AGREEMENT
This Agreement (this "Agreement") is effective as of August 11, 1997 by
and between Fotoball USA, Inc., a Delaware corporation (the "Company"), and
ADR Management Group Ltd., a New Jersey corporation ("ADR").
WITNESSETH:
WHEREAS, the Company desires to enter into this Agreement in order to
continue to retain ADR as its independent financial relations management
agent;
WHEREAS, ADR desires to enter into this Agreement upon the terms and
subject to the conditions set forth in this Agreement; and
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and for the other good and valuable consideration, the
adequacy and receipt of which are hereby acknowledged, the parties agree as
follows:
1. Consulting Services.
(a) The Company hereby retains ADR on a non-exclusive basis, and ADR
agrees to provide services as an independent financial relations management
agent to the Company, upon the terms and subject to the conditions set forth
in this Agreement.
(b) ADR shall, during the Term (as herein defined), make its officers
and directors, including but not limited to Xxxx X. Xxxxxxxxxx, ADR's Chief
Executive Officer ("Germinario"), available to devote such business time and
attention as is necessary, and perform such duties and functions as it may be
called upon to perform, including the duties and functions set forth on
Exhibit A annexed hereto.
2. Compensation.
In consideration of the services to be rendered by ADR pursuant to
this Agreement, the Company shall grant to ADR options to purchase an
aggregate of 15,000 shares of common stock, par value $.01 per share, of the
Company at $2.6875 per share, of which 1,250 shares shall vest on the 11th day
of each month commencing September 11, 1997 until and including August 11,
1998, and all of which shares shall be exercisable from the date of their
vesting until August 11, 2000. The terms and conditions of all options
granted hereunder shall be subject to the terms and conditions contained in
that certain stock option agreement between the Company and ADR dated the
date hereof(the "Option Agreement").
3. Expenses.
During the Term, the Company shall reimburse ADR for all reasonable
out-of-pocket expenses incurred by it (including disbursements) in the
performance of its duties for the Company, including telephone, facsimile,
audio/visual, meeting costs, photography, mailing, design and printing,
clipping service and research expenses, in all cases upon submission to the
Company of written evidence of ADR's incurrence of such expenses; provided,
however, that the Company shall not be responsible for any such expenses or
disbursements in excess of $1,000 individually unless ADR has obtained the
prior written consent of the Company prior to incurring any such expenses or
disbursements.
4. Term.
Except as otherwise specifically provided in Section 5 below, the
term of this Agreement shall commence effective as of August 1, 1997, and
shall continue until July 31, 1998 (the "Term").
5. Termination.
(a) ADR may terminate this Agreement at any time and for any reason
by delivering to the Company written notice of its desire to terminate this
Agreement thirty (30) days prior to such termination. Upon such termination
by ADR, all options not yet vested pursuant to Section 2 shall be canceled.
(b) Notwithstanding the provisions of clause (a), nothing herein
shall prevent the Company from terminating this Agreement for Good Reason
(as defined below). From and after the date of such termination, all options
not yet vested pursuant to Section 2 shall be canceled. For purposes of this
Agreement, "Good Reason" shall mean (i) ADR's willful misconduct or fraud in
the performance of its duties hereunder, (ii) ADR's breach of this Agreement
or the Confidentiality Letter (as hereinafter defined) in a material manner,
or (iii) the entering of a plea of guilty or nolo contendere by ADR to or the
conviction of ADR for a felony or any other criminal act involving dishonesty,
theft or unethical business conduct.
(c) Notwithstanding the provisions of clause (a), nothing herein
shall prevent the Company from terminating this Agreement if Germinario shall
(i) die, (ii) retire from full-time employment with ADR or (iii) be unable to
render the services or perform his duties hereunder by reason of illness,
injury or incapacity (whether physical, mental, emotional or psychological)
(any of the foregoing reasons shall be referred to herein as a "Disability")
for a period of either (x) ninety (90) consecutive days or (y) one hundred
eighty (180) days in any consecutive three hundred sixty-five (365) day
period.
6. Relationship to the Company.
Except as expressly provided herein or approved in writing, ADR shall
have no power or authority, express or implied, to incur any debt, obligation
or liability or to enter into any contract or commitment on behalf of the
Company. ADR shall have no authority or power to alter, amend, terminate or
otherwise change any contract, or other document issued by the Company. In
addition, nothing contained herein shall be construed in any manner that
would deem ADR or any of its employees to be an employee of the Company.
7. Confidential Information.
ADR and the Company hereby acknowledge that the confidentiality
letter dated August 23, 1995 by and between ADR and the Company (the
"Confidentiality Letter") remains in full force and effect. ADR covenants and
agrees that it will, and will cause its officers, directors and agents to,
comply with the terms and provisions of the Confidentiality Letter through
strict control of the distribution and use of the Information (as defined in
the Confidentiality Letter).
8. Non-Competition and Non-Solicitation.
(a) Each of ADR and Germinario agree that, in consideration of the
options granted pursuant to the Option Agreement, during the Non-Competition
Period (as defined below), without the prior written consent of the Company,
they shall not: (i) be a principal, manager, agent, consultant officer,
director or employee of, or, directly or indirectly, own more than one (1%)
percent of any class or series of equity securities in, any partnership,
corporation or other entity, except for Germinario's relationship with ADR,
which, now or at such time, has material operations which are engaged in any
business activity competitive (directly or indirectly) with the business of
the Company, and (ii) on behalf of any competing entity, directly or
indirectly, have any dealings or contact with any suppliers or customers of
the Company; provided, however, that nothing contained herein shall prohibit
ADR from continuing relationships it had with suppliers or customers of the
Company prior to the effective date of this Agreement so long as such
relationships do not otherwise violate the provisions of this Agreement.
