CONSULTING AGREEMENT
This Consulting Agreement is made and entered into as of the 1st
day of October, 1998, by and between GOLFGEAR INTERNATIONAL,
INC., a Nevada corporation (the "Company") and SPORTS
OPPORTUNITIES INTERNATIONAL, a South Carolina corporation (the
"Consultant").
RECITALS
WHEREAS, the Company has developed certain proprietary technology
relating to the design and manufacture of golf clubs;
WHEREAS, the Company is in the business of manufacturing and
selling golf clubs and golf accessories (hereinafter collectively
referred to as the "Products");
WHEREAS, Consultant, is experienced in the marketing of golf
products and golf companies and wishes to provide consulting
services to the Company with respect to the Company's marketing
endeavors;
WHEREAS, Consultant, by and through Xxxxxx Xxxxx, also desires to
serve as a member of the Board of Directors of the Company; and
WHEREAS, the Company desires to utilize the services of
Consultant.
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein, and with reference to the above Recitals, the
parties hereby agree as follows:
1. Services.
a. Marketing Services. Consultant shall provide services with
respect to advising the Company on matters relating to the
marketing of the Company and its Products. This shall include
interfacing with media, developing an overall marketing plan
which shall include introduction to and coordinating golf event
promotions and golf club distribution. These services shall not
include attendance at promotional events. Compensation for
actual attendance at promotional events shall be agreed upon on a
case by case basis.
b. Board of Directors. During the term of this Agreement,
Xxxxxx Xxxxx agrees to act as and accept the position on the
Board of Directors of the Company. This position shall be
subject to removal in accordance with the bylaws of the Company
and/or the Nevada Revised Statutes.
c. General Duties of Consultant. During the term of this
Agreement, Consultant shall have the, fill and complete
obligation and responsibility for the performance of the duties
as contemplated under this Agreement. Consultant shall devote,
during the term of this Agreement, such time, energy and skill as
is necessary in the performance of his duties as contemplated
hereunder, and shall periodically, or at such time that the
Company may require. It is anticipated that Consultant will work
approximately forty (40) hours per month in fulfilling
obligations imposed pursuant to this Agreement.
d. Assignment. Consultant (including Xxxxxx Xxxxx) may not
assign the consulting obligations hereunder to an entity or
person.
2. Compensation. Consultant shall be compensated for services
contemplated hereunder as follows:
a. Annual Compensation. Forty Thousand Dollars ($40,000) per
year with Ten Thousand Dollars ($10,000) to be paid upon
execution of this Agreement and Ten Thousand Dollars ($10,000) to
be paid each consecutive quarter from execution hereof commencing
on January 1, 1999.
b. Stock Compensation. In addition to the annual
compensation above, Consultant shall receive twenty-five (25,000)
shares of common stock of the Company upon execution of this
Agreement, which shall be restricted pursuant to Rule 144 of the
Securities Act of 1933, as amended (the "Securities Act"). Said
shares shall be subject to the lock-up restrictions identified in
Schedule A attached hereto and made a part hereof.
c. Compliance with Rule 144. Shares issued pursuant to
this Agreement or received upon exercise of stock options have
not been registered under the Securities Act or qualified under
the California Corporate Securities Law of 1968, as amended.
Consultant understands that securities issued hereunder have been
acquired for investment purposes and not with a view to or for
sale in connection with any distribution hereof within the
meaning of the Securities Act. Securities issued hereunder may
not be sold or offered for sale in the absence of an effective
registration statement under the Securities Act and compliance
with the California Securities Law or an opinion of counsel
satisfactory to the Company to the effect that said registration
and compliance is not required.
d. Stock Options. Stock options allowing Consultant to
purchase 50,000 shares of common stock of the Company at $2.00
per share. Said options shall vest as follows:
(i) 20,000 upon execution of this Agreement.
(ii) 15,000 after six months of execution of this Agreement.
(iii) 15,000 one year after execution of this Agreement.
e. Distribution Override. Twenty five cents ($0.25) per
golf club sold through distributors introduced to the Company by
Consultant. Nothing contained in this subparagraph shall
obligate the Company to enter into a distribution agreement with
any distributor introduced to the Company by Consultant. Any
obligation to pay compensation under this Paragraph 2(c) shall
survive the termination of this Agreement and shall remain in
full force and effect for five (5) years from the date any
distribution agreement is entered into as the result of
Consultant's efforts. All payments due to Consultant shall be
paid within ten (10) business days of receipt by the Company and
shall be subject to adjustment for sales returns and allowances.
f. Finder's Fee. In addition to the compensation above, the
Company shall pay Consultant a finder's fee in the amount of ten
percent (10%) of any equity financing received as a result of
introductions made by the direct efforts of Consultant.
3. Term of the Agreement. This Agreement shall be effective
until December 31, 1999. At the end of this period, the parties
may renew this Agreement for a one year period (or other agreed
upon period) under mutually agreeable terms and conditions. This
Agreement may be terminated by the Company in the event
Consultant becomes insolvent or files for bankruptcy or fails to
provide services as contemplated herein (which shall include the
death or incapacity of Xxxxxx Xxxxx). In such event, the Company
shall give Consultant written notice identifying the reason for
proposed termination and allow Consultant a reasonable
opportunity to cure any such breach.
