Exhibit 10.2

INVESTOR RIGHTS AGREEMENT
 
This Investor Rights Agreement (this “Agreement”) is made and entered into as of
February 22, 2008, by and among ProElite, Inc., a New Jersey corporation (the
“Company”), and Showtime Networks Inc. (“Holder”) with reference to the
following.
 
A. Pursuant to the Subscription Agreement between the Company and Holder dated
as of the date hereof, the Company has issued to Holder two warrants (the
“Warrants”) to purchase an aggregate of 4,000,000 shares of the Company’s Common
Stock (“Shares”).
 
B. The parties desire to enter into this Agreement providing for certain
registration rights with respect to the shares of the Company’s Common Stock
issuable upon exercise of the Warrants (the “Warrant Shares”), and restrictions
on resale.
 
The Company, and the Holder hereby agree as follows:
 
1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Warrant Agreements shall have the meanings given such terms in
the Warrant Agreements. As used in this Agreement, the following terms shall
have the following meanings:
 
“Closing” means the closing of the transactions contemplated by the Purchase
Agreement.
 
“Commission” means the Securities and Exchange Commission.
 
“Common Stock” means shares of the Company’s Common Stock.
 
“Effectiveness Date” means, with respect to the Registration Statement required
to be filed hereunder, the earlier of (a) the 120th day following the filing of
the Registration Statement, and (b) the fifth trading day following the date on
which the Company is notified by the Commission that the Registration Statement
will not be reviewed or is no longer subject to further review and comments.
 
“Effectiveness Period” shall have the meaning set forth in Section 2.1 except
that for purposes of Section 3, the Effectiveness Period shall extend until all
Shares issuable upon exercise of the Warrants have been sold or may be sold
without volume restrictions pursuant to Rule 144(k).
 
“Filing Date” means, with respect to the Registration Statement required to be
filed hereunder, the later to occur of the 45th calendar day following the date
that the Company receives a request from Holder that the Company effect a
registration with respect to at least 50% of the Registrable Securities or six
months from the effective date of the Investor Registration Statement.
 
“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time, of Registrable Securities.
 
“Indemnified Party” shall have the meaning set forth in Section 6(c).
 
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“Indemnifying Party” shall have the meaning set forth in Section 6(c).
 
“Losses” shall have the meaning set forth in Section 6(a).
 
“Permitted Transferee” shall have the meaning set forth in the Subscription
Agreement as of the date hereof between Holder and the Company.
 
“Person” means any individual, partnership, corporation, group, trust or other
legal entity.
 
“Plan of Distribution” shall have the meaning set forth in Section 2.1.
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
 
“Prospectus” means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
 
“Registrable Securities” means, as to this Agreement only, all of the Warrant
Shares, together with any shares of the Company’s Common Stock issued or
issuable upon any stock split, dividend or other distribution, recapitalization
or similar event with respect to the foregoing.
 
“Registration Statement” means the registration statements required to be filed
hereunder, including (in each case) the Prospectus, amendments and supplements
to the registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in the registration statement.
 
“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.
 
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.
 
“Securities Act” means to Securities Act of 1933, as amended.
 
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“Selling Shareholder Questionnaire” shall have the meaning set forth in
Section 4(a).
 
“Transfer” means any assignment, sale, disposition or any other like transfer of
securities.
 
“Warrant Agreements” means the applicable Warrants issued pursuant to the
Subscription Agreement.
 
2. Registration.
 
2.1 On or prior to the Filing Date, the Company shall prepare and file with the
Commission, and in accordance with the Securities Act and all applicable
regulations promulgated thereunder, the Registration Statement covering the
resale of all of the Registrable Securities (or so much of the Registrable
Securities as Holder requests to be included therein) for an offering to be made
on a continuous basis pursuant to Rule 415. The Registration Statement required
hereunder shall be on Form SB-2 (except if the Company is not then eligible to
register for resale the Registrable Securities on Form SB-2, in which case the
Registration shall be on another appropriate form in accordance herewith). The
Registration Statement required hereunder shall contain (except if otherwise
directed by the Holders) substantially the “Plan of Distribution” attached
hereto as Annex A. Subject to the terms of this Agreement, the Company shall use
its best efforts to cause the Registration Statement to be declared effective
under the Securities Act as promptly as possible after the filing thereof, but
in any event not later than the Effectiveness Date, and shall use its best
efforts to keep the Registration Statement continuously effective under the
Securities Act until the date when all of the Shares have been sold or may be
sold without volume restrictions pursuant to Rule 144(k) as determined by the
counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company’s transfer agent and the affected
Holders (the “Effectiveness Period”).
 
