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Exhibit 10.11
Amended and Restated Advisory Agreement
Amended and Restated Advisory Agreement ("Agreement") made and entered into as
of the 3d day of October, 2003 among DAMG Capital LLC ("DAMG"), 575 Lexington
Avenue - 4th Floor, New York, New York 10022, Energy West, Incorporated, P.O.
Box 2229, Great Falls, Montana 59403 ("Company") and D.A. Davidson & Co., 8
Third Avenue North, Great Falls, Montana 59401 ("Davidson").
Whereas, the parties entered into an Advisory Agreement on June 5, 2003 (the
"Former Agreement"), and wish to amend and restate such agreement in its
entirety; and
Whereas, pursuant to the Former Agreement DAMG and Davidson provided advisory
services in connection with the Credit Agreement dated September 30, 2003,
between the Company and LaSalle Bank National Association as Agent, and certain
Banks (the "Credit Agreement").
Now therefore, in consideration of the mutual promises made herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree that the Former Agreement shall be
amended and restated in its entirety to provide as follows:
1. In full and complete satisfaction of any and all obligations arising
under the Former Agreement with respect to the Credit Agreement and any
other transaction contemplated by the Former Agreement, including any
transaction or transactions occurring after the date hereof, the
Company shall contemporaneously with the execution hereof (a) pay the
sum of $225,000 to DAMG, and (b) pay the sum of $225,000 to Davidson.
Upon the payment described in part (a), the Company shall have no
further obligations to DAMG except for DAMG's unpaid expenses and as
set forth in Paragraph 13 hereof, and DAMG expressly releases the
Company from any and all other claims of any nature, and the Company
expressly releases DAMG from any and all other claims of any nature.
Upon the payment described in part (b), the Company's obligations to
Davidson shall be limited to those set forth expressly in this
Agreement, and Davidson expressly releases the Company from any and all
other claims of any nature. All of the parties acknowledge that the
intent of the foregoing is to fully settle and release any claims
arising out of the Former Agreement, the Wells Fargo financing, the
completion of the Credit Agreement, and any other claims of any nature
whatsoever, with any surviving obligations to be only those set forth
explicitly in this Agreement.
2. Upon execution of this Agreement, the Company shall be deemed to have
engaged Davidson for the term specified in Paragraph 3 hereof to act as
an advisor to the to the Company relating to financial and similar
matters upon the terms and conditions set forth herein.
3. Except as otherwise provided in this Agreement, the term of Davidson's
continued engagement as an advisor pursuant to this Agreement shall be
deemed to have commenced on the date hereof and shall continue until
March 31, 2004, unless otherwise extended by mutual agreement of the
Company and Davidson. The engagement of Davidson hereunder may be
terminated at any time prior to March 31, 2004, with or without cause,
by either the Company or Davidson upon delivery of 10 business days'
prior written notice thereof to the other.
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4. During the term of this Agreement, Davidson shall provide the Company
with such consulting advice as is reasonably requested by the Company,
provided that Davidson shall not be required to undertake duties not
reasonably within the scope of the financial advisory or investment
banking services contemplated by this Agreement. It is understood and
acknowledged by the parties that the value of Davidson's advice is not
readily quantifiable, and that Davidson shall be obligated to render
advice upon the request of the Company, in good faith, but shall not be
obligated to spend any specific amount of time in doing so. Davidson's
duties may include, but will not necessarily be limited to, providing
recommendations and rendering advice concerning refinancing or
restructuring of all or a portion of the Company's long-term debt
(including adding approximately $8 million of new long-term debt to
reduce the amount of the present credit line under the Credit
Agreement) (such refinancing and/or restructuring being referred to
herein as a "Transaction"). For avoidance of doubt, Davidson's duties
hereunder are advisory in nature and do not extend to the placement or
underwriting of bonds, notes or other debt securities of the Company;
provided that it is contemplated that Davidson's duties hereunder shall
include assisting the Company in: (a) the placement of debt through
LaSalle Bank or an affiliate of LaSalle Bank, and/or (b) the placement
of debt with the Montana Board of Investments, and/or (c) obtaining any
consents or modifications required to be obtained in connection with
the Company's currently outstanding long-term debt.
