SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1996
                                       OR
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

             For the transition period from __________ to __________

                         Commission File Number O-28690

                           HOLLYWOOD PRODUCTIONS, INC.
             (Exact name of registrant as specified in its charter)

Delaware                                                    13-3704059
(State or other jurisdiction of                             (I.R.S. Employer
Incorporation or organization)                              Identification No.)

14 East 60th Street, Suite 402, New York, NY                10022
--------------------------------------------                -----
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (212) 688-9223
              (Registrant's telephone number, including area code)

                    Securities registered pursuant to Section
                               12(b) of the Act:
Title of each class                   Name of each exchange on which registered
-------------------                   -----------------------------------------
NONE                                    NONE

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $.001 per share
                                (Title of Class)

                         Common Stock Purchase Warrants
                                (Title of Class)

         Check whether the Issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such  shorter  period that  registrant  was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes [X] No [ ]

         Check if no  disclosure  of  delinquent  filers in response Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K [ ].

         The  Registrant's  revenues for its fiscal year ended December 31, 1996
were  $1,217,152.  The  aggregate  market value of the voting stock on April 15,
1996   (consisting  of  Common  Stock,  par  value  $.001  per  share)  held  by
non-affiliates was approximately $3,366,360,  based upon the average closing bid
and asked  prices for such Common Stock on said date  ($2.16),  as reported by a
market maker. On such date, there were 6,092,500  shares of Registrant's  Common
Stock outstanding.



<PAGE>






PART I

                        ITEM 1. DESCRIPTION OF BUSINESS

Business Development

         Hollywood  Productions,  Inc. (the "Company") is a Delaware Corporation
which was organized in December,  1995, by European Ventures Corp. ("EVC").  EVC
invested  $1,100,000  for 5,000,000  shares of the Company's  Common Stock.  The
Company  was formed for the  purpose of  acquiring  screen  plays and  producing
independent   motion  pictures  with  budgets  ranging  between  $1,000,000  and
$3,000,000,  using named talent.  The Company  acquired all the capital stock of
Breaking  Waves,  Inc.,  a  New  York  corporation   ("Breaking  Waves"),  which
acquisition  was  consummated  simultaneously  with the closing of the Company's
initial  public  offering  in  September  1996.  Unless  the  context  otherwise
requires, all references to the "Company" include its wholly owned subsidiaries,
Breaking Waves and D.L. Productions, Inc.

Initial Public Offering

         In September 1996, the Company consummated a public offering of 800,000
shares of its Common Stock and  1,600,000  warrants at purchase  prices of $5.00
per share and $.25 per warrant, respectively,  through Euro-Atlantic Securities,
Inc. ("Euro-Atlantic"). The Company received net proceeds of $3,813,294 from the
offering.  The proceeds from the Company's  offering  have been  apportioned  as
follows:  (i)  $1,700,000  as security for the issuance of a letter of credit to
replace the personal guarantees provided to Nationsbank (ii) $50,000 was paid to
Daniel  Stone  pursuant  to his  consulting  agreement  (iii)  $100,000  capital
contribution  to Breaking  Waves  pursuant to the  acquisition  thereof and (iv)
$1,963,294 was used for the Company's working capital needs.

         Included in the Company's  registration statement referenced above were
1,400,000  shares and 2,000,000  warrants  registered for resale by the European
Ventures  Corp.  ("EVC"),  the majority  stockholder  of the  Company.  Pursuant
thereto  between  September  1996 and  February  1997.  EVC sold an aggregate of
549,000 shares of Common Stock and 432,000 warrants.

         Euro-Atlantic Securities, Inc., the underwriter of the Company's public
offering,  was a dominant  influence in the market for the Company's  securities
until February 1997. In February 1997, Euro-Atlantic's clearing firm WS Clearing
Corp.,  ceased  operations,  which  froze  all  the  accounts  of  Euro-Atlantic
including its client's accounts and firm trading account.  Euro-Atlantic  ceased
operations immediately thereafter.  The market for the Company's securities have
been  significantly  affected  and may  continue  to be  affected by the loss of
Euro-Atlantic's  participation in the market. The loss of Euro-Atlantic's market
making  activities of the Company's  securities has decreased  significantly the
liquidity of an investment in such securities.







<PAGE>






Formation of D.L. Productions, Inc.; Production of "Dirty Laundry" Film.

         In  March  1995,  the  Company  entered  into  a  property  acquisition
agreement  (the  "Purchase  Agreement")  and  a  co-production   agreement  (the
"Production  Agreement") with Rogue Features,  Inc., an unaffiliated  entity, to
acquire the rights to and co-produce a motion picture of the screenplay entitled
"Dirty Laundry". In April 1996, the Company formed D.L. Productions, Inc., a New
York corporation, as a wholly-owned subsidiary, for the purpose of producing and
arranging for the  distribution  of Dirty  Laundry.  In addition the Company and
Rogue  entered into a right of first refusal  agreement  with respect to the two
next products of Rogue and/or its principals.

         The Purchase  Agreement  conveyed all rights to the  screenplay and the
Motion  Picture to Hollywood  Production,  Inc.,  in return  Rogue  directed the
Motion  Picture and has the right to 25% of the profits of the Motion Picture as
described in the co-production agreement.  Rogue retained the right to produce a
live comedy or musical after five years of the Motion Picture's  release or upon
the earlier approval of the Company.  In addition,  Michael Normand, a principal
of Rogue, retained the right to produce a novel of the Motion Picture as long as
the Company agrees to its compensation. The co-production agreement provided for
the principals of Rogue to direct and retain creative  control of the production
of the film, with the Company retaining final approval.

     Pursuant to the terms of the Purchase  Agreement and Production  Agreement,
the Company  financed all but $100,000,  which was invested by the  co-producer,
for the production of the Motion Picture. Pursuant to such agreements as well as
the terms of the participation agreements entered into with the two stars of the
Motion  Picture,  each of Jay  Thomas  and Tess  Harper  shall have the right to
receive $50,000 against a 5% participation  fee from the first revenues received
by the Company.  This $100,000 will be paid out of the first  proceeds  received
from the  distribution  of the Motion  Picture by the Company.  Thereafter,  the
Company and the co-producer shall have the right to all subsequent revenues, pro
rata, until their initial investment is repaid.

         The next  proceeds  received by the  Company  after the talent had been
paid $50,000 each and the co-  producers  have each  received  their  investment
back,  shall be distributed as follows;  (i) 5% of revenues to each of the stars
up to a maximum of $250,000,  at which time their  distribution  decreases to 2%
thereafter; (ii) the Company and the co-producer shall each receive 25% and 35%,
respectively, of each parties investment, from revenues generated, as payment of
an investment  premium for their  financing of the Motion  Picture and (iii) all
revenues above (i) and (ii) shall be first used to repay any distribution  costs
incurred and then  distributed 2% to each of the two stars with the remainder to
the Company and the co-producer at the rate of 75% and 25%, respectively.

         The  filming of the  Motion  Picture  commenced  in April 1996 and took
approximately  five weeks to complete.  After  completion  of the filming of the
Motion  Picture the Company  undertook  the  process of editing,  adding  sound,
special effects and music,  which took an addition 20 weeks.  Upon completion of
the Motion Picture,  the Company made  arrangements  for private showings of the
Motion  Picture in order to obtain both a foreign and domestic  distributor  for
the film. The Company is currently negotiating a foreign distribution  agreement
for the Motion Picture.





<PAGE>







         As a result  of the  private  showings  of the  Motion  Picture  by the
Company, the Company is currently involved in negotiations with several entities
who have expressed an interest in obtaining domestic  distribution rights in the
Motion Picture, though no agreements or arrangements have been entered into.

         The Motion Picture is a romantic  comedy which was shot in the New York
tri-state  area,  stars Jay Thomas as Joey Green,  a dry cleaner going through a
mid-life  crises and Tess Harper as his wife,  Beth,  of 15 years,  who is a sex
advice columnist for a woman's magazine. Mr. Thomas has most recently co-starred
in the motion picture "Mr.  Holland's  Opus" is known for his television work in
"Love & War",  "Cheers",  "Murphy Brown" and "Mork & Mindy". Ms. Harper earned a
Golden Globe  nomination for her performance in the film "Tender Mercies" and an
Oscar nomination for her role in the film "Crimes of the Heart". Joey owns a dry
cleaning  business  which  is doing  poorly  and is  convinced  that he is aging
prematurely.  Do to their lack of intimacy,  Beth tells Joey to seek counseling,
which he does  unbeknownst  to Beth,  who  herself has become  attracted  to her
chiropractor.  Throughout  the  Motion  Picture  there are a variety  of bizarre
mishaps which occur causing the couple to go from separation to back in love.

Acquisition of Breaking Waves, Inc.

         Pursuant  to a  stock  purchase  agreement,  dated  May 31,  1996  (the
"Agreement")  entered into between the Company and the  stockholders of Breaking
Waves,  Inc., a New York  corporation  ("Breaking  Waves"),  the shareholders of
Breaking Waves delivered to the Company all of the issued and outstanding shares
of  Breaking  Wave's  common  stock for  150,000  shares of common  stock in the
Company. The consummation of the acquisition took place  contemporaneously  with
the closing of the Company's initial public offering.

         Pursuant  to the terms of the  Agreement,  on the  closing  date of the
acquisition,  Breaking Waves performed a recapitalization and exchange of all of
its  common  stock for new  common  stock and for a series of  Preferred  Stock,
whereby for each share of Breaking  Wave's  common  stock  exchanged  the holder
received  one share of new common  stock and 28 shares of the Series A Preferred
Stock.  In  connection  therewith  Breaking  Waves  amended its  certificate  of
incorporation  to authorize 5,600 shares of Preferred  Stock, par value $.01 per
share,  designated as the "Series A Preferred Stock". The shares of the Series A
Preferred  Stock have the right to  redemption,  whereby,  on each of January 1,
1997 and 1998, Breaking Waves shall redeem one half of the outstanding shares of
the Series A Preferred  Stock,  at a redemption  price of $100.00 per share on a
pro rata basis, from legally available funds. The Series A Preferred Stock shall
have no dividend,  conversion or voting  rights,  but shall have a preference on
liquidation  equal to $100 per  share.  The shares of Series A  Preferred  Stock
issued to the  stockholders  of  Breaking  Waves does not  affect the  Company's
rights to control,  own or operate Breaking Waves,  except,  that Breaking Waves
will not be able to issue dividends or other  distributions to the Company until
all the shares of the Series A Preferred  Stock are  redeemed.  In January  1997
2,800 shares of the Series E Preferred Stock were redeemed by the Company.










<PAGE>






         Pursuant  to the  terms of the  Agreement,  the  Company  replaced  the
personal  guarantees  of the prior  stockholders  of  Breaking  Waves  issued to
Nationsbank,  in  accordance  with the  Company's  line of credit.  The  Company
replaced the guarantees  with letters of credit  secured by bank  deposits.  The
Company  contributed  $100,000 of the proceeds to the capital of Breaking  Waves
and simultaneously  therewith,  Breaking Waves repaid loans made by Daniel Stone
and Susan Stone in the aggregate amount of $100,000.  Immediately  preceding the
consummation of the Acquisition,  Breaking Waves distributed to its stockholders
an amount equal to 45% of the net income before taxes of Breaking  Waves for the
period from January 1, 1996 to the closing  date,  in order to pay taxes owed by
such stockholders due to Breaking Waves being a subchapter S corporation.

Film Business

General

         The  Company  anticipates  that  in  general  it will  seek to  acquire
screenplays  and  produce  motion  pictures  which have  budgets in the range of
between $1,000,000 and $3,000,000.  However, projects will be reviewed on a case
by case basis by the Company,  whereby, the Company may invest in the production
of motion  pictures  where it does not  receive  total  ownership  of either the
screenplay,  the motion picture or certain ancillary rights thereto. The Company
acquired  the  rights  to  the  screenplay  "Dirty  Laundry",  and  formed  D.L.
Productions,  Inc., as its production and distribution arm to produce and market
the Motion  Picture.  The Company  will retain all  distribution  and  ancillary
rights to the screenplay and the Motion Picture.

         The  distribution  of  proceeds   received  by  the  Company  from  the
distribution of future films will most likely be different then the distribution
of Dirty Laundry,  as when there are different partners involved,  there will be
different agreements and terms negotiated.  As in the case of Dirty Laundry, the
distribution  of the  proceeds  from  other  films  will  be  made  pursuant  to
negotiated  agreements  between the Company,  the co-producers,  if any, and the
hired talent.

Production of Motion Pictures

         The Company has been actively soliciting and reviewing  screenplays for
the  production  of motion  pictures.  The Company  shall attempt to acquire the
rights to screenplays for the production of motion picture, which it anticipates
either  producing or  co-producing.  After the screenplay is acquired;  a budget
will be prepared; revisions to the screenplay made; the talent, production crews
and all ancillary items required for the filming of the motion picture obtained;
and a filming scheduled set. Once the filming of the motion picture is complete,
the film will be  edited,  sound and  special  effects  added and a final  print
produced. Upon completion,  the Company will arrange for private showings of the
film as well as other  arrangements made for the purpose of finding both foreign
and domestic distribution for the film.

         The Company  estimates  that the production of each motion picture will
take between 5 and 8 weeks to film,  with an  additional  14 weeks to edit,  add
sound and special effects. Upon completion of the print the





<PAGE>






Company  estimates  that it  will  take  between  8 and 12  weeks  to  obtain  a
distributor  for  the  film,  if one  is  obtained  and  between  8 to 24  weeks
thereafter until the film is released to the theaters.

Distribution Methods; Billings

         Distribution  of a film may be  performed  either by one of the  motion
picture studios, an independent  distributor or by the Company itself through an
agent. The distributors or agent, in the event the Company  self-distributes its
films,  have  agreements with the theaters to provide the theaters with films to
show the public.  Most  theaters  have  multiple  screens and can show  multiple
movies at the same  time.  There is  continuously  a demand  for new  films.  In
negotiating  with a  distributor  to sign on to a project,  the  Company and the
distributor  determine  who will incur what  portion of the costs of marketing a
film,  at which time a budget is  prepared  and the extent of the release of the
film is determined.  For most high budget, top name talent pictures,  there is a
wide release of the film typically  between 1,500 to 2,500 theaters  nationwide.
For films which the Company anticipates producing,  including Dirty Laundry, the
release may be done in platforming  stages.  Initially the film will be released
in one or two markets in several theaters in each market,  in which  advertising
and marketing will be done. A screening will be held and critics  invited to the
film in anticipation of a review. If the film receives a favorable response from
either the critics  and/or the  audience,  the film's  distribution  will expand
gradually into additionally markets and theaters.

         Once a film has been  distributed  throughout  theaters  in the  United
States, it may be distributed in markets throughout the world. In addition,  the
film may be further distributed through cable television including pay-per-view,
premium channels and standard  channels,  public television and through the sale
of video tapes.  There are many avenues for the  distribution  of a film and the
exploitation  of all  ancillary  rights  thereto.  The  Company  may enter  into
agreements  with different  distributors  for different  markets or sell all the
rights to one  distributor.  Revenues  generated are  distributed to all parties
involved,  including the distributor,  the producers,  the owners and the talent
pursuant to extensive formulas previously agreed upon.

