EXHIBIT 10.11
XXXXXX & XXXXXXX INCORPORATED
000 X. XXXXXXXX XXXX.
XXXXX 0000
XXXXX, XX 00000
TEL: (000) 000-0000
THIS INVESTMENT BANKING AGREEMENT, made as of this 5th day of June, 1997,
is by and between Laboratory Specialists of America, Inc., an Oklahoma
corporation (the "Company"), with its address at 000 Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxxx Xxxx, Xxxxxxxx 00000 and Xxxxxx & Xxxxxxx Incorporated ("BBI"), having
its principal place of business at 000 Xxxxx Xxxxxxxx Xxxx., Xxxxx 0000, Xxxxx,
Xxxxxxx 00000
R E C I T A L S:
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A. The Company is a public company with a class of publicly traded common
stock purchase warrants (the "Warrants") which the Company desires to have
exercised, and also desires to identify prospects for mergers, acquisitions,
joint ventures, and similar transactions; and
B. The Company desires to have BBI's assistance in connection with the
Company's contemplated Warrant call, and with respect to identifying prospects
for mergers, acquisitions, joint ventures, and similar transactions on the terms
specified herein.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the parties hereto hereby agree as follows:
1. TERM. The term of this Agreement shall be for one year commencing as
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of the date first written above. Thereafter, this Agreement may be renewed for
subsequent one year terms upon mutual agreement of the parties. After December
31, 1997, either party may terminate this Agreement upon 60 days prior written
notice.
2. SERVICES. The Company and BBI agree that BBI shall serve as the
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manager for the Company's contemplated Warrant call and corresponding exercise,
and that BBI's responsibilities shall include, but not be limited to, providing
advice and counsel to the Company with respect to maximizing the number of
Warrants that are exercised, providing the Company with the appropriate forms
upon which to make notification of the Warrant call as well as for holders to
exercise their Warrants, assisting broker-dealers in notifying holders,
reviewing press releases related to the Warrant call and exercise, providing
input to the Company with respect to the registration statement registering the
shares underlying the Warrants, and providing instructional materials to the
Company
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to help effectuate the exercise. BBI shall also work with the Company in
identifying prospects for mergers, acquisitions, joint ventures, and similar
transactions.
3. FEES FOR SERVICES RENDERED AND TO BE RENDERED HEREUNDER.
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(a) FOR SERVING AS MANAGER OF THE WARRANT CALL. If the Company receives
any proceeds from the exercise of the Warrants on or prior to December 31,
1997, the Company agrees to pay to BBI (1) a non-accountable expense
allowance equal to 4% of the gross proceeds realized upon exercise of the
Warrants, and (2) a flat fee equal to $50,000, which amount shall be
reduced if at least 90% of the Warrants are not exercised, to an amount
that equals $50,000 times a fraction, the numerator of which shall be the
number of Warrants exercised and and the denominator of which shall be
660,000. In no case shall any fees be due and payable under this Section if
less than 132,000 Warrants are exercised.
Notwithstanding anything contained herein to the contrary, the company
hereby agrees that the Company will not change any of the terms and
conditions of the Warrants without the prior written consent of BBI,
including, without limitation, the exercise price, term of the Warrants and
redemption price of the Warrants. In addition, the Company hereby agrees
that the Company will take no action that will cause the anti-dilution
provisions of the Warrants to be triggered without the prior written
consent of BBI. The Company further hereby represents and warrants that the
terms and conditions of this Agreement will not trigger any of the any of
the anti-dilution provisions set forth in the Warrants.
Additionally, the Company herein agrees to issue to BBI, its assignees and
designees, that number of warrants (the "BBI Warrants"), identical in kind
to those included as Exhibit B herein, that corresponds to the Percentage
of Warrants that are exercised, as set forth below. The BBI warrants shall
be exercisable at a price per share equal to $2.375.
