EXHIBIT 10.5
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (the "Agreement"), dated as of April 1, 2007
(the "Effective Date"), is made by and among AXON TECHNOLOGIES, INC., a
Florida not-for-profit corporation ("Axon"), and OPTIMA TECHNOLOGIES, LLC, a
Delaware limited liability company ("Manager").
RECITALS:
A. Axon is a corporation that is exempt from tax as a 501(c)(3)
organization that provides employment opportunities for disabled persons.
B. Axon is currently a certified employment center for Respect of
Florida ("RESPECT");
C. RESPECT is the central nonprofit agency of the State of Florida,
and works with nonprofit organizations around the State of Florida whom
employ persons with disabilities in the production of products and services
to ensure a constant market for these products and services to state and
local government agencies.
D. Along with other endeavors, Axon provides print management,
printing supplies and repair services ("Printer Business").
E. Manager is in the business of print management, printing supplies
and repair services (the "Business").
F. Axon desires Manager to perform certain duties on behalf of Axon on
the terms and conditions described herein, and Manager desires to so provide,
with such services to commence on the Effective Date.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENT
1. Appointment. Axon hereby appoints and designates Manager to assist
in the management and operation the Printer Business, effective as of the
Effective Date, and Manager and Principal hereby accept such appointment and
designation, subject to the terms and conditions set forth below. Subject to
the limitations and conditions set forth in this Agreement, Manager shall
have the exclusive authority and responsibility to manage the sales and
fulfillment operations of the Printer Business on behalf of and for the
account of the Axon (subject to final oversight and direction by RESPECT); to
provide such facilities and services for the operation of the Printer
Business as are described in this Agreement, and to take all actions related
thereto.
2. Duties of Manager. Subject to the terms and conditions contained in
this Agreement, Manager shall provide the following services for the Printer
Business, and in such capacity, shall have the attendant rights and
responsibilities as set forth in this Agreement. The services of Manager
shall consist of managing the workload of the Printer Business for Axon as
set forth on Exhibit A attached hereto. Manager shall ensure that cartridges
purchased to resell to Axon clients have been manufactured using some degree
of labor provided by the severely disabled.
3. Duties of Axon. Axon shall provide Manager with access to its
customer base as necessary to allow Manager to complete its duties hereunder.
Axon shall set all pricing for the Printer Business. Axon shall have final
decision-making authority on which representatives may service the Axon
RESPECT accounts.
4. Contract for RESPECT of Florida Outside Government Account
Representatives. The parties acknowledge that Axon has an agreement with
RESPECT to furnish and manage three (3) outside sale representatives.
Manager shall provide the three sales representatives, and Axon agrees that,
in addition to the Management Fee hereunder, any compensation received from
RESPECT relating to the field sales representatives that are representing
Axon and RESPECT (but compensated by Optima) in this capacity will be paid by
Axon to Optima within 10 days of receipt by Axon.
5. Standard of Conduct. Manager shall in all material respects (i)
abide by and comply with all applicable laws, statutes, orders, rules,
regulations, policies or guidelines promulgated, or judgments, decisions or
orders entered by, any court, arbitral tribunal, administrative agency, or
commission or other governmental or regulatory body, agency or
instrumentality or authority relating to Axon's' business; and (ii) conduct
itself with respect to the Printer Business with the prudence, care,
dedication and skill as would be manifested by one in the operation and
management of his own assets and properties and in this regard shall owe a
duty of dedication and care to the Printer Business.
6. Management Fee. During the term of this Agreement, as total
compensation for services rendered by Manager pursuant to this Agreement,
Axon shall pay to Manager a management fee (the "Management Fee") equal to
ninety percent (90%) of the amounts invoiced (by Manager) and collected (by
Axon) in its Printer Business. Such amounts shall be paid within 10 days
after collected by Axon. The parties acknowledge and agree that Axon will
always receive three percent (3%) of the fees collected, that the central
non-profit agency (CNA) fee has been seven percent (7%) for several years,
but it could change, if so, the fee payable to Manager shall be adjusted
upward or downward based directly upon any increase or decrease in the CNA
fee percentage.
7. Term. The Agreement shall commence on the Effective Date hereof
and shall continue until terminated as set forth in Section 8 hereof (the
"Management Term").
