Document:

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                                                                   EXHIBIT 10.54

            FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

                  THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "First Amendment") is made and dated as of the 31st day of March, 2005 by
and among CALLAWAY GOLF COMPANY, a Delaware corporation (the "Borrower"), BANK
OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and
each Lender party with the Borrower, the Administrative Agent, Swing Line Lender
and L/C Issuer to the Amended and Restated Credit Agreement dated as of November
5, 2004 (as amended, modified, waived, amended and restated or replaced from
time to time, the "Credit Agreement").

         A. The Borrower has asked the Lenders to amend the Credit Agreement to
modify the Consolidated Interest Coverage Ratio (as such term and other
capitalized terms used, but not otherwise defined in this First Amendment, are
defined in the Credit Agreement) requirement for the period ending March 31,
2005.

         B. On the terms and subject to the conditions of this First Amendment,
the Lenders have agreed to so amend the Credit Agreement.

                  NOW, THEREFORE, in consideration of the above Recitals and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:

                                    AGREEMENT

                  1. Amendment. A proviso is added at the end of Section 7.11(d)
of the Credit Agreement that reads as follows: "provided that, if the
Consolidated LTM EBITDA as of March 31, 2005 is not less than minus (negative)
$10,000,000 this covenant to maintain a minimum Consolidated Interest Coverage
Ratio shall not apply for the fiscal period ending March 31, 2005."

                  2. Conditions to Effectiveness. As conditions precedent to the
effectiveness of this First Amendment, (a) there shall have been delivered to
the Administrative Agent counterpart copies of this First Amendment signed by
the Borrower and Required Lenders and acknowledged by each Guarantor, (b) the
representations and warranties of each Loan Party contained in this First
Amendment and in each of the other Loan Documents shall be accurate and complete
in all material respects as of the date of this First Amendment except to the
extent relating solely to a prior date, (c) there shall not have occurred and be
continuing any Default and (d) the Borrower shall have paid to the
Administrative Agent, individually or for the account of the Required Lenders,
such amendment fees as the parties shall separately have agreed in writing.

                  3. Representations and Warranties of the Borrower. As an
inducement to the Lenders to enter into this First Amendment, the Borrower
represents and warrants to each Lender that (a) the Credit Agreement, as amended
hereby, constitutes the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, or similar
Laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability, (b) no Default has occurred and is
continuing and (c) no event or circumstance since the financial statements as of
December 31, 2004 delivered to the Lenders pursuant to Section 6.01 of the
Credit Agreement has had, or could reasonably be expected to have, either
individually or in the aggregate a Material Adverse Effect.

<PAGE>

                  4. MISCELLANEOUS PROVISIONS. THIS FIRST AMENDMENT MAY BE
EXECUTED IN ONE OR MORE COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL,
BUT ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT AND,
TOGETHER WITH THE CREDIT AGREEMENT, COMPRISES THE COMPLETE AND INTEGRATED
AGREEMENT OF THE PARTIES ON THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDES
ALL PRIOR AGREEMENTS, WRITTEN OR ORAL, ON SUCH SUBJECT MATTER. IF ANY PROVISION
OF THIS FIRST AMENDMENT IS HELD TO BE ILLEGAL, INVALID OR UNENFORCEABLE, THE
LEGALITY, VALIDITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS OF THIS FIRST
AMENDMENT SHALL NOT BE AFFECTED OR IMPAIRED THEREBY .THIS FIRST AMENDMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN
ALL RIGHTS ARISING UNDER FEDERAL LAW.

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
duly executed as of the date first above written.