% of Warrants Exercised Total Number of BBI Warrants Exercise Period
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Up to 19.999% 20,000 1 Year
20-39.999 40,000 1 Year
40-59.999 60,000 1 Year
60-79.999 85,000 2 Years
80-89.999 120,000 3 Years
90 or Over 170,000 3 Years
(b) MERGERS, ACQUISITIONS AND SIMILAR TRANSACTIONS.
In the event the Company effectuates a merger, acquisition, joint venture, or
similar transaction subsequent to the date hereof and prior to two years from
the date of termination of this Agreement, and such merger, acquisition, joint
venture, strategic alliance or similar transaction is effectuated as a result or
a consequence of an introduction made, directly or indirectly, by BBI or any of
its affiliates during the term of this Agreement, then the Company hereby agrees
to pay BBI the following cash consideration, which payment shall be due and
payable in cash on the date of any such closing with respect thereto:
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5% of the consideration from $1 and up to $5,000,000, plus
4% of the consideration in excess of $5,000,000 and up to $10,000,000, plus
3% of the consideration in excess of $10,000,000 and up to $15,000,000,
plus
2% of the consideration in excess of $15,000,000 and up to $20,000,000,
plus
1% of the consideration in excess of $20,000,000.
For purposes of this Agreement, "consideration" shall mean the value of the
transaction described herein and shall include the aggregate value of all
cash, securities, and other property and consideration of every kind,
including but not limited to assumption and forgiveness of indebtedness,
the maximum amount realizable under the terms of an "earn- out" provision,
rights to receive periodic payments and all other rights that may be at any
time either (I) transferred or contributed to the Company, its affiliates
or shareholders in connection with an acquisition of equity or assets
thereof, or (ii) transferred or contributed by the Company, its affiliates
or shareholders in any transaction involving an investment in or
acquisition of any third party, or acquisition of the equity or assets
thereof, by the Company or any affiliate thereof, or (iii) transferred or
contributed by the Company, its affiliates or shareholders and any other
parties entering into any joint venture or similar joint enterprise or
undertaking with the Company or any affiliate thereof. The aggregate value
of all such cash, securities and other property shall be the aggregate fair
market value thereof as determined by BBI and the Company, or by an
independent appraiser jointly selected by BBI and the Company, the cost of
which shall be borne entirely by the Company.
In the event BBI or any of its affiliates agrees to act as Placement Agent
or Underwriter for the Company in raising capital, the parties hereto
herein agree that the compensation to be paid to BBI or its affiliates for
said assistance shall be the subject of an agreement, the terms of which
are to be mutually agreed to, by and between the parties hereto.
4. EXPENSES. The Company hereby agrees to pay all out-of-pocket expenses
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incurred by BBI in connection with such services to be rendered hereunder,
provided, however, that all singular expenses in excess of $500 be approved, in
advance, by the Company. BBI may, from time to time, deem it to be in the best
interests of the Company to retain an outside consultant in connection with
certain specific acquisitions or proposed transactions. BBI agrees to obtain
the written consent of the Company prior to retaining such consultant. In such
event, the Company agrees to pay any and all fees and expenses of such
consultant.
5. REPRESENTATION OF THE COMPANY. The Company hereby represents and
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warrants that any and all information supplied hereunder to BBI in connection
with any and all services to be performed hereunder by BBI for and on behalf of
the Company shall be true, complete and correct as of the date of such
dissemination and shall not fail to state a material fact necessary to make any
of such information not misleading. The Company hereby acknowledges that the
ability of BBI to adequately provide services as described herein is dependent
upon the prompt dissemination of accurate, correct and complete information to
BBI. The Company further represents and warrants
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hereunder that this Agreement and the transactions contemplated hereunder have
been duly and validly authorized by all requisite corporate action; that the
Company has the full right, power and capacity to execute, deliver and perform
its obligations hereunder; and that this Agreement, upon execution and delivery
of the same by the Company, will represent the valid and binding obligation of
the Company enforceable in accordance with its terms. The representations and
warranties set forth herein shall survive the termination of this Agreement.
6. INDEMNIFICATION. See Exhibit A attached hereto.
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7. CONFIDENTIALITY. See Exhibit A attached hereto.
