<PAGE> 1
As filed with the Securities and Exchange Commission on March 12, 1999
REGISTRATION NO. 33-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMERICAN ARTISTS ENTERTAINMENT CORPORATION
(Formerly American Artists Film Corporation)
(Exact name of registrant as specified in its charter)
MISSOURI 58-1950450
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6600 PEACHTREE DUNWOODY ROAD
BUILDING 600, SUITE 250
ATLANTA, GEORGIA 30328
1999 CONSULTANTS' STOCK PLAN
(Full Title of the Plan)
J. ERIC VAN ATTA, 6600 PEACHTREE DUNWOODY ROAD, BUILDING 600, SUITE 250,
ATLANTA, GEORGIA 30328
(Name and address of agent for service)
Copies of Communications to:
J. ERIC VAN ATTA
6600 PEACHTREE DUNWOODY ROAD
BUILDING 600, SUITE 250
ATLANTA, GEORGIA 30328
CALCULATION OF REGISTRATION FEE
1999 CONSULTANTS' STOCK PLAN
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Securities Amount To Be Offering Price Aggregate Amount of
To Be Registered Registered(1) Per Share(2) Offering Registration Fee
Price(2) (2)
<S> <C> <C> <C> <C>
Class A 1,200,000 $0.8125 $975,000 $295.45
Common Stock,
$0.001 per share
(Issued Pursuant to the
1999 Consultants' Stock Plan)
</TABLE>
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(1) This Registration Statement also covers such indeterminable additional
number of shares as may be issuable under the Plan by reason of adjustments in
the number of shares covered thereby as described in the Registration
Statement.
(2) Pursuant to Rule 457(h), the proposed Maximum Offering Price per share
and the proposed Maximum Aggregate Offering Price for 1,200,000 of the shares
are estimated solely for purposes of calculating the registration fee and is
based upon the closing price of the Company's Common Stock of $0.81 per share
on the bulletin board on March 11, 1999.
Pursuant to Rule 416(a) of the General Rules and Regulations under the
Securities Act of 1933, this Registration Statement shall cover such additional
securities as may be offered or issued to prevent dilution resulting from stock
splits, stock dividends or similar transactions.
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. PLAN INFORMATION
This registration statement relates to the offer and sale of common
stock, $.001 par value (the "Common Stock") of American Artists Entertainment
Corporation to two (2) outside consultants, Fontenelle, LLC and FT Enterprises,
Inc. (collectively the "Consultants) representing payment by the Company to
Consultants for services rendered in connection with the Fontenelle, LLC
Consulting Agreement and F T Enterprises, Inc., Consulting Agreement
(collectively the "Consulting Agreements") which are incorporated herewith and
are Exhibits hereto. In connection therewith, the Consultants have been issued
1,200,000 shares of Common Stock in the aggregate. This summary should be read
in conjunction with said Consulting Agreements.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN INFORMATION
The Consultants have been provided with copies of the documents
incorporated herein by reference in Part II, Item 3 and have been advised by
the Company in writing that such documents will be available to the Consultant
without charge upon the Consultants' request to the Company's offices located
at 6600 Peachtree Dunwoody Road, Building 600, Suite 250, Atlanta, Georgia,
30328.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-KSB for the year ended July 31,
1998, which has been filed by the Company with the Commission as well as the
Company's Quarterly Report on Form 10-QSB for the quarter ended October 31,
1998, are incorporated herein by reference. All other reports filed by the
Company pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") since the end of the fiscal year covered
by the foregoing Annual Report on Form 10-KSB are incorporated herein by
reference. All other reports or documents filed by the Company pursuant to the
requirements of Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
subsequent to the date of this Registration Statement and prior to the
termination of the offering of the securities offered hereby shall be deemed to
be incorporated by reference herein and to be a part hereof from the date of
filing of such reports or documents. Any statements contained in a document
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is incorporated herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
The description of the Company's Class A Common Stock, the class of
securities offered pursuant to this Registration Statement, and Class B Common
Stock, is contained in the Company's Registration Statement, on Form S-4 (File
No. 333-4159), filed on May 21, 1996, and is incorporated herein by reference,
including any subsequent amendments or reports filed for the purpose of
updating that description.
