Exhibit 10.13
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is entered into on December 30,
1996, by and between Hartcourt Companies, Inc., a Utah corporation and its
subsidiaries or affiliates (the "Company"), and American Equities LLC, a
California limited liability company ("Consultant").
WHEREAS, the Company's desires to acquire, manage and develop a large real
estate portfolio for its real estate division (the "Business"), including, but
not limited to, office, retail, industrial and multi-family properties, and raw
land;
WHEREAS, the Company recognizes that the Consultant can contribute to the
acquisition, management and development of a real estate portfolio;
WHEREAS, the Company believes it to be important both to the future prosperity
of the Business and to the Company's general interest to retain Consultant as an
exclusive consultant to the Company and have Consultant available to the Company
for consulting services in the manner and subject to the terms, covenants, and
conditions set forth herein;
WHEREAS, the Company and Consultant have entered into that agreement dated
December 20, 1996 which contains a summary of the provisions herein (the "Term
Sheet") and hereby desire to more fully document the agreement contained in the
Term Sheet in accordance with the provisions therein; and
WHEREAS, in order to accomplish the foregoing, the Company and Consultant desire
to enter into this Agreement, effective on January 1, 1997, to provide certain
assurances as set forth herein.
NOW THEREFORE, in view of the foregoing and in consideration of the premises and
mutual representations, warranties, covenants and promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound hereby
agree as follows:
1. RETENTION. The Company hereby retains the Consultant during the
Consulting Period (as defined in Section 2 below), and Consultant
hereby agrees to be so retained by the Company, all subject to the
terms and provisions of this Agreement.
2. CONSULTING PERIOD. The Consulting Period shall commence on January
1, 1997 and terminate no earlier than December 31, 2001. After December
31, 2001, either party may terminate this agreement upon at least 30
days written notice.
3. DUTIES OF CONSULTANT. During the Consulting Period, the Consultant
shall use reasonable and best efforts to perform those actions and
responsibilities necessary to analyze, purchase, sell, refinance and
manage real property (the "Services"), throughout the world. Consultant
shall render such services diligently and to the best of its ability.
Consultant shall report to Xx. Xxxx X. Xxxx, President. Consultant
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shall present various opportunities to the Company, and the Company
shall be under no obligation to accept such opportunities. The Company
shall not retain or hire any other person to perform services similar
or related to the Services, including but not limited to, real estate
brokers, mortgage brokers or property managers. The Company shall
provide all necessary financing required in order to purchase
properties approved by the Company, including cash or freely tradable
or restricted securities. Such securities may include freely tradable
Common Stock, restricted Common Stock, preferred stock in the Company,
debt, convertible debt or any other security.
4. OTHER ACTIVITIES OF CONSULTANT. The Company recognizes the Consultant
shall perform only those services that are reasonably required to
accomplish the goals and objectives set forth herein, and that
Consultant shall provide services to other businesses and entities
other than the Company. Consultant shall be free to directly or
indirectly own, manage, operate, join, purchase, organize or take
preparatory steps for the organization of, build, control, finance
acquire, lease or invest or participate in the ownership, management,
operation, control or financing of, or be connected as an officer,
director, employee, partner, principal, manager, agent,
representative, associate, consultant, investor, advisor or otherwise
with (collectively, be "Affiliated" with), any business or enterprise,
or permit its name or any part thereof to be used in connection with
any business or enterprise engaged in any business, including but not
limited to, any business that is the same as, substantially similar to
or otherwise competitive with, adverse, to affiliated with, or
otherwise related to the Company. Consultant may be Affiliated with any
entity which may provide services to the Company. In the event
Consultant is Affiliated with any entity which proposes to sell real
property to, or purchase real property from, the Company, Consultant
shall disclose the nature of such relationship to the Company prior to
the Company making any decision, and shall obtain the approval of the
Company, which approval shall be conclusively deemed granted upon
written notice from Xx. Xxxx X. Xxxx or his or the Company's designated
representative. The Company hereby waives any conflict of interest that
may arise from a relationship between Consultant and any entity which
Consultant is Affiliated with. This Agreement may be assigned by
Consultant to an entity designated by Consultant, whether Affiliated or
not Affiliated with Consultant, and wherever located.
