CONSULTING AGREEMENT
EXHIBIT 4.1
This
Consulting Agreement (this “Agreement”)
is
made and entered into as of April 10, 2006 between CenterStaging Corp., a
Delaware corporation (the “Company”),
and
Xxxxxxx X. Xxxxxxxxx (the “Consultant”),
with
reference to the following facts:
A. The
Company is a music and production services company which provides rehearsal
facilities, soundstages, professional technical support, audio equipment and
live event expertise to television producers and musicians for the broadcast
television and music industries; and
B. The
Company is expanding its business to include audiovisual content development
for
distribution through various media; and
C. Upon
the
terms and subject to the conditions of this Agreement, the Company desires
to
retain the Consultant to provide certain consulting services to the Company,
and
the Consultant wishes to render such services.
NOW,
THEREFORE,
in
consideration of the mutual promises and covenants hereinafter set forth, the
Company and Consultant agree as follows:
1. Engagement.
The
Company hereby engages Consultant to provide consulting services pursuant to
this Agreement, and the Consultant hereby accepts such engagement.
2. Services.
Consultant’s services will include advice to the Company and its directors and
executive officers regarding such strategic and operational matters as the
Company or its directors or executive officers shall request from time to time.
Consultant also shall identify prospective business opportunities for the
Company, and seek to make such business introductions as the Company may request
in the event the Company desires to pursue any such opportunities. Consultant
shall make himself reasonably available to provide such consulting services
hereunder. Notwithstanding the foregoing or any requests made of Consultant
hereunder, Consultant shall render no services hereunder in connection with
any
capital-raising transactions by the Company or which, directly or indirectly,
promote or maintain any market for the Company’s securities.
3. Consulting
Fee
3.1 In
consideration of Consultant’s entering into this Agreement and for all services
rendered hereunder, the Company agrees to pay and issue to Consultant 20,000
shares (the “Shares”)
of the
Company’s common stock, subject to adjustment for any stock split, stock
dividend or reverse stock split between the date of this Agreement and the
date
of issuance of the Shares. The Shares shall be issued to Consultant by the
Company no later than the third day following the effectiveness of a
Registration Statement on Form S-8 to be filed by the Company with the
Securities and Exchange Commission to register the issuance of the Shares under
the Securities Act of 1933, as amended (the “Securities
Act”);
and
provided further, that the Company shall make such filing not later than July
21, 2006. Whether or not such Registration Statement has been filed or become
effective under the Securities Act, and without limiting any other rights or
remedies that Consultant may have in the event the Company breaches its
obligation to file such Registration Statement, Consultant may at any time
after
July 31, 2006 elect to have the Shares issued to Consultant without registration
under the Securities Act upon notice to the Company.
3.2 If
the
Company requests the Consultant to provide any specific services hereunder
that
cause the Consultant to incur expenses, the Company shall reimburse the
Consultant for all reasonable expenses upon presentation of expense vouchers
or
statements or such other supporting information as the Company may require.
However, notwithstanding anything contained in the foregoing to the contrary,
the Consultant shall not incur any reimbursable expense in excess of $250
without the prior written consent of the Company.
3.3 Consultant
represents and warrants to, and agrees with the Company as follows, with respect
to the Shares:
3.3.1 Consultant
is acquiring the Shares for his own account, for investment purposes only,
and
not with a view to or for sale in connection with a distribution of the
Shares;
3.3.2 Consultant
understands that an investment in the Shares involves a high degree of risk,
and
Consultant has such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of an investment in the
Shares and in protecting his own interests in connection with this
Agreement.
3.3.3 Consultant
is an “accredited investor” as such term is defined in Rule 501(a)(6) of
Regulation D under the Securities Act.
3.3.4 Consultant
has had the opportunity to ask questions of, and to receive answers from,
appropriate executive officers of the Company with respect to the terms and
conditions of this Agreement and with respect to the business, affairs,
financial condition and results of operations of the Company. Consultant has
had
access to such financial and other information regarding the Company and the
Shares as is necessary in order for him to make a fully informed decision
whether to enter into this Agreement or to acquire the Shares, and has had
the
opportunity to obtain from the Company any additional information it possesses
necessary to verify any of such information to which Consultant has had
access.
3.3.5 Consultant
understands and agrees that, if he elects to receive the Shares prior to
registration of the issuance of the Shares under the Securities
Act:
(a) Consultant
shall not be entitled to sell, transfer, assign, gift, create a security
interest in, or otherwise dispose of, with or without consideration
(collectively, “Transfer”),
any
of the Shares, except pursuant to an effective registration statement under
the
Securities Act or an exemption from such registration and applicable state
securities laws. As a further condition to any such Transfer, except in the
event that such Transfer is made pursuant to an effective registration statement
under the Securities Act, if in the reasonable opinion of counsel to the Company
any Transfer of the Shares by the contemplated transferee thereof would not
be
exempt from the registration and prospectus delivery requirements of the
Securities Act, the Company may require the contemplated transferee to furnish
the Company with an investment letter setting forth such information and
agreements as may be reasonably requested by the Company to ensure compliance
by
such transferee with the Securities Act; and
(b) Consultant
is familiar with the provisions of the Securities Act and Rule 144 thereunder,
and understands that the restrictions on transfer of the Shares may result
in
Consultant being required to hold the Shares for an indefinite period of time;
in this regard, Consultant has adequate means for providing for his current
financial needs and has no need for liquidity with respect to the
Shares.
