**EXHIBIT 10.61**
                   Stock Purchase Agreement with Mr. Yuanhao Li

 

 
**STOCK PURCHASE AGREEMENT**
		THIS AGREEMENT, made as of the 27th day ofDecember, 2000, by and among American Champion Entertainment, Inc., acorporation organized and existing under the laws of the state of Delaware, withits principal offices at 22320 Foothill Blvd., Hayward, California 94541("Seller"), and, Mr. Yuanhao Li, having an address at 31 Ashglen Way, Markham,Ontario, L3R 3A6, Canada ("Purchaser").

		WHEREAS, Purchaser wishes to purchase certain newlyissued shares of common stock of Seller, and Seller wishes to sell such sharesto Purchaser.

		NOW THEREFORE, intending to be legally bound hereby,and in consideration of the mutual covenants herein contained and other good andvaluable consideration, the receipt and sufficiency of which is herebyacknowledged, the parties hereto agree as follows:
**ARTICLE I**
PURCHASE AND SALE OF STOCK

		1.1 Terms. Subject to the terms andconditions hereof, and in reliance upon the mutual representations, covenants,agreements and warranties herein contained, and for, and in consideration of theaggregate payment by Purchaser to Seller in the amount of $1,000,000 (the"Purchase Price"), the parties hereby agree that, at the closing:

			(i) Seller shall sell, assign, transfer andconvey to Purchaser and Purchaser shall purchase 6,250,000 shares of commonstock, $.0001 par per share of Seller ("Common Stock"). Seller shall deliver atthe Closing certificates representing such shares of Common Stock (the"Shares"), in the denominations set forth by Purchaser.

			(ii) In consideration for the sale of the Shares,Purchaser shall make, and Seller shall accept, payment of the Purchase Price bydelivery of a certified or official bank check or checks payable to Seller, orwire transfer, in the amount of $1,000,000, or a promissory note from Purchaserto Seller for the same amount due not later than March 31, 2001.

			(iii)	Notwithstanding anything else containedherein, in the event the Seller is advised by The Nasdaq Stock Market ("Nasdaq")that the sale of the Shares without prior approval by the stockholders of theSeller will result in the delisting of the Seller from Nasdaq, Seller orPurchaser, in their sole discretion, may upon written demand to the other partyrequire that the Shares be returned to Seller for cancellation and the fullamount of the Purchase Price be reflected as a debt of the Seller to Purchaser,on the terms and conditions set forth in the promissory note attached hereto asExhibit 1.1(iv).
**ARTICLE II**
REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants, upon whichrepresentations and warranties Purchaser relies, as follows:

		2.1.	 Corporate Organization. Seller is acorporation duly organized, validly existing, and in good standing under thelaws of its state of incorporation, and has all requisite power and authority(corporate and other) to own, lease and operate its properties and carry on itsbusiness as it is now being conducted and to enter into this Agreement and toconsummate the transactions contemplated hereunder. Seller is qualified,licensed or registered to do business in any states where the nature of itsbusiness and activities and the character of the properties owned by it, requireit to be so qualified, licensed or registered, except where the failure to be soqualified, licensed or registered would not have a materially adverse effect onthe business or operations of Seller.

		2.2.	Power and Authority. Seller has thefull, absolute and unrestricted right, power, legal capacity and authority toenter into this Agreement, and to carry out the transaction contemplated hereby;nor will it violate any statute, law, regulation, rule, court or administrativejudgment, order, writ, injunction or decree which is applicable to Seller or anyof its properties, or to which Seller is subject or by which it is bound. Allactions of Seller necessary to authorize it to execute, deliver and consummatethis Agreement have been duly and validly authorized and taken, and no furtheractions or authorizations are required. This Agreement constitutes the valid,legally binding obligation of Seller, and is enforceable in accordance with itsterms. The Shares, when issued, will be duly authorized, validly issued, fullypaid and non-assessable. The Shares, when issued, will be free and clear of allliens, charges, encumbrances, liabilities and restrictions of every kind, natureor description.

