SALES AGENCY AND SERVICE AGREEMENT
EXHIBIT
10.7
THIS
AGREEMENT, executed this 19th day of May, 2008 and effective July 1, 2008 (the
“Closing Date”) between Xxxxxxx International Logistics, Inc. a New Jersey
corporation with its principal place of business at 000 Xxxx Xxxxxx, Xxxxxxxxx,
Xxx Xxxxxx (hereinafter “FIL”) and Xxxxx World Trade, Ltd., a Nevada corporation
with a principal place of business at 000-00 000xx
Xxxxxx,
Xxxxxxx, Xxx Xxxx (hereinafter “Xxxxx”)
WHEREAS,
the Parties hereto intend to enter into a certain Asset Purchase Agreement
by
which Xxxxx will purchase certain specified assets constituting substantially
all of the assets of a Customs Brokerage business owned and operated by FIL,
(hereinafter “the Business”) but none of the liabilities or debts of said
business, and
WHEREAS,
Xxxxx is desirous of retaining the services of FIL for the promotion, operation,
expansion, and sale of the services of the Business,
THEREFORE,
1.
Customers; Duties
FIL
has
agreed to bring and transfer to Xxxxx its book of business of its customs
brokerage operation, which includes the customers of FIL’s customs brokerage
operations and any new business developed. FIL’s duties shall consist of
soliciting, marketing, advertising and selling Janel’s goods and services,
obtaining customers for Xxxxx, any administrative or service functions that
accompany servicing customers, cooperation with Xxxxx with respect to its
operations, and regularly informing Xxxxx of FIL’s business activities on its
behalf or with respect to customers. Xxxxx will provide its general
administrative services to customers, including, but not limited to, customs
clearance, payment of duties, delivery of merchandise, special projects, and
billing and collections. FIL agrees to fully disclose all payment terms and
schedules to customers on a regular basis and will supply Xxxxx, on a current
basis, with all information concerning customers, potential customers, and
the
status of customer negotiations, contracts or orders. FIL may not offer any
discount to customers without prior approval from Xxxxx. Any business
transactions or accounts that involved the handling of activities outside of
the
scope of customs clearance (e.g. trucking, warehousing, international
airfreight, international ocean freight) handled by FIL will not be part of
this
transaction and will not be cross-solicited by Xxxxx to handle those
services.
2.
Best Efforts
FIL
agrees to develop and maintain all accounts brought by it to Xxxxx. FIL will
use
its best effort to establish customer relations, satisfaction and retention
by
performing its business and sales functions to the best of your ability and
providing premium service, which includes, but is not limited to, maintaining
regular contact, inviting customers to events, if applicable, maintaining
customer contact, information lists, and providing service reports and price
schedules.
3.
Independent Contractor
Pursuant
to this Agreement, FIL is an independent contractor and not an employee. This
Agreement is not to be construed in any manner as an employment contract or
to
entitle FIL or any of its representatives, officers or employees to any benefits
to which an employee of Xxxxx would be entitled, except for those directly
employed by Xxxxx. As an independent contractor, FIL is solely responsible
for
its business expenses, benefits and taxes, including, but not limited to, any
unemployment, social security, and disability insurance payments, income and
other tax deductions and withholdings which may be required by federal, state
or
local law, filing tax returns, purchasing and maintaining medical coverage
or
other health or insurance benefits, expenses relating to any automobile or
other
transportation, and expenses relating to sales efforts hereunder.
4.
Non-Disclosure of Confidential Information
FIL
has
or will receive Confidential Information as a result of its dealings with Xxxxx
and its representatives and customers. Accordingly, FIL agrees not to, directly
or indirectly, at any time and in any way, use, communicate, disclose or
disseminate any Confidential Information in any manner whatsoever. FIL shall
use
its best efforts and exercise utmost diligence to protect and safeguard all
Confidential Information that is or becomes under its control. “Confidential
Information” means any and all trade secrets and other intellectual property,
proprietary and other information, in any form, relating to Xxxxx or its
affiliates, or their directors, officers, or employees, other than information
which is in the public domain other than as a result of your willful or
negligent act or omission or any breach of the provisions of the Agreement,
including, but not limited to, information relating to the development, identity
and description of customers, operations, pricing, prospects, marketing,
finances, business proposals, and all other aspects of Janel’s or its
affiliates’ business.
