EXHIBIT 10.27
CONSULTING AGREEMENT
This CONSULTING AGREEMENT dated as of December 1, 1999, between
MOTORCAR PARTS & ACCESSORIES, INC., a New York corporation currently having an
address at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 (the "COMPANY"), and
XXXXXX XXXXX, an individual residing at 0000 Xxxxxxxx Xxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000 ("CONSULTANT").
W I T N E S S E T H:
WHEREAS, Consultant is the [title] of [Employer] ("Employer"), which is
engaged in the [amusement, entertainment and restaurant businesses], and is a
Director of the Company, and
WHEREAS, the Company has experienced an immediate need for certain
oversight, management, strategic and other advisory services in light of recent
executive officer changes at the Company and other circumstances and
requirements, and
WHEREAS, the Company desires to obtain the services of Consultant upon
the terms and conditions stated herein, and
WHEREAS, Consultant desires to be retained by the Company upon the
terms and conditions stated herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. CONSULTING TERM. The Company hereby agrees to retain Consultant and
Consultant agrees to be retained by the Company on the terms and conditions set
forth below for a term commencing on the date hereof (the "COMMENCEMENT DATE")
and continuing for a period through and including the eighteen-month anniversary
of the Commencement Date (the "CONSULTING TERM"), unless extended in writing by
both parties or earlier terminated pursuant to the terms and conditions set
forth herein.
2. DUTIES. Consultant shall report to the Board of Directors.
Consultant shall make himself available to render these advisory or consultative
services to the Company as reasonably appropriate or necessary from time to time
and shall provide oversight, management, strategic and other advisory services
to the Company, in light of its recent executive officer changes and other
circumstances and requirements, including without limitation the Company's
arrangements with its bank and auditors and operations, employees and long-term
business plan, among other things. In addition, Consultant's duties shall
include apprising the board of Directors with respect to the foregoing and other
matters.
3. OTHER BUSINESS. The Company acknowledges that Consultant is a
full-time employee of Employer. In addition to serving in such capacity, the
parties hereto agree that Consultant may engage in any other business that
Consultant desires during the term of this Agreement; provided that in the event
that such business shall (in the reasonable judgment of the Company) in any way
interfere with the performance of Consultant's duties hereunder, then this
Agreement may be terminated at any time pursuant to the terms of Paragraph 7
hereof. The foregoing shall not prevent the purchase, ownership or sale by
Consultant of investments or securities of publicly held companies and any other
business which is not competitive and does not have any other business relations
with the Company or any subsidiary of the Company, provided such purchase,
ownership or sale by Consultant does not interfere with the performance of his
duties hereunder.
4. COMPENSATION. For the performance of the duties and services to be
performed by Consultant hereunder, the Company agrees (i) to pay Consultant a
consulting fee of One Hundred and Sixty Thousand Dollars ($160,000) per year
(the "CONSULTING FEE") and (ii) to grant to Consultant, not later than January
_, 2000, an option to purchase, for a period of ten (10) years from the date of
grant, Forty Thousand (40,000) shares of the Company's Common Stock pursuant to
the terms of Company's 1994 Stock Option Plan (the "Plan"), at an exercise price
per share to be determined by the Board of Directors on such date and subject to
the terms of the Plan, a copy of which Plan shall be delivered to Consultant
contemporaneously with the execution of this Agreement, and any related stock
option agreements required to be executed by Consultant in connection therewith.
Such options shall become exercisable as to Twenty Thousand (20,000) shares on
each of the date of grant and the first anniversary thereof.
5. CONSULTING BENEFITS. Consultant shall receive no retirement, profit
sharing, insurance or similar benefits which may at any time be payable to
employees of the Company pursuant to any plan or policy of the Company relating
to such benefits. Consultant shall, for all purposes, be deemed an independent
contractor and not an employee of the Company.
6. DEATH AND DISABILITY.
(a) The Consulting Term shall terminate on the date of Consultant's
death, in which event Consultant's estate shall be entitled to receive such
portion of the Consulting Fee that has been granted through the date of death.
Consultant's estate will not be entitled to any other compensation upon
termination of this Agreement pursuant to this Paragraph 6(a).
