INDEPENDENT CONTRACTOR AGREEMENT
This
Independent Contractor Agreement (“Agreement”) is entered into by and between
Gateway International Holdings, Inc., a Nevada corporation, and its subsidiaries
(“Gateway”), and Xxxxxxxx X. Xxxxxxxx, an individual, (“Xxxxxxxx”). Gateway and
Xxxxxxxx are each a “Party” and together the “Parties.”
RECITALS
WHEREAS,
Gateway, through its subsidiaries, including, but not limited to, E.M.
Tool
Company, Inc., a California corporation d.b.a. Elite Machine Tool Company
(“Elite Machine”),
is
a
company
engaged in the acquisition, refurbishment, distribution and sales of pre-owned
computer numerically controlled (“CNC”) machine tools to manufacturing customers
across the United States of America;
WHEREAS,
Gateway has numerous CNC machines in its inventory and has a need of a
salesperson to sell both existing inventory and procure new transactions for
the
purchase and sale of CNC machines;
WHEREAS,
Xxxxxxxx is the former President of Elite Machine and has extensive experience
in acquiring and selling new and used CNC machines;
WHEREAS,
the Parties wish to enter into an agreement under which Xxxxxxxx will work
as an
independent contractor to assist Gateway with the acquisition and sale of new
and used CNC machines;
NOW
THEREFORE, in consideration of the premises and respective mutual agreements,
covenants, representations and warranties herein contained, it is agreed between
the Parties hereto as follows:
I.
RELATIONSHIP
1.1 This
Agreement is entered into between Gateway and Xxxxxxxx in order to set forth
the
terms of the Xxxxxxxx’x relationship with Gateway. XXXXXXXX EXPLICITLY
UNDERSTANDS THAT HE IS NOT AN EMPLOYEE, AGENT OR SERVANT OF GATEWAY OR THE
COMPANY.
1.2 Xxxxxxxx
is a commission-only independent contractor salesman for Gateway. In that
capacity, Xxxxxxxx’x primary responsibility will be the purchase and sale of new
and used CNC machines on behalf of Gateway and its subsidiaries. Xxxxxxxx shall
report directly to Xxxxxxx X. Xxxxxxxx, Elite Machine’s President and Chief
Executive Officer. Xxxxxxxx shall conduct all of his activities in a manner
so
as to maintain and promote the business and reputation of Gateway. Xxxxxxxx
has
non-exclusive rights to transact with Gateway regarding the sale and purchase
of
CNC machines. Nothing in this Agreement shall be construed to xxxxx Xxxxxxxx
exclusivity regarding Gateway’s purchase or sale of machines.
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1.3 Xxxxxxxx
may not, without specific written approval of Xxxxxx Xxxxxxxx or Xxxxxxx X.
Xxxxxxxx, do or contract to do, any of the following:
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(1)
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Bind
Gateway, or its subsidiaries, to any contract or
agreement;
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(2)
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Act
as an agent or lead others to believe he is an officer, director
or
employee of Gateway or its
subsidiaries;
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(3)
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Access
in any way, any bank account, credit line, loan, or any other funds
of
Gateway or its subsidiaries;
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(4)
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Hire,
terminate or reprimand any of Gateway’s employees or independent sales
agents;
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(5)
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Sell
any used CNC machine with any warranty or other guarantee of performance,
and in any other condition other than “as is”;
or
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(6)
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Take
any other action prohibited by Gateway’s written practices and
policies.
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1.4 If
requested, Gateway shall provide Xxxxxxxx with an office, office equipment,
and
supplies, including a desktop computer already in Xxxxxxxx’x possession, for
Xxxxxxxx’x use. Gateway will also provide Xxxxxxxx with access to Elite
Machine’s warehouse where the new and used CNC machines Elite Machine has in
inventory are stored. However, these items remain Gateway’s property and Gateway
has the right to inspect any of the property at any time, without notice. If
Gateway wishes to review the information on the computer, Xxxxxxxx shall make
the computer available at the earliest practicable time and provide any
necessary passwords, etc., necessary to access the computer.
1.5 Xxxxxxxx
understands that as an independent contractor to Gateway and he is not entitled
to unemployment compensation from Gateway upon termination of this Agreement.
Xxxxxxxx understands that in the event of injury or death to her during the
course of this Agreement, he is not entitled to Worker's Compensation from
Gateway. Xxxxxxxx and Xxxxxxxx also understand that NO DEDUCTION FOR FEDERAL,
STATE OR OTHER GOVERNMENTAL SUBDIVISION TAXES OR CHARGES OF ANY TYPE WILL BE
MADE FROM THE AMOUNT DUE XXXXXXXX UNDER THE TERMS OF THIS AGREEMENT. XXXXXXXX
FULLY AND COMPLETELY UNDERSTANDS THAT IT IS SOLELY AND TOTALLY RESPONSIBLE
FOR
THE PAYMENT OF ALL SUCH TAXES OR CHARGES. At the end of each calendar year,
Xxxxxxxx shall receive a Form 1099 notifying the Internal Revenue Service of
all
compensation paid to Xxxxxxxx by Gateway.
