EXHIBIT 10.35
CONSULTING AGREEMENT
This Agreement, entered in to this 24th day of January 2002, is by and
between Ultimate Sports Entertainment, Inc., a Delaware corporation
(hereinafter referred to as the "Company") and Xxxxxx Xxxxx (hereinafter
referred to as "Consultant") under the following terms and conditions:
RECITALS:
A. The Company and Consultant desire to set forth in writing the
terms and conditions on which (i) the Company shall engage Consultant, (ii)
Consultant shall render services to the Company or a subsidiary of the
Company, and (iii) the Company shall compensate Consultant for such services
to the Company; and
B. In connection with the engagement of Consultant by the Company,
the Company desires to restrict Consultant's rights to disclose certain
confidential information of the Company;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. ENGAGEMENT OF CONSULTANT
1.1 Engagement. The Company hereby engages Consultant and
Consultant hereby accepts engagement with the Company upon the terms and
conditions hereinafter set forth.
1.2 Independent Contractor. Consultant shall be an independent
contractor and not an agent or employee of the Company. Consultant shall not
have any power or authority to bind the Company. The Company shall not
provide office space or office materials to Consultant to provide the services
set forth in this Agreement. Except for the compensation to be provided
herein, Consultant shall not be entitled to any of the benefits provided by
the Company to its employees. Consultant shall be responsible for and shall
pay any and all state, federal, or local taxes on compensation paid to
Consultant hereunder.
2. TERM
2.1 Initial Term. The term of this Agreement shall be for a
period commencing on the Effective Date (as defined in subsection 2.2 below)
of this Agreement through December 31, 2002, subject, however, to prior
termination as provided herein below, in Section 6.
2.2 Effective Date. The effective date of this Agreement shall
be January 1, 2002.
3. COMPENSATION
3.1 Cash Compensation. For all services rendered by Consultant
under this Agreement, the Company shall pay Consultant during the term hereof
$8,000 per month, payable on the first business day of the month following the
month in which services under this Agreement were rendered by Consultant. If
the Company does not have the cash resources to pay the consulting fee, the
amount of such unpaid fee shall be paid as soon as cash resources are
reasonably available. Unpaid consulting fees shall accrue and bear interest
at 5% per annum.
3.2 Stock Options. As additional compensation to Consultant,
the Company shall grant to him non-statutory options to purchase 3,500,000
shares of common stock of the Company under the Company's Stock Option Plan,
which plan shall be amended to increase the number of options available to
include these options. The options shall vest immediately. The exercise
prices of the options shall be as follows: $0.35 for the first 500,000
shares; $0.75 for the next 500,000 shares; $1.25 for the next 500,000 shares;
$2.00 for the next 1,000,000 shares; and $4.00 for the next 1,000,000 shares.
Unless sooner terminated in accordance with the provisions of the Company's
Stock Option Plan, the options shall expire on December 31, 2006.
4. DUTIES AND RESPONSIBILITIES
4.1 Time Commitment. Consultant shall devote a minimum of 100
hours per month to his duties as a consultant to the Company, but shall not be
required to devote in excess of 200 hours per month to such duties.
4.2 Description of Duties. During the term of this Agreement,
Consultant shall perform the following duties:
(a) Assist the president in all of his duties as chief
executive officer;
(b) In consultation with management, negotiate all business contracts;
(c) Secure foreign methods of distribution for the Company's products; and
(d) Work with management in restructuring existing licensing agreements
and in negotiating new licensing agreements.
4.3 Additional Duties. During the term of this Agreement,
Consultant shall perform such additional duties as he and the Company shall
agree.
5. ADDITIONAL CONSULTANT COVENANTS
5.1 Confidential Information. Consultant recognizes and
acknowledges that certain information, including, but not limited to,
information pertaining to the financial condition of the Company, its systems,
methods of doing business, agreements with customers or suppliers, or other
aspects of the business of the Company or which are sufficiently secret to
derive economic value from not being disclosed (hereinafter "Confidential
Information") may be made available or otherwise come into the possession of
Consultant by reason of his engagement with the Company. Accordingly,
Consultant agrees that he will not (either during or after the term of his
Agreement with the Company) disclose any Confidential Information to any
person, firm, corporation, association, or other entity for any reason or
purpose whatsoever or make use to his personal advantage or to the advantage
of any third party, of any Confidential Information, without the prior written
consent of the Board of Directors (the "Board"). Consultant shall, upon
termination of this Agreement, return to the Company all documents which
reflect Confidential Information (including copies thereof). Notwithstanding
anything heretofore stated in this subsection 5.1, Consultant's obligations
under this subsection 5.1 shall not, after termination of this Agreement,
apply to information which has become generally available to the public
without any action or omission of Consultant (except that any Confidential
Information which is disclosed to any third party by an Consultant or
representative of the Company who is authorized to make such disclosure shall
be deemed to remain confidential and protectable under this subsection 5.1).
