EXHIBIT 10.17
AMENDED AND RESTATED ENDORSEMENT AGREEMENT
This Amended and Restated Endorsement Agreement is entered into as of this 15
day of March, 2000, between Carbite, Inc., a California corporation located at
0000 Xxxxx Xxxxx Xx., Xxxxx 000, Xxx Xxxxx, XX 00000 which is a wholly-owned
subsidiary of Carbite Golf, Inc., a British Columbia corporation (hereinafter
collectively referred to as "Carbite") and Xxxxx Xxxxxxx Productions, Inc. an
Indiana corporation located at XX Xxx 0000, Xxx Xxxxxx, XX 00000 (hereinafter
referred to as "Xxxxxxx").
Whereas, Xxxxxxx represents it owns all the rights to the Xxxxx Xxxxxxx name
and likeness who is known through the world as a professional golfer; and
Whereas, Carbite manufactures and distributes products world wide; and
Whereas, Carbite is desirous of acquiring the exclusive rights to use Xxxxxxx'x
name and likeness in promoting the company and products of Carbite, or other
brands to be acquired by Carbite;
Whereas, the parties entered into an Endorsement Agreement dated as of August
20, 1999 which they now desire to amend and restate;
Therefore, in consideration of the Agreement herein and for other good and
valuable consideration, it is agreed to as follows:
1. Xxxxxxx agrees to allow the unlimited worldwide use of Xxxxxxx'x name and
likeness in the promotion of Carbite products under the Carbite name or
other brand to be acquired. The use of the Xxxxxxx image and direct quotes
attributed to Xxxxxxx will be submitted to Xxxxxxx in advance for approval
and such approval will not be unreasonably withheld. Carbite agrees not to
use Xxxxxxx in the promotion of specific products that will violate the
endorsement agreements currently in place.
2. Xxxxxxx will provide a link from xxx.xxx.xxx to domains that Carbite will
designate. Carbite will provide a link from Carbite domains to xxx.xxx.xxx.
Xxxxxxx will be available occasionally for on-line chats, providing time
and schedule permit.
3. Xxxxxxx will carry a Carbite or other brand to be acquired golf bag while
competing on the PGA and Senior PGA TOUR, while attending corporate outings
and all golf functions and activities in general and continue to conduct
himself in a professional manner.
4. Xxxxxxx will use his best efforts to attempt to use products by Carbite or
other brands to be acquired. At a minimum, Xxxxxxx will use 10 Carbite or
other brand to be acquired clubs including wedges and putter. Carbite
agrees to allow Xxxxxxx to continue to play the Daiwa 153 irons until such
time as Carbite has an agreement with Daiwa for continued use of the
trademark or Carbite can provide an acceptable replacement. Xxxxxxx will
wear a Carbite or company to be acquired shirt for advertising or
promotional purposes.
5. Xxxxxxx will occasionally advise and consult with Carbite on golf club
design.
6. Xxxxxxx will provide a maximum of eight (8) days per contract year (dates,
times, locations and schedule permitting) for sales and marketing of
Carbite products or other brands to be acquired including filming
infomercials, trade shows and customer meetings. Carbite agrees to the best
of its ability to have as many of these dates as possible at Covered Bridge
Golf Course.
7. Xxxxxxx will use his best efforts to aid Carbite in corporate development.
Carbite anticipates the need to use Xxxxxxx to periodically meet with
investment bankers, investors and shareholders among others to develop and
expand relationships that will benefit the company. These meetings will be
arranged in advance to meet the time and schedule of Xxxxxxx.
8. As compensation, Carbite agrees to pay Xxxxxxx the following in cash and
common stock of Carbite Golf Inc:
Cash Stock Total
Value
Contract Year 1 (8/20/99-2/19/00) $ 50,000 $ 88,000 $138,000
Contract Year 2 (2/20/00-2/19/01) $200,000 $100,000 $300,000
Contract Year 3 (2/20/01-2/19/02) $200,000 $100,000 $300,000
Contract Year 4 (2/20/02-2/19/03) $275,000 $225,000 $500,000
Contract Year 5 (2/20/03-2/19/04) $300,000 $250,000 $550,000
Contract Year 6 (2/20/04-2/19/05) $325,000 $250,000 $575,000
a. The cash portion of such compensation shall be paid following schedule:
(i) For Contract Year 1, $25,000 on the execution of this agreement
and $25,000 90 days thereafter.
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(ii) For Contract Years 2-6, one-quarter increments shall be due on
February 20/th/, May 20/th/, August 20/th/ and October 20/th/ of the
Contract Year.
b. The stock portion of such compensation shall be governed by the following:
(i) For Contract Year 1, the shares shall be issued at the end of
Contract Year 1 and shall be calculated at $.45 per share.
(ii) For Contract Years 2-6, the shares to be issued shall be calculated
semi-annually as follows:
50% of the dollar value of stock to be issued in each Contract
Year shall be calculated at August 20/th/ of each Contract year
based on the weighted average closing sale price of the stock
during the ten trading days prior to August 20/th/ of that
Contract Year.
The remaining 50% shall be calculated at the end of each Contract
Year based on the weighted average closing sale price of the
stock during the ten trading days prior to the last day of that
Contract Year.
