CONSULTING AGREEMENT
This consulting agreement (the "Agreement") is entered into
this 27th day of February, 2002 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 Contact Sports, Inc.,
a corporation organized under the laws of the State of New York
("Contact") all of whom maintain their offices at 000 Xxxxxxxxxx
Xxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000, on the one hand, and B&G
Consulting Corp., a corporation organized under the laws of the
State of New York ("B&G"), which maintains its office at 000 Xx.
Xxxx'x Xxxxxx, 0xx Xxxxx, Xxxxxx Xxxxxx, X.X. 00000 ("B&G"), on the
other hand. Alfa, Ty-Breakers and Contact are sometimes referred to
herein as the "Companies" and Alfa, Ty-Breakers, Contact and B&G
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 quoted on NASDAQ's OTC
Electronic Bulletin Board under the symbol "TYBR", and
WHEREAS with the assistance of B&G Alfa has, as generally
described in Alfa's Report on Form 8-K dated 9/26/01 attached
hereto as Exhibit A, acquired Contact, and
WHEREAS Ty-Breakers and Contact are now both wholly owned
subsidiaries of Alfa, and
WHEREAS Alfa is now desirous of further developing its
business through (I) the international expansion of Ty-Breakers'
and Contact's marketing efforts, (II) trade finance, factoring and
capital raising activities, and (III) further acquisitions of
companies synergistic with Contact and/or Ty-Breakers
(collectively, the "Targets"), and
WHEREAS B&G has expertise in (1) the structuring of mergers &
acquisitions, (2) international markets & marketing to and sourcing
vendors from such international markets, (3) the equity capital and
financial markets and (4) debt structuring and factoring, and
WHEREAS B&G has agreed to act as the Company's consultant for
the matters covered by this Agreement, and
WHEREAS B&G understands and acknowledges the importance of
maintaining the secrecy and confidentiality of all information
relating to or concerning Contact and its products and plans,
including but not limited to: marketing plans, drawings,
prototypes, products, documents, manuals, notes, photographs,
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customer lists, customer notes, sales materials, customer
proposals, sales orders, things and information, whether oral or
written, relating to Contact or its products as well as all other
confidential information, financial or otherwise, relating to Alfa,
the Companies and Targets (the "Proprietary Information"), and
WHEREAS B&G has received and is desirous of receiving
confidential information relating to Contact and other confidential
information relating to Alfa, Ty-Breakers and the Targets,
including the Proprietary Information, and
WHEREAS B&G has, 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 B&G agrees to continue to
provide such services and advice during the Term (as hereinafter
defined) to Alfa, Ty-Breakers, Contact (and should Alfa acquire any
of the Targets) to the Targets, relating to among other things:
(a) the corporate structure and advisability of future
acquisitions by Alfa of one or more of the Targets.
(b) identifying and structuring transactions and conducting
appropriate due diligence reviews thereof for suitable
Targets
(c) advising and assisting Contact in securing a relationship
with a reputable factor for the purpose of financing
Contact's growth through accounts receivable financing
(d) advising and assisting Alfa as necessary in its capital
raising activities, including but not limited to
introducing Alfa to appropriate registered broker/dealers
for the purpose of selling Alfa's proposed private equity
placements
(e) the provision of marketing and consulting advice to
Contact and 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/or with the European Professional
Basketball Association,
(3) contracting with a professional basketball player as
a spokesperson for Contact,
(4) securing reliable international vendors for the
offshore production of Contact's products, and
(5) the direct marketing of Contact's and Ty-Breakers
products in Russia and via Russian National
television.
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(f) the licensing by Contact (both inside and outside the
U.S.) of it's brand for a children's line and a women's
line.
(g) 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. Preamble. The above stated preamble clauses are all
incorporated herein as if fully set forth in the body of this
Agreement.
2. Term. The term of this Agreement (the "Term") shall be for
three years beginning on the first day of March 2002 unless
otherwise terminated in accordance with the provisions of this
Agreement. Either Party may terminate this Agreement (and the Term)
at any time prior to the expiration of the Term for any reason
whatsoever, but no such termination shall deprive B&G of its rights
to its compensation as described in Sections 4 and 7 and as limited
by Section 8 hereof. Any Party desiring to terminate this Agreement
prior to the expiration of the Term may do so by giving the other
Party thirty (30) days written notice of its intention to do so in
accordance with the provisions of section 17 hereof. In such event
this Agreement and the Term shall be terminated as of the effective
date stated in such notice.
3. Catalogs & Samples. Contact and Ty-Breakers agree to
provide B&G with 50 copies of their product catalogs and with
product samples as the Parties deem necessary or required. B&G will
arrange for a presentation of the Contact and Ty-Breakers product
lines to Xx. Xxxx Xxxx at the government owned Russian Television
Network for inclusion in its "Show Channel" which is the Russian
version of the "home shopping network".
