INVESTMENT ADVISORY SERVICES AGREEMENT
Exhibit
10.34
Execution
Copy
THIS
INVESTMENT ADVISORY SERVICES AGREEMENT (this “Agreement”)
is made
and entered into as of August 17, 2007, by and among Advanced Communications
Technologies, Inc., a Delaware corporation (the “Company”)
and
H.I.G. Capital L.L.C., a Delaware limited liability company (“H.I.G.”).
WHEREAS,
on the terms and subject to the conditions contained in this Agreement, the
Company desires to engage H.I.G. to provide certain financial advisory services
and H.I.G. desires to perform such services for the Company.
NOW,
THEREFORE, in consideration of the premises and the respective mutual
agreements, covenants, representations and warranties contained in this
Agreement, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Appointment
of H.I.G.
On the
terms and conditions provided in this Agreement, the Company appoints H.I.G.
and
H.I.G. accepts appointment as a financial advisor to the Company and its
subsidiaries, including the business of any companies hereafter formed or
acquired by the Company or any such subsidiary.
2. Board
of Directors Supervision.
The
activities of H.I.G. to be performed under this Agreement will be subject to
the
supervision of the Board of Directors of the Company (the “Board”)
to the
extent required by applicable law or regulation and subject to reasonable
policies consistent with the terms of this Agreement adopted by the Board and
in
effect from time to time.
3. Authority
of H.I.G.
Subject
to any limitations imposed by applicable law or regulation, H.I.G. will render
financial advisory services to the Company and its subsidiaries, which services
will include advice and assistance concerning any acquisitions, dispositions
or
financing transactions undertaken by the Company and its subsidiaries, including
advising the Company and its subsidiaries in their relationships with banks
and
other financial institutions and with accountants, attorneys, financial advisers
and other professionals with respect to such transactions. Upon the request
of
the Board, H.I.G. will make periodic reports to the Company with respect to
the
financial advisory services provided hereunder. H.I.G. will cause its employees
and agents to provide the Company and its subsidiaries with the benefit of
their
special knowledge, skill and business expertise to the extent relevant to the
services provided hereunder.
4. Reimbursement
of Expenses; Independent Contractor.
All
obligations or expenses incurred by H.I.G. in the performance of its duties
under this Agreement will be for the account of, on behalf of, and at the
expense of the Company. H.I.G. will not be obligated to make any advance to,
or
for the account of, the Company or to pay any sums, except out of funds held
in
accounts maintained by the Company, nor will H.I.G. be obligated to incur any
liability or obligation for the account of the Company without assurance that
the necessary funds for the discharge of the liability or obligation will be
provided. H.I.G. will be an independent contractor, and nothing contained in
this Agreement will be deemed or construed (a) to create a partnership or joint
venture between the Company and H.I.G., (b) to cause H.I.G. to be responsible
in
any way for the debts, liabilities or obligations of the Company, any of its
subsidiaries or any other party or (c) to constitute H.I.G. or any of its
employees as employees, officers, or agents of the Company or any of its
subsidiaries.
5. Other
Activities of H.I.G.; Investment Opportunities.
The
Company acknowledges and agrees that H.I.G. will not be required to devote
H.I.G.’s (or any of its employees, officers, directors, affiliates or
associates) full time and business efforts to the duties of H.I.G. specified
in
this Agreement, but only so much of such time and efforts as H.I.G. reasonably
deems necessary. The Company further acknowledges and agrees that H.I.G. and
its
affiliates are or may be engaged in the business of investing in, acquiring
and/or managing businesses for H.I.G.’s own account, for the account of H.I.G.’s
affiliates and associates and for the account of other unaffiliated parties
and
that no aspect or element of these activities will be deemed to be engaged
in
for the benefit of the Company nor to constitute a conflict of interest. H.I.G.
will be required to bring only those investments and/or business opportunities
to the attention of the Company which H.I.G., in its sole discretion, deems
appropriate.
6. Compensation
of H.I.G.
HIG
will be entitled to the fees described below with respect to the acquisition
or
disposition of any business operation or material assets by the Company or
its
subsidiaries, the sale of the Company or any of its subsidiaries, or any other
transaction not in the ordinary course of business, including any public or
private debt or equity financing of the Company or its subsidiaries (which
shall
include an initial public offering), in each case which has been introduced,
arranged, managed and/or negotiated by HIG or its affiliates (each, a
“Transaction”).