         Distribution  rights to motion  pictures are granted  legal  protection
under the copyright laws of the United States and most foreign countries,  which
provide  substantial civil and criminal  sanctions for unauthorized  duplication
and exhibition of motion pictures. The Company plans to take all appropriate and
reasonable  measures to secure,  protect and maintain or obtain  agreements from
licenses to secure,  protect and maintain  copyright  protection  for all of the
motion  pictures  distributed  by the Company  under the laws of all  applicable
jurisdictions.

         The Company  anticipates that the films it produces will be distributed
and shown at movie theaters,  including Dirty Laundry.  Due to the type of films
and budgets the Company anticipates that the releases may be done in platforming
stages.  Initially,  such films will be released in one or two major  markets in
several theaters in each market.  Advertising and marketing will be done in such
markets.  The  Company  will  invite  film  critics to the film  screenings,  in
anticipation of their revues. If the film receives  favorable revues from either
the critics and/or the audiences,  the film's  distribution may expand gradually
into additional markets and theaters.









<PAGE>






Regulations

         The Code and Ratings  Administration of the Motion Picture  Association
of America,  an  industry  trade  association,  assigns  ratings  for  age-group
suitability for viewing of motion pictures. The Company will follow the practice
of submitting most of its motion pictures for such ratings. However, the Company
may review this policy from time to time.

         United  Stated  television  stations and  networks,  as well as foreign
governments,  impose  restrictions  on the content of motion  pictures which may
restrict  in  whole  or in part  exhibition  on  television  or in a  particular
territory.  There can be no assurance  that current and future  restrictions  on
motion  pictures  released by the Company may not limit or affect the  Company's
ability to exhibit such motion pictures.

         The Company  estimates  that  between 36 weeks and 58 weeks will elapse
between the  commencement of expenditures by the Company in the acquisition of a
screenplay,  the  production  of a motion  picture and the release of such film.
Additionally,  it is  anticipated  that no revenues  will be  received  from the
exploitation  of such film for an  additional  period of between 24 and 36 weeks
after  release.  Billing  in the  industry  is done  quarterly,  therefore,  the
theaters pay the  distributors on a quarterly basis and then the Company is paid
the following quarter. However, in the event a distributor desires to distribute
one of the Company's films, such distributor may either offer an initial payment
to the Company  against or in addition to future  royalties or purchase the film
outright.

Competition in the Film Industry.

         The  Company  is and will  continue  to be in  competition  with  other
institutions  which produce,  distribute and exploit and finance films,  some of
which have substantial financial and personnel resources, which are greater with
and more extensive than the Company's. These institutions include the major film
studios,  including Disney,  Universal,  MGM, and Sony as well as the television
networks.  There is substantial competition in the industry for a limited number
of producers,  directors,  actors and properties which are able to attract major
distribution in all media and all markets throughout the world.

         The motion picture  business is highly  competitive  and extremely high
profile in terms of name recognition,  with relatively insignificant barriers to
entry and with  numerous  firms  competing  for the same  directors,  producers,
actors/actresses, distributors and theaters, among other items. There is intense
competition  within the film industry for exhibition times at theaters,  as well
as for  distribution  in other media,  and for the attention of the  movie-going
public and other viewing audiences.  Competition for distribution in other media
is as intense as the competition for theatrical  distribution  and not all films
are  licensed  in other  media.  There are  numerous  production  companies  and
numerous motion pictures  produced,  all of which are seeking full  distribution
and exploitation. Despite the increase in the number of films, a small number of
films  which  receive  widespread  consumer  acceptance,  account  for  a  large
percentage of total box office receipts.

         There is intense  competition  within the film industry for  exhibition
time at  theaters,  as well as for  distribution  in  other  media,  and for the
attention of the movie-going public and other viewing audiences.





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Competition for distribution in other media is as intense as the competition for
theatrical distribution and not all films are licensed in other media. There are
numerous  production  companies and numerous  motion pictures  produced,  all of
which are seeking full distribution and  exploitation.  Despite the large number
of films  produced,  only a small number of films  receive  widespread  consumer
acceptance, account for a large percentage of total box office receipts.

Swimwear Business

General

         The  Company  is a  designer,  manufacturer  and  distributor  of girls
swimwear sold throughout the United States. In addition to swimwear, the Company
also makes beach cover ups and  accessories  to  coordinate  with its  swimwear.
Swimwear is made in children's sizes from 2-16 and pre-teen sizes.

         The Company markets swimwear under its private brand labels,  including
"Breaking  Waves," "All Waves," "Making  Waves," "Small Waves" and  "Huk-A-Poo."
Under its license agreement with Beach Patrol,  Inc., markets and manufactures a
line of swimwear under the name "Daffy Waterwear."

Products and Design

         Through the Company's wholly owned  subsidiary,  Breaking Waves,  Inc.,
the Company designs,  manufactures,  and sells both private-label and name brand
girls swimwear and accessories.  The designs are sent to a clothing manufacturer
in Korea for prototyping,  and the knitting and printing of fabrics,  whereafter
they are sent to  Indonesia  for sewing.  Finished  goods are then  shipped to a
public warehouse in the City of Industry, California. The Company has found that
this process is its most  cost-effective  means of operating its  business.  The
Company  anticipates,  continuing  its  operations in this manner in the future,
though the Company may use other  manufacturers  and  suppliers in the future in
different countries.

         The  Company  has an office  in Miami,  Florida  where it  designs  its
swimwear  lines and  accessory  items.  Prints and styles are developed for each
line. Each season  approximately  12-15 prints and fabrics are developed for the
"Breaking  Waves" line,  and 10-12 prints and fabrics are developed for the "All
Waves"  line,  which lines  comprised  approximately  33% and 38% of the Company
sales  for the year  ended  December  31,  1996.  The  Company  has a  licensing
agreement  with "Beach  Patrol,  Inc.," which gives Breaking Waves access to the
complete  "Daffy" woman's line,  which line comprised  approximately  29% of the
Company's  sales for the year ended December 31, 1996. The Company select prints
and  styles  from this line that they feel are  appropriate  for the  children's
market and produces such line under its "Daffy's Waterwear" label. Anywhere from
6-12 prints and styles are usually marketed under the Daffy Waterwear label. The
Company is under no obligation to adapt all or any of the prints and styles used
in the  "Daffy"  woman's  line.  Of each  fabric or prints  chosen,  the Company
usually manufacturers two swimsuits, a one piece model and a two piece model.









<PAGE>






         The Company produces swimwear in basically two blended fabrics,  one is
a blend of nylon  and lycra  spandex  ("NL"),  and the other a blend of  cotton,
polyester  and lycra  spandex  ("CPL").  Each product line  manufactured  by the
Company uses different designs and emphasizes  different fabric blends.  The All
Waves line is  approximately  80% CPL and 20% NL. The Breaking Waves line is 90%
NL and 10% CPL.The Daffy's line is 60% CPL and 40% NL.

Supplies and Inventory

         The  swimwear  designs  are  sent  to a  manufacturer  in  Korea  where
prototype  samples of the  designs and prints are  delivered  to the Company for
approval.  The Company  typically  approves between 35-50 prints and fabrics for
all its lines. Once the lines are approved,  the manufacturer in Korea knits and
prints and  fabrics.  The  fabrics are then sent to a company in  Indonesia  for
sewing. Approximately 95% of its piece goods are purchased from one manufacturer
in Korea, Zone Company, Ltd. and approximately 95% of the sewing is performed by
one  Company  in  Indonesia,  P.T.  Kizone  International,   Inc.  Although  the
management of Breaking  Waves is of the opinion that the fabrics and  non-fabric
sub-materials  it uses  are  readily  available  and  that  there  are  numerous
manufactures  for such piece goods on similar terms and prices,  there can be no
assurances  that  management is correct in such belief.  The  unavailability  of
fabrics or the  sewing  thereof at current  prices  could  adversely  affect the
operations of the Company.

         Since  the  Company   purchases   finished   garments   from   overseas
contractors,  it doesn't  buy or  maintain an  inventory  of any  sub-materials.
Letters of credit  are opened to foreign  suppliers  for  finished  garments  by
Nationsbank, pursuant to its line of credit, which line is presently, guaranteed
by the  Company.  The  Company  has not  experienced  difficulty  in  satisfying
finished garment requirements and considers its sources of supply adequate.  The
Company's  inventory of garments  varies  depending upon its backlog of purchase
orders and its financial position.

Marketing and Sales

         The "Daffy"  label is sold to  department  and  specialty  stores.  The
"Breaking  Waves"  label  is also  distributed  through  better  department  and
specialty  stores.  The "All Waves" label is sold to mass  merchants and also as
promotional goods in department  stores.  Private label programs are supplied to
several major chains and  department  store groups.  For the year ended December
31, 1996 the "Breaking  Waves" label  accounted  from  approximately  33% of the
Company's  volume,  the "All Waves"  label 38%, the "Daffy"  label 29%,  private
labels 0% and the "Huk A Poo" label 0%.

         The Company sells its swimwear and accessory items through its showroom
sales staff and through  independent  representatives.  The Company's  customers
include the Dillard and Federated department store groups, as well as Kids R Us,
Sears, Wal-Mart, T.J. Maxx and Marshalls. No single customer accounts for 10% or
more of the Company's sales.  Some of the Company's  customers,  including large
retail department store chains, have recently experienced financial difficulties
and some have  filed for  protection  under the  federal  bankruptcy  laws.  The
Company is unable to predict what effect,  if any,  the  financial  difficulties
encountered  by such  retailers and other  customers  will have on the Company's
future business.






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         The  Company  does not have any  written  or oral  agreements  with its
customers.  All orders are shipped  pursuant to purchase  orders received by the
Company.  Shipments  are sent  F.O.B.  (freight  on board,  which means that the
Company is not  responsible  for the goods  during  shipment or for the delivery
charge)  and  payment  is due 30  days  thereafter.  No  goods  are  shipped  on
consignment,  therefore,  except for  non-conforming or damaged goods, all goods
shipped are considered sold.

         In addition to its in-house sales and showroom personnel, the Company's
lines are sold by approximately ten independent sales representatives throughout
the United States. These  representatives  service department stores and smaller
specialty retailers.  The "Daffy Waterwear" line is sold by separate independent
representatives.  None  of  these  representatives  are  under  contract  to the
Company,  nor do they  receive  a  salary  from  the  Company.  They  are paid a
commission  based upon their  sales.  In addition  to  showroom  sales and sales
representatives calling on customers, the Company exhibits its products at major
trade shows.  End of season and  discontinued  merchandise  is sold to off-price
stores.

Work in Progress

         The Company manufactures its lines during the month of June to December
based  on the  Company's  knowledge  of the  market  and past  sales  histories.
Customer  orders  start  arriving  in June and  July,  goods  are  reordered  by
customers on a continual  basis through the following June. The quantity of open
purchase  orders at any date may be affected by, among other things,  the timing
and recording of orders.  The Company does not sell on consignment  and does not
accept return of products other than imperfect goods or goods shipped in error.

         The major  design  work  takes  place from  January  to May.  Goods are
manufactured, printed and sewn overseas from June to December. Finished garments
are shipped from the factory to a public  warehouse in Los Angeles for shipments
to  retailers.  The majority of shipments to retailers  occurs from  November to
May, with January through March being the peak shipping time.

Trademarks and Licensing

         The  Company  relies on common law  trademarks  for use of its  private
label  swimwear  lines.  In  addition,  the Company has entered into a licensing
agreement  with Beach Patrol,  Inc., to use the trademark  "Daffy's  Waterwear."
Beach Patrol supplies prints and designs under this agreement which are used for
the Daffy's  woman's line.  Pursuant to the licensing  agreement the Company has
the right to use those designs for a children's line under the Daffy's Waterwear
label. The license agreement commenced January 1, 1996, is for an initial period
of 30 months,  broken up into an initial six month period with two additional 12
month  periods the last of which  expires on June 30,  1998.  In  addition,  the
Company  has the right to extend the  agreement  for three  additional  one year
periods the last of which  expires on June 30,  2001.  The Company  shall pay to
Beach  Patrol,  Inc.,  the greater of 5% of net sales and the minimum  trademark
royalty  fee.  The  minimum  fee is  $75,000  for the first  six month  term and
increases each year to $200,000 in the event all extensions are exercised by the
Company.









<PAGE>






         The  Company has also filed to register  additional  trademarks  in the
United  States,  which  applications  are  currently  pending.  There  can be no
assurance that such  additional  trademarks will be registered or if registered,
that such marks, as well as other currently  registered  marks or marks licensed
by the Company will be adequately  protect  against  infringement.  In addition,
there can be no assurance that the Company will not be found to be infringing on
another  company's  trademark.  In the event the  Company  finds  another  party
infringing upon its trademark, if registered,  or is found by another company to
be infringing upon such company's trademark, there can be no assurances that the
Company will have the financial means to litigate such matters.

Competition

         There is intense  competition in the swimwear apparel industry in which
the Company participates.  The Company competes with many other manufacturers in
these  markets,  many of which are larger and have  greater  resources  than the
company.  Major  competitors in the swimwear  industry  include "Ocean Pacific,"
"Gottex" and "Speedo." Also department store and retailer have their own private
label programs, which are the major competition in the mass merchant business.

         The  Company's   business  is  highly   competitive,   with  relatively
insignificant  barriers to entry and with numerous firms  competing for the same
customers.  The  Company  is in direct  competition  with  local,  regional  and
national clothing  manufacturers,  many of which have greater resources and more
extensive distribution and marketing capabilities than the Company. In addition,
many large  retailers have recently  commenced  sales of "store brand"  garments
which  compete  with those sold by the  Company.  Management  believes  that the
Company's market share is not significant in its product lines.

         Many of the national clothing  manufacturers have extensive advertising
campaigns which develop and reinforce brand  recognition.  In addition,  many of
such  manufacturers  have agreements with department  stores and national retail
clothing  chains to jointly  advertise  and  market  their  products.  Since the
Company does little  advertising and has no agreement with any department  store
or national retail chain to advertise any of its products,  the Company competes
with companies which have brand names which are well known to the public. It can
be expected that a retail  shopper will buy a garment from a "brand name" entity
before that of an unknown entity, if all other factors are equal.

Seasonality

         The Company believes that its business may be considered  seasonal with
a large portion of its revenues and profits being derived  between  December and
June for shipments  being made between  November and May. Each year from January
to November the Company  engages in the process of designing  and  manufacturing
the following  seasons swimwear lines,  during which time the Company incurs the
majority of its expenses, with limited revenues. There can be no assurances that
revenues received during December to June will support the Company's  operations
for the rest of the year.

Employees






<PAGE>






         The Company has two executive officers which oversees the operations of
its  subsidiaries,  one  administrative  assistant and no other employees.  D.L.
Productions,  Inc. is a movie production  company which hires a production staff
and actors/actress per production. Most screenwriters, performers, directors and
technical  personnel  who will be involved in the films are members of guilds or
unions which bargain  collectively with producers on an industry-wide basis from
time to time.  Any work  stoppages or other labor  difficulties  could delay the
production  of the films,  resulting in increased  production  costs and delayed
return of investments.  Breaking Waves has three executive  officers,  including
two vice-presidents in charge of design, merchandising,  marketing and sales, as
well as two  administrative  assistants.  Breaking  Waves has  approximately  20
independent road sales people.

