ENDORSEMENT AGREEMENT
THIS
ENDORSEMENT AGREEMENT (“Agreement”) is entered into as of March 25, 2008 by and
among Purple Beverage Company (“Buyer”), and Xxxxxxx Xxxxxx (“Athlete”), in
connection with the endorsement of, and the advertising and promotion for,
Buyer’s product PURPLE
(“Endorsed Product”).
The
parties hereto agree as follows:
Section
1. TERM:
The
term
(“Term”) of this Agreement shall commence on the date hereof and shall continue
for three (3) years.
Section
2. SERVICES:
Athlete
shall participate in one (1) still photo session and/or video shoot day
(“Service Day”) per year on a date to be mutually agreed during each year of the
Term. On such agreed dates, Athlete’s services may be up to four
(4) consecutive hours. Athlete shall also make himself available over the
Term for seven (7) radio, television and press interviews per year (not to
exceed ten minutes in duration) to promote the Endorsed Product.
Athlete
shall also participate in three (3) personal appearances (“Personal
Appearances”) each year during the Term on dates and times to be mutually agreed
upon. The Personal Appearances shall not involve a public and/or private
autograph signing session. One (1) Personal Appearance each year must be a
meet
and greet located at Yankee Stadium. One (1) Personal Appearance each year
must
occur during the Major League Baseball season, and must take place at a location
within a thirty (30) mile radius of Yankee Stadium. And one (1) Personal
Appearance each year must occur during the Major League Baseball off-season,
and
must take place at a location in the general vicinity of New York City, New
York. Any Personal Appearances outside of a thirty (30) mile radius from Yankee
Stadium shall require the approval of the Athlete and, to the extent so
approved, Buyer shall be responsible for all first class travel, local limousine
and lodging costs associated therewith. A Personal Appearance shall be up to
2
consecutive hours. Any additional Personal Appearances shall be on dates and
times and for compensation to be mutually agreed upon.
During
the Term of this Agreement, Athlete agrees to personally autograph two hundred
and fifty (250) items, as requested by Buyer (and which shall be provided by
Buyer). Such items may be used by Buyer for internal corporate or local market
publicity purposes, or as charitable donations, promotional purposes such as
prizes, premiums or giveaways, but shall not be offered for sale to consumers.
The
dates
for the Service Days and Personal Appearances shall be determined in good faith
by agreement of the parties.
During
the Term of this Agreement, Athlete shall use commercially reasonable efforts
to
obtain from the New York Yankees, at the Buyer's cost and expense, four (4)
lower level season tickets at face value at Yankee Stadium for the
Buyer.
Section
3. THE
ADVERTISING/PROMOTION CAMPAIGN:
The
Buyer’s Advertising/Promotion
Campaign utilizing Athlete may include radio, television, online, and print
advertising, print materials (photographs, pictures, stills as generally used
in
the course of an advertising campaign) (collectively, the “Prints”), public
relations and press materials, visual presence on the Internet sites of Buyer
and social networking sites, and also may include signed editorial and blog
entries by Athlete to be mutually agreed upon.
Section
4. TERRITORY:
The
entire world (the “Territory”).
Section
5. USAGE:
Athlete
hereby authorizes, grants, and conveys to Buyer the right to use, exhibit,
broadcast, print, and exploit Athlete’s name, image, likeness, and voice and as
a spokesperson for the Endorsed Product during the Term, and in the
Territory.
All
of
Athlete’s services hereunder shall be deemed a “work made for hire” for purposes
of U.S. Copyright Laws, and Buyer shall own all the results and proceeds of
such
services. Any and all materials created which include Athlete shall be for
the
use contracted under this Agreement only, for the Term and in the Territory
only, it being understood that at the expiration of the Term, Buyer shall cease
to use said materials under its possession or control and instruct any third
party to cease any such use. If a third party uses the materials beyond the
Term, Buyer shall use good faith commercial efforts to cause the third party
to
cease such use. Buyer shall be granted a forty five (45) day grace period from
the end of the Term or the earlier termination of this Agreement to remove
all
Prints installed at or affixed to various media displays.
