EXHIBIT 10.4
AMERICAN TONERSERV
CORP.
INDEPENDENT
SALES PARTNER AGREEMENT
This
agreement (the “Agreement”) is entered into and
effective on this 15th day of April, 2009, by and between American
TonerServ Corp, (“ATS”) a Delaware corporation, located
at 420 Aviation Boulevard, Suite #103, Santa Rosa, CA, 94939 and
Mid-America Environmental, LLC (dba Alpha Laser) and Alpha Imaging
Solutions, LLC (collectively referred to as “Alpha
Laser/Imaging”), (“Independent Sales Partner” or
“ISP”), located at 1730 North Burkhardt, Evansville,
IN, 47115. ATS and ISP are collectively referred to herein as
"Party" or "Parties."
ISP has
applied to ATS for the right to market ATS’s Products and
Services (collectively "Services") and use ATS’s operational
assistance provided through this Agreement. ATS desires to engage
ISP pursuant to the terms and conditions set forth
herein.
Therefore,
the Parties agree as follows:
1. APPOINTMENT
AND RELATIONSHIP
A.
Appointment. ATS appoints
the ISP to market, solicit and provide ATS’s services to
end-customers ("Customers"). This is a non-exclusive appointment
and as such ATS will have the right to authorize other ISP’s
or affiliates to perform the same functions.
B. No Joint
Venture. The
relationship between the Parties arising from this Agreement does
not constitute or create a general agency, joint venture,
partnership, or employment relationship between them. ISP is an
independent consultant with no authority to act for or on behalf of
ATS, except as expressly granted in this Agreement, nor to bind ATS
in any manner. Except as otherwise provided in this Agreement, or
as otherwise agreed in writing by ATS and ISP, ISP is responsible
for the expenses and obligations it incurs in its efforts to
solicit Customers. Neither the ISP nor any ISP Sales Agents (as
defined below) who are compensated for Services and are paid by the
ISP may, in any way, be construed as employees of ATS for any
purpose, including, without limitation, with respect to any
mandated or other insurance coverage, tax or contributions, or
requirements pertaining to withholding levied or fixed by any city,
state, or federal governmental agency.
C. ISP Sales
Agents. ISP may use
employees, subagents, referral partners or others (collectively
“ISP Sales Agents”) to market and sell the Services.
Upon ATS’s request, ISP will furnish a list of current ISP
Sales Agents. ATS will incur no obligations to ISP Sales Agents.
ISP will require all ISP Sales Agents to comply with this
Agreement. ISP will indemnify, defend and hold ATS and its
affiliates harmless from any and all costs (including reasonable
attorney fees), damages and liabilities arising from or relating to
an ISP Sales Agent’s acts or omissions.
D. Independent
Sales Partner Representation . ISP
represents that ISP (1) is not by law or agreement with others
prohibited from entering into this Agreement; and (2) has not been
in the past, and is not currently an employee, subagent or
affiliated in any other professional capacity with any currently
active ATS ISP.
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2.
COMMISSIONS
A.
Commissions . ATS will
pay ISP a monthly commission at the rate of 40% of the Adjusted
EBITDA (as defined in that certain Asset Purchase Option Agreement.
of even date herewith (the "Option Agreement"). Commissions will be
paid once a month, on the 15 th day of the following
month, or as close to the 15th as reasonably possible. ISP must pay
all taxes due as a result of Commission payments to ISP under this
Agreement. The amount due ISP under the Contingent Note (as defined
and more fully described in the Option Agreement) will be reduced
by the amount of commissions received by ISP under this
Agreement.
B.
Chargebacks . If ATS pays
a Commission to the ISP that is subsequently owed, refunded or
credited back to any person or entity for any reason, including but
not limited to, incorrect rates or bad-debt, or if any Commission
is paid to ISP in error, ATS may deduct the amount of such
Commission from future Commissions owed to ISP or require ISP to
repay such Commission to ATS upon ten (10) days of receipt of
ATS’s request therefore.
Specifically,
all bad debt that remains unpaid after 90 days (or after the
applicable due date for the accounts receivable from the customers
listed on Exhibit A attached hereto, which customers have payment
terms greater than 90 days, and which exhibit may be updated from
time to time upon mutual consent) from initial due-date will result
in the loss of entire ISP commission on said bad debt if never
paid, and will result in loss of 50% of the ISP commission on said
bad debt if paid after ninety (90) days (or the applicable due date
for the Exhibit A customers); provided, however any such commission
reduction shall be offset by the amount of any finance charges
collected on said bad debt.
