<PAGE>
As filed with the Securities and Exchange Commission on May 20, 1999
Reg. No. 33
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------
DIAMOND ENTERTAINMENT CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
New Jersey 22-2748019
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
16200 Carmenita Road
Cerritos, CA 90703
(562) 921-3999
(Address of principal executive offices)
------------------------------------------------
ADVISORY AND CONSULTING AGREEMENT
(Full title of plan)
--------------------------------
JAMES K.T. LU
President
16200 Carmenita Road
Cerritos, California 90703
(Name and address of agent for service)
(562) 921-3999
(Telephone number, including area code of agent for service)
Copy to:
Owen Naccarato, Esq.
31 Grenache
Irvine, CA 92614
(949) 510-4982
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------
Proposed maximum Proposed maximum
Title of securities Amount to be Offering price Aggregate offering Amount of
to be registered registered Per share Price registration fee
- ----------------------- --------------------- -------------------- --------------------- --------------------
<S> <C> <C> <C> <C>
Common Stock
( no par value) 6,000,000 .05 $300,000 $83.40
- ----------------------- --------------------- -------------------- --------------------- --------------------
</TABLE>
Estimated solely for the purpose of determining the amount of registration fee
and pursuant to Rules 457(c) and 457 (h) of the General Rules and Regulations
under the Securities Act of 1993, based upon the exercise price of 6,000,000
warrants at .05 per share.
1
<PAGE>
PART I
INFORMATION REQUIRED IN THIS SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
*Information required by Part 1 to be contained in the Section 10(a)
prospectus is omitted from the registration statement in accordance
with Rule 428 under the Securities Act of 1933 and the Note to Part I
of Form S-8.
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by Diamond Entertainment Corporation (the
"Company") with the Securities and Exchange Commission (the "Commission") are
incorporated by reference herein:
(a) the Company's annual report on Form 10-K for the fiscal year ended
March 31, 1998 (Commission File No. 0-17953):
(b) all other reports filed by the Company pursuant to Section 13(a) or
Section 15 (d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since March 31, 1998 through the date hereof;
(c) the Registrant's Form S-18, file No. 33-33997 filed pursuant to
Section 12 of the Exchange Act, in which there is described the terms, rights
and provisions applicable to the Registrant's outstanding Common Stock, and
(d) any document filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
hereof, but prior to the filing of a post-effective amendment to this
Registration Statement which Indicates that all shares of Common Stock
registered hereunder have been sold or that deregisters all such shares of
common Stock then remaining unsold, such documents being deemed to be
incorporated by reference herein and to be part hereof from the date of filing
of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officer
Section 14A: 3-5 of the New Jersey Business Corporation Act (the
"Statute" empowers a corporation as follows:
3
<PAGE>
"Any corporation organized for any purpose under any general or special
law of this State shall have the power to indemnify a corporate agent against
his expense and liabilities in connection with any proceeding involving the
corporate agent by reason of his being or having been such a corporate agent,
other than a proceeding by or in the right of the corporation, if (a) such
corporate agent acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation; and (b) with respect
to any criminal proceeding, such corporate agent had no reasonable cause to
believe his conduct was unlawful. The termination of any proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not of itself create a presumption that such corporate agent
did not meet the application standards of conduct set forth elsewhere in this
statute.
Certificate of Incorporation
The Company's Certificate of Incorporation provides that the Company
shall indemnify those persons entitled to be indemnified, to the fullest extent
permitted by Section 14 A:3-5 of the Statute.
Commission Policy
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers or persons controlling the Company, the Company
has been informed that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The Exhibits to this registration statement are listed in the index to
Exhibits on page 7.
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes::
(1) To file during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
securities Act 1933:
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement:
4
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that paragraph (1) (I) and (I)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraph is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15 (d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendments shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
To remove from registration by mean of a post-effective amendment
any of the securities being registered hereunder that remain unsold at the
termination of the offering.
