CONSULTING AGREEMENT
This consulting agreement (the "Agreement") is entered into this 20th day
of January 1999 by Alfa International Corp., a corporation organized under the
laws of the State of New Jersey ("Alfa"), Ty-Breakers Corp., a corporation
organized under the laws of the State of New York ("Ty-Breakers") and Auto-
Pilot, Inc., a corporation organized under the laws of the State of Delaware
("API") all of whom maintain their offices at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇-▇▇-▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the one hand, and, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇, as principals in Continental International Trading Corp., who
maintain their office at ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ (the
"Consultants"), on the other hand. Alfa, Ty-Breakers and API are sometimes
referred to herein as the "Companies" and Alfa, Ty-Breakers, API and the
Consultants are sometimes referred to herein as a "Party" or the "Parties".
W I T N E S E T H :
_________________
WHEREAS Alfa is a holding company and a publicly traded corporation,
whose common stock is traded on NASDAQ's OTC Electronic Bulletin Board under
the symbol "TYBR", and
WHEREAS API is a private company and has developed and has proprietary
rights in a single board micro computer device known as the Reconfigurable
Computer Node (the "RCN"), and
WHEREAS Alfa has completed a private placement of its securities, has
acquired and funded Ty-Breakers, and is now desirous of further developing its
business through (I) the acquisition of API and the acquisition of a company in
the machinery marketing business (collectively, the "Targets"), (both of which
Targets are described in the confidential memorandum attached hereto as Exhibit
A) as well as acquiring a software company synergistic with API, (II) through
the international expansion of Ty-Breakers' marketing efforts, (III) through
executing licensing agreements for certain of API's technology, and (IV)
through the start-up and development of a subsidiary in Russia or Israel to
design software products both for API and otherwise.
WHEREAS Alfa has, as generally described in Alfa's Report on Form 10-KSB
for the period ended 12/31/97 attached hereto as Exhibit B, acquired
Ty-Breakers and conducted preliminary discussions with two of the Targets, and
WHEREAS the Consultants have expertise in (1) the structuring of mergers &
acquisitions, (2) international markets & marketing to such international
markets, and (3) the laws, commerce, customs and business practices &
conditions in Russia and Israel as well as numerous personal & business
contacts in Russia and Israel, and
WHEREAS the Consultants have agreed to act as the Company's non-exclusive
Consultants for the matters covered by this Agreement, and
WHEREAS the Consultants understand and acknowledge the importance of
maintaining the secrecy and confidentiality of all information relating to or
concerning the RCN, including but not limited to: circuit diagrams, parts
lists, run lists, drawings, blueprints, prototype circuits, products, computer
programs, hardware, software, documents, manuals, notes, photographs, customer
>PAGE>
lists, customer notes, sales materials, customer proposals, sales orders,
things and information, whether oral or written, relating to the RCN as well
as all other confidential information relating to API, Alfa, Ty-Breakers and
the Targets (the "Proprietary Information"), and
WHEREAS the Consultants have received and are desirous of receiving
confidential information relating to the RCN from API and other confidential
information relating to Alfa, Ty-Breakers and the Targets, including the
Proprietary Information, and
WHEREAS the Consultants have, prior to the date hereof, and on a
continuing basis to date, provided corporate finance advice to Alfa and
management consulting and international marketing advice to the Companies
without compensation; and Consultants agree, to provide such services and
advice to Alfa, Ty-Breakers (and should Alfa acquire one or both of the
Targets, to the Targets) subsequent to the date hereof, relating to among
other things:
(a) the corporate structure of and advisability of future acquisitions
by Alfa relating to the acquisition by Alfa of one or more of the
Targets as wholly owned subsidiaries or relating to the acquisition
by Alfa of any other wholly owned subsidiary(s).
(b) the provision of marketing and consulting advice to Ty-Breakers
with respect to (1) marketing and/or licensing of its products
outside the United States, (2) obtaining a license agreement with
the National Hockey League, and (3) the direct marketing of its
Tyvek and ▇▇▇▇▇▇ jackets on Russian National television.
(c) the sale and/or license by API of the western European and/or Asian
marketing rights and/or manufacturing rights to API's RCN product
line.
(d) the organization, start-up, advice regarding financing (including
government financing) and management of a Russian OR Israeli
domiciled corporation at the Mofet B'▇▇▇▇▇▇ incubator (or similar
Israeli or Russian incubator) which will be a wholly owned
subsidiary of API.
(e) identifying, structuring the transactions and conducting
appropriate due diligence reviews thereof for suitable
acquisition candidates for Alfa.
(f) consulting on such other matters, as the Parties deem desirable and
advisable.
NOW THEREFORE, for and in consideration of the compensation to be paid and
the services previously rendered and to be rendered under the terms of this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged by the Parties, the Parties hereto
covenant and agree as follows:
1. The above stated preamble clauses are all incorporated herein as if
fully set forth in the body of this Agreement.
