Document:

EMPLOYMENT
      AGREEMENT

     

    This
      EMPLOYMENT AGREEMENT (this “Agreement”)
      is
      entered into as of December 12, 2006 by and among Pro Elite, Inc., a New Jersey
      corporation, with its principal office at 12100 Wilshire Boulevard,
      Suite 800, Los Angeles, California 90025 (the “Company”),
      and
      Edward G. Hanson (“Employee,”
      together with the Company, the “Parties”),
      with
      reference to the following facts:

     

    WHEREAS,
      the Company desires to employ the Employee, and Employee desires to be employed
      by Company pursuant to the terms hereof;

     

    WHEREAS,
      Employee desires to commit to an agreement with the Company to serve as the
      Company’s Chief Financial Officer; and

     

    NOW,
      THEREFORE, the Company and Employee desire to set forth in this Agreement the
      terms and conditions of the Employee's employment with the Company.

     

    ARTICLE
      I

     

    EMPLOYMENT;
      TERM; DUTIES

     

    1.1  Employment.
      Upon
      the terms and conditions hereinafter set forth, the Company hereby employs
      Employee, and Employee hereby accepts employment to serve as the Company’s Chief
      Financial Officer. 

     

    1.2  Duties.
      Employee shall perform such duties for the Company as are prescribed by
      applicable job specifications for the Chief Financial Officer, the Bylaws of
      the
      Company, and such other or additional duties as may be assigned to him from
      time
      to time by the Board of Directors of the Company (the “Board”).
      Employee shall report to the Chief Executive Officer of the Company.

     

    1.2.1  Employee
      shall use his best efforts and abilities faithfully and diligently to promote
      the Company’s business interests. For so long as Employee is employed by the
      Company, Employee shall not, directly or indirectly, either as an employee,
      employer, consultant, agent, investor, principal, partner, stockholder (except
      as the holder of less than 1% of the issued and outstanding stock of a publicly
      held corporation), corporate officer or director, or in any other individual
      or
      representative capacity, engage or participate in any business that is in
      competition in any manner whatsoever with the business of the Company Group,
      which includes the Company, Real Sport, Inc., EliteXC Live, Inc., and
      EliteXC.com, Inc., and other entities the Company may form in the future, as
      such businesses are now or hereafter conducted. Subject to the foregoing
      prohibition and provided such services or investments do not violate any
      applicable law, regulation or order, or interfere in any way with the faithful
      and diligent performance by Employee of the services to the Company otherwise
      required or contemplated by this Agreement, the Company expressly acknowledges
      that Employee may:

     

    (a)  make
      and
      manage personal business investments of Employee’s choice without consulting the
      Board of Directors (the “Board”); and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)  serve
      in
      any capacity with any non-profit civic, educational or charitable organization
      without consulting with the Board.

     

    1.3  Covenants
      of Employee

     

    1.3.1  Reports.
      Employee shall use his best efforts and skills to truthfully, accurately, and
      promptly make, maintain, and preserve all records and reports that the Company
      may, from time to time, request or require, fully account for all money,
      records, equipment, materials, or other property belonging to the Company of
      which he may have custody, and promptly pay and deliver the same whenever he
      may
      be directed to do so by the Board.

     

    1.3.2  Rules
      and Regulations.
      Employee shall obey all rules, regulations and special instructions of the
      Company and all other rules, regulations, guides, handbooks, procedures,
      policies and special instructions applicable to the Company’s business in
      connection with his duties hereunder and shall endeavor to improve his ability
      and knowledge of the Company’s business in an effort to increase the value of
      his services for the mutual benefit of the Company and the
      Employee.

     

    1.3.3  Opportunities.
      Employee shall make all business opportunities of which he becomes aware that
      are relevant to the Company’s business available to the Company, and to no other
      person or entity or to himself individually.

     

    1.4  Term.
      The
      term of this Employment Agreement shall be the period commencing on December
      13,
      2006, and ending upon the date of termination of Employee’s employment with the
      Company (the “Term”).

     

    ARTICLE
      II

     

    COMPENSATION

     

    2.1  Base
      Salary.
      During
      the Term, for all services rendered by Employee hereunder and all covenants
      and
      conditions undertaken by both Parties pursuant to this Agreement, the Company
      shall pay, and Employee shall accept, as compensation, an annual base salary
      of
      $175,000 per year through November 30, 2007[,
      and the amount determined by the Company thereafter, which shall reflect an
      increase of no less than 5% per year][Is Hanson guaranteed a 5% increase in
      his
      salary in light of the $50k guaranteed bonus?]
      (“Base
      Salary”).
      This
      Base Salary shall be payable in accordance with the normal payroll practices
      of
      the Company. 

     

    2.2  Performance
      and Review.
      Employee’s performance will be reviewed on no less than an annual
      basis.

     

    2.3  Bonus.
      Employee shall receive a bonus of at least $50,000 at the end of each Year,
      as
      defined below in Section 2.4. Subject to the minimum bonus, the amount of the
      Bonus shall be based on the following two factors, each of which shall be given
      equal weight in determining the bonus amount Employee will receive that
      Year:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    2.3.1  The
      Company’s performance, based on the performance criteria established by the
      Company’s Compensation Committee in its sole discretion; and

     

    2.3.2  The
      Employee’s job performance, based on the performance criteria established by the
      Company’s Compensation Committee in its sole discretion.

     

    2.4  Options.
      Employee shall be granted options to acquire 400,000 shares of the Company’s
      common stock under the Company’s 2006 Stock Compensation Plan. The
      options will be exercisable at $2.00 per share and options shall vest in equal
      installments every 90 days from the date of this Agreement for each Year during
      the Term until all options have been fully vested. A “Year”
shall
      be a 360-day period, commencing on December 1 and ending on November 30 of
      the
      following year, with the exception of the first year, which starts on December
      ___, 2006 and ends on November 30, 2007. The options can only vest upon the
      conclusion of a 90-day period. In the event this Agreement is terminated
      pursuant to Section 4.1 of this Agreement, Employee shall not thereafter be
      able
      to exercise any options that are not vested. 