ITEM 2.     DESCRIPTION OF PROPERTY

         The  Company's  executive  offices are located at 14 East 60th  Street,
Suite 402, New York, New York 10022, (212) 688-9223.  The Company entered into a
Lease  Agreement for  approximately  1,800 square feet.  The lease term is for a
period of five years  with an option by the  Company to  terminate  after  three
years, with a current annual rental payment of approximately  $68,000.  Breaking
Waves has its  executive  offices and showroom  located at 112 West 34th Street,
New York, New York, which combined is approximately 1,000 square feet. The lease
is for a term of 10 years until May 31, 2000 at a current  annual rental payment
of  $46,200,  which  shall  increase  to  $49,500  for the  balance  of the term
commencing in June 1997.  Breaking  Waves has a design office in Miami,  Florida
located at 8410 N.W. 53rd Terrace,  where it rents approximately 778 square feet
at an annual fee of $9,336 for a period of 12 months until February 1997,  which
it plans on reviewing on an annual basis.

ITEM 3.     LEGAL PROCEEDINGS

         The Company is not a party to any material  litigation and is not aware
of any threatened  litigation  that would have a material  adverse effect on its
business.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  Not Applicable.





ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
                  MATTERS

Market Information.









<PAGE>






         The  Company's  Common  Stock is quoted on the  SmallCap  Market of the
Nasdaq Stock Market. The following table sets forth  representative high and low
closing bid quotes as reported by a market maker for the Company's  Common Stock
and Warrants,  during the period from September 23, 1996 through April 15, 1997.
Bid quotations  reflect prices between dealers,  do not include resale mark-ups,
mark-downs or other fees or commissions, and do not necessarily represent actual
transactions.

                            Common Stock                  Warrants

Calendar Period             Low         High              Low         High

09/23/96 - 12/31/96         6           11 1/2            3 1/4       6 3/4
01/01/97 - 04/15/97         1 15/16     7 1/2               1/2       4 5/8


         Each warrant  entitles the holders thereof to purchase one share of the
Company's Common Stock at an exercise price of $6.50 per share,  until September
9,  2001.  The  Warrants  and the  underlying  shares  of  Common  Stock  are in
registered  form,  pursuant  to the terms of a  warrant  agreement  between  the
Company and  Continental  Stock  Transfer & Co., as warrant  agent,  so that the
holders of the warrants will receive upon their  exercise and payment  therefor,
unrestricted shares of Common Stock.

         As of March 31, 1997, the number of shares of Common Stock  outstanding
of the Company was 6,092,500  (takes into account the return of shares  pursuant
to consulting and employment arrangements which did not vest.

         The  Company  has  paid no  dividends  and has no  present  plan to pay
dividends.  Payment of future  dividends will be determined from time to time by
its board of  directors,  based  upon its  future  earnings,  if any,  financial
condition,  capital requirements and other factors. The Company is not presently
subject to any  contractual  or  similar  restriction  on its  present or future
ability to pay such dividends.

<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
                  OPERATIONS

         The Company was organized in December 1995 and acquired Breaking Waves,
Inc.  on  September  24,  1996.  The  results of  operations  for the year ended
December 31, 1996 are  comprised of Breaking  Waves from  September 31, 1996 and
general and  corporate  overhead  expenses of the Company  since the Company had
immaterial  operations  independent of those of Breaking Waves.  The Company has
begun to sell and  distribute  the  Motion  Picture in  foreign  markets  and is
currently seeking a domestic  distribution deal for the Motion Picture.  Results
of operations for the Company and Breaking Waves have been discussed separately.

Results Of Operations

         The consolidated  financial statements at December 31, 1996 include the
accounts of the Company and its wholly  owned  subsidiaries,  D.L.  and Breaking
Waves  after  elimination  of  all  significant  inter-company  transactions  nd
accounts.  Additionally,  purchase  accounting  requires the  elimination of all
operating  transactions  of the acquired  subsidiary  from the  inception of its
fiscal year to the date of acquisition. The consolidated statement of operations
and  consolidated  statement of cash flows for the year ended  December 31, 1996
reflects the transactions of the subsidiary, Breaking Waves, for the period from
September 24, 1996, the acquisition date, to December 31, 1996. If the operating
transactions  from  January 1, 1996 to September  24, 1996 were  included in the
December  31, 1996  consolidated  statement of  operations,  the effect by major
components would be as follows:

Net sales                  $        3,596,982
Cost and expenses:
         Cost of sales              2,401,586
         Operating and
         interest expense           1,221,040

Net Loss                   $            (25,644)
                           ====================

         For the years  ended  December  31,  1996 as compared to the year ended
December 31, 1995 Since the Company was incorpora ed on December 1, 1995, and no
operations  incurred  through December 31, 1995, no discussion is applicable for
the year ended  December 31, 1995.  From  September 24, 1996 (the date Hollywood
acquired Breaking Waves) to December 31, 1996 the Company's subsidiary, Breaking
Waves,  generated  sales amounting to $1,217,152 with cost of sales amounting to
$667,722.  Breaking Waves generated  operating profit amounting to approximately
$294,908.  Operating  profit is total  revenue  less cost of sales and  selling,
general and administrative expenses.  Accordingly, of the total selling, general
and  administrative  expenses  amounting to $675,416,  $246,654 were incurred by
Breaking  Waves  with the  remainder  amounting  to  $428,762,  incurred  by the
Company.  The major components of the total selling,  general and administrative
expenses of the Company are  composed of the  following:  $58,750 of  consulting
expenses paid to an officer of the Company whereby $40,000 was paid in cash with
the  remainder in 7,500  shares of common  stock at $2.50 per share;  $62,500 of
consulting expenses paid to two officers of the








<PAGE>
Company  paid in the form of 100,000  shares of common  stock at $2.50 per share
which vest June 30, 1997 and 1998; and  amortization of  organization  costs and
acquisition   costs  of  $42,738.   The  remainder  of  expenses   amounting  to
approximately  $264,774  is  composed of rent  amounting  to $15,666,  officer's
salaries and related payroll taxes amounting to  approximately  $105,670,  legal
and professional fees of $85,537 and  miscellaneous  office expenses of $57,901.
For the year ended December 31, 1996, the Company  reported a consolidated  loss
amounting  to $221,982  which was  primarily  a result of general and  corporate
expenses incurred by the Company.

Liquidity And Capital Resources

         On September 24, 1996,  the Company  successfully  completed its public
offering. As a result, the Company sold 800,000 shares and 1,840,000 Warrants of
which 240,000  Warrants were sold pursu nt to the  underwriter's  over-allotment
option.  The Company yielded a total net proceeds of $3,813,294  after deducting
underwriter   discount  and  non-accountable   expense  allowance  and  offering
expenses.  Simultaneously  with the offering,  the Company  charged all deferred
offering costs incurred to additional paid-in capital which totaled $996,182. At
December 31, 1996, the Company has a working capital amounting to $4,629,441. It
is not  anticipated  that the Company  will be required to raise any  additional
capital within the next twelve months, since no material change in the number of
employees  or any other  material  events are  expected to occur.  Pursuant to a
stock purchase  agreement  dated May 31, 1996 among the Company,  EVC,  Breaking
Waves and its  shareholders,  the Company on September  24, 1996 issued  150,000
shares of Common Stock in exchange for all of the issued and outstanding capital
stock of  Breaking  Waves.  The  transaction  has been  accounted  for using the
purchase method of accounting,  and, accordingly,  the accompanying consolidated
financial  statements  include the results of operations of Breaking  Waves from
the date of  acquisition,  September 24, 1996.  As a result of the  transaction,
excess of cost over net assets  acquired  totaling  $1,064,283 has been recorded
and will be amortized  over their useful lives of the related  assets of fifteen
(15) years.  Amortization  expense from  September 24, 1996 to December 31, 1996
totaled $17,738.

         In conjunction with such Agreement,  a previous stockholder of Breaking
Waves entered into a two year  consulting  agreement  effective  January 1, 1996
with  Breaking  Waves for an annual  consulting  fee of $100,000.  Additionally,
pursuant to the  Agreement,  the previous stoc holders of Breaking  Waves agreed
not to compete with the Company for a period of four years from the consummation
thereof.  Prior to the consummation of the Company's IPO, during September 1996,
Breaking Waves performed a re-capitalization  and exchanged all its common stock
for new common  stock,  and for a series of  preferred  stock.  Pursuant  to the
Agreement,  Breaking Waves issued 5,600 shares of its newly authorized  Series A
Preferred Stock to its previous  stockholders in proportion to their  respective
holdings.  The holders of the shares of the Series A Preferred  Stock shall have
the right to redemption  whereby, on each of January 1, 1997 and 1998 subject to
legally available funds, Breaking Waves shall redeem one half of the outstanding
shares of the Series A Preferred  Stock, at a redemption price of $100 per share
on a pro rata basis.  During January 1997,  Breaking Waves redeemed 2,800 shares
of its Series A preferred stock for a total of $280,000.






<PAGE>
         On April 4, 1991,  Breaking  Waves entered into an accounts  receivable
financing agreement with NationsBanc  Commercial Corp. ("Nations") to sell their
interest in all present and future receivables without recourse.  Breaking Waves
subm ts all sales orders to Nations for credit  approval prior to shipment,  and
pays Nations .75% of the gross amount of the  receivables.  Nations retains from
amounts  payable to Breaking  Waves a reserve for possible  obligations  such as
customer disputes and possible credit losses on unapproved receivables. Breaking
Waves may take advances of up to 85% of the purchase  price on the  receivables,
with  interest  charged at the rate of 13/4%  over  prime.  Interest  charged to
expense  totaled   approximately  $67,173  from  September  24,  1996,  date  of
acquisition to December 31, 1996. Nations has a continuing  interest in Breaking
Waves's inventory as collateral for the advances.

         On October 16, 1995,  Brea ing Waves  entered into a license  agreement
with Beach Patrol,  Inc. ("BPI") for the exclusive use of certain  trademarks in
the United States. The agreement commenced January 1, 1996 and is for an initial
period of thirty (30) months divided into one (1) six month,  and two (2) twelve
month terms with the option to extend the agreement for an additional  three (3)
12 month term periods.  In exchange,  Breaking Waves will pay BPI the greater of
5% of net  sales,  as  defined,  or the  guaranteed  minimum  trademark  royalty
("GMTR").  The GMTR ranges from  $75,000 for the first term to $200,000  for the
sixth term. In addition,  Breaking Waves is obligated to pay BPI 2% of net sales
for  showroom/advertising  expenses,  and to spend an additional 1% of net sales
for  advertising.  A minimum  guaranteed  showroom/advertising  expense  will be
payable for the first three terms. BPI has the option to terminate the agreement
if  Breaking  Wave's  net  sales do not reach  specified  levels,  ranging  from
$1,000,000 for the first term to $4,000,000  for the sixth term.  From September
24, 1996 (the date of acquisition) to December 31, 1996, Breaking Waves incurred
royalty and advertising expenses amounting to approximately $26,000.

         During May, 1996, the Company  established  the 1996 Senior  Management
Incentive Plan ("Incentive  Plan") pursuant to which 250,000 of common stock are
reserved for issuance.  The Incentive  Plan is designed to serve as an incentive
for retaining  qualified and competent key employees,  officers and directors of
the Company.  During June 1996,  pursuant to such plan the Company issued 50,000
shares to each of two  officers of the Company.  50% of such shares  issued will
vest 12 months from the issuance  date and the remaining 50% will vest 24 months
from the  issuance  date.  Such  shares  were  valued at 50% of the IPO price of
$2.50.  Accordingly,  the Company recorded a deferred compensation  amounting to
$250,000  which is being  amortized as the shares vest. As of December 31, 1996,
$62,500 has been amortized as a compensation  expense.  As of December 31, 1996,
25,000 shares were returned to the Company's  treasury due to the termination of
a consulting agreement.

D.L. Productions, Inc.

         Pursuant to co-production and property purchase  agreements dated March
15, 1996, as amended,  the Company,  through is wholly owned  subsidiary,  D.L.,
acquired the rights to co-produce a motion picture and has agreed to finance the
costs of production and distribution of such motion








<PAGE>
picture  with the  co-producer  agreeing  to  finance  $100,000  of the costs of
production.   The  Company  retains  all  rights  to  the  motion  picture,  the
screenplay,  and all ancillary rights attached thereto. Pursuant to the terms of
the agreements with the stars of the motion picture, the two stars each have the
right to receive $50,000 against a 5%  participation  fee based on revenues from
the  first  proceeds  received  from the  distribution  of the  Motion  Picture.
Thereafter,  the Company shall have the right to all  subsequent  revenues until
the first  $990,000 of their  initial  investment  is repaid.  The next proceeds
received by the Company shall be distributed  as follows:  (i) 5% of revenues to
each of the  two  stars  up to a  maximum  of  $250,000,  at  which  time  their
distribution decreases to 2%; (ii) the Company and the co-producer shall receive
the remainder of their initial investment; (iii) the Company and the co-producer
each receives revenues up to 25% and 35%, respectively,  of each parties initial
investment;  (iv) the co-producers shall receive their deferred compensation for
writing,  production and direction;  and (v) all revenues in excess of (i), (ii)
(iii) and (iv) shall  first be used to repay any  distribution  costs  incurred,
with the  remainder  to the  Company and  co-producer  at a rate of 75% and 25%,
respectively.  As of December 31, 1996, the Company invested  $1,381,750 in D.L.
for the  co-production  and  distribution  of such  motion  picture  whereas the
co-producers  have  invested  $100,000  which  has been  recorded  as a  capital
contribution to the Company.

         For the year  ended  December  31,  1996,  the  Company  used  cash for
operating activities  amounting to $1,899,878.  The major components of such use
of cash was for the  acquisition  of  Breaking  Waves  inventory  and the  costs
incurred for the  production of the motion picture which totaled an aggregate of
$3,334,165.   The  majority  of  cash  for  operating  activities  amounting  to
$1,434,686  was provided from advances  from the factor  (NationsBanc).  For the
year ended  December 31, 1996, the Company  obtained  financing of $4,548,204 of
cash which was primarily from the Company's initial public offering.

ITEM 7.  FINANCIAL STATEMENTS

         See attached Financial Statements.

ITEM 8.  CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE

         Not Applicable.

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTORS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Officers and Directors.

         The names, ages and positions of the Company's  executive  officers and
directors are as follows:
<PAGE>
<TABLE>
<CAPTION>

         Name                                Age                 Position

         <S>                                 <C>                 <C>               
         Harold Rashbaum                     70                  President, CEO and Director

         Robert DiMilia                      51                  Vice President, Secretary and
                                                                 Director

         Alain A. Le Guillou, M.D.           40                  Director
</TABLE>

         The directors of the Company are elected  annually by its  stockholders
and  the  officers  of the  Company  are  appointed  annually  by its  Board  of
Directors.  Vacancies on the Board of Directors  may be filled by the  remaining
directors.  Each  current  director  and officer will hold office until the next
annual meeting of stockholders, or until his successor is elected and qualified.
All outside  directors  receive a directors' fee of $1,000 per month,  for their
participation  as a director.  The sole outside director is Alain D. Le Guillou,
M.D.  The  Company  does not have  key man  insurance  on the life of any of its
officers  or  directors.  Harold  Rashbaum is the  father-in-law  of Alain A. Le
Guillou,  M.D.  On January 10,  1997,  Robert  Melillo and the Company  mutually
agreed to the  resignation  of Mr.  Melillo as the  President,  Chief  Executive
Officer and Director of the Company.  As of that time, Harold Rashbaum took over
as President and Chief Executive Officer of the Company. Mr. Melillo remained as
a consultant to the Company at a weekly fee of $600 until April 1, 1997.

