Exhibit 10.13


 


TRANSPORTATION
MANAGEMENT AGREEMENT


 


This transportation
management agreement (“Agreement”) is made as of the 16th day of
May, 2008 (“Effective Date”), by and between Archway Marketing Services, Inc.,
a Delaware corporation, with its principal place of business at 19850 South
Diamond Lake Road, Rogers, MN, 55374 (“Archway”), and Echo Global Logistics, Inc.,
a Delaware corporation, with its principal place of business at 600 West
Chicago, Suite 750, Chicago, IL 60610 (“Echo”).


 


WHEREAS, Archway is in
the business of providing products and services that enhance the management of
their client’s supply chain and marketing efforts; and


 


WHEREAS, Echo is in the
business of managing transportation on an outsourced basis, selling freight and
freight-related services to its clients, and performing other functions
relating to management, procurement, and administration of transportation; and


 


WHEREAS, Echo has
determined that Echo can manage Archway’s transportation functions and sell
transportation services to Archway allowing Archway to realize savings; and


 


WHEREAS, Archway and Echo
desire to enter into an agreement on the terms and conditions set forth herein.


 


NOW, THEREFORE, in
consideration of the mutual promises contained herein, the sufficiency of which
is hereby acknowledged, the parties agree as follows.


 


1.     Services Provided by Echo to Archway


 


Echo shall provide full
transportation management services to Archway, which is defined as the
management and provision of all freight and transportation-related services to
Archway at all of its locations. Such services and/or products shall be
provided by Echo in a good, timely, and workmanlike manner. Specifically, the
services provided by Echo to Archway are as follows;


 


a.     Echo shall provide transportation services procured by
it from third party common carriers in all modes of transportation, including
small parcel, less-than-truckload, truckload, intermodal, ocean, air, and all
other modes of transportation used by Archway to move products either to or
from its clients. Echo will utilize its network of transportation providers to
provide Archway all required transportation services.


 


b.     For Archway’s recordkeeping purposes, for each
shipment Echo shall provide a conclusive statement to Archway no later than two
business days after the delivery of such shipment, and each such statement
shall state the actual cost due to Echo from Archway for such shipment, and
such statement shall be final for each such shipment. Echo shall also provide a
statement specifically used by Archway to invoice its client for each such
shipment, which shall calculate the amount due to Archway (from its client) for
such shipment based on any tariffs or discount rates specified by Archway to
Echo.


 


c.     Echo shall provide to Archway a rolled-up
invoice on the 1st and 15th of each month (or on the
first business day thereafter if the date falls on a weekend or holiday) for
all shipments delivered prior to that date (which such invoice shall provide
detail of all shipments included in such invoice), and Archway shall pay each
such invoice Net 14 (i.e. prior to the date of the next consecutive invoice
date). For each shipment detailed in each invoice, Echo shall provide audit
services which verify that, for each shipment, the amount billed, the delivery
information, and the related details correspond to the actual agreement between
Echo and each transportation provider and the actual shipment instructions
provided to each  transportation provider for each
shipment.


 


d.     Echo shall provide all statements,
invoices, and related rolled-up and shipment-specific information to Archway in the electronic format,
reasonably specified by Archway, which shall allow Archway to import the
information into its general ledger in its desired format, with
client-specific, category-specific, or other categorized information as
specified by Archway.


 


e.     Echo shall provide one full-time
transportation professional who will sit in an office at Archway’s Rogers,
Minnesota location, who will be the primary liaison between Archway and Echo
for all day-to-day issues, and


 


Archway
and Echo Transportation Management Agreement 2008


 


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who shall be a contact
point for all Archway employees for all transportation-related issues. Archway
will provide this on-site Echo employee office space, computer, internet
connection, and other customary supplies as 
are provided to Archway employees in the Rogers, MN location. Archway
will not maintain a separate transportation department, thus Echo’s on-site and
off-site resources dedicated to Archway (including the  Archway Desk, described below) shall
serve as the primary point of contact for all Archway transportation
activities. Archway shall not conduct any transportation procurement,
management, or related activities on its own account outside of this Agreement.