     

    2.5  Withholding.
      The
      Company may deduct from any compensation payable to Employee (including payments
      made pursuant to Section 2 of this Agreement in connection with or following
      termination of employment) amounts sufficient to cover Employee’s share of
      applicable federal, state and/or local income tax withholding, old-age and
      survivors’ and other social security payments, state disability and other
      insurance premiums and payments.

     

    ARTICLE
      III

     

    BUSINESS
      EXPENSES

     

    3.1  Business
      Expenses.
      Employee
      will be reimbursed for all reasonable, out-of-pocket business expenses incurred
      in the performance of his/her duties on behalf of the Company consistent with
      the Company’s policies and procedures, including prior approval requirements and
      submission of appropriate supporting documentation.

     

    3.2  Housing
      Allowance.
      For the
      first six (6) months of the Term, Employee shall be entitled to a housing
      allowance of up to $4,000 per month[,
      payable in a manner consistent with the Company’s practices and policies
      therefor.][Does Pro Elite plan on adopting such a policy? Or would you rather
      have the housing allowance payable at the end of each
      month?]

     

    ARTICLE
      IV

     

    TERMINATION
      OF EMPLOYMENT

     

    4.1  Termination

     

    4.1.1  Employee’s
      employment pursuant to this Agreement shall terminate on the earliest to occur
      of the following, subject to Section 4.4:

     

    (a)  November
      30, 2010;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (b)  upon
      the
      death of Employee (“Death”);

     

    (c)  upon
      the
      delivery to Employee of written notice of termination by the Company if Employee
      shall suffer a physical or mental disability or illness which renders Employee,
      in the reasonable judgment of the Board, unable to perform his duties and
      obligations under this Agreement, with or without reasonable accommodation,
      for
      either 60 consecutive days or 180 days in any 12-month period (“Disability”); 

     

    (d)  upon
      delivery to Company of written notice of termination by the Employee for Good
      Reason; 

     

    (e)  upon
      delivery to Employee of written notice of termination by the Company For Cause;
      or

     

    (f)  November
      30, 2007
      if
      Employee does not receive a written notice from the Company by October 31,
      2007
      of its intention to continue Employee’s
      employment as Chief Financial Officer for the period beginning on December
      1,
      2007 until November 30, 2008; 

     

    (g)  November
      30, 2008
      if
      Employee does not receive a written notice from the Company by October 31,
      2008
      of its intention to continue Employee’s
      employment as Chief Financial Officer for the period beginning on December
      1,
      2008 until November 30, 2009; or

     

    (h)  November
      30, 2009
      if
      Employee does not receive a written notice from the Company by October 31,
      2009
      of its intention to continue Employee’s
      employment as Chief Financial Officer for the period beginning on December
      1,
      2009 until November 30, 2010.

     

    4.2  Certain
      Definitions.
      For
      purposes of this Agreement, the following terms shall have the following
      meanings:

     

    4.2.1  “For
      Cause”
shall
      mean, in the context of a basis for termination of Employee’s employment with
      the Company, that:

     

    (a)  Employee
      is convicted
      of, or pleas nolo
      contendere
      (no
      contest) to, any crime (whether or not involving the Company) constituting
      a
      felony in the jurisdiction involved;

     

    (b)  Employee’s
      willful misconduct in the performance of Employee’s duties
      hereunder;

     

    (c)  Employee’s
      gross negligence in the performance of his duties hereunder or willful and
      repeated failure or refusal to perform such duties as may be delegated to
      Employee by Company commensurate with his position; or 

     

    (d)  Employee
      is in material breach of any provision of this Agreement, which breach is not
      cured or corrected within ten (10) days of written notice thereof from the
      Company. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    4.2.2  “Good
      Reason”
giving
      rise to Employee’s right to terminate this Agreement means if
      Employee claims that Company has materially breached this Agreement, Employee
      shall have first provided written notice to Company of any such claimed material
      breach with exact details of the claimed material breach and Company shall
      have
      had thirty (30) days from the date of receipt of such written notice to cure
      any
      such breach; if curable, and in the event Company does so cure such breach
      within said thirty (30) days, such claimed breach shall not constitute good
      reason or a breach of this Agreement.  

     

    4.3  Effect
      of Termination.If
      Employee’s employment is terminated by the Company without cause or by the
      Employee for Good Reason, and provided that Employee executes and delivers
      to
      the Company, and does not revoke, a written release (the “Release”)
      of any
      and all claims against the Company with respect to all matters arising out
      of
      Employee’s employment by the Company, or the termination thereof (other than
      claims for any entitlements under the terms of this Agreement, claims
      under
      any plans or programs of the Company under which Employee has accrued a benefit,
      and rights to indemnification under applicable law or agreement), the
      Company agrees to pay to Employee the Base Salary through the end of that
      particular Year, provided that Employee receive at least four months’ payment
      (“Severance”).
      The
      Company shall be entitled to defer payment of any amounts under this Section
      4
      until the expiration of any period during which Employee shall have the right
      to
      revoke the Release.
      Employee
      shall not be entitled to Severance if Employee’s employment is terminated
      pursuant to (a), (b), (d), (e), (f), (g), or (h) of Subsection 4.1.1.

     

    4.4  Notwithstanding
      Section 4.1.1, Employee acknowledges that the Company has the right to terminate
      Employee’s employment without cause and that such termination shall not be a
      breach of this Agreement or any other express or implied agreement between
      the
      Company and Employee. Accordingly, in the event of such termination, Employee
      shall be entitled only to those benefits specifically provided for in this
      Agreement in the event of such termination, and shall not have any other rights
      to any compensation or damages from the Company for breach of contract or tort
      arising from such termination.