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ITEM 4. DESCRIPTION OF SECURITIES
The class of securities to be offered is registered under Section 12
of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Restated Certificate of Incorporation provides that the
Company shall have the power, without further action by the shareholders of the
Company, to give any further indemnity in addition to the indemnity authorized
or contemplated under the Bylaws of this Company to any person who is or was a
director, officer, employee, or agent, or to any person who is or was serving
at the request of the Company as a director, officer, employee, or agent of
another company, partnership, joint venture, trust, or other enterprise or to
enter into agreements with any of such persons providing such rights of
indemnification as the Company may deem appropriate; provided that no such
indemnity shall indemnify any person from or on account of such person's
conduct which was finally adjudged to have been knowingly fraudulent,
deliberately dishonest or willful misconduct.
Pursuant to the Company's bylaws, as amended, the Company shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative (other than an action by or
in the right of this Company) by reason of the fact that (i) such person is or
was a director, officer, employee, or agent of this Company, or (ii) is or was
serving at the request of this Company as a director, officer, employee,
partner, trustee, or agent of another company, partnership, joint venture,
trust, or other enterprise, or (iii) is or was, at the request of the Company,
a guarantor of any debts of the Company, against expenses (including attorneys'
fees), judgment, fines, taxes, and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit, or
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of this
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such conduct was unlawful. The Company shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of
this Company to procure a judgment in its favor by reason of the fact that such
person is or was a director, officer, employee, or agent of this Company, or is
or was serving at the request of this Company as a director, officer, employee,
partner, trustee, or agent of another company, partnership, joint venture,
trust, or other enterprise, against expenses (including attorneys' fees) and
amounts paid in settlement actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit, if such
person acted in good faith and in a manner such person reasonably believed to
be in or not opposed to the best interests of this Company and except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of such person's duty to this Company unless and
only to the extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability,
but in view of all the circumstances of the case, such person if fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper. Any indemnification thereunder (unless ordered by a court) shall be
made by this Company only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee, partner,
trustee, or agent is proper in the circumstances because he has met the
applicable standard of conduct. Such determination shall be made (1) by the
Board of Directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit, or proceeding, or (2) if such a quorum
is not obtainable, or, even if obtainable a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (3) by the
shareholders. Expenses incurred in defending any actual or threatened civil or
criminal action, suit, or proceeding may also be paid by the Company in advance
of the final disposition of such action, suit, or proceeding as authorized by
the Board of Directors.
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ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
Reference is made to the Exhibit Index.
ITEM 9. UNDERTAKINGS
(1) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represents a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement; provided, however, that paragraphs (1)(i) and (1) (ii)
do not apply if the registration statement is on Form S-3, Form S-8, or Form
F-3, and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15 (d) of Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(b) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(2) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Atlanta, State of Georgia, on the 12th day of
March, 1999.
AMERICAN ARTISTS ENTERTAINMENT CORPORATION
By /s/ Steven D. Brown
----------------------------------------
Steven D. Brown, Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Steven Brown and J. Eric Van Atta, and
each of them, his or her true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission and any other
regulatory authority, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing required and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his or her substitute,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on March 12, 1999, by the
following persons in the capacities indicated.
