Sales Representative Agreement
Exhibit 10.8
THIS AGREEMENT is made and entered into this 20th day of November, 2007
(“Effective Date”) by
and between PEI Disposal Group, Inc., a Delaware corporation (hereinafter called “the Company”),
having its principal executive office and place of business at Xxx Xxxxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxxxxxx 00000 and Soil Disposal Group, Inc., a New York corporation (hereinafter
called the “Representative”), having its principal offices at 00 Xxxxxxxx Xxxxx, Xxxxxxxxx, XX
00000, and for purposes of being personally and individually bound to the confidentiality
provisions contained in Section 13 hereof and the non-competition, non-solicitation and
non-disparagement provisions set forth in Section 14 hereof, Xxxxxxx Xxxxxx (“RR”), Xxxxxxx Xxxxxxx
(“SS”), Xxxxx Xxxx (“JC”), Xxxxxxx Xxxxxx (“JB” and with RR, SS and
JC, individually, a “Principal”
and collectively, the “Principals”) and Xxxxx Environmental Group, Inc. (“AEG”).
BACKGROUND
The Company is a wholly-owned subsidiary of Pure Earth, Inc., a Delaware
corporation (“PEI”).
The PEI Entities’ (as defined in Section 1 below) business includes the purchase, sale, treatment,
processing, cleansing, transport, disposal and/or use or reuse of contaminated soils (including
without limitation, soils not meeting applicable regulatory definitions of clean fill, and soils
considered contaminated under applicable regulatory definitions), uncontaminated soils, aggregate
materials, dredged materials, construction debris, and demolition debris, as well as other liquid,
solid and semi-solid waste materials (the “Business” and any services provided to customers in
connection with the Business are referred to herein as the “Services”). The Company was formed for
the purpose of promoting and selling the Services on behalf of PEI. Representative is an
independent contractor in the business of promoting and selling such Services. The Company desires
to retain the services of Representative and Representative desires to serve the Company to market
and solicit orders for the sale of the Services on the terms and under the conditions herein set
forth.
The Principals and AEG are direct or indirect shareholders of Representative and will receive
benefits from this Agreement in their capacities as such. The Principals and AEG are entering into
this Agreement and agreeing to be bound by Sections 13 and 14 hereof as a material inducement to
Company to enter into this Agreement. The Company would not enter into this Agreement without the
Principals and AEG agreeing to be bound by such provisions.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein and
intending to be legally bound, the parties do hereby covenant and agree as follows:
1. Definitions. The following meanings shall apply herein to the following respective terms
wherever the same are used in this Agreement:
(a) “Acquisition Agreement” shall mean that certain Asset Purchase Agreement dated the date
hereof by and among the Representative, Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxx, Xxxxxxx
Xxxxxx, AEG and the Company.
(b) “Adjusted Profit” shall mean with respect to a given period, the Company’s sales (net of
any discounts for prompt payment or otherwise, “Net Sales”)
(i) minus (reduced by) the following items:
(A) transportation and Disposal Costs associated with such sales,
(B) all the Company’s direct costs of sales,
(C) all general and administration expenses of the Company,
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(D) a corporate G&A overhead allocation (related to services provided by PEI as the corporate
parent) equal to five and one-half percent (5.5%) of the Company’s transportation and Disposal
Costs, and
(E) expenditures for office equipment regardless whether the same is capitalized or expensed
by the Company;
(ii) plus (increased by) the following items:
(A) salary, bonus and benefits expense of one office manager (not to exceed $75,000 per year
in the aggregate),
(B) rent expense for the Long Island Office (as defined below) (which shall include annual
base rent, additional rent, common area expenses and utilities (including heat, air conditioning
and similar expenses)) (collectively, “Rent”),
(C) expenditures for office equipment (not to exceed $20,000 during the period commencing on
the Effective Date continuing through December 31, 2008, and thereafter only as approved by the
Company);
(D) supplies, internet advertising, telephone expenses and dodge report subscription
aggregating with Rent and office equipment (described in clause (b)(ii)(C) above (x) not more than
$150,000.00 during the period commencing on the Effective Date and continuing through December 31,
2008 and (y) not more than $135,000 per calendar year thereafter (provided that the Company will
give due consideration to approving additional expenditures for office equipment needed in the
event Representative expands its staff (with the Company’s consent) after the first year of this
Agreement), and
(E) any applicable Right of First Refusal Adjustment Amount (as defined below).
In clarification of the foregoing, costs incurred at the Company such as staff salaries (in excess
of the one office manager referenced in clause (b)(ii)(A) above), non-internet advertising, other
subscriptions, holiday gifts for clients, etc. (and any other selling, general or administrative
expenses not specifically enumerated in clause (b)(ii) above) will be treated as expense of the
Company and will reduce the Adjusted Profit.
(c) “Current Contract Term” shall mean with respect to the then current Initial Term (as
defined below) or Renewal Term (as defined below), as the case may be, such entire Initial Term or
Renewal Term notwithstanding any early termination thereof.
(d) “Customers” shall mean all persons, firms, corporations or other entities to which PEI or
the Company sells Services. The identity of and information obtained concerning Persons that
become customers of the Company as a result of the efforts of Representative under this Agreement
shall be the property of the Company.
(e) “Disposal
Costs” shall mean all costs associated with managing, treating, processing,
cleansing, using and/or reusing Waste Materials, and including fees paid or payable to third party
receiving facilities.
(f) “House Account(s)” shall mean “those Customers of any PEI Entity existing as of the date
hereof or which become Customers of any PEI Entity after the date hereof through no substantial
effort or assistance of Representative and which are or will be serviced directly by the Company,
PEI or other PEI Entity and as to which Representative shall not be entitled to earn Commissions,
provided, however, that House Accounts that are general contractors (e.g., Xxxxxx Construction) or
other House Accounts that, similar to general contractors, traditionally run multiple independent
projects in diverse geographical areas, will be treated as House Accounts on a job registration
basis, such that Representative may pursue job opportunities for such general contractors (and
other similarly structured operations) with respect to jobs or projects that are not or have not
already been solicited by any
PEI Entity. Notwithstanding the foregoing, to the extent a Customer identified by
Representative is an existing Customer of a PEI Entity, the parties will examine both the nature
and longevity of the business relationship between such Customer and the PEI Entities on the one
hand and such Customer and Representative or its shareholders on the other hand, and the historical
amount of business transacted with such Customer, in determining whether Representative should be
provided the opportunity to solicit sales from such Customer and receive commissions in connection
therewith.