     

    4.5  Employee
      acknowledges that in the event of termination of his employment for any reason:
      (a) Employee shall not be entitled to any severance or other compensation from
      the Company, except as specifically provided in Section 4.3; and (b) Employee
      shall not be entitled to participate in any employee benefits plans except
      as
      provided in such plans or as required by law. Without limitation on the
      generality of the foregoing, this Section supersedes any plan or policy of
      the
      Company that provides for severance to its officers or employees, and Employee
      shall not be entitled to any benefits under any such plan or
      policy.

     

    ARTICLE
      V

     

    INVENTIONS
      AND TRADEMARK; CONFIDENTIAL INFORMATION; NON-

    DISCLOSURE;
      UNFAIR COMPETITION; CONFLICT OF INTEREST

     

    5.1  Inventions
      and Trademark.
      All
      ideas, inventions, trademarks, proprietary information, know-how, processes
      and
      other developments or improvements developed by Employee, alone or with others,
      during the Term, that are within the scope of Company’s business operations or
      that relate to Company’s work or projects, are the exclusive property of
      Company. In that regard, Employee agrees to disclose promptly to Company any
      and
      all inventions, discoveries, trademarks, proprietary information, know-how,
      processes or improvements, patentable or otherwise, that he may make from the
      beginning of Employee’s employment until the termination thereof, that relate to
      the business of Company, whether such is made solely or jointly with others.
      Employee further agrees that, during the Term, he will provide Company with
      a
      reasonable level of assistance, at Company’s sole option and expense, to obtain
      patents in the United States of America, or elsewhere on any such ideas,
      inventions, trademarks and other developments, and agrees to execute all
      documents necessary to obtain such patents in the name of Company.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    5.2  Confidential
      Information.
      Employee shall hold and keep confidential for the benefit of Company all secret
      or confidential information, files, documents other media in which confidential
      information is contained, knowledge or data (collectively the “Confidential
      Information”)
      relating to the Company or any of its affiliated companies, and their respective
      businesses, which shall have been obtained by Employee during his employment
      by
      Company or any of its affiliated companies. Confidential Information does not
      include information that is already public knowledge at the time of disclosure
      (other than by acts by Employee or his representatives in violation of this
      Agreement) or that is provided to Employee by a third party without an
      obligation with Company to maintain the confidentiality of such information.
      After termination of Employee’s employment with Company, he shall not, without
      the prior written consent of Company, or as may otherwise be required by law
      or
      legal process, communicate or divulge any Confidential Information to anyone
      other than Company and those designated by it. Employee shall acknowledge that
      all confidential documents are and shall remain the sole and exclusive property
      of Company regardless of who originally acquired the confidential documents.
      Employee agrees to return to Company promptly upon the expiration or termination
      of his employment or at any other time when requested by Company, any and all
      property of Company, including, but not limited to, all confidential documents
      and copies thereof in his possession or control. Any loss resulting from a
      breach of the foregoing obligations by Employee to protect the Confidential
      Information could not be reasonably or adequately compensated in damages in
      an
      action at law. Therefore, in addition to other remedies provided by law or
      this
      Agreement, Company shall have the right to obtain injunctive relief, in the
      appropriate court, at any time, against the dissemination by Employee of the
      Confidential Information, or the use of such information by Employee in
      violation hereof.

     

    5.2.1  Restriction
      on Use of Confidential/Trade Secret Information.
      Employee agrees that his use of confidential/trade secret information is subject
      to the following restrictions for an indefinite period of time so long as the
      confidential/trade secret information has not become generally known to the
      public:

     

    (a)  Non-Disclosure.
      Employee agrees that he will not publish or disclose, or allow to be published
      or disclosed, confidential/trade secret information to any person without the
      prior written authorization of the Company unless pursuant to Employee’s job
      duties to the Company under this Agreement.

     

    (b)  Non-Removal/Surrender.
      Employee agrees that he will not remove any confidential/trade secret
      information from the offices of the Company or the premises of any facility
      in
      which the Company is performing services, except pursuant to his duties under
      this Agreement. Employee further agrees that he shall surrender to the Company
      all documents and materials in his possession or control which contain
      confidential/trade secret information and which are the property of the Company
      upon the termination of this Agreement, and that he shall not thereafter retain
      any copies of any such materials.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    5.2.2  Non-Solicitation
      of Customers/Prohibition Against Unfair Competition.
      Employee agrees that at no time after his employment with the Company will
      he
      engage in competition with the Company while making any use of the Company’s
      confidential/trade secret information. Employee agrees that he will not directly
      or indirectly accept or solicit, whether as an employee, independent contractor
      or in any other capacity, the business of any customer of the Company with
      whom
      Employee worked or otherwise had access to the Company’s confidential/trade
      secret information pertaining to its business with that customer during the
      last
      year of his employment with the Company.

     

    5.3  Non-Solicitation
      During Employment.
      Employee shall not during his employment inappropriately interfere with the
      Company’s business relationship with its customers or suppliers or solicit any
      of the employees of the Company to leave the employ of the Company.

     

    5.4  Non-Solicitation
      of Employees.
      Employee agrees that, for one year following the termination of his employment,
      he shall not, directly or indirectly, ask or encourage any of the Company’s
      employees to leave their employment with the Company or solicit any of the
      Company’s employees for employment.

     

    5.5  Breach
      of Provisions.
      If the
      Employee breaches any of the provisions of this Section 5, or in the event
      that
      any such breach is threatened by the Employee, in addition to and without
      limiting or waiving any other remedies available to the Company at law or in
      equity, the Company shall be entitled to immediate injunctive relief in any
      court, domestic or foreign, having the capacity to grant such relief, to
      restrain any such breach or threatened breach and to enforce the provisions
      of
      this Section 5. 

     

    5.6  Reasonable
      Restrictions.
      The
      parties acknowledge that the foregoing restrictions, as well as the duration
      and
      the territorial scope thereof as set forth in this Section 5, are under all
      of
      the circumstances reasonable and necessary for the protection of the Company
      and
      its business.

