STOCK PURCHASE AGREEMENT
EXHIBIT
10.1
THIS
STOCK PURCHASE AGREEMENT, dated as of September 11, 2007 (the “Agreement”),
is by
and among King of the Cage, Inc. (the “Company”),
and
the shareholders of the Company as listed in Schedule A hereto (collectively,
the “Seller”),
on
the one hand, and ProElite, Inc., a New Jersey corporation (the “Purchaser”),
on
the other hand.
WITNESSETH:
WHEREAS,
the Seller owns all issued and outstanding shares of capital stock of the
Company (the “Company
Shares”);
and
WHEREAS,
the Seller desires to sell to the Purchaser, and the Purchaser desires to
purchase, the Company Shares on the terms and conditions set forth below;
and
NOW,
THEREFORE, in consideration of the premises and of the mutual representations,
warranties and agreements set forth herein, the parties hereto agree as
follows:
ARTICLE
I
SALE
AND PURCHASE OF SHARES
1.1 Transfer
of Shares.
Subject
to the terms and conditions set forth in this Agreement and in reliance upon
the
representations and warranties of the Seller, the Company and the Purchaser
herein set forth, at the Closing as defined below in Section 3.1, the Seller
shall sell, transfer, convey, assign and deliver to the Purchaser, and the
Purchaser shall purchase from the Seller, by appropriate bills of sale,
assignments and other instruments satisfactory to the Purchaser and its counsel,
good and marketable title in and to the Company Shares.
ARTICLE
II
PURCHASE
PRICE, PAYMENT AND RELATED MATTERS
2.1 Purchase
Price.
The
Purchaser shall pay to the Seller for the Company Shares the purchase price
(the
“Purchase Price”) as follows:
(a) Fixed
Payments.
(i) $3,250,000
cash, payable at the Closing (the “Closing
Cash Payment”),
by
certified or cashier’s check or wire transfer of immediately available funds
into a bank account or accounts designated in writing by the Seller on or prior
to the Closing; and
(ii) 178,571
restricted shares of common stock of the Purchaser to be delivered by the
Purchaser on January 2, 2008 to Seller and/or their designees, (the
“Initial
PE Shares”).
(iii) $500,000
in cash to be paid to accounts designated by Seller sixty days from the Closing
Date subject to any offset for claims made pursuant to Article VIII
hereof.
(b) Contingent
Payments.
For
each twelve month period, commencing on the first day of the month immediately
following the Closing Date, the following (collectively, the “Contingent
Payments”),
(i) The
sum
of US$500,000 within sixty days from the date (the “Anniversary
Date”)
of
each of the first five anniversaries of the first day of the month immediately
following the Closing Date, provided that
not less
than fifteen events were produced under the supervision of Xxxxx Xxxxxxxxxx
(“Xxxxxxxxxx”)
under
the King of the Cage (“KOTC”)
name
during the twelve month period prior to the applicable Anniversary
Date.
(ii) On
each
of the first five Anniversary Dates, $75,000 and the number of shares of common
stock equal to $75,000, based on the lesser of the average closing prices of
the
Purchaser’s Common Stock for the five trading days immediately before the date
of payment, or $7.00 per share (subject to adjustment for any stock splits,
recapitalizations etc.), provided that
no less
than 22 events were produced under the supervision of Xxxxxxxxxx and under
the
KOTC name for each 12 month period commencing the first day of the month after
the Closing Date.
(iii) 13
months
after the Closing, $350,000 split evenly between a cash payment and a stock
payment if the following conditions have been satisfied:
(1) The
earnings before interest, taxes, depreciation and amortization (“EBITDA”) for
the Company’s operations for the twelve month period commencing the first
calendar month immediately following the Closing shall be at least $700,000;
and
(2) There
have been at least 22 events produced under the supervision of Xxxxxxxxxx under
the KOTC name during such period (the “Event
Test”).
Assuming
the Event Test has been met for the applicable period, if EBITDA for the
Company’s operations for the twelve month period commencing the first calendar
month immediately following the Closing is below $700,000, the additional
$350,000 payment will be proportionally reduced with the reduced amount split
between cash and stock. The per share price shall be the lesser of the average
closing prices of the Purchaser’s Common Stock for the 5 trading days
immediately before the date of payment or $7.00 per share price (subject to
adjustment for any stock splits, recapitalizations etc.).
(iv) 25
months
after the Closing, $350,000 split evenly between a cash payment and a stock
payment if the following conditions have been satisfied:
(1) EBITDA
for the Company’s operations for the twelve month period commencing the first
full calendar month after the first anniversary of the Closing is at least
$900,000; and
(2) The
Event
Test has been met during such period.
Assuming
the Event Test has been met for the applicable period, if EBITDA for the
Company’s operations for the twelve month period commencing the first full
calendar month after the first anniversary of the Closing is below $900,000,
the
additional $350,000 payment will be proportionally reduced with the reduced
amount split between cash and stock. The per share price shall be the lesser
of
the average closing prices of the Purchaser’s Common Stock for the five trading
days immediately before the date of payment or $7.00 share price (subject to
adjustment for any stock splits, recapitalizations etc.).
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(v) 37
months
after the Closing, $350,000 split evenly between a cash payment and a stock
payment if the following conditions have been satisfied:
(1) EBITDA
for the Company’s operations for the twelve month period commencing the first
full calendar month after the second anniversary of the Closing is at least
$1,000,000; and
(2) The
Event
Test has been met during such period.
Assuming
the Event Test has been met for the applicable period, if EBITDA for the
Company’s operations for the twelve month period commencing the first full
calendar month after the second anniversary of the Closing is below $1,000,000,
the additional $350,000 payment will be proportionally reduced with the reduced
amount split between cash and stock. The per share price shall be the lesser
of
the average closing prices of the Purchaser’s stock for the five trading days
immediately before the date of payment or $7.00 per share (subject to adjustment
for any stock splits, recapitalizations etc.).
(vi) 49
months
after the Closing, $350,000 split evenly between a cash payment and a stock
payment if the following conditions have been satisfied:
(1) EBITDA
for the Company’s operations for the twelve month period commencing the first
full calendar month after the third anniversary of the Closing is at least
$1,300,000; and
(2) The
Event
Test has been met during such period
Assuming
the Event Test has been met for the applicable period, if EBITDA for the
Company’s operations for the twelve month period commencing the first full
calendar month after the third anniversary of the Closing is below $1,300,000,
the additional $350,000 payment will be proportionally reduced with the reduced
amount split between cash and stock. The per share price shall be the lesser
of
the average closing prices of the Purchaser’s Common Stock for the five trading
days immediately before the date of payment or $7.00 per share (subject to
adjustment for any stock splits, recapitalizations etc.).
