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EXHIBIT 10.26
XXXX XXXXXX
PERSONAL SERVICES AND ENDORSEMENT AGREEMENT
THIS AGREEMENT is entered into this 1st day of January, 1998 by and
between LBE TECHNOLOGIES, INC., a California corporation with offices at 00000
Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxx 00000 ("LBE") , XXXX XXXXXX, INC., an Indiana
corporation with offices at 0000 Xxx Xxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx
00000 ("JGI") and XXXX XXXXXX, an individual resident of North Carolina
("Xxxxxx").
W I T N E S S E T H:
WHEREAS, Xxxxxx is recognized and widely known throughout the world as
a professional race car driver in the NASCAR Winston Cup Series ("Winston Cup");
and
WHEREAS, Xxxxxx'x name, by virtue of his ability and experience, has
acquired a meaning in the mind of the purchasing public important to the
advertising, promotion, and sale of products and merchandise; and
WHEREAS, Xxxxxx is currently the driver of the #24 Xxxxxxxx Xxxxxxxxxxx
Limited Partnership ("Xxxxxxxx")/DuPont Automotive Finishes ("DuPont") race car
("#24 Race Car"); and
WHEREAS, LBE is engaged in, among other things, the operation of NASCAR
Silicon Motor Speedway themed auto-racing entertainment centers featuring
driving simulators; and
WHEREAS, LBE is desirous of obtaining certain personal appearances from
Xxxxxx and acquiring the right to utilize Xxxxxx'x name and likeness in
connection with the advertisement and promotion of NASCAR Silicon Motor Speedway
entertainment centers ("Silicon Motor Speedway") and the use of simulators
("Simulators") produced by LBE in the United States of America and its
territories and possessions, Puerto Rico and United States military bases
throughout western Europe (the "Territory") , and JGI and Xxxxxx are willing to
grant such rights on the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and for other good and valuable consideration, the parties hereto agree
as follows:
1. GRANT OF ENDORSEMENT RIGHTS. Subject to the terms and conditions set
forth herein, JGI and Xxxxxx hereby grant to LBE the right during the Term (as
defined below) and within the Territory to use Xxxxxx'x name, photograph,
likeness and/or endorsement (collectively, the "Endorsements") in connection
with the advertisement and promotion of Silicon Motor Speedway entertainment
centers and the Simulators operated therein in the Territory. Subject to the
terms and conditions herein, JGI and Xxxxxx specifically grant LBE the right to
use the Endorsements in the following during such period:
(i) national and regional television commercials, including edits
and tags;
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(ii) radio commercials, including edits and tags to serve as
promotional carriers during the Term;
(iii) print and outdoor advertising materials;
(iv) point-of-sale and product promotional materials, counter-top,
shelf, and freestanding displays, banners, posters and cutouts; and
(v) press releases and other press materials.
2. TERM. This Agreement shall be binding as of the date of execution by
both parties and shall extend through August 1, 2000, unless terminated earlier
pursuant to the terms hereof (the "Term"). Provided that no default by LBE has
occurred hereunder and provided that the value of the stock options granted
herein exceed $850,000 (such valuation to be following LBE's initial public
offering and calculated based on the public market if publicly traded and if not
publicly traded in a manner and on a basis mutually acceptable to JGI and LBE),
this Agreement will be renewed for a three-year period from August 1, 2000
through August 1, 2003, with personal appearance terms and conditions to be
mutually agreed (including dates and fees) by LBE and JGI.
3. COMPENSATION. In consideration for the rights granted hereunder, LBE
agrees to pay to JGI, on behalf of Xxxxxx, during the Term of this Agreement a
promotional fee as provided for below (the "Promotional Fee").
- A signing fee of $15, 000 is due and payable and earned on the date
hereof. In addition, LBE hereby agrees to pay to JGI the following appearance
fees:
Year Fee
---- ---
1998 $25,000 (1 appearance)
1999 $10,000 (1 appearance)
2000 $15,000 (1 appearance)
The appearance fees are due and earned on the earliest of the date of
the appearance or December 31 of the relevant calendar year (August 1 in the
case of the year 2000) ; provided, however, no appearance fee shall be due in
any calendar year where Xxxx Xxxxxx has wrongfully refused to provide the
required appearance or is unable to make any appearance for LBE; provided
further, that LBE has complied with the terms of Section 4 hereof and has given
JBI sufficient advance notice and alternate dates for an appearance that do not
conflict with Xxxx Xxxxxx'x driving schedule and other commitments.