     

    5.7  Definition.
      For
      purposes of this section 5, the term “Company”
shall
      be deemed to include any parent, subsidiary or affiliate of the
      Company.

     

    ARTICLE
      VI

     

    MISCELLANEOUS

     

    6.1  Binding
      Effect; Assignment.
      This
      Agreement shall be binding upon and inure to the benefit of the Parties and
      their respective legal representatives, heirs, distributees, successors and
      assigns. Employee may not assign any of his rights and obligations under this
      Agreement. The Company may assign its rights and obligations under this
      Agreement to any successor entity. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    6.2  Notices.
      Any
      notice provided for herein shall be in writing and shall be deemed to have
      been
      given or made (a) when personally delivered or (b) when sent by telecopier
      and
      confirmed within 48 hours by letter mailed or delivered to the party to be
      notified at its or his/hers address set forth herein; or three days after being
      sent by registered or certified mail, return receipt requested, (or by
      equivalent currier with delivery documentation such as FEDEX or UPS) to the
      address of the other party set forth or to such other address as may be
      specified by notice given in accordance with this section 6.2:

     

    
      	
              If
                to the Company:

            	
              Pro
                Elite, Inc.

              12100
                Wilshire Boulevard, Suite 800

              Los
                Angeles, California 90025

              Telephone: (310)
                806-9420

              Facsimile: (310)
                806-9426

              Attention: Douglas
                De Luca

            
	 	 
	
              If
                to Employee:

            	
              Edward
                G. Hanson

               

              ______________________

              
                ______________________

              

              Telephone: (___)
                ___________ 

              Facsimile: (___)
                _____________

            

    

     

    6.3  Severability.
      If any
      provision of this Agreement, or portion thereof, shall be held invalid or
      unenforceable by a court of competent jurisdiction, such invalidity or
      unenforceability shall attach only to such provision or portion thereof, and
      shall not in any manner affect or render invalid or unenforceable any other
      provision of this Agreement or portion thereof, and this Agreement shall be
      carried out as if any such invalid or unenforceable provision or portion thereof
      were not contained herein. In addition, any such invalid or unenforceable
      provision or portion thereof shall be deemed, without further action on the
      part
      of the parties hereto, modified, amended or limited to the extent necessary
      to
      render the same valid and enforceable.

     

    6.4  Waiver.
      No
      waiver by a party hereto of a breach or default hereunder by the other party
      shall be considered valid, unless expressed in a writing signed by such first
      party, and no such waiver shall be deemed a waiver of any subsequent breach
      or
      default of the same or any other nature.

     

    6.5  Entire
      Agreement.
      This
      Agreement sets forth the entire agreement between the Parties with respect
      to
      the subject matter hereof, and supersedes any and all prior agreements between
      the Company and Employee, whether written or oral, relating to any or all
      matters covered by and contained or otherwise dealt with in this Agreement.
      This
      Agreement does not constitute a commitment of the Company with regard to
      Employee’s employment, express or implied, other than to the extent expressly
      provided for herein.

     

    6.6  Amendment.
      No
      modification, change or amendment of this Agreement or any of its provisions
      shall be valid, unless in writing and signed by the party against whom such
      claimed modification, change or amendment is sought to be enforced.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    6.7  Authority.
      The
      Parties each represent and warrant that it/he or she has the power, authority
      and right to enter into this Agreement and to carry out and perform the terms,
      covenants and conditions hereof.

     

    6.8  Attorneys’
      Fees.
      If
      either party hereto commences an arbitration or other action against the other
      party to enforce any of the terms hereof or because of the breach by such other
      party of any of the terms hereof, the prevailing party shall be entitled, in
      addition to any other relief granted, to all actual out-of-pocket costs and
      expenses incurred by such prevailing party in connection with such action,
      including, without limitation, all reasonable attorneys’ fees, and a right to
      such costs and expenses shall be deemed to have accrued upon the commencement
      of
      such action and shall be enforceable whether or not such action is prosecuted
      to
      judgment.

     

    6.9  Titles.
      The
      titles of the sections of this Agreement are inserted merely for convenience
      and
      ease of reference and shall not affect or modify the meaning of any of the
      terms, covenants or conditions of this Agreement.

     

    6.10  Applicable
      Law; Choice of Forum.
      This
      Agreement, and all of the rights and obligations of the parties in connection
      with the employment relationship established hereby, shall be governed by and
      construed in accordance with the substantive laws of the State of California
      without giving effect to principles relating to conflicts of law.

     

    6.11  Arbitration.

     

    6.11.1  Scope.
      To the
      fullest extent permitted by law, Employee and the Company agree to the binding
      arbitration of any and all controversies, claims or disputes between them
      arising out of or in any way related to this Agreement, the employment
      relationship between the Company and Employee and any disputes upon termination
      of employment, including but not limited to breach of contract, tort,
      discrimination, harassment, wrongful termination, demotion, discipline, failure
      to accommodate, family and medical leave, compensation or benefits claims,
      constitutional claims; and any claims for violation of any local, state or
      federal law, statute, regulation or ordinance or common law. For the purpose
      of
      this agreement to arbitrate, references to “Company” include all parent,
      subsidiary or related entities and their employees, supervisors, officers,
      directors, agents, pension or benefit plans, pension or benefit plan sponsors,
      fiduciaries, administrators, affiliates and all successors and assigns of any
      of
      them, and this agreement to arbitrate shall apply to them to the extent
      Employee’s claims arise out of or relate to their actions on behalf of the
      Company.