Consultant shall present any real estate project which it is
considering acquiring for its own account first to the Company, and
Consultant hereby grants to the Company an exclusive right to acquire
any such real estate project prior to Consultant making such
acquisition for its own account. In the event that the Company elects
not to go forward with said acquisition of real property, Consultant
may, in and for its own account, acquire said property.
5. COMPENSATION. In consideration for Consultant entering into this
Agreement, the Company shall compensate Consultant as follows:
a. MONTHLY FEES AND BENEFITS:
I. Retainer. The Company shall pay to Consultant a
non-refundable monthly retainer of $5,000.
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ii. Expenses. The Company shall pay all such expenses
reasonably incurred during the Consulting Period
by the Consultant for business purposes related to
or in furtherance of the goals and objectives of
the Company and/or the provision of the Services
(collectively, "Company Purposes"), including,
without limitation, expenses incurred with respect
to the Consultant's travel (including business
class travel for flights of less than three hours
and first class travel for flights of three hours
or more), meals and entertainment and other
customary and reasonable expenses for Company
Purposes. The Company shall pay such expenses
directly, or, upon submission of bills, receipts
and/or vouchers by the Consultant, by direct
reimbursement to the Consultant.
iii. Automobile Allowance. The Company shall pay to
Consultant an automobile allowance of $750 per
month, and shall pay for fuel, maintenance and
automobile insurance. The Company acknowledges that
Consultant may have a master automobile insurance
policy covering more than one automobile, and that,
for purposes of this paragraph, Consultant will
reasonably determine the portion of the insurance
premium to be allocated to the automobile used by
Consultant for Company Purposes.
iv. Benefit Plans. Two employees of Consultant, which
shall be designated by Consultant, shall be
entitled to participated in and receive benefits
under any retirement plan, health and dental plan,
disability plan and life insurance plan or employee
benefit plan or arrangement currently or in the
future made available by the Company to its
employees and/or consultants ("Benefit Plans") and
to which Consultant is eligible, in accordance with
the terms, conditions and overall administration of
such Benefit Plans; provided, however, that if
under the terms of any Benefit Plan, the Company
shall provide the Consultant with benefits that are
substantially similar to the benefits that would
have been provided under such Benefit Plan. At the
Company's option, and with at least 30 days notice,
in lieu of providing the benefits under any or all
of the Benefit Plans, the Company may elect to pay
to the Consultant a monthly amount equal to the
Company's cost of providing such benefits to
Consultant. Nothing in this Agreement shall limit
the Company's ability to adopt, terminate or amend
any such benefits at any time provided the
Consultant is provided with benefits that are at
least substantially similar to the benefits
provided prior to such adoption, amendment
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or termination. Any Benefit Plans that are
determined according to annual compensation shall
be calculated assuming an annual salary of $250,000
for each of Consultant's two designated employees.
b. Advance. The Company shall pay to the Consultant the
following advance and Warrants (as defined below). The
Warrants and any unearned portion of the advance described in
this section shall not be refundable and shall be considered
earned by Consultant in the event the Agreement is terminated
by the Company, with or without cause.
i. The Company shall transfer or cause to be
transferred 1,000,000 shares of the Company's
common stock (the "Common Stock") as an advance
against future fees to be earned from the
acquisition, sale or refinance of real property, or
any other fees due and payable hereunder. Such
Common Stock shall not be freely tradable. The
Company shall be obligated to prepare and file a
registration statement (the "Registration
Statement") and amendments thereto, with the
Securities and Exchange Commission (the
"Commission") for the registration of the Common
Stock under the Securities and Exchange Act of 1933
(the "Act)") and shall be obligated to cause such
registration statement, and amendments thereto, to
be declared effective by the Commission on or prior
to May 1, 1997. The Company shall be obligated to
the Consultant to continually maintain, at the
Company's own expense, the currency and
effectiveness of such registration statement of the
Company, including the filing of any and all
applications and other notifications, filings and
post effective amendments and supplements
(collectively, the "Current Registration
Statement"), as may be necessary, so as to permit
the resale of the Common Stock until the earlier of
the time that all shares of Common Stock have been
sold pursuant to the Current Registration Statement
or two years from the date of the effectiveness of
the Registration Statement. In lieu of filing such
Registration Statement, the Company may exchange
the Common Stock for common stock of the Company,
which is freely tradable pursuant to a registration
statement filed on Form S-8.
