EXHIBIT 10.21
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement"), which includes Exhibit A hereto
which is incorporated herein by this reference, is entered into by and between
DAY RUNNER, INC., a Delaware corporation (the "Company"), and ALAN R. RACHLIN, a
resident of Virginia who is operating a consulting business as a sole
proprietorship ("Consultant"), and shall be effective as of May 22, 1999 (the
"Effective Date").
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the receipt and sufficiency of which are hereby acknowledged, the
Company and Consultant agree as follows:
1. CONSULTANCY. The Company hereby retains Consultant, and Consultant
hereby accepts such retention, upon the terms and subject to the conditions set
forth herein, commencing as of May 22, 1999 and continuing through and including
November 21, 1999 (the "Term"). Consultant shall render such services to the
Company as an independent contractor, and not as an employee, agent, joint
venturer or otherwise. Although Consultant is an attorney, it is understood that
such services shall be rendered as a consultant to, and not as an attorney for,
the Company. By executing this Agreement, the parties hereto acknowledge and
agree that the First Amendment to Consulting Agreement between the Company and
Consultant effective as of April 21, 1999 has terminated effective as of May 21,
1999.
2. DUTIES. Consultant shall make himself available during the Term to
advise the Chairman and such Company employees as he designates with regard to
such strategic business issues and projects as he shall select, including,
without limitation, those relating to new or existing business development,
strategic and tactical planning, corporate finance or business aspects of
potential securities or other legal matters. Time devoted to Consultant's duties
as a member of the Company's Board of Directors and committees thereof shall not
be considered as consulting services under this Agreement. The Company shall be
entitled to require Consultant to make himself available up to 60 days during
the Term (but not more than 10 days in any single month) for the performance of
consulting services hereunder at such times and places as are mutually
satisfactory to the Company and Consultant. Consultant will travel to the
Company's principal offices as necessary to meet with management but will not
otherwise be required to perform any of his duties outside of Virginia.
3. COMPENSATION. In consideration for his agreement herein to render
consulting services to the Company, the Company agrees to compensate Consultant
in cash at the rate of $2,500 per day.
4. EXPENSES. Any and all expenses incurred by Consultant in rendering
consulting services hereunder shall be borne by Consultant, such expenses to
include travel within the Virginia-Washington D.C.-area, secretarial support
(unless provided with the Chairman's permission by an employee of the Company),
office supplies, telephone (unless long distance), overhead, meals, market
research, seminars, textbooks and computer time. The Company shall pay all its
own expenses incurred by it in connection with such consulting and shall
reimburse Consultant for all long distance telephone charges and expenses for
travel (including transportation, hotel, meals and other reasonable charges
resulting from such travel) outside of the Virginia-Washington D.C.-area and for
such other expenses as are authorized by the Chairman as appropriate for
reimbursement.
5. TERMINATION. Consultant's retention hereunder shall continue during
the Term unless earlier terminated by Consultant's death or by lawful
termination of this Agreement after breach hereof by Consultant. Neither party
may terminate this Agreement for breach except after providing written notice to
the other of the alleged breach (specifically describing therein in full detail
the basis for such alleged breach) and allowing 30 days after such notice for
the other party to cure such breach or cease breaching the Agreement.
6. CONFIDENTIALITY. Consultant shall execute on the date hereof and
send to the Company the Confidentiality Agreement attached hereto as Exhibit A
(the "Confidentiality Agreement").
7. MISCELLANEOUS.
7.1 Notices. Except as otherwise noted herein, all notices
pursuant to this Agreement shall be in writing, shall specifically reference
this Agreement and shall be deemed duly sent and given upon actual delivery to
and receipt by the relevant party (which in the case of the Company, shall be
the Chairman).
7.2 Legal Advice and Construction of Agreement. Both parties
hereto have received independent legal advice with respect to, and neither has
relied upon the other (or his or its advisors) in, entering into this Agreement.
7.3 Entire Agreement. This Agreement, the Confidentiality
Agreement and the Warrants constitute a single integrated contract expressing
the entire agreement of the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous oral and written agreements and
discussions with respect to the subject matter hereof.
7.4 Amendment and Waiver. This Agreement and each provision
hereof may be amended, modified, supplemented or waived only by a written
document specifically identifying this Agreement and signed by both parties
hereto.
7.5 Specific Performance. Each party hereto may obtain
specific performance to enforce its/his rights hereunder and each party
acknowledges that failure to fulfill its/his obligations to the other party
hereto would result in irreparable harm.
7.6 Virginia Law. This Agreement was negotiated and delivered
within the Commonwealth of Virginia and the rights and obligations of the
parties hereto shall be construed and enforced in accordance with and governed
by the internal (and not the conflict of laws) laws of Virginia applicable to
the construction and enforcement of contracts between parties resident in
Virginia which are entered into and fully performed in Virginia. Any action or
proceeding arising out of, relating to or concerning this Agreement shall be
filed in the state courts of the County of Fairfax, Commonwealth of Virginia or
in a U.S. District Court in the Eastern District of Virginia. The parties hereby
waive the right to object to such location on the basis of venue.
