CONSULTING AGREEMENT
--------------------
This Consulting Agreement (the "Agreement") is made this 24th day of
September, 2005, by and between Xxxxxx Xxxxxxx Promotions, Inc. and Ckrush
Sports, Inc., on the one hand (the "Company"), each having an address at 1414
Avenue of the Americas, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000 and Xxxx Xxxx, an
individual (the "Consultant"), having an address at c/x Xxxx Boxing LLC, 000
Xxxxxxxxxx Xxx, Xxxx Xxxxxxxx, XX 00000.
WHEREAS, the Company desires to retain the benefit of the Consultant's
knowledge and experience during the term of this Agreement.
NOW THEREFORE, in consideration of the mutual promises contained herein,
and other good and valuable consideration, the parties hereto do agree as
follows:
1. Appointment, Term. The Company hereby appoints Consultant and
Consultant hereby accepts appointment to act as a consultant to the Company.
Consultant shall devote such of its time and effort necessary to the discharge
of its duties hereunder. The Company acknowledges that Consultant is engaged in
other business activities, including as a Manager of Xxxx Boxing, LLC, and that
he may continue such activities during the term of this Agreement. Consultant
shall not be restricted from engaging in other business activities during the
term of this Agreement. It is understood that Consultant need not devote his
full time energies to the Company and will make reasonable efforts to
accommodate any time necessary to devote to Company matters. The term of this
Agreement shall be twenty four (24) months from the date of this Agreement,
after which the Agreement will continue on a month-to-month basis (unless
otherwise renewed for a fixed term by the parties) subject to the right of
either party after the expiration of the initial 24 month period to terminate
this Agreement by giving thirty (30) days prior written notice to the other
party.
2. Consultant's Duties and Responsibilities
2.1 During the term of this Agreement, Consultant shall provide
consulting services to the Company in connection with the Company's boxing
related business, including without limitation, advice concerning the following:
(a) Promotional agreements with boxers;
(b) Contracts with boxers for single or multiple bouts, whether
or not through a promotional agreement;
(c) Management and administration of live boxing events;
(d) Domestic and international contracts with governmental
regulatory agencies, media companies (for example, television, pay-per-view,
digital and closed circuit), venues (for example, casinos and other facilities),
advertisers, sponsors, trainers, other promotional companies (for example,
partnerships or joint ventures relating to specific events or boxers) and any
acquirer of rights concerning boxers;
(e) The creation, licensing, marketing, distribution and sales
of any boxing video library; and
(f) Other business activities or ventures related to boxing.
2.2 During the term of this Agreement, Consultant shall be based in
the New York City area, and shall undertake such occasional travel, within or
without the United States, at the expense of the Company, as is or may be
reasonably necessary in the interests of the Company.
2.3 The Company shall pay any out-of-pocket expenses incurred by the
Consultant in performing his duties under this Agreement, including all travel
expenses related to traveling between and among different locations, or as
Consultant may be directed to do or as may be necessary to the Consultant's
responsibilities. Consultant may request that (a) travel or other significant
expenses be paid to him in advance, or (b) that the Company make direct payment
arrangements on his behalf for any such expenses to be incurred.
2.4 Independent Contractor Status. It is expressly agreed that the
Consultant is carrying out his obligations hereunder as an independent
contractor, and not as an agent or employee of the Company. As such, the
Consultant shall not have the power to bind the Company, and no pension and/or
profit sharing contribution shall be made with respect to any payments received
hereunder nor shall the Consultant be entitled to any other benefits paid to
employees of the Company except as enumerated herein. It is contemplated by the
parties hereto that the duties of Consultant may be expanded at which time
Consultant's powers or authority may be broadened by the parties.
3. Compensation. In consideration for the Consultant's services under
this Agreement, the Company agrees to pay to the Consultant the amounts set
forth below:
a. During the term of this Agreement, the Consultant shall be paid
the sum of five thousand ($5,000.00) per month payable on the 1st day of each
month in advance of each months services. The Company at its discretion may also
pay Consultant performance or other bonuses at any time during the term of this
agreement;
2
b. Within 30 days of the execution of this Agreement, Consultant
shall be issued as additional compensation, 500,000 shares of Xxxxxx Xxxxxxx
Promotions, Inc. ("CKP") common stock. The Consultant understands that these
Shares will not be registered under the Securities Act of 1933 and must be held
until such shares are registered or unless an exemption from registration
applies. The Company further agrees that all such shares issued pursuant to this
section shall have piggy-back registration rights. The Company use its best
efforts to complete a registration within 12 months of the date of the execution
of this Agreement. However, if Consultant is successfully able to remove any
restrictive legend from his shares and obtain full marketability pursuant to
Rule 144 (with which the Company will provide full assistance and legal counsel
at its expense to attempt to undertake), the Company will be excused from its
obligation to use its best efforts to undertake a registration within this 12
month time period.
