EXHIBIT 99.3
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made as of October 1, 2004 by
and between JAKKS Pacific, Inc., a Delaware corporation ("JAKKS" or the
"Company") and Michael Bianco ("Consultant" or "Bianco"). JAKKS and Bianco may
also be referred to as a "Party" or the "Parties".
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Consultant has been employed as an Executive Vice President
of the Company, which employment has terminated, and the Company wishes to avail
itself of the skill and knowledge of the Consultant regarding the Company and
its products by engaging the Consultant as a product development and marketing
consultant and the Consultant is willing to provide such services, each on the
terms and conditions set forth in this Agreement.
WHEREAS, as a material inducement to the Company to enter into this
Consulting Agreement, the Consultant has agreed to abide by the terms and
conditions of the restrictive covenants hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the Company and Consultant agree as follows:
1. DESCRIPTION OF SERVICES. Commencing with the Effective Date (as
hereafter defined), the Company hereby engages Consultant during the Term (as
hereafter defined) to serve as a product development and marketing consultant to
the Company, in particular with respect to the Company's product and marketing
activities conducted at the annual toy fairs held in New York, New York. Such
consultation shall be on an exclusive basis during the First Restrictive Period
(as such term is defined below), and on a non-exclusive basis thereafter,
subject only to the limitations set forth in Section 5 of this Agreement below.
Consultant agrees to provide reasonable consultation services to the Company as
may be reasonably requested by the Company and its senior management at times
and locations mutually convenient to the Company and Consultant regarding the
development of new products, enhancement and improvement of existing products,
and marketing of the Company's products, including consultation with the
Company's sales personnel, and, in particular, to consult with the Company
regarding its participation in and the conduct of the toy fairs held in New
York, New York. In performing his services Consultant will not be required to
devote a particular amount of time to such performance, but Consultant agrees to
meet with the Company, including at its offices in New York, New York from time
to time preceding and during the New York toy fairs, on a mutually convenient
schedule during normal business hours, among other things, to review the
Company's product concepts and presentations at such Toy Fair events. During the
First Restrictive Period, Consultant will not consult with any other Person
involved in the Business of the Company (as such term is defined below)
regarding the development and marketing of writing instruments, "paper and
stationery" (as such term is defined below) businesses, and the children's,
"tween" and teen toy, arts and crafts, activity, and scrapbook products. Any
travel
and other reasonable and necessary expenses incurred by the Consultant in
performing such consulting services shall be paid by the Company, subject to
prior approval by the Company.
2. TERM. The term of this Agreement shall commence on the Effective Date
and continue for a term ending on September 30, 2007, subject to earlier
termination upon the terms and conditions provided elsewhere herein (the
"Term"). As used herein, "Termination Date" means the last day of the Term.
3. COMPENSATION.
(a) In consideration for Consultant's entry into this agreement
and performance of the services and the restrictive covenants contained in this
Agreement, the Company shall pay Consultant a consulting fee as follows: (i)
$400,000.00 on the execution and delivery of this Agreement, as an advance
payment for the balance of calendar year 2004; and (ii) $80,000.00 per quarter
during each calendar year in the balance of the Term, beginning January 1, 2005,
which quarterly installments shall be paid on the first day of January, April,
July and October, subject to any required tax withholding.
(b) For the first four (4) weeks of the Term, Consultant shall
have available to utilize, upon request during normal working hours, the
services of his current administrative assistant, Melissa Terrick.
(c) In further consideration for Consultant's entry into this
agreement and performance of the services and restrictive covenants contained in
this Agreement, the Company has agreed that the Consultant shall have the right
to retain the award of ninety-six thousand (96,000) shares of restricted common
stock, par value $.001 per share (the "Restricted Stock") granted to Consultant
in January, 2004 pursuant to the Company's 2002 Stock Award and Incentive Plan
(the "Plan"), except that the vesting of such shares of Restricted Stock is
hereby modified in accordance with the following vesting Schedule (each date on
which shares vest is referred to as "Vesting Date"):
(A) Forty-eight thousand (48,000) of the shares of
Restricted Stock shall vest on January 1, 2005;
(B) twenty-four thousand (24,000) of the shares of
Restricted Stock shall vest on January 1, 2006;
(C) twenty-four thousand (24,000) of the shares of
Restricted Stock shall vest on January 1, 2007.