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8. INDEPENDENT CONTRACTOR. See Exhibit A attached hereto.
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9. AMENDMENT. No modification, waiver, amendment, discharge or change of
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this Agreement shall be valid unless the same is evidenced by a written
instrument, executed by the party against which such modification, waiver,
amendment, discharge, or change is sought.
10. NOTICES. All notices, demands or other communications given hereunder
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shall be in writing and shall be deemed to have been duly given when delivered
in person or transmitted by facsimile transmission or on the third calendar day
after being mailed by United States registered or certified mail, return receipt
requested, postage prepaid, to the addresses herein above first mentioned or to
such other address as any party hereto shall designate to the other for such
purpose in the manner hereinafter set forth.
11. ENTIRE AGREEMENT. This Agreement contains all of the understandings
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and agreements of the parties with respect to the subject matter discussed
herein. All prior agreements, whether written or oral, are merged herein and
shall be of no force or effect.
12. SEVERABILITY. The invalidity, illegality or unenforceability of any
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provision or provisions of this Agreement will not affect any other provision of
this Agreement, which will remain in full force and effect, nor will the
invalidity, illegality or unenforceability of a portion of any provision of this
Agreement affect the balance of such provision. In the event that any one or
more of the provisions contained in this Agreement or any portion thereof shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
this Agreement shall be reformed, construed and enforced as if such invalid,
illegal or unenforceable provision had never been contained herein.
13. CONSTRUCTION AND ENFORCEMENT. This Agreement shall be construed in
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accordance with the laws of the State of Florida, without application of the
principles of conflicts of laws. If it becomes necessary for any party to
institute legal action to enforce the terms and conditions of this Agreement,
the successful party will be awarded reasonable attorney's fees, expenses and
costs at all trial and appellate levels.
14. BINDING NATURE. The terms and provisions of this Agreement shall be
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binding upon and inure to the benefit of the parties, and their respective
successors and assigns.
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15. COUNTERPARTS. This Agreement may be executed in any number of
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counterparts, including facsimile signatures which shall be deemed as original
signatures. All executed counterparts shall constitute one Agreement,
notwithstanding that all signatories are not signatories to the original or the
same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
LABORATORY SPECIALISTS OF
AMERICA, INC. , an Oklahoma corporation
By:
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Xxxx Xxxxxxxxx, Chief Executive Officer
XXXXXX & XXXXXXX INCORPORATED,
a Florida corporation
By:
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Xxxxx X. Xxxxxx, Executive Vice President
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EXHIBIT A
INDEMNIFICATION; CONFIDENTIALITY; AND INDEPENDENT CONTRACTOR STATUS
1. (a) The Company hereby agrees to indemnify, defend and hold harmless
BBI, its officers, directors, principals, employees, affiliates, and
shareholders, and their successors and assigns from and against any and all
claims, damages, losses, liability, deficiencies, actions, suits, proceeding,
costs and legal expenses (collectively the "Losses") arising out of or resulting
from: (I) any breach of a representation, or warranty by the Company contained
in the attached Agreement; or (ii) any activities or services performed
hereunder by BBI, unless such Losses were the result of the intentional
misconduct or gross negligence of BBI or were the result of any information
supplied by BBI in writing; or (iii) any and all costs and expenses (including
reasonable attorneys' and paralegals' fees) related to the foregoing, and as
more fully described below.