5.
Ownership of Proprietary Information
Xxxxx
is,
and shall remain during the term of this Agreement and thereafter, the sole
and
exclusive owner of all Confidential Information for FIL customs brokerage
operation.
6.
Non-Compete
FIL
agrees that while it is an independent contractor sales representative for
Xxxxx, and in any event until the end of the initial and any renewal term of
this Agreement, it will not, directly or indirectly (i) offer or provide or
conduct any business services relating to customs brokerage in the New York/New
Jersey area to any other person or entity or (ii) participate in, own, manage,
operate, or control any business which is in competition with Xxxxx or its
affiliates pertaining to customs brokerage services in the New York/New Jersey
area. During the initial and any renewal term of this Agreement, and for two
(2)
years following the termination hereof, FIL and its officers, employees and
representatives shall not in any manner, directly or indirectly, solicit for
employment or employ any person who was employed by Xxxxx pertaining to customs
brokerage during the initial and any renewal term of this Agreement, or call
on
or solicit any person or entity who or which was a customer of Xxxxx during
the
initial and any renewal term of this Agreement, unless such calling on or
soliciting does not relate to any products or services which are then
competitive with those of Xxxxx pertaining to customs brokerage services.
7.
Irreparable Harm
It
is our
mutual intent that the restrictions contained in the Non-Disclosure and
Non-Compete paragraphs herein will be enforced to the fullest extent permissible
under the laws and public policies of each jurisdiction in which enforcement
is
sought. FIL agrees that the restrictions contained herein are reasonably
necessary for the protection of Xxxxx, that Xxxxx would be irreparably harmed
by
any breach or threatened breach of these restrictions, that monetary damages
alone would not be adequate, and that Xxxxx would be entitled, in addition
to
any and all remedies at law, and without the posting of a bond or other
security, the right to an injunction, specific performance or other equitable
relief. FIL also agrees that, if any one or more of these restrictions are
held
by a court to be invalid or unenforceable for any reason, the provisions will
be
construed by limiting and reducing them so as to be enforceable to the greatest
extent permissible.
8.
Termination
Any
of
the following actions by either party shall constitute good cause and give
either party the right to immediately terminate this Agreement without any
liability to either party except for any net profit earned and calculated
pursuant to Paragraph ___.
(a)
material breach of this Agreement;
(b)
dereliction of duties hereunder that is not cured within five (5) business
days
following written notice from either party to you of such
dereliction;
(c)
willful or intentional act or omission that xxxxx either party or its
affiliates, and such condition cannot be cured to the reasonable satisfaction
of
Xxxxx;
(d)
commission of any fraud, misappropriation, or embezzlement; or
(e)
commission of any felony;
Upon
any
termination of this Agreement each party’s obligations and restrictions shall
cease and desist and the parties shall be returned to their position prior
to
the execution of the agreement, except as set forth in Paragraph 6
hereof.
9.
Term
FIL’s
engagement under this Agreement shall be for a three (3) year period, commencing
as of the closing date, unless sooner terminated pursuant to the provisions
of
this Agreement or unless notice of termination is delivered by one party to
the
other not later than sixty (60) days prior to the end of the initial or renewed
term of this Agreement.
10.
Compensation
If
the
earnings before interest, taxes, depreciation and amortization (“EBITDA”) of the
Business for the three (3) years immediately following the Closing Date exceeds
Two Million One Hundred Thousand Dollars ($2,100,000.00), Xxxxx will pay 40%
of
the excess amount to FIL.
For
each
year after the three (3) year period immediately following the closing date,
FIL
shall be entitled to payment of 40% of the amount by which the annual EBITDA
of
the Business exceeds Seven Hundred Thousand Dollars ($700,000.00) for that
year.
