CONSULTING AGREEMENT
This consulting agreement (the "Agreement") is entered into as of
the 1st day of January, 2003 by Alfa International Corp., a
corporation organized under the laws of the State of New Jersey
("Alfa") and Contact Sports, Inc., a corporation organized under
the laws of the State of New York ("Contact") both of which
maintain their offices at 000 Xxxxxxxxxx Xxxxx, Xxxxxx Xxxx, Xxx
Xxxxxx 00000, on the one hand, and SMAT, Inc., a Florida
corporation ("Smat") and Xxxx X. Xxxxx, an individual ("Xxxxx"),
both of whom maintain their business offices at 0000 XX 000xx
Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000, on the other hand. Xxxxx
is the president of Smat. Alfa and Contact are sometimes referred
to herein as the "Companies" and Alfa, Contact, Xxxxx and Smat 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 Contact designs and manufactures athletic and urban
apparel and is a wholly owned subsidiary of Alfa, and
WHEREAS Alfa and Contact are desirous of further developing
Contact's sales and marketing efforts, and
WHEREAS Xxxxx and Smat have expertise in the sales and marketing
of sports apparel to retail stores in the U.S. and overseas, and
WHEREAS Xxxxx and Smat have agreed to act as the Company's sales
and marketing and general business consultant pursuant to this
Agreement, and
WHEREAS Xxxxx and Smat have, prior to the execution date of this
Agreement provided services and advice to Contact and Xxxxx and
Smat agree to continue to provide such services and advice to
Contact during the Term (as hereinafter defined), relating to
among other things:
(a) the provision of marketing, sales and sales promotion advice
to Contact with respect to (1) marketing and selling its products
to retail store accounts in the United States, (2) marketing,
selling and/or licensing its products for sale by others outside
the United States, (3) contracting with professional athletes and
other prominent individuals to act as a spokespersons for Contact,
(4) securing reliable international vendors for the offshore
production of Contact's products, (5) assistance in securing
additional sales and marketing employees and/or independent sales
representatives for Contact, and (6) contracting with professional
firms to further Contact's advertising and public relations
objectives.
(b) the direct marketing and sale by Xxxxx and Smat of Contact's
products
(c) consulting on such other general business 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 hereby 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 two
years beginning on the first day of January 2003 unless otherwise
terminated in accordance with the provisions of Articles 5 or 8
hereof.
3. Xxxxx and Smat's Obligations. Contact has disclosed certain
portions of the Proprietary Information (as hereinafter defined)
to Xxxxx and Smat and agrees to disclose to Xxxxx and Smat such
further portions of the Proprietary Information which, in the
judgment of the Parties, is necessary to enable Xxxxx and Smat to
determine the needs and requirements of Contact. Xxxxx and Smat
agree to exert his best efforts (i) to assist Contact in
accomplishing its primary objective of selling its products to
retail stores, and (ii) to perform those duties outlined in the
preamble above. In this respect, Xxxxx and Smat agree to devote a
portion of their business time and efforts - such time to be not
less than 5 days per month during the Term - to the business
affairs of Contact. Notwithstanding anything to the contrary
contained herein, the Companies hereby expressly agree that Xxxxx
and Smat, at their sole discretion, shall be permitted to consult
for other businesses during the Term, provided only, that such
businesses are not competitors of Contact.
0.Xxxxxxxxx Disclosure by Alfa & Contact. The Companies agree to
disclose to Xxxxx and Smat 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
Xxxxx and Smat to develop a strategy to fulfill their obligations
and to accomplish Contact's objectives. Such disclosure shall be
made by the Companies within ten (10) days after the execution of
this Agreement by the Parties (the "Disclosure Date").
5. Effectiveness of Agreement.The Parties agree that Xxxxx and
Smat, in their sole discretion, shall have a period of ten (10)
days after the Disclosure Date (the "Decision Period") to notify
Contact in writing of their intention to either (a) continue with
this Agreement, or (b) terminate this Agreement. If, during the
Decision Period, Xxxxx and Smat either (i) notify Contact of their
intention to terminate this Agreement or (ii) fail to notify
Contact of their intention to continue with this Agreement, then
this Agreement shall be terminated on the first day next following
the last day of the Decision Period. If, during the Decision
Period, Xxxxx and Smat notify Contact of their intention to
continue with this Agreement, then the date of such notice by
Xxxxx and Smat shall be the "Effective Date". Any notice given
under the terms of this Section 5 must be given by both Xxxxx and
Smat in order to be effective. The occurrence of the Effective
Date shall evidence Xxxxx and Smat's best judgment that they are
able to fulfill all of their obligations under this Agreement.
