Exhibit 3
CONSULTING AGREEMENT
This CONSULTING AGREEMENT (this "Agreement") is made and entered
into as of April 30, 2002, by and among ZENASCENT, INC., a Delaware corporation
(the "Parent"), BIG CONTENT, INC., a Delaware corporation and an indirect
wholly-owned subsidiary of the Parent ("Big Content"), XXXXXX XXXXXXX
PROMOTIONS, LTD., a New York corporation and a wholly-owned subsidiary of the
Parent ("CKP" and, together with Big Content, the "Company"), XXXXXX XXXXXXX
BOXING, INC., a Delaware corporation and a wholly-owned subsidiary of the Parent
("Boxing"), and XXXXXXXXXX INVESTMENTS, LLC, a Florida limited liability company
(the "Consultant"). The Parent, Big Content, CKP and Boxing are referred to
herein collectively as the "Zenascent Companies."
RECITALS
WHEREAS, Big Content is engaged in the business of acquiring,
adapting, selling, licensing and marketing boxing-related programming, whether
in film or other media (such business, the "Business" and such programming, the
"Content");
WHEREAS, the Zenascent Companies wish for the Company to retain the
services of the Consultant, upon the terms and conditions set forth herein, to
provide services intended to enhance the value of the Business; and
WHEREAS, the Consultant desires to provide consulting services to
the Company upon such terms and conditions.
NOW, THEREFORE, in reliance on and in consideration of the premises
and of the mutual benefits and covenants contained herein, the parties hereto,
intending to be bound, hereby agree as follows:
1. RETENTION AND TERM
Subject to the terms hereof, the Company hereby retains the
Consultant, and the Consultant hereby agrees to such retention, all in
accordance with the terms and conditions set forth herein, for a period
commencing on the date hereof (the "Commencement Date") and ending on the date
determined pursuant to Section 5 (the "Expiration Date").
2. DUTIES
(a) The Consultant shall devote such time to the performance of its
obligations hereunder as the Consultant may make available to the Company, which
shall be limited to a maximum of five (5) hours each week.
(b) The duties of the Consultant hereunder shall be to provide the
services of its personnel to (i) advise the Company with respect to its
strategic planning and development and (ii) advise the Company with respect to
such matters concerning the Business as the Company and the Consultant may from
time to time agree upon.
(c) In performing its services hereunder, the Consultant shall act
in accordance with the privacy and security standards and policies of the
Company as communicated from time to time to the Consultant.
3. COMPENSATION
(a) As compensation for its services hereunder, the Consultant shall
receive (i) a consulting fee during the term of this Agreement at the weekly
rate of $5,000, payable in advance by the Company on the first Business Day (as
hereinafter defined) of each week that the Consultant is retained pursuant to
the terms hereof, (ii) a payment equal to ten percent (10%) of the Net Revenues
(as hereinafter defined) derived by CKP, from any transaction or event related
to boxing matches promoted or co-promoted by CKP (including, without limitation,
lawsuit or settlement proceeds, step-aside fees and proceeds from television
series, a "Boxing Transaction") and generating to total revenues to CKP of at
least $500,000, payable by CKP within five (5) Business Days following the
receipt of such Net Revenues by CKP and (iii) a commission equal to twenty
percent (20%) of the Net Revenues (as hereinafter defined) derived by Big
Content from the sale, licensing or other exploitation of the Library (as
hereinafter defined), payable by Big Content within five (5) Business Days
following the receipt of such Net Revenues by Big Content. As used herein, (A) a
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which federally chartered financial institutions are not open for business in
the City of New York, New York, (B) "Net Revenues" shall mean the total revenues
received by CKP from a Boxing Transaction less the expenses incurred by CKP in
respect of such Boxing Transaction (it being agreed that CKP's general overhead
expenses shall not be deemed expenses incurred in respect of a Boxing
Transaction for purposes of this definition) and (C) the "Library" shall mean
the inventory of filmed boxing events owned by Big Content.
(b) As further compensation for its services hereunder, the Parent
shall be required to apply fifteen percent (15%) of the net proceeds to any of
the Zenascent Companies of any Qualified Financing (as hereinafter defined) to
the repurchase of Series C Convertible Redeemable Preferred Stock, par value
$0.01 per share, of the Parent ("Series C Stock") then held by the Consultant
and its Affiliates at a price per share equal to the liquidation value of such
Series C Stock, which repurchase shall occur as promptly as practicable and in
any event within thirty (30) Business Days following the receipt of such
Qualified Financing by such Zenascent Company. As used herein, a "Qualified
Financing" shall mean any equity or debt financing received by a Zenascent
Company subsequent to the date hereof, other than any such financing required by
the Amended and Restated Agreement and Plan of Merger, dated as of February 21,
2002, by and among the Parent, Zenascent Newco Inc., a Delaware corporation,
Boxing, CKP, Xxxxxx Xxxxxxx and Xxxxx XxXxxxxxx (the "Boxing Merger Agreement").
