Document:

EXHIBIT 10.54

                              EMPLOYMENT AGREEMENT

          THIS  EMPLOYMENT  AGREEMENT  (this  "Agreement") is entered into as of
     August  28,  1998,  by and  between  Putnam,  Hayes  &  Bartlett,  Inc.,  a
     Massachusetts  corporation (the "Company" or "PHB"), and John C. Butler III
     ("Employee").

          WHEREAS,  pursuant to that certain  Agreement  and Plan of Merger (the
     "Merger  Agreement") dated as of the date hereof among the Company,  HAGLER
     BAILLY,  INC., a Delaware  corporation  ("Hagler  Bailly"),  and PHB MERGER
     CORP., a Massachusetts  corporation and  wholly-owned  subsidiary of Hagler
     Bailly  ("Merger  Sub"),  Merger  Sub  will  merge  with  and into PHB (the
     "Merger"), and Hagler Bailly will acquire one hundred percent (100%) of the
     common  stock  of PHB,  including  the  common  stock  of PHB  owned by the
     Employee,  in exchange for shares of common stock of Hagler Bailly ("Common
     Stock");

          WHEREAS,  after the  Merger,  certain  operating  companies  of Hagler
     Bailly will be merged with and into PHB and the  surviving  corporation  of
     such merger will be named PHB Hagler Bailly,  Inc.  ("PHB Hagler  Bailly");
     and

          WHEREAS,  as an  inducement  to Hagler Bailly to enter into the Merger
     Agreement and as a condition precedent to Hagler Bailly's obligations under
     the Merger  Agreement,  Employee  has agreed to execute  and  deliver  this
     Agreement  and to  terminate,  effective  as of the  Effective  Time of the
     Merger  (as  defined  in  the  Merger  Agreement),   any  prior  employment
     agreements or arrangements with PHB;

          WHEREAS,   in   consideration   of  Employee's   employment   and  the
     compensation  paid to  Employee  by the  Company,  and for  other  good and
     valuable  consideration,  the  receipt and  sufficiency  of which is hereby
     acknowledged, the parties agree as follows:

          NOW,  THEREFORE,  in  consideration of the foregoing and of the mutual
     covenants and agreements  hereinafter set forth,  the parties hereto hereby
     agree as follows:

          1.  Employment.  On  the  terms  and  conditions  set  forth  in  this
     Agreement,  the Company agrees to employ Employee and Employee agrees to be
     employed  by the  Company for the term set forth in Section 2 hereof and in
     the position and with the duties set forth in Section 3 hereof.

          2. Term. The term of this Agreement shall commence as of the Effective
     Time of the  Merger  (the  "Commencement  Date") and shall end on the third
     anniversary  of the date  hereof,  unless  sooner  terminated  pursuant  to
     Section 6 hereof (the "Term").

          3. Position and Duties.  Employee shall serve as a "Managing Director"
     of the Company or such other comparable position as may, from time to time,
     be prescribed by the Chief Executive  Officer and Board of Directors of the
     Company (the "Board of  Directors")  or any of its affiliates and agreed to
     by Employee.

          Employee agrees to serve the Company faithfully and to the best of his
     ability; to devote his time, energy and skill during regular business hours
     (except for illness or incapacity  and except for vacation time as provided
     herein) to such employment;  to use his best efforts, skills and ability to
     promote the Company's interests;  if elected, to serve as a director of the
     Company and its  subsidiaries or affiliated  corporations  or entities;  to
     perform  such  duties  and  responsibilities  as from  time to time  may be
     assigned to him by the Chief Executive  Officer and the Board of Directors,
     which duties  shall be  consistent  with his  positions as set forth in the
     preceding paragraph.

     4. Compensation.

          The Company agrees to pay Employee,  either directly or through one of
     its  affiliates,  as  compensation  for all duties  performed by him in any
     capacity during the period of his employment under this Agreement:

(a)  An annual base salary ("Base Salary"),  payable in equal installments twice
     monthly to Employee, at the annualized rate of $287,664 per year commencing
     on the Commencement Date through December 31, 1998.  Commencing  January 1,
     1999 and for the  remainder  of the Term,  the annual  rate of Base  Salary
     shall be determined  by  management  of the Company in accordance  with the
     compensation  policies of the Company for employees of comparable  rank but
     in no event shall the Base Salary be less than  $287,664 at any time during
     the term of this Agreement;

(b)  A bonus payment ("Bonus") for the calendar year 1998, in an amount, if any,
     determined by management of the Company  substantially  in accordance  with
     the bonus structure used by PHB as outlined in Appendix A attached  hereto;
     for calendar year 1999 and each calendar year thereafter during the Term, a
     Bonus,  in an amount,  if any,  determined  by management of the Company in
     accordance with the  compensation  policies of the Company for employees of
     comparable rank;

(c)  A grant of  options to  purchase  30,000  shares of common  stock of Hagler
     Bailly,  Inc. on the Commencement  Date, with an exercise price at the fair
     market value on the Commencement Date and a term of ten (10) years, vesting
     in accordance with the schedule set forth in the Stock Option  Agreement to
     be executed by and between  Hagler Bailly and Employee,  and subject to the
     terms  and  conditions  of  the  Hagler  Bailly   Employee   Incentive  and
     Non-Qualified Stock Option and Restricted Stock Plan or any successor plan;
     and

(d)  From time to time  Employee  shall also be eligible  to receive  options to
     purchase  Common Stock pursuant to the terms of the Hagler Bailly  Employee
     Incentive and  Non-Qualified  Stock Option and Restricted Stock Plan or any
     successor plan, and in the amounts  determined by, and subject to the terms
     and conditions of, the Stock Option Committee of the Board of Directors, or
     the Board of Directors, of Hagler Bailly.

5. Benefits; Reimbursement of Expenses; Vacation.

     During the Term, Employee shall also be eligible to:

(a)  For calendar  year 1998, to continue to  participate  in all of the benefit
     programs  which  are  currently   provided  by  PHB;   including,   without
     limitation, all vacation, retirement, health, life and disability insurance
     programs  ("Benefit  Programs") in  accordance  with policies in effect for
     officers of comparable rank; provided, that nothing in this Agreement shall
     require  the  Company  to  create,   continue  or  refrain  from  amending,
     modifying,  revising or revoking any Benefit Programs described herein. For
     calendar  year  1999  and   thereafter,   Employee  shall  be  entitled  to
     participate  in all of the Benefit  Programs which are then provided by the
     Company. For purposes of Employee's  participation in the Benefit Programs,
     the Company shall treat the full period of Employee's  service with PHB, or
     any PHB subsidiary; Dickenson, O'Brien & Associates, Inc.; and/or Freeman &
     Mills, Incorporated as if it had been service with the Company;

(b)  Reimbursement  by the Company of all  expenses  reasonably  incurred by him
     during  the  Term  in  connection  with  the  performance  of  his  duties,
     including, without limitation, travel and entertainment expenses reasonably
     related to the business or interests of the Company, upon submission by him
     of written documentation of such expenses; and

(c) The other benefits set forth in this Agreement.

6. Termination.

This Agreement may be terminated prior to the expiration of its Term as follows:

(a) Automatically upon Employee's death;

(b)  By the Company,  for "cause,"  which for purposes of this  Agreement  shall
     mean: (i) failure to comply with material rules,  standards,  or procedures
     reasonably promulgated by the Company in accordance with ordinary and usual
     business standards, or dereliction of assigned responsibilities  consistent
     with Section 3 above,  such  failure or  dereliction  remaining  uncured by
     Employee  for thirty  (30) days after  receiving  written  notice  from the
     Company of such failure or  dereliction  that  specifically  describes  the
     nature of such alleged failures;

(ii) substandard performance of assigned responsibilities measured in accordance
     with  performance  standards  agreed upon from time to time by Employee and
     the Company;

(iii)material  violation  by  Employee,  or any  other  person  acting  upon his
     specific  directions,  of a  federal,  state  or  local  statute,  rule  or
     regulation  applicable  to  the  Company,  to  its  management,  or to  the
     operation of the Company's business;

(iv) material breach of the terms of this Agreement;

(v)  knowing falsification of Company's records or documents;

(vi) gross negligence;

(vii)conviction by Employee, or any other person acting upon Employee's specific
     directions, of any misdemeanor that involves fraud or results in a material
     loss to the Company or of a felony; or

(viii) any material act of dishonesty or moral turpitude.

The  refusal to permanently  relocate from Employee's current place of work will
     not constitute a "cause" for termination of employment by the Company.

During the Term of the  Agreement,  the Company shall have no right to terminate
     this Agreement without "cause."

(c)  By Employee,  upon the  Company's  failure to perform or observe any of the
     material terms or provisions of this Agreement,  and the continued  failure
     of the Company to cure such default  within  thirty (30) days after written
     demand for  performance  has been given to the Company by  Employee,  which
     demand shall describe  specifically  the nature of such alleged  failure to
     perform or observe such material terms or provisions.  Without limiting the
     generality of the foregoing,  it is acknowledged and agreed that Sections 4
     and 5 of this Agreement are material provisions of this Agreement;

          (d) By Employee,  upon notice from Employee upon the Company's failure
     to pay Employee amounts under Section 4 when due and the continued  failure
     of the  Company to make such  payment  within  ten (10) days after  written
     demand for such payment is made by Employee; and

(e)  Upon  permanent  disability  of  Employee,  as such term is  defined in the
     disability insurance programs of the Company; and

(f)  By Employee at any time, in the Employee's discretion.

7.   Effect of Termination.

(a)  In the event of the  termination of this  Agreement  pursuant to paragraphs
     (a), (b) and (f) of Section 6, the Company  shall be under no obligation to
     Employee,  except to pay his accrued and unpaid Base Salary, Bonus and paid
     leave payments to the date of  termination,  and any vested but unexercised
     options  under the Option  Plan,  and  Employee  shall not be  entitled  to
     receive  any Base  Salary or Bonus  after the date of  termination,  or any
     unvested options under the Option Plan.

(b) In the event of the termination of this Agreement by Employee of the Company
pursuant to paragraphs  (c), (d) or (e) of Section 6, Employee shall be entitled
(without  regard to any pay received by Employee from a subsequent  employer) to
receive all of the compensation and benefits  provided herein until the later of
(i) the date  the  Term  would  have  expired  absent  any  termination  of this
Agreement,  or (ii) six (6) months from the effective  date of such  termination
(such later date being herein referred to as the "Final Payment  Date").  In the
event of any  termination  pursuant to Section 6 (e), any  payments  pursuant to
this Section 7 shall be reduced by any disability  benefits received by Employee
pursuant to any  disability  insurance  provided by the Company or  purchased by
Employee (the cost of which is  reimbursed  by the Company).  If the Company and
Employee  shall become  involved in a dispute  relating to any alleged breach of
this  Agreement  by the  Company  or  Employee,  and if  Employee  prevails  (by
judgment,  settlement or otherwise) in such dispute, the Company shall reimburse
Employee for all reasonable costs (including fees and  disbursements of counsel)
incurred by him in connection with such dispute upon presentation to the Company
of evidence of such costs.

8.       Non-compete and Other Restrictive Covenants.

(a)  Employee  acknowledges  that,  because  of the  competitive  nature  of the
Company's  business and the Company's repeat  transaction with its clients,  the
development and enhancement of relationships with clients  constitute  goodwill,
which is critical to the  Company's  success  and is one of the  Company's  most
valuable business assets.

(b) Employee agrees that it is Employee's responsibility to generate and develop
goodwill  between the Company and its clients.  Employee  recognizes  and hereby
explicitly  agrees that all goodwill  with the  Company's  clients  generated or
developed by Employee  during  Employee's  employment  with the Company  belongs
exclusively  to the  Company,  even if such  goodwill  was  generated  solely by
Employee's own efforts.

(c) In order to protect the Company's legitimate business interests,  including,
without  limitation,  protecting the Company's  goodwill,  Employee  agrees that
Employee  will not  solicit or cause any of the clients of the Company set forth
in  Schedule  A  attached  hereto  (and  amended  with  additional  clients on a
quarterly basis) to divert business from the Company without the Company's prior
written consent.  It is acknowledged and agreed that Schedule A will be specific
for the "practice area" in which Employee provides consulting services, and will
include  only those  clients of the Company for which that  "practice  area" has
provided  services from 1 January 1997 forward.  The Company agrees that it will
be reasonable in its  consideration  of such requests for prior written consent,
and that prior  written  consent  will not be  withheld in the event the Company
discontinues a "practice area".

(i)  Employee  further  agrees that Employee will not,  directly or  indirectly,
     recruit  or  otherwise  seek to induce  any  employees  of the  Company  to
     terminate their  employment or to violate any agreement with the Company or
     to assist any third party in so doing.

(d)  The covenants contained in this Section 8 shall be construed as a series of
     separate and severable covenants. Employee and the Company agree that if in
     any  proceeding,  the tribunal  shall refuse to enforce fully any covenants
     contained  herein because such  covenants  cover too extensive a geographic
     area or too long a period of time or for any other reason  whatsoever,  any
     such  covenant  shall be  deemed  amended  to the  extent  (but only to the
     extent)  required  by law.  Each party  acknowledges  and  agrees  that the
     services to be rendered  by  Employee  to the  Company  hereunder  are of a
     special and unique character. Each party shall have the right to injunctive
     relief,  in addition to all of its other  rights and  remedies at law or in
     equity, to enforce the provisions of this Agreement.