Section
6. ENDORSEMENT:
Athlete
represents and warrants that Athlete is an endorser of the Endorsed Product
and
that, during the Term, Athlete will continue to endorse such products. Athlete
understands that the packaging, marketing, advertising and general promotion
of
such products may attribute statements to Athlete to the effect that he is
an
endorser thereof and Athlete represents and warrants that such statements
represent Athlete’s actual belief and experience. Athlete will have prior
reasonable approval over such endorsement statements within the time period
set
forth for approvals below.
Section
7. COMPENSATION:
In
consideration of the rights granted and the services to be performed hereunder,
Buyer shall pay to Athlete an aggregate amount of $150,000 via check payable
to
SFX Baseball Group and sent to SFX Baseball Group at the address set forth
in
Section 21(f) below (the “Cash Compensation”) and promptly issue to the Athlete
an option to purchase an aggregate amount of 1,414,286 shares of common stock
of
the Buyer at a cashless exercise price of $0.01 per share in the form of the
option attached hereto as Exhibit A (the “Compensation Shares”, and
collectively with the “Cash Compensation” referred to herein as the
“Compensation”).
The
Cash
Compensation shall be payable in accordance with the following
schedule:
|
Cash Compensation
|
Due
Date
|
||||
|
$
|
50,000
|
March
25, 2008
|
|||
|
$
|
50,000
|
|
March
25, 2009
|
||
|
$
|
50,000
|
March
25, 2010
|
|||
The
Buyer
agrees that without the express written consent of the Athlete, it shall not
increase the compensation payable to any other celebrity endorser of the
Endorsed Product pursuant to any endorsement agreement entered into with any
other celebrity endorser prior to the date hereof.
Promptly
after December 13, 2008, the Buyer shall issue to the Athlete a new certificate
representing the Compensation Shares free of any restrictive legend. At the
Buyer’s request at any time after December 13, 2008 or the one year
anniversary of the date hereof, as applicable, the Buyer shall cause its legal
counsel to issue an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public
sale or transfer of the Compensation Shares may be made without registration
under the Securities Act of 1933.
In
connection with the issuance of the Compensation Shares, Athlete hereby makes
the following representations to Buyer regarding the Compensation
Shares:
(a) Athlete
understands that none of the Compensation Shares have been registered under
the
Securities Act of 1933, as amended (“Securities Act”), by reason of a specific
exemption from the registration provisions of the Securities Act, the
availability of which depends upon, among other things, the bona fide nature
of
the investment intent and the accuracy of Athlete’s representations as expressed
herein. Athlete is acquiring all of the Compensation Shares for his own account,
not as a nominee or agent, for investment and not with a view to, or for resale
in connection with, any distribution or public offering thereof within the
meaning of the Securities Act.
2
(b) Athlete
understands that all of the Compensation Shares will constitute “restricted
securities” under the federal securities laws, inasmuch as it is being acquired
from Buyer or such other company in one or more transactions not involving
a
public offering and that under such laws the Compensation Shares may not be
resold without registration under the Securities Act or an exemption therefrom.
The certificates representing the Compensation Shares will be endorsed with
a
legend to such effect. Athlete has been informed and understands that (i) there
are substantial restrictions on the transferability of the Compensation Shares,
and (ii) no federal or state agency has made any finding or determination as
to
the fairness for public investment, nor any recommendation nor endorsement,
of
the Compensation Shares.
(c) Athlete,
or Athlete’s business and financial advisors, have substantial experience in
evaluating and investing in private transactions of securities in companies
similar to Buyer and such other company and Athletes acknowledges that he can
protect his own interests. Athlete, or such advisors, have such knowledge and
experience in financial and business matters so that he is capable of evaluating
the merits and risks of his acceptance of all of the Compensation Shares of
Buyer as compensation or otherwise.
(d) Athlete
is an “accredited investor” within the meaning of Rule 501 of Regulation D
promulgated under the Securities Act.
(e) Athlete
understands that all books, records, and documents of Buyer relating to it
have
been and remain available for inspection by him or his business and financial
advisors upon reasonable notice. Athlete confirms that all documents requested
have been made available, and that he or such advisors have been supplied with
all of the information concerning Buyer that has been requested. Athlete
confirms that he or such advisors have obtained sufficient information, in
his
and their judgment to evaluate the merits and risks of receipt of the
Compensation Shares as compensation or otherwise. Athlete confirms that he
has
had the opportunity to obtain such independent legal and tax advice and
financial planning services as he has deemed appropriate prior to making a
decision to enter this Agreement, provide the Service Days and the Personal
Appearances in consideration of the issuance to him of the Compensation Shares.