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(g) “Person” shall mean a natural person, joint venture, corporation, partnership, trust,
estate, sole proprietorship, governmental agency or authority or other entity.
(h) “PEI Entities” means, PEI and any and all subsidiaries and affiliates of PEI, including,
without limitation, the Company, and the term “PEI Entity” means any of the PEI Entities.
(i) “Prospect List” shall mean the list of Persons attached hereto as Exhibit A, which
was acquired by the Company pursuant to the Acquisition Agreement.
(j) “Representative Parties” shall mean, collectively, Representative, the Principals and AEG
and the term “Representative Party” shall mean any of the Representative Parties.
(k) “Restricted Period” shall mean
(i) The Current Contract Term plus eighteen (18) months thereafter, if:
(x) Representative’s appointment as a sales representative hereunder is (A) terminated by the
Company pursuant to Section 9(a), 9(c) or, 9(d), (B) deemed to automatically terminate prior to
expiration of the Current Contract Term pursuant to Section 9(b), or (C) terminated voluntarily by
Representative prior to expiration of the Current Contract Term, or
(y) if Representative determines not to permit this Agreement to automatically renew at the
end of the Current Contract Term pursuant to Section 9 hereof; or
(ii) The period commencing on the date hereof and continuing through and including the
Termination Date if:
(x) the Company determines not to permit this Agreement to automatically renew at the end of
the Current Contract Term,
(y) the Company otherwise terminates the Agreement for any reason other than pursuant to
Sections 9(a), 9(c) or 9(d) hereof, or
(z) Representative otherwise terminates this Agreement pursuant to Section 9(a) hereof due to
a Payment Default under this Agreement by the Company that remains uncured and, if the Company
contests the termination of this Agreement by Representative, a court of competent jurisdiction has
made a final and non-appealable determination that the Company committed a Payment Default and
failed to cure such Payment Default, and as a result thereof Representative had the right to
terminate the Agreement pursuant to Section 9(a) hereof. For purposes of this Agreement a “Payment
Default” shall mean the wrongful failure of the Company to pay amounts due under this Agreement
when due, of if such amounts are in good faith dispute among the parties, then such failure to pay
continues for more than thirty (30) days after a determination on the merits thereof by an
arbitrator pursuant to the procedures for arbitration of disputes set forth in the Acquisition
Agreement;
provided, however, that to the extent the Restricted Period applies to the
Principals or AEG individually and any Principal or AEG ceases at any time to hold, on a direct or
indirect basis, stock or other equity interest in Representative, then the Restricted Period only
as it applies to such Principal or AEG individually shall end on the earlier to occur of (i) the
end of the Restricted Period or (ii) the expiration of eighteen (18) months after the date on
which such Principal or AEG ceases to hold, on a direct or indirect basis, stock or other equity
interest in Representative.
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(l) “Termination Date” shall mean the effective date upon which Representative’s appointment
and position as a sales representative for the Company pursuant to Section 2 hereof terminates or
is terminated.
(m) “Waste Materials” shall mean contaminated soils (including without limitation, soils not
meeting applicable regulatory definitions of clean fill, and soils considered contaminated under
applicable regulatory definitions), uncontaminated soils, aggregate materials, dredged materials,
construction debris, and demolition debris, as well as other liquid, solid and semi-solid waste
materials.
2. Appointment.
(a) The Company hereby appoints Representative and Representative hereby accepts such
appointment as an independent sales representative of the Company with the non-exclusive,
non-assignable right during the term of this Agreement to solicit orders for the sale of Services
to the Persons listed on the Prospect List and other prospects known to or developed by
Representative, provided that House Accounts shall not be solicited or otherwise called upon by
Representative.
(b) Nothing in this Agreement shall be construed to constitute Representative as the partner,
employee, joint venturer, or agent of the Company, nor shall Representative have any authority to
enter into any binding agreement with Customers or any other Person on behalf of the Company in any
respect; provided however that in connection with the services rendered by Representative
hereunder, Representative shall present itself as a sales representative exclusively for the
Company. Representative shall not identify itself as the Company or as authorized to assume or
create any obligation of any kind, express or implied, on behalf of the Company or to bind the
Company in any respect whatsoever. Representative is and shall at all times during the term of
this Agreement be and remain an independent contractor and as such is and shall be solely
responsible for its own actions.
(c) Representative shall indemnify, defend and hold the Company harmless from and against all
claims, losses, and liabilities whatsoever arising out of damage to property, injury to, or death
of persons, occasioned by or in connection with, the acts or omissions of Representative or any of
Representative’s salespersons, employees, agents or contractors, or the use of any motor vehicle or
other equipment or property in connection therewith and from and against all claims, losses, and
liability for costs, expenses, and attorney’s fees in connection therewith.
3. Covenants, Duties and Obligations of Representative.
(a) Representative shall endeavor and use all best efforts (through the efforts of the
Principals) to market and promote the sales of and solicit orders for Services exclusively for the
Company and PEI by all means at its disposal from the Persons listed on the Prospect List and from
other prospects known to or developed by Representative as well as to develop new Customers for PEI
and the Company, in accordance with the terms and conditions from time to time established by the
Company in its sole discretion. Representative shall not promote the sale of or solicit orders for
products or services (including, without limitation, the Services) or otherwise perform any
services for any Person other than PEI and the Company.
(b) Representative shall promptly submit to the Company all orders submitted by a Person to
Representative for Services. The information submitted to Representative with respect to each such
order shall include the name of the Person placing the order and its principal business address and
telephone number, the key personnel responsible for placing the order, the Services to be rendered
and such other information that the Company may request from time to time.