              CALLAWAY GOLF COMPANY

              By:                /s/ Bradley J. Holiday
                  --------------------------------------------------------------

              Name: Bradley J. Holiday
                    ------------------------------------------------------------

              Title: CFO
                     -----------------------------------------------------------

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            BANK OF AMERICA, N.A., as Administrative Agent

            By:  /s/ Dora A. Brown
            -----------------------------------------------------------------
                 Dora A. Brown, Vice President Agency Management Officer

            BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swing Line Lender

            By:  /s/ Gordon Wiens
            -----------------------------------------------------------------
                 Gordon Wiens, Senior Vice President

            UNION BANK OF CALIFORNIA, N.A., as Syndication Agent and a Lender

            By:  /s/ Douglas S. Lambell
            ----------------------------------------------------------------

            Name:    Douglas S. Lambell
            ----------------------------------------------------------------

            Title:   Vice President/SCM
            ----------------------------------------------------------------

            JPMORGAN CHASE BANK, N.A., as Documentation Agent and a Lender

            By:  /s/ Clara Sohan
            ----------------------------------------------------------------

            Name:    Clara Sohan
            ----------------------------------------------------------------

            Title:   Vice President
            ----------------------------------------------------------------

            COMERICA WEST INCORPORATION, as a Lender

            By:  /s/ Elise Walker
            ----------------------------------------------------------------

            Name:    Elise Walker
            ----------------------------------------------------------------

            Title:   Vice President
            ----------------------------------------------------------------

            FIFTH THIRD BANK, as a Lender

            By:  /s/ Gary Losey
            ----------------------------------------------------------------

            Name:    Gary Losey
            ----------------------------------------------------------------

            Title:   AVP - Relationship Manager
            ----------------------------------------------------------------

            CITIBANK (WEST), F.S.B., as a Lender

            By:  /s/ Dennis Jans
            ----------------------------------------------------------------

            Name:    Dennis Jans
            ----------------------------------------------------------------

            Title:   Vice President
            ----------------------------------------------------------------

<PAGE>

                                  REAFFIRMATION

         AS OF THE DATE FIRST ABOVE WRITTEN, EACH OF THE UNDERSIGNED GUARANTORS
acknowledges receipt of a copy of the foregoing First Amendment, reaffirms each
of the Loan Documents to which it is a party (the "Guarantor Documents"),
acknowledges that the execution and delivery of the First Amendment and the
performance of the Credit Agreement, as amended thereby, have no affect on such
Guarantor's agreements and obligations under the Guarantor Documents, all of
which remain the legal, valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with their respective terms
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.

                                                 CALLAWAY GOLF SALES COMPANY

                                                 By:       /s/ Julie Maloy
                                                    ----------------------------

                                                 Name: Julie Maloy
                                                       -------------------------

                                                 Title: CFO
                                                       -------------------------

                                                 THE TOP-FLITE GOLF COMPANY

                                                 By:    /s/ Bradley J. Holiday
                                                    ----------------------------

                                                 Name: Bradley Holiday
                                                      --------------------------

                                                 Title: CFO
                                                       -------------------------

                                                 CALLAWAY GOLF INTERACTIVE, INC.

                                                 By:     /s/ David Schofman
                                                    ----------------------------

                                                 Name: David Schofman
                                                      --------------------------

                                                 Title: CEO
                                                       -------------------------<PAGE>

                                                                   EXHIBIT 10.19
                              EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into this 26th
day of August, 2004, and by and between Absorption Corp., a Nevada Corporation
(the "Company"), and Doug Ellis, an individual resident of the Province of
British Columbia, (the "Executive").

                                   WITNESSETH:

WHEREAS, the Executive has heretofore been engaged by International Absorbents,
Inc. (the "Parent Company") to look after manufacturing, production and
operations of the Company and has the experience to provide services;

WHEREAS, the Company desires to retain the services of the executive, and the
Executive desires to be employed by the Company for the term of this Agreement
and each wants the terms and conditions as set out herein;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, the Company and the Executive, intending to be
legally bound, hereby agree as follows:

1.   EMPLOYMENT

     The Company hereby employs the Executive as Chief Operations Officer in
     charge of manufacturing, production and operations and the Executive
     accepts such employment and agrees to perform services for the Company,
     subject always to such resolutions as are established from time to time by
     the Board of Directors of the Company, for the period and upon the other
     terms and conditions set forth in this Agreement. This contract shall be
     valid through October 20, 2005, which is the term of the employee's work
     visa. If the work visa is renewed then this contract will be extended
     subject to the terms of section 2.(retirement).