In making each such decision, Athlete has relied exclusively upon his experience
and judgment, or that of such advisors, upon such independent investigations
as
he, or they, deemed appropriate, and upon information provided by Buyer in
writing or found in the books, records, or documents of Buyer.
(f) Athlete
is aware that the economic ownership of the Compensation Shares is highly
speculative and subject to substantial risks. Athlete is capable of bearing
the
high degree of economic risk and burdens of this venture, including, but not
limited to, the possibility of a complete loss, the lack of a sustained and
orderly public market, and limited transferability of the Compensation Shares,
which may make the liquidation thereof impossible for the indefinite
future.
(g) The
offer
to issue the Compensation Shares as compensation to the Athlete was directly
communicated to Athlete or his business or financial advisors by such a manner
that he or such advisors were able to ask questions of and receive answers
from
Buyer or a person acting on its behalf concerning this Agreement. At no time
was
he presented with or solicited by or through any leaflet, public promotional
meeting, television advertisement, or any other form of general
advertising.
(h) None
of
the following information has ever been represented, guaranteed, or warranted
to
Athlete, expressly or by implication by any broker, Buyer, or agent or employee
of the foregoing, or by any other person:
(1) The
approximate or exact length of time that Athlete will be required to remain
as a
holder of any of the Compensation Shares;
(2) The
amount of consideration, profit, or loss to be realized, if any, as a result
of
owning any of the Compensation Shares; or
3
(3) That
the
past performance or experience of Buyer, its officers, directors, associates,
agents, affiliates, or employees or any other person will in any way indicate
or
predict economic results in connection with the plan of operations of Buyer
or
the return on any of the Compensation Shares.
(i) Athlete
hereby agrees to indemnify Buyer and its affiliates and to hold them harmless
from and against any and all liability, damage, cost, or expense, including
their respective attorneys’ fees and costs, incurred on account of or arising
out of:
(1) Any
material inaccuracy in the declarations, representations, and warranties
hereinabove set forth;
(2) The
disposition of the Compensation Shares or any part thereof by him, directly
or
indirectly, contrary to the foregoing declarations, representations, and
warranties; and
(3) Any
action, suit, or proceeding based upon:
(A) the
claim
that said declarations, representations, or warranties were inaccurate or
misleading or otherwise cause for obtaining damages or redress from Buyer or
its
affiliates; or
(B) the
disposition of the Compensation Shares or any part thereof.
Section
8. EXPENSES:
In
connection with Service Days and Personal Appearances, Buyer shall provide,
pay
or reimburse all reasonable pre-approved expenses (including without limitation
first class travel and accommodations) incurred by Athlete related to Athlete’s
services hereunder.
Section
9. EXCLUSIVITY:
During
the Term, Athlete shall not provide Athlete’s services, nor shall Athlete
authorize the use of Athlete’s likeness, voice, name or image, nor shall Athlete
endorse or participate in publicity events for the advertising or promotion
of
any of the following:
(a) Any
organization whose primary product lines are beverages;
(b) Any
of
the following products: beverages of all kinds, including, without limitation,
water (including vitamin water), soft drinks, energy drinks, fruit juices and
drinks, sports drinks, isotonic drinks, anti-oxidant drinks, dairy drinks of
all
kind (including milk).
Nothing
shall preclude Athlete from appearing in any form of audio or audiovisual
entertainment programming, including sporting events, concert tours, motion
pictures, television, radio or other entertainment programs, regardless of
sponsorship or use of competing products therein, provided that Athlete shall
not be the host, a regular commentator, or series regular performer, in any
such
programming that has as a primary sponsor an organization or product referred
to
paragraphs (a) and (b) above.
