Consulting Agreement



 






Exhibit 10.4




CONSULTING AGREEMENT




     This Consulting Agreement (this “Agreement”) dated as of April 12, 2005, and effective
as of March 21, 2005 (the “Effective Date”) is entered into by and between Party City
Corporation, a Delaware corporation (the “Company”), and Dillon Associates Retail
Consultants (the “Consultant”).



RECITALS




     WHEREAS, the Company desires to engage the Consultant to provide services to the Company
pursuant to this Agreement and the Consultant desires to provide such services to the Company
pursuant to this Agreement;



     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the
Company and the Consultant agree as follows:



1. Services and Duties.





     (a) The Company agrees to engage the Consultant to provide strategic business,
management and financial advice to the Company as directed by and reporting to the Board of
Directors of the Company (the “Board”).








     (b) The Consultant agrees to devote as much time as is reasonably necessary to the
performance of services hereunder; including an appropriate amount of time at the Company’s
offices in Rockaway, NJ (to include by example but not limitation reasonable travel between
such location and the Consultant’s primary residence in Wisconsin) and the balance of which may be performed from the Consultants home in Wisconsin or at a location beneficial to the
Company and selected by the Consultant.







     2. Term. The term of this Agreement (the “Initial Term”) shall be for the
period beginning on the Effective Date and ending on June 30, 2005 provided that the term will
automatically be extended for successive ninety (90) day periods (each, an “Extension
Term”) unless either party shall provide written notice to the other not later than 30 days
prior to the expiration of the Initial Term or Extension Term, if any, then in effect. The Initial
Term and any Extension Term shall be collectively referred to as the “Term” hereunder.



     3. Fees/Expenses. During the Term, the Company shall pay to the Consultant a
consulting fee of $700 per hour (the “Hourly Fee”). The Hourly Fee shall include by
example reasonable travel time incurred by Consultant pursuant to this Agreement. The Hourly Fee
shall be payable on the first business day of each month (beginning April 2005) provided that the
Consultant properly accounts for his hours worked as a consultant hereunder. In addition, the
Consultant shall be entitled to prompt reimbursement by the Company for all reasonable travel,
entertainment and other business expenses incurred by him in connection with his services
hereunder, in accordance with the policies and procedures established by the Company.



     4. Health Coverage. From the effective date of this Agreement the Company shall
provide medical and dental benefit plan coverage to the Consultant to the same degree available to
senior executives of the Company through the date of the Consultant’s death (and to the
Consultant’s spouse to whom he is married as of the Effective Date from the date of such
termination until her



 









 







death). If and to the extent that the Company cannot provide such coverage or it is not
payable or provided under the terms of the Company’s plans because the Consultant is not an active
employee or for any other reason, the Company itself shall, to the extent necessary, provide for
payment of such benefit to the Consultant or of an amount sufficient for him to purchase such
benefits. In every event, and notwithstanding anything to the contrary contained above, Consultant
understands and agrees that, upon the Consultant or spouse being eligible for Medicare, the
Company’s medical benefit plan coverage shall be secondary, with Medicare being primary coverage.
The provision of this paragraph shall survive the termination of this Agreement.



     5. Other
Consulting Arrangements. Prior to the execution of this Agreement, the Company
and Consultant were parties to an oral agreement (the “Oral Agreement”) pursuant to which
Consultant was paid at the rate of $10,000 per month for consulting services rendered to the
Company. As of the Effective Date of this Agreement, the Company and Consultant agree as follows:
(1) During any period in which Consultant performs services pursuant to this Agreement, the prior
Oral Agreement shall be suspended and Consultant will receive no fees (except for fees incurred for
services rendered prior to the Effective Date of this Agreement) pursuant to the Oral Agreement;
and (2) upon termination of this Agreement, the Oral Agreement shall be reinstated, provided,
however, that either party may terminate the Oral Agreement at any time upon notice to the other
party.



     6. Company Property. Upon the later of the termination of this Agreement for any
reason or the Consultant’s termination of services as a Director, the Consultant will promptly
deliver to the Company all Company property in his possession and all documents including drawings,
manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or
any other documents concerning the Company’s customers, business plans, marketing strategies,
products or processes which contain proprietary information or trade secrets provided or obtained
by Consultant pursuant to this Agreement.







     7. Confidential Information. Unless specifically authorized in writing by the Company
to do so, except to the extent required by an order of a court having competent jurisdiction or
under subpoena from an appropriate government agency, the Consultant shall not disclose any
information disclosed or made available to the Consultant or known by the Consultant as a direct or
indirect consequent of or through his services as Director or Consultant to the Company, related to
the Company’s referral sources, business practices, trade secrets, operating methods, techniques,
products, processes, services or other operations (individually or collectively
“Operations”), including but not limited to, information relating to research, development,
inventions, accounting, engineering or marketing of such Operations and including any such
information of any third party which the Company is under an obligation to keep confidential
(individually or collectively, “Confidential Information”) to any third person unless such Confidential
Information has been previously disclosed to the public by the Company or is in the public domain
(other than by reason of the Consultant’s breach of this Section 7 or breach of any duty as a
Director). Notwithstanding the foregoing, if the Consultant is required by an order of a court
having competent jurisdiction or under subpoena from an appropriate government agency to disclose
Confidential Information, the Consultant shall provide the Company with prompt written notice of
such requirement and shall assist the Company to seek a protective order or other appropriate
remedy protecting its interests. In any event, the Consultant will furnish only the part of the
Confidential Information that is required to be disclosed by the court order or subpoena and will
use reasonable efforts to obtain reliable assurances that confidential treatment will be accorded
to any Confidential Information so furnished.







