Exhibit 10.3

 
MANAGEMENT AGREEMENT
 
THIS MANAGEMENT AGREEMENT (“Agreement”) is dated July 22, 2008 (“Effective
Date”) by and between UNIVERSAL CAPITAL MANAGEMENT, INC., a Delaware corporation
(“Manager”), and THEATER XTREME ENTERTAINMENT GROUP, INC., a Florida corporation
(“TXEG” or “Company”).
 
BACKGROUND
 
TXEG desires to obtain from the Manager, and the Manager is willing and able to
provide to TXEG, management services and other assistance in accordance with and
subject to the terms and conditions set forth in this Agreement.
 
For and in consideration of the mutual benefits and covenants set forth below,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
 
1.           Appointment as Manager
 
(a)  TXEG hereby engages Manager to provide management services and other
assistance in accordance with the terms of this Agreement.  The Manager shall
and hereby agrees to devote such time as is reasonably necessary to provide such
services and assistance.
 
2.           Scope of Services
 
(a)  Manager hereby agrees to provide to TXEG the following services (as amended
from time to time, collectively, the “Services”):
 
(i)           Strategic Planning.  Manager shall assist TXEG management in the
strategic planning process to include but not be limited to analysis of
potential markets, competition, product marketing approaches, pricing and future
product utility.
 
(ii)           Investor Relations:  Manager will assist TXEG in retaining the
services of a qualified Investor Relations company or manager suitable for
providing marketing and public relations services in the investor community on
behalf of TXEG.
 
(iii)           Optional Services.  The following services are available to be
provided by Manager.  It is not anticipated that these services will be utilized
by TXEG, but are available upon request.
 
 
A.
Significant Managerial Assistance.  Upon TXEG’s request, Manager may provide
TXEG with day to day managerial assistance on issues such as employment,
payroll, and benefits; real estate leasing; utility utilization; capital
expenditures; personnel; and other related matters.

 
B.
Financial Reporting Services.  Upon TXEG’s request, Manager may assist in
providing TXEG on a quarter-annual basis a balance sheet, income statement and
statement of cash flow for TXEG.  Such financial reports shall be completed not
later than thirty (30) days after the end of the quarter-annual period reported
on.  Income statements will be based on generally accepted accounting principles
as in effect in the United States of America, consistently applied from period
to period and in accordance with the terms of contracts and service agreements.

 
 
 

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C. Tax Reporting Services.  Upon TXEG’s request, Manager may assist in the
preparation of sales and use tax returns for all jurisdictions in which TXEG is
then subject to reporting as determined by TXEG for goods or services sold.  If
such services are requested, Manager shall provide TXEG with the amount of such
liability not later than the 10th business day of each calendar month in which a
sales/use tax liability is due to be paid TXEG..  Such returns shall be
delivered to TXEG for execution no later than three (3) days prior to the filing
due date for any such return.
D. Accounts Payable Services.
(I.)           Upon TXEG’s request, Manager may assist TXEG in providing for the
usual and ordinary business aspects of the accounts payable process for TXEG,
including but not limited to:
 

 
i.
Maintaining vendor master
     
ii.
Processing vendor invoices
     
iii.
Executing vendor payments from
 
TXEG’s funds
     
iv.
Processing travel expense reports
     
v.
Executing employee payments for
 
travel expense from   funds
     
vi.
Stop payment administration
     
vii.
1099 Misc. reporting
     
viii.
Invoice filing
     
ix.
Documentation retention

 
(II.)           Upon TXEG’s request, Manager may assist TXEG with its
outstanding accounts payable based upon contracted payment terms and consistent
with past business practice.
 
 
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 (b) Investment Banking Consultation and Investor Introduction Services. Manager
is not registered at this time as a securities broker or dealer, and represents
and warrants that such registration is not required.  Manager further represents
that it does not have an affiliation with any securities brokerage firm.  As a
result, the Company understands that, while the Manager will introduce the
Company to qualified persons and/or institutions who indicate a serious interest
in pursuing a possible financing transaction for the Company within the
parameters established by the Company, the Manager will not be involved in
conducting negotiations for the Company with any such persons, handling any
funds or securities, or performing services that would constitute a business of
effecting transactions in securities under applicable federal or state
law.  Manager further represents and warrants that it has not acted as a broker
or finder in any other sale of securities and does not intend to participate in
any distribution of securities after any transaction under this Agreement.
 