Section
10. APPROVALS:
Athlete
will have the right to approve any materials containing the name or likeness
of
Athlete, provided that such approval shall not be unreasonably withheld,
delayed, or denied. Athlete’s approval or disapproval must be given in writing
within three (3) business days of Athlete’s receipt of the proposed item by
personal delivery, facsimile, or computer e-mail transmission. For purposes
of
this Agreement, receipt within the hours of 9:00 a.m. to 5:00 p.m., Eastern
Time, shall constitute receipt on that business day and the approval or
disapproval must be given by 5:00 p.m., Eastern Time, of the second business
day
thereafter. If Athlete fails to respond within said three (3) business day
period, the submitted item shall be deemed approved. For purposes hereof,
“receipt” shall be deemed to occur when the proposed materials are personally
delivered or sent to Athlete at the facsimile number or e-mail address provided
by Athlete in this Agreement. Subject to the aforesaid approval rights, Buyer
shall retain creative control in all matters. Athlete may not disapprove any
materials because Athlete is more or less prominent than any other likeness
in
the relevant materials.
4
Athlete
shall have the right of reasonable approval of wardrobe worn by Athlete during
Service Days and Personal Appearances hereunder.
Section
11. INDEMNITY:
(a) By
Athlete.
Athlete
will at all times indemnify and hold Buyer and its agents and licensees harmless
from and against any and all claims, damages, liabilities, costs and expenses
(including reasonable outside attorneys’ fees), arising out of any breach by
Athlete of any warranty or agreement made by Athlete and/or Athlete
hereunder.
(b) By
Buyer. Buyer
agrees to protect, indemnify, save, defend, and hold harmless Athlete, his
affiliates and partners, and each of his assigns, agents, representatives,
officers, directors, shareholders, and employees from and against any and all
expenses, damages, liabilities, claims, suits, actions, judgments, costs and
expenses whatsoever (including reasonable attorney’s fees; both those incurred
in connection with the defense or prosecution of the indemnifiable claim and
those incurred in connection with the enforcement of this provision), caused
by,
arising out of, or in any way connected with (i) any injury, death, or other
harm or claim connected with, or claimed defect in, any food, beverage,
equipment, instrument, product or service provided, manufactured, produced,
marketed, promoted, sold, and/or distributed by Buyer (including any party
affiliated with Buyer); (ii) any material inaccuracy or misrepresentation by
Buyer in this Agreement; (iii) any advertisement and/or promotion of Buyer,
including but not limited to any use of the materials produced pursuant to
this
Agreement, as well as Buyer’s Advertising/Promotion Campaign described above in
Section 3 of this Agreement; (iv) this Agreement; (v) any material breach of
this Agreement by Buyer; and/or (vi) any action, brought by any entity, that
is
in any way related to Buyer’s existence as a publicly traded company and/or
Athlete’s ownership of Compensation Shares of Buyer. Should the Athlete commence
an action against Buyer to recover any sums he is due under this Agreement,
he
shall be entitled to recover his costs and attorney’s fees in the event that he
is the prevailing party. No settlement will be entered into by Athlete without
Buyer’s prior written approval. Athlete shall have the right to be independently
represented in any such defense by legal counsel of Athlete’s
choosing.
(c) Survival
After Termination.
The
parties hereto agree that the indemnity provisions provided above shall survive
the termination of this Agreement.
Section
12. INSURANCE:
Buyer
shall name Athlete as additional insured during services hereunder under Buyer’s
comprehensive general liability insurance policies and errors and omissions
insurance policies, and shall name Athlete on an insurance policy with limits
of
at least One Million ($1,000,000) US dollars per occurrence, including, but
not
limited to, products liability and an extended liability endorsement (including
advertising liability).
Section
13. TERMINATION:
If
either
party is in breach or default of any of its material obligations under this
Agreement, the affected party shall have the right to terminate this Agreement
by providing the other party with written notice within thirty (30) days of
discovery of such breach or default, provided that the event cannot be cured
within ten (10) days from the notice date.
Nothing
in this subsection is intended to relieve either party of any liability of
any
payment or any other obligation existing at the time of
termination.
5
Section
14. ATHLETE
CONDUCT:
During
the Term, if Athlete is convicted of a felony or if Athlete disparages Buyer
and/or its affiliates, the products of Buyer and its affiliates, or the
Campaign, then Athlete shall be in material breach of this Agreement and Buyer
shall have the right to immediately terminate this Agreement and any
compensation not yet due shall no longer be due Athlete. In such event Buyer
shall have the right to pursue any and all remedies, damages and equitable
relief available to Buyer against Athlete, including, but not limited to,
seeking a return of some or all of the compensation paid. Buyer’s decision to
terminate hereunder must be exercised, if at all, not later than forty-five
(45)
days after the facts giving rise to such right under this paragraph are brought
to Buyer’s attention.