 


f.      Echo shall provide a dedicated “Archway
Transportation Desk” (the “Archway Desk”), which shall be based at Echo’s
Chicago, Illinois office, which shall consist of no less than three full-time
transportation professionals who shall be available on a 24/7 basis to execute
and support all transportation services as provided by Echo to Archway under
this Agreement, and who shall be available to address any service or related
issues raised by any Archway employee related to transportation and related
services. The Archway Desk will include a dedicated toll-free number for the
use of all Archway employees to reach the Archway Desk. The Archway Desk may
also be utilized by Archway’s former affiliated Consumer Services company.


 


g.     Echo shall utilize e-bills, EDI, and
other electronic communications to interact with its transportation providers
to provide services to Archway and, as such, shall make EDI or related
electronic transmission of transportation reporting available to Archway as
reasonably requested.


 


h.     Echo shall provide to Archway, on a
reasonably basis, reporting services as contained in its technology
applications, including weekly, monthly, and quarterly service and shipment
analysis reports, tracking and tracing reporting, claim and damage analysis and
reporting, post-audit reporting, and contract compliance analysis.


 


i.      Echo shall provide an electronic routing
guide and transportation procedures manual for the use of all Archway

facilities and personnel as it relates to tendering and interacting with loads
and shipments, and Echo shall provide on-site training of such procedures at
all Archway locations as reasonably required by Archway.


 


j.      Echo shall utilize its technology tools
to provide the transportation management services referenced in this Agreement,
and,
solely through this Agreement, shall make its technology
available to Archway to deliver the services that are outlined in this
Agreement. Echo, through its on-site and off-site personnel, shall manage all
such technology used by Archway, to minimize Archway’s technology resources
necessary to support Echo’s services. Tools which shall be used to support
Archway include imaging and shipment-based archival of all relevant
transportation documentation, auto-rating and routing software and load
tendering and tracing technology for less-than-truckload shipments, truckload
shipments, and small parcel shipments, and the Echo Customer Portal. Echo shall
provide Archway with up to 225 hours per year of custom technology development
time without charge; all hours over 225 will be invoiced to Archway at $125 per
hour. Echo will receive written approval from Archway’s Vice President of
Finance, or other authorized employee, prior to beginning custom technology
development on Archway’s behalf. Echo will provide Archway with a monthly
report detailing the number of hours worked per project and the total hours
remaining. This report will be provided to Archway no later than the 10th of
each month.


 


k.     Echo shall act as an  advocate
to Archway for all claims and recoveries arising from any exceptions and events
from all shipments provided by the transportation providers contemplated
herein, and shall file all such claims, expedite all such claims, and maintain
a status of open adjustments due from all such claims.


 


l.      Echo shall provide Archway’s customer
service department tools to manage all tracking and tracing of in-transit
shipments, provide notification of late loads and forecasted arrivals, and to
highlight any variances between actual shipment results and pre-shipment rating
profiles.


 


m.    As part of its services to Archway, Echo
will maintain a carrier quality control function which includes monthly or
quarterly audits of the performance of each transportation provider (including
status of failed services, service level
noncompliance, invoicing accuracy, and other metrics), and Echo shall adjust
transportation providers for Archway as necessary based on the results of its
audits.


 


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n.     Echo shall provide transportation study
services to Archway, as reasonably requested, which is defined as the service
of analyzing the transportation activities of an Archway client and providing
analysis and reporting to the Archway client in order to demonstrate the
transportation acumen of Archway, and to facilitate the advocacy of Archway as
an exceptional provider of services to the Archway client or prospective
client. Such services shall be, at a minimum, equivalent to those
transportation studies currently being provided by Archway’s  internal
transportation department.