(vii) 61
months
after the Closing, $350,000 split evenly between a cash payment and a stock
payment if the following conditions have been satisfied:
(1) EBITDA
for the Company’s operations for the twelve month period commencing the first
full calendar month after the fourth anniversary of the Closing is at least
$1,500,000; and
(2) The
Event
Test has been met during such period
Assuming
the Event Test has been met for the applicable period, if EBITDA for the
Company’s operations for the twelve month period commencing the first full
calendar month after the fourth anniversary of the Closing is below $1,500,000,
the additional $350,000 payment will be proportionally with the reduced amount
reduced split between cash and stock. The per share price shall be the lesser
of
the average closing prices of Purchaser’s Common Stock for the five trading days
immediately before the date of payment or $7.00 per share.
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Notwithstanding
anything herein to the contrary, with regard to any Contingent Payment payable
in stock, (a) there shall be a floor of $2 per share (adjusted for any stock
splits, recapitalizations, etc.), and (b) in the event the average closing
prices of the stock for the five trading days before the applicable date of
payment is less than $7 per share, the Purchaser shall have the option to pay
in
cash.
2.2 Transfer
Taxes.
The
Seller shall be solely responsible for the payment of any and all federal and
state income taxes incident to the sale and transfer of the Company Shares
contemplated herein.
ARTICLE
III
THE
CLOSING
3.1 Time
and Place of Closing.
The
closing of the transactions contemplated hereby (the “Closing”) shall take place
at the offices of Xxxx & Xxxxx Professional Corporation at 10:00 a.m. on
September 12, 2007 (the “Closing Date”) as such date may be changed upon
agreement of the Parties.
3.2 Actions
at the Closing.
At the
Closing, the Seller and the Purchaser shall take such action and execute and
deliver such agreements and other documents and instruments as necessary or
appropriate to effect the transactions contemplated by this Agreement in
accordance with its terms and conditions, including, without limitation, the
following:
(a) The
Purchaser shall pay and deliver to the Seller the Closing Cash
Payment;
(b) The
Seller shall deliver to the Purchaser certificates representing all Company
Shares, together with stock powers duly endorsed for transfer of the Company
Shares to the Purchaser.
(c) The
applicable parties shall execute and deliver the Xxxxxxxxxx Employment
Agreement, the Pledge Agreement, and the Lock-up Agreement.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE SELLER AND THE COMPANY
Each
Seller and the Company hereby jointly and severally represent and warrant to
the
Purchaser that:
4.1 Title
to Company Shares.
The
Seller is the sole legal and beneficial owner of the Company Shares, and upon
consummation of the purchase contemplated herein, the Purchaser will acquire
from the Seller good and marketable title to the Company Shares, free and clear
of all liens, claims, encumbrances or restrictions.
4.2 Authority
to Execute and Perform Agreements.
The
Seller has the full right, power and authority to enter into, execute and
deliver this Agreement and to transfer, convey and sell to the Purchaser at
the
Closing the Company Shares.
4.3 Enforceability.
This
Agreement has been duly and validly executed by the Seller and (assuming the
due
authorization, execution and delivery of Purchaser) constitutes the legal,
valid
and binding obligation of the Seller, enforceable in accordance with its terms,
except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
or by general equitable principles affecting the enforcement of
contracts.
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4.4 No
Violation.
The
execution or delivery by the Seller of this Agreement does not violate in any
material respect any applicable law or any judgment, order or decree of any
court, and will not result in the creation or imposition of any lien, charge
or
other encumbrance upon the Company Shares.
4.5 Non-Contravention.
Neither
the execution and delivery of this Agreement or the other agreements
contemplated hereby to be executed by the Seller nor the consummation by the
Seller of the transactions contemplated hereby or thereby does or would after
the giving of notice or the lapse of time or both, (i) conflict with, result
in
a breach of, constitute a default under, or violate the charter documents of
the
Company or, (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, amend, modify, cancel or refuse to perform under, or
require any notice under any agreement, contract, commitment, license, lease,
instrument or other arrangement to which either of the Seller or the Company
is
a party or by which either of them is bound; or (iii) result in the
creation of, or give any party the right to create, any lien or other rights
or
adverse interests upon any right, property or asset of the Company or the
Seller.
4.6 Securities
Laws.
The
Company Shares were issued in full compliance with all applicable laws relating
to the issuance or sale of securities, and the Seller has obtained all necessary
permits and other authorizations or orders of exemption as may be necessary
or
appropriate under all applicable laws relating to the issuance or sale of
securities with respect to the transactions contemplated herein.
4.7 No
Adverse Litigation.
The
Seller is not a party to any pending litigation which seeks to enjoin or
restrict the Seller’s ability to sell or transfer the Company Shares hereunder,
nor is any such litigation threatened against the Seller. Furthermore, there
is
no litigation pending or threatened against the Seller which, if decided
adversely to the Seller, could adversely affect the Seller’s ability to
consummate the transactions contemplated herein or the Purchaser’s ownership of
the Company shares.
4.8 Representations
with Respect to the Company.
(a) The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of California.
(b) The
Company does not own, directly or indirectly, any capital stock, equity or
interest in any corporation, firm, partnership, joint venture or other
entity.
(c) The
authorized capital stock of the Company consists solely of 1,000,000 shares
of
Common Stock, of which 100 shares are issued and outstanding. All of the
outstanding shares of Common Stock have been duly authorized, validly issued,
fully paid and nonassessable, and have not been issued in violation of any
preemptive right of stockholders. There is no outstanding voting trust agreement
or other contract, agreement, arrangement, option, warrant, call, commitment
or
other right of any character obligating or entitling the Company to issue,
sell,
redeem or repurchase any of its securities, and, there is no outstanding
security of any kind convertible into or exchangeable for any shares of the
capital stock of the Company. The Company has not granted registration rights
to
any person.
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(d) Except
as
disclosed on the balance sheet of the Company as of June 30, 2007, the
Company does not have any (a) assets of any kind or (b), commitments,
liabilities or obligations, whether secured or unsecured, accrued, determined,
absolute or contingent, asserted or unasserted or otherwise.
(e) The
Company has provided true, correct and accurate copies of the unaudited balance
sheet of the Company as of June 30, 2007 and the related statements of
operations, changes in shareholders’ equity and cash flow for the period then
ended, all of which fairly
present the financial position of the Company and the results of operation
and
cash flow thereof, as of the dates and for the periods indicated.
(f) The
Company has filed all tax returns and reports which were required to be filed
on
or prior to the date hereof in respect of all income, withholding, franchise,
payroll, excise, property, sales, use, value-added or other taxes or levies,
imposts, duties, license and registration fees, charges, assessments or
withholdings of any nature whatsoever (together, “Taxes”),
and
has paid all Taxes (and any related penalties, fines and interest) which have
become due pursuant to such returns or reports or pursuant to any assessment
which has become payable, or, to the extent its liability for any Taxes (and
any
related penalties, fines and interest) has not been fully discharged, the same
have been properly reflected as a liability on the books and records of the
Company and adequate reserves therefore have been established.
(g) Schedule 4.8(g)
contains a complete and accurate list of all material agreements (whether
written or oral) to which the Company is a party or is bound (“Contracts”).
Each
Contract is in full force and effect and is valid and enforceable in accordance
with its terms. The Company is, and at all times has been, in compliance with
all material terms and requirements of each Contract and the other party or
parties to such Contracts is, and has been, in like compliance.