2. The term of this Agreement (the "Term") shall be for three years
beginning on the first day of January 1999 unless otherwise terminated in
accordance with the provisions of this Agreement. Either Party may terminate
this Agreement at any time prior to the expiration of the Term for any reason
whatsoever, but no such termination shall deprive the Consultants of their
rights to their compensation as described in section 4(i) hereof. Any Party
desiring to terminate this Agreement prior to the expiration of the Term may do
so by notifying the other Party, in accordance with the provisions of section
22 hereof, of its intention to do so.
3. Ty-Breakers agrees to provide Consultants with 100 copies of its
retail product catalog and with 2 samples of each jacket displayed in such
catalog. Consultants will arrange for a presentation of the Ty-Breakers product
line to ▇▇. ▇▇▇▇ ▇▇▇▇ at the government owned Russian Television Network for
inclusion in its "Show Channel" which is the Russian version of the "home
shopping network".
4. API has disclosed certain portions of the Proprietary Information
to Consultants and agrees to disclose to the Consultants such further
portions of the Proprietary Information which, in the sole judgement of API,
is necessary to enable the Consultants to determine the needs and
requirements of API. Consultants agree to exert their best efforts to assist
API in accomplishing the following:
(i) to locate a suitable western European corporation and a suitable
Asian corporation in the electronics marketing and/or manufacturing
business (the "Licensees"), which Licensees will be acceptable to
API, and to negotiate on behalf of API a definitive marketing
rights agreement with each such Licensee whereby Licensees will
be granted the exclusive marketing rights in western Europe or in
Asia, as the case may be, for API's product line (including the
RCN and follow on products) and API will be paid a sum of not
less than one million dollars (the "License Fee") by each such
Licensee in exchange for granting Licensees such rights. If such
License Fee(s) is/are paid to the Company during the Term then
Consultants shall be entitled, in addition to the compensation set
forth in Section 13 hereof, to a finder's fee of five percent (5%)
of each such License Fee.
(ii) to enable API to open, staff and operate an Israeli or Russian
domiciled corporation for the purpose of continued research and
development of follow on and upgrade products for its RCN product
line. In this regard Consultants will assist API to initiate
negotiations with Russian private companies and/or individuals or
to conclude negotiations with Israeli Government authorities
(either Mofet'B'▇▇▇▇▇▇ or other similar Israeli authority as
generally outlined in their letter to API); and to secure such
assistance, both financial and otherwise, as may be available for
such a Russian or Israeli domiciled enterprise from agencies of
the government of Russia or Israel. The Consultants agree, among
other things, to provide API and Alfa with such corporate finance
and management advice as is necessary to assist API in the
negotiation of financing terms and tax abatement issues with the
Economic Development Administration (or other such appropriate
agency) of the government of Russia or Israel and with local
Russian or Israeli banking institutions, as the case may be.
5. The Companies agree to disclose to the Consultants such corporate
and financial information about their past and present operations to allow the
Consultants to develop a corporate structure and strategy to accomplish Alfa's
objectives.
6. The Consultants agree to treat as confidential any and all
information obtained from the Companies pursuant to this Agreement, and to that
end the Consultants further agree:
(a) except in the interest of fulfilling their obligations under
this Agreement, to not disclose the Proprietary Information, or any portion
thereof to third parties; and
(b) to keep any and all of the Proprietary Information obtained
under this Agreement in strict confidence and to segregate the Proprietary
Information in a safe and secure location to which only persons authorized
herein to use such information have access; and
(c) to insure that the Proprietary Information, or any portion
thereof, is disclosed only to those employees of the Consultants who have a
need to know the Proprietary Information and to advise those employees to
whom the Proprietary Information is disclosed of its confidential nature and
of the Consultants' obligation to treat such Proprietary Information as
confidential and to the extent such employees are likewise obligated to
maintain such Proprietary Information in confidence in accordance with the
terms of this Agreement.
7. The Consultants shall be responsible for the acts or omissions of
any of their employees, affiliates or agents to whom the Consultants shall
disclose the Proprietary Information or any portion thereof and the Consultants
hereby warrant and guarantee the full and substantial performance by such
employees, affiliates or agents of the terms, conditions and obligations of
confidentiality of this Agreement.
8. The Consultants agree not to use the Proprietary Information, or
any portion thereof, for any purpose other than that contemplated by this
Agreement.
8.1 In the event of the termination of this Agreement prior to the
expiration of the Term, then, all compensation due to the Consultants, if any,
which remains unpaid, shall immediately become due and payable upon such
termination of this Agreement.