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(c) Representative shall ensure that each Person whom it retains or employs in connection with
this Agreement other than the Principals (each, a “Representative Employee”) executes and delivers,
prior to or contemporaneously with his or her retention or engagement by Representatives and as a
condition precedent to
any such engagement or employment, a Confidentiality and Non-Competition Agreement, in the
form attached hereto as Exhibit 3(c)(i). No Representative Employee shall be permitted to provide
any services for Representative under this Agreement until the Company receives an original
executed copy of Exhibit 3(c)(i) from such Representative Employee. Representative represents and
warrants to the Company that none of the Principals have been hired by Representative as an
employee or in any other capacity prior to the execution and delivery of this Agreement.
Contemporaneously with the execution and delivery of this Agreement, Representative shall hire each
of the Principals as an employee of the Company and require each of the Principals, as a condition
to employment with Representative, to execute and deliver a Confidentiality and Non-Competition
Agreement, in the form attached hereto as Exhibit 3(c)(ii). Additionally, Representative shall
cause each of the Principals other than Xxxxxxx Xxxxxx to execute and deliver a Confidentiality and
Non-Competition Agreement in the form attached hereto as Exhibit 3(c)(iii) contemporaneously with
the execution and delivery of this Agreement and shall cause Xxxxx Environmental Group, Inc. and
Xxxxxxx Xxxxxx to execute and deliver a Confidentiality and Non-Competition Agreement in the form
attached hereto as Exhibit 3(c)(iv). A copy of all such Confidential and Non-Competition
Agreements shall be promptly delivered to the Company upon the execution thereof by the applicable
parties thereto. No Representative Employee or Principal shall perform services for the Company on
behalf of Representative until the Company receives a copy of the applicable Confidentiality and
Non-Competition Agreements executed by such Representative Employee or Principal.
(d) Representative shall abide by all rules, regulations and policies prescribed from time to
time by the Company in connection with the sale of Services or the servicing of Customers.
(e) Representative shall not appoint any sub-representatives to promote the sale of Services
without first obtaining the prior written consent of the Company. Representative agrees to and
does hereby exonerate, indemnify and hold the Company harmless from and against and shall be solely
responsible for the payment of all federal, state and local taxes, contributions and/or special
levies imposed or required under employment, insurance, social security, income tax, or other tax
with respect to the performance by Representative under this Agreement.
(f) Representative shall promptly follow up on all sales leads supplied to Representative by
the Company.
(g) Representative shall assist the Company in the collection of any delinquent accounts of
the Customers from which Representative obtains orders.
(h) Representative shall not make any promise, affirmation or representation or other benefit
in favor of any Customer or assume any liability on behalf of the Company.
(i) Representative shall not use any advertising, promotional or selling materials in relation
to the Services, other than those Materials (defined below) approved in advance or provided by the
Company, except with the Company’s prior written approval.
(j) Principals shall be the individuals primarily responsible for performing and/or
supervising the performance of the functions that are undertaken by Representative hereunder.
Representative shall direct and cause each Principal to diligently and faithfully devote his entire
time, energy, skill and good faith efforts during regular business hours to perform, in such
Principal’s capacity as an employee of Representative and on behalf of Representative,
Representative’s obligations and this Agreement. Representative shall cause each Principal to
comply with the terms and conditions of this Agreement and to be governed by and be subject to all
of the Company’s rules and regulations applicable to Representative in connection with the
performance of this Agreement. Representative shall direct and cause each Principal to travel as
required in furtherance of Representative’s obligations under this Agreement.
(k) Representative shall render services, including, but not limited to, general staffing,
sales and operations at the Company provided, however, that all pricing and credit terms for
transactions must be approved by PEI or the Company.
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(l) Representative shall make recommendations to the Company regarding staffing needs and
hiring and firing decisions for the Company, which recommendations shall be given due consideration
by the Company. In addition, all general and administration expenses of the Company referred to in
Paragraph 1(b)(i)(C) hereof, shall be directly related to the business and affairs of the Company,
which shall be limited to the solicitation of , selling to, management of , entertainment of,
servicing of, and/or contracting with or for, customers and prospective customers of the Company,
pursuant to the efforts of Sales Representative.
4. Duties, Obligations and Rights of the Company. The Company agrees to:
(a) furnish Representative advertising materials and promotional materials (collectively
“Materials”), as the Company deems advisable, and may from time to time prepare for use regarding
the sale of Services. All of such Materials shall remain the exclusive property of the Company
until distributed to Customers.
(b) furnish such sales and service assistance as it, in its sole discretion, deems advisable.
(c) issue invoices to the Customers upon completion of the Services with respect to an order.
(d) hire transporters for the purpose of fulfilling orders, that are identified by
Representative and reasonably acceptable to the Company, subject to PEI’s right of first refusal
set forth in Section 16 below.
(e) subject to the following sentence regarding prior approval of certain expenses, reimburse
Representative for necessary and customary business related expenses incurred by Representative in
connection with the performance of its obligations under this Agreement in accordance with the
normal reimbursement policies of the Company, including, but not limited to, reimbursement for
business expenses related to Customer entertainment and holiday gifts for Customers, provided that
Representative shall provide the Company with receipts and other documentation to the reasonable
satisfaction of the Company evidencing such expenditures. Notwithstanding the foregoing, the
following expenditures shall require the prior written approval of the Company in order to be
eligible for reimbursement by the Company: (i) any single expenditure or series of related
expenditures in excess of $500.00, (ii) if the aggregate amount of expenditures in a given month
exceeds $2,000.00, any expenditures in excess of $250.00 in such month and (iii) any other
expenditures that from time to time the Company notifies Representative as requiring prior written
approval. Any such expenditures reimbursed by the Company will reduce the Adjusted Profit except
as otherwise provided herein.
5. Quotations.
(a) Unless otherwise instructed by the Company, all quotations made by Representative on
behalf of the Company and orders obtained shall be at prices authorized by the Company. All prices
for Services within the scope of this Agreement shall be subject to revision in accordance with the
Company’s prices and terms in effect at the time of acceptance of the order, unless otherwise
specified by the Company.
