Exhibit 10.11
EXCLUSIVE INVESTMENT BANKING SERVICES AGREEMENT
BETWEEN
ALTERNATIVE CONSTRUCTION COMPANY, INC., ITS AFFILIATES AND ASSIGNS
(THE "COMPANY") AND
AVANTE HOLDINGS GROUP, INC., ITS SUCCESSORS AND ASSIGNS ("AVANTE")
OCTOBER 24, 2004
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SCOPE OF SERVICES: The Company is engaging Avante on an exclusive basis
to perform investment banking and merger and
acquisition consulting services. The scope of such
services shall include the merger of the Company with
or into another entity, or the sale of part or all of
the Company's fixed, technology or intangible assets
including the Company's IT product(s), its website and
any related systems (the "Transactions").
For the purposes of this Agreement a "sale" shall mean
any transaction or series or combination of
transactions, other than in the ordinary course of
trade or business, whereby, directly or indirectly,
control of or any interest in the Company or its
subsidiaries or affiliates, or any of their respective
businesses (a "Business") or any of their respective
assets, is transferred for consideration, including,
without limitation, a sale or exchange of capital
stock or assets, a lease of assets with or without a
purchase option, a merger or consolidation, a
recapitalization, a tender or exchange offer, a
leveraged buy-out, the formation of a joint venture,
minority investment or partnership, or any similar
transaction.
(a) Except as provided in subsection (b) below,
"consideration" shall mean the full transaction
value of any sale of the Company including,
without limitation, the total value of all cash,
securities, other property and any contingent,
earned or other consideration paid or payable,
directly or indirectly, by an acquiring party to a
selling party or to a participant in the
transaction in connection with a sale of the
Company. The value of any such securities (whether
debt or equity) or other property or items of
value shall be determined as follows: (i) the
value of securities that are freely tradeable in
an established public market shall be the last
closing market price of such securities prior to
the public announcement of the sale; (ii) the
value of securities which are not freely tradeable
or which have no established public market, or if
the consideration utilized consists of property
other than securities, the value of such
securities or other property shall be the fair
market value thereof; and (iii) the sum of all
lease payments. "Consideration" shall also include
the face value of any indebtedness (except to
trade creditors) to which the sale of the Company
is subject or to which the Company or its
subsidiaries or affiliates (or portion thereof) to
be sold remains obligated, or indebtedness that is
assumed in connection therewith, the value of any
consulting or employment agreements received by
the principals of the Company in excess of their
historical salary levels, and the value of any
payments to be received by the principals of the
Company for entering into non-compete or similar
agreements. In the case of a recapitalization,
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"consideration" shall include the aggregate amount
of indebtedness incurred or equity raised by the
Company or a successor thereof in connection with
such recapitalization. If any consideration to be
paid is computed in a foreign currency, the value
of such foreign currency shall, for purposes
hereof, be converted into U.S. Dollars at the
prevailing exchange rate on the date or dates on
which such consideration is paid.
(b) If the sale of the Company is structured in
such a way as to provide for the transfer of only
part of the assets of the Company or its
subsidiaries or affiliates or one or more of the
Businesses of the Company or its subsidiaries or
affiliates and the retention of other assets or
Business (es), including, but not limited to,
cash, cash equivalents, investments, inventories
and receivables, such retained assets shall not be
deemed to be part of the consideration received in
connection with the sale of the Company, as
follows: (A) with respect to investments, in an
amount equal to the market value of such
investments, (B) with respect to inventories and
receivables, in an amount equal to the book value
thereof, and (C) with respect to any other assets,
in an amount to be reasonably determined by the
parties.
(c) The Company reserves the right to manage
internally or through a third party, the necessary
duties and responsibilities associated with the
Company merging, completing a strategic
allegiance, and/or any other transaction of the
Company. Avante, if qualified to complete said
responsibility, will be given the right of first
refusal in said matters. The Company has the right
to utilize the most effective assistance in all
matters.
(d) Avante will be compensated as outlined under
separate agreement and/or via stock as defined in
future agreements on a case-by-case basis.
