CONSULTANCY AGREEMENT
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THIS AGREEMENT made as of and to have effect from the 11th day of
October, 2002
BETWEEN:
HORSEPOWER BROADCASTING NETWORK (HBN) INTERNATIONAL LTD., a company
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duly incorporated in the Province of Quebec under the Canada Business
Corporation Act, which is a wholly-owned subsidiary of Sungold
Entertainment Corp., a company duly incorporated under the laws of the
Province of British Columbia, and hav-ing its registered and records
office at Suite 500 - 666 Burrard Street, Vancouver, B.C., V6C 3P6
(hereinafter called the "Company" or "HBN")
OF THE FIRST PART
AND:
LARRY R. SIMPSON, of
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51 Belmont Blvd., Georgetown, Ontario L7G 6C4
(hereinafter called the "Consultant")
OF THE SECOND PART
WHEREAS:
A. The Horsepower(TM) virtual horseracing game is available on the internet
and the Company is in the business of operating the game as a U.S. Dollar
wagering site;
B. The Company and the Consultant wish to enter into a Consulting Agreement on
the terms and conditions hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and of the covenants and agreements hereinafter contained, the parties
hereto have agreed as follows:
1. CONSULTANT AND DUTIES
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1.01 The Consultant shall act and be retained by the Company as an
independent contractor and be responsible for securing new racetracks to sign on
under an approved HBN contract as full Horsepower2 Wagering Affiliates, offering
the HP2 Progressive, pari-mutuel jackpot wager at all of their licensed
pari-mutuel facilities during their live and simulcast periods subject to their
local regulations and subject to receiving full approval from their local
regulators. Horsepower Broadcasting Network International Limited (HBN), a
federally registered Canadian Corporation doing business as www.horsepower2.com
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on the internet under license by Kahnawake Gaming Commission and will have the
obligation, duties, authority and power to provide services to the company as
Consultant, such services to include but not be limited to the following:
(i) initiate negotiations with interested parties, present the
Horsepower pari-mutuel wagering opportunity and promptly identify
any such parties to HBN's President Kim Noble Hart in writing and
with an expression of interest from such a potential North
American Racetrack Horsepower Affiliate on their Racetrack
letterhead by fax or international courier service for
consideration.
(ii) disseminating the HBN opportunity to licensed industry leaders,
owners, trainers (where appropriate) and breeders.
1.02 In conducting his duties under this agreement, the Consultant will
report to the Company's President and CEO Kim Noble Hart and will act
consistently with such of the Company's directives and policies as are made
known to him.
1.03 The Consultant will perform the duties set out above (collectively the
"Services") and protect the confidentiality of all Horsepower(TM) confidential
information.
1.04 The consultant shall be required to devote his attention full time to
providing the Services and shall devote such time as is necessary to promote the
Horsepower pari-mutuel wagering opportunity to all North American Racetracks in
a timely and professional manner.
2. TERM
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2.01 The effective date of this agreement is October 11, 2002 and shall be
for an initial term of five years and thereafter shall continue until terminated
as provided for in this agreement. Termination shall not affect the obligation
of the Company to pay remuneration under Article 3.
3. REMUNERATION
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3.01 The remuneration to be paid to the Consultant for all the services
rendered by him under this agreement shall be:
(a) a basic fee of one half of one percent (0.5%) of the gross HP2
racetrack wagering of any HBN approved North American Racetrack
formally introduced and identified to the Company by Consultant, which
fee shall continue to accrue and be paid by company for a period of
sixty months from the first day HBN approved wagering begins in
earnest at their facilities under the regulation and supervision of
their local pari-mutuel authority.
(b) a consulting fee of $90,000 ($2,500 CAD per month in cash and balance
to be in 25,000 shares) for the first year ending November 2003
(c) a Stock Option Agreement to purchase a total of Two Hundred Thousand
(200,000) common shares in the capital of the Company at a price of
$0.15 US per share exercisable on or before October 11, 2007
(d) a basic fee of $25,000 CAD once HBN has approved formally the official
pari-mutual offering of Horsepower Progressive Jackpot wagering at any
HBN approved Thoroughbred, Standard bred or Greyhound Racetrack in
North America formally introduced and identified to the Company by
Consultant. Such fee shall be paid on the first day HBN wagering
begins in earnest at the facility.