5. Davidson shall render such other financial advisory and investment
and/or investment banking services as may from time to time be agreed
upon by Davidson and the Company.
6. In consideration for the services rendered by Davidson to the Company
pursuant to this Agreement (and in addition to the expenses provided
for in Paragraph 8 hereof), the Company shall pay to Davidson the sum
of $75,000.00 (the "Fee") upon the successful completion of a
Transaction or Transactions during the term of this Agreement or
thereafter if such Fee is due under the provisions of Paragraph 7
hereof. During the term of this Agreement, the Company agrees that it
will advise Davidson of any discussions with any party concerning a
Transaction; provided that the Company shall be free to engage other
parties to assist it in connection with any Transaction.
7. The Fee shall be due and payable to Davidson in cash at the closing of
any Transaction (it being understood that only one Fee shall be paid
pursuant to this Agreement regardless of the nature and structure of
the Transaction or Transactions involved in the restructuring and
refinancing of the Company's long term debt). If this Agreement is not
renewed or if it is terminated for any reason then, notwithstanding any
such non-renewal or termination, Davidson shall be entitled to the Fee
upon closing of any Transaction for which serious, substantive
discussions with the counterparty or counterparties were initiated or
conducted during the term of this Agreement (with Davidson directly
involved as advisor to the Company), were under way at the end of the
term of this Agreement and resulted in the closing of the Transaction
with such counterparty or counterparties within a period of six (6)
months after non-renewal or termination of this Agreement; provided
that no Fee shall be payable following any termination or non-renewal
(i) by the Company on the grounds of bad faith or material failure by
Davidson in the performance of the services hereunder, or (ii) by
Davidson other than on the grounds of bad faith or material failure by
the Company in the performance of its obligations hereunder.
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8. In addition to the Fee payable hereunder, and regardless whether any
Transaction is proposed or consummated, the Company shall reimburse
Davidson for all reasonable fees and disbursements of Davidson's
counsel and Davidson's travel and out of pocket expenses incurred in
connection with the services performed by Davidson pursuant to this
Agreement, including without limitation, reasonable travel, hotel, food
and associated expenses and printing, mailing and long-distance
telephone calls, subject to a maximum of Ten Thousand Dollars
($10,000.00) unless agreed to in writing by the Company.
9. The Company acknowledges that all opinions and advice (written or oral)
given by Davidson to the Company in connection with Davidson's
engagement are intended solely for the benefit and use of the Company
in considering the Transaction to which they relate, and the Company
agrees that no person or entity other than the Company shall be
entitled to make use of or rely upon the advice of Davidson to be given
hereunder, and no such opinion or advice shall be used for any other
purpose or reproduced, disseminated, quoted or referred to at any time,
in any manner or for any purpose, nor may the Company make any public
references to Davidson, or use Davidson's name in any annual reports or
any other reports or release of the Company without Davidson's prior
written consent; provided that the foregoing shall not be construed to
prevent the Company from complying with its disclosure obligations
arising under law, including the Federal securities laws and
regulations. The Company acknowledges that Davidson is not an agent of
the Company or acting as a fiduciary of the Company nor is Davidson
assuming any duties other than those explicitly set forth in this
Agreement. The Company shall be under no obligation under this
Agreement to accept the terms of any proposed Transaction contemplated
by this Agreement. Neither party shall have any liability in the event
the terms of any Transaction proposals are not acceptable to the
Company or a Transaction is not consummated.
10. The Company acknowledges that Davidson and its affiliates are in the
business of providing financial services and consulting advice to
others. Nothing herein contained shall be construed to limit or
restrict Davidson in conducting such business with respect to others,
or in rendering such advice to others. Davidson, however, agrees not to
accept engagements during the term hereof directly conflicting with its
obligations to the Company hereunder.
11. DAMG and Davidson shall maintain in strict confidence, and use solely
for purposes of their engagement hereunder, all non-public information
disclosed to either of them by the Company in the course of their
engagement. The obligation of confidentiality shall survive the
termination of this Agreement.