		2.3.	No Violations. The execution anddelivery of this Agreement and the consummation of the transactions contemplatedby this Agreement will not result in any breach of, or constitute a defaultunder, the Certificate or Articles of Incorporation or By-laws of Seller, or anyagreement, instrument or obligation to which Seller is a party or by which it isbound.

		2.4.	Litigation. Seller is not a party to,or the subject of, any action, suit, litigation, claim, administrativeproceeding or governmental or quasi-governmental investigation relating toSeller, its operations, properties, business or prospects, or to this Agreementor the consummation or the transactions contemplated hereby, or material to suchtransactions; nor to the best of the knowledge of Seller is any such action,suit, litigation, proceeding or investigation threatened or contemplated, nordoes there exist any basis for any of the same. Seller is not subject to anyorder, judgment, decree or obligation which would limit its ability to operateits business in the ordinary course.

		2.5. Condition of Assets. All of Seller'sassets are in good operating condition and repair, ordinary wear and tearexcepted, and are adequate for the uses to which they are being put.

		2.6. Taxes. Seller has paid (and, as to any ofthe following which are payable after the date hereof, Seller has properly andadequately reserved against and will pay when due) all income taxes, sales anduse taxes, unemployment taxes, ad valorem taxes, property taxes, excise taxes,duties and imports, and all other taxes of every kind, character or descriptionimposed by any federal, state or local governmental or quasi-governmentalauthority (collectively, "Taxes"), required to be paid with respect to theassets or operations of Seller for all periods prior to the Closing Date. Allfederal, state and local tax returns and reports (collectively, "Returns") to befiled by Seller with respect thereto have been accurately prepared, dulyexecuted and filed or will be so prepared, executed and filed before theirrespective due dates, and all Taxes due with respect to such returns as filedhave been paid (or will be so paid) by Seller in full, except where the failureto make any such payments would not have a material adverse effect upon Seller.Seller has not received, and there are not outstanding, any notices of anymaterial deficiencies, adjustments, assessments or changes in assessments orincreases in Taxes or tax rates with respect to any Taxes, or other chargeswhich are due or required to be filed at or prior to the date hereof, and whichhave not been paid in full or otherwise fully settled and satisfied. Noextension of time is in effect for the assessment of deficiencies against Sellernor has any waiver of any statute of limitations with respect to any taxableyear.

		2.7. Compliance with Laws. Seller has compliedwith, and is currently in compliance with all statutes, laws, ordinances, rules,regulations, judgments, decrees and orders, of any government, court orgovernmental or quasi-governmental authority, to which it is subject or by whichit is bound, except where the failure to comply therewith would not have amaterial adverse effect upon the Seller. Seller has all material permits,licenses and authorizations required for the operation of its business as it ispresently conducted 

	("Permits"), and all of such Permits are in full forceand effect. 

		2.8. Labor Matters.

			(i) No employees of Seller are represented by anylabor organization and, as of the date hereof, no labor organization or group ofemployees of Seller has made a demand for recognition, has filed a petitionseeking a representation proceeding or given Seller notice of any intention tohold an election of a collective bargaining representative. There is no strike,work stoppage, or labor disturbance pending or threatened which involves anyemployee of Seller;

			(ii) There are no unfair employment or labor practice chargeswhich are presently pending. Seller has no employment-related litigation oradministrative proceedings which are presently pending, filed by or on behalf ofany employee of Seller or involving any employee of Seller; and

			(iii) As of the date hereof, there are nopresently pending or threatened, claims by any governmental authority, labororganization or employee of Seller alleging that Seller has violated anyapplicable laws respecting employment practices. Seller is in compliance in allmaterial respects with its obligations under all statutes, executive orders andother governmental regulations governing its employment practices, includingwithout limitation, provisions relating to wages, hours, equal opportunity andpayment of social security and other taxes.