For example, if the EBITDA of the Business in year 4 of the Agreement is One
Million Dollars ($1,000,000.00) FIL shall be entitled to payment for that year
of One Hundred Twenty Thousand Dollars ($120,000.00).
11.
Representations, Warranties and Covenants of Xxxxx
Xxxxx
represents, warrants, covenants and agrees with FIL as follows:
(a)
Xxxxx
is a corporation duly organized, validly existing and in good standing under
the
laws of Nevada, with full power and authority to enter into this Agreement
and
perform its obligations;
(b)
This
Agreement has been duly and validly authorized, executed and delivered on behalf
of Xxxxx and is the valid, binding and enforceable obligation of Xxxxx in
according with its terms.
12.
Representations, Warranties and Covenants of FIL
FIL
represents, warrants, covenants and agrees with Xxxxx as follows:
(a)
FIL
is a corporation duly organized, validly existing and in good standing under
the
laws of New Jersey, with full power and authority to enter into this Agreement
and perform its obligations.
(b)
This
Agreement has been validly and duly authorized, executed and delivered by FIL
and is a valid, binding and enforceable obligation upon it in accordance with
its terms.
(c)
FIL
shall at all times comply with all applicable federal and state laws in
connection with your activities pursuant to this Agreement, in particular the
rules and regulations of the SEC under the Securities Act of 1933 and the
Securities Exchange Act of 1934.
13.
No Other Representations
None
of
Xxxxx, its affiliates, or their directors, officers, or employees, or any other
person or entity has made any representations or warranties to FIL other than
as
expressly set forth and designated in this Agreement as such.
14.
Assignment
FIL
shall
not assign this Agreement or any rights or obligations hereunder without the
prior written consent of Xxxxx, which consent shall not be unreasonably
withheld.
15.
Binding Effect
This
Agreement shall inure solely to the benefit of, and shall be binding upon,
the
parties and their respective successors and assigns and, except as otherwise
specifically provided for herein, no other person shall have or be construed
to
have any legal or equitable right, remedy or claim under or in respect of or
by
virtue of this Engagement Letter or any provisions herein
contained.
16.
Entire Agreement; Waiver; Severability
This
Agreement contains the entire understanding of the parties (with the exception
of the terms of the stock subscription agreement that conflict herewith, in
which case, the terms of the stock subscription agreement shall prevail) and
no
waiver or modification of any provision of this Agreement shall be valid unless
in writing and signed by the party to be charged with such waiver. No waiver
of
any breach shall be deemed a waiver of any subsequent breach or of a breach
of
any other provision of this Agreement. If any provision of this Agreement is
held to be invalid or unenforceable, the remaining provisions shall not be
affected.
17.
Headings
The
headings of the paragraphs herein are inserted for convenience of reference
only
and shall not affect any interpretation of this Agreement.
18.
Construction and Jurisdiction
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York without giving effect to choice of law or
conflicts of laws principles. The New York state and federal courts in New
York
county, and any arbitration or other alternative dispute resolution forum in
New
York County mutually selected by the parties, shall have jurisdiction over
any
and all disputes arising out of or related to this Agreement.
19.
Notices
All
notices and communications hereunder, except as herein otherwise specifically
provided, shall be in writing and shall be deemed to have been duly given,
effective upon receipt, if mailed or transmitted by any confirmed standard
form
of personal delivery, mail, courier, fax or e-mail to the parties at their
respective addresses as set forth in this Agreement or as subsequently
designated by them in writing.
20.
Counterparts
This
Agreement may be executed in any number of counterparts, including confirmed
fax
transmission, each of which shall be deemed to be an original, and all of which
taken together shall be deemed to be an original, and all of which taken
together shall be deemed to be one and the same instrument.
XXXXX
WORLD TRADE, LTD.
By:
/s/
Xxxxx
X Xxxxxxxx
Xxxxx
X. Xxxxxxxx
Executive
Vice President
XXXXXXX
INTERNATIONAL LOGISTICS, INC.
By:/s/
Xxxx
Xxxxxxx
Xxxx
Xxxxxxx, CEO
