Exhibit (10a) Representation agreement between Web Press Corporation and
PaySys Inc.
REPRESENTATION AGREEMENT
THIS IS A SERVICE AGREEMENT made by and between PACSYS INC, an independent
contractor (hereinafter, for convenience, generally referred to as "PacSys") and
WEB PRESS CORPORATION (and its wholly owned subsidiary WEB LEADER INTERNATIONAL,
INC.), both corporations organized under the laws of the state of Washington,
U.S.A. (hereinafter, for convenience, generally referred to as "Web" or "WPC").
WITNESSETH
WHEREAS, Web is in the business of manufacturing, constructing, assembling
and installing certain machinery and equipment consisting of, among other items,
printing presses of various types and functions; and
WHEREAS, Web has extended certain terms and conditions, which have been
accepted by PacSys, authorizing PacSys to solicit and negotiate domestically and
internationally offers to purchase the machinery and equipment manufactured by
Web,
NOW THEREFORE, in consideration of the conditions hereinafter set forth, it
is agreed by and between Web and PacSys as follows:
Web hereby appoints PacSys as its sales representative to solicit and
negotiate orders in the territories outlined in this agreement for all
products manufactured and sold by Web.
This agreement shall become effective immediately and shall remain in
effect for twelve (12) months. Upon the expiration of the initial term, it
may be renewed for additional terms, unless one of the parties hereto shall
notify the other party, in writing, of its decision not to renew this
agreement.
PacSys may draw upon and Web will provide all of Web's resources,
including: sales executives, agents, brochures, advertising, meetings,
conventions, engineering expertise, technical service, and finance, to
promote and sell Web's equipment. PacSys will continuously scrutinize Web's
marketing and sales methods, including Web's sales executives and agents,
to determine how Web can better market and sell its equipment. Web
authorizes PacSys to provide marketing and sales guidance to Web's sales
executives, sales assistants, and agents; and to execute whatever steps Web
and PacSys agree are necessary to improve sales and marketing operations.
Concomitantly, PacSys may represent itself to prospects and customers as
Web's sole negotiator for all sales of equipment of Web.
1
Exhibit (10a) Representation agreement between Web Press Corporation and
PaySys Inc.
PacSys is an independent contractor and shall have no authority to
contract on Web's behalf or in any other way to obligate Web to any third
parties without the written agreement of Web. PacSys shall define each
prospect's printing requirements as well as the equipment PacSys believes
should be quoted to the prospect and shall forward that information to Web.
Web will prepare the requested quotation or alternative quotations that Web
believes should be considered and forward those quotations to PacSys or the
prospect. PacSys will, as Web's sole negotiator, present proposals to
prospects, promote the sale of Web's equipment, and negotiate on behalf of
Web offers to purchase Web's equipment. PacSys may delegate to Web's sales
executives and agents this authority.
PacSys may not compromise Web's quoted selling price without Web's
prior written approval. Signed FAX approvals are acceptable.
PacSys and its employees are prohibited from representing any other
manufacturer, owner, or distributor of full-width, web-fed printing presses
(normally considered as Web's competition), new or used, without the prior
written agreement of Web.
NORTHEAST TERRITORY
TERMS & CONDITIONS
1. A commission of 6.5% (amount to be fixed at the time of quotation) of the
"Net Sales Value" of Web's equipment and 2% of auxiliary equipment (so long
as that equipment is sold at a 10% gross profit), manufactured by other
than Web, will be paid to PacSys. Commissions paid will be directly
proportional to the amount received by Web from a payment, to the total
amount Web is to receive from the sale. Change in the commission percentage
or structure requires written permission of PacSys and Web. For purposes of
this agreement, "Net Sales Value" is defined as the contract selling price
minus commissions paid to others, license fees, and accommodation costs.
Accommodation costs are those costs that are passed on to the customer with
no xxxx-up (i.e. C.I.F. charges, travel and expenses of an installer,
etc.).
2. A territory bonus of 25% will be paid to PacSys on any portion of gross
sales margin exceeding 30%. Such margin will be calculated using Web's
Sales Price Analysis form (SPA).
3. PacSys will forward to Web monthly information concerning the status of any
prospects PacSys is working with on behalf of Web, using a mutually agreed
upon Contact Report Form.
4. PacSys will visit, on a regular basis, those customers who are currently or
at a time in the future, utilizing Web equipment within the exclusive
territory assigned. Such territory definition may be modified from time to
time upon written agreement of both PacSys and Web.
2
Exhibit (10a) Representation agreement between Web Press Corporation and
PaySys Inc.
5. Travel will be required, and the expense of that travel and all subsequent
sales expenses will be the responsibility of PacSys unless travel is for an
authorized sales meeting or business purpose wherein participation is
requested by Web.
6. The assigned territory will include the following states and Canadian
provinces:
New York Rhode Island Pennsylvania
Maine Maryland New Jersey
New Hampshire Massachusetts Connecticut
Vermont New Brunswick Newfoundland
Nova Scotia Ontario Quebec
Xxxxxx Xxxxxx Island
7. All written or published material including, but not limited to literature,
proposals, market information, call reports, forecasts, files, etc. created
or supplied by WPC or created by PacSys (both hard copy and digital) in
conjunction with their representation of WPC are to be considered the sole
property of WPC and must be surrendered to WPC upon request.
TERMS & CONDITIONS
FOR ALL OTHER EQUIPMENT SALES
1. A commission of 2% of the "Net Sales Value" of Web's equipment and 1% of
auxiliary equipment (so long as that equipment is sold at a 10% gross
profit), manufactured by other than Web, will be paid to PacSys.
Commissions paid will be directly proportional to the amount received by
Web from a payment, to the total amount Web is to receive from the sale.