 (c)To the extent that Manager is able in the ordinary course of business,
Manager shall provide or cause to be provided, and shall be responsible for said
costs associated with, all personnel, facilities, equipment, systems and
management necessary or appropriate to provide such Services.  In no event will
Manager be required to stay in business or take other extraordinary measures
solely to provide the Services to TXEG; provided, that Manager shall provide
Services pursuant to this Agreement in the same order of priority as it provides
the same or similar services to its own departments, and provided TXEG is
notified in advance of any delay and the Services are provided to TXEG at the
next available opportunity.
 
(d)  During the Term of this Agreement, TXEG may from time to time request that
Manager provide special services or projects in addition to the Services
identified in this Section 2, and Manager may in its sole discretion agree to
provide such additional services or projects.  If Manager agrees to provide such
additional services or projects, the Parties shall negotiate in good faith to
establish the terms (including, without limitation, price) for providing such
additional services or projects, and following agreement on such terms, this
Section 2 shall be amended to include such additional services and projects.
 
3.           Term and Termination
 
(a)           This Agreement shall be effective as of the Effective Date and,
subject to the provisions of section (b) of this Section 3, shall terminate
after one (1) year (the “Term”).  The Term shall be automatically extended from
year to year in the absence of ninety (90) days’ notice from one party to the
other.
 
(b)           Notwithstanding the provisions of subsection (a) of this Section
3, (i) Manager can terminate this Agreement at any time upon thirty (30) days’
notice to TXEG upon TXEG’s failure to pay the amounts required hereunder, and
(ii) TXEG can terminate this Agreement after thirty (30) days’ notice to Manager
of Manager’s material failure to fulfill its obligations hereunder and Manager’s
failure to correct such failure during such time period.
 
4.           Compensation.
 
 
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(a)           TXEG shall pay Manager for the Services by delivering to Manager
Two Million Five Hundred Thousand (2,500,000) Shares of common stock of TXEG
within thirty (30) days of the Effective Date, which shares TXEG intends to
include, to the extent practicable, in TXEG’s next Registration of its shares
with the Securities and Exchange Commission.
 
(b)           In addition, TXEG shall reimburse Manager for third party and
out-of-pocket expenses actually and reasonably incurred by Manager as an adjunct
to and as a supplement to Manager’s responsibility for performing the Services
for which Manager is being paid compensation described herein, and which are
approved in advance by TXEG; provided that expenses of Affiliates of Manager
shall not be deemed third party expenses for purposes of this Section 4.
 
5.           Non-Exclusive Contract
 
.  The Manager acts as adviser to other clients and may give advice, and take
action, with respect to any such client which may differ from the advice given,
or the timing or nature of action taken, with respect to TXEG.
 
6.           Delegation and Assignment
 
.  With TXEG’s prior written consent, which consent shall not be unreasonably
withheld or delayed, Manager may delegate all or part of its duties to perform
Services hereunder; provided, that Manager’ costs associated with any duties so
delegated shall not be deemed out-of-pocket expenses added to the price of
Services pursuant to Section 4.  Notwithstanding the foregoing, Manager shall be
entitled to delegate all or any part of its duties to one or more of its
Affiliates upon notice to TXEG; provided, however, that Manager and its designee
Affiliate(s) shall be jointly and severally liable for performance of Manager’s
obligations under this Agreement.  TXEG shall not assign or subcontract its
rights, duties, or obligations under this Agreement.
 
7.           Confidential Information; Ownership
 
(a)           Each party shall treat as confidential all Confidential
Information of the other party that comes to its knowledge through this
Agreement.  Each party shall take such steps to prevent disclosure of such
Confidential Information to any third person as it would take in protecting its
own proprietary or confidential information and shall not use any portion of
such Confidential Information for any purpose not authorized herein.  All
Confidential Information of each party and any information containing a party’s
Confidential Information shall at all times, remain the exclusive property of
that party.
 
(b)           No party shall be under any obligations with respect to any
Confidential Information:
 
(i)           which is, at the time of disclosure, available to the general
public;
 
(ii)           which becomes at a later date available to the general public
through no fault on the part of such party and then only after such later date;
 
(iii)           which such party can demonstrate was in its possession before
receipt from the other party; or
 
(iv)           which is disclosed to such party without restriction on
disclosure by a third party who has the lawful right to disclose such
information.
 
 
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(c)           The confidentiality obligations of this Section 7 shall survive
the termination of this Agreement.
 