5.2 Records. All files, records, memoranda, and other documents
regarding former, existing, or prospective customers of the Company or
relating in any manner whatsoever to Confidential Information or the business
of the Company (collectively ""Records"), whether prepared by Consultant or
otherwise coming into his possession, shall be the exclusive property of the
Company. All Records shall be immediately placed in the physical possession
of the Company upon the termination of this Agreement, or at any other time
specified by the Board. The retention and use by the Consultant of duplicates
in any form of Records after termination of this Agreement is prohibited.
5.3 Remedies. Consultant hereby recognizes and acknowledges
that irreparable injury or damage shall result to the Company in the event of
a breach or threatened breach by Consultant of any of the terms or provisions
of this Section 5, and Consultant therefor agrees that the Company shall be
entitled to an injunction restraining Consultant from engaging in any activity
constituting such breach or threatened breach. Nothing contained herein shall
be construed as prohibiting the Company from pursuing any other remedies
available to the Company at law or in equity for such breach or threatened
breach, including, but not limited to, the recovery of damages from Consultant
and, if Consultant is an Consultant of the Company, the termination of his
engagement with the Company in accordance with the terms of this Agreement.
6. TERMINATION
6.1 For Cause. The Company may terminate this Agreement at any
time for cause. "Cause" shall exist for such termination if Consultant (i) is
adjudicated guilty of illegal activities of consequence by a court of
competent jurisdiction; (ii) commits any act of fraud or intentional
misrepresentation; or (iii) breaches any of the provisions of this Agreement
and which breach the Consultant has not cured or altered to the satisfaction
of the Board within ten (10) days following notice by the Board to the
Consultant regarding such breach.
6.2 Compensation if Terminated for Cause. If the Company
terminates this Agreement pursuant to the provisions of subsection 6.1 hereof,
the Consultant shall not be entitled to receive any compensation following the
date of such termination.
6.3 Termination Other than For Cause. If this Agreement is
terminated due to the death or permanent disability of Consultant or for any
reason other than pursuant to the provisions of subsection 6.1 above, the
Consultant shall continue to receive compensation for three (3) months from
the date of such termination (such payments by the Company to be diminished,
however, by the extent to which the Consultant receives compensation during
such three-month period from a third party employer) in an amount equal to the
monthly compensation paid Consultant for the month prior to such termination.
6.4 Termination by Either Party. This Agreement may be
terminated by either party without cause upon thirty (30) days' prior written
notice. The Consultant shall not be entitled to receive any compensation
following the date of such termination.
6.5 Consultant's Duties on Termination. In the event of
termination of this Agreement, Consultant agrees to deliver promptly to the
Company all equipment, notebooks, documents, memoranda, reports, files,
samples, books, correspondence, lists, or other written or graphic records,
and the like, relating to the Company's business, which are or have been in
his possession or under his control.
7. EXPENSES
7.1 Reimbursement for Expenses. Consultant shall be entitled to
reimbursement of all reasonable expenses actually incurred in the course of
his engagement. Consultant shall submit such expenses on the Company's
standardized expense report form, provided by the Company, and shall attach
thereto receipts for all expenditures. Automobile expenses shall be
reimbursed at the maximum mileage rate allowed by the Internal Revenue
Service.
7.2 Reimbursement Procedures. The Company shall reimburse
Consultant within fifteen (15) days after submission by Consultant of his
expense report; provided that the Company shall have sufficient cash resources
available to pay such expenses within this timeframe. If not, the amount due
for expenses shall accrue and bear interest at 5% per annum and shall be paid
as soon as the cash resources are reasonably available.
8. THE COMPANY'S AUTHORITY
Consultant agrees to observe and comply with the reasonable rules
and regulations of the Company as adopted by the Board either orally or in
writing respecting performance of his duties and to carry out and perform
orders, directions, and policies stated by the Board, to him from time to
time, either orally or in writing.