     Harold  Rashbaum  has been the  President,  Chief  Executive  Officer,  and
director of the Company since January 1997. Mr. Rashbaum had served as Secretary
and  Treasurer  of the  Company  since May 1996.  When  Robert  Melillo,  former
President  and Chief  Executive  Officer,  resigned Mr.  Rashbaum was elected as
President and Chief  Executive  Officer.  Since May 1996, Mr. Rashbaum served as
the  secretary,  treasurer and a director of D.L.  Productions,  Inc. and became
President in January 1997.  From January 1991 to March 1992, he was a consultant
for National  Wholesale  Liquidators,  Inc.,  a retailer of household  goods and
housewares.  From February 1996 to present,  Mr. Rashbaum has been the president
and a director of H.B.R.  Consultant  Sales Corp., of which his wife is the sole
stockholder. From March 1992 to June 1995, Mr. Rashbaum was a consultant to 47th
Street Photo, Inc., a retailer of electronics, which position was at the request
of the bankruptcy court,  during the time it was in Chapter 11. Mr. Rashbaum was
a consultant for Play Co. Toys & Entertainment Corp., since June 1995 and became
the Chairman of the board in October  1996,  which  company is a wholesaler  and
retailer of children's toys.

         Robert  DiMilia,  has been a Director,  Vice President and Secretary of
the Company since January 10, 1997,  prior to thereto he was a consultant to the
Company with respect to the production of the Motion Picture.  From 1991 to 1994
Mr.   DiMilia   was  a   vice-president   for  The  Bon  Bon  Group  a  national
payroll/accounting  entertainment  service company.  From March 1995 to May 1996
Mr. DiMilia was a media and marketing consultant in the film industry working on
a variety of projects.

     Alain A. Le Guillou,  M.D.  has been a director  of the  Company  since May
1996. Since July 1995, Dr. Guillou has been a doctor of Pediatrics at Montefiore
Medical Group. From July 1992 to June 1995 Dr. Guillou was a Pediatric  resident
at the University of Minnesota,  Gillette Hospital,  St. Paul,  Minnesota.  From
July 1991 to June 1992 Dr. Guillou was an intern at Montefiore  Medical  Center,
Bronx, N.Y. Dr. Guillou is the son-in-law of Harold Rashbaum.








<PAGE>
Significant Employees

         Dan Stone,  61, had been the  chairman of the board of  Breaking  Waves
since  its  inception  in 1991  until the  consummation  of the  Acquisition  in
September  1996,  at which time he became a  consultant  Mr.  Stone has been the
president and a director of D. Stone Industries, Inc., and Dan Stone Industries,
Inc. since their inceptions in 1981 and 1991, respectively.

         Malcolm   Becker,   61,   has  been  the   vice-president   of  design,
merchandising  and production of Breaking  Waves,  Inc.,  since its inception in
1991.

         Michael Friedland, 59, has been the vice-president of design, marketing
and sales of Breaking Waves, Inc., since its inception in 1991.

         The Company has agreed to indemnify  its officers  and  directors  with
respect to certain liabilities  including  liabilities which may arise under the
Securities Act of 1933. Insofar as indemnification for liabilities arising under
the  Securities  Act may be permitted  to  directors,  officers and  controlling
persons of the Company  pursuant to any charter,  provision,  by-law,  contract,
arrangement,  statute or  otherwise,  the Company has been  advised  that in the
opinion of the  Securities  and Exchange  Commission,  such  indemnification  is
against  public  policy as expressed in the  Securities  Act 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 such action,  suit or  proceeding)  is asserted by such director,
officer or controlling  person of the Company 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 Act and will be governed by the final
adjudication of such issue.

ITEM 10. EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

         The following  provides  certain  information  concerning  all Plan and
Non-Plan (as defined in Item 402 (a)(ii) of Regulation S-B) compensation awarded
to, earned by, paid by the Company  during the period ended December 31, 1996 to
each of the named executive officers of the Company.

                           Summary Compensation Table
<TABLE>
<CAPTION>

                                                                      Securities          Restricted Securities
Name and Principal                                                    Underlying          Underlying               All Other
Position                 Year      Salary($)      Options/SARS ($)    Award                                        Compensation

<S>                      <C>       <C>            <C>                 <C>                 <C>
Harold Rashbaum          1996 (1)  26,000         100,000 (2)         50,000 (3)          --
Chief Executive Officer
President

Robert Melillo           1996 (4)  69,200          --                 25,000 (5)          --
Former Chief Executive Officer
</TABLE>

<PAGE>
     In October 1996,  Mr.  Rashbaum began  receiving a salary of  approximately
$100,000 per annum.  At the closing of the  Company's  initial  public  offering
H.B.R.  Consulting Sales,  Corp., a company controlled by Mr. Rashbaum and owned
by his wife  received  7,500  shares of Common  Stock  and a  consulting  fee of
$40,000.
     Includes  options to purchase  shares of Common  Stock issued in March 1997
under the Company's Senior Management Incentive Plan.

     Includes shares issued under the Senior  Management  Incentive Plan in June
1996, subject to a vesting schedule. See "Senior Management Incentive Plan".

     Mr. Melillo  received an annual salary of $104,000 per annum up and through
January 10, 1997, when he resigned as an officer and director of the Company. He
continued as a consultant until April 1997 and received a consulting fee of $600
per week. See "Management".

     Mr. Melillo  received 50,000 shares of Common Stock in the Company pursuant
to  the  Company's  Senior  Management  Incentive  Plan,  subject  to a  vesting
schedule,  whereby  25,000  shares  would vest in each of June of 1997 and 1998.
Upon the  resignation  of Mr.  Melillo on January 10, 1997,  he returned  25,000
shares to the Company and the Company agreed that the remaining shares should be
vested.

Employment and Consulting Agreements

         Prior to Harold  Rashbaum  becoming  an  officer  and  director  of the
Company, he provided  consulting to the Company through H.B.R.  Consultant Sales
Corp.,  ("HBR"),  a Company of which he is an officer and  director and of which
his wife is the sole stockholder.  HBR entered into an oral consulting agreement
with the Company  whereby,  it will  receive 5% of the net profits of the Motion
Picture  received by the Company.  In addition,  HBR received  $40,000 and 7,500
shares of the  Company's  Common Stock at the closing of the  Company's  initial
public offering.  Mr. Rashbaum receives a salary of $104,000 per annum for being
an officer or director of the Company. In addition, Mr. Rashbaum received 50,000
shares of Common Stock under the  Company's  Senior  Management  Incentive  Plan
which  shares  vest at the rate of 25,000  shares on each of June 1997 and 1998.
Pursuant to the restricted  share agreement the shares only vest if Mr. Rashbaum
continues  to provide  services  to the  Company.  Shares  not  vested  shall be
returned  to the  Company's  treasury.  In March 1997,  the Company  granted Mr.
Rashbaum as chief executive  officer an option to purchase  100,000 shares at $5
1/8 per share, pursuant to the Company's Senior Management Incentive Plan.

         Dan Stone entered into a two year  consulting  agreement  with Breaking
Waves as of  January  1996,  pursuant  to which he  oversees  the  operation  of
Breaking  Waves in return for a yearly  consulting  fee of  $100,000.  Mr. Stone
received $50,000 from the proceeds of the Company's initial public offering,  as
payment in advance of half of the 1997  consulting  fee, the balance of which is
being paid in weekly installments.

         In  November  1997,  Breaking  Waves  entered  into 3  year  employment
agreements  with each of Malcolm  Becker and Michael  Friedland.  The agreements
provide for a salary of $110,000 for the term of  employment  and the receipt of
shares of the Company's Common Stock in each year of the agreements.  The number
of shares of the Common Stock shall be equal to a Market  Value (as  hereinafter
defined) of $25,000 on the date of issuance,  subject to a vesting schedule. The
vesting schedule shall be as follows; (i) 1/2 of the shares received on the date
hereof shall vest 90 days from the date hereof with the balance vesting 270 days
from the date  hereof and (ii) on each  subsequent  annual  issuance  commencing
November 27, 1997,  1/2 of the shares shall vest six months from  issuance  with
the balance  vesting on the following  anniversary.  The shares vest pursuant to
restricted share agreements.  "Market Value" shall mean (i) $5.00 per share with
respect to the shares issued in November 1996








<PAGE>
and (ii) the average of the  closing bid and asked  prices for a share of Common
Stock for a period of 30 days ending five days prior to the date of issuance, as
officially  reported by the  principal  securities  exchange on which the Common
Stock is quoted. The agreements include no-disclosure and non-compete clauses.

Senior Management Incentive Plan

         In May 1996,  the Board of  Directors  adopted  the  Senior  Management
Incentive  Plan (the  "Management  Plan"),  which  was  adopted  by  stockholder
consent.  The Management  Plan provides for the issuance of up to 250,000 shares
of the Company's  Common Stock in connection  with the issuance of stock options
and other stock  purchase  rights to executive  officers and other key employees
and consultants.

         The Management  Plan was adopted to provide the Board of Directors with
sufficient  flexibility regarding the forms of incentive  compensation which the
Company will have at its disposal for rewarding  executive  officers,  employees
and  consultants  of the  Company or a  subsidiary  or the  Company,  who render
significant  services to personnel  equity  ownership in the Company through the
grant of stock  options  and other  rights  pursuant to the  Management  Plan to
enable  the  Company  to  attract  and  retain   qualified   personnel   without
unnecessarily  depleting the Company's  cash reserves.  The  Management  Plan is
designed to augment the Company's existing compensation programs and is intended
to enable the Company to offer a personal  interest in the Company's  growth and
success  through  awards of either  shares of Common  Stock or rights to acquire
shares of Common Stock to individuals  who provide  significant  services to the
Company.

         The Management  Plan is intended to help the Company attract and retain
key  executive  management  personnel  whose  performance  is expected to have a
substantial  impact on the Company's  long-term  profit and growth  potential by
encouraging and assisting those persons to acquire equity in the Company.  It is
contemplated  that only employees who perform services of special  importance to
the Company will be eligible to participate  under the Management  Plan. A total
of 250,000  shares of Common  Stock has been  reserved  for  issuance  under the
Management  Plan. It is anticipated  that awards made under the Management  Plan
will be subject to three-year vesting periods,  although the vesting periods are
subject to the discretion of the Administrator (as defined below).

         The Management  Plan is to be administered by the Board of Directors or
a committee  of the Board,  if one is  appointed  for this purpose (the Board or
such  committee,  as the  case  may be,  will be  referred  to in the  following
description as the  "Administrator").  Members of the Board of Directors who are
eligible  for awards or have been  granted  awards  may not vote on any  matters
affecting the  administration  of the Management  Plan or the grant of any award
thereunder.  Subject to the specific  provisions  of the  Management  Plan,  the
Administrator  will have the  discretion  to  determine  the  recipients  of the
awards,  the nature of the awards to be  granted,  the dates such awards will be
granted,  the  terms and  conditions  of awards  and the  interpretation  of the
Management  Plan,  except that any award  granted to any employee of the Company
who is also a director  of the Company  will also be  subject,  in the event the
persons serving as





<PAGE>
members of the  Administrator of such plan at the time such award is proposed to
be granted do not  satisfy  the  requirements  regarding  the  participation  of
"disinterested persons" set forth in Rule 16b-3 ("Rule 16b-3") promulgated under
the  Securities  Exchange Act of 1934, as amended (the "Exchange  Act"),  to the
approval of an auxiliary committee consisting of not less than three individuals
(all of whom qualify as "disinterested  persons" as defined under Rule 16b-3. In
the event the Board of Directors  deems the formation of an auxiliary  committee
impractical,  the Board is authorized to approve any award under the  Management
Plan. As of the date hereof,  the Company has not yet  determined who will serve
on such auxiliary committee,  if one is required.  The Management Plan generally
provides that, unless the  Administrator  determines  otherwise,  each option or
right  granted  under  the plan will  become  exercisable  in full upon  certain
"change of control" events as described in the plan.

         If any change is made in respect  of the  Common  Stock  subject to the
Management  Plan or subject to any right or option  granted under the Management
Plan (through merger,  consolidation,  reorganization,  recapitalization,  stock
dividend,  dividend  in  property  other than  cash,  stock  split,  liquidating
dividend,  combination  of  shares,  exchange  of  shares,  change in  corporate
structure or otherwise),  the Administrator will make appropriate adjustments to
the Management Plan and the number of shares and price per share of Common Stock
subject to outstanding rights or options.  Generally, the Management Plan may be
amended by action of the Board of  Directors,  except that any  amendment  which
would  change the class of  securities  subject to the plan,  increase the total
number of shares  subject  to such  plan,  extend  the  duration  of such  plan,
materially  increase the benefits  accruing to participants  under such plan, or
change the  category of persons who can be eligible  for awards  under such plan
must be approved by the  affirmative  vote of the owners of a majority of Common
Stock entitled to vote. The Management Plan permits awards to be made thereunder
until November 2004.

     Directors  who  are not  otherwise  employed  by the  Company  will  not be
eligible for  participation in the Management Plan. The Management Plan provides
for  four  types  of  awards:  stock  options,  incentive  stock  rights,  stock
appreciation  rights (including  limited stock  appreciation  rigither incentive
stock  options which qualify as such under the Code ("ISOs") or options which do
not  qualify  under the Code as ISOs  ("non-ISOs").  ISOs may be  granted  at an
option  price of not less than 100% of the fair market value of the Common Stock
on the date of grant,  except  that an ISO granted to any person who owns Common
Stock  representing  more than 10% of the  total  combined  voting  power of all
classes of Common Stock of the Company ("10% Stockholder") must be granted at an
exercise  price of at least 110% of the fair market value of the Common Stock on
the date of the grant.  The exercise  price of non-ISOs may not be less than 85%
of the  fair  market  value  of the  Common  Stock  on the  date of  grant.  The
Administrator  will determine the exercise  period of the options  granted which
shall  be no less  than  one  year  from  the  date of  grant.  Non-ISOs  may be
exercisable for a period of up to 13 years from the date of grant.  ISOs granted
to persons other than 10%  Stockholders may be exercisable for a period of up to
10  years  from the date of  grant;  ISOs  granted  to 10%  Stockholders  may be
exercisable  for a  period  of up to five  years  from the  date of  grant.  The
aggregate fair market value (determined at the time an ISO is granted) of shares
of Common Stock that are subject to ISOs held by a plan  participant that may be
exercisable  for the  first  time  during  each  calendar  year  may not  exceed
$100,000. In March 1997, the








<PAGE>
Company granted options to purchase 100,000 and 50,000 shares of Common Stock to
Harold Rashbaum and Robert DiMilia  respectively,  at $5.125 per share,  100% of
the market price on the date of grant.

