EXHIBIT 10.12
MANAGEMENT AGREEMENT
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MANAGEMENT AGREEMENT, dated as of January 28, 2000, between The Orlando
Predators Entertainment, Inc., a Florida corporation with an office and place of
business at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xx 00000 (the "Company"), and
United Sports Ventures, Inc., an Ohio corporation with an office at 00 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Manager").
INTRODUCTION
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A. The Manager has available to it certain expertise in the operations and
management of professional sports teams and franchises, including certain
developed practices, techniques and procedures which have proven successful in
the operation of sports franchises in the United States of America.
B. The Company is a publicly held company whose primary business operations
are the operation of the Orlando Predators football team, a member of the Arena
Football League.
C. The Company believes that the application of such expertise, practices,
techniques and procedures to its business would be of great value to the Company
and would have a materially positive impact on its financial performance and
operations.
D. The Manager is willing to provide such expertise, practices, techniques
and procedures to the Company on the terms and conditions contained herein.
E. The Manager and the Company have ben engaged in discussions and
negotiations whereby the parties may enter into a transaction pursuant to which
the Manager may be acquired (whether by merger or otherwise) by the Company, and
pending such transaction the Company desires to retain the Manager upon the
terms provided herein.
ENGAGEMENT
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1.01. Engagement of the Manager. The Company hereby engages the Manager to
provide to the Company management services in connection with the Company's
operation of its Orlando Predators football sports franchise and for general
management services in the operation of the Company and for such other services
as the Company may reasonably ask the Manager to perform in connection with any
and all present activities of the Company, and the Manager hereby accepts such
engagement.
1.02. Duties. During the term of this Agreement, the Manager shall perform
such management services for the Company as the Manager and the Board of
Directors of the Company believe are necessary or desirable to advance the
financial and business affairs of the Company. Subject to the control and
direction of the Board of Directors of the Company, the Manager shall have
complete discretion with respect to the personnel designated to render services
hereunder and the time, place and manner of performance, it being expressly
understood and agreed that the Manager shall be required to devote to its
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duties hereunder only such time as it may in good faith determine necessary. The
Manager shall have no liability to the Company or any other person or entity for
any act or failure to act in connection with such services (except to the extent
such act or failure to act resulted from gross negligence or willful bad faith
on the part of the Manager). The Company hereby acknowledges that the Manager
presently engages, in the operation of other sports franchises and related
businesses and agrees that the Manager may continue to engage, directly and
indirectly, in such business irrespective of whether any such operations may
compete with those of the Company.
1.03. Term. Unless sooner terminated as provided in Section 3.01 hereof,
the term of this Agreement shall be for an initial period of one (1) year
commencing on the date hereof (the "Initial Term"), and thereafter shall be
automatically renewed for successive one-year periods (each a "Renewal Term"),
unless either party shall give written notice to the other party, at least
thirty (30:) days prior to the expiration of the Initial Term or current Renewal
Term, as the case may be, of its intent to terminate this Agreement on and as of
such expiration date. Notwithstanding the foregoing, in the event that the
parties enter into a definitive agreement whereby the Manager shall be acquired
by, or merge with, the Company, this Agreement shall terminate on the date of
closing of such transaction.
1.04. Appointment of Personnel. The Manager shall make available the
following persons who shall be appointed by the Board of Directors of the
Company to the offices of the Company as set forth below:
Name Title
---- -----
Xxxx Xxxxxxxx Chief Executive Officer, Director
Xxxxx Xxxxxx Vice President
MichaelTatoian Vice President
Xxxxxxx Xxxxxxxx Vice President
Xxxxxx Xxxxxxxxx Vice President
The Company shall deliver a written copy of resolutions, certified by the
Secretary of the Company, of the Board of Directors which resolutions evidence
the appointment of the person set forth above to the offices stated above.
1.05. Relationship of the Parties. The Company and the Manager acknowledge
and agree that nothing contained in this Agreement is intended to constitute
them as employer/employee, joint venturers or partners, it being their intention
that the Manager is an independent contractor.