4. B&G's Obligations. Contact has disclosed certain portions
of the Proprietary Information to B&G and agrees to disclose to B&G
such further portions of the Proprietary Information which, in the
sole judgment of Contact, is necessary to enable B&G to determine
the needs and requirements of Contact. B&G agrees to exert its
best efforts to assist Alfa and Contact in accomplishing the
following:
(i) to locate a suitable corporation in the apparel marketing
and/or manufacturing business (the "Licensee"), which
Licensee will be acceptable to Contact, and to negotiate
on behalf of Contact a definitive marketing and
manufacturing rights agreement (the License Agreement")
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with such Licensee whereby such Licensee will be granted
the exclusive worldwide marketing & manufacturing rights
for a children's (age 3 to 10) product line bearing the
Contact Sports brand. The License Agreement will
stipulate that Contact will be paid a royalty on all
sales of licensed product subject to the License
Agreement, will contain such terms as are usual and
customary in such agreements and will be entered into at
the sole discretion of Contact. If such royalties are
paid to Contact during the Term then B&G shall be
entitled, in addition to the compensation set forth in
Section 7 hereof, to ten percent (10%) of each such
royalties.
(ii) to locate a suitable corporation in the apparel
marketing and/or manufacturing business (the "Licensee"),
which Licensee will be acceptable to Contact, and to
negotiate on behalf of Contact a definitive marketing and
manufacturing rights agreement (the License Agreement")
with such Licensee whereby such Licensee will be granted
the exclusive worldwide marketing & manufacturing rights
for a women's and girls product line bearing the Contact
Sports brand. The License Agreement will stipulate that
Contact will be paid a royalty on all sales of licensed
product subject to the License Agreement, will contain
such terms as are usual and customary in such agreements
and will be entered into at the sole discretion of
Contact. If such royalties are paid to Contact during
the Term then B&G shall be entitled, in addition to the
compensation set forth in Section 7 hereof, to ten
percent (10%) of each such royalties.
(iii) to assist Alfa in its capital raising activities.
(iv) to assist Contact in its financing activities
5. Financial Disclosure by Alfa. The Companies agree to
disclose to B&G such corporate and financial information, some of
which may be material non-public information, about their past and
present operations and future plans to allow B&G to develop a
corporate structure and strategy to accomplish Alfa's objectives.
6. Non-Disclosure by B&G. B&G agrees to treat as
confidential any and all information, including the Proprietary
Information, obtained from the Companies pursuant to this
Agreement, and to that end B&G further agrees:
(a) except in the interest of fulfilling their obligations
under this Agreement, to not disclose the Proprietary Information
(which the Parties acknowledge may include material non-public
information, financial or otherwise, pertaining to Alfa), or any
portion thereof to third parties; and
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(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 B&G 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 B&G's 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.
6.1 B&G shall be responsible for the acts or omissions
of any of its employees, affiliates or agents to whom B&G shall
disclose the Proprietary Information or any portion thereof and
B&G hereby warrants and guarantees the full and substantial
performance by such employees, affiliates or agents of the terms,
conditions and obligations of confidentiality of this Agreement.
6.2 B&G agrees not to use the Proprietary Information,
or any portion thereof, for any purpose other than that
contemplated by this Agreement.
6.3 B&G agrees that at the end of the Term, or if any of
the Companies at any time during the Term notifies B&G or if B&G at
any time during the Term notifies any of the Companies, of their or
its election to terminate this Agreement, then B&G shall return to
Alfa within two weeks of such notification any and all of the
Proprietary Information provided to B&G by the Companies, and B&G
shall destroy all records of B&G, which refer to or relate to the
Proprietary Information disclosed to B&G under this Agreement, and
B&G shall affirm such record destruction in writing to Alfa.
6.4 The Companies agree that the obligations of B&G
under this Agreement with respect to the confidentiality of the
Proprietary Information shall not be applicable to any information
disclosed by the Companies to B&G which:
(a) is already in the possession of B&G from sources
other than from the Companies, provided that within twenty days
after the receipt by B&G of information from the Companies under
this Agreement, B&G 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
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Information by the Companies to B&G, or which thereafter, through
no act or failure of B&G, 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 B&G 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
B&G should ever meet any of the criteria established in the above
sub-paragraphs 6.4(a), (b) or (c), such shall not affect B&G's
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.
6.5 The Parties understand and agree that no license(s)
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.
6.6 Title to and ownership of the Proprietary
Information shall at all times remain with Contact, Ty-Breakers,
Alfa or the Targets, as the case may be.
6.7 If the Companies, or any one of them, in their sole
discretion, determine that B&G is neglecting or failing to perform
or observe any of its obligations of confidentiality under this
Agreement with respect to the Proprietary Information, then,
immediately upon notification from the Companies (or any one of
them), B&G shall return the Proprietary Information to Alfa, and
B&G shall comply with the requirements of section 6.3 hereof.