		2.9. Trademarks; Trade Names; Etc. Allpatents, trademarks, service marks, trade names, copyrights and similar rights(collectively, "Rights"), and any applications in respect thereof, andinventions, processes and formulae (collectively, "Processes") used by Seller inwhole or in part for the conduct of its business, all of which are owned bySeller free and clear of any and all licenses, liens, claims, securityinterests, charges or encumbrances whatsoever, are valid and in good standing,and do not to the best of Seller's knowledge infringe upon, and have not to thebest of Seller's knowledge, in the past infringed upon, the rights of any otherperson, firm or corporation. 	

		2.10. Insurance. Seller maintains adequatepolicies of fire, liability, title, professional liability, theft, employeefidelity workers' compensation and all other forms of casualty and liabilityinsurance. All of such policies are sufficient for compliance with allrequirements of law and of all contracts, commitments and agreements of anynature to which Seller is a party, and provide coverage for property in limitsof not less than the amounts sufficient to replace all property owned by Sellerupon loss, with no co-insurance penalties applicable thereto. Seller is not indefault under any of such policies or binders, and Seller has not failed to giveany notice or to present any claim under any such policy or binder in a due andtimely fashion. There are no facts upon which an insurer might be justified inreducing coverage or increasing premiums on existing policies or binders. Thereare no outstanding unpaid claims under any such policies or binders.

		2.11. Public Reports.
		Purchaser has had an opportunity to review thefilings of Seller made with the Securities and Exchange Commission (the"Filings"). The filings are true and accurate in all material respects, do notcontain any material misstatements and do not omit to state any materialinformation required to be set forth therein.

		2.12. Accuracy of Representations andWarranties. None of the representations and warranties made by Sellercontained in this Agreement, including all Exhibits, nor in any statement,document, certificate, schedule, list, memorandum or other writing(collectively, "Statements") furnished or to be furnished by Seller pursuanthereto, or in connection with the transactions contemplated hereby, is or willbe incorrect or incomplete, or contains or will contain any untrue statement offact, and none of such representations, warranties and Statements omits or willomit to state a fact necessary in order to make the statements contained hereinor therein not misleading. There is no fact known to Seller which Seller has notdisclosed in this Agreement, or in an Exhibit hereto, or in a Statement, whichadversely affects or may reasonably be expected to affect adversely the businessor assets of Seller.
**ARTICLE III**
REPRESENTATIONS AND WARRANTIES OF PURCHASER

	Purchaser represents and warrants to Seller, uponwhich representations and warranties Seller relies, as follows:

		3.1.	Power and Authority. The Purchaser hasthe full, absolute and unrestricted right, power, legal capacity and authorityto enter into this Agreement and to carry out the transaction contemplatedhereby; nor will it violate any statute, law, regulation, rule, court oradministrative judgment, order or decree which is applicable to any Purchaser,or to which it is subject or by which it is bound. This Agreement constitutesthe valid, legally binding obligation of Purchaser and is enforceable inaccordance with its terms.

		3.2.	Litigation. Purchaser is not a partyto, or the subject of, any action, suit, litigation, claim, administrativeproceeding or governmental or quasi-governmental investigation relating thisAgreement or the consummation or the transactions contemplated hereby, ormaterial to such transactions; nor to the best of the knowledge of eachPurchaser is any such action, suit, litigation, proceeding or investigationthreatened or contemplated, nor does there exist any basis for any of thesame.

		3.3. Acquisition for Investment. Purchaser hassuch knowledge and experience in financial and business matters that it iscapable of evaluating the merits and risks of the investment in the Shares, andis able to bear the economic risks of such investment. Purchaser acknowledgesthat:

			(i) they have been given the opportunity to askquestions of Seller's management; and

			(ii)	the sale of the Shares has not beenregistered under the Securities Act of 1933 (the "Securities Act"); there is nocommitment to register the Shares or the Warrants under the Securities Actexcept as provided in Article IV; and Purchasers are relying on the exemptionfrom such registration provided by Section 4(2) of the Securities Act as atransaction by an issuer not involving a public offering.