     

    6.11.2  Arbitration
      Procedure.
      To
      commence any such arbitration proceeding, the party commencing the arbitration
      must provide the other party with written notice of any and all claims forming
      the basis of such right in sufficient detail to inform the other party of the
      substance of such claims. In no event shall this notice for arbitration be
      made
      after the date when institution of legal or equitable proceedings based on
      such
      claims would be barred by the applicable statute of limitations. The arbitration
      will be conducted in Los Angeles, California, by a single neutral arbitrator
      and
      in accordance with the then-current rules for resolution of employment disputes
      of the American Arbitration Association (“AAA”).
      The
      Arbitrator is to be selected by the mutual agreement of the Parties. If the
      Parties cannot agree, the Superior Court will select the arbitrator. The parties
      are entitled to representation by an attorney or other representative of their
      choosing. The arbitrator shall have the power to enter any award that could
      be
      entered by a judge of the trial court of the State of California, and only
      such
      power, and shall follow the law. The award shall be binding and the Parties
      agree to abide by and perform any award rendered by the arbitrator. The
      arbitrator shall issue the award in writing and therein state the essential
      findings and conclusions on which the award is based. Judgment on the award
      may
      be entered in any court having jurisdiction thereof. The Company shall bear
      the
      costs of the arbitration filing and hearing fees and the cost of the
      arbitrator.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    6.12  This
      Agreement shall not be terminated by any voluntary or involuntary dissolution
      of
      the Company resulting from either a merger or consolidation in which the Company
      is not the consolidated or surviving corporation, or a transfer of all or
      substantially all of the assets of the Company. In the event of any such merger
      or consolidation or transfer of assets, Employee’s rights, benefits and
      obligations hereunder shall be assigned to the surviving or resulting
      corporation or the transferee of the Company’s assets.

     

    

     

    [Signature
      page to follow]

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      day
      and year first above written.

     

    

    
      	
               

               

               

              /s/
                Edward G.
                Hanson                                        
                

              Edward
                G. Hanson

            	
              Pro
                Elite, Inc., a New Jersey corporation

               

               

              By:/s/
                Douglas
                DeLuca                                     
                 

              Douglas
                DeLuca, Chief Executive Officer

            

    

    

     

    
      
        
        

      

      
        11SECURITIES
      PURCHASE AGREEMENT

     

    Ladies
      and Gentlemen:

     

    Showtime
      Networks, Inc. (“SNI”) hereby confirms its agreement with you as
      follows:

     

    1.  This
      Securities Purchase Agreement, including Annex I hereto, and the exhibits and
      schedule thereto, each of which Annex, exhibit and schedule are hereby expressly
      incorporated as an integral part of this agreement (collectively, the
“Agreement”)
      is
      made as of January 3, 2007 between Pro Elite, Inc. (the “Company”)
      and
      SNI with respect to (a) the sale of 1,666,667 units (the “Units”) to SNI, each
      Unit consisting of three shares of the Company’s Common Stock (the “Shares”) and
      one three-year warrant to purchase one Share at an exercise price of $2.00
      per
      Share (the “Investor
      Warrant”),
      and
      (b) warrants to purchase five million Shares of which (i) warrants to
      purchase 2,500,000 Shares shall be issued to SNI (the “Vested
      Warrants”)
      and be
      exercisable as of the date of the closing of the purchase of the Units and
      (ii) warrants to purchase 2,500,000 Shares shall be issued to SNI (the
“SNI
      Warrants”)
      and be
      exercisable at any time upon the earlier of (x) November 8, 2009 and
      (y) the date when the Exclusive Distribution Agreement dated
      November 8, 2006 between the Company and SNI is terminated (if at all) due
      to a breach of the Company. The form of the Investor Warrants, the Vested
      Warrants and the SNI Warrants are attached hereto as Exhibits A, B and C,
      respectively.

     

    2.  SNI
      shall
      purchase from the Company, and the Company will sell to the SNI, 1,666,667
      Units, at a purchase price per Unit of $3.00 and the Company shall issue to
      SNI
      the Investor Warrants, the Vested Warrants and the SNI Warrants, all pursuant
      to
      the Terms and Conditions for Purchase of Securities attached hereto as Annex
      I
      and incorporated herein by reference as if fully set forth herein. Unless
      otherwise requested, certificates representing the Shares and Investor Warrants
      included within the Units and the Vested Warrants and the SNI Warrants will
      be
      registered in SNI’s name and address as set forth below.

     

    The
      next page is the signature page.

     

    
      
        
        

      

      
        A
          -
          1

        
          

        

      

      
        
        

      

    

    Please
      confirm that the foregoing correctly sets forth the agreement between us by
      signing in the space provided below for that purpose. 

     

    
      	
              AGREED
                AND ACCEPTED:

            	 	 
	
              COMPANY:

            	 	
              PRO
                ELITE, INC.

               

               

            
	 	 	
              By:_________________________________________

               

               

            
	
              INVESTOR:

            	 	
              SHOWTIME
                NETWORKS, INC.

               

              ______________________________________

            
	 	 	 
	 	 	
              By:_________________________________________

              Signature
                of investor or authorized person

            
	 	 	
              Its:_________________________________________

              Title
                of authorized person

            
	 	 	
              Address:____________________________________

              ___________________________________________

              ___________________________________________

              Contact
                Name:________________________________

              Facsimile
                Number:_____________________________

              Email
                Address:_______________________________

            
	 	 	 
	 	 	
              Name
                in which warrant certificates should be 

              registered
                (if different):

               

              ______________________________________

            
	 	 	
              Tax
                I.D. No: __________________________________

            
	 	 	 

    

     

    
      
        
        

      

      
        A
          -
          2

        
          

        

      

      
        
        

      

    

     

    ANNEX
      I

     

    TERMS
      AND CONDITIONS FOR PURCHASE OF SECURITIES

     

    1.  Agreement
      to Sell and Purchase the Units, the Vested Warrants and the SNI Warrants;
      Subscription Date.

     

    1.1  At
      the
      Closing (as defined in Section 2), the Company will sell to SNI, and SNI
      will purchase from the Company, upon the terms and conditions hereinafter set
      forth, 1,666,667 Units (“Investor’s
      Units”)
      at a
      purchase price per Unit of $3.00, and the Company will issue to SNI the Vested
      Warrants and the SNI Warrants, pursuant to the Terms and Conditions set forth
      herein.