(c) the Consultant may, upon written notice to the Parent, declare
all amounts payable to the Consultant pursuant to Section 3(a)(i) through the
tenth anniversary of the date hereof to be, whereupon the same shall become,
forthwith due and payable in the event either (i) the Company shall fail to pay
the Consultant any amount due to the Consultant pursuant to Sections 3(a) or
3(b) and such failure shall continue unremedied for twelve (12) or more Business
Days following written notice thereof from the Consultant to the Company or (ii)
Boxing shall fail to pay to Xxxxxx Charitable Remainder Trust, a Florida trust
("Xxxxxx"), any amount due under the 10% Senior Promissory Note, made as of
March 15, 2002, by Boxing to Xxxxxx (the "Note") on the date such payment is
due, and such default shall continue unremedied for twelve (12) or more Business
Days following written notice thereof from Xxxxxx to Boxing. Following the
occurrence of an event specified in clauses (i) or (ii) of this Section 3(c),
the Consultant be entitled to receive the television revenues of CKP and Boxing
to satisfy any amounts then payable to the Consultant pursuant to this Section
3(c), and, upon the Consultant's demand following any such occurrence, CKP and
Boxing shall take all action to ensure that such television revenues are paid
over promptly to the Consultant.
(d) Notwithstanding anything to the contrary herein, the obligations
of the Company and the Parent to pay compensation or make other payments to the
Consultant pursuant to this Section 3 shall terminate immediately upon the
termination of this Agreement pursuant to clauses (i) or (ii) of Section 5(b).
4. INDEPENDENT CONTRACTOR STATUS
Notwithstanding anything to the contrary in this Agreement, the
relationship of the Consultant's officers, employees and equity holders
(collectively, the "Consultant Professionals") to the Zenascent Companies is
that of an independent contractor and this Agreement does not constitute a
contract of employment between the Zenascent Companies and any Consultant
Professional. The Zenascent Companies shall not be required to withhold any
federal, state or local taxes from the Consultant's compensation hereunder or to
make any other deductions required by law or usually made by employers in
respect of employees. No Consultant Professional shall be entitled by virtue of
this Agreement to medical coverage, life insurance, participation in any
pension, stock, option, profit sharing or savings plan of the Zenascent
Companies, or any other benefits now or in the future offered to employees of
the Zenascent Companies.
5. TERMINATION
(a) This Agreement shall terminate in accordance with the terms of
Section 5(b) hereof; provided that the provisions of Sections 5(c), 6, 8(f) and
8(g) shall survive the termination of this Agreement.
(b) This Agreement shall terminate immediately upon the receipt by
the Consultant and its Affiliates (as hereinafter defined), including but not
limited to Xxxxxx, of an aggregate of (i) $4,300,000 in Covered Payments (as
hereinafter defined), if received not later than March 25, 2005 or (ii)
$5,300,000 in Covered Payments, if received not later than March 25, 2012. As
used herein, (A) an "Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Securities and
Exchange Act of 1934, as amended and (B) "Covered Payments" shall mean all
payments pursuant to (1) this Agreement (including, without limitation, Section
3), (2) the Note, (3) section 1.4(b) of the Agreement and Plan of Merger, dated
as of March 8, 2002, by and among Boxing, CKP, Big Content Acquisition Corp., a
Delaware corporation, Big Content, Xxxxxx and the Consultant, (4) proceeds from
the sale of common stock, par value $0.01 per share, of the Parent ("Parent
Common Stock"), acquired pursuant to the warrant to purchase Parent Common Stock
issued to the Consultant and/or its Affiliates pursuant to section 1.3(a)(iii)
of the Boxing Merger Agreement and (5) the Distribution and Purchase Agreement,
dated as of April 30, 2002, by and among Xxxxxx Xxxxxxx, Xxxxx XxXxxxxxx and the
Consultant.
(c) At any time following the termination of this Agreement, the
Parent may, at its option, acquire all shares of Series C Stock then held by the
Consultant and its Affiliates for an aggregate purchase price of $10.00.
6. CONFIDENTIAL INFORMATION
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(a) The Consultant covenants and agrees that it will not at any time
during the continuance of this Agreement or at any time thereafter print,
publish, divulge or communicate to any person, firm, corporation or other
business organization (except in connection with the Consultant's performance of
services hereunder) or use for its own account any secret or confidential
information relating to the business of the Zenascent Companies or any secret or
confidential information relating to the affairs, dealings and concerns of the
Zenascent Companies (the "Confidential Information") which the Consultant has
received or obtained or may receive or obtain during the term hereof (whether or
not developed, devised, or otherwise created in whole or in part by the efforts
of the Consultant). The term "Confidential Information" does not include
information which is or becomes generally available to the public other than as
a result of disclosure by the Consultant. The Consultant further covenants and
agrees that it shall retain the Confidential Information received or obtained
during such service in trust for the sole benefit of the Zenascent Companies and
their respective successors and assigns.
