EXHIBIT 10.63
CONSULTING AGREEMENT
CONSULTING AGREEMENT, dated as of February 1, 1996 (the "Agreement"),
between L.A. GEAR, INC., a California corporation (the "Company"), and Xxxxx
X. XxxXxxxxx ("Consultant").
In consideration of the premises and the mutual agreements hereinafter
contained, the parties hereto, intending to be legally bound, agree as
follows:
1. TERM.
The Company hereby retains Consultant, and Consultant hereby agrees
to render consulting and advisory services to the Company on an exclusive
full time basis, upon the terms and conditions set forth herein. The term of
Consultant's services under this Agreement shall commence as of February 1,
1996 and shall continue through the close of business on July 31, 1996 (the
"Consultancy Term"). Unless this Agreement is earlier terminated as provided
herein, the Company and Consultant agree to discuss the possibility and terms
of any future relationship between the two parties during the sixty (60) day
period immediately preceding the Expiration of the Consultancy Term.
2. SERVICES.
(a) During the Consultancy Term, Consultant shall serve as a
strategic business development consultant to the Company, and shall perform
such duties, services and responsibilities as are assigned to him by the
Company (the "Services"), including, without limitation, the preparation, and
submission to the President of the Company, of written business plans for the
launch of new brands or sub-brands by means of internal generation, licensing
and/or acquisition ("Business Plans"), and the execution, to the extent
reasonably practicable during the Consultancy Term, of those Business Plans
which are approved by the President of the Company.
(b) Each Business Plan prepared by Consultant in the performance
of his Services hereunder shall include, among other things, definition and
analysis of (i) the concept of, and opportunities for, the proposed brand,
(ii) the market for the proposed brand (including, without limitation, the
target consumer, dynamics and trends, distribution channels, pricing issues
and growth potential), (iii) anticipated competition (current and potential),
(iv) financial proformas on a net present value basis and (v) perceived
threats and risks facing the proposed brand. Any and all
Business Plans prepared by Consultant during the Consultancy Term, whether
complete or incomplete at the expiration of the Consultancy Term, shall be
the sole and absolute property of the Company.
(c) Consultant agrees to travel as the Company determines is
necessary in connection with the rendering of his Services hereunder and
shall be available to render Services at the Company's headquarters located
in Santa Monica, California during the Consultancy Term. Consultant shall not
engage in any other business activity which would interfere with the
performance of his Services hereunder.
3. CONSULTING FEE.
In consideration of the Services rendered hereunder, the Company
will pay Consultant a fee in the amount of $120,000 (the "Consulting Fee").
The Company will pay the Consulting Fee to Consultant in six equal monthly
installments of $20,000, each of which shall be payable on the last business
day of each month, commencing on February 29, 1996.
4. EXPENSES.
The Company shall reimburse Consultant for reasonable out-of-pocket
expenses incurred by Consultant solely in rendering Services to the Company
(including, without limitation, travel expenses) within thirty (30) days
after Consultant's presentation to the Company of appropriate bills or
vouchers evidencing such expenses.
5. ADDITIONAL COVENANTS.
(a) CONFIDENTIAL INFORMATION. Consultant agrees that during the
Consultancy Term and at all times thereafter Consultant shall keep
confidential and shall not use, divulge or disclose, either directly or
indirectly, to any third party (except with the prior authorization of the
Company or in connection with Consultant's rendering of Services hereunder),
any information relating to the confidential affairs of the Company
("Confidential Information"), including, without limitation, (i) any and all
information relating to the Company's strategies, future plans, projects and
business policies and practices, and (ii) any and all other forms of
information considered by the Company to be confidential, proprietary or in
the nature of trade secrets (including, without limitation, technical
information, business and marketing plans (including, without limitation,
Business Plans), customer information and other information concerning
products, promotions, development, financing and expansion plans). Upon the
termination of this Agreement, Consultant will return to the Company all
documents, records, notebooks and other materials constituting or
containing Confidential Information, whether prepared by Consultant or
others. This confidentiality covenant has no temporal, geographical or
territorial restrictions. In the event that Consultant is requested pursuant
to subpoena or other legal process to disclose any of the Confidential
Information, Consultant will provide the Company with prompt notice so that
the Company may seek a protective order or other appropriate remedy and/or
waive compliance with this Section 5(a) and Consultant will furnish only that
portion of the Confidential Information which is legally required.
(b) NON-COMPETITION. By and in consideration of the Company's
entering into this Agreement and the payments to be made by the Company to
Consultant hereunder, and further in consideration of Consultant's exposure
to Confidential Information, Consultant agrees that Consultant will not,
during the Consultancy Term, directly or indirectly own, manage, operate,
join, control, be employed by, or participate in the ownership, management,
operation or control of, or be connected in any manner, including but not
limited to holding the position of shareholder, director, officer,
Consultant, independent contractor, employee, partner, or investor, with any
person, corporation, partnership or other entity which is engaged in the
footwear and/or apparel business.
(c) REMEDIES. Consultant agrees that any breach of the terms of
this Section 5 would result in irreparable injury and damage to the Company
for which the Company would have no adequate remedy at law. Consultant
further agrees therefore, that in the event of such breach, or any threat of
breach, the Company shall be entitled to an immediate injunction and
restraining order, without having to prove damages, in addition to any other
remedies to which the Company is entitled at law or in equity. The terms of
this Section 5(c) shall not prevent the Company from pursuing any other
available remedies for any breach or threatened breach hereof, including,
without limitation, the recovery of damages from Consultant.
