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Exhibit 4.7
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT, dated October 30, 1998 (the "Agreement"), by and
among THE ENDEAVOUR CAPITAL FUND S.A. ("Endeavour" or an "Initial Subscriber")
and AMRO INTERNATIONAL S.A. ("Amro" or an "Initial Subscriber"), on the one
hand, and ADVANTAGE (BERMUDA) FUND, LTD., a Bermuda corporation ("Bermuda" or
an "Assignee"), and CANADIAN ADVANTAGE L.P., an Ontario limited partnership
("Canadian" or an "Assignee"), on the other hand.
W I T N E S S E T H:
WHEREAS, American Champion Entertainment, Inc. (the "Company") and the Initial
Subscribers are parties to that certain Securities Purchase Agreement, dated
as of July 2, 1998 (the "Securities Purchase Agreement"; all capitalized terms
not otherwise defined herein shall have the meanings ascribed to them in the
Securities Purchase Agreement); providing, among other things, for the sale
and purchase of the Additional Debentures in the aggregate principal amount of
$800,000, on the terms and conditions therein stated; and
WHEREAS, pursuant to the terms of that certain First Additional Tranche
Agreement, dated September 23, 1998 (the "First Additional Agreement"),
between the Company and Amro, Amro has purchased $250,000 of the First
Additional Tranche, so that there remains a balance of $550,000 of Additional
Debentures to be sold and purchased pursuant to the terms of the Securities
Purchase Agreement (the "Remaining Additional Debentures"); and
WHEREAS, each of the Initial Subscribers is willing to assign to the
Assignees, in the aggregate, such Initial Subscriber's rights to purchase the
Remaining Additional Debentures, to the extent applicable to such Initial
Subscriber, and each of the Assignees is willing to assume a portion of the
Initial Subscribers' obligations with respect to the Remaining Additional
Debentures, all on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of this Agreement and intended to
be legally bound hereby, the parties hereto agree as follows:
1. Assignment. (i) Each of the Initial Subscribers hereby
assigns to the Assignees (allocated among them as provided below) such
Initial Subscriber's rights to acquire the Remaining Additional Debentures
as indicated below. In connection therewith, each Initial Subscriber
assigns to each Assignee such Initial Subscriber's rights under the
Securities Purchase Agreement to the extent relevant to the Remaining
Additional Debentures, but not otherwise.
(ii) Endeavour is assigning its rights to purchase Additional Debentures in
the aggregate principal amount of $400,000, including $250,000 of Additional
Debentures in the First Additional Tranche and $150,000 of Additional
Debentures in the Second Additional Tranche. Amro is assigning its rights to
purchase $150,000 of Additional Debentures in the Second Additional Tranche.
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(iii) In consideration of the aforesaid assignments by the Initial
Subscribers, (x) Bermuda is assuming the obligations to purchase $275,000 of
the Remaining Additional Debentures, and (y) PPartners is assuming the
obligations to purchase $275,000 of the Remaining Additional Debentures.
2. Each of the Assignees represents and warrants to and covenants and
agrees with the Initial Subscribers and the Company (which, upon its consent to
the transactions contemplated by this Agreement, as evidenced by its signature
at the foot of this Agreement, shall be a third party beneficiary of this
Agreement), each of the representations, warranties, covenants and agreements
set forth in Section 2 of the Securities Purchase Agreement, as if such
representation were set forth herein in full and as if it such Assignee were a
Buyer named therein. In addition, and not in lieu thereof, each Assignee
hereby further represents and warrants that such Assignee (x) has reviewed the
First Additional Agreement and such additional documents as have been filed by
the Company with the SEC since the Initial Closing Date, (y) is not relying on
any oral or written representations of either or both of the Initial
Subscribers in connection with the transactions contemplated by the Securities
Purchase Agreement or this Agreement and (y) will look solely to the Company
for the performance of the terms of the Securities Purchase Agreement.
3. (i) To induce the Initial Investors and the Assignees to enter into
this Assignment Agreement, the Company, by its execution in the space provided
at the foot of this Agreement,
(a) hereby notifies each of the Initial Investors and each of the Assignees,
that, as contemplated by the provisions of Section 4(E)(vi) of the Debentures
issued to the Initial Investors and to be issued to the Assignees, the
Conversion Rate will be permanently computed as if there were no Floor Price
(as those terms are defined in the Debentures) for all of such Debentures;
(b) hereby consents to the assignment of the rights of the Initial Subscribers
to the Assignees and the assumption by the Assignees of the obligations of the
Initial Subscribers with respect to the Remaining Additional Debentures;
(c) hereby agrees that (i) within two (2) business days after the closing of
the Remaining Additional Debentures, the Company will give its transfer agent
irrevocable written instructions that the transfer agent shall rely on the
opinion of counsel of a Holder (as defined in a Debenture) regarding the
issuance of shares of Common Stock without a restrictive legend of any kind to
such Holder upon conversion of all or a part of a Debenture, and (ii) the
Company will pay the legal fees for such opinion of counsel of Holder if, if
upon conversion of a Debenture by a Holder, the Company's transfer agent
requires an opinion regarding the issuance of shares of Common Stock without a
legend and the Company's counsel for any reason does not issue such an opinion
within five (5) business days after the relevant Delivery Date; provided,
however, that nothing in this subparagraph (c) shall limit or otherwise amend
the Company's obligations to a Holder on conversion as provided in any of the
Transaction Agreements; and
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(d) hereby agrees that it will cause its counsel to issue a letter indicating
that each of the Assignees may rely on the Authorization Opinion, dated
October 19, 1998, issued by such counsel to the Initial Subscribers, as if it
were addressed to such Assignee. (ii) In furtherance of the provisions of the
(ii) In furtherance of the provisions of the subparagraph (i)(b) of this
Section 3, and not in limitation thereof, the Company acknowledges and agrees
that (x) the Company will not look to either of the Initial Subscribers with
respect to any obligations to purchase the Remaining Additional Debentures; (y)
all terms of the Securities Purchase Agreement as may be relevant to the
Remaining Additional Debentures, including, but not necessarily limited to, the
provisions of Sections 5, 9, 10, 11 and 12 thereof, shall be enforceable by
each of the Assignees, to extent of the interests assigned to and assumed by
such Assignee, as if it were a Buyer named therein; and (z) for purposes of
Section 11 thereof, the address for notices to each Assignee shall be such
Assignee's address opposite its signature at the foot of this Agreement.
4. Except to the extent specifically contemplated herein, all rights and
other obligations of Endeavour and Amro with respect to the Company remain in
full force and effect. Nothing herein shall be deemed to limit or reduce the
Company's obligations to either or both of the Initial Subscribers with respect
to any of the Transaction Agreements or any existing Debenture or Warrant.
5. The provisions of Section 10 of the Securities Purchase Agreement are
incorporated herein by reference as if set forth herein in full.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
THE INITIAL SUBSCRIBERS:
THE ENDEAVOUR CAPITAL FUND S.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director
AMRO INTERNATIONAL S.A.
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
Name: ▇. ▇. ▇▇▇▇▇▇▇▇
Title: Director
THE ASSIGNEES:
ADVANTAGE (BERMUDA) FUND, LTD.
c/o Thomson Kernaghan & Co.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Canada Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Title: General Partner
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
CANADIAN ADVANTAGE L.P.
c/o Thomson Kernaghan & Co.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Canada Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Title: General Partner
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
CONSENTED AND AGREED TO BY:
AMERICAN CHAMPION ENTERTAINMENT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President & CEO