EXHIBIT 10.17
INDEPENDENT CONTRACTOR AND
PROPRIETARY INFORMATION AGREEMENT
This Agreement dated as of July 1, 2003, is by and between Superior Galleries,
Inc., a Delaware corporation, (the "Company"), and Xxxxxxx Xxxxx, Inc., a
California corporation, (the "Contractor"), as follows:
1. CONTRACTOR STATUS. The parties agree that Contractor is acting as an
independent contractor to assist the Company to manage the Company's public
auctions of rare coins. Contractor does not have an employment, joint
venture, or partnership relationship with Company, and shall not represent
to any third party that Contractor has authority to bind the Company to any
contract or commitment other than consignment agreements subject to the
approval of the Company.
2. INSTRUCTIONS/CLIENT PROTECTION. Contractor shall have the discretion to
decide how he performs any work for the Company. However, Contractor shall
not obligate the Company to any price, credit, commission or other terms
with clients without the Company's approval, and in addition (a) Contractor
shall not make any unfair, deceptive or misleading statements to clients
regarding the Company and its products, or (b) omit any material facts so
as to make literally true statements deceptive or misleading. Without
limiting the generality of the foregoing, Contractor agrees to comply fully
with California Business and Professions Code ss.17511 et seq. (the
"telephonic seller" law), and 16 C.F.R.ss.310 et seq. (the FTC's
Telemarketing Sales Rule) in any transactions with the Company's actual or
prospective customers, and to adhere to the Company's Due Diligence
policies as adopted from time to time during the term of this Agreement.
Contractor agrees to indemnify the Company for any loss or damage
(including attorney's fees) incurred by it as a result of any violation of
Contractor's obligations under this Paragraph.
3. TRAINING. Contractor shall not be required to attend any training sessions
with Company personnel, and Company relies upon Contractor's prior
experience and contacts in the rare coin marketplace.
4. CONTROL/EXPENSES. Contractor acknowledges that his services are not
controlled by Company, and that Company's success in business is not
dependent upon those services. Company does not require Contractor to work
only during fixed hours or at Company's place of business, or to conform
strictly to routines, schedules and work patterns established by Company.
Rather, Contractor is free to work at his own schedule, and to use such
equipment and assisting personnel as he deems necessary (at his own
expense). The Company agrees to provide Contractor with leads and marketing
support and reimbursement for actual and reasonable out-of-pocket travel
and entertainment expenses incurred by Contractor directly in connection
with his services for the Company, but Contractor is solely responsible for
any office and/or
employee expenses connected with his services consumed outside of the
personnel and offices that may be made available from time to time by the
Company.
5. COMPENSATION. Contractor shall be paid compensation as follows: (a) a
monthly fee of $19,250, payable in two equal installments on the 15th and
30th of each month hereunder, and (b) a commission equal to five (5.0%)
percent through August 31, 2003 and ten percent (10.0%) thereafter of the
Company's Net Commissions and Buybacks excluding commissions earned from
the sale of Superior owned inventory. For purposes of this Agreement, "Net
Commissions and Buybacks" shall be defined as the Company's gross
commissions plus buyback fees earned from rare coin auctions minus finder's
fees paid by the Company.
6. TERM/TERMINATION. This Agreement shall continue for a term of twelve (12)
months. Either party may terminate this Agreement on 60 days' written
notice to the other. In the event of termination, each party agrees to pay
the other promptly any sums due under this Agreement, and Company
specifically agrees that Contractor shall be entitled to commissions in
accordance with Paragraph 5 for any auctions taking place within 60 days
following the effective date of the termination.
7. NON-DISCLOSURE OF INFORMATION. Contractor acknowledges that the list of
Company's customers, as it may exist from time to time, and Company's
policies and processes are valuable, special and unique assets of Company's
business. Accordingly, Contractor will not, during or after the term of his
relationship with Company, disclose the list of Company's customers or any
part thereof, or any numismatic policy or process employed by Company, to
any other person, firm, corporation or any other entity for any reason or
purpose whatsoever.