     

    2.  Delivery
      of the at Closing.
      The
      completion of the purchase and sale of the Investor’s Units (the “Closing”)
      shall
      occur no later than January 6, 2007, as such date may be extended by the Company
      and SNI (the “Closing
      Date”),
      at
      the offices of Troy & Gould, Professional Corporation, the Company’s
      counsel, 1801 Century Park East, Suite 1600, Los Angeles, California 90067.
      At
      the Closing, the Company shall deliver to SNI certificates representing the
      Shares and Investor Warrants included with the Investor’s Units and the Vested
      Warrants and the SNI Warrants, each such certificate to be registered in the
      name of SNI, or, if so indicated on the signature page of the Securities
      Purchase Agreement, in the name of a nominee designated by such party. If
      neither SNI nor a representative of SNI is present at the Closing to take
      physical delivery of the certificates, then delivery shall be deemed made at
      Closing by the transmission of a facsimile of the certificates to the Investor
      (or nominee designated by the Investor) followed by delivery of the original
      certificates by a nationally recognized overnight express courier.

     

    The
      Company’s obligation to issue the Shares, the Investor Warrants, the Vested
      Warrants and the SNI Warrants shall be subject to the following conditions,
      any
      one or more of which may be waived by the Company:

     

    (a) receipt
      by the Company of a certified or official bank check or wire transfer of funds
      in the full amount of the aggregate purchase price for the Investor’s Units;
      and

     

    (b) the
      accuracy of the representations and warranties made by the SNI and the
      fulfillment of those undertakings of SNI (the “Investor”)
      to be
      fulfilled prior to the Closing.

     

    3.  Representations,
      Warranties and Covenants of the Company.
      The
      Company hereby represents and warrants to, and covenants with, the Investor,
      as
      follows:

     

    3.1  Due
      Authorization and Valid Issuance.
      The
      Company has all requisite power and authority to execute, deliver and perform
      its obligations under the Purchase Agreement and the Investor Rights Agreement
      referred to in Section 7 (collectively, the “Transaction
      Documents”),
      and
      the Transaction Documents have been duly authorized and validly executed and
      delivered by the Company and constitute legal, valid and binding agreements
      of
      the Company enforceable against the Company in accordance with their terms,
      except as enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, fraudulent conveyance, moratorium or similar laws affecting
      creditors’ and contracting parties’ rights generally and except as
      enforceability may be subject to general principles of equity (regardless of
      whether such enforceability is considered in a proceeding in equity or at
      law).

     

    
      
        
        

      

      
        A
          -
          3

        
          

        

      

      
        
        

      

    

    3.2  Non-Contravention.
      The
      execution and delivery of the Transaction Documents by the Company, the issuance
      and sale of the Units, the Shares, and the Investor Warrants, Vested Warrants
      and SNI Warrants (collectively, the “Warrants”) to be sold by the Company
      hereunder, the fulfillment of the terms of the Agreement by the Company and
      the
      consummation by the Company of the transactions contemplated hereby and thereby
      will not (A) conflict with or constitute a violation of, or default (with
      the passage of time or otherwise) under (i) any material bond, debenture,
      note or other evidence of indebtedness, or under any material lease, contract,
      indenture, mortgage, deed of trust, loan agreement, joint venture or other
      agreement or instrument to which the Company is a party or by which the Company
      or its properties are bound, (ii) the charter, by-laws or other
      organizational documents of the Company, or (iii) any material law,
      administrative regulation, ordinance or order of any court or governmental
      agency, arbitration panel or authority applicable to the Company or its
      properties, or (B) result in the creation or imposition of any lien,
      encumbrance, claim, security interest or restriction whatsoever upon any of
      the
      material properties or assets of the Company or an acceleration of indebtedness
      pursuant to any obligation, agreement or condition contained in any material
      bond, debenture, note or any other evidence of indebtedness or any material
      indenture, mortgage, deed of trust or any other agreement or instrument to
      which
      the Company is a party or by which it is bound or to which any of the property
      or assets of the Company is subject. No consent, approval, authorization or
      other order of, or registration, qualification or filing with, any regulatory
      body, administrative agency, or other governmental body in the United States
      is
      required for the execution and delivery of the Transaction Documents by the
      Company and the valid issuance and sale of the Units, Shares and Warrants to
      be
      sold by the Company pursuant to the Agreements, other than such as have been
      made or obtained, and except for any post-closing securities filings or
      notifications required to be made under federal or state securities
      laws.

     

    3.3  Most
      Favored Nations.
      If, at
      any time and from time to time during the period commencing on October 3, 2006
      (the “Effective
      Date”)
      and
      ending on the first anniversary of the Effective Date, the Company issues
      additional shares of Common Stock or options, warrants or other securities
      which
      would entitle the holder thereof to acquire (whether by exercise, exchange,
      conversion or otherwise) at any time Common Stock (the “Additional
      Shares”)
      at a
      price or exercise, exchange, conversion or other price per share of Common
      Stock
      less than $2.00 (subject to adjustment for splits, recapitalizations,
      reorganizations), then the Company shall provide notice thereof to SNI, and
      within ten business days, from receipt of notice, SNI shall have the right
      to
      purchase at the par value thereof such number of additional shares of Common
      Stock so that the “effective purchase price per share” payable by SNI shall be
      the same per share purchase price of the Additional Shares. As used herein,
      the
“effective price per share” shall mean the product of (i) the total
      consideration paid for all shares purchased by SNI (both those purchased at
      the
      Closing under this Agreement and those which may be purchased under this
      Section 3.3), divided by (ii) the total number of shares described in
      clause (i). Notwithstanding the foregoing, no adjustment will be made in respect
      of (a) shares of Common Stock or options to employees, consultants officers
      or directors of the Company pursuant to any stock or option plan, other
      arrangement or agreement duly adopted by the Board of Directors of the Company,
      (b) securities upon the exercise of or conversion of any securities issued
      at the Closing, or convertible securities, options or warrants issued and
      outstanding on the Closing, (c) securities issued pursuant to strategic
      transactions with an operating company in a business synergistic with the
      business of the Company and in which the Company receives benefits in addition
      to the investment of funds or pursuant to acquisitions or equipment leases,
      but
      shall not include a transaction in which the Company is issuing securities
      primarily for the purpose of raising capital or to an entity whose primary
      business is investing in securities, and (d) securities issued in connection
      with any other antidilution or price protection provisions.

