EXHIBIT 10.10
CORPORATE DEVELOPMENT AND CONSULTING AGREEMENT
This Corporate Development and Consulting Engagement Agreement (the
"Agreement") is entered into on July 7, 2006 (the "Effective Date") by and
between the techno-business provider firm of Fort Holdings Ltd, a British
Virgin Island Corporation (the "Firm"), and American TonerServ Corp., a
Delaware Corporation with Federal ID No. 00-0000000, located at 000 Xxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxx, XX 00000 United States, (the "Client"), to
govern the consultant-client relationship between the parties as follows:
1. Services to be Provided. The Firm shall provide consulting services
to Client regarding corporate and business development, corporate planning,
financial engineering and advice as specified in a Service Order from time to
time submitted by Firm and accepted in writing by both Client and Firm
("Service Order(s)"). Each Service Order shall be in a form similar to the
one attached as Exhibit A. Any accepted Service Order may be amended or
superseded by any new Service Order only in writing by both parties which
expressly provided that it amends or supersedes a prior Service Order. Each
and all accepted Service Order including the Service Order in Exhibit A
constitutes part of this Agreement.
2. Duties of Client. The Client shall cooperate with the Firm in
whatever way is reasonably necessary for the Firm to provide the services
contemplated hereunder and shall participate with the Firm in the handling of
the Client's matter. Without limiting the foregoing, the Client agrees to
respond with reasonable promptness to telephone calls and other inquiries by
the Firm, review documents and correspondence, regularly communicate with the
Firm about the matter in general, including but not limited to any
suggestions, questions or concerns that the Client has, and to promptly pay
the charges for the services rendered and expenses incurred hereunder. The
Client further covenants to provide all relevant information and
documentation available to Client and requested by Firm and necessary for the
Firm to handle the matter, and the Client acknowledges that failure to do so
may result in an outcome that is less favorable than would otherwise be
attainable.
3. Fees For Services. Client shall pay Firm a fee for services
performed for Client. With respect to certain matters that shall be subject
to the prior written agreement of the parties, that fee will be determined by
multiplying the number of hours spent working on Client's matters by the
billing rate. The Firm's hourly billing rate is listed in Exhibit B. From
time to time, Firm may also perform services for a fee calculated in other
than hours including fee in lump sums and also commissions. Client shall pay
Firm for invoiced services in cash or in such other means as the parties
agrees in writing. Introductions to Client by Firm, its agents, staff,
affiliates, and other sources of Firm has a relationship with that results in
a strategic alliance, joint venture or any other commercial transaction or
funds raised (including both debt and equity) shall be paid, unless agreed
upon by both Parties on terms of a separate agreement accepted prior to the
transaction taking place, at Ten percent (10%) of the value of the
transaction or the amount of the funds raised, payable in cash, options, or
warrants or combination at the option of Firm (the Firm will be responsible
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for any split with any of the Firm's agents involved in such efforts unless
otherwise specified in writing). However, the forgoing provision shall not
apply to any offerings of securities by Client, and Firm will not be entitled
to any fee related to the amount of securities sold in such offerings. In
those cases where the parties have agreed in writing that the fee will be
determined on an hourly basis, the following shall apply. Time shall be
billed in increments of 1/10th of an hour. The hourly rates set forth in
Exhibit B will not increase without at least thirty (30) days prior written
notice and the opportunity for Client to terminate this Agreement. The
Client's fee shall be calculated by multiplying the number of hours devoted
to Client's matter(s) (including fractions of hours) by the then current
hourly rate. As used herein, the term "Number of Hours Devoted" shall mean
any time spent by Firm in dealing with any aspect of the matter for which
Client has retained Firm including, but not limited to consulting with Client
(in person or by telephone), investigating facts, conducting research,
preparing correspondence, documents, interviewing or negotiating with others
(in person or by telephone), preparing for and conducting meetings and
interviews, performing technical work, and/or traveling.
4. Retainer. The Client shall pay the Firm a retainer in the amount
detailed in the Service Order at the time of the signing of this Agreement.
