EXHIBIT 10.19
CONFIDENTIAL PORTIONS OMITTED
PROLONG SUPER LUBRICANTS, INC.
SERVICE AND ENDORSEMENT CONTRACT
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This Agreement is made this 1st day of November, 1996, by and between
Prolong Super Lubricants, Inc., a Nevada corporation ("Prolong"), and Xxxxxx
Xxxxxx, an individual ("Yunick"). Prolong and Yunick are hereinafter at times
referred to individually as the "Party" and collectively as the "Parties".
RECITALS
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A) Prolong is in the business of manufacturing and marketing hydrocarbon
based lubricant products (the "Products"). The defined term "Products" shall
include all enhancements, improvements, modifications and changes to the
existing Products;
B) Yunick has obtained substantial public recognition in the automotive
racing business and is often times referred to as the "world's greatest
mechanic."
C) Prolong believes it would be in its best interest and Yunick believes
it would be in his best interest for Prolong to engage Yunick and to use
Yunick's likeness, name, photograph, voice, signature, initials and endorsements
(the "Promotional Materials") in marketing the Products.
NOW THEREFORE, in consideration of the foregoing Recitals and the terms and
conditions hereinafter set forth, the Parties hereby agree as follows:
AGREEMENT
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1. Services.
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1.1 Use of Promotional Materials. Yunick hereby grants to Prolong
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the exclusive right and license throughout the world to use his likeness, name,
photograph, voice, signature, initials and endorsements in the promotion and
sale of the Products during the term of this Agreement. The Promotional
Materials may be used by Prolong in any advertising now existing or hereafter
used in any and all media forms during the term, and only during the term, of
this Agreement. The Promotional Materials shall be used to promote the sale of
the Products. The exclusivity of Section 1.1 shall be with respect to Products
only. Yunick shall be free to grant rights throughout the world to use his
likeness, name, photograph, voice, signature, initials and endorsements in the
promotion and sale of other products so long as such other products are not
Competitive Products as hereinafter defined in Section 9.
1.2 Personal Services. Yunick agrees to be available for not less
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than fifty (50) days during each twelve (12) month period that this Agreement is
in effect ("Service Day" or
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"Service Days"). If Yunick is required to travel on a date immediately preceding
or following the date of any personal appearance either the whole day or half of
each such day shall be counted as a Service Day. A travel day shall be counted
as half of a Service Day if Yunick's travel begins by his departure from his
home or office as the case may be after 2:00 p.m. on the date of departure or
ends by return to his home or office as the case may be prior to 2:00 p.m. on
the return date. Except as noted in the preceding sentence, travel days shall be
counted as a full Service Day. The services to be provided by Yunick shall
consist of participation in any media or promotional events, selling, taping or
any other activity reasonably related to the marketing and promotion of the
Products. Yunick agrees to act as a goodwill ambassador for Prolong and the
Products and to take advantage of opportunities to talk about and promote
Prolong and the Products during the course of his day-to-day activities. As part
of said promotional activities Yunick agrees to wear Prolong's apparel,
including shirts and jackets, but excluding hats, when such apparel would be
reasonably appropriate based on the nature of the event when Yunick is in
attendance at race car events. The duties set forth in this Section 1.2 shall
hereinafter be referred to as the "Services". Yunick shall be compensated for
the Services in accordance with the terms and conditions set forth in Section 7
below.
2. Availability. The dates and times when Yunick shall be personally
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available to provide the services on behalf of Prolong shall be determined by
mutual agreement between the Parties. Prolong shall make every effort to notify
Yunick no less than thirty (30) days in advance of any personal appearances and
Yunick shall not have the right to refuse said appearances so long as they do
not conflict with any items on his personal schedule. Yunick shall use his best
efforts to honor any request by Prolong to make an appearance. Prolong
acknowledges that Yunick also has commitments to American Racing Products and
may have other commitments that he is required to honor, therefore, Prolong will
use its best efforts to cooperate with Yunick in allowing him to comply with
said commitments so long as said commitments do not interfere with the ability
of Yunick to be reasonably available to provide the Services.