2.   RETIREMENT

     It is further understood that at the age of 60 years the contract shall be
     reduced to a term of one year and renewable each year automatically if
     neither party gives 90 days written notice to the other of their intention
     to terminate this agreement. The term of the Executive's employment
     hereunder is subject to earlier termination as hereafter specified save and
     except that there will be no severance pay or benefits that extends beyond
     the age of 65 years.

3.   POSITION AND DUTIES

3.1  SERVICE WITH THE COMPANY

     During the term of this Agreement, the Executive agrees to perform the
     duties of Chief Operations Officer in charge of manufacturing, production
     and operations including additional executive duties as the Company's Board
     of Directors (the "Board") shall assign to him from time to time, and is
     customary for a similar position within the Company's industry.

3.2  HOME OFFICE

     The Company recognizes that as the Executive resides in Canada that he may
     need from time to time to have an office at home with the necessary tools
     and services to be able to carry on his functions from there. It is
     understood that such additional equipment, furniture, other supplies and/or
     other services will be at the Executive's cost. Nothing in this clause is
     to relieve the Executive of his duties which include being available on a
     day to day basis when the Company requires him.

3.3 NO CONFLICTING DUTIES

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     During the term hereof, the Executive shall devote reasonable time, effort
     and skill to managing the manufacturing production and operations as Chief
     Operations Officer of the Company, and will offer any directly relevant
     business opportunity he encounters to the Company. The Executive hereby
     confirms that he is under no contractual commitments inconsistent with his
     obligations set forth in this Agreement, and that during the term of this
     Agreement, he will not render or perform services, or enter into any
     contract to do so, for any other company, firm, entity or person which are
     inconsistent with the provisions of this Agreement.

4.   COMPENSATION

4.1  BASE SALARY

     As compensation for all services to be rendered by the Executive under this
     Agreement, the Company shall pay to the Executive a base annual salary of
     $11,212.50 per month (the "Base Salary") which shall be paid commencing on
     February 1, 2004 on a regular basis in accordance with the Company's normal
     payroll procedures and policies together with all the Company's benefits.
     The Executive's compensation will be reviewed on the same schedule as the
     other executives of the Company.

4.2  BONUS

     The Board of Directors of the Company shall set and determine each year how
     bonuses will be awarded based on criteria agreed to by the Executive and
     the Company. The bonus to be distributed will be determined by the
     Compensation Committee in consultation with such persons as are necessary
     as soon as possible after the financial results from the year are
     available. It will be based primarily upon the target criteria as set at
     the beginning of the fiscal year.

4.3  LONG TERM INCENTIVE

     The Company agrees to maintain a long term incentive plan using stock
     options, stock grants or other long term incentives which may provide for
     cash, other remuneration or the issuance of stock options and granting of
     shares under the rules and policies of the applicable governing securities
     exchange rules for the stock of The Parent Company.

4.4  PARTICIPATION IN BENEFIT PLANS

     The Executive shall be included to the extent eligible thereunder in any
     and all plans of the Company providing general benefits for the Company's
     Executives, including but not limited to Group Life Insurance,
     Hospitalization, Disability, Medical, Dental, Pension, Profit Sharing,
     Savings and Stock Bonus Plans. The Executive's participation in any such
     plan or program shall be subject to the provisions, rules and regulation
     applicable thereto. If for any reason the Executive cannot participate in
     such program, his compensation will be adjusted in the cash equivalent.
     Also, if the Executive pays United States payroll taxes for which he
     currently is not eligible to receive benefits as a result of his current or
     prior Canadian residency, his compensation will be adjusted in the cash
     equivalent.