6. Non-Disclosure by Xxxxx and Smat. Xxxxx and Smat understand
and acknowledge 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, designs,
documents, manuals, notes, photographs, 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 "Proprietary
Information"), and Xxxxx and Smat agree to treat as confidential
any and all information, including the Proprietary Information,
obtained from the Companies pursuant to this Agreement, and to
that end Xxxxx and Smat further agree:
(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
(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 Xxxxx and Smat
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 Xxxxx and Smat's obligations 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. Xxxxx and Smat shall be responsible for the acts or
omissions of any of its employees, affiliates or agents to whom
Xxxxx and Smat shall disclose the Proprietary Information or any
portion thereof and Xxxxx and Smat 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.
6.2. Xxxxx and Smat agree not to use the Proprietary
Information, or any portion thereof, for any purpose other than
that contemplated by this Agreement.
6.3 Xxxxx and Smat agree that at the end of the Term, or if
Contact at any time during the Term notifies Xxxxx and/or Smat or
if Xxxxx and/or Smat at any time during the Term notifies Contact,
of its or his election to terminate this Agreement, then Xxxxx
and Smat shall return to Alfa within two weeks of such
notification any and all of the Proprietary Information provided
to Xxxxx and Smat by the Companies, and Xxxxx and Smat shall
destroy all records of Xxxxx and Smat, which refer to or relate to
the Proprietary Information disclosed to Xxxxx and Smat under this
Agreement.
6.4 The Companies agree that the obligations of Xxxxx and Smat
under this Agreement with respect to the confidentiality of the
Proprietary Information shall not be applicable to any information
disclosed by the Companies to Xxxxx and/or Smat which:
(a) is already in the possession of Xxxxx and/or Smat from
sources other than from the Companies,
(b) is generally known to and readily ascertainable by proper
means by other persons, or which thereafter, through no act or
failure of Xxxxx and/or Smat, becomes generally known to and
readily ascertainable by proper means by other persons; or
(c) is disclosed to Xxxxx and/or Smat 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
Xxxxx and/or Smat should ever meet any of the criteria established
in the above sub-paragraphs 6.4(a), (b) or (c), such shall not
affect Xxxxx'x and Smat's continuing obligations 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 or Alfa, as the case may
be.
7. Compensation. lfa and Contact hereby agree to compensate
Xxxxx and Smat for their services under this Agreement as follows:
7.1 During the period beginning on January 1, 2003 and
ending on December 31, 2003, Contact shall pay Smat the sum of
five thousand dollars ($5,000) for each month, or portion
thereof, that this Agreement remains in effect. During the period
beginning on January 1, 2004 and ending on December 31, 2004
Contact shall pay Smat the sum of ten thousand dollars ($10,000)
for each month, or portion thereof, that this Agreement remains
in effect. Such payments shall be made by Contact on or before
the 10th day of each month during the Term, except that any such
payment which may become due to Smat upon execution of this
Agreement by the Parties shall be paid to Smat upon execution of
this Agreement by the Parties.
7.2 If this Agreement is terminated early in accordance with
the provisions of Section 5 hereof, then Contact shall be only
liable to pay Smat through the last day of the Decision Period.
If this Agreement is terminated early by Xxxxx and/or Smat in
accordance with the provisions of Section 8 hereof, then Contact
shall be only liable to pay Smat through the last day of the
month in which this Agreement is so terminated. If, in accordance
with the provisions of Section 8 hereof, this Agreement is (i)
automatically terminated early or, (ii) terminated early by Alfa
or Contact, then Contact shall be only liable to pay Smat through
the last day of the third month next following the "Termination
Date" (as hereinafter defined).
7.3 Alfa shall issue Xxxxx three hundred fourteen thousand
six hundred sixty (314,660) shares of its $0.01 par value common
stock ("Common Stock") within thirty (30) days after the Effective
Date. Such 314,660 shares of Common Stock issued to Xxxxx pursuant
to this Section 7.3 are defined as the "Xxxxx Stock".