                           (e) The  obligations of Employee under this Section 8
shall not survive if this
Agreement is terminated earlier than the Term pursuant to Section 6 (c) and (d),
but in any  event  these  obligations  will not  survive  longer  than the third
anniversary of the Agreement.

9. Proprietary Rights.

(a) Employee  acknowledges  that,  in order for  Employee to perform  Employee's
duties,  the Company  must  entrust  Employee  with  certain  trade  secrets and
confidential  business  information  belonging to the Company (the "Confidential
Information").  The Confidential  Information  includes,  but is not limited to,
client  lists,  including  the identity of the  Company's  clients,  information
concerning the  characteristics of the Company's  clients,  pricing policies and
practices,  negotiating  strategies,  computer software,  financial information,
information about the Company's  business plans, and any other information about
or  generated  by the  Company  which  could,  if  disclosed,  be  useful to any
competitors  of the  Company.  The  Confidential  Information  does not  include
information that is in the public domain through no fault or action of Employee.
Employee  further  acknowledges  that the Company has developed or acquired such
Confidential  Information  at great  effort and  significant  expense,  that the
Confidential Information is critical to the success and survival of the Company,
and that the  unauthorized  disclosure  or use of the  Confidential  Information
would cause the Company irreparable harm.

(b) Employee  agrees that,  during the term of  Employee's  employment  with the
Company and  thereafter,  Employee will not disclose the Company's  Confidential
Information  or use it in any way,  except on behalf of the Company,  whether or
not such  Confidential  Information  was  produced by  Employee's  own  efforts.
Employee further agrees, upon termination of Employee's employment,  promptly to
deliver to the Company all Confidential Information,  including, but not limited
to, all files,  books,  documents,  computer disks or tapes,  and other property
prepared on behalf of the Company or  purchased  with Company  funds,  including
Confidential Information produced by Employee's own efforts, and to refrain from
making, retaining or distributing any copies thereof.

(c)  At all times  during  the Term,  all  right,  title,  and  interest  in all
     copyrightable  material which Employee shall conceive or originate,  either
     individually or jointly with others, in Employee's  capacity as an employee
     of the  Company  will  be the  property  of the  Company  and  are by  this
     Agreement  assigned  to the  Company  along with  ownership  of any and all
     copyrights  in the  copyrightable  material.  At all times during the Term,
     Employee agrees to execute all papers and perform all other acts reasonably
     necessary to assist the Company to obtain and register  copyrights  on such
     materials in any and all countries,  and the Company agrees to pay expenses
     associated with such copyright registration. Works of authorship created by
     Employee  for the Company in  performing  his  responsibilities  under this
     Agreement  during the Term  shall be  considered  "works  made for hire" as
     defined in the U.S. Copyright Act. In addition,  Employee hereby assigns to
     the  Company all  proprietary  rights  which  originate  during  Employee's
     employment  with the Company,  including,  but not limited to, all patents,
     copyrights,  trade secrets and trademarks Employee might otherwise have, by
     operation  of law or  otherwise,  in all  inventions,  discoveries,  works,
     ideas,  information,  knowledge  and data  based on  Employee's  access  to
     Confidential  Information  of the Company or  developed  by Employee in his
     capacity as an employee of the Company.

(d)  If, during the Term, Employee is engaged in or associated with the planning
     or  implementing of any project,  program or venture  involving the Company
     and a third party or parties all rights in such project, program or venture
     shall belong to the Company.  Except as formally  approved by the Company's
     Board of Directors,  Employee shall not be entitled to any interest in such
     project,  program or venture or to any  commission,  finder's  fee or other
     compensation in connection therewith other than the compensation to be paid
     to Employee as provided in this Agreement.

(e)  At all times during the Term and  thereafter,  Employee  further  agrees to
     execute and deliver any additional  documents,  instruments,  applications,
     oaths or other  writings  reasonably  necessary  or  desirable  to  further
     evidence  the   assignments   described  in  this  Section  9  ("Supporting
     Documents").

                           (f) The  obligations of Employee under this Section 9
shall survive the termination
or expiration of the Term.

                  10.      Notice.

All  notices or other  communications  which may be or are required to be given,
     served or sent by any party to any other party  pursuant to this  Agreement
     shall be in  writing  and  shall be mailed by  first-class,  registered  or
     certified mail, return receipt requested,  postage prepaid,  or transmitted
     by hand delivery,  or a nationally  recognized  overnight  courier service,
     addressed as follows:

                           (a)      If to the Company:

                                    Hagler Bailly, Inc.
                                    1530 Wilson Boulevard
                                    Arlington, Virginia  22209

                                    Telephone No:  (703) 312-9855
                                    Attention: Stephen V.R. Whitman,
                                    Vice President and General Counsel

                           (b)      If to the Employee:

                                    John C. Butler III
                                    Box 65L, Route 9 Arroyo Hondo
                                    Santa Fe, NM  87505

                                    Telephone No:  (505) 989-7579

                                    And  at  the   Employee's   usual  place  of
business, if known by the Company.

Each party may  designate by notice in writing a new address to which any notice
or other  communication may thereafter be so given,  served or sent. Each notice
or other  communication  which  shall be mailed  or  transmitted  in the  manner
described above, shall be deemed sufficiently given, served, sent, delivered and
received for all purposes at such time as it is delivered to the addressee (with
the return  receipt,  the delivery  receipt or the affidavit of messenger  being
deemed  conclusive  evidence  of such  delivery)  or at such time as delivery is
refused by the addressee upon presentation.

11. Severability.

          If any part or any  provision  of this  Agreement  shall be invalid or
     unenforceable  under  applicable law, such part shall be ineffective to the
     extent of such  invalidity  or  unenforceability  only,  without in any way
     affecting the remaining parts of such provision or the remaining provisions
     of this Agreement.

12. Survival.

          It is the express  intention and agreement of the parties  hereto that
     all  covenants,  agreements  and  statements  made  by any  party  in  this
     Agreement shall survive the execution and delivery of this  Agreement,  and
     that  certain  covenants,  agreements  and  statements  shall  survive  the
     termination  or expiration of the Term to the extent  specified in Sections
     7, 8 and 9 hereof.

13. Waiver.

          Neither  the waiver of any of the  parties  hereto of any breach of or
     default under any of the provisions of this  Agreement,  nor the failure of
     any of  the  parties,  on  one or  more  occasion,  to  enforce  any of the
     provisions  of  this  Agreement  or to  exercise  any  right  or  privilege
     hereunder,  shall  thereafter  be construed  as a waiver of any  subsequent
     breach  or  default,  or as a waiver  of any such  provisions,  rights,  or
     privileges hereunder.

14. Binding Effect.

          This Agreement shall be binding upon and shall inure to the benefit of
     the parties  hereto  and,  subject to Section 19 hereof,  their  respective
     heirs, devisees, executors,  administrators,  legal representatives, and to
     the benefit of PHB Hagler Bailly as successor to the Company.

15. Entire Agreement.

          As of  immediately  prior to the  Effective  Time of the Merger,  this
     Agreement (a) represents the entire  understanding  and agreement among the
     parties  hereto with respect to the subject  matter hereof and  supersedes,
     cancels and terminates all other negotiations, agreements, arrangements and
     understandings, oral or written, between such parties with respect thereto,
     (b) constitutes the sole agreement between the parties with respect to this
     subject  matter,  and (c)  supersedes,  cancels  and  terminates  all prior
     negotiations, agreements, arrangements and understandings, oral or written,
     with respect to (i) the Employee's  employment with PHB or any affiliate of
     PHB, and (ii) any other  obligations or liabilities of PHB or any affiliate
     of PHB except as reflected in PHB's audited  financials  for 1997 or as set
     forth in Schedule B hereto.

16. Amendment.

          No amendment or modification of this Agreement and no waiver hereunder
     or thereunder  shall be valid or binding unless set forth in writing,  duly
     executed  by  the  party  against  whom   enforcement   of  the  amendment,
     modification or waiver is sought.

17. Governing Law.

          This  Agreement  shall be subject to and  governed  by the laws of the
     state of California.

18. Forum.

          At all times during the Term, (a) Employee  irrevocably submits to the
     exclusive  jurisdiction of any California court or Federal court sitting in
     California,  in any action or proceeding arising out of or relating to this
     Agreement or the transactions contemplated hereby, and Employee irrevocably
     agrees that all claims in respect of any such action or  proceeding  may be
     heard and  determined  in such  California or Federal  court;  (b) Employee
     irrevocably  consents  to the  service  of any and all  process in any such
     action or  proceeding  by the mailing of copies of such process to Employee
     at his address specified in Section 10; (c) Employee  irrevocably  confirms
     that  service of process out of such courts in such manner  shall be deemed
     due service  upon him for the  purposes of such action or  proceeding;  (d)
     Employee  irrevocably waives (i) any objection he may have to the laying of
     venue of any such action or proceeding  in any of such courts,  or (ii) any
     claim that he may have that any such action or proceeding  has been brought
     in an inconvenient forum; and (e) Employee  irrevocably agrees that a final
     judgment in any such action or proceeding  shall be  conclusive  and may be
     enforced  in other  jurisdictions  by suit on the  judgment or in any other
     manner  provided by law.  Nothing in this Section 18 shall affect the right
     of any party hereto to serve legal process in any manner permitted by law.

19. Assignment.

          Except as  otherwise  provided  herein,  this  Agreement  shall not be
     assignable by either party hereto without the prior written  consent of the
     other party hereto.

20. Headings.

          Headings  contained in this Agreement are inserted for  convenience of
     reference only,  shall not be deemed to be a part of this Agreement for any
     purpose,   and  shall  not  in  any  way  define  or  affect  the  meaning,
     construction or scope of any of the provisions hereof.

21. Execution in Counterparts.

          This  Agreement may be executed in one or more  counterparts,  each of
     which shall be deemed an original  hereof,  and all of which together shall
     constitute one and the same instrument.

22. Termination of Merger Agreement.

          This  Agreement  shall  automatically  terminate and be of no force or
     effect upon the termination of the Merger Agreement.

<PAGE>

                  IN WITNESS  WHEREOF,  the undersigned  have duly executed this
Employment  Agreement,  or have  caused  this  Employment  Agreement  to be duly
executed on their behalf, as of the day and year first hereinabove set forth.

                                    PUTNAM, HAYES & BARTLETT, INC.

                                    By:/s/ William E. Dickenson
                                    Name:    William E. Dickenson
                                    Title: President and Chief Executive Officer

                                    John C. Butler III

                                    /s/ John C. Butler III

<PAGE>

11

                                  EXHIBIT 10.55

                              EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT  AGREEMENT (this  "Agreement") is entered into
as of August  28,  1998,  by and  between  Putnam,  Hayes &  Bartlett,  Inc.,  a
Massachusetts corporation (the "Company" or "PHB"), and William H.
Hieronymus ("Employee").

                  WHEREAS, pursuant to that certain Agreement and Plan of Merger
(the "Merger  Agreement") dated as of the date hereof among the Company,  HAGLER
BAILLY, INC., a Delaware corporation ("Hagler Bailly"),  and PHB MERGER CORP., a
Massachusetts  corporation and wholly-owned subsidiary of Hagler Bailly ("Merger
Sub"), Merger Sub will merge with and into PHB (the "Merger"), and Hagler Bailly
will acquire one hundred  percent  (100%) of the common stock of PHB,  including
the common stock of PHB owned by the Employee,  in exchange for shares of common
stock of Hagler Bailly ("Common Stock");

                  WHEREAS,  after the Merger,  certain  operating  companies  of
Hagler Bailly will be merged with and into PHB and the surviving  corporation of
such merger will be named PHB Hagler Bailly, Inc. ("PHB Hagler Bailly"); and

                  WHEREAS,  as an  inducement to Hagler Bailly to enter into the
Merger  Agreement and as a condition  precedent to Hagler  Bailly's  obligations
under the Merger  Agreement,  Employee  has agreed to execute and  deliver  this
Agreement and to terminate, effective as of the Effective Time of the Merger (as
defined  in  the  Merger   Agreement),   any  prior  employment   agreements  or
arrangements with PHB;

                  WHEREAS,  in  consideration  of Employee's  employment and the
compensation  paid to Employee by the  Company,  and for other good and valuable
consideration,  the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:

                  NOW,  THEREFORE,  in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto hereby
agree as follows:

1. Employment.

          On the terms and conditions set forth in this  Agreement,  the Company
     agrees to employ Employee and Employee agrees to be employed by the Company
     for the term set forth in Section 2 hereof and in the position and with the
     duties set forth in Section 3 hereof.

2. Term.

          The term of this Agreement  shall commence as of the Effective Time of
     the Merger (the "Commencement Date") and shall end on the third anniversary
     of the date hereof,  unless sooner terminated  pursuant to Section 6 hereof
     (the "Term").

3. Position and Duties.

          Employee  shall serve as a "Managing  Director" of the Company or such
     other  comparable  position as may, from time to time, be prescribed by the
     Chief  Executive  Officer and Board of Directors of the Company (the "Board
     of Directors") or any of its affiliates and agreed to by Employee.

