CONSULTING SERVICES AGREEMENT
THIS AGREEMENT, is made as of the 8th day of May, 1997, by and between
Sunkyong U.S.A., Inc., with offices located at 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 ("Sunkyong"), and Proformance Research Organization,
Inc. ("Company").
WHEREAS, Company desires to appoint Sunkyong its exclusive placement
representative in the Republic of Korea (the "Exclusive Territory") with
respect to finding potential investors in Company and/or to locate franchise
or operations possibilities for Company (the "Services") and Sunkyong is
agreeable to such appointment.
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, the parties hereby agree as follows:
Article I. APPOINTMENT. Subject to the terms and conditions hereinafter set
forth, Company hereby appoints Sunkyong as its exclusive service
representative in the Exclusive Territory and non-exclusive service
representative in other Pacific Rim countries (the "Non-Exclusive Territory"
and together with the Exclusive Territory, referred to herein as the
"Territory") to provide the Services described herein and further set forth
in Article II hereof during the term of this Agreement.
Article II. SERVICES. The Services to be provided or rendered by Company
shall be on a reasonable best efforts basis and shall include:
A. To furnish certain information, including but not limited to, identities
of corporations with possible interest in investing in the Company, and
information and introductions relating to product sales, possible learning
center franchises and/or golf school operations opportunities at golf courses
("Sites") in the Territory, and to solicit inquiries about investment
opportunities in the Territory without binding Company in any way, and to
furnish such information to Company; and
B. To provide Company with such other services as may from time to time be
agreed upon by the parties in writing.
Article III. FEES/EXPENSES. Company agrees that Sunkyong shall be entitled
to a fee ("Fee"), to be mutually agreed upon by the parties on a
transaction-by-transaction basis, and which shall take into account the value
of the capital investment. Sunkyong's expenses and other financial
considerations relating to a transaction facilitated by the Services (each a
"Transaction"). The Fee shall be payable to Sunkyong upon the acceptance and
closing or consummation of such Transaction. In addition to the Fee, at
Sunkyong's option, Sunkyong may obtain common stock of the Company at the
rate of $5.00 per share up to $50,000 or 10,000 shares per Site for a maximum
of thirty-two (32) Sites. Company has agreed with Merit Capital Associates
("Merit") that it shall pay a fee to Merit as finder of the relationship
between Company and Sunkyong, as mutually agreed upon based on the total
value of capital and other financial considerations relating to a
Transaction, payable to Merit upon the acceptance and closing of such
Transaction. Sunkyong shall not be obligated to pay any fees, costs or other
amounts to Merit in connection with any Transaction or services provided by
Merit. Sunkyong and Company agree that Company may accept or reject any
Transaction in its sole reasonable discretion.
Article IV. TERM AND TERMINATION. This Agreement shall be effective for an
initial term of five (5) years commencing as of the date hereof, subject to
the terms and conditions of this Agreement. Notwithstanding the foregoing,
either party may terminate this Agreement by written notice if the other
party (i) defaults in performance of any material provision of this Agreement
and fails to cure such default within thirty (30) days after notice thereof
from the non-defaulting party, (ii) appoints a receiver, trustee or
liquidator of all or
1
substantially all of its assets or is unable to pay debts as they mature, or
is adjudicated bankrupt or insolvent and such condition is not cured in
thirty (30) days; or (iii) for any reason upon sixty (60) days prior written
notice.
ARTICLE V. INFORMATION PROVIDED BY COMPANY; MUTUAL NON-DISCLOSURE AGREEMENT
A. Company agrees to provide Sunkyong with all information concerning
Company which Sunkyong reasonably requests. Company represents, warrants and
covenants that all information disclosed or to be disclosed to Sunkyong under
this Agreement shall be permitted to be disclosed by it and shall be complete
and correct in all material respects. In providing the Services hereunder,
Sunkyong will be using and relying on information provided by Company,
without independent verification thereof or independent appraisal of
Company's assets. Further, in evaluating any prospective investor or
Transaction, Sunkyong will be using information provided in public reports
and other sources of information provided by the prospective investor or
third parties. Sunkyong does not assume responsibility for the accuracy or
completeness of information regarding the company or any prospective investor
or Transaction and Company releases Sunkyong from any liability and will
indemnify and hold Sunkyong and its affiliates and their respective officers,
directors, employees and agents (collectively, "Sunkyong Indemnities")
harmless from and against all suits, claims, demands, damages, costs and
expenses which are made against or incurred by Sunkyong in the performance of
its Services or related to any Transaction. Sunkyong may divulge information
regarding the Company and its operations to such third parties unless the
Company specifically notifies Sunkyong in writing that such information is
confidential.