(d) All other terms of the Restricted Stock Agreement between
Consultant and the Company with respect to the Restricted Stock shall remain in
effect.
4. HEALTH INSURANCE. Throughout the Term the Company shall provide
Consultant and his wife and children with coverage under the Company's group
health plan at no cost to Consultant, substantially similar in all material
respects to the coverage provided as of the date hereof to Consultant and the
Chairman, President and Chief Financial Officer of the Company
-2-
(including the Blue Cross PPO option, Execucare Gold and Execucare Medics, and
Amerident), and any changes to the coverage provided to Consultant will be
consistent with changes made to the coverage for said executives as a group.
5. RESTRICTIVE COVENANTS.
(a) The Consultant acknowledges that a material and substantial
part of the consideration described in Section 3 of this Agreement is being
given for his undertaking the restrictive covenants contained in this Agreement,
and that but for the Consultant's agreement to undertake and perform such
restrictive covenants the Company would not have retained him as a consultant
and would not have agreed to the payments and Restricted Stock described in
Section 3 of this Agreement. Furthermore, the Consultant acknowledges that his
previous position as an officer and employee of the Company placed him, and his
position with the Company as a Consultant may also place him in a position of
confidence and trust with the Company. The Consultant therefore agrees that it
is reasonable and necessary for the protection of the goodwill and business of
the Company that the Consultant make the covenants contained herein. The
Consultant also acknowledges that the Company's business is conducted and its
customers and prospective customers are located throughout the United States and
the world and that, therefore, it is impossible to place a geographic limitation
upon the scope of the restrictive covenants contained in this Section 5.
(b) Non-Competition.
(i) The Consultant agrees that during the First
Restrictive Period (as such term is defined below), he will not, directly or
indirectly, by himself, or through or on behalf of any other person, firm,
company, entity or enterprise: (i) in the capacity of an investor, member,
manager, officer, director, consultant, advisor, stockholder, or employee,
commence, join or assist in the operation of a business that is engaged in
operations or the development of products or a business that is competitive with
the Business of the Company; provided, that, Consultant may invest his funds in
securities of a Person engaged in a business that is directly competitive with
the Business of the Company if the securities of such Person are listed for
trading on a registered securities exchange or actively traded in an
over-the-counter market and Consultant's holdings therein represent less than 1%
of the total number of shares or principal amount of the securities of such
Person outstanding, or (ii) directly or indirectly endeavor or assist any other
Person to entice away from the employ of or relationship with the Company or its
Affiliates or assist any other Person to interfere with the relationship of the
Company or its Affiliates with any employee or consultant then working for the
Company or its Affiliates, or (iii) directly or indirectly endeavor or assist
any other Person to entice away from a relationship with the Company or its
Affiliates any customer, vendor, supplier, licensor, strategic marketing
partner, joint venturer or other party engaged in a business relationship with
the Company or its Affiliates during the First Restrictive Period or for the
twelve (12) month period preceding the date of this Agreement.
(ii) The Consultant agrees that during the First
Restrictive Period and the Second Restrictive Period (as such term is defined
below), he will not, directly or indirectly, by himself, or through or on behalf
of any other person, firm, company, entity or enterprise: (i) in the capacity of
an investor, member, manager, officer, director, stockholder, or employee, seek
to
-3-
enter into a business relationship with either the MTV Networks and
Nickelodeon division of Viacom International, Inc. or with Sanrio, Inc.,
including, but not limited to, as a licensee, manufacturer, sales representative
or distributor.
(c) Definitions.
(i) As used in this Agreement, the term "Business of the
Company" refers to the writing instruments, "paper and stationery" (as such term
is defined below) businesses, and the children's, "tween" and teen toy, arts and
crafts, activity, and scrapbook businesses being conducted by the Company or its
Affiliates during the First Restricted Period and during the period prior to
this date during which Consultant was employed by the Company, except that any
new products or services developed, marketed, sold or distributed by the Company
during the First Restricted Period shall only be included in the term "Business
of the Company" if Consultant receives actual notice of such new products or
services.
