Exhibit 10.19
EXECUTION COPY
TUG CHINA BONUS AGREEMENT
by and among
Sea Master Logistics (Holdings) Limited.
and
Xxxxxx Xxx and Xxxxxx Xx
October 2, 2006
TUG CHINA BONUS AGREEMENT
THIS TUG CHINA BONUS AGREEMENT (the "Agreement") is dated October 2,
2006 by and among SEA MASTER LOGISTICS (HOLDING) LIMITED, a Hong Kong
corporation (the "SeaMaster"), and each of Xxxxxx Xxx and Xxxxxx Xx (the
"Executives").
WITNESSETH:
WHEREAS, SeaMaster is engaged or will engage in, the business of
providing ocean, air and land transportation intermediary services in China to
major retailers, wholesalers, importers, and domestic manufacturers in the
Transpacific trade lanes as an international freight agency (collectively, the
"Logistics Business");
WHEREAS, the Executives historically conducted Logistic Business in
China through Shanghai Pudong International Transportation Co., Ltd. with a pro
forma revenue of US$25,000,000 in 2005, and desire to conduct that business
through SeaMaster or SeaMaster (China) Logistics, Ltd., and SeaMaster desires to
handle this business.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereby agree as follows:
ARTICLE I
EXECUTIVES COMPENSATION
1.1 COMPENSATION:
Cash Payment: SeaMaster will pay the Executives a cash payment based
upon the achievement of specific EBITDA Targets (as defined in the SeaMaster
Sale and Purchase Agreement) of the Executive's Logistic Business (as defined
below) per annum ("Cash Payments"). It is understood that the revenue
contributed to the EBITDA Targets by the Executives' Logistic Business is in
addition to the Seller's Logistic Business (as defined in the SeaMaster Sale and
Purchase Agreement). The EBITDA Target shall be calculated using funds received
by SeaMaster free and clear of any encumbrance. The estimated Cash Payment in
each of the following years is: Year 1 is US$550,000, Year 2 is US$550,000, Year
3 is US$550,000, Year 4 is US$550,000, and Year 5 is US$550,000. The Cash
Payments would be paid forty-five (45) days after the first quarter of each
calendar year (the "Payment Date"), subject to the availability of sufficient
cash flow and the Credit Agreement. If the Cash Payment is not paid within the
period of forty-five (45) days after the Payment Date, it will be paid
subsequently in full with accrued interest at an agreed money market rate
subject to the terms of the Credit Agreement. "Executives' Logistics Business"
means: the net revenue received from any co-load business and agent business of
the Executives, and the Executives' controlled business (excluding business
controlled by Xxxxx Xxxxx and SeaMaster) evidenced by written agreement for the
Transpacific trade lanes originating from any offices previously used by the
Executives pre-Closing in China, and excludes any other trade lane volume, such
as Europe/Asia, introduced to Executives by the Company or any of its affiliates
or personnel or controlled by, the Company or other personnel or assets
affiliated with the Company (except any former employees of Executives' China
agency (other than Xxxxx Xxxxx)), which shall not be counted towards the Cash
Payment or revenue of Executives' Logistics Business (the "Excluded Cargo").
SeaMaster shall charge against the Executives' Logistic Business a management
fee equal to US$10,000.
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1.2 DISBURSEMENT OF COMPENSATION. The Executives agree that the Cash
Payment shall be disbursed as specified in Schedule 1.2 attached hereto and made
a part hereof and to the bank accounts set forth therein.
ARTICLE II
COVENANTS
2.1 FURTHER ASSURANCES AND ASSISTANCE. SeaMaster and the Executives
shall, from time to time, at the request of SeaMaster, do, execute, acknowledge
and deliver or will cause to be done, executed, acknowledged and delivered all
such further acts, deeds, assignments, transfers, conveyances, assurances and
take such other action as SeaMaster may reasonably request and as may be
reasonably necessary in order to effectuate the terms of this Agreement.
2.2 ACCOUNTS RECEIVABLE. The Executives shall use their reasonable
efforts to collect and account for all accounts receivable that will be
reflected on the Closing Balance Sheet. Based upon the audited Closing Balance
Sheet, the parties agree that upon delivery of the final determination of the
Closing Balance Sheet, a net accounts receivable equal to accounts receivable as
set forth on such balance sheet less the allowance for doubtful accounts as set
forth thereon will be calculated (the "Net Receivables"). Forty-Five (45) days
prior to the Cash Payment Date, amounts received by SeaMaster in connection with
the Executives' Logistic Business will be applied to the specific invoice
designated by the customer remittance. In applying any payment made by an
account debtor, such payment shall be applied to any account receivable to which
it clearly relates by reason of the amount thereof, and otherwise, as shall be
specified by the customer at the time of the making thereof or upon subsequent
inquiry by SeaMaster.
2.3 ACCOUNTS PAYABLE. Upon request, SeaMaster shall furnish to the
Executives lists of accounts payable and accrued expenses of the Executives'
Logistics Business.
ARTICLE III
MISCELLANEOUS
3.1 AMENDMENT. This Agreement may amended only by a written instrument
executed by all parties hereto.
3.2 TERMINATION. This Agreement may be terminated at any time by the
mutual agreement of the parties, with the consent of Maritime US Logistics
Holdings Inc.
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3.3 ARBITRATION. In the event of any dispute, the parties agree to
arbitrate such matter in New York City, pursuant to the rules of the American
Arbitration Association, and SeaMaster shall nominate one arbitrator, the
Executives shall nominate one arbitrator, and the two chosen arbitrators shall
select a third independent arbitrator. The finding of a majority of the
arbitrators shall be binding on the parties.
3.4 EXPENSE. Except as provided elsewhere in this Agreement, each party
hereto shall assume and bear all expenses, costs and fees incurred or assumed by
such party in the preparation and execution of this Agreement. SeaMaster shall
assume the cost and expense of any arbitration.
3.5 ASSIGNMENT. This Agreement may not be assigned by either party
hereto without the prior consent of the other party.
3.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts which together shall constitute one and the same document.
3.7 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New York.
3.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
3.9 NO THIRD PARTY BENEFICIARIES. No provision of this Agreement shall
create nor confer upon any person and third party beneficiary rights or
otherwise.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
MARITIME LOGISTICS US HOLDINGS INC. SEA MASTER LOGISTICS (HOLDING), LIMITED
By: /s/ [signature illegible] By: /s/ Xxxxx Xxxxx
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Name: Name: XXXXX XXXXX
Title: Title: MANAGING DIRECTOR
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Xxxxxx Xxx Xxxxxx Xx
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