EXHIBIT 10.3
BUSINESS DEVELOPMENT AGREEMENT
This BUSINESS DEVELOPMENT AGREEMENT (the "Agreement"), dated and effective
as of the 31st day of July, 2001, is between PRO SQUARED, INC. a Texas
corporation, with its principal place of business in Houston, Texas ("Pro2") ,
and XXX XXXXXX, an individual residing in Austin, Texas doing business as
Entrecorp ("Representative").
Background Facts
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WHEREAS, Pro2 is a service and software products company providing business
process improvement consulting and solutions;
WHEREAS, PRO2 desires to appoint a nonexclusive representative to promote
the sale Pro2'S products and services, such appointment to be made on the basis
of all of the terms and conditions contained in this Agreement; and
WHEREAS, Representative desires to be appointed by Pro2 as a nonexclusive
representative for the development of business for Pro2, on the basis of the
terms and conditions set forth below in this Agreement.
WITNESSETH:
NOW, THEREFORE, in consideration of the premises and the mutual promises
and undertakings set forth below and intending to be legally bound hereby, the
parties agree as follows:
1. DEFINITIONS. The following capitalized terms, as used in this Agreement,
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shall have the meanings defined for them as follows:
(a) "Customer" - any client who purchases Products and/or Services from
Pro'.
(b) "Revenue" - the total dollars earned by Pro2 in a monthly or annual
accounting period before deducting any sales costs or sales, general and
administrative costs, excluding travel expenses that are billed on a "pass
through" basis.
(c) "Products" - any and all products sold by PRO2.
(d) "Services" - any and all services provided by Pro2.
2. APPOINTMENT. Representative hereby represents to Pro2 that Representative
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has the necessary skills and experience to effectively perform his
responsibilities as a business development representative for Pro2 as described
in this Agreement. In reliance upon that representation, Pro2 hereby appoints
Representative as a nonexclusive business development representative for Pro2 to
promote the sale of Products and Services.
3. TERM. The term of this Agreement, and of Representative's appointment as
a business development representative for Pro2 hereunder, shall commence on the
effective date of this Agreement as set forth above. Unless sooner terminated
as described in Section 13 below, the term shall continue in effect for a period
of three (3) years after the effective date.
4. RESPONSIBILITIES OF REPRESENTATIVE. During the term of this Agreement,
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Representative shall:
(a) use his best efforts to actively promote and solicit the sale of
Products and Services by Pro2 to Customers; and
(b) promptly forward to Pro2 all inquiries, bid and quotation requests, and
correspondence relating to Products and/or Services which may be received by
Representative from Customers; and
(c) whenever requested to do so by Pro2 (but not more often than once in any
thirty day period), prepare and furnish to Pro', in oral or written form, as
Pro' may request, confidential reports regarding the activities of
Representative on behalf of Pro2 and/or containing other business development
information of potential interest to Pro2 ; and
(d) maintain in strict confidence, and not disclose to any other person or
firm except with the prior written permission of an authorized officer of Pro2 ,
any and all information received from Pro' or prepared by Representative for
Pro2 regarding fees, customer lists, business plans, strategies, forecasts,
studies, reports and any other information which may be considered confidential
or proprietary by Pro2
and which is not publicly available. The confidentiality obligation of
Representative under this sub-part (d) shall survive the expiration or
termination of this Agreement.
5. COMPENSATION. As the sole and exclusive compensation for the services to
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be performed by Representative hereunder and subject to Section 13, PRO2, shall
pay to Representative the following:
(a) $15,000 per quarter for four quarters, payable on the last day of each
quarter beginning December 31, 2001;
(b) Upon Pro' obtaining revenue aggregating at least $6,000,000.00 over a
twelve-month period, $7,500 per month payable for twenty-four (24) months;
(c) Upon Pro2 obtaining revenue aggregating an additional $11,000,000.00
over a twelve-month period, an additional $10,000 per month payable for
twenty-four
(24) months.
