Exhibit 10.8
AGREEMENT
This Agreement (the "Agreement"), is entered into by and between FULL TILT
SPORTS, INC., a Colorado corporation with its principal place of business
located at 000 Xxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000 (the
"Company") and XXXXX XXXXXXXX ("Xxxxxxxx") effective as of August 18, 2000.
RECITALS
WHEREAS, Landhuis acquired 3,594,256 shares of Common Stock of the Company
pursuant to the Subscription Agreement and other documents associated therewith
dated April 19, 2000 (collectively, the "Transaction");
WHEREAS, Landhuis and the Company desire to confirm their understanding as
to accounting and tax treatment of the Transaction in order to properly prepare
respective tax returns.
WHEREAS, the Company has consulted with its independent accountants
concerning this Agreement and in connection with the preparation and filing of
the Form 10-Q of the Company for the quarter ended June 30, 2000, and has
learned that notwithstanding the bona fide and arm's length nature of the
Transaction, that the Company's accountants believe that certain stock grant
compensation must be taken into account for financial accounting purposes even
though such compensation was not within the contemplation of the parties to the
Transaction.
NOW, THEREFORE, in consideration of the Recitals that shall be deemed to be
a substantive part of this Agreement and the mutual covenants, promises,
agreements, representations and warranties contained in this Agreement, the
parties hereby covenant, promise, agree, represent and warrant as follows:
1. Accounting. Upon the advice of the independent accountants of the
Company, the Company is required to record, for financial statement accounting
purposes only, stock grant compensation of an aggregate of $648,000 over the
lives of the consulting and rental agreements delivered as part of the
Transaction. The parties agree that the financial statement adjustment described
in this paragraph is not intended to, and does not, value or measure any
consulting or rental income to Landhuis. The Transaction documents accurately
establish the value of the shares transferred to Landhuis for consulting, rental
and other purposes.
2. Tax. The Company represents and warrants to Landhuis that the
compensation expense recorded by the Company as described in Section 1 will not
change the income to Landhuis of the Transaction for tax purposes, which the
parties agree is as follows:
(a) No more than $117,844 of income in 2000 for consulting services, for
which the Company will send to Landhuis a Form 1099 evidencing such
amount;
(b) No more than $193,744 of income in 2000 for rent (includes future
pre-paid rent and accordingly, no income to Landhuis in 2001);
(c) No more than $220,000 of income in 2001 for consulting services;
(d) Ordinary income in any year of any cash amounts paid to Landhuis by
the Company.
The Company agrees that it will not act in any manner contrary to this
Agreement, nor will it file any tax return, or execute or deliver any tax
document, contrary to this paragraph 2, and will indemnify and hold Landhuis
harmless for taxes, interest and penalties on income in excess of the foregoing
(or that would result from any acceleration of the receipt of income into any
tax year of Landhuis ending earlier than the years set forth above) or resulting
from any action of the Company contrary to this Agreement, provided however,
that Landhuis shall pay all of his taxes attributable to income as a result of
any sale by him of securities of the Company.
Section 8 of the Subscription Agreement is incorporated by reference herein and
shall govern as to any interpretation or matters covered by the provisions of
such Section.
IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Agreement, on the date first above written.
COMPANY: LANDHUIS:
Full Tilt Sports, Inc.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ XxXxx Xxxxxxxx
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Xxxxx X. Xxxxxxx, President XxXxx Xxxxxxxx