(h) The
Company has conducted its business in material compliance with all applicable
laws, ordinances, rules, regulations, court or administrative order, decree
or
process (“Applicable
Law”).
The
Company has not received any notice of violation or claimed violation of any
Applicable Law.
(i) There
is
no claim, dispute, action, suit, proceeding or investigation pending or, to
the
knowledge of Seller, threatened, against the Company, or challenging the
validity or propriety of the transactions contemplated by this Agreement, at
law
or in equity or admiralty or before any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality, nor to
the
knowledge of the Seller, has any such claim, dispute, action, suit, proceeding
or investigation been pending or threatened, during the twelve month period
preceding the date hereof. There is no outstanding judgment, order, writ,
ruling, injunction, stipulation or decree of any court, arbitrator or federal,
state, local, foreign or other governmental authority, board, agency, commission
or instrumentality, against the Company. The Company has not received any
written or verbal inquiry from any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality concerning
the possible violation of any Applicable Law.
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(j) Schedule 4.8(b)
contains a complete and accurate list of all trademarks, service marks, trade
names, domain names, copyrights, trade secrets, websites and all other
proprietary and intellectual property rights (the “Intellectual
Property”)
owned
by or licensed to the Company. None of the Intellectual Property infringes
or
violates the rights of any third party and no claim is pending or threatened
alleging any of the foregoing. The Intellectual Property listed on
Schedule 4.8(b) is all of the Intellectual Property necessary for the
conduct of the Company’s business.
4.9 Interested
Party Transactions.
The
Company is not indebted to the Seller or any of them or to any director, officer
or employee of the Company (except for amounts due as salaries, bonuses,
commissions and reimbursements of expenses in the ordinary course of the
Company’s business), and no such person is indebted to the Company.
4.10 No
Broker.
No
broker, finder, agent or similar intermediary has acted for or on behalf of
Seller or is entitled to a fee or commission in connection with this Agreement
or the transactions contemplated hereby.
4.11 Investment
Purpose; Lock-up
(a) The
Seller is acquiring the Initial PE Shares and any additional shares of the
Purchaser’s Common Stock as provided herein (together with the Initial PE
Shares, the “PE
Shares”),
for
investment for the Seller’s own account and not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and the Seller
has no present intention of selling, granting any participation in, or otherwise
distributing the same. The Seller further represents that the Seller does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation to such person or to any third person,
with respect to any of the PE Shares.
(b) The
Seller understands that the sale of the PE Shares hereunder are not being
registered under the Securities Act of 1933, as amended (the “Securities
Act”),
on
the ground that the sale is exempt from registration under the Securities Act,
and that the Purchaser’s reliance on such exemption is predicated, in part, on
the Seller’s representations set forth herein.
(c) The
Seller acknowledges that the PE Shares are subject to the terms of the Lock-up
Agreement attached hereto (the “Lock-up” Agreement).
4.12 Restricted
Securities.
The
Seller understands that the PE Shares may not be sold, transferred, or otherwise
disposed of without registration under the Securities Act of 1933 as amended
(the “Securities
Act”)
or an
exemption therefrom, and that in the absence of an effective registration
statement covering the PE Shares or any available exemption from registration
under the Securities Act, the PE Shares must be held indefinitely. The Seller
is
aware that the PE Shares may not be sold pursuant to Rule 144 promulgated under
the Securities Act unless all of the conditions of that Rule are met. Among
the
conditions for use of Rule 144 may be the availability of current information
to
the public about the Purchaser. Notwithstanding the foregoing, a portion of
the
PE Shares may be issued or distributed to persons other than the Seller provided
that each such issuee or distributee executes an appropriate investment
representation document.
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ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
The
Purchaser represents and warrants to the Seller that:
5.1 Organization;
Authority; Due Authorization.
The
Purchaser is duly organized, validly existing and in good standing under the
laws of the state of New Jersey, and has all requisite corporate power,
authority and approvals required to enter into, execute and deliver this
Agreement and to perform fully its obligations hereunder. The Purchaser has
taken all actions necessary to authorize it to enter into and perform fully
its
obligations under this Agreement and to consummate the transactions contemplated
herein. This Agreement is the legal, valid and binding obligation of the
Purchaser, enforceable in accordance with its terms.
5.2 No
Violation.
The
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein will not (a) violate, conflict with, or
constitute a default under any contract or other instrument to which the
Purchaser is a party or by which it or its property is bound, (b) require the
consent of any party to any material contract or other agreement to which
Purchaser is a party or by which it or its property is bound, or
(c) violate any laws or orders to which Purchaser or its property is
subject.
5.3 Capitalization.
The
authorized capital stock of Purchaser consists of (i) 250,000,000 shares of
common stock, par value $0.0001, of which 43,028,333 shares are outstanding
as
of the date of this Agreement and (ii) 20,000,000 shares of preferred
stock, of which no shares are outstanding. The PE Shares have been duly
authorized, and, when issued in accordance with the provisions of this
Agreement, will be validly issued, fully paid and nonassessable.
5.4 Financial
Statements.
Purchaser’s financial statements included in Purchaser’s filings with the U.S.
Securities and Exchange Commission fairly and accurately present the financial
condition and results of operations as of the respective dates of and for the
periods referred to in such financial statements.
5.5 Taxes.
Purchaser has filed all tax returns and reports which were required to be filed
on or prior to the date hereof in respect of all income, withholding, franchise,
payroll, excise, property, sales, use, value-added or other taxes or levies,
imposts, duties, license and registration fees, charges, assessments or
withholdings of any nature whatsoever and has paid all Taxes (and any related
penalties, fines and interest) which have become due pursuant to such returns
or
reports or pursuant to any assessment which has become payable, or, to the
extent its liability for any Taxes (and any related penalties, fines and
interest) has not been fully discharged, the same have been properly reflected
as a liability on the books and records of Purchaser and adequate reserves
therefore have been established.
5.6 Compliance
with Law.
Purchaser has conducted its business in material compliance with all applicable
laws, ordinances, rules, regulations, court or administrative order, decree
or
process. Purchaser has not received any notice of violation or claimed violation
of any Applicable Law.
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5.7 Litigation.
There
is no claim, dispute, action, suit, proceeding or investigation pending or,
to
the knowledge of Purchaser, threatened, against Purchaser, or challenging the
validity or propriety of the transactions contemplated by this Agreement, at
law
or in equity or admiralty or before any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality, nor to
the
knowledge of the Purchaser, has any such claim, dispute, action, suit,
proceeding or investigation been pending or threatened, during the twelve month
period preceding the date hereof. There is no outstanding judgment, order,
writ,
ruling, injunction, stipulation or decree of any court, arbitrator or federal,
state, local, foreign or other governmental authority, board, agency, commission
or instrumentality, against Purchaser. Purchaser has not received any written
or
verbal inquiry from any federal, state, local, foreign or other governmental
authority, board, agency, commission or instrumentality concerning the possible
violation of any Applicable Law.
