be assigned, in whole or in part, by operation of law or otherwise by either
of the parties hereto without the prior written consent of the other party. Any
assignment in violation of the preceding sentence will be void. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
(k) The parties agree
that irreparable damage would occur and that the parties would not have any
adequate remedy at law in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties will be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any federal court
located in the State of Utah or in Utah state court, this being in addition to
any other remedy to which they are entitled at law or in equity. In addition,
each of the parties hereto (i) consents to submit itself to the personal
jurisdiction of any federal court located in the State of Utah or any Utah state
court in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (ii) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, and (iii) agrees that it will not bring any
action relating to this Agreement or any of the transactions contemplated by
this Agreement in any court other than a federal court sitting in the State of
Utah or a Utah state court.
[Signature page
follows.]
IN WITNESS
WHEREOF, the parties have caused this Amended and Restated Monitoring Agreement
to be executed as of the date first written above by their respective officers
thereto duly authorized.
| XXXXXXXX XXXXX CO. | ||
|
By: |
/s/ XXXXXX X. XXXXXXX | |
|
Name: |
Xxxxxx X. Xxxxxxx | |
|
Title: |
President and Chief Executive Officer |
| HAMPSTEAD INTERESTS, LP | ||
|
By: |
Hampstead Interests GenPar Partners | |
|
Its: |
General Partner | |
|
By: |
Hampstead Associates, Inc. | |
|
Its: |
General Partner and Manager | |
|
By: |
/s/ XXXXXX X. XXXXXXXX | |
|
Name: |
Xxxxxx X. XxXxxxxx | |
|
Title: |
President |