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At the discretion of Pro', all amounts due and payable under clause (a), (b) or
(c) above shall be payable either in cash or in shares of common stock, $0.001
par value ("Common Stock") of Pro'. For purposes hereof, shares of Common Stock
shall be valued at $0.20 per share unless and until the Common Stock is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") or Pro2 is required to file reports pursuant to
Section 15(d) of the Exchange Act. Thereafter (when Pro2 shall be described
hereunder as a "Reporting Company"), the Common Stock shall be valued at the
average bid price on the ten trading days prior to the date the payment is to be
made.
On or before January 31, 2002, Pro2 shall issue to Representative shares to be
purchased in the amount of 25,000 shares of Common Stock of Pro2 at a price of
$0.20 per share. In addition Pro2 shall issue to Representative options to
purchase 12,500 shares of Common Stock of Pro2 at a purchase price equal to
$5.00 per share, which options shall vest once Pro2 has obtained annual revenues
of $5,000,000 over a twelve (12) month period. Finally, Pro2 agrees to issue to
Representative options to purchase 12,500 shares of Common Stock of Pro2 at a
purchase price equal to $10.00 per share, which options shall vest once Pro2 has
obtained annual revenues of $10,000,000 in aggregate over a twelve (12) month
period. The options granted pursuant hereto shall be subject to the terms of
the option agreement between Pro2 and Representative in the form attached hereto
as EXHIBIT "A". The two groups of options for 12,500 shares each shall only be
exercisable in the event Pro2 effects a merger into a public shell or files
documents necessary to become a publicly traded, fully reporting entity. PRO2
shall be obligated to cause a forward split of all PRO2 common shares on a forty
to one (40: 1) basis resulting in the 25,000 shares purchased by Xxxxxx totaling
1,000,000 shares of the common stock. This action shall be taken prior to the
trading of the common stock on any public exchange.
Notwithstanding any of the foregoing, no amounts shall be payable to
Representative in connection with achieving the annual revenue goals (i) under
clause (b) above unless and until the first monthly payments aggregating at
least $500,000 have been received by Pro2. Pro2 shall send all commission
payments only to the principal place of business of Representative or other
address requested in writing by Representative. Any income or other taxes
arising from the payment of amounts hereunder to Representative shall be the
sole responsibility of Representative.
6. Expenses. All costs and expenses incurred by Representative, its
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employees, agents and representatives in performing services hereunder
including, without limitation, travel, lodgings, entertainment, telephone,
telecopy, and telex expenses, shall be paid by Representative, except for any
costs or expenses which Pro2 shall have specifically agreed in writing, and in
advance of the time when such costs or expenses are incurred, to pay or
reimburse to Representative.
7. TERMS AND CONDITIONS OF SALE. All Products and Services to be sold by
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Pro2 to Customers shall be sold only on the basis of such terms and conditions
as are established by Pro2 at its sole discretion. Representative shall nor
misrepresent such terms and
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conditions to Customers, and shall not modify or extend such terms and
conditions without the prior written authorization of Pro2 . All orders from
Customers for Products and/or Services shall be subject to acceptance by Pro2 at
its sole discretion.
8. CHANGES. At any time and from time to time during the term of this
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Agreement, Pro' shall have the right to change the Products and Services
provided to Customers and the prices or rates charged therefore, and its terms
and conditions without incurring any liability to Representative, except as to
obligations which have accrued prior to the effective date of the change. Pro2
will endeavor to promptly notify Representative of all such changes.
9. COMPLIANCE WITH LAWS. In all of its activities pursuant to this
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Agreement, Representative and Pro2 shall strictly comply with all laws, decrees,
statutes, rules, regulations, codes and ordinances of any jurisdiction.
10. NO AGENCY. In connection with its activities on behalf of Pro2 under this
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Agreement, Representative shall not be an agent or employee of Pro2 , and
Representative is not authorized to obligate or commit Pro2 in any manner in
dealings with Customers, potential customers, or other persons, firms or
governmental units. Representative shall not hold itself out as an agent or
employee of Pro2 or as having any authority to obligate or commit Pro2.