(b) If, during the Consulting Term, Consultant, because of physical
or mental illness or incapacity, shall become substantially unable to perform
the duties and services required of him under this Agreement for a period of 30
consecutive days or 60 days in the aggregate during any six-month period the
Company may, upon at least ten (10) days' prior written notice given at any time
after the expiration of such 30 or 60-day period, as the case may be, to
Consultant of its intention to do so, terminate this Agreement as of such date
which is the date 30 days after the date of such notice. In case of such
termination, Consultant shall be
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entitled to receive such portion of the Consulting Fee that has already been
granted through the date of termination. Consultant will not be entitled to any
other compensation upon termination of this Agreement pursuant to this Paragraph
6(b). In the event of any dispute regarding the existence of Consultant's
substantial inability to perform the duties and services required of him
hereunder, the matter will be resolved by the determination of a majority of
three physicians qualified to practice medicine in California, one to be
selected by each of Consultant and the Company and the third to be selected by
the two designated physicians. For this purpose, Consultant will submit to
appropriate medical examinations.
7. TERMINATION. (a) The Company may terminate the relationship with
Consultant for Cause (as hereinafter defined) and Consultant may resign without
cause. Upon such termination, the Company shall be released from any and all
further obligations under this Agreement, except that the Company shall be
obligated to provide Consultant with such portion of the Consulting Fee that has
already been granted through the date of such termination. Consultant will not
be entitled to any other compensation upon termination of this Agreement
pursuant to this Paragraph 7(a).
(b) As used herein, the term "CAUSE" shall mean: (i) the willful
failure of Consultant to perform his duties pursuant to Paragraph 2 hereof,
which failure is not cured by Consultant within 20 days following written demand
for substantial performance from the Company, which demand identifies the manner
in which the Company believes that Consultant has not performed such duties and
the steps required to cure such failure to perform; (ii) any other material
breach of this Agreement by Consultant, including any of the material
representations or warranties made by Consultant, and including engaging in any
interfering other business as described in Paragraph 3 hereof, which breach has
not ceased within 20 days after written notice thereof has been delivered to
Consultant by the Company, which notice identifies in reasonable detail the
manner in which the Company believes that Consultant has breached this Agreement
and the steps required to cure such breach, if applicable; (iii) Consultant
shall intentionally and willfully engage in misconduct toward the Company which
is materially injurious to the Company, monetarily or otherwise; or (iv) the
conviction of Consultant of, or the entering of a plea of nolo contendere by
Consultant with respect to, a felony.
8. DISCLOSURE OF INFORMATION AND RESTRICTIVE COVENANT. Consultant
acknowledges that, he has been and will be in a confidential relationship with
the Company and will have access to confidential information and trade secrets
of the Company, its subsidiaries and affiliates. Confidential information and
trade secrets include, but are not limited to, customer, supplier and client
lists, price lists, marketing, distribution and sales strategies and procedures,
operational and equipment techniques, business plans and systems, quality
control procedures and systems, special projects and technological research,
including projects, research and reports for any entity or client or any
project, research, report or the like concerning sales or manufacturing or new
technology, employee compensation plans and any other information relating
thereto, and any other records, files, drawings, inventions, discoveries,
applications, processes, data and information concerning the business of the
Company other than such of the
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foregoing which (i) is in the public domain or known in the industry of the
Company, (ii) is disclosed to Consultant by a third party who, to Consultant's
knowledge, was not prohibited by any fiduciary, legal, contractual or other duty
from disclosing such information, or (iii) was known to Consultant before its
disclosure by the Company. Consultant agrees that in consideration of the
execution of this Agreement by the Company, except in any way with respect to
foreign affiliates of the Company as of the date hereof:
(a) Consultant will not, during the Consulting Term or at any time
thereafter, use, or disclose to any third party, trade secrets or confidential
information of the Company, including, but not limited to, confidential
information or trade secrets belonging or relating to the Company, its
subsidiaries, affiliates, customers and clients or proprietary processes or
procedures of the Company, its subsidiaries, affiliates, customers and clients.
Proprietary processes and procedures shall include, but shall not be limited to,
all information which is known or intended to be known only to employees of the
Company, its respective subsidiaries and affiliates or others in a confidential
relationship with the Company or its respective subsidiaries and affiliates
which relates to business matters.
(b) This Paragraph 8 and Paragraphs 9 and 10 hereof shall survive
the expiration or termination of this Agreement for any reason.
(c) It is expressly agreed by Consultant that the nature and scope
of each of the provisions set forth above in this Paragraph 8 are reasonable and
necessary. If, for any reason, any aspect of the above provisions as it applies
to Consultant is determined by a court of competent jurisdiction to be
unreasonable or unenforceable, the provisions shall only be modified to the
minimum extent required to make the provisions reasonable and/or enforceable, as
the case may be. Consultant acknowledges and agrees that his services are of a
unique character and expressly grants to the Company or any subsidiary,
successor or assignee of the Company, the right to enforce the provisions above
through the use of all remedies available at law or in equity, including, but
not limited to, injunctive relief.
