CONSULTING AGREEMENT
Exhibit
A
This
CONSULTING AGREEMENT (this “Agreement”) is entered into as of December 7, 2007
(“Effective Date”) by and between PROELITE, INC., a New Jersey corporation, with
its principal office at 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000 (the “Company” or “PE”), and FFP, INC., a Hawaii corporation
(“Consultant,” together with the Company, the “Parties”), with reference to the
following facts:
WHEREAS,
concurrently herewith, the Company is acquiring all or substantially all of
the
business and assets of Future Fight Productions, Inc., pursuant to an Asset
Purchase Agreement, dated as of September 13, 2007, between Consultant and
the
Company (the “Purchase Agreement”), and including the tradename, “Future Fight
Productions” (hereafter, “Future Fight Productions” shall refer to such business
operations and assets); and
WHEREAS,
in connection with the Company’s acquisition of such business and assets of
Consultant, and as a condition thereto, the Company desires that Consultant
be
retained by the Company; and
WHEREAS,
Consultant has certain knowledge, expertise, experience and reputation of which
the Company desires to avail itself; and
WHEREAS,
Consultant and Company desire to set forth their future independent contractor
relationship;
NOW,
THEREFORE, the Company and Consultant desire to set forth in this Agreement
the
terms and conditions of Consultant's engagement by the Company.
ARTICLE
I
ENGAGEMENT;
TERM; DUTIES
1.1 Engagement.
The
Company hereby agrees that, commencing on December 7, 2007 (the “Commencement
Date”) and, subject to Section 4.1, ending on October 31, 2012 (the “Term”), the
Company shall engage Consultant to provide certain consulting services, and
Consultant hereby accepts such engagement by the Company, upon the terms and
subject to the conditions hereinafter set forth.
1.2 Consulting
Services.
Consultant’s duties and services for the Company shall include and not be
limited to the following:
1.2.1 Organizing,
managing, promoting live events for Future Fight Productions and EliteXC Live,
a
subsidiary of the Company (“EliteXC”).
1.2.2 Providing
Consulting Services for all events that are promoted, organized or managed
by
EliteXC;
1.2.3 Signing
fighters to EliteXC and Future Fight Productions;
1.2.4 Seeking
and exploring business opportunities that are relevant to the Company’s
business, including but not limited to sponsorships, strategic deals and
distribution deals;
1.2.5 Reporting
to the President of EliteXC, Xxxx Xxxx, on a routine basis, to be determined
by
Xx. Xxxx; and
1.2.6 Traveling
to PE's headquarters periodically at the request of the Company, as may be
requested from time to time by the President of EliteXC.
1.3 Covenants
of Consultant.
1.3.1 Reports.
Consultant shall use its best efforts and skills to truthfully, accurately,
and
promptly make, maintain, and preserve all records and reports that the Company
may, from time to time, request or require, fully account for all money,
records, equipment, materials, programming including master tapes, or other
property belonging to the Company of which it may have custody, and promptly
pay
and deliver the same whenever it may be directed to do so by the management
of
PE.
(a) In
accordance with Sections 1.2.5 and 1.3.1, Consultant shall submit to the Chief
Financial Officer of the Company all documents, invoices, agreements,
understandings, and contracts and all other records received from third parties
in connection with any Company events, which shall include events promoted
under
“Future Fight Productions”, “ICON”, “EliteXC” or any events promoted by the
Company or an affiliate thereof.
1.3.2 Rules
and Regulations.
Consultant shall obey and be bound by all rules, regulations and special
instructions of the Company and all other rules, regulations, guides, handbooks,
procedures, policies and special instructions applicable to the Company’s
business in connection with its duties hereunder and shall endeavor to improve
its ability and knowledge of the Company’s business in an effort to increase the
value of its services for the mutual benefit of the Company and the
Consultant.
1.3.3 Opportunities.
Consultant shall make all business opportunities of which it becomes aware
that
are relevant to the Company’s business available to the Company, and to no other
person or entity or to itself individually.
1.3.4 Time.
The
Consultant agrees to devote such time and attention to Consulting Services
hereunder as is required to fulfill its obligations under this Agreement in
a
timely and professional manner, recognizing that the time demands may vary
month-to-month.