          Employee agrees to serve the Company faithfully and to the best of his
     ability; to devote his time, energy and skill during regular business hours
     (except for illness or incapacity  and except for vacation time as provided
     herein) to such employment;  to use his best efforts, skills and ability to
     promote the Company's interests;  if elected, to serve as a director of the
     Company and its  subsidiaries or affiliated  corporations  or entities;  to
     perform  such  duties  and  responsibilities  as from  time to time  may be
     assigned to him by the Chief Executive  Officer and the Board of Directors,
     which duties  shall be  consistent  with his  positions as set forth in the
     preceding paragraph.

4. Compensation.

          The Company agrees to pay Employee,  either directly or through one of
     its  affiliates,  as  compensation  for all duties  performed by him in any
     capacity during the period of his employment under this Agreement:

(a) An annual base salary ("Base Salary"),  payable in equal  installments twice
monthly to Employee,  at the annualized  rate of $287,664 per year commencing on
the Commencement Date through December 31, 1998.  Commencing January 1, 1999 and
for  the  remainder  of the  Term,  the  annual  rate of Base  Salary  shall  be
determined  by management  of the Company in  accordance  with the  compensation
policies of the Company for employees of  comparable  rank but in no event shall
the Base  Salary  be less  than  $287,664  at any time  during  the term of this
Agreement;

(b) A bonus payment  ("Bonus") for the calendar year 1998, in an amount, if any,
determined  by management of the Company  substantially  in accordance  with the
bonus  structure  used by PHB as  outlined in  Appendix A attached  hereto;  for
calendar year 1999 and each calendar year  thereafter  during the Term, a Bonus,
in an amount, if any, determined by management of the Company in accordance with
the compensation policies of the Company for employees of comparable rank;

(c) A grant of  options  to  purchase  12,250  shares of common  stock of Hagler
Bailly, Inc. on the Commencement Date, with an exercise price at the fair market
value  on the  Commencement  Date  and a term  of ten  (10)  years,  vesting  in
accordance  with the  schedule  set forth in the Stock  Option  Agreement  to be
executed by and between Hagler Bailly and Employee, and subject to the terms and
conditions  of the Hagler Bailly  Employee  Incentive  and  Non-Qualified  Stock
Option and Restricted Stock Plan or any successor plan; and

(d) From time to time  Employee  shall also be  eligible  to receive  options to
purchase  Common  Stock  pursuant  to the terms of the  Hagler  Bailly  Employee
Incentive  and  Non-Qualified  Stock  Option  and  Restricted  Stock Plan or any
successor  plan, and in the amounts  determined by, and subject to the terms and
conditions  of, the Stock  Option  Committee of the Board of  Directors,  or the
Board of Directors, of Hagler Bailly.

5. Benefits; Reimbursement of Expenses; Vacation.

During the Term, Employee shall also be eligible to:

          (a) For calendar year 1998, to continue to  participate  in all of the
     benefit programs which are currently  provided by PHB;  including,  without
     limitation, all vacation, retirement, health, life and disability insurance
     programs  ("Benefit  Programs") in  accordance  with policies in effect for
     officers of comparable rank; provided, that nothing in this Agreement shall
     require  the  Company  to  create,   continue  or  refrain  from  amending,
     modifying,  revising or revoking any Benefit Programs described herein. For
     calendar  year  1999  and   thereafter,   Employee  shall  be  entitled  to
     participate  in all of the Benefit  Programs which are then provided by the
     Company. For purposes of Employee's  participation in the Benefit Programs,
     the Company shall treat the full period of Employee's  service with PHB, or
     any PHB subsidiary; Dickenson, O'Brien & Associates, Inc.; and/or Freeman &
     Mills, Incorporated as if it had been service with the Company;

          (b) Reimbursement by the Company of all expenses  reasonably  incurred
     by him during the Term in connection  with the  performance  of his duties,
     including, without limitation, travel and entertainment expenses reasonably
     related to the business or interests of the Company, upon submission by him
     of written documentation of such expenses; and

          (c) The other benefits set forth in this Agreement.

6. Termination.

          This  Agreement may be terminated  prior to the expiration of its Term
     as follows:

          (a) Automatically upon Employee's death;

          (b) By the Company,  for "cause," which for purposes of this Agreement
     shall mean:

     (i)  failure  to comply  with  material  rules,  standards,  or  procedures
     reasonably promulgated by the Company in accordance with ordinary and usual
     business standards, or dereliction of assigned responsibilities  consistent
     with Section 3 above,  such  failure or  dereliction  remaining  uncured by
     Employee  for thirty  (30) days after  receiving  written  notice  from the
     Company of such failure or  dereliction  that  specifically  describes  the
     nature of such alleged failures;

     (ii)  substandard  performance  of  assigned  responsibilities  measured in
     accordance  with  performance  standards  agreed  upon from time to time by
     Employee and the Company;

     (iii) material  violation by Employee,  or any other person acting upon his
     specific  directions,  of a  federal,  state  or  local  statute,  rule  or
     regulation  applicable  to  the  Company,  to  its  management,  or to  the
     operation of the Company's business;

     (iv) material breach of the terms of this Agreement;

     (v) knowing falsification of Company's records or documents;

     (vi) gross negligence;

     (vii)  conviction by Employee,  or any other person acting upon  Employee's
     specific directions, of any misdemeanor that involves fraud or results in a
     material loss to the Company or of a felony; or

     (viii) any material act of dishonesty or moral turpitude.

     The refusal to permanently  relocate from Employee's  current place of work
     will not constitute a "cause" for termination of employment by the Company.

During the Term of the  Agreement,  the Company shall have no right to terminate
this Agreement without "cause."

          (c) By Employee,  upon the Company's failure to perform or observe any
     of the material  terms or provisions of this  Agreement,  and the continued
     failure of the Company to cure such default  within  thirty (30) days after
     written demand for  performance  has been given to the Company by Employee,
     which demand shall describe specifically the nature of such alleged failure
     to perform or observe such material terms or provisions.  Without  limiting
     the  generality  of the  foregoing,  it is  acknowledged  and  agreed  that
     Sections  4 and  5 of  this  Agreement  are  material  provisions  of  this
     Agreement;

          (d) By Employee,  upon notice from Employee upon the Company's failure
     to pay Employee amounts under Section 4 when due and the continued  failure
     of the  Company to make such  payment  within  ten (10) days after  written
     demand for such payment is made by Employee; and

          (e) Upon permanent disability of Employee,  as such term is defined in
     the disability insurance programs of the Company; and

          (f) By Employee at any time, in the Employee's discretion.

7. Effect of Termination.

          (a) In the event of the  termination  of this  Agreement  pursuant  to
     paragraphs  (a),  (b) and (f) of Section 6, the  Company  shall be under no
     obligation  to Employee,  except to pay his accrued and unpaid Base Salary,
     Bonus and paid leave  payments to the date of  termination,  and any vested
     but  unexercised  options under the Option Plan,  and Employee shall not be
     entitled to receive any Base Salary or Bonus after the date of termination,
     or any unvested options under the Option Plan.

          (b) In the event of the  termination  of this Agreement by Employee of
     the Company  pursuant to paragraphs  (c), (d) or (e) of Section 6, Employee
     shall be entitled  (without  regard to any pay received by Employee  from a
     subsequent  employer)  to  receive  all of the  compensation  and  benefits
     provided herein until the later of (i) the date the Term would have expired
     absent any termination of this  Agreement,  or (ii) six (6) months from the
     effective date of such  termination  (such later date being herein referred
     to as the "Final Payment Date").  In the event of any termination  pursuant
     to Section 6 (e), any payments  pursuant to this Section 7 shall be reduced
     by any disability  benefits received by Employee pursuant to any disability
     insurance  provided by the Company or  purchased  by Employee  (the cost of
     which is  reimbursed  by the  Company).  If the Company and Employee  shall
     become  involved  in a  dispute  relating  to any  alleged  breach  of this
     Agreement  by the  Company  or  Employee,  and  if  Employee  prevails  (by
     judgment,  settlement  or  otherwise)  in such  dispute,  the Company shall
     reimburse   Employee  for  all  reasonable   costs   (including   fees  and
     disbursements  of counsel)  incurred by him in connection with such dispute
     upon presentation to the Company of evidence of such costs.

8. Non-compete and Other Restrictive Covenants.

(a)  Employee  acknowledges  that,  because  of the  competitive  nature  of the
     Company's  business and the Company's repeat  transaction with its clients,
     the development and enhancement of  relationships  with clients  constitute
     goodwill,  which is  critical  to the  Company's  success and is one of the
     Company's most valuable business assets.
(b)  Employee  agrees  that it is  Employee's  responsibility  to  generate  and
     develop goodwill between the Company and its clients.  Employee  recognizes
     and hereby  explicitly  agrees that all goodwill with the Company's clients
     generated or developed by Employee  during  Employee's  employment with the
     Company  belongs  exclusively  to the  Company,  even if such  goodwill was
     generated solely by Employee's own efforts.

(c)  In order to protect the Company's legitimate business interests, including,
     without limitation, protecting the Company's goodwill, Employee agrees that
     Employee  will not  solicit or cause any of the  clients of the Company set
     forth in Schedule A attached hereto (and amended with additional clients on
     a
                                          ----------
          quarterly  basis) to divert  business  from the  Company  without  the
     Company's  prior  written  consent.  It is  acknowledged  and  agreed  that
     Schedule  A will be  specific  for the  "practice  area" in which  Employee
     provides
                                   ----------
          consulting  services,  and will  include  only  those  clients  of the
     Company for which that "practice area" has provided services from 1 January
     1997  forward.  The  Company  agrees  that  it will  be  reasonable  in its
     consideration  of such requests for prior written  consent,  and that prior
     written consent will not be withheld in the event the Company  discontinues
     a "practice area".

          (i)  Employee  further  agrees  that  Employee  will not,  directly or
     indirectly,  recruit  or  otherwise  seek to induce  any  employees  of the
     Company to terminate their  employment or to violate any agreement with the
     Company or to assist any third party in so doing.

          (d) The covenants  contained in this Section 8 shall be construed as a
     series of separate and severable covenants.  Employee and the Company agree
     that if in any  proceeding,  the tribunal shall refuse to enforce fully any
     covenants  contained  herein because such  covenants  cover too extensive a
     geographic  area or too  long a  period  of time  or for any  other  reason
     whatsoever,  any such covenant  shall be deemed  amended to the extent (but
     only to the extent)  required by law.  Each party  acknowledges  and agrees
     that the services to be rendered by Employee to the Company  hereunder  are
     of a special  and  unique  character.  Each  party  shall have the right to
     injunctive  relief,  in addition to all of its other rights and remedies at
     law or in equity, to enforce the provisions of this Agreement.

          (e) The obligations of Employee under this Section 8 shall not survive
     if this Agreement is terminated earlier than the Term pursuant to Section 6
     (c) and (d),  but in any event these  obligations  will not survive  longer
     than the third anniversary of the Agreement.

9. Proprietary Rights.

(a) Employee  acknowledges  that,  in order for  Employee to perform  Employee's
duties,  the Company  must  entrust  Employee  with  certain  trade  secrets and
confidential  business  information  belonging to the Company (the "Confidential
Information").  The Confidential  Information  includes,  but is not limited to,
client  lists,  including  the identity of the  Company's  clients,  information
concerning the  characteristics of the Company's  clients,  pricing policies and
practices,  negotiating  strategies,  computer software,  financial information,
information about the Company's  business plans, and any other information about
or  generated  by the  Company  which  could,  if  disclosed,  be  useful to any
competitors  of the  Company.  The  Confidential  Information  does not  include
information that is in the public domain through no fault or action of Employee.
Employee  further  acknowledges  that the Company has developed or acquired such
Confidential  Information  at great  effort and  significant  expense,  that the
Confidential Information is critical to the success and survival of the Company,
and that the  unauthorized  disclosure  or use of the  Confidential  Information
would cause the Company irreparable harm.

(b) Employee  agrees that,  during the term of  Employee's  employment  with the
Company and  thereafter,  Employee will not disclose the Company's  Confidential
Information  or use it in any way,  except on behalf of the Company,  whether or
not such  Confidential  Information  was  produced by  Employee's  own  efforts.
Employee further agrees, upon termination of Employee's employment,  promptly to
deliver to the Company all Confidential Information,  including, but not limited
to, all files,  books,  documents,  computer disks or tapes,  and other property
prepared on behalf of the Company or  purchased  with Company  funds,  including
Confidential Information produced by Employee's own efforts, and to refrain from
making, retaining or distributing any copies thereof.

     (c)  At all times during the Term,  all right,  title,  and interest in all
          copyrightable  material  which  Employee  shall conceive or originate,
          either  individually or jointly with others, in Employee's capacity as
          an employee of the Company will be the property of the Company and are
          by this Agreement  assigned to the Company along with ownership of any
          and all copyrights in the copyrightable  material. At all times during
          the Term,  Employee agrees to execute all papers and perform all other
          acts reasonably necessary to assist the Company to obtain and register
          copyrights on such materials in any and all countries, and the Company
          agrees to pay expenses  associated  with such copyright  registration.
          Works of authorship  created by Employee for the Company in performing
          his  responsibilities  under this  Agreement  during the Term shall be
          considered "works made for hire" as defined in the U.S. Copyright Act.
          In addition,  Employee  hereby assigns to the Company all  proprietary
          rights which originate during Employee's  employment with the Company,
          including, but not limited to, all patents,  copyrights, trade secrets
          and trademarks  Employee might  otherwise have, by operation of law or
          otherwise, in all inventions,  discoveries, works, ideas, information,
          knowledge  and  data  based  on  Employee's   access  to  Confidential
          Information of the Company or developed by Employee in his capacity as
          an employee of the Company.