 


o.     Echo and Archway shall work together to
offer Echo’s transportation management services, including but not limited all
of the services provided by Echo under this Agreement, to Archway clients and
prospective clients, based on introductions made to Echo by Archway. Any
agreements consummated through these introductions shall result in such client
becoming an “Archway Referral,” with all revenues derived by Echo from such
Archway Referral governed by the financial terms detailed below. Attachment A
to this agreement shall specify the Archway clients for which Archway intends
to provide introductions for Echo, and all names on (or to be added to)
Attachment A shall be agreed to in writing by both Archway and Echo, and all
such names will be considered Archway Referral clients if specifically
designated in Attachment A. It is anticipated that Attachment A may be updated to
add additional Archway clients prior to the time Archway markets Echo’s
services to such additional Archway clients. In connection with this provision,
during the term of this Agreement
Echo agrees to offer products and services to the Archway Referral clients
solely through Archway-approved
channels, during the term of this Agreement. Pursuant to this Agreement, Echo
agrees to obtain Archway’s prior approval on all pricing of products and
services to be sold to the Archway Referral clients. The pricing formulas for
such products and services shall be cost plus Archway’s Commission, as defined
below. “Cost,” as used in the preceding sentence, is intended to include
compensation to Echo for its services and for the product that it is providing.
Payment of commissions to Archway shall be computed and remitted monthly, and
shall be accompanied by any necessary supporting documentation.


 


2.             Financial Terms


 


a      The financial terms for the services provided by Echo,
as outlined above, are as follows:


 


i.      Echo will invoice Archway beginning immediately based
on a 50/50 savings split as follows:


a.     27.75% savings, which converts to a 16.1%
Echo Gross Profit through December 31, 2008;


b.     28.5% savings, which converts to a 16.6%
Echo Gross Profit through December 31, 2009;


c.     29.25% savings, which converts to a 17.1%
Echo Gross Profit through December 31, 2010. 


Echo shall provide
a report to Archway on each six-month anniversary of this Agreement detailing
the actual price Echo paid for all transportation services. This report will be
delivered to Archway no later than August 15th and February 15th
after each anniversary date.


ii.     Any rebates or refunds received by Echo or Archway
from carriers related to Archway’s freight, except FedEx Smart Post, will be
split 50/50 between Echo and Archway; rebates related to FedEx Smart Post will
be kept 100% by Archway.


iii     For the personnel provided to Archway
under section 1 above, Archway shall pay Echo $29,333 per month (referred to as
the “HR Cost”).


iv    Archway shall reimburse Echo for any
actual travel and related expenses incurred by Echo for travel

required by Archway for the Echo professionals based on-site at Archway’s
Rogers, MN facility.


 


b.     For all Archway Referral clients of Echo, Echo will
pay Archway a commission equal to 20% of the Collected Gross Profits (as
defined below) received by Echo from the Archway Referral clients (“Commission”).
For purposes of this Agreement, “Collected Gross Profits” shall mean all
payments received by the Company from sales to the Archway Referral clients
minus all costs of goods sold related to such payments, as well any agreed upon
dedicated support (allocated at actual cost) that is needed to fulfill the
services that relate to such payments. The Commission shall be payable for as
long as Echo continues to receive Collected Gross Profits from sales to the
Archway Referral clients, notwithstanding any termination of this Agreement.
Archway’s sole compensation under this provision shall be the Commission. As
the service provider, Echo shall invoice the Archway Referral clients for the
products and services provided by Echo.


 


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3.             Authorized Source


 


Archway agrees to make
Echo its exclusive transportation management and transportation and logistics
services supplier. Accordingly, Archway agrees to use its best efforts to
accomplish the following:


 


a.     Archway will assist Echo in educating, training, and
providing general marketing support to Archway’s sales representatives so that
they can efficiently target the Archway Referral clients.


 


b.     During the term of this Agreement, Archway may
introduce Echo in writing as a preferred source of services to its affiliated
companies and clients. Archway may market integrated transportation and
logistics management and fulfillment services under the name “Archway-Echo.”
Archway’s marketing materials providing such services will be created by
Archway, and approved by Echo, at an agreed upon sharing of the cost thereof.