(b) Whenever special prices, terms or other conditions are necessary in order to secure
business not otherwise obtainable, Representative shall promptly advise the Company which may at
its sole option authorize the quotation of special prices, terms or conditions. Any special prices,
deliveries, terms or conditions granted by the Company in any such case shall be limited to that
case and shall not be used for any future sale without the Company’s written authorization.
6. Order Acceptance/Rejection.
(a) The Company has the right, in its sole discretion, to accept or reject (in whole or in
part) any or all orders from Customers, including without limitation, orders that, in the sole
opinion of the Company, involve questionable credit risks or orders which for any reason are deemed
unacceptable to the Company. the Company shall not be liable to Representative for loss or damage
caused by the Company’s inability or refusal for any reason to accept an order to provide Services
and Representative shall have no right to any indemnification or other compensation whatsoever on
account of the Company’s refusal or failure to accept any order. All sales of
Services shall be subject to the Company’s terms and conditions of sale in effect at the time
of acceptance of the corresponding order.
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(b) The Company may, in its sole discretion, from time to time and at any time establish,
change, alter or amend terms and conditions of sale, rates of discount, price and methods of
payment on all sales of Services.
(c) Orders solicited by Representative on behalf of the Company shall in all cases be subject
to the Company’s acceptance at its principal office, in its sole discretion.
7. Compensation.
(a) In consideration of Representative’s performance of its duties as described herein, the
Company shall, during the Term, (i) pay Representative Nine Hundred Dollars ($900) per month per
Principal, during each month in which each of the Principals continues to be employed by
Representative and continues to perform his obligations contemplated by this Agreement (the “Fixed
Monthly Payment”), with the first such Fixed Monthly Payment being prorated for the unexpired
portion of the first month in which this Agreement becomes effective, payable within five (5)
business days after the date of this Agreement and all subsequent Fixed Monthly Payments payable on
or before the 5th day of each calendar month thereafter during the Term and (ii) pay
Representative commissions (“Commissions”) based on the amount of the Company’s Adjusted Profit
during the Term, as set forth herein. The Commissions payable to Representative shall be equal to
(x) for the period commencing on the Effective Date and continuing through and including June 30,
2008, five percent (5%) of the Adjusted Profit for such period and (y) for the period commencing
July 1, 2008 and continuing through and including the Termination Date, twenty-five percent (25%)
of the Adjusted Profit for such period. In clarification of the Fixed Monthly Payment, for
example, in any month where only three of the Principals remain employed by Representative and
continue to perform the obligations contemplated hereby, the aggregate Fixed Monthly Payment will
be $2,700.
(b) Subject to the Advance Commission Limit (as defined below), Commissions with respect to
Net Sales in a given month shall be paid by the Company to Representative on or prior to the
twentieth (20th) day of the next following month in order to allow time for the
Company’s books of account for the month to be closed. Commissions will be deemed paid as advances
on Net Sales to the extent that receivables related to such sales remain outstanding and
uncollected at the time the Commissions are paid, but Commissions will not be deemed earned until
the accounts receivable related to such sales have actually been collected. No Commissions shall
be earned on sales to the extent any receivables related to such sales have not been collected
within one hundred eighty (180) days after the date of the applicable invoice (“Delinquent
Accounts”) and any Commissions that were advanced against Delinquent Accounts shall be, at the
election of the Company in its sole discretion, either credited back to the Company against future
Commissions earned or directly reimbursed to the Company by Representative upon demand by the
Company. In no event shall Representative be entitled to Commissions on any Delinquent Accounts,
even if such receivables are ultimately collected. On or about the 15th day of each
calendar month, Representative shall submit to the Company an estimate of its actual Net Sales
during such initial 15-day period in such month and the good faith estimated transportation and
disposal costs associated therewith, and the Company shall estimate the Adjusted Profit related to
such Net Sales (the “Estimated Interim Profit”). Subject to the Advance Commission Limit, the
Company shall pay Representative twenty percent (20%) of such Estimated Interim Profit within five
(5) days following such submission by Representative. At the time Commissions are paid as
contemplated by the first sentence of this Section 7(b), any advances to Representative based on
such Estimated Interim Profit shall be reconciled and the amount of Commissions payable adjusted to
reflect the prior payment of advances on such Estimated Interim Profit. Commissions advanced on
uncollected sales (including, without limitation, amounts advanced with respect to the Estimated
Interim Profit) shall not at any time, in the aggregate, exceed Two Hundred Thousand Dollars
($200,000.00) (the “Advance Commission Limit”) and the Company shall not be obligated to advance
Representative unearned Commissions in excess of the Advance Commission Limit notwithstanding
anything to the contrary contained herein. The Company shall deliver with each Commission Payment,
a statement describing the calculation of the Adjusted Profit and Commissions.
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(c) Periodically, but not less than annually, the Company shall reconcile Commissions paid to
Representative against Commissions earned by Representative based upon the Adjusted Profit as
calculated by
the Company for the applicable period. If such reconciliation indicates that Commissions paid
to Representative are greater than Commissions earned by Representative, the amount of the
overpayment shall be, at the election of the Company in its sole discretion, either credited back
to the Company against future Commissions earned or directly reimbursed to the Company by
Representative upon demand by the Company. If such reconciliation indicates that Commissions paid
to Representative are less than Commissions earned by Representative, then the amount of the
underpayment shall be paid by the Company to Representative. In any event, the Company shall
deliver to Representative a statement describing such reconciliation.
(d) The Company shall not deduct for taxes, assessments or other charges. However, if the
Company shall be required under the laws of any jurisdiction to deduct from any payments made to
Representative any income taxes, or withholding taxes or fees in lieu of income taxes which may be
levied against Representative, then the Company shall so deduct such taxes or fees, provided the
Company promptly furnishes to Representative tax receipts or other documentary evidence, evidencing
payment of such taxes or fees to the appropriate governmental authority or agency.
(e) Any overpayments of Commissions to Representative resulting from refunds, settlements of
claims, other adjustments with Customer, or any other cause, similar or dissimilar, may be deducted
from any Commissions otherwise due Representative or in the alternative shall be repaid by
Representative immediately upon demand of the Company, as the Company shall determine.