II.
TERM
2.1 This
Agreement shall be effective as of October 1, 2008, and shall continue in force
for a period of one year (1) year therefrom or until terminated as set forth
below. Either party may terminate this Agreement at any time by giving thirty
(30) days written notice to the other party.
2.2 This
Agreement terminates automatically on the occurrence of any of the following
events: (a) bankruptcy or insolvency of either party; (b) sale of the business
of either party; (c) the death of either party, or (d) the breach of a material
term of this Agreement, including, but not limited to, Section 1.3,
above.
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III.
AMOUNTS
DUE
3.1 Gateway
agrees to compensate Xxxxxxxx as follows:
(1) For
any
CNC machines currently in Gateway or Elite Machine’s inventory, as identified on
Exhibit
A,
attached hereto, the amount listed under the “10% Xxxx-Up” column for those CNC
machines with no sales order; Xxxxxxxx does not receive any compensation for
the
CNC machines listed with a sales order; and
(2) For
any
CNC machines that Gateway purchases, which are not in Gateway’s inventory as of
the date of this Agreement, Gateway will xxxx up the machine 20% over Gateway’s
cost and Xxxxxxxx will be entitled to any purchase price received by Gateway
for
the machine, minus the amount that was 20% over Gateway’s cost.
3.2 Xxxxxxxx
will not entitled to any compensation on any sales of CNC machine until ten
(10)
days after Gateway
receives
full payment for the machine.
3.3 Consistent
with Section 1.3, Xxxxxxxx cannot enter into any transaction that will obligate
Gateway, or any of its subsidiaries, to purchase or sell any CNC machine,
regardless of whether or not that machine is currently in Gateway’s inventory,
without the written approval of Xxxxxx Xxxxxxxx or Xxxxxxx X.
Xxxxxxxx.
3.4 Other
than as provided for in Section 1.4, Gateway will not pay any business expenses
for Xxxxxxxx under this Agreement. Any expenses incurred by Xxxxxxxx shall
be
the sole responsibility of Xxxxxxxx.
3.5 The
compensation paid by Gateway to Xxxxxxxx under this Section is meant to fully
compensate Xxxxxxxx and Xxxxxxxx for Xxxxxxxx’x services, as well as ensure
Xxxxxxxx and Xxxxxxxx’x compliance with the terms of this Agreement, including,
but not limited to, Section IV, below.
IV.
DISCLOSURE
OF CONFIDENTIAL INFORMATION
4.1 Xxxxxxxx
acknowledges that Gateway has developed and is developing a unique and
successful business of which the name, customers, goodwill, and methods of
doing
business are valuable assets, and also that Gateway at times does business
with
certain entities whose name and scope of work are confidential. In the course
of
Xxxxxxxx carrying out his obligations under this Agreement, Xxxxxxxx will have
access to Gateway’s confidential information, including, but not limited to,
trade secrets, financial information, customer lists, marketing methods, data,
properties, personnel and internal affairs, relating to Gateway’s business and
customers (the “Confidential Information”).
4.2 Xxxxxxxx
shall not, during the term of this Agreement and for one year thereafter,
communicate, divulge, or use for the benefit of herself or any other person,
partnership, association, or corporation, either directly or indirectly, any
information or knowledge concerning Gateway and any information, including
but
not limited to client lists, communication techniques, invoicing, billing,
schematics, hardware and software designs and prototypes which may be
communicated to Xxxxxxxx by Gateway during the term of this
Agreement.
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4.3 Xxxxxxxx
covenants and agrees that during the term of this Agreement he will not do
any
act or fail to do any act which may be prejudicial or injurious to the business
and goodwill of Gateway.
V.
NON-COMPETITION
5.1 During
the term of this Agreement and thereafter, Xxxxxxxx and Xxxxxxxx shall be free
to act as an independent contractor for other companies provided, however,
that
during the term of this Agreement and for any period in which Xxxxxxxx is
receiving compensation by Gateway under Exhibit
A,
Xxxxxxxx will not be permitted to: (a) for his own account or for the account
of
any other person or entity, interfere with Gateway’s relationship with any of
its suppliers, material customers, accounts, brokers, representatives or agents;
(b)
call
on, solicit, or take away any of Gateway’s clients or potential clients about
whom Xxxxxxxx
became
aware as a result of Xxxxxxxx’x
services to Gateway, either for Xxxxxxxx
or for
any other person or entity; or (c) solicit or take away or attempt to solicit
or
take away any of Gateway’s employees or contractors either for Xxxxxxxx
or for
any other person or entity.