Section
15. FORCE
MAJEURE:
If
by
reason of any event of force majeure, such as strikes, boycotts, war, Acts
of
God, labor troubles, riots, delays of commercial carriers, restraints of public
authority, or for any other force majeure event, similar or dissimilar, beyond
Buyer’s control, Buyer shall be unable to use and/or reuse Athlete’s services or
the materials produced hereunder during the Term or any portion thereof, Buyer
shall have the right to extend the Term hereof, or applicable portion, for
an
equivalent period, without any additional compensation to Athlete; provided
that: (i) the postponed date for Athlete’s services shall be mutually selected
by Athlete and Buyer within a reasonable time after the end of the force majeure
and such postponed services shall be subject to Athlete’s professional
availability; and (ii) the extension shall not be longer than six (6) months
in
length (“Outside Date”). In the event that Athlete is unable to render services
on or before the Outside Date, then the parties shall discuss in good faith
not
less than two alternative dates and if the parties cannot agree on any such
alternative date within a period of thirty (30) days following the commencement
of such discussions, then Buyer shall have the right to terminate this
Agreement, and the compensation paid to Athlete hereunder shall be adjusted
on a
basis to be negotiated in good faith between the parties.
Section
16. ATHLETE’S
DISABILITY:
If
Athlete fails to fulfill Athlete’s material required obligations hereunder due
to death, illness, injury or accident, such that Athlete is precluded from
rendering services or Buyer is precluded from making use of the materials
produced hereunder, then Buyer shall have the right to terminate this Agreement
and the compensation paid to Athlete hereunder shall be adjusted on a basis
to
be negotiated in good faith between the parties.
Section
17. INTELLECTUAL
PROPERTY RIGHTS:
Any
and
all rights, including but not limited to the rights pertaining to intellectual
properties related to any and all pictures, photos, films or any other mediums
produced and/or made under this Agreement shall belong to Buyer. These rights
shall include, without limitation intellectual property rights such as
copyrights to all materials produced under this Agreement that contain Athlete’s
likeness, voice, and other physical and non-physical characteristics. The
parties hereto agree and acknowledge that Buyer shall retain and maintain all
property interests including the aforementioned rights in any and all pictures,
photographs, films or any other mediums produced or made under this Agreement.
Buyer acknowledges that Athlete maintains exclusive, absolute and unrestricted
control of the usage of Athlete’s name, voice, photograph and likeness and that
except as set forth in this Agreement no use of the same may be made without
first having secured the prior written approval of Athlete.
Section
18. PERSONAL
NATURE OF THE SERVICES:
It
is
expressly understood and agreed that Athlete’s grant and Athlete’s services and
the rights and privileges granted to Buyer hereunder are of a special, unique,
unusual, extraordinary and intellectual character, giving them a peculiar value,
the loss of which cannot be reasonably or adequately compensated in damages
in
an action at law and Athlete’s failure or refusal to perform Athlete’s required
material obligations hereunder would cause irreparable harm or damage. Should
Athlete fail or refuse to perform such obligations, Buyer shall be entitled
to
seek injunctive or other equitable relief against Athlete to prevent the
continuance of such failure or refusal or to prevent Athlete from performing
services for or granting rights to others in violation of this
Agreement.
Section
19. ASSIGNMENT:
Athlete
may not assign or sub-license this Agreement without the prior written consent
of Buyer, which may be withheld, delayed, or denied for no reason or for any
reason within its sole and absolute discretion. However, Buyer may assign or
sublicense this Agreement to any of its affiliates, parents, or subsidiaries,
provided that no such assignment shall enlarge Athlete’s obligations under this
Agreement; and provided further that Buyer shall remain secondarily liable
with
respect to all of the obligations to Athlete hereunder.
6
Section
20. CONFIDENTIALITY:
Athlete
shall hold all confidential or proprietary information relating to Buyer and
its
affiliates, its products, marketing strategies, business matters, financial
information, internal procedures and its methods of operation, in strictest
confidence and will not, reveal or otherwise transfer, sell or assign any such
information to any third party or use such information for any purpose unrelated
for the services rendered hereunder. This obligation will survive the
termination or expiration of this Agreement.
