[Confidential treatment is being sought for certain portions of this Exhibit, as
indicated by a "[*]" symbol and footnoted as "omitted pursuant to Rule 406."
Such omitted portions have been filed with the Securities and Exchange
Commission.]
Exhibit 10.31
PROLONG SUPER LUBRICANTS, INC.
SERVICE AND ENDORSEMENT CONTRACT
--------------------------------
This Agreement is made this 11th day of January, 2000, 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 and car care appearance 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
----------------------------
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, photographs, 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.
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1.2 Personal Services. Yunick agrees to be available for not less
-----------------
than fifty (50) days during each twelve (12) month period that this Agreement is
in effect ("Service Day" or "Service Days"). Any portion of any day used for
travel to or from an appearance shall be considered a Service Day. Any portion
of any day used for an appearance shall be considered a 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. Yunick will be given a Prolong Super Lubricants, Inc. credit
card to be used to pay for previously "out of pocket" expenses incurred by
Yunick in the course of Promoting Prolong on a day to day basis. As part of
said promotional activities Yunick agrees to wear Prolong's apparel, including
shirts and jackets, but not 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 compensation for Services in accordance
with the terms and conditions set forth in Section 7. In event of travel
delays, Yunick will be compensated as if the delay time was normal travel time.
2. Availability. The dates and times when Yunick shall be personally
------------
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
------------------
advertising, press releases and any other communicative materials utilizing
Yunick's photographic image, name, signature, 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
--------------------
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 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
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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
----------------------------
be subject to approval by Yunick 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.
Prolong shall have the right at no fee or compensation to Yunick or others,
to use the names "Xxxxxx Xxxxxx" and the names, trademarks, photographs of and
likeness of Yunick, and his race car(s) in Prolong's advertising (including
print, point of purchase, radio and television) and promotional material during
the term of this Agreement with the prior approval of Yunick, which consent will
not be unreasonably withheld. Prolong may promote its sponsorship in any manner
it deems proper, subject to the prior approval of Yunick.
It is understood between the parties that Prolong is utilizing the image
and likeness of Yunick on it's product packaging, in printed ads, on brochures
and flyers, in television commercials and in various other marketing media which
is in wide circulation in the marketplace. Upon expiration of this Agreement
Prolong shall be allowed to work off its remaining inventory of printed
materials, whether on packaging or otherwise, but in any event not to exceed six
(6) months after expiration of this agreement. Yunick shall be compensated $[*]
Dollars ($[*]) per month for the use of his image and likeness.
During the term of this Agreement, and without payment or consideration
other than the fee and as provided in Paragraph 7.1, Yunick consents to the non-
exclusive use (including but not limited to reproduction, display, broadcasting,
televising, publication and distribution) in any media of Yunick's name,
biographical information, photograph and any other likeness including
caricatures, either in whole or in part and in any form, style, size and color
selected by Prolong and approved by Yunick (which approval shall not be
unreasonably withheld). Yunick agrees that his name, biographical information,
and photograph or likeness and the name and photograph or likeness of the his
race car(s) may be used for the aforesaid purposes alone or in conjunction with
each other and/or with sketches, cartoons, captions, films, artwork, textual
matter or other photographs. Any print or electronic advertisement involving
Yunick shall be subject to the prior approval of Yunick, which shall not be
unreasonably withheld.
6. Term. The Promotional Materials shall be available to Prolong and the
----
Services shall be provided to Prolong for a period of twenty four (24) months,
beginning on February 1, 2000 and ending on January 31, 2002. Prolong may not
cancel this contract. Yunick give Prolong authority to insure him any way they
see fit.
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7. Compensation.
------------
7.1 Compensation Amount. Prolong shall compensate Yunick for the
-------------------
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"):
7.2 Payment Dates.
--------------
2/1/00 $[*]
8/1/00 $[*]
2/1/01 $[*]
8/1/01 $[*]
Total Amount $[*] Period: 2/1/00 - 1/31/02
7.3 Additional Personal Appearance Fees. In the event that Yunick
-----------------------------------
and Prolong each agree to Service Days in excess of fifty (50) Service Days per
twelve (12) month period, Yunick shall be compensated for the additional days at
the rate of [*] Dollars ($[*]) per day. If services include radio or television
advertising or promotions that will be telecast, Yunick shall be entitled to
additional Consideration 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
--------
associated with his performance of the Services plus a $[*] Dollar ($[*]) per
diem allowance (the "Per Diem Allowance") for food and expenses. Yunick may
elect to have his wife travel with him and Prolong shall pay for her airfare and
the reasonable additional hotel expenses associated with said travel.
In exchange for her assistance to Yunick in fulfilling his obligations
to Prolong during appearances, Prolong shall pay Yunick an additional $[*]
Dollars ($[*]) per appearance day as compensation Xxx. Xxxxxx'x assistance.
9. Noncompetition by Yunick. Yunick agrees that he will not endorse any
------------------------
competitive products during the Term of this Agreement. The competitive products
shall include engine treatments, transmission treatments, fuel conditioners,
penetrant sprays, precision oils, greases, dry car wash and car wax.
10. Confidentiality. In the course of working with Prolong in providing
---------------
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 ("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
4
steps to protect any public disclosure of the Confidential Information. Yunick
shall, during the Term of this Agreement, 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 and the results and proceeds of the 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.
11. Independent Contractor Status. Yunick hereby declares that Yunick is
-----------------------------
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
---------------
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 intent of this indemnification Section is 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. At any time that Prolong is in breach of the
-----------
compensation terms of this Agreement, Prolong shall have thirty (30) days to
cure such breach after written notice from Yunick. 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
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shall cease using in any way the Promotional Materials as defined in Section 1.1
and agrees to recall all outstanding Promotional Materials.
(14) General Provisions.
------------------
(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
6 Xxxxxx c/o Xxxxx Xxxxxx Revocable Trust
Xxxxxx, 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
---------------
help, or 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 their attorney's fees and any other costs and expenses
relating thereto.
(c) Governing Law. The validity, interpretation, construction 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 Volusia County which is the
agreed upon location where the Parties entered into this Agreement.
(d) Binding Effect. Each and every covenant, term, provision 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
-------------------------------------
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 personal
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and shall not be assigned, transferred, shared or divided in any manner by
Yunick.
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(g) Severability. Every provision of this Agreement is intended to
------------
be severable. If any terms or provisions hereof are illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of the Agreement.
(h) Parties in Interest. Nothing in this Agreement shall confer 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.
(i) Entire Agreement. This Agreement contains the entire Agreement
----------------
between the Parties hereto, and supersedes any prior written or oral agreement
between the Parties concerning the subject matter contained here. 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.
(j) Yunick will be paid in full and contract terminated if Prolong is
sold or changes hands.
(k) Mr. and Xxx. Xxxxxx will be provided Nascar hard cards by
Prolong.
(l) Yunick to receive [*] Dollars ($[*]) per month for telephone
expenses.
(m) Yunick to receive [*] Dollars ($[*]) per month for uniform
expenses.
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 /s/ Xxxxxx Xxxxxx
------------------------ ---------------------------
President Xxxxxx Xxxxxx
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