7.7 Attorney's Fees. In the event a lawsuit is instituted by
either party concerning a dispute under this Agreement, the prevailing party in
such lawsuit shall be entitled to recover from the losing party all reasonable
attorneys' fees, costs of suit and expenses (including the reasonable fees,
costs and expenses of appeals), in addition to whatever damages or other relief
the injured party is otherwise entitled to under law or equity.
7.8 Force Majeure. Neither party hereto shall be deemed in
default if its/his performance of obligations hereunder is delayed or becomes
impossible or impracticable by reason of any act of God, war, fire, earthquake,
strike, civil commotion, epidemic, or any other cause beyond such party's
reasonable control.
7.9 Successors and Assigns. Neither party may assign this
Agreement or any of its/his rights or obligations hereunder to any third party
or entity, and this Agreement may not be involuntarily assigned by operation of
law, without the prior written consent of the nonassigning party, which consent
may be given or withheld by such nonassigning party in the sole exercise of
its/his discretion, except that the Company may assign this Agreement to a
corporation acquiring: (1) 50% or more of the Company's capital stock in a
merger or acquisition; or (2) all or substantially all of the assets of the
Company in a single transaction; and except that Consultant may transfer or
assign his rights under this Agreement voluntarily, involuntarily or by
operation of law upon or as a result of his death to his heirs, estate and/or
personal representative(s). Any prohibited assignment or attempted assignment
shall be null and void. This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and their respective lawful successors and
permitted assigns.
7.10 Limitation of Damages. Except as expressly set forth
herein, in any action or proceeding arising out of, relating to or concerning
this Agreement, including any claim of breach of contract, liability shall be
limited to compensatory damages, proximately caused by the breach and neither
party shall, under any circumstances, be liable to the other party for
consequential, incidental, indirect or special damages, including but not
limited to lost profits or income, even if such party has been apprised of the
likelihood of such damages occurring.
7.11 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and which together shall
constitute one and the same instrument.
DAY RUNNER, INC. ALAN R. RACHLIN
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By:___________________________ /s/ ALAN R. RACHLIN
Mark Vidovich
Chairman
EXHIBIT A
CONFIDENTIALITY AGREEMENT
AGREEMENT, dated and made effective as of this 21st day of May, 1999, by and
between Day Runner, Inc., a Delaware corporation ("Discloser"), and Alan R.
Rachlin, a Virginia resident ("Disclosee");
WHEREAS, Discloser intends to provide Disclosee with certain data and other
information possibly of a confidential or proprietary nature to Discloser; and
WHEREAS, Discloser considers certain of this information confidential but is
willing to provide such information to Disclosee on a confidential basis;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. For purposes of this Agreement, the term "Confidential Information"
shall mean that information of Discloser which is disclosed to Disclosee under
the Consulting Agreement, effective as of the date hereof by and between the
Discloser and Disclosee and which is in written graphic, recorded, photographic
or any machine readable form, and which is conspicuously marked as confidential.
2. (a) Disclosee will use such Confidential Information for his own use
only and shall use the same degree of care he uses to protect and safeguard the
confidentiality of his own proprietary information to not disclose such
Confidential Information to any person or persons other than his attorneys or
accountants. Disclosee covenants that such degree of care is reasonably designed
to protect the confidentiality of Disclosee's proprietary and confidential
information.
(b) Disclosee shall not be liable for disclosure of any such Confidential
Information if the same:
(i) was in the public domain at the time it was disclosed;
(ii) was known to Disclosee prior to the time of disclosure;
(iii) is disclosed with the prior written approval of Discloser;
(iv) is or becomes publicly known through no wrongful act of Disclosee;
(v) is disclosed after two years from the date of this Agreement;
(vi) was or is independently developed by Disclosee without any use of the
Confidential Information;
(vii) becomes known to Disclosee from a source other than Discloser without
breach of this Agreement by Disclosee;
(viii) is or has been furnished by Discloser to others not in a
Confidential relationship with Discloser without restrictions similar to or
stricter than those herein on the right of the Receiving party to use or
disclose;
(ix) is received by Disclosee after written notification to Discloser that
Disclosee will not accept any further information;
(x) is disclosed pursuant to the order or requirement of a court,
administrative agency, or other governmental body; or
(xi) is disclosed pursuant to litigation involving Disclosee and relating
to the information disclosed hereunder.
(c) In the event of a disclosure under subsection (b)(x) above, Disclosee
shall give Disclosure written notice of such order or requirement as soon as
practicable prior to disclosure of the Confidential Information.
3. The provisions of this Agreement shall supersede the provisions of
any legends which may be affixed to any Confidential Information provided by
Discloser to Disclosee.
4. This document contains the entire agreement between the parties as
to the subject matter hereof and supersedes any previous or contemporaneous
understandings, commitments or agreements, oral or written, as to such subject
matter. This Agreement can only be amended by a written document executed by the
parties hereto.
5. This Agreement shall be governed by the laws of the Commonwealth of
Virginia.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first
above-written.
Understood and Agreed:
"Discloser" "Disclosee"
DAY RUNNER, INC. ALAN R. RACHLIN
By:/s/ Mark Vidovich Signature: /s/ Alan R. Rachlin
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Mark Vidovich
Chairman