EXHIBIT 10.10
CONSULTING AGREEMENT
AGREEMENT, made as of the 26th day of June, 1996, by and between DIPLOMAT
AMBASSADOR INC., a Delaware corporation with offices at 0000 Xxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Diplomat"), and XXX XXXXXXX, an individual
residing at 0000 Xxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Consultant").
W I T N E S S E T H:
WHEREAS, Diplomat is engaged in the optical business, including but not
limited to the design, manufacture, importing, and sale of eyewear (the
"Business"); and
WHEREAS, concurrently with the execution and delivery of this Agreement,
Diplomat is purchasing substantially all of the assets of Windsor Optical, Inc.
("Windsor"), which also is engaged in the Business; and
WHEREAS, Consultant is an executive officer and shareholder of Windsor, is
intimately familiar with Windsor's day to day operations, and is acquainted with
Windsor's customers; and
WHEREAS, in connection with the purchase by Diplomat of Windsor's assets,
Consultant and Diplomat have agreed that Consultant shall become a consultant
to Diplomat on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereby agree as follows:
1. Engagement.
(a) Diplomat hereby engages Consultant as a consultant to
1
Diplomat, to render his services to Diplomat during the Term, as hereinafter
defined. Consultant hereby accepts such engagement, and undertakes to perform
all the duties and obligations assumed by him hereunder.
(b) Consultant shall devote such time, energies, and attention as
may be necessary for the performance of his duties and services hereunder.
2. Duties and Term. During the three (3) year period commencing on the
date of this Agreement (the "Term"), Consultant shall provide such advice with
respect to the operation and management of the business purchased by Diplomat
from Windsor, and such information as may be available to Consultant regarding
Windsor's customers and products, as Diplomat may from time to time request, at
such times and in such manner, including over the telephone, as may be
convenient to Consultant.
2. Compensation. Diplomat shall pay to Consultant, for all of his duties,
obligations, and services hereunder, a total consulting fee of $250,000.00,
payable in thirty-six (36) monthly installments of $6,944.44 each commencing
June 20, 2004. Subject to the provisions of Section 6(b) of this Agreement, the
consulting fee payable hereunder is deemed fully earned immediately upon the
execution and delivery of this Agreement. Diplomat shall have the right at its
option to withhold from any amounts payable under this Agreement such Federal,
State, and other income taxes and other items as may be required to be withheld
from persons who are employees of Diplomat under applicable law. In addition,
Diplomat
2
shall have the right at any time prior to the payment of all consulting fees due
and payable hereunder to pre-pay same based on its then-current value, which
shall be calculated assuming interest at the the prime rate of interest, as set
forth in the Wall Street Journal, in effect at the time of prepayment.
3. Trade Secrets and Documents.
(a) For purposes of this Agreement, the term "Trade Secrets" shall
mean the shipping information of Diplomat and Windsor, including but not limited
to freight rates; the methods and processes of assembling and distributing their
products, including those in the process of development; Diplomat's and
Windsor's pricing, customer lists and credit terms and counter-trade
arrangements, including those in the process of completion; Diplomat's and
Windsor's methods and results of the research; the names of Diplomat's and
Windsor's customers and the products used by each such customer; and any other
confidential information or data relating to Diplomat's or Windsor's business
which is not publicly known and does not become publicly known without a breach
of this or any other confidentiality agreement or obligation to Diplomat.
(b) Consultant agrees that he will not, either during his engagement by
Diplomat hereunder (except pursuant to his engagement hereunder) or at any time
thereafter, impart or disclose any Trade Secrets to any person, firm or
corporation other than Diplomat, or use any Trade Secrets, directly or
indirectly, for his own benefit or for the benefit of any person, firm or
corporation other than
3
Diplomat.
(c) Consultant agrees that all memoranda, notes, records, reports,
manuals, charts, formulae, specifications, lists and other documents made,
compiled, received, held, or used by Consultant while engaged by Diplomat
hereunder, concerning any phase of Diplomat's business or Trade Secrets,
including without limitation such items stored on computer-readable media, and
all copies thereof, shall be Diplomat's property and shall be delivered by
Consultant to Diplomat on the termination of Consultant's obligation to provide
services hereunder or at an earlier time on the request of Diplomat.
4. Noncompetition.
(a) For purposes of this Agreement, the term "Customer" shall mean
any person or entity to which Windsor sold goods or provided services during the
two (2) year period prior to the date of this Agreement.
(b) Consultant covenants and agrees that, provided that Diplomat is
not in breach of this Agreement, for a period of three (3) years after the date
of this Agreement, he shall not, directly or indirectly, individually or in
concert with others or as stockholder, director, officer, partner, member,
principal, agent, employer, employee, or consultant, or in any other individual
or representative capacity:
(i) Call on, solicit, serve, or cater to, or attempt to call
on, solicit, serve, or cater to, any Customer for the purpose of rendering any
service or selling any product
4
competitive with, or usable for substantially the same purpose as, any service
or product provided, manufactured or sold or in the process of development by
Windsor as of the date of the closing of the purchase of Windsor's assets by
Diplomat; or
(ii) Engage in the Business.
(c) Consultant agrees that he will not directly or indirectly at any
time solicit or induce other employees of Diplomat to terminate their agreements
or employment with Diplomat.
5. Continuing Effect and Enforcement of Certain Provisions.
(a) Consultant hereby acknowledges that his obligations under
Sections 3 and 4 will continue in effect, notwithstanding the termination of his
engagement by Diplomat, and will be binding on his heirs, legal representatives,
and assigns.
