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EXHIBIT 10.8
[EMERY INTERNATIONAL DEVELOPMENTS LTD. LETTERHEAD]
January 2, 1998
Agreement between:
Emery International Developments Limited ("Emery")
and
International Technology Packaging ("ITP")
Emery and ITP hereby agree as follows:
As of January 2, 1998, and for two years only, regarding machine sales,
quotations, follow up, machine and/or project financing of Emery's prospective
clients only those as designed by Emery or as separately located and negotiated
fully by ITP only in North America, Emery shall pay every 2 weeks all ITF
related and modest expenses such as air fares, hotels, but no salaries. Emery
shall require complete detailed documentation and receipts for same with trip
and customer reports. This agreement supercedes any previous agreements. All
travel points must be used only for Emery's business.
ITP's position will be that of an independent sales and finance agent and
consultant to Emery clients in North America. ITF will keep Emery fully
informed in detail with copies of all documentation or information received
from or pertaining to all potential designated clients.
For all sales of all large and small machine sales in North America, for
selling at full price as designated by Emery price list and in full accordance
with Emery's standard terms and conditions. Emery shall pay to ITP the agreed
upon three percent (3%) for "Large Machine Sales" and five percent (5%) amounts
for all "Small Machine Sales" respectively which are sold in the North American
market by ITF. This constitutes an exclusive sales territory for ITP, and only
credit for all sales in North America that ITP sold at full price and standard
terms and conditions.
However Emery shall not pay any commission on dies for "Small Machines". Also
Emery shall increase the ITF commission only on the first four (4) "Small
Machines" sold to 7% (instead of the above 5%) and a corresponding increase in
the proposal price shall be made from the Emery 1998 list price in advance of
the sale (see attached Appendix #1 showing selling prices for 1998 including 3%
commission on "Large Machines" and 7% commission on "Small Machines" calculated
by dividing Emery 1998 and 1999 prices by 0.97 and 0.93 respectively. Also for
a two (2) year Emery shall advance to ITF $2000 US per month against anticipated
sales commissions and such accumulated amount shall be justified every six (6)
months and credited against outstanding commissions or otherwise it shall be
paid back to Emery whichever as the result of such justifications not credited
to ITP.
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For clients in North America, ITP will assist with sales, Emery shall insist
that ITP instruct Emery to mark-up or increase the standard 1998 and 1999 Emery
prices, for any Emery "Large Machines" herein defined as "48-2-125 or larger"
to include a 3% commission (ie for 3% commission to be included divide 1998/9
prices by 0.97) and for machines smaller than 48-2-125 (herein defined as
"Small Machines") shall include 7% commission for 1998 and 5% commission for
1999 (ie divide proposal prices by 0.93 and 0.95 respectively). Any different
mark-ups or prices or terms must be agreed to by Emery in advance in writing
and signed by Emery.
Outside of North America, ITP shall not negotiate with any Emery potential
clients, for the purpose of assisting with sales of machinery or moulded pulp
products or financing, that Emery has not agreed to and designated to ITP in
writing but it may do so with other sourced or found by ITP on its own if Emery
has not been in contact with them already or located at our booth at trade
shows except if agreed in signed written form as an agreed client list for ITP
to pursue. ITP shall not sell moulded pulp products made on non-Emery machines
nor sell nor finance nor lease any non-Emery machines, parts, or dies to or for
any customer.
The mark-up amounts of initially three and five percent (or 7%) are only to be
paid to ITP if the following events occur:
Emery shall pay to ITP $10,000.00 U.S. per client that as a result of ITP, the
said clients pay $100,000.00 U.S. to $200,000.00 U.S. "non-refundable
next-in-line status" fee for large machines (or a minimum of $50,000.00 U.S. on
RP4200 and smaller machines) against signed, initialled and unchanged Emery
proposals. This $10,000.00 U.S. will be applied as a credit against the three
to seven percent mark-up amount(s) should the sale(s) be completed. Should the
sale not be completed in an acceptable time frame to Emery and the
non-refundable next-in-line status deposit is forfeited by the client, then the
$10,000.00 U.S. paid to ITP is deemed to be earned. Any legal fees paid to
protest the non-refundable nature of the deposit or settlement amounts paid
shall be deducted from money owing or paid to ITP. However, ITP shall only pay
its proportionate share of the legal costs and proportionate share of any
negotiated settlement amounts agreed to by ITP and Emery (eg. if a $1000,000
deposit is received and $10,000 is paid to ITP, then ITP's proportionate share
would be [10,000/100,000] x 100 = 10%)
For any clients from which ITF obtains a $100,000.00 U.S. to $200,000.00 U.S.
(or a minimum of $50,000.00 U.S. on RP4200 and smaller machines)
"non-refundable next-in-line status" fee paid to Emery and/or if ITP provides
successful financing which Emery and Emery's customer accepts for a 48-2-125 or
larger machine standard contract which has no holdbacks and no "strings"
attached for Emery such as "ultimate net loss guarantees", EPC or personal or
corporate guarantees by Emery or overprices to later be refunded or discounts or
clauses modified and giving risk to Emery, etc. with full quoted price or
without holdbacks, etc. unless agreed to in writing by Emery to ITP and the
Buyer, only then will Emery pay the three (3%) percent for 48-2-125 and larger
machines (or five (5%) percent (or 7% as noted) for smaller than 48-2-125
machines) mark-up to ITP in U.S. funds and furthermore only on the following
successfully completed milestones as set out below:
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1) $10,000.00 U.S. payable to ITP if, and only if, the $200,000.00 U.S.