ARTICLE II
COMPENSATION
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2.01. Management Fee. As compensation for the management services to be
rendered by it hereunder, the Company shall pay the Manager a management fee,
payable semi-annually commencing June 30, 2000 in an amount equal to 30% of the
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overhead costs and expenses of the New York offices of the Manager (including,
without limitation, (i) salaries, social security, disability, FICA and local
payroll taxes, health and welfare benefits and (other compensation, paid to or
in respect of employees and other personnel; (ii) rent; (iii) supplies; and (iv)
telephone and utilities) (Management Fee"). The Manager shall maintain internal
accounting records in good faith and such expenses shall be subject to review by
the Board of Directors of the Company. The Management Fee shall be paid by the
Company to the Manager within 10 days of the end of each six month period. In
the event that the parties consummate a transaction in which the Manager has
been acquired by, or merge with, the Company, no Management Fee shall be paid
hereunder
2.02. Reimbursement of Expenses. The Company shall promptly reimburse the
Manager for all reasonable direct expenses and disbursements incurred by the
Manager in rendering management services hereunder, which reimbursement shall
not include any payments made under Section 2.01 above. The Manager shall keep.
reasonable records of all such direct expenses and disbursements and shall
produce them at the request of the Company.
ARTICLE III
TERMINATION
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3.01. Notice of Termination. This Agreement may be terminated as follows:
(a) By either party effective on the date of expiration of the Initial Term
or current Renewal Term, as the case may be, as provided in Section 1.03;
(b) By either party upon 90 days' written notice to the other party if by
(i) June 30, 2000 the parties have not entered into a Definitive Acquisition
Agreement or (ii) the closing as described under the Definitive Acquisition
Agreement has not occurred by September 30, 2000;
(c) By the Company upon five (5) days' written notice to the Manager if the
Manager has committed an act of gross negligence, willful misconduct, fraud,
misappropriation of funds or embezzlement in connection with the performance of
its duties hereunder;
(d) By the Manager upon ten (10) business days' written notice to the
Company if the Company shall have failed to pay when due any amounts payable to
the Manager hereunder; or
(e) By the Company in the event that the Manager cannot provide the
services of Xxxx Xxxxxxxx.
Any notice of termination given as provided in clause (c) or (d) of this
Section 3.01 shall specifically identify the provision relied upon for
termination and shall set forth in reasonable detail the facts and circumstances
claimed to provide the basis for such termination. The obligations of the
Manager under Section 5.02 shall survive a termination of this Agreement.
3.02. Compensation. Upon termination of this Agreement, the Manager shall
be entitled to receive only the amounts due to it through the date of
termination under Sections 2.01 and 2.02 hereof.
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ARTICLE IV
INDEMNIFICATION
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4.01. Agreement to Indemnify. The Company shall indemnify and hold harmless
the Manager, its successors, assigns and affiliates and the stockholders,
directors, officers, employees and agents of each of the foregoing against all
loss, liability, damage and expense (including, without limitation, reasonable
attorneys' fees and disbursements), directly or indirectly suffered by any such
indemnified party (other than as a stockholder of the Company) as a result of,
or arising from, any act or failure to act on the part of the Company in
connection with the performance of any of its duties hereunder. The Manager
shall indemnify and hold harmless the Company, its successors, assigns and
affiliates and the stockholders, directors, officers, employees and agents of
each of the foregoing against all loss, liability, damage and expense
(including, without limitation, reasonable attorneys' fees and disbursements),
directly or indirectly suffered by any such indemnified party (other than as a
stockholder of the Company) as a result of, or arising from, any act or failure
to act on the part of the Manager in connection with the performance of any of
its duties hereunder; provided, however, in no event shall the Manager be liable
or responsible for any loss or damages in excess of the total Management Fee
paid by the Company hereunder.
4.02. Conditions to Indemnification. If any action, suit, proceeding,
claim, liability, demand or assessment shall be asserted against any Indemnified
Party in respect of which it proposes to demand indemnification pursuant to this
Article IV, such Indemnified Party shall promptly notify the Company and furnish
copies of all pleadings and related correspondence, if any. Subject to rights of
or duties to any insurer or other third person having liability therefor, the
Company shall have the right promptly after receipt of such notice to assume the
control of the defense, compromise or settlement of any such action, suit,
proceeding, claim, liability, demand or assessment, including, at the Company's
own expense, employment of counsel satisfactory to such Indemnified Party.