     (d) If,  during the Term,  Employee  is engaged in or  associated  with the
     planning or implementing of any project,  program or venture  involving the
     Company and a third party or parties all rights in such project, program or
     venture  shall  belong to the Company.  Except as formally  approved by the
     Company's  Board  of  Directors,  Employee  shall  not be  entitled  to any
     interest in such project, program or venture or to any commission, finder's
     fee  or  other   compensation  in  connection   therewith  other  than  the
     compensation to be paid to Employee as provided in this Agreement.

     (e) At all times during the Term and thereafter, Employee further agrees to
     execute and deliver any additional  documents,  instruments,  applications,
     oaths or other  writings  reasonably  necessary  or  desirable  to  further
     evidence  the   assignments   described  in  this  Section  9  ("Supporting
     Documents").

          (f) The obligations of Employee under this Section 9 shall survive the
     termination or expiration of the Term.

10. Notice.

          All notices or other communications which may be or are required to be
     given,  served  or sent by any party to any other  party  pursuant  to this
     Agreement  shall  be  in  writing  and  shall  be  mailed  by  first-class,
     registered or certified mail, return receipt requested, postage prepaid, or
     transmitted by hand delivery,  or a nationally recognized overnight courier
     service, addressed as follows:

                           (a)      If to the Company:

                                    Hagler Bailly, Inc.
                                    1530 Wilson Boulevard
                                    Arlington, Virginia  22209

                                    Telephone No:  (703) 312-9855
                                    Attention: Stephen V.R. Whitman,
                                           Vice President and General Counsel

                           (b)      If to the Employee:

                                    William H. Hieronymus
                                    15 Reservoir Road
                                    Wayland, MA  01778

                                    Telephone No:  (508) 358-6614

                                    And  at  the   Employee's   usual  place  of
                                    business, if known by the Company.

Each party may  designate by notice in writing a new address to which any notice
or other  communication may thereafter be so given,  served or sent. Each notice
or other  communication  which  shall be mailed  or  transmitted  in the  manner
described above, shall be deemed sufficiently given, served, sent, delivered and
received for all purposes at such time as it is delivered to the addressee (with
the return  receipt,  the delivery  receipt or the affidavit of messenger  being
deemed  conclusive  evidence  of such  delivery)  or at such time as delivery is
refused by the addressee upon presentation.

11. Severability.

          If any part or any  provision  of this  Agreement  shall be invalid or
     unenforceable  under  applicable law, such part shall be ineffective to the
     extent of such  invalidity  or  unenforceability  only,  without in any way
     affecting the remaining parts of such provision or the remaining provisions
     of this Agreement.

12. Survival.

          It is the express  intention and agreement of the parties  hereto that
     all  covenants,  agreements  and  statements  made  by any  party  in  this
     Agreement shall survive the execution and delivery of this  Agreement,  and
     that  certain  covenants,  agreements  and  statements  shall  survive  the
     termination  or expiration of the Term to the extent  specified in Sections
     7, 8 and 9 hereof.

13. Waiver.

          Neither  the waiver of any of the  parties  hereto of any breach of or
     default under any of the provisions of this  Agreement,  nor the failure of
     any of  the  parties,  on  one or  more  occasion,  to  enforce  any of the
     provisions  of  this  Agreement  or to  exercise  any  right  or  privilege
     hereunder, shall thereafter be construed as a
waiver  of any  subsequent  breach  or  default,  or as a  waiver  of  any  such
provisions, rights, or privileges hereunder.

14. Binding Effect.

          This Agreement shall be binding upon and shall inure to the benefit of
     the parties  hereto  and,  subject to Section 19 hereof,  their  respective
     heirs, devisees, executors,  administrators,  legal representatives, and to
     the benefit of PHB Hagler Bailly as successor to the Company.

15. Entire Agreement.

          As of  immediately  prior to the  Effective  Time of the Merger,  this
     Agreement (a) represents the entire  understanding  and agreement among the
     parties  hereto with respect to the subject  matter hereof and  supersedes,
     cancels and terminates all other negotiations, agreements, arrangements and
     understandings, oral or written, between such parties with respect thereto,
     (b) constitutes the sole agreement between the parties with respect to this
     subject  matter,  and (c)  supersedes,  cancels  and  terminates  all prior
     negotiations, agreements, arrangements and understandings, oral or written,
     with respect to (i) the Employee's  employment with PHB or any affiliate of
     PHB, and (ii) any other  obligations or liabilities of PHB or any affiliate
     of PHB except as reflected in PHB's audited  financials  for 1997 or as set
     forth in Schedule B hereto.

16. Amendment.

          No amendment or modification of this Agreement and no waiver hereunder
     or thereunder  shall be valid or binding unless set forth in writing,  duly
     executed  by  the  party  against  whom   enforcement   of  the  amendment,
     modification or waiver is sought.

17. Governing Law.

          This  Agreement  shall be subject to and  governed  by the laws of the
     Commonwealth of Massachusetts.

18. Forum.

          At all times during the Term, (a) Employee  irrevocably submits to the
     exclusive  jurisdiction of any Massachusetts court or Federal court sitting
     in Massachusetts, in any action or proceeding arising out of or relating to
     this  Agreement  or the  transactions  contemplated  hereby,  and  Employee
     irrevocably  agrees  that all  claims  in  respect  of any such  action  or
     proceeding  may be heard and  determined in such  Massachusetts  or Federal
     court;  (b)  Employee  irrevocably  consents  to the service of any and all
     process in any such action or  proceeding  by the mailing of copies of such
     process to Employee at his address  specified  in Section 10; (c)  Employee
     irrevocably  confirms  that  service of process  out of such courts in such
     manner shall be deemed due service upon him for the purposes of such action
     or  proceeding;  (d) Employee  irrevocably  waives (i) any objection he may
     have to the laying of venue of any such action or proceeding in any of such
     courts,  or (ii) any  claim  that he may  have  that  any  such  action  or
     proceeding  has been  brought in an  inconvenient  forum;  and (e) Employee
     irrevocably  agrees that a final  judgment in any such action or proceeding
     shall be conclusive and may be enforced in other  jurisdictions  by suit on
     the  judgment  or in any other  manner  provided  by law.  Nothing  in this
     Section  18 shall  affect  the  right of any party  hereto  to serve  legal
     process in any manner permitted by law.

19. Assignment.

          Except as  otherwise  provided  herein,  this  Agreement  shall not be
     assignable by either party hereto without the prior written  consent of the
     other party hereto.

20. Headings.

          Headings  contained in this Agreement are inserted for  convenience of
     reference only,  shall not be deemed to be a part of this Agreement for any
     purpose,   and  shall  not  in  any  way  define  or  affect  the  meaning,
     construction or scope of any of the provisions hereof.

21. Execution in Counterparts.

          This  Agreement may be executed in one or more  counterparts,  each of
     which shall be deemed an original  hereof,  and all of which together shall
     constitute one and the same instrument.

22. Termination of Merger Agreement.
          This  Agreement  shall  automatically  terminate and be of no force or
     effect upon the termination of the Merger Agreement.

<PAGE>

                  IN WITNESS  WHEREOF,  the undersigned  have duly executed this
Employment  Agreement,  or have  caused  this  Employment  Agreement  to be duly
executed on their behalf, as of the day and year first hereinabove set forth.

                                    PUTNAM, HAYES & BARTLETT, INC.

                                    By:      /s/ William E. Dickenson
                                    Name:    William E. Dickenson
                                    Title: President and Chief Executive Officer

                                    William H. Hieronymus

                                    /s/ William H. Hieronymus

<PAGE>

11

                                  EXHIBIT 10.56

                              EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT  AGREEMENT (this  "Agreement") is entered into
as of August  28,  1998,  by and  between  Putnam,  Hayes &  Bartlett,  Inc.,  a
Massachusetts corporation (the "Company" or "PHB"), and Walter H. A.
Vandaele ("Employee").

                  WHEREAS, pursuant to that certain Agreement and Plan of Merger
(the "Merger  Agreement") dated as of the date hereof among the Company,  HAGLER
BAILLY, INC., a Delaware corporation ("Hagler Bailly"),  and PHB MERGER CORP., a
Massachusetts  corporation and wholly-owned subsidiary of Hagler Bailly ("Merger
Sub"), Merger Sub will merge with and into PHB (the "Merger"), and Hagler Bailly
will acquire one hundred  percent  (100%) of the common stock of PHB,  including
the common stock of PHB owned by the Employee,  in exchange for shares of common
stock of Hagler Bailly ("Common Stock");

                  WHEREAS,  after the Merger,  certain  operating  companies  of
Hagler Bailly will be merged with and into PHB and the surviving  corporation of
such merger will be named PHB Hagler Bailly, Inc. ("PHB Hagler Bailly"); and

                  WHEREAS,  as an  inducement to Hagler Bailly to enter into the
Merger  Agreement and as a condition  precedent to Hagler  Bailly's  obligations
under the Merger  Agreement,  Employee  has agreed to execute and  deliver  this
Agreement and to terminate, effective as of the Effective Time of the Merger (as
defined  in  the  Merger   Agreement),   any  prior  employment   agreements  or
arrangements with PHB;

                  WHEREAS,  in  consideration  of Employee's  employment and the
compensation  paid to Employee by the  Company,  and for other good and valuable
consideration,  the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:

                  NOW,  THEREFORE,  in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto hereby
agree as follows:

                  1.       Employment.

          On the terms and conditions set forth in this  Agreement,  the Company
     agrees to employ Employee and Employee agrees to be employed by the Company
     for the term set forth in Section 2 hereof and in the position and with the
     duties set forth in Section 3 hereof.

                  2.       Term.

          The term of this Agreement  shall commence as of the Effective Time of
     the Merger (the "Commencement Date") and shall end on the third anniversary
     of the date hereof,  unless sooner terminated  pursuant to Section 6 hereof
     (the "Term").

                  3.       Position and Duties.

          Employee  shall serve as a "Managing  Director" of the Company or such
     other  comparable  position as may, from time to time, be prescribed by the
     Chief  Executive  Officer and Board of Directors of the Company (the "Board
     of Directors") or any of its affiliates and agreed to by Employee.

          Employee agrees to serve the Company faithfully and to the best of his
     ability; to devote his time, energy and skill during regular business hours
     (except for illness or incapacity  and except for vacation time as provided
     herein) to such employment;  to use his best efforts, skills and ability to
     promote the Company's interests;  if elected, to serve as a director of the
     Company and its  subsidiaries or affiliated  corporations  or entities;  to
     perform  such  duties  and  responsibilities  as from  time to time  may be
     assigned to him by the Chief Executive  Officer and the Board of Directors,
     which duties  shall be  consistent  with his  positions as set forth in the
     preceding paragraph.

4. Compensation.

          The Company agrees to pay Employee,  either directly or through one of
     its  affiliates,  as  compensation  for all duties  performed by him in any
     capacity during the period of his employment under this Agreement:

(a) An annual base salary ("Base Salary"),  payable in equal  installments twice
monthly to Employee,  at the annualized  rate of $287,664 per year commencing on
the Commencement Date through December 31, 1998.  Commencing January 1, 1999 and
for  the  remainder  of the  Term,  the  annual  rate of Base  Salary  shall  be
determined  by management  of the Company in  accordance  with the  compensation
policies of the Company for employees of  comparable  rank but in no event shall
the Base  Salary  be less  than  $287,664  at any time  during  the term of this
Agreement;

(b) A bonus payment  ("Bonus") for the calendar year 1998, in an amount, if any,
determined  by management of the Company  substantially  in accordance  with the
bonus  structure  used by PHB as  outlined in  Appendix A attached  hereto;  for
calendar year 1999 and each calendar year  thereafter  during the Term, a Bonus,
in an amount, if any, determined by management of the Company in accordance with
the compensation policies of the Company for employees of comparable rank;

(c) A grant of  options  to  purchase  30,000  shares of common  stock of Hagler
Bailly, Inc. on the Commencement Date, with an exercise price at the fair market
value  on the  Commencement  Date  and a term  of ten  (10)  years,  vesting  in
accordance  with the  schedule  set forth in the Stock  Option  Agreement  to be
executed by and between Hagler Bailly and Employee, and subject to the terms and
conditions  of the Hagler Bailly  Employee  Incentive  and  Non-Qualified  Stock
Option and Restricted Stock Plan or any successor plan; and

(d) From time to time  Employee  shall also be  eligible  to receive  options to
purchase  Common  Stock  pursuant  to the terms of the  Hagler  Bailly  Employee
Incentive  and  Non-Qualified  Stock  Option  and  Restricted  Stock Plan or any
successor  plan, and in the amounts  determined by, and subject to the terms and
conditions  of, the Stock  Option  Committee of the Board of  Directors,  or the
Board of Directors, of Hagler Bailly.