The undersigned Company hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, each filing of the
company's annual report pursuant to Section 13 (a) or Section 15 (d) of the
Securities and Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the above-described provisions or otherwise,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing a form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cerritos, State of California on May 20, 1999.
Diamond Entertainment Corporation
By /s/ James K.T. Lu
-----------------------------------------
James K.T. Lu, President, Chief Executive
Officer, Principal Executive Officer
and Director
By /s/ Fred U. Odaka
-----------------------------------------
Fred U. Odaka, Chief Financial Officer,
Principal Financial Officer and Principal
Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ James K.T. Lu President, Chief Executive Officer, May 20, 1999
- ----------------------- and Director
James K.T. Lu
/s/ Jeffrey I. Schillen Executive Vice President and May 20, 1999
- ----------------------- Director
Jeffrey I. Schillen
/s/ Murray T. Scott Director May 20, 1999
- -----------------------
Murray T. Scott
</TABLE>
6
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
------- -----------
4.1 Advisory and Consulting Agreements
5.1 Opinion of Counsel, regarding the legality of the securities
registered hereunder.
23.1 Consent of Independent Accountant.
23.2 Consent of Counsel (included as part of Exhibit 5.1)
7
Exhibit 4.1 Advisory and Consulting Agreement
Number of Shares/Options
------------------------
4.1(a) 2,000,000
4.1(b) 2,000,000
4.1(c) 2,000,000
8
<PAGE>
Exhibit 4.1(a)
CONSULTING AGREEMENT
This Consulting Agreement (the "Consulting Agreement") made as of April
12, 1999, by and between Howard Schraub, 8638 Rueffe Monte Carlo, La Jolla CA
92037 ("Consultant") and Diamond Entertainment Corporation with offices at 16200
Carmenita Road, Cerritos, CA 90703 (the "Company").
WITNESSETH
WHEREAS, the Company is engaged in the business of marketing and
selling a variety of videocassette titles and wishes to expand its business by
acquiring other companies; and
WHEREAS, the Company requires and will continue to require consulting
services relating management, strategic planning and marketing in connection
with its business; and
WHEREAS, Consultant can provide the Company with strategic planning and
marketing consulting services and is desirous of performing such services for
the Company; and
WHEREAS, the Company wishes to induce Consultant to provide these
consulting services to the Company,
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
stated, it is agreed as follows:
1. APPOINTMENT.
-----------
The Company hereby engages Consultant and Consultant agrees to render
services to the Company as a consultant upon the terms and conditions
hereinafter set forth.
2. TERM.
-----
The term of this Consulting Agreement began as of the date of this
Agreement, and shall terminate on April 11, 2000, unless earlier terminated in
accordance with paragraph 8 herein or extended as agreed to between the parties.
3. SERVICES.
---------
During the term of this Agreement, Consultant shall provide advice to
undertake for and consult with the Company concerning management, marketing,
consulting, strategic planning, corporate organization and structure, financial
matters in connection with the operation of the businesses of the Company,
expansion of services, acquisitions and business opportunities, and shall review
and advise the Company regarding its overall progress, needs and condition.
Consultant agrees to provide on a timely basis the following enumerated services
plus any additional services contemplated thereby:
(a) The implementation of short-range and long-term strategic
planning to fully develop and enhance the Company's assets,
resources, products and services;
(b) The implementation of a marketing program to enable the
Company to broaden the markets for its services and promote
the image of the Company and its products and services;
9
<PAGE>
(c) Advise the Company relative to the recruitment and
employment of key executives consistent with the expansion
of operations of the Company;
(d) The identification, evaluation, structuring, negotiating
and closing of joint ventures, strategic alliances, business
acquisitions and advice with regard to the ongoing managing
and operating of such acquisitions upon consummation thereof;
and
(e) Advice and recommendations regarding corporate financing
including the structure, terms and content of bank loans,
institutional loans, private debt funding, mezzanine
financing, blind pool financing and other preferred and common
stock equity private or public financing.