 


4.             Term and Termination


 


The term of this
Agreement will commence on the Effective Date, and shall continue through December 31,
2010 (“Initial Term”). Following the Initial Term, this Agreement shall renew
for consecutive one year terms upon written agreement of the parties. If either
party should become insolvent, be adjudged as bankrupt, or make a general
assignment for the benefit of creditors, or if a receiver should be appointed
on account of such party’s insolvency, and such receiver is not removed within
sixty (60) days, then the other party may, without prejudice to any other right
or remedy, Immediately terminate this Agreement. If either party commits a
material breach which is not cured within thirty (30) days of written notice of
breach, then the other party may, without prejudice to any other right or
remedy, immediately terminate this Agreement. In the event of termination, only
Section 6 and Section 7 survive this Agreement. Archway may terminate
this Agreement upon six (6) months prior written notice to Echo, upon a change
of control of the ownership of Archway of greater than 50% of its shareholdings
or the: sale of substantially all of its assets. The transaction between
Archway’s parent company (AHI, Services, Inc. and Union Street Acquisition
Corp. shall not be considered a change of control of the ownership of Archway
for the purpose of this Agreement.


 


5.             Records


 


Echo shall maintain
detailed and accurate books and records of account with respect to activities
undertaken pursuant to this Agreement. At the request of Archway, Archway or
its designated agent may inspect Echo’s books and records, solely as it relates
to the transactions involving Archway and any Archway Referral clients, at
reasonable times during normal business hours upon reasonable, advance notice
to Echo and at the expense of Archway.


 


6.             Confidentiality and Intellectual
Property


 


a.     Archway and Echo acknowledge and agree that during the
term of this Agreement Archway and Echo may have access to each other’s
proprietary or confidential business information. Archway and Echo specifically
agree to maintain a strict policy of confidentiality and nondisclosure for all
business and trade secrets or other confidential or proprietary information of
the other party. The parties agree, therefore, to the extent possible, to so
designate information it considers proprietary or confidential at the time such
information is provided to the other party. Neither party will misuse or
appropriate such proprietary or confidential business information. Further, the
parties specifically acknowledge that the terms of this Agreement are
confidential and neither shall disclose any details of this Agreement, unless
both parties agree. This provision shall survive the termination or expiration
of this Agreement for a period of twelve (12) months.


 


b.     Each party shall exclusively own its own Intellectual
Property and neither party will have any claim or right to the Intellectual
Property of the other by virtue of this Agreement or the performance of any
activities hereunder except as otherwise provided herein. Neither party will
take any action or make any claim to any Intellectual property belonging to the
other party, whether during the term of this Agreement or thereafter, which is
inconsistent with this section. No right or license shall be implied by
estoppel or otherwise, other than the rights and licenses expressly granted in
this section.


 


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c.     Without limiting the generality of Section 6(b),
Archway acknowledges that the technology, software, computer programming,
statistical analysis, database, system architecture and design, domain name(s),
database maintenance and various systems, procedures, processes, and
documentation used to provide the services provided for by Echo is this Agreement
(hereinafter referred to as “OptimizerPlus”) have been developed or acquired by
Echo and is Confidential Information and Intellectual Property of Echo. In
addition, Archway acknowledges that Echo OptimizerPlus and all of its
components constitute valuable intellectual Property of Echo, and OptimizerPlus
is, and shall remain, the sole exclusive property of Echo, and nothing in the
Agreement, during its term or after its termination, shall constitute an
ongoing obligation or Echo to allow Archway any use or access to OptimizerPlus.
The Archway specific raw data that is inside OptimizerPlus shall remain the
sole property of Archway and upon Archway’s request. Echo shall further that
data to Archway in a reasonably acceptable format.


 


d.     Archway acknowledges that the various transportation
providers utilized by Echo, which were introduced to Archway as a direct result
of this Agreement, shall be considered Confirmation Information under this
Agreement, and Archway agrees to not transact business with all such
transportation providers during the term of this Agreement and for a period of
twelve months thereafter.


 


7.             Indemnity


 


Both parties agree to
indemnify, defend and hold harmless the other, their parents and affiliates,
and their officers, directors, employees, and agents from all claims,
liabilities, costs and expenses, including reasonable attorneys’ fees, that
arise from, or may be attributable to errors, omissions or fault of the other
party pursuant to this Agreement. Both  parties’ obligation to indemnify,
defend and hold harmless the other will survive the termination of the
Agreement.