5.8 No
Broker.
No
broker, finder, agent or similar intermediary has acted for or on behalf of
Purchaser or is entitled to a fee or commission in connection with this
Agreement or the transactions contemplated hereby.
ARTICLE
VI
COVENANTS
6.1 Further
Assurances.
Upon
the terms and subject to the conditions contained in this Agreement, the parties
agree, before and after the Closing, (a) to use all reasonable efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement, (b) to execute any documents, instruments or
conveyances of any kind which may be reasonably necessary or advisable to carry
out any of the transactions contemplated hereunder or thereunder, (c) to provide
whatever information and documentation is reasonably required to enable the
Purchaser to prepare financial statements with respect to the Company, and
(d)
to cooperate with each other in connection with the foregoing.
6.2 Conduct
of Business.
From
the Agreement Date through the Closing Date, the Company shall, except as
permitted by this Agreement or as consented to by the Purchaser in writing,
conduct the business only in the ordinary course of business and (i) will not
take any action inconsistent with this Agreement or with the consummation of
the
transactions contemplated hereby and thereby, and (ii) use its best efforts
to
maintain the continuity of management and maintain the business in a condition
that complies with laws and is consistent with the requirements of the business
as it is presently conducted except that the Company may distribute to the
Seller the assets set forth on Schedule B.
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6.3 Covenant
Not to Compete.
(a) Subject
to the performance by the Purchaser of its obligations under this Agreement
and
the other agreements contemplated hereby, Seller shall not, for a period of
four
years from and after the Closing Date, directly or indirectly, as a partner,
joint venturer, employer, employee, contractor, consultant, shareholder,
director, officer, trustee, principal or agent engage in, control, advise with
respect to, manage, act as a consultant to, receive any economic benefit from
or
exert any influence upon any business or businesses engaged in the business
as
conducted by the Company immediately prior to the Closing (the “Restricted
Business”),
in the
United States, provided that the Seller may, without violating this covenant,
become employed or otherwise engaged by a given entity which engages in one
or
more businesses in addition to the Restricted Business, if such other businesses
are separate and distinct from the Restricted Business and such Seller (i)
is
not involved in any way whatsoever in the Restricted Business either directly
or
indirectly through supervision of, administration of, or consultation to those
involved in the Restricted Business, or otherwise and (ii) prior to accepting
such employment or engagement, notifies such entity in writing that he is
subject to this covenant not to compete, supplies a copy of such covenant to
such entity and delivers a copy of such notice to the Purchaser; and provided
further that the Seller may, without violating this covenant own as a passive
investment not in excess of five percent of the securities of a corporation
which engages in the Restricted Business if such securities are regularly and
publicly traded on a national securities exchange or in the over-the-counter
market.
(b) Subject
to the performance by the Purchaser of its obligations under this Agreement
and
the other agreements contemplated hereby, Seller shall not, for a period of
four
years from and after the Closing Date, engage or participate in any effort
or
act to solicit the Company’s or Purchaser’s clients, associates or employees to
cease doing business, or to cease their employment or association, with the
Company or the Purchaser or interfere in any manner with the contractual or
employment relationship between the Company or the Purchaser and any such
client, associate or employee of the Company or Purchaser.
(c) The
Seller acknowledges that the foregoing territorial and time limitations are
reasonable and properly required for the adequate protection of the Purchaser
and that in the event that any such territorial or time limitation is deemed
to
be unreasonable and is then reduced by a court of competent jurisdiction, then,
as reduced, the territorial or time limitation shall be enforced.
(d) The
Seller acknowledges that the remedy at law for any breach or threatened breach
by them of the agreements contained in this Section 6.1 will be inadequate
and agree that the Purchaser, in the event of such breach or threatened breach,
in addition to all other remedies available for such breach or threatened breach
(including a recovery of damages), will be entitled to obtain preliminary or
permanent injunctive relief without being required to prove actual damages
or
post bond and, to the extent permitted by applicable statutes and rules of
procedure, a temporary restraining order (or similar procedural device) upon
the
commencement of such action. This Section 6.3 constitutes an independent
and severable covenant and if any or all of the provisions of this
Section 6.3 are held to be unenforceable for any reason whatsoever, it will
not in any way invalidate or affect the remainder of this Agreement which will
remain in full force and effect. The Seller and Purchaser intend for the
covenants of this Section 6.1 to be enforceable to the maximum extent
permitted by law, and if any reviewing court deems any such covenants to be
unenforceable or invalid, the Seller and the Purchaser authorize such court
to
reform the unenforceable or invalid provisions and to impose such restrictions
as reformed and the remaining provisions as it deems reasonable.
-
10 -
(e) The
covenants set forth in this Section 6.3 shall no longer be in force and effect
at such time as Seller exercises their rights and remedies pursuant to Section
11(b) of the Pledge Agreement, it being understood that upon any such exercise,
the Purchaser shall have no further right to use the name “King of the
Cage.”
6.4 Operation
of the Business—Post Closing.
The
Parties acknowledge that a portion of the Purchase Price is contingent upon
the
operation of the Company after the Closing. Accordingly, the following shall
apply during the period that any Contingent Payment is subject to being earned
pursuant to Section 2.1(b):
(a) The
Company will be operated as a separate unit under the “KOTC” name and trademark.
Prior to each quarterly period (or portion thereof), Xxxxxxxxxx and Purchaser
shall develop a budget (the “Budget”)
for
MMA events to be held in such quarter. Xxxxxxxxxx shall have sole check writing
responsibility for expenses related to such events up to $20,000 per item or
series of related items and thereafter co-authority with a designated officer
of
Purchaser. Any expense not directly related to an event, such as s, g & a
items, will be paid out of Purchaser’s account (but will be charged against the
Company). Purchaser shall not interfere with any contractual obligations of
the
Company disclosed on Schedule 4.8(g).
(b) Subject
to Xxxxxxxxxx’x compliance with the terms of the Xxxxxxxxxx Employment Agreement
(as referenced to in Section 7.1(f) below), Xxxxxxxxxx shall have the
principal responsibility for the ordinary course decisions relating to the
arranging and promotion of events consistent with past practice, including
venue
and fighter selection and the terms of the arrangements with fighters. However,
such responsibility is subject to the overall strategic objections of Purchaser.
Accordingly, Xxxxxxxxxx will consult with Purchaser regarding selection of
fighters and must obtain Purchaser’s approval with respect to matters which may
affect Purchaser’s strategic or corporate initiatives including, without
limitation, sponsorships and media. To the extent that Xxxxxxxxxx is prevented
from pursuing initiatives, including as a direct result of Xxxxxxxxxx performing
duties for other than the Company, which, had they been implemented would have
increased EBITDA, the Company shall be credited for any objectively
ascertainable loss in EBITDA or, if not so ascertainable, the parties shall
use
their best efforts to develop an arrangement to credit the Company for the
loss
in EBITDA, in the absence of which the provisions of Section 9.15 shall
apply. To the extent that Xxxxxxxxxx is prevented by Purchaser from conducting
events under the KOTC name and trademark which would ordinarily be conducted
under such name, Xxxxxxxxxx will get credit for such event as if it was
conducted under the KOTC name.