2.2 Notwithstanding the foregoing obligations, if the Company furnishes to
Holder a certificate signed by the Company’s chief executive officer stating
that in the good faith judgment of the Company’s Board of Directors it would be
materially detrimental to the Company and its shareholders for such registration
statement to either become effective or remain effective for as long as such
registration statement otherwise would be required to remain effective, because
such action would (i) materially interfere with a significant acquisition,
corporate reorganization, or other similar transaction involving the Company;
(ii) require premature disclosure of material information that the Company has a
bona fide business purpose for preserving as confidential; or (iii) render the
Company unable to comply with requirements under the Securities Act or Exchange
Act, then the Company shall have the right to defer taking action with respect
to such filing, and any time periods with respect to filing or effectiveness
thereof shall be tolled correspondingly, for a period of not more than thirty
(30) days after the request of Holder; provided, however, that the Company may
not invoke this right more than once in any twelve (12) month period; and
provided further that the Company shall not register any securities for its own
account or that of any other stockholder during such thirty (30) day period
other than pursuant to a registration relating to the sale of securities to
employees of the Company pursuant to a stock option, stock purchase, or similar
plan; a registration on any form that does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities; or a registration in which the
only Common Stock being registered is Common Stock issuable upon conversion of
debt securities that are also being registered.
 
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3. “Piggy Back” Registration.
 
If at any time during the Effectiveness Period there is not an effective
Registration Statement covering all of the Registrable Securities and the
Company shall determine to prepare and file with the Commission a registration
statement relating to an offering for its own account under the Securities Act
of any of its equity securities, other than on Form S-4 or Form S-8 (each as
promulgated under the Securities Act) or their then equivalents relating to
equity securities to be issued solely in connection with any acquisition of any
entity or business or equity securities issuable in connection with the stock
option or other employee benefit plans, then the Company shall send to Holder a
written notice of such determination and, if within fifteen days after the date
of such notice, Holder shall so request in writing, the Company shall include in
such registration statement all or any part of such Registrable Securities such
Holder requests to be registered, subject to customary underwriter cutbacks
applicable to all holders of registration rights. In such event, the provisions
of Section 4 shall apply to such a registration.
 
4. Registration Procedures.
 
In connection with the Company’s registration obligations pursuant to this
Agreement, the Company shall:
 
(a) Not less than five trading days prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto, the
Company shall, (i) furnish to Holder copies of any disclosure relating to the
Holders, including but not limited to the entire Selling Stockholder and Plan of
Distribution sections which sections shall be subject to the review of such
Holders, and (ii) cause its officers and directors, counsel and independent
certified public accountants to respond to such inquiries as shall be necessary,
in the reasonable opinion of counsel, to conduct a reasonable investigation
within the meaning of the Securities Act. The Company shall not file the
Registration Statement or any such Prospectus or any amendments or supplements
thereto to which the Holder shall reasonably object in good faith, provided that
the Company is notified of such objection in writing no later than two trading
days after the Holder has been so furnished copies of such documents. Prior to
any filing relating to the Registration Statement, Holder agrees to furnish to
the Company a completed Questionnaire substantially in the form attached to this
Agreement as Annex B (a “Selling Shareholder Questionnaire”) within five trading
days of written request by the Company.
 
(b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep the Registration Statement
continuously effective for the Effectiveness Period and prepare and file with
the Commission such additional Registration Statements in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably practicable to any comments received
from the Commission with respect to the Registration Statement or any amendment
thereto and, as promptly as reasonably practicable, provide Holder true and
complete copies of all correspondence from and to the Commission relating to the
Registration Statement; (iv) comply with the provisions of the Securities Act
and the Exchange Act with respect to the disposition of all Registrable
Securities covered by the Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Holder set forth in
the Registration Statement as so amended or in such Prospectus as so
supplemented; and (v) take all other actions as may be reasonably necessary or
appropriate in furtherance of the matters required by this Section 3(b).
 
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(c) Notify Holder as promptly as reasonably practicable and confirm such notice
in writing promptly following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to the Registration Statement is proposed
to be filed; (B) when the Commission notifies the Company whether there will be
a “review” of the Registration Statement and whenever the Commission comments in
writing on the Registration Statement (the Company shall upon request provide
true and complete copies thereof and all written responses thereto to each of
the Holders); and (C) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments
or supplements to the Registration Statement or Prospectus or for additional
information, (iii) of the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in the Registration Statement ineligible for
inclusion therein or any statement made in the Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. 
 