(iii) Such calculations shall be based on trading on the Canadian Venture
Exchange during such time as the stock is traded there or, if the
stock ceases to be traded on the Canadian Venture Exchange, on such
other stock exchange on which it is traded. If the shares are
actively traded on more than one exchange, the calculations shall be
based on an average of the weighted average closing sale price on
those exchanges.
(iv) If, in any Contract Year, the weighted average closing sale price
is below $.45 U.S., Carbite may elect to pay Xxxxxxx in cash.
(v) If the shares to be issued to Xxxxxxx during any Contract Year shall
cause the cumulative number of shares issued to Xxxxxxx under this
Agreement to exceed 4.9% of the issued and outstanding shares of
Carbite, Carbite may elect to cap the shares at 4.9% and pay the
difference in cash.
(vi) Carbite shall take all steps necessary to cause the shares due
Xxxxxxx for each Contract Year to be issued within thirty (30) days
after the calculation date for each share issuance.
(vii) Any shares issued pursuant to this Agreement, once issued, will not
have been registered under the United States Securities Act of 1933
(the "Act") or the securities laws of any state of the United States,
and will be "Restricted Securities" as the term is defined in Rule
144 under the Act. The shares, once issued, may not be offered for
sale, sold or otherwise
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transferred within the United States except pursuant to an
effective Registration Statement under the Act and any applicable
state securities laws, or pursuant to an exemption from
registraton under the Act, the availability of which must be
established to the satisfaction of the Company.
(viii) Xxxxxxx will execute an Investment Representation Agreement in
the form attached hereto as Exhibit A.
(ix) If Carbite subdivides or consolidates its stock, pays a stock
dividend (other than in the ordinary course), or conducts a
rights offering to its shareholders, then the number of shares to
be issued Xxxxxxx and the minimum price in Paragraph 8(b)(i)
shall be increased or decreased proportionately.
(x) Carbite stock in currently traded on the Canadian Venture
Exchange. The shares issued to Xxxxxxx under this Agreement will
be subject to a hold period under the Securities Act (British
Columbia), the rules and policies of the Canadian Venture
Exchange, and/or other applicable securities laws.
9. Carbite agrees to pay all reasonable and necessary expenses involved in
sales and marketing or corporate development appearances for Xxxxxxx
including first class travel hotel and meal expenses.
10. Xxxxxxx will compete in a minimum of 15 PGA tournaments per year. If for
whatever reason Xxxxxxx plays in less than 15 PGA tournaments in any year,
the compensation will be reduced by dividing the compensation by 15 and
multiplying by the number of events played.
11. Carbite can terminate the contract for the following reasons:
x. Xxxxxxx is unable to compete due to serious injury, dies, or fails to
conduct himself in a professional manner consistent with the standards
of the PGA Tour.
b. The gross sales (net of returns) of Carbite, Inc., in calendar year
2001, do not exceed $25,000,000.
12. Carbite will indemnify Xxxxxxx from any claims and damages arising from the
use of the endorsed product or the endorsement of the products or the
advertising of Carbite products.
13. This agreement shall be governed by the laws of the State of California.
Any disputes between the parties that cannot be resolved will be determined
by arbitration
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according with the American Arbitration Association. The prevailing party
shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements.
14. The contact period shall commence on August 20, 1999 and conclude on August
20, 2004 unless sooner terminated, extended or renewed in accordance with
this agreement.
15. Nothing contained in this Agreement shall be construed as establishing an
employer/employee relationship between Carbite and Xxxxxxx. There shall be
no withholdings for tax purposes from any payments due to Xxxxxxx form
Carbite.
16. Neither party shall have any right to grant sublicenses or to otherwise
assign any of its rights or obligations in this Agreement without the
express written consent of the other party.
17. All notices or statements shall be sent via overnight express to the
following addresses.
Carbite Inc. or Carbite Golf, Inc. Xxxxx Xxxxxxx Productions, Inc.
0000 Xxxxxxxxxx Xx. XX Xxx 0000
Xxx Xxxxx, XX 00000 Xxx Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxxx Attention: Xxxx Xxxxxx
18. This Agreement is subject to regulatory approval by the Canadian Venture
Exchange. Carbite shall promptly take all reasonable steps to secure such
regulatory approval.
19. Carbite and Xxxxxxx shall execute any and all such further deeds, documents
and assurances and shall do any and all such further and other things as
may be necessary to implement and carry out the intent of this Agreement.
20. The provisions herein contained constitute the entire agreement between the
parties and supersede all previous understandings, communications,
representations and agreements, whether written or verbal, between the
parties with respect to the subject matter of this Agreement.
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21. All dollar amounts referred to in this Agreement have been expressed in
United States currency, unless otherwise indicated.
In Witness, the parties in this Agreement have caused it to be executed as of
the 15th day of March, 2000.
Date: 3/15/00 CARBITE INC.
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By: /s/ Xxxx X. Xxxxxxxxxxx
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Date: 3/15/00 CARBITE GOLF, INC.
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By: /s/ Xxxx X. Xxxxxxxxxxx
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Date: 3/15/00 XXXXX XXXXXXX PRODUCTIONS, INC.
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By: /s/ Xxxx Xxxxxx
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Xxxxx Xxxxxxx Productions, Inc.
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