5. Benefits; Reimbursement of Expenses; Vacation.

During the Term, Employee shall also be eligible to:

          (a) For calendar year 1998, to continue to  participate  in all of the
     benefit programs which are currently  provided by PHB;  including,  without
     limitation, all vacation, retirement, health, life and disability insurance
     programs  ("Benefit  Programs") in  accordance  with policies in effect for
     officers of comparable rank; provided, that nothing in this Agreement shall
     require  the  Company  to  create,   continue  or  refrain  from  amending,
     modifying,  revising or revoking any Benefit Programs described herein. For
     calendar  year  1999  and   thereafter,   Employee  shall  be  entitled  to
     participate  in all of the Benefit  Programs which are then provided by the
     Company. For purposes of Employee's  participation in the Benefit Programs,
     the Company shall treat the full period of Employee's  service with PHB, or
     any PHB subsidiary; Dickenson, O'Brien & Associates, Inc.; and/or Freeman &
     Mills, Incorporated as if it had been service with the Company;

          (b) Reimbursement by the Company of all expenses  reasonably  incurred
     by him during the Term in connection  with the  performance  of his duties,
     including, without limitation, travel and entertainment expenses reasonably
     related to the business or interests of the Company, upon submission by him
     of written documentation of such expenses; and

          (c) The other benefits set forth in this Agreement.

6. Termination.

          This  Agreement may be terminated  prior to the expiration of its Term
     as follows:

          (a) Automatically upon Employee's death;

          (b) By the Company, for "cause," which for purposes
of this Agreement shall mean:

                                    (i) failure to comply with  material  rules,
                                    standards,    or    procedures    reasonably
                                    promulgated  by the  Company  in  accordance
                                    with ordinary and usual business  standards,
                                    or dereliction of assigned  responsibilities
                                    consistent   with  Section  3  above,   such
                                    failure or dereliction  remaining uncured by
                                    Employee   for   thirty   (30)  days   after
                                    receiving written notice from the Company of
                                    such    failure    or    dereliction    that
                                    specifically  describes  the  nature of such
                                    alleged failures;

                                    (ii)  substandard  performance  of  assigned
                                    responsibilities measured in accordance with
                                    performance  standards agreed upon from time
                                    to time by Employee and the Company;

                                    (iii) material violation by Employee, or any
                                    other   person   acting  upon  his  specific
                                    directions,  of a  federal,  state  or local
                                    statute,  rule or  regulation  applicable to
                                    the Company,  to its  management,  or to the
                                    operation of the Company's business;

          (iv) material breach of the terms of this Agreement;

          (v) knowing falsification of Company's records or documents;

          (vi) gross negligence;

          (vii)  conviction  by  Employee,  or  any  other  person  acting  upon
     Employee's specific  directions,  of any misdemeanor that involves fraud or
     results in a material loss to the Company or of a felony; or

          (viii) any material act of dishonesty or moral turpitude.

          The refusal to permanently  relocate from Employee's  current place of
     work will not  constitute a "cause" for  termination  of  employment by the
     Company.

During the Term of the  Agreement,  the Company shall have no right to terminate
this Agreement without "cause."

          (c) By Employee,  upon the Company's failure to perform or observe any
     of the material  terms or provisions of this  Agreement,  and the continued
     failure of the Company to cure such default  within  thirty (30) days after
     written demand for  performance  has been given to the Company by Employee,
     which demand shall describe specifically the nature of such alleged failure
     to perform or observe such material terms or provisions.  Without  limiting
     the  generality  of the  foregoing,  it is  acknowledged  and  agreed  that
     Sections  4 and  5 of  this  Agreement  are  material  provisions  of  this
     Agreement;

          (d) By Employee,  upon notice from Employee upon the Company's failure
     to pay Employee amounts under Section 4 when due and the continued  failure
     of the  Company to make such  payment  within  ten (10) days after  written
     demand for such payment is made by Employee; and

          (e) Upon permanent disability of Employee,  as such term is defined in
     the disability insurance programs of the Company; and

          (f) By Employee at any time, in the Employee's discretion.

7. Effect of Termination.

          (a) In the event of the  termination  of this  Agreement  pursuant  to
     paragraphs  (a),  (b) and (f) of Section 6, the  Company  shall be under no
     obligation  to Employee,  except to pay his accrued and unpaid Base Salary,
     Bonus and paid leave  payments to the date of  termination,  and any vested
     but  unexercised  options under the Option Plan,  and Employee shall not be
     entitled to receive any Base Salary or Bonus after the date of termination,
     or any unvested options under the Option Plan.

          (b) In the event of the  termination  of this Agreement by Employee of
     the Company  pursuant to paragraphs  (c), (d) or (e) of Section 6, Employee
     shall be entitled  (without  regard to any pay received by Employee  from a
     subsequent  employer)  to  receive  all of the  compensation  and  benefits
     provided herein until the later of (i) the date the Term would have expired
     absent any termination of this  Agreement,  or (ii) six (6) months from the
     effective date of such  termination  (such later date being herein referred
     to as the "Final Payment Date").  In the event of any termination  pursuant
     to Section 6 (e), any payments  pursuant to this Section 7 shall be reduced
     by any disability  benefits received by Employee pursuant to any disability
     insurance  provided by the Company or  purchased  by Employee  (the cost of
     which is  reimbursed  by the  Company).  If the Company and Employee  shall
     become  involved  in a  dispute  relating  to any  alleged  breach  of this
     Agreement  by the  Company  or  Employee,  and  if  Employee  prevails  (by
     judgment,  settlement  or  otherwise)  in such  dispute,  the Company shall
     reimburse   Employee  for  all  reasonable   costs   (including   fees  and
     disbursements  of counsel)  incurred by him in connection with such dispute
     upon presentation to the Company of evidence of such costs.

8. Non-compete and Other Restrictive Covenants.

(a)  Employee  acknowledges  that,  because  of the  competitive  nature  of the
Company's  business and the Company's repeat  transaction with its clients,  the
development and enhancement of relationships with clients  constitute  goodwill,
which is critical to the  Company's  success  and is one of the  Company's  most
valuable   business   assets.   (b)  Employee   agrees  that  it  is  Employee's
responsibility  to  generate  and develop  goodwill  between the Company and its
clients. Employee recognizes and hereby explicitly agrees that all goodwill with
the  Company's  clients  generated or developed  by Employee  during  Employee's
employment  with the Company  belongs  exclusively to the Company,  even if such
goodwill was generated solely by Employee's own efforts.

(c) In order to protect the Company's legitimate business interests,  including,
without  limitation,  protecting the Company's  goodwill,  Employee  agrees that
Employee  will not  solicit or cause any of the clients of the Company set forth
in  Schedule  A  attached  hereto  (and  amended  with  additional  clients on a
quarterly basis) to divert business from the Company without the Company's prior
written consent.  It is acknowledged and agreed that Schedule A will be specific
for the "practice area" in which Employee provides consulting services, and will
include  only those  clients of the Company for which that  "practice  area" has
provided  services from 1 January 1997 forward.  The Company agrees that it will
be reasonable in its  consideration  of such requests for prior written consent,
and that prior  written  consent  will not be  withheld in the event the Company
discontinues a "practice area".

          (i)  Employee  further  agrees  that  Employee  will not,  directly or
     indirectly,  recruit  or  otherwise  seek to induce  any  employees  of the
     Company to terminate their  employment or to violate any agreement with the
     Company or to assist any third party in so doing.

          (d) The covenants  contained in this Section 8 shall be construed as a
     series of separate and severable covenants.  Employee and the Company agree
     that if in any  proceeding,  the tribunal shall refuse to enforce fully any
     covenants  contained  herein because such  covenants  cover too extensive a
     geographic  area or too  long a  period  of time  or for any  other  reason
     whatsoever,  any such covenant  shall be deemed  amended to the extent (but
     only to the extent)  required by law.  Each party  acknowledges  and agrees
     that the services to be rendered by Employee to the Company  hereunder  are
     of a special  and  unique  character.  Each  party  shall have the right to
     injunctive  relief,  in addition to all of its other rights and remedies at
     law or in equity, to enforce the provisions of this Agreement.

                           (e) The  obligations of Employee under this Section 8
shall not survive if this
Agreement is terminated earlier than the Term pursuant to Section 6 (c) and (d),
but in any  event  these  obligations  will not  survive  longer  than the third
anniversary of the Agreement.

9. Proprietary Rights.

(a) Employee  acknowledges  that,  in order for  Employee to perform  Employee's
duties,  the Company  must  entrust  Employee  with  certain  trade  secrets and
confidential  business  information  belonging to the Company (the "Confidential
Information").  The Confidential  Information  includes,  but is not limited to,
client  lists,  including  the identity of the  Company's  clients,  information
concerning the  characteristics of the Company's  clients,  pricing policies and
practices,  negotiating  strategies,  computer software,  financial information,
information about the Company's  business plans, and any other information about
or  generated  by the  Company  which  could,  if  disclosed,  be  useful to any
competitors  of the  Company.  The  Confidential  Information  does not  include
information that is in the public domain through no fault or action of Employee.
Employee  further  acknowledges  that the Company has developed or acquired such
Confidential  Information  at great  effort and  significant  expense,  that the
Confidential Information is critical to the success and survival of the Company,
and that the  unauthorized  disclosure  or use of the  Confidential  Information
would cause the Company irreparable harm.

(b) Employee  agrees that,  during the term of  Employee's  employment  with the
Company and  thereafter,  Employee will not disclose the Company's  Confidential
Information  or use it in any way,  except on behalf of the Company,  whether or
not such  Confidential  Information  was  produced by  Employee's  own  efforts.
Employee further agrees, upon termination of Employee's employment,  promptly to
deliver to the Company all Confidential Information,  including, but not limited
to, all files,  books,  documents,  computer disks or tapes,  and other property
prepared on behalf of the Company or  purchased  with Company  funds,  including
Confidential Information produced by Employee's own efforts, and to refrain from
making, retaining or distributing any copies thereof.

          (c) At all times during the Term,  all right,  title,  and interest in
     all  copyrightable  material  which  Employee  shall conceive or originate,
     either  individually or jointly with others,  in Employee's  capacity as an
     employee of the Company will be the property of the Company and are by this
     Agreement  assigned  to the  Company  along with  ownership  of any and all
     copyrights  in the  copyrightable  material.  At all times during the Term,
     Employee agrees to execute all papers and perform all other acts reasonably
     necessary to assist the Company to obtain and register  copyrights  on such
     materials in any and all countries,  and the Company agrees to pay expenses
     associated with such copyright registration. Works of authorship created by
     Employee  for the Company in  performing  his  responsibilities  under this
     Agreement  during the Term  shall be  considered  "works  made for hire" as
     defined in the U.S. Copyright Act. In addition,  Employee hereby assigns to
     the  Company all  proprietary  rights  which  originate  during  Employee's
     employment  with the Company,  including,  but not limited to, all patents,
     copyrights,  trade secrets and trademarks Employee might otherwise have, by
     operation  of law or  otherwise,  in all  inventions,  discoveries,  works,
     ideas,  information,  knowledge  and data  based on  Employee's  access  to
     Confidential  Information  of the Company or  developed  by Employee in his
     capacity as an employee of the Company.

          (d) If, during the Term, Employee is engaged in or associated with the
     planning or implementing of any project,  program or venture  involving the
     Company and a third party or parties all rights in such project, program or
     venture  shall  belong to the Company.  Except as formally  approved by the
     Company's  Board  of  Directors,  Employee  shall  not be  entitled  to any
     interest in such project, program or venture or to any commission, finder's
     fee  or  other   compensation  in  connection   therewith  other  than  the
     compensation to be paid to Employee as provided in this Agreement.

          (e) At all times  during  the Term and  thereafter,  Employee  further
     agrees to  execute  and  deliver  any  additional  documents,  instruments,
     applications,  oaths or other writings reasonably necessary or desirable to
     further  evidence the assignments  described in this Section 9 ("Supporting
     Documents").

                           (f) The  obligations of Employee under this Section 9
shall survive the termination
or expiration of the Term.

10. Notice.

          All notices or other communications which may be or are required to be
     given,  served  or sent by any party to any other  party  pursuant  to this
     Agreement  shall  be  in  writing  and  shall  be  mailed  by  first-class,
     registered or certified mail, return receipt requested, postage prepaid, or
     transmitted by hand delivery,  or a nationally recognized overnight courier
     service, addressed as follows:

                           (a)      If to the Company:

                                    Hagler Bailly, Inc.
                                    1530 Wilson Boulevard
                                    Arlington, Virginia  22209

                                    Telephone No:  (703) 312-9855
                                    Attention: Stephen V.R. Whitman,
                                    Vice President and General Counsel

                           (b)      If to the Employee:

                                    Walter H. Vandaele
                                    3115 34th Street, NW
                                    Washington, DC  20008

                                    Telephone No:  (202) 363-3785

                                    And  at  the   Employee's   usual  place  of
business, if known by the Company.

                                    And a courtesy copy to:

                                    Michael Schlesinger, Esq.
                                    Tucker, Flyer & Lewis
                                    1615 L Street N.W., Suite 400
                                    Washington, DC  20036

Each party may  designate by notice in writing a new address to which any notice
or other  communication may thereafter be so given,  served or sent. Each notice
or other  communication  which  shall be mailed  or  transmitted  in the  manner
described above, shall be deemed sufficiently given, served, sent, delivered and
received for all purposes at such time as it is delivered to the addressee (with
the return  receipt,  the delivery  receipt or the affidavit of messenger  being
deemed  conclusive  evidence  of such  delivery)  or at such time as delivery is
refused by the addressee upon presentation.