8. Termination.
(a) Termination by Axon on Default. Axon shall be entitled to
terminate this Agreement by delivering written notice of termination to
Manager if Manager fails to perform in any respect any obligation required
of it hereunder, and such default continues for 30 days after the giving of
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written notice by Axon, specifying the nature and extent of such default;
provided, however, that if such default is not cured within 30 days, but is
capable of being cured within a reasonable period of time in excess of 30
days, then Axon shall not be entitled to terminate this Agreement if Manager
commences the cure of such default within such 30-day period and thereafter
diligently and in good faith continues to cure such default until completion.
(b) Termination by Axon Other than for Default. Axon shall be
entitled to terminate this Agreement by delivering written notice of
termination to Manager if Manager (i) applies for or consents to the
appointment of a receiver, trustee or liquidator of all or a substantial part
of its assets, files a voluntary petition in bankruptcy or consents to an
involuntary petition, makes a general assignment for the benefit of its
creditors, files a petition or answer seeking reorganization or arrangement
with its creditors, or admits in writing its inability to pay its debts when
due; (ii) suffers any order, judgment or decree to be entered by any court of
competent jurisdiction, adjudicating such party bankrupt or approving a
petition seeking its reorganization or the appointment of a receiver, trustee
or liquidator of such party or of all or a substantial part of its assets,
and such order, judgment or decree continues unstayed and in effect for 90
days after its entry; or (iii) if Manager merges, consolidates, or combines
with any other person or entity, reorganize, liquidate or dissolve, other
than such merger, consolidation combination, or reorganization that does not
result in a change in control. As used in this Agreement, "Change in
Control" shall mean the closing of the acquisition of Manager by another
entity by means of merger, consolidation, or other transaction or series of
related transactions, resulting in the exchange of the outstanding equity of
Manager such that the beneficial owners of Manager prior to such transaction
own, directly or indirectly, less than fifty percent (50%) of the voting
power of the surviving entity.
(c) Termination by Manager on Default. Manager shall be entitled
to terminate this Agreement if Axon fails to pay the Management Fee when due
in accordance with this Agreement, and such default continues for 30 days
after the giving of written notice by the Manager.
(d) Automatic Termination. This Agreement shall terminate
automatically without notice if RESPECT terminates its contractual
relationship with Axon.
(e) Effect of Termination. Upon expiration of the Management
Term or other termination of this Agreement:
(1) Manager shall return to Axon all assets or property of
the Printer Business, if any are in Manager's possession or control.
(2) Manager a shall no longer be obligated to provide any
management, consulting or similar services to Axon, except to the extent
reasonably necessary to effectuate an orderly transition of the Printer
Business, which Manager and Principal agree to provide for a reasonable
period following termination, but in any event, not to exceed 60 days, at no
charge to Axon.
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(3) This Agreement shall no longer be of any force and
effect, except that this Agreement shall remain in full force and effect with
respect to events, actions, omissions or occurrences which occurred prior to
the termination of this Agreement.
9. Independent Contractor. The relationship of Manager and Axon which
is created hereunder is that of an independent contractor. This Agreement is
not intended to be construed as creating between Manager and Axon, the
relationship of employee and employer, affiliate, principal and agent, joint
venture, partnership or any other similar relationship, the existence of
which is hereby expressly denied. The parties agree to treat the payment of
the Management Fee for all purposes as compensation for the services
rendered.
10. Liability Insurance; Expenses. Manager hereby agrees that it
shall, at its sole expense, provide and maintain liability insurance for
itself and all of its employees relating to the period of engagement with
Axon, in the a minimum coverage amount of $1,000,000 per occurrence,
2,000,0000 aggregate. In addition, Manager shall be responsible for all
business expense of Manager or its employees. Manager further agrees to
indemnify and hold Axon harmless against any claim, liability, loss or
damage, including attorney fees and costs, from any breach of any term of
this Agreement or as a result of any complaint or action arising out of the
actions of Manager.