9. REMEDY. It is mutually understood and agreed that Consultant's
services are special, unique, unusual, extraordinary and of an intellectual
character giving them a peculiar value, the loss of which cannot be reasonably
or adequately compensated in damages in an action at law. Accordingly, in the
event of any breach of this Agreement by Consultant, including, but not limited
to, the breach of the non-disclosure clauses under Paragraph 8 hereof the
Company shall be entitled to equitable relief by way of injunction or otherwise,
in addition to damages the Company may be entitled to recover. If any action at
law or equity is necessary to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorneys' fees, costs and
disbursements in addition to any other relief to which that party may be
entitled.
10. REPRESENTATIONS AND WARRANTIES OF CONSULTANT. In order to induce
the Company to enter into this Agreement, Consultant hereby represents and
warrants to the Company that
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(i) Consultant has the legal capacity and right to execute and deliver this
Agreement and to perform all of his obligations hereunder, and (ii) Consultant
has received the express consent of the Employer to this Agreement.
11. NOTICES. All notices given hereunder shall be in writing and shall
be deemed effectively given five days after being mailed, if sent by registered
or certified mail, return receipt requested, or on the next business day if sent
by overnight courier, and in each case addressed to Consultant at his address
set forth on the first page of this Agreement or to any other address that
Consultant may designate in writing to the Company and to the Company at its
address set forth on the first page of this Agreement, Attention: Chief
Executive Officer, with a copy to Xxxxxx Xxxxxx Flattau & Klimpl, 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxx, Esq., or at
such address as such party shall have designated by a notice given in accordance
with this Paragraph 12, or when actually received by the party for whom
intended, if sent by any other means.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the parties with respect to its subject matter and no change,
alteration or modification hereof may be made except in writing signed by the
parties hereto. Any prior or other agreements, promises, negotiations or
representations not expressly set forth in this Agreement are of no force or
effect.
13. SEVERABILITY. If any provision of this Agreement shall be
unenforceable under any applicable law, then notwithstanding such
unenforceability, the remainder of this Agreement shall continue in full force
and effect.
14. WAIVERS, MODIFICATIONS, ETC. No amendment, modification or waiver
of any provision of this Agreement shall be effective unless the same shall be
in writing and signed by each of the parties hereto, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
15. ASSIGNMENT. Neither this Agreement, nor any of Consultant's rights,
powers, duties or obligations hereunder, may be assigned by Consultant. This
Agreement shall be binding upon and inure to the benefit of Consultant and his
heirs and legal representatives and the Company and its successors and assigns.
Successors of the Company shall include, without limitation, any corporation or
corporations acquiring, directly or indirectly, all or substantially all of the
assets of the Company, whether by merger, consolidation, purchase, lease or
otherwise, and such successor shall thereafter be deemed "the Company" for the
purpose hereof.
16. APPLICABLE LAW. This Agreement shall be deemed to have been made,
drafted, negotiated and the transactions contemplated hereby consummated and
fully performed in the State of New York and shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
conflicts of law rules thereof. Nothing contained in this Agreement shall be
construed so as to require the commission of any act contrary to law, and
whenever there is any conflict between any provision of this Agreement and any
statute, law,
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ordinance, order or regulation, contrary to which the parties hereto have no
legal right to contract, the latter shall prevail, but in such event any
provision of this Agreement so affected shall be curtailed and limited only to
the extent necessary to bring it within the legal requirements.
17. JURISDICTION AND VENUE. It is hereby irrevocably agreed that all
disputes or controversies between the Company and Consultant arising out of, in
connection with or relating to this Agreement shall be exclusively heard,
settled and determined by arbitration to be held in the City of New York, County
of New York, or in the City of Los Angeles, County of Los Angeles, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association to
be conducted before a single arbitrator, who shall be either an attorney or
retired judge licensed to practice law in the State of New York or California,
as applicable. The parties also agree that judgment may be entered on the
arbitrator's award by any court having jurisdiction thereof and the parties
consent to the jurisdiction of any court located in the City of New York, County
of New York, or in the City of Los Angeles, County of Los Angeles for this
purpose.
18. FULL UNDERSTANDING. Consultant represents and agrees that he fully
understands his right to discuss all aspects of this Agreement with his private
attorney, that to the extent, if any that he desired, he availed himself of this
right, that he has carefully read and fully understands all of the provisions of
this Agreement, that he is competent to execute this Agreement, that his
agreement to execute this Agreement has not been obtained by any duress and that
he freely and voluntarily enters into it, and that he has read this document in
its entirety and fully understands the meaning, intent and consequences of this
document which is that it constitutes an agreement of consulting.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
MOTORCAR PARTS & ACCESSORIES, INC.
By:
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Name:
Title:
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XXXXXX XXXXX
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