8. Long Island Office. The Company shall promptly following the execution of the Agreement
open an office (the “Long Island Office”) in leased space at a location identified by
Representative on Long Island, New York, that is reasonably acceptable to the Company.
Representative shall have the right to occupy and use such office in connection with the
performance of Representative’s obligations under this Agreement. Representative agrees to comply
with any and all terms of any applicable lease agreement and rules and regulations for the premises
and any applicable laws, including, without limitation, those related to occupancy of the leased
premises. The Company shall be solely responsible for paying all rent for the Long Island Office.
9. Term and Termination. Representative’s appointment and position as a sales representative
pursuant to this Agreement shall commence on the date hereof and continue until December 31, 2012
(the “Initial Term”). The Initial Term shall thereafter automatically renew on the same terms for
additional two-year terms (each, a “Renewal Term”) unless either party gives the other party
written notice of non-renewal at least ninety (90) days prior to the end of the Initial Term or the
then current Renewal Term, as the case may be. Representative’s appointment and position as a
sales representative pursuant to this Agreement shall be terminable as follows:
(a) by either party upon breach by the other party of any of the covenants or agreements
contained herein, provided that, if such breach is capable of being cured Representative’s
appointment as a sales representative hereunder may not be terminated unless the breach remains
uncured for a period of ten (10) days after the non-breaching party provides written notice of the
breach to the breaching party;
(b) automatically without prior notice, demand or judicial notice upon the occurrence of any
of the following events:
(i) if Representative enters into voluntary or involuntary bankruptcy, or ceases to make
payments to its creditors or for any reason ceases to actively conduct business,
(ii) if Representative liquidates or makes or causes to be made an assignment of its assets or
business, whether in whole or in part, for the benefit of its creditors,
(iii) if a receiver or trustee is appointed to take over or administer or conduct all or any
part of the business or property of Representative, or
(iv) if there is a change in control of Representative or transfer of substantially all of the
business assets of Representative or a merger or reorganization which, in the Company’s opinion,
affects the
relationship between the Company and Representative (Representative shall give the Company
notice at least ten (10) days before the occurrence of any such event);
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(c) by the Company if one or more Principals (i) is convicted of a felony or crime of moral
turpitude, (ii) commits an act of theft, embezzlement or act of fraud or dishonesty with respect to
the Company, (iii) willfully violates any federal, state or local law in connection with causing
Representative to carry out its responsibilities and duties hereunder or which adversely affects
the Company, the health, safety or welfare of its employees or its reputation, (iv) willfully
violates any material rules, policies or procedures of the Company in connection with causing
Representative to perform its duties hereunder, (v) engages in other misconduct which is harmful to
the Company in any material respect or (vi) engages in continued recklessness, neglect or
incompetence in the performance, or the non-performance, of Representative’s duties and obligations
contemplated under this Agreement; or
(d) by the Company upon notice to Representative if any two or more of the Principals fail to
remain actively involved in Representative’s business,
10. Effect of Termination.
(a) Upon termination, all rights granted to Representative under or pursuant to this Agreement
shall cease, except that Representative shall be entitled to Commissions on orders meeting each and
all of the following criteria: (i) such orders are received by the Company prior to the
Termination Date, and (ii) such orders are for Services to be rendered not more than thirty (30)
days after the Termination Date, and (iii) the Company is paid in full within one hundred eighty
(180) days after the date of the invoice related to the order. Representative specifically
acknowledges that no Commissions whatsoever will be due to Representative with respect to any order
or portion of an order which does not meet each and all of the foregoing requirements.
(b) Notwithstanding the foregoing, if this Agreement is terminated by the Company as a result
of Representative’s failure to comply with all of its obligations set forth in Subsection 10(c) and
Sections 13 and 14 below, Representative shall forfeit all outstanding accrued and unpaid
commissions including Commissions which would have otherwise been payable to Representative
pursuant to section 10(a) above. Representative and the Company agree that such forfeiture is in
the nature of liquidated damages, is reasonable and is not in the nature of a penalty, provided
that, notwithstanding the foregoing, the PEI Companies shall also have the right to injunctive
relief set forth in Section 15 hereof.
(c) Representative shall submit to the Company at least three (3) days before the Termination
Date, a complete list of quotations outstanding, full information on each, including current status
as well as such other information concerning the Customers as the Company may reasonably request.
(d) Upon expiration or termination of this Agreement in any manner, and except for the
obligations set forth above in this Section 10, the Company shall not be liable to Representative
either for compensation or for direct, incidental, special, exemplary, consequential, or punitive
damages of any kind or character whatsoever, whether on account of the loss by Representative of
present or prospective profits or expenditures, investments or commitments made in connection
therewith or in connection with the establishment, development or maintenance of Representative’s
business.
11. Reimbursement of Legal Fees. Provided that (i) Representative is not in continuing breach
of this Agreement, (ii) the appointment of Representative as a sales representative hereunder has
not been terminated by the Company pursuant to Section 9(a), 9(c) or 9(d) above or automatically
pursuant to Section 9(b) above and (iii) if any of the Principals are claiming reimbursement for
attorneys’ fees pursuant to this Section 10, such Principals continue to be employed by
Representative and actively involved in Representative’s business and causing Representative to
perform its obligations under this Agreement, the Company shall pay any reasonable attorneys’ fees
that are incurred by Representative and/or any of the Principals in connection with the defense of
any legal proceedings, lawsuits or claims asserted against any of them by Clean Earth, Inc. arising
from this Agreement or the Acquisition Agreement, provided, however, that any award of damages will
be borne by Principals and/or Representative. Such legal fees will be paid within thirty (30) days
after the Company’s receipt of the legal xxxx and confirmation with the Principals and/or
Representative, as applicable, that the amount of legal fees is not in dispute.