This retainer shall be maintained at this level until the termination of the
engagement of service. Towards the end of the engagement, this retainer will
be applied towards any outstanding invoices. If there is surplus after all
outstanding invoices are brought current, this surplus will be refunded to
Client. The retainer is not meant to be an estimate of the total fees that
may be incurred, but rather an initial payment for the purposes of
establishing the consultant-client relationship. The retainer amount may be
increased if the nature of the services is changed. The Client will be
informed of changes to the retainer amount.
5. Estimates. While an estimate or indication of the amount of fees
which will likely be incurred in any particular project may be provided from
time to time, such estimates are not guaranteed amounts, but rather are meant
to serve as guidelines only. Numerous factors on any project may affect those
estimates and require that they be revised. If at any time an estimate for a
particular project has been given to the Client, and it becomes apparent that
the actual hours required for the project will significantly exceed the
estimate, the Client will be informed of that fact and the Client may elect
to discontinue further action. The Client may, at any time, request a written
estimate of projected consulting fees and costs associated with particular
requirements or actions to be undertaken by the Firm.
6. Disbursements. In addition to the fees described above, the Client
shall pay for all out-of-pocket disbursements actually incurred in the course
of providing services to the Client under this Agreement. Disbursements
include, but are not limited to, such costs as photocopying, filing fees,
facsimile charges, electronic mail charges, travel expenses, computer
research charges, telephone charges, postage, express mail, courier, and
other out-of-pocket expenses. These out-of-pocket disbursements shall be
billed per Exhibit B under Out-of Pocket Disbursements.
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7. Manner of Billing and Payment. An invoice will be submitted to
Client usually each week for the services and related costs and disbursements
undertaken or incurred on Client's behalf during the previous period. Payment
is due within 7 days of receipt thereof. In the event that Client fails to
make timely payment as defined herein, and fails to cure such untimely
payment within ten (10) days of written notice thereof, Firm shall be free to
stop work. Interest shall accrue on all outstanding past due amounts due at
the rate of 1.5% per month or the highest rate allowed by law, whichever is
less.
8. Termination. Either party shall have the right to terminate this
Agreement upon sixty (60) days (the "Termination Timeframe") written notice.
Termination and withdrawal from further engagement may occur if Client has
failed or refused to comply with its obligations hereunder and if Client does
not cure same within ten (10) days after written notice thereof is received
by Client. In the event a termination notice is issued, Client shall be
responsible for payment of all services and costs incurred during the
Termination Timeframe.
9. Return of Client Records. Upon termination, the Firm may give the
Client notice that the Firm wishes to deliver the Client's records in the
possession of the Firm to the Client. Within thirty (30) days, the Client
shall notify the Firm as to the address to which such records shall be
delivered. If the Client does not respond within said thirty (30) day period,
the Firm shall be entitled to destroy such records and the Client shall waive
any and all claims relating to such destruction.
10. Objection to Billing. In the event that the Client has any
objection whatsoever to any of the fees for services rendered or the costs
and disbursements which are billed, it is the Client's obligation to
immediately set forth any such objection at that time, and no later than
seven (7) days of receipt of such invoices and to bring it to the Firm's
attention in writing within that period. The Client's failure to timely set
forth any such disagreement or objection to any fee for services rendered or
costs incurred shall be considered to be a waiver of any such objections.
11. Collection Fees. In the event of any dispute between the parties,
the prevailing party shall be entitled to reasonable costs incurred,
including attorneys' fees.
12. Liability. Firm will perform the services with reasonable care and
professional skill. Firm does not warrant or provide warranties of any kind,
expressed or implied including but not limited to the merchantability or
fitness for use or purpose of the work performed or non-infringement. In no
event shall Firm be liable to Client or any third party for incidental,
indirect, special, or consequential damages (including, without limitation,
lost profits, loss of data, loss of use or claims of third parties) as a
result of implementing this agreement. Client acknowledges that Firm does
not provide legal advice and is not a broker-dealer or underwriter and does
not provide services directly or indirectly related to the offering, issuance
or sale of securities.