 


8.             Insurance


 


Echo will deliver to
Archway, certificates of insurance evidencing coverage for errors and omissions
with limits of no less than One Million Dollars ($1,000,000.00); comprehensive
general liability, including contractual liability, with limits of no less than
One Million Dollars ($1,000,000.00) combined single limit for personal injury
and property damage; and comprehensive automobile liability for all owned,
non-owned and hired vehicles with bodily injury limits of no less than One
Million Dollars ($1,000,000.00) per person, One Million Dollars ($1,000,000.00)
per accident; and property damage limits of no less than One Million Dollars
($1,000,000.00) per accident. The insurance certificates must list Archway and
its parents, affiliates, employees and assigns as additional insured and must
state that Archway will be provided at least thirty (30) days advance, written
notice of a cancellation or modification of the insurance. The insurance must
be primary and not contributory with Archway’s insurance.


 


9.             Independent Contractor


 


Archway and Echo are each
independent contractors and this Agreement shall not be construed to create an
association, partnership, joint venture, relation of principal and agent or
employer and employee between Archway
and Echo or its agents within the meaning of any federal, state or local law.
Neither party will enter into any agreement, oral or written, on behalf of the
other or otherwise obligate the other party without that party’s advance
written approval. In its role as an independent contractor, Archway will
provide all confirmatory documentation required by Echo in order to establish
Echo as the sole party designated for, and responsible for, negotiating rates
and terms with transportation providers in order to provide transportation
services for Archway.


 


10.          Miscellaneous


 


(a)   This Agreement and all matters collateral hereto shall
be governed by the laws of the State of Illinois applicable to agreements made
and to be performed entirely within the State of Illinois.


 


(b)   Echo must comply with all applicable laws,
regulations, and ordinances relating to its performance of this Agreement.


 


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(c)   This Agreement is the complete agreement between the
parties and supersedes any prior oral or written agreement concerning the
subject matter, specifically including the Letter of Intent dated September 6,
2005, and amendments thereto, provided however, that the terms of the “SmartPost
Process/Billing Memo” dated May 31, 2007, shall continue to remain in
effect.


 


(d)   If any provision of this Agreement is held invalid or
unenforceable, the remaining provisions will remain in effect.


 


(e)   This Agreement may not be amended or assigned except
in a writing signed by both parties. If an assignment occurs, the assignment
will not relieve the assigning party of its liabilities and obligations under
the agreement. This Agreement is binding upon successors and assignees of the
parties. A waiver by either party of any of the terms and conditions of this
Agreement in one or more instances will not constitute a permanent waiver of
the terms and conditions.


 


(f)    Any dispute under this Agreement shall be resolved
solely through binding arbitration to be held in Chicago, Illinois by, and
according to the rules of, the American Arbitration Association (“AAA”),
and all rulings from the AAA shall be conclusive and binding upon both parties
in any court of law.


 


(g)   Notices provided shall be in writing and sent by
certified mail (return receipt requested), overnight mail or facsimile. Notices
to Echo will be sent to 600 West Chicago, Suite 750, Chicago, IL 60610,
Attention: General Counsel, Notice to Archway will be sent to Archway, 19850
South Diamond Lake Road, Rogers, MN 55374. Attention: Mike Moroz President.


 


The parties acknowledge
that they have read this Agreement and understand and agree to be bound by its
terms and conditions.


 


IN WITNESS WHEREOF the
parties have caused this Agreement to be signed by their duly authorized
representatives.


 


	
  Archway Marketing
  Services, Inc.

  	
   

  	
  Echo Global
  Logistics, Inc.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael D. Moroz

  	
   

  	
  By:

  	
  /s/
  Orazio Buzza

  
	
  Its:

  	
  President

  	
   

  	
  Its:

  	
  COO

  
	
  Title:

  	
  Michael D. Moroz

  	
   

  	
  Title:

  	
  Orazio
  Buzza

  



 


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