In
connection with each Transaction, HIG will be entitled to (a) a fee for
investment banking services (the “Investment
Banking Fee”)
and
(b) a supplemental management fee (the “Supplemental
Management Fee”
and,
together with the Investment Banking Fee, the “Transaction
Fee”).
The
Transaction Fee will be paid at the closing or other consummation of any
Transaction. The Investment Banking Fee for a Transaction will be equal to
1% of
the Transaction Value (as defined below) and the Supplemental Management Fee
will also be equal to 1% of the Transaction Value (as defined below). The
“Transaction
Value”
for
a
Transaction shall mean (i) the enterprise value, in connection with an
acquisition or disposition, (ii) the financing amount, in connection with a
debt
or equity financing, or (iii) the benefit value, in connection with any other
transaction not in the ordinary course of business. The Parties agree that
the
Transaction Fee for the Transaction pursuant to that certain Purchase Agreement,
dated as of the date hereof, between the Company, ACT-DE LLC and certain other
purchasers thereunder (and the other transactions related thereto, will be
comprised of a $262,500 Investment
Banking Fee and a $262,500 Supplemental Management Fee.
7. Limitations
on Payment of Transaction Fee.
Notwithstanding anything contained herein to the contrary Transaction Fees
shall
only be payable to the extent permitted by the terms of the Note Purchase
Agreement (as defined below). The parties hereby agree that to the extent the
Company is prohibited from timely paying the Transaction Fee in whole or in
part
by the Note Purchase Agreement, such unpaid Transaction Fee, or portion thereof,
shall be accrued (and shall accrue interest at a rate of 5% per annum,
compounded monthly). Any such accrued Transaction Fee, or portion thereof,
shall
be paid by the Company within ten (10) days after the prohibition on such
payment has been waived or otherwise terminated. “Note Purchase Agreement” means
that certain Note Purchase Agreement, dated the date hereof, among the Company,
its subsidiaries, Sankaty Advisors, LLC and the parties identified as “Note
Purchasers” therein.
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8. Term.
This
Agreement will commence as of the date hereof and will remain in effect until
the fifth anniversary of the date hereof, unless terminated earlier in
accordance with the provisions of this Agreement.
9. Termination.
Either
the Company or H.I.G. may terminate H.I.G.’s engagement under this Agreement in
the event of the breach of any of the material terms or provisions of this
Agreement by the other party, which breach is not cured within 10 business
days
after notice of the same is given to the party alleged to be in breach by the
other party. If this Agreement is terminated by H.I.G. because of the breach
of
any of the material terms or provisions hereof by the Company, H.I.G. will
be
entitled to recover damages from the Company and will not be required to
mitigate or reduce damages by seeking or undertaking other management
arrangements or business opportunities.
10. Standard
of Care.
H.I.G.
(including any person or entity acting for or on behalf of H.I.G.) will not
be
liable for any mistakes of fact, errors of judgment, losses sustained by the
Company or any subsidiary or acts or omissions of any kind, unless caused by
the
gross negligence or willful misconduct of H.I.G., as finally determined by
a
court of competent jurisdiction.
11. Indemnification
of H.I.G.
The
Company will indemnify and hold harmless H.I.G. and its present and future
officers, directors, affiliates, employees, controlling persons, agents and
representatives (“Indemnified
Parties”)
from
and against all losses, claims, liabilities, suits, costs, damages and expenses
(including attorneys’ fees) arising from their performance of services
hereunder, except as a result of their gross negligence or willful misconduct.
The Company will reimburse the Indemnified Parties on a monthly basis any cost
of defending any action or investigation (including, but not limited to,
attorneys’ fees and expenses) subject to an undertaking from any such
Indemnified Party to repay the Company if such party is determined not to be
entitled to indemnity.
12. Company
Representations.
Each
party hereby represents and warrants to the other. that (i) the execution,
delivery and performance of this Agreement by it does not conflict with, breach,
violate or cause a default under any contract, agreement, instrument, order,
judgment or decree to which it is a party or by which it is bound and (ii)
upon
the execution and delivery of this Agreement by the other party, this Agreement
shall be the valid and binding obligation of the first party, enforceable in
accordance with its terms.
13. Successors
and Assigns.