(b) Consultant hereby agrees that monetary damages alone will not
adequately compensate Diplomat in the event of a breach by Consultant of his
obligations contained in Section 3 or 4. Therefore, Consultant agrees that, in
addition to any other remedies available to it, Diplomat shall be entitled to
interim restraints and permanent injunctive relief for the enforcement of the
provisions of Section 3 or 4, and to an accounting and payment over of all
amounts received by Consultant as a result of his breach of his obligations
under Section 3 or 4.
(c) It is the intention of the parties hereto that the provisions of
Sections 3 and 4 be construed and interpreted so as to afford the full measure
of protection provided for therein. Each paragraph of Sections 3 and 4 will be
construed as an
5
agreement independent of any other provision of this Agreement. Except as
otherwise specifically provided in this Agreement, no claim or cause of action
that Consultant may have against Diplomat, whether predicted on his consulting
relationship with Diplomat or otherwise, will constitute a defense to the
enforcement by Diplomat of Consultant's agreements set forth in Sections 3 and
4.
6. Default.
(a) All consulting fees payable hereunder shall become immediately due and
payable without discount, and Consultant's obligations hereunder shall
terminate, upon the occurrence of any of the following:
(i) Failure of Diplomat to make any payment due hereunder within
five (5) days after it fell due which is not cured within ten (10) days after
written notice of such default is given to Diplomat by (A) certified mail,
return receipt requested, or (B) Federal Express or other overnight courier
which provides a signed receipt for delivery which notice shall be deemed to
have been given on the date actually delivered;
(ii) A default by Diplomat under or breach by Diplomat of the Asset
Purchase Agreement of even date herewith among Windsor, Diplomat, Consultant,
and Xxxxxxx Xxxxxxx (the "Purchase Agreement") or the promissory notes issued
pursuant thereto, which default is not cured after the giving of any required
notice and the expiration of any applicable grace period.
(b) Any defense of Diplomat to the performance of its obligations under
the Purchase Agreement shall constitute a defense
6
of Diplomat to its obligation to pay consulting fees and otherwise perform its
obligations under this Agreement.
7. Miscellaneous.
(a) All notices required or permitted to be given hereunder shall be
in writing, and shall be duly given if delivered to the other party personally,
or sent to the other party by certified mail (return receipt requested),
addressed to the other party at the address first set forth above or to such
other address as any party may designate by a similar notice, and deposited in
the U.S. mail, and shall be deemed to have been given as of the date so
personally delivered or mailed.
(b) This Agreement shall be binding upon and enure to the benefit of
the parties hereto, the executors, administrators and legal representatives of
Consultant and the successors and assigns of Diplomat. The provisions of this
Agreement shall not be construed as conferring and are not intended to confer
any rights on any other persons. Neither this Agreement nor any rights or
obligations hereunder may be assigned or delegated by Consultant; provided that
Consultant shall have the right to assign payments due and owing under this
Agreement to his spouse or children or to a trust for the benefit of any of
them. In the event of the death of Consultant prior to the payment of the full
$250,000.00 consulting fee provided for herein, the unpaid balance of such
consulting fee shall be paid to his estate.
(c) The provisions of this Agreement shall be considered to be
separable and independent of each other. In the event that
7
any provision of this Agreement shall be determined in any jurisdiction to be
unenforceable, such determination shall not be deemed to affect the
enforceability of any other provision of this Agreement. The parties agree that
any court making such a determination is hereby requested and empowered to
modify such unenforceable provision and to substitute therefor such limitation
or provision of maximum scope as the court then deems reasonable and judicially
enforceable, and the parties further agree that such substitute provision shall
be enforceable in said jurisdiction as if set forth initially in this Agreement.
Any such substitute provision shall be applicable only in the jurisdiction in
which the original provision was determined to be unenforceable.
(d) This Agreement constitutes the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes and cancels all prior agreements relating thereto. This Agreement may
not be modified or amended except by a writing signed by the party sought to be
charged therewith. No waiver by any party of any of his or its rights or
remedies on any one occasion shall bar such party from exercising any of his or
its rights or remedies on any subsequent occasion, and no such waiver shall be
binding unless made in writing and signed by the party making the waiver.
(e) This Agreement shall be governed by, and construed and enforced
in accordance with, the laws of the State of New Jersey, but without giving
effect to any New Jersey choice of law
8
provisions that might otherwise make the law of a different jurisdiction control
or apply.
(f) CONSULTANT HEREBY ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT
IN ITS ENTIRETY, AND FULLY UNDERSTANDS ALL OF THE PROVISIONS CONTAINED HEREIN.
CONSULTANT FURTHER ACKNOWLEDGES THAT HE HAS HAD SUFFICIENT TIME TO REVIEW THIS
AGREEMENT, AND IS SIGNING IT WITH FULL KNOWLEDGE OF THE CONSEQUENCES OF THE
RESTRICTIONS CONTAINED IN SECTIONS 3 AND 4.
IN WITNESS WHEREOF, the parties, intending to be legally bound hereby,
have duly executed this Agreement as of the date first above written.
WITNESS: DIPLOMAT AMBASSADOR, INC.
By: /s/ X. Xxxxxxx
---------------------- ----------------------
/s/ Xxx Kitnik
---------------------- -------------------------
XXX KITNIK
9
