Exhibit 10.7
Application for
confidential treatment for a portion of this document has been
submitted to the Securities and Exchange Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934.
This document omits the information subject to the confidentiality
request. Omissions are designated by the symbol
“**”. A complete version of this document has
been filed separately with the Securities and Exchange
Commission.
CONSULTING AGREEMENT
THIS CONSULTING
AGREEMENT (the “Agreement”) is entered into
as of April 30, 2008 (the “Effective Date”),
between Heeling Sports EMEA (the “Company”) and
Trotwood Investments Ltd represented by Margarete Stanley
(“Consultant”). The Company and Consultant are
sometimes collectively referred to herein as the
“Parties” and individually as a
“Party.”
WHEREAS, the
Company wishes to enter into this Agreement with Consultant for the
provision of consulting services in France, Monaco and Andorra;
WHEREAS, the
Company and its affiliates, in their business, use confidential
customer, dealer and supplier lists and other trade secrets and
confidential and proprietary information that will be communicated
to Consultant during its provision of services to the Company and
its affiliates, and the Company and its affiliates have expended
and will expend substantial time, effort, and money to develop said
customer, dealer and supplier lists, other trade secrets and
confidential and proprietary information, data, processes,
business, patronage and goodwill to promote and increase its
business; and
WHEREAS, Consultant
desires to perform services for the Company, and the Company is
desirous of having Consultant perform services to the Company and
its affiliates, provided that in so doing, the Company can protect
its customer, dealer and supplier lists, other trade secrets and
confidential and proprietary information, data, processes,
business, patronage and goodwill.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth
herein, the Parties agree as follows:
1.
Consulting Term and
Services. The Company hereby engages Consultant as
an independent contractor, and not as an employee, to render
consulting services to the Company.
(a)
Term
. The term of this
Agreement is twelve (12) months from the Effective Date (the
“Term”). This Agreement will terminate of its own
accord at the conclusion of the Term without any further action
required by any Party, unless terminated earlier as set forth
herein, or unless the Parties renew or extend by mutual agreement
this Agreement by separate written addendum within 30 days after
the expiration of the Term.
(b)
Termination
. Either Party may
terminate this Agreement at any time without notice, for
Cause. For the purpose of this paragraph, “Cause”
shall mean (i) the other Party’s felony conviction;
(ii) the other Party’s theft and/or misappropriation
and/or misdirection of a Parties’ funds, property, and/or
business opportunities; (iii) the other Party’s
material
violation of this Agreement; and/or
(iv) the other Party’s violation of the terms of the
Termination Agreement by and between the Company and Consultant,
dated as of April 30, 2008 (the “Termination
Agreement”). Termination of this Agreement for Cause
shall include the prospective termination of the consideration
recited in Section 2 of this Agreement. In the event that
termination is for Cause relating to the Company then the Company
shall pay within 30 days the unpaid outstanding consideration
through the termination date to the Consultant.
(c)
Services
. During the Term,
Consultant shall use its knowledge and contacts in order to render
consulting services to the Company and to assist the Company and
its affiliates in France, Monaco and Andorra (the
“Territory”). The services rendered by Consultant
hereunder shall be provided by Consultant as a consultant, and not
as an employee, partner or joint venturer of the
Company.
(i)
Throughout the Term,
Consultant shall: (A) make available to the Company all
current and prospective customer lists that would be useful to the
Company in developing the brand and the distribution business in
the Territory; (B) act to preserve the goodwill of all
employees, customers, dealers, suppliers, and other persons having
business relations with the Company and its affiliates;
(C) perform its services in a business-like manner and in a
manner that will not harm the business reputation of the Company;
(D) refer all inquiries received for Heelys Products to the
Company; and (E) comply with good business practices and all
applicable laws in the Territory and regulations (collectively with
all of the Company’s other products that become subject to
this Agreement, the “Products”) in the Territory.