11. Severability.

          If any part or any  provision  of this  Agreement  shall be invalid or
     unenforceable  under  applicable law, such part shall be ineffective to the
     extent of such  invalidity  or  unenforceability  only,  without in any way
     affecting the remaining parts of such provision or the remaining provisions
     of this Agreement.

12. Survival.

          It is the express  intention and agreement of the parties  hereto that
     all  covenants,  agreements  and  statements  made  by any  party  in  this
     Agreement shall survive the execution and delivery of this  Agreement,  and
     that  certain  covenants,  agreements  and  statements  shall  survive  the
     termination  or expiration of the Term to the extent  specified in Sections
     7, 8 and 9 hereof.

13. Waiver.

          Neither  the waiver of any of the  parties  hereto of any breach of or
     default under any of the provisions of this  Agreement,  nor the failure of
     any of  the  parties,  on  one or  more  occasion,  to  enforce  any of the
     provisions  of  this  Agreement  or to  exercise  any  right  or  privilege
     hereunder,  shall  thereafter  be construed  as a waiver of any  subsequent
     breach  or  default,  or as a waiver  of any such  provisions,  rights,  or
     privileges hereunder.

14. Binding Effect.

          This Agreement shall be binding upon and shall inure to the benefit of
     the parties  hereto  and,  subject to Section 19 hereof,  their  respective
     heirs, devisees, executors,  administrators,  legal representatives, and to
     the benefit of PHB Hagler Bailly as successor to the Company.

15. Entire Agreement.

          As of  immediately  prior to the  Effective  Time of the Merger,  this
     Agreement (a) represents the entire  understanding  and agreement among the
     parties  hereto with respect to the subject  matter hereof and  supersedes,
     cancels and terminates all other negotiations, agreements, arrangements and
     understandings, oral or written, between such parties with respect thereto,
     (b) constitutes the sole agreement between the parties with respect to this
     subject  matter,  and (c)  supersedes,  cancels  and  terminates  all prior
     negotiations, agreements, arrangements and understandings, oral or written,
     with respect to (i) the Employee's  employment with PHB or any affiliate of
     PHB, and (ii) any other  obligations or liabilities of PHB or any affiliate
     of PHB except as reflected in PHB's audited  financials  for 1997 or as set
     forth in Schedule B hereto.

16. Amendment.

          No amendment or modification of this Agreement and no waiver hereunder
     or thereunder  shall be valid or binding unless set forth in writing,  duly
     executed  by  the  party  against  whom   enforcement   of  the  amendment,
     modification or waiver is sought.

17. Governing Law.

          This  Agreement  shall be subject to and  governed  by the laws of the
     District of Columbia.

18. Forum.

          At all times during the Term, (a) Employee  irrevocably submits to the
     exclusive  jurisdiction  of any District of Columbia court or Federal court
     sitting in the District of Columbia,  in any action or  proceeding  arising
     out of or  relating  to this  Agreement  or the  transactions  contemplated
     hereby,  and Employee  irrevocably agrees that all claims in respect of any
     such action or proceeding  may be heard and  determined in such District of
     Columbia or Federal court; (b) Employee irrevocably consents to the service
     of any and all process in any such action or  proceeding  by the mailing of
     copies of such process to Employee at his address  specified in Section 10;
     (c)  Employee  irrevocably  confirms  that  service of process  out of such
     courts in such manner shall be deemed due service upon him for the purposes
     of such  action or  proceeding;  (d)  Employee  irrevocably  waives (i) any
     objection  he may  have to the  laying  of  venue  of any  such  action  or
     proceeding  in any of such courts,  or (ii) any claim that he may have that
     any such action or proceeding  has been brought in an  inconvenient  forum;
     and (e)  Employee  irrevocably  agrees  that a final  judgment  in any such
     action or  proceeding  shall be  conclusive  and may be  enforced  in other
     jurisdictions  by suit on the judgment or in any other  manner  provided by
     law.  Nothing in this Section 18 shall affect the right of any party hereto
     to serve legal process in any manner permitted by law.

19. Assignment.

          Except as  otherwise  provided  herein,  this  Agreement  shall not be
     assignable by either party hereto without the prior written  consent of the
     other party hereto.

20. Headings.

          Headings  contained in this Agreement are inserted for  convenience of
     reference only,  shall not be deemed to be a part of this Agreement for any
     purpose,   and  shall  not  in  any  way  define  or  affect  the  meaning,
     construction or scope of any of the provisions hereof.

21. Execution in Counterparts.

          This  Agreement may be executed in one or more  counterparts,  each of
     which shall be deemed an original  hereof,  and all of which together shall
     constitute one and the same instrument.

22. Termination of Merger Agreement.

          This  Agreement  shall  automatically  terminate and be of no force or
     effect upon the termination of the Merger Agreement.

                  IN WITNESS  WHEREOF,  the undersigned  have duly executed this
Employment  Agreement,  or have  caused  this  Employment  Agreement  to be duly
executed on their behalf, as of the day and year first hereinabove set forth.

                         PUTNAM, HAYES & BARTLETT, INC.

                                     By: /s/ William E. Dickenson
                                     Name:    William E. Dickenson
                                     Title:President and Chief Executive Officer

                                                     Walter H. A. Vandaele

                                                     /s/ Walter H. A. VandaeleExhibit 10.48

LICENSING AGREEMENT

This Licensing Agreement (this "Agreement") is made and entered  into on
this 19 day of October, 1999 by  and between American Champion  Media Inc.,
a corporation duly organized and existing under the laws of  the state of
California, located at 1694 The Alameda Suite 100, San  Jose, California
95126 ("Licensor") Prestige Toys Corp., a corporation  duly organized and
existing under the laws of the state of New York,  located at 131 West 33rd
Street Room 606, New York, New York 10001  ("Licensee").

The Licensor is the owner of and/or has the right to license the Kanga
Roddy character and all the related characters including the television
program entitled "Adventures with Kanga Roddy" (collectively the
"Characters"), the names, symbols, likenesses, designs and other indicia
associated with the Characters, and all copyrights, including all
derivative works, and trademarks which exist in the Characters and the
names and likeness of the characters ("Properties"); and

The License desires to obtain a license to manufacture and sell certain
Products using or based upon the Properties;

        In consideration of the mutual covenants contained herein the
parties agree as follows.

1.    License To Use Properties.

(a) Grant of License. Licensor grants to licensee a non-transferable
exclusive License to all channels of retail distribution with exception to
the following categories which shall be non-exclusive, (Department Stores,
Educational Chains, Electronic Commerce, Gift  Stores) to use the
Properties in connection with the manufacture, distribution and sale of the
Products in the Territory. Except for the specific rights,which are granted
to Licensee under this Agreement, all rights in and to the Properties are
retained by Licensor.  Except to the extent set forth in paragraph 10(a)
below, Licensee shall not have the right to sublicense any of the rights
granted to it under this  Agreement.

(b)  Use of Licensed Properties.  The Licensee will: (i) use the
Properties only on Products and Advertising Materials, as defined below;
(ii) package and sell Products only in packaging approved by Licensor;
(iii) refrain from use of the Properties except under the terms of this
Agreement; (iv) notify Licensor in writing of any conflicting uses,
applications for registration or registrations of the properties or  marks
similar thereto of which it has knowledge; (v) execute any  documentation
requested by Licensor relating to the Properties; (vi)  indicate on the
Products and/or their labeling or packaging that the  Products are
manufactured by Licensee, or a manufacturer as described in  paragraph
10(a), and that such manufacture is pursuant to license from  Licensor;
(vii) comply with all of Licensor's instructions relating to  the use and
display of the properties; and (viii) not knowingly sell  Products to
parties who intend or are likely to resell them outside the  Territory.

(c)  Restriction on Use of Properties.  The properties, either in  whole or
in part, will not be shown endorsing the Licensee or products  (including
the Products) or services of Licensee or others, without the  prior written
approval of Licensor.  None of the Properties shall be  combined in any
Products or Advertising materials with any other  characters or persons.

(d)  Restrictions on Sale of Products.  Licensee shall not use or  sell the
Products as premiums, including, but not limited to, using or  selling the
Products in connection with self-liquidating programs, joint  merchandising
programs, tie-ins, giveaways, sales incentive programs,  door openers,
traffic builders, fundraisers, sweepstakes prizes and any  other
promotional programs designed to encourage the sale of the  Products or
other goods or services of the Licensee or a third party  without the prior
written approval of Licensor.

(e)  Method of Sale.  Licensee agrees that the products will be  sold,
shipped and distributed outright, not on an approval, consignment,  sale or
return basis, at a competitive price that does not exceed the  price
customarily charged the trade by Licensee.  Licensee will not be
discriminate against the Products by granting commissions or discounts  to
sales persons, dealers and/or distributors in favor of Licensee's  other
products.  Licensee further agrees that the Products will only be  sold to
retailers or to distributor for sale, shipment and distribution  to
retailers, with the understanding that the Products shall be sold to  the
public only in the manner in which merchandise of the same general
description is customarily marketed, displayed and sold. License agrees  to
offer a warranty to purchasers of the Products substantially similar  to
that offered for products competitive with Products, and in no event
shorter or less comprehensive than the warranty offered by Licensee for
other similar items produced by it.

2.    Product Quality.

(a) Quality Standards.  Licensee acknowledges that the quality of  Products
must be high in order to preserve and maintain Licensor's  reputation and
the goodwill inherent in the Properties, and agrees that  failure to adhere
to Licensor's quality ("Standards") or depicting the  Properties in a
manner which is unethical, immoral or offensive to good  taste, will impair
the value and goodwill associated with the Properties  and Licensor's
licensing program in general.  Licensee therefore agrees  that prior to the
sale of any Product, it will submit (3) samples of the  Product to Licensor
for approval, as provided in Section 3.  Once  Licensor's approval has been
obtained, Licensee agrees that it will not  deviate from the approved
samples.  Failure by Licensee to conform its  Products to the approved
samples will be considered a breach of this  Agreement and upon notice of
such, Licensee agrees that it will  immediately stop the manufacture,
distribution and sale of the  nonconforming Products.  The determination
and the judgement as to  whether the Products conform to the approved
samples shall rest solely  with Licensor.

(b) Provision of Samples.  Licensee will furnish free of charge to
Licensor twenty-four (24) samples of each Product.  Upon written  request,
Licensor may annually request an additional twelve (12) samples  of each
Product.

(c) Inspections.  Upon reasonable notice from Licensor, Licensee  shall
permit representatives of Licensor to enter Licensee's premises  and
plant(s) during normal business hours for the purpose of inspecting
Licensee's plant(s), equipment, records, operation and supplies which
relate to the manufacture, distribution and sale of the Products.

(d) Changes in Standards. Licensor shall have the right from time  to time
to change, withdraw, or supplement the Standards or its approval  of
samples previously authorized for use and sale by Licensee.  Licensee  will
have a reasonable period of time to dispose of its existing  inventory of
Products if the changes to the Standards or approved  samples result solely
from a decision made in Licensor's discretion.  In  any other event,
Licensee agrees to implement all changes immediately at  its own expense.

(e) Product Warranty.  Licensee represents and warrants that the  Product
will be of good quality in design, material and workmanship and  will be
suitable for their intended purpose; that no injuries,  detleerious, or
toxic substances will be used in or on the Products;  that the Products
will not cause harm when used in a foreseeable manner;  and that Licensee
will, at its own expense, comply with all laws and  regulations, including
those relating to the operation of Licensee's  plants, the manufacture,
sale and distribution of the Products,  including the labeling thereof and
including safety standards and  testing of the Products.

 3.    Approval Procedures.

(a) Approval of Products.  Prior to producing or offering any  Product for
sale, Licensee will submit to Agent for its review and  written approval,
three (3) identical production samples of the Product,  and the address of
the production facilities where the Product will be  produced.

(b) Approval of Advertising Materials.  With respect to all  advertising
and promotional materials and all packaging wrapping, and  labeling
materials for the Products (including, but not limited to,  catalogs, sales
shoots, package inserts, hang tags, and displays) which  make any use of or
reference to the Properties ("Advertising  Materials"), Licensee will
submit three (3) prior to the final printed  samples of the Advertising
Materials where feasible (as for example, in  the case of labels, hang
tags, printed brochures, catalogs, and the  like) to Licensor for its
review and written approval.  Advertising  Materials must be submitted with
a description of the proposed uses of  the Advertising Materials, including
the media in which the items will  run, and the duration of such proposed
uses. Approval of Advertising  Materials will extend only to proposed uses
described in Licensee's  submissions and will not be deemed approval for
other uses.

(c) Approval Standards.  Licensor and Agent shall have the right,  in their
sole discretion, to approve or disapprove any Products or  Advertising
Materials.

(d) Time for Approval.  Licensor or Agent will use reasonable  efforts to
approve or disapprove any Products or Advertising Materials  within fifteen
(15) business days after Agent's receipt thereof.   Agent's failure to
approve or disapprove within such period shall be  deemed disapproval,
unless Agent subsequently notifies Licensee of its  approval.

