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EXHIBIT 99.1
JANUARY 2001 CONSULTANT COMPENSATION AGREEMENT
THIS CONSULTANT COMPENSATION AGREEMENT (the "Plan") is made as of this 1st
day of January, 2001, among Entertainment Technologies & Programs, Inc., a
Delaware corporation ("ETPI"); and Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxx, Xxxxx
X. Xxxxxx, Xxxxxxx X. Xxxx, Xxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxx X.
Xxxxxxx, Xxxx X. XxXxxxx, Xxxxxx X. Xxxxxx, Xxxx X. Xxxxx, and Xxxxx Xxxx
(collectively, the "Consultants").
WHEREAS, the Board of Directors of ETPI has adopted a written compensation
agreement for compensation of eleven individual Consultants who are natural
persons and are attorneys or consultants for the Company; and
WHEREAS, ETPI has engaged the Consultants to provide services at the
request of and subject to the satisfaction of its management; and
WHEREAS, the Consultants have provided services at the request and subject
to the approval of the management of ETPI, and will provide additional services
to ETPI; and
WHEREAS, ETPI and the Consultants intend that this Plan and the services
performed hereunder shall be made, requested and performed in such a manner that
this Plan shall be a "written compensation agreement" as defined in Rule 405 of
the Securities and Exchange Commission ("Commission") pursuant to which ETPI may
issue "freely tradeable" shares (except as may be limited by "affiliate" status)
of its common stock as payment for services rendered pursuant to an S-8
Registration Statement to be filed with the Commission by ETPI;
NOW, THEREFORE, in consideration of the mutual covenants and provisions
contained herein, it is agreed:
Section I
Compensation Plan
1.1 Employment. ETPI hereby employs the Consultants and the consultants
hereby accept such employment, and have and will perform legal or consulting
services in connection with debt restructuring, general corporate matters, real
estate leasing/acquisition, and/or marketing. The services performed by the
Consultants hereunder have been and will be personally rendered by the
Consultants, and no one acting for or on behalf of the Consultants, except those
persons normally employed by the Consultants in rendering services to others,
such as secretaries, bookkeepers and the like.
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1.2 Independent Contractors. Regardless of the Consultants' status as
"employees" under Rule 405 of the Commission, all services rendered by the
Consultants hereunder have been or will be rendered as independent contractors,
and the Consultants shall be liable for any FICA taxes, withholding or other
similar taxes or charges, and the Consultants shall indemnify and hold ETPI
harmless therefrom; it is understood and agreed that the value of all such items
has been taken into account by the Consultants in computing the billable rate
for the services the Consultants have rendered and agreed to render to ETPI.
1.3 Term. All services performed at the request of ETPI by the Consultants
shall have been performed within two years from the date hereof, at which time
this Plan shall terminate, unless otherwise provided herein.
1.4 Invoices for Services. On the completion of rendering the services
performed by the Consultants hereunder, each of the Consultants shall provide
ETPI with a written invoice detailing the services duly performed. Consultants
shall xxxx ETPI for services at their usual hourly rates. Such invoice shall be
paid by ETPI in accordance with Section 1.5, below.
1.5 Payment. ETPI and the Consultants agree that ETPI shall pay for the
services performed under this Plan by the issuance of shares of its common
stock; provided, however, such shares of common stock shall be issued pursuant
to and shall be subject to the filing with the Commission and effectiveness of a
Registration Statement on Form S-8 covering such shares. The maximum number of
shares to be issued pursuant to this Plan is 2,133,333. ETPI shall issue 500,000
shares at a price of $0.10 per share to Xxxx X. XxXxxxx as a non-refundable
retainer for services, and all invoices up to $50,000 shall be paid out of such
retainer. Any amounts due above such retainer shall be paid in cash or by such
means as the parties may agree upon. ETPI shall issue 333,333 shares at a price
of $0.15 per share to Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxx,
Xxxxxxx X. Xxxx, Xxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx as a
non-refundable retainer for their services, and all invoices up to $50,000 shall
be paid out of such retainer. Any amounts due above such retainer shall be paid
in cash or by such means as the parties may agree upon. Allocation of such
shares among such Consultants shall be as they determine. ETPI shall issue up to
400,000 shares to Xxxxxx X. Xxxxxx at market price upon receipt of invoices for
services. ETPI shall issue up to 800,000 shares to Xxxx X. Xxxxx at market price
upon receipt of invoices for services. ETPI shall issue up to 100,000 shares to
Xxxxx Xxxx at market price upon receipt of invoices for services. Market price
shall be equal to the average of the high and low price of ETPI's common stock
on the NASDAQ OTC-BB market on the date of receipt of the invoice.
