May 13, 1997
Xx. Xxxx X. Xxxxx
Gruppo, Xxxxx & Xxxxxx, Inc.
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0006
Re: Consulting Agreement with Diplomat Corporation
Dear Xxxx:
This letter will serve to confirm our agreement on the terms
under which you will perform certain consulting services for Diplomat
Corporation (the "Company") as more particularly set forth herein. The term of
this agreement shall be of one year from the date hereof. The services you agree
to provide are consultation with management and the Board of Directors, from
time-to-time as they may reasonably request with respect to stategic planning in
connection with the Company's catalogue and direct marketing businesses
(including Biobottoms and Xxx Xxxxxx catalogues). Such services will be
performed subject to your availability and only in the New York City
metropolitan area unless you agree otherwise.
All costs in connection with the performances of your services set
forth herein shall be borne by the Company. The Company hereby indemnifies and
holds you harmless with respect to any advice or recommendations made by you in
good faith in the course of the performance of your services hereunder. In the
event that during the course of the performance of your services hereunder you
(directly or through Gruppo, Xxxxx & Xxxxxx, Inc. or any affiliate thereof)
introduce the Company to any transaction which the Company enters into during
the term of this Agreement or for a period of one year thereafter, the Company
agrees to pay you (or such affiliate) an additional fee of which you and the
Company mutually determine.
In exchange for your services, and in full consideration therefor, the
Company agrees to promptly issue to you upon the execution hereof 100,000 fully
paid non-assessable shares of its Common Stock. Such Common Stock may be held by
you or, if you elect to sell such Common Stock within a period of 60 days
hereof, the Company will promptly pay you the amount by which $250,000 exceeds
your net proceeds or, if for any reason you are prohibited or unable to sell
such shares within such 60 day period
Xxxx X. Xxxxx
May 13, 1997
Page 2
the Company will promptly remit the full amount of $250,000 to you. In the event
of a sale within such 60 day period, you agree to return any proceeds above
$250,000, if so requested by the Company.
Promptly upon the delivery of the Common Stock, the Company will
undertake to file the Registration Statement or Form S-8 or such other Form as
the Company and its counsel deem appropriate with the Securities and Exchange
Commission, at the sole cost and expense of the Company, for the purpose of
registering such shares of Common Stock as foresaid. Simultaneously with the
delivery of such stock Diplomat Corporation will issue an opinion of its counsel
to the effect that shares are validly issued, fully paid and non-assessable. The
Company will advise (and render an opinion of counsel to such effect) as soon as
you are permitted to sell the Common Stock as contemplated herein.
In no event shall your lack of availability to perform the consulting
services described in the first paragraph of this Agreement or the nature or
manner of services is performed affect your right to the Common Stock and your
other rights and benefits set forth herein.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. If the foregoing correctly states our
understanding please execute and acknowledge a counterpart of this Agreement as
set forth below.
Very truly yours,
Diplomat Corporation
By: /s/ Xxxxxxxx Xxxxxxxxx
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Xxxxxxxx Xxxxxxxxx
President
Agreed Accepted
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