(ii) As used in this Agreement, the term "First
Restrictive Period" means the period commencing on the Effective Date and ending
on September 30, 2005.
(iii) As used in this Agreement, the term "Second
Restrictive Period" means the period commencing on October 1, 2005 and ending on
September 30, 2007.
(iv) As used in this Agreement, the term "paper and
stationery" means paper and stationery goods of the type developed, marketed,
sold, and distributed by the Company as of the date hereof, described in
Schedule A annexed hereto, and similar types of paper and stationery goods
developed, marketed, sold, and distributed by the Company during the period
prior to this date during which Consultant was employed by the Company, and any
additional types of paper and stationery goods developed, marketed, produced and
sold by the Company of which Consultant is informed during the First Restrictive
Period.
(v) As used in this Agreement, the term "Person"
includes without limitation a natural person, corporation, joint stock company,
limited liability company, partnership, joint venture, association, trust,
governmental authority, or any group of the foregoing acting in concert.
(vi) As used in this Agreement, the term "Affiliate" of
a Person means another Person directly or indirectly controlling, controlled by,
or under common control with, such Person; for this purpose, "control" of a
Person means the power (whether or not exercised) to direct the policies,
operations or activities of such Person by virtue of the ownership of, or right
to vote or direct the manner of voting of, securities of such Person, or
pursuant to agreement or law or otherwise.
(d) As used in this Agreement, the term "Restricted Inventions"
means any patent, claim of copyright, trademark, trade name, brand name, service
mark, logo, symbol, trade dress or design, or representation or expression of
any thereof, or registration or application for registration thereof, or any
other improvement, development or discovery, invention, trade secret, process,
system, technical information, know-how, proprietary right or intellectual
property conceived, developed, created or made by Consultant, alone or with
others, during the
-4-
First Restrictive Period, and applicable to the Business of the Company, and
whether or not patentable or registerable.
(e) Confidential Information.
(i) Consultant shall hold in a fiduciary capacity for
the benefit of the Company all confidential or proprietary information relating
to or concerned with the Company and its Affiliates or their products,
prospective products, operations, business and affairs ("Confidential
Information") acquired or learned by him during the period in which he was
previously employed by the Company or during the Term of this Agreement, and he
shall not, at any time hereafter, use any Confidential Information or disclose
any Confidential Information to any Person other than to the Company or its
designees or except as may otherwise be required in connection with the business
and affairs of the Company, and in furtherance of the foregoing Consultant
agrees that:
(A) Consultant will receive, maintain and hold
Confidential Information in strict confidence,
(B) Consultant will take all such steps as may
be reasonably necessary to prevent the
disclosure of Confidential Information; and
(C) Consultant will not utilize Confidential
Information without first having obtained the
Company's consent to such utilization, except as
may otherwise be required in connection with the
business and affairs of the Company.
(ii) The commitments set forth in Section 5(e)(i) shall
not extend to any portion of Confidential Information:
(A) that is generally available to the public;
(B) that was known to the Consultant prior to
disclosure to him (other than information
regarding the Company or its Affiliates which
would otherwise be Confidential Information that
was disclosed to Consultant during the period of
his employment by the Company or its
predecessors or their respective Affiliates);
(C) that was not acquired, directly or
indirectly and/or in any manner, from the
Company or any of its Affiliates and which
Consultant lawfully had in his possession prior
to the date of this Agreement and prior to the
date Consultant commenced his employment with
the Company;
(D) that, hereafter, through no act or omission
on the part of Consultant, becomes information
generally available to the public.
-5-
(iii) At any time upon written request by the Company
(i) the Confidential Information, including any copies, shall be returned to the
Company, and (ii) all documents, drawings, specifications, computer software,
and any other material whatsoever in the possession of Consultant that relates
to such Confidential Information, including all copies and/or any other form of
reproduction and/or description thereof made by Consultant shall, at the
Company's option, be returned to the Company or destroyed.