(d) SURVIVAL. The provisions of this Section 5 shall survive any
expiration or termination of the Consultancy Term, and the existence of any
claim or cause of action by Consultant against the company, whether
predicated on this Agreement or otherwise, shall not constitute a defense to
the enforcement by the Company of the covenants and agreements of this
Section 5.
(e) COMPANY. For purposes of this Section 5, the term "Company"
shall refer to the Company and its subsidiaries and affiliates.
6. RELATIONSHIP OF PARTIES.
Consultant and the Company hereby expressly acknowledge that the
relationship between them is that of an independent contractor and a client,
respectively. Neither this Agreement nor anything contained herein shall
imply any agent/principal, employment, joint venture or partnership
relationship between the parties, and the parties hereto expressly disclaim
any such relationships. Under no circumstances shall Consultant have or
represent to any third party that he has any authority to bind or commit the
Company with respect to any matter. In connection with such independent
contractor relationship, Consultant agrees to provide the Company with the
following items prior to rendering any services hereunder:
- A copy of Consultant's appropriate city or county business license;
- Consultant's business card;
- A signed and completed IRS Form 4669;
- A signed and completed IRS Form W-9.
Additionally, Consultant shall provide any other documentation or forms
under California or Federal law which may be required for independent
contractors. Consultant shall further submit any invoices or requests for
reimbursement to the Company on consultant's letterhead or business invoice
forms.
7. TAXES.
In the event that the Company is held liable for any personal taxes,
including, without limitation, any applicable taxes required to be withheld
pursuant to federal, state or local law with respect to payments made or
benefits granted hereunder, Consultant shall indemnify and hold the Company
harmless from and against any penalties or interest associated therewith. In
the event that the Company is compelled by any taxing authority to withhold
any such taxes, the Company shall give Consultant notice thereof and shall
have the right to deduct the same from subsequent payments due under this
Agreement.
8. TERMINATION.
Except as otherwise provided herein, this Agreement (and the Consultancy
Term) shall terminate upon the earlier of the close of business on (i) July
31, 1996, (ii) an early termination date mutually agreed to in writing by the
Company and Consultant, (iii) the date of Consultant's death, or (iv) the day
on which the Company delivers to Consultant a written notice
of the Company's election to terminate this Agreement for "Cause". For
purposes of this Agreement, "Cause" shall mean (i) Consultant's material
breach of this Agreement, (ii) conviction of Consultant for (x) any crime
constituting a felony in the jurisdiction in which committed, (y) any crime
involving moral turpitude (whether or not a felony), or (z) any other
criminal act against the Company involving dishonesty or willful misconduct
intended to injure the Company, (iii) substance abuse by Consultant, or (iv)
willful malfeasance, dishonesty or misconduct by consultant which discredits
or damages the Company. Within thirty (30) days following the date of
termination of this Agreement, the Company shall pay Consultant any portion
of the consulting Fee accrued hereunder on or prior to the date of
termination but not paid. Except as otherwise provided herein, the foregoing
payments upon termination shall constitute the exclusive payments due
Consultant upon termination under this Agreement.
9. ENTIRE AGREEMENT.
This Agreement expresses the entire understanding of the parties hereto
with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, between them as to such subject matter. This
Agreement may not be amended, nor may any provision hereof be modified or
waived, except by an agreement in writing signed by the party against whom
enforcement of any waiver change, amendment, modification or discharge is
sought.
10. NOTICES.
All notices and any other communications required or permitted hereunder
shall be in writing and shall be deemed to have been duly given (i) if
personally delivered when so delivered, or (ii) if mailed, three business
days after having been placed in the United States mail, registered or
certified, return receipt requested, postage prepaid, addressed to the party
to whom it is directed at the address set forth below, or at such other
address or attention as may be designated in writing by either party to the
other:
If to the Company to:
L.A. GEAR, INC.
0000 Xxxxx Xxxx Xxxx.
Xxxxx Xxxxxx, XX 00000
Attention: General Counsel
If to Consultant:
Xxxxx X. XxxXxxxxx
00000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxx 00000
11. GOVERNING LAW.
This Agreement has been executed and delivered in the State of
California and its validity, interpretation, performance and enforcement
shall be governed by and construed in accordance with the laws thereof
applicable to contracts executed and to be wholly performed in the State of
California, without regard to principles of conflict of laws.
12. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of, and be binding upon, the
parties hereto and their respective heirs, executors, personal
representatives, estates, successors and assigns. Consultant may not assign
her rights or obligations under this Agreement without the prior written
consent of the Company.
13. WAIVERS.
No waiver by either party hereto of any breach by the other party hereto
of any provision of this Agreement to be performed by such other party shall
be deemed a waiver of similar or dissimilar provisions at the time or at any
prior or subsequent time.
14. COUNTERPARTS.
This Agreement may be executed in two counterparts, each of which shall
be deemed to be an original but both of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
L.A. GEAR, INC.
By: /s/ X. X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: President
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CONSULTANT
/s/ Xxxxx X. XxxXxxxxx
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Xxxxx X. XxxXxxxxx