(e) a finders fee of 5 percent for any private placement of Sungold
Entertainment Corp. shares arranged by the Consultant and accepted by
Sungold Entertainment Corp.
3.02 The fees payable to the Consultant may be altered, by mutual agreement
between the parties in writing, executed by the parties hereto. All racetrack
fees payable to the Consultant shall be dispersed to the Consultant or its
assignee upon the initiation of official HP2 wagering and acceptance and
approval from the local pari-mutuel authority.
3.03 The entire Item 3 of this present agreement (that is, subparagraphs
3.01 through 3. is deemed by the parties to this agreement to be a material
provision of this agreement.
4. NON-WAIVER
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4.01 No consent or waiver, express or implied, by any party to or of any
breach or default by the other party in the performance by the other of its
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other breach or default of the same or any other obligation of such
party. Failure on the part of any party to complain of any act or failure of
act of the other of them, or to declare the other party in default irrespective
of how long such failure continues, shall not constitute a waiver by such party
of its rights hereunder or of the right to then or subsequently declare a
default.
5. PRIOR AGREEMENTS
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5.01 Save and except for the express provisions of this agreement, any and
all previous agreements, written or oral, between the parties hereto or on their
behalf relating to the employment of the Consultant by the Company are hereby
terminated and canceled.
6. SEVERABILITY
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6.01 If any covenant or agreement herein is determined to be void or
unenforceable in whole or in part, it shall not be deemed to affect or impair
the enforceability or validity of any other covenant or agreement of this
Agreement or any part thereof, and any such covenant or agreement may be severed
from this Agreement without affecting the remainder of the Agreement.
7. GOVERNING LAW
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7.01 The provisions of this agreement shall be governed by and interpreted
in accordance with the laws of the Province of British Columbia, Canada.
8. NOTICE
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8.01 Any notice or other communication required or permitted to be given
hereunder shall be in writing and may be validly given either if delivered
personally, telexed, telegrammed, sent by facsimile, or mailed by prepaid
registered airmail, addressed to the Consultant or to the Company at their
addresses hereinbefore appearing. Any notice or other communication aforesaid
if delivered shall be deemed to have been given or made on the date on which it
was delivered, or if mailed as aforesaid shall be deemed to have been given or
made on the fifth business day following the day on which it was mailed.
PROVIDED THAT if the notice is posted at the time of threatened or actual
disruption in postal services whether by reason of labor dispute or otherwise,
any notice so posted shall not be deemed to have been given until actually
received; and if a notice is delivered on a date that is a Saturday or holiday.
Notwithstanding the foregoing, any notice between the parties hereto may be
given by transmitting it via e-mail, facsimile or telefax to the email address
facsimile or telefax number of the other party as above given, or as changed by
either party from time to time in accordance herewith, and by sending it in hard
copy, duly executed, simultaneously to the other party by means of international
courier service (such as FedEx, DHL, or Purolater) and any such notice so
transmitted and sent shall be deemed to have been given, and any relevant time
periods running from its delivery shall be deemed to commence on the day of its
delivery to the other party by said international courier service, the delivery
records of any such international courier service being deemed definitively
dispositive of the date of delivery by the parties hereto. Any party to this
agreement may change its address, e-mail address or facsimile or telefax number
for service from time to time by notice given in accordance with the foregoing.
9. HEADINGS
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9.01 The headings to the clauses in this agreement have been inserted as a
matter of convenience and for reference only and in no way define, limit, or
enlarge the scope or meaning of this agreement or any provision hereof.
10. CONFIDENTIAL INFORMATION
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10.01 The parties hereto acknowledge and agree that the Consultant by virtue
of his position with the Company will have access to confidential and secret
information and therefore the Consultant agrees that during the term of this
agreement and on termination, for any reason whatsoever, it will not divulge or
utilize to the detriment of the Company any of such confidential or secret
information so obtained.