As fees are earned pursuant to paragraph 5(d) below, the advance
will be considered earned at the rate equal to the Bid Price on the
date prior to the date of this Agreement. For example, if the Bid
Price on the date prior to the execution of this Agreement was $3.00,
then the advance will have been earned after the Consultant will have
become entitled to $3,000,000 of fees pursuant to paragraph 5(d)
below.
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c. WARRANTS. The Company shall issue warrants to purchase Common
Stock (the "Warrants"), which shall vest immediately, and which
may be exercised by Consultant at any time through the payment
of cash or a promissory note bearing interest at six percent
(6%) per annum, at Consultant's option. The exercise price of
the Warrants shall be based on the closing bid price of the
Common Stock as quoted on the NASDAQ Bulletin Board, or such
other U.S. stock market as it shall be quoted on, on the day
prior to the date of this Agreement (the "Bid Price"). The
Company shall, at its sole expense, cause the Common Stock
underlying the Warrants to be registered with the Securities and
Exchange Commission upon demand, or upon the first registration
of any of the Common Stock of the Company after the date of this
Agreement. In the event the Company issues or sells Common Stock
or any other equity securities of the Company after the date of
this agreement to any party other than Consultant for cash
consideration or non-cash consideration which has a fair value
below the closing bid price as of the date prior to such
issuance or sale, the terms of the Warrants herein shall be
adjusted so as to protect Consultant against any dilution of its
interest in the Common Stock underlying the Warrants. Within
five business days of the execution of this Agreement, the
Company shall issue the following Warrants to Consultant and/or
its assignee:
I. 400,000 Warrants at 20% of the Bid Price
ii. 400,000 Warrants at 40% of the Bid Price
iii. 400,000 Warrants at the Bid Price
iv. 400,000 Warrants at 120% of the Bid Price
v. 400,000 Warrants at 140% of the Bid Price
d. ACQUISITION AND DISPOSITION FEES. The Company shall pay to the
Consultant the following fees for the acquisition or sale of
real property in each year during the Consulting Period, which
fees may be paid in cash or Common Stock at the closing of each
transaction:
I. Six percent (6%) of the first 100,000,000 of gross purchase
or sale price in each year;
ii. Five percent (5%) of the second $100,000,000 of gross
purchase or sale price in each year;
iii. Four percent (4%) of the third $100,000,000 of gross
purchase or sale price in each year;
iv. Three percent (3%) of the fourth $1,000,000 of gross
purchase or sale price in each year;
v. Two percent (2%) of the fifth $1,000,000 of gross purchase
or sale price in each year;
vi. 1%of the aggregate gross purchase and sales prices in each
year during the Consulting Period in excess of $600,000,000
on any one year.
e. PROPERTY MANAGEMENT, ASSET MANAGEMENT AND REFINANCING FEES. The
Company shall pay to Consultant the following fees for services
to be provided:
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i. Management Fee: Six percent (6%) of all gross income
or receipts from all properties owned or controlled by
the Company ("Company Properties"), including, but not
limited to, rental fees, storage fees, application fees and
any other operating income.
ii. Asset Management Fee: One percent (1%) per annum of the
gross value of all real property assets owned by the
Company, including, but not limited to, all Company
Properties.
iii. Refinancing Fee: One percent (1%) of the gross amount of
all refinancings that take place on any of the real
property assets owned or controlled by the Company.
iv. All fees under this section shall be payable monthly
commencing January 1, 1997. In the event the Company shall
defer payment of such fees, for a maximum of six months
from January 1, 1997, the deferred fees shall accrue
interest at 1% per month.
f. THIRD PARTY COMMISSIONS. Consultant and/or its Affiliates shall
be entitled to share in any fees or commissions payable by third
parties on any transaction contemplated herein, including, but
not limited to, real estate or mortgage brokerage commissions
payable by third party sellers or purchasers arising from any
acquisition or sale of real property by the Company (a
"Commission"). The Company hereby waives any conflict of
interest that may arise due to any transaction wherein
Consultant receives such a Commission, including, but not
limited to, any conflict of interest which may arise as a result
of the dual representation by Consultant of the seller or
purchaser of real property on the one hand, and the Company on
the other. The Company acknowledges that, from time to time, the
Consultant may present to the Company as a possible acquisition
real property owned or controlled by Consultant. Consultant
shall fully disclose to the Company the nature of Consultant's
interest in such real property prior to the Company entering
into any agreement to purchase said real property. In cases in
which Consultant owns or controls all or any part of real
property which has been presented to the Company as a possible
acquisition, the Company is encouraged, and shall have the right
to retain an unaffiliated consultant to assist the Company in
evaluating that property only.