4.5  EXPENSES

     In accordance with the Company's policies established from time to time,
     the Company will pay or reimburse the Executive for all reasonable and
     necessary out-of-pocket expenses incurred by him in the performance of his
     duties under this Agreement, subject to the presentment of appropriate
     vouchers.

4.6  VACATION TIME

     Executive shall be entitled to take paid vacation time of up to four (4)
     weeks per year, in addition to the normal holidays when the business office
     is closed.

5.   COMPENSATION UPON THE TERMINATION OF THE EXECUTIVE'S EMPLOYMENT

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     The Executive has been engaged by International Absorbents, Inc. since
     April 4, 1986.

5.1  SEVERANCE WAGES

     The Executive is to receive severance compensation and benefits under the
     terms of this Agreement, the compensation and bonus shall be 24 months. The
     bonus calculation will be based on the previous 2 year average.

5.2  SEVERANCE BENEFITS

     In the event of termination of the Executive and his entitlement to
     severance wages as provided in 5.1 the Executive shall be entitled to
     receive the same severance benefits that went along with his salary for the
     length of time set out in paragraph 5.1. If the executive has not moved to
     the United States during the term of this contract and has not qualified to
     receive U.S. Social Security benefits at the end of this severance salary
     continuation, then he shall be compensated for Social Security payroll
     taxes paid since January 1, 2004. In lieu of this compensation, the company
     reserves the right to extend severance wages with the minimum payment(s)
     that would complete the Executive's qualification for Social Security
     benefits.

5.3  DISABILITY BENEFITS

     In the event the Executive is terminated pursuant to Section 8.1
     (disability) and is entitled to receive benefits from a plan to which the
     Company contributed to disability benefits and such disability benefits
     cease prior to the time set out in paragraph 5.1. Then the Company will
     continue to pay the Executive his salary for the balance of the time
     remaining as set out in 5.1 together with his benefits that may still be
     applicable and not being covered by the disability insurance as set out in
     5.2. If the benefits are not covered in the disability plan or the
     disability plan term has run out prior to the time set out in 5.1 then the
     Company will pay the same directly to the Executive or pursuant to the
     Executive's direction to the provider of such coverage. Any stock options
     or stock grants shall continue until they expire or such shorter period of
     time as is required under securities legislation in Washington State, The
     United States of America and British Columbia. The Compensation Committee
     will evaluate the appropriateness of partial bonus achievement prior to the
     time of disability.

5.4  SEVERANCE ON DEATH.

     In the event the Executive's employment is terminated pursuant to Section
     8.2 (death), the Executive's beneficiary or a beneficiary designated by the
     Executive in writing to the Company, or in the absence of such beneficiary,
     the Executive's estate, shall be entitled to receive the Group Life
     Insurance which are part of the Company benefits and in the absence of any
     group life insurance or other life insurance benefits contributed to or
     organized by the Company then the estate of the executive shall receive the
     amounts set out in 5.1 and those that may be payable to the estate under
     5.2. Any options or stock grants shall continue to their expiry date or
     such shorter period of time as is required under securities legislation in
     Washington State and The United States of America and British Columbia.

5.5  SEVERANCE ON TERMINATION FOR CAUSE

     In the event that the Executive's employment is terminated pursuant to
     Sections 8.3 (termination for cause), then he shall not be entitled to any
     compensation other than his current Base Salary which has accrued and any
     benefits set out in 5.2 calculated only to the date of termination. In the
     event that Executive's employment is terminated pursuant to Section 8.4
     (resignation), he shall be entitled to his then current Base Salary, any
     benefits to the date of termination only and any bonus, if such, is accrued
     or calculated monthly through to the date of termination.