8.2 The Consultants agree that at the end of the Term, or if any of the
Companies at any time during the Term notifies the Consultants or if the
Consultants, or any one of them, at any time during the Term notifies any of
the Companies, of their election to terminate this Agreement, then the
Consultants shall return to Alfa within two weeks of such notification or end of
the Term any and all of the Proprietary Information provided to the
Consultants by the Companies, and the Consultants shall destroy all records
of the Consultants, which refer to or relate to the Proprietary Information
disclosed to the Consultants under this Agreement, and the Consultants shall
affirm such record destruction in writing to the Companies.
9. The Companies agree that the obligations of the Consultants under
this Agreement with respect to the confidentiality of the Proprietary
Information shall not be applicable to any information disclosed by the
Companies to the Consultants which:
(a) is already in the possession of the Consultants from sources
other than from the Companies, provided that within twenty days after the
receipt by the Consultants of information from the Companies under this
Agreement, the Consultants notify Alfa in writing of the existence and nature
of such information in its possession from such other sources and furnish
Alfa with copies of the documents relied upon; or
(b) is generally known to and readily ascertainable by proper means
by other persons who can obtain economic value from its disclosure or use at
the time of disclosure of the Proprietary Information by the Companies to the
Consultants, or which thereafter, through no act or failure of the Consultants,
becomes generally known to and readily ascertainable by proper means by other
persons who can obtain economic value from its disclosure or use; or
(c) is disclosed to the Consultants by a third party not under an
obligation to maintain the information in confidence.
If any part of the information disclosed by the Companies to the
Consultants should ever meet any of the criteria established in the above sub-
paragraphs 9(a),(b) or (c), such shall not affect the Consultants' continuing
obligation to maintain in confidence in accordance with the terms of this
Agreement any other part of the Proprietary Information which does not meet
such criteria.
10. The Parties understand and agree that no license or rights are
granted under this Agreement to any aspect of the Proprietary Information or
the like, other than for the limited purposes contemplated by this Agreement.
11. Title to and ownership of the Proprietary Information shall at all
times remain with API, Ty-Breakers, Alfa or the Targets, as the case may be.
12. If the Companies, or any one of them, in their sole discretion,
determine that the Consultants, or any one of them, are neglecting or failing
to perform or observe any of their obligations of confidentiality under this
Agreement with respect to the Proprietary Information, then, immediately upon
notification from the Companies (or any one of them), the Consultants shall
return the Proprietary Information to Alfa, and the Consultants shall comply
with the requirements of section 8.2 hereof.
13. The Parties to this Agreement acknowledge and agree:
(a) that the Consultants have rendered services to the
Companies prior to the date of this Agreement.
(b) that concurrently with the execution of this Agreement by
the Parties that Alfa shall, as compensation to the
Consultants for their work under this Agreement, grant a
total of four options (the "Stock Options") consisting of
two separate options for each of the Consultants, to
purchase shares of Alfa's $.01 par value common stock
("Common Stock").
(c) that the aforementioned grant of the Stock Options as
compensation to be paid by Alfa to the Consultants under
the provisions of this Agreement shall represent full
payment for all services rendered by the Consultants to
any and all of the Companies or the Targets (i) prior to
the date of this Agreement and (ii) except as required
by section 4(i) hereof, for all services to be rendered
by the Consultants during the Term, to any and all of the
Companies or Targets under the provisions of this
Agreement.
The form of the Stock Option Agreements are attached hereto as Exhibits
C,D,E & F. Each Stock Option is for 500,000 shares of Common Stock and the
exercise prices of the Stock Options are $0.25; $0.50; $0.75 and $1.00 per
share of Common Stock.
14. Governing Law; Jurisdiction; Venue. This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York applicable to contracts made and to be entirely performed
therein and without regard to principles of conflict of laws. Any litigation
based hereon, or arising out of, under or in connection with this Agreement
shall be brought and maintained exclusively in the courts of the State of New
York or in the United States District Court for the Southern District of New
York. Each of Alfa, Ty-Breakers, API and the Consultants hereby expressly and
irrevocably submit to the jurisdiction of the courts of the State of New York
and of the United States District Court for the Southern District of New York
for the purpose of any such litigation set forth above. Each of Alfa, Ty-
Breakers, API and the Consultants hereby expressly and irrevocably waives,
to the fullest extent permitted by law, any objection which they have or
hereafter may have to the laying of venue of any such litigation brought in any
such court referred to above and any claim that any such litigation has been
brought in an inconvenient forum.
15. Assignment; Binding Nature; No Beneficiaries. This Agreement may
not be assigned by any Party hereto without the written consent of the other
Parties. This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the Parties hereto and their respective heirs, personal
representatives, legatees, successors and permitted assigns. This Agreement
shall not confer any rights or remedies upon any person other than to the
Parties hereto and their respective heirs, personal representatives, legatees,
successors and permitted assigns.
