The Football Network, Inc.
CONSULTING AGREEMENT
Date:
THIS AGREEMENT is made and entered into this 30th day of January, 2001,
by and between, Xxxx Xxxxxxx ("Consultant") and TFN, The Football
Network, Inc., a Delaware corporation (the "Company"), pursuant to which
Consultant is to act as a non-exclusive consultant to the Company in
connection with the acquisition of private funding for the Company's
business (a "Transaction").
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties mutually agree as follows:
1. Term. The term of this Agreement shall commence on the date first
above written and terminate three months later, with no further rights
and obligations, as set forth herein. This agreement may survive the
term only by mutual written consent of both parties.
2. Services to be Performed by Consultant. Consultant agrees that in
connection with a potential Transaction, it shall perform the following
services in its capacity as non-exclusive consultant to the Company:
(a) Develop introductions to potential accredited investors and /or
partners ("Investor/Partners"), and, upon the Company's written approval
of the potential introductions, notify the Company of said
Investor/Partner for investment potential, provided that such
Investor/Partner is an accredited investor as defined in SEC
regulations; within seven days of the introduction, the Consultant will
deliver to the Company a letter (the "Registration Letter") noting the
name of the Investor/Partner and the particulars of the introduction,
specifying the parties participating in the introductory conversation or
meeting.
(b) Evaluate with the Company any possible Transaction that might
develop with the Investor/Partner; however, all negotiations between a
potential Investor/Partner and the Company will be conducted by
representatives of the Company, and Consultant shall not be required to
or participate in any negotiations on the Company's behalf.
(c) Perform additional advisory services as might be necessary in order
to successfully complete a Transaction, provided that such advice and/or
assistance shall not encompass legal or tax issues nor the sale of any
securities nor any activities which require a license or registration
not held by Consultant, or anything in violation of any applicable
federal, state or local law.
3. Non-Binding Authority; No Solicitation. In its role as consultant,
Consultant shall have no authority to bind the Company to any third
party. Nothing contained in this Agreement will require the Company to
accept the terms of any proposal from a potential Investor/Partner.
Furthermore, the Company shall have the right, in its sole and absolute
discretion, to reject any proposed Transaction regardless of its terms.
Consultant will not attempt to sell any security on behalf of the
Company and will not engage in any activity that would be deemed as an
offering of securities, public or private.
4. Finder's Fees:
(a) Definitions. For purposes of this Paragraph 4:
"Consideration" shall be defined to include all payments received from a
particular Transaction in the form of cash, stocks, notes or other
securities, equity investment, funded debt assumed or paid off, funded
development contracts, leases, royalties, licenses or any other similar
form of consideration included in a Transaction.
"Aggregate Consideration" shall mean the aggregate amount of
Consideration received by the Company pursuant to this Agreement by
virtue of a Transaction.
"Grace Period" shall mean the period commencing on the date of
termination of this Agreement and expiring at any time upon written
notice.
Consultant shall receive a finder's fee, as set forth in Paragraph 4(c),
only if:
A Transaction is consummated during the term of this Agreement or during
the Grace Period between the Company and an Investor/Partner introduced
by Consultant to the Company and the Investor/Partner appears on the
Potential Referral List (which may be amended by the Consultant during
the term of the agreement) and the Consultant has sent the Company a
Registration Letter per the requirements herein.
Negotiations are reopened during the Grace Period between the Company
and an Investor/Partner with whom discussions were previously held and a
Transaction is consummated within six (6) months after said discussions
were reopened.
(c) Consultant shall be paid $2,500 at the first of each month for no
more than three months unless Company terminates this agreement per
Clause1 of this Agreement. Consultant shall receive (at the time the
Consideration is cleared by the bank and received by the Company) a
finder's fee equal to ten percent (10%) of Aggregate Consideration, in
cash. Notwithstanding the preceding, each $2,500 fee paid shall then be
deducted from any Finder's Fee (percentage fee from the gross proceeds
of the capital raised).
Consultant will additionally receive options as follows:
Consultant shall receive at the closing of any Transaction in which he
is entitled to the cash fee described above an option to purchase an
amount of the common stock of the Company equal to the numerical
statement of the value of the consideration received by the Company in
any such Transaction multiplied by 0.05 (5%); by way of example, if the
value of the consideration is $1,000,000, then the Consultant would
receive an option to purchase 50,000 shares, subject to the conditions
herein. This method shall be used for each closed Transaction (meaning
funds have been accepted and cleared by the bank) by an Investor/Partner
introduced by Consultant to the Company. The exercise price of the
options granted pursuant to this section shall be $1.00. The option
shall be exercisable over a ten-year period and will expire thereafter.
(d) If the Consideration received by the Company consists of a security,
the value assigned to such security for purposes of determining
Consultant's Finder's fee (pursuant to Paragraph 4) shall be based on
the closing price of such security on the domestic securities exchange
on which it is listed; or, if there is no public market, by mutual
agreement between the parties with reference to fair market value.
In the event that the Consideration to be received includes securities
or other Consideration to be received as an installment sale, earn-out
or other form of delayed or contingent payment, the present value of
that Consideration, discounted at 10% per annum, will be used to
determine Consultant's finder's fees under this Paragraph or at the
option of the Consultant, the Company will issue a note to the
Consultant in the full amount of the unpaid portion of the fee (with
interest at 9% per annum) and the note to the Consultant will be paid as
the Company receives cash for the delayed, contingent, or other non-cash
Consideration. Additionally, at the option of the Consultant, if the
Transaction includes securities, the Consultant may have its fee paid
(with no discount) by distribution of a portion of the securities
received, the amount due the Consultant to be calculated by multiplying
the fair market value of the securities by 10%.