3. Approval by Yunick. All printed promotional materials, printed
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advertising, press releases and any other communicative materials utilizing
Yunick's photographic image, name, signature, narration, endorsement or initials
shall not be derogatory to the image of Yunick as reasonably determined by
Yunick, Yunick's authorized agent, prior to release, publishing, broadcasting or
other dissemination. Prolong agrees to provide Yunick copies of all such
materials for approval no later than five (5) days before any such release or
dissemination. Yunick agrees to respond promptly to every such request for
approval, but in any case shall respond no later than five (5) days after
receipt of such request for approval. If no response is received by Prolong
within such five-day period, such non-response shall be deemed to constitute
approval. Any approval to be provided by Yunick shall not be unreasonably
withheld.
4. Professional Conduct. Yunick hereby agrees to provide the Services
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pursuant to this Agreement in a professional manner that will reflect favorably
on Prolong and others associated with Prolong, and on the Products. Yunick
agrees to use his best efforts to promote
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Prolong and the Products during the term of this Agreement and will take every
reasonable opportunity during the term of this Agreement when and where
reasonably appropriate to promote Prolong and the Products. Yunick agrees to
conduct himself with due regard to public conventions and morals and further
agrees not to do or commit any act or thing that would reasonably tend to
derogate or detract from the goodwill of Prolong or the Products.
5. Use of Promotional Materials. Use of the Promotional Materials shall
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be subject to approval by nick as set forth in Section 3 above. The Promotional
Materials shall not be used in any way that would diminish the goodwill
associated therewith or in any way damage the image or reputation of Yunick.
6. Term. The Promotional Materials shall be available to Prolong and the
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Services shall be provided to Prolong for a period of four (4) years and three
(3) three months, beginning on November 1, 1996 and ending on January 31, 2000
(the "Term"). Prolong may terminate this Agreement under the provision of
Section 13 of this Agreement prior to the end of the Term if Yunick is unable to
perform the Services for any reason or if there is a material breach of this
Agreement by Yunick. Any compensation to be paid to Yunick shall be prorated
through the date of termination subject to any damages that may be offset by
Prolong.
7. Compensation.
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7.1 Compensation Amount. Prolong shall compensate Yunick for the
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right to use the Promotional Materials and the Services by paying him the
following compensation as set forth opposite each period set forth below (the
"Consideration"):
Period Amount
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11/1/96 - 1/31/97 $[ * ]
2/1/97 - 1/31/98 $[ * ]
2/1/98 - 1/31/99 $[ * ]
2/1/99 - 1/31/2000 $[ * ]
7.2 Payment Terms. The Consideration for the period from November 1,
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1996 through January 31, 1997 shall be concurrent with the execution of this
Agreement. Thereafter, the annual amounts hall be paid on a semi-annual basis
as follows:
Date Payment
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2/1/97 $[ * ]
8/1/97 $[ * ]
2/1/98 $[ * ]
8/1/98 $[ * ]
2/1/99 $[ * ]
8/1/2000 $[ * ]
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* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
7.3 Additional Personal Appearance Fees. In the event that Yunick
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and Prolong each agree to Service Days in excess of fifty (50) days during each
twelve (12) month period during the Term, Yunick shall be compensated for the
additional days at the rate of [ * ][ * ] Dollars ($[ * ]) per day. If the
Services include radio or television advertising or promotions that will be
retelecast, Yunick shall be entitled to additional Compensation which shall be
agreed upon by the Parties prior to performance of the Services related thereto.
8. Expenses. Prolong shall pay Yunick for airfare and hotel expenses
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associated with his performance of the Services plus a [ * ] Dollar ($[ * ]) per
diem allowance (the "Per Diem Allowance") for food, cabs and miscellaneous
travel expenses (the "Expenses"). The Per Diem Allowance will be [ * ] for half
Service Days as defined in Section 1.2. Yunick may elect to have his wife
travel with him and Prolong shall pay for her airfare and the reasonable
additional hotel expenses (based on double occupancy) associated with said
travel. The Per Diem Allowance shall, however, be deemed to cover both the
travel of Yunick and his wife.
9. Noncompetition by Yunick. Yunick agrees that he will not endorse any
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competitive products during the Term of this Agreement. The competitive
products shall include engine treatments, transmission treatments, fuel
conditioners, penetrant sprays, precision oils and greases.