4. Termination
of this Agreement
4.1 Consultant’s
engagement as consultant pursuant to this Agreement shall commence on the date
of this Agreement and shall terminate upon the earlier to occur of July 31,
2006 or not less than 10 days notice from the Company to Consultant at any
time.
4.2 The
termination of this Agreement shall not affect the Company’s obligation to pay
and issue the Shares to Consultant as provided in Section 3.
5. Confidentiality
5.1 For
purposes of this Agreement, “Confidential
Information”
shall
mean: (a) all information regarding the Company and its current and future
subsidiaries, affiliates, related entities and investments which is not in
the
public domain, including without limitation, business plans, marketing plans,
business development and expansion, financial statements and financial
information, products, services, vendors, suppliers, customers, contracts,
forecasts, projections, sales, marketing and employees and consultants of the
Company, and (b) information of any third party with respect to which the
Company is under obligation to keep confidential; but excluding information
that
(i) was in the public domain at or subsequent to the time such portion was
communicated to Consultant by the Company through no fault of Consultant;
(ii) was rightfully in Consultant’s possession free of any obligation of
confidence at or subsequent to the time such portion was communicated to
Consultant by the Company; (iii) was developed by Consultant independently
of and without reference to any the Confidential Information; or (iii) was
communicated by the Company to an unaffiliated third party free of any
obligation of confidence.
5.2 Consultant
agrees that he will maintain the Confidential Information in strictest
confidence, will not disclose the Confidential Information to any person and
will not use the Confidential Information except to assist the Company as
contemplated by this Agreement. Consultant shall immediately give notice to
the
Company of any unauthorized use or disclosure of the Confidential Information.
Consultant agrees to assist the other party in remedying any such unauthorized
use or disclosure of the other party’s Confidential Information.
5.3 A
disclosure by Consultant of Confidential Information shall not be considered
to
be a breach of this Agreement or a waiver of confidentiality for other purposes
if such disclosure is: (a) in response to a valid order by a court or other
governmental body; (b) otherwise required by law; or (c) necessary to
establish the rights of the parties under this Agreement; provided, in any
case,
that Consultant shall provide prompt prior written notice thereof to the Company
to enable the Company to seek a protective order or otherwise prevent disclosure
of the Confidential Information.
5.4 The
provisions of this Section 5 shall survive any termination of Consultant’s
engagement under this Agreement.
6. Miscellaneous
6.1 No
Violation of Other Agreements.
Each of
the parties hereto represents and warrants that execution, delivery, or
performance of this Agreement does not conflict with, or violate the terms
of,
any other agreement to which it is a party or by which it is bound.
6.2 Independent
Contractor: Limitation of Liability.
The
Consultant is an independent contractor to the Company, and nothing herein
shall
be deemed to constitute the Consultant or his agents as an employee or agent
of
the Company. Consultant has no power or authority to bind the Company, and
shall
not make any representation or statement that he has such power.
6.3 Notices.
All
notices, requests, demands and other communications (collectively, “Notices”)
given
pursuant to this Agreement shall be in writing, and shall be delivered by
personal service, courier, facsimile transmission or by United States first
class, registered or certified mail, postage prepaid, addressed to the party
at
the address set forth on the signature page of this Agreement. Any Notice,
other
than a Notice sent by registered or certified mail, shall be effective when
received; a Notice sent by registered or certified mail, postage prepaid return
receipt requested, shall be effective on the earlier of when received or the
third day following deposit in the United States mails. Any party may from
time
to time change its address for further Notices hereunder by giving notice to
the
other party in the manner prescribed in this Section.
6.4 Assignment.
Neither
party may assign its interest in this Agreement or delegate its responsibilities
hereunder without prior written consent of the other party, provided that the
Company may assign its rights and obligations under this Agreement to any
successor by merger or consolidation, to any purchaser of all or substantially
all of the assets of the Company or to any subsidiary or parent of the
Company.
6.5 Severability.
The
invalidity or unenforceability of any particular provision of this Agreement
or
portion thereof shall not affect the validity or unenforceability of any other
provision thereof. If any provision of this Agreement is adjudicated to be
so
broad as to be unenforceable, it shall be interpreted to be only as broad as
is
enforceable.
6.6 Counterparts:
Governing Law.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of California, without giving effect to conflict
of
laws.
6.7 Arbitration.
All
claims or disputes between the Company and Consultant arising out of or relating
to this Agreement, or the breach thereof, shall be decided by arbitration in
accordance with the Arbitration Rules of the American Arbitration Association
currently in effect unless the parties mutually agree otherwise. The governing
law shall be that of the State of California. The award rendered by the
arbitrator or arbitrators shall be final, and judgment may be entered upon
it in
accordance with applicable law of the State of California.
6.8 Headings.
The
article and section headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or interpretation
of
this Agreement.
IN
WITNESS WHEREOF, the parties execute this Agreement as of the date first above
written.
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By: /s/
Xxxxxx
Xxxxxxxxxx
Name: Xxxxxx
Xxxxxxxxxx
Title: Chief
Financial
Officer
0000
Xxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxxxx 00000
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/s/
Xxxxxxx X.
Xxxxxxxxx
XXXXXXX
X. XXXXXXXXX
0000
Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
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