11. Miscellaneous.
(a) Notice. Any notice required or permitted under this Agreement
shall be given in writing and delivered as described herein. A notice shall
be deemed effectively given as follows: (i) upon personal delivery; (ii) one
(1) business day after transmission by electronic means, provided such
transmission is electronically confirmed as having been successfully
transmitted and a copy of such notice is deposited within 24 hours for either
overnight delivery or for registered or certified mail, in accordance with
clause (iii) or (iv) below, respectively; (iii) one (1) business day after
deposit with a reputable overnight courier service, prepaid for overnight
delivery; or (iv) three (3) business days after deposit with the United
States Postal Service, postage prepaid, registered or certified with return
receipt requested. Addresses for notice shall be as follows, or at such
other address as such party may designate by ten (10) days' advance written
notice to the other parties:
If to Manager:
Optima Technologies, LLC
c/o American TonerServ Corp.
000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Chief Executive Officer
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With a copy, which shall not constitute notice, to:
Xxxxxxxxx XxXxxxxxxx & Xxxxxx LLP
00 Xxxxx X Xxxxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxx X. XxXxxxxxxx or Xxxxxxx X. (DJ) Xxxxxxx
If to the Axon:
Axon Technologies, Inc.
0000 Xxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, CEO
With a copy, which shall not constitute notice, to:
Johnson, Pope, Xxxxx, Xxxxxx and Xxxxx, LLP
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
(b) Time of Essence. Time is of the essence with respect to the
terms, covenants, and conditions contained herein.
(c) Entire Agreement. This Agreement, including any other
agreements, exhibits, and schedules to be entered into in connection with the
transactions contemplated hereby and specifically referenced in this
Agreement, constitutes and embodies the entire understanding and agreement of
the parties hereto relating to the subject matter hereof and supersedes all
prior agreements or understandings of the parties hereto, whether written or
oral.
(d) Construction. Every covenant, term, and provision of this
Agreement shall be construed simply according to its fair meaning and not
strictly for or against any party. Every exhibit, schedule, attachment, or
other appendix attached to this Agreement and referred to herein shall
constitute a part of this Agreement and is hereby incorporated herein by
reference. Any reference to any federal, state, local, or foreign statue or
law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. Unless the context
clearly requires otherwise, (i) plural and singular numbers will each be
construed to include the other; (ii) the masculine, feminine, and neuter
genders will each be construed to include the others; (iii) "shall," "will,"
"must," "agree," and "covenants" are each mandatory; (iv) "may" is
permissive; (v) "or" is not exclusive; (vi) "includes" and "including" are
not limiting; and (vii) "actual knowledge" is limited to actual knowledge and
does not include constructive knowledge or any information that might have
been gained upon further investigation.
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(e) Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), but only with the written consent of the party or parties to
be bound thereby. No delay in the exercise of any right or remedy under this
Agreement shall constitute a waiver thereof and the waiver by any party of
any right or remedy under this Agreement on any one occasion shall not be
deemed a waiver of such right or remedy on any subsequent occasion.
(f) Successors and Assigns; Assignment. The obligations of
Manager and hereunder require performance by Manager and this Agreement shall
be binding upon Manager and its heirs, executors, administrators, legal
representatives, successors and assigns and Axon's and its successors and
assigns. There shall be no transfer or assignment of any obligation of
Manager under this Agreement without the written consent of Axon. There
shall be no transfer of any voting or economic interest in Manager or in this
Agreement, either directly or indirectly, without the written consent of
Axon.
(g) No Third Party Beneficiaries. Except as expressly provided
herein, nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto, or their respective successors
and assigns, any rights, remedies, obligations, or liabilities under or by
reason of this Agreement.
(h) Headings. The titles and subtitles used in this Agreement
are used for convenience only and shall not be considered in construing or
interpreting this Agreement.
(i) Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Florida without regard to the
conflict of laws rules of such state.
(j) Venue. The parties to this Agreement agree that jurisdiction
and venue shall exclusively lie in the Sixth Judicial Circuit of the State of
Florida, in and for Pinellas County, Florida, or in the United States
District Court for the Middle District of Florida (Tampa Division), with
respect to any legal proceedings arising from this Agreement.
(k) Cumulative Remedies. The rights and remedies of a party
available under this Agreement or otherwise available are cumulative and may
be exercised singularly or concurrently, and the exercise of any one or more
remedy shall not constitute a waiver of any other available remedy. No act,
delay, omission, or course of dealing between the parties hereto shall be
constitute a waiver of a party's rights or remedies available under this
Agreement.