10. Confidentiality. In the course of working with Prolong in providing
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the Services as set forth in this Agreement, Yunick may have access to certain
confidential information and materials which may be disclosed verbally or in
writing to Yunick concerning Prolong and/or the Products (the "Confidential
Information"). Yunick hereby agrees not to utilize or disclose any Confidential
Information except as required in carrying out the Services and shall take
reasonable steps to protect any public disclosure of the Confidential
Information. Yunick shall, during the Term of this Agreement and at any time
thereafter, hold in confidence and not disclose to any person or entity without
the express prior written authorization of Prolong, names or addresses of any of
Prolong's customers, Prolong's past or prospective dealings with its customers;
the parties, dates or terms, if any, of Prolong's contracts; any information,
trade secrets, systems, processes or business methods, or any other secret
confidential matters relating to the customers or business affairs of Prolong or
any companies affiliated with Prolong. All written material or other property,
tangible or intangible, provided to Yunick, or developed in conjunction with
Yunick, that contain proprietary rights and materials, including copyrights
therein, arising out of or resulting from the performance of this Agreement
shall belong to Prolong and shall not be disseminated or used in any way by
Yunick except as expressly set forth herein. Upon termination of this
Agreement, all said materials shall be returned by Yunick to Prolong. Such
information and materials shall not include any general marketing information or
other materials or information that is generally known by or has been
disseminated to the public.
Prolong's rights and interests (including all rights of copyright print) in
and to the Promotional Materials bearing confidential information and the
results and proceeds of the
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* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
Services hereunder are at times referred to hereinafter as the "Proceeds". The
Proceeds are a "work made for hire" for Prolong to be used by Prolong in its
promotional and marketing materials, commercials and ads in any form of
marketing media and, therefore, are "specially ordered and commissioned" for use
as a part of the marketing activities and promotional works of Prolong.
The parties are cognizant that the information exchanged between the
parties in accordance with the performance of this Agreement is valuable
property. Accordingly, the parties agree that each shall take all reasonable
efforts to hold in confidence all such information given each party by the other
under this Agreement. This obligation shall endure permanently as to all such
information, except that which:
(a) Becomes a part of the public domain or of the public knowledge
through no fault of the party receiving such information;
(b) Was in the possession of the party to whom such information
was disclosed prior to such disclosure, and such possession by the party
receiving disclosure is documented prior to the date of the disclosure;
(c) Is received by the party to which such disclosure is made
lawfully and properly from a third party;
(d) Must be disclosed to a governmental agency or designee to
comply with laws or regulations relating to health or safety or other
governmental purpose;
(e) Is and can be shown by competent proof to have been
independently developed by one party without recourse to any proprietary
information disclosed to the other party.
11. Independent Contractor Status. Yunick hereby declares that Yunick is
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engaged in an independent business and Yunick will perform the Services as an
independent contractor and not as agent, employee or servant of Prolong. In no
event shall Yunick be allowed to engage any other individual to carry out the
duties of Yunick pursuant to this Agreement. Yunick shall be responsible for the
payment of any state or federal withholding tax, social security tax or other
payroll tax, and worker's compensation insurance related to the performance of
the Services.
12. Indemnification. Prolong agrees for itself and its successors and
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assignors to defend, hold harmless and indemnify Yunick, his officers, agents,
employees and their successors and assigns, and anyone acting on his behalf,
from and against any and all losses, costs and damages, expenses or claims
(including attorney's fees), whether such claims are groundless or to, arising
out of any claim, including but not limited to claims of personal injury, death,
or damage to property, whether real or personal, or false advertising or
misrepresentation, unless such claims arises from Yunick's misconduct or
negligence. The
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intent of this indemnification Section it to cause Prolong to indemnify and hold
harmless Yunick from any and all third-party claims of any nature arising out
of, or related to this Agreement or performance hereunder, unless such claims
arise from the breach of this Agreement by Yunick or the misconduct or
negligence of Yunick.
13. Termination.
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(a) Termination by Either Party. Either Party may, upon 30 days'
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notice to the other of breach and a subsequent failure to correct such breach
within 30 days after such written notice, terminate further performance under
this Agreement, while maintaining the right to require performance by the other
party of those obligations occurring prior to the date of termination as
determined herein. The payment of all compensation earned by Yunick under this
Agreement will fully discharge all of Prolong's obligations hereunder.
(b) Cure. At any time that Prolong is in breach of the compensation
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terms of this Agreement, Prolong shall have thirty (30) days to cure such breach
after 30 days' written notice from Yunick of the breach. In the event of
failure to cure within the time limits provided hereunder, in addition to such
other remedies to which Yunick may be entitled, Yunick shall have the right to
halt use of the Promotional Materials by Prolong and cease providing the
Services thereafter, in which event Prolong agrees it shall cease using in any
way the Promotional Materials as defined in Section 1.1 and agrees to recall
all outstanding Promotional Materials.
