IN THE CIRCUIT COURT OF MONTGOMERY COUNTY, ALABAMA ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) COMPLAINT

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1 IN THE CIRCUIT COURT OF MONTGOMERY COUNTY, ALABAMA ELECTRONICALLY FILED 11/14/2012 4:38 PM CV CIRCUIT COURT OF MONTGOMERY COUNTY, ALABAMA FLORENCE CAUTHEN, CLERK INNOVATION SPORTS & ENTERTAINMENT, as Successor-in- Interest to GSP CONSULTING CORP., v. Plaintiff, ALABAMA STATE UNIVERSITY, WILLIAM HARRIS, Individually and in his official capacity as President of Alabama State University, DR. JOSEPH SILVER, Individually and in his official capacity as President of Alabama State University, JOHN KNIGHT, Individually and in his official capacity as Executive Vice President of Alabama State University, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CIVIL ACTION NUMBER CV- JURY DEMAND COMPLAINT Plaintiff, Innovation Sports & Entertainment ( Innovation ), as successor-in-interest to GSP Consulting Corp., by and through its undersigned counsel, avers as follows: INTRODUCTION 1. This action involves the wrongful, improper and premature breach by Defendants Alabama State University ( ASU ), William Harris ( Harris ), former President of ASU, Dr. Joseph Silver ( Silver ) President of ASU, and John Knight ( Knight ), Executive Vice President of ASU, (hereinafter, collectively Defendants ), of a marketing agreement that was being fully performed by Innovation at the time that the Defendants and its representatives abruptly declared it terminated. { } - 1 -

2 PARTIES AND VENUE 2. GSP Consulting Corp. ( GSP ) is a Pennsylvania corporation with a principal place of business at Landmarks Building - Suite 500, 100 West Station Square Drive, Pittsburgh, PA Innovation is a Colorado company, with a principal place of business at 7852 South Elati Street, Suite 100, Littleton, CO As set forth below, Innovation is the successor in interest to GSP with respect to the contract at issue in this action. 4. ASU is a university having its principal place of business at 915 South Jackson Street, Montgomery, AL William Harris is the former President of Alabama State University and is an individual over the age of 19 years and upon information and belief is a citizen and resident of Montgomery, Alabama. President Harris was at all times relevant to this Complaint, the President of ASU. President Harris is a Defendant, both individually and in his official capacity as the President of ASU. 6. Dr. Joseph Silver is President of Alabama State University and is an individual over the age of 19 years and upon information and belief is a citizen and resident of Montgomery, Alabama. President Silver is the President of ASU. President Silver is a Defendant, both individually and in his official capacity as the President of ASU. 7. John Knight is Executive Vice President of Alabama State University and is an individual over the age of 19 years and upon information and belief is a citizen and resident of Montgomery, Alabama. Vice President Knight is the Executive Vice President of ASU. Vice President Knight is a Defendant, both individually and in his official capacity as the Executive Vice President of ASU. { } - 2 -

3 8. Venue is proper in this Court because the transactions or occurrences giving rise to the causes of action in this Complaint took place in this county. 9. All conditions precedent to this action have occurred or have been waived by defendant. FACTUAL ALLEGATIONS The Marketing Agreement 10. ASU and GSP entered into a Marketing Consultant Agreement ( Marketing Agreement ), which was made, entered into and effective as of April 1, A true and correct copy of the Marketing Agreement is attached as Exhibit A. 11. Pursuant to the Marketing Agreement, ASU and GSP agreed that, among other things, GSP would provide professional marketing and fundraising services to ASU. The goal of the Marketing Agreement was for GSP to analyze and develop naming rights, sponsorship and other revenue programs for ASU's new football stadium and other athletic facilities. See Ex. A, pp. 1, The Marketing Agreement provided that, as the relationship between GSP and ASU developed and work progressed, some measures of success would include: Developing a public relations and marketing plan; Identifying appropriate sponsorship opportunities; Creating an organized and efficient approach to developing a sponsorship request; Timely meeting application deadlines and protocols; or Securing sponsorships. Marketing Agreement, Ex. A, p The process of negotiating these and other terms of the Marketing Agreement was an extensive one. It began with GSP s proposal in October 29, 2010 and lasted nearly eight { } - 3 -