RIGHT TO TERMINATE
NEGOTIATIONS: The Company may refuse to discuss or negotiate any
Transaction with any party for any reason whatsoever
and may terminate negotiations with any party at any
time.
LIST OF PARTIES: Avante shall maintain a comprehensive written list
(the "List") of parties (the "Parties") developed by
Avante and the Company, which may be potential Parties
to any Transaction involving the Company. Avante shall
be entitled to the compensation as described herein
resulting from any Transaction, during the term of
this agreement, with any Party that is on the List.
Avante shall provide a copy of the List to the Company
from time to time.
TERM OF AVANTE
ENGAGEMENT: Three years from the date of execution of this
agreement.
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RESPONSIBILITIES OF
THE COMPANY: The Company agrees to make its executive staff and
employees available, upon reasonable notice, on a
regular basis to conduct meetings with Avante and
outside parties that Avante deems are necessary to
perform its duties under this agreement. The Company
personnel also will provide historical financial and
operating data as well as other information, reports,
etc. within a reasonable time upon being requested by
Avante. The Company would be responsible for all
direct reasonable expenses for services related to
Avante's activities on behalf of (and approved by) the
Company, provided by outside professionals including,
but not limited to, law firm(s), accounting firm(s)
and other consultants. The Company acknowledges that
Avante is not required to contribute any capital or
provide legal or auditing services in connection with
the activities defined in this agreement.
The Company represents and warrants that all
information made available to Avante by the Company or
contained in the Documents will, at the time such
information is made available to Avante, be complete
and correct in all material respects and will not
contain any untrue statement of a material fact or
omit to state a material fact necessary in order to
make the statements therein not misleading in light of
the circumstances under which such statements are
made.
The Company further represents and warrants that any
projections provided to Avante or contained in the
Documents will have been prepared in good faith and
will be based upon assumptions which, in light of the
circumstances under which they are made, are
reasonable. The Company acknowledges and agrees that
in rendering its services hereunder, Avante will be
using and relying, without any independent
investigation or verification thereof, on all
information that is or will be furnished to Avante by
or on behalf of the Company and on publicly available
information, and Avante will not in any respect be
responsible for the accuracy or completeness of any of
the foregoing kinds of information (included in the
Documents or otherwise), and that Avante will not
undertake to make an independent appraisal of any of
the assets of the Company or any of its subsidiaries
or affiliates. The Company understands that in
rendering services hereunder Avante will also rely
upon the advice of counsel to the Company and other
advisors to the Company as to legal, tax and other
matters relating to any transaction or proposed
transaction contemplated by this Agreement.
ROLE OF AVANTE: Avante is being retained to serve as financial advisor
solely to the Company, and it is agreed that the
engagement of Avante is not, and shall not be deemed
to be, on behalf of, and is not intended to confer
rights or benefits upon, any shareholder or creditor
of the Company or its subsidiaries or upon any other
person or entity. No one other than the Company is
authorized to rely upon this engagement of Avante or
any statements, conduct or advice of Avante, and no
one other than the Company is intended to be a
beneficiary of this engagement. All opinions, advice
or other assistance (whether written or oral) given by
Avante in connection with this engagement are intended
solely for the benefit and use of the Company and
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will be treated by the Company as confidential.
In connection with our engagement, Avante will
develop, in consultation with the Company, a List of
entities that Avante believes might be potential
purchasers of the Company, its securities, its
subsidiaries, its affiliates and/or any of their
respective assets. Avante will initiate discussions
with potential purchasers, participate in the
negotiation of possible transactions and advise the
Company as to negotiating strategy and other matters
in connection therewith. The Company will furnish
Avante with all available information and material
regarding the Company as Avante may request in
connection with the performance of its obligations
hereunder. Avante will assist the Company in preparing
a document or documents (collectively, "Documents") to
describe the Company and its management and financial
status for use in discussions with prospective
purchasers.