<TABLE>
<S> <C> <C>
/s/ Glen C. Warren Chairman of the Board March 12, 1999
- ---------------------------------------
Glen C. Warren
/s/ Rex Hauck Director and President March 12, 1999
- ---------------------------------------
Rex Hauck
/s/ Robert A. Martinez Vice President/Finance, Chief March 12, 1999
- --------------------------------------- Financial Officer and Treasurer
Robert A. Martinez
/s/ John W. Boyd Director March 12, 1999
- ---------------------------------------
John W. Boyd
/s/ Malcolm C. Davenport, V Director March 12, 1999
- --------------------------------------
Malcolm C. Davenport, V
</TABLE>
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<TABLE>
<S> <C> <C>
/s/ Dan W. Holloway Director March 12, 1999
- --------------------------------------
Dan W. Holloway
/s/ Norman J. Hoskin Director March 12, 1999
- ---------------------------------------
Norman J. Hoskin
/s/ Ben E. Noble Director March 12, 1999
- ----------------------------------------
Ben E. Noble
</TABLE>
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EXHIBIT INDEX
The following exhibits are filed as a part of the Registration Statement:
<TABLE>
<S> <C>
Exhibit 4 Fontenelle, LLC Consulting Agreement and F T Enterprises, Inc., Consulting Agreement
Exhibit 5 Opinion Sims Moss Kline & Davis LLP
Exhibit 23.1 Consent of BDO Seidman, LLP
Exhibit 23.2 Consent of Sims Moss Kline & Davis LLP - included in Exhibit 5
Exhibit 24 Power of Attorney - included on the signature page hereof
</TABLE>
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EXHIBIT 4
CONSULTING AGREEMENT
This agreement ("Agreement") is made and entered into this 19th day of
February, 1999 between American Artists Film Corporation, a Missouri
corporation (the "Company") and Fontenelle, LLC ("Consultant"), a Nevada
limited liability company.
RECITALS
A. The Company is a multi-faceted entertainment company
committed to the creation, production and distribution of original, innovative
programming and films for a variety of media. The Company has also developed a
concept for the installation and operation of a network of large screen video
display ("LSVD") units.
B. The Consultant is generally knowledgeable in the areas of
business operations and plan implementation, possesses a high level of
experience in the entertainment/LSVD industry and is experienced in evaluating
and developing strategic business plans.
C. The Company wishes to engage the Consultant on a nonexclusive
basis as an independent contractor to utilize Consultant's general business and
entertainment/LSVD industry experience and contacts and to further develop and
refine its strategic business plan.
D. The Consultant is willing to be so retained on the terms and
conditions as set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
1. Engagement. The Company hereby retains and engages Consultant
to perform the following consulting services (the "Consulting Services"):
a. Review and evaluate the Company's current business
plan and remain knowledgeable about the contents thereof;
b. Work with the Company's management to develop and
prepare a detailed strategic business plan as well as periodically revise said
plan as required during the Term of this Agreement;
c. Provide general strategic advice and consultation to
the Company's management on all matters pertaining to the business of the
Company, and;
d. Provide introductions to entertainment/LSVD industry
contacts.
2. Duties Expressly Excluded. This Agreement expressly excludes
the Consultant from providing any and all capital formation and/or public
relation services to the Company inclusive of but not limited to (i) direct or
indirect promotion of the Company's securities; (ii) assistance in making of a
market in the Company's securities; and (iii) assistance in obtaining debt
and/or equity financing.
3. Consideration. As full and complete consideration for the
performance by the Consultant of the Consulting Services, the Company will
issue to the Consultant 800,000 shares of the Company's Class A common stock,
$0.001 par value (the "Shares"). In the event that Consultant does not
completely perform the Consulting Services (for any reason, including the death
or incapacity of Consultant), then for each month that Consultant does not
perform the Consulting Services during the Term, one sixth (1/6) of the Shares
(as adjusted for stock splits,
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reverse stock splits, stock dividends or distributions or other
reclassifications of the Company's capital stock) shall be returned to the
Company and canceled. Consultant agrees to purchase shares in the open market,
if necessary, to fulfill such obligation to return shares to the Company.
The Shares will be issued as soon as practicable following
execution of this Agreement and the filing of a registration statement under
the Securities Act of 1933, as amended, on Form S-8 (or other available form)
covering the issuance of the Shares to Consultant.
