EXHIBIT A
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is effective as of April 29,
2000 (the "Effective Date"), by and between Designs, Inc., a Delaware
corporation (the "Corporation"), with its principal executive offices located
at ▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and Jewelcor Management, Inc.,
a Nevada corporation (the "Independent Contractor"), having its principal
executive offices located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS
WHEREAS, the stated term of the Consulting Agreement dated October 28, 1999
between the Corporation and the Independent Contractor (the "Original
Consulting Agreement") ended on April 28, 2000; and
WHEREAS, the Independent Contractor has, at the request of the
Corporation, continued up to and including the present time to provide
consulting services to the Corporation beyond the stated term of the Original
Consulting Agreement; and
WHEREAS, the Corporation desires to confirm the retention of the
Independent Contractor, effective as of April 29, 2000, to continue as a
consultant to the Corporation to assist the Corporation in developing and
implementing a strategic plan for the Corporation and for other related
consulting services to which the parties may agree, as described in
Schedule A attached hereto and incorporated herein by reference (the
"Services"); and
WHEREAS, the Independent Contractor agrees to perform the Services for
the Corporation under the terms and conditions set forth in this Agreement,
it being expressly understood that the Independent Contractor shall perform
Services as an independent contractor and nothing contained herein shall be
construed to be inconsistent with this relationship or status;
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Corporation and the Independent Contractor hereby agree as follows:
SECTION ONE
Representations and Warranties of the Independent Contractor
The Independent Contractor represents, warrants, covenants and agrees
that:
(a)the Independent Contractor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and is
duly qualified and in good standing as a foreign corporation in each
jurisdiction where its performance of Services requires such qualification;
(b)the Independent Contractor has all necessary power and authority to
execute and deliver this Agreement and to perform all of its obligations
under this Agreement;
(c)this Agreement has been duly and validly authorized, executed and
delivered by the Independent Contractor, and constitutes the valid and
binding obligation of the Independent Contractor, and is enforceable against
the Independent Contractor in accordance with its terms; and
(d)the execution, delivery and performance by the Independent Contractor
of this Agreement does not (1) violate or conflict with any provision of the
Independent Contractor's charter or By-Laws; (2) violate, conflict with, or
result in a breach or termination of (or require any consent or approval
under) any agreement, license, arrangement or understanding, whether written
or oral, to which the Independent Contractor, its agents or employees
(or any one of them) is a party; or (3) violate any law, judgment, decree,
order, rule or regulation applicable to the Independent Contractor, its
agents or employees (or any one of them).
SECTION TWO
Representations and Warranties of the Corporation
The Corporation represents, warrants, covenants and agrees that:
(a)the Corporation is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware;
(b)the Corporation has all necessary power and authority to execute and
deliver this Agreement and to perform all of its obligations under this
Agreement;
(c)this Agreement has been duly and validly authorized, executed and
delivered by the Corporation, and constitutes the valid and binding
obligation of the Corporation, and is enforceable against the Corporation
in accordance with its terms; and
(d) the execution, delivery and performance by the Corporation of this
Agreement does not (1) violate or conflict with any provision of the
Corporation's Certificate of Incorporation or By-Laws; (2) violate, conflict
with, or result in a breach or termination of (or require any consent or
approval under) any agreement, license, arrangement or understanding,
whether written or oral, to which the Corporation is a party; or (3) violate
any law, judgment, decree, order, rule or regulation applicable to
the Corporation.
SECTION THREE
Nature of the Services
In accordance with the terms and conditions of this Agreement, the
Independent Contractor shall, to the extent requested from time to time by
the Corporation, perform consulting Services for the benefit of the
Corporation with respect to all matters relating to or affecting all items
contained in Schedule A attached hereto. The Independent Contractor shall
perform such additional Services as may be agreed to by both parties from
time to time in writing which, when so agreed, shall be deemed incorporated
into this Agreement. The Independent Contractor shall perform Services at
the direction of the President and Chief Executive Officer of the Corporation
(or another executive officer of the Corporation as may be designated from
time to time by the Board of Directors of the Corporation). As a part of
the Independent Contractor's consulting Services, the Independent Contractor
shall review, analyze, and make suggestions to the Corporation on all matters
included in Schedule A attached hereto. The Independent Contractor agrees
and stipulates that this Agreement is a personal service contract under
which Services shall be performed by particular agents and employees of the
Independent Contractor who are subject to the approval of the Corporation
from time to time. The Corporation initially approves ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, together with support staff directly reporting to and
under the personal supervision of such individuals as required for such
Services, as individuals to perform Services hereunder.