Where a controversy arises where two or more parties claim to have
introduced an Investor/Partner to the Company, any finder's fee will be
payable only to the party who first introduced the Investor/Partner to
the Company as determined by the date of introduction, provided that
such Consultant has timely sent the Registration Letter discussed herein
and provided that it has complied with the other requirements of this
agreement.
Consultant introductions to the Company i. for purposes of strategic
partnerships, strategic alliances, mergers, acquisitions or other types
of Transactions not defined herein, ii. For the purpose of financing
beyond the current $3,500,000 it is seeking and iii. Introductions to
financing intermediaries' brokers, advisors, etc. will be the subject of
a separate negotiable agreement.
The Company will pay to the Consultant the cash portion of the fees
earned by the Consultant pursuant to this agreement within 24 hours of
the Company's receipt of good funds from the then subject
Investor/Partners introduced to the Company pursuant to the terms of
this agreement.
5. Retainer Fee: Consultant shall be paid an initial retainer fee of
$2,500 (two thousand five hundred). Upon attainment of funding, this
fee shall be deducted from the Finder's Fee (percentage fee from the
gross proceeds of the capital raised).
6. Sharing of Finder's Fee: Should Consultant negotiate with any
other 3rd parties for the sharing of the finder's fee, payment or any
other consideration for services performed in referring
Investors/Partners, Consultant agrees:
(a). That the total finder's fee price paid to the Consultant and any
other 3rd parties shall not exceed the finder's fee (10% of the Aggregate
Consideration) and 5% in stock options set forth in this agreement.
(b). Consultant agrees that Company shall directly pay any 3rd party
their respective percentage of the total finder's fee from the total
aggregate finder's fee, per the payment terms and conditions of the
agreement between Consultant and 3rd party.
(c). Consultant shall forward to the Company a copy of the agreement,
upon entering into any 3rd party agreement wherein the terms set forth
sharing or payment of the finder's fee or any other consideration from
the funds acquired for the benefit of Company.
(d). Any 3rd party must be in compliance with all SEC requirements,
including, but not limited to, any Investor/Partner must be an
accredited investor and the 3rd party must hold the required licenses.
Should the 3rd party fail to comply with any SEC regulation, the Company
shall have the right to deny payment.
(e). Company shall not pay any 3rd party retainers or monthly service
fees or any additional fees in whatever capacity.
7. Expenses. The Company will reimburse the Consultant for all expenses
related to Consultant performing its duties under the Agreement, except
that any total expense during a one-month period shall not exceed one
hundred dollars ($100). Any further expenses must receive the prior
approval from the Company with accompanying receipts in order to be
reimbursable.
8. Non Circumvention: The Company agrees, represents and warrants that
it will neither circumvent nor independently enter into any oral or
written contractual agreements or obligations with the Investor/Partners
parties engaged by the Consultant and introduced to the Company for the
purpose of fulfilling the obligations of this Agreement. In the event
that a Investor/Partners commitment is made to the Company by a
Investor/Partners heretofore engaged by the Consultant, or if a loan to
the Company is consummated within two (2) years from the date of this
Agreement by a Investor/Partners heretofore engaged by the Consultant,
then the Consultant shall be entitled to receive and the Company shall
be obligated to pay the Finder's Fee in accordance with and as described
in this Agreement.
9. Transaction Costs. The Company shall be responsible for all costs
associated with closing a Transaction, including but not limited to
legal, accounting, other professional services, appraisals, travel,
fees, and applicable taxes.
10. Termination. The Company or Consultant may terminate this
Agreement at any time upon thirty- (30) days written notice to the other
party. The termination will not affect clauses herein regarding the
Finder's fees (Paragraph 4), which shall continue in full force and
effect.
11. Entire Agreement. This Agreement executed between the parties
contains the entire understanding of the subject matter contained
herein, and supercedes any oral or written contemporaneous or prior
communications between the parties.
12. Amendment. This Agreement and the terms hereof may be amended
only by the written consent of both Consultant and the Company.
13. Governing Law. This Agreement shall be construed in accordance
with the laws of the state of California.
14. Arbitration. Any controversy or claim arising out of or relating
to this Agreement between the Company and Consultant, or breach thereof,
shall be settled by arbitration in Los Angeles, California, in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the
Arbitrator(s) may be entered in any court having jurisdiction thereof.
All expenses incurred by the prevailing party including attorney fees,
will be reimbursed in addition to the funds allowed under the
arbitration proceedings.
15. Indemnification by Company. The Company will indemnify and hold
Consultant and its employees, agents and affiliates (collectively
referred to in this article 15 as "Consultant"), free and harmless to
the maximum extent allowed by law from and against any and all loss,
claims for damage, liability and expenses arising from wrongful acts or
omissions by the Company, in its business operations or Company's
involvement in the services performed under this agreement, or
information given to Consultant or a potential Investor/Partner by the
Company.
16. Indemnification by Consultant. The Consultant will indemnify and
hold Company, its employees, agents and affiliates (collectively
referred to in this article 16 as "Company"), free and harmless, to the
maximum extent allowed by law from and against any and all loss, claims
for damage, liability and expenses arising from wrongful acts or
omissions by Consultant.
17. Business Plan. Consultant agrees to maintain as confidential any
information learned from Company of a proprietary nature.
18. Assignability. This Agreement is not assignable.
19. Misc. This agreement will be binding upon the Company and the
Consultant and their respective successors and assigns. The parties to
this agreement represent that they are authorized to enter into this
agreement. This agreement may be executed via facsimile, which will be
deemed to be an original and will be valid and binding upon each of the
Company and the Consultant.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
THE COMPANY
TFN, The Football Network, Inc.
a Delaware corporation, by:
/s/Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx, President.
CONSULTANT:
/s/Xxxx Xxxxxxx
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