ATS’s
right to deduct and ISP’s obligation to repay amounts owed by
ISP hereunder will survive any termination or cancellation of this
Agreement for a period not to exceed one hundred and fifty (150)
days. If there are chargebacks due to bad debt, then ATS reserves
the right to establish a reasonable reserve holdback for future bad
debts not to exceed 25% of anticipated commissions.
C. Complaints
and Errors . Either
party must provide written notice of Commission payment errors to
the other party within ninety (90) days from the Commission payment
date. If ISP or ATS fails to make the forgoing complaint within the
time period stated, then the other party will have no obligation to
take any action to address the complaint, and the original
Commission payment will be considered complete and
satisfied.
3. TERM,
TERMINATION AND EFFECT OF TERMINATION
A.
Term . The term of
this Agreement shall commence on the date of this Agreement and
terminate on the earlier of (i) five (5) years from the date of
this Agreement, or (ii) the earlier termination of this Agreement
in accordance with the terms and conditions of this Agreement.
Either party may terminate this Agreement effective immediately
upon 5 business days' written notice upon the material breach by
the other party of its obligations under this Agreement, or by ATS
or its Affiliates (as defined in the Option Agreement) of their
obligations under the Option Agreement, or the Option Documents (as
defined in the Option Agreement), in each case, which breach
remains uncured for 10 business days after receiving written notice
of such breach. Upon termination, ATS will pay ISP Commission at
ISPs’ then-current Commission rate for all eligible
commissionable sales up to the termination of this Agreement less
any chargebacks permitted by Section 2B of this
Agreement.
B. Effect of
Termination . Immediately
upon termination of this Agreement, the ISP will (1) discontinue
the use of any service mark, trade name or trademark (as defined in
Section 7) and will not represent itself in any fashion as an ISP,
contractor, agent or representative of ATS.; and (2) at ATS’s
option,
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destroy or
deliver to ATS all materials relating to ATS, including, but not
limited to, all price lists, prospect lists, sales literature and
any other such materials. Immediately upon termination of this
Agreement, the Option Agreement shall also terminate.
4. INDEPENDENT
SALES PARTNER RESPONSIBILITIES
ISP agrees to
all of the following:
A.
To comply
with all applicable federal, state or local laws, rules and
regulations, and use its best efforts to promote and market the
Services and to preserve the image and reputation of
ATS.
B.
To sell to
ISP Customers as required by ATS and to ensure the satisfaction and
continued utilization of ATS’s Products and
Services.
C.
ISP will not:
(1) misrepresent ATS Services; (2) sponsor or participate in any
pyramid or multilevel marketing system; (3) recklessly, knowingly
or intentionally engage in deceptive or misleading marketing
practices in obtaining Customers; or (4) knowingly submit an
unauthorized prospective Customer.
D.
To obtain and
submit complete and accurate documentation required by ATS and/or
its Vendors, as outlined in the sales materials provided by ATS or
the Vendors, to enable ATS or Vendors to process the application
and approve the ISP Customer’s credit.
E.
To assist ATS
in collecting ISP Customer’s past due/bad debts, as requested
by ATS or its Vendors.
4B. ATS
RESPONSIBILITIES
ATS agrees to
all of the following:
A.
To process,
fulfill and track all ISP sales orders to Customers of any
Services.
B.
To provide
the administrative support necessary to maintain the appropriate
level of ATS employee, sales and customer support, including but
not limited to: Accounts Payable, Accounts Receivable, Cash
Management, Collections, Reporting, Human Resources and
Payroll.
C.
To manage any
necessary inventories of toner cartridges.
D.
To account
for all transactions and provide timely reports of sales activity
to the ISP including reports upon which commission calculations are
based.
E.
ATS will pay
for and on behalf of ISP when due all operating expenses incurred
in the ordinary course of business by ISP during the term of this
Agreement and approved by ATS, including but not limited to rent,
cell phones, land line telephone service, wages and employee
benefits, payroll taxes, approved travel expenses,
