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EXHIBIT 10.5
JOINT VENTURE AGREEMENT
AGREEMENT made as of the 9th day of February, 2007 by and
between Ace
Marketing & Promotions, Inc., with its principal executive
office located at 457
Rockaway Avenue, Valley Stream, NY 11581 ("Ace") and Atrium
Enterprises Ltd.,
with its principal executive office located at 91 Michelle
Drive, Jericho, NY
11753 ("Atrium").
W I T N E S S E T H :
WHEREAS, Ace is a full service advertising specialties and
promotional
products distributor company, which distributes items
manufactured by others to
its customers typically with its customers' logos on them (the
"Ace Business");
and
WHEREAS, Atrium is a leader in the motivation and rewards
industry having
a combination of over 30 years of experience, knowledge and long
term
relationships in this industry and specifically to the incentive
and rewards
business under the direction of Ken Sternfeld, it Chief
Executive Officer and
President, it being understood that Atrium's mission is to fuse
together a suite
of marketing and service solutions with a family of products and
services that
develop, maintain, and enhance business relationships, and the
value of related
transactions or actions (the "Atrium Business"); and
WHEREAS, Ace and Atrium mutually agree to enter into a Joint
Venture
Agreement whereby each company retains the other company's
services as an
independent sales representative for the other party; and
WHEREAS, it is intended that the parties will in the future
explore joint
venture initiatives to deepen the relationship between the
parties and to
increase the value of both organizations.
NOW, THEREFORE, it is agreed as follows:
ACE HIRES ATRIUM AS ITS SALES REPRESENTATIVE.
1. Atrium is hereby retained as a commissioned independent
sales
representative of Ace. Atrium will provide its sales services to
Ace on an
exclusive basis inasmuch as it will not provide similar services
to other
promotional product companies. Atrium's services will consist of
selling
promotional products, print sales and the like of Ace's Business
to Atrium's
clients.
2. Atrium shall commit to secure one or more qualified
individuals to
promote and sell promotional products, print sales and the like
of Ace's
Business.
3. Ace shall pay Atrium the following compensation:
(a) A 50% commission on gross profit (as defined herein)
determined on a cash basis after collection of all sales orders
receivables.
"Gross Profit" shall be defined as collected revenues from sales
orders in which
Atrium are the salesman of record minus cost of goods, taxes,
shipping and
handling. Commissions due under this paragraph 3(a) shall be
paid monthly on or
about the last business day of each month.
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(b) Atrium will receive a draw of up to $7,500 per month
against
its commissions, with the total outstanding draw amount never
exceeding $30,000.
On or before February 15, 2007, Ace shall grant Atrium four year
non-qualified
stock options to purchase 70,000 shares of its common stock at a
purchase price
of $2.50 per share. The options shall vest in three equal annual
installments
commencing February 15, 2008. These options, which shall be
transferable to the
extent permitted by law and subject to the consent of Ace, which
consent shall
not be unreasonably withheld, shall be granted outside of Ace's
stock option
plan. In the event Ace determines that stockholder approval is
required for the
grant of these options due to the listing requirements of any
Exchange NASDAQ or
otherwise, Ace will undertake to obtain stockholder approval of
same prior to
February 15, 2008.
(c) Ace will reimburse Atrium for its out-of-pocket expenses on
a
monthly and non-accountable basis up to $400 per month. Any
expense in excess of
$400 is subject to the written approval of Ace.
4. Atrium agrees that the projected Gross Profit on all sales
orders
will be at least 25%, unless an officer of Ace consents to a
lower Gross Profit.
In the event that the Gross Profit on an order is less than 25%,
the commission
rate of 50% will be reduced by an agreed upon amount in
writing.
5. Atrium and its employees who are assigned to work on Ace's
account
shall not be employees of Ace and shall not be entitled to any
employee
benefits, such as health, hospitalization and participation in a
401(k) plan or
otherwise.
ATRIUM HIRES ACE AS ITS SALES REPRESENTATIVE.
6. Ace is hereby retained as a commissioned independent
sales
representative of Atrium. Ace will seek to introduce Atrium's
Business products
and services to its clients, including its incentive platform
programs and/or
Solata based target marketing/communication projects. These
services will be
provided by Ace to its clients either through one more trained
employees or
independent sales representatives of Ace or by referral of an
Ace client to one
o
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