(iv) In the event that Consultant becomes legally
compelled (by deposition, interrogatory, request of documents, subpoena, civil
investigative demand or similar process) to disclose any of the Confidential
Information, Consultant shall provide the Company with prompt prior written
notice of such requirement so that it may seek a protective order or other
appropriate remedy and/or waive compliance with the terms of this Agreement. In
the event that such protective order or other remedy is not obtained, or the
Company waives compliance with the provisions hereof, Consultant agrees to
furnish only such portion of the Confidential Information that is legally
required to be furnished.
(f) Non-disclosure of Restricted Inventions. During the First
Restrictive Period Consultant shall not (i) disclose any Restricted Inventions
to any Person, (ii) use any Restricted Invention for, or arrange, alone or with
others, for the development, production, marketing, sale or distribution of any
product or service using or incorporating any Restricted Invention.
(g) Consultant acknowledges that a breach of the provisions of
Section 5 would irreparably damage the Company and its Affiliates and that once
such a breach has occurred, there may be no accurate way of determining the
amount of damage or loss suffered by the Company or its Affiliates. The
Consultant therefore agrees that the provisions of Section 5 of this Agreement
may be enforced through preliminary or final injunctive relief or other
equitable remedy, in addition to any other remedies available to the Company at
law or in equity, and Consultant consents to the issuance thereof without the
requirement for posting of a bond or other security, and further agrees that
such relief may be sought from a court of competent jurisdiction or from the
arbitration panel referred to below in this Agreement.
(h) The Consultant acknowledges that the type and periods of
restriction imposed in Section 5 are fair and reasonable and are reasonably
required for the protection of Company and its Affiliates and the goodwill,
business and assets of the Company and its Affiliates. If any of the provisions
of Section 5 relating to time, geographical area, services, products, devices
and/or information are deemed by a court of competent jurisdiction to be overly
broad or for any other reason unenforceable, the parties agree that such
restrictions herein as to time, geographical area, services, products, devices
and/or information shall be reduced to such time, geographical area, services,
products, devices and/or information as such court shall hold to be reasonable
and legally enforceable. In addition, if any court determines that any of the
restrictive covenants contained in Section 5, or any part thereof, is invalid or
unenforceable, the remainder of the restrictive covenants shall not thereby be
affected and shall be given full effect without regard to the invalid portions.
-6-
6. INTELLECTUAL PROPERTY.
(a) Any patent, claim of copyright, trademark, trade name, brand name,
service mark, logo, symbol, trade dress or design, or representation or
expression of any thereof, or registration or application for registration
thereof, or any other improvement, development or discovery, invention, trade
secret, process, system, technical information, know-how, proprietary right or
intellectual property developed, conceived of, invented or otherwise produced by
Consultant, alone or with others, during the Term, in connection with the
design, manufacture and marketing of the products of the Company and its
Affiliates, and whether or not patentable or registerable (collectively referred
to as "Trade Rights") shall become the sole and exclusive property of the
Company.
(b) Consultant shall disclose all Trade Rights promptly and completely
to the Company and shall, during the Term or thereafter, (i) execute all
documents requested by the Company for vesting in the Company the entire right,
title and interest in and to the same, (ii) execute all documents requested by
the Company for filing and procuring such applications for patents, trademarks,
service marks or copyrights as the Company, in its sole discretion, may desire
to prosecute, and (iii) give the Company all assistance it may reasonably
require, including the giving of testimony in any Proceeding (as hereinafter
defined), in other to obtain, maintain and protect the Company's right therein
and thereto; provided that the Company shall bear the entire cost and expense of
such assistance, including without limitation paying the Consultant reasonable
compensation for any time or effort expended by him in connection with such
assistance after the Termination Date. In furtherance of the foregoing,
Consultant acknowledges and agrees that for all purposes of U.S. and foreign
Copyright Laws, the Trade Rights and any inventions, discoveries, enhancements
or improvements to any tangible or intangible property, resulting from the
services performed by Consultant for the Company or its Affiliates (for the
purposes of this Section all of the foregoing is collectively referred to as the
"Work"), and any and all elements thereof, shall be deemed to constitute "works
for hire" belonging to the Company within the meaning of Title 17, United States
Code, Section 101, and any comparable provisions of the law of any other
jurisdiction, such that all right, title and interest therein, including,
without limitation, copyrights and exclusive rights under copyright, vest in the
Company. Consultant hereby transfers and conveys to the Company the exclusive,
world-wide, royalty-free, paid-up right to exploit, use, develop, license, and
sell products and services relating to or derived from the Work; and the
exclusive right, title and interest in and to all inventions, improvements,
patent applications and letters patent, "know-how", and all intellectual
property and other rights, tangible or intangible, which relate to or are based
upon or derived from the Work; and to all information, documents, and
specifications that relate to the Work. If the Work or any of the elements
thereof is deemed not to be "works for hire" within the meaning of Title 17,
United States Code, Section 101, then Consultant hereby assigns and transfers to
the Company all right, title and interest in and to the Work, including rights
throughout the world for good and valuable consideration, receipt of which
Consultant hereby acknowledges. For the sole and exclusive purpose of perfecting
and documenting such limited assignment and transfer, Consultant hereby grants
to the Company an irrevocable power of attorney.