- LBE hereby agrees to grant to JGI, or if designated Xxxx Xxxxxx,
individually, options to purchase 85,000 shares of LBE common stock for an
exercise price of $.075 per share. Options for (i) 35,000 shares will vest upon
execution of this agreement, (ii) 16,667 shares will
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vest on the first anniversary hereof and (iii) the remaining shares shall vest
at a rate of 1,388.875 shares per month thereafter on the first day of each such
month. The options must be exercised, at the option of Xxxxxx if Xxxxxx chooses
to exercise the options, by the earlier of (a) seven (7) years after the date of
grant or (b) the date of completion of LBE's qualified initial public offering.
If this Agreement is terminated due to a breach by JGI or Xxxxxx, no further
vesting shall occur after the date of termination.
4. PERSONAL APPEARANCES.
(a) If requested to do so by LBE, Xxxxxx agrees to make himself
available for one (1) day during each calendar year of the Term for photo shoots
and production of television and radio commercials, point of sale and print
materials and other promotional materials for use in LBE's advertising. Such
session shall be at Xxxxxxxx Xxxxxxxxxxx race shop or at a mutually agreed to
location. The date and location of such session shall be coordinated with JGI
and shall be subject to Xxxxxx'x driving schedule and other personal appearances
and professional commitments. Such session shall be for or no more than one (1)
hour. In connection with the foregoing, Xxxxxx agrees to participate as a
principal non-union performer in the production of television commercials (the
"Commercials") for regional and/or national imagebased advertising for
Simulators to be broadcast in the Territory. The Commercials may be broadcast
over network and cable television. LBE shall be responsible for any amounts due
the Screen Actors Guild or related pension, welfare or similar plans. In
connection with the Commercials:
(i) The filming and recording date and time of the production of
the Commercials will be subject to Xxxxxx'x prior commitments and will be
mutually agreed upon by JGI and LBE;
(ii) The result of Xxxxxx'x services hereunder shall be deemed
"a work for hire" under the provisions of the U.S. Copyright Act, and the
resulting Commercials shall be owned by LBE for all purposes. LBE shall have
full usage rights for the Commercials produced hereunder until August 1, 2000
for so long as this Agreement is in full force and effect;
(iii) All rights, if any, to the #24 Race car, as well as
Xxxxxx'x uniform, helmet, etc. will be coordinated through JGI or, its affiliate
JG Motorsports, Inc.; however, rights to any racing footage or with respect to
tracks or other drivers are to be granted to LBE by the appropriate owners; and
(iv) All production costs shall be the responsibility of LBE.
(b) If requested to do so by LBE, Xxxxxx shall make one (1)
appearance in each year of the Term on behalf of LBE (total of three (3) during
the term). The time, date and location of such personal appearance shall be
mutually agreed upon by LBE and JGI and shall be subject to Xxxxxx'x driving
schedule and other personal appearances and professional commitments. LBE shall
use reasonable efforts to give JGI at least sixty (60) days' prior notice for
such requested appearance; however, LBE acknowledges that any such request is
subject to Xxxxxx'x availability on the requested date. Such appearance shall be
attendance at a Silicon Motor Speedway entertainment center. The appearance
shall be for no more than two (2) hours, not including travel time. If
reasonably deemed necessary by JGI, LBE will provide appropriate
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security and crowd control to ensure Xxxxxx'x safety and orderly conduct of such
personal appearance.
(c) With respect to each photo session or appearance set forth
above, LBE agrees to pay first-class or private corporate jet travel expenses at
JGI's customary reasonable rates from time to time agreed upon between JGI and
LBE, at the option of Xxxxxx, for Xxxxxx, and one other, and reasonable
out-of-pocket expenses (including, without limitation, ground transportation,
hotel accommodations and meals and beverages) incurred by Xxxxxx in connection
with such session or appearance. Additionally, LBE shall provide an employee to
coordinate all logistics in connection with such sessions or appearances.
(d) At LBE's request, Xxxxxx agrees to wear, whenever rendering
services for LBE, either his racing uniform or other clothing provided by LBE
bearing LBE's trademarks after consulting with Xxxxxx and with appropriate
consideration for Xxxxxx'x personal taste. LBE will supply Xxxxxx, Xxxxxx X.