12. CONFLICT OF INTEREST. During the term of this Agreement, Representative
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shall not promote, solicit or otherwise assist in the sale of Products or
Services which compete with Products or Services of Customers by any other
person or firm except as may be expressly permitted in writing by an authorized
officer of Pro2 . Representative shall immediately and fully disclose to Pro2
any interests or activities of Representative which may conflict with the
interest of Pro2 under this Agreement including, without limitation, any
agreement by Representative to perform activities in connection with the
products or services of any competitor of Pro2 or the products or services of
any competitor of any affiliate of Pro2.
13. TERMINATION. This Agreement may be terminated at any time:
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(a) by mutual agreement of the parties;
(b) by either party upon giving a notice of termination to the other party
in the event the other party fails to perform, observe or comply with any of the
obligations or undertakings of such other party which are contained in this
Agreement, and such failure has not been cured within thirty (30) days after the
terminating party has given a written notice specifying such failure to the
other party;
(c) by Pro2 or Representative in the event Pro2 fails to become a Reporting
Company on or before January 31, 2002;
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(c) by Pro' in the event that Pro' has not achieved revenues of at least
$6,000,000.00 during the calendar year ending December 31, 2002.
(d) upon the expiration of the term as provided herein.
Following any such termination, Pro2 shall pay amounts to Representative in
circumstances where the efforts of Representative prior to the effective
termination date would otherwise entitle Representative to receive amounts in
accordance with the provisions of this Agreement.
14. ASSIGNMENT This Agreement may not be assigned by either party without
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the prior written consent of the other party, except that Pro2 may assign this
Agreement to (a) any affiliate of Pro2, or (b) any party succeeding to ownership
of substantially all of the assets of PRO2, upon notice to, but without the
consent of, Representative.
15. NOTICES. All notices under this Agreement shall be in writing and shall
be deemed to have been given when received by the party to whom such notices are
being given. Notices may be delivered personally, by courier, or facsimile
transmission and shall be addressed as follows:
(a) If to Representative:
Xxx Xxxxxx
00 Xxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telecopier No. (000)-000-0000
(b) If to Pro2: Pro2, Inc.
Attn: Xxxxx Xxxxxxxx
0000 Xx. Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telecopier No. (000) 000-0000
or at such other address as either party may hereafter notify the other in the
manner described in this Section. Such notices shall be deemed given when they
are received by the party to which they are directed as evidenced by: (i) an
acknowledgement or receipt executed by the recipient party, or (ii) a record of
delivery or receipt prepared by an independent delivery service or postal
agency.
16. HEADINGS. The headings contained in this Agreement are for convenience of
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reference only, and do not form a part of the Agreement.
17. APPLICABLE LAW. This Agreement shall be governed by the laws of the
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State of Texas.
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18. SEVERABILIIY .If any portion of this Agreement is declared to be invalid
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or unenforceable by a final judgment, order or decree of any court or
administrative body having proper jurisdiction, then, as to that jurisdiction
only, such portion shall be deemed to be severed from the Agreement and the
remainder of the Agreement shall remain in full force and effect.
19. ENTIRE AGREEMENT. This Agreement sets forth the entire Agreement between
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the parties as to the subject matter hereof and supersedes any prior oral or
written negotiations, understandings, or Agreements as to such subject matter.
This Agreement cannot be amended except by a writing dated subsequent to the
date hereof and executed on behalf of both parties by their duly authorized
representative which, in the case of Pro2, must be an officer.
20. ARBITRATION. All disputes, claims, and/or requests for specific
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contractual performance, or other equitable relief, or damages or any other
matters in question between the parties arising out of this agreement shall be
submitted for arbitration, solely. Demand shall be submitted for arbitration,
solely. Demand shall be made to the American Arbitration Association and shall
be conducted in Houston, Texas by a one-person arbitrator, unless the parties
mutually agree otherwise. Arbitration shall be in accordance with the
commercial rules of the American Arbitration Association. The Award of the
Arbitrator shall be final and judgment may be entered upon it in any court
having jurisdiction thereof, and the prevailing party shall be entitled to costs
and reasonable attorney's fees arising out of such arbitration
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IN WITNESS HEREOF, this Agreement has been executed on behalf of the
parties by their duly authorized representative as of the date FIRST written
above.
XXX XXXXXX
PRO SQUARED, INC.
By: __________________
Xxxxx Xxxxxxxx, President
Signature Page to
Business Development Agreement