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13. Confidentiality, Non-Solicitation and Non-Circumvention. Client
agrees to not disclose the content of this Agreement, Service Orders or
subordinate Agreements to this Agreement to third parties and non-parties to
this Agreement in any form orally, electronic, or otherwise. Both parties
agree to the adherence of any executed Non-disclosure provisions of Client
and/or Firm. Furthermore, Client understands that Firm's business depends on
its resources which include but not limited to human, knowledge, technology,
intellectual, partnerships, and contacts. Client agrees, during the term of
this Agreement and for a period of twenty four (24) months after the
termination of this Agreement, not to, directly or indirectly, solicit or
circumvent, offer employment, hire, contract or employ in any form for pay or
otherwise, any of Firm's resources including, but not limited to, employees,
contractors, suppliers, investors, brokers, bankers, manufacturers,
consultants, clients, introduced by Firm to Client, its director's,
employees, agents, and affiliates during the performance of this Agreement
without Firm's expressed written approval. Client shall inform in writing
within seven (7) days of any prior direct relationship which may affect Firms
contribution to the Agreement especially as described in this section.
14. Force Majeure. Neither party hereto shall be liable for any breach
of its obligation hereunder resulting from causes beyond its reasonable
control including but not limited to fire, strikes (excluding their own
employees) insurrection or riots, embargoes, wrecks or delays in
transportation, inability to obtain supplies and raw materials, or regulation
of any civil or military authority. Each of the parties hereto agrees to give
notice forthwith to the other upon becoming aware of an event of Force
Majeure such notice to contain details of the circumstances giving rise to
the Force Majeure.
15. Governing Law, Binding Arbitration. This Agreement is governed by
the laws of the State of California. In the event of any disagreement as to
the billing statements, Client has the right to arbitration. Any dispute
arising out of or relating to this agreement or the services provided
hereunder, including but not limited to any disagreement and/or appeal
remaining after the arbitration referred to in the previous sentence, shall
be resolved through binding arbitration by an arbitrator under the Commercial
Rules of the American Arbitration Association.
16. Potential Conflicts of Interest. The Client acknowledges and agrees
that the Firm presently does, or may in the future, work for or consult for
other clients with whom the Client does business, contracts or competes.
Nothing herein shall be construed as prohibiting or preventing the Firm from
continuing or commencing such work for such clients, provided that the Firm
takes adequate steps to ensure that confidential information of the Client is
not divulged or revealed to such other clients.
17. Severability. In the event any of the provisions of this agreement
is held by a court or other tribunal of competent jurisdiction to be
unenforceable, the other provisions of this Agreement will remain in full
force and effect.
18. Amendments. This Agreement shall not be amended or modified except
in writing signed or otherwise confirmed by the parties.
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19. Entire Agreement. This Agreement, together with its Service
Order(s), exhibits, constitutes the entire agreement between the parties
pertaining to the subject matter hereof, and supersedes in their entirety any
and all written or oral agreements previously existing between the parties
with respect to such subject matter.
20. Effectiveness. This Agreement will become effective only after it
has been signed by Client, and it has been accepted by Firm at its principal
place of business. Client and signing party certifies that it has been given
the authority to bind Client into this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
For "CLIENT" For "FIRM"
American TonerServ Corp. Fort Holding Ltd.
By: /s/ Xxxxxx X. Xxxxxxx By: Xxxxxx Xxx - Representing
Kelink Limited
Title: President and CEO Title: Director
Date: 7-7-06 Date: 7-7-06
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CORPORATE DEVELOPMENT AND CONSULTING AGREEMENT
EXHIBIT A
1st Service Order Form
Client (the "Client"): Project Name:
American TonerServ Corp Client Purchase Order No.:
000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000 Amendment or Superseding prior Service
Xxxxx Xxxx, XX 00000 Order? NO
If so, describe:
Upon acceptance of this Service Order by the Client, Fort Holdings Ltd.
