Exhibit 10.45
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") is entered into this 26th day of
May, 1999, to be effective as of May 26 , 1999, between American
Champion Entertainment , Inc. a corporation organized and existing under
the laws of Delaware ("ACEI"), and Xxxxx Xxxxxxx, Ltd., a limited
partnership organized and existing under the laws of Texas, and doing
business as Xxxxx Xxxxxxx & Associates ("XXXXXXX"), and consists of the
following terms and conditions:
1. PROVISION OF SERVICES
XXXXXXX shall provide advice based on the experiences of XXXXXXX
with respect to market-making information, and shareholder and
investor relations, but only so long as the rendering of such
advice does not require that XXXXXXX be licensed or directly
regulated in any pertinent state or federal jurisdiction or
otherwise cause it to become subject to such licensure or
regulation (the "Services"). The Services are not, and are not to
be construed as, without limitation, legal, tax, accounting,
investment banking, brokerage or any other services or advice
which would require the dispenser of such advice to be licensed or
otherwise directly regulated by any entity of the federal or any
state government. XXXXXXX specifically disclaims all warranties,
express or implied, including fitness for a specific or intended
purpose.
2. PERFORMANCE OF SERVICES
(a) XXXXXXX shall devote its best efforts and experience to the
performance of the Services, and shall perform the Services
with due diligence, in accordance with the highest
prevailing standards and subject to all applicable laws,
regulations and standards.
(b) XXXXXXX shall report to ACEI's representative, or to such
other individual(s) as ACEI may specify in writing.
3. PAYMENT
(a) As compensation for all the Services performed and to be
performed by XXXXXXX pursuant to this Agreement, XXXXXXX
shall receive the following:
(i) Six Hundred Thousand (600,000) Shares of restricted,
unregistered common stock of ACEI (the "Common
Stock"), to be issued upon execution of this
Agreement. XXXXXXX acknowledges that the Common Stock
will be subject to a minimum holding period of one
year pursuant to the provisions of SEC Rule 144. The
parties further agree that the Common Shares will be
issued effective as of the date XXXXXXX or its agents
first rendered services to ACEI, which the parties
stipulate and agree was or will be May 26 ,
1999 (the "Commencement Date").
(ii) Unregistered Warrants to purchase Fifty Thousand
(50,000) Shares of unregistered common stock of ACEI
at each of the following strike prices per share:
$5.00, $6.00, $7.00, $8.00, $9.00, and $10.00, for a
total of Three Hundred Thousand (300,000) such
warrants (the "Warrants"). The Warrants will be
substantially similar to the form of Warrant attached
as Exhibit A to this agreement.
(b) Four Hundred Eighty Thousand (480,000) shares of the Common
Stock issued pursuant to this agreement, but not the
Warrants, shall be subject to an Escrow Agreement in the
form attached as Exhibit B to this agreement. These shares
will be released to XXXXXXX in the following amounts upon
ACEI's share price reaching or exceeding the following
closing prices for two consecutive trading days:
Number of Shares Released Closing
Price per Share
120,000 shares $ 1.75
120,000 shares $ 2.50
120,000 shares $ 3.25
120,000 shares $ 4.00
(c) ACEI represents and warrants that it will not dilute the
compensation to XXXXXXX hereunder except by the issuance of
its shares for acquisitions or financing activities in
accordance with its business plan as evidenced by its
filings with the SEC and NASDAQ. To the extent shares are
issued for any other purpose except de minimus amounts not
exceeding 100,000 shares in the aggregate during the twelve
months following the execution of this agreement, the
Company will immediately issue comparable shares to XXXXXXX
sufficient to maintain its same percentage of the actual
outstanding shares immediately prior to such issuance using
the total compensation as if it were released and/or
exercised at such date.
(d) The amounts specifically provided for in this Agreement are
the only compensation to be paid to XXXXXXX hereunder,
unless otherwise agreed.
4. TERM
(a) The term of this Agreement shall commence effective as of
the Commencement Date, and shall continue thereafter for an
initial term of one (1) year. Thereafter, this Agreement
may be extended for any number of successive periods by
mutual written agreement.
(b) Any of the parties may terminate this Agreement for cause
during the initial term, or any extension of this Agreement.
5. TAXES
XXXXXXX shall be responsible for the ascertainment and payment of
all taxes, including, without limitation, income taxes and social
security taxes, fees, duties, imposts and other charges imposed
upon the consideration paid to XXXXXXX under this Agreement.
6. CONTRACTOR STATUS
In the performance of the Services, XXXXXXX is an independent
contractor, and XXXXXXX shall not be considered the employee, agent or
servant of ACEI. XXXXXXX shall have no authority to bind ACEI, nor to
act on its behalf, nor to make decisions for ACEI, except as expressly
provided in this Agreement. ACEI, being interested only in the results
of XXXXXXX'x performance of the Services, will give only broad direction
thereto, provided such direction is clear and adequate relative to the
Services to be performed.
7. CONFLICT OF INTEREST
XXXXXXX represents that, to the best of its knowledge, neither its
entering into, nor its performance under, this Agreement creates
nor will create any conflict of interest as to any relationship,
contractual, fiduciary or otherwise, which XXXXXXX may have with
any third party. In addition, XXXXXXX shall not enter into any
such conflict-of-interest relationship with any third party during
the term of this Agreement. If any actual or potential conflict
of interest arises during the term of this Agreement regarding
XXXXXXX'x performance under this Agreement, XXXXXXX shall so
notify ACEI immediately. XXXXXXX and ACEI shall use their best
efforts to settle satisfactorily any point of conflict.