(c) Any
overhead or similar charges imposed by the Purchaser shall be reasonable and
consistent with such charges as may be imposed with respect to other units
of
the Purchaser and the benefits to be received by the Company such as legal
and
accounting assistance, rents (if any space is provided), and payroll and payroll
taxes of persons assigned to work on the Company’s activities. Subject to a
pre-approved budget and the right of Purchaser to reject a specific individual
on reasonable grounds Xxxxxxxxxx shall have the right to control staffing and
hiring of professionals, agents and representatives except accountants, it
being
understood that the Company’s current operational event crew members are
pre-approved.
-
11 -
(d) Based
on
the Budget, the Purchaser will ensure that the Company has sufficient resources
to operate in accordance with a business plan to be developed by Xxxxxxxxxx
and
approved by Purchaser at the beginning of each yearly period.
Notwithstanding
the foregoing, the Seller acknowledges that the Purchaser is a public company
and that Xxxxxxxxxx and the other management of the Company must comply with
the
rules and guidelines reasonably imposed by the Purchaser, including policies,
procedures and controls established by Purchaser, as in effect from time to
time, to comply with Purchaser’s obligations under the securities laws and the
rules and regulations promulgated thereunder.
(e) All
parties agree that: (i) an election shall be made under Internal Revenue
Code section 1377(a)(2) for closing the corporate books and Sellers will be
responsible for filing the final S corporation tax return and allocation of
the
income and expense shall be made under accrual basis accounting; and
(ii) that they will make a timely election under internal Revenue Code
Section 338(h)(10) and that Purchaser shall allocate the purchase price pursuant
to the rules thereunder; provided that there are no adverse tax consequences
to
Sellers for making such an election.
6.5 Receivables.
All
receivables accrued as of September 30, 2007 (and all cash collected with
respect thereto) from the ordinary course activities of the Company shall be
distributed to Seller as soon as possible.
ARTICLE
VII
CONDITIONS
PRECEDENT TO CLOSING
7.1 Conditions
to Seller’s Obligations to Close.
The
obligations of the Seller to consummate the transactions provided for hereby
are
subject to the satisfaction, before or on the Closing Date, of each of the
conditions set forth below in this Section 7.1, any of which may be waived
by Seller.
(a) Representations,
Warranties and Covenants.
(i) All
representations and warranties of the Purchaser contained in this Agreement,
shall be true and correct at and as of the Agreement Date and at and as of
the
Closing Date, and (ii) the Purchaser shall have performed and satisfied all
agreements and covenants, required hereby to be performed by it before or on
the
Closing Date.
(b) No
Actions or Court Orders.
There
shall not be any court decision, order or injunction by any court or other
governmental body that makes the purchase and sale of the Company Shares
contemplated hereby illegal or otherwise prohibited.
(c) Closing
Deliverables.
The
Purchaser shall have delivered, or caused to be delivered, to Seller those
items
set forth in Section 3.2(a) hereof.
(d) Pledge
Agreement.
The
Purchaser shall have executed and delivered to the Seller a Pledge Agreement
(the “Pledge
Agreement”)
in
form and substance reasonably satisfactory to the Seller pursuant to which
the
Purchaser has granted to the Seller a first priority security interest in and
to
the Company Shares to secure the Purchaser’s obligations with respect to the
Contingent Payments.
-
12 -
(e) Employment
Agreement.
Xxxxxxxxxx shall have entered into an Employment Agreement with the Company
(the
“Xxxxxxxxxx Employment Agreement”) in form and substance reasonably satisfactory
to the Parties on the terms set forth on Schedule C.
(f) Distribution
of Assets.
On or
before the Closing, all cash and cash equivalents as of the Closing shall be
distributed to the Seller.
(g) Lock-up
Agreement.
The
parties have entered into the Lock-up Agreement.
7.2 Conditions
to the Purchaser’s Obligations to Close.
The
obligations of the Purchaser to consummate the transactions provided for hereby
are subject to the satisfaction, before or on the Closing Date, of each of
the
conditions set forth below in this Section 7.2, any of which may be waived
by the Purchaser.
(a) Representations,
Warranties and Covenants.
(i) All
representations and warranties of Seller and the Company contained in this
Agreement, shall be true and correct at and as of the Agreement Date and at
and
as of the Closing Date, and (ii) Seller and the Company shall have performed
and
satisfied all agreements and covenants, required hereby to be performed by
it
before or on the Closing Date.
(b) No
Actions or Court Orders.
No
action by any governmental body or other person shall have been instituted
or
threatened which questions the validity or legality of the transactions
contemplated hereby and which could reasonably be expected to damage the
Purchaser, or the Company if the transactions contemplated hereby are
consummated. There shall not be any regulation or court order that makes the
purchase and sale of the Company Shares contemplated hereby illegal or otherwise
prohibited.
(c) Ancillary
Agreements.
Seller
shall have executed and delivered all agreements contemplated hereunder to
which
it is a party.
(d) Consents.
All
permits, consents, approvals and waivers from any entity shall have been
obtained, except to the extent that the failure to obtain such permits,
consents, approvals and waivers could not reasonably be expected to materially
damage the Purchaser after the Closing.
(e) No
Material Adverse Change.
There
shall have been no material adverse change to the business of the
Company.
(f) Closing
Deliverables.
The
Seller shall have delivered, or caused to be delivered, to the Purchaser those
items set forth in Section 3.2(b) hereof.
(g) Xxxxxxxxxx
Employment Agreement.
The
Xxxxxxxxxx Employment Agreement shall have been entered into.
(h) Due
Diligence Confirmation.
The
Purchaser has confirmed to its reasonable satisfaction the
following:
-
13 -
(1) The
Company has enforceable fighter and talent contracts with at least 10 fighters
including Xxxxxxx Xxxxxxx, Xxxx Xxxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxxxxxx,
Xxxx
Xxxx, Xxxxxxx Xxxxxx, Xxxx Xxxxxxxxx, Xxxx XxXxxxxxxx, and Xxxxxx
Xxxxxxxxxx.
(2) The
Company has enforceable venue contracts with at least 6 casinos and a pending
deal with Soboba Casino for a period of 2 years for at least 8
dates.
(3) The
Company has sponsorship agreements of at least $350,000 for 2007.
(4) The
Company has a Canadian Event License Agreement for $77,000 per year for 2007,
2008, and 2009.
(5) The
Company has library of content (including at least 70 titles) for all media
platforms; and enforceable contracts for the home video license of content
(including DVD) showing minimum fees of $200,000 per year for a period of five
years.
(6) The
Company owns or has license rights in all KOTC brands, Logos, Marks, Trade
Marks, Service Marks.
(7) The
Company has an enforceable retail merchandise contract with CF Brand guaranteed
for 2007 for a minimum of $75,000.
(8) The
Company has generated at least $220,000 in net income for 2006 and such results
together with the financial results for 2005 are auditable.