4. Term. This Agreement shall be effective for a term of six (6)
months starting from the date first written above unless sooner terminated upon
mutual written agreement of the parties hereto.
5. Expenses. Consultant shall bear his out-of-pocket costs and
expenses incident to performing the Consulting Services, without a right of
reimbursement from the Company unless such expenses are pre-approved by the
Company.
6. Consultant's Liability. In the absence of gross negligence or
willful misconduct on the part of the Consultant or the Consultant's breach of
any terms of this Agreement, the Consultant shall not be liable to the Company
or to any officer, director, employee, stockholder or creditor of the Company,
for any act or omission in the course of or in connection with the rendering or
providing of services hereunder. Except in those cases where the gross
negligence or willful misconduct of the Consultant or the breach by the
Consultant of any terms of this Agreement is alleged and proven, the Company
agrees to defend, indemnify, and hold the Consultant harmless from and against
any and all reasonable costs, expenses and liability (including reasonable
attorney's fees paid in the defense of the Consultant) which may in any way
result from services rendered by the Consultant pursuant to or in any
connection with this Agreement. This indemnification expressly excludes any and
all damages as a result of any actions or statements, on behalf of the Company,
made by the Consultant without the prior approval or authorization of the
Company.
7. Company's Liability. The Consultant agrees to defend,
indemnify, and hold the Company harmless from and against any and all
reasonable costs, expenses and liability (including reasonable attorney's fees
paid in defense of the Company) which may in any way result pursuant to its
gross negligence or willful misconduct or in any connection with any actions
taken or statements made, on behalf of the Company, without the prior approval
or authorization of the Company or which are otherwise in violation of
applicable law.
8. Representations. The Consultant makes the following
representations:
(a) Consultant has no prior or existing legally binding
obligations that are in conflict with its entering into this Agreement;
(b) Consultant shall not offer or make payment of any
consideration to brokers, dealers, or others for purposes of inducing the
purchase, making of a market or recommendation for the purchase of the
Company's securities;
(c) Consultant is not currently the subject of an
investigation or inquiry by the Securities and Exchange Commission, the NASD,
or any state securities commission;
(d) Consultant's activities and operations fully comply
with now and will comply with in the future all applicable state and federal
securities laws and regulations;
(e) Consultant is either properly registered as, or
exempt from registration, as a broker-dealer or an investment advisor;
(f) Consultant understands that, as a result of its
services, it may come to possess material non-public information about the
Company, and that it has implemented internal control procedures designed to
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reasonably to insure that it and none of its employees, agents, consultants or
affiliates, trade in the securities of client companies while in possession of
material non-public information;
(g) During the Term of this Agreement and for a period
of two year thereafter, the Consultant shall treat as the Company's
confidential trade secrets all data, information, ideas, knowledge and papers
pertaining to the affairs of the Company. Without limiting the generality of
the foregoing, such trade secrets shall include: the identity of the Company's
customers, suppliers and prospective customers and suppliers; the identity of
the Company's creditors and other sources of financing; the Company's
estimating and costing procedures and the cost and gross prices charged by the
Company for its products; the prices or other consideration charged to or
required of the Company by any of its suppliers or potential suppliers; the
Company's sales and promotional policies; and all information relating to
entertainment programs or properties being produced or otherwise developed by
the Company. The Consultant shall not reveal said trade secrets to others
except in the proper exercise of its duties for the Company, or use their
knowledge thereof in any way that would be detrimental to the interests of the
Company, unless compelled to disclose such information by judicial or
administrative process; provided, however, that the divulging of information
shall not be a breach of this Agreement to the extent that such information was
(i) previously known by the party to which it is divulged, (ii) already in the
public domain, all through no fault of the Consultant, or (iii) required to be
disclosed by Consultant pursuant to judicial or governmental order. The
Consultant shall also treat all information pertaining to the affairs of the
Company's suppliers and customers and prospective customers and suppliers as
confidential trade secrets of such customers and suppliers and prospective
customers and suppliers, and:
(h) Consultant agrees to notify the Company immediately
if, at any time, any of the representations and warranties made by the
Consultant herein are no longer true and correct or if a breach of any of the
representations and warranties made by the Consultant herein occurs.
