Exhibit 10.20
MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement, dated as of August 15, 2005 between
Advanced Construction Partners, LLC (hereinafter "ACP"), and ProSteel Builders
Corp (hereinafter "ProSteel").
WHEREAS, ProSteel is in the business of constructing buildings,
including residential housing, dormitories and schools, utilizing panels
manufactured by its majority shareholder, Alternative Construction Company, Inc.
("ACC");
WHEREAS, Advanced Construction Options, LLC ("ACO") and Gami, LLC
("Gami") through their wholly-owned corporation, Advanced Construction Partners,
LLC ("ACP") are in the business of providing management services to the
construction industry; and
WHEREAS, Prosteel wishes to engage ACP to provide professional
management and other specified services to it; and
WHEREAS, ACP and its owners ACO and Gami are willing to provide such
services on the terms and conditions set forth herein;
NOW THEREFORE, in consideration of foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Duties of ACP. ACP shall operate as the general contractor for the
supervision of all construction projects contracted with ProSteel, including all
marketing, selling, and general administration of ProSteel. ACP shall be
consulted and review in advance any and all such contracts with ProSteel. Any
and all business operations of ProSteel shall be contracted directly with ACP
which shall, in turn, utilize ACO unless ACO is unable to complete or fulfill
such contracts or refuses any such proposed contract for any reason. Upon any
such refusal to contract by ACO, ProSteel shall be permitted to contract with
any other entity to fulfill such contract. Any and all business and operations
of ACO will be conducted under contract with or on behalf of ACP, unless
ProSteel and ACP specifically refuse any such proposed contract for any reason.
Upon any such refusal to contract by ProSteel and ACP, then ACO shall be
permitted to contract with any other entity to carry out such contract without
obligation to ACP or ProSteel.
2. Fees and Other Compensation. ProSteel shall provide funding to ACP
for the operating expenses of ACO on a monthly basis. The parties agree to the
current estimate of such monthly expenses pursuant to the current budget
attached hereto as Exhibit A and incorporated herein by reference, which
expenses shall be regularly reviewed and agreed upon by the management of
ProSteel and ACP. Under no circumstances shall ACP be entitled to reimbursement
for expenses not listed on Exhibit A, or otherwise approved by it in writing.
ACO shall provide ProSteel and ACP with an itemized statement of such expenses
no later than the 5th day of each month, and ACP shall reimburse ACO for all
monthly operating expenses no later than the 10th day of each month.
Reimbursable expenses shall not include expenses of ACP associated with any
outside contract with any other entity the costs of which shall not be subject
to proportionate reimbursement to ACP.
3. Relationship of the Parties. ACP and Prosteel shall at all times
remain as independent contractors. ProSteel shall be the public contact for
construction contracts and services of the parties hereto. Any and all such
contracts by and/or among the parties shall be marketed, solicited and
contracted in the name of ProSteel, except to the extent that any party hereto
refuses to participate in any such contract as provided in Section 1 herein. Any
and all marketing, advertising or other solicitation by or on behalf of the
parties hereto shall be in the name of ProSteel. The parties will cooperate to
establish and carry out a joint marketing, sales and contract effort for all
construction projects and services.
4. Revenue Sharing. All revenues from any and all construction
contracts, projects and/or services generated under this Agreement shall be paid
directly to ProSteel. Prosteel shall have its books audited by an independent
auditor reasonably acceptable to ACP. ACP will be entitled to receive in payment
an amount equal to 50% of the Net Profit of Prosteel, as defined by Generally
Accepted Accounting Principles (GAAP). Net profit shall be calculated after
deducting all costs and expenses of Prosteel, including interest, debt service
and income and sales taxes. Revenues collected under construction draw schedules
will not be considered in the calculation of Net Profit until completion of the
project. All construction project funds contracted by ProSteel will be made
immediately available for use by ACP, on a construction draw schedule agreed
upon between the parties consistent with the construction draw schedule
contained in the subject construction contract between the customer and
ProSteel. To the extent required under each contract, ACP shall be primarily
responsible for the supervision of any and all construction projects and
ProSteel shall be primarily responsible for securing the necessary financing for
any and all such projects. In the event ACO, ACP, or GAMI brings Financial
Resources in order to provide funding for specific projects, ProSteel, ACO, ACP,
and GAMI agree to waive any potential Conflicts of Interests allowing the
procuring entity to negotiate acceptable financing terms separate from this
agreement.
5. Business Referral. During the term of this Agreement, each of ACC
and ACO, and its principals, agrees to use its best efforts to refer all
construction business to Prosteel, In addition, the parties agree to refer all
orders or inquiries for construction materials, including modular panels to ACC.
6. Corporate Governance. During the term of this Agreement, ACP shall
have the right to appoint two of five members to the Prosteel Board of Directors
("ACP Designees"), provided however, that such ACP Designees will, at all times,
recuse themselves from voting on any matter related to the engagement of ACP
hereunder.
7. Books and Records. ACO shall maintain it corporate books and
financial records at its offices located at 000 Xxxxx Xxxxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxx 00000. ProSteel shall have access to such records of ACO
during normal business hours. ProSteel shall also maintain its corporate books
and financial records at its corporate offices located at 0000 X. Xxxxxx Xxxx
Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx 00000 and ACP shall have access thereto
during normal business hours.
8. Term. The term of this Agreement shall be one year automatically
renewable unless terminated by one of the parties sixty (60) days prior to the
end of the term, or renewal term.
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9. Miscellaneous. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Florida.
The undersigned parties hereby specifically agree to be bound by the
terms and provisions referenced herein, and to further cooperate in the
management and operations of Prosteel for the mutual benefit of all parties.
SO AGREED to by and among the parties hereto this 25th day of August,
2005.
PROSTEEL BUILDERS, INC.
By: /s/
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Name:
Title:
ADVANCED CONSTRUCTION PARTNERS, LLC
By: /s/
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Name:
Title:
By: /s/
---------------------------------
Name:
Title:
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