NON-CIRCUMVENT: The Company further agrees not to attempt to
circumvent this agreement in an attempt to deprive
Avante or any other party of any fees, commissions, of
any other remuneration. To that end this document
shall be considered to apply to any and all
corporations of the Parties, divisions, subsidiaries,
employees, consultants, principals, agents,
associates, family members, assignees, or other
associated persons.
Should the Company circumvent Avante and complete a
Transaction with any party on the List then Avante
will be compensated as defined herein for any
Transaction occurring within three (3) years from any
such circumvention.
TRANSACTION FEES: In the event that Avante identifies a Transaction with
a party on the List and introduces the Company to an
entity that subsequently is acquired by or merged into
the Company or if such entity acquires any ownership
interest (including placement of shareholders' stock)
in, or merges the Company into such entity in any
form, then Avante would be paid, at the closing of
each such acquisition or merger, a fee based of the
value of such transaction calculated with respect to
the amount of the aggregate purchase price including
assumed debt (or the value of the consideration given,
whichever is greater) for each such Transaction (the
"Purchase Value") as follows:
(a) 10% of the 1st one million dollars of
Purchase Value
(b) 8% of the 2nd one million dollars of
Purchase Value
(c) 6% of the 3rd one million dollars of
Purchase Value
(d) 4% of the 4th one million dollars of
Purchase Value
(e) 2% of the Purchase Value in excess of
four million dollars
A FIXED 2% EXPENSE ACCOUNT FOR OUT-OF-POCKET EXPENSES
SHALL BE PAID TO AVANTE. ANY EXPENSES IN EXCESS OF THE
2% WILL BE ABSORBED BY AVANTE. ANY FUNDS LEFT OVER
WILL BE THE PROPERTY OF AVANTE. THIS FEE WILL BE PAID
IN
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CONJUNCTION WITH THE ABOVE STATED TRANSACTION FEES.
TIMING OF
PAYMENT: As compensation for the services rendered by Avante
hereunder, the Company shall pay or cause Avante to be
paid as follows:
(a) If a merger or sale of the Company occurs, or the
parties reach a preliminary or definitive
agreement of such merger or sale, either:
(i) during the term of Avante's engagement
and (a) if the party or parties to the
recapitalization, merger or sale were
identified by Avante as reflected on the
List or
(ii) at any time during a period of three (3)
years following the effective date of
termination of Avante's engagement
hereunder, and the merger or sale involves
a party introduced by Avante, and included
on the List, then, upon consummation of
such transaction, the Company shall pay to
Avante the applicable fees for the
Transactions described herein.
(b) Compensation which is payable to Avante pursuant
to (a) above shall be paid by the Company to
Avante at the closing of a merger or sale of the
Company, provided that compensation attributable
to that part of consideration which is contingent
upon the occurrence of some future event (e.g.,
the realization of earnings projections)
("Contingent Consideration") shall be paid by the
Company to Avante at the earlier of (i) the
receipt of such consideration or (ii) the time
that the amount of such consideration can be
determined.
(c) In the event that Contingent Consideration
described in (b) above is payable by an
individual, group or legal entity other than the
Company, or by a successor to the Company, after
the closing of a recapitalization, merger or sale
of the Company, the Company shall cause such
individual, group, entity or successor to pay
compensation payable to Avante hereunder, or, at
the closing, to enter into an agreement to pay
such compensation to Avante according to the terms
hereof.
BEST EFFORTS
BASIS All activities conducted by Avante on behalf of the
Company are on a best-efforts basis only. Avante makes
no representation or warranty that the achievement of
any of the goals or objectives outlined in this
agreement is guarantied. The Company acknowledges the
best efforts nature of this agreement and that
Avante's efforts may not result in any of these goals
and objectives being realized or in any capital being
raised for the Company.