7. COOPERATION. Consultant will provide reasonable cooperation to the
Company and its Affiliates at their sole expense in connection with the defense
or prosecution of any action or
-7-
dispute with respect to which Consultant has any information, knowledge or
involvement, including, for example, the litigation with Kotobuki.
8. NON-DISPARAGEMENT. Each of the Company and Consultant covenants and
agrees that it shall not at any time engage in any conduct that involves the
making or publishing of written or oral statements or remarks (including,
without limitation, the repetition or distribution of rumors, allegations,
reports, or comments) which are disparaging, deleterious or damaging to the
integrity, reputation or good will of the other, or, in the case of the Company,
of its management or the management of its Affiliates.
9. VESTING OF SHARES AND ACCELERATION OF PAYMENTS UPON DEATH. In the
event of Consultant's death during the Term, and provided that he has not
breached his obligations under this Agreement, all of the Restricted Shares
shall immediately vest and any remaining payments under Section 3 through the
end of the Term shall be paid within thirty (30) days to Consultant's spouse, or
in the event his spouse does not survive him, his designated beneficiary.
10. INDEMNIFICATION. The Company shall indemnify Consultant to the
fullest extent permitted under law from and against any expenses (including but
not limited to attorneys' fees, expenses of investigation and preparation, and
fees and disbursements of Consultant's attorneys, accountants or experts),
judgments, fines, penalties and amounts paid in settlement actually and
reasonably incurred by Consultant in connection with any proceeding brought by a
third party in which Consultant was or is made party or was or is involved (for
example, as a witness) by reason of the fact that Consultant was employed by, or
was or is a consultant to, the Company (the foregoing are referred to as the
"Indemnified Expenses"); provided, however, that Indemnified Expenses shall not
include expenses, judgments, fines, penalties and settlement amounts incurred by
Consultant that arise out of any violation of law by Consultant or breach by
Consultant of his material obligations under the employment agreement between
Consultant and the Company in effect immediately prior to the date hereof or
under this Consulting Agreement, if it is finally determined by a court of
competent jurisdiction that the Indemnified Expense at issue arose out of such
violation of law or breach. Such indemnification shall continue during the Term
hereof and for ten (10) years thereafter with respect to acts or omissions that
occurred prior to the Termination Date and shall inure to the benefit of
Consultant's heirs, executors and administrators.
