Sample Sales Contracts - Legal Document Example

Exhibit 10. 31 Agreement between the Company and Direct 1 Source dated June 25, 2008

SUNOVIA ENERGY TECHNOLOGIES, INC. STRATEGIC SALES, MARKETING, SOURCING CONSULTING & REPRESENTATIVE AGREEMENT

This agreement ("Agreement") is made on June 25, 2008 (the "Effective Date") by and between Sunovia Energy Technologies, Inc., (hereinafter "COMPANY") and Direct 1 Source Corporation (hereinafter "REPRESENTATIVE").

WHEREAS, COMPANY is currently engaged in the manufacturing and/or sale of solid state lighting fixtures, renewable energy products, and electrical and mechanical engineering services (hereinafter "Services"); and

WHEREAS, REPRESENTATIVE is a professional organization that is capable and skilled in the sales and marketing of the Services to Customers both domestically and internationally (hereinafter "Customers"); and

WHEREAS, both parties deem it in their best interest for REPRESENTATIVE to undertake such sales of COMPANY Services to the Customers as specified,

NOW, THEREFORE, in consideration of the premises and intending to be legally bound hereby,

COMPANY and REPRESENTATIVE agree as follows:

1. COMPANY appoints REPRESENTATIVE as its non-exclusive sales REPRESENTATIVE to the Customers and grants the right and license in said Customers during the term of this Agreement, to sell the Services provided by COMPANY subject to the following requirements and conditions:

2. REPRESENTATIVE accepts said appointment upon the terms and conditions herein set forth.

3. COMPANY shall pay to REPRESENTATIVE a sales commission, as set forth in Appendix A, calculated on the Net Purchase Orders of all Products and Services sold by REPRESENTATIVE to the Customers during a payment period. Net purchase orders are defined as the total invoice amount less discounts, returns, bad debts, allowances, shipping and handling charges.

4. COMPANY shall be responsible to pay REPRESENTATIVE a one-time Tooling Costs fee (the "Tooling Cost Fee") of fifty thousand dollars ($50,000) as set forth for the wireless LED switch covers herein. REPRESENTATIVE implicitly understands and agrees that COMPANY shall not be responsible to pay the Tooling Cost Fee if the sales forecasts (as set forth in Appendix B hereto) are not achieved. COMPANY may elect to immediately pay the "Tooling Cost Fee" to REPRESENTATIVE upon the delivery of a purchase order by REPRESENTATIVE to COMPANY that warrants, in COMPANY'S sole discretion, the immediate payment of the Tooling Cost Fee.

5. COMPANY shall pay REPRESENTATIVE its reasonable, out-of-pocket, pre­approved expenses as incurred by REPRESENTATIVE in connection with its performance under this Agreement. REPRESENTATIVE shall not incur any expenses without the express prior written consent of COMPANY. REPRESENTATIVE agrees to provide COMPANY with copies of any receipts, ledgers and other records as may be reasonably appropriate for COMPANY to verify the amount and nature of such expenses.

6. Commissions shall not accrue, nor be payable, for Non-Commissionable Items. Non­Commissionable Items are defined sales for products and services that do not have a gross profit margin such as: charges for documentation, third party software, labeling and trade dress, nonrecurring engineering, experimental samples, tools, equipment, test fixtures and software, development or experimental products, special testing, paperwork training and other services, import and customs duties and levies, value added and sales taxes, order cancellation modification-rescheduling fees, storage, unloading and insurance and all similar items; and (ii) any consignment sale or shipment, such as samples, first articles and development products for which COMPANY is not likely to be paid.

7. If price is the determining factor to secure an order because of competitive conditions or other circumstances and it is necessary to reduce the normal pricing for such Services, then COMPANY and REPRESENTATIVE agree to reduce the commission, to a mutually acceptable level, in order to finalize the sale of the Services to that particular Customer.

8. Commissions due on these sales shall be paid within 15 days after the end of the month in which the payment is both received and becomes negotiable to the COMPANY. COMPANY is to provide monthly billing statements for any business that was transacted by REPRESENTATIVE during the payment period, which is to include purchase orders, invoices, amounts billed and amounts received by COMPANY. REPRESENTATIVE shall have the right to audit related COMPANY records on a periodic basis and without unreasonable disruptions of the COMPANY'S business and operations.

9. REPRESENTATIVE agrees:

To secure, in writing, an Exclusive License Agreement for the three patents (Patent Numbers 5,473,517 and 5,713,655 and 6,010,228) to the COMPANY; and

To expediently manage the liquidation of the current US and China inventory (7,276 individual units) that is owned or controlled by the inventors at no obligation to the COMPANY with no royalty payments or Commissions to be paid by the COMPANY to the inventors or the REPRESENTATIVE for this inventory; and

To work within COMPANY's Engineering and Manufacturing Services division to establish a low cost production strategy and product life cycle strategy for the Backup LED Light product line that is based upon the assigned patents listed in Section

8.1. above, and other LED based products that are defined and developed by the COMPANY; and

To work with the big box retail channels (Wal-Mart, Lowes, Home Depot, etc.) to get the COMPANY's products established, approved, and sold into these channels. Also to work with international customers and/or markets; and

To work within the COMPANY's LED products division to secure the appropriate sales, marketing, and account managers that are required to service the established sales channels; and

To provide strategic marketing information specific to the efficient development and penetration of domestic and foreign LED lighting markets that are identified by the COMPANY and/or the REPRESENTATIVE; and

To provide strategic marketing information and advice to COMPANY specific to the development of LED products that REPRESENTATIVE believes to have vast market appeal; and

To define comprehensive sourcing and product life cycle management for the COMPANY's products; and

To provide suggestions specific to contractual terms and conditions between COMPANY and various entities, including but not limited to, customers and vendors; and

To interface and collaborate with other COMPANY's contractors, subcontractors, buyers, VARs, employees, etc. in all aspects associated with the successful sales and marketing of any and all COMPANY products and Services; and

To achieve the quarterly sales minimums that are set forth in Appendix B hereto, and to provide quarterly status reports to the President, or to such other REPRESENTATIVEs as the COMPANY may designate, that details the following items:

1) Pertinent marketing data required by COMPANY to plan and formulate policies.

2) At least ninety (90) days prior to