Exhibit 10.3
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.
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT (the "Termination Agreement") is dated as of
March 13, 2008, but to be effective as of March 31, 2008 (the "Effective Date"),
by and between Heeling Sports Limited, a Texas limited partnership (the
"Company"), The Territory Distribution GmbH, a German Company (the
"Distributor") and Achim Lippoth, a German individual and the sole owner of the
Distributor (the "Owner").
The Company, Distributor and Owner are sometimes
collectively referred to herein as the "Parties" and individually as a "Party."
WHEREAS, the Company and the Distributor entered into that certain Distributor
Agreement, dated as of March 8, 2007 (the "Distributor Agreement"); and
WHEREAS, the Parties desire to terminate the Distributor Agreement and to
evidence their agreement to certain other matters as set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereby agree as follows:
1.
Defined Terms.
Capitalized terms used
but not defined herein and defined in the Distributor Agreement shall have the
meanings ascribed to such terms in the Distributor Agreement.
2.
Termination.
(a)
Subject to Section 2(b), the Distributor
Agreement shall terminate in all respects on the Effective Date and thereafter
have no further force and effect.
(b)
Notwithstanding Section 2(a), the Parties
agree that the covenants and obligations set forth in Sections 3(f), 3(m), 3(n),
3(s), 3(t), 3(u), 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 of the Distributor
Agreement shall survive the termination of the Distributor Agreement.
3.
Product/Inventory Re-Purchase and
Payment.
Upon the Effective Date, the Company shall purchase from Distributor,
and Distributor shall sell, assign, transfer, convey,
to the Company, free and
clear of any and all liens, claims and encumbrances, all of Distributor's unsold
Products as of the Effective Date, as confirmed via inventory within five
business days prior to the Effective Date, and such other inventory and other
incidental assets of Distributor related to the distribution operations as
described on Exhibit A attached hereto (collectively, the "Purchase Items").
The Company will arrange for transportation of the Purchase Items.
The Company
shall not
1
assume any liabilities of Distributor and Distributor shall indemnify, defend
and hold Company harmless from and against any such liabilities.
(a)
The Company shall pay Distributor in full
by April 30, 2008.
Payment shall be by means of a check or a wire transfer of
immediately available funds to a bank account of Distributor, specified in
writing to the Company.
The Parties agree that the Company shall pay the
historical price (e.g., the booked landed cost) for the Purchase