(l) Specific Performance. Each party's obligation under this
Agreement is unique. If any party should default in such party's obligations
under this Agreement, each party acknowledges that it would be extremely
impracticable to measure the resulting damages; accordingly, the
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nondefaulting party or parties, in addition to damages and any other
available rights or remedies, may xxx in equity for specific performance, and
the parties hereby expressly waive the defense that a remedy in damages shall
be adequate. The parties also hereby expressly waive any requirement that
the nondefaulting party or parties post a bond or similar security prior to
obtaining and enforcing any specific performance.
(m) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be or
become prohibited or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
(n) Attorneys' Fees. If any legal action or other proceeding,
including arbitration or action for declaratory relief, is brought for the
enforcement of this Agreement or because of an alleged dispute, breach,
default, or misrepresentation in connection with this Agreement, the
Prevailing Party (as defined below) shall be entitled to recover reasonable
attorneys' fees and other costs, in addition to any other relief to which the
party may be entitled.
As used in this Agreement, "Prevailing Party" shall include without
limitation: (i) the party who dismisses an action in exchange for sums
allegedly due; (ii) the party who receives performance from the other party
of an alleged breach of covenant of a desired remedy where that is
substantially equal to the relief sought in an action; or (iii) the party
determined to be the prevailing party by a court of law or arbitrator.
(o) Counterparts and Signature Pages. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be
one and the same instrument. The exchange of copies of this Agreement and of
signature pages by facsimile or other electronic transmission shall
constitute effective execution and delivery of this Agreement as to the
parties and may be used in lieu of the original Agreement for all purposes.
Signatures of the parties transmitted by facsimile or other electronic means
shall be deemed to be their original signatures for all purposes.
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The parties have duly executed this Management Agreement as of the date
first above written.
AXON:
AXON TECHNOLOGIES, INC.,
a Florida corporation
By: /s/ Xxxxxx X. Xxxxxx
Its: President
MANAGER:
OPTIMA TECHNOLOGIES, LLC,
a Delaware limited liability company
By: AMERICAN TONERSERV CORP.,
a Delaware corporation
Its: Managing Member
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, President & CEO
Exhibit A Duties
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Exhibit A
SCHEDULE OF SERVICES OF MANAGER
Manager will provide immediate management of the continuing and growing Axon
Printer Business operation, which includes:
* Receiving incoming orders and service request via phone, voicemail,
e-mail, web-interface, or walk-in clients;
* Distributing service calls to appropriate Axon Service Technicians
via service software program;
* Directing Axon Service Technicians in prioritizing client service
calls, monitoring response times and call volume;
* Facilitating the pricing/quotes and ordering and shipping of parts,
equipment, supplies and etcetera on Axon's behalf, to facilitate the
described services of supporting the customers and technicians.
Manager shall be responsible for all freight costs.
* Manager, at Manager's cost, will have an adequate available stock of
inventory to fulfill Axon's orders within 24 hours.
Manager will provide immediate management of Axon's Service Software Program
to:
* Facilitate the coordination of client page counts, ticket verification
and meter billing;
* Orchestrate reviews and reconciliations of client accounts.
Manager will provide, at Manager's sole cost, any needed warehouse or office
space to provide the management functions.
Manager will provide immediate management for the accounting of the Printer
Business by:
* Processing and fulfilling all orders in a timely manner and such
billing services as are determined by Axon and Manager to be
reasonably necessary to xxxx on a timely basis for products and
services provided by the Printer Business. Said billing services will
be provided on Axon branded invoices in the name of Axon with payment
remittance to Axon; Manager shall provide Axon with a monthly listing
of all Printer Business Sales that were invoiced on Axon's behalf and
at least a bi-weekly aging of accounts receivable
* Processing all authorized product returns and associated approved
credits
Manager will provide immediate management of the Axon Marketing Strategy by:
* Assist in developing and maintaining an ever-evolving marketing plan
that contributes to reaching revenue and higher profitability goals by
communicating a consistent message of product and service offerings;
* Assist in developing a sales management plan applicable to existing
and potential clients and prospects;
* Assist in designing marketing tools consistent with product and
service offerings;
* Assist in directing, in cooperation with key personnel, the use of
marketing plan and marketing tools through the training of sales
personnel regarding the various product and service offerings;
* Delivering marketing materials through direct mail campaigns for
existing and potential clients and prospects.
All expenses incurred by or on behalf of the Printer Business or in
connection with the operations or activities of the Printer Business shall be
expenses of the Manager.
