CONSULTING AGREEMENT
TFN, The Football Network
Xxxx Xxxxx, dba Wilshire Resources
February 19, 2001
THIS AGREEMENT is made and entered into this 19th day of February, 2001,
by and between, Xxxx Xxxxx dba Wilshire Resources ("Consultant") and
TFN, The Football Network, Inc., a Delaware corporation (the "Company"),
pursuant to which Consultant is to act as a non-exclusive consultant to
the Company in connection with the acquisition of private funding for
the Company's business (a "Transaction").
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties mutually agree as follows:
1. Term. The term of this Agreement shall commence on the date first
above written and terminate upon receipt of written notice as set forth
herein.
2. Services to be Performed by Consultant. Consultant agrees that in
connection with a potential Transaction, it shall perform the following
services in its capacity as non-exclusive consultant to the Company:
(a) Work with the Company to develop a written list of potential
accredited investors and /or partners ("Investor/Partners"), the list
being referred to as the "Potential Referral List", and, upon the
Company's written approval of the Potential Referral List, introduce
said Investor/Partner to the Company, provided that such
Investor/Partner is an accredited investor as defined in SEC
regulations; within seven days of the introduction, the Consultant will
deliver to the Company a letter noting the name of the Investor/Partner
and the particulars of the introduction, specifying the parties
participating in the introductory conversation or meeting (the
"Registration Letter").
(b) Evaluate with the Company any possible Transaction that might
develop with the Investor/Partner; however, all negotiations between a
potential Investor/Partner and the Company will be conducted by
representatives of the Company, and Consultant shall not be required to
negotiate on the Company's behalf.
(c) Perform additional advisory services as might be necessary in order
to successfully complete a Transaction, provided that such advice and/or
assistance shall not encompass legal or tax issues nor the sale of any
securities nor any activities which require a license or registration
not held by Consultant, or anything in violation of any applicable
federal, state or local law.
3. Non-Binding Authority; No Solicitation. In its role as consultant,
Consultant shall have no authority to bind the Company to any third
party. Nothing contained in this Agreement will require the Company to
accept the terms of any proposal from a potential Investor/Partner.
Furthermore, the Company shall have the right, in its sole and absolute
discretion, to reject any proposed Transaction regardless of its terms.
Consultant will not attempt to sell any security on behalf of the
Company and will not engage in any activity that would be deemed as an
offering of securities, public or private.
4. Transaction Fees:
(a) Definitions. For purposes of this Paragraph 4:
(i)"Consideration" shall be defined to include all payments received
from a particular Transaction in the form of cash, stocks, notes or
other securities, equity investment, funded debt assumed or paid off,
funded development contracts, leases, royalties, licenses or any other
similar form of consideration included in a Transaction.
(ii) "Aggregate Consideration" shall mean the aggregate amount of
Consideration received by the Company pursuant to this Agreement by
virtue of a Transaction.
(iii)"Grace Period" shall mean the period commencing on the date
of termination of this Agreement and expiring three (three) months
thereafter.
(b)Consultant shall receive a transaction fee, as set forth in Paragraph
4(c), only if:
A Transaction is consummated during the term of this Agreement or during
the Grace Period between the Company and an Investor/Partner introduced
by Consultant to the Company and the Investor/Partner appears on the
Potential Referral List (which may be amended by the Consultant during
the term of the agreement) and the Consultant has sent the Company a
Registration Letter per the requirements herein.
(b) Negotiations are reopened during the Grace Period between the
Company
and an Investor/Partner with whom discussions were previously held and a
Transaction is consummated within six (6) months after said discussions
were reopened.
(c) Consultant shall receive (at the time the Consideration is received
by the Company) a finder's fee equal to ten percent (10%) of Aggregate
Consideration, in cash.
Consultant will additionally receive options as follows:
Consultant shall receive at the closing of any Transaction in which he
is entitled to the cash fee described above an option to purchase an
amount of the common stock of the Company equal to the numerical
statement of the value of the consideration received by the Company in
any such Transaction multiplied by 0.05; by way of example, if the
value of the consideration is $1,000,000, then the Consultant would
receive an option to puchase 50,000 shares, subject to the conditions
herein. This method shall be used for each closed Transaction by an
Investor/Partner introduced by Consultant to the Company. The exercise
price of the options granted pursuant to this section shall be $1.00..
The option shall be exercisable over a ten-year period and will expire
thereafter.
(d) If the Consideration received by the Company consists of a security,
the value assigned to such security for purposes of determining
Consultant's transaction fee (pursuant to Paragraph 4) shall be based on
the closing price of such security on the domestic securities exchange
on which it is listed; or, if there is no public market, by mutual
agreement between the parties with reference to fair market value.
