Exhibit 10.8 Letter of Agreement for Franchise Program Assistance
PSA
PAUL STEWART ASSOCIATES, INC.
14455 Preston Road, Suite 128 o Dallas, Texas 75254
Mail: RO. Box 802216 o Dallas, Texas 75380-2216
1.888.716.9931 o 972.716.9931 o Fax 97 2 716.9913
April 13, 2002
Mr. C. J. Comu
Humitech International Group, Inc.
15851 Dallas Parkway, Ste. 410
Addison, TX 75001
Re: LETTER OF AGREEMENT FOR FRANCHISE PROGRAM ASSISTANCE
Dear Mr. Comu:
Here are the terms and conditions under which Paul Stewart Associates, Inc.
("PSA") will agree to augment and assist the franchising and marketing efforts
of Humitech International Group, Inc. ("HIGI") with its franchise concept for
commercial humidity control systems (the "Franchise Program"):
A. DOCUMENTATION & MARKETING. PSA will undertake the creation, review and
revision as needed of the following elements of the proposed Franchise
Program, including the:
l. Offering Circular 4. Franchise Advertising
2. Franchise Agreement 5. Marketing Plan
3. Sales Brochure Inserts 6. Franchise Financing Options
B. COMPLIANCE WITH LAW. PSA will cooperate with and assist HIGI in all
matters relative to the continued success of the Franchise Program, in
a professional and responsible manner with respect to compliance with
all state and federal franchising statues, laws and regulations;
C. HOLD HARMLESS. HIGI will hold Paul J. Stewart and PSA harmless for any
misstatement of fact or misrepresentation or legal action arising from
or caused by owners, officers, directors, employees or agents of HIGI,
and VICE VERSA;
D. BUDGETS. HIGI acknowledges that the estimated financial commitment for
the revision of the existing Franchise Program may be from $15,000 to
$20,000, including all consulting retainers and marketing fees, over a
period of two months-not including printing and advertising costs,
which must be approved by HIGI in advance;
E. MODIFICATIONS. PSA acknowledges that the final budgets for the
recreation of documents and/or marketing materials shall be based on
bid to, and approval by HIGI in advance of any such expenditures. HIGI
may cancel, modify, delay or accelerate projects and/or timetables as
HIGI deems necessary and appropriate;
O SPECIALISTS IN BUSINESS CONSULTING, PACKAGING & MARKETING O
F. PRIOR APPROVAL. PSA will not incur or authorize any financial
expenditure, of any type or kind, without the prior consent of, and
approval by HIGI in advance of such expenditure;
G. APPROVED EXPENSES. HIGI will pay for all prior approved and necessary
expenses to be incurred in the development, packaging and marketing of
the Franchise Program, which may include, but not be limited to
printing and production expenses, marketing costs, advertising
placements, travel, room and board, clerical and other such
expenditures as are directly related to or part of the Franchise
Program as per this Agreement;
H. RETAINERS AND FEES. HIGI shall retain Paul Stewart and PSA to perform
the above services, in conjunction with and under the supervision of
HIGI, for the sum of $12,500 as the total consulting retainer, to be
paid monthly, at the rate of $7,500 deposited for the rough drafts of
the franchise documents and $5,000 for completion of the final approved
documents, to be delivered within thirty days or less. The initial
consulting retainer installment of $7,500 is due upon signing this
Agreement;
I. COMPLETION/ADDITION OF PROJECTS. At the conclusion of the above
projects (OR OTHERS AS MAY BE IDENTIFIED BY HIGI), or at such time as
HIGI requests further assistance from Paul Stewart and PSA for projects
not listed above, HIGI shall have the option of retaining PSA as needed
on a project-to-project basis, at the regular hourly rate of $250 per
hour, or as mutually agreed;
J. TERM. This Agreement, which shall incorporate and include the exhibited
project timetable and budget indicated above, shall commence from the
date of its signing for 90 days, and may be extended and/or amended
only by mutual written agreement; and
K. CANCELLATION. This Agreement may be canceled by either party upon ten
(10) days written notice and receipt of all then due earned and payable
retainers, fees and/or approved expenses. Any unearned retainers or
fees that may be due PSA shall be returned to HIGI after cancellation
of this Agreement by HIGI.
