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
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");
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
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
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.
(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
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