SECTION FOUR
Compensation
Subject to the provisions of this Section 4, the consideration to be
furnished to the Independent Contractor by the Corporation for the Services
rendered by the Independent Contractor under this Agreement shall consist of
(a) 182,857 non-forfeitable, fully vested, fully paid and non-assessable
shares of the Corporation's Common Stock (the fair value of which Common
Stock on June 26, 2000, the date of the approval of the extension of the
original Consulting Agreement as set forth herein, was $240,000 or $1.3125
per share) and (b) the reimbursement of actual and direct out-of-pocket
expenses incurred by the Independent Contractor in the rendering of Services
under this Agreement.
4.1 Following the end of each calendar month during the term of this
Agreement, the Independent Contractor shall furnish the Corporation with an
invoice with respect to the month then ended.
4.2 Subject to Section 16 hereof, the Corporation shall reimburse the
Independent Contractor, within thirty (30) days following receipt of
documentation that satisfies the Corporation's travel and expense reimbursement
policies, an amount in cash equal to the actual and direct cost of all
reasonable out-of-pocket expenses incurred by the Independent Contractor in
the rendering of Services under this Agreement. The Independent Contractor
hereby acknowledges that it has received in writing, read and understands
the Corporation's travel and expense reimbursement policies in effect as of
the Effective Date.
SECTION FIVE
Duration
The term of this Agreement shall be for a period of one (1) year commencing
on April 29, 2000 and ending on April 28, 2001 (the "Expiration Date").
SECTION SIX
Complete Performance
Independent Contractor agrees to fully perform its Services throughout
the term of this Agreement and further agrees to perform such Services in a
manner that fulfills the spirit and purpose of this Agreement. For the
purposes of this Section Six only, it shall be assumed by the parties that
the compensation paid to the Independent Contractor for its Services is
earned at the per diem rate of $658 (the "Per Diem Rate"). If the Independent
Contractor were to fail or refuse to completely perform its services hereunder
as a result of or based upon circumstances that are within the
Independent Contractor's control, the Corporation shall be entitled, upon
written demand ( the "Penalty Notice"), to receive from the Independent
Contractor 150% of the Per Diem Rate to have been earned by the Independent
Contractor from the date of the Penalty Notice to the Expiration Date.
SECTION SEVEN
Place of Work
It is understood that the Services shall be rendered primarily from the
Independent Contractor's offices in ▇▇▇▇▇▇-▇▇▇▇▇, Pennsylvania and Boca Raton,
Florida, but that any approved agent or employee of the Independent Contractor
shall, upon request of the Corporation, travel to the Corporation's executive
offices located at ▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, or such other places
as may be designated by the Corporation.
SECTION EIGHT
Time Devoted To Work
In performing the Services, the hours that approved agents and employees
of the Independent Contractor work on any given day shall be entirely within
the Independent Contractor's control and the Corporation shall rely upon the
Independent Contractor to determine the number of hours as is reasonably
necessary to fulfill the spirit and purpose of this Agreement.
SECTION NINE
Status of Independent Contractor
The Independent Contractor and the Corporation acknowledge and agree that
the Independent Contractor shall perform the Services hereunder as an
"independent contractor" and not as agent or employee of the Corporation, and
nothing herein shall be construed to be inconsistent with this relationship
or status. Except as provided herein, it is agreed between the parties hereto
that the Independent Contractor is solely responsible for all labor and
expenses in connection with the performance of every obligation of the
Independent Contractor hereunder. The Independent Contractor assumes the
responsibility for furnishing the Services hereunder and shall withhold and
pay when due all employment taxes required by federal, state and local laws,
including, without limitation, all social security and withholding taxes,
and contributions for unemployment and compensation funds. The Independent
Contractor acknowledges and understands that the Corporation will not
maintain worker's compensation, health or liability insurance on behalf of
the Independent Contractor.
SECTION TEN
Materials and Equipment
Except as provided herein, the Independent Contractor shall furnish, at its
own expense, all materials and equipment necessary to carry out the terms of
this Agreement.
SECTION ELEVEN
Work Standards
The Independent Contractor shall adhere to professional standards and shall
perform all Services required under this Agreement in a manner consistent with
generally accepted procedural standards.
SECTION TWELVE
Copyrights and Patents
The Corporation shall own all copyrights and/or patents developed by the
Independent Contractor while performing the Services provided under this
Agreement. All improvements, discoveries, ideas, inventions, concepts,
trade names, trademarks, service marks, logos, processes, products, computer
programs or software, subroutines, source codes, object codes, algorithms,
machines, apparatuses, items of manufacture or composition of matter, or any
new uses therefore or improvements thereon, or any new designs or
modifications or configurations of any kind, or work of authorship of any kind,
including without limitation, compilations and derivative works, and
techniques (whether or not copyrightable or patentable) conceived, developed,
reduced to practice or otherwise made by the Independent Contractor, or any
of the Independent Contractor's agents or employees, and in any ways related
to the rendering of Services under this Agreement shall become property of
the Corporation. The Independent Contractor agrees to assign, and hereby
does assign (and hereby agrees to cause its agents and employees to assign),
to the Corporation any and all copyrights, patents and propriety rights in any
such invention to the Corporation, together with the right to file and/or own
wholly without restrictions applications for United States and foreign
patents, trademark registration and copyright registration and any patent, or
trademark or copyright registration issuing thereon.