1.4 Representative
of Consultant.
Consultant shall perform its duties through its representative, XXXXXX XXX
XXXXXXXX (“Xxxxxxxx”). In this Agreement, “Consultant” means and includes
Xxxxxxxx.
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ARTICLE
II
COMPENSATION
2.1 Consulting
Fee.
In
consideration of the Consulting Services to be rendered hereunder, the Company
shall pay to Consultant a consulting fee of Eleven Thousand Six Hundred
Sixty-Six and 66/100 Dollars ($11,666.66) per month for the Term, payable in
arrears on the last day of each month, with the first payment to be made on
December 31, 2007 (“Consulting Fee”). If Xxxxxxxx ceases to be the
representative of Consultant, then, at Company’s election, this Agreement shall
terminate.
2.1.1 For
a
period of five (5) years, Consultant shall receive twenty percent (20%) of
the
earnings before interest, taxes, depreciation and amortization related to the
events that the Consultant promotes under “Future Fight Productions” or “ICON”
(“EBITDA”), after deducting: (i) the Consulting Fee paid under this Agreement
and (ii) any additional sales, general and administrative expenses incurred
by
the Company. The EBITDA payable to Consultant in accordance with this Section
2.1.1, shall be payable to Consultant within ninety (90) days after the end
of
each fiscal year (December 31).
2.2 Consulting
Shares.
In
addition to the Consulting Fee and the EBITDA payable under Section 2.1.1,
if
any, Company shall pay Consultant Consulting Shares, which shall mean Fifty
Thousand shares of Company’s common stock.
2.2.1 Payment.
The
Consulting Shares shall be made in equal payments on each of the first three
(3)
anniversaries of the Effective Date of this Agreement.
2.2.2 Forfeiture.
The
Consulting Shares shall be subject to forfeiture as follows:
(a) Upon
the
termination of this Agreement sooner than the third (3rd) anniversary of its
Effective Date, all shares not yet paid shall be forfeited, except as otherwise
provided in (i) and (ii), immediately below.
(i) A
pro
rata portion of the shares that would have been payable on the anniversary
of
the Closing Date next following the date on which the Consulting Agreement
is
terminated shall be paid to Consultant, such pro rata portion being equal to
the
product of one-third of the Consulting Shares and a fraction, the numerator
of
which is the number of days that have elapsed since the immediately preceding
anniversary of the Closing Date through the date of the termination of the
Consulting Agreement and the denominator of which is 365 (or 366 in the case
of
leap years).
(ii) If
the
Consulting Agreement is terminated by Company “Without Cause” (as defined in
Section 4.5 of this Agreement), then fifty percent (50%) of all shares that
would have been payable after the date on which the Consulting Agreement is
terminated shall be paid to Consultant.
The
shares identified in (i) and (ii), above, shall be paid on the dates on which
such shares would have been paid in accordance with Section 2.2.1, above, had
no
forfeitures occurred.
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(b) Any
payment of Consulting Shares made by Company to Consultant shall be forfeited
by
Consultant, and Consultant shall be obligated to return to Company, without
the
necessity of any demand therefor, the certificate evidencing such shares, if,
within one year of such payment Consultant shall engage or attempt to engage
in
any of the following (each, a “Prohibited Transaction”): (x) sell, exchange,
assign, or otherwise transfer ownership of such Consulting Shares to any person;
(y) hypothecate, mortgage, or otherwise transfer, offer, or pledge such
Consulting Shares as security for indebtedness or for any other purpose; or
(z)
file a petition for protection from creditors under any of the United States
or
any State. A Prohibited Transaction shall be null and void ab initio, and the
Company shall not, and shall not be required to, recognize or otherwise give
effect to any such transfer.
2.2.3 Restricted
Stock; Lock-up.