(d) Use commercially reasonable efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of the
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.
 
(e) Furnish to Holder, without charge and upon request, at least one conformed
copy of the Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Person, and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission.
 
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(f) Promptly deliver to Holder, without charge and upon request, as many copies
of the Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request in
connection with resales by Holder. Subject to the terms of this Agreement, the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by Holder in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto, except after the giving on any notice pursuant to Section
4(c) until the Company has delivered the Advice and either the supplemented
prospectus or the amended Registration Statement as contemplated by Section
7(c).
 
(g) Prior to any resale of Registrable Securities by the Holder, use its
commercially reasonable efforts to register or qualify or cooperate with the
Holder in connection with the registration or qualification (or exemption from
the Registration or qualification) of such Registrable Securities for the resale
by the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep the
Registration or qualification (or exemption therefrom) effective during the
distribution period described in the Registration Statement and to do any and
all other acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statement, provided, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified, subject
the Company to any tax in any such jurisdiction where it is not then so subject
or file a general consent to service of process in any such jurisdiction.
 
(h) If requested by the Holder, cooperate with the Holder to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to the Registration
Statement, which certificates shall be free, to the extent permitted by any
applicable purchase agreement, of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such names
as any such Holders may request.
 
(i) Upon the occurrence of any event contemplated by Section 4(c)(v), as
promptly as reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. If the
Company notifies Holder in accordance with clauses (ii) through (v) of Section
4(c) above to suspend the use of any Prospectus until the requisite changes to
such Prospectus have been made, then Holder shall suspend use of such
Prospectus. The Company will use its best efforts to ensure that the use of the
Prospectus may be resumed as promptly as is practicable.
 
(j) Comply with all applicable rules and regulations of the Commission.
 
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5. Registration Expenses. All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to any Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses with respect to filings required to be
made with the trading market on which the Common Stock is then listed for
trading, (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions or any legal fees or other
costs of Holder.
 
6. Indemnification.
 
(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless Holder, the officers,
directors, agents, managers, members, partners, shareholders and employees of
Holder, each Person who controls Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers, directors,
agents and employees of each such controlling Person, to the fullest extent
permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable
attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out
of or relating to any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (i) such
untrue statements or omissions are based solely upon information regarding
Holder furnished in writing to the Company by Holder expressly for use therein,
or to the extent that such information relates to Holder or Holder’s proposed
method of distribution of Registrable Securities and was reviewed and expressly
approved in writing by such Holder expressly for use in the Registration
Statement, such Prospectus or such form of Prospectus or in any amendment or
supplement thereto (it being understood that Holder has approved Annex A hereto
for this purpose) or (ii) in the case of an occurrence of an event of the type
specified in Section 4(c)(ii) through (v), the use by Holder of an outdated or
defective Prospectus after the Company has notified Holder in writing that the
Prospectus is outdated or defective. The Company shall notify Holder promptly of
the institution, threat or assertion of any Proceeding of which the Company is
aware in connection with the transactions contemplated by this Agreement. 
 
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(b) Indemnification by Holder. Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and
employees, each Person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents or employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, to the
extent arising out of or based solely upon: (i) Holder’s failure to comply with
the prospectus delivery requirements of the Securities Act or (ii) any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case (A) to the extent, but only to the extent, that such untrue statement
or omission is contained in any information so furnished in writing by Holder to
the Company specifically for inclusion in the Registration Statement or such
Prospectus or (B) to the extent that (x) such untrue statements or omissions are
based solely upon information regarding Holder furnished in writing to the
Company by such Holder expressly for use therein, or (C) to the extent that such
information relates to Holder or Holder’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
Holder expressly for use in the Registration Statement (it being understood that
Holder has approved Annex A hereto for this purpose), such Prospectus or such
form of Prospectus or in any amendment or supplement thereto or (y) in the case
of an occurrence of an event of the type specified in Section 4(c)(ii) through
(v), the use by Holder of an outdated or defective Prospectus after the Company
has notified Holder in writing that the Prospectus is outdated or defective;
provided, however, that the indemnity agreement contained in this Section 5(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of
Holder. In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the net proceeds received by Holder
upon the sale of the Registrable Securities giving rise to such indemnification
obligation. 
 