B. Each of Sunkyong and Company agrees that except as otherwise herein
permitted, without the prior written consent of the other, which consent
shall not be unreasonably withheld, delayed or made unreasonably conditional,
it shall use the propriety non-public information ("Confidential
Information") of the other company only for the purposes stated hereinabove
and will make reasonable efforts to restrict disclosure of Confidential
Information it receives from the other party to those of the employees and
agents that it deems shall reasonably require access to the Confidential
Information, and to is accountants or legal counsel as it may deem necessary.
ARTICLE VI MISCELLANEOUS
A. Nothing herein shall be construed to place Sunkyong and Company in
relationship of partners, joint venturers or of principal and agent. The
parties hereto have negotiated and entered into this Agreement solely as
independent contractors, and no employer-employee relationship exists or
shall be deemed to exist between them.
B. Company and Sunkyong shall make no representations or warranties
concerning each other without the other's express written consent. Each of
Company and Sunkyong represents to the other that it is free to enter into
this Agreement, and that it is not under restrictive covenant, court order or
any other restriction concerning its entering into this Agreement and
performing its obligations hereunder.
C. Company agrees to fully and completely indemnify and hold harmless
Sunkyong information from any and all claims, losses, costs, fees, or
expenses (including reasonable attorney's fees) incurred in connection with
any claim, action, inquiry or investigation, statute or common law, or
otherwise relating to the Services provided hereunder or any Transaction,
unless and only to the extent caused solely by the willful misconduct by
Sunkyong or breach by Sunkyong of any material provision of this Agreement.
D. All taxes, dues, duties, fees and charges (collectively "Taxes") imposed
in the Territory on or in connection with the payment of any fees or other
amounts to Sunkyong and the services provided by Sunkyong hereunder shall be
for the account of Sunkyong. All Taxes imposed in or outside the Territory
on or in
2
connection with the receipt of any capital, investment, contract or other
thing of value by Company in connection with any Transaction shall be for the
account of Company. Each party agrees to indemnify and hold harmless the
other from and against any and all penalties, losses, fees, damages,
expenses, and other amounts arising from any suit, claim or proceeding in
connection with the Taxes for which such party is responsible.
E. All notices given pursuant to this Agreement shall be in writing and
delivered by hand or sent by certified mail, return receipt requested,
commercial courier or by telex or telecopier transmission to the parties at
the addresses specified by a party for notices. Such notices shall become
effective upon receipt.
F. This Agreement sets forth the entire agreement between the parties hereto
and supersedes all prior agreements, understandings and representations
including, but not limited to that certain Agreement Addendum dated April 7,
1997 between the parties. No part of this Agreement may be amended or
modified except by a writing signed by the authorized representatives of both
parties hereto.
G. Should any disputes or questions arise between or among the parties to
this Agreement during or after the term of this Agreement with respect to the
rights, obligations and remedies hereunder of such parties or with respect to
the construction or application of this Agreement which shall not be amicably
resolved among the parties, the undersigned agree that such disputes or
questions shall be submitted in New York, New York, to the American
Arbitration Association for arbitration under its rules before a single
arbitrator. No recourse shall be made to any court other than to enforce a
final arbitral award. This Agreement shall be governed and construed in
accordance with the laws of the State of New York without regard to its
conflicts of laws principles. Should any provision of this Agreement be
deemed unenforceable in any judicial proceeding, such determination shall not
affect the validity and enforceability of the balance of this Agreement.
H. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and together which shall constitute one and
the same document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year hereinabove stated.
SUNKYONG U.S.A., INC.
By: /s/ Xxxx Song
---------------------------
Name: Xxxx Song
Title: Project Manager
PROFORMANCE RESEARCH ORGANIZATION, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Name:
Title: President
3