The
Consulting Shares shall be “restricted stock” for purposes of the Securities Act
of 1933, as amended (“Securities Act”), and the Consulting Stock shall be
subject to a stop transfer order, which Company shall deliver to its transfer
agent. The certificates evidencing the Consulting Shares shall bear a legend
representing (A) that the shares may not be sold, offered for sale or otherwise
transferred or disposed of unless a registration statement is in effect under
the Securities Act or Company has received an opinion of counsel satisfactory
to
it that an exemption from such registration is applicable to such shares and
(B)
that the Company’s transfer agent, prior to acting upon a request to transfer
the stock to the name of a new owner, must notify Company and must decline
to
effect such transfer absent the approval of Company. The Consulting Shares
shall
be subject to certain lock-up provisions pursuant to a separate Lock-up
Agreement.
ARTICLE
III
BUSINESS
EXPENSES
3.1 Business
Expenses.
Consultant will be reimbursed for all reasonable, out-of-pocket business
expenses incurred in the performance by Xxxxxxxx of his duties on behalf of
the
Company, subject to the following: (a) all expenses are to be submitted to
the
Company every two (2) weeks on formal expense sheets; and (b) all expenses
over
Two Hundred and Fifty Dollars ($250.00) require prior approval and submission
of
appropriate supporting documentation to the Chief Financial Officer of the
Company.
ARTICLE
IV
TERMINATION
OF ENGAGEMENT
4.1 Termination
by the Consultant.
The
Consultant may terminate this Agreement “For Good Reason” upon fifteen (15)
days’ written notice to the Company subject to the other Sections in this
Article IV.
4.2 Definition
of “For Good Reason”.
In this
Agreement, “For Good Reason” shall mean any of the following reasons: (i) the
Company materially decreases the Consultant’s authority or responsibilities
and/or assigns to the Consultant duties inconsistent with Consultant’s position
or (ii) the Company’s breach of this Agreement which continues uncured for
fifteen (15) days after receipt by the Company of written notice from Consultant
identifying such breach with reasonable specificity and demanding an immediate
cure thereof.
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4.3 Termination
by Company.
The
Company may terminate this Agreement “With Cause” upon fifteen (15) days’
written notice to Consultant subject to the other Sections in this Article
IV.
4.4 Definition
of “With Cause”.
In this
Agreement, “With Cause” shall mean any of the following causes: (i) Xxxxxxxx
ceases to be a representative of Consultant or (ii) Consultant’s breach of this
Agreement which continues uncured for fifteen (15) days after receipt by
Consultant of written notice from the Company identifying such breach with
reasonable specificity and demanding an immediate cure thereof.
4.5 Definition
of “Without Cause”.
In this
Agreement, “Without Cause” shall mean any and/or all causes that are not
specified in the definition of the term “With Cause” in Section 4.4
above.
4.6 Termination
Prior to October 31, 2008.
Notwithstanding the foregoing Sections in this Article IV, should Company
terminate this Agreement prior to October 31, 2008, whether “With Cause” or
“Without Cause”, Company shall pay Consultant the entire Consulting Fee that
would have been payable through the end of such date. The payment referred
to in
the foregoing sentence shall be payable in arrears on the last day of each
month
and shall be in addition to other termination payments that may be applicable
as
specified in Sections 4.7 and 4.8 below.
4.7 Termination
by Company “Without Cause”.
Should
Company terminate this Agreement “Without Cause”, Company shall pay Consultant
fifty percent (50%) of the remaining Consulting Fee that would have been payable
through the end of the Term, such payment to be made in equal amounts on
December 31 of each calendar year within the original Term.
4.8 Termination
by Consultant “For Good Reason”.
Should
Consultant terminate this Agreement “For Good Reason”, Company shall pay
Consultant fifty percent (50%) of the remaining Consulting Fee that would have
been payable through the end of the Term, such payment to be made in equal
amounts on December 31 of each calendar year within the original
Term.
ARTICLE
V
INVENTIONS
AND TRADEMARK; CONFIDENTIAL INFORMATION;
NON-DISCLOSURE;
UNFAIR COMPETITION; CONFLICT OF INTEREST
5.1 Inventions
and Trademark.