11. TERMINATION OF AGREEMENT
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11.01 Notwithstanding any other provision herein, it is understood and
agreed by and between the parties hereto that the Consultant may terminate this
agreement in its entirety by giving the Company not less than one hundred and
eighty (180) days written notice of such intention to terminate; provided,
however, such termination shall affect the obligation of Company to pay
Consultant the amounts set forth in Article 3 above.
11.02 The Company may also terminate this agreement in its entirety, for
cause by giving the Consultant not less than one hundred and eighty (180) days
written notice of such intention to terminate; provided, however, such
termination shall affect the obligation of company to pay consultant the amounts
set forth in Article 3 above.
11.03 It is specifically agreed between the parties to this agreement that,
notwithstanding the termination of this agreement for any reason whatsoever, in
the event of a sale of a private placement of common shares of the parent
company shares (Sungold Entertainment Corp: SGGNF, to a party (or any related
legal entity, director, officer, shareholder, or employee or other related
person of such a party) introduced and identified to the Company by Consultant,
the remuneration payable to the Consultant shall be five percent of the net
placement amount paid over to the Consultant or his assignee as provided
hereinabove in Item 3 of this agreement.
12. AGREEMENT VOLUNTARY AND EQUITABLE
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12,01 The Company and the Consultant acknowledge and declare that in
executing this Agreement they are each relying wholly on their own judgment and
knowledge and have not been influenced to any extent whatsoever by any
representations or statements made by or on behalf of the other party regarding
any matters dealt with herein or incidental hereto.
12.02 The Company and the Consultant further acknowledge and declare that they
will
each have carefully considered and understand the terms contained in the
agreement including, but without limiting the generality of the foregoing, the
Consultant's rights upon termination and the restrictions on the Consultant
after termination, and acknowledge and agree that the said terms of this
agreement and rights and restrictions upon termination are mutually fair and
equitable, and that they execute this agreement voluntarily and of their own
free will.
13. TIME IS OF THE ESSENCE
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13.01 Time is of the essence in the performance of this agreement by the
parties hereto.
14. AMENDMENTS
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14.01 Except as otherwise provided herein, this agreement may only be
modified or amended by a written agreement duly executed by each party.
15. ENTIRE AGREEMENT
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15.01 This agreement and the instruments and schedules referred to herein
constitute the entire agreement between the parties with respect to the subject
matter of the agreement and supercede all prior agreements, undertakings
negotiations and discussions, whether oral or written, between the parties and
there are no warranties, conditions, representations or other agreements between
the parties in connection with the subject matter of this agreement, except as
specifically set forth herein.
16. SUCCESSORS AND ASSIGNS
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16.01 This agreement and everything contained herein shall inure to the
benefit of and be binding upon the parties and their respective successors and
assigns.
17. INDEPENDENT ADVICE
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17.01 The Consultant has been asked to obtain independent legal advice before
signing this agreement.
18. ACKNOWLEDGEMENT
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18.01 Each of the parties to this agreement hereby acknowledges that it or he
has read this agreement, understands it and agrees to be bound by it.
18.02 The Company hereby warrants and represents that it has entered into this
agreement pursuant to a duly approved unanimous resolution of its Board of
Directors in accordance with the laws of Canada and it shall not at any time
assert that its entering into this agreement was either not authorized or an
ultra vires act. This subparagraph
18.02 is deemed by the parties to this agreement to be a material provision of
this agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
HORSEPOWER BROADCASTING NETWORK
(HBN) INTERNATIONAL LTD.
Per: /s/ Kim N. Hart
_________________________
Kim N. Hart, President & CEO
The terms and conditions of this letter agreement are hereby accepted and agreed
to this 11th day of October 2002.
/s/ Larry R. Simpson
__________________________
Larry R. Simpson
"Consultant"
SIGNED, SEALED AND DELIVERED
in the presence of:
)
)
)
/s/ Anne Kennedy )
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Name of witness: )
) /s/ Lonne Kennedy
) ________________________
) Signature of Witness
)
1504 - 1050 Burrard Str. )
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Vancouver, BC )
Address of witness: )
This is page 7 to that certain Consulting Agreement dated as of October 11th,
2002 between
HORSEPOWER BROADCASTING NETWORK (HBN) INTERNATIONAL LTD.
and LARRY R. SIMPSON, CONSULTANT.