7. Compensation. The Parties to this Agreement acknowledge
and agree:
(a) that B&G has rendered services to the Companies prior
to the date of this Agreement, which services include
but are not limited to (i) assistance with the
selection, structuring & closing of the acquisition
of Contact by Alfa; (ii) the introduction of [name
withheld], a registered broker dealer ("Dealer") to
Alfa; (iii) structuring of the "Private Placement" of
150 Units of Alfa's securities as described in the
Subscription Booklet attached hereto as Exhibit B;
and (iv) assistance in negotiations with Dealer
regarding Dealer's acting as a "selected dealer" for
the Private Placement.
(b) that Alfa shall, subject to the provisions of Section
8 hereof, compensate B&G for its work under this
Agreement by paying B&G the sum of three hundred
sixty thousand dollars ($360,000) during each year of
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the Term. If this Agreement (and the Term) is
terminated early in accordance with the provisions of
Section 2 hereof, then Alfa shall, subject to the
provisions of Section 8 hereof, only be liable to pay
B&G such proportional amount thereof as shall have
accrued based upon a 365 day year.
(c) that the compensation mentioned in Section 7(b)
hereof to be paid by Alfa to B&G under the provisions
of this Agreement shall represent full payment for
all services rendered by B&G to any and all of the
Companies or the Targets (i) prior to the date of
this Agreement and (ii) during the Term except as
required by Sections 4(i), 4(ii) and 7(d) hereof,
(d) that additionally Alfa shall during the Term
compensate B&G in accordance with the Xxxxxx formula
(5, 4, 3, 2, 1 ) for any acquisition of a Target
which was arranged and/or introduced to Alfa by B&G .
(e) in the event of the termination of this Agreement
prior to the expiration of the Term, then, subject to
the conditions set forth in Section 8 hereof, all
compensation due to B&G which remains unpaid, if any,
shall immediately become due and payable.
8. Limitations on Compensation. Notwithstanding anything to the
contrary contained anywhere else in this Agreement, the Parties agree
as follows:
(a) 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, and
(b) The parties acknowledge that in order to continue
operations Alfa (and the Companies) are dependent upon the sale of
Units to be sold in the Private Placement. The Parties therefore
acknowledge and agree that the compensation specified in Section 7(b)
above is contingent upon such sale and such compensation shall only
become due and payable to B&G upon completion of or in proportion to
such sale of Units by Alfa (or after the first year of the Term, in
proportion to Alfa's positive cash flow from operations) and the
receipt by Alfa of (i) funds from such sales of Units or (ii)
positive cash flow from such operations. The Parties agree that the
timing of the payment of such compensation within the Term will be
agreed upon by the Parties and will give due deference to Alfa's cash
position and operational cash flow situation as determined by Alfa's
management at the time.
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(c) Under that certain promissory note dated January 15,
2001 between Continental Consulting Group, Inc., a New York
corporation ("Continental") and Alfa (the "Note") attached hereto as
Exhibit C, Continental is obligated to pay Alfa $66,625 plus accrued
interest thereon. The principals of B&G are also the principals of
Continental. The Parties hereto agree that the total amount due under
the Note will be deducted from the compensation, if any, due to B&G
under this Agreement and will be used to pay the Note in full.
Nothing in this paragraph 8(c) shall be deemed to modify the Note or
Continental's obligations under the Note in any manner whatsoever.
9. 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, Contact and B&G 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, Contact and
B&G 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.
10. 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.
11. 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.
12. Amendment. This Agreement may be modified or amended only
by an instrument in writing, duly executed by the Parties.
13. 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
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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.
14. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part thereof.
15. 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.
16. 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.
17. 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 17); (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 Contact: With a Copy To:
----------------------------------- ---------------
Alfa International Corp., or Xxxxxx X. Xxxxxxxxx, Esq.
Ty-Breakers Corp., or c/o Actrade
Contact Sports, Inc. 0 Xxxx Xxxxx, Xxxx 000
000 Xxxxxxxxxx Xxxxx Xxxx 000
Xxxxxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
Conf:(000) 000-0000 Conf:(212) 563-3271
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If to B&G:
---------
B&G Consulting Corp.
000 Xx. Xxxx'x Xxxxxx
0xx Xxxxx
Xxxxxx Xxxxxx, X.X. 00000
Fax: (000) 000-0000
Conf:(000) 000-0000
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.
18. 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.
19. 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. B&G acknowledges that monetary
damages may be inadequate to compensate the Companies for any
violation by B&G of its 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.
20. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be made
without advance written approval thereof by Alfa.
IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the date first above written.
B&G Consulting Corp. Alfa International Corp.
a New York corporation a New Jersey corporation
By:____________________ By:______________________
Xxxx Xxxx Xxxxx X. Xxxxxx
President President
Ty-Breakers Corp. Contact Sports, Inc
a New York corporation a New York corporation
By:_______________________ By:________________________
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxxx
President Vice-President & Secretary
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