9. The Company makes the following representations:
(a) The Company is not currently the subject of an
investigation or inquiry by the Securities and Exchange Commission, the NASD,
or any state securities commission.
(b) The Company is in good standing in its state of
incorporation, Missouri.
(c) The Company is a "reporting company" under the
Securities Act of 1934 and has timely filed all of its required reports, except
for its Form 10-KSB for the year ended July 31, 1998 and its Form 10-QSB for
the quarter ended October 31, 1998.
(d) The Company and its senior management are not aware
of any materially adverse events not previously disclosed in the Company's
annual and quarterly reports with the Securities and Exchange Commission.
10. Entire Agreement. This Agreement embodies the entire
agreement and understanding between the Company and the Consultant and
supersedes any and all negotiations, prior discussions and preliminary and
prior agreements and understandings related to the primary subject matter
hereof. This Agreement shall not be modified except by written instrument duly
executed by each of the parties hereto.
11. Waiver. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute a waiver of any other provision, nor shall
any waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
12. Assignment and Binding Effect. This Agreement and the rights
hereunder may not be assigned by the parties (except by operation of law or
merger) and shall be binding upon and inure to the benefit of the parties and
their respective successors, assigns and legal representatives.
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<PAGE> 4
13. Notices. Any notice or other communication between the
parties hereto shall be sufficiently given if sent by certified or registered
mail, postage prepaid, or faxed and confirmed at the following locations:
Company:
American Artists Film Corporation
6600 Peachtree Dunwoody Road, Bldg. 600, Suite 250
Atlanta, Georgia 30328
Attn: Steven D. Brown
Consultant:
Fontenelle, LLC
345 North Maple Drive, Suite 358
Beverly Hills, California 90210
Attn: Steven Antebi
or at such other location as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice or other communication
shall be deemed to be given on the date of receipt.
14. Severability. Every provision of this Agreement is intended
to be severable. If any term or provision hereof is deemed unlawful or invalid
for any reason whatsoever, such unlawfulness or invalidity shall not affect the
validity of this Agreement.
15. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Georgia, without giving
effect to conflicts of laws.
16. Headings. The headings of this Agreement are inserted solely
for the convenience of reference and are not part of, and are not intended to
govern, limit or aid in the construction of any term or provision hereof.
17. Further Acts. Each party agrees to perform any further acts
and execute and deliver any further documents that may be reasonably necessary
to carry out the provisions and intent of this Agreement.
18. Acknowledgment Concerning Counsel. Each party acknowledges
that it had the opportunity to employ separate and independent counsel of its
own choosing in connection with this Agreement.
19. Independent Contractor Status. There is no relationship,
partnership, agency, employment, franchise or joint venture between the
parties. The parties have no authority to bind the other or incur any
obligations on their behalf.
20. Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first written above.
AMERICAN ARTISTS FILM CORPORATION
By: /s/ Steven D. Brown
--------------------------------------
Steven D. Brown, CEO
FONTENELLE, LLC
By: /s/ Steven Antebi
--------------------------------------
Steven Antebi, Authorized Officer
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<PAGE> 5
CONSULTING AGREEMENT
This agreement ("Agreement") is made and entered into this 19th day of
February, 1999 between American Artists Film Corporation, a Missouri
corporation (the "Company") and F T Enterprises, Inc. ("Consultant"), a Nevada
corporation.
RECITALS
A. The Company is a multi-faceted entertainment company
committed to the creation, production and distribution of original, innovative
programming and films for a variety of media. The Company has also developed a
concept for the installation and operation of a network of large screen video
display ("LSVD") units.
