EXHIBIT 10.7
REPRESENTATION AGREEMENT
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LSP Smart Products - Selbre Associates
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This Agreement is between LSP Smart Products, Inc. ("LSP"), a Florida
corporation, located at 000 Xxxxxxx Xxxxxx, Xxxxxxxx Xxx, Xxxxxxx, Xxxxxxx
00000, [(000) 000-0000]; and, Selbre Associates ("Selbre"), a Maryland
corporation, located at 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxx Xxxxxxxx,
Xxxxxxxx, Xxxxxxxx 00000, [(000) 000-0000].
WHEREAS, LSP desires to achieve a cumulative revenue target of at least
$13,000,000 over the next twenty-four (24) months (starting with the date this
REPRESENTATION AGREEMENT is effective) in order to adequately prepare the
company for an Initial Public offering ("IPO") of securities, or alternatively,
a secondary offering;
WHEREAS, LSP and Selbre believe that the Federal Government market
offers significant opportunities for achieving said revenue target;
WHEREAS, LSP wishes engage the assistance of Selbre in achieving this
revenue target and Selbre wishes to provide advice, counseling and support in
this regard;
NOW, THEREFORE, in order to establish the parameters of a working
relationship, and in consideration of the foregoing as well as the mutual
covenants contained herein, the parties hereby agree as follows:
1. Term.
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The term of this Agreement shall be for two years, beginning with the
date that this Agreement is ratified by LSP's Board of Directors.
Thereafter, this agreement may be extended or renewed for a fixed term,
by mutual agreement of the parties.
Alternatively, this agreement will continue in force for 30 day
increments, unless terminated by mutual agreement, or until terminated
by either party in accordance with Paragraph 7, "Termination", below.
2. Confidentiality.
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The parties acknowledge that from time to time each may have access to
certain confidential information, proprietary information and/or trade
secrets of the other. Accordingly, each party agrees to hold such
information in confidence and shall be bound by the terms of the
Confidentiality/Non-Disclosure Agreement attached as Exhibit "A".
3. Scope of Authority.
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Selbre shall not enter into contracts or commitments in the name of, or
on behalf of, LSP. LSP will not exercise control over the amount of
time the Selbre devotes in the performance of this Agreement. Moreover,
during the course of this Agreement, Selbre shall be free to engage in
other activities and representation and to market for other individuals
or companies, provided that such activities/representation does not
result in a conflict of interest with the services provided LSP.
Further, such activities/representation may not violate the terms of
Confidentiality/Non-Disclosure Agreement described in Section 2, above.
4. Responsibilities of Selbre.
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Selbre will use its extensive in-house capabilities (in addition to the
subcontracted services of selected experts) to provide Marketing and
Sales support on a "best efforts" basis, to accomplish the following:
v Establish initial contacts and arrange for introduction of potential
teaming partners;
v Register potential teaming partners in writing with LSP (see Exhibit
"B" for sample registration form);
v Explore potential Government business opportunities with respect to
management's goals and objectives; Develop a general understanding of
LSP's capabilities and product line;
v Determine estimated market potential; Research and analyze
competitors; Recommend corporate investment required to meet goals;
v Provide assistance in developing a marketing methodology to designed
to achieve revenue targets;
v Provide assistance in developing a strategy to successfully integrate
Government business with LSP's existing commercial sales and
marketing organization;
v Develop Federal agency relationships and establish appropriate levels
of contact with key procurement officials; Identify sales
opportunities; Identify unique circumstances that would establish a
competitive edge for LSP;
v On an "as-needed" basis, provide a "base of operations" for LSP's
visits to the Washington DC area;
v Conduct an on-going information gathering and analysis; Identify new
programs, changes in relevant Government rules and regulations;
v Provide contract administration and 72A reporting services, if and
when specifically requested by LSP, at a 50% discount from Selbre's
standard commercial hourly rates.
v Furnish LSP with copies of written communications between Selbre and
clients under contract to LSP.
v On a regular basis, advise LSP of Selbre's activities. E-mail will be
used as much as possible, as well as other streamlined methods of
communication(s).
5. Responsibilities of LSP.
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LSP will:
v Maintain an active and adequate sales force capable of pursuing and
closing opportunities identified by Selbre.
v Provide all available marketing tools such as brochures and
presentation materials for Selbre's use;
v Follow-up on a timely basis with potential clients and/or teaming
partners;
v Advise Selbre regularly of the status of any pending contracts in the
Federal marketplace;
v Cooperate fully with Selbre's efforts to assist LSP in reaching its
revenue targets, and in general, conduct activities in such a way
that does not frustrate the purpose(s) of this Agreement;
v Advise Selbre of achievement of revenue targets on a monthly basis;
v Remit to Selbre any compensation as specifically set forth in
"Compensation Schedule", attached as Exhibit "C".