Consultant represents and warrants to the Company that it has, and
during the Term will continue to maintain the capacity necessary to
carry out its obligations under this Agreement. Consultant
acknowledges that it has no authority to negotiate the sale or
purchase of Products on behalf of the Company or any of its
affiliates or to negotiate or conclude such transactions on behalf
of or in the name of the Company or any of its
affiliates.
(ii)
Throughout the Term,
Consultant shall not, without prior written approval of the
Company: (A) encourage the sale of the Heelys Products
outside the Territory; (B) maintain or seek to establish any
branch or channel distribution inside the Territory;
(C) engage in deceptive, misleading or unethical practices
detrimental to the Company or the Products, including, but not
limited to, disparagement of the Company or the Heelys Products;
(D) make representations, warranties or guarantees to
customers or to the trade with respect to the specifications,
features or capabilities of the Products that are inconsistent with
the literature distributed by the Company; (E) market,
promote, sell, lease, solicit or procure orders for or otherwise
represent any product in competition with any of the Products in
the Territory; or (F) engage in conduct or business activities
in violation of the terms set forth herein.
(iii)
During the Term and for a
period of three (3) years thereafter, Consultant shall, upon
reasonable notice, furnish such information and proper assistance
to the Company as may reasonably be required by the Company in
connection with any litigation or administrative proceeding in
which the
2
Company or any of its subsidiaries or
affiliates is, or may become, a party in the Territory or involving
any issues or events connected to the Territory. The Company
shall reimburse the Consultant for all reasonable out-of-pocket
expenses incurred by the Consultant in rendering such assistance
and, after the first anniversary of the Effective Date, to the
extent not otherwise paid under the Termination Agreement, for
assistance that is pre-approved by Company in writing a rate of
€125 per hour for each hour Consultant renders
assistance. The provisions of this
Paragraph 1(c)(iii) shall continue in effect
notwithstanding expiration or termination of this Agreement for any
reason, and Consultant agrees to keep all such information
regarding any such litigation or administrative proceeding as
strictly confidential.
2.
Compensation
. In consideration of
Consultant’s consulting services set forth in Section 1
above, the Company shall pay Consultant ** per month during the Term. Payment
shall be made on or before the last day of each month. The
Company shall also reimburse Consultant for its reasonable and
pre-approved business and travel expenses during the
Term.
3.
Relationship of the Parties;
Independent Contractors; No Employee Benefits
. Notwithstanding any provision
hereof, Consultant is an independent contractor and not an
employee, agent, partner or joint venturer of the Company and shall
neither bind nor attempt to bind the Company to any contract.
Consultant shall accept with reasonable notice any directions
within reason, which are reasonable and lawful, issued by the
Company pertaining to the goals to be attained and the results to
be achieved but shall be solely responsible for the manner and
hours in which Services are performed under this Agreement.
Consultant shall not be eligible to participate in any of the
Company’s employee benefit plans, fringe benefit programs,
group insurance arrangements or similar programs. The Company
shall not provide workers’ compensation, disability
insurance, Social Security or unemployment compensation coverage or
any other statutory benefit to Consultant. Consultant shall
comply at Consultant’s expense with all applicable provisions
of workers’ compensation laws, unemployment compensation
laws, social security, federal, state and local income tax laws,
and all other applicable federal, state and local laws, regulations
and codes relating to terms and conditions of employment required
to be fulfilled by employers or independent
contractors.
4.
Nondisclosure
Agreement . Consultant acknowledges that the
information, observations and data obtained by it while engaged as
Consultant by the Company are the property of the Company and that
during the Term, Consultant will have access to and become familiar
with various trade secrets, consisting of information, records,
specifications, sales procedures, customer requirements, customer,
dealer and supplier lists, methods of doing business, and other
confidential information (all of which are hereinafter referred to
as “Trade Secrets”), which are owned by the Company and
its Affiliates and which are regularly used in the operation of the
business of the Company and its Affiliates.
“Affiliates” shall mean entities and natural persons
controlling, controlled by, or under common control with the
Company. Consultant shall not disclose any of the Trade
Secrets, directly or indirectly, or use them in any way, either
during the Term or at any time thereafter, except as required
in
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