This
Agreement is intended to bind and inure to the benefit of and be enforceable
by
H.I.G., the Company and their respective successors and assigns, except that
without the prior written consent of H.I.G., the Company will not assign,
transfer or convey any of its rights, duties or interest under this Agreement,
nor will it delegate any of the obligations or duties required to be kept or
performed by it hereunder.
14. Notices.
Any
notices, requests, demands and other communications required or permitted to
be
given under this Agreement will be in writing and, except as otherwise specified
in writing, will be given by personal delivery, facsimile transmission, express
courier service or by registered or certified mail, postage prepaid, return
receipt requested:
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If
to the Company:
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Advanced
Communications Technologies, Inc.
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000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
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Xxx
Xxxx, XX 00000
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Attention:
Xxxxx Xxxxxx, Chief Executive Officer
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Facsimile:
646.227.1666
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If
to H.I.G.:
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H.I.G.
Capital, L.L.C.
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000
Xxxxxxxx Xxxxxx, 00xx
Xxxxx
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Xxxxxx,
Xxxxxxxxxxxxx 00000
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Attn:
Xxxx Xxxxx and Xxxxxxx Xxxxx
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Facsimile
No.: (000) 000-0000
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or
to
such other addresses as either party hereto may from time to time give notice
of
(complying as to delivery with the terms of this Section 14) to the other.
Notice by registered or certified mail will be effective three days after
deposit in the United States mail. Notice by any other permitted means will
be
effective upon receipt.
15. Severability.
If any
term or provision of this Agreement or the application thereof to any person
or
circumstance will, to any extent, be invalid or unenforceable, the remainder
of
this Agreement, or the application of such term or provision to persons or
circumstances other than those which are invalid or unenforceable, will not
be
affected thereby, and each term and provision of this Agreement will be valid
and be enforced to the fullest extent permitted by law.
16. No
Waiver.
The
failure of the Company or H.I.G. to seek redress for any violation of, or to
insist upon the strict performance of, any term or condition of this Agreement
will not prevent a subsequent act by the Company or H.I.G., which would have
originally constituted a violation of this Agreement by the Company or H.I.G.,
from having all the force and effect of any original violation. The failure
by
the Company or H.I.G. to insist upon the strict performance of any one of the
terms or conditions of the Agreement or to exercise any right, remedy or
election herein contained or permitted by law will not constitute or be
construed as a waiver or relinquishment for the future of such term, condition,
right, remedy or election, but the same will continue and remain in full force
and effect. Except to the extent that the Company’s rights of termination are
limited herein, all rights and remedies that the Company or H.I.G. may have
at
law, in equity or otherwise upon breach of any term or condition of this
Agreement, will be distinct, separate and cumulative rights and remedies and
no
one of them, whether exercised by the Company or H.I.G. or not, will be deemed
to be in exclusion of any other right or remedy of the Company or
H.I.G.
17. Entire
Agreement; Amendment; Certain Terms.
This
Agreement contains the entire agreement among the parties hereto with respect
to
the matters herein contained and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way. The
provisions of this Agreement may be amended only with the prior written consent
of the Company and H.I.G.
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18. Governing
Law.
This
Agreement will be governed by and construed in accordance with the internal
laws
of the State of New York without reference to the laws of any other
state.
19. Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts, any one
of
which need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same
Agreement.
20. Delivery
by Facsimile.
This
Agreement and any amendments hereto, to the extent signed and delivered by
means
of a facsimile machine, shall be treated in all manner and respects as an
original agreement or instrument and shall be considered to have the same
binding legal effect as if it were the original signed version thereof delivered
in person. At the request of any party hereto, each other party hereto shall
reexecute original forms thereof and deliver them to all other parties. No
party
hereto shall raise the use of a facsimile machine to deliver a signature or
the
fact that any signature was transmitted or communicated through the use of
a
facsimile machine as a defense to the formation or enforceability of a contract
and each such party forever waives any such defense.
{Remainder
of Page Intentionally Left Blank}
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IN
WITNESS WHEREOF, this Investment Advisory Services Agreement has been duly
executed as of the date first written above.
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ADVANCED
COMMUNICATIONS
TECHNOLOGIES, INC. |
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By:
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/s/
Xxxxx X. Xxxxxx
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Name:
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Xxxxx
X. Xxxxxx
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Its:
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President
& Chief Executive Officer
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H.I.G.
CAPITAL L.L.C.
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By:
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/s/
Xxxxxxx X. Xxxxx XX
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Name:
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Xxxxxxx
X. Xxxxx XX
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Its:
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