4 months. See October 29, 2010 proposal of GSP and November 1, 2010 follow up correspondence to ASU, attached as Exhibit B. It was not until June 15, 2011 that ASU signed the Marketing Agreement (effective as of April 1, 2011). 14. The initial term of the Marketing Agreement was twenty (20) months. The Marketing Agreement provided, inter alia: I. TERM a. The parties agree to an initial term of twenty (20) months beginning April 1, Except, as provided in section I(b), neither party, during the term of this agreement, may terminate this agreement without cause. In the event either ASU or GSP asserts that there is cause for termination, the party asserting that there exists cause for termination shall notify the other party of the alleged cause and thereafter the party receiving such notice shall have thirty (30) days to cure the defect which gives rise to the allegation of cause. b. Notwithstanding, the foregoing, if either GSP or ASU becomes insolvent, or the terms of this agreement are determined to be violative of any applicable law, the parties expressly agree that this agreement may be terminated immediately. Marketing Agreement, Ex. A, p. 1 (emphasis added). 15. Under the Marketing Agreement, the parties agreed that GSP would subcontract a portion of its work under the Scope of Work (Exhibit A) therein, to Bruno Event Team ( Bruno ). Marketing Agreement, Ex. A, p. 1. Bruno was selected as the subcontractor for the project because (i) Bruno held itself as having previous and significant experience with not only ASU, but with potential sponsors in the target market and (ii) GSP needed Bruno to handle the daily sales activities in Alabama and other tasks contemplated by the Marketing Agreement using Bruno s local and regional sales expertise. 16. To that end, the tasks contemplated by the Marketing Agreement were broken out into deliverables to be provided by GSP to ASU during certain phases. Specifically, the { } - 4 -

5 parties agreed to deliverables and a compensation/commission structure for each Phase I and Phase II of the Marketing Agreement. See Marketing Agreement, Ex. A, pp Phase I of the Marketing Agreement involved research, suites, loges, season tickets, game day tickets, naming rights and sponsorship inventory and sales development whereby GSP would develop a naming rights and sponsorship sales plan. Activities associated with doing so were outlined in the Marketing Agreement. For Phase I, professional fees were to be paid according to an agreed upon schedule set forth in the Marketing Agreement. 18. Phase II of the Marketing Agreement involved a sales and revenue generating process whereby the parties were to finalize and agree upon a budget, sales materials and a sales matrix/financial report was to be implemented and distributed to ASU monthly. For Phase II, a specified monthly retainer and professional fee retainer were to be paid according to an agreed upon schedule set forth in the Marketing Agreement. See Marketing Agreement, Ex. A, p Additionally, the parties agreed to further compensation/commissions according to an agreed upon commission structure set forth in Section III.c. of the Marketing Agreement. See Marketing Agreement, Ex. A, pp Other terms or conditions on certain commissions and payments owed to GSP by ASU were delineated and agreed to by the parties in the Marketing Agreement. See Marketing Agreement, Ex. A, pp The Consulting Agreement 20. In accordance with the Marketing Agreement's terms, GSP and Bruno entered into a Consulting Agreement, executed as of June 2011 and effective as of April 1, A true and correct copy of the Consulting Agreement is attached as Exhibit C. 21. By and through the Consulting Agreement, GSP and Bruno formalized the agreement that, inter alia, Bruno would work as a subcontractor/independent contractor for GSP { } - 5 -

6 in connection with the Marketing Agreement -- to assist GSP in fulfilling its duties thereunder. See Consulting Agreement, Ex. C, p By and through the Consulting Agreement, GSP and Bruno agreed that, inter alia, the term of the Consulting Agreement would correspond to the duration of the Marketing Agreement and the "rights of the parties to terminate this [Consulting Agreement] shall be consistent with the corresponding provisions of the [Marketing Agreement], including, without limitation, the right to cure any alleged event of default after written notice thereof." See Consulting Agreement, Ex. C, p GSP and Bruno further agreed to a compensation/fee splitting structure for the services that Bruno rendered to Innovation under the Consulting Agreement. See Consulting Agreement, Ex. C, p. 2. GSP's Assignment of the Marketing Agreement and Consulting Agreement 24. By and through an Assignment and Assumption Agreement ( Assignment ) effective December 31, 2011, GSP assigned, conveyed and transferred to Innovation all of GSP's right, title, claim and interest in, to and under the Marketing Agreement and Consulting Agreement, including without limitation all payments due thereunder. A true and correct copy of the Assignment is attached as Exhibit D. 25. ASU was aware of and agreed to the assignment by GSP of the Marketing Agreement to Innovation. 26. The Marketing Agreement did not prohibit GSP s assignment of it to Innovation. { } - 6 -