c. On the date of the first anniversary of this Agreement, and every
twelve month anniversary thereafter that this Agreement shall remain in effect,
the Company shall issue to Consultant cashless stock options for 250,000
additional shares of CKP common stock at an exercise price of $0.10 per share
good for an exercise period of 1 year. The Consultant understands that the
Shares underlying these Options will not be registered under the Securities Act
of 1933 and must be held until such shares are registered or unless an exemption
from registration applies. The Company further agrees that all such shares
issued pursuant to this section shall have piggy-back registration rights on the
next registration to take place after the time of issuance of the options.
d. The Company agrees to lease a car for the Consultant during the
term of this Agreement at the Company's expense. The monthly allowance for the
car lease shall be $500.
e. In the event that certain conditions are met as described below
in paragraph 4, then the monthly payment to Consultant as set forth in paragraph
3(b) above shall be increased to $7,500.
4. Additional Transactions. Consultant is a 50% ownership member of
Xxxx Boxing LLC. Currently, Xxxx Boxing LLC has a significant amount of debt and
pursuant to an Amendment to the Operating Agreement of Xxxx Boxing LLC, is
obligated to make extensive payments to pay down this outstanding debt as well
as certain operating costs before any significant distributions of\ profits may
be made to Consultant (the "Debt"). At such time as the Debt is reduced to zero,
the Consultant will contribute his share of all profits and distributions from
Xxxx Boxing LLC to the Company for the balance of the term of this Agreement
after first deducting his Allocated Portion to which he is entitled to keep (the
"Profit Payment"). It is understood by the Company that only the profits and
distributions are being assigned to the Company and that the Company shall have
no management or ownership rights in or to Xxxx Boxing LLC.
3
If an when any Profit Payments are made to the Company by Xxxx
Boxing LLC, Consultant's compensation shall be increased as set forth in
Paragraph 3(e) above. Additionally, at such time, the Company shall issue to
Consultant an additional 500,000 shares of Xxxxxx Xxxxxxx Promotions, Inc.
("CKP") common stock. The Consultant understands that these Shares will not be
registered under the Securities Act of 1933 and must be held until such shares
are registered or unless an exemption from registration applies. The Company
further agrees that all such shares issued pursuant to this section shall have
piggy-back registration rights on the next registration to take place after the
time of issuance of the options. Moreover, the Company agrees that Consultant is
only assigning that portion of the Profit Payment after Consultant first deducts
his Allocated Portion of the Profit Payment as follows: (a) for any amount of
the Profit Payment up to $125,000, the Consultant keeps an amount equal to 7.5%
of that portion of the Profit Payment; (b) for any amount of the Profit Payment
between $125,000 up to $250,000, the Consultant keeps an amount equal to 15% of
that portion of the Profit Payment; (c) for any amount of the Profit Payment
between $250,000 up to $500,000, the Consultant keeps an amount equal to 20% of
that portion of the Profit Payment; and (d) for any amount of the Profit Payment
above $500,000, the Consultant keeps an amount equal to 12.5% of that portion of
the Profit Payment. In addition, with regard to any Profit Payment above
$500,000, the Company shall pay to the Consultant an additional 12.5% of that
portion of the Profit Payment, such payment to Consultant by the Company shall
be made, at the Company's discretion, in either cash or in additional shares of
CKP common stock valued as of the date that this share of the Profit Payment
funds are received by the Company. (The Consultant understands that these
additional Shares will not be registered under the Securities Act of 1933 and
must be held until such shares are registered or unless an exemption from
registration applies. The Company further agrees that all such shares issued
pursuant to this section shall have piggy-back registration rights on the next
registration to take place after the time that the payment owing to Consultant
shall have been due).
5. Non-Solicitation/Limited Confidentiality Provision.
a. Non-Solicitation. For so long as Consultant continues to provide
consulting services for the Company and for twelve (12) months thereafter,
Consultant shall not, on his own behalf or on behalf of any person, firm or
company, directly or indirectly, solicit or hire any person who has been
employed by the Company or any of its subsidiaries or affiliates at any time
during the twelve (12) months immediately preceding such solicitation.