THEREFORE, on this the 13th day of April, 2002, the parties named below do
hereby agree.
/s/C.J. Comu /s/ Paul J. Stewart
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C. J. Comu, Chairman Paul J. Stewart, President
Humitech International Group, Inc. Paul Stewart Associates, Inc.
O SPECIALISTS IN BUSINESS CONSULTING, PACKAGING & MARKETING O
BUYSIDE 1103 Knott Court
P A R T N E R S Dallas, Texas 75013
214.718.9202 Tel.
972.359.9202 Fax
gmatus@buysidepartners.com
www.buysidepartners.com
- --------------------------------------------------------------------------------
DALLAS O SAN FRANCISCO O NEW YORK O BOSTON O LOS ANGELES O LONDON O ZURICH
10.9 SERVICE AGREEMENT WITH BUYSIDE PARTNERS LLC
THIS SERVICE AGREEMENT (Agreement) is entered into as of the 1st the
day of March, 2002, between Buyside Partners, Inc. (Buyside Partners) and CLIENT
RECITALS
A. Buyside Partners is engaged in providing investor relations, strategic
consulting, public relations and other consulting services for the
primary purpose of enhancing the market valuations of publicly traded
and privately held corporations.
B. CLIENT requires the services from Buyside Partners that are set forth
in Exhibit "A" attached hereto and made a part of this Agreement
(hereinafter referred to as "the Services").
C. Buyside Partners desires to provide the Services to CLIENT and CLIENT
desires to receive the Services from Buyside Partners.
NOW THEREFORE, in consideration of the mutual covenants, conditions, and
promises contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, Buyside Partners and CLIENT
agree as follows:
1. ENGAGEMENT. CLIENT hereby engages Buyside Partners to provide the
Services and Buyside Partners accepts said engagement.
2. TERM. This Agreement shall commence as of the date hereof and shall
continue until terminated by either party upon Thirty (30) days written
notice to the other party.
3. COMPENSATION. CLIENT agrees to pay Buyside Partners a 'fixed' monthly
fee of $6,300 dollars within thirty (30) days after date of month-end
invoice from Buyside Partners. Options will be offered at client's
discretion.
a. BUYSIDE PARTNERS SHALL INVOICE CLIENT, AND CLIENT SHALL PAY
BUYSIDE PARTNERS FOR ALL FEES AND EXPENSES THAT BUYSIDE
PARTNERS HAS INCURRED IN PERFORMING THE SERVICES DURING SUCH
INVOICE PERIOD.
BUYSIDE PARTNERS FEES FOR SERVICES PROVIDED INCLUDE A STANDARD
MONTHLY BILLING FEE OF $6,300 DOLLARS. FOLLOWING THE END OF
EACH MONTH, A FULLY DOCUMENTED AND DETAILED REPORT WILL BE
SUBMITTED. CLIENT'S ONLY "FIXED" COMMITMENT WILL BE $6,300 PER
MONTH FOR A 12 MONTH PERIOD INCLUDING A ONE-TIME $5,000
RETAINER.
4. PROGRESS REPORTS. Buyside Partners shall provide CLIENT with monthly
progress reports at the same time as invoices for its services are
rendered and where appropriate and upon request, samples of work in
progress.