5.6  SEVERANCE ON TERMINATION WITHOUT CAUSE

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     In the event the Executive is terminated by the Company pursuant to Section
     8.5 (Termination without Cause), the Executive shall receive severance as
     set out in Sections 5.1 and 5.2 of this Agreement.

5.7  PAYMENT OF SEVERANCE

     All payments required to be made by the Company to the Executive pursuant
     to this Section 5 shall be paid in the manner and at the times specified in
     Section 4.1 hereof. Any notice given to the Executive pursuant to Section 8
     shall be counted as part of the time calculated and the payments of
     benefits.

6.   CONFIDENTIALITY INFORMATION.

     Except as permitted or directed by the Company's Board, the Executive shall
     not during the term of his employment under this Agreement or at any time
     thereafter divulge, furnish, disclose or make accessible (other than in the
     ordinary course of the business of the Company) to anyone for use in any
     way, any confidential or secret knowledge or information of the Company
     which the Executive has acquired or become acquainted with or will acquire
     or become acquainted with during the period of his employment by the
     Company (including employment by the Company prior to the date of this
     Agreement), whether developed by himself or by others, concerning any trade
     secrets, confidential or secret designs, processes, formulae, software or
     computer programs, plans, devices or material (whether or not patented or
     patentable, copyrighted or copyrightable) directly or indirectly useful in
     any aspect of the business of the Company, any confidential customer or
     supplier lists of the Company, any confidential or secret development or
     research work of the Company, price lists, know how, forecasts, or any
     other confidential, secret or non-public aspects of the business of the
     Company. The Executive acknowledges that the above-described knowledge or
     information constitutes a unique and valuable asset of the Company acquired
     at great time and expense by the Company, and that any disclosure or other
     use of such knowledge or information other than for the sole benefit of the
     Company would be wrongful and would cause irreparable harm to the Company.
     Both during and after the term of this Agreement, the Executive will
     refrain form any acts or omissions that would reduce the value of the use
     of such knowledge or information to the Company. The foregoing obligations
     of confidentiality, however, shall not apply to any knowledge or
     information which is now published or which subsequently becomes generally
     publicly known, other that as direct or indirect result of the breach of
     this Agreement by the Executive.

7.   NON COMPETITION

     The Executive agrees that during the term of this Agreement, he will not,
     directly or indirectly, assist or encourage any other person in carrying
     out, directly or indirectly, any activity that would be prohibited by the
     above provisions of this Section, if such activity were carried out by the
     Executive, either directly or indirectly, and in particular the Executive
     agrees that he will not, directly or indirectly, induce any employee of the
     Company to carry out, directly or indirectly, any such activity.

7.1  The Executive agrees not to directly or indirectly or otherwise assist,
     encourage any person to be involved in any manner to invest or promote any
     business or activity of a similar nature if the Executive has terminated
     this Agreement pursuant to Sections 8.1, 8.4 or 8.6 of this Agreement for a
     period of ONE (1) YEAR or for the length of the severance pay, whichever is
     the longer, from the date of termination.

8.   TERMINATION PRIOR TO EXPIRATION OF THE TERM

8.1  DISABILITY

     The Executive's employment shall terminate upon the Executive's becoming
     totally or permanently disabled for a period of six (6) months or more for
     purposes of this Agreement, the term "totally or permanently disabled" or
     "total or permanent disability" means Executive's inability on account of
     sickness or accident whether or not job-related, to engage in regularly or
     to perform adequately his assigned duties under this Agreement. The Board
     of Directors shall determine, acting reasonably and bona fide, whether

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     the Executive can engage in regularly or perform adequately his assigned
     duties using the reports of doctors and such other information as may be
     helpful. The Board may seek such advice as it deems necessary to make such
     determination.

8.2  DEATH OF EXECUTIVE

     The Executive's employment shall terminate immediately upon the death of
     the Executive.