(e) In the event that the Consideration to be received includes
securities or other Consideration to be received as an installment sale,
earn-out or other form of delayed or contingent payment, the present
value of that Consideration, discounted at 10% per annum, will be used
to determine Consultant's transaction fees under this Paragraph or at
the option of the Consultant, the Company will issue a note to the
Consultant in the full amount of the unpaid portion of the fee (with
interest at 9% per annum) and the note to the Consultant will be paid as
the Company receives cash for the delayed, contingent, or other non-cash
Consideration. Additionally, at the option of the Consultant, if the
Transaction includes securities, the Consultant may have its fee paid
(with no discount) by distribution of a portion of the securities
received, the amount due the Consultant to be calculated by multiplying
the fair market value of the securities by 10%.
(f) Where a controversy arises where two or more parties claim to have
introduced an Investor/Partner to the Company, any transaction fee will
be payable only to the party who first introduced the Investor/Partner
to the Company as determined by the date of introduction, provided that
such Consultant has timely sent the Registration Letter discussed herein
and provided that it has complied with the other requirements of this
agreement.
(g)Consultant introductions to the Company i. for purposes of strategic
partnerships, strategic alliances, mergers, acquisitions or other types
of Transactions not defined herein, ii. for the purpose of financing
beyond the current $3,500,000 it is seeking and iii. introductions to
financing intermediariesm brokers, advisors, etc. will be the subject of
a separate agreement.
(h) The Company will pay to the Consultant the cash portion of the fees
earned by the Consultant pursuant to this agreement within 24 hours of
the Company's receipt of good funds from the then subject
Investor/Partners introduced to the Company pursuant to the terms of
this agreement.
5. Expenses. The Company will reimburse the Consultant for all expenses
related to Consultant performing its duties under the Agreement, except
that any single expense in excess of one hundred dollars ($100) or an
aggregate in monthly expenses in excess of $200 must receive the prior
approval of the Company to be reimbursable.
6. Transaction Costs. The Company shall be responsible for all costs
associated with closing a Transaction, including but not limited to
legal, accounting, other professional services, appraisals, travel,
fees, and applicable taxes.
10. Termination. The Company or Consultant may terminate this
Agreement at any time upon thirty- (30) days written notice to the other
party. The termination will not affect clauses herein regarding the
Transaction fees (Paragraph 4), which shall continue in full force and
effect.
11. Entire Agreement. This Agreement executed between the parties
contains the entire understanding of the subject matter contained
herein, and supercedes any oral or written contemporaneous or prior
communications between the parties.
12. Amendment. This Agreement and the terms hereof may be amended
only by the written consent of both Consultant and the Company.
13. Governing Law. This Agreement shall be construed in accordance
with the laws of the state of California.
14. Arbitration. Any controversy or claim arising out of or relating
to this Agreement between the Company and Consultant, or breach thereof,
shall be settled by arbitration in Los Angeles, California, in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the
Arbitrator(s) may be entered in any court having jurisdiction thereof.
All expenses incurred by the prevailing party including attorney fees,
will be reimbursed in addition to the funds allowed under the
arbitration proceedings.
15. Indemnification by Company. The Company will indemnify and hold
Consultant and its employees, agents and affiliates (collectively
referred to in this article 15 as "Consultant"), free and harmless to
the maximum extent allowed by law from and against any and all loss,
claims for damage, liability and expenses arising from wrongful acts or
omissions by the Company, in its business operations or Company's
involvement in the services performed under this agreement, or
information given to Consultant or a potential Investor/Partner by the
Company.
16. Indemnification by Consultant. The Consultant will indemnify and
hold Company, its employees, agents and affiliates (collectively
referred to in this article 16 as "Company"), free and harmless, to the
maximum extent allowed by law from and against any and all loss, claims
for damage, liability and expenses arising from wrongful acts or
omissions by Consultant.
17. Business Plan. Consultant agrees to maintain as confidential any
information learned from Company of a proprietary nature.
18. Assignability. This Agreement is not assignable.
19. Misc. This agreement will be binding upon the Company and the
Consultant and their respective successors and assigns. The parties to
this agreement represent that they are authorized to enter into this
agreement. This agreement may be executed via facsimile, which will be
deemed to be an original and will be valid and binding upon each of the
Company and the Consultant.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
THE COMPANY
TFN, The Football Network, Inc.
a Delaware corporation, by:
CONSULTANT:
Xxxx Xxxxx, dba Wilshire Resources
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