4. DUTIES OF THE COMPANY.
----------------------
The Company shall provide Consultant, on a regular and timely basis,
with all approved data and information about it, its subsidiaries, its
management, its products and services and its operations as shall be reasonably
requested by Consultant, and shall advise Consultant of any facts which would
affect the accuracy of any data and information previously supplied pursuant to
this paragraph. The Company shall promptly supply Consultant with full and
complete copies of all financial reports, all fillings with all federal and
state securities agencies; with full and complete copies of all stockholder
reports; with all data and information supplied by any financial analyst, and
with all brochures or other sales materials relating to its products or
services.
5. COMPENSATION.
-------------
The Company will immediately grant Consultant the option to purchase
2,000,000 shares of the Company's Common Stock with an exercise price at $.05
per share, which option shall expire on April 11, 2000 at 5:00 P.M. P.S.T. The
number of shares herein are subject to the anti-dilution provisions of the
corresponding warrant which is being issued in conjunction with this Agreement.
Consultant in providing the foregoing services, shall not be responsible for any
out-of-pocket costs, including, without limitation, travel, lodging, telephone,
postage and Federal Express charges.
6. REPRESENTATION AND INDEMNIFICATION.
-----------------------------------
The Company shall be deemed to have been made a continuing
representation of the accuracy of any and all facts, material information and
data which it supplies to Consultant and acknowledges its awareness that
Consultant will rely on such continuing representation in disseminating such
information and otherwise performing its advisory functions. Consultant in the
absence of notice in writing from the Company, will rely on the continuing
accuracy of material, information and data supplied by the Company. Consultant
represents that he has knowledge of and is experienced in providing the
aforementioned services.
7. MISCELLANEOUS.
--------------
TERMINATION: This Agreement may be terminated by either Party upon
written notice to the other Party for any reason which shall be effective five
(5) business days from the date of such notice. This Agreement shall be
terminated immediately upon written notice for material breach of this
Agreement.
MODIFICATION: This Consulting Agreement sets forth the entire
understanding of the Parties with respect to the subject matter hereof. This
Consulting Agreement may be amended only in writing signed by both Parties.
10
<PAGE>
NOTICES: Any notice required or permitted to be given hereunder shall
be in writing and shall be mailed or otherwise delivered in person or by
facsimile transmission at the address of such Party set forth above or to such
other address or facsimile telephone number as the Party shall have furnished in
writing to the other Party.
WAIVER: Any waiver by either Party of a breach of any provision of this
Consulting Agreement shall not operate as or be construed to be a waiver of any
other breach of that provision or of any breach of any other provision of this
Consulting Agreement. The failure of a Party to insist upon strict adherence to
any term of this Consulting Agreement on one or more occasions will not be
considered a waiver or deprive that Party of the right thereafter to insist upon
adherence to that term of any other term of this Consulting Agreement.
ASSIGNMENT: The Options under this Agreement are assignable at the
discretion of the Consultant.
SEVERABILITY: If any provision of this Consulting Agreement is invalid,
illegal, or unenforceable, the balance of this Consulting Agreement shall remain
in effect, and if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and circumstances.
DISAGREEMENTS: Any dispute or other disagreement arising from or out of
this Consulting Agreement shall be submitted to arbitration under the rules of
the American Arbitration Association and the decision of the arbiter(s) shall be
enforceable in any court having jurisdiction thereof. Arbitration shall occur
only in San Diego, CA. The interpretation and the enforcement of this Agreement
shall be governed by California Law as applied to residents of the State of
California relating to contracts executed in and to be performed solely within
the State of California. In the event any dispute is arbitrated, the prevailing
Party (as determined by the arbiter(s)) shall be entitled to recover that
Party's reasonable attorney's fees incurred (as determined by the arbiter(s)).