         Payment for shares of Common  Stock  purchased  pursuant to exercise of
stock  options  may be paid in full in cash,  or by  certified  check or, at the
discretion of the  Administrator,  (i) by promissory  note, (ii) promissory note
combined  with cash,  (iii) by shares of Common Stock having a fair market value
equal to the total exercise  price or (iv) by a combination  of items  (i)-(iii)
above.  The provision that permits the delivery of already owned shares of stock
as payment for the  exercise of an option may permit  "pyramiding".  In general,
pyramiding  enables a holder to use shares of Common Stock owned in order to pay
for the exercise of the stock option.  This is done by transferring  such shares
to the  Company  as  payment  of the  exercise  price for the  shares  purchased
pursuant  to the  exercise  of the  Option.  The value of such  shares  shall be
determined  by  the  market  value  of  the  shares  at the  time  of  transfer.
Thereafter,  the shares  received  upon the exercise of the option could then be
used to do the same. Thereby,  the holder, may start with as little as one share
of Common Stock and, by using the shares of Common Stock acquired in successive,
simultaneous exercises of the option, to exercise the entire option,  regardless
of the number of shares covered  thereby,  with no additional cash or investment
other than the original share of Common Stock used to exercise the option.

         Upon  termination  of  employment,  an  optionee  will be  entitled  to
exercise  the vested  portion  of an option  for a period of up to three  months
after the date of  termination,  except that if the reason for termination was a
discharge for cause, the option shall expire immediately,  and if the reason for
termination  was death or  permanent  disability  of the  optionee,  the  vested
portion  of the  option  will  remain  exerciseable  for a period  of 12  months
thereafter.

Incentive Stock Rights.

         Incentive  stock rights consist of incentive  stock units each of which
is equivalent  to one share of Common Stock and may be awarded in  consideration
for services  performed for the Company or any subsidiary.  Each incentive stock
unit shall  entitle the holder  thereof to receive,  without  payment of cash or
property to the Company, one share of Common Stock in consideration for services
performed for the
Company or any subsidiary by the employee, subject to the lapse of the incentive
periods, at which tiof Common Stock for each unit awarded upon the completion of
each specified  period.  If the employment with the Company of the holder of the
incentive  stock  units  terminates  prior  to the end of the  incentive  period
relating  to the units  awarded,  the rights  will  thereupon  be null and void,
except  that if  termination  is caused by death or  permanent  disability,  the
holder or his/her  heirs,  as the case may be, will be entitled to receive a pro
rata portion of the shares  represented by the units, based upon that portion of
the incentive period which has elapsed prior to the death or disability.

Stock Appreciation Rights (SARs)

         SARs may be granted to recipients of stock options under the Management
Plan.  In  the  discretion  of the  Board  of  Directors,  SARs  may be  granted
simultaneously  with, or subsequent  to, the grant of a related stock option and
may be exercised to the extent that the related  option is  exercisable,  except
that no general





<PAGE>
SAR (as hereinafter  defined) may be exercised  within a period of six months of
the date of grant of such SAR and no SAR granted  with  respect to an ISO may be
exercised  unless  the  fair  market  value of the  Common  Stock on the date of
exercise  exceeds the exercise price of the ISO. An option holder may be granted
general SARs ("general SARs") or limited SARs ("limited SARs"), or both. General
SARs permit the holder  thereof to receive an amount (in cash,  shares of Common
Stock or a  combination  of both) equal to the value of the Common  Stock on the
exercise date over the exercise  price of the related  option.  Limited SARs are
similar to general  SARs,  except  that,  unless  the  Administrator  determines
otherwise,  they may be exercised only during a prescribed  period following the
occurrence of one or more of the following "change of control" transactions: (i)
the  approval of the Board of  Directors  and  stockholders  of the Company of a
consolidation  or merger in which the Company is not the surviving  corporation,
the  sale  of all or  substantially  all  the  assets  of  the  Company,  or the
liquidation or dissolution of the Company;  (ii) the commencement of a tender or
exchange offer for the Company's  Common Stock (or securities  convertible  into
Common Stock) without the prior consent of the Board;  (iii) the  acquisition of
beneficial  ownership by any person or other  entity  (other than the Company or
any employee benefit plan sponsored by the Company) of securities of the Company
representing  25% or more  of the  voting  power  of the  Company's  outstanding
securities;  or (iv) in the event, during any period of two consecutive years or
less,  individuals  who at the  beginning of such period  constitute  the entire
Board cease to constitute a majority of the Board,  unless the election,  or the
nomination for election, of each new director is approved by at least a majority
of the directors then still in office.

         An SAR holder  may  exercise  his or her SAR  rights by giving  written
notice of such exercise to the company  which  specifies the number of shares of
Common Stock  involved.  The exercise of any portion of either the related stock
option or the tandem SARs will cause a corresponding  reduction in the number of
shares  remaining  subject to the option or the tandem SARs, thus  maintaining a
balance between  outstanding  options and SARs.  SARs have the same  termination
provisions as the underlying  stock options (as described above) in the event an
SAR holder ceases to be an employee of the Company.

Restricted Stock Purchase Agreements.

     Restricted share agreements  provide for the issuance of restricted  shares
of Common Stock to eligible participants under the Management Plan. The Board of
Directors may determine the price to be paid by the  participant  for the shares
or that the  shares  may be issued  for no  monetary  consideration.  The shares
issued shall be subject to restrictions  for a stated  restricted  period during
which the  participant  must  continue  employment  with the Company in order to
retain  the  shares.  Payment  can be  made  in  cash,  a  promissory  note or a
combination of both.  The Company has issued an aggregate of 125,000  restricted
shares of which (i) each of Mr. Rashbaum and Mr. Melillo  received 50,000 shares
and (ii) Charles Rosen, a consultant to the Company received 25,000 shares.  All
such shares were subject to a vesting schedule whereby, 1/2 of the shares were t
vest  in each of June  1997  and  1998.  Upon  the  termination  of Mr.  Rosen's
consulting  agreement  the  25,000  shares  were  returned  to the  Company.  In
addition,  upon the  resignaares to the Company and retained 25,000 shares which
became fully vested, pursuant to an agreement.









<PAGE>
         Restricted  shares awarded under the Management Plan will be subject to
a period of time  designated  by the  Administrator  (the  "restricted  period")
during  which the  recipient  vested.  The  Administrator  may also impose other
restrictions,  terms and conditions that must be fulfilled before the restricted
shares  may  vest.  Upon the  grant of  restricted  shares,  stock  certificates
registered  in the name of the  recipient  will be issued and such  shares  will
constitute  issued  and  outstanding  shares of Common  Stock for all  corporate
purposes.  The holder will have the right to vote the  restricted  shares and to
receive  all  regular  cash  dividends  (and  such  other  distributions  as the
Administrator may designate,  other than  distributions made solely with respect
to the restricted shares ("retained distributions")),  if any, which are paid or
distributed on the restricted shares, and generally to exercise all other rights
as a holder of  Common  Stock,  except  that,  until  the end of the  restricted
period:  (i) the holder  will not be entitled  to take  possession  of the stock
certificates   representing   the   restricted   shares  or   receive   retained
distributions  and (ii) the holder  will not be  entitled  to sell,  transfer or
otherwise dispose of the restricted shares. A breach of any restrictions,  terms
or conditions  established by the  Administrator  with respect to any restricted
shares will cause a forfeiture of such restricted shares.

         Upon  expiration  of  the  applicable   restricted  period(s)  and  the
satisfaction of any other applicable  conditions,  the restricted shares and any
dividends or other  distributions  not  distributed to the holder (the "retained
distributions")  thereon  will  become  vested.  Any  restricted  shares and any
retained  distributions  thereon  which do not so vest will be  forfeited to the
Company.  If prior  to the  expiration  of the  restricted  period  a holder  is
terminated  without  cause or  because  of a total  disability  (in each case as
defined in the Management Plan), or dies, then,  (unless  otherwise  provided in
the restricted share agreement providing for the award of restricted shares) the
restricted  period  applicable to each award of restricted shares will thereupon
be deemed to have expired.  Unless the Administrator  determines otherwise, if a
holder's  employment  terminates  prior  to the  expiration  of  the  applicable
restricted  period for any reason other than as set forth above,  all restricted
shares and any retained distributions thereon will be forfeited. Upon forfeiture
of any  restricted  shares,  the  Company  will repay to the holder  thereof any
amount the holder originally paid for such shares.

         Acceleration  of all awards  under the  Management  Plan  shares  shall
occur,  under the provisions of Section 13 the Management Plan, on the first day
following  the  occurrence  of any of the  following:  (a) the  approval  by the
stockholders  of  the  Company  of an  "Approved  Transaction";  (b) a  "Control
Purchase"; or (c) a "Board Change".

         An "Approved Transaction" is defined as (A) any consolidation or merger
of the  Company  in  which  the  Company  is not  the  continuing  or  surviving
corporation  or pursuant to which shares of Common Stock would be converted into
cash,  securities or other  property other than a merger of the Company in which
the  holders  of Common  Stock  immediately  prior to the  merger  have the same
proportionate ownership of Common Stock of the surviving corporation immediately
after the merger,  or (B) any sale, lease,  exchange,  or other transfer (in one
transaction or a series of related  transactions) of all, or substantially  all,
of the assets of the  Company,  or (C) the  adoption of any plan or proposal for
the liquidation or dissolution of the Company.






<PAGE>
         A "Control  Purchase" is defined as  circumstances  in which any person
(as such term is defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act),
corporation or other entity (other than the Company or any employee benefit plan
sponsored by the Company) (A) shall purchase any Common Stock of the Company (or
securities  convertible into the Company's Common Stock) for cash, securities or
any other  consideration  pursuant to a tender offer or exchange offer,  without
the prior consent of the Board of Directors, or (B) shall become the "beneficial
owner" (as such term is defined in Rule 13d-3 under the Exchange Act),  directly
or indirectly,  of securities of the Company  representing  twenty-five  percent
(25%) or more of the combined voting power of the then outstanding securities of
the  Company   ordinarily   (and  apart  from  rights   accruing  under  special
circumstances) having the right to vote in the election of directors (calculated
as provided in paragraph (d) of such Rule 13d-3 in the case of rights to acquire
the Company's securities).

         A "Board  Change"  is  defined as  circumstances  in which,  during any
period of two  consecutive  years or less,  individuals  who at the beginning of
such period constitute the entire Board shall cease for any reason to constitute
a majority  thereof  unless the election,  or the nomination for election by the
Company's stockholders,  of each new director was approved by a vote of at least
a majority of the directors then still in office.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT.
<TABLE>
<CAPTION>

Name And Address of                     Amount and Nature             Percent of
Beneficial Owner                        Of Beneficial Owner           Class (1)

<S>                                     <C>                           <C>
European Ventures Corp. (2)             6,019,000 (3)                 78.6%
P.O. Box 47
Road Town, Tortolla, British
Virgin Islands

Harold Rashbaum  (2)                    157,500 (4)                   2.5%
c/o Hollywood Productions, Inc.
14 East 60th Street, Suite 402
New York, New York 10022

Alain A. Le Guillou, M.D. (2)           --                            --
c/o Hollywood Productions, Inc.
14 East 60th Street, Suite 402
New York, New York 10022

Robert DiMilia                          50,000 (5)                    *
c/o Hollywood Productions, Inc.
14 East 60th Street, Suite 402
New York, New York 10022

All Officers and Directors              207,500 (5)                   3.3%

(3 as a Group) (2)-(5)
* Less than 1%
</TABLE>
<PAGE>


     (1) Does not give effect to the issuance of (i) 4,400,000  shares of Common
Stock  reserved for issuance  upon the  exercise of the  Warrants,  (ii) 240,000
shares  of  Common  Stock  reserved  for  issuance  upon  the  exercise  of  the
underwriter's  warrants and the Warrants  underlying the underwriter's  warrants
and (iii)  250,000  shares of  Common  Stock  reserved  for  issuance  under the
Company's 1995 Senior  Management  Incentive Plan,  except for the 75,000 shares
issued  thereunder  and the 150,000  shares  underlying  option  grant  pursuant
thereto.

     (2) Harold Rashbaum is the  father-in-law  of Ilan Arbel,  the sole officer
and director of EVC.

     (3) Includes 1,568,000 shares of Common Stock issuable upon the exercise of
Warrants owned by EVC.

     (4) Includes  (i)50,000 shares of Common Stock under the Senior  Management
Incentive Plan,  pursuant to a vesting schedule,  none of which have vested (ii)
100,000 shares of Common Stock pursuant to an option granted under the Company's
Senior  Management  Incentive  Plan and  (iii)  7,500  shares  issued  to H.B.R.
Consultants  Sales  Corp.  in  September  1996.  See  "Executive   Compensation-
Employment and Consulting  Agreements" and "Senior  Management  Incentive Plan."

     (5) Includes 50,000 shares of Common Stock issuable upon the exercise of an
option granted to Robert DiMilia under the ompany's Senior Management  Incentive
Plan.

ITEM 12.               CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In December 1995, in connection with the  incorporation of the Company,
EVC  acquired  5,000,000  shares of the  Company's  Common  Stock and  2,000,000
Warrants for aggregate consideration of $1,100,000. The sale of 1,400,000 shares
of  Common  Stock  and  2,000,000  Warrants  was  registered  for  resale in the
Company's  initial public offering of which 549,000 shares and 432,000  Warrants
were resold.

         Dan Stone entered into a two year  consulting  agreement  with Breaking
Waves as of  January  1996,  pursuant  to which he  oversees  the  operation  of
Breaking Waves in return for a yearly  consulting fee of $100,000,  which fee is
currently being paid in weekly installments.  At the closing of the Acquisition,
Mr. Stone  received  $50,000 from the  proceeds of the  Offering,  as payment in
advance of half of the 1997 consulting fee.

         In June 1996,  the  Company  issued  50,000  shares of Common  Stock to
Robert Melillo,  the former chief executive  officer,  president and director of
the Company under the Company senior management  incentive plan. The shares were
to vest at the rate of  25,000 in each of June 1997 and  1998.  On  January  10,
1997, Mr. Melillo  resigned and returned 25,000 shares to the Company.  Pursuant
to Mr. Melillo's agreement with the Company,  the remaining 25,000 shares became
fully vested.

         Prior to Harold  Rashbaum  becoming  an  officer  and  director  of the
Company,  commencing in March 1996 he provided consulting to the Company through
H.B.R.  Consultant Sales Corp., ("HBR"), a Company of which he is an officer and
director and of which his wife is the sole stockholder. HBR entered into an oral
consulting  agreement  with the  Company  whereby it will  receive 5% of the net
profits of the Motion Picture received by the Company. In addition, HBR received
$40,000 and 7,500  shares of the  Company's  Common  Stock at the closing of the
Acquisition from the Company. In June 1996 Mr.





<PAGE>
Rashbaum  received  50,000  shares of Common  Stock under the  Company's  Senior
Management Incentive Plan which shares and 1998.

         See "Executive Compensation-Employment and Consulting Agreements" for a
discussion of the Company's employment and consulting arrangements.

         All  transactions  between the Company and any officer,  director or 5%
stockholder  will be on terms no less  favorable  than  could be  obtained  from
independent  third parties and will be approved by a majority of the independent
disinterested  directors of the  Company.  The Company  believes  that all prior
affiliated transactions were made on terms no less favorable to the Company than
available from unaffiliated parties.

