EXHIBIT 4.4
Consulting Agreement dated as of June 21, 1996 between the Corporation and
Ronald Ainsworth, Andres Boyd-Jones and Leon Bronfin.
CONSULTING AGREEMENT
AGREEMENT entered into as of the 21st day of June 1996, between DIAMOND
ENTERTAINMENT CORPORATION, a New Jersey corporation (the "Company"), and RONALD
E. AINSWORTH, ANDREW BOYD-JONES and LEON M. BRONFIN (together, the
"Consultants").
WHEREAS, the Company desires that Consultants provide consulting services to the
Company pursuant hereto and Consultants are agreeable to providing such
services.
NOW, THEREFORE, in consideration of the premises and the mutual promises set
forth herein, the parties hereto agree as follows:
1. For a period of two years form the date hereof (the "Consulting Period"),
Consultants shall serve as consultants to the Company on matters pertaining
to the restructuring and design of the Company's operations and long-term
strategic plan, including but not limited to the development of new
products, acquisition of new products, merger and acquisition of companies
and marketing strategies. Consultants' services shall include consultation
with, and advice to, directors and officers of the Company.
2. During the Consulting Period, the Company shall be entitled to Consultants'
services for reasonable times when and to the extent requested by, and
subject to the direction of the Chairman and Chief Executive Officer of the
Company.
3. Consultants' services shall be rendered form their office, unless by mutual
agreement from time to time arrangements are made for those services to be
rendered elsewhere. Reasonable travel and living expenses, approved in
advance by the Company, necessarily incurred by Consultants to render
services at locations other than their office shall be reimbursed by the
Company promptly upon receipt of proper statements with regard to the
nature and amount of those expenses. Those statements shall be furnished to
the company monthly at the end of each calendar month of the Consulting
Period during which any of those expenses are incurred. Consultants'
expenses shall not exceed $750 for any calendar month without prior written
consent form the Company.
4. In consideration of Consultants' entering into this Agreement, the Company
hereby agrees to issue to Consultants, in the amounts set forth below,
warrants to purchase an aggregate of 1,000,000 shares of the Company's
Common Stock at a exercise price of $0.25 per share (the "Warrants"). The
Warrants will vest as follows: 400,000 shares will vest immediately and the
balance will vest at a rate of 25,000 shares per month, beginning one month
after the date of this Agreement. The warrants shall expire three years
after the date of issuance ("Termination Date'). The warrants shall survive
termination of this Agreement and remain exercisable until the Termination
Date,
CONSULTING AGREEMENT
Page 2
unless the Agreement is terminated as a result of termination of
Consultants of Cause (as defined below). For purposes of this Agreement,
"Cause" shall mean the continuing and willful failure or refusal by
Consultants to perform their duties hereunder after receipt of written
notice form the Company of such failure.
The Warrants shall be allocated and issued in the names of the
individual.,l Consultants as follows: 45% to Leon M. Brofin; 27.5% to
Ronald E. Ainsworth; and 27.5% to Andrew Boyd-Jones.
The Company intends to register the shares issuable upon exercise of the
Warrants (the "Warrant Shares") with the Securities and Exchange Commission
as soon as possible on a Registration Statement on Form S-8, subject to
appropriate clearance form the Company's accountants and attorneys. If a
Form S-8 Registration Statement is unavailable with respect to the Warrant
Shares, the Company agrees to grant Consultants customer piggyback
registration rights with respect to such securities, effective six months
after the date of this Agreement.
5. Consultants agree that they will not, without the Company's consent,
disclose to anyone any trade secrets of the Company or any confidential or
non-public information relating the Company's business, operations or
prospects.
6. Consultants acknowledge that it would be extremely difficult, if not
impossible, to measure accurately the damages to the Company from any
breach by Consultants of Section 5 of this Agreement, and that the injury
to the Company from any such breach would be incalculable in irremediable.
Accordingly, Consultants agree that upon any breach of Section 5 of this
Agreement, the Company's remedy at law would be inadequate and the Company
shall be entitled as a matter of right to institute legal proceedings in
any court of competent jurisdiction and receive an injunction restraining
the further and continued breach of Section 5 of this Agreement and
recovery of all damages to the Company incurred by reason of conducting the
activity in violation of Section 5 of this Agreement.
7. In any legal or equitable action brought with respect to this Agreement
(including, but not limited to, suit for injunctive relief for a breach of
the terms and provisions of Section 5 of this Agreement), the prevailing
party shall be entitled to recover all of its reasonable attorney's fees
and costs in connection therewith at all levels.
8. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective legal representative and to any successor
to the Company, which successor shall be deemed substituted for the Company
under the terms of this Agreement.
CONSULTING AGREEMENT
Page 3
9. Any notice, request, instruction, legal process or other document to be
given hereunder shall be in writing and shall be delivered personally,
against receipt, by fax or by registered or certified mail, return receipt
requested as set forth below:
If to Consultants: Ronald E. Ainsworth
4651 Brighton Road
Corona del Mar, CA 92625
Andrew Boyd-Jones
17 Riva
Newport Beach, CA 92660
Leon M. Bronfin
1970 Port Locksleigh
Newport Beach, CA 92660
If to the Company: Diamond Entertainment Corporation
16818 Marquardt Avenue
Cerritos, CA 90703
Attention: James Lu
President and CEO
Fax No: (310) 921-3993
10. This Agreement constitutes the entire agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations between the parties with respect to the subject matter of this
Agreement.
11. This agreement shall be construed and enforced in accordance with the laws
of the State of California.
12. The invalidity or unenforceability of any provision hereof shall in no way
affect the validity of enforceability of any other provision.
13 This Agreement may be executed in two or more counterparts, each 9 of which
shall be deemed an original, but all of shall be considered one and the
same instrument.
CONSULTING AGREEMENT
Page 4
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
"COMPANY"
DIAMOND ENTERTAINMENT CORPORATION,
a New Jersey Corporation
By: /s/James Lu
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James Lu
President and Chief Executive Officer
"CONSULTANTS"
By: /s/Ron E. Ainsworth
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Ron E. Ainsworth
By: /s/Andrew Boyd-Jones
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Andrew Boyd-Jones
By: /s/Leon M. Bronfin
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Leon M. Bronfin