     

    
      
        
        

      

      
        A
          -
          4

        
          

        

      

      
        
        

      

    

    4.  Representations,
      Warranties and Covenants of the Investor.

     

    4.1  The
      Investor represents and warrants to, and covenants with, the Company that:
      (i) the Investor is an “accredited investor” as defined in Rule 501 of
      Regulation D under the Securities Act of 1933, as amended (the
“Securities
      Act”)
      OR is
      a “Qualified Institutional Buyer” within the meaning of Rule 144A of the
      Act and, in any such case the Investor is also knowledgeable, sophisticated
      and
      experienced in making, and is qualified to make decisions with respect to,
      investments in securities presenting an investment decision like that involved
      in the purchase of the Investor’s Units, including investments in securities
      issued by the Company and investments in comparable companies, and has
      requested, received, reviewed and considered all information it deemed relevant
      in making an informed decision to purchase the Investor’s Units; (ii) the
      Investor is acquiring the Investor’s Units, Shares and Warrants in the ordinary
      course of its business and for its own account for investment only and with
      no
      present intention of distributing any of such Investor’s Units, Shares and
      Warrants or any arrangement or understanding with any other persons regarding
      the distribution of such Investor’s Units, Shares and Warrants; (iii) the
      Investor will not, directly or indirectly, offer, sell, pledge, transfer or
      otherwise dispose of (or solicit any offers to buy, purchase or otherwise
      acquire or take a pledge of) any of the Investor’s Units, Shares and Warrants
      except in compliance with the Securities Act, applicable state securities laws
      and the respective rules and regulations promulgated thereunder, except that
      the
      Investor may pledge the Shares in connection with a bona fide margin account
      or
      other loan or financing; (iv) the Investor and the Investor’s
      representatives, if any, have been solely responsible for the Investor’s own
“due diligence” investigation of the Company and its management and business,
      for its own analysis of the merits and risks of this investment, and for the
      Investor’s own analysis of the fairness and desirability of the terms of the
      investment; and (v) the Investor has, in connection with its decision to
      purchase the Investor’s Units, Shares and Warrants, relied only upon the
      Company’s Confidential Private Offering Memorandum dated September 28, 2006 (the
“Memorandum”)
      and
      the representations and warranties of the Company contained herein. The Investor
      understands that its acquisition of the Shares and Warrants has not been
      registered under the Securities Act or registered or qualified under any state
      securities law in reliance on specific exemptions therefrom, which exemptions
      may depend upon, among other things, the bona fide nature of the Investor’s
      investment intent as expressed herein.

     

    4.2  The
      Investor hereby covenants with the Company not to make any sale of the
      Investor’s Units, Shares and Warrants without complying with the provisions of
      this Agreement, and the Investor acknowledges that the certificates evidencing
      the Shares and Warrants will be imprinted with a legend that prohibits their
      transfer except in accordance therewith.

     

    
      
        
        

      

      
        A
          -
          5

        
          

        

      

      
        
        

      

    

    4.3  The
      Investor further represents and warrants to, and covenants with, the Company
      that (i) the Investor has full right, power, authority and capacity to
      enter into this Agreement and to consummate the transactions contemplated hereby
      and has taken all necessary action to authorize the execution, delivery and
      performance of this Agreement, and (ii) this Agreement constitutes a valid
      and binding obligation of the Investor enforceable against the Investor in
      accordance with its terms, except as enforceability may be limited by applicable
      bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
      creditors’ and contracting parties’ rights generally and except as
      enforceability may be subject to general principles of equity (regardless of
      whether such enforceability is considered in a proceeding in equity or at
      law).

     

    4.4  The
      Investor understands that nothing in this Agreement or any other materials
      presented to the Investor in connection with the purchase and sale of the Shares
      and Warrants constitutes legal, tax or investment advice. The Investor has
      consulted such legal, tax and investment advisors as it, in its sole discretion,
      has deemed necessary or appropriate in connection with its purchase of the
      Shares and Warrants.

     

    4.5  The
      Investor hereby acknowledges that it has received, read and understands the
      Memorandum. Without limiting the generality of the foregoing, Investor
      understands and acknowledges that there are substantial risks incident to the
      investment in and ownership of the Units, Shares and Warrants including, without
      limitation, each of the matters discussed in the Memorandum under the heading
      “Risk Factors.” 

     

    4.6  Investor
      and Investor’s representatives, if any, have had a reasonable opportunity to ask
      questions of and receive answers from the management of the Company, or a person
      or persons acting on behalf of the Company, concerning the Company and its
      proposed activities and business, the Company’s capitalization, the Company’s
      management, and the offering and sale of the Units, and otherwise to investigate
      the Company’s business, operations, management, financial condition and
      prospects. Investor has adequate means of providing for Investor’s current needs
      and possible personal contingencies, has no need for liquidity in this
      investment and could afford to lose the entire amount of this investment.
      Investor’s commitment to all investments and investments, which are not readily
      marketable, is reasonable in relation to Investor’s net worth and an investment
      in the Units will not cause Investor’s overall commitment to be excessive.
      Investor is acquiring the Units for Investor’s own account, as a principal,
      without a view to the resale or distribution of all or any part of the Units
      and
      has no present intention, agreement or arrangement to divide Investor’s
      participation with others or to resell, assign, transfer or otherwise dispose
      of
      all or any part of the Units for which Investor has subscribed. If Investor
      is a
      corporation, partnership, limited liability company, trust or other entity,
      it
      is authorized and otherwise duly qualified to purchase and hold a membership
      interest in the Company and has not been formed for the specific purpose of
      acquiring Units.