ITEM 13.
         EXHIBITS AND REPORTS ON FORM 8-K

(a)
         The following financial  statements of the Company are included as Part
II, Item 8:
<TABLE>
<CAPTION>

<S>                                                                        <C>
Index to Financial Statements                                              F-0

Report of Independent Certified Public Accountants                         F-1

Balance Sheets                                                             F-2

Statements of Operations                                                   F-3

Statements of Stockholders' Equity                                         F-4

Statements of Cash Flows                                                   F-5

Notes to Financial Statements                                              F-6
</TABLE>



     (b) During the last quarter,  the Company has not filed any reports on Form
8-K.

     (c) All exhibits,  except those market with an asterisk (*) have previously
been filed with the  Commission  in connection  with the Company's  Registration
Statement on Form SB-2 and pursuant to 17 C.F.R.  230.411,  are  incorporated by
reference herein. Exhibits marked with an * are filed with this Form 10-KSB.
<TABLE>
<CAPTION>

<S>                              <C>                               
  1.1                  -         Form of Underwriting Agreement.
  3.1                  -         Certificate of Incorporation of the Company
  3.2                  -         Amendment to Certificate of Incorporation of the Company, filed in June 7, 1996.
  3.3                  -         Certificate of Incorporation of D.L. Productions, Inc.
  3.4                  -         By-Laws of the Company
  3.5                  -         By-Laws of D.L. Productions, Inc.
  3.6                  -         Certificate of Incorporation of Breaking Waves, Inc.
  3.7                  -         By-Laws of Breaking Waves, Inc.
  4.1                  -         Specimen Common Stock Certificate.
  4.2                  -         Specimen Warrant Certificate.
  4.3(a)               -         Form of Warrant  Agreement to purchase  shares of Common Stock  between
                                 the Company and Euro-Atlantic Securities, Inc.
  4.3(b)               -         Form of Warrant  Agreement to purchase Warrants between the Company and
                                 Euro-Atlantic Securities, Inc.
  4.4                  -         Form of Warrant Agreement between the Company, the
                                 Underwriter and Continental Stock Transfer & Trust Company.
  4.5                  -         Form of Restricted Stock Agreement.
 10.1                  -         Form of Lock-up Agreement
 10.2                  -         The Company's Senior Management Incentive Plan.
 10.3                  -         Consulting Agreement between Hollywood Productions, Inc., and Charles Rosen.
 10.4                  -         Consulting Agreement between Breaking Waves, Inc., and Dan Stone.
 10.5                  -         Lease at 112 West 34th Street, New York, New York. 
                                 Lease at 8410 N.W. 53rd Terrace, Miami, Florida.
 10.6(a)*              -         Amendment to lease at 8410 N.W. 53rd Terrace, Miami, Florida.
 10.7                  -         Stock Purchase Agreement between the Company, European Ventures Corp.,
                                 Breaking Waves, Inc., and the stockholders of Breaking Waves, Inc., dated May,
                                 1996.
 10.8                  -         Consulting between the Company and Euro-Atlantic Securities, Inc.
 10.9                  -         Property Acquisition  Agreement between the Company and Rogue Features,
                                 Inc., dated March, 1996.
 10.10                  -        Co-production agreement  between the  Company  and Rogue  Features,
                                 Inc., dated March, 1996 and all amendments thereto.
 10.11                  -        Right of First Refusal Agreement with principals of Rogue Features, Inc.
 10.12                  -        Form of Assignment of right to Huk-A-Poo line.
 10.13                  -        Shippers Agency Agreement between Hollywood Productions, Inc., and Third Party
                                 Enterprises, Inc.
 10.14                  -        License Agreement between Breaking Waves, Inc. and Beach Patrol, Inc.
                        -        Mergers and Acquisition Agreement between the Company and Euro-Atlantic Securities, Inc.
   *                    -        Employment agreement with Michael Friedland.
   *                    -        Employment agreement with Malcolm Becker.
 10.18 *                -        Termination of Employment Agreement with Robert Melillo.
</TABLE>

<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this Report to be signed on its behalf by the
Undersigned hereunto duly authorized on the 15 day of April, 1997.



                                                     HOLLYWOOD PRODUCTIONS, INC.



                                                         By: \s\ Harold Rashbaum
                                                                Harold Rashbaum,
                                                         Chief Executive Officer


         Pursuant to the  requirements of the Securities Act of 1933 as amended,
this  Registration  Statement has been signed below by the following  persons in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>


<S>                           <C>                                               <C>
\s\ Harold Rashbaum           Chief Executive Officer,
Harold Rashbaum               President and Director                            04/15/97
                              (Principal Executive Officer)                     Date


\s\ Robert DiMilia            Vice President, Secretary,                        04/15/97
Robert DiMilia                and Director                                      Date



\s\ Alain A. Guillou, M.D.    Director                                          04/15/97
Alain A. Le Guillou, M.D.                                                       Date

</TABLE>

<PAGE>






INDEPENDENT AUDITORS' REPORT





To the Board of Directors and Stockholders of
Hollywood Productions, Inc. and Subsidiaries



We have  audited  the  accompanying  consolidated  balance  sheet  of  Hollywood
Productions,  Inc. and Subsidiaries  (the "Company") as of December 31, 1996 and
the related consolidated statements of operations, stockholders' equity and cash
flows for year  ended  December  31,  1996 and from  December  1, 1995  (date of
inception) to December 31, 1995. These consolidated financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable  assurance about whether the  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
consolidated  financial  statement  presentation.  We  believe  that our  audits
provide a reasonable basis for our opinion.

In our  opinion,  based on our audits,  the  consolidated  financial  statements
referred to above  present  fairly,  in all  material  respects,  the  financial
position of the Company as of December 31, 1996 and the consolidated  results of
its  operations  and cash flows for the year ended  December  31,  1996 and from
December 1, 1995 (date of  inception)  to December 31, 1995 in  conformity  with
generally accepted accounting principles.




Scarano & Lipton, P.C.
Mitchel Field, New York
March 19, 1997











1
<PAGE>

                   HOLLYWOOD PRODUCTION, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 1996

                                          ASSETS
<TABLE>
<CAPTION>



Current assets:
<S>                                                                                                              <C>         
    Cash and cash equivalents $                                                                                  2,717,629
    Accounts receivable                                                                                          22,351
    Prepaid expenses                                                                                             86,698
    Inventory                                                                                                    1,815,526
    Film production and distribution costs                                                                       1,518,639
    Advances to related parties                                                                                  115,854
                                                                                                                 -------
         Total current assets                                                                                    6,276,697

Deferred compensation, net                                                                                       209,722
Organizational costs, net                                                                                        100,000
Excess of cost over net assets acquired, net                                                                     1,046,545
Other assets                                                                                                     10,118

Total assets                                                                                                     $ 7,643,082

                    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable $                                                                                           61,788
    Accrued expenses                                                                                             103,194
    Due to factor                                                                                                1,434,686
    Income taxes payable                                                                                         35,279
    Deferred taxes payable                                                                                       12,309
                                                                                                                 ------
         Total current liabilities                                                                                       1,647,256

Redeemable preferred stock of subsidiary:
    Series A redeemable preferred stock, 5,600 shares
     authorized, issued and outstanding, full liquidation
     value $560,000                                                                                              560,000

Commitments and contingencies (Note 6)  -

Stockholders' equity:
    Common stock - $.001 par value, 20,000,000 shares authorized,
     6,117,500 and 5,000,000 shares issued and outstanding, respectively                                         6,118
    Additional paid-in capital                                                                                   5,651,690
    Accumulated deficit                                                                                          (221,982)
                                                                                                                 --------
         Total stockholders' equity                                                                              5,435,826

Total liabilities and stockholders' equity                                                                       $7,643,082
                                                                                                                 =================

See notes to consolidated financial statement
</TABLE>
<PAGE>


                  HOLLYWOOD PRODUCTIONS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                     From December 1,
                                                       For the year ended 1995       (date of
                                                       December 31, 1996             inception) to
                                                       (Note 2a)                     December 31, 1995


<S>                                                    <C>                           <C>
Net sales                                              $ 1,217,152                   $ -

Cost of sales                                          667,722                       -

Gross profit                                           549,430                       -
 
Expenses:
    Selling, general and administrative expenses       657,678                       -
    Amortization of excess of costs over net 
    assets acquired                                    17,738                        -
                                                                                          

Total expenses                                         675,416                       -

Loss before interest expense
and provision for income taxes                         (125,986)                     -

Other income (expense):
    Interest and finance expense                       (85,099)                      -
    Interest income                                    38,386                        -

         Total other income (expense)                  (46,713)                      -

Loss before provision for
 income taxes                                          (172,699)                     -

Provision for income taxes                             49,283                        -

Net loss  $                                            (221,982)                     $-

Loss per common equivalent shares:
    Net loss $                                         (.04)                         $     Nil

Weighted average number of
 common shares outstanding                             5,331,877                     5,000,000

    See notes to consolidated financial statements
</TABLE>
<PAGE>
                  HOLLYWOOD PRODUCTIONS, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
         FROM DECEMBER 1, 1995 (DATE OF INCEPTION) TO DECEMBER 31, 1995
                    AND FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>


                                                                                Additional                              Total
                                                Common Stock                    Paid-in             Accumulated         Stockholders
                                             Shares         Amount              Capital             Deficit             Equity
<S>                                          <C>            <C>                 <C>                 <C>                 <C>
Balance at inception of the
 Company, December 1, 1995                   -              $ -                 $-                  $-                  $-

Issuance of shares upon
 capitalization                              5,000,000      5,000               1,095,000           -                   1,100,000

Balances at December 31, 1995                5,000,000      5,000               1,095,000           -                   1,100,000

Contributed capital in connection with
 co-production and property purchase
 agreement (Note (6f))                       -              -                   100,000             -                   100,000

Issuance of common stock as
 consideration for services
 rendered to the Company                     50,000         50                  124,950             -                   125,000

Issuance of common stock and warrants in
 connection with the initial public offering 800,000        800                 4,459,440           -                   4,460,240

Costs associated with initial
 public offering                             -              -                   (996,182)           -                   (996,182)

Issuance of common stock in connection
 with acquisition of Breaking Waves          150,000        150                 574,850             -                   575,000

Issuance of common stock in connection with 
senior management incentive plan as consideration 
for services rendered to the Company         100,000        100                 249,900             -                   250,000

Issuance of common stock pursuant to a
 consulting agreement as consideration for
 services rendered to the Company            7,500          8                   18,742              -                   18,750

Issuance of common stock pursuant to a
 management employment agreement for
 services rendered to the Company            10,000         10                  24,990              -                   25,000

Net loss for the year
 ended December 31, 1996                     -              -                   -                   (221,982)           (221,982)

Balances at December 31, 1996                6,117,500      $6,118              $5,651,690          $(221,982)          $5,435,826

See notes to consolidated financial statements
</TABLE>

<PAGE>
                  HOLLYWOOD PRODUCTIONS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                                                   From December 1,
                                                                                           For the year ended 1995 (date of
                                                                                           December 31, 1996       inception) to
                                                                                           (Note 2a)               December 31, 1995

Cash flows from operating activities:
<S>                                                                                       <C>                      <C>    
    Net loss $                                                                            (221,982)                $     -
Adjustments to reconcile net loss to
 net cash used for operating activities
    Issuance of common stock for services                                                 18,750
    Amortization and depreciation                                                         108,490                  -
    Change in assets and liabilities:
         Accounts receivable                                                              (22,351)                 -
         Prepaid expenses                                                                 (86,698)                 -
         Inventory                                                                        (1,815,526)              -
         Film production costs                                                            (1,518,639)              -
         Security deposits                                                                (9,178)                  -
         Accounts payable                                                                 61,788                   -
         Accrued expenses                                                                 103,194                  -
         Due to factor                                                                    1,434,686                -
         Income taxes payable                                                             35,279                   -
         Deferred tax payable                                                             12,309                   -
         Net cash used for operating activities                                           (1,899,878)              -
                                                                                                
Cash flows from investing activities:
    Acquisition of furniture and fixtures                                                 (1,414)                  -
                                                                                                                 
    Acquisition of subsidiary's common stock                                              70,717                   -

         Net cash used for investing activities                                           69,303                   -
                                                                                          ------                   -

Cash flows from financing activities:
    Advances to related parties                                                           (115,854)                -
    Proceeds from issuance of common stock and warrants                                   5,560,240                -
    Offering costs incurred                                                               (996,182)                -
    Proceeds from capital contributions                                                   100,000                  -
                                                                                          -------                  -
         Net cash provided from financing activities                                      4,548,204                -

Net increase in cash                                                                      2,717,629                -

Cash, beginning of period                                                                 -                        -

Cash, end of period                                                                       $ 2,717,629              $ -

Supplemental disclosure of non-cash flow information:  Cash paid during the year
    for:
         Interest                                                                         $ 85,098                 $-
         Income taxes                                                                     $ -                      $-

Schedule of non-cash  operating  activities:  In connection with the issuance of
    common stock, 167,500 shares of common stock were issued as
    consideration for services                                                            $418,750                 $-

Schedule of non-cash investing activities:
    In connection with the acquisition of a subsidiary,
     150,000 shares of common stock were issued                                           $575,000                 $-

See notes to consolidated financial statements
</TABLE>
<PAGE>

NOTE 1 - ORGANIZATION

     Hollywood  Productions,  Inc. (the "Company") was incorporated in the State
of  Delaware  on  December  1, 1995.  The  Company was formed for the purpose of
acquiring screen plays and producing motion pictures.  During December 1995, the
Company issued  5,000,000 shares of its $.001 par value common stock to European
Ventures  Corp.  ("EVC") for an investment of  $1,100,000.  The sole officer and
director of EVC is the former  President  and  Director of the  Company.  During
September 1996, in connection with the completion of its Initial Public Offering
("IPO"),  the Company  acquired all the capital  stock of Breaking  Waves,  Inc.
("Breaking Waves"). Breaking Waves designs,  manufactures and distributes a line
of private label swimwear.

     On April 8, 1996, the Company formed a wholly-owned  subsidiary  named D.L.
Productions,  Inc.  ("D.L.").  D.L.  was formed in the State of New York for the
purpose of purchasing and producing the motion picture  "Dirty  Laundry".  As of
December 31, 1996, the Company has presented consolidated financial statements.

     The Company's and its subsidiaries' year end is December 31.

NOTE 2       -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            a)    Basis of presentation

                  The  consolidated  financial  statements  at December 31, 1996
include the accounts of the Company and its wholly owned subsidiaries,  D.L. and
Breaking Waves after  elimination of all significant  intercompany  transactions
and accounts. Additionally,  purchase accounting requires the elimination of all
operating  transactions  of the acquired  subsidiary  from the  inception of its
fiscal year to the date of acquisition.  Hence,  the  consolidated  statement of
operations and consolidated  statement of cash flows for the year ended December
31, 1996 reflects the  transactions of the subsidiary,  Breaking Waves,  for the
period from September 24, 1996, the  acquisition  date, to December 31, 1996. If
the  operating  transactions  from  January 1, 1996 to  September  24, 1996 were
included in the December 31, 1996  consolidated  statement  of  operations,  the
effect by major components would be as follows:

                                   Increase
     
                                   Net sales                          $3,596,982
                                   Cost and expenses:
                                   Cost of sales                       2,401,586
                                   Operating and interest expense      1,221,040
                                   Net Loss                           $ (25,644)


b) Cash and cash equivalents

     The Company  considers  highly liquid  investments  with  maturities of six
months or less at the time of purchase to be cash equivalents. Included in these
amounts are  certificate  of deposits of $2,229,310 and mutual funds of $372,943
The Company  maintains  its cash  deposits  in  accounts  which are in excess of
Federal Deposit Insurance Corporation limits by $2,562,852.