(e)  Artwork for Properties.  If Licensee requests Licensor to  furnish it
with any artwork or copies of material relating to the  Properties,
Licensee agrees to reimburse Licensor for its costs of  supplying such
materials to Licensee, to the extent Licensor is able to  furnish such
materials.

(f) Translations.  All translations of written material used on or  in
connection with the Products or Advertising Materials shall be  accurate.
Licensee shall pay directly all costs incurred by Licensor in  verifying the
accuracy of the translations.

4.    Sale of Products.

(a) Initial Approval and Sale. If Licensee has not begun the sale  of any
approved Product by the Initial Sale Date in every country in the
Territory. Licensor shall have the right to terminate this Agreement
immediately by giving notices of termination to Licensee in relation to
Products for which approval has not been obtained or for countries in  the
Territory where sales have not been made.

(b) Exploitation of Rights. Licensee agrees that during this Agreement, it
will diligently and continuously distribute, ship and sell all of the
Products in all countries of the Territory and that it will use its best
efforts to manufacture the Products in sufficient quantities to meet the
reasonably anticipated demand in the Territory. Licensor shall have the
right to terminate the portion(s) of this Agreement relating to any
Products and any county(s) in the Territory of Licensee, for any reason,
after the commencement of sale, shipment and distribution of Products in
such country or countries, fails for a period in excess of sixty (60) days
to continue to sell, ship and distribute such Products therein. Licensee
also agrees to advertise and promote the Products at its own expense so as
to maximize the sale of the Products in the Territory.

(c)  Sale to Licensor.  Licensee agrees to sell to Licensor, on  request,
up to one hundred (100) units of each Product at Licensee's  cost for such
Product.  No royalties will be due on sales to Licensor.

5.  Protection of the Properties.

(a)  Registrations.  Licensor shall have the right, in its sole
discretion, to file trademark, design, patent or other applications in  the
Territory, relating to the use or proposed use by Licensee of any of  the
Properties and/or to record this Agreement.  Such filings will be  made in
the name of the Licensor or in the name of any third party  selected by
Licensor.

(b)  Trademark Use For Licensor's Benefit.  All uses of the names,
symbols, designs and other works associated with the Properties
("Trademarks") by Licensee shall inure to the benefit of the Licensor,
which shall own all trademarks and trademark rights and all copyrights
created by such uses.  To the extent Licensee acquires any rights to any
of the Copyrights and Trademarks, Licensee hereby assigns and transfers  to
Licensor and agrees to execute any documentation relating to such
assignment, all trademarks and trademark rights and all copyrights  created
by such uses, together with the goodwill of the business in  connection
therewith.  Licensee agrees to use the text appearing in  conjunction with
the trademarks, and not as the generic name of the  Product.

(c)  Other Uses of Trademarks.  Licensee shall not use any of the
Trademarks in combination with any other trademark, word, symbol,  letter,
or design, or as part of its company name or in connection with  any
product other than the Products.  Further, Licensee agrees not to  adopt
any trademark, trade name, design, logo or symbol which, in  Licensor's
opinion, is similar to or likely to be confused with any of  the Trademarks.

(d)  Copyright Protection.  Licensee recognizes the importance to  Licensor
of preserving copyright protection and registrations therefor  on the
Properties and all works relating to the Properties, including  new works
and derivative works ("Copyrights"), and the importance of  securing
copyright protection for the products and Advertising Materials  which
constitute "new works" or derivative works" for copyright law  purposes,
and for all reproductions of the Properties which appear on  the Products
or in the Advertising Materials.  Therefore, Licensee's  license to
manufacture, distribute and sell products and to display  Advertising
Materials is expressly conditioned upon Licensee's agreeing  to place a
copyright notice(s) in the name(s) specified by Licensor on  all Products
and Advertising Materials.  Licensee agrees that it will  not affix to the
Products or the Advertising Materials a copyright  notice in its name or
the name of any other person, firm, or  corporation, except as requested by
Licensor.  Licensee acknowledges  that proper copyright notices must be
permanently affixed to all  products and Advertising Materials and to any
portions of products or  Advertising Materials intended to be used
separately by the ultimate  purchaser or user.  Such notices will be
sufficient in size, legibility,  form, location, and permanency to comply
with both the United States  copyright laws and also the copyright notice
requirements of the Universal Copyright Convention.

(e)  Assignment by licensee. The Licensee hereby sells, assigns,  and
transfers to Licensor its entire worldwide right, title, and  interest in
and to all "new works", derivative and/or "joint works"  heretofore or
hereafter created using all or any portion of the  Properties including,
but not limited to the Copyrights and renewal  copyrights thereon.  If
parties who are not employees of Licensee living  in the United States make
or have made any contribution to the creation  of a work, so that such
parties might be deemed to be "authors" as that  term us used in present or
future United States copyright statutes,  Licensee agrees to obtain from
such parties a full assignment of rights  so that the foregoing assignment
by Licensee shall vest in Licensor full  rights in the work, free of any
claims, interests, or rights of other  parties.  Licensee will not permit
any of its employees to obtain or  reserve any rights as "authors" of such
works and agrees to furnish  Licensor with full information concerning the
creation of new works  and/or derivative works and with copies of
assignments of rights  obtained from other parties, and to execute, without
charge, any  documents requested by Licensor for such purposes.

(f)  Notices.  The Licensee agrees to affix or to cause its  authorized
manufacturing sources to affix to both the Products and  Advertising
Materials notices in the format shown on Page 1 or as  otherwise requested
by Licensor in relation to Licensor's trademark,  copyright, patent or
other protection.  The Licensee agrees that it will  not distribute or
sell, not authorize others to distribute or sell, any  Products or
Advertising Materials which do not carry copyright and other  notices
meeting the requirements of this section.

(g)  Acknowledgement of Validity.  Licensee shall not, directly or
indirectly, in any way dispute or impugn the validity of the Trademarks,
Copyrights or Properties, or Licensor's sole ownership and right to use
and control the use of the Trademarks, Copyrights and Properties during
the term of this Agreement and thereafter.  Licensee will not do or  permit
to be done and action or thing which will in any way impair  Licensor's
rights in and to the Trademarks, Copyrights and Properties.   Licensee
acknowledges that its use of the Trademarks, Copyrights and  Properties
will not create in any right, title or interest therein and  agrees that
all use thereof will be for the benefit of Licensor.

6.  Infringements.

(a)  Infringement by Third Parties.  When Licensee learns that a  party is
making unauthorized use of the rights granted to the Licensee  hereunder,
Licensee agrees promptly to give Licensor written notice  containing full
information with respect to the actions of such party.   Licensor, entirely
at its option, will decide what, if any, action to  take.  Licensee agrees
not to make any demands or claims, bring suit,  effect any settlement, or
take any other action in relation to such  party without the prior written
consent of Licensor.  Licensee agrees to  cooperate with Licensor, at
Licensor's expense, in connection with any  action taken by Licensor to
terminate infringements.

(b)  Claims.  If a claim is made or suit is brought against  Licensor or
Licensee by a party asserting rights in the Properties, or  names or
designs similar thereto, or if either party hereto learns that  another
party has or claims rights which would or might conflict with  the proposed
or actual use of some or all of the Properties by Licensee,  Licensee
agrees either to make responsible modifications in its use of  the
Properties as requested by Licensor, or to discontinue the us eof  the
allegedly infringing part of the Properties in the country of the
Territory in question on the particular Products which are involved, if
Licensor, in its sole discretion, considers such action necessary or
desirable to resolve or settle the claim or suit to eliminate or reduce
the threat of a claim or suit by such party.  In no event shall Licensee
have the right to acknowledge the validity of such a claim, to obtain or
seek a license from such party, or to take any other action which might
impair the ability of Licensor to contest h claim.  Licensor shall have
the right to participate fully at its own expense in the defense of any
claim or suit instituted against Licensee with respect to the use of the
Properties by Licensee.

7.  Indemnification's.

(a)  Licensee's Indemnification.  Licensee agrees to indemnify and  hold
Licensor harmless, from any and all claims, liabilities,  judgements,
penalties, losses, costs, damages, and expenses resulting  therefrom,
including reasonable attorney's fees, but excluding lost  profits,
allegedly arising out of (i) any act pursuant to this Agreement  by
Licensee, its subsidiaries, manufactures, distributor, agents or
representatives, or their employees or agents; (ii) the exercise by
Licensor of its termination rights in Section 10. (b) against third
parties appointed by Licensee to manufacture or distribute the Products;
and (iii) Licensee's failure to comply with the terms hereof.  Claims
based solely upon the use of the Properties by Licensee in manner which had
been previously approved by Licensor in strict accordance with the  terms
of this Agreement are expressly excluded from Licensee's indemnity  of
Licensor.

(b)  Licensor's Indemnification.  Licensor agrees to indemnify and  hold
Licensee harmless, up to the amount of royalties paid by Licensee  to
Licensor, from any and all claims, liabilities, judgements,  penalties,
losses, costs, damages, and expenses resulting therefrom,  including
reasonable attorney's fees, but excluding lost profits, made  by third
parties asserting rights in the properties as used on Products,  when use
of the Properties by Licensee has been in strict accordance  with the terms
of this Agreement.

(c)  Claims Procedures.  With respect to the forgoing  indemnification's;
(i) each party agrees promptly to notify and keep the  other fully advised
with respect to such claims and the progress suits  in which the other
party is not participating; (ii) each party shall  have the right to
assume, at its sole expense, in any suit instituted  against it and to
approve any attorney's selected by the other party to  defend it, which
approval shall not be unreasonably withheld or delayed;  and (iv) a party
assuming the defense of a claim or suit against the  other party shall not
settle such a claim or suit without the prior or  written approval of the
other party, which shall not be unreasonably  withheld.

8.  Insurance.

(a)  Insurance Required.  The Licensee agrees during the term  hereof and
for as long as Products are offered for sale to end users, to  obtain and
maintain at its own cost from an insurance company acceptable  to Licensor,
standard Product Liability Insurance, Contractual Liability  and
Advertising Insurance, the form of which must be acceptable to  Licensor,
naming Licensor, its subsidiaries and affiliates, and their  directors,
officers, agents, employees, assignees, and successors as  additional named
insureds.

(b)  Products Liability Insurance.  Licensee's product and  contractual
liability insurance policy shall provide coverage for any  and all losses,
expenses, claims, demands, causes of action and  settlements, including
attorney's fees, allegedly arising out of any  contractual liability or any
defects in the Products or any material  used in connection therewith,
their failure to perform, or any use  thereof.  The amount of coverage
shall be a minimum of $1,000,000  combined single limit with no deductible
amount, for each single  occurrence for bodily injury and/or for property
damage or contractual  liability.

(c)  Certificate of Insurance.  Within thirty (30) days after the
execution of this Agreement, Licensee will provide a certificate to
Licensor issued by Licensee's carrier confirming that such policy has  been
issued and is in full force and effect and provides coverage as  required
by this Section 8., and also confirming that before any  cancellation,
modification, or reduction in coverage of such policy, the  insurance
company will give Licensor thirty (30) days prior written  notice thereof.
The policy (s) will include a provision that it will be  deemed primary
insurance and any insurance obtained by Licensor will be  excess insurance.
 In no event will Licensee manufacture, offer for  sale, sell, advertise,
promote, ship and/or distribute Products prior to  the receipt by Licensor
of such evidence of insurance.

9.  Royalties.

(a)  Guaranteed and Advance Royalties.  Licensee agrees to pay  Licensor a
Guaranteed Royalty, and on execution of this Agreement to pay  Licensor a
nonrefundable Advance against royalties as stated on page 1  (one) of this
agreement.  If, on expiration or termination of this  Agreement, the
Advance and Earned Royalties paid to Licensor pursuant to  subsections (a)
and (b) are less than the Guaranteed Royalty; Licensee  shall immediately
pay the difference to Licensor.  Only Earned Royalties  paid pursuant to
subsection (b) in relation to products shipped prior to  expiration or
termination of this Agreement to persons or entities in  the Territory will
be credited against the Guaranteed Royalty.  No  portion of the Advance or
Guaranteed Royalty will be refundable to  Licensee on termination or
expiration of this Agreement.

(b)  Earned Royalty.  Licensee agrees to pay Licensor the Earned  Royalty
on Net Sales of the Products.  "Net Sales" as used herein shall  mean
Licensee's total invoice price less actual returns for defensive  products
or credits given to customers for defective Products in lieu of  returns,
up to a maximum of ten percent (10%) of the Net Sales being  reported.  A
sale shall be deemed to have taken place when the Products  are shipped,
transferred or invoiced by Licensee, whichever occurs  first.  Whenever
Products are transferred in whole or in part in  transactions in which some
or all of the consideration is non-monetary,  or where the transferee is
affiliated with :Licensee, the transferee  shall be deemed to have
purchased the Products at licensee's list price  or the price quoted to
non-affiliated buyers for similar Products,  whichever is higher.

(c)  Deductions. There will be no deduction from royalties for
uncollectible amounts, taxes based on Licensee's income or sales, fees,
assessments, or other expenses of any kind which may be incurred or paid by
Licensee in connection with performance of this Agreement. It is Licensee's
sole responsibility and expense to obtain the approval of any foreign
authorities and to take whatever steps may be required to effect the
remission of funds to Licensor.