8.           Independent Contractor
 
.  Manager is and shall remain at all times an independent contractor of TXEG in
the performance of all Services hereunder, and all persons employed by Manager
to perform such Services shall be and remain employees solely of Manager and
subject only to the supervision of Manager’s supervisory personnel.   With
respect to Manager’s employees providing services under this Agreement, Manager
shall be responsible for the payment of all salaries and benefits and all income
taxes, social security taxes, employment compensation taxes and other employment
taxes and withholdings with respect to such employees and all fringe benefits
program expenses, such as insurance costs, pension or retirement plans,
vacation, sick leave and similar matters, with respect to such
employees.  Manager shall be entitled to determine which of its employees shall
provide the Services.
 
9.           Force Majeure.
 
(a)           Neither party shall be liable for any loss or damage for delay or
non-performance under this Agreement resulting from the operation of any
applicable law, rule, ordinance or regulation of any governmental entity or
regulatory agency, or from any requirement or intervention of civil, naval or
military authorities or other agencies of the government, or by reason of any
other causes whatsoever not reasonably within the control of such party,
including, but not limited to, acts of God, war, riot, insurrection, civil
violence or disobedience, blockages, embargoes, sabotage, epidemics, fire,
strikes, lock-outs or other industrial or labor disturbances, lightning,
hurricanes, cyclonic storms, explosions and delay of carriers; provided, that
the affected party notifies the other party promptly of the occurrence of the
cause and thereafter exerts reasonable commercial efforts to overcome the cause
of prevention and hindrance and to resume performance; and provided, further,
that the settlement of strikes, lock-outs and other industrial or labor
disturbances shall be entirely within the discretion of the affected party, and
the affected party shall not be required to make settlement of strikes,
lock-outs and other industrial or labor disturbances by acceding to the demands
of any opposing third party or parties when such course is unfavorable in the
affected party’s judgment.
 
(b)           If Manager’s performance under this Agreement is suspended or
rendered impractical by reason of any cause covered by subsection (a) of this
Section 9 (“Force Majeure”) for a period in excess of twenty (20) days, TXEG
 shall have either the right to terminate this Agreement with respect to the
disrupted Services immediately upon written notice to Manager or require that
the Agreement continue in force for that period of time beyond the Term that
such Force Majeure condition existed during the Term without incurring any
obligation by TXEG for additional payment for Services by Manager.  An event of
Force Majeure shall not otherwise limit amounts payable for Services rendered on
or prior to the actual date of the event of Force Majeure.
 
10.           Limitation of Liability
 
.  Notwithstanding any other provision of this Agreement to the contrary,
Manager shall not be liable to TXEG by reason of any error of omission or
commission, performance or failure to perform or delay in performing any
Services under this Agreement, for  special, incidental or consequential
damages, suffered by TXEG beyond a refund to TXEG of all charges paid and/or
shares issued by TXEG to Manager for the Services that caused such damages,
unless Manager shall have committed gross negligence or willful misconduct.  The
provisions of this Section 10 shall survive termination of this Agreement.
 
 
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11.           Manager’s Investment Representations.  Manager hereby represents
and warrants to and with TXEG that:
 
(a)           Manager will be acquiring the Shares for its own account as
principal and not with a view to, or for sale in connection with, any
distribution of all or any of such Shares.  Manager hereby agrees that it will
not, directly or indirectly, assign, transfer, offer, sell, pledge, hypothecate
or otherwise dispose of all or any of such Shares (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of any of such Shares) except in
accordance with the registration provisions of the Securities Act of 1933 (the
“Securities Act”) or an exemption from such registration provisions or any
applicable securities laws.
 
(b)           Manager (i) is knowledgeable and experienced with respect to the
financial, tax and business aspects of the ownership of investments such as the
Shares and of the business contemplated by TXEG and is capable of evaluating the
risks and merits of acquiring the Shares and in making a decision to proceed
with this investment, has not relied on any representations, warranties or
agreements of TXEG or others, and (ii) can bear the economic risk of an
investment in Shares for an indefinite period of time and can afford to suffer
the complete loss thereof.
 
(c)           Manager has evaluated the risks involved in investing in the
Shares and has determined that the Shares are a suitable investment for
Manager.  Specifically, the aggregate amount of the investments the Manager has
in and Manager’s commitments to, all similar investments that are illiquid is
reasonable in relation to Manager’s net worth, both before and after the
acquisition of the Shares pursuant to this Agreement.
 
(d)           Manager understands and acknowledges that the Shares have not been
registered under the Securities Act or any state securities laws and are being
offered and sold in reliance on exemptions provided in the Securities Act and
state securities laws for transactions not involving any public offering and,
therefore, cannot be resold or transferred unless they are subsequently
registered under the Securities Act and such applicable state securities laws or
unless an exemption from such registration is available.  Manager also
understands that TXEG does not have any obligation or intention to register the
Shares for sale under the Securities Act or any state securities laws or of
supplying the information which may be necessary to enable the Manager to sell
Shares and that Manager has no right to require the registration of the Shares
under the Securities Act, any state securities laws or other applicable
securities regulations.