(9) The
Company has no liabilities/lawsuits except for trade payables incurred in the
ordinary course of business.
(10) The
Company’s books and records are auditable.
ARTICLE
VIII
INDEMNIFICATION
8.1 Indemnity
of the Seller.
For a
period of two (2) calendar years following the date of the Closing the Seller
shall indemnify, defend and hold harmless the Purchaser from and against, and
shall reimburse the Purchaser with respect to, all liabilities, losses, costs
and expenses, including, without limitation, reasonable attorneys’ fees and
disbursements (collectively the “Losses”)
asserted against or incurred by such Purchaser by reason of, arising out of,
or
in connection with any material breach of any representation or warranty
contained in this Agreement made by the Seller or in any document or certificate
delivered by the Seller pursuant to the provisions of this Agreement or in
connection with the transactions contemplated thereby.
8.2 Indemnity
of the Purchaser.
The
Purchaser agrees to indemnify, defend and hold harmless the Seller from and
against, and to reimburse the Seller with respect to, all liabilities, losses,
costs and expenses, including, without limitation, reasonable attorneys’ fees
and disbursements, asserted against or incurred by the Seller by reason of,
arising out of, or in connection with any material breach of any representation
or warranty contained in this Agreement or made by the Purchaser or in any
document or certificate delivered by the applicable Purchaser pursuant to the
provisions of this Agreement or in connection with the transactions contemplated
thereby.
-
14 -
8.3 Indemnification
Procedure.
A party
(an “Indemnified
Party”)
seeking indemnification shall give prompt notice to the other party (the
“Indemnifying
Party”)
of any
claim for indemnification arising under this Article VII. The Indemnifying
Party
shall have the right to assume and to control the defense of any such claim
with
counsel reasonably acceptable to such Indemnified Party, at the Indemnifying
Party’s own cost and expense, including the cost and expense of attorneys’ fees
and disbursements in connection with such defense, in which event the
Indemnifying Party shall not be obligated to pay the fees and disbursements
of
separate counsel for such in such action. In the event, however, that such
Indemnified Party’s legal counsel shall determine that defenses may be available
to such Indemnified Party that are different from or in addition to those
available to the Indemnifying Party, in that there could reasonably be expected
to be a conflict of interest if such Indemnifying Party and the Indemnified
Party have common counsel in any such proceeding, or if the Indemnified Party
has not assumed the defense of the action or proceedings, then such Indemnifying
Party may employ separate counsel to represent or defend such Indemnified Party,
and the Indemnifying Party shall pay the reasonable fees and disbursements
of
counsel for such Indemnified Party. No settlement of any such claim or payment
in connection with any such settlement shall be made without the prior consent
of the Indemnifying Party which consent shall not be unreasonably
withheld.
8.4 Limitation
on Indemnification.
An
Indemnifying Party shall not have any liability under Section 8.1 or 8.2
for any claims unless the aggregate amount of Losses to the Indemnified Party
finally determined exceeds $25,000 (the “Threshold
Amount”),
in
which event the Indemnifying Party shall be required to pay the full amount
of
such Losses in excess of the Threshold Amount, provided, however, that maximum
liability of any party hereunder shall be limited to the consideration received
by such Party under this Agreement.
ARTICLE
IX
MISCELLANEOUS
9.1 Publicity.
No
party to this Agreement shall issue any press release or make any public
announcement regarding the transactions contemplated by this Agreement without
the prior written approval of the other party.
9.2 Confidential
Information.
The
parties acknowledge that the transaction described in this Agreement is of
a
confidential nature and shall not be disclosed except to representatives and
affiliates, or as required by law, until such time as the parties make a public
announcement regarding the transaction as provided in Section 9.1. No party
shall make any public disclosure of the specific terms of this Agreement, except
as required by law. In connection with the negotiation of this Agreement and
preparation for the consummation of the transactions contemplated hereby, each
party acknowledges that it will have access to confidential information relating
to the other party. Such confidential information shall be subject to this
Agreement and be kept confidential and used only in connection with the
transactions contemplated herein.
-
15 -
9.3 Termination
Events.
(a) This
Agreement may be terminated at any time prior to the Closing:
(i) by
the
mutual written agreement of the Purchaser and the Seller;
(ii) by
the
Purchaser or the Seller:
on
or
after October 1, 2007 if the Closing shall not have occurred by the close of
business on such date, provided that such date may, from time to time, be
extended by either party (with written notice to the other party) up to and
including October 15, 2007, and provided, that the terminating or extending
party may not be in default of any of its obligations hereunder and may not
have
caused the failure of the transactions contemplated by this Agreement to have
occurred on or before such date; or if there shall be in effect a final
nonappealable order of a governmental body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby; it being agreed that the parties hereto shall
promptly appeal any adverse determination which is appealable (and pursue such
appeal with reasonable diligence);
(iii) by
the
Purchaser if there is a breach of any representation or warranty set forth
in
Article IV or any covenant or agreement to be complied with or performed by
Seller pursuant to the terms of this Agreement;
(iv) by
the
Seller if there is a breach of any representation or warranty set forth in
Article V or of any covenant or agreement to be complied with or performed
by
the Purchaser pursuant to the terms of this Agreement.
(b) Upon
the
occurrence of any valid termination event set forth in this Section 9.3, the
Purchaser and/or Seller, as applicable, shall deliver written notice to the
non-terminating party. Upon delivery of such notice, this Agreement shall
terminate and the transfer of the Company Shares contemplated hereby shall
be
deemed to have been abandoned without further action by Buyer or Seller. Upon
such termination, the Purchaser shall deliver or destroy all confidential
information regarding Seller, Seller shall deliver or destroy all confidential
information related to the Purchaser to which Seller had access in connection
with the negotiation of this Agreement and the consummation of the transactions
contemplated hereby.
(c) In
the
event that this Agreement is validly terminated as provided in this Section
9.3,
then each of the parties shall be relieved of their respective duties and
obligations arising under this Agreement after the date of such termination
and
such termination shall be without liability to the Purchaser or Seller;
provided, however, that nothing in this Section 9.3 shall relieve the Purchaser
or Seller of any liability for any willful breach of this Agreement occurring
prior to the proper termination of this Agreement.
9.4 Expenses.
Seller,
on one hand, and the Purchaser, on the other hand, shall each bear its own
expenses, including attorneys’, accountants’ and other professionals’ fees,
incurred in connection with the negotiation and execution of this Agreement
and
each other agreement, document and instrument contemplated by this Agreement
and
the consummation of the transactions contemplated hereby and
thereby.
-
16 -
9.5 Survival
of Representations, Warranties and Agreements.
All
representations and warranties and statements made by a party to this Agreement
or in any document or certificate delivered pursuant hereto shall survive the
Closing Date for two years. Each of the parties hereto is executing and carrying
out the provisions of this Agreement in reliance upon the representations,
warranties and covenants and agreements contained in this Agreement or at the
closing of the transactions herein provided for and not upon any investigation
which it might have made or any representations, warranty, agreement, promise
or
information, written or oral, made by the other party or any other person other
than as specifically set forth herein.
