Exhibit 10.22
CONSULTING AGREEMENT DATED AS OF MAY 1, 1997
BY AND BETWEEN THE CORPORATION AND
THE VAYNESS CORPORATION, LTD.
CONSULTING AGREEMENT
CONSULTING AGREEMENT, dated as of May 1, 1997, by and between Xxxxxx
Xxxxxx, Ltd., a New York corporation (the "Company"), and The Vayness Company,
Ltd. located at 00000 Xxxxxxxx Xxxx., Xxxxxxxx X, Xxxxx #0000, Xxx Xxxxxxx, XX
00000 (the "Consultant").
W I T N E S E T H :
WHEREAS, the Company desires to secure the services of the Consultant and
the Consultant desires to render services to the Company, upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, the parties mutually agree as follows:
Section 1. Consulting Services. The Company hereby engages Consultant and
the Consultant hereby accepts such engagement, as a consultant to the Company,
subject to the terms and conditions set forth in this Agreement. The Consultant
shall:
1. assist the Company with developing and refining its marketing
objectives for the Japanese marketplace;
2. assist the Company in identifying, selecting and developing
relationships with strategic partners to service the Japanese
marketplace (the "Japan Partners");
3. assist the Company in negotiating and finalizing agreements with
Japanese Partners;
4. assist the Company in expanding its business in the Japanese
marketplace, including without limitation, maintaining and further
developing the Company's relationship with Japanese Partners; and
5. assist the Company in identifying potential abuses of the Company's
rights in the Japanese marketplace, including without limitation,
trademark infringement.
Until an agreement is executed by the Company with a Japanese Partner, or two(2)
years following the date hereof, whichever occurs first (the" Personal Service
Period"), all services provided by Consultant pursuant to this Agreement shall
be performed only by Vital Vayness. Any delegation of Consultant's duties
hereunder during the Personal Service Period to an individual other than Mr.
Vayness without the Company's prior written consent shall be a breach of this
Agreement and may permit the Company to terminate this Agreement in accordance
with the terms of Section 4.
Section 2. Term of Agreement.
The term of this Agreement shall be for a period of ten (10) years
commencing on the date hereof and ending on March 31, 2007 (the "Term"), subject
to earlier termination by the parties pursuant to Section 4.
Section 3. Payments to Consultant.
(a) The Company shall (i) pay to Consultant a fee equal to fifteen percent
(15%) of any and all gross revenue and other consideration (prior to any tax
withholding or other deductions if any) received by the Company and/or its
affiliates, related companies, successors or assigns (collectively, a "Company
Entity") from any and all Japanese Partners and/or their affiliates, successors,
assigns, related companies, subsidiaries, or sublicenses, in perpetuity in
connection with the licensing of any and all Company Entity trademarks, logos,
names, designs and/or visual representations, (ii) pay to Consultant a fee equal
to fifteen percent (15%) of any and all Net Profit (as hereinafter defined)
realized by a Company Entity as the result of the sale of products by a Company
Entity, and/or its subcontractors to any and all Japanese Partners and/or their
affiliates, successors, assigns, related companies, subsidiaries, or subleases,
in perpetuity, and (iii) grant to Consultant a number of options (the "Options")
to purchase shares of Common Stock of the Company in accordance with the terms
of the Option Agreement attached hereto as Exhibit A (collectively, the
"Consulting Fee"). All payments by the Company to Consultant shall be paid
within thirty (30) days following receipt of revenue by a Company Entity, along
with accounting statements pertaining to such payments, showing the gross
revenues received,
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the expenses incurred as set forth below and all commissions payable to
consultant therefrom. "Net Profit" means any and all gross revenue and other
considerations (prior to any tax withholding or other deductions if any) less
only direct expenses and costs incurred by the Company in connection with
manufacturing and shipping, if any, of said products.
(b) During the term of this Agreement, the Company shall promptly reimburse
the Consultant for all reasonable and necessary travel expenses and other
disbursements incurred by the Consultant on behalf of the Company, in
performance of the Consultant's duties hereunder, assuming Consultant has
received prior approval for such travel expenses and disbursements by the
Company.
(c) During the term of this Agreement, the Company shall keep complete and
accurate books and records covering all transactions relating to the subject
matter of this Agreement, and Consultant or its representatives shall have the
right to inspect and audit such books and records.
Section 4. Termination.