5. TRADE SECRETS AND CONFIDENTIALITY. Buyside Partners shall not disclose,
use, or sell any trade secret of CLIENT except as specifically
authorized in writing by CLIENT. "Trade Secret" is defined as
Information owned by CLIENT, its subsidiaries or divisions, that are
not generally known to the public, has economic value to CLIENT, its
subsidiaries or divisions, and were collected through efforts put forth
by CLIENT, its subsidiaries or divisions. The term "trade secret" shall
not, however, include (a) anything that is generally known in the
relevant trade or industry or to the public generally, or (b)
nonproprietary knowledge, skills, or experience that Buyside Partners
would have gained in the course of similar employment or work
elsewhere.
6. MISCELLANEOUS PAYMENTS. Buyside Partners shall pay all agents,
subcontractors, and vendors for all services and products pertaining to
this Agreement that are received or purchased by Buyside Partners with
the prior written authorization of CLIENT.
7. TERMINATION. Either party may terminate his Agreement with or without
cause and at any time by giving the other party 30 day written notice.
If this Agreement is terminated, Buyside Partners shall cease all work
for CLIENT and shall immediately deliver all CLIENT related material in
Buyside Partners procession and a final invoice to CLIENT.
8. INDEPENDENT CONTRACTOR. Buyside Partners is an independent contractor
and no training or assistance that Buyside Partners may give or offer
to CLIENT shall defeat this status. The relationship between the
parties hereunder is not an employment, partnership, joint venture,
legal representation, membership or fiduciary relationship. Buyside
Partners shall be responsible to pay all its sub-contractors, taxes and
similar items.
9. OWNERSHIP OF COPYRIGHT, I.P. AND WORK PRODUCTS. All work performed and
all work product credited on behalf of CLIENT by Buyside Partners,
shall remain the property of CLIENT. Such work and work product will
include, but not be limited to, any inventions or idea arising out of,
and related to CLIENT, Analyst Reports, any finished work product,
literatures, reports, slicks, advertisement, presentations and data,
either in printed, hand written or electronic form and any technology
developed for CLIENT, or intended for CLIENT, or paid for by CLIENT in
any parts of such development.
10. INDEMNIFICATION. CLIENT shall indemnify, defend and hold harmless
Buyside Partners for any liabilities arising out of, or as a result of,
negligence by CLIENT. Buyside Partners shall indemnify, defend and hold
harmless CLIENT for any liabilities, expenses and legal costs arising
out of, or as a result of negligence on the part of Buyside Partners.
11. GENERAL PROVISIONS.
a. INTERPRETATION. The paragraph headings contained herein are
for convenience and reference only and shall not expand,
limit, or otherwise affect interpretation of any provision of
this Agreement. Whenever the text requires, the singular shall
include the plural, the plural hall include the singular, the
whole shall include any part thereof, and any gender shall
include both other genders.
b. ENFORCEABILITY AND SEVERABILITY. CLIENT represents and
warrants to Buyside Partners, and Buyside Partners represents
and warrants to CLIENT, that this Agreement constitutes a
legal, valid, and binding obligation of the respective parties
enforceable in accordance with the terms herein contained. The
provisions of this Agreement shall be deemed and construed to
be independent and severable, and the invalidity or partial
invalidity or un-enforceability of any one provision or
portion thereof shall not affect the validity or
enforceability of any other provision of this Agreement.
c. ENTIRE AGREEMENT. This Agreement constitutes the final
agreement between Buyside Partners and CLIENT regarding the
subject matter of this agreement and supersedes all prior
agreements, understandings, negotiations, and discussions,
written or oral, between Buyside Partners and CLIENT with
respect thereto. No subsequent modification, amendment, or
change of this Agreement shall be binding unless reduced to
writing and signed by both Buyside Partners and CLIENT.
d. BINDING EFFECT. All provisions hereof shall be binding upon
and shall inure to the benefit of the parties hereto, and
their respective successors and assigns.
e. NOTICES. All notices required to be given hereunder shall be
in writing and shall be delivered in person or sent by
certified mail, return receipt requested, to the address of
the other party set forth on the first page hereof or to such
other address as such party shall have designated by written
notice.
f. ATTORNEYS' FEES. If either party employs an attorney or
attorneys to enforce any of the provisions hereof, the
non-prevailing party agrees to pay the prevailing party all
reasonable costs and expenses, including attorney fees,
incurred in connection therewith.
g. NO WAIVER. Acceptance by either party of any performance less
than required hereby shall not be deemed to be a waiver of the
rights of such party to enforce all of the terms and
conditions hereof. No waiver of any right hereunder shall be
binding unless reduced to writing and signed by the party to
be charged therewith.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
Buyside Partners, Inc.