9.6 Further
Assurances.
If, at
any time after the Closing, the parties shall consider or be advised that any
further deeds, assignments or assurances in law or any other things are
necessary, desirable or proper to complete the transactions contemplated herein
or to vest, perfect or confirm, of record or otherwise, the title to any
property or rights of the parties hereto, the parties agree that their proper
officers and directors shall execute and deliver all such proper deeds,
assignments and assurances in law and do all things necessary, desirable or
proper to vest, perfect or confirm title to such property or rights and
otherwise to carry out the purpose of this Agreement, and that the proper
officers and directors of the parties are fully authorized to take any and
all
such action.
9.7 Notice.
All
communications, notices, requests, consents or demands given or required under
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered to, or received by prepaid registered or certified mail or
recognized overnight courier addressed to, or upon receipt of a facsimile sent
to, the party for whom intended, as follows, or to such other address or
facsimile number as may be furnished by such party by notice in the manner
provided herein:
|
Attention:
|
|
|
If
to the Seller:
|
Xxxxx
X. Xxxxxxxxxx, Xx.
0000
Xxxxxxx Xxxxx
Xxxxxxx,
XX 00000
|
|
With
a copy to:
|
Xxxxxx
X. Xxxxxxx, Esq.
0000
Xxxxx Xxxxxx
Xxxxxxxx,
XX 00000
|
|
If
to the Purchaser:
|
00000
Xxxxxxxx Xxxxxxxxx, Xxxxx0000
Xxx
Xxxxxxx, XX 00000
Attn:
Chief Executive Officer
|
|
With
a copy to:
|
Xxxxx
X. Xxxxxxxx, Esq.
Xxxx
& Xxxxx Professional Corporation
0000
Xxxxxxx Xxxx Xxxx, 00xx
Xxxxx
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
|
-
17 -
9.8 Entire
Agreement.
This
Agreement and any instruments and agreements to be executed pursuant to this
Agreement, sets forth the entire understanding of the parties hereto with
respect to the Agreement’s subject matter, merges and supersedes all prior and
contemporaneous understandings with respect to its subject matter, including
that certain confidential Letter Agreement dated June 26, 2007 and may not
be
waived or modified, in whole or in part, except by a writing signed by each
of
the parties hereto. No waiver of any provision of this Agreement in any instance
shall be deemed to be a waiver of the same or any other provision in any other
instance. Failure of any party to enforce any provision of this Agreement shall
not be construed as a waiver of its rights under such provision.
9.9 Successors
and Assigns.
This
Agreement shall be binding upon, enforceable against and inure to the benefit
of, the parties hereto and their respective heirs, administrators, executors,
personal representatives, successors and assigns, and nothing herein is intended
to confer any right, remedy or benefit upon any other person. This Agreement
may
not be assigned by any party hereto except with the prior written consent of
the
other parties, which consent shall not be unreasonably withheld.
9.10 Governing
Law.
This
Agreement shall in all respects be governed by and construed in accordance
with
the laws of the State of California applicable to agreements made and fully
to
be performed in the state, without giving effect to any conflicts of law
principles thereof
9.11 Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the
same
instrument.
9.12 Construction.
Headings contained in this Agreement are for convenience only and shall not
be
used in the interpretation of this Agreement. References herein to Articles,
Sections and Exhibits are to the articles, sections and exhibits, respectively,
of this Agreement. As used herein, the singular includes the plural, and the
masculine, feminine and neuter gender each includes the others where the context
so indicates.
9.13 Severability.
If any
provision of this Agreement is held to be invalid or unenforceable by a court
of
competent jurisdiction, this Agreement shall be interpreted and enforceable
as
if such provision were severed or limited, but only to the extent necessary
to
render such provision and this Agreement enforceable.
9.14 Attorneys’
Fees and Costs.
Subject
to Section 9.15, in the event of any action at law or in equity between the
parties hereto to enforce any of the provisions hereof, the unsuccessful party
to such litigation shall pay to the successful party all costs and expenses,
including reasonable attorneys’ fees, incurred therein by such successful party;
and if such successful party shall recover judgment in any such action or
proceeding, such costs, expenses and reasonable attorneys’ fees may be included
in and as part of such judgment.
9.15 Arbitration.
Any
disagreement, dispute, controversy or claim arising out of or relating to this
Agreement, the interpretation hereof, the breach, termination or invalidity
hereof or the employment relationship shall be settled exclusively and finally
by arbitration. Any such arbitration shall be conducted in accordance with
the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitration shall be conducted in Los Angeles, California or in such other
city
in the United States as the parties to the dispute may designate by mutual
written consent. Any decision or award of the arbitral tribunal shall be in
the
form of a written opinion and shall be final and binding upon the parties to
the
arbitration proceeding. The arbitral tribunal shall assess any costs associated
with the arbitration.
-
18 -
IN
WITNESS WHEREOF, each of the parties hereto has executed this Agreement as
of
the date first set forth above.
|
SELLER:
________________________________
XXXXX
XXXXXXXXXX
________________________________
XXXXXXXX
XXXXXXXXXX
|
PURCHASER:
PROELITE
INC.
By:__________________________________
Name:
_______________________________
Its:__________________________________
|
|
COMPANY:
KING
OF THE CAGE, INC.
By:_______________________________
Xxxxx
Xxxxxxxxxx, President
|
-
19 -
EXHIBIT
4.8(g)
|
1.
|
Sponsorship
Agreement
|
December
31, 2006
|
KOTC
- ROCKSTAR, INC.
|
|
2.
|
Sponsorship
Agreement
|
February
15, 2007
|
KOTC
- XXXXX.XXX
|
|
3.
|
Merchandising
Agreement
|
December
31, 2006
|
KOTC
- CF BRAND, LLC
|
|
4.
|
Videogram
License Agreement
|
July
14, 2005
|
KOTC
- BCI ECLIPSE COMPANY, LLC
|
|
5.
|
Videogram
License Agreement
|
January
1, 2007
|
KOTC
- BCI ECLIPSE COMPANY, LLC
|
|
6.
|
Broadcast
and Videogram Production Agreement
|
January
1, 2000
|
KOTC
- BRENTWOOD COMMUNICATIONS, INC.
|
|
7.
|
Broadcast
and Videogram Production Agreement
|
January
1, 2000
|
GLADIATOR
CHALLENGE, INC. - BCI ECLIPSE LLC
|
|
8.
|
Broadcast
and Videogram Production Agreement
|
September
1, 2001
|
KOTC
- BRENTWOOD COMMUNICATIONS INTERNATIONAL, INC.
|
|
9.
|
Trademark
License Agreement
|
July
10, 2005
|
KOTC
- KNK PRODUCTIONS, LIMITED and XXX XXXXXX
|
|
10.
|
Octagon
License Agreement
|
January
__, 2006
|
ZUFFA,
LLC - KnK PROMOTIONS
|
|
11.
|
Sponsorship
Agreement
|
October
26, 2006
|
KOTC
- WELLNX LIFE SCIENCES INC.