6. OFFICE AND STAFF. The Company shall provide Consultant with a
reasonable office and staff, along with the necessary costs and
expenses to carry out the objectives of the Company. Such office and
staff shall be commensurate with the offices and staff reasonably
required by other companies with similar real estate assets and
operations. It is acknowledged that until such time as additional
office space and personnel are needed to service the real estate
operations of, and properties acquired by, the Company, the Company
will provide an executive suite to Consultant in the West Los Angeles
area at an approximate cost of $2,000 per month, plus operating
expenses including, but not limited to, telephone (including cellular),
utility, facsimile and copy machine charges as well as required office
staff.
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7. TERMINATION. Subject to the cure provisions contained herein, the
Company may terminate the Consulting Period upon written notice for
Cause at any time. Cause shall mean that during the Consulting Period,
the Consultant engaged in gross and willful misconduct that is
materially and significantly injurious to the Company, and, after
written notice of such conduct, Consultant has failed to cease such
conduct within not less than 30 days. Any termination pursuant to this
section shall be communicated by written Notice of Intended
Termination. For purposes of this Agreement, a "Notice of Intended
Termination" shall mean a notice which shall clearly state the specific
termination provision in this Agreement relied upon and shall set forth
in reasonable and specific detail the facts and circumstances claimed
to provide a basis for termination of the Consulting Period. No Notice
of Intended Termination shall be valid unless it is signed by the
entire board of directors of the Company (the "Board").
a. Not less than 15 days after receipt of the Notice of Intended
Termination, Consultant shall have the opportunity to a full,
complete and fair hearing in the presence of the entire Board.
The Board shall present to Consultant its reasons for the
termination, including the specific actions, inactions, omissions
or other facts relied upon by the Board in making its
determination that Consultant has engaged in gross and willful
misconduct and that the Company has the right to terminate this
Agreement for Cause. Consultant shall have the right to rebut any
evidence or allegations of wrongdoing and shall have the right to
be represented by counsel of Consultant's choice at such hearing.
After such hearing, should the Board determine that this
Agreement shall be terminated for Cause, it shall issue a written
Final Notice of Termination to Consultant, signed by all members
of the Board, setting forth in detail the specific facts,
conclusions and findings of the Board in determining that Cause
exists for the termination of this Agreement. The Final Notice of
Termination shall contain an effective termination date, which
effective termination date shall be no less than thirty (30) days
from the date of the Final Notice of Termination.
b. For a term of one (1) year, in the event the Company terminates
this Agreement, then the Company shall pay to Consultant, as
liquidated damages, 87,500 shares of freely tradable Common Stock
for each month or fraction thereof commencing with January 1,
1997 through the effective date of such termination, up to a
maximum of 1,000,000 shares. All compensation paid to Consultant
pursuant to Section 5 hereof shall be deemed earned, including,
but not limited to, the Warrants; provided, however, that after
Company has delivered the liquidated damages as described above,
Consultant shall return to Company the unearned portion of the
1,000,000 shares advanced to Consultant pursuant to Section 5(a).
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8. NOTICE. Any notice required, permitted or desired to be given pursuant
to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if delivered in person or
sent by certified mail, return receipt requested, postage and fees
prepaid, or by national overnight delivery prepaid service to the
parties at their addresses set forth above. Copies of notices to
Consultant shall be sent to the attention of Xxxx Xxxxxxxx, Esq. at the
address below. Notice to Consultant shall be sent to Consultant at the
address below. Any party hereto may at any time and from time to time
hereafter change the address to which notice shall be sent hereunder by
notice to the other party given under this paragraph. The date of the
giving of any notice sent by mail shall be the day two days after the
posting of the mail, except that notice of an address change shall be
deemed given when received. The addresses of the parties are as
follows:
TO CONSULTANT: With a Copy to:
AMERICAN EQUITIES, LLC Xxxx Xxxxxxxx, Esq.
0000 X. Xxxxxx Xxxxxx, #000 Xxxx, Scholer, Fierman,
Xxx Xxxxxxx, Xxxxxxxxxx 00000 Xxxx & Handler LLP
Telephone: (000) 000-0000 0000 Xxxxxx xx xxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
TO THE COMPANY:
Xx. Xxxx X. Xxxx, President
Hartcourt Companies, Inc.