9
The Company’s sole obligation pursuant to this Section 11 is to pay reasonable attorneys’ fees
incurred by Representative and/or the Principals in accordance with this Section 11, subject at all
times to the conditions and limitations set forth herein. Notwithstanding the foregoing, the
Company shall have no obligation to pay any such legal fees in the event that Representative has
breached its representations and warranties set forth in Section 18(b) hereof and the restrictive
covenants described in Section 18(b) gave rise to the lawsuit or other proceeding and, in the event
the Company has paid any such legal fees, Representative shall or shall cause Principals to
reimburse Representative for the amount of such legal fees paid by the Company upon demand by the
Company.
12. Finder’s Fee Program. If Representative identifies and introduces opportunities for PEI
that are acquired by PEI, PEI will pay to Representative a finder’s fee equal to one percent (1.0%)
of the aggregate cash and stock paid by PEI for such acquisition opportunities.
13. Confidentiality. Each of the Representative Parties recognizes and acknowledges that by
reason of its or his present and future service to the Company it or he has been and will be given
access to confidential and/or proprietary information of the PEI Entities, including, without
limitation, information and knowledge pertaining to innovations, designs, ideas, plans, trade
secrets, proprietary information, sales and profit figures, customer and client lists (including,
without limitation, the Persons listed on the Prospect List), and relationships between certain PEI
Entities, customers, clients, suppliers and others who have business dealings with PEI Entities
(collectively, “Confidential Information”). Each of the Representative Parties acknowledges that
such Confidential Information is a valuable and unique asset of the applicable PEI Entities and
each of the Representative Parties covenants and agrees that it or he will at all times keep
confidential such Confidential Information, and will not at any time during or after the expiration
or earlier termination of this Agreement (a) disclose, in whole or in part, any Confidential
Information to any person, firm, corporation, association or other entity for any reason or purpose
whatsoever unless authorized in writing to do so by the Company, or (b) use any Confidential
Information for its own purpose or for the benefit of any person, firm, corporation, association or
other entity other than the Company; except in the proper performance of sales representative
services under this Agreement as instructed by the Company. Upon the expiration or earlier
termination of the term of this Agreement, or at any other time upon request of the Company, each
of the Representative Parties shall promptly deliver to the Company, all property, equipment, sales
literature, promotional materials, other records, documents and Materials relating to any PEI
Entity or the Services (including information and documents stored on computers, disks or any other
medium), regardless of whether or not such information is Confidential Information. Representative
and AEG shall cause their respective officers, agents, employees and other representatives to be
bound by the foregoing confidentiality provisions, and agrees to be responsible for any breach
thereof by any such officers, agents, employees or other representatives. The provisions of this
Section 13 shall survive the expiration or earlier termination of the Term of this Agreement.
Confidential Information does not include information which: (a) is known to any Representative
Party at the time of disclosure to such Representative Party by the Company as evidenced by such
Representative Party’s written records, (b) has become publicly know and made generally available
through no wrongful act of a Representative Party, or (c) has been rightfully received by a
Representative Party from a third party who is authorized to make such disclosure.
14. Non-Competition; Non-Solicitation; Non-Disparagement. Each of the Representative Parties
agrees that it or he will not except with the Company’s prior written consent, during the
Restricted Period, directly or indirectly:
(a) for its own benefit or for the benefit of any Person in any business in competition with
the Business, canvas, contact, solicit, contract with or accept any business from any customer or
prospective customer of a PEI Entity, including, without limitation, any Person on the Prospect
List;
(b) directly or indirectly request or advise any past, present or future Customers (a future
Customer being defined as one that has been actively solicited by any PEI Entity prior to the
cessation of Representative’s engagement as a sales representative of the Company) of such PEI
Entity, including, without limitation, the Persons listed on the Prospect List, to withdraw,
curtail or cancel their business with such PEI Entity;
(c) render services to, become engaged as an independent contractor by, own or have a
financial interest in (either as a partner, joint venturer, owner, stockholder, independent
contractor or any other role) any business which is engaged in the same, similar or competitive
business as the Business, within a 125 mile radius
of Times Square, New York, except that nothing herein shall prohibit the Representative
Parties from owning up to 1% of the outstanding shares in a publicly traded corporation;
10
(d) induce, offer, assist, encourage or suggest (i) that another business or enterprise offer
employment to or enter into a business affiliation with any Person that is or was an employee,
agent or representative of any PEI Entity within the one (1) year period prior to such solicitation
or employment, or (ii) that any PEI Entity employee, agent or representative terminate his
employment or business affiliation with such PEI Entity;
(e) hire, employ or contract with any Person that is or was an employee, agent or
representative of any PEI Entity within one (1) year period prior to such solicitation or
employment; or
(f) disparage any of the PEI Entities or any of their respective directors, officers,
employees or agents.
15. Injunctive Relief.
(a) The parties agree that any breach by any Representative Party of the covenants and
agreements contained in Sections 13 and 14 will result in irreparable injury to the applicable PEI
Entities for which money damages could not adequately compensate the PEI Entities, and, therefore,
in the event of any such breach, the PEI Entities shall be entitled (in addition to any other
rights and remedies which it may have at law or in equity) to have an injunction, whether
preliminary, mandatory, temporary or permanent issued by any competent court of equity enjoining
and restraining such Representative Party and/or any other Person involved therein from continuing
such breach without the necessity of showing any particular injury or damage or posting of any bond
or other security. The existence of any claim or cause of action which any Representative Party
may have against any PEI Entity or any other Person shall not constitute a defense or bar to the
enforcement of such covenants. The covenants contained in Sections 13 and 14 are independent of
all other covenants between the parties hereto and shall survive the termination of this Agreement.
(b) Each of the Representative Parties and the Company agree and acknowledge that the
duration, scope and geographic area of the covenant not to compete described in Section 14 above is
fair, reasonable and necessary in order to protect the goodwill and other legitimate interests of
the PEI Entities, that adequate consideration has been provided to Representative. If, however,
any portion of the covenants or agreements contained herein, or the application thereof, is
construed to be invalid or unenforceable, then the other portions of such covenant(s) or
agreement(s) or the application thereof shall be considered divisible and not be affected and shall
be given full force and effect without regard to the invalid or unenforceable portions. If any
covenant or agreement herein is held to be unenforceable because of the area covered, the duration
thereof, or the scope thereof, then the court making such determination shall have the power to
reduce the area and/or duration and/or limit the scope thereof, and the covenant or agreement shall
then be enforceable in its reduced form.