7 Innovation's Performance of the Marketing Agreement 27. Innovation fully performed any and all obligations that it owed to ASU under the Marketing Agreement. Bruno, at all times relevant, assisted Innovation in so doing per the terms of the Consulting Agreement. 28. For example, Innovation timely delivered to ASU a complete and thorough Phase I report in August 2011, which included packaging and a draft creative. Innovation, in good faith, began its work with respect to Phase I even prior to the Marketing Agreement being executed by ASU and despite the delays caused by ASU in that process. 29. Innovation also researched and developed a strategic plan and process to raise funds, on behalf of ASU. The plan was formulated through several months of research and analytical efforts performed by Innovation, which included, among other things, detailed studies of similar college and university stadium projects, review of prior year pricing and revenue, the development of inventory and sponsorship packaging and pricing, and the development of the sales process. 30. Innovation's research findings, the strategic plan, the sales process and Innovation's execution of it were fully communicated by Innovation to ASU. During the course of the Marketing Agreement, Innovation also fully informed ASU of the expected timing of achieving the goals that Innovation had outlined (i) in the strategic plan, sales and other documents that it had developed and (ii) to ASU itself. Again, per the Consulting Agreement, Bruno assisted in Innovation's performance of this work under the Marketing Agreement as Innovation's subcontractor. 31. Furthermore, upon the completion of certain sales materials, which were prepared and completed by working together with the ASU University Relations Department, the sale of { } - 7 -

8 Suites, Loges, Club Seating and Season Tickets was launched. A Pre-sale was first made to existing season ticket holders, alumni, family and friends of ASU. 32. Innovation and Bruno also began the process of selling naming rights and sponsorship packages in accordance with Phase II of the Marketing Agreement -- focusing on five major packages first which Innovation believed would account for over 75% of sponsorship and naming rights revenue. This sales process took significantly more time than Innovation anticipated due to, among other things, various delays and problems caused by ASU personnel regarding the sales material development. 33. Significant work by Innovation went into selling naming rights and sponsorship packages with respect to the ASU stadium project and per the terms of the Marketing Agreement. At all times, Innovation reported and fully communicated the status of its work under the Marketing Agreement with respect to naming rights, sponsorships and otherwise in meetings with both ASU and Bruno. 34. At no time did ASU advise Innovation that it objected to Innovation's performance, plans or ongoing work with respect to Phase II or under the Marketing Agreement generally. 35. Rather, from its inception and throughout the course of the Marketing Agreement, Innovation fully performed the duties contemplated thereby and provided to ASU, without objection, the deliverables that the parties had agreed upon therein. The Termination of the Marketing Agreement 36. On April 13, 2012, ASU, through President Harris, terminated the Marketing Agreement, declaring the termination effective that day. A true and correct copy of ASU's April 13, 2012 letter is attached as Exhibit E. { } - 8 -

9 37. ASU's termination of the Marketing Agreement came abruptly, without any advanced notice and without any warning. 38. ASU's termination of the Marketing Agreement was without cause. 39. ASU's April 13, 2012 letter did not provide that the Marketing Agreement was being terminated "for cause"; nor was any alleged "cause" identified in ASU's letter or otherwise. Thus, ASU's termination of the Marketing Agreement prior to the expiration of the initial twenty (20) month term was prohibited by the terms of the Marketing Agreement itself. See Ex. A, Section I.a. 40. Further, ASU never articulated or gave Innovation notice of any alleged cause that existed in connection with its purported termination of the Marketing Agreement. Had it done so, Innovation would have had an opportunity to cure under the terms of the Marketing Agreement. 41. At the time of the declared termination of the Marketing Agreement by ASU, discussions between Innovation and a number of prospects were ongoing and active. Innovation was, in fact, in the middle of a sales process and plan that were prepared by Innovation and Bruno and fully explained to ASU in meetings and otherwise. 42. Defendants had a legal duty to continue performing under the contract. The Termination of the Consulting Agreement 43. On April 26, 2012, Gene Hallman, on behalf of Bruno, declared that the Consulting Agreement was terminated and no longer in force. A true and correct copy of Bruno's April 26, 2012 letter is attached as Exhibit F. 44. Bruno's letter was purportedly prompted by ASU's termination of the Marketing Agreement. See Ex. E and Ex. F. { } - 9 -