All
ideas, inventions, trademarks, proprietary information, know-how, processes
and
other developments or improvements developed by Consultant, alone or with
others, during the Term, that are within the scope of Company’s business
operations or that relate to Company’s work or projects, are the exclusive
property of Company. In that regard, Consultant agrees to disclose promptly
to
Company any and all inventions, discoveries, trademarks, proprietary
information, know-how, processes or improvements, patentable or otherwise,
that
it may make from the beginning of Consultant’s engagement until the termination
thereof, that relate to the business of Company, whether such is made solely
or
jointly with others. Consultant further agrees that, during the Term, it will
provide Company with a reasonable level of assistance, at Company’s sole option
and expense, to obtain patents in the United States of America, or elsewhere
on
any such ideas, inventions, trademarks and other developments, and agrees to
execute all documents necessary to obtain such patents in the name of
Company.
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5.2 Confidential
Information.
Consultant shall hold and keep confidential for the benefit of Company all
secret or confidential information, files, documents other media in which
confidential information is contained, knowledge or data (collectively the
“Confidential Information”) relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained
by
Consultant during its engagement by Company or any of its affiliated companies.
Confidential Information does not include information that is already public
knowledge at the time of disclosure (other than by acts by Consultant or
Xxxxxxxx in violation of this Agreement) or that is provided to Consultant
by a
third party without an obligation with Company to maintain the confidentiality
of such information. After termination of Consultant’s engagement with Company,
Consultant shall not, without the prior written consent of Company, or as may
otherwise be required by law or legal process, communicate or divulge any
Confidential Information to anyone other than Company and those designated
by
it. Consultant shall acknowledge that all confidential documents are and shall
remain the sole and exclusive property of Company regardless of who originally
acquired the confidential documents. Consultant agrees to return to Company
promptly upon the expiration or termination of its engagement or at any other
time when requested by Company, any and all property of Company, including,
but
not limited to, all confidential documents and copies thereof in its possession
or control. Any loss resulting from a breach of the foregoing obligations by
Consultant to protect the Confidential Information could not be reasonably
or
adequately compensated in damages in an action at law. Therefore, in addition
to
other remedies provided by law or this Agreement, Company shall have the right
to obtain injunctive relief, in the appropriate court, at any time, against
the
dissemination by Consultant of the Confidential Information, or the use of
such
information by Consultant in violation hereof.
5.2.1 Restriction
on Use of Confidential/Trade Secret Information.
Consultant agrees that its use of confidential/trade secret information is
subject to the following restrictions for an indefinite period of time so long
as the confidential/trade secret information has not become generally known
to
the public:
(a) Non-Disclosure.
Consultant agrees that it will not publish or disclose, or allow to be published
or disclosed, confidential/trade secret information to any person without the
prior written authorization of the Company unless pursuant to the services
and
Consultant’s duties to the Company under this Agreement.
(b) Non-Removal/Surrender.
Consultant agrees that it will not remove any confidential/trade secret
information from the offices of the Company or the premises of any facility
in
which the Company is performing services, except pursuant to its duties under
this Agreement. Consultant further agrees that it shall surrender to the Company
all documents and materials in its possession or control which contain
confidential/trade secret information and which are the property of the Company
upon the termination of this Agreement, and that it shall not thereafter retain
any copies of any such materials.
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5.2.2 Non-Solicitation
of Customers/Prohibition Against Unfair Competition.
Consultant agrees that at no time after its engagement with the Company will
it
engage in competition with the Company while making any use of the Company’s
confidential/trade secret information. Consultant agrees that it will not
directly or indirectly accept or solicit, whether as an employee, independent
contractor or in any other capacity, the business of any customer of the Company
with whom Consultant worked or otherwise had access to the Company’s
confidential/trade secret information pertaining to its business with that
customer during the last year of Consultant’s engagement with the
Company.
5.3 Non-Solicitation
During Engagement.
Consultant shall not during its engagement inappropriately interfere with the
Company’s business relationship with its customers or suppliers or solicit any
of the employees of the Company to leave the employ of the Company.
5.4 Non-Solicitation
of Employees.
Consultant agrees that, for one year following the termination of this
engagement, it shall not, directly or indirectly, ask or encourage any of the
Company’s employees to leave their employment with the Company or solicit any of
the Company’s employees for employment.