Consultant further recognizes and agrees that any violation of this provision
would cause such damage or injury to the Company as would be irreparable and the
exact amount of which would be impossible to ascertain; therefore Consultant
agrees that the Company shall be entitled, as a matter of right, to an
injunction from any Court of competent jurisdiction restraining any violation of
this provision by Consultant of this Agreement. Such right to an injunction
shall be cumulative and in addition to, and not in limitation of, any other
rights and remedies the Company may have in equity or at law.
4
b. Limited Confidentiality Provision. Consultant understands that by
virtue of his position as a Consultant he may become in possession of
confidential information regarding the Company's finances and operations.
Consultant agrees to hold any such Confidential Information in confidence and
not to directly or indirectly reveal, report, publish, disclose or transfer,
directly or indirectly, any of the Confidential Information to any person or
entity. Consultant will not remove Confidential Information from the Company's
premises or copy or reproduce any portion of the Confidential Information in any
way. Notwithstanding the foregoing, the Company acknowledges that Consultant
will continue to be engaged in business with Xxxx Boxing, LLC, a competing
boxing promotion company. The Company agrees that it shall make no claim that
Consultant has improperly utilized any Confidential Information from the Company
in furtherance of the business of Xxxx Boxing, LLC. The Company acknowledges
that it consents to Consultant's continued association and employment with Xxxx
Boxing, LLC and waives this confidentiality provision with regard to Xxxx Boxing
LLC's operations. As used herein, Confidential Information means the Company's
proprietary information or material which is not available to the public or
others in the boxing industry.
6. "Piggyback" Registration Rights. As set forth above, the shares and
options of CKP common stock being issued to Consultant shall have Piggyback
Registration Rights. If at any time, the Company proposes to register any of its
securities under the Act (other than in connection with an exchange offer or a
registration statement on Form S-8 or S-4 or any similar form then in effect or
any other unsuitable registration statement), the Company will automatically
have all options and shares then issued to the Consultant registered under the
Company's Registration Statement at the Company's sole cost and expense and at
no cost or expense to the Consultant.
7. Indemnification. The Company agrees to indemnify and hold harmless
the Consultant from any losses, claims, damages or liabilities, joint or
several, asserted against the Consultant or to which the Consultant may become
liable arising out of his performance of any services in connection with this
agreement.
8. No Waiver. Either party's failure to enforce any violation or
provision of this Agreement shall not constitute a waiver of its rights
hereunder with respect to any violation or provision of this Agreement.
9. Notices. All notices, requests, demands and other communications of
any kind whatsoever which may or must be given under this Agreement shall be in
writing and shall be deemed duly given or made only if mailed by certified or
registered mail, return receipt requested, postage prepaid at the addresses set
forth above, or such other addresses as may be given by like notice.
10. Binding Effect. This Agreement shall be binding upon and shall
5
inure to the benefit of the parties hereto and their successors, assigns and
legal representatives.
11. Governing Laws. This Agreement shall be governed by the laws of
the State of New York without giving effect to the conflict of law provisions
thereof.
12. Presumption. This Agreement or any section thereof shall not be
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
13. Savings Clause. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
14. Assignment. This Agreement may not be assigned by either party
hereto without the written consent of the other.
15. Consent to Jurisdiction. The parties agree that in the event any
dispute arises out of or relates to this Agreement, or the breach thereof, and
if said dispute cannot be settled through direct discussion, the parties agree
that such dispute shall be adjudicated in the Courts of the State of New York,
in New York County.
16. Entire agreement. This Agreement contains the entire understanding
and agreement among the parties. There are no other agreements, conditions or
representations, oral or written, express or implied, with regard thereto. This
Agreement may be amended only in writing signed by all parties.
17. Counterparts. This Agreement may be executed in duplicate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement. In the event that the
document is signed by one party and faxed to another the parties agree that a
faxed signature shall be binding upon the parties to this agreement as though
the signature was an original.
6
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year provided herein.
XXXXXX XXXXXXX PROMOTIONS, INC.
By: /s/ Xxx XxXxxxxxx
-----------------
Name: Xxx XxXxxxxxx
Title: Vice President
CKRUSH SPORTS, INC.
By: /s/ Xxx XxXxxxxxx
-----------------
Name: Xxx XxXxxxxxx
Title: President
/s/ Xxxx Xxxx
-------------
Xxxx Xxxx
7
