EXHIBIT 4.10
CONSULTING AGREEMENT
CONSULTING AGREEMENT between Genius Products, Inc (the "Company") and
Xxxx Xxxxx ("Consultant") dated as of July 30, 2002 (the "Agreement").
WHEREAS, the Company wishes to engage Consultant to solicit sales of
the Company's products and Consultant wishes to be so engaged (the "Services")
for a period of approximately six months;
NOW THEREFORE, in consideration of the mutual covenants set forth
herein and for other good and valuable consideration the adequacy and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
SECTION 1. SERVICES TO BE PROVIDED BY CONSULTANT. As of the date hereof,
Consultant shall solicit sales of the Company's Baby Genius
and Kid Genius products and the Company's
lifestyle/interactive programs.
SECTION 2. PAYMENT BY THE COMPANY.
a) ISSUANCE OF COMMON STOCK. In lieu of a monthly retainer, the
Company will issue to Consultant 20,000 shares of the
Company's common stock (the "Shares") which will vest as
follows: (1) 10,000 shares for Services related to sales of
Baby and Kid Genius products to be issued 1,667 shares per
month for six months; and (2) 10,000 shares for Services
related to the sales of the Company's lifestyle/interactive
programs to be issued 3,333 shares per month for three months.
The issuances are to commence as of the date of this Agreement
and continue to be issued as of each monthly anniversary date
of this Agreement. The Shares will be registered by the
Company on an S-8 Registration Statement. The Company shall
use its best efforts to effect such a registration and deliver
Consultant each certificate from its transfer agent as soon as
reasonably possible.
b) COMMISSION. The Company agrees to compensate Consultant with a
7% commission on Net Collected Sales under the terms of this
Agreement as outlined below ("Commission"). Net Collected
Sales shall be defined as collected revenue less any allowable
deductions; i.e, actual returns, markdown monies, ad
allowances, reserves for returns by customers, discounts off
invoice, chargebacks and/or bad debt.
i) If the Agreement is terminated, the Consultant shall
only earn a Commission for purchase orders in place
at the time of the termination and issued to ship
within thirty (30) days from the date of termination
in which case Consultant will earn a full Commission
for that sale only. The Company may, in its
reasonable business judgment, hold a reserve for any
anticipated returns from any such sale.
ii) The Company agrees to remit Commission payments due
to Consultant for sales within thirty (30) days of
the end of each calendar month. Commission payments
shall be based upon receipt the Company's receipt of
payments for sales as defined in paragraph "b" above.
Commission payments shall be accompanied by a
statement which details customer sales and collection
activity during the period. Commission payments will
be paid by a single check to the principal business
address of the Consultant.
SECTION 3. OBLIGATIONS OF CONSULTANT. Consultant shall (1) not engage in
any act that the Company determines in its sole discretion may
be deemed to be in competition with the Company, including
representation, sales or assistance in the development of
products that directly compete with the Company's current
products or products the Company is planning to develop for
sale to its customers or licensees, (2) treat as confidential
all Company information disclosed to him by the Company, and
Consultant shall return all such information to the Company at
the end of this agreement in whatever form such information
such may exist, and (3) perform all work for the Company to
the highest professional standards. Consultant shall be
responsible for the payment of all Consultant's federal,
state, local income, social security, and FICA taxes.
Consultant acknowledges that the relationship with the Company
is one of an independent contractor and not one of employment.
SECTION 4. TERM AND TERMINATION.
a) Either party may terminate the Agreement on 30 days' prior
written notice, and if not so terminated the Agreement will
expire on December 31, 2002, unless renewed for an additional
twelve months at the Company's discretion by the Company's
providing written notice to Consultant of its intention to
renew the Agreement.
b) Shares issuable prior to the termination date will be issued
pro rata for the number of days between the monthly
anniversary date and the termination date. The Company's
obligation to issue shares will expire as of the termination
date of the Agreement.
c) The Consultant may not engage in any of type of competition
with the Company as further described in Section 4(1), above,
for a twelve-month period following the termination date of
the Agreement.
SECTION 5. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of
California without regard to conflict of laws principles. The
parties hereby submit to the state and federal courts in San
Diego County, California, and waive all defenses to venue or
that the forum is inconvenient
THE PARTIES WAIVE THEIR RIGHT TO A TRIAL BY JURY IN CONNECTION
WITH ANY PROCEEDINGS ARISING OUT OF THIS AGREEMENT.
SECTION 6. MISCELLANEOUS. This Agreement may be executed in counterparts,
all of which together shall constitute one and the same
instrument. The parties may execute the Agreement by
facsimile. This Agreement supersedes all previous oral and
written agreements and negotiations relating to the subject
matter hereof. This Agreement may not be modified except by an
instrument in writing executed by the parties. This Agreement
shall inure to the successors and assigns of each party except
that no party may assign any of its obligations hereunder
without the written consent of the other party. In any
proceedings brought hereunder the losing party shall pay all
the attorneys' fees and expenses of the other party incurred
in such proceedings.
IN WITNESS HEREOF, the parties have executed this Agreement on the date
first written above.
COMPANY: GENIUS PRODUCTS, INC
By: /S/ XXXXXXX XXXXXX
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Xxxxxxx Xxxxxx, President
CONSULTANT:
/S/ XXXX XXXXX
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Xxxx Xxxxx