/s/ George Matus
-----------------------------------
George Matus, Director
CLIENT
/s/ C.J. Comu
-----------------------------------
(CLIENT SIGNATURE)
EXHIBIT "A"
This Addendum is attached to and made a part of the Service Agreement
between Buyside Partners and CLIENT dated _____________, 2002.
CLIENT requires the following services from Buyside Partners:
During the term of the Agreement, Buyside Partners shall manage investor
relations for CLIENT.
Deliver the following program elements to help increase visibility and attain
"full" market valuation correlated to future growth prospects:
1. RESEARCH ORIENTATION. Buyside Partners will provide a thorough analysis
of CLIENT'S "investment fundamentals and appeals" to develop a
Management Vision Statement, Analyst Reports for fund managers on a
quarterly basis and corporate goals, including a long range business
plan, market demand projections by segment and CLIENT'S competitive
position within CLIENT'S markets and internal factors likely to affect
the CLIENT'S operating margins. Buyside Partners will visit CLIENT'S
headquarters for a full orientation and interviews with CLIENT'S key
executives.
2. COUNSELING, PROGRAM PLANNING AND REPORTING. Buyside Partners will
provide consulting, as needed, with top management regarding the
effective structuring of CLIENT'S investment story, speech
presentations, pitch documents and printed communications; and
strategies to enhance the marketability of the common and/or any
preferred stock, such as: policy on dividends, stock splits, exchange
listings, and annual meeting planning and staging. Also, the issuance
of monthly program reports to CLIENT and a conference as often as
needed to analyze CLIENT's performance, plan a disclosure tack and
review prevailing street feedback and review program progress through
monthly written reports.
3. TARGETING. MEETING AND FOLLOW-UP. Buyside Partners will provide both
its personal/ professional investment contacts as well as an extensive
electronic nation-wide database (BUYSIDE CONNECT(TM)) of approx.
(30,000) investment professionals to CLIENT, including analysts, fund
managers, brokerage officers, high net-worth individuals and other
professional contacts in the investment community. Buyside Partners
will arrange meetings between qualified and strategically important
investment professionals, analysts, fund managers, brokerage officers,
high net-worth individuals and other contacts in the investment
community on a weekly and monthly basis. This process will include:
* Audience selection and personal contact
* Deliver advance CLIENT information to attendees
* Site selection and all logistics including; catering, sound
and projection equipment, printed materials handling; etc.
* Preparing the "pitch" presentation.
* Securing audience reactions within 48 hours thereafter.
4. INVESTMENT COMMUNITY OUTREACH. Ongoing identification of investment
professionals both nationwide and internationally who should be the top
priority candidates for first time introduction to the CLIENT. Buyside
Partners pre-qualifies analysts, brokers and fund managers and all
other investment professionals for private group meetings with CLIENT
officers. A screening process is conducted through on-going personal
interviews with identified candidates.
5. PERCEPTION STUDY. Identification and interviews with investment
professionals influencing CLIENT's stock float to determine prevailing
attitudes, including analysis of the 13F SEC filings of all those
institutions holding stock of CLIENT's peer group (public companies in
CLIENT's category), as well as an analysis of CLIENT's shareholder
roster, street name holdings and other data.