Xxxxxxx, III and the appropriate officers and advisors of JGI with a reasonable
quantity of such clothing and other promotional items, which may include banners
and race caps bearing LBE's trademarks. If appropriate, LBE will consider the
purchase of apparel and products through Sports Image, Inc. or M.T. Sales and
Marketing, Inc. and utilize the "Chase Authentics(TM)" or "Competitors
View(TM)" labels.
5. NOTICE AND PAYMENTS. Any notice required to be given pursuant to
this Agreement shall be in writing and mailed to Xxxxxx at the address set forth
below by certified or registered mail, return receipt requested or delivered by
a national overnight express service:
If to JGI or Xxxxxx:
Xxxx Xxxxxx, Inc.
0000 Xxx Xxxx-Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, III
Fax: (000) 000-0000
If to LBE:
LBE Technologies, Inc.
00000 Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxxxx Xxxxx
Fax: (000) 000-0000
6. ENDORSED PRODUCTS FOR XXXXXX'X USE. During the Term of this
Agreement, LBE shall supply Xxxxxx, and his agents, at no charge, a reasonable
number of passes for use at Silicon Motor Speedway entertainment centers.
7. PROMOTIONAL MATERIALS. All advertising and promotional material
prepared by LBE in connection with the Simulators depicting Xxxxxx or the #24
Race Car shall be subject to the prior written approval of JGI and Xxxxxx which
approval or disapproval shall be given
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within ten (10) business days following receipt of the advertising or
promotional material, such approval not to be unreasonably withheld. If the
materials are not approved by JGI and Xxxxxx within such ten (10) day period,
the materials will be deemed disapproved. Such approvals shall be based on the
submission of initial renderings, layouts, comps, pencils and other works in
progress. If the text of the advertising and/or promotional material has been
previously approved in writing by JGI and Xxxxxx, LBE may reuse such material
without again obtaining the written approval of JGI and Xxxxxx unless such
approval has been previously withdrawn in writing by JGI or Xxxxxx or unless
this Agreement has been terminated.
8. RESERVATION OF RIGHTS; NO LICENSE.
(a) "Xxxx Xxxxxx(R)" is a federally registered trademark. JGI and
Xxxxxx shall retain all rights in and to Xxxxxx'x name, likeness, signature and
endorsement and, whether during the Term or any extension thereof, Xxxxxx shall
not be prevented from using or permitting or licensing others to use his name or
endorsement in connection with the advertisement, promotion, and sale of any
product or service.
(b) It is understood and agreed that Xxxxxx, and JGI as applicable,
shall retain all right, title and interest in this likeness, name and/or
trademarks, where applicable.
(c) This agreement does not grant any license in favor of LBE to
produce any products or souvenirs bearing the name, likeness, signature or other
xxxx of JGI or Xxxxxx or the #24 Race Car for sale.
(d) The use of the Endorsements in conjunction with any other
celebrity or any other marks must be preapproved by Xxxxxx; provided, however,
that XXX may utilize the Endorsements in connection with other NASCAR Winston
Cup drivers involved with the Simulators, subject to approval of the materials
in accordance with the terms hereof.
9. REPRESENTATIONS, WARRANTIES AND INDEMNITY.
(a) Xxxxxx, JGI and JG Motorsports, Inc. represent to LBE that they
have the full title, right, power, and authority to grant the rights and
Endorsements herein and to perform hereunder. Xxxxxx, JGI and JG Motorsports,
Inc. agree to defend, indemnify and hold LBE harmless against all costs,
expenses, and losses (including reasonable attorneys' fees and costs) incurred
through claims of third parties against LBE arising out of their breach of this
representation.
(b) LBE agrees to defend, indemnify and hold JGI, JG Motorsports,
Inc. and Xxxxxx harmless against all costs, expenses and losses (including
reasonable attorneys' fees and costs) incurred through claims of third parties
against JGI, JG Motorsports, Inc. and/or Xxxxxx based on the manufacture or
operation of the Silicon Motor Speedway entertainment centers or of the
Simulators, including, but not limited to, actions founded on product liability,
or on any violation of the terms hereof by LBE.
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10. TERMINATION.