1.6 Common Stock Price. To the extent deemed required or necessary and for
all purposes of this Plan, the Consultants shall have an "option" covering such
shares of common stock at the per share price set forth in paragraph 1.5, above,
during the term hereof; the Consultants assume the risk of any stock price
fluctuation subsequent to the price determination, and the Consultants agree
that any such fluctuation shall in no way affect the rights, obligations or
duties of the Consultants hereunder.
1.7 Limitation on Services. None of the services rendered by the
Consultants and paid for
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by the issuance of shares of common stock of ETPI shall be services related to
any "capital raising" transaction.
1.8 Delivery of Shares. Subject to the filing and effectiveness of a
Registration Statement on Form S-8 covering issuance of such shares, one or more
stock certificates representing such shares shall be delivered to the respective
Consultants at the addresses listed on the Counterpart Signature Pages, unless
another address shall be provided to ETPI in writing prior to the issuance of
such shares.
1.9 Adjustments in the Number of Shares of Common Stock and Price Per
Share. In the event ETPI shall undergo a merger, consolidation, reorganization,
recapitalization, declare a stock dividend of its shares of common stock or
cause to be implemented a forward or reverse stock split which affects the
present number of issued and outstanding shares of common stock of ETPI prior to
the issuance of shares to the Consultants, that the per share price and the
number of shares issuable to the Consultants for services actually rendered
hereunder after such event shall be appropriately adjusted to reflect any such
event.
1.10 Effective Date. The Effective Date of the Plan for each of the
Consultants shall be the date set forth on the respective Counterpart Signature
Pages.
1.11 Conditions. The Plan is subject to the following condition, to-wit:
The number of shares of common stock to be issued under the Plan shall
in no event exceed 10% of the total issued and outstanding shares of
common stock of the Company on the date of issuance.
Section 2
Representations and Warranties of ETPI
ETPI represents and warrants to, and covenants with, the Consultants as
follows:
2.1 Corporate Status. ETPI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
licensed or qualified as a foreign corporation in all states in which the nature
of its business or the character or ownership of its properties makes such
licensing or qualification necessary.
2.2 Compensation Plan . The Board of Directors of ETPI has duly adopted a
Compensation Plan as defined in Rule 405 of the Commission pursuant to which
ETPI may issue "freely tradeable" shares of its common stock as payment for
services rendered, subject to the filing and effectiveness of an S-8
Registration Statement to be filed with the Commission by ETPI.
2.3 Registration Statement on Form S-8. ETPI shall engage the services of a
competent
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professional to prepare and file a Registration Statement on Form S-8 with the
Commission to cover the shares of common stock to be issued under the Plan;
shall cooperate with such professional in every manner whatsoever to the extent
reasonably required or necessary so that such Registration Statement shall be
competently prepared, which such Registration Statement shall not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading, and which such Registration
Statement shall become effective immediately upon its filing; such Registration
Statement shall be prepared at the sole cost and expense of ETPI; and ETPI will
provide to the Consultants prior to the issuance and delivery of any such shares
of common stock a copy of such Registration Statement, the Compensation Plan
adopted by its Board of Directors, all quarterly, annual or current reports or
other documents incorporated by reference into such Registration Statement and
any other similar reports filed or publicly disseminated following the effective
date of any such Registration Statement.
2.4 Federal and State Securities Laws, Rules and Regulations. ETPI shall
fully comply with any and all federal or state securities laws, rules and
regulations governing the issuance of any such shares of common stock.
2.5 Limitation on Services. ETPI shall not request the Consultants to
perform any services in connection with any "capital raising" transaction under
this Plan.
2.6 Reports With the Commission. ETPI is required to file reports with the
Commission pursuant to Section 15(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and ETPI has or will file with the Commission all
reports required to be filed by it forthwith, and shall continue to file such
reports with the Commission so long as required, but for a period of not less
than one year; and such reports are or will be true and correct in every
material respect.
2.7 Corporate Authority and Due Authorization. ETPI has full corporate
power and authority to enter into this Plan and to carry out its obligations
hereunder. Execution of this Plan and performance by ETPI hereunder have been
duly authorized by all requisite corporate action on the part of ETPI, and this
Plan constitutes a valid and binding, obligation of ETPI and performance
hereunder will not violate any provision of the Articles of Incorporation,
Bylaws, agreements, mortgages or other commitments of ETPI.