(minimum $100,000.00 U.S.) non-refundable next-in-line status fee is
received and accepted by Emery along with the unchanged contract duly
signed and all pages initialled by the Buyer.
2) Thirty percent (30%) of the three (3%) percent for larger machines (or of
the 5% to 7% percent for smaller machines) mark-up amount on the designated
equipment, less any $10,000.00 payments noted above less ITPF expenses paid
by Emery prior to the sale shall be payable in U.S.D. to ITP only on or
after receipt and acceptance by Emery of the standard full size machine
contract as quoted and duly signed and all pages initialled by the Buyer
without any special "strings" attached or holdbacks or discounts or changed
terms unless agreed to by Emery in writing to ITP as well as receipt and
acceptance by Emery of the thirty (30%) percent deposit, as well as an
irrevocable letter of credit for the balance of the full contract amount
and in full accordance with the terms and conditions of the contract and
furthermore agreed to in writing by Emery and confirmed by the Bank of Nova
Scotia in Canada. ITP share of expenses deducted from commissions for said
new clients shall be only for those expenses related to activities to
secure and conclude financing and contracts for said new clients and share
of general office expenses charged by ITP.
3) For the sale of designated large size machines, $5,000.00 U.S. will be
payable to ITP every 30 days after the receipt and acceptance by Emery of
the thirty percent (30%) deposit and the irrevocable letter of credit
confirmed by the Bank of Nova Scotia for the balance, as a draw against the
balance of the three percent fee less the ten thousand ($10,000.00 U.S.)
fee paid initially when Emery received the next-in-line status deposit less
the proportion of expenses paid to ITP by Emery prior to the sale (as noted
in (2) above) and less any advances paid by Emery to ITP or any amount owed
by ITP to Emery.
4) The balance of the three (3%) percent mark-up, if any, shall be payable to
ITP in U.S. funds only upon receipt of the final payment and upon delivery
and final acceptance of the equipment without backcharges by the Buyer.
Backcharges that are warranty or Emery's fault are for Emery's expense.
Other backcharges shall not exceed the commission after expenses are
deducted. ITP shall have the opportunity to rectify said backcharges.
5) For sale of designated machines smaller than 48-2-125, on terms noted
above, the five (5%) percent shall be payable to ITP in U.S. funds only on
receipt of the final payment upon delivery and final acceptance of the
equipment without backcharges by the Buyer. Backcharges that are warranty
or Emery's fault are for Emery's expense. Other backcharges shall not
exceed the commission. ITP shall have the opportunity to rectify said
backcharges (except the first four (4) contracts in 1998 shall be at 7% not
5%).
ITP agrees not to offer nor to negotiate any contracts with "strings" or
holdbacks of any nature such as "ultimate net loss guarantees", EPC contracts
or product rate or quality or personal or corporate guarantees, or lack of a
proper letter of credit, or overprices later to be refunded or changes in
terms, conditions, prices, clauses, etc. Should ITP be in negotiation with a
finance
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company for the financing of an Emery machine and if and only if the financing
company brings up the topic and continually on one or more of the above, and
only after it becomes a deadlock, ITP must only state that they believe Emery
will not accept the same and only on further insistence from the financing
company ITP can only say they will relay this request to Emery and that Emery
will probably not even consider it.
Only Emery shall prepare and type all proposals to be presented, and these
shall only be couriered out from Emery with ITP advice on any special comments
that could be made.
For any clients from which ITP obtains the $200,000.00 U.S. (or minimum
$100,000.00 U.S.) "non-refundable next-in-line status" fee paid to Emery and/or
ITP provides financing or assistance for the client in concluding successful
financing which Emery and Emery's customer both accept in writing for a full
size machine duly signed standard contract which may have holdbacks or "strings"
attached for Emery such as "ultimate net loss guarantees", or corporate
guarantees by Emery or discounts or changed clauses which create risk to Emery,
or lack of a proper letter of credit, etc., the three (3%) percent mark-up shall
have adjustments made by mutual agreement of ITP and Emery in the amounts
payable to ITP due to compensation for the above deviations from the proposal
first presented and deductions for liquidated damages and penalties paid to be
agreed on by both parties in writing at the time of signing the contract(s).
Any brokerage fee or shares, etc. being negotiated or having been obtained by
ITP from the same client or from the financing or leasing institution involved
or for moulded pulp product sales must immediately be disclosed to Emery by ITP
and Emery has the right to refuse to let ITP negotiate for shares in said
client's company but any of the above approved by Emery will be additional
income earned by ITP for its services to Emery's clients.
All above payments covered by this contract shall be invoiced to Emery and
detailed as above and shall be noted as "sales and financing fees" (along with
the description of milestones stated above). ITP shall obtain Emery's prior
approval for all commitments that Emery may or may not wish to make and only
Emery shall sign any contracts or any documents that Emery chooses to accept.
Emery shall not pay for ITP expenses of the second person if ITP staff travel
in pairs to meetings since this increases expenses where one person would be
sufficient unless prior approval is given in writing by Emery.
This agreement is valid only for two years from date of signing and is only
renewable on written signed agreements by both parties for further periods of
two years.
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Accepted this 2nd day of January, 1998
in Toronto by Emery International Developments Limited
per: /s/ John Emery
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John Emery
Accepted this 2nd day of January, 1998
in Toronto by International Technology Funding Inc.
per: /s/ Howard Keep
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Howard Keep
per: /s/ Terry Keep
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Terry Keep