00000 X. Xxxxxxx Xxxx.
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
9. WAIVER. No course of dealing nor any delay on the part of either party
in exercising any rights hereunder will operate as a waiver of any
rights of such party. No waiver of any default or breach of this
Agreement or application of any term, covenant or provision hereof
shall be deemed a continuing waiver or a waiver of any other breach or
default or the waiver of any other application of any term, covenant or
provision.
10. DEFINITION OF "REASONABLE AND BEST EFFORTS". Reasonable and best
efforts shall not include the payment of any non-reimbursable
out-of-pocket costs or other payments by Consultant. Consultant shall
not guarantee, make any representation concerning (which representation
would survive the closing of any escrow or other transaction) or
warrant (1) the condition, performance, value, or profitability of any
real property purchased, sold by, or otherwise considered for purchase
by the Company; (2) the validity, marketability or insurability of any
title to any real property purchased, sold by, or otherwise considered
for purchase by the Company; (3) the validity, enforceability or value
of any leases of or pertaining to all or any part of any real property
purchased, sold by, or otherwise considered for purchase by the
Company; (4) the market value of any real property purchased, sold by,
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or otherwise considered for purchase by the Company; (5) the ability to
finance, refinance or otherwise mortgage or encumber any real property
purchased, sold by, or otherwise considered for purchase by the
Company; or (6) that Consultant will find or present any real property
which the Company will consider, approve or ultimately purchase or be
able to purchase.
11. SUCCESSORS; BINDING AGREEMENTS. Prior to the effectiveness of any
succession (whether direct or indirect, by purchase, merger
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company, the Company will require the successor to
expressly assume and agree to perform it if no such succession had
occurred. As used in this Agreement, "Company" shall mean the Company
as defined above and any successor to its business and/or assets which
executes and delivers the Agreement provided for in this Section 10 or
which otherwise becomes bound by all the terms and provisions of this
agreement by operation of law.
12. SURVIVAL OF TERMS. Notwithstanding the termination of this Agreement
for whatever reason, the provisions hereof shall survive such
termination, unless the context requires otherwise.
13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument. Any
signature by facsimile shall be valid and binding as if an original
signature were delivered.
14. CAPTIONS. The caption headings in this Agreement are for convenience
of reference only and are not intended and shall not be construed as
having any substantive effect.
15. GOVERNING LAW. This Agreement shall be governed, interpreted and
construed in accordance with the laws of the state of California
applicable to agreements entered into and to be performed entirely
therein. Any suit, action or proceeding with respect to this Agreement
shall be brought exclusively in the state courts of the State of
California or in the federal courts of the United States which are
located in Los Angeles, California. The parties hereto hereby agree to
submit to the jurisdiction and venue of such courts for the purposes
hereof. Each party agrees that, to the extent permitted by law, the
losing party in a suit, action or proceeding in connection herewith
shall pay the prevailing party its reasonable attorneys' fees incurred
in connection therewith.
16. ENTIRE AGREEMENT/MODIFICATIONS. This Agreement constitutes the entire
agreement between the parties and supersedes all prior understandings
and agreements, whether oral or written regarding Consultant's
retention by the Company, including, but not limited to, the Term
Sheet. This Agreement shall not be altered or modified except in
writing, duly executed by the parties hereto.
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17. WARRANTY. The Company and Consultant each hereby warrant and agree that
each is free to enter into this Agreement, that the parties signing
below are duly authorized and directed to execute this agreement, and
that this Agreement is a valid, binding and enforceable against the
parties hereto.
18. SEVERABILITY. If any term, covenant or provision, or any part thereof,
is found by any court of competent jurisdiction to be invalid, illegal
or unenforceable in any respect, the same shall not affect the
remainder of such term, covenant or provision, any other terms,
covenants or provisions or any subsequent application of such term,
covenant or provision which shall be given the maximum effect possible
without regard to the invalid, illegal or unenforceable term, covenant
or provision, the parties hereto intend that there shall be added as
part of this Agreement a term, covenant or provision as similar in
terms to such invalid, illegal or unenforceable term, covenant of
provision, or part thereof, as may be possible and be valid, legal and
enforceable.
IN WITNESS HEREOF, the parties hereto have duly executed and delivered this
Agreement as of the day and year first written above.