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from whom
indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying
Party shall have the right to assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have prejudiced the
Indemnifying Party. 
 
An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (i) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (ii) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (iii) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall reasonably believe
that a material conflict of interest is likely to exist if the same counsel were
to represent such Indemnified Party and the Indemnifying Party (in which case,
if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of one separate counsel shall be at the expense
of the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
 
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Subject to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten trading days of written notice thereof to the
Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is not entitled to
indemnification hereunder, determined based upon the relative faults of the
parties.
 
(d) Contribution. If a claim for indemnification under Section 6(a) or 6(b) is
unavailable to an Indemnified Party (by reason of public policy or otherwise),
then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in this Agreement, any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms. 
 
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud by
such Holder.
 
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The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
 
7. Rights and Obligations of Holder and the Company.
 
(a) Remedies. In the event of a breach by the Company or by Holder of any of
their obligations under Sections 2 and 3 of this Agreement, Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement will be entitled to specific
performance of its rights under this Agreement. The parties agree that monetary
damages would not provide adequate compensation for any losses incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would be
adequate.
 
(b) Compliance. Holder covenants and agrees that he will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement.
 
(c) Discontinued Disposition. Holder agrees by his acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 4(c), Holder will
forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until Holder’s receipt of the copies of the supplemented
Prospectus and/or amended Registration Statement or until it is advised in
writing (the “Advice”) by the Company that the use of the applicable Prospectus
may be resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement. The Company will use its
best efforts to ensure that the use of the Prospectus may be resumed as promptly
as it practicable.
 
8. Lock-Up.
 
During the period beginning on the date hereof and ending March 5, 2009 (the
“Lock-up Period”), Holder will not sell, transfer, assign, pledge or hypothecate
any Warrants or Warrant Shares (the “Covered Securities”), unless it is to a
Permitted Transferee that agrees to be subject to the terms and conditions of
this Section. In addition, during the Lock-Up Period, the Covered Securities
shall not be the subject of any hedging, short sale, derivative, put, or call
transactions that would result in the effective economic disposition of the
Covered Securities by any person. The obligations of the Holder that are
contained in herein also apply (i) to all Covered Securities that Holder may
receive as a stock dividend or other distribution on the Covered Securities and
(ii) to all other securities of the Company that Holder may receive in a
recapitalization or similar transaction in exchange for Covered Securities
acquired by Holder.
 
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9. Miscellaneous.
 
(a) Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be made in accordance with the
provisions of the Subscription Agreement.
 
(b) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder. Each Holder may assign their
respective rights hereunder to its Permitted Transferees.
 
(c) Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.
 
(d) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be with the internal laws
of the State of California, without giving effect to the principles of conflicts
of law. All actions arising out of or relating to this Agreement shall be heard
and determined exclusively in any California federal court sitting in the City
of Los Angeles.
 
(e) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
 
(f) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
 
(g) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
 
[SIGNATURE PAGES FOLLOW]
 
11

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IN WITNESS WHEREOF, the parties have executed this Investor Rights Agreement as
of the date first written above.
 

 
PROELITE, INC.
 
 
By:____________________________________
Name: Douglas DeLuca
Title: Chief Executive Officer
         
SHOWTIME NETWORKS INC.
 
 
By:____________________________________
Name:
Title:

 
12

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Exhibit 10.2

ANNEX A
 
PLAN OF DISTRIBUTION
 
The Selling Stockholders (the “Selling Stockholders”) of the common stock
(“Common Stock”) of Pro Elite, Inc., a New Jersey corporation (the “Company”)
and any of their pledgees, assignees and successors-in-interest may, from time
to time, sell any or all of their shares of Common Stock on any stock exchange,
market or trading facility on which the shares are traded or in private
transactions. These sales may be at fixed or negotiated prices. The Selling
Stockholders may use any one or more of the following methods when selling
shares:
 

 
·
ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 

 
·
block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction;

 

 
·
purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 

 
·
an exchange distribution in accordance with the rules of the applicable
exchange;

 

 
·
privately negotiated transactions;

 

 
·
settlement of short sales entered into after the date of this prospectus;

 

 
·
broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;

 

 
·
a combination of any such methods of sale;

 

 
·
through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise; or

 

 
·
any other method permitted pursuant to applicable law.

 
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”), if available, rather
than under this prospectus.
 