8.3  TERMINATION FOR CAUSE

     The Company may terminate the Executive's employment at any time for
     "Cause" (as hereinafter defined) immediately upon written notice to
     Executive. Such written notice shall set forth with reasonable specificity
     the Company's basis for such termination. As used herein, the term "Cause"
     shall mean that the Executive shall have (i) in the reasonable judgment of
     the Board of Directors committed a criminal act or an act of fraud,
     embezzlement, breach of trust or other act of gross misconduct, (ii)
     willfully violated written corporate policy or rules of the Company, or
     (iii) in the reasonable judgment of the Board of Directors, willfully
     refused to follow the reasonable written directions given by the Board of
     Directors from time to time or breached any covenant or obligation under
     this Agreement or other agreement with the Company or (iv) has acted in
     such a manner that his actions constitute gross dereliction of his duties
     as set out by the Company from time to time.

8.4  RESIGNATION

     The Executive's employment shall be terminated on the earlier of the date
     that is one (1) month following the written submission of the Executive's
     resignation to the Board or the earlier date such resignation is accepted
     by the Board.

8.5  TERMINATION WITHOUT CAUSE

     The Company may terminate the Executive's employment without cause upon
     written notice to the Executive. Termination "without cause" shall mean
     termination of employment on any basis other than termination of
     Executive's employment hereunder pursuant to Sections 8.1, 8.2. 8.3 or 8.4.
     Notice by the Company that this Agreement shall not be renewed as defined
     in Section 2 herein, shall be defined as termination without cause
     entitling the Executive to compensation as defined in Section 5.1 and 5.2
     with the maximum payment being only to age 65. The company shall make every
     reasonable effort to renew the work Visa and any action that that may
     hinder this objective shall be deemed "Termination without cause".

8.6  SALE OF COMPANY OR INTERNATIONAL ABSORBENTS INC.

     Should the Company's assets be sold or more than 51% of the capital stock
     of the Company be sold or should the control of International Absorbents
     Inc. (the owner of 100% of the issued and out standing shares of the
     Company) change such that sixty (60%) percent of the then present Board
     changes and not because of retirement, incapacity, sickness or voluntary
     resignation causing a change in management practice of the Company then the
     Executive shall be entitled to receive all options or stock grants made
     subject to the provisions of the option plan or stock grant plan in force
     with the Company at the time and any additional incentive packages granted,
     but which have not vested immediately upon the sale of the Company or
     change of control being completed and all such compensation shall be dealt
     with in the same manner as for all other Executives of the Company, unless
     such Executive has different terms to his/her contract.

     Should the management change the Executive's duties or make the execution
     of the duties such that the Executive would have the right to claim
     constructive dismissal then the executive shall have the right to claim
     severance as if he had been terminated without cause. The Executive has an
     equivalent right to severance if such constructive dismissal results from
     the sale of the Company assets. Should the Executive be successful in such
     claim then the Executive shall be entitled to all reasonable lawyer's costs
     and disbursements that he has incurred in prosecuting such suit including
     any other costs that were necessary.

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8.7  SURRENDER OF RECORDS AND PROPERTY

     Upon termination of his employment with the Company, the Executive shall
     deliver promptly to the Company all records, manuals, books, blank forms,
     documents, letters, memoranda, notes, notebooks, reports, data, tables,
     calculations or copies thereof, which are the property of the Company and
     which relate in any way to the business, products, practices or techniques
     of the Company, and all other property, trade secrets and confidential
     information of the Company, including, but not limited to, all documents
     which in whole or in part contain any trade secrets or confidential
     information of the Company, which in any of these cases are in his
     possession or under his control.