5.5 Breach
of Provisions.
If the
Consultant breaches any of the provisions of this Section 5, or in the event
that any such breach is threatened by the Consultant, in addition to and without
limiting or waiving any other remedies available to the Company at law or in
equity, the Company shall be entitled to immediate injunctive relief in any
court, domestic or foreign, having the capacity to grant such relief, to
restrain any such breach or threatened breach and to enforce the provisions
of
this Section 5.
5.6 Reasonable
Restrictions.
The
parties acknowledge that the foregoing restrictions, as well as the duration
and
the territorial scope thereof as set forth in this Section 5, are under all
of
the circumstances reasonable and necessary for the protection of the Company
and
its business.
ARTICLE
VI
INDEPENDENT
CONTRACTOR
6.1 Independent
Contractor.
The
Consultant’s relationship with the Company will be that of an independent
contractor, and neither Consultant nor Xxxxxxxx shall be partners or joint
venturers with Company. Xxxxxxxx shall not be an employee of the
Company.
6.2 No
Authority.
Neither
the Consultant nor Xxxxxxxx, nor any partner, agent or employee of the
Consultant, has authority to enter into contracts that bind the Company or
EliteXC or create obligations on the part of the Company or EliteXC without
the
prior written authorization of the Company or EliteXC.
6.3 No
Benefits.
The
Consultant and Xxxxxxxx acknowledge and agree that Xxxxxxxx will not be eligible
for any Company employee benefits, regardless of whether the status of Xxxxxxxx
is redetermined by the Internal Revenue Service or other regulatory authority
to
be that of employee.
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6.4 Withholding.
Consultant shall have full responsibility for applicable taxes on all amounts
paid to Consultant under this Agreement, and by Consultant to Xxxxxxxx, and
for
compliance with all applicable labor and employment requirements with respect
to
Xxxxxxxx, including, without limitation, all requirements respecting the
withholding and payment of taxes.
ARTICLE
VII
MISCELLANEOUS
7.1 Binding
Effect; Assignment.
This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective legal representatives, heirs, distributees, successors and
assigns. Consultant may not assign any of its rights and obligations under
this
Agreement. The Company may assign its rights and obligations under this
Agreement to any successor entity.
7.2 Notices.
Any
notice provided for herein shall be in writing and shall be deemed to have
been
given or made (a) when personally delivered or (b) when sent by telecopier
and
confirmed within 48 hours by letter mailed or delivered to the party to be
notified at its or his/her address set forth herein; or three days after being
sent by registered or certified mail, return receipt requested, (or by
equivalent courier with delivery documentation such as FEDEX or UPS) to the
address of the other party set forth or to such other address as may be
specified by notice given in accordance with this Section 7.2:
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If
to the Company:
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00000
Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
XxXxxx
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If
to Consultant:
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FFP,
Inc.
c/x
Xxxxxx Xxx Xxxxxxxx
0000
Xxxxxxxx Xxxx Xxxx
Xxxxxxxx,
Xxxxxx 00000
Telephone: (000)
000-0000
Facsimile: (808)
___-____
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7.3 Severability.
If any
provision of this Agreement, or portion thereof, shall be held invalid or
unenforceable by a court of competent jurisdiction, such invalidity or
unenforceability shall attach only to such provision or portion thereof, and
shall not in any manner affect or render invalid or unenforceable any other
provision of this Agreement or portion thereof, and this Agreement shall be
carried out as if any such invalid or unenforceable provision or portion thereof
were not contained herein. In addition, any such invalid or unenforceable
provision or portion thereof shall be deemed, without further action on the
part
of the parties hereto, modified, amended or limited to the extent necessary
to
render the same valid and enforceable.
7.4 Waiver.
No
waiver by a party hereto of a breach or default hereunder by the other party
shall be considered valid, unless expressed in a writing signed by such first
party, and no such waiver shall be deemed a waiver of any subsequent breach
or
default of the same or any other nature.
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7.5 Entire
Agreement.