B. The Consultant is generally knowledgeable in the areas of
business operations and plan implementation, possesses a high level of
experience in the entertainment/LSVD industry and is experienced in evaluating
and developing strategic business plans.
C. The Company wishes to engage the Consultant on a nonexclusive
basis as an independent contractor to utilize Consultant's general business and
entertainment/LSVD industry experience and contacts and to further develop and
refine its strategic business plan.
D. The Consultant is willing to be so retained on the terms and
conditions as set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
1. Engagement. The Company hereby retains and engages Consultant
to perform the following consulting services (the "Consulting Services"):
a. Review and evaluate the Company's current business
plan and remain knowledgeable about the contents thereof;
b. Work with the Company's management to develop and
prepare a detailed strategic business plan as well as periodically revise said
plan as required during the Term of this Agreement;
c. Provide general strategic advice and consultation to
the Company's management on all matters pertaining to the business of the
Company, and;
d. Provide introductions to entertainment/LSVD industry
contacts.
2. Duties Expressly Excluded. This Agreement expressly excludes
the Consultant from providing any and all capital formation and/or public
relation services to the Company inclusive of but not limited to (i) direct or
indirect promotion of the Company's securities; (ii) assistance in making of a
market in the Company's securities; and (iii) assistance in obtaining debt
and/or equity financing.
3. Consideration. As full and complete consideration for the
performance by the Consultant of the Consulting Services, the Company will
issue to the Consultant 400,000 shares of the Company's Class A common stock,
$0.001 par value (the "Shares"). In the event that Consultant does not
completely perform the Consulting Services (for any reason, including the death
or incapacity of Consultant), then for each month that Consultant does not
perform the Consulting Services during the Term, one sixth (1/6) of the Shares
(as adjusted for stock splits, reverse stock splits, stock dividends or
distributions or other reclassifications of the Company's capital stock) shall
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<PAGE> 6
be returned to the Company and canceled. Consultant agrees to purchase shares
in the open market, if necessary, to fulfill such obligation to return shares
to the Company.
The Shares will be issued as soon as practicable following
execution of this Agreement and the filing of a registration statement under
the Securities Act of 1933, as amended, on Form S-8 (or other available form)
covering the issuance of the Shares to Consultant.
4. Term. This Agreement shall be effective for a term of six (6)
months starting from the date first written above unless sooner terminated upon
mutual written agreement of the parties hereto.
5. Expenses. Consultant shall bear his out-of-pocket costs and
expenses incident to performing the Consulting Services, without a right of
reimbursement from the Company unless such expenses are pre-approved by the
Company.
6. Consultant's Liability. In the absence of gross negligence or
willful misconduct on the part of the Consultant or the Consultant's breach of
any terms of this Agreement, the Consultant shall not be liable to the Company
or to any officer, director, employee, stockholder or creditor of the Company,
for any act or omission in the course of or in connection with the rendering or
providing of services hereunder. Except in those cases where the gross
negligence or willful misconduct of the Consultant or the breach by the
Consultant of any terms of this Agreement is alleged and proven, the Company
agrees to defend, indemnify, and hold the Consultant harmless from and against
any and all reasonable costs, expenses and liability (including reasonable
attorney's fees paid in the defense of the Consultant) which may in any way
result from services rendered by the Consultant pursuant to or in any
connection with this Agreement. This indemnification expressly excludes any and
all damages as a result of any actions or statements, on behalf of the Company,
made by the Consultant without the prior approval or authorization of the
Company.
7. Company's Liability. The Consultant agrees to defend,
indemnify, and hold the Company harmless from and against any and all
reasonable costs, expenses and liability (including reasonable attorney's fees
paid in defense of the Company) which may in any way result pursuant to its
gross negligence or willful misconduct or in any connection with any actions
taken or statements made, on behalf of the Company, without the prior approval
or authorization of the Company or which are otherwise in violation of
applicable law.