4. Cooperation. The Company agrees that it shall cooperate
with Consultant to the extent that is reasonably necessary to
allow Consultant to perform any of the applicable services as set
forth in Paragraph 1 above.
5. No Authority to Bind. It is understood and agreed that
Consultant is not acting as an agent for or on behalf of the
Company and nothing contained in this Agreement shall be
construed as authority for Consultant to bind the Company or
obligate the Company to any agreement or contract. In this
regard, Consultant agrees not to use any business card,
stationary or other correspondence, which utilizes the name or
logo of the Company in connection with services being tendered
hereunder by Consultant.
6. Exclusivity. During the term of this Agreement, Consultant
agrees not to consult with or advise, either formally or
informally, directly or indirectly, with any other golf companies
or golf products that compete with, or tend to compete with, the
Company's Products.
7. Confidentiality/Covenant Not to Unfairly Compete.
Consultant understands that he may, during the relationship as
contemplated under this Agreement, become aware of or develop
certain business and/or marketing practices, business plans,
methods of operations and other similar information which the
Company deems proprietary and confidential. Consultant hereby
acknowledges that such information is in fact proprietary and
agrees not to directly or indirectly disclose this information or
compete with the business of the Company, or the proposed
business of the Company that my exist from time to time, without
the prior written consent of the Company.
8. Independent Contractor. At all times during the term of
this Agreement, the Consultant is and shall be an independent
contractor in providing the consulting services hereunder, with
the sole right to supervise, manage, operate,. control, and
direct the performance incident to such consulting services.
Nothing contained in this Agreement shall be deemed or construed
to create a partnership or joint venture, to create the
relationship of employer/employee or principal/agent, or
otherwise create any liability whatsoever as partners, joint
venturers, employer, employee, principal, agent, for either the
Company or the Consultant with respect to the indebtedness,
liabilities, or obligations of each other or of any other person
or entity.
9. Responsibility for Payment of Taxes. Consultant shall be
responsible for any and all withholding tax (including income tax)
or other employment taxes that may be required to be' withheld
and/or paid as the result of any cash or non-cash compensation
received under this Agreement.
10. Attorneys' Fees. In the event of any litigation to
interpret or enforce any provision(s) of this Agreement, a court
of competent jurisdiction may award the prevailing xxxxx
reasonable attorneys' fees and costs.
11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California
applicable to agreements made and to be performed therein.
12. Independent Counsel. Consultant acknowledges that this
Agreement hag been prepared by counsel to the Company, and said
counsel does not represent Consultant. Consultant has been advised
to consult with an independent attorney of his own choice for the
purpose of reviewing this Agreement and giving legal advice on
behalf of Consultant with respect thereto.
13. Arbitration. In the event of any controversy or dispute
arising out of this Agreement including, without limitation, the
interpretation f any of the provisions hereof, any party shall
give a Notice to other parties advising each of them of such
controversy or dispute in reasonable detail. Upon receipt of
such Notice by all of the parties, the parties shall work
together in good faith for thirty (30) days from the, date of
receipt of such Notice by each party to resolve such controversy
or dispute. In the event that such controversy or dispute is not
resolved within said time period, such controversy or dispute
shall be submitted to neutral, binding arbitration in Orange
County, California, before the American Arbitration Association
under the commercial arbitration rules then in effect. Any award
or decision obtained from any such arbitration proceeding shall
be final and binding. Any arbitration award or decision and any
judgment thereon may be entered and enforced in any court having
jurisdiction thereof. No action at law or in equity based upon
any claim arising out of or related to this Agreement shall be
instituted in any court except (a) an action to compel
arbitration pursuant to this subsection; or (b) an action to
enforce all award obtained in an arbitration proceeding in
accordance with this section.
14. Severability. The holding of any provision of this
Agreement to be invalid or unenforceable by a court of competent
jurisdiction shall not effect any other provision of this
Agreement, which shall remain in full force and effect.
15. Notices. Any notices required or permitted to be given
hereunder shall be sufficient if in writing, and if delivered by
hand, or sent by certified mail, return receipt requested, to the
addresses set forth below or such other address as either party
may from time to time designate in writing to the other, and
shall be deemed given as of the date of the delivery or mailing.
IF TO COMPANY:
Xxx Xxxxxxxx
GolfGear International, Inc.
0000-X Xxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, XX 00000
IF TO CONSULTANT:
Xxxxxx Xxxxx
Sports Opportunities International
0000 Xxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
16. Waiver or Breach. It is agreed that a waiver by either
party of a breach of any provision of this Agreement shall not
operate , or be construed, as a waiver of any subsequent breach
by that same Party.
17. Entire Agreement and Binding Effect. This Agreement
contains the entire agreement between the parties hereto with
respect to the subject matter hereof and shall be binding upon
and inure to the benefit of the parties hereto and their
respective legal representatives, heirs, distributes, successors,
and assigns.
18. Assignment. This Agreement may not be transferred or
assigned by either party without the prior written consent of the
other party.
19. Headings. The section headings appearing in this Agreement
are for purposes of easy reference and shall not be considered a
part of this Agreement or in any way modify, amend or affect its
provisions.
20. Amendments. This Agreement may not be amended except by a
writing signed by all parties hereto.
21. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all
of which together shall constitute an Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date and year first above written.
GOLFGEAR INTERNATIONAL, INC.
By: /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
President
SPORTS OPPORTUNITES INTERNATIONAL
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