(b) If BBI receives written notice of the commencement of any legal
action, suit or proceeding with respect to which the Company is or may be
obligated to provide indemnification pursuant to this Paragraph, BBI shall,
within thirty (30) day period of the receipt of such written notice, give the
Company written notice thereof (a "Claim Notice"). Failure to give such Claim
Notice within such thirty (30) day period shall not constitute a waiver by BBI
of its right to indemnify hereunder with respect to such action, suit or
proceeding, unless the defense thereof is prejudiced thereby. Upon receipt by
the Company of a Claim Notice from BBI with respect to any claim for
indemnification which is based upon a claim made by a third party ("Third Party
Claim"), the Company may assume the defense of the Third Party Claim with
counsel of its own choosing, as described below. BBI shall cooperate in the
defense of the Third Party Claim and shall furnish such records, information and
testimony and amend all such conferences, discovery proceedings, hearings, trial
and appeals as may be reasonably required in connection therewith. BBI shall
have the right to employ its own counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of BBI unless the Company shall
not have with reasonable promptness employed counsel to assume the defense of
the Third Party Claim, in which event such fees and expenses shall be borne
solely by the Company. The Company shall not satisfy or settle any Third Party
Claim for which indemnification has been sought and is available hereunder,
without the prior written consent of BBI, which consent shall not be reasonably
withheld or delayed and which shall not be required if BBI is granted a release
in connection therewith. If the Company shall fail with reasonable promptness to
defend such Third Party Claim, BBI may defend, satisfy or settle the Third Party
Claim at the expense of the Company (but subject to its consent which shall not
be unreasonably withheld) and the Company shall pay to BBI the amount of any
such Loss with ten (10) days after written demand therefor. The indemnification
provisions hereunder shall survive the termination of the attached Agreement.
(c) BBI hereby agrees to indemnify, defend and hold harmless the
Company, its officers, directors, principals, employees, affiliates, and
shareholders, and their successors, and assigns from
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and against Losses arising out of or resulting from intentional misconduct or
gross negligence of BBI. The procedure set forth in (B) above shall also serve
as the protocol to permit the Company to seek indemnification from BBI.
2. BBI agrees that all non-public information pertaining to the prior,
current or contemplated business of the Company are valuable and confidential
assets of the Company. Such information shall include, without limitation,
information relating to customer lists, bidding procedures, intellectual
property, patents, trademarks, trade secrets, financing techniques and sources
and such financial statements of the Company as are not available to the public.
BBI, its officers, directors, employees, agents and shareholders shall hold all
such information in trust and confidence for the Company and shall not use or
disclose any such information for other than the Company's business and shall be
liable for damages incurred by the Company as a result of the use or disclosure
of such information by BBI, its officers, directors, employees, agents or
shareholders for any purpose other than the Company's business, either during
the term of the attached Agreement or after the premature termination or
expiration thereof, except (I ) where such information is publicly available or
later becomes publicly available other than through a breach of the attached
Agreement, or (ii) where such information is subsequently lawfully obtained by
BBI from a third party or parties, or (iii) if such information is known to BBI
prior to the execution of the attached Agreement, or (iv) as may be required by
law.
3. It is expressly understood and agreed that BBI shall, at all times, act
as an independent contractor with respect to the Company and not as an employee
or agent of the Company, and nothing contained in the attached Agreement shall
be construed to create a joint venture, partnership, association or other
affiliation, or like relationship, between the parties. It is specifically
agreed that the relationship is and shall remain that of independent parties to
a contractual relationship and that BBI shall have no right to bind the Company
in any manner. In no event shall either party be liable for the debts or
obligations of the other except as otherwise specifically provided in the
attached Agreement. BBI shall not have any claim under the attached Agreement,
or otherwise against the Company for vacation pay, paid sick leave, retirement
benefits, social security, worker's compensation, health, disability,
unemployment insurance benefits, or other employee benefits of any kind. BBI
understands and agrees that: (I) BBI will not be treated as an employee of the
Company for Federal tax purposes; (ii) the Company will not withhold on BBI's
behalf any sums for income tax, unemployment insurance, social security or any
other withholding pursuant to any law or requirement of any governmental body,
or make available any of the benefits afforded to employees of the Company;
(iii) all of such payments, withholdings or benefits, if any, are BBI's sole
responsibility; and (iv) BBI will indemnify and hold harmless the Company from
any and all loss or liability arising from its failure to make such payments,
withholdings and benefits, if any. In the event the Internal Revenue Service or
any other governmental agency should question or challenge BBI's independent
contractor status, the parties hereby agree that both BBI and the Company shall
have the right to participate in any discussion or negotiation occurring with
such agency or agencies, regardless of with whom or by whom such discussions or
negotiations are initiated.
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