Paisley Consulting Agreement

THIS CONSULTING AGREEMENT (this "Agreement") is made and entered into as of May 16, 2002, to be effective as of August 9, 2000 by and between American Inflatables, Inc. (the "Company"), a Delaware corporation headquartered in Costa Mesa, California, and Dale Paisley, a resident of the State of California ("Consultant").


RECITALS


A. The Company hired Consultant to provide services to the Company for a three month period ending August 9, 2000 pursuant to that certain Independent Contractor/Consulting Agreement dated May 9, 2000 by and between the Company and Consultant.


B. Following the expiration of the May 9, 2000 agreement between the Company and Consultant, Consultant continued to provide the services to the Company set forth below in this Agreement. These services were provided pursuant to oral agreements between the Company and Consultant.


C. The Company desires that Consultant continue to provide services to the Company, and Consultant desires to continue to provide such services. The Company and Consultant desire to reduce to writing and to amend and restate their prior oral agreements pertaining to the provision of services by Consultant to the Company since the expiration of the May 9, 2000 agreement and after the date hereof as provided below in the Agreement.


D. The Company has entered into a Share Exchange Agreement dated May 16, 2002 (the "Share Exchange Agreement") with William R. Fairbanks, Red Oak Limited Partnership and Douglas A. Brown (each an "ASDG Shareholder"), the sole shareholders of American Sports Development Group, Inc., a South Carolina corporation ("ASDG"), and the ASDG Shareholders were unwilling to enter into the Share Exchange Agreement unless the Company and Consultant entered into this Agreement as a condition of closing of the transactions contemplated in the Share Exchange Agreement. The Company and Consultant both believe that the Share Exchange Agreement and the transactions contemplated therein are in their respective best interests.


NOW, THEREFORE, for and in consideration of the mutual promises herein contained and the benefits that have and will inure to each of the parties hereto and as an inducement to the ASDG Shareholders to enter into and consummate the transactions contemplated in the Share Exchange Agreement, the parties hereto do agree as follows:


1. SERVICES. Subject to the terms and conditions of this Agreement, Consultant agrees to perform for Company the services listed in the Scope of Services section in SCHEDULE A, attached hereto and executed by both Company and Consultant. Such services are hereinafter referred to as "Services." Company agrees that Consultant shall have ready access to Company's staff and resources as necessary to perform the Consultant's Services provided for by this Agreement.


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2. PERIOD OF PERFORMANCE. The Company shall hire Consultant for the "Period of Performance" as defined in SCHEDULE A, attached hereto and executed by both Company and Consultant, unless earlier terminated pursuant to the terms of this Agreement.


3. STANDARD OF PERFORMANCE. Consultant agrees that the Services performed hereunder will represent his best efforts and will be of the highest professional standards and quality. If the Company requires Consultant to remedy any deficiencies in the Services provided, such corrections shall be made at no additional charge to the Company.


4. COMPLIANCE WITH COMPANY'S POLICIES. Notwithstanding the fact that he is an independent contractor, while on the Company premises, Consultant shall observe and obey and cause his employees and subcontractors to observe and obey, all policies, procedures, rules, and regulations of Company applicable to Company's own employees.


5. COMPENSATION FOR SERVICES. Company agrees to compensate Consultant for Services in accordance with the terms and conditions described in SCHEDULE A, attached hereto and executed by both Company and Consultant. 6. EXPENSE REIMBURSEMENT: Consultant agrees that he will supply all instrumentalities, tools, implements, appliances, and other materials needed for the performance of Services and will bear all routine business and operational expenses incurred to perform such Services. The Company will reimburse Consultant for the following out-of-pocket expenses, so long as such expenses are pre-approved and documented, and incurred in performing the Services:


a. TRAVEL EXPENSES. The Company shall reimburse Consultant for the
following reasonable travel expenses incurred by Consultant directly
in the performance of Services for the Company: (1) transportation
expenses, including coach class airfare, rental cars, gas, and taxi
fare; (2) hotel expenses; (4) meals and (4) dry cleaning expenses for
trips longer than three (3) days.


b. OTHER EXPENSES. The Company shall also reimburse Consultant for other
reasonable expenses incurred by Consultant directly in the performance
of Services for the Company, including expenses for faxes, business
calls, etc.


c. RECEIPT REQUIRED. For the reimbursement of expenses identified in the
above paragraphs 6(a) and 6(b) that exceed ten dollars ($10.00), the
Company requires that the Consultant present an original receipt for
such expenses.


7. INVOICING. Company shall pay the amounts due to Consultant pursuant to paragraphs 5, 6(a), and 6(b) of this Agreement upon receipt of an invoice, which shall be sent to Company by Consultant. Company shall pay the amount of such invoice to Consultant within fifteen (15) days from the date the invoice is received by Company.


8. RETURN OF COMPANY PROPERTY. When the Services are completed, Consultant agrees to return to the Company all property of the Company, and all data and records of Company Data, as defined herein, including all copies thereof. This includes all of the Company's processes, customer lists, customer requirements, and information not generally known relating to research, development, manufacture and sale of Company products.


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9. TERMINATION. For the duration of the Period of Performance, this Agreement may be terminated only:


a. by mutual agreement of the Company and Consultant;
b. by the Company if the Company reasonably determines based on business
necessity that it no longer requires the Consultant to perform the
Services described in this Agreement;
c. by the Company if Consultant materially breaches this Agreement and
fails to cure any such breach within ten (10) days of receiving
written notice from the Company stating the specific nature of the
breach;
d. by the Company, effective immediately, if Consultant (a) is convicted
or pleads guilty or nolo contendere to a felony or misdemeanor
involving fraud, embezzlement, theft, or dishonesty, or other criminal
conduct; (b) commits any act of fraud or dishonesty with respect to
the Company; or (c) takes other action that is likely, in the
reasonable, good faith judgment of the Company, to have a material
adverse effect upon the Company; or
e. by Consultant if the Company materially breaches this Agreement and
fails to cure any such breach within ten (10) days of receiving
written notice from Consultant stating the specific nature of the
breach.


Effective as of the date of termination (the "Termination Date"), Consultant's right to receive compensation hereunder shall cease (except to the extent, as of the Termination Date, that the Company owes the Consultant for Services previously performed prior to the Termination Date).


10. NONDISCLOSURE OF COMPANY DATA. Whereas the Company has a proprietary interest in, and its business is one that requires secrecy concerning "Company Data,"* which is defined as Company or ASDG information that is not generally known by or readily ascertainable to the public, and includes (i) inventions, formulas, data, patterns, designs, drawings, discoveries, improvements, know-how, methods, processes, and methods employed or sold by the Company, ASDG or relating to their businesses; (ii) client data (whether or not reduced to writing or capable of being memorized), including but not limited to client lists, client preferences, the specific services and/or products provided to specific clients, client contacts, pricing information, concessions and prior bids; (iii) marketing information, including but not limited to business strategy, plans and research; (iv) business plans, including but not limited to capital projects; (v) financial information; and (vi) trade secrets as defined by California law. Company Data includes documents, records, tapes, files, media, and any other medium of communicating information.


a. Consultant shall hold in trust for the Company, and not disclose to
any unauthorized person or use for any purpose other than the
performance of this Agreement any Company Data without the prior


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- -------- * What may be classified as Company Data, Client Data and/or disclosed or removed pursuant to the normal course of Consultant's duties, will be determined in the sole discretion of the Company. If Consultant has questions about what may be classified as ...