(b) During the Non-Competition Period, each of ADR and Germinario
agrees that, without the prior written consent of the Company (and other than
on behalf of the Company), they shall not, on his own behalf or on behalf of
any person or entity, directly or indirectly hire or solicit the employment
of any employee who has been employed by the Company at any time during the
six (6) months immediately preceding such date of hiring or solicitation.
(c) ADR, Germinario and the Company agree that the covenants of
noncompetition and non-solicitation are reasonable covenants under the
circumstances, and further agree that if, in the opinion of any court of
competent jurisdiction such covenants are not reasonable in any respect,
such court shall have the right, power and authority to excise or modify
such provision or provisions of these covenants as the court determines are
not reasonable and to enforce the remainder of these covenants as so amended.
ADR and Germinario agree that any breach of the covenants contained in this
Section 8 would irreparably injure the Company. Accordingly, ADR and
Germinario agree that the Company, in addition to pursuing any other remedies
it may have in law or in equity, may obtain an injunction against ADR and
Gerninario from any court having jurisdiction over the matter, restraining
any further violation of this Section 8.
(d) The provisions of this Section 8 shall extend for the Term and
survive the termination of this Agreement for six months from the date of
such termination (herein referred to as the "Non-Competition Period").
9. Indemnification.
The Company agrees to indemnify and hold harmless ADR, and all
directors, officers, employees and representatives of ADR (collectively, the
"Indemnified Parties"), against any and all damage, loss, claim, expense,
deficiency or cost incurred as the result of any claim, suit or proceeding
made or brought against any of the Indemnified Parties, or in which any of
the Indemnified Parties are asked to participate, based on (i) any materials
or information that any of the Indemnified Parties prepared or disseminated
on behalf of the Company and based on information approved by the Company
before its dissemination, production and/or publication and (ii) the nature
and use of the Company's products and services.
10. Notices.
All notices and other communications hereunder shall be in writing
and shall be deemed to have been given if delivered personally or sent by
facsimile transmission, overnight courier, or certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally or sent by facsimile transmission (provided that a
confirmation copy is sent by overnight courier), one day after deposit with
an overnight courier, or if mailed, five (5) days after the date of deposit
in the United States mails, as follows:
If to the Company, to: Fotoball USA, Inc.
0000 Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
If to ADR, to: ADR Management Group Ltd.
00 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Telecopy: (000)000-0000
Attention: Xxxx X. Xxxxxxxxxx
00. Entire Agreement.
This Agreement, the Option Agreement and the Confidentiality Letter
contain the entire agreement between the parties hereto with respect to the
matters contemplated herein and supersede all prior agreements or
understandings among the parties related to such matters.
12. Binding Effect.
Except as otherwise provided herein, this Agreement shall be binding
upon and inure to the benefit of the Company and its successors and assigns,
ADR and its successors and assigns, and Germinario. "Successors and assigns"
shall mean, in the case of the Company, any successor pursuant to a merger,
consolidation, or sale, or other transfer of all or substantially all of the
assets or common stock of the Company.
13. No Assignment.
Except as contemplated by Section 12 above, this Agreement shall not
be assignable or otherwise transferable by the parties hereto.
14. Amendment or Modification: Waiver.
No provision of this Agreement may be amended or waived unless such
amendment or waiver is authorized by the Company and is agreed to in writing,
signed by a duly authorized officer of each of the Company and ADR. Except as
otherwise specifically provided in this Agreement, no waiver by the parties
hereto of any breach by any other party hereto of any condition or provision
of this Agreement to be performed by such other party shall be deemed a
waiver of a similar or dissimilar provision or condition at the same or at
any prior or subsequent time.
15. Governing Law.
The validity, interpretation, construction, performance and
enforcement of this Agreement shall be governed by the internal laws of the
State of California, without regard to its conflicts of law rules. Any
controversy or claim arising out of or relating to this Agreement or the
breach of this Agreement that cannot be resolved by ADR, on the one hand, and
the Company, on the other, including any dispute as to termination for Good
Reason shall be submitted to arbitration in the City of San Diego in
accordance with California law and the procedures of the American Arbitration
Association. The determination of the arbitrator(s) shall be conclusive and
binding on the Company and ADR, and judgment may be entered on the
arbitrator(s) award in any court having jurisdiction.
16. Titles.
Titles to the Sections in this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by
reference to the title of any Section.
17. Counterparts.
This Agreement may be executed in one or more counterparts, which
together shall constitute one agreement. It shall not be necessary for each
party to sign each counterpart so long as each party has signed at lease one
counterpart.
18. Severabilitv.
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms and
provisions of this Agreement in any other jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first set forth above.
FOTOBALL USA
By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
President and Chief Executive Officer
ADR MANAGEMENT GROUP LTD.
By: /s/ Xxxx X. Xxxxxxxxxx
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Xxxx X. Xxxxxxxxxx
Chief Executive Officer
For the purpose of binding himself to Section 8 hereof.
/s/ Xxxx X. Xxxxxxxxxx
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Xxxx X. Xxxxxxxxxx