("Firm") is authorized to provide the services described below pursuant to
the Business Development and Consulting Agreement between Firm and Client.
Description of the Project:
Firm will act as consultant and perform with best efforts under the direct
guidance of Client the following:
1. Develop and manage a Corporate Development Plan (CDP) which
includes:
* Capital Structure
* Business and Marketing Plan
* Strategic Project Plan
* Merger and Acquisition Plan
* Public Relations and Investors Relations
2. Organizing of a Compensation Committee and Finance & Audit Committee
with participating thereof.
3. Assist Client in managing all aspects of corporate development
pertaining to the Project up to completion until Client reaches at
least $20 million in revenue.
Target Schedule (ESTIMATE ONLY): Estimated Cost (ESTIMATE ONLY):
CDP: 45 days To be determined by CDP and paid from
proceeds of funds raised.
Ownership of Intellectual Property:
None.
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CORPORATE DEVELOPMENT AND CONSULTING AGREEMENT
Special Conditions:
1. Client engages Firm in an exclusive basis for the purpose of Project.
2. Firm shall have exclusive rights for one (1) seat in two (2) committees
at choice of Firm with priorities to the Executive Compensation. Committee
and the Finance & Audit Committee.
3. Firm understands that Client is seeking to be valued at $10 million at
the time of signing this Agreement.
Payment Schedule:
1. Client shall pay Firm $10,000.00 retainer upon signing of this Service
Order.
2. Upon signing of this Agreement, Client shall issue to firm One Hundred
Fifty Thousand (150,000) shares (as of July 5, 2006) of its common stock
("Initial Shares"). The Initial Shares are priced at $0.15 per share. If
Client splits its stock after the Effective Date (i.e. July 5, 2006) of this
Agreement, the number of Initial Shares to be issued to Firm shall be
adjusted accordingly based on the ratio of split.
3. Shares issued to Firm including but not limited to Initial Shares shall
be adjusted for splits to Firm while the Agreement is in effect. Shares are
to be issued to Firm or its authorized agent. Client shall piggyback
register the Initial Shares and any other shares Firm receives from Client in
the future at Firm's request.
4. Firm shall return a portion of the Initial Shares as described below if
this Agreement is terminated prior to the following milestones being reached,
and provided that Firm has been given the freedom to perform its duties:
a) Fifty Thousand (50,000) Shares will be returned to Client if CDP is
not completed.
b) One Hundred Thousand (100,000) Shares will be returned to Client if
Firm terminates this Agreement within six (6) months.
c) The above number of shares returned shall be adjusted for splits and
represent the correct ratio based on the Initial Shares issued to Firm.
5. For Out-of-Scope activities as authorized by Client: The hourly rates in
Exhibit B for Executives, Consultants and Managers will be charged at 50/50
cash/equity. Equity in the form of cashless warrants or S-8 Stock or
Preferred Shares or Common shares any for at the option of firm. If payment
is in the form of equity, either in Preferred Convertible Shares or Common
shares, such shares will carry piggy back registration rights.
6. Client shall reimburse Firm for out of pocket expenses during the term of
this Agreement.
Payment term: Net 7 days.
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This Service Order is Accepted:
For "CLIENT" For "FIRM"
American TonerServ Corp. Fort Holdings Ltd.
By: /s/ Xxxxxx X. Xxxxxxx By: Xxxxxx Xxx - Representing
Kelink Limited
Title: President and CEO Title: Director
Date: 7-7-06 Date: 7-7-06
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CORPORATE DEVELOPMENT AND CONSULTING AGREEMENT
EXHIBIT B
Billing Rates
Categories Rate
Executive managers/consultants $350/hr.
Senior managers/consultants $250/hr.
Project managers $175/hr.
Administrative $90/hr.
Clerical $35/hr.
Outsourced Consultants Cost plus 25%.
Out-of Pocket Disbursements Cost plus 15%
Governmental and regulatory work At 25% surcharge above
regular billing rate.
Governmental Lobbying At 50% surcharge above
regular billing rate.
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