Exhibit 10.6
CONSULTING AGREEMENT
THIS AGREEMENT is made August 12, 2004, between Universal Am-Can, Ltd., a
Delaware corporation ("Buyer") and Xxxxxx X. Xxxxx (the "Consultant").
BACKGROUND
WHEREAS, Consultant has contemporaneously herewith sold all of his stock
(the "Stock") in AFA Enterprises, Inc. ("AFA"), a Pennsylvania corporation, and
all of his personal goodwill in the transportation business (the "Personal
Goodwill") to Buyer (the "Acquisition"); and
WHEREAS, Buyer desires to engage Consultant to assist in the transition of
ownership of AFA, including to cause the effective transfer of the Personal
Goodwill, and Consultant agrees to accept such engagement, on the following
terms,
NOW, THEREFORE, in consideration of the foregoing, and in further
consideration of the promises herein contained, Buyer and the Consultant agree:
SECTION 1 - RETENTION OF CONSULTANT; TERM
Buyer hereby retains the services of Consultant, and the Consultant agrees
to perform services as reasonably requested by Buyer, for a term of four (4)
years from and after the Effective Date hereof, under the terms and conditions
herein provided. Consultant shall be designated President Emeritus of AFA.
SECTION 2 - DUTIES OF CONSULTANT; COMPENSATION
A. Consultant shall perform such services as Buyer shall reasonably
request to assist with the transition of the ownership of AFA, and the Personal
Goodwill, from Consultant to Buyer. Consultant shall join Buyer in announcing
the Acquisition, and in introducing Buyer to all Key Relationships (as hereafter
defined). Consultant shall use his best efforts to perform his duties in a
prompt and competent manner as and when reasonably requested by Buyer.
Consultant's duties shall include, without limitation, using his best efforts to
assist in the aspects
EXHIBIT B-1
of the ownership and operational transition of AFA and its subsidiaries, and of
the Personal Goodwill, as each relates to operations and to relationships with
key employees, commission and other agents (collectively, "agents"), fleet
owners, owner-operators and customers of AFA and/or its subsidiaries (the "Key
Relationships"). In this regard, Consultant shall use his best efforts to cause
the Key Relationships to remain intact following the Acquisition. In particular,
Consultant, at such times and frequency as are mutually agreeable to Consultant
and Buyer: (a) shall participate in joint visits with such agents, fleet owners,
owner-operators and customers as Buyer may reasonably request, and (b) shall
consult with Buyer by telephone as reasonably requested by Buyer.
In addition, Consultant shall attend such AFA company meetings as may be,
from time to time reasonably required by Buyer upon reasonable notice, and shall
use his best efforts to serve as a public relations ambassador for Buyer and AFA
at such times and frequency as are mutually agreeable to Consultant and Buyer.
Any such company meeting shall be at such location as the Buyer may designate.
Except as may be reasonably necessary with respect to the participation in
company meetings or on joint visits with agents, fleet owners, owner-operators
and customers, it is understood that Consultant shall otherwise be rendering
services hereunder from his home office. Consultant shall maintain reasonable
availability to perform his services hereunder at such times and with such
frequency during the term hereof as are mutually agreeable to Consultant and
Buyer.
B. In consideration of such services, Buyer shall pay to Consultant the
sum of Ten Thousand Dollars ($10,000) per month, such payments to commence on
the Effective Date of the Purchase Agreement between Consultant and the
predecessor to Buyer ("the Purchase Agreement") and continue for a period of
twelve (12) months and thereafter Buyer shall pay to Consultant the sum of Five
Thousand ($5,000) Dollars per month during years two through four of the term
hereof, with the payment for any portion of a month to be prorated in accordance
with this Section.
C. During the term of this Agreement, Consultant shall be entitled to use
of the 2003 leased Mercedes, currently used by Consultant, the rental for which
shall be paid by Buyer, including reimbursement for fuel, insurance and all
other automobile expenses, until the earlier of the expiration of the term
hereof or the term of such lease. Upon expiration of the lease for
EXHIBIT B-2
the 2003 Mercedes, if prior to the expiration of the term hereof, Consultant
shall receive a Four Hundred ($400) Dollar per month automobile allowance until
the term of this Agreement has expired.
D. Consultant shall be reimbursed for all bona fide business expenses
incurred by Consultant in performing services hereunder, upon presentation of
receipts and other appropriate documentation therefor.
E. Buyer shall provide medical insurance for Consultant's spouse (but not
Consultant) during the term hereof.