		3.4.	Accuracy of Representations andWarranties. None of the representations and warranties made by Purchasercontained in this Agreement, including all Exhibits, nor in any Statementfurnished or to be furnished by Purchaser pursuant hereto, or in connection withthe transactions contemplated hereby, is or will be incorrect or incomplete, orcontains or will contain any untrue statement of fact, and none of suchrepresentations, warranties and Statements omits or will omit to state a factnecessary in order to make the statements contained herein or therein notmisleading.
**ARTICLE IV**
REGISTRATION RIGHTS

 

		4.1 Registration. Upon the written requestof the Purchaser, all of the Shares and the shares of Common Stock issuable uponexercise of the Warrants (collectively, the "Securities"), shall be registeredfor resale pursuant to the Securities Act, pursuant to which Seller shall:

			i.	prepare and file with the Securities andExchange Commission (the "Commission") a registration statement and shall useits best efforts to cause such registration statement to become effective andremain effective until all the Securities are sold or become capable of beingpublicly sold without registration under the Securities Act.

			ii.	prepare and file with the Commission suchamendments and supplements to such registration statement and the prospectusused in connection therewith as may be necessary to keep such registrationstatement effective and to comply with the provisions of the Securities Act withrespect to the sale or other disposition of all securities covered by suchregistration statement whenever Purchaser shall desire to sell or otherwisedispose of the same (including prospectus supplements with respect to the salesof securities from time to time in connection with a registration statementpursuant to Rule 415 of the Commission); 

			iii.	furnish to Purchaser such numbers ofcopies of a summary prospectus or other prospectus, including a preliminaryprospectus or any amendment or supplement to any prospectus, in conformity withthe requirements of the Securities Act, and such other documents, as Purchasermay reasonably request in order to facilitate the public sale or otherdisposition of the Securities owned by Purchaser;

			iv.	use its best efforts to list suchSecurities on any securities exchange on which any securities of the Seller arethen listed, if the listing of such Securities is then permitted under the rulesof such exchange;

			v.	notify Purchaser, at any time when aprospectus relating thereto covered by such registration statement is requiredto be delivered under the Securities Act, of the happening of any event of whichit has knowledge as a result of which the prospectus included in suchregistration statement, as then in effect, includes an untrue statement of amaterial fact or omits to state a material fact required to be stated therein ornecessary to make the statements therein not misleading in the light of thecircumstances then existing; and

			vi. take such other actions as shall bereasonably requested by Purchaser to facilitate the registration and sale of theSecurities; provided, however, that Seller shall not be obligated to take anyactions not specifically required elsewhere herein which in the aggregate wouldcost in excess of $5,000.

		4.2	Expenses. All expenses incurred in theregistration of the Securities shall be paid by Seller, including, withoutlimitation, printing expenses, fees and disbursements of counsel for the Seller,all registration and filing fees for the Purchaser's Securities under federalsecurities laws; provided, however, Seller shall not be liable for (a) anydiscounts or commissions to any underwriter; (b) any stock transfer taxesincurred with respect to Securities sold, or (c) the fees and expenses ofcounsel for Purchaser, provided that Seller will pay the costs and expenses ofSeller's counsel when Seller's counsel is representing any or all sellingsecurity holders.

		4.3.	Indemnification. In the event theShares are included in a registration statement pursuant to thisAgreement:

			i. Seller Indemnity. Seller shallindemnify and hold harmless Purchaser, the affiliates, officers, directors andpartners of each Purchaser, any underwriter (as defined in the Securities Act)for Purchaser, and each person, if any, who controls Purchaser or underwriter(within the meaning of the Securities Act or the Securities Exchange Act of 1934(the "Exchange Act"), against any losses, claims, damages or liabilities (jointor several) to which they may become subject under the Securities Act, theExchange Act or other federal or state law, insofar as such losses, claims,damages or liabilities (or actions in respect thereof) arise out of or are basedupon any of the following statements, omissions or violations (collectively a"Violation"): (i) any untrue statement or alleged untrue statement of a materialfact contained in such registration statement including any preliminaryprospectus or final prospectus contained therein or any amendments orsupplements thereto, (ii) the omission or alleged omission to state therein amaterial fact required to be stated therein, or necessary to make the statementstherein, (iii) any violation or alleged violation by Seller of the SecuritiesAct, the Exchange Act, or (iv) any state securities law or any rule orregulation promulgated under the Securities Act, the Exchange Act or any statesecurities law, and Seller shall reimburse Purchaser, affiliate, officer ordirector or partner, underwriter or controlling person for any legal or otherexpenses incurred by them in connection with investigating or defending any suchloss, claim, damage, liability or action; provided, however, that Seller shallnot be liable to any Purchaser in any such case for any such loss, claim,damage, liability or action to the extent that it arises out of or is based upona Violation.