At any time that Yunick is in breach of the Serveces terms of
this Agreement, Yunick shall have thirty (30) days to cure such breach after 30
days' written notice from Prolong of the breach. In the event of failure to
cure within the time limits provided hereunder, this Agreement shall terminate
and come to an end.
14. General Provisions.
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(a) Notices. All notices pertaining to this Agreement shall be in
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writing and shall be transmitted either by facsimile, overnight mail, personal
hand delivery or through the facilities of the United States Post Office,
certified or registered mail, return receipt requested. The addresses set
forth below for the respective Parties shall be the places where notices shall
be sent, unless written notice of a change of address is given.
Prolong Super Lubricants, Inc. Xxxxxx Xxxxxx
0000 Xxxxx Xxxxxxx Xxx c/o Xxxxx Xxxxxx Revocable Trust
Xxxxxxx, XX 00000 000 X. Xxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Any such notices shall be deemed to be given as of the date so
delivered.
(b) Attorneys' Fees. In the event that any legal, declaratory, self
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help, or
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equitable action or arbitration or any other action not considered to be a legal
or equitable action is commenced between the Parties hereto or their personal
representatives concerning any provision of this Agreement or the rights and
duties of any person in relation thereto, the prevailing Party shall be
entitled, in addition to such other relief that may be granted, to a reasonable
sum for his or their attorney's fees and any other costs and expenses relating
thereto.
(c) Governing Law. The validity, interpretation, construction
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and performance of this Agreement shall be controlled by and construed under the
laws of the State of Florida. In the event of any litigation arising out of any
dispute in connection with this Agreement, the Parties hereby consent to the
jurisdiction of the Florida courts with venue in Florida which is the agreed
upon location where the Parties entered into this Agreement.
(d) Binding Effect. Each and every covenant, term, provision
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and agreement herein contained shall be binding upon and inure to the benefit of
the Parties hereto and their respective heirs, successors, assigns and legal
representatives and shall survive the termination of this Agreement where
appropriate to carry out the terms thereof.
(e) Amendments, Modifications and Waivers. No amendment or
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modification of this Agreement or any exhibit or schedule hereto shall be valid
unless made in writing and signed by the party to be charged therewith. No
waiver of any provision of this Agreement shall be deemed, or shall constitute,
a waiver of any other provision, whether or not similar. No waiver shall be
binding unless executed in writing by the party making the waiver.
(f) Assignment. The interest of Yunick in this Agreement is
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personal and shall not be assigned, transferred, shared or divided in any manner
by Yunick.
(g) Severability. Every provision of this Agreement is
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intended to be severable. If any terms or provisions hereof are illegal or
invalid for any reason whatsoever, such illegality shall not affect the validity
of the remainder of the Agreement.
(h) Parties in Interest. Nothing in this Agreement shall confer
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any rights or remedies under or by reason of this Agreement on any persons other
than the Parties and their respective successors and assigns nor shall anything
in this Agreement relieve or discharge the obligation or liability of any third
person to any party to this Agreement, nor shall any provision give any third
person any right of subrogation or action over or against any party to this
Agreement.
(j) Entire Agreement. This Agreement contains the entire
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Agreement between the Parties hereto, and supersedes any prior written or oral
agreement between the Parties concerning the subject matter contained herein.
There are no representations, agreements, arrangements or understandings, oral
or written between the Parties hereto, relating to the subject matter contained
in this Agreement, which are not fully expressed herein.
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This Agreement is adopted and made effective as of the date first set
forth above as evidenced by the signatures of the Parties hereto.
PROLONG SUPER LUBRICANTS, INC.
By: /s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx, President
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
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[LETTERHEAD OF SMOKEY'S AUTOMOTIVE SERVICE]
These are the things I agree to do for Prolong regarding the contract agreement
ending 1/31/2000.
(AA) 50 days of personal services
(A) Seminars
(B) Personal appearances
(C) Autographs
(D) Sell Products
(E) Recommend Products
(F) Offer free advice to Prolong Customers
(G) Be Spokesman
(H) Offer constructive criticism or advise Prolong
(I) Try to develop new uses and markets for products.
(J) Develop a simple, accurate explanation on why Prolong works
and why it is better.
(K) Use of my name, picture & comments on products.
(L) Spend approximately 5 hours a week at shop telling the Prolong
story.
(M) Write technical articles.
(N) Work at races with Prolong Cars.