SECTION THIRTEEN
Privileged and Confidential Information
13.1 The Corporation and the Independent Contractor acknowledge that the
Corporation has acquired and developed, and will continue to acquire and
develop, information related to its business and its industry which is
secret and confidential in character and is and will continue to be of great
and unique value to the Corporation and its subsidiaries and affiliates. The
term "confidential information" as used in this Agreement shall mean all
trade secrets, propriety information and other data or information (and any
tangible evidence, record or representation thereof), whether prepared,
conceived or developed by an employee of the Corporation or received by the
Corporation from an outside source (including the Independent Contractor),
which is in the possession of the Corporation, which is maintained in
confidence by the Corporation or any subsidiary or affiliate of the
Corporation or which might permit the Corporation or any subsidiary or
affiliate of the Corporation or any of their respective customers to obtain
a competitive advantage over competitors who do not have access to such trade
secrets, proprietary information, or other data or information, including,
without limitation, information concerning the Corporation's seasonal product
line plans, store and brand image and trade dress developments and strategies,
business plans, real estate leasing terms, conditions and plans, occupancy
costs, customers, suppliers, designs, advertising plans, marketing plans
merchandising plans, market studies and forecasts, competitive analyses,
pricing policies, employee lists, and the substance of agreements with
landlords, tenants, subtenants, customers, suppliers and others. The term
"confidential information" also includes information that the Corporation
has in its possession from third parties, that such third parties claim to be
confidential or proprietary, and which the Corporation has agreed to keep
confidential. However, the term "confidential information" as used in this
Agreement shall not include information that is generally known to the public
or in the trade as a result of having been disclosed by the Corporation in a
press release or in a filing by the Corporation with the U.S. Securities and
Exchange Commission. The Independent Contractor shall keep and maintain all
confidential information in complete secrecy, and shall not use for itself or
others, or divulge to others, any knowledge, data or other information relating
to any matter which is confidential information relating to the Corporation
obtained by the Independent Contractor as a result of its Services, unless
authorized in writing by the Corporation in advance of such use or disclosure.
All written information made available to the Independent Contractor by the
Corporation, which concerns the business activities of the Corporation, shall
be the Corporation's property and shall, if requested in writing by the
Corporation, be delivered to it on the termination or expiration of this
Agreement.
13.2 The Independent Contractor acknowledges that money alone will not
adequately compensate the Corporation for breach of any confidentiality
agreement herein and, therefore, agrees that in the event of the breach or
threatened breach of such agreement, in addition to other rights and remedies
available to the Corporation, at law, in equity or otherwise, the Corporation
shall be entitled to injunctive relief compelling specific performance of, or
other compliance with, the terms hereof, and such rights and remedies shall
be cumulative.
SECTION FOURTEEN
Indemnification
14.1 The Independent Contractor shall defend, indemnify and hold harmless the
Corporation (including, without limitation, the Corporation's successors,
assigns, subsidiaries, affiliates and contractors and their respective
officers, directors, employees, agents and other representatives) from and
against all liabilities, losses, claims, actions, damages, expenses (including
but not limited to attorneys' fees), suits and assessments (whether proven or
not) based upon or arising out of damage or injury (including death) to
persons or property caused by Independent Contractor in connection with the
performance of Services, or Contractor shall also defend, indemnify and hold
harmless the Corporation against all liability and loss in connection with,
and shall assume full responsibility for, payment of all federal, state, or
local income taxes imposed or required under applicable laws with respect to
Services performed and compensation paid the Independent Contractor under
this Agreement.
14.2 Notwithstanding anything contained in the preceding paragraph, the
Corporation shall defend, indemnify and hold harmless the Independent
Contractor (including, without limitation, the Independent Contractor's
successors, assigns, subsidiaries, affiliates and contractors and their
respective officers, directors, employees, agents and other representatives)
from and against all liabilities, losses, claims, actions, damages, expenses
(including but not limited to attorney's fees), suits and assessments
(whether proven or not) based upon or arising out of damage or injury
(including death) to persons or property caused by the Corporation in
connection with the Corporation's performance of its obligations under this
Agreement (including, but not limited to, claims based upon the material
supplied to the Independent Contractor by the Corporation and utilized by the
Independent Contractor in performing the Services), or based upon any
violation of any applicable statute, law, ordinance, code or regulation.
SECTION FIFTEEN
Compliance with Laws
The parties agree that all obligations to be performed by the parties under
this Agreement shall be performed in compliance with all then applicable
federal, state and local laws and regulations.