IN WITNESS WHEREOF, this Consulting Agreement has been executed by the
Parties as of the date first above written.
DIAMOND ENTERTAINMENT CORPORATION CONSULTANT
/s/ James Lu /s/ Howard Schraub
- ----------------------- -----------------------------
James Lu Howard Schraub
President
11
<PAGE>
Exhibit 4.1(b)
CONSULTING AGREEMENT
This Consulting Agreement (the "Consulting Agreement") made as of April
12, 1999, by and between George Furla, 2317 Mount Olympus Dr., Los Angeles, CA
94402 ("Consultant") Diamond Entertainment Corporation with offices at 16200
Carmenita Road, Cerritos, CA 90703, (the "Company").
WITNESSETH
WHEREAS, the Company is engaged in the business of marketing and
selling a variety of videocassette titles and wishes to expand its business by
acquiring other companies; and
WHEREAS, the Company requires and will continue to require consulting
services relating management, strategic planning and marketing in connection
with its business; and
WHEREAS, Consultant can provide the Company with strategic planning and
marketing consulting services and is desirous of performing such services for
the Company; and
WHEREAS, the Company wishes to induce Consultant to provide these
consulting services to the Company,
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
stated, it is agreed as follows:
1. APPOINTMENT.
------------
The Company hereby engages Consultant and Consultant agrees to render
services to the Company as a consultant upon the terms and conditions
hereinafter set forth.
2. TERM.
-----
The term of this Consulting Agreement began as of the date of this
Agreement, and shall terminate on April 11, 2000, unless earlier terminated in
accordance with paragraph 8 herein or extended as agreed to between the parties.
3. SERVICES.
---------
During the term of this Agreement, Consultant shall provide advice to
undertake for and consult with the Company concerning management, marketing,
consulting, strategic planning, corporate organization and structure, financial
matters in connection with the operation of the businesses of the Company,
expansion of services, acquisitions and business opportunities, and shall review
and advise the Company regarding its overall progress, needs and condition.
Consultant agrees to provide on a timely basis the following enumerated services
plus any additional services contemplated thereby:
(a) The implementation of short-range and long-term strategic
planning to fully develop and enhance the Company's assets,
resources, products and services;
(b) The implementation of a marketing program to enable the
Company to broaden the markets for its services and promote
the image of the Company and its products and services;
(c) Advise the Company relative to the recruitment and
employment of key executives consistent with the expansion
of operations of the Company;
12
<PAGE>
(d) The identification, evaluation, structuring, negotiating
and closing of joint ventures, strategic alliances, business
acquisitions and advice with regard to the ongoing managing
and operating of such acquisitions upon consummation thereof;
and
(e) Advice and recommendations regarding corporate financing
including the structure, terms and content of bank loans,
institutional loans, private debt funding, mezzanine
financing, blind pool financing and other preferred and common
stock equity private or public financing.
4. DUTIES OF THE COMPANY.
----------------------
The Company shall provide Consultant, on a regular and timely basis,
with all approved data and information about it, its subsidiaries, its
management, its products and services and its operations as shall be reasonably
requested by Consultant, and shall advise Consultant of any facts which would
affect the accuracy of any data and information previously supplied pursuant to
this paragraph. The Company shall promptly supply Consultant with full and
complete copies of all financial reports, all fillings with all federal and
state securities agencies; with full and complete copies of all stockholder
reports; with all data and information supplied by any financial analyst, and
with all brochures or other sales materials relating to its products or
services.
5. COMPENSATION.
-------------
The Company will immediately grant Consultant the option to purchase
2,000,000 shares of the Company's Common Stock with an exercise price of $.05
per share, which option shall expire on April 11, 2000 at 5:00 P.M. P.S.T. The
number of shares herein are subject to the anti-dilution provisions of the
corresponding warrant which is being issued in conjunction with this Agreement.