		ii.	Purchaser Indemnity. Purchaser shallindemnify and hold harmless Seller, its affiliates, its counsel, officers,directors, shareholders and representatives, any underwriter (as defined in theAct) and each person, if any, who controls Seller or the underwriter (within themeaning of the Securities Act or liabilities (joint or several) to which theymay become subject under the Securities Act, the Exchange Act or any statesecurities law, and Purchaser shall reimburse Seller and each such affiliate,officer or director or partner, underwriter or controlling person for any legalor other expenses incurred by them in connection with investigating or defendingany such loss, claim, damage, liability or action; insofar as such losses,claims, damages or liabilities (or actions and respect thereof) arise out of orare based upon any statements or information provided by Purchaser to Seller inconnection with the offer or sale of Securities.

		iii.	Survival of Indemnity. Theindemnification provided by this Agreement shall be a continuing right toindemnification and shall survive the registration and sale of any Shares by anyperson entitled to indemnification hereunder and the expiration or terminationof this Agreement.
** 

ARTICLE V**
MISCELLANEOUS PROVISIONS

 

		5.1. Entire Agreement. This Agreement,together with the Exhibits hereto, constitutes and sets forth the entireagreement and understanding of the parties pertaining to the subject matterhereof, and there are no other prior or contemporaneous written or oralagreements, understandings, undertakings, negotiations, promises, discussions,warranties or covenants not specifically referred to or contained herein orattached hereto. No supplement, modification, termination in whole or in part,or waiver of this Agreement shall be binding unless executed in writing by theparty to be bound thereby. No waiver of any of the provisions of this Agreementshall be deemed, or shall constitute, a waiver of any other provision hereof(whether or not similar), nor shall any such waiver constitute a continuingwaiver unless otherwise expressly provided. 

		5.2. Assignment. Neither this Agreement norany of the rights or obligations hereunder may be assigned by either partywithout the prior written consent of the other party; except that Purchaser may,without such consent, assign all such rights and such obligations to a wholly-owned subsidiary of Purchaser, which shall assume all obligations andliabilities hereunder. 

		5.3. Headings. The headings or titles of thevarious paragraphs of this Agreement are inserted merely for the purpose ofconvenience and do not expressly or by implication or intention, limit, define,extend or affect the meaning or interpretation of this Agreement or the specificterms or text of the section so designated. 

		5.4. Law Governing. This Agreement shall begoverned in all respects, whether as to validity, construction, interpretation,capacity performance or otherwise, by the laws of the State of New York. If anyone or more of the provisions contained in this Agreement or in any otherinstrument referred to herein shall, for any reason, be held to be invalid,illegal or unenforceable in any respect, then and in that event, to the maximumextent permitted by law, such invalidity, illegality or unenforceability shallnot affect any other provisions of this Agreement or any other suchinstrument.

		5.5. Counterparts. This Agreement may beexecuted in one or more counterparts, each of which shall be deemed an original,but all of which taken together shall constitute one and the sameinstrument.

 

		IN WITNESS WHEREOF, the corporate parties hereto havecaused this Agreement to be executed by their respective duly authorizedofficers and the individual parties have executed this Agreement as of the dayand year first above written. 

 

					AMERICAN CHAMPION ENTERTAINMENT, INC.

 

					By:	/s/ Anthony K. Chan				
						Anthony K. Chan

						President & CEO

					

 

					MR. YUANHAO LI

 

					By:	/s/ YuanhaoLi