<PAGE>

NOTE 2       -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

c) Inventory

     Inventory amounting to $1,815,526 at December 31, 1996 consists of finished
goods, and is valued at the lower of cost (using the first-in, first-out method)
or market. All inventory is pledged as collateral for factored receivables under
an agreement with a commercial bank. (See Note 4).

d) Film production and distribution costs

     The Company follows industry  standards in capitalizing film production and
distribution  costs.  Film production and  distribution  costs include all costs
associated  with the writing,  producing  and  distribution  of the film.  As of
December  31,  1996,  the  Company has not  amortized  any film  production  and
distribution costs.

e) Income taxes

     Effective  December 1, 1995 (date of  inception)  the Company  accounts for
income taxes in accordance with Statement of Financial  Accounting Standards No.
109,  "Accounting  for Income  Taxes" which  requires the use of the  "liability
method" of accounting for income taxes.  Accordingly,  deferred tax  liabilities
and  assets  are  determined  based  on the  difference  between  the  financial
statement  and tax bases of assets and  liabilities,  using enacted tax rates in
effect for the year in which the  differences  are expected to reverse.  Current
income taxes are based on the  respective  periods  taxable  income for Federal,
State and City income tax reporting purposes.

f) Revenue and cost recognition

     i) Breaking Waves

     Sales are  recognized  upon the  transfer  to the  customer of title to the
goods  (generally upon shipment to the customer from  warehouse).  Sales returns
are recorded upon  acceptance of the goods  (generally  upon receipt of goods in
the  warehouse  with prior  approved  authorization).  Duty  costs,  which are a
component  of cost of sales,  are  recorded  upon the  clearance  of such  goods
through customs.

     ii) D.L.

     D.L.  recognizes  revenue  when  amounts are  realized  and  earned.  As of
December  31,  1996 no  revenue  associated  with the  motion  picture  has been
recognized.

     g) Net loss per share. In calculating  primary loss per share,  the Company
uses the weighted  average number of shares of common stock  outstanding  during
each respective period.

     h) Use of estimates.  In preparing financial  statements in conformity with
generally  accepted  accounting  principles,  management  is  required  to  make
estimates and assumptions which affect the reported

<PAGE>

amounts of assets and  liabilities  and the disclosure of contingent  assets and
liabilities  at the date of the financial  statements  and revenues and expenses
during the reporting period. Actual results could differ from those estimates.

i) Fair value disclosure at December 31, 1996

     The  carrying  value  of cash,  accounts  receivable,  inventory,  accounts
payable, accrued expenses and short-term debt are a reasonable estimate of their
fair value.

j) Deferred compensation

     Deferred   compensation   consists  of  common  stock  issued  in  lieu  of
compensation   pursuant  to  the  1996  Senior  Management  Incentive  Plan  and
management  employment  agreements.  Such costs are amortized using the straight
line method over the period of the vesting rights of the respective shares.

k) Organizational costs

     Organizational  costs consist of common stock issued in lieu of legal costs
incurred in the  establishment  of the Company.  Organizational  costs are being
amortized  on a straight  line basis over their  estimated  useful lives of five
years.

l) Excess of cost over net assets acquired

     Excess of cost over net assets  acquired  is being  amortized  on a monthly
basis over the estimated useful life of the related assets acquired for a period
of fifteen (15) years.

NOTE 3       -    ADVANCES TO RELATED PARTIES

     During October 1996,  pursuant to two promissory  notes, the Company loaned
two of its officers a total of $87,000  bearing  interest at six and one-half (6
1/2)  percent  payable  over three  years.  As of  December  31, 1996 such notes
amounted to $83,397.
<PAGE>

     The  remaining  balance,  amounting  to  $32,457,  represents  advances  to
affiliates of an officer which are non-interest bearing and are due on demand.

NOTE 4       -    DUE TO FACTOR

     On April 4,  1991,  Breaking  Waves  entered  into an  accounts  receivable
financing agreement with NationsBanc  Commercial Corp. ("Nations") to sell their
interest in all present and future receivables without recourse.  Breaking Waves
submits all sales orders to Nations for credit  approval prior to shipment,  and
pays Nations .75% of the gross amount of the  receivables.  Nations retains from
amounts  payable to Breaking  Waves a reserve for possible  obligations  such as
customer disputes and possible credit losses on unapproved receivables. Breaking
Waves may take advances of up to 85% of the purchase  price on the  receivables,
with  interest  charged at the rate of 13/4%  over  prime.  Interest  charged to
expense  totaled   approximately  $67,173  from  September  24,  1996,  date  of
acquisition to December 31, 1996. Nations has a continuing  interest in Breaking
Waves's inventory as collateral for the advances.

<PAGE>

NOTE 5       -    PROVISION FOR INCOME TAX

     Provision  for income tax is comprised of the  following for the year ended
December 31, 1996:

                  Current:
                           Federal           $ -
                           State and local   35,279
                                            $35,279
                  Deferred:
                           Federal           $ 9,289
                           State and local   4,715
                                             14,004

                           Total provision for income taxes $49,283
                                                             

     The Company's  provision for income taxes includes state and local income,
capital and minimum franchise taxes.

     A  reconciliation  of the provision for income taxes on income per the U.S.
Federal statutory rate to the reported income tax expense is as follows:

                                                       December 31,
                                                       1996
U.S. Federal statutory rate applied to
pretax loss                                            $ (58,718)
State and local income taxes, net of federal
income tax benefit, applied to pretax loss             (25,456)
Permanent differences                                  3 ,337
Increase in valuation allowance                        80,837
Current provision for state and local taxes            35,279
Increase in deferred tax liability                     14,004

Total provision for income taxes                       $ 49,283



     The Company  has  adopted  SFAS No.  109,  "Accounting  for Income  Taxes",
effective   December  1,  1995.   Management   has   evaluated   the  effect  of
implementation  and has  determined  that  there is no  material  impact  on the
Company's financial position except for the effect of Breaking Waves IRC Section
263A inventory capitalization  adjustment, the differential between book and tax
treatment  with  respect to SEC Section  144 stock  issued as  compensation  for
services and the different lives used for book and tax purposes for amortization
of the purchase of trademarks.

     Income taxes are provided for the tax effects of  transactions  reported in
the financial  statements and consist of taxes currently due plus deferred taxes
related  to  differences  between  the  financial  and tax basis of  assets  and
liabilities for financial and income tax reporting purposes. Deferred tax assets
and liabilities  represent the future tax return consequences of these temporary
differences,  which will  either be taxable or  deductible  in the year when the
assets or liabilities are recovered or settled.








<PAGE>
     The  Company  has a  policy  of  capitalizing  certain  indirect  costs  to
inventory  attributable  to the  current  year for tax  reporting  purposes  and
expensing such amounts currently for financial statement  purposes.  The Company
expects to continue this policy for an indeterminable time period.  Accordingly,
measurement  of the deferred tax liability  attributable  to the book-tax  basis
differentials  is  computed  at a rate of 34%  federal  and 11%  state and local
pursuant to SFAS No. 109.

                                                                              
     The tax effect of significant  items comprising the Company's  deferred tax
assets are as follows:

                                                  December 31, 1996


Net operating loss carryforwards                  $ 37,389
SEC Section 144 stock compensation                43,448
Valuation allowance                               (80,837)
Long-term portion of deferred tax assets          $ -

     The tax effect of significant  items comprising the Company's  deferred tax
liability are as follows:

                                                  December 31, 1996


Section 263A differential                         $ 12,309
Long-term portion of deferred tax liability       $ 12,309

     The  Company  and its  subsidiaries  files a  consolidated  tax  return for
federal  tax  purposes.  For state  and  local  purposes,  the  Company  and its
subsidiaries file separate tax returns.  As such, each entity computes its state
and local tax based on its own taxable income or loss.

     At December 31, 1996,  the Company had a net  operating  loss  carryforward
(NOL) of approximately $94,000 which expires in 2011. The Company has recorded a
full valuation allowance against the











<PAGE>
     deferred  tax asset at  December  31,  1996  pursuant  to SFAS  109,  since
management  could  not  determine  that it was "more  likely  than not" that the
deferred asset would be realized in the future.

NOTE 6 -COMMITMENTS AND CONTINGENCIES

a)Lease commitments

     The Company and its subsidiaries'  approximate future minimum rentals under
non-cancelable operating leases in effect on December 31, 1996 are as follows:

1997      $ 119,380
1998        119,157
1999        119,157
2000         90,282
2001         69,657
------
          $ 517,633

     Rent expense  charged to  operations  for the year ended  December 31, 1996
amounted to approximately $33,500.

     b) Guarantees.  Prior to the  acquisition by the Company,  Breaking  Waves,
along with an  affiliate  of Breaking  Waves,  D. Stone  Industries  Inc.,  ("D.
Stone"),  an  entity  wholly  owned by the  previous  majority  stockholders  of
Breaking Waves, had issued cross-corporate  guarantees to NationsBanc Commercial
Corp. for trade acceptances  payable.  In connection with the acquisition by the
Company,  such  cross-corporate  guarantees  were  replaced by letters of credit
issued by the Company.

     c) License  agreement.  On October 16, 1995,  Breaking Waves entered into a
license  agreement  with Beach  Patrol,  Inc.  ("BPI") for the  exclusive use of
certain trademarks in the United States. The agreement commenced January 1, 1996
and is for an initial  period of thirty  (30)  months  divided  into one (1) six
month,  and two (2) twelve  month terms with the option to extend the  agreement
for an additional three (3) 12 month term periods.  In exchange,  Breaking Waves
will pay BPI the  greater  of 5% of net sales,  as  defined,  or the  guaranteed
minimum trademark  royalty ("GMTR").  The GMTR ranges from $75,000 for the first
term to $200,000 for the sixth term. In addition, Breaking Waves is obligated to
pay BPI 2% of net  sales  for  showroom/advertising  expenses,  and to  spend an
additional   1%  of  net   sales   for   advertising.   A   minimum   guaranteed
showroom/advertising  expense will be payable for the first three terms. BPI has
the option to terminate the agreement if Breaking  Wave's net sales do not reach
specified  levels,  ranging from $1,000,000 for the first term to $4,000,000 for
the sixth term.  From September 24, 1996 (the date of  acquisition)  to December
31, 1996, Breaking Waves incurred royalty and advertising  expenses amounting to
approximately $26,000.

     d) Concentration of risk

     Breaking Waves  purchases the majority of it's inventory from one vendor in
the Far East.

     e) Seasonality

<PAGE>

     Breaking Waves's  business may be considered  seasonal with a large portion
of its  revenues  and  profits  being  derived  between  December  and  June for
shipments  being  made  between  November  and May.  Each year from  January  to
November  Breaking  Waves engages in the process of designing and  manufacturing
the following  seasons swimwear lines,  during which time it incurs the majority
of its expenses, with limited revenues.

     f)   Co-production   and   property   purchase   agreements.   Pursuant  to
co-production and property purchase agreements dated March 15, 1996, as amended,
the Company,  through is wholly owned subsidiary,  D.L.,  acquired the rights to
co-produce  a motion  picture and has agreed to finance the costs of  production
and distribution of such motion picture with the co-producer agreeing to finance
$100,000  of the costs of  production.  The  Company  retains  all rights to the
motion picture, the screenplay, and all ancillary rights attached thereto.

     Pursuant  to the  terms  of the  agreements  with the  stars of the  motion
picture,  the two  stars  each have the right to  receive  $50,000  against a 5%
participation  fee based on revenues from the first  proceeds  received from the
distribution of the Motion Picture. Thereafter, the Company shall have the right
to all subsequent  revenues until the first $990,000 of their initial investment
is repaid.  The next proceeds  received by the Company shall be  distributed  as
follows:  (i) 5% of  revenues  to each  of the  two  stars  up to a  maximum  of
$250,000, at which time their distribution decreases to 2%; (ii) the Company and
the co-producer shall receive the remainder of their initial  investment;  (iii)
the  Company  and the  co-producer  each  receives  revenues  up to 25% and 35%,
respectively,  of each parties initial  investment;  (iv) the co-producers shall
receive their deferred compensation for writing,  production and direction;  and
(v) all  revenues  in excess of (i),  (ii) (iii) and (iv) shall first be used to
repay any  distribution  costs  incurred,  with the remainder to the Company and
co-producer at a rate of 75% and 25%, respectively. As of December 31, 1996, the
Company invested  $1,381,750 in D.L. for the  co-production  and distribution of
such motion picture whereas the  co-producers  have invested  $100,000 which has
been recorded as a capital contribution to the Company.

            g)    Financial advisory fee

     Pursuant to the Letter of Intent entered into with an underwriter to effect
the IPO, the Company entered into a two-year  financial  advisory  contract with
the underwriter at an annual fee of $30,000.  On September 24, 1996, the Company
paid $30,000 for the first year of such contract.

            h)    Employment agreements

     On November 27, 1996, the Company  entered into two  employment  agreements
with two employees of Breaking  Waves.  Such employees are  responsible  for the
designing,  marketing and sales of Breaking Waves. The employment agreements are
for a term of three years with an annual salary of $110,000 each. In addition to
the salary,  the Company has agreed to issue on each November 27, 1996, 1997 and
1998,  common  stock in the  amount  equal to the market  value (as  hereinafter
defined) of $25,000 on the date of each issuance, subject to a vesting schedule.
The  vesting  schedule  shall be as follows;  (i) 1/2 of the shares  received on
November  27,  1996 shall vest 90 days from  November  27, 1996 with the balance
vesting  270 days from  November  27,  1996 and (ii) on each  subsequent  annual
issuance  commencing  November 27, 1997, 1/2 of the shares shall vest six months
from issuance with the balance  vesting on the  following  anniversary.  "Market
Value" shall mean (i) $5.00 per share with respect to the shares to be issued on
November 27, 1996 and (ii) the average of the closing bid and


<PAGE>
     asked  prices for a period of 30 days ending five days prior to the date of
issuance for shares to be issued on November 27, 1997 and 1998.

NOTE 7 - STOCKHOLDER'S EQUITY

     a) Articles of Incorporation

     In June 1996, the Company amended its Articles of Incorporation  increasing
its authorized  common stock from 200 common shares, no par value, to 20,000,000
common shares, $.001 par value. In addition, the Company effected a 50,000 for 1
stock split of all issued and outstanding  shares of common stock. The financial
statements give retroactive effect to these items.

     b) Initial public offering

     On December  21,  1995,  the Company  signed a Letter of Intent,  which was
subsequently amended during June 1996, with an underwriter to proceed on a "Firm
Commitment"  basis with the IPO of the  Company's  Common  Stock and  redeemable
common stock purchase  Warrants ("the  Warrants").  The Company  offered 800,000
shares and 1,600,000  Warrants.  The 800,000 shares and 1,600,000  Warrants were
offered  to the  public  at a price of $5.00  per  share  and $.25 per  Warrant,
respectively. The total gross offering proceeds to the Company was $4,400,000.