Notwithstanding the above, this Section is not intended to prohibit Xxxxxxxx
from purchasing and/or selling CNC machines in transactions that do not involve
Gateway or its subsidiaries (“Non-Gateway Transactions”). For any Non-Gateway
Transaction, Xxxxxxxx agrees to offer Gateway the transaction, in writing,
on a
right of first refusal basis. If Gateway wishes to participate in the
Non-Gateway Transaction, it shall notify Xxxxxxxx, in writing, within 24 hours
of receiving Xxxxxxxx’x written notice of the transaction. If Gateway does not
wish to participate in the Non-Gateway Transaction, Xxxxxxxx may consummate
the
transaction with any third party and it will not violate the provisions of
this
Section.
VI.
MISCELLANEOUS
6.1 This
Agreement is not assignable, in whole or in part, by either Party without the
prior written consent of the other Party, and any assignment not approved by
both Parties in writing shall be void.
6.2 Xxxxxxxx
agrees to comply with all Federal, State and Municipal laws, rules and
regulations that may now be in effect or which may be in effect in the
future.
6.3 This
Agreement constitutes the entire Agreement of the Parties, and no oral
representations or agreements are binding on either Party unless set forth
in
writing.
6.4 For
any
notices required in this Agreement, the following addresses shall govern for
delivery of notices to either Party, and the sending of notice by facsimile
or
overnight mail with confirmation of receipt, to such address shall be
conclusively presumed to have satisfied the notice requirements of this
Agreement.
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Gateway:
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Gateway
International Holdings, Inc.
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0000
Xxx Xxxxxx
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Xxxxxx,
XX 00000
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Attn.
President
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Facsimile
No.: (000) 000-0000
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Xxxxxxxx:
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Xxxxxxxx
X. Xxxxxxxx
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00000
Xxxx Xxxxx Xx.
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Xxxxx
Xxxxx, CA_ 92886
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Facsimile
No.:________
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6.5 Xxxxxxxx
acknowledges that a remedy at law for any breach or attempted breach of any
part
of Article IV and Article V of this Agreement will be inadequate and agrees
that
Gateway shall be entitled to specific performance and injunctive and other
equitable relief in case of any such breach or attempted breach. Xxxxxxxx
further agrees to waive any requirement for the securing or posting of any
bond
in connection with the obtaining of any such injunctive or any other equitable
relief.
6.6 Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law. If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such provision or invalidity only, without
invalidating the remainder of such provision or the remaining provisions of
this
Agreement. No waiver of Gateway of any breach or failure to enforce any
provision hereof shall be construed as a waiver of any future breach or right
to
enforce any of the provisions of this Agreement.
6.7 This
Agreement shall be construed and enforced in accordance with and governed by
the
laws of the State of California, notwithstanding conflicts of laws principles
thereof. Venue for any action shall be Orange County, California.
6.8 Forbearance
or failure to pursue any legal remedy or right upon default or breach hereof
shall not constitute waiver of such right, nor shall any such forbearance,
failure or actual waiver imply or constitute waiver of any subsequent default
or
breach.
6.9 This
Agreement may be executed simultaneously in one or more counterparts, each
of
which shall be deemed an original and all of which together shall constitute
one
and the same instrument. A facsimile signature shall be effective in all
respects.
6.10 This
Agreement may not be altered, modified or amended except pursuant to a written
instrument executed by all the Parties.
6.11 Each
Party acknowledges and represents that, in executing this Agreement, such Party
has had the opportunity to consult legal counsel, and has not relied on any
inducements, promises, or representations made by any Party or any party
representing or serving such Party, unless expressly set forth
herein.
6.12 Notwithstanding
anything to the contrary herein, this Agreement shall not in any manner be
construed to create a joint venture, partnership or other similar form of
relationship, and neither Party shall have the right to: (a) commit the other
Party to any obligation or transaction not expressly authorized by such other
Party, or (b) act or purport to act as agent or representative of the other,
except as expressly authorized in writing by such other Party.
[signature
page follows]
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EXECUTED
this 30th day of September 2008, in Tustin, California.
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“Gateway”
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“Xxxxxxxx”
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Gateway
International Holdings, Inc.,
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Xxxxxxxx
X. Xxxxxxxx
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a
Nevada corporation
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an
individual
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/s/
Xxxxxx Xxxxxxxx
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/s/
Xxxxxxxx X. Xxxxxxxx
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By:
Xxxxxx Xxxxxxxx
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By:
Xxxxxxxx X. Xxxxxxxx
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Its:
Executive Vice President
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6
Exhibit
A
CNC
Machine Inventory
7