8. Representations. The Consultant makes the following
representations:
(a) Consultant has no prior or existing legally binding
obligations that are in conflict with its entering into this Agreement;
(b) Consultant shall not offer or make payment of any
consideration to brokers, dealers, or others for purposes of inducing the
purchase, making of a market or recommendation for the purchase of the
Company's securities;
(c) Consultant is not currently the subject of an
investigation or inquiry by the Securities and Exchange Commission, the NASD,
or any state securities commission;
(d) Consultant's activities and operations fully comply
with now and will comply with in the future all applicable state and federal
securities laws and regulations;
(e) Consultant is either properly registered as, or
exempt from registration, as a broker-dealer or an investment advisor;
(f) Consultant understands that, as a result of its
services, it may come to possess material non-public information about the
Company, and that it has implemented internal control procedures designed to
reasonably to insure that it and none of its employees, agents, consultants or
affiliates, trade in the securities of client companies while in possession of
material non-public information;
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<PAGE> 7
(g) During the Term of this Agreement and for a period
of two year thereafter, the Consultant shall treat as the Company's
confidential trade secrets all data, information, ideas, knowledge and papers
pertaining to the affairs of the Company. Without limiting the generality of
the foregoing, such trade secrets shall include: the identity of the Company's
customers, suppliers and prospective customers and suppliers; the identity of
the Company's creditors and other sources of financing; the Company's
estimating and costing procedures and the cost and gross prices charged by the
Company for its products; the prices or other consideration charged to or
required of the Company by any of its suppliers or potential suppliers; the
Company's sales and promotional policies; and all information relating to
entertainment programs or properties being produced or otherwise developed by
the Company. The Consultant shall not reveal said trade secrets to others
except in the proper exercise of its duties for the Company, or use their
knowledge thereof in any way that would be detrimental to the interests of the
Company, unless compelled to disclose such information by judicial or
administrative process; provided, however, that the divulging of information
shall not be a breach of this Agreement to the extent that such information was
(i) previously known by the party to which it is divulged, (ii) already in the
public domain, all through no fault of the Consultant, or (iii) required to be
disclosed by Consultant pursuant to judicial or governmental order. The
Consultant shall also treat all information pertaining to the affairs of the
Company's suppliers and customers and prospective customers and suppliers as
confidential trade secrets of such customers and suppliers and prospective
customers and suppliers, and;
(h) Consultant agrees to notify the Company immediately
if, at any time, any of the representations and warranties made by the
Consultant herein are no longer true and correct or if a breach of any of the
representations and warranties made by the Consultant herein occurs.
9. The Company makes the following representations:
(a) The Company is not currently the subject of an
investigation or inquiry by the Securities and Exchange Commission, the NASD,
or any state securities commission.
(b) The Company is in good standing in its state of
incorporation, Missouri.
(c) The Company is a "reporting company" under the
Securities Act of 1934 and has timely filed all of its required reports, except
for its Form 10-KSB for the year ended July 31, 1998 and its Form 10-QSB for
the quarter ended October 31, 1998.
(d) The Company and its senior management are not aware
of any materially adverse events not previously disclosed in the Company's
annual and quarterly reports with the Securities and Exchange Commission.
10. Entire Agreement. This Agreement embodies the entire
agreement and understanding between the Company and the Consultant and
supersedes any and all negotiations, prior discussions and preliminary and
prior agreements and understandings related to the primary subject matter
hereof. This Agreement shall not be modified except by written instrument duly
executed by each of the parties hereto.
11. Waiver. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute a waiver of any other provision, nor shall
any waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
12. Assignment and Binding Effect. This Agreement and the rights
hereunder may not be assigned by the parties (except by operation of law or
merger) and shall be binding upon and inure to the benefit of the parties and
their respective successors, assigns and legal representatives.
13. Notices. Any notice or other communication between the
parties hereto shall be sufficiently given if sent by certified or registered
mail, postage prepaid, or faxed and confirmed at the following locations:
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<PAGE> 8
Company:
American Artists Film Corporation
6600 Peachtree Dunwoody Road, Bldg. 600, Suite 250
Atlanta, Georgia 30328
Attn: Steven D. Brown
Consultant:
F T Enterprises, Inc.