6. PRINTED MATERIALS. Buyside Partners shall assist in the review and
preparation of initial draft for the following documents, however,
CLIENT shall approve in writing all printed materials, prior to
distribution to any outside entity. CLIENT shall have the
responsibility to design and print all printed materials and shall rely
on Buyside Partners for advice in the development of these collateral
materials:
a. Quarterly Shareholder Letters: to accompany earnings
releases.
b. Quarterly Analyst Report
c. Annual Report: Theme and format; review and editing.
d. Corporate Press Releases: Prepare and distribute all press
releases to PR News Wire and other appropriate media, subject
to final sign-off by CLIENT officer prior to distribution of
any press release.
e. Investment Profile: Buyside Partners shall prepare a research
report designed for top analysts and money managers.
f. Broker Fact Sheet: Buyside Partners shall prepare a two-page
distillation of the CLIENT's investment profile aimed at the
retail investment community.
g. Investor Kit: Buyside Partners shall prepare a sample Investor
Kit.
7. CONFERENCE CALL BRIEFINGS. Buyside Partners will assist with script
development and review; invitation dissemination, set-up of all
conference call logistics, set-up of conference call web-cast with
v-call, street link, etc., including telephonic archives, and immediate
follow-up with key participants. Buyside Partners will also arrange for
CLIENT to participate in Buyside Partners annual virtual CEO conference
call.
8. FINANCIAL PRESENTATIONS. Buyside Partners will assist in producing
speech outline and slides to be utilized in effectively presenting the
CLIENT's story to assembled groups of brokers, money managers and
investment analysts.
9. MEDIA RELATIONS. Buyside Partners will make arrangement for media
interviews and preparation therefore; and development of editorial
interest in feature profile articles on CLIENT in local, regional, and
national financial media. CLIENT's publications will include
BusinessWeek, Fortune, Barrons, Forbes, Wall Street Journal and other
major media as well as CNBC, BLOOMBERG TV AND CNNFN. Buyside Partners
will also arrange for regular progress report conferences with Dow
Jones, Reuters or Bloomberg on an exclusive basis just in advance of
quarterly results issuance to obtain the fullest possible coverage with
the national wires.
10. MATERIALS DISTRIBUTION. Buyside Partners will be responsibility for the
creation of, review, cleanup, expansion and maintenance of CLIENT's
financial mailing list of brokers and analysts targeted for direct
mail. Responsibility also includes; supervising the distribution of
investor kits, news bulletins, shareholder reports, profile reports and
feature article reprints to existing investors and potential analysts,
fund managers, retail brokers and targeted financial media. Buyside
Partners also offers the usage of its premises as CLIENT's information
base in the investment community, to stock CLIENT's financial materials
and facilitate convenient handling of broker/analyst inquiries and
requests for literature.
11. INVESTOR RELATIONS WEBSITE CONSULTING. Buyside Partners will review
CLIENT's investor relations page section on CLIENT's web site, and make
recommendation's on the items for dissemination, such as; investment
profile, news, releases, frequently asked questions, key financial
highlights, current quotes, and SEC information hyper-linked to the
appropriate sites throughout the internet.
Buyside Partners will, within 3 months, establish a WEB presence under
its own domain name to promote and disseminate information for the
companies it represents, including CLIENT.
12. STOCK ACTIVITY SURVEILLANCE. Buyside Partners will provide CLIENT with
information about who is buying, selling or shorting CLIENT's stock and
why.
13. PROGRAM MEASUREMENT. Buyside Partners shall provide to CLIENT every six
months a report which measures the effectiveness of the Buyside
Partners efforts with respect to the following criteria:
DJIA
S&P 500 Index
NASDAQ
CLIENT's stock price
CLIENT's average monthly stock trading volume
CLIENT's rank in industry stock group by:
P/E
ROE
12-month sales/earnings growth
The number of analysts following the CLIENT's stock
The number of investment professionals on the CLIENT's mailing
list
The number of sponsoring brokerage houses
The number of shares held by institutions
The number of institutional holders and their names
Changes in investor perception
Media interest