SECTION SIXTEEN
Approvals
16.1 In addition to approvals required by other Sections of this Agreement,
the Independent Contractor shall seek to obtain the Corporation's written
approval in advance of all expenditures in excess of four thousand dollars
($4,000.00) incurred in connection with the rendering of Services and for which
the Independent Contractor seeks reimbursement from the Corporation. In
addition, all estimates presented to the Corporation by the Independent
Contractor for the Corporation's consideration and/or approval shall be
carefully prepared and shall be based upon reasonable assumptions using the
Independent Contractor's best judgment.
16.2 All approvals by the Corporation must be in writing and shall be sought
from the President and Chief Executive Officer of the Corporation, or such
other person that the Board of Directors may designate in writing from time
to time. As of the date of this Agreement, the President and Chief Executive
Officer of the Corporation is ▇▇▇▇▇ ▇▇▇▇▇. If the Corporation fails to approve
in writing any matter submitted for approval within fifteen (15) days from the
date of its submission, then the matter submitted for approval shall be deemed
to be disapproved.
SECTION SEVENTEEN
Notices
All notices and other communications required or permitted to be given under
this Agreement by one party to another shall be in writing and the same shall
be deemed effective when delivered (i) in person, (ii) by United States
certified or registered first class or priority mail, return receipt
requested, (iii) by nationally-recognized overnight delivery or courier
service, or (iv) by facsimile transmission (▇▇▇-▇▇▇-▇▇▇▇ for the Corporation,
and ▇▇▇-▇▇▇-▇▇▇▇ for the Independent Contractor), and addressed to the party's
principal offices set forth on page one of this Agreement, or at such other
address or facsimile telephone number as may be designated in writing by such
party to the other in accordance with the requirements of this Section 16.
SECTION EIGHTEEN
Governing Law
The place of this Agreement, its status, or forum is at all times in the
County of Norfolk, Commonwealth of Massachusetts, in which County and
Commonwealth all matters, whether sounding in contract or in tort relating to
the validity, construction, interpretation, and enforcement of this Agreement,
shall be determined. This Agreement shall be construed and enforced according
to the laws of Massachusetts without regard to its principles of conflicts of
laws. Any action on the Agreement or arising out of its terms and conditions
shall be instituted and litigated in the courts of the Commonwealth of
Massachusetts. In accordance, the parties submit to the jurisdiction of the
courts of the Commonwealth of Massachusetts. The prevailing party in any such
litigation shall be entitled to recover its reasonable attorneys' fees in
addition to any damages that may result from a breach of this Agreement.
SECTION NINETEEN
Miscellaneous
This Agreement may not be modified, amended, or waived, except by a writing
executed by both parties hereto. This Agreement, and all attached or
referenced schedules, exhibits and attachments, constitutes the full and
entire understanding and agreement between the two parties with regard to the
subject matter hereof and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter. The section
headings herein are for convenience of reference only, are not part of this
Agreement and shall have no effect on the interpretation of this Agreement or
the provisions hereof. Neither this Agreement nor any interest therein, or
claim thereunder, shall be assigned or transferred by the Independent
Contractor to any party or parties. If any provision of this Agreement shall
to any extent be invalid or unenforceable, such invalid or unenforceable
provision shall be reformed to the extent required to make it valid and
enforceable to the maximum extent possible under law, and the remainder of
this Agreement shall not be affected thereby, with each provision hereof being
valid and enforceable to the fullest extent permitted by law. This Agreement
shall be binding upon, and inure to the benefit of, the parties and their
respective successors and permitted assigns. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original and
all of which together shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have signed, sealed and delivered this
Consulting Agreement in duplicate, each of which is deemed an original, as of
the Effective Date.
ATTEST: DESIGNS, INC.
_____________________________ By: __________________________________
(Signature)
Print Name: ▇▇▇▇▇ ▇▇▇▇▇
Print Title: President and
Chief Executive Officer
ATTEST: JEWELCOR MANAGEMENT, INC.
___________________________ By:___________________________________
(Signature)
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Print Title: Vice-President/General Counsel
SCHEDULE A
Consulting Agreement
Between
JEWELCOR MANAGEMENT, INC.
And
DESIGNS, INC.
SERVICES
The services to be performed by the Independent Contractor are to assist in
developing and assist in implementing a strategic operating plan, which
assistance shall include:
(a) assist in seeking to reduce operating expenses and overhead,
merchandising, budgeting, financing, real estate, insurance, corporate
development, and investor relations;
(b) assist in seeking to identify and hire certain management level
employees;
(c) assist in analysis and negotiation of business relationships;
(d) assist in analysis, drafting and negotiation of arrangements with
certain executive officers and others; and
(e) such other services as the Board of Directors may reasonably request
from time to time.