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. Each Selling Stockholder does not expect these commissions and
discounts relating to its sales of shares to exceed what is customary in the
types of transactions involved.
 
A - 1

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In connection with the sale of our common stock or interests therein, the
Selling Stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
 
The Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each Selling Stockholder has informed the
Company that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the Common Stock.
 
The Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
 
Because Selling Stockholders may be deemed to be “underwriters” within the
meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act. In addition, any securities covered by this
prospectus, which qualify for sale pursuant to Rule 144 under the Securities
Act, may be sold under Rule 144 rather than under this prospectus. Each Selling
Stockholder has advised us that they have not entered into any agreements,
understandings or arrangements with any underwriter or broker-dealer regarding
the sale of the resale shares. There is no underwriter or coordinating broker
acting in connection with the proposed sale of the resale shares by the Selling
Stockholders.
 
We agreed to keep this prospectus effective until the earlier of (i) the date on
which the shares may be resold by the Selling Stockholders without registration
and without regard to any volume limitations by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect or (ii) all of the shares
have been sold pursuant to the prospectus or Rule 144 under the Securities Act
or any other rule of similar effect. The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the resale shares may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.
 
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the resale shares may not simultaneously engage
in market making activities with respect to our common stock for a period of two
business days prior to the commencement of the distribution. In addition, the
Selling Stockholders will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including Regulation M, which may
limit the timing of purchases and sales of shares of our common stock by the
Selling Stockholders or any other person. We will make copies of this prospectus
available to the Selling Stockholders and have informed them of the need to
deliver a copy of this prospectus to each purchaser at or prior to the time of
the sale.
 
A - 2

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Exhibit 10.2
 
ANNEX B
 
Pro Elite, Inc.
 
SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
 
The undersigned beneficial owner of common stock, (the “Common Stock”), of Pro
Elite, Inc., a New Jersey corporation (the “Company”), (the “Registrable
Securities”) understands that the Company has filed or intends to file with the
Securities and Exchange Commission (the “Commission”) a registration statement
on Form SB-2 (the “Registration Statement”) for the registration and resale
under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”),
of the Registrable Securities, in accordance with the terms of the Investor
Rights Agreement, dated as of February 12, 2008 (the “Investor Rights
Agreement”), among the Company and the holder named therein. A copy of the
Investor Rights Agreement is available from the Company upon request at the
address set forth below. All capitalized terms not otherwise defined herein
shall have the meanings ascribed thereto in the Investor Rights Agreement.
 
Certain legal consequences arise from being named as a selling securityholder in
the Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and the related
prospectus.
 
NOTICE
 
The undersigned beneficial owner (the “Selling Securityholder”) of Registrable
Securities hereby elects to include the Registrable Securities owned by it and
listed below in Item 3 (unless otherwise specified under such Item 3) in the
Registration Statement.
 
 
B - 1

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QUESTIONNAIRE
 
The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
 
1. 
Name.
 
(a) 
Full Legal Name of Selling Securityholder
 
 
       
(b) 
Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:
 
 
       
(c) 
Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):
 
 
     
2. 
Address for Notices to Selling Securityholder:
 
Telephone:_______________________________________________________________________________
 
Fax:_____________________________________________________________________________________
 
Contact
Person:____________________________________________________________________________
   
3. 
Beneficial Ownership of Registrable Securities:
     
(a) 
Type and Number of Registrable Securities beneficially owned:
 
 
                 
4. 
Broker-Dealer Status:
     
(a) 
Are you a broker-dealer?
         
Yes
¨
No
¨
               
Note: If yes, the Commission’s staff has indicated that you should be identified
as an underwriter in the Registration Statement.

 
B - 2

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(b) 
Are you an affiliate of a broker-dealer?
         
Yes
¨
No
¨
             
(c) 
If you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of
the purchase of the Registrable Securities to be resold, you had no agreements
or understandings, directly or indirectly, with any person to distribute the
Registrable Securities?
         
Yes
¨
No
¨
           
5. 
 
Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.
         
Except as set forth below in this Item 5, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
       
(a) 
Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:
 
 
           
6. 
 
Relationship with the Company:
         
Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years. State any exceptions here:
         
State any exceptions here:
 
 
     

 

 
The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof at any time while the Registration Statement remains effective.
 
B - 3

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By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.
 
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
 

Dated: ________________
Beneficial Owner
 
______________________________________
 
 
By:_________________________________________
Name:__________________________________
Title:___________________________________

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

B - 4

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