9. CAR ALLOWANCE
During the term hereof, the Company shall provide the Consultant
with a car allowance, taxable to the Consultant, equal to $1,000 per month comme
ncing as of the Effective Date of this Agreement; provided that the Company
shall have sufficient cash resources available to pay such allowance. If not,
the amount due for car allowance shall accrue and bear interest at 5% per
annum and shall be paid as soon as the cash resources are reasonably
available.
10. ASSIGNMENT
10.1 Assignment by Consultant. This Agreement is a personal
contract, and the duties and obligations of the Consultant hereunder may not
be assigned, without the prior written consent of the Company.
10.2 Assignment by Company. The Company shall have the right to
assign this Agreement to any successor of substantially all of its business or
assets, and any such successor shall be bound by all of the provisions hereof.
11. CORPORATE AND SHAREHOLDER APPROVALS
The Company represents and warrants that the execution of this
Agreement by its corporate officer named below has been duly authorized by the
Board, is not in conflict with any Bylaw or other agreement and will be a
binding obligation of the Company, enforceable in accordance with its terms.
12. MISCELLANEOUS
12.1 Notices. All notices, requests, demands, and other communications
required to or permitted to be given under this Agreement shall be in writing
addressed to the other party at the address set forth below and shall be
conclusively deemed to have been duly given when:
(a) Hand-delivered to the other party;
(b) Received when sent by telex or facsimile at the address and
number set forth below;
(c) The next business day after same have been deposited with a
national overnight delivery service, shipping prepaid, addressed to the
parties as set forth below with next-business day delivery guaranteed,
provided that the sending party receives a confirmation of delivery from the
delivery service provider; or
(d) Three business days after mailing if mailed from within the
continental United States by registered or certified mail, return receipt
requested, addressed to the parties as set forth below.
Company: 0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Facsimile Number (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxx, President
With Copy to Xxxxxx X. Xxxxx
Attorney at Law
00 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Facsimile Number (000) 000-0000
Consultant: 00 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx 0X
Xxx Xxxx, XX 00000
Facsimile Number (000) 000-0000
12.2 Attorneys' Fees. If any legal action or other proceeding
is brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default, or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party or parties
will be entitled to recover reasonable attorneys' fees and other costs
incurred in that action or proceeding, in addition to any other relief to
which it or they may be entitled.
12.3 Entire Agreement; Modification; Waiver. This Agreement
constitutes the entire agreement between or among the parties pertaining to
the subject matter contained in it and supercedes all prior and
contemporaneous agreements, representations, and understandings of the
parties. No supplement, modification, or amendment of this Agreement will be
binding unless executed in writing by all the parties or the applicable
parties to be bound by such amendment. No waiver of any of the provisions of
this Agreement will constitute a waiver of any other provision, whether or not
similar, nor will any waiver constitute a continuing waiver. No waiver will
be binding unless executed in writing by the party making the waiver.
12.4 Governing Law. This Agreement and the rights and duties of
the parties hereto shall be construed and determined in accordance with the
laws of the State of California, and any and all actions to enforce the
provisions of this Agreement shall be brought in a court of competent
jurisdiction in the State of California, and in no other place.
12.5 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of final jurisdiction, it is the intent
of the parties that all other provisions of this Agreement be construed to
remain fully valid, enforceable, and binding on the parties.
12.6 Effect of Headings. The subject headings of the sections
and subsections of this Agreement are included for convenience only and will
not affect the construction of any of its provisions.
12.7 Counterparts; Facsimile Execution. This Agreement may be
executed in any number of counterparts and all such counterparts taken
together shall be deemed to constitute one instrument. Delivery of an
executed counterpart of this Agreement by facsimile shall be equally as
effective as delivery of a manually executed counterpart of this Agreement.
Any party delivering an executed counterpart of this Agreement by facsimile
also shall deliver a manually executed counterpart of this Agreement, but the
failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, or binding effect of this Agreement.
12.8 Full Knowledge. By their signatures, the parties
acknowledge that they have carefully read and fully understand the terms and
conditions of this Agreement, that each party has had the benefit of counsel,
or has been advised to obtain counsel, and that each party has freely agreed
to be bound by the terms and conditions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date above written.
THE COMPANY: Ultimate Sports Entertainment, Inc.
By /s/ Xxxxxxxxx X. Xxxxx
Xxxxxxxxx X. Xxxxx, President
CONSULTANT: ____________________________________
Xxxxxx Xxxxx