(e)           Manager has no contract, understanding, agreement or arrangement
with any person to sell, transfer or pledge to such person or anyone else any of
the Shares which the Manager will acquire pursuant to this Agreement and that
Manager has no present plans to enter into any such contract, undertaking,
agreement or arrangement.
 
12.           Definitions
 
 
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(a)           “Affiliate” means, with respect to a Person, another Person who
controls, is controlled by or is under common control with the first such
Person.
 
(b)           “Confidential Information” means any and all information of either
party that might reasonably be considered confidential, secret, sensitive,
proprietary or private. To the extent practical, Confidential Information shall
be marked “proprietary” or “confidential.”  Confidential Information shall
include the following:
 
(i)           data, know-how, formulae, processes, designs, sketches,
photographs, plans, drawings, specifications, samples, reports, lists, financial
information, studies, findings, inventions and ideas, computer programs and
software, or proprietary information relating to either party or the methods or
techniques used by either party;
 
(ii)           data, documents or proprietary information employed in connection
with the marketing and implementation of each party’s products, including cost
information, business policies and procedures, revenues and markets, distributor
and customer lists, and similar items of information; and
 
(iii)           any other data or information obtained by either party during
the term of this Agreement which is not generally known to and not readily
ascertainable by proper means by third persons who could obtain economic value
from its use or disclosure.
 
(c)           “Control” means the ability, through stock ownership, contract, or
otherwise, to control the business or officers of a Person.
 
(d)           “Damages and Expenses” means costs, liabilities, and expenses
incurred in investigating, defending, and paying settlements or judgments with
respect to claims (including reasonable attorneys’ fees).
 
(e)           “Holiday” means for purposes of this Agreement, a day, other than
a Saturday or Sunday, on which national banks with branches in the Commonwealth
of Pennsylvania are or may elect to be closed.
 
(f)           “Person” means an individual or entity.
 
(g)           “Shares” means shares of common stock of TXEG, par value $0.001
dollars per share acquired by Manager pursuant to this Agreement.
 
13.           Miscellaneous.
 
(a)           Indulgences, Etc.  Neither the failure nor any delay on the part
of either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.  No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.
 
 
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(b)           Controlling Law.  This Agreement and all questions relating to its
validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the State of Delaware,
notwithstanding any conflict-of-laws doctrines of any jurisdiction to the
contrary, and without the aid of any canon, custom or rule of law requiring
construction against the draftsman.
 
(c)           Notices.  All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received only when delivered
(personally, by courier service such FedEx or by other messenger) against
receipt or upon actual receipt of registered or certified mail, postage prepaid,
return receipt requested, addressed as set forth below:
 

 
If to:
Manager
   
Universal Capital Management, Inc.
   
2601 Annand Drive
   
Suite 16
   
Wilmington, DE 19808
   
Attention: Michael D. Queen
         
If to:
Theater Xtreme Entertainment Group, Inc.
   
250 Corporate Blvd, Suites E & F
   
Newark, DE  19702
   
Attention: Robert Oberosler
 

In addition, notice by mail shall be sent by a reputable international courier
(such as FedEx) if posted outside of the continental United States.  Any party
may alter the address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the provisions of this
subparagraph for the giving of notice.

(d)           Binding Nature of Agreement; No Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
 
(e)           Provisions Separable.  The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
 
(f)           Entire Agreement.  This Agreement contains the entire
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained.  The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof.  This Agreement may not be modified or amended other than by an
agreement in writing.
 
 
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(g)           Section Headings. The Section and subsection headings in this
Agreement have been inserted for convenience of reference only; they form no
part of this Agreement and shall not affect its interpretation.
 
(h)           Gender, Etc. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate.
 
(i)           Number of Days.  In computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays, Sundays and
Holidays; provided, however, that if the final day of any time period falls on a
Saturday, Sunday or Holiday, then the final day shall be deemed to be the next
day which is not a Saturday, Sunday or Holiday.
 
IN WITNESS WHEREOF, the Parties hereto have executed this Management Agreement
 

 
Theater Xtreme Entertainment Group, Inc.
 
Universal Capital Management, Inc.
   
 
By:   Robert Oberosler signature on file
 
By:
Name:  Robert Oberosler
Name: Michael D. Queen
Title: Chairman, President & Chief Executive Officer
Title: President and CEO

 
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