 









 





8. Independent Contractor Status.

     (a) It
is hereby understood and agreed by the Company and the Consultant that the
Consultant’s rendering of the consulting services pursuant to this Agreement is as an
independent contractor and not as a stockholder, officer, employee, director or partner of
the Company, and that the Consultant’s retention as a consultant pursuant to this Agreement
shall not entitle the Consultant to any benefits as an employee of the Company under any
benefit plan maintained by the Company or any of its subsidiaries or affiliates for its or
their respective employees except as expressly provided herein. It is further hereby
understood and agreed by the Company and the Consultant that, as an independent contractor,
the Consultant shall be responsible for complying with all applicable laws, rules and
regulations concerning taxes, social security contributions, pension plans contributions,
unemployment contributions, and the like.


     (b) It is hereby acknowledged by the Company and the Consultant that as of the
Effective Date the Consultant is a member of the Board (a
“Director”). Nothing in this
Agreement shall affect the Consultant’s duties, obligations or authority as a Director or
the Company’s obligations to the Consultant in respect of his services as a Director.
Except as expressly provided herein, the Consultant’s continuation or termination of
services as a Director shall have no effect on this Agreement or the obligations of either
party hereto. In addition, Consultant agrees that time devoted in the performance of
services for Board duties shall not be deemed time devoted for Consultant’s services under
the Agreement or applied in anyway against the services and duties requirements of Section
1.(b) herein.



     9. Authority. The Consultant hereby acknowledges and agrees that in his capacity as
Consultant he shall have no right or authority to enter into any agreements or other arrangements
in the name or on behalf of the Company, or to assume or create any obligation or liability of any
kind whatsoever, express or implied, in the name or on behalf of the Company, except as expressly
authorized by the Board.



     10. Amendments. This Agreement may not be amended or changed except by the written
agreement of the Company and the Consultant.



     11. Not an Employment Contract. This Agreement is not a contract of employment
between the Consultant and the Company, and the Consultant and the Company hereby agree and
acknowledge that this Agreement does not impose any obligation on the Company to offer employment
to the Consultant at any time.



     12. Governing Law. This Agreement, and any dispute arising under or relating to any
provision of this Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey.



     13. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision, but this Agreement shall be reformed, construed and enforced as if
such invalid, illegal or unenforceable provision had never been contained herein.



 









 





     14. Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto with respect to the Consultant’s services as a consultant to the Company. No other
agreement relating to the terms of the Consultant’s engagement to perform consulting services for
the Company, oral or otherwise, shall be binding between the parties unless it is in writing and
signed by the party against whom enforcement is sought. There are no promises, representations,
inducements or statements between the parties relating to the terms of the Consultant’s engagement
as a consultant to the Company other than those that are expressly contained herein. The
Consultant acknowledges that he is entering into this Agreement of his own free will and accord,
and with no duress, that he has read this Agreement and that he understands it and its legal
consequences.



     15. Successors and Assigns of the Company. This Agreement shall be binding upon inure
to the benefit of the Company and its successors and assigns (whether by merger, consolidation,
sale of all or substantially all assets or otherwise). The Consultant hereby acknowledges and
agrees that the consulting services to be performed by him pursuant to this Agreement are personal
in nature and that he shall not assign any of his rights or delegate any of his duties or
obligations under this Agreement to any other person or entity.



     16. Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, and such counterparts together shall
constitute and be one and the same instrument.



     17. Arbitration. In the event that any dispute or controversy should arise under or
in connection with this Agreement the parties hereto shall first attempt to resolved such dispute
through mediation, the costs of which shall be shared equally by the parties. In the event that
such dispute is not resolved in mediation, the parties agree that it shall be resolved by binding
arbitration. The arbitration shall be held in Morris County, New Jersey and except to the extent
inconsistent with this Agreement, shall be conducted in accordance with the Labor Arbitration Rules
of the American Arbitration Association then in effect at the time of the arbitration, and
otherwise in accordance with principles which would be applied by a court of law or equity. The
arbitrator shall be acceptable to both the Company and the Consultant. If the parties cannot agree
on an acceptable arbitrator, the dispute shall be heard by one arbitrator, appointed by the
American Arbitration Association. Judgments on any award may be entered in and enforced by any
court appropriate jurisdiction. Each party shall pay his or its own costs for the arbitration or
litigation, as the case may be, with the cost of the arbitrator, if applicable, to be equally
divided between the parties.



[signature page follows]




 









 





     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year
first above written.



	 
	Party City Corporation


	By: /s/ L. R. Jalenak, Jr.

	It’s:  


	 

	Consultant: Dillon Associates Retail Consultants


	By: /s/ Ralph D. Dillon

	Ralph D. Dillon