8. RETURN OF DOCUMENTS AND RECORDS. Contractor agrees that upon termination of
this Agreement it shall return to the Company any documents, records,
notebooks, computer software or diskettes, and any other repositories of or
containing any information obtained in connection with Contractor's
relationship with Company, including any and all copies thereof, then in
Contractor's possession, whether prepared by Contractor or third parties.
9. NON-SOLICITATION OF CUSTOMERS. Contractor agrees that during the term of
this Contract it shall not directly or indirectly solicit or accept, or
assist in the solicitation or acceptance of, any business involving the
purchase or sale of rare coins from any customer or prospective customer of
the Company except in accordance with this Agreement. Contractor further
agrees that for a period of one (1) year after the termination of this
Agreement, it shall not directly or indirectly solicit or accept, or assist
in the solicitation or acceptance of, any business involving the purchase
or sale of rare coins from any person who was a customer or prospective
customer of the Company at the time of termination, PROVIDED, HOWEVER, that
Contractor shall be free to do business with any customer or prospective
customer of whom it became aware other than through the Company, or which
it generated through its own leads during the term hereof or those
customers that the Xxxxxxx Xxxxx, the President of Contractor has had a
business relationship prior to July 6, 2001 or those customers common to
the rare coin trade.
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10. NON-INTERFERENCE WITH BUSINESS. The parties mutually agree that during the
term of this Agreement and for a period of one (1) year thereafter, neither
shall attempt to or disrupt, damage, impair or interfere with the other's
business whether by way of interfering with or soliciting its employees,
soliciting relationships with independent contractors, agents,
representatives, vendors and customers, or otherwise, of the Company.
11. BREACH OF RESTRICTIVE COVENANTS. Violation of any of Paragraphs 7-10 hereof
will cause the other party irreparable harm and loss which cannot be
reasonably or adequately compensated by damages in an action at law.
Accordingly, in the event of a breach or threatened breach by either party
of any of the provisions of said paragraphs, the other party shall be
entitled to injunctive and other equitable relief to prevent or cure any
breach or threatened breach thereof. Notwithstanding the foregoing, the
parties shall have other legal remedies as may be appropriate under the
circumstances including, but not limited to, recovery of damages occasioned
by such breach. In the event that a court of competent jurisdiction
determines any of the provisions of Paragraphs 7-10 hereof to be
unreasonable in scope, time or geographic reach, that court is hereby
authorized by Contractor and the Company to enforce the same in such
narrower scope, shorter time or smaller geographic reach as the court
determines to be reasonable under all the circumstances.
12. ENTIRE AGREEMENT/AMENDMENT. This Agreement constitutes the entire agreement
of the parties with respect to its subject matter and supersedes all prior
and contemporaneous agreements and understandings of the parties. This
Agreement cannot be modified, waived, assigned, or transferred without the
express written consent of both parties.
13. BINDING ON SUCCESSORS/NO ASSIGNMENT. This Agreement is binding upon the
parties thereto and their affiliates, subsidiaries, parents, successors,
and representatives. This Agreement may not be assigned by either party
without the other's express written consent and any purported assignment
without consent shall be null and void.
14. SEVERABILITY. If any provision of this Agreement is found invalid or
unenforceable, that provision will be enforced to the maximum extent
permissible, and the other provisions of this Agreement will remain in
force.
15. CALIFORNIA LAW/FORUM. This Agreement shall be construed and enforced in
accordance with California law, excluding choice of law rules. Any dispute
arising under or relating to this Agreement shall be submitted to
arbitration under the Commercial Arbitration Rules of the American
Arbitration Association, with venue in Beverly Hills, California, and the
parties agree that the prevailing party shall be entitled to an award of
its attorney's fees and costs, whether or not those are otherwise
recoverable by statute. Judgment on any arbitration award may be entered in
any court of competent jurisdiction.
16. AUTHORITY. Those persons executing this Agreement do so with proper
authority from their respective principals.
17. COUNTERPARTS. This Agreement may be executed by facsimile or in
counterparts, which each shall be deemed an original hereof.
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Superior Galleries, Inc.
By: /S/ XXXX BIBERKRAUT
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Its Chief Financial Officer
Xxxxxxx Xxxxx, Inc.
By: /S/ XXXXXXX XXXXX
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Its President
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