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NO OTHER BROKERS: The Company represents and warrants that there are no
brokers, representatives or other persons, which have
an interest in any compensation from any transaction
contemplated herein. The Company has in the past
utilized the services of other financial related
people and/or companies for the purpose of raising
funds. Therefore, if funds become available after the
effective date of this agreement from a prior
relationship, said funds can be incorporated into the
current funds that are in the process of being raised
and any associated fees to said third parties would be
paid by the Company. These funds would be accepted
with the joint agreement of the Company and Avante and
are bound by reasonable methods of evaluation as to
the benefit of said funds to the Company. In the case
of funds received by a party or parties not introduced
by Avante, Avante shall not be compensated according
the compensation plan defined herein. The Company and
Avante mutually agree that the attainment of the
Company goals and objectives may require a revision to
the current financial attainment path as agreed upon.
The Company and Avante agree to reevaluate and modify
the long-term goals to maximize the benefit to the
Company and its shareholders.
ANNOUNCEMENTS: The Company agrees that, following the closing or
consummation of a recapitalization, merger or sale of
the Company, Avante has the right to place
advertisements in financial and other newspapers and
journals at its own expense, describing its services
to the Company hereunder, provided that Avante will
submit a copy of any such advertisements to the
Company for its prior approval, which approval shall
not be unreasonably withheld. The Company will have
the opportunity to employ a third party with the
appropriate expertise if said expertise is not
applicable to Avante. The Company reserves the right
to employ the best party to complete said duties.
INDEMNIFICATION: In connection with engagements of the nature covered
by this Agreement, it is Avante's practice to provide
for indemnification, contribution, and limitation of
liability. By signing this Agreement, the Company
agrees to the provisions attached to this Agreement
(Attachment A), which provisions are expressly
incorporated by reference herein.
GOVERNING LAW: The terms and provisions of this Agreement are solely
for the benefit of the Company and Avante and the
other Indemnified Persons and their respective
successors, assigns, heirs and personal
representatives, and no other person or entity shall
acquire or have any right by virtue of this Agreement.
This Agreement represents the entire understanding
between the Company and Avante with respect to
Avante's engagement hereunder, and all prior
discussions are merged herein. This Agreement shall be
governed by, and construed in accordance with, the
laws of the State of Florida without regard to such
state's principles of conflicts of laws, and may be
amended, modified or supplemented only by written
instrument executed by each of the parties hereto.
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RESOLUTION OF
DISPUTES: Any dispute related to this Agreement, any
transaction contemplated hereby, or any other matter
contemplated hereby shall be settled by arbitration in
the County of Sarasota, Florida, in accordance with
the commercial arbitration rules then in effect of the
American Arbitration Association, before a panel of
three arbitrators. Any award entered by the
arbitrators shall be final, binding and non-appealable
and judgment may be entered thereon by any party in
accordance with applicable law in any court of
competent jurisdiction. This arbitration provision
shall be specifically enforceable. The fees of the
American Arbitration Association and the arbitrators
and any expenses relating to the conduct of the
arbitration shall be paid by the Company.
RIGHT TO
INVESTIGATE: The Company authorizes Avante to have investigative
background inquiries made relating to the legal,
credit, employment and other histories of the Company
and its principals. If such investigations provide
information that Avante determines, in its sole
discretion, will impede its ability to effectively
perform the activities defined in this engagement
agreement, then Avante shall have the right to
terminate this agreement without advance notice during
the first thirty days of the engagement and fully
refund any amounts, other than out-of-pocket expenses,
paid by the Company to Avante.
MODIFICATION: Any modification, alteration, or change to this
agreement, including but not limited to modification
of the services to be performed, extension of time of
performance, or changes to the amount or form of
compensation, shall be made only by written
supplemental agreements executed by each of the
parties.
AUTHORITY: Each individual executing this agreement on behalf of
any party expressly represents and warrants that such
individual has the authority to so execute, and
thereby to bind the party on behalf of which such
individual signs, to the terms of this agreement. The
Company represents and warrants to Avante that this
Agreement has been duly authorized and represents the
legal, valid, binding and enforceable obligation of
the Company and that neither this Agreement nor the
consummation of the transactions contemplated hereby
requires the approval or consent of any governmental
or regulatory agency or violates any law, regulation,
contract or order binding on the Company.
