<PAGE>
As filed with the Securities and Exchange Commission on February 16, 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 CONSULTANTING 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 5,350,000 .0537 $287,500 $79.93
( no par value)
- ------------------------------------------------------------------------------------------------------------
</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 4,950,000
warrants at .05 per share and 400,000 warrants at $0.10 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:
"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
3
<PAGE>
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 February 24, 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, February 24, 1999
- -------------------------- and Director
James K.T. Lu
/s/ Jeffrey I. Schillen Executive Vice President and February 24, 1999
- -------------------------- Director
Jeffrey I. Schillen
/s/ Murray T. Scott Director February 24, 1999
- -------------------
Murray T. Scott
</TABLE>
6
<PAGE>
INDEX TO EXHIBITS
EXHIBIT SEQUENTIALLY
NO. DESCRIPTION NUMBERED PAGES
--- ----------- --------------
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
<PAGE>
Exhibit 4.1 Advisory and Consulting Agreement
Number of Shares/Options
------------------------
4.1(a) 1,400,000
4.1(b) 1,400,000
4.1(c) 1,900,000
4.1(d) 400,000
4.1(e) 250,000
8
<PAGE>
Exhibit 4.1(a)
CONSULTING AGREEMENT
This Consulting Agreement (the "Consulting Agreement") made as of
January 10, 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 December 31, 1999, 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.
COMPENSATION.
-------------
The Company will immediately grant Consultant the option to purchase
1,400,000 shares of the Company's Common Stock with an exercise price at $.05
per share, which option shall expire on December 31, 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
January 10, 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 December 31, 1999, 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;
12
<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
1,400,000 shares of the Company's Common Stock with an exercise price of $.05
per share, which option shall expire on December 31, 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.
13
<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/ George Furla
- --------------------------- ----------------------------
James Lu George Furla
President
14
<PAGE>
Exhibit 4.1(c)
CONSULTING AGREEMENT
This Consulting Agreement (the "Consulting Agreement") made as of
January 10, 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 December 31, 1999, 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;
15
<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
1900,000 shares of the Company's Common Stock with an exercise price of $.05 per
share, which option shall expire on December 31, 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.
16
<PAGE>
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.
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
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<PAGE>
Exhibit 4.1(d)
CONSULTING AGREEMENT
This Consulting Agreement (the "Consulting Agreement") made as of
August 21, 1997, by and between Al Davis ("Consultant") and Diamond
Entertainment Corporation, a New Jersey 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 August 22, 1999, 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;
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(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
400,000 shares of the Company's Common Stock with an exercise price of $.10 per
share, which option shall expire on August 22, 1999 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.
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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.
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/ Al Davis
- ----------------------------- -----------------------------
Lames Lu Al Davis
President
20
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Exhibit 4.1(e)
INTERNET MEDIA CONSULTING AND PUBLIC RELATIONS SERVICES AGREEMENT
THIS INTERNET MEDIA CONSULTING AND PUBLIC RELATIONS SERVICES AGREEMENT
(the "Agreement") is made and entered into as of this 11h
day of February 1999, by and between The "Consultant", MARKETEX, 204 1/2 Hale
Street, Kilgore, TX 75662, (903) 984-7660 and the "Company", Diamond
Entertainment, 16200 Carmenita Road, Cerritos, CA, 90703, 562-921-3999
*** This agreement transcends all other Agreements ***
- --------------------------------------------------------------------------------
WITNESSETH:
WHEREAS, Consultant is in the business of providing media consulting
relation services (the "Services") to certain publicly traded companies; and the
Company is a publicly-held company and files periodic reports to the
requirements of the Security Exchange Act of 1934, with its common stock trading
on the NASDAQ Over The Counter Bulletin Board Market under the symbol of DMEC
and; the Company desires to retain Consultant to provide the Services to the
Company upon the terms and conditions set forth here in below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ENGAGEMENT; SERVICES
The Company hereby agrees to retain Consultant as an "Independent Contractor" to
provide public relation services upon the terms and conditions set forth herein.
Consultant agrees to profile Company on Consultant's Internet Web Site
http://www.marketex.net. Some of the services are Communications Strategy
Development, Brand/Company Positioning, Crisis/Issue Management, Investor
Relations, and Strategic Event Planning.
The Company represents and warrants to Consultant that the Company will
cooperate fully and timely with Consultant to perform its obligations; the
Company's Board of Directors has duly authorized the execution and performance
of this Agreement; the Company's performance of this Agreement will not violate
any applicable count decree, law or regulation, nor will it violate any
provisions of the organized documents of the Company or any contractual
obligation by which the Company may be bound; the Company will pay the expenses
of the Consultant to travel to survey the Company's business at least once
bi-monthly. The Company will provide all necessary documents to support and
verify any information provided to the Consultant.
Also in the course of providing media consulting services to the Company,
Consultant will explore various strategic options for review and consideration
by the Company. Such options may include: Public Relations Agreement
introductions to potential investors, market makers, to broker/dealer firms, to
other entities that may have common goals and objectives.
The Consultant and Company further agrees to Consultant shall not author any
news releases on behalf of the Company; Consultant shall have no authority to
bind the Company to any contract or obligation or to transact any business in
the Company's name or on behalf of the Company, in any manner.
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Page Two
Public Relations Agreement
NON-EXCLUSIVITY
This Agreement will be non-exclusive in nature. In the course of Consultant's
business, Consultant may, at its discretion, elect to retain various individuals
or firms to assist with the media consulting relation services subject to the
Company's prior approval. Any election to do such and any compensation agreed
to, at the sole discretion of the Consultant, shall be assumed by the
Consultant. The Company may utilize any other media consulting relation service
company in conjunction with or in place of Consultant. Moreover, Consultant may
provide media consulting relation services to any other person or entity.