6. Registration of Clients and/or Teaming Partners.
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For information purposes, Selbre shall register potential clients
and/or potential teaming partners with LSP. Such registration may be
done by E-mail (see Exhibit "B" for sample registration form);
7. Termination.
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After the initial twenty-four (24) month terms, either party may
terminate this Agreement by giving thirty (30) days' written notice to
the other party. Any fees due to Selbre, as well as the Confidentiality
provisions referenced in Section 2, above, shall survive this
termination.
8. Amendments.
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This agreement may be amended with the written consent of both parties
with notices given to the address(es) referenced above.
9. Governing Law.
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This Agreement shall be governed by the laws of the State of Florida.
Should it be necessary to enforce the terms of this Agreement by
litigation, the prevailing party shall be entitled to reasonable
attorney fees and court costs.
10. Ratification by LSP's Board of Directors.
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This Agreement shall be effective upon ratification by LSP's Board of
Directors. LSP shall give Selbre prompt written notice of such
ratification. Right to stock options, to be granted in accordance with
the terms and conditions contained herein, shall vest upon the date
this REPRESENTATION AGREEMENT is ratified by LSP's Board of Directors.
11. Entire Agreement.
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This Agreement contains the entire understanding between the parties
hereto relating to the subject matter hereof and as of its effective
date shall supersede and cancel all previous negotiations, agreements,
commitments, and writings in respect thereto. This Agreement may not be
modified in any manner except by an instrument in writing signed by a
duly authorized officer or representative of each of the parties
hereto.
On this 29th day of April 1999, this Agreement is entered into and
agreed to by:
FOR: LSP Smart Products, Inc. FOR: Selbre Associates, Inc.
/s/ Xxxxxxxx Xxxxxx /s/ Xxxxxx X. Xxxxxxx 4/28/99
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(Date) Xxxxxx X. Xxxxxxx, President (Date)
COMPENSATION SCHEDULE
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1. Consultation Fee.
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In consideration of the actions to be taken by Selbre, as outlined in Section 4
of the REPRESENTATION AGREEMENT, LSP shall pay to Selbre a Consultation Fee of
Four Thousand ($4,000.00) dollars per month, in advance, due and payable on the
first day of every month. [The initial payment shall be due immediately upon the
effective date of the REPRESENTATION AGREEMENT, and shall be prorated through
the last day of the month the REPRESENTATION AGREEMENT becomes effective.] In
general, this Consultation Fee shall be used as a "pass through" payment to
acquire the subcontracted services of selected experts on LSP's behalf.
2. Stock Options.
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In addition, LSP shall grant and deliver stock options to individual third-party
beneficiaries Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxx ("Grantees"), as outlined
below.
(A) The parties acknowledge that it is an underlying assumption of this Section
2 of the Compensation Schedule that LSP intends to effect a reverse merger with
a fully-reporting corporate shell, and list the shares of the newly merged
company on the NASDAQ Electronic Bulletin Board shortly after the effective date
of the REPRESENTATION AGREEMENT.
(C) Stock options will be issued for the purchase of LSP common stock and will
be immediately exercisable on the grant date. Such options will not be subject
to taxation until exercised.
(D) The exercise price for all options shall be the price at which the initial
bid for LSP stock is posted, once trading in LSP stock commences.
(E) Options will expire ten (10) years from the grant date.
(F) In the event of a merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, or other changes in corporate structure or
capitalization affecting the Common Stock, the parties shall agree on an
appropriate adjustment to be made in the number, kind, option price, etc., of
shares subject to Options granted.
(G) Options may not be transferred except by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order, and during the
Grantee's lifetime, may be exercised only by said Grantee or by said Grantee's
legal representative.
Number of Stock Options Grant Date
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(EACH to Xxxxxx X. Xxxxxxx(1)
and Xxxxxxx X. Xxxxxx)
240,000 shares Upon the execution of this Agreement.
60,000 shares Date that LSP achieves a cumulative revenue target of
$3,000,000.
60,000 shares Date that LSP achieves a cumulative revenue target of
$6,000,000.
60,000 shares Date that LSP achieves a cumulative revenue target of
$9,000,000.
80,000 shares Date that LSP achieves a cumulative revenue target of
$13,000,000.
3. Travel Expenses.
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[Any] travel expenses will be exclusive of the above and MUST be pre-approved by
LSP. Travel expenses (to include meals, ground transportation, accommodations,
and minor incidental expenses) will be reimbursed by LSP at cost, provided such
costs are not excessive (i.e., costs are reasonable and customary for ordinary
business class travel.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
LSP Smart Products, Inc. Selbre Associates
By: /s/ Xxxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Title: CEO Title: President
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Date: 4-29-99 Date: 4/28/99
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1 On a discretionary basis Xxxxxx X. Xxxxxxx reserves the right to have his
options issued to Selbre Associates, Inc.