This
Agreement, the Asset Purchase Agreement and the Noncompetition, Nonsolicitation
And Nondisclosure Agreement by and between the Company and the Consultant,
set
forth the entire agreement between the Parties with respect to the subject
matter hereof, and supersedes any and all prior agreements between the Company
and Consultant, whether written or oral, relating to any or all matters covered
by and contained or otherwise dealt with in this Agreement. This Agreement
does
not constitute a commitment of the Company with regard to Consultant’s
engagement, express or implied, other than to the extent expressly provided
for
herein.
7.6 Amendment.
No
modification, change or amendment of this Agreement or any of its provisions
shall be valid, unless in writing and signed by the party against whom such
claimed modification, change or amendment is sought to be enforced.
Notwithstanding the foregoing sentence, no change shall be made with respect
to
the time or form of any payments due hereunder.
7.7 Authority.
The
Parties each represent and warrant that it or he has the power, authority and
right to enter into this Agreement and to carry out and perform the terms,
covenants and conditions hereof.
7.8 Attorneys’
Fees.
If
either party hereto commences a mediation or other action against the other
party to enforce any of the terms hereof or because of the breach by such other
party of any of the terms hereof, the prevailing party shall be entitled, in
addition to any other relief granted, to all actual out-of-pocket costs and
expenses incurred by such prevailing party in connection with such action,
including, without limitation, all reasonable attorneys’ fees, and a right to
such costs and expenses shall be deemed to have accrued upon the commencement
of
such action and shall be enforceable whether or not such action is prosecuted
to
judgment.
7.9 Titles.
The
titles of the sections of this Agreement are inserted merely for convenience
and
ease of reference and shall not affect or modify the meaning of any of the
terms, covenants or conditions of this Agreement.
7.10 Gender
and Number.
As used
in this Agreement, the masculine, feminine, or neuter gender, and the singular
or plural number, shall each include the other.
7.11 Mediation.
To the
fullest extent permitted by law, Consultant and the Company agree to
confidential mediation in accordance with the Rules, Procedures and Protocols
for Mediation of Dispute Prevention & Resolution, Inc., then in effect of
any and all controversies, claims or disputes between them arising out of or
in
any way related to this Agreement, the engagement relationship between the
Company and Consultant and any disputes upon termination of engagement,
including but not limited to breach of contract, tort, discrimination,
harassment, wrongful termination, demotion, discipline, failure to accommodate,
family and medical leave, compensation or benefits claims, constitutional
claims; and any claims for violation of any local, state or federal law,
statute, regulation or ordinance or common law. For the purpose of this
agreement to mediate, references to “Company” include all parent, subsidiary or
related entities and their employees, supervisors, officers, directors, agents,
pension or benefit plans, pension or benefit plan sponsors, fiduciaries,
administrators, affiliates and all successors and assigns of any of them, and
this agreement to mediate shall apply to them to the extent Consultant’s claims
arise out of or relate to their actions on behalf of the Company. The Parties
agree to hold the mediation in Honolulu, Hawaii. The Parties also agree that
a
good faith attempt to resolve all issues in mediation is a mandatory
prerequisite to further adversarial proceedings of any kind, including
commencement of litigation.
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7.12 This
Agreement shall not be terminated by any voluntary or involuntary dissolution
of
the Company resulting from either a merger or consolidation in which the Company
is not the consolidated or surviving corporation, or a transfer of all or
substantially all of the assets of the Company. In the event of any such merger
or consolidation or transfer of assets, Consultant’s rights, benefits and
obligations hereunder shall be assigned to the surviving or resulting
corporation or the transferee of the Company’s assets.
IN
WITNESS WHEREOF, the parties hereto have executed this Consulting Agreement
as
of the day and year first above written.
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FFP,
Inc.
By:
/s/ Xxxxxx Xxx Xxxxxxxx
Name:
Xxxxxx
Xxx Xxxxxxxx
Title:
President
and sole shareholder
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a
New Jersey corporation
By: /s/ Xxxxxx
Xxxxxx
Name: Xxxxxx Xxxxxx
Title: CFO
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|
/s/ Xxxxxx
Xxx Xxxxxxxx
Xxxxxx
Xxx Xxxxxxxx
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