AMERICAN EQUITIES LLC HARTCOURT COMPANIES, INC.
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxx X. Xxxx
----------------------- ---------------------------
Xxxx Xxxxxxxx, President Xx. Xxxx X. Xxxx, President
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ADDENDUM TO CONSULTING AGREEMENT
This Addendum to Consulting Agreement is entered into on December 30, 1996, by
and between Hartcourt Companies, Inc., a Utah corporation and its subsidiaries
or affiliates (the "Company"), and American Equities LLC, a California limited
liability company ("Consultant").
The parties hereby acknowledge that the "Bid Price," as defined in the
Consulting Agreement, is One Dollar and Fifty Cents ($1.50).
IN WITNESS HEREOF, the parties hereto have duly executed and delivered this
Addendum as of the day and year first above written.
AMERICAN EQUITIES LLC HARTCOURT COMPANIES, INC.
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxx X. Xxxx
--------------------------- ---------------------------
Xxxx Xxxxxxxx, President Xx. Xxxx X. Xxxx, President
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December 20, 1996
Xx. Xxxx Xxxx
Hartcourt Investments, Inc.
00000 X. Xxxxxxx Xxxx.
Xxxxxxx, Xxxxxxxxxx 00000
Re:American Equities LLC Consulting Agreement
Dear Xx. Xxxx:
This letter shall clarify certain issues raised by you in connection with the
consulting agreement (the "Consulting Agreement") between American Equities LLC
("American Equities") and Hartcourt Investments, Inc. ("Hartcourt") and shall be
incorporated as part of such Consulting Agreement reached on December 20, 1996.
Hartcourt and American Equities agree to the following:
1. EXCLUSIVITY. All real estate purchases shall be for Harcourt
only. Not to go forward with said property, Consultant agrees
not to purchase said property.
2. MINIMUM PERFORMANCE OBJECTIVE. Consultant shall have increased
the assets and/or market capitalization of Harcourt by a
minimum of $50,000,000 by December 31, 1997. In the event
Consultant shall not meet this minimum performance objective,
Consultant shall return that portion of the 1,000,000 shares
of Common Stock advanced to Consultant, valued at $.50 per
share, which has not been earned pursuant to the terms set
forth in the Consultant Agreement, or shall pay to Hartcourt
the sum equal to the number of shares unearned multiplied by
$0.50. For purposes of the minimum performance objective, the
assets of Hartcourt shall be defined as all assets that
Hartcourt acquires of any kind, including real estate, other
operating companies, all other tangible and intangible assets,
and any increase in the market capitalization of Hartcourt.
The market capitalization as of December 17, 1996 is agreed to
be $18,569,432. Therefore, if the market capitalization of
Hartcourt exceeds $68,569,432 at any time, or if the total
assets of Hartcourt exceeds approximately $82,000,000 at any
time, or, if in the aggregate, the total assets plus market
capitalization of Hartcourt shall exceed $100,500,000 at any
time, this minimum performance objective will have been
satisfied. To the extent any assets are sold or removed from
Hartcourt's balance sheet, this calculation will be adjusted
to the extent of the dollar value of such sale or removal so
as to reduce the minimum performance objective.
3. Expense Cap. Hartcourt shall sell to Consultant 300,000 shares
of restricted Common Stock at $0.50 per share. Hartcourt shall
advance to Consultant $50,000 to be used for the opening and
operating of an office. The initial budget to open said office
shall not exceed $10,000. The parties agree that Hartcourt
shall pay the monthly operating expenses of this office
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pursuant to the Consulting Agreement. Hartcourt shall advance
twelve thousand dollars ($12,000) per month towards the agreed
upon budget. Consultant shall advance any portion in excess of
$12,000 per month which shall be reimbursed by Hartcourt upon
approval of such expenses. Any travel expenses, except for
local travel, must be approved in advance by Hartcourt and
will be reimbursed by Hartcourt. Hartcourt agrees to set aside
an additional $100,000 in a segregated account to pay for the
operating expenses of the consultant.
IN WITNESS WHEREOF, the parties hereby agree to this modification of
the Consulting Agreement. All other terms remain the same and are in
full force and effect.
AMERICAN EQUITIES LLC HARTCOURT INVESTMENTS, INC.
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxx X. Xxxx
---------------------- ---------------------------
Xxxx Xxxxxxxx, President Xx. Xxxx X. Xxxx, President
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