F. Notwithstanding any language contained herein to the contrary, the term
of this Agreement shall terminate upon Consultant's death or in the event he is
unable to provide services hereunder due to his illness, accident or injury, for
any period of 90 consecutive days, and in such event, Buyer shall have no
further obligations to Consultant from and after such termination.
SECTION 3 - INDEPENDENT CONTRACTOR
Consultant is not an employee of Buyer for any purpose whatsoever but is
an Independent Contractor. Buyer is interested only in the results obtained by
Consultant, who shall have control of the manner and means of performing under
this Agreement. Consultant shall pay all income and other taxes with respect to
the amounts payable to Consultant hereunder, and shall defend, indemnify and
hold harmless Buyer with respect thereto.
SECTION 4 - AUTHORITY
Consultant acknowledges and agrees, except as specifically authorized by
Buyer, that he has no authority to enter into agreements for and on behalf of
Buyer, AFA or any subsidiary of AFA, and no authority to bind any of them in any
way whatsoever.
SECTION 5 - CONFIDENTIAL INFORMATION
Consultant shall keep secret and confidential all Confidential Information
of Buyer, AFA or any subsidiary of AFA, and shall not use or disclose such
Confidential Information, either during or at any time after the term of this
Agreement, without the express written consent of
EXHIBIT B-3
Buyer. For purposes of this Section 5, "Confidential Information" shall mean
information not generally known about Buyer (or its parent corporation,
Universal Truckload Services, Inc or any other subsidiary thereof), AFA or any
subsidiary of AFA which is disclosed or becomes known to Consultant as a
consequence of or through his activities under this Agreement, or prior
relationships with AFA and its subsidiaries or his prior use of the Personal
Goodwill, including but not limited to, matters of a technical nature, such as
"know how", innovations, discoveries, methods, software programs, service
methodologies, research projects and methods; matters of a business nature, such
as information about costs, profits, markets, sales, business processes,
computer programs, accounting methods, information systems, and business,
financial or financing plans and reports (whether or not disclosed to a
government agency); the identity of specific current or potential employees or
independent contractors (including owner-operators and fleet owners); the
identity of commission and other agents and the identity of business
relationships with specific persons and specific business organizations; as well
as all information protectable as trade secrets, including unpublished financial
statements, budgets, projections, prices, costs, customer and supplier lists and
training and promotional materials; and any other information of a similar
nature. Upon the termination of this Agreement, Consultant shall deliver to
Buyer all records, including copies thereof, which contain Confidential
Information, including but not limited to such documents as memoranda, notes,
records, manuals, and software which has come into Consultant's possession or
was obtained by Consultant subsequent to the Effective Date of this Agreement.
Further, Consultant agrees not to breach any other agreement regarding
Confidential Information to which he is a party in connection with the
Acquisition. Nothing contained in this Section is intended to prohibit Seller
from using such Proprietary Information concerning the Corporate Group as may be
required for Seller, its accountants and other representatives to prepare, file
and support any tax returns and other necessary documents applicable to periods
on and prior to the Effective Date of the Purchase Agreement.
SECTION 6 - INJUNCTIVE RELIEF
Consultant agrees that a breach or threatened breach of Section 5 of this
Agreement may result in irreparable injury to Buyer, and therefore, in addition
to all other remedies provided by
EXHIBIT B-4
law, Consultant consents that Buyer shall be entitled to an injunction to
prevent a breach or threatened breach of any of the obligations contained
herein.
SECTION 7 - EFFECTIVE DATE
This Consulting Agreement will become effective on the Effective Date of
the Purchase Agreement. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement may be
brought, exclusively, against any of the parties in the courts of the State of
Michigan, County of Macomb, or the Commonwealth of Pennsylvania, located in
Alleghany County, Pennsylvania or if it has or can acquire jurisdiction, in the
United States District Court located in either Detroit, Michigan or Pittsburgh,
Pennsylvania, and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein.
SECTION 8 - NOTICES
All notices, requests, demands and other communications hereunder, shall
be in writing, and shall be deemed to have been duly given if given in the
manner set forth in the Purchase Agreement.
SECTION 9 - MICHIGAN LAW
This Agreement has been made in Michigan and shall be construed in
accordance with the laws of Michigan without regard to conflicts of law
principles.
[SIGNATURE PAGE FOLLOWS]
EXHIBIT B-5
Executed as of the date set forth above.
"Consultant" "Buyer"
Universal Am-Can, Ltd.
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxx a Delaware corporation
By:
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Its:
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[SIGNATURE PAGE TO CONSULTING AGREEMENT]
EXHIBIT B-6