16. Counterparts. For the convenience of the Parties, any number of
counterparts hereof may be executed, each such executed counterpart shall be
deemed an original and all such counterparts together shall constitute one and
the same instrument.
17. Amendment. This Agreement may be modified or amended only by an
instrument in writing, duly executed by the Parties.
18. Nonwaiver. No waiver by any Party of any term, provision,
covenant, representation or warranty contained in this Agreement (or any breach
thereof) shall be effective unless it is in writing executed by the Party
against which such waiver is to be enforced; no waiver shall be deemed or
construed as a further or continuing waiver of any such term, provision,
covenant, representation or warranty (or breach) on any other occasion or as a
waiver of any other term, provision, covenant, representation or warranty (or
the breach of any other provision) contained in this Agreement on the same or
any other occasion.
19. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part thereof.
20. Construction. In this Agreement (i) words denoting the singular
include the plural and vice versa, (ii) "it" or "its" or words denoting any
gender include all genders, (iii) the word "including" shall mean "including
without limitation," whether or not expressed, (iv) any reference herein to a
Section refers to a Section of this Agreement, unless otherwise stated, (v)
when calculating a period of time within or following which any act is to be
done or steps taken, the date which is the reference day in calculating such
period shall be excluded and if the last day of such period is not a business
day, then the period shall end on the next day which is a business day, and
(vi) except as otherwise expressly provided herein, all dollar amounts are
expressed in United States funds.
21. Entire Agreement. This Agreement, including the Exhibits attached
hereto, constitutes the entire agreement among the Parties with respect to the
subject matter hereof and supersedes all other prior representations,
agreements and understandings, both written and oral, among the Parties with
respect to such subject matter.
22. Notices. Unless otherwise specifically provided in this
Agreement, all notices, requests, consents, approvals, agreements or other
communications required or permitted to be given under this Agreement shall
be in writing and shall be delivered in one of the following means: (a) by
hand; (b) by facsimile transmission to those Parties with fax numbers
indicated below (with subsequent written confirmation by another means in
compliance with this Section 22); (c) by registered or certified mail, first
class postage prepaid, return receipt requested; or (d) by nationally
recognized overnight courier, addressed to the respective addresses of the
Parties as follows:
If to Alfa, Ty-Breakers or API: With a Copy To:
_______________________________ _______________
Alfa International Corp., or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
Ty-Breakers Corp., or ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Auto-Pilot, Inc. ▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10017
▇▇▇▇▇▇▇▇▇-▇▇-▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Conf:(▇▇▇) ▇▇▇-▇▇▇▇ Conf:(▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇ or ▇▇▇▇: With a Copy To:
____________________ _______________
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, or
▇▇. ▇▇▇▇ ▇▇▇▇
c/o Continental Int'l. Trading Corp. ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 65 Highland Road
Staten Island, N.Y. 10305 ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Conf:(▇▇▇) ▇▇▇-▇▇▇▇ Conf:(▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any Party shall designate for himself or itself by
notice to the other Parties given in accordance herewith. Any such notice or
other communication shall be deemed to have been given or made (i) upon
delivery, if delivered personally, (ii) one (1) business day after
transmission, if delivered by facsimile transmission during normal business
hours, (iii) three (3) business days after mailing, if mailed, or (iv) one (1)
business day after delivery to the courier, if delivered by overnight courier
service.
23. The invalidity or un-enforceability of any provision of this
Agreement shall not affect or limit the validity or enforceability of any other
provision hereof and any such invalid or unenforceable provision shall be
construed or deemed amended by the Parties only to the extent necessary to make
it valid and enforceable.
24. No delay or omission by the Companies in enforcing any right under
this Agreement with respect to the Proprietary Information shall operate as a
waiver of such right. Any such waiver in order to be effective must be in
writing. The Consultants acknowledge that monetary damages may be inadequate to
compensate the Companies for any violation by the Consultants of their
confidentiality obligations with respect to the Proprietary Information
hereunder and that the Companies may seek equitable or injunctive relief in
order to prevent or prohibit any threatened or continuing violation of the
confidentiality of the Proprietary Information disclosed subject to this
Agreement.
25. No publicity release or announcement concerning this Agreement or
the transactions contemplated hereby shall be made without advance written
approval thereof by Alfa. Notwithstanding anything to the contrary contained
anywhere else herein, this Agreement does not obligate Alfa or any of the
Companies or Targets to enter into any merger or acquisition agreement. Any
merger or acquisition that Alfa, the Companies or the Targets may consummate
shall be at the sole discretion of Alfa, the Companies, or the Targets, as the
case may be.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Alfa International Corp.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________ ________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
▇▇▇▇ ▇▇▇▇ Ty-Breakers Corp.
By: /s/▇▇▇▇ ▇▇▇▇ By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________ ________________________
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
Auto-Pilot, Inc.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