8. CONFIDENTIALITY
(a) All data, information and reports received by XXXXXXX from
ACEI, in the course of performing the Services shall remain
the sole property of ACEI. XXXXXXX shall keep confidential
all such data, information and reports.
(c) For purposes hereof, confidential information shall not
include information which is public knowledge or in the
public domain, is known to XXXXXXX at or prior to the time
of disclosure thereof by ACEI or becomes known to XXXXXXX
independent of the disclosure by ACEI.
(d) The rights and obligations under this Article 11 shall be
continuing ones and shall survive the expiration or
termination, for any reason, of this Agreement for a period
of three (3) years after that expiration or termination.
9. FORCE MAJEURE
If either XXXXXXX or ACEI is rendered unable to perform any
obligations hereunder, in whole or in part, due to force majeure,
then upon prompt notice to the other, that party's performance
shall be suspended for the period that it is unable to perform the
obligation, and any corresponding remaining obligations of the
other party shall also be suspended for that period. For the
purpose of this Agreement, "force majeure" shall mean any act or
event beyond the reasonable control of the party affected
including, but not limited to, a strike, labor dispute, lockout,
fire, flood, tornado, hurricane, earthquake, explosion, act of God
or the public enemy, war (declared or undeclared), terrorism,
blockade, governmental regulation, order or decree, insurrections,
riots and other civil disturbances.
10. INDEMNIFICATION AND CONSEQUENTIAL DAMAGES
XXXXXXX agrees that it shall, defend, indemnify and hold harmless
ACEI, its co-owners, joint venturers and its and their
shareholders, officers, directors, agents, employees and invitees,
against any direct or indirect damage, cost or expense arising out
of this Agreement and relating to any losses sustained by ACEI and
caused exclusively by the acts of XXXXXXX, its officers, agents or
employees in the performance of activities pursuant to this
Agreement.
ACEI agrees that it shall, defend, indemnify and hold harmless
XXXXXXX, its co-owners, joint venturers and its and their
shareholders, partners, officers, directors, agents, employees and
invitees, against any direct or indirect damage, cost or expense
arising out of this Agreement and relating to any losses sustained
by XXXXXXX and caused exclusively by the acts of ACEI, its
officers, agents or employees in the performance of activities
pursuant to this Agreement.
Neither XXXXXXX nor ACEI shall be liable to the other for any of
its incidental or consequential damages (including, without limitation,
lost profits). Neither of them shall assert any such claim against the
other or its subsidiaries or affiliated companies or their respective
shareholders, partners, officers, directors or employees.
11. ASSIGNMENT
XXXXXXX shall not assign, in whole or in part, any of its rights
or obligations under this Agreement, unless the assignment is made
to an affiliate or subsidiary of. ACEI may assign any of its
rights and obligations under this Agreement to any of its
affiliates upon written consent of XXXXXXX, which shall not be
unreasonably withheld..
12. APPLICABLE LAW AND ARBITRATION
THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS, U.S.A., EXCLUDING ANY CHOICE-OF-LAW
RULE(S) WHICH WOULD CAUSE THE LAW OF ANOTHER JURISDICTION TO APPLY. ANY
CONTROVERSY, CLAIM OR DISPUTE OF WHATEVER NATURE ARISING BETWEEN THE
PARTIES AND RELATING TO THIS AGREEMENT SHALL BE EXCLUSIVELY REFERRED TO
AND DETERMINED BY ARBITRATION IN HOUSTON, TEXAS, BY USING ONE ARBITRATOR
IN ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION.
TO THE EXTEND PERMITTED BY LAW, THE ARBITRATION SHALL BE FINAL AND
BINDING UPON THE PARTIES. THE NON-PREVAILING PARTY IN THE ARBITRATION
PROCEEDING SHALL REIMBURSE THE PREVAILING PARTY FOR ALL REASONABLE
ATTORNEY'S FEES ASSOCIATED WITH THE ARBITRATION.
13. INTEGRATED AGREEMENT AND AMENDMENT
(a) This Agreement constitutes the entire agreement between ACEI
and XXXXXXX regarding the subject matter of this Agreement,
and it supersedes all prior discussions, correspondence,
negotiations and agreements regarding that subject matter.
This Agreement may not be amended except by a written
instrument duly signed by both ACEI and CONTRACTOR.
(b) The headings to the Articles of this Agreement are for
convenience only, and shall not be utilized in interpreting
this Agreement.
14. NOTICES
Any notice that is required or permitted to be delivered hereunder
shall be deemed to be delivered only when actually received by a
party, at the addresses set forth below, or at such other address
as a party has specified:
American Champion Entertainment, Inc.
0000 Xxx Xxxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxx, CEO
Xxxxx Xxxxxxx, Ltd.
00000 Xxxxxxxx Xxxxx, Xxxxx 00
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxx, CEO
15. COUNTERPARTS
Each Party may sign identical counterparts of this Agreement with
the same effect as if the Parties signed the same document. A
copy of this Agreement signed by a Party and delivered by
facsimile transmission to the other Party shall have the same
effect as the delivery of an original of this Agreement containing
the original signature of such Party.
16. JOINT DRAFTING
The parties acknowledge that each party and its counsel have
reviewed this Agreement and that the normal rule of construction
to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this
Agreement, it extensions or any amendment thereto.
IN WITNESS WHEREOF, this Agreement is signed as of the date first above
written.
AMERICAN CHAMPION ENTERTAINMENT, INC
Signature: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: President & CEO
Date: May 26, 1999
XXXXX XXXXXXX, LTD.
Signature: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: CEO
Date: May 26, 1999