16. Right of First Refusal. PEI shall have rights of first refusal as described herein to
provide all transportation and disposal services to the Company on sales generated by
Representative; provided, however, that for purposes of calculating Adjusted Profit, if PEI’s cost
of providing such transportation and disposal services is more than ten percent (10%) in excess of
the bona fide competitive bid (“Bona Fide Competitive Bid”) for such services by a third party
having the financial wherewithal, operational capacity and bonding capability (if required) to
perform the services, and PEI desires to perform the services it may do so, provided that an
adjustment shall be made to the Adjusted Profit calculation in the amount by which PEI’s charge for
such services exceeds 110% of such other competitive bid (the “Right of First Refusal Adjustment
Amount”) to avoid adversely affecting Commissions payable to Representative. If Representative
obtains a Bona Fide Competitive Bid and desires to accept it, Representative shall provide written
notice to the Company and PEI of such Bona Fide Competitive Bid, including a copy of the Bona Fide
Competitive Bid, the name of the bidder and its principal office address and telephone number and
information regarding the financial wherewithal, operational capacity and bonding ability (if
applicable) of the bidder. PEI shall have a period of twenty four hours from the date and time
such notice is received by PEI to notify Representative whether or not it desires to exercise its
right of first refusal pursuant to this Section 16. If PEI notifies Representative in accordance
with the terms of this Agreement that it desires to exercise its right of first refusal, then
Representative may not cause the Company to accept the Bona Fide Competitive Bid and PEI shall be engaged to perform such services.
11
If PEI notifies the Company that it does
not intend to exercise its right of first refusal or if PEI fails to provide such notice to
Representative within such twenty four hour period, then Representative may accept the Bona Fide
Competitive Bid on behalf of the Company, but only on the same terms and conditions that were
provided in the notice to PEI. If any of the terms of the Bona Fide Competitive Bid change, then
Representative shall provide written notice to PEI and the Company of the changed terms and PEI
shall again have the right of first refusal described herein with respect to the Bona Fide
Competitive Bid, as amended or modified.
17. Common Stock Opportunities. PEI will endeavor to have the Board of Directors of PEI
establish opportunities for Representative to obtain additional common stock opportunities after
the second year of the Term (i.e., after the end of the twenty-four month period following the
Effective Date), tied to future performance by Representative.
18. No Violation of Third Party Proprietary Rights, etc.
(a) Representative represents and warrants to the Company (i) that none of the information and
materials in its possession and/or the possession of any of the Principals, or that from time to
time may come into their possession, which may from time to time be used by Representative and/or
the Principals acting on behalf of Representative in the performance of this Agreement, including,
without limitation, any and all lists of Persons identified as prospective customers that were
obtained by or from any of the Principals, is considered proprietary or confidential information of
any other Person, including, without limitation, Clean Earth, Inc. or any other former employer of
any of the Principals, nor was such information acquired by Representative or the Principals in
violation of any proprietary rights of any other Person, including, without limitation, Clean
Earth, Inc. or any other former employer of any of the Principals and (ii) that Representative and
the Principals have the right to use all such information in furtherance of Representative’s duties
under this Agreement. The use of such information will not infringe or otherwise violate the
proprietary or other rights of any other Person, including, without limitation, Clean Earth, Inc.
or any other former employer of any of the Principals. No Person, including, without limitation,
Clean Earth, Inc. or any other former employer of any of the Principals, will have any claim for
monetary damages or equitable relief (including injunctive relief) against any Principal,
Representative, the Company, PEI or any other PEI Entity for misappropriation of proprietary
information or under any other legal theory, as a result of or related to Representative and/or any
Principal using such information in the performance of Representative’s duties under this
Agreement.
(b) Representative further represents and warrants to the Company that Principals’ ownership
interest in Representative, Representative’s entry into this Agreement and the performance of this
Agreement by Representative and Principals acting on behalf of Representative does not violate any
restrictive covenants to which Representative or to any Principal is subject or bound, including,
without limitation, any covenant not-to-compete, and that neither Representative nor any Principal
is prohibited from performing or causing Representative to perform Representative’s obligations
under this Agreement due to such restrictive covenants.
(c) Representative represents and warrants to the Company that neither it nor any of the
Principals are presently, directly or indirectly, employed by, serving as an independent contractor
for, or joint venturer, partner, or director of Clean Earth, Inc., or any other company in
competition with the Business.
(d) Representative shall indemnify, defend and hold harmless the Company from and against any
and all losses, expenses, costs, damages, claims, actions, lawsuits and proceedings, including,
without limitation, reasonable attorneys’ fees, arising from or related to any breach of the
representations and warranties made by Representative in this Section 18.
19. Shareholders of Representative. Representative represents and warrants that a true,
correct and accurate list of the shareholders of Representative as of the date hereof is set forth
on Exhibit 19 attached hereto, and if any such shareholders are entities, a list of the owners of
all of the issued and outstanding equity of such entities.
20. Notice. All notices and communications between the parties hereunder shall be in writing
and shall be delivered in person, by certified U.S. mail, return receipt requested or via a
nationally recognized overnight courier, postage or shipping costs prepaid, and shall be addressed
to the parties at their respective business addresses
as set forth on the first page of this Agreement, or at such different address as such party
may hereafter designate in writing by notice similarly given. All such notices shall be deemed
given on the day delivered if delivered in person, on the third day after deposited in the U.S.
mail or the next day after deposited with an overnight courier service for delivery.
12
21. Miscellaneous.
(a) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns and Representative and Representative’s legal representatives, successors,
and permitted assigns.
(b) This Agreement and the Exhibits attached hereto supersede and replace any and all prior
and contemporaneous written or oral understandings, agreements and commitments between the parties
relating to the subject matter hereof. It expresses the complete and final understanding of the
parties hereto and cannot be changed or terminated orally.