     

    5.  Survival
      of Representations, Warranties and Agreements.
      Notwithstanding any investigation made by any party to this Agreement, all
      covenants, agreements, representations and warranties made herein by the Company
      and the Investor shall survive the execution of this Agreement, the delivery
      to
      the Investor of the Units, Shares and Warrants being purchased and the payment
      therefore.

     

    
      
        
        

      

      
        A
          -
          6

        
          

        

      

      
        
        

      

    

    6.  Indemnification.
      Investor
      hereby agrees to indemnify the Company and its agents and representatives,
      and
      hold the Company and its agents and representatives harmless from and against,
      any and all liability, damage, cost or expense incurred on account of, relating
      to or arising out of or in connection with: (i) any inaccuracy in Investor’s
      declarations, representations, and warranties set forth herein or in any other
      communications to the Company or any of the foregoing parties; and/or (ii)
      the
      disposition of any of the Units, Shares or Warrants for which Investor has
      subscribed herein contrary to the foregoing declarations, representations and
      warranties.

     

    7.  Registration
      of the Shares; Compliance with the Securities Act.
      Pursuant to an Investor Rights Agreement entered into concurrently with this
      Agreement, the Company agrees to file a registration statement with the SEC
      on
      the later to occur of (a) 45 days from the date that SNI notifies the Company
      to
      so file, or (b) sixty days from the effective date of a registration statement
      covering the resale of securities issued by the Company on October 3, 2006
      in a
      private placement.

     

    8.  Notices.
      All
      notices, requests, consents and other communications hereunder shall be in
      writing, shall be mailed (A) if within the United States by first-class
      registered mail, Express Mail or nationally recognized overnight express
      courier, postage prepaid, or by facsimile, or (B) if delivered from outside
      the United States, by International Federal Express or facsimile, and shall
      be
      deemed given (i) if delivered by first-class registered mail, three
      business days after so mailed, (ii) if delivered by Express Mail or a
      nationally recognized overnight carrier, one business day after so mailed,
      (iii) if delivered by International Federal Express, two business days
      after so mailed, (iv) if delivered by facsimile, upon electronic
      confirmation of receipt and shall be delivered as addressed as
      follows:

     

    
      	 	  (a)	if to the
              Company,
              to:	 
	 	 	 	 
	 	 	
              Pro
                Elite, Inc. 

              Santa
                Monica Capital Partners

              9229
                Sunset Boulevard, Suite 505

              Los
                Angeles, California 90069

              Attention:
                David Marshall

              Phone:
                (310) 573-9711

            	 
	 	 	 	 
	 	 	
              with
                a copy to:

            	 
	 	 	 	 
	 	 	
              Troy
                & Gould, Professional Corporation

              Attn:
                David Ficksman

              Phone:
                (310) 789-1290

              Facsimile:
                (310) 789-1490

            	 

    

    

    (b)  if
      to the
      Investor, at its address on the signature page hereto, or at such other address
      or addresses as may have been furnished to the Company in writing

     

    9.  Changes.
      This
      Agreement may not be modified or amended except pursuant to an instrument in
      writing signed by the Company and the Investor.

     

    
      
        
        

      

      
        A
          -
          7

        
          

        

      

      
        
        

      

    

    10.  Headings.
      The
      headings of the various sections of this Agreement have been inserted for
      convenience of reference only and shall not be deemed to be part of this
      Agreement.

     

    11.  Severability.
      In case
      any provision contained in this Agreement should be invalid, illegal or
      unenforceable in any respect, the validity, legality and enforceability of
      the
      remaining provisions contained herein shall not in any way be affected or
      impaired thereby.

     

    12.  Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance 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. 

     

    13.  Entire
      Agreement.
      This
      Agreement constitutes the entire agreement between the parties hereto pertaining
      to the subject matter hereof, and any and all other written or oral agreements
      relating to such subject matter are expressly cancelled.

     

    14.  Finders’
      Fees.
      Neither
      the Company nor the Investor nor any affiliate thereof has incurred any
      obligation which will result in the obligation of the other party to pay any
      finder’s fee or commission in connection with this transaction, except for fees
      payable by the Company to the Placement Agent.

     

    15.  Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      constitute an original, but all of which, when taken together, shall constitute
      but one instrument, and shall become effective when one or more counterparts
      have been signed by each party hereto and delivered to the other
      parties.

     

    16.  Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of the Company and the Investor, including without limitation
      and without the need for an express assignment, affiliates of the Investor.
      With
      respect to transfers that are not made pursuant to the Investor Rights
      Agreement, the rights and obligations of an Investor under this Agreement shall
      be automatically assigned by the Investor to any transferee of all or any
      portion of the Investor’s Shares who is a Permitted Transferee (as defined
      below); provided, however, that within two business days prior to the transfer,
      (i) the Company is provided notice of the transfer including the name and
      address of the transferee and the number of Shares and Warrants transferred;
      and
      (ii) that such transferee agrees in writing to be bound by the terms of
      this Agreement. (For purposes of this Agreement, a “Permitted Transferee” shall
      mean any person who (a) is an “accredited investor,” as that term is
      defined in Rule 501(a) of Regulation D under the Securities Act and
      (b) is a transferee of at least 25% of the Investor’s Shares received in a
      transaction permitted under the securities laws of the United States), or (c)
      with respect to SNI, is CBS Corporation or is a person controlled by CBS
      Corporation. Upon any transfer permitted by the second sentence of this
      Section 16, the Company shall be obligated to such transferee to perform
      all of its covenants under this Agreement as if such transferee were an
      Investor.

     

    
      
         

      

      
        A
          -
          8

        
          

        

      

      
         

      

       

    

    17.  Press
      Release.
      Except
      as required by applicable law or regulation, the Company shall not issue any
      press release, which refers to CBS Corporation, SNI or their respective
      subsidiaries without the express prior written consent of CBS
      Corporation.

     

    
      
        
        

      

      
        A
          -
          9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]