Consultant in providing the foregoing services, shall not be responsible for any
out-of-pocket costs, including, without limitation, travel, lodging, telephone,
postage and Federal Express charges.
6. REPRESENTATION AND INDEMNIFICATION.
-----------------------------------
The Company shall be deemed to have been made a continuing
representation of the accuracy of any and all facts, material information and
data which it supplies to Consultant and acknowledges its awareness that
Consultant will rely on such continuing representation in disseminating such
information and otherwise performing its advisory functions. Consultant in the
absence of notice in writing from the Company, will rely on the continuing
accuracy of material, information and data supplied by the Company. Consultant
represents that he has knowledge of and is experienced in providing the
aforementioned services.
7. MISCELLANEOUS.
--------------
TERMINATION: This Agreement may be terminated by either Party upon
written notice to the other Party for any reason which shall be effective five
(5) business days from the date of such notice. This Agreement shall be
terminated immediately upon written notice for material breach of this
Agreement.
MODIFICATION: This Consulting Agreement sets forth the entire
understanding of the Parties with respect to the subject matter hereof. This
Consulting Agreement may be amended only in writing signed by both Parties.
NOTICES: Any notice required or permitted to be given hereunder shall
be in writing and shall be mailed or otherwise delivered in person or by
facsimile transmission at the address of such Party set forth above or to such
other address or facsimile telephone number as the Party shall have furnished in
writing to the other Party.
13
<PAGE>
WAIVER: Any waiver by either Party of a breach of any provision of this
Consulting Agreement shall not operate as or be construed to be a waiver of any
other breach of that provision or of any breach of any other provision of this
Consulting Agreement. The failure of a Party to insist upon strict adherence to
any term of this Consulting Agreement on one or more occasions will not be
considered a waiver or deprive that Party of the right thereafter to insist upon
adherence to that term of any other term of this Consulting Agreement.
ASSIGNMENT: The Options under this Agreement are assignable at the
discretion of the Consultant.
SEVERABILITY: If any provision of this Consulting Agreement is invalid,
illegal, or unenforceable, the balance of this Consulting Agreement shall remain
in effect, and if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and circumstances.
DISAGREEMENTS: Any dispute or other disagreement arising from or out of
this Consulting Agreement shall be submitted to arbitration under the rules of
the American Arbitration Association and the decision of the arbiter(s) shall be
enforceable in any court having jurisdiction thereof. Arbitration shall occur
only in San Diego, CA. The interpretation and the enforcement of this Agreement
shall be governed by California Law as applied to residents of the State of
California relating to contracts executed in and to be performed solely within
the State of California. In the event any dispute is arbitrated, the prevailing
Party (as determined by the arbiter(s)) shall be entitled to recover that
Party's reasonable attorney's fees incurred (as determined by the arbiter(s)).
IN WITNESS WHEREOF, this Consulting Agreement has been executed by the
Parties as of the date first above written.
DIAMOND ENTERTAINMENT CORPORATION CONSULTANT
/s/ James Lu /s/ George Furla
- ---------------------- -------------------------
James Lu George Furla
President
14
<PAGE>
Exhibit 4.1(c)
CONSULTING AGREEMENT
This Consulting Agreement (the "Consulting Agreement") made as of April
12, 1999, by and between Peter Benz, 543 Virginia Street, San Mateo, CA 94402
("Consultant") Diamond Entertainment Corporation with offices at 16200 Carmenita
Road, Cerritos, CA 90703, (the "Company").
WITNESSETH
WHEREAS, the Company is engaged in the business of marketing and
selling a variety of videocassette titles and wishes to expand its business by
acquiring other companies; and
WHEREAS, the Company requires and will continue to require consulting
services relating management, strategic planning and marketing in connection
with its business; and
WHEREAS, Consultant can provide the Company with strategic planning and
marketing consulting services and is desirous of performing such services for
the Company; and
WHEREAS, the Company wishes to induce Consultant to provide these
consulting services to the Company,
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
stated, it is agreed as follows:
1. APPOINTMENT.
------------
The Company hereby engages Consultant and Consultant agrees to render
services to the Company as a consultant upon the terms and conditions
hereinafter set forth.