Promptly after notice of the commencement of any proceeding by a third party
involving a claim ("Claim") for which Consultant claims to be entitled to
indemnification under this Section (a "Proceeding"), Consultant shall give
written notice to the Company of the commencement of such Claim or Proceeding,
setting forth in reasonable detail the nature thereof and the basis upon which
Consultant seeks indemnification hereunder. Such notice shall include an
undertaking by Consultant to repay the amounts paid by the Company for the
defense of any such Claim if it shall ultimately be determined that Consultant
is not entitled to be indemnified against such Claim. In case a Proceeding is
brought against or involving Consultant, and provided that proper notice is duly
given, the Company shall assume and control the defense thereof with counsel
selected by the Company, and, after notice from the Company to Consultant of its
assumption of the defense thereof, the Company shall not be liable to Consultant
for any legal or other expenses subsequently incurred by Consultant in
connection with the defense thereof (but the Consultant shall have the right,
but not the obligation, to participate at his own cost and expense in such
-8-
defense by counsel of his own choice), except that, if both the Company and the
Consultant are named as parties or subject to such Proceeding and either such
party determines with advice of counsel that a material conflict of interest
between such parties may exist in respect of such Proceeding, the Company may
decline to assume the defense on behalf of the Consultant or the Consultant may
retain the defense on his own behalf, and, in either such case, after notice to
such effect is duly given hereunder to the other party, the Company shall be
relieved of its obligation to assume the defense on behalf of the Consultant,
but shall be required to pay the out-of-pocket legal costs and expenses (such as
reasonable attorneys' fees and disbursements) of such defense; provided,
however, that the Company shall not be liable for such expenses on account of
more than one separate firm of attorneys (and, if necessary, local counsel) at
any time representing the Consultant in connection with any Proceeding or
separate Proceedings in the same jurisdiction arising out of or based upon
substantially the same allegations or circumstances. If the Company is obligated
to but does not undertake the defense of any Claim, the Consultant, at the
expense of the Company, may undertake the defense of that Claim with counsel of
its choosing and the Company in that event shall reasonably cooperate with the
Consultant and its counsel in the investigation and defense of that Claim, but
the Consultant will control such investigation and defense at the expense of the
Company. If the Company shall assume the defense of any such Proceeding, the
Consultant shall cooperate fully with the Company and shall appear and give
testimony, produce documents and other tangible evidence, allow the Company
access to the books and records of the Consultant, and otherwise assist the
Company in conducting such defense. If the Company is obligated under this
Section to advance to Consultant the costs and expenses incurred by him in
connection with any Proceeding it shall do so within thirty (30) days after
receipt by the Company of a written request for such advance. Such request shall
include an undertaking by Consultant to repay the amount of such advance if it
shall ultimately be determined that he is not entitled to be indemnified against
such costs and expenses. The provisions of this Section 10 shall survive
termination of this Agreement.
11. LIMITATION OF AUTHORITY. Except as expressly provided herein, no
provision hereof shall be deemed to authorize or empower either party hereto to
act on behalf of, obligate or bind the other party hereto.
12. NOTICES. All notices which are required by or may be given pursuant
to the terms of this Agreement must be in writing and must be delivered
personally, sent by certified mail, return receipt requested, postage prepaid,
facsimile (with written confirmation of transmission) provided, that, notice is
also sent via first class, postage prepaid, mail, or sent for next-day delivery
by a nationally recognized overnight delivery service as follows:
to the Company: 22619 Pacific Coast Highway
Malibu, California 90265
Attn: President
Fax: (310) 456-7099
with a copy to: Feder, Kaszovitz, Isaacson,
Weber, Skala, Bass & Rhine LLP
750 Lexington Avenue
New York, New York 10022
Attn: Murray L. Skala, Esq.
Fax: (212) 888-7776
-9-
to Consultant: 1625 Crown Ridge Court
Westlake Village, CA 91362
Fax: (805) 370-3785
with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Ave., 34th Floor
Los Angeles, CA 90071
Attn: Karen L. Corman, Esq.
Fax: (213) 687-5600
Any of the addresses set forth above may be changed from time to time by written
notice from the party requesting the change.
Such notices and other communications will be treated for all purposes
of this Agreement as being effective immediately if delivered personally or by
facsimile (with written confirmation of transmission), or five days after
mailing by certified mail, return receipt requested, first class postage
prepaid, or one day after deposit for next business day delivery by a nationally
recognized overnight delivery service.
12. AMENDMENT. Except as otherwise provided herein, no amendment of this
Agreement shall be valid or effective, unless in writing and signed by or on
behalf of the parties hereto.
13. WAIVER. No course of dealing or omission or delay on the part of
either party hereto in asserting or exercising any right hereunder shall
constitute or operate as a waiver of any such right. No waiver of any provision
hereof shall be effective, unless in writing and signed by or on behalf of the
Party to be charged therewith. No waiver shall be deemed a continuing waiver or
waiver in respect of any other or subsequent breach or default, unless expressly
so stated in writing.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND INTERPRETED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CHOICE OF LAW OR CONFLICT OF LAWS AND EACH OF THE
PARTIES BELIEVES SUCH CHOICE OF LAW TO BE REASONABLE UNDER ALL OF THE
CIRCUMSTANCES.
