Exhibit 4(a)(1)
CONSULTING AGREEMENT
This Agreement is effective as of the 3rd day of May, 1996, by and between
Hollywood Trenz, Inc., a Delaware corporation (the "Company") and Electronic
Experience (the "Consultant").
WHEREAS, the Company is engaged in the business of building and operating
family entertainment centers; and
WHEREAS, the Consultant is an expert in the operation of coin operated
video and redemption games; and
WHEREAS, the Company desires to retain the Consultant to provide consulting
services for the Company in connection with the arcade areas in the family
entertainment centers.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:
1. Duties and Involvement.
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a. The Company hereby engages Consultant to provide consulting services to
the Company with respect to the purchase and operation of coin operated video
and redemption games to be included in the arcade areas of the Company's family
entertainment centers.
b. Consultant acknowledges that it is not an officer, director, or agent of
the Company, that it is not and will not be responsible for any management
decisions on behalf of the Company and that it may not commit the Company to any
action. Consultant represents that it does not have, through stock ownership or
otherwise, the power to control the Company nor to exercise any dominating
influence over its management.
2. Term.
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This Agreement shall continue for twelve (12) months from the date of this
Agreement; provided that Consultant's employment hereunder may be terminated
during the term of this Agreement under the following circumstances:
a. Cause. The Company may immediately terminate Consultant's employment
hereunder for cause without prior notice. For purposes of this Agreement, the
Company shall have "cause" to terminate Consultant's employment hereunder upon
(i) the willful failure or refusal by Consultant to perform its duties
hereunder; or (ii) Consultant's willful misconduct which is materially injurious
to the Company, monetarily or otherwise; or (iii) the violation by Consultant of
the provisions of this Agreement.
b. Termination by the Company with Notice. The Company may terminate this
Agreement at any time upon 30 days' written notice.
3. Compensation and Expenses.
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a. As total and complete consideration for the services to be provided by
Consultant to the Company;
The Company agrees to issue to Consultant 1,000,000 free trading shares of
the Company's Common Stock in such installments and at such times during the
term of this Agreement as the Company's management shall determine that the
shares have been earned by the performance of the services required pursuant to
the terms of this Agreement.
b. The Company will reimburse the Consultant for expenses reasonably
incurred by the Consultant in performing its obligations under this Agreement,
subject to prior approval of such expenses by the Company. The Consultant will
repay to the Company advances made by the Company to or on behalf of the
Consultant that the Company and the Consultant agree are to be repaid.
4. Services not Exclusive.
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The Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that the Consultant
is engaged in other business activities and that it will continue such
activities during the term of this Agreement. The Consultant shall not be
restricted from engaging in other business activities during the term of this
Agreement.
5. Confidentiality.
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Consultant acknowledges that it will have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the term of this Agreement, divulge, furnish
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not limited to, the products of the
Company, whether in the concept or development stage or being marketed by the
Company on the effective date of this Agreement or during the term hereof.
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6. Covenant not to Compete.
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During the term of this Agreement, Consultant warrants, represents and
agrees that it will not directly or indirectly compete with the Company.
Investment Representation.
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a. Access to Information.
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The Consultant represents and warrants that it has access to all
information available to the Company concerning its condition, financial and
otherwise, its management, its business and its prospects. The Consultant
represents that it has received a copy of the Company's most recent Form 10-KSB
and any subsequent Forms 10-QSB and Forms 8-K (the "Disclosure Documents"). The
Consultant represents that it has read the Disclosure Documents and has reviewed
all available information with its legal, financial and investment advisors to
the extent that it deemed such review necessary or appropriate. The Consultant
acknowledges that it is aware that because of the Company's financial position
and other factors, the acquisition of the shares to be paid to Consultant as
compensation involves a high degree of risk, including the risk that the
Consultant may lose the entire investment in the shares of Common Stock.
The Consultant further represents that it and its advisors have been afforded
the opportunity to discuss the Company with its management. As a result, the
Consultant is cognizant of the financial condition and operations of the
Company, has available full information concerning its affairs and has been able
to evaluate the merits and risks of the investment in the Common Stock. The
Consultant represents and warrants to the Company that it has received from the
Company and otherwise has access to all information necessary to verify the
accuracy of the information contained in the Disclosure Documents.
b. Registration of Securities.
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The Company agrees at its expense to file a Registration Statement on Form
S-8 to register the shares prior to the first issuance of shares under Section 3
hereof.
7. Assignment.
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This Agreement may not be assigned by either party hereto.
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8. Arbitration.
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Any dispute arising between Consultant and the Company concerning this
Agreement or its interpretation shall be resolved by submission to arbitration
in Ft. Lauderdale, Florida, in accordance with the rules of the American
Arbitration Association then in effect. Any award made by such arbitrators shall
be binding and conclusive for all purposes thereof, may include injunctive
relief, and may be entered as a final judgment in any court of competent
jurisdiction. The costs and expenses of such arbitration shall be borne in
accordance with the determination of the arbitrators.
9. Notices.
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All notices required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given: (i) two hours after
delivered personally to the party to be notified; or (ii) three business days
after deposited in the U.S. mail, postage paid via registered or certified mail,
return receipt requested. Notices to the Company shall be addressed to its
Chairman at its principal executive office, and to the Consultant at the address
set forth beneath the signature line, or to such other addresses as either party
may designate by notice to the other party.
10. Governing Law.
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This Agreement shall be construed by and enforced in accordance with the
laws of the State of Florida.
11. Entire Agreement.
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This Agreement contains the entire understanding and agreement between the
parties. There are no other agreements, conditions or representations, oral or
written, express or implied, with regard thereto. This Agreement may be amended
only in writing signed by both parties.
12. Non-waiver.
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A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right.
13. Headings.
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Headings in this Agreement are for convenience only and shall not be used
to interpret or construe its provisions.
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14. Counterparts.
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This Agreement may be executed in courterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
15. Binding Effect.
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The provisions of this Agreement shall be binding upon the parties, their
successors and assigns.
16. Severability.
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If any provisions of this Agreement or application thereof to any person or
circumstance shall be deemed or held to be in invalid, illegal or unenforceable
to any extent, the remainder of this Agreement shall not be affected and the
application of such affected provision shall be enforced to the greatest extent
possible under the law.
17. Pronouns.
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All the words used in this Agreement, regardless of the number and gender
in which they are used, shall be deemed to include any other number, singular or
plural, and any other gender, masculine, feminine or neuter, as the context may
require.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first above written.
HOLLYWOOD TRENZ, INC. ELECTRONIC EXPERIENCE
By: /S/ EDWARD R. SHOWALTER By: /S/ JON DAUGHERTY
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Chairman, President, C.E.O. President
3471 N. Federal Highway, Suite 501 332 Forest Hills Drive
Ft. Lauderdale, FL 33306 Rancho Mirage, CA 92270