Section
21. MISCELLANEOUS:
(a) Notices:
Any and
all notices, elections, offers, acceptances, and demands permitted or required
to be made under this Agreement shall be in writing.
(b) Physical
Condition and Appearance:
Athlete
shall inform Buyer of any physical changes that affect Athlete’s
appearance.
(c) Severability:
In the
event any provision, clause, sentence, phrase, or word hereof, or the
application thereof in any circumstances, is held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder hereof, or of the application of any such
provision, sentence, clause, phrase, or word in any other
circumstances.
(d) Entire
Agreement:
This
Agreement (including any exhibits hereto, if any) constitutes the entire
understanding and agreement between Athlete and Buyer hereto and supersedes
any
and all prior or contemporaneous representations, understandings and agreements
between the Athlete and Buyer with respect to the subject matter
hereof..
(e) Governing
Law:
This
Agreement shall be construed in accordance with the laws of the State of New
York applicable to agreements entered into and wholly performed therein. All
parties hereby consent to the exclusive jurisdiction of the courts (state and
federal) located in the Southern District of New York with respect to any
dispute relating to or arising out of this Agreement.
(f) All
correspondence to Athlete will be addressed to:
Xxxxxxx
Xxxxxx
With
a
copy to:
(which
shall not constitute notice)
SFX
Baseball Group
0000
Xxxx
Xxxxxx
Xxxxx
000
Xxxxxx,
Xx. 00000
| Attn: |
Xxxxxxxx
Xxxx
|
| Fax: |
(000)
000-0000
|
All
correspondence to Buyer will be addressed to:
Purple
Beverage Company
000
X.
Xxx Xxxx Xxxx. #000
Xx.
Xxxxxxxxxx, Xx. 33301
| Attn: |
Chief
Executive Officer
|
| Fax: |
000-000-0000
|
7
With
a
copy to:
(which
shall not constitute notice)
Esquire
Sports Marketing, L.L.C.
000-00
Xxxxxxx Xxxxxx Xxxx
Xxxxxxxx,
XX 00000
| Attn: |
Xxxxxx
X. Xxxxxxxx, Esq.
|
| Fax: |
000-000-0000
|
(g) Waivers:
No
waiver, modification or addition to this Agreement shall be valid unless in
writing and signed by the parties to this Agreement. The failure by either
party
to exercise rights granted to such party herein upon the occurrence of any
of
the contingencies set forth in this Agreement shall not constitute a waiver
of
such rights upon the recurrence of such contingency.
(h) Independent
Contractor:
Athlete
acknowledges he is an independent contractor and not an employee of Buyer and
Athlete will be responsible for payment of all income or other taxes resulting
from the entry into this Agreement and the receipt of any compensation, direct
or indirect, therefrom. Accordingly, Buyer shall not withhold, report or pay
so
called withholding taxes, nor will Athlete or Athlete be entitled to any
benefits that may be received by employees of Buyer. Athlete will discharge
all
obligations imposed by any law, regulation or order on Athlete, including,
but
not limited to taxes, unemployment compensation and the filing of all returns
and reports, required of employers and the payment of all taxes, contributions
and other sums required of them. Athlete will indemnify and hold Buyer harmless
from and against any and all claims and demands resulting from Athlete’s failure
to comply with the provisions of this paragraph.
Section
22. COUNTERPARTS:
This
Agreement may be executed by means of facsimile or original copies, and may
be
executed in two (2) or more counterparts, each of which shall constitute an
original but when taken together shall constitute one (1)
agreement.
*
* * *
*
8
IN
WITNESS WHEREOF, duly authorized representatives of the parties hereto execute
this Agreement as of the date first written above.
BUYER:
|
By:
|
/s/
Xxxxxxxx Xxxxxxxxxx
|
|
|
Name:
|
Xxxxxxxx
Xxxxxxxxxx
|
|
|
Title:
|
Chief Executive
Officer
|
|
ATHLETE:
| /s/ Xxxxxxx Xxxxxx |
|
XXXXXXX
XXXXXX
|
9