9.   ASSIGNMENT

     This Agreement shall not be assignable, in whole or in part, by either
     party without the written consent of both parties, except for a Change in
     Control as defined in Paragraph 8 and 8.6. Upon such assignment by the
     Company, the Company shall obtain the Assignees' written agreement
     enforceable by Executive to assume and perform, from and after the date of
     such assignment the terms, conditions and provisions imposed by the
     Agreement upon the Company. After any such assignment by the Company and
     such written agreement by the Assignee, the Company shall be discharged
     from all further liability hereunder and such assignee shall thereafter be
     deemed to be the Company for the purposes of all provisions of this
     Agreement including the Section 9. It is agreed by both parties to this
     Agreement that in the case of a change of control of the Company as defined
     in Section 8.6 of this Agreement, that this Agreement shall be
     automatically assigned to the new controlling entity.

10   INDEMNIFICATION

     The Company shall indemnify Executive as provided in the Company's Bylaws.

10.1 DIRECTORS AND OFFICERS INSURANCE

     The Company shall maintain Directors and Officers insurance as decided by
     the Board of Directors from time to time required to protect the Executive
     from claims made against him as a result of his duties and performance of
     his employment with the Company.

11   GENERAL PROVISIONS

11.1 GOVERNING LAW

     This Agreement is made under and shall be governed by and construed in
     accordance with the laws of the State of Washington.

11.2 WITHHOLDING TAXES

     The Company may withhold from any benefits payable under this Agreement all
     federal, provincial, state, city or other taxes as shall be required
     pursuant to any law or governmental regulation or ruling.

11.3 AMENDMENTS

     No amendment or modification of this Agreement shall be deemed effective
     unless made in writing signed by the parties hereto.

11.4 NO WAIVER

     No term or condition of this Agreement shall be deemed to have been waived
     nor shall there be any estoppel to enforce any provisions of this
     Agreement, except by a statement in writing signed by the party

                                       6
<PAGE>

     against whom enforcement of the waiver or estoppel is sought. Any written
     waiver shall not be deemed a continuing waiver unless specifically stated,
     shall operate only as to the specific term or condition waived and shall
     not constitute a waiver of such term or condition for the future or as to
     any act other than that specifically waived.

11.5 SEVERABILITY

     To the extent any provision of this Agreement shall be invalid or
     unenforceable, it shall be considered deleted here from and the remainder
     of such provision and of this Agreement shall be unaffected and shall
     continue in full force and effect. In furtherance and not in limitation of
     the foregoing, should the duration or geographical extent of, or business
     activities covered by any provision of this Agreement be in excess of that
     which is valid and enforceable under applicable law, then such provision
     shall be construed to cover only that duration, extent or activities which
     may validly and enforceably be covered. The Executive acknowledges the
     uncertainty of the law in this respect and expressly stipulated that this
     Agreement shall be given the construction which renders its provisions
     valid and enforceably to the maximum extent (not exceeding its express
     terms) possible under applicable law.

11.6 SURVIVAL

     Sections 6, 7, 8.7 and 9 shall survive termination of this Agreement.

11.7 ENTIRE AGREEMENT

     This Agreement constitutes the entire understanding and agreement between
     Executive and Company with respect to the transactions contemplated herein
     and supersedes any and all prior or contemporaneous oral or written
     communications with respect to the subject matter hereof, all of which are
     merged herein. It is expressly understood and agreed that, there being no
     expectations to the contrary between the parties hereto no usage of trade
     or other regular practice or method of dealing between the parties hereto
     shall be used to modify, interpret, supplement or alter in any manner the
     express terms of this Agreement or any part hereof. This Agreement shall
     not be modified, amended or in any way altered except by an instrument in
     writing signed by both of the parties hereto.

IN WITNESS WHEREOF, the parties have executed and sealed this Agreement as of
the day and year set forth above.

ABSORPTION CORP.

GORDON ELLIS, CEO                                DANIEL WHITTLE, INTERNATIONAL
                                              Absorbents, Inc. Compensation Comm

     /s/ Gordon Ellis                                    Daniel Whittle
------------------------------                ---------------------------------

DOUG ELLIS

     /s/ Doug Ellis
------------------------------

ATTEST:

     /s/ David Thompson
------------------------------

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