(b) The term Confidential Information as defined in Section 6(a)
hereof shall include information obtained by the Zenascent Companies from any
third party under an agreement including restrictions on disclosure known to the
Consultant.
(c) In the event that the Consultant is required pursuant to
subpoena or other legal process to disclose any of the Confidential Information,
the Consultant will provide the Company with prompt notice so that the Company
may seek a protective order or other appropriate remedy and/or waive compliance
with this Section 6. In the event that such protective order or other remedy is
not obtained or that the Company waives compliance with the provisions of this
Section 6, the Consultant shall furnish only that portion of the Confidential
Information which is legally required.
(d) Since a breach by the Consultant of the provisions of this
Section 6 may injure the Zenascent Companies in a way that cannot be compensated
adequately by damages, in addition to any other remedies available to it, the
Zenascent Companies may obtain an injunction restraining any such breach, and no
bond or other security shall be required. It is understood by and between the
parties hereto that the foregoing covenants by the Consultant set forth in this
Section 6(d) is an essential element of this Agreement, and the Consultant
recognizes that a portion of the payments payable to it under this Agreement is
in consideration of the covenants set forth in such sections.
7. NOTICES
All notices requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given on the date if delivered personally, or
upon the next business day after it shall have been deposited with a nationally
recognized overnight courier (such as Federal Express), or sent by telecopier,
as follows (or at such other address or telecopier number for a party as shall
be duly specified by like notice):
(a) If to the Consultant, to it at
000 Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. English
Telecopier: (000) 000-0000,
with a copy to:
Law Offices of Xxxxxxxx X. Xxxxxxxx
000 Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
(b) If to the Company or the Parent, to it at:
c/o Xxxxxx Xxxxxxx Boxing, Inc.
0 Xxxxxxx Xxxxxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx, President
Telecopier: (000) 000-0000,
with a copy to:
Xxxxxxxxx Xxxxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Telecopier: (000) 000-0000
8. MISCELLANEOUS
(a) This Agreement contains the entire agreement between the parties
hereto and supersedes all prior agreements and understandings, oral or written,
between the parties hereto with respect to the subject matter hereof. The
obligations of each of the Zenascent Companies hereunder shall be on a joint and
several basis.
(b) This Agreement shall inure to the benefit of, and shall be
binding upon, the parties hereto and their respective successors, permitted
assigns, heirs and legal representatives, including any corporation or other
business organization with which the Company may merge or consolidate.
(c) This Agreement shall not be assigned or otherwise transferred by
a party (other than by the Consultant to an Affiliate) without the prior written
consent of the other parties hereto.
(d) This Agreement may not be changed, modified or extended except
upon written amendment executed by the Company and the Consultant. The waiver by
a party of a breach of any of the provisions of this Agreement shall not operate
or be construed as a waiver of any subsequent breach hereof.
(e) If any provision of this Agreement is held invalid or
unenforceable by any court or other tribunal of competent jurisdiction, the
other provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held invalid or
unenforceable.
(f) All questions or disputes pertaining to the validity,
construction, execution and performance of this Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
regard to the conflicts of laws provisions thereof.
(g) Each of the parties hereby agrees to (i) submit to the personal
jurisdiction of the United States District Court for the Southern District of
New York (and all appropriate appellate courts), or, if jurisdiction in such
court is lacking, any court of the State of New York of competent jurisdiction
sitting in New York County (and all appropriate appellate courts), in connection
with any action or dispute hereunder, and (ii) irrevocably waive any objection
it may now or hereafter have as to the venue of any proceeding brought in any
such court or that any such court is an inconvenient forum. In the case any
action or dispute shall be brought hereunder, the losing party or parties
thereto shall pay all attorney fees, court costs and fees and costs of the
prevailing party or parties thereto incident to such action or dispute or the
appeal thereof.
(h) This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
[Signatures appear on the following page]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
ZENASCENT, INC.
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: President
BIG CONTENT, INC.
By: /s/ Xxxxx XxXxxxxxx
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Name: Xxxxx XxXxxxxxx
Title: President
XXXXXX XXXXXXX PROMOTIONS, LTD.
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: President
XXXXXX XXXXXXX BOXING, INC.
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: President
XXXXXXXXXX INVESTMENTS, LLC
By: /s/ Xxxxxxx X. English
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Xxxxxxx X. English, Managing Member