TERM
This Agreement will commence on the date (the "Effective Date") of the issuance
of the Stock Payment Shares (as hereinafter defined) and will continue in full
force and effect for a term of twelve (12) months from the date thereof (the
"Term"). Consultant agrees to perform the Services during the Term and will
utilize all efforts to create awareness programs that will inform investors of
the Company and its operations during this time.
INDEMNIFICATION.
Company agrees to indemnify and hold harmless Consultant and all its officers,
directors, employees and representatives and any other affiliated parties from
any claims, damages, costs, actions, or otherwise arising in connection with the
providing of Services by Consultant hereunder as: a result of any action by the
Company, its principals, agents, employees, officers, directors, consultants, or
any other affiliated parties. accuracy of contents and stated facts in any
capacity the Company provides the Consultant in news releases and any other
materials to profile the Company on the Consultant's Internet Web Site. and
agrees to forever indemnify and defend Consultant from any past, present, or
future liabilities as a result of the Company's actions.
COMPENSATION.
During the Term, for all Services provided by Consultant hereunder, the Company
agrees to pay the Consultant Company monthly cash fee of $3,000.00 for Services
rendered pursuant to this agreement to be paid on the first business day of each
month. Also issue two hundred and fifty thousand (250,000) stock options for
free trading common shares at $0.05 per share for an aggregate of $12,500.00
exerciseable within the next two years. Company agrees to hereby irrevocably
constitute and appoint the Company SEC attorney as attorney-in-fact to transfer
all ownership rights and interests in connection with said options and
underlying stock to comply within all laws, rules and regulations of the
Securities and Exchange Codes regarding the issuance of any and all options or
shares. The Stock Options shall be issued in the name of Gary Swancey. The
Company understands that Consultant will commence providing Services hereunder
awaiting Stock Option filing if the monthly fees are issued to Consultant which
is in "good delivery". The Company further agrees to defend Consultant should
any action relating to the 250,000 Stock Option be brought against the
Consultant. The Company shall not seek return of the Stock Option / Shares or
cash or compensation of any kind performed under this agreement. The Stock
Option is solely for Consultant's own account for investment purposes. The
Consultant reserves the right to sell any or part of the Stock Option as the
Consultant's financial situation dictates.
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Page Three
Public Relations Agreement
BEST EFFORTS.
Consultant represents to the Company that Consultant agrees to use its best
efforts to provide the Services during the Term of this Agreement, makes no
promises other than as contained within this Agreement, makes no representations
or promises relating to the performance of the common stock or other equity
securities of the Company whatsoever, to represent the Company with the highest
degree of integrity at all times on the information provided by the Company,
under no condition or circumstance issue a buy or sell recommendations, make any
type financial projections on the Company or its stock price, not to resell the
Stock Payment Shares without being in compliance with the Securities Act and any
applicable state securities laws.
GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Texas without regard to the principles of conflicts of laws of such
state.
EXPENSES.
The Company will reimburse Consultant for any expenses incurred at the request
of the Company and approved in advance and in writing by an officer of the
Company. If the Company or Consultant requests travel of the Consultant and or
Consultant's employees, the Company agrees to pay all travel related expenses
and to compensate on a per diem basis an amount equal to $200.00 per day for
hotel expenses. All per diem amounts are to be paid prior to the commencement of
travel. Except as set forth here-in-above, the Company will be responsible for
any and all general office expenses associated with the performance of the
Services hereunder including all press releases cost, telephone, etc., and other
expenses with the Company's pre-approval, shall be paid by the Company.
ENTIRE AGREEMENT; AMENDMENTS.
This Agreement contains the entire agreement between the parties with respect to
the subject matter hereof. This Agreement may not be amended, waived, changed,
modified or discharged except by an instrument in writing executed by or on
behalf of the parties hereto. The parties whose signatures appear below state
through their signatures that they have the authority on behalf of the Company
to execute this Agreement.
SEVERABILITY.
In case any one or more of the provisions or part of a provision contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect in any jurisdiction, such invalidity, illegality or
unenforceability shall be deemed not to affect any other jurisdiction or any
other provision or part of a provision of this Agreement, nor shall such
invalidity, illegality or unenforceability affect the validity, legality or
enforceability of this Agreement or any provision or provisions hereof in any
other jurisdiction.
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Page Four
Public Relations Agreement
CONFIDENTIALITY.
In performing Services hereunder, Consultant agrees to comply with all
applicable laws and regulations. Consultant agrees, and each person or entity to
whom it delegates the responsibility for providing Services hereunder pursuant
to Section 2 shall agree, to maintain the confidentiality of all information
furnished by the Company to the Consultant and not approved for public release.
ASSIGNABILITY.
Either party hereto without the prior written consent of the other party may not
assign this Agreement.
WAIVER AND FURTHER AGREEMENT.
Any waiver of any breach of any terms or conditions of this Agreement shall not
operate as a waiver of any other breach of such terms or conditions or any other
term or condition, nor shall any failure to enforce any provision hereof operate
as a waiver of such provision or of any other provision hereof. Each of the
parties hereto agrees to execute all such further instruments and documents and
to take all such further action as the other party may reasonably require in
order to effectuate the terms and purposes of this Agreement.
HEADINGS OF NO EFFECT.
The paragraph headings contained in this Agreement are for reference purposes
only and shall not in any way affect he meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ATTEST: Marketex
By: /s Gary G. Swancey February 12, 1999
----------------------------------------
Name: Gary G. Swancey
Its: CEO
ATTEST: Diamond Entertainment Inc.
By: /s/ James Lu February 12, 1999
----------------------------------------
Name: James Lu,
Its: CEO / President
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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
- --------------------------------------------------------------------------------
February 16, 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 5,350,000 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
February 23, 1999.
26