(c) If any provision of this Agreement shall be or shall become illegal or unenforceable in
whole or in part, for any reason whatsoever, the remaining provisions shall nevertheless be deemed
valid, binding and subsisting.
(d) No failure on the part of any party hereto to exercise and no delay in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or remedy hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or remedy.
(e) This is a personal service contract and may not be assigned by Representative.
(f) The headings of the several sections of this Agreement have been inserted for convenience
of reference only and shall in no way restrict or modify any of the terms or provisions hereof.
(g) This Agreement shall be governed by and construed and enforced in accordance with the laws
of the Commonwealth of Pennsylvania, without regard to conflicts of laws and each party hereto
consents to the exclusive jurisdiction and venue of the state courts located in Bucks County,
Pennsylvania and the federal courts for the Eastern District of Pennsylvania. The parties
irrevocably consent to service of process by certified mail, return receipt requested to the
addresses set forth herein, or to such other address as to which notice thereof has been given. If
the Company is forced to resort to the courts in order to enforce its rights under this Agreement,
the Company will be entitled to receive reimbursement of any and all legal fees and costs incurred
in connection therewith.
(h) THE PARTIES ACKNOWLEDGE THAT STRADLEY, RONON, XXXXXXX & YOUNG, LLP (THE “FIRM”) DRAFTED
THIS AGREEMENT ON BEHALF OF THE THE COMPANY AT THE REQUEST OF THE THE COMPANY AND THAT PRIOR
THERETO, AND IN CONJUNCTION THEREWITH, THE FIRM ADVISED THE PARTIES TO THIS AGREEMENT THAT: (I) THE
FIRM DID NOT AND DOES NOT REPRESENT THE INTERESTS OF REPRESENTATIVE OR ANY OF THE PRINCIPALS AND
(II) REPRESENTATIVE SHOULD CONFER WITH SEPARATE COUNSEL WITH REGARD TO ITS INTERESTS.
REPRESENTATIVE FURTHER ACKNOWLEDGES THAT (I) REPRESENTATIVE ENTERS INTO THIS AGREEMENT AFTER HAVING
HAD THE OPPORTUNITY TO CONSULT WITH SEPARATE COUNSEL AND (II) REPRESENTATIVE HAS NOT RELIED ON ANY
ADVICE OF THE FIRM IN ENTERING INTO THIS AGREEMENT.
(i) The PEI Entities (other than the Company which is a party hereto) shall be third party
beneficiaries of this Agreement, including, without limitation, with respect to the provisions
contained in Sections 3(b), 13, 14, 15 and 16 hereof.
(j) This Agreement may be executed in two or more counterparts, each of which shall be deemed
an original and all of which together shall be deemed one and the same document.
13
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| SOIL DISPOSAL GROUP, INC. | PEI DISPOSAL GROUP, INC. | |||||||||
By:
|
/s/ Xxxxxxx Xxxxxx
|
By: | /s/ Xxxxxx Xxxxxxxxx
|
|||||||
The undersigned Principals and AEG are executing this Agreement for the purpose of being personally
and individually bound to the confidentiality provisions set forth in Section 13 hereof and the
non-competition, non-solicitation and non-disparagement provisions set forth in Section 14 hereof.
/s/ Xxxxxxx Xxxxxx
|
/s/ Xxxxxxx Xxxxxxx
|
|||||
/s/ Xxxxx Xxxx
|
/s/ Xxxxxxx Xxxxxx | |||||
Xxxxx Xxxx
|
Xxxxxxx Xxxxxx | |||||
XXXXX ENVIRONMENTAL GROUP, INC. |
||||||
By:
|
/s/ Xxxxxxx Xxxxxx
|
State of New York
|
: | |||
| SS | ||||
County of Nassau
|
: |
On this 20th day of November, in the year 2007, before me, the undersigned, a Notary Public in
and for said State, personally appeared Xxxxxxx Xxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxxxx Xxxxxx and
Xxxxx Xxxx, in their respective individual capacities; Xxxxxxx Xxxxxx, in his capacity as
president of Xxxxx Environmental Group, Inc, and in his capacity as president of Soil Disposal
Group, Inc.; and Xxxxxx Kotrosis, in his capacity as president of PEI Disposal Group, Inc.,
personally known to me or proved to me on the basis of satisfactory evidence to be the individuals
whose names are subscribed to the within instrument and acknowledged to me that they executed the
same in their individual and/or representative capacities, and that by their signature(s) on the
instrument, the individuals, or the person upon behalf of which the individuals acted, executed
this instrument.
| /s/ Xxxxx X. Xxxxxx | ||||
Sworn to before me this 20th
day of November, 2007.
day of November, 2007.
14
Exhibit A
Prospect List
[Omitted.]
Exhibit 19
List of Shareholders of Representative
List of Shareholders of Representative
Each of the following Persons is the owner of 25% of the issued and outstanding capital stock of
Representative:
Xxxxx Environmental Group, Inc.**
00 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
631.261.2941
.. FID# XX-XXXXXXX
00 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
631.261.2941
.. FID# XX-XXXXXXX
Xxxxxxx X. Xxxxxxx
0000 Xxxxxx Xxxxx
Xxxxx Xxxxxxxx, XX 00000
000 000-0000
SS: XXX-XX-XXXX
0000 Xxxxxx Xxxxx
Xxxxx Xxxxxxxx, XX 00000
000 000-0000
SS: XXX-XX-XXXX
Xxxxxxx Xxxxxx
000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
000 000-0000
SS: XXX-XX-XXXX
000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
000 000-0000
SS: XXX-XX-XXXX
Xxxxx Xxxx
00 Xxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
516.626.7201
SS: XXX-XX-XXXX
00 Xxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
516.626.7201
SS: XXX-XX-XXXX
| ** | 100% of the issued and outstanding capital stock of Xxxxx Environmental Group, Inc., is owned by
Xxxxxxx Xxxxxx, 00 Xxxxxxxx Xxxxx, Xxxxxxxxx, XX 00000. Phone Number 000.000.0000. SSN: XXX-XX-XXXX |