345 North Maple Drive, Suite 358
Beverly Hills, California 90210
Attn: David Antebi
or at such other location as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice or other communication
shall be deemed to be given on the date of receipt.
14. Severability. Every provision of this Agreement is intended
to be severable. If any term or provision hereof is deemed unlawful or invalid
for any reason whatsoever, such unlawfulness or invalidity shall not affect the
validity of this Agreement.
15. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Georgia, without giving
effect to conflicts of laws.
16. Headings. The headings of this Agreement are inserted solely
for the convenience of reference and are not part of, and are not intended to
govern, limit or aid in the construction of any term or provision hereof.
17. Further Acts. Each party agrees to perform any further acts
and execute and deliver any further documents that may be reasonably necessary
to carry out the provisions and intent of this Agreement.
18. Acknowledgment Concerning Counsel. Each party acknowledges
that it had the opportunity to employ separate and independent counsel of its
own choosing in connection with this Agreement.
19. Independent Contractor Status. There is no relationship,
partnership, agency, employment, franchise or joint venture between the
parties. The parties have no authority to bind the other or incur any
obligations on their behalf.
20. Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first written above.
AMERICAN ARTISTS FILM CORPORATION
By: /s/ Steven D. Brown
-----------------------------------------
Steven D. Brown, CEO
F T ENTERPRISES, INC.
By: /s/ David Antebi
-----------------------------------------
David Antebi, Authorized Officer
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<PAGE> 1
EXHIBIT 5
Attorneys at Law Suite 310
Sims Moss Kline & Davis LLP 400 Northpark Town Center
A Limited Liability Partnership 1000 Abernathy Road, N.E.
Atlanta, Georgia 30328
Telephone: (770) 481-7200
Facsimile: (770) 481-7210
Raymond L. Moss
Direct Dial: (770) 481-7201
Email: [email protected]
March 12, 1999
American Artists Entertainment Corporation
6600 Peachtree Dunwoody Road
Building 600, Suite 250
Atlanta, Georgia 30328
Re: Registration Statement on Form S-8 Relating to Consulting
Agreements
Gentlemen:
With respect to the Registration Statement on Form S-8 (the
"Registration Statement"), filed by American Artists Entertainment Corporation,
a Missouri corporation (the "Company"), with the Securities and Exchange
Commission for the purpose of registering under the Securities Act of 1933, as
amended, 1,200,00 shares of the Company's Class A common stock, par value of
$0.001 per share, for issuance pursuant to the Consulting Agreements (the
"Plan"), we have examined such documents and questions of law we consider
necessary or appropriate for the purpose of giving this opinion. On the basis
of such evaluation, we advise you that in our opinion the 1,200,000 shares
covered by the Registration Statement in accordance with the terms stated in
the Plan and the Registration Statement, will be duly and legally authorized,
issued and outstanding and will be fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or under the rules and regulations of
the Securities and Exchange Commission relating thereto.
Sincerely,
SIMS MOSS KLINE & DAVIS LLP
By: /s/ Raymond L. Moss
-------------------------------------
Raymond L. Moss
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<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
AMERICAN ARTISTS ENTERTAINMENT CORPORATION
Atlanta, Georgia
We hereby consent to the incorporation by reference of our report dated
March 2, 1999 relating to the consolidated financial statements of American
Artists Entertainment Corporation (formerly American Artists Film Corporation)
included in the Company's Annual Report on Form 10-KSB as of and for each of the
years ended July 31, 1998 and 1997 in the Registration Statement on Form S-8
pertaining to the 1999 Consultants' Stock Plan.
/s/ BDO Seidman, LLP
- ----------------------------------
BDO Seidman, LLP
Atlanta, Georgia
March 12, 1999
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