|
|
12.
|
Broadcast
License Agreement
|
September
25, 2006
|
KOTC
- JJJ MEDIA PTE. LTD.
|
|
13.
|
Letter
of Confirmation
|
February
9, 2007
|
KOTC
- JJJ MEDIA PTE, LTD
|
|
14.
|
License
Agreement
|
May
2, 2004
|
ZUFFA,
LLC - KOTC and GLADIATOR CHALLENGE, INC.
|
|
15.
|
License
Agreement
|
May
2, 2002
|
ZUFFA,
LLC - GLADIATOR CHALLENGE, INC.
|
|
16.
|
License
Agreement
|
May
2, 2002
|
ZUFFA,
LLC - KOTC
|
|
17.
|
Letter
of Agreement
|
October
12, 2006 (and revision dates )
|
SONY
PICTURES TELEVISION INC. - KOTC
|
|
18.
|
Amendment
1
|
March
22, 2007 (and revised date)
|
SONY
PICTURES TELEVISION INC. - KOTC
|
|
19.
|
Letter
of Understanding
|
March
1, 2006
|
LINK
MEDIA MANAGEMENT - KOTC
|
|
20.
|
Letter
of Agreement
|
January
1, 2006
|
KOTC
- LINK MEDIA MANAGEMENT
|
|
21.
|
Pay-Per-View
Master License Agreement
|
February
28, 2007
|
EchoStar
SATELLITE, LLC
|
|
22.
|
License
Agreement
|
October
28, 2003
|
TVN
- KOTC
|
1
|
23.
|
Amendment
Letter
|
February
25, 2005
|
TVN
- KOTC
|
|
24.
|
Agreement
for License of Rights
|
February
2, 2006
|
STONECUTTER
MEDIA LTD. - FIGHT + LIMITED
|
|
25.
|
Fight
Event Agreement
|
December
16, 2004
|
KOTC
and XXXXX XXXXXXXXXX - MYKY ENTERTAINMENT, LLC and XXXXXXX XXXXXXXXX
|
|
26.
|
License
Agreement
|
January
5, 2004
|
KOTC
and iN DEMAND LLC
|
|
27.
|
Production
Agreement
|
January
1, 2000
|
KOTC
and Brentwood Communications
|
|
28.
|
License
Agreement
|
August
2, 2007
|
KOTC
and Global Gaming Group
|
|
29.
|
Sales
Representative Agreement
|
May
15, 2007
|
KOTC
and BCII
|
|
30.
|
License
Agreement
|
May
15, 2007
|
KOTC
and Brentwood Communications Int’l
|
|
31.
|
Finders
Fee Agreement
|
Xxxxx
0, 0000
|
Xxxx
Xxxxxxxxx and KOTC
|
|
32.
|
Licensing
Agreement
|
June
1, 2007
|
Queenbury
Media and KOTC
|
|
33.
|
Licensing
Agreement
|
Nov.
23, 2006
|
The
Wrestling Channel and KOTC
|
|
34.
|
Casino
Agreement
|
December
31, 2006
|
KOTC—APACHE
GOLD CASINO
|
|
35.
|
Casino
Agreement
|
April
28, 2007
|
KOTC—CHUMASH
CASINO
|
|
36.
|
Casino
Agreement
|
April
1, 2007
|
KOTC—EAGLE
MT. CASINO
|
|
37.
|
Casino
Agreement
|
August
23, 2005
|
KOTC—KONOCTI
VISTA
|
|
38.
|
Casino
Agreement
|
November
21, 2006
|
KOTC—KIOWA
CASINO
|
|
39.
|
Casino
Agreement
|
February
2, 2007
|
KOTC—LAKE
OF THE TORCES
|
|
40.
|
Casino
Agreement
|
February
22, 2007
|
KOTC—NEWCO—RENO
|
|
41.
|
Casino
Agreement
|
December
1, 2004
|
KOTC—SOBOBA
CASINO
|
|
42.
|
Agent
Agreement
|
March
2, 2006
|
KOTC—ICM
|
|
43.
|
Fighter
contracts listed in DUE DILIGENCE PACKET.
|
||
|
44.
|
Preexisting
videogram license agreements with BCI Eclipse for various KOTC titles
under the same terms and conditions as the July 14, 2005
agreement.
|
KOTC—BCI
ECLIPSE COMPANY, LLC
|
|
|
45.
|
Extension
Agreement
|
August
7, 2007
|
KOTC
and iN DEMAND LLC
|
|
46.
|
Casino
Agreement
|
July
25, 2007
|
KOTC—XXXXXX
XXXXXX
|
|
00.
|
Videogram
Production Agreement
|
September
1, 2005
|
KOTC—EXTREME
CHALLENGE
|
|
48.
|
KOTC
and Xxxxxx Xxxxxxx Agreement
|
June
23, 2000
|
Attorney
agreement *
Purchaser’s
fee obligation limited to $125,000 per year and for 6 months following
termination
|
2
Schedule
A
Shareholders
|
Name
|
||
|
Xxxxx
Xxxxxxxxxx
|
50
|
|
|
Xxxxxxxx
Xxxxxxxxxx
|
50
|
|
A-1
Schedule B
Assets
to be Transferred
|
1.
|
2003
Chevrolet Corvette Z06
|
|
2.
|
2004
Dodge Ram Hemi
|
|
3.
|
2004
Mercedes Benz S55
|
|
4.
|
2006
Chevrolet Corvette Z06
|
|
*5.
|
2006
Mako Boat + Trailer
|
|
6.
|
2006
Pontoon Boat + Trailer
|
|
7.
|
2006
Dodge Ram Mega Cab (Diesel)
|
|
*8.
|
Mountain
Property
|
|
9.
|
Present
Checking Account / Cash and Receivables generated through work prior
to
Closing Date. (estimated date - September 1,
2007).
|
|
10.
|
Cameras
(2), Editing and Dubbing Equipment
|
|
11.
|
Personal
Lap-Top.
|
|
*12.
|
Country
Club Membership
|
|
13.
|
Mutual
Funds, IRAs, Pension Accounts, etc.
|
|
14.
|
Home
Office Air Conditioning Xxxx
|
|
00.
|
Home
Office Furniture
|
|
16.
|
All
Auto Improvements
|
|
17.
|
Fitness
Video
|
|
18.
|
Cash
- Bank of America checking account
|
|
19.
|
All
receivables accrued as of September 30, 2007 from the ordinary course
activities of the Company
|
*denotes
not presently in the company*
B-1
Schedule C
Terms
of Xxxxxxxxxx Employment Agreement
| Term: |
5
years
|
| Salary: |
$150,000
annually
|
Incentive
Payment equal to 20% of the excess, if any, of the net income attributable
to
the Company operations for each 12 month period of the employment term above
the
following target: First 12 months: $850,000: Second 12 months: $1,050,000:
Third
12 months: $1,150,000: Fourth 12 Months: $1,450,000: Fifth 12 months:
$1,650,000
ProElite
benefit package equivalent to other top executives
C-1