(a) JGI and Xxxxxx shall have the right to terminate this Agreement
upon fifteen (15) days' prior written notice to LBE in the event of any of the
following contingencies:
(i) If LBE is adjudicated insolvent, declares bankruptcy, or
fails to continue its business of operating the Simulators; or
(ii) In the event LBE fails to make payments to JGI of any sums
due pursuant to this Agreement within fifteen (15) days after such payment is
due or upon other breach hereunder by LBE unless the breach is cured during the
notice period; or
(iii) In the event that Xxxxxxxx obtains a competitive sponsor
for the #24 Race Car or, as to the #24 Race Car, in the event of any sponsor
changes or if Xxxxxx ceases to be a driver for the #24 team;
(b) JGI and Xxxxxx shall have the right to terminate this Agreement
upon default by LBE under the Limited License Agreement of even date.
(c) Either party may terminate this Agreement on thirty (30) days'
written notice to the other party in the event of a material breach of any
material provision of this Agreement by the other party, provided that, during
the thirty (30) day period, the breaching party fails to cure such breach.
(d) LBE shall have the right to terminate this Agreement (i) upon
fifteen (15) days, prior written notice to JGI and Xxxxxx in the event of any
breach hereof by JGI or Xxxxxx and failure to cure during such notice period,
(ii) if Xxxxxx is convicted of a felony or a crime of moral turpitude or (iii)
at any time after sixty (60) days' written notice to JGI and Xxxxxx if Xxxxxx
has permanently ceased being a NASCAR Winston Cup series driver.
11. POST TERMINATION RIGHTS.
(a) Upon the expiration or termination of this Agreement, all
rights granted to LBE under this Agreement shall forthwith terminate and
immediately revert to JGI and Xxxxxx, and LBE shall discontinue all use of and
reference to the Endorsement.
(b) In the event of termination of this Agreement other than due to
a breach of any representation or warranty by Xxxxxx, all moneys paid to JGI and
Xxxxxx shall be deemed non-refundable.
12. RELATIONSHIP OF THE PARTIES. Xxxxxx'x performance of services for
LBE hereunder is in his capacity as an independent contractor. Accordingly,
nothing contained in this Agreement shall be construed as establishing an
employer/employee, a partnership, or a joint venture relationship between JGI
and Xxxxxx and LBE.
13. JURISDICTION & DISPUTES. This Agreement shall be governed by the
laws of North Carolina and all disputes hereunder shall he resolved in the
applicable state or federal
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courts of North Carolina. The parties consent to the jurisdiction of such
courts, agree to accept service of process by mail, and waive any jurisdictional
or venue defenses otherwise available.
14. AGREEMENT BINDING ON SUCCESSORS; COSTS. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, their heirs,
administrators, successors and assigns. Each party hereto shall bear its own
costs in connection with the preparation, negotiation and execution of this
Agreement.
15. ASSIGNABILITY. The license granted hereunder is personal to Xxxxxx
and may not be assigned by any act of Xxxxxx, with the exception that Xxxxxx
shall have the right to assign his financial benefits hereunder. LBE may not
assign its rights or obligation hereunder without the prior written consent of
JGI and Xxxxxx.
16. WAIVER. No waiver by either party of any default shall be deemed as
a waiver of any prior or subsequent default of the same or other provisions of
this Agreement.
17. SEVERABILITY. If any provision hereof is held invalid or
unenforceable by a court of competent jurisdiction, such invalidity shall not
affect the validity or operation of any other provision and such invalid
provision shall be deemed to be severed from the Agreement.
18. INTEGRATION. This Agreement constitutes the entire understanding of
the parties and revokes and supersedes all prior agreements between the parties
and is intended as a final expression of this Agreement. It shall not be
modified or amended except in writing signed by the parties hereto and
specifically referring to this Agreement. This Agreement shall take precedence
over any other documents which may be in conflict therewith.
19. CONFIDENTIALITY. The terms and conditions of this Agreement, as
well as LBE's advertising and marketing plans and programs, are confidential and
will not be disclosed by either party, other than to their agencies and
representatives, without the other party's prior consent.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have each caused to be affixed hereto its or his/her hand and seal the
day indicated.
LBE TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxx
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Title:
XXXX XXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxx, III
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Xxxxxx X. Xxxxxxx, III
Vice President
/s/ Xxxx Xxxxxx
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XXXX XXXXXX
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