Notwithstanding the preceding sentence, in any such matter described in the
preceding sentence, the Indemnified Party shall have the right to retain its own
separate counsel, but the fees and expenses of such counsel shall be at the
Indemnified Party's expense unless (a) the Company and the Indemnified Party
shall have agreed to the contrary, (b) the Company have failed within a
reasonable time to retain counsel satisfactory to the Indemnified Party or (c)
the named parties in any such proceeding (including any impleaded parties)
include the Company and the Indemnified Party and representation of all such
parties by the same counsel could be inappropriate due to actual or potential
differing interests between them. In any matter described above where the
Indemnified Party has obtained counsel to represent it in addition to counsel
obtained by the Company, counsel selected by the Company and counsel selected by
the Indemnified Party shall cooperate fully with each other in such matter.
Neither the Manager nor the Company shall be liable for any claim settled
without its consent, which consent may not be unreasonably withheld.
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ARTICLE V
MISCELLANEOUS
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5.01. Full Access. The Company shall give the Manager and its authorized
representatives full access during the term of this Agreement to all personnel,
properties, assets, books, records, contracts and documents of the Company, and
shall cooperate fully with the Manager in connection with the performance by the
Manager of its duties hereunder. The Manager and its authorized representatives
shall also be entitled from time to time to consult and communicate with the
independent certified public accountants of the Company as well as, upon prior
notice to the Company, lenders and lessors to, suppliers of, and others having
business dealings with the Company (and the Company shall promptly authorize all
of such persons, in writing, to disclose to the Manager information concerning
the Company requested by the Manager).
5.02. Confidentiality. The Manager agrees to keep confidential any
information relating to the Company of a confidential nature and not generally
known to the sports franchise operations industry (including without limitation,
trade secrets and information relating to the operations or financial condition
of the Company) disclosed to the Manager by the Company or its representatives,
except that the Manager shall be entitled to disclose any such information (i)
to its attorneys, accountants and banking representatives and (ii) to the extent
required by law or by order of any court or governmental agency.
5.03. Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the Company and the Manager and their respective: successors
and assigns; provided, however, that neither party may assign or transfer its
rights or obligations under this Agreement without the prior written consent of
the other party.
5.04. Notices. Any notice required or permitted to be given under this
Agreement to either party, shall be sufficient if in writing and if personally
delivered or if sent by registered or certified mail, postage prepaid, return
receipt requested, to the address of such party hereinabove set forth, or to
such other address as such party may hereafter designate by a notice given to
the other party in the manner provided in this Section 5.04.
5.05. Waiver. A waiver by a party hereto of a breach of any term, covenant
or condition of this Agreement by the other party hereto shall not operate or be
construed as a waiver of any other or subsequent breach by such other party of
the same or any other term, covenant or condition hereof.
5.06. Entire Agreement; Amendments. This Agreement is intended by the
parties hereto as a final expression of their agreement and understanding and
exclusive statement of the terms thereof and supersedes any and all prior and
contemporaneous agreements and understandings relating thereto. The Company and
the Manager acknowledge and agree that neither party, nor any attorney or agent
for either party, has made any promise, representation or warranty whatsoever
not contained herein concerning the subject matter hereof to induce the other
party to execute this Agreement. No waiver, modification, change or amendment of
any of the provisions of this Agreement shall be valid, unless in writing and
signed by the party against whom such claimed waiver, modification, change or
amendment is sought to be enforced; provided, however, that no such waiver,
modification, change or amendment shall be effective unless it is approved by a
majority of the directors of the Company who are not affiliated with the
Manager.
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5.07. Authority. Each of the Company and the Manager represents and
warrants to the other that it has the power, authority and right to enter into
this Agreement and to carry out and perform the terms, covenants and conditions
hereof.
5.08. Applicable Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of New York, without giving
effect to principles relating to conflicts of law. Each party hereby submits to
the jurisdiction of the courts of the State of Florida and New York and agrees
that all suits or proceedings shall be brought in solely in such courts. Each
party hereby waives all defenses of forum non conveniens.
5.09. Severability. In the event that any of the provisions of this
Agreement, or any portion thereof, shall be held to be invalid or unenforceable,
the validity and enforceability of the remaining provisions hereof shall not be
affected or impaired, but shall remain in full force and effect.
5.10. Titles. The titles of the Articles and 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THE ORLANDO PREDATORS ENTERTAINMENT, INC
(Company)
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Director
UNITED SPORTS VENTURES, INC.
(Manager)
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: President
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