The Company may terminate the engagement of the Consultant and all of the
Company's obligations under this Agreement at any time for Cause (as hereinafter
defined) by giving the Consultant notice of such termination, with reasonable
specificity of the details thereof. "Cause" shall mean (i) the Consultant's
misconduct which could reasonably be expected to have a material adverse effect
on the business and affairs of the Company, (ii) the Consultant's disregard of
lawful instructions of the Company's President or Chief Operating Officer
relating to Consultant's neglect of duties or failure to act, which, in each
case, could reasonably be expected to have a material adverse effect on the
business and affairs of the Company, (iii) the commission by the Consultant of
an act constituting common law fraud, or a felony, or criminal act against the
Company or any affiliate thereof or any of the assets of any of them, (iv) the
Consultant's abuse of alcohol or other drugs or controlled substances, or
conviction of a crime involving moral turpitude, (v) the Consultant's material
breach of any of the agreements contained herein or (vi) during the Personal
Service Period only, the Consultant's death, Disability (as hereinafter
defined);
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provided however, that if the Consultant terminates this Agreement as a result
of a material breach by the Company of this Agreement, such termination shall
not be considered "Cause" hereunder. "Disability" shall mean the Consultant is
incapable of performing the services required hereunder as a result of a mental
or physical disability for a period of one-hundred eighty (180) consecutive days
or for a period of two hundred seventy (270) days during any three hundred sixty
(360) day period.
A termination pursuant to this Section 4(i), (ii), (iii), (iv) (other than
as a result of a conviction of a crime involving moral turpitude) or (v) shall
take effect 60 days after the giving of the notice contemplated hereby unless
the Consultant shall, during such 60-day period, remedy to the reasonable
satisfaction of the Board of Directors of the Company the misconduct, disregard,
abuse or material breach specified in such notice. A termination pursuant to
Section 4(iv) (as a result of a conviction of a crime involving moral turpitude)
or (vi) shall take effect immediately upon the giving of the notice contemplated
hereby. The effective date of termination shall hereinafter be referred to as
the "Termination Date".
Section 5. Effect of Termination of Agreement.
Upon the termination of Consultant for Cause, neither the Consultant nor
the Consultant's beneficiaries or estate shall have any further rights to
compensation under this Agreement or any claims against the Company arising out
of this Agreement, except the right to receive (i) the unpaid portion of the
Consulting Fee provided for in Section 3, earned through the Termination Date
(the "Unpaid Fee Amount"), and (ii) reimbursement for any expenses for which the
Consultant shall not have theretofore been reimbursed (the "Expense
Reimbursement Amount"); provided however, that in the event that Consultant is
terminated pursuant to Section 4(vi), then in addition to the foregoing, the
Consultant shall be entitled to the Consulting Fee for the two (2) years
following the Termination Date.
Section 6. Disclosure of Confidential Information.
Consultant recognizes that it has had and will continue to have access to
secret and confidential information regarding the Company, including but not
limited to its customer list,
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products, know-how, and business plans. Consultant acknowledges that such
information is of great value to the Company, is the sole property of the
Company, and has been and will be acquired by it in confidence. In consideration
of the obligations undertaken by the Company herein, Consultant will not, at any
time, during or after his engagement hereunder, reveal, divulge or make known to
any person, any information acquired by Consultant during the course of his
employment, which is treated as confidential by the Company, including but not
limited to its customer list, and marketing and strategic plans, not otherwise
in the public domain, except as may be required in performance of Consultant's
duties. The provisions of this Section 5 shall survive Consultant's engagement
hereunder.
Section 7. Covenant Not To Compete.
(a) Consultant recognizes that the services to be performed by it hereunder
are special and unique. The parties confirm that it is reasonably necessary for
the protection of Company that each of Consultant, its officers, directors and
affiliates agree, and accordingly, each of Consultant, its officers, directors,
and affiliates does hereby agree, that it shall not, directly or indirectly, at
any time during the Personal Service Period:
(i) except as provided in Subsection (c) below, be engaged in the sale,
licensing, distribution or marketing of footwear products targeting
primarily the junior marketplace (the "Products") or provide technical
assistance, advice or counseling regarding the Products worldwide
either on his own behalf or as an officer, director, stockholder,
partner, consultant, associate, employee, owner, agent, creditor,
independent contractor, or co- venturer of any third party; or
(ii) employ or engage, or cause or authorize, directly or indirectly, to be
employed or engaged, for or on behalf of itself or any third party,
any employee or agent of Company or any affiliate thereof.