7.3.1 Notwithstanding anything to the contrary contained
herein, if the Effective Date shall not have occurred then Alfa
shall be under no obligation to issue any of the Xxxxx Stock
7.3.2 The Xxxxx Stock, when issued will equal three
percent (3%) of the 10,488,688 shares of Common Stock issued and
outstanding prior to such issuance and as of the date hereof. The
number of shares of the Xxxxx Stock outstanding may be reduced
from time to time by sales or other transfers by Xxxxx of shares
of such Xxxxx Stock. The "Remaining Xxxxx Stock" is defined at
any time as that number of shares of Xxxxx Stock owned by and
registered to Xxxxx(x) which is calculated by subtracting (y) the
number of shares of Xxxxx Stock, if any, sold or transferred by
Xxxxx up to such time from (z) 314,660. The percentage derived by
dividing the number of shares of Remaining Xxxxx Stock issued and
outstanding at any time by the number of shares of Common Stock
issued and outstanding at such time is defined as the "Xxxxx
Percentage". The Xxxxx Percentage shall not be protected against
dilution to any greater extent than the percentage ownership of
any other Alfa shareholder is protected against such dilution;
except as specified in the next sentence. If Alfa at any time
after the Effective Date (1) declares or pays, without
consideration, any dividend on the Common Stock payable in Common
Stock, or (2) creates any right to acquire Common Stock for no
consideration, then Alfa shall proportionately increase the
number of shares of the Remaining Xxxxx Stock so that the Xxxxx
Percentage shall be the same as it was immediately prior to such
transaction.
7.3.3 Xxxxx acknowledges that (i) the shares of Common
Stock represented by the Xxxxx Stock are "restricted securities"
within the meaning of the Securities Act of 1933, as amended (the
"Act"), (ii) as such the Xxxxx Stock has not been registered
under the Act or the securities laws of any state, (iii) the
resale or other transfer of the Xxxxx Stock may be restricted
under the Act and/or applicable state securities laws and such
Xxxxx Stock therefore may not be sold, pledged, assigned or
otherwise disposed of, unless they are registered under the Act,
or an exemption from such registration is available and, (iv)
Alfa is under no obligation to register the Xxxxx Stock under the
Act or any state securities law, or to take any action to make
any exemption from any such registration provisions available.
Xxxxx further acknowledges that Alfa will endorse all
certificates representing the Xxxxx Stock with a legend, together
with any legend that any state authority may require
substantially in the following form:
"These Securities have not been registered under the Securities
Act of 1933, as amended, (the "Act") or the securities laws or
regulations of any state. They may not be offered for sale or
sold, absent an effective registration statement under the Act or
an opinion of counsel, satisfactory to the Company, that such
registration is not required under the Act or any applicable
State laws or regulations".
7.4 Contact agrees to promptly pay, or reimburse Xxxxx for,
all economy class air travel, expenses incurred or expended by
Xxxxx in performing his duties and responsibilities on behalf of
Contact under this Agreement. Xxxxx agrees that when such travel
is combined with business related to clients other than Contact or
with personal travel, then, in such an event, such travel expenses
charged to Contact shall be proportional to Xxxxx'x time spent on
behalf of Contact. Contact agrees to promptly pay, or reimburse
Xxxxx for all entertainment and other business expenses incurred
or expended by Xxxxx in performing his duties and responsibilities
on behalf of Contact under this Agreement, provided Xxxxx receives
prior approval from Contact for any such expenses in excess of
$500. Xxxxx agrees to provide proof of the expenses for which he
seeks reimbursement in accordance with Contact's present expense
reporting policies.
8. Termination. No Party may terminate this Agreement for any
reason prior to December 31, 2003. Any Party may terminate this
Agreement at any time after January 1, 2004 prior to the
expiration of the Term for any reason whatsoever by giving the
other Parties 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 shall be terminated as of the effective
date (a "Termination Date") stated in such notice. Notwithstanding
the foregoing, if, at any time during the Term, Xxxxx shall die
then this Agreement shall automatically terminate on such date of
death (a "Termination Date").
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, Contact and Xxxxx and Smat 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, Contact and Xxxxx and
Smat 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
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 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
or e-mail transmission to those Parties with fax numbers and/or e-
mail addresses 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 or Contact:
Alfa International Corp., or
Contact Sports, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Conf:(000) 000-0000
e-mail: xxxxxx@xx-xxxxxxxx.xxx
If to Xxxxx or Smat:
Xx. Xxxx X. Xxxxx, or
SMAT, Inc
0000 XX 000xx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
Conf:(000) 000-0000
e-mail: xxxxxxxxxx000@xxx.xxx
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 e-mail or
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 publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be made
without advance written approval thereof by Alfa. Xxxxx hereby
consents to the public announcement(s) by Alfa and/or Contactof his
engagement as their consultant as described in this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement
this 2nd day of January 2003.
Xxxx X. Xxxxx Alfa International Corp.
Individually a New Jersey corporation
By:_______________________ By:______________________
Xxxx X. Xxxxx Xxxxx X. Xxxxxx
President
SMAT, Inc Contact Sports, Inc
A Florida corporation a New York corporation
By:_______________________ By:_______________________
Xxxx X. Xxxxx Xxxxx X. Xxxxxx
President Chairman/CEO
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