INVALID PROVISIONS: If any provision of this agreement is held to be
illegal, invalid or unenforceable under present or
future laws, such provisions shall be fully severable
and this agreement shall be construed and enforced as
if such illegal, invalid or unenforceable provision
had never comprised a part hereof or thereto. The
remaining provisions hereof shall remain in force and
effect and shall not be affected by the illegal,
invalid or unenforceable provision.
PRIOR AGREEMENTS: Both parties agree that this Agreement is the complete
and exclusive statement of
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the Agreement between the parties, superseding all
proposals or prior agreements, oral and/or written,
between the parties relating to the specific subject.
In recognition of the preceding, this agreement is executed and accepted as of
the first date written herein by:
AVANTE HOLDINGS GROUP, INC. ALTERNATIVE CONSTRUCTION COMPANY, INC.,
/s/ /s/
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By: By:
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ATTACHMENT A
INDEMNIFICATION, CONTRIBUTION AND
LIMITATION OF LIABILITY PROVISIONS
(a) Alternative Construction Company, Inc., and its affiliates
(collectively the "Company") agrees to indemnify and hold harmless
Avante Holdings Group, LLC. ("Avante") and its affiliates and their
respective officers, directors, employees and agents, and any
persons controlling Avante or any of its affiliates within the
meaning of Section 15 of the Securities Act of 1933 or Section 20 of
the Securities Exchange Act of 1934 (Avante and each such other
person or entity being referred to herein as an "Indemnified
Person"), from and against all claims, liabilities, losses or
damages (or actions in respect thereof) or other expenses which (A)
are related to 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 its affiliates or (ii) actions
taken by an Indemnified Person with the consent or in conformity
with the actions or omissions of the Company or its affiliates or
(B) are otherwise related to or arise out of Avante's activities on
behalf of the Company. The Company will not be responsible, however,
for any losses, claims, damages, liabilities or expenses pursuant to
the preceding sentence which are determined to have resulted from
such Indemnified Person's negligence or willful misconduct. In
addition, the Company agrees to reimburse each Indemnified Person
(who is entitled to be indemnified pursuant to the two previous
sentences) for all out-of-pocket expenses (including fees and
expenses of counsel) as they are incurred by such Indemnified Person
in connection with defending any such action or claim in which such
Indemnified Person is a named party, or in connection with enforcing
the rights of such Indemnified Person under this Agreement if a
judgment is found on behalf of the Indemnified Person in conjunction
with enforcing such rights under this Agreement.
(b) If for any reason, except pursuant to the second sentence of
Paragraph (a) above, the foregoing indemnity is unavailable to an
Indemnified Person or insufficient to hold an Indemnified Person
harmless, then the Company shall contribute to the amount paid or
payable by such Indemnified Person as a result of such claim,
liability, loss, damage or expense in such proportion as is
appropriate to reflect not only the relative benefits received by
the Company on the one hand and Avante on the other, but also the
relative fault of the Company and such Indemnified Person, as well
as any relevant equitable considerations. It is hereby further
agreed that the relative benefits to the Company on the one hand and
Avante on the other with respect to any transaction or proposed
transaction contemplated by this Agreement shall be deemed to be in
the same proportion as (i) the total value the transaction (minus
the fees in (ii)) bears to (ii) the fees paid to Avante with respect
to such transaction.
(c) No Indemnified Person shall have any liability to the Company or any
other person in connection with the services rendered pursuant to
this Agreement, except for any liability for losses, claims,
damages, liabilities or expenses determined to have resulted from
such Indemnified Person's negligence or misconduct.
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(d) The Company agrees that it will not settle or compromise or consent
to the entry of any judgment in any pending claim, action, suit or
proceeding in respect of which indemnification may be sought from
the Company by any Indemnified Person unless such settlement,
compromise or consent includes an unconditional release of such
Indemnified Persons hereunder from all liability arising out of such
claim, action, suit or proceeding.
(e) The provisions of this Attachment A shall be in addition to any
liability the Company may have to any Indemnified Person at common
law or otherwise, and shall survive the expiration of the term of
this Agreement and the closing of any sale of the Company.
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