(b) If any of the restrictions contained in this Section 7 shall be deemed
to be unenforceable by reason of the extent,
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duration or geographical scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration, geographical
scope, or other provisions hereof, and in its reduced form this Section shall
then be enforceable in the manner contemplated hereby.
(c) This Section 7 shall not be construed to prevent Consultant from (i)
owning, directly or indirectly, in the aggregate, an amount not exceeding two
percent (2%) of the issued and outstanding voting securities of any class of any
company whose voting capital stock is traded on a national securities exchange
or on the over-the-counter market other than securities of the Company or (ii)
from working with or for any Japanese company with respect to the manufacturing,
marketing, licensing, sub-licensing or selling the Products in Japan.
Section 8. Miscellaneous.
8.1 Injunctive Relief. Consultant acknowledges that the services to be
rendered under the provisions of this Agreement are of a special, unique and
extraordinary character and that it would be difficult or impossible to replace
such services. Accordingly, Consultant agrees that any breach or threatened
breach by him of Sections 6 or 7 of this Agreement shall entitle Company, in
addition to all other legal remedies available to it, to apply to any court of
competent jurisdiction to seek to enjoin such breach or threatened breach. The
parties understand and intend that each restriction agreed to by Consultant
hereinabove shall be construed as separable and divisible from every other
restriction, that the unenforceability of any restriction shall not limit the
enforceability, in whole or in part, of any other restriction, and that one or
more or all of such restrictions may be enforced in whole or in part as the
circumstances warrant. In the event that any restriction in this Agreement is
more restrictive than permitted by law in the jurisdiction in which Company
seeks enforcement thereof, such restriction shall be limited to the extent
permitted by law.
8.2 Assignments. Neither Consultant nor the Company may assign or delegate
any of their rights or duties under this Agreement without the express written
consent of the other party.
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8.3 Entire Agreement. This Agreement constitutes and embodies the full and
complete understanding and agreement of the parties with respect to Consultant's
engagement by the Company, supersedes all prior understandings and agreements,
whether oral or written, between the Consultant and the Company, and shall not
be amended, modified or changed except by an instrument in writing executed by
the party to be charged. The invalidity or partial invalidity of one or more
provisions of this Agreement shall not invalidate any other provision of this
Agreement. No waiver by either party of any provision or condition to be
performed shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same time or any prior or subsequent time.
8.4 Binding Effect. This Agreement shall inure to the benefit of, be
binding upon and enforceable against, the parties hereto and their respective
successors, heirs, beneficiaries and permitted assigns.
8.5 Headings. The headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
8.6 Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when personally delivered, sent by registered or
certified mail, return receipt requested, postage prepaid, or by private
overnight mail service (e.g. Federal Express) to the party at the address set
forth on the books and records of the Company or to such other address as either
party may hereafter give notice of in accordance with the provisions hereof.
Notices shall be deemed given on the sooner of the date actually received or the
third business day after sending.
8.7 Governing Law; Arbitration. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to such State's conflicts of laws provisions. Any and all disputes,
controversies and claims arising out of or relating to this Agreement or
concerning the respective rights or obligations hereunder of the parties hereto
shall be settled and determined by arbitration in New
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York, New York before the Commercial Panel of the American Arbitration
Association in accordance with and pursuant to the then existing Commercial
Arbitration Rules. The arbitrators shall have the power to award specific
performance or injunctive relief and reasonable attorneys' fees and expenses to
any party in any such arbitration. However, in any arbitration proceeding
arising under this Agreement, the arbitrators shall not have the power to
change, modify or alter any express condition, term or provision hereof, and to
that extent the scope of their authority is limited. The arbitration award shall
be final and binding upon the parties and judgment thereon may be entered in any
court having jurisdiction thereof.
8.8 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one of the same instrument.
8.9 Independent Contractor. Consultant's engagement pursuant to this
Agreement shall be as independent consultant and not as an employee, officer or
other agent of the Company. Neither party to this Agreement shall represent or
hold itself out to be the employer or employee of the other. Consultant further
acknowledges that the compensation provided herein is a gross amount of
compensation and that the Company will not withhold from such compensation any
amounts respective income taxes, social security payments or any other payroll
taxes. All such income taxes and payments shall be made or provided for by
Consultant and the Company shall have no responsibility or duties regarding such
matters.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
XXXXXX XXXXXX, LTD.
By: /s/Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
Title: Chief Operating Officer
THE VAYNESS COMPANY, LTD.
By: /s/Vital Vayness
-------------------------------
Name: Vital Vayness
Title: President
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