2. TERM.
-----
The term of this Consulting Agreement began as of the date of this
Agreement, and shall terminate on April 11, 2000, unless earlier terminated in
accordance with paragraph 8 herein or extended as agreed to between the parties.
3. SERVICES.
---------
During the term of this Agreement, Consultant shall provide advice to
undertake for and consult with the Company concerning management, marketing,
consulting, strategic planning, corporate organization and structure, financial
matters in connection with the operation of the businesses of the Company,
expansion of services, acquisitions and business opportunities, and shall review
and advise the Company regarding its overall progress, needs and condition.
Consultant agrees to provide on a timely basis the following enumerated services
plus any additional services contemplated thereby:
(a) The implementation of short-range and long-term strategic
planning to fully develop and enhance the Company's assets,
resources, products and services;
(b) The implementation of a marketing program to enable the
Company to broaden the markets for its services and promote
the image of the Company and its products and services;
(c) Advise the Company relative to the recruitment and
employment of key executives consistent with the expansion
of operations of the Company;
15
<PAGE>
(d) The identification, evaluation, structuring, negotiating
and closing of joint ventures, strategic alliances, business
acquisitions and advice with regard to the ongoing managing
and operating of such acquisitions upon consummation thereof;
and
(e) Advice and recommendations regarding corporate financing
including the structure, terms and content of bank loans,
institutional loans, private debt funding, mezzanine
financing, blind pool financing and other preferred and common
stock equity private or public financing.
4. DUTIES OF THE COMPANY.
----------------------
The Company shall provide Consultant, on a regular and timely basis,
with all approved data and information about it, its subsidiaries, its
management, its products and services and its operations as shall be reasonably
requested by Consultant, and shall advise Consultant of any facts which would
affect the accuracy of any data and information previously supplied pursuant to
this paragraph. The Company shall promptly supply Consultant with full and
complete copies of all financial reports, all fillings with all federal and
state securities agencies; with full and complete copies of all stockholder
reports; with all data and information supplied by any financial analyst, and
with all brochures or other sales materials relating to its products or
services.
5. COMPENSATION.
-------------
The Company will immediately grant Consultant the option to purchase
2,000,000 shares of the Company's Common Stock with an exercise price of $.05
per share, which option shall expire on April 11, 2000 at 5:00 P.M. P.S.T. The
number of shares herein are subject to the anti-dilution provisions of the
corresponding warrant which is being issued in conjunction with this Agreement.
Consultant in providing the foregoing services, shall not be responsible for any
out-of-pocket costs, including, without limitation, travel, lodging, telephone,
postage and Federal Express charges.
6. REPRESENTATION AND INDEMNIFICATION.
-----------------------------------
The Company shall be deemed to have been made a continuing
representation of the accuracy of any and all facts, material information and
data which it supplies to Consultant and acknowledges its awareness that
Consultant will rely on such continuing representation in disseminating such
information and otherwise performing its advisory functions. Consultant in the
absence of notice in writing from the Company, will rely on the continuing
accuracy of material, information and data supplied by the Company. Consultant
represents that he has knowledge of and is experienced in providing the
aforementioned services.
7. MISCELLANEOUS.
--------------
TERMINATION: This Agreement may be terminated by either Party upon
written notice to the other Party for any reason which shall be effective five
(5) business days from the date of such notice. This Agreement shall be
terminated immediately upon written notice for material breach of this
Agreement.
MODIFICATION: This Consulting Agreement sets forth the entire
understanding of the Parties with respect to the subject matter hereof. This
Consulting Agreement may be amended only in writing signed by both Parties.