10 45. Innovation believes, however, that the declared termination of the Consulting Agreement was done to allow Bruno to directly pursue a relationship and work with ASU to the exclusion of Innovation. 46. For example, Innovation understands that ASU and Bruno met on or about April 3, 2011 in Montgomery, Alabama. Innovation believes that, during that meeting, Bruno criticized Innovation and discussed with ASU the prospect of no longer having Innovation involved with the ongoing work under the Marketing Agreement. 47. It was immediately after this April 3, 2011 meeting between Bruno and ASU that ASU began to cancel weekly sales calls scheduled with Innovation, including conference calls scheduled for April 6, 2011 and April 13, 2011 at noon. 48. Innovation also believes that, in addition to the April 3, 2011 meeting, Bruno openly criticized Innovation s work under the Marketing Agreement at a Stadium Trustee Committee meeting that took place sometime during the week after April 3, It was not long after these meetings that ASU ended all communications with Innovation. It was also not long after these meetings that ASU declared the Marketing Agreement terminated. Moreover, to date, Innovation believes that Bruno continues to provide services to ASU regarding the stadium project. COUNT I BREACH OF CONTRACT (Innovation v. ASU; William Harris; Joseph Silver; John Knight) 50. Plaintiff incorporates herein paragraphs 1 through The Marketing Agreement was a valid contract, binding upon both Innovation, as successor-in-interest to GSP, and ASU. 52. Innovation fully performed under the Marketing Agreement. { }

11 53. ASU breached the Marketing Agreement. 54. As set forth above, ASU's termination of the Marketing Agreement was without cause. ASU's April 13, 2012 letter did not assert that the Marketing Agreement was being terminated for cause (see Ex. E); nor did ASU otherwise assert any alleged cause in connection with its termination of the Marketing Agreement. 55. Termination of the Marketing Agreement, without cause, was prohibited during the term of the Marketing Agreement, as expressly set forth in the Marketing Agreement. See Ex. A, Section I.a. 56. At the time of ASU's declared termination of the Marketing Agreement, the initial twenty (20) month term of the Marketing Agreement was still in effect and ongoing. Thus, the Marketing Agreement could not be terminated without cause in April Innovation has been damaged by ASU's conduct and improper termination and breach of the Marketing Agreement. Such damage includes but is no way limited to damage to Innovation s reputation. 58. Innovation is owed substantial additional compensation and commissions for services rendered under the Marketing Agreement that ASU has failed to pay to it, in breach of the terms of the Marketing Agreement. 59. Defendants had a legal duty to continue to pay Plaintiff for services rendered. Plaintiff seeks repayment of the amounts due and owing for past and future services. Defendants have a duty to pay Plaintiff for the contracted benefits and services provided by Plaintiff. WHEREFORE, Plaintiff respectfully requests that this Court enter judgment in its favor and against Defendants and award it interest, the costs of this action and such other remedies as may be available. { }

12 COUNT II QUANTUM MERUIT (Innovation v. ASU; William Harris; Joseph Silver; John Knight) 60. Plaintiff incorporates herein paragraphs 1 through ASU knowingly accepted and benefited from the services rendered by Innovation with respect to the ASU stadium project and Marketing Agreement. it to ASU. 62. Innovation is entitled to receive the reasonable value of such services rendered by 63. Innovation had a reasonable expectation of fair compensation for the services that it rendered to ASU. Innovation. 64. ASU has failed to pay Innovation the reasonable value for services provided by 65. Innovation has, thus, been damaged and is entitled to (i) reasonable payment for services rendered to ASU and (ii) return of confidential information and property, including but not limited to client or customer lists, that Innovation developed and prepared during its course of work under the Marketing Agreement. WHEREFORE, Plaintiff respectfully requests that this Court enter judgment in its favor and against Defendants and award it interest, the costs of this action and such other remedies as may be available. { }

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