Change in the commission structure requires written permission of PacSys
and Web. For purposes of this agreement, "Net Sales Value" is defined as
the contract-selling price, minus commissions paid to others, license fees,
and accommodation costs. Accommodation costs are those costs that are
passed on to the customer with no xxxx-up (i.e. C.I.F. charges, travel and
expenses of an installer, etc.). Commencing in 2002, and each year
thereafter, if net sales value for a calendar year exceeds nine million
dollars ($9,000,000.00), the above 2% commission on net sales value will
increase to 2.5% and will apply retroactively for the entire year. In 2001,
the commission rate will be increased to 2.5% if sales for the period
beginning June 1, 2001, through December 31, 2001, exceed five million two
hundred and fifty thousand dollars ($5,250,000.00).
2. A management bonus of 10% will be paid to PacSys on any portion of gross
margin exceeding 30%. Such margin will be calculated using Web's Sales
Price Analysis form (SPA).
3
Exhibit (10a) Representation agreement between Web Press Corporation and
PaySys Inc.
3. PacSys will forward to Web monthly information concerning the status of any
prospects PacSys is working with on behalf of Web, using a mutually agreed
upon Contact Report Form.
4. PacSys will visit, on a regular basis, those customers who are currently or
at a time in the future, utilizing Web equipment worldwide. Such territory
definition may be modified from time to time upon written agreement of both
PacSys and Web.
5. Web authorizes PacSys to provide marketing and sales guidance to Web's
sales executives, sales assistants, and agents; and to execute whatever
steps Web and PacSys agree are necessary to improve sales and marketing
operations.
6. PacSys shall assign one of its principals or a qualified employee
acceptable to Web, the primary responsibility for interfacing directly with
Web's management and employees on all matters attendant to their mutual
interests.
7. Travel will be required, and the expense of that travel and all subsequent
sales expenses sustained by PacSys will be reimbursed by Web. PacSys will
provide Web with documentation of such expenses prior to reimbursement.
Reimbursements will be on a monthly basis.
8. The commission structure applies to the entire world, and includes the
Northeast sales territory.
9. Web will pay PacSys a non-refundable draw against commissions for the first
twelve (12) months of this agreement. Such draw will be paid at $7,500 for
the first four (4) months; and $18,750 for the remaining eight (8) months
10. On June 22, 2001, Web's board of directors unanimously approved increasing
the number of shares outstanding of Web's common stock to four million
(4,000,000) shares. The board also approved using up to seven hundred
seventy-five thousand (775,000) shares for the expressed purpose of issuing
PacSys options to purchase Web shares. It is understood by PacSys that a
special election of all of Web's shareholders must be held to approve
granting the options before options can be granted and issued. Web agrees
to hold a special election of its shareholders no later than December 31,
2001, specifically to approve increasing the number of Web shares
outstanding, and to authorize granting stock options to PacSys to purchase
Web stock. Web's directors intend to vote their shares in favor of
increasing the number of shares outstanding and granting the stock options.
Contingent upon approval of Web's shareholders, Web and PacSys agree to the
following:
Web will grant stock options to PacSys to purchase Web's common stock at a
strike price of $.75 per share.
4
Exhibit (10a) Representation agreement between Web Press Corporation and
PaySys Inc.
In 2001, one "Unit" of 25,000 shares will be granted for every five hundred
thousand dollars ($500,000.00) that Web's actual equipment sales exceed six
million seven hundred eight thousand three hundred thirty-three dollars
($6,708,333.00) for the period commencing June 1, 2001, through December
31, 2001.
In 2002, and each year thereafter, one "Unit" of 25,000 shares will be
granted for every five hundred thousand dollars ($500,000.00) that Web's
actual equipment sales exceed eleven million five hundred thousand dollars
($11,500,000.00).
Commencing in 2002, and each year thereafter, actual sales will be measured
on a calendar year basis, January 1, through December 31.
A maximum of 325,000 shares (13 units) may be earned in any one calendar
year.
A maximum of 775,000 shares (31 units) may be earned in total under this
agreement.
Any options earned will be granted at the end of the calendar year in which
they are earned (December 31).
PacSys will have a period of twenty-four (24) months after being granted a
stock option in which it may exercise that option. Options will expire
after such twenty-four (24) month period, unless extended by Web in
writing.
Any violation of the above terms and conditions will constitute a breach of the
Representation Agreement, and, upon written notice by either party, the said
Representation Agreement will be terminated.
Either party may terminate this agreement by giving six (6) months written
notice to the other party by certified mail to the last know company
headquarters. Should this agreement be terminated by Web or PacSys for other
than a violation of the above terms and conditions, normal commissions will be
paid on orders taken from prospects in the above territory who have quotations
on file for a period of six (6) months from the termination date. During such
time, PacSys will continue to work on behalf of Web in the territories assigned
under this agreement and supply whatever assistance is required.
It is the intent of both parties to renegotiate this agreement after the first
year.
Tax Indemnification
-------------------
PacSys Inc., its officers, directors and shareholders, individually and jointly,
agree to indemnify and hold harmless Web Press Corporation, its officers,
directors and agents from and against all applicable taxes, including income,
employment, self-employment, withholding, value added or a similar tax of any
tax jurisdiction, and any penalties and interest, and the cost of any tax
controversy related thereto, which may arise out of the performance of or
compensation for the services provided by PacSys Inc. or any of its officers,
directors, employees or agents.
5
IN WITNESS WHEREOF, the parties have caused the agreement to be executed by
its duly authorized officers on the day and year first above written.
Accepted by:
WEB PRESS CORPORATION PacSys Inc.
By:_______________________________ By:_____________________________
Its:_______________________________ Its:____________________________
Date:______________________________ Date:___________________________
PacSys Inc.
By:_____________________________
Its:____________________________
Date:____________________________
6