NOTICES: Any notice required or permitted to be given hereunder shall
be in writing and shall be mailed or otherwise delivered in person or by
facsimile transmission at the address of such Party set forth above or to such
other address or facsimile telephone number as the Party shall have furnished in
writing to the other Party.
16
<PAGE>
WAIVER: Any waiver by either Party of a breach of any provision of this
Consulting Agreement shall not operate as or be construed to be a waiver of any
other breach of that provision or of any breach of any other provision of this
Consulting Agreement. The failure of a Party to insist upon strict adherence to
any term of this Consulting Agreement on one or more occasions will not be
considered a waiver or deprive that Party of the right thereafter to insist upon
adherence to that term of any other term of this Consulting Agreement.
ASSIGNMENT: The Options under this Agreement are assignable at the
discretion of the Consultant.
SEVERABILITY: If any provision of this Consulting Agreement is invalid,
illegal, or unenforceable, the balance of this Consulting Agreement shall remain
in effect, and if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and circumstances.
DISAGREEMENTS: Any dispute or other disagreement arising from or out of
this Consulting Agreement shall be submitted to arbitration under the rules of
the American Arbitration Association and the decision of the arbiter(s) shall be
enforceable in any court having jurisdiction thereof. Arbitration shall occur
only in Los Angeles, CA. The interpretation and the enforcement of this
Agreement shall be governed by California Law as applied to residents of the
State of California relating to contracts executed in and to be performed solely
within the State of California. In the event any dispute is arbitrated, the
prevailing Party (as determined by the arbiter(s)) shall be entitled to recover
that Party's reasonable attorney's fees incurred (as determined by the
arbiter(s)).
IN WITNESS WHEREOF, this Consulting Agreement has been executed by the
Parties as of the date first above written.
DIAMOND ENTERTAINMENT CORPORATION CONSULTANT
/s/ James Lu /s/ Peter Benz
- ---------------------------- ---------------------------
Lames Lu Peter Benz
President
17
Exhibit 5.1
OPINION OF COUNSEL
OWEN M. NACCARATO
ATTORNEY AT LAW
31 GRENACHE
IRVINE, CA 91614
Office: (310) 312-9652 Fax: (310) 473-5442
- --------------------------------------------------------------------------------
May 14, 1999
Diamond Entertainment Corporation
16200 Carmenita Road
Cerritos, California 90703
Re: Registration Statement on Form S-8
Gentleman:
I have acted as counsel for Diamond Entertainment Corporation (the "Company"),
in connection with the preparation and filing of the Company's Registration
statement on Form S-8 under the Securities Act of 1933, as amended, (the
"Registration Statement"), relating to 6,000,000 shares of the Company's common
stock, no par value, (the "common stock"), issuable pursuant to the Company's
Advisory and Consultants Agreement, (the "Plan").
I have examined the Certificate of Incorporation, as amended, and the
By-Laws of the company and all amendments thereto, the Registration Statement
and originals, or copies certified to my satisfaction, of such records and
meetings, written actions in lieu of meetings, or resolutions adopted at
meetings, of the directors of the Company, and such other documents and
instruments as in my judgement are necessary or appropriate to enable me to
render the opinions expressed below.
Based on the foregoing examination, I am of the opinion that the shares
of Common Stock issuable with the Plan are duly authorized and, when issued in
accordance with the Plan, will be validly issued, fully paid and nonassessable.
Further, I consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Owen Naccarato
- -----------------------------
Owen Naccarato, Esq.
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Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
We consent to the incorporation by reference in the registration
Statement of Diamond Entertainment Corporation on Form S-8 of our report dated
August 7, 1998, on our audit of the financial statements of Diamond
Entertainment Corporation. We also consent to the reference of our firm under
the caption "Experts" in the Prospectus forming part of such Registration
Statement.
/s/ Moore Stephens, P.C.
----------------------------
MOORE STEPHENS, P.C.
Certified Public Accountants.
Cranford, New Jersey
May 19, 1999.
19