15. ARBITRATION; VENUE. ANY DISPUTE OR ISSUE ARISING UNDER THIS
AGREEMENT SHALL BE RESOLVED BY ARBITRATION BEFORE A PANEL OF THREE (3)
ARBITRATORS IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION, AT A HEARING OR HEARINGS CONDUCTED IN NEW YORK, NEW
YORK. THE DECISION OF THE ARBITRATORS SHALL BE IN WRITING, AND SHALL BE FINAL
AND BINDING ON EACH OF THE PARTIES AND BE ENFORCEABLE BY ENTRY AS A JUDGMENT IN
ANY COURT OF COMPETENT JURISDICTION. THE PARTIES AGREE THAT A PARTY MAY SEEK
INJUNCTIVE RELIEF TO WHICH IT MAY BE ENTITLED UNDER THE PROVISIONS OF THIS
AGREEMENT FROM THE ARBITRATORS OR FROM A COURT LOCATED IN NEW YORK, NEW YORK,
AND EACH PARTY TO THIS AGREEMENT SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK,
-10-
LOCATED IN NEW YORK COUNTY, NEW YORK, AND TO THE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, NEW YORK, NEW YORK,
UNITED STATES OF AMERICA FOR SUCH PURPOSE AND FOR ALL OTHER PURPOSES FOR WHICH A
COURT WOULD HAVE JURISDICTION UNDER THIS AGREEMENT, AND EACH PARTY WAIVES ANY
OBJECTION TO VENUE IN THE COUNTIES OF NEW YORK, STATE OF NEW YORK, OR SUCH
DISTRICT.
16. SEVERABILITY. The provisions hereof are severable and in the event
that any provision of this Agreement shall be determined to be invalid or
unenforceable in any respect by a court of competent jurisdiction, the remaining
provisions hereof shall not be affected, but shall, subject to the discretion of
such court, remain in full force and effect, and any invalid or unenforceable
provision shall be deemed, without further action on the part of the parties
hereto, amended and limited to the extent necessary to render the same valid and
enforceable.
17. FURTHER ASSURANCES. Each Party hereto shall promptly execute,
deliver, file or record such agreements, instruments, certificates and other
documents and perform such other and further acts as any other Party hereto may
reasonably request or as may otherwise be reasonably necessary or proper, to
carry out the provisions of this Agreement.
18. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, heirs and
permitted assigns. This Agreement is not intended, and shall not be deemed, to
create or confer any right or interest for the benefit of any Person not a Party
hereto.
19. TITLES AND CAPTIONS. The titles and captions of the Articles and
Sections of this Agreement are for convenience of reference only and do not in
any way define or interpret the intent of the parties or modify or otherwise
affect any of the provisions hereof.
20. REMEDIES. All remedies hereunder are cumulative and not exclusive,
and nothing herein shall be deemed to prohibit or limit either party from
pursuing any other remedy or relief available at law or in equity for such
actual or prospective breach or default, including the recovery of damages.
21. ASSIGNMENT. This Agreement, and each right, interest and obligation
hereunder, may not be assigned by either party hereto without the prior written
consent of the other party hereto, and any purported assignment without such
consent shall be void and without effect, except that this Agreement shall be
assigned to, and assumed by, any Person with or into which the Company merges or
consolidates, or which acquires all or substantially all of its assets, or which
otherwise succeeds to and continues the Company's business substantially as an
entirety. Except as otherwise expressly provided herein or required by law,
Consultant shall not have any power of anticipation, assignment or alienation of
any payments required to be made to him hereunder, and no other Person may
acquire any right or interest in any thereof by reason of any purported sale,
assignment or other disposition thereof, whether voluntary or involuntary, any
claim in a bankruptcy or other insolvency Proceeding against Consultant, or any
other ruling, judgment, order, writ or decree.
22. GRAMMATICAL CONVENTIONS. Whenever the context so requires, each
pronoun or verb used herein shall be construed in the singular or the plural
sense and each capitalized term
-11-
defined herein and each pronoun used herein shall be construed in the masculine,
feminine or neuter sense.