(d)  Reports.  Licensee shall provide Licensor and Agent with a  report of
transactions relating to products on which royalties have  accrued for each
calendar quarter during the term of this Agreement.   Licensee shall
forward the original report to Agent with copies of such  report to
Licensor at: American Champion Media, Inc. 1694 The Alameda,  Suite 100,
San Jose, CA  95126-2219.  Licensee shall furnish to Licensor  and Agent a
full and complete statement, duly certified by an officer of  Licensee to
be true and accurate, showing the number of each type of  product sold by
country in the Territory during the calendar quarter in  question, and the
total Gross Sales for each such Product, together with  any information
requested by Licensor.  Al amounts shall first be stated  in the currency
in which the sales were actually made with the  equivalent amount stated in
United States dollars or other currency in  which royalties are being
remitted, and the actual rate exchange  obtained by the Licensee, used in
making the conversion.  In the event  there have not been any transactions
relating to the Products during the  quarter, Licensee will provide
Licensor with a report indicating this.   Reports shall be due thirty (30)
days after the end of each calendar  quarter.  Payment for royalties which
exceed the advance, as provided in  Section 9. (a), will accompany each
report to Licensor.  All royalties  will be due and payable in US dollars,
unless otherwise specified by  Licensor.

(e)  Taxes.  If any taxes imposed by governments other than the  U.S based
on funds remitted to Licensor are required to be paid by  Licensee on
behalf of Licensor and Licensee in fact pays such taxes.   Licensee may
deduct these from the royalties due, provided that Licensee  furnishes
Licensor with documentation sufficient to enable Licensor to  receive a
credit for such taxes from the U.S government and that  Licensor is able to
claim the benefit of such credit.  Licensee agrees  to reimburse Licensor
for any taxes withheld from royalties for which  Licensor does not receive
such a credit.

(f)  Retention of Records.  During the term of this Agreement and  for two
years thereafter, Licensee shall keep full and accurate books of  account
and copies of all documents and other material relating to this  Agreement
at Licensee's principal office, which are necessary for a  ready
determination of royalty obligations due by Licensee.  The  Licensor, its
agents or representatives, shall have the right to audit  books, documents,
and other material, shall have access thereto during  ordinary business
hours, and shall be allowed to make copies of such  books, documents, and
other material.  At Licensor's request, Licensee  shall provide an employee
to assist in the examination of Licensee's  records.

(g)  Audits.  If any audit of Licensee's books and records reveals  that
License has failed properly to account and pay royalties owing to  Licensor
hereunder, and the amount of any royalties which Licensee has  failed
properly to account for and pay for any quarterly accounting  period
exceeds, by five percent (5%) or more, the royalties actually  accounted
for and paid to Licensor for such period, Licensee shall, in  addition to
paying Licensor such past due royalties, reimburse Licensor  for its
incurred in conducting the audit, together with interest on the  overdue
royalty amount at an annual rate of two percent (2%) over the  prevailing
prime interest rate fixed and published by The First National  Bank of
Chicago, Illinois in effect as of the date on which such overdue  royalty
amount should have been paid to Licensor.

10.  Agreements with Manufactures and Distributors.

(a)  Manufacturers and Distributors.  Licensee shall have the  right to
arrange with others to manufacture the products or components  thereof for
the exclusive sale, use, and distribution by Licensee, or to  serve as a
distributor for products which have been made by or for  Licensee and sold
to such distributor.  Licensee agrees to enter into  written agreements
with all manufactures and distributors and agrees to  incorporate into such
written agreements all of the provisions contained  herein which relate to
the production, distribution and sale of the  Products or are otherwise
relevant to the third party's performance as  distributor or manufacturer,
including an express agreement by the  parties that Licensor is a third
party beneficiary of the agreement.   Licensee further agrees to furnish
Licensor within thirty (30) days of  execution, copies of all agreements
with such manufactures and  distributors.

(b)  Enforcement of Agreements.  Licensee agrees strictly to  enforce its
manufactures and distributors all of the provisions in such  agreements
which protect Licensor's rights, to advise Licensor of any  violations
thereof and of corrective actions taken by the Licensee and  the results
thereof, and, at the request of Licensor, to terminate such  agreements if
any manufacturer or distributor is in violation of any  provisions
identical or similar to the obligations undertaken by  Licensee herein.  If
Licensee fails to give notice of termination to the  other party within
twenty (20) days after being requested to do so by  Licensor, Licensee
irrevocably appoints Licensor as its attorney-in-fact  to terminate the
manufacture or distributor in the name of Licensee.   Any breach by a
manufacturer or distributor appointed by Licensee will  be considered a
breach of this Agreement by Licensee.

11.  Term and Termination.

(a)  Term.  Except as otherwise provided herein, the term of this
Agreement shall be the Term set forth on page 1 of this Agreement.

(b)  Immediate Right of termination.  Licensor shall have the  right to
terminate this Agreement immediately on notice to Licensee, if  Licensee:

   (i)   breaches any of the provisions of Section 2.;

   (ii)  becomes subject to any order of any governmental  agency involving
the recall of any of the Products;

   (iii)  makes, sells,  offers for sale, distributes or uses  any Product
or item of Advertising Material without  having the prior written approval
of the Licensor or Agent, as required  by Section 3.;

   (iv)  fails to obtain approval of or offer sale products in  the
Territory, as required by Section 4. (a); or to continue to sell products
as required by Section 4.(b);

   (v)   fails to comply with Section 5. (e) or (g);

   (vi)  fails to obtain or maintain insurance as required by  Section 8.;

   (vii)  two or more times during a twelve-month period fails  to make
timely payment of royalties or fails to make timely  submission of royalty
statements as provided in Section 9.;  or

   (viii)  is unable to perform for reasons described in  Section 12. (a)
for a period in excess of sixty (60) days.

(c)  Termination on Thirty Days Notice.  If Licensee breaches any  of the
terms of this Agreement other than those specified in (a) above,  and fails
to cure the breach within thirty (30) days after receiving  written notice
thereof, this Agreement will terminate at the end of the  thirty (30) day
notice period.

(d) Bankruptcy or Insolvency.  Licensor may terminate this  Agreement if:
(i) Licensee becomes insolvent, or a petition in  bankruptcy or for
reorganization is filed by or against it, or any  insolvency proceedings
are instituted by or against it, or (ii) Licensee  makes an assignment for
the benefit of its creditors, is placed in the  hands of a receiver, or
liquidates its business.  If Licensor terminates  this Agreement under any
of the foregoing provisions, the Licensee, its  receivers, trustees, or
other representatives shall have no right to  sell, exploit, or in any way
deal with the Products, Properties or the  Advertising Materials, except
with the express written consent of  Licensor.

(e)  Effect of Termination.  Termination of this Agreement shall  be
without prejudice to any rights or claims which Licensor may  otherwise
have against Licensee.  Upon termination of this Agreement,
notwithstanding anything to the contrary herein, all royalties on sales
thereto made shall become immediately due and payable to Licensor,
including the Guaranteed Royalty set forth in Section 9.(a)

(f)  Discontinuance of Use of Trademarks.  Subject to the  provisions of
subsection 11. (g), upon the  expiration or termination of  this Agreement,
Licensee agrees immediately to discontinue manufacturing  selling,
advertising. distributing, and using the Products and  Advertising
Materials; to turn over to Licensor or to destroy any molds,  dies,
patterns, or similar items from which the Products and Advertising
Materials were made, as requested by Licensor, unless it is possible to
completely obliterate all references to Licensor and the Properties, and
to terminate all agreements with manufactures, distributors, and others
which relate to the manufacture, sale, distribution, and use of the
Products.

(g)  Disposition of Inventory Upon Expiration.  Notwithstanding  the
provisions of subsection 11. (f), if this Agreement expires in  accordance
with its terms and is not terminated for a breach by  Licensee, Licensee
shall have  the right to sell Products on hand or in  the process of
manufacture as of such expiration or termination for  a  period of ninety
(90) days immediately following expiration, subject to  payment of
royalties to Licensee on any such sales and compliance with  all the terms
of this Agreement.  The sell-off right granted to Licensee  is expressly
conditioned on Licensee's providing Licensor with an  accurate total of all
inventory of Products on hand and on  Licensor's having the right to
conduct a physical inventory in order to verify such  inventory.  In the
event Licensee fails to provide such inventory to  Licensor, and/or refuses
to permit Licensor to conduct a physical  inventory, the terms of
subsection 11. 9f) will control.  Upon  expiration of the sell-off period,
all remaining Products shall upon  Licensor's option be sold to Licensor at
Licensee's direct cost of  manufacture, excluding overhead, or Licensee
shall destroy the Products  and furnish Licensor with a sworn certificate
of destruction.

12.  General Provisions.

(a)  No Liability.  Neither party will be liable to the other for  any loss
or injury incurred or damages sustained by the other party sue  to a
failure on the part of a party to perform under this Agreement,  except
Licensee's failure to make payments to Licensor as provided  herein, if
such failure to perform is a result of war, not labor strike  or lock-out,
shortages, fire, flood, wind, storm, Act of God,  governmental control or
regulation or other similar condition beyond the  party's control.

(b)  Relationship of the Parties.  Nothing contained in this  Agreement and
no action taken by either party to this Agreement will be  deemed to
constitute any party or any of such party's employees, agents,  or
representatives to be an employee, agent or representative of any  other
party or will be deemed to create any partnership, joint venture,
association or syndication among or between any of the parties, or will  be
deemed to confer on any party any express or implied right, power or
authority to enter into any agreement or commitment, express or implied,
or to incur any obligation or liability on behalf of any other.

(c)  Final Agreement.  This Agreement sets forth the entire and  final
agreement and understanding of the parties with respect to the  matter
hereof.  Any and all prior agreements or understandings, whether  written
or oral, with respect to the subject matter of this Agreement  are
terminated.  Subject to Licensor's right to delete Products and  countries
of the Territory from this Agreement pursuant to Section 4.,  this
Agreement may not be modified or amended except by an instrument in
writing specifically referring to this Agreement and executed by the
parties hereto.

(d)  No Waiver.  No waiver, forbearance or failure by any party of  its
right to enforce any provision of this Agreement will constitute a  waiver
or estoppel of such party's right to enforce any other provision  of this
Agreement or such party's right to enforce such provision in the  future.

(e)  Remedies.  The right of or to be indemnified and held  harmless under
Section 7. will not be exclusive, but will be in addition  to any and all
other rights and remedies to which Licensor may be  entitled under this
Agreement or otherwise.

(f)  Notice.  Any notice or other communication will be and  effective only
if given in writing, evidenced by a delivery receipt, and  personally
delivered or sent by facsimile, overnight courier, or mail,  postage
prepaid to the addresses shown on page 1.  Any notice or other
communication if given personally will be effective upon the date shown  or
the delivery if given receipt.  Notices directed to Licensor will be  given
to both Agent and Licensor.

(g)  Assignment.  Licensee may not assign or otherwise transfer by
operation of law or otherwise, this Agreement to any entity without the
express written consent of Licensor and any attempt to do so will be  null
and void.  Licensor may assign or otherwise transfer this Agreement
without Licensee's consent.

(h) Governing Law.  This Agreement will be constructed and  enforced in
accordance with the laws of the State of California, USA. The parties
agree that the exclusive jurisdiction and venue of any  action between the
parties arising out of this relationship, including  disputes that may
arise following termination of this Agreement, shall  be the Superior Court
of California for the County of Santa Clara or the  United States District
court for the Northern District of California and  each of the parties
hereby submits itself to the exclusive jurisdiction  and venue of such
courts for the purpose of such an action.

(i)  Submission to Jurisdiction.   The Licensee hereby consents to  the
jurisdiction of the courts specified above and waives any objection  based
on improper venue or forum non conveniences to the court of any  proceeding
in such court and waives personal service of any and all  process upon it,
and consents that all such service of process be made  by mail directed to
it at the address set forth on page one of the  Agreement and that service
so made shall be deemed to be completed upon  the earlier of actual receipt
or three (3) days after the same shall  have been sent to Licensee by
Licensee's agent as set forth below.   Licensee irrevocably appoints Yee
and Dublin, LLP, in Los Angeles,  California with notification to Licensor
in writing, as its agent for the purpose of accepting the service of any
process within the State of  California.

(j)  Captions.  The captions in this Agreement are for convenience  only
and will not be considered a part of or be deemed to affect the
construction or interpretation of, any provision of this Agreement.

(k)  Attorney Fees.  If Licensor initiates any action to collect  monies
due to Section 9., or to obtain Licensee's compliance with the  provisions
of Section 5., Licensee will pay all of Licensor's costs,  including
attorney's fees, incurred in relation to such action.

The parties have agreed to the terms of this license contained above.

American Champion Media, Inc.                 Prestige Toy Corp.

By:     /s/ Joy Tashjian                      By:     /s/ Robert Gershin

        (signature)                                    (signature)
                                              Robert Gershin, President

Addendum to clause 10(a):

In the event that Licensor has reasons to suspect that manufacturer,
distributor or sub-licensee may be
shipping  licensed goods without the knowledge of the licensee or the
Licensor, Licensee agrees to provide
Licensor, upon Licensor's request, copies of all correspondences,
memoranda, and any other document or
record of communication between Licensee and any manufacturer,
distributor or sub-licensee.

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