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Section 3
Representations and Warranties of the Consultants
Each of the Consultants represents and warrants to, and covenants with,
ETPI as follows:
3.1 Employment. Each of the Consultants hereby accepts employment as
independent contractors by ETPI for the services performed pursuant to this
Agreement. The services performed by the Consultants hereunder have been
personally rendered by the Consultants, and no one acting for or on behalf of
the Consultants.
3.2 Access to Information. All Consultants acknowledge receipt of a copy of
all reports filed by the Company with the Securities and Exchange Commission
during the past 12 months, and a copy of the written compensation agreement for
their services.
3.3 Limitation on Services. None of the services rendered by the
Consultants and paid for by the issuance of shares of common stock of ETPI shall
be services related to any "capital raising" transaction, and none is involved
in the promotion of the common stock of ETPI, any fund raising activities on its
behalf, and no services being performed hereunder are for public relation
services.
3.4 Authority and Authorization. Each of the Consultants has full power and
authority to enter into this Plan and carry out the obligations hereunder.
Execution of this Plan and performance by the Consultants hereunder constitutes
a valid and binding obligation of the Consultants and performance hereunder will
not violate any other agreement to which any of the Consultants is a party.
Section 4
Indemnity
ETPI and the Consultants agree to indemnify and hold the other harmless for
any loss or damage resulting from any misstatement of a material fact or
omission to state a material fact by the other contained herein or contained in
the S-8 Registration Statement of ETPI to be filed hereunder, to the extent that
any misstatement or omission contained in the Registration Statement was based
upon information supplied by the other.
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Section 5
Termination
Prior to the performance of services hereunder, this Plan may be terminated
(1) by mutual consent of ETPI and the respective Consultants in writing; (2) by
either the Directors of ETPI or the respective Consultants if there has been a
material misrepresentation or material breach of any warranty or covenant by the
other party; and (3) shall automatically terminate at the expiration of the term
hereof, provided, however, all representations and warranties shall survive the
termination hereof, provided, further, however, that any obligation of ETPI to
pay for any services actually rendered by the Consultants hereunder shall
survive any such termination.
Section 6
General Provisions
6.1 Further Assurances. At any time, and from time to time, after the
execution hereof, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to carry out the
intent and purposes of this Plan.
6.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent by
prepaid first-class registered or certified mail, return receipt requested, as
follows:
If to ETPI: If to Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxx,
00000 Xxxxx Xxxxxx Xxxx., Xxxxx 000 Xxxxx X. Xxxxxx, Xxxxxxx X. Xxxx, Xxxxx X. Xxxxxxxx,
Xxxxxxx, Xxxxx 00000 Xxxxxx X. Xxxxxx, or Xxxxxx X. Xxxxxxx:
0000 Xxxxxxxx Xxxx., Xxxxxxxxx
Xxxxxxx Xxxxx, XX 00000
If to Xxxx X. XxXxxxx: If to Xxxxxx X. Xxxxxx:
0000 Xxxxxx Xxxxxx 0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
If to Xxxx X. Xxxxx: If to Xxxxx Xxxx:
00000 Xxxxx Xxx Xxxx., Xxxxx 000 00000 Xxxxxxxxxx, Xxxxx 000-X
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
6.3 Entire Agreement. This Plan constitutes the entire agreement between
the parties and supersedes and cancels any other agreement, representation, or
communication, whether oral or written, between the parties hereto relating to
the transactions contemplated herein or the subject matter hereof.
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6.4 Headings. The section and subsection headings in this Plan are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Plan.
6.5 Governing law. This Plan shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware, except to the
extent pre-empted by federal law, in which event (and to that extent only),
federal law shall govern.
6.6 Assignment. Neither ETPI nor the Consultants can assign any rights,
duties or obligations under this Plan, and in the event of any such assignment,
such assignment shall be deemed null and void.
6.7 Counterparts. This Plan may be executed simultaneously 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.
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IN WITNESS WHEREOF, the parties have executed this Plan effective the day
and year first above written.
Entertainment Technologies & Programs, Inc. Consultants:
By: /s/ Xxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, Chairman/CEO Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
/s/ Xxxx X. XxXxxxx
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Xxxx X. XxXxxxx
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
/s/ Xxxxx Xxxx
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Xxxxx Xxxx
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