23. REFERENCES. The terms "herein," "hereto," "hereof," "hereby," and
"hereunder," and other terms of similar import, refer to this Agreement as a
whole, and not to any Section or other part hereof.
24. SEPARATE COUNSEL. Each Party hereto acknowledges that it has had an
opportunity to consult with counsel and that such counsel has participated in
the preparation of this Agreement.
25. NO PRESUMPTIONS. No Party hereto is entitled to any presumption
with respect to the interpretation of any provision hereof or the resolution of
any alleged ambiguity herein based on any claim that the other Party hereto
drafted or controlled the drafting of this Agreement, the Parties acknowledging
that each Party and its counsel has participated in the preparation of this
Agreement.
26. 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 agreement.
27. EFFECTIVENESS. The Parties have concurrently with the entry into
this Agreement entered into a Termination Agreement and General Release
terminating the Amended and Restated Employment Agreement dated March 26, 2003
between JAKKS and Bianco (the "Termination Agreement"), which is subject to a
twenty-one (21) day period of acceptance by Bianco and following such acceptance
a seven (7) day period of revocation by Bianco. The Parties agree that the
effectiveness of this Agreement is conditioned on the validity and effectiveness
of the Termination Agreement. Accordingly, this Agreement shall take effect and
the Effective Date under this Agreement shall occur only if the Termination
Agreement is accepted by Bianco during such twenty-one (21) day period in the
manner provided for in the Termination Agreement, and is not thereafter revoked
by Bianco in the manner provided for in the Termination Agreement, in which
event the Effective Date under this Consulting Agreement shall be the same as
the Effective Date under the Termination Agreement.
(SIGNATURE PAGE FOLLOWS)
-12-
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the day and year first above written.
JAKKS PACIFIC, INC.
By: /s/ Jack Friedman
-----------------------------------------
CONSULTANT:
/s/ Michael Bianco
- -----------------------------------
Michael Bianco
-13-
SCHEDULE A
PAPER AND STATIONERY
PAPER ITEMS
Diary: with or without lock and key, writing instruments and stickers.
Posters, Puzzles & Projects set: color your own jigsaw puzzles, coloring
postcards, coloring stickers. activity/game booklet. door hanger. stickers.
stencils. sticker mixup puzzles. crayons, markers, texture rubbing plates,
poster activities, color-by-number cords. Pen Pal Sets: stationery. envelopes,
envelope seal stickers, picture frame, stick pen, notecards to color & decorate.
rubber stomps. mini address book, mini photo album.
Memory Book: fabric covered/liquid filled book with stickers. stamps. stencils,
scissors, glue stick, gel pens, markers, colored pencils.
Stamp & Sticker Set: sticker sheets (plain, foil stomped, scented. puffy.
prismatic, glitter), sticker booklets, coloring stickers. stamp & sticker album.
molded rubber stamps, wooden rubber stamps. mini self-inking stamps. rolling
stamps. stamper rings, ink pad. Make your own stamp & sticker storybook
Vinyl Cling Storyboard - playset with clings and background storyboards.
Magnetic Tin - playset with printed tin and character magnets. Calendar Playset
- - make your own with stickers, magnets, coloring seasonal picture inserts
Greeting Car Set - decorate your own cards
STATIONERY ITEMS
Stencils
Dry Erase Boards
Lunch Boxes
Themebooks
Composition Books
3-Ring Binders
Binder Inserts
Portfolios
Diaries
Journals
Fat Book
Notepads
Shopping Pads
-i-
Sticky Notes
Book Covers
Stationery Sets
Pencil Pouches
Pencil Cases
Stampers
Velvet Items/Flock Items
Posters
Die-Cut
Flat Cut
3D Pop-up
Keeper Boxes
Shadow Boxes
Photo Albums
Puzzles
Stickers
Color 'N Reveal
Doorhanger
Accessories
Figurines
Puppets
Velvet Books
Notebooks
Chipboard Books
Mobiles
Frames
Purses
Sun Catchers
CD Holder
Coin Holder
Roll Desk
Color by Number
-ii-