12. The Company recognizes and confirms that, in advising the Company and
in fulfilling its engagement hereunder, Davidson will use and rely on
data, material and other information furnished to Davidson by the
Company. The Company acknowledges and agrees that in performing its
services under this engagement, Davidson may rely upon the data,
material and other information supplied by the Company without
independently verifying the accuracy, completeness or veracity of same.
13. The Company has entered into indemnification agreements with DAMG and
Davidson, respectively, in connection with the Former Agreement. The
Company and DAMG hereby acknowledge that the terms of the
indemnification agreement with DAMG shall survive and continue in full
force and effect with respect to DAMG's services provided pursuant to
the Former Agreement. The Company and Davidson hereby acknowledge that
the terms of the
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indemnification agreement with Davidson shall survive and continue in
full force and effect with respect to Davidson's services provided
pursuant to the Former Agreement, and pursuant to this Agreement. Each
of DAMG and Davidson has entered into this Agreement in reliance on
the indemnities set forth in such indemnification agreement.
Notwithstanding the foregoing, DAMG and Davidson each agrees that the
Company's obligations under the aforementioned indemnification
agreements shall not cover any obligation or liability of DAMG or any
affiliate thereof to Davidson or any affiliate thereof, or any claims
or actions arising out of any such liabilities, and shall not cover
any obligation or liability of Davidson or any affiliate thereof to
DAMG or any affiliate thereof, or any claims or actions arising out of
any such liabilities.
14. Davidson shall perform its services hereunder as an independent
contractor and not as an employee of the Company or an affiliate
thereof. It is expressly understood and agreed to by parties hereto
that Davidson shall have no authority to act for, represent or bind the
Company or any affiliate thereof in any manner, except as may be agreed
to expressly by the Company in writing from time to time.
(a) This Agreement and the indemnification agreements referred to
in Paragraph 13 hereof constitute the entire agreement and
understanding of the parties hereto, and supersede any and all
previous agreements and understandings, whether oral or
written, between the parties with respect to the matters set
forth herein.
(b) Any notice or communication permitted or required hereunder
shall be in writing and shall be deemed sufficiently given if
hand-delivered or sent postage prepaid by registered mail,
return receipt requested, or by facsimile, to the respective
parties at their address above set forth or such other address
as either party may notify the other of in writing if to the
Company to the attention of John C. Allen, Interim President
and Chief Executive Officer and if to DAMG to the attention of
Philip M. Getter, President and if to Davidson to the
attention of Mark J. Semmens.
1) This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and their respective
successors, legal representatives and assigns.
2) This Agreement may be executed in any number of
counterparts, each of which together shall constitute one
and the same original document.
3) No provision of this Agreement may be amended modified or
waived except in writing signed by the parties hereto.
4) This Agreement shall be construed in accordance with and
governed by the laws of the State of Montana, without
giving effect to its conflict of law principles. The
parties hereby agree that any dispute which may arise
between them arising out of or in connection with this
Agreement shall be adjudicated before a court located in
Montana, and they hereby submit to the exclusive
jurisdiction of the courts of the State of Montana with
respect to any action or legal proceeding commenced by any
party, and irrevocably waive any objection they now or
hereafter may have respecting the venue of any such action
or proceeding brought in such a court or respecting the
fact that such court is an inconvenient forum, relating to
or arising out of this Agreement, and consent to the
service of
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process in any such action or legal proceeding by means of
registered or certified mail, return receipt requested, in
care of the addresses set forth in Paragraph 14(b) hereof.
5) The parties hereby waive trial by jury in any action or
proceeding involving, directly or indirectly, any matter
in any way arising out of or in connection with this
Agreement.
If the foregoing correctly sets forth the understanding between DAMG,
Davidson and the Company with respect to the foregoing, please so
indicate by signing in the place provided below, at which time this
Agreement shall become a binding contract.
DAMG Capital LLC
By: /s/ Roger N. Greene
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Roger N. Greene, Senior Managing Director
D.A. Davidson & Co.
By: /s/ Mark J. Semmens
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Mark J. Semmens, Managing Director
Accepted and Agreed:
Energy West, Incorporated
By: /s/ John C. Allen
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John C. Allen, Interim President and Chief Executive Officer
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