     Each Warrant  entitles  the holder  thereof to purchase one share of Common
Stock at a price of $6.50 during the four year period  commencing  one year from
the ("Effective Date") of the IPO. The Warrants are redeemable by the Company at
any time  commencing  one year from the  Effective  Date upon  thirty  (30) days
notice at a redemption price of $.05 per warrant,  provided that the closing bid
quotation  of the common stock for each of the thirty (30) trading days on which
the  Company  gives  notice is at least 170% of the then  exercise  price of the
warrants.

     On  September  24,  1996,  the Company  successfully  completed  its public
offering. As a result, the Company sold 800,000 shares and 1,840,000 Warrants of
which 240,000  Warrants were sold pursuant to the  underwriter's  over-allotment
option.  The Company yielded a total net proceeds of $3,813,294  after deducting
underwriter   selling   expenses   and   non-accountable    expense   allowance.
Simultaneously  with the  offering,  the  Company  charged  all  offering  costs
incurred to additional paid-in capital which totaled $996,182.  Upon the closing
of the  sale  of the  Shares  and  Warrants  offered,  the  Company  sold to the
underwriter,  underwriter's  warrants to purchase up to 80,000  shares of Common
Stock and 160,000 Warrants

     c)  Acquisition  of  Breaking  Waves,  Inc.  Pursuant  to a stock  purchase
agreement dated May 31, 1996 (the "Agreement") among the Company,  EVC, Breaking
Waves and it's respective shareholders, the Company on September 24, 1996 issued
150,000 shares of Common Stock in exchange for all of the issued and outstanding
capital stock of Breaking  Waves.  The  transaction has been accounted for using
the  purchase  method  of  accounting,   and,   accordingly,   the  accompanying
consolidated  financial statements include the results of operations of Breaking
Waves  from the date of  acquisition,  September  24,  1996.  As a result of the
transaction,  excess of cost over net assets  acquired  totaling  $1,064,283 has
been  recorded  and will be  amortized  over their  useful  lives of the related
assets.  Amortization  expense  from  September  24, 1996 to  December  31, 1996
totaled $17,738.








<PAGE>
     In  conjunction  with such  Agreement,  a previous  stockholder of Breaking
Waves entered into a two year  consulting  agreement  effective  January 1, 1996
with  Breaking  Waves for an annual  consulting  fee of $100,000.  Additionally,
pursuant to the Agreement,  the previous  stockholders  of Breaking Waves agreed
not to compete with the Company for a period of four years from the consummation
thereof.  The Agreement  stipulates  that the previous  stockholders of Breaking
Waves will not engage  directly or indirectly in any business in which  Breaking
Waves is conducting or in the process of forming.

     Prior to the  consummation  of the Company's IPO,  during  September  1996,
Breaking Waves performed a  recapitalization  and exchanged all its common stock
for new common  stock,  and for a series of  preferred  stock.  Pursuant  to the
Agreement,  Breaking Waves issued 5,600 shares of its newly authorized  Series A
Preferred Stock to its previous  stockholders in proportion to their  respective
holdings.  The holders of the shares of the Series A Preferred  Stock shall have
the right to redemption  whereby, on each of January 1, 1997 and 1998 subject to
legally available funds, Breaking Waves shall redeem one half of the outstanding
shares of the Series A Preferred  Stock, at a redemption price of $100 per share
on a pro rata basis. (See Note 10(a) for additional information).

     Lastly, the Company  contributed  $100,000 to the capital of Breaking Waves
whereby simultaneously therewith,  Breaking Waves repaid its stockholders' loans
amounting to $100,000.

     d) 1996 Senior Management Incentive Plan

     During May,  1996,  the  Company  established  the 1996  Senior  Management
Incentive Plan ("Incentive  Plan") pursuant to which 250,000 of common stock are
reserved for issuance.  The Incentive  Plan is designed to serve as an incentive
for retaining  qualified and competent key employees,  officers and directors of
the Company.

     During June 1996, pursuant to such plan the Company issued 50,000 shares to
each of two  officers of the  Company.  50% of such  shares  issued will vest 12
months from the issuance date and the remaining 50% will vest 24 months from the
issuance  date.  Such  shares  were  valued  at 50% of the IPO  price of  $2.50.
Accordingly,  the Company recorded a deferred compensation amounting to $250,000
which is being  amortized as the shares vest.  As of December 31, 1996,  $62,500
has been  amortized as a  compensation  expense.  (See Note 10(b) for additional
information).

     e) Consulting Services

     During  September 1996, the company paid $40,000 and issued 7,500 shares of
common stock to an affiliate of the Company's President and Director pursuant to
a consulting arrangement. The shares have been valued at 50% of the IPO price or
$2.50 per share.  Accordingly  the Company  recorded  total  consulting  expense
amounting to $58,750.

<PAGE>
NOTE 8       -    RELATED PARTIES TRANSACTIONS

     a) During  September  1996,  the Company  contributed  $100,000 to Breaking
Waves pursuant to the Agreement whereby simultaneously therewith, Breaking Waves
repaid its stockholders' loans amounting to $100,000.

     b) During June 1996, pursuant to such plan the Company issued 50,000 shares
to each of two officers of the Company.  50% of such shares  issued will vest 12
months from the issuance date and the remaining 50% will vest 24 months from the
issuance  date.  Such  shares  were  valued  at 50% of the IPO  price of  $2.50.
Accordingly,  the Company recorded a deferred compensation amounting to $250,000
which is being  amortized as the shares vest.  As of December 31, 1996,  $62,500
has been  amortized as a  compensation  expense.  (See Note 10(b) for additional
information).

     c) Prior to the acquisition by the Company,  Breaking Waves,  along with an
affiliate,   D.  Stone,  an  entity  wholly  owned  by  the  previous   majority
stockholders  of  Breaking  Waves,  had  issued  cross-corporate  guarantees  to
NationsBanc  Commercial Corp. for trade acceptances  payable. In connection with
the acquisition by the Company, such cross-corporate guarantees were replaced by
letters of credit issued by the Company.

     d) During  September 1996, the company paid $40,000 and issued 7,500 shares
of common stock to an affiliate of the Company's President and Director pursuant
to a consulting arrangement. The shares have been valued at 50% of the IPO price
or $2.50 per share.  Accordingly the Company recorded total  consulting  expense
amounting to $58,750.

NOTE 9   -                 INDUSTRY SEGMENTS.

     The Company's  operations have been classified into two segments:  swimwear
sales and film  productions.  Information  about the two  segments  for the year
ended December 31, 1996, is as follows:
<TABLE>
<CAPTION>

                                                     Swimwear           Film
                                                     Sales            Production          Consolidated

<S>                                                  <C>              <C>                 <C>        
Sales                                                $ 1,217,152      $ -                 $ 1,217,152

Operating profit                                     $ 294,908        $ -                 $ 294,908

Corporate general and
administrative expense                                                                    (403,156)
Amortization expense                                                                      (17,738)
Interest income                                                                           38,386
Interest and finance expense                                                              (85,099)
Loss from operations
before provision for income taxes                                                         $ (172,699)

Provision for income taxes                                                                49,283

                  Net loss                                                                $    (221,982)

Identifiable assets at December
                   31, 1996                          $1,947,789       $1,536,487          $3,484,276


Corporate assets                                                                          4,096,306

Total assets at December 31, 1996                                                         $ 7,580,582
</TABLE>
                                                                            
<PAGE>

     Total revenue by segment  includes only sales to unaffiliated  customers as
there are no intersegment sales.  Operating profit is total revenue less cost of
sales and operating expenses, and excludes general corporate expenses,  interest
expense and income taxes.

     Identifiable  assets  are  those  used by  each  segment  of the  Company's
operations. Corporate assets are primarily cash and marketable securities.

NOTE 10      -    SUBSEQUENT EVENTS

     a) Redemption of Preferred Stock

     During  January 1997,  Breaking Waves redeemed 2,800 shares of its Series A
preferred stock as described in Note 7(c) for a total of $280,000.

     b) Cancellation of shares

     Effective  January  10,  1997,  upon the  resignation  of an officer of the
Company, 25,000 of the 50,000 shares originally issued to such officer under the
Incentive  Plan  (Note  7(d))  were  caused  to be  immediately  vested  and the
remaining 25,000 shares were returned to treasury.

     c) 1996 Senior Management Incentive Plan

     Effective  March 14, 1997, the Company  granted 150,000 options to purchase
shares of common stock pursuant to the Company's Incentive Plan. 100,000 options
were granted to the Company's  President  and 50,000  options were granted to an
officer.
<PAGE>


                                 Exhibit 10.6(a)

          Amendment to lease at 8410 N.W. 53rd Terrace, Miami, Florida.

                                  Exhibit 10.16

                   Employment agreement with Michael Friedland

<PAGE>

                              EMPLOYMENT AGREEMENT

          AGREEMENT  made as of the 27th day of November,  1996,  by and between
Michael Friedland, an individual who resides at 117 Margaret Blvd., Merrick, New
York 11566 (hereinafter referred to as the "Employee") and Breaking Waves, Inc.,
a New York corporation  with principal  offices located at 112 West 34th Street,
New York, New York (hereinafter referred to as the "Company").

                              W I T N E S S E T H :

     WHEREAS,  the  Company  designs,  manufactures  and  distributes  a line of
private label,  including  "Breaking Waves," "All Waves," "Making Waves," "Small
Waves"  and  "Huk-A-Poo"  and  a  line  of a  brand  name  label  called  "Daffy
Waterwear", girls swim wear and accessory items; and

     WHEREAS,  Hollywood Productions,  Inc., a Delaware corporation and publicly
traded company, is the parent company of the Company (the "Parent"); and

     WHEREAS,  the Company  desires to retain the  services  of the  Employee as
vice-president of marketing and sales; and

     WHEREAS,  Employee  acknowledges  that all work  product,  inclusive of all
Intellectual  Property (as hereina ter defined) developed by the Employee during
Employees tenure with the Company shall be the sole property of the Company; and

     WHEREAS,  the Employee  desires to be employed by the Company,  pursuant to
the terms and  conditions  herein set forth,  superseding  all prior  agreements
between the Company and Employee, if any;

     NOW, THEREFORE,  it is mutually agreed by and between the parties hereto as
follows:

                                    ARTICLE I
                                   EMPLOYMENT

         Subject to and upon the terms and  conditions  of this  Agreement,  the
Company  hereby  employs and ag ees to continue the  employment of the Employee,
and  the  Employee   hereby   accepts  such   employment   in  his  capacity  as
vice-president  of sales and marketing.  In this capacity,  Employee will report
directly  to the Chief  Executive  Officer and  President  of the  Company.  The
Employee's principal place of employment is New York City.

                                   ARTICLE II
                           DUTIES AND ACKNOWLEDGMENTS

         (A) The  Employee  shall,  during the term of his  employment  with the
Company,  and subject to the  direction  and control of the  Company's  Board of
Directors, perform such duties and functions relate to his


<PAGE>

position as  vice-president  of sales and  marketing as he may be called upon to
perform by the Company's Board of Directors during the term of this Agreement.

         (B) The Employee  agrees to devote 100% of his normal  business time to
the  business  of the  Company.  Employee  shall  use his  best  efforts  in the
performance of his duties for the Company as stated herein.

         (C) The Employee  shall  perform,  in  conjunction  with the  Company's
Senior  Management,  to the best of is ability the following services and duties
for the Company and its subsidiary  corporations (by way of example,  and not by
way of limitation):

     (i) Those duties attendant to the position with the Company for which he is
hired;

     (ii) Providing sales and marketing of the Company's product lines; and

         (D) Employee  acknowledges that all Intellectual  Property developed by
the  Employee  during the  Employees  tenure with the Company  shall be the sole
property  of the Com any and  that any  Intellectual  Property  (as  hereinafter
defined) filed by the Employee with any federal,  state,  city, local or foreign
government  agency or authority shall be immediately upon filing assigned to the
Company.

                                   ARTICLE III
                                  COMPENSATION

         (A) Commencing with the commencement date hereof, the Company shall pay
to Employee a salary at the rate of $110,000  per annum until  November 27, 1999
(payable in equal  weekly  installments  or pursuant to such regular pay periods
adopted by the Company) (the "Base Salary").

         (B) The Company shall deduct from Employee's  compensation all federal,
state and local taxes which it may now or may hereafter be required to deduct.

                                   ARTICLE IV
                                    BENEFITS

         (A) During the term hereof, (i) the Company shall provide Employee with
Blue Cross/Blue Shield or equivalent health insurance benefits and major medical
insurance;   and  (ii)  Employee   shall  be  reimbursed  by  the  Company  upon
presentation of appropriate  vouchers for all business  expenses incurred by the
Employee on behalf of the Company.

         (B) In the event the Company wishes to obtain Key Man life ins rance on
the  life of  Employee,  Employee  agrees  to  cooperate  with  the  Company  in
completing  any  applications  necessary to obtain such  insurance  and promptly
submit  to such  physical  examinations  and  furnish  such  information  as any
proposed insurance carrier may request.
<PAGE>
         (C) For each year of the term  hereof,  Employee  shall be  entitled to
sick days and fifteen (15) days paid vacation.




                                    ARTICLE V
                                 NON-DISCLOSURE

         The Employee shall not, at any time during or after the  termination of
his  employment  hereunder,  except  when  acting  on  behalf  of and  with  the
authorization  of  the  Company,   make  use  of  or  disclose  to  any  person,
corporation,  or other entity, for any purpose  whatsoever,  any trade secret or
other  confidential  information  concerning the Company's  business,  finances,
proposed and current services and pricing,  and any information  relating to the
Company's business (collectively referred to as the "Proprietary  Information").
For the purposes of this Agreement,  trade secrets and confidential  information
shall  mean  information  disclosed  to  the  Employee  or  known  by  him  as a
consequence  of his  employment by the Company,  whether or not pursuant to this
Agreement,  and not generally  known in the industry,  concerning  the Company's
Intellectual  Property,  business,  finances,  methods,  operations,   marketing
information,  pricing and  information  relating to  proposed  expansion  of the
Company or the Company's  business plans. The Employee  acknowledges  that trade
secrets and other items of confidential information, as they may exist from time
to time, are valuable and unique assets of the Company,  and that  disclosure of
any  such  information  would  cause  substantial  injury  to the  Company.  The
foregoing is intended to be confirmatory of the common laws of the states of New
York,  and  Delaware  relating to trade  secrets and  confidential  information.
"Intellectual   Property"  means  (a)  all  inventions  (whether  patentable  or
unpatentable and whether or not reduced to practice),  all improvements thereto,
and all patents, patent applications, and patent disclosures,  together with all
re-issuances, continuations,  continuations- in-part, revisions, extensions, and
reexaminations  thereof, (b) all trademarks,  service marks, trade dress, logos,
trade names, and corporate names,  together with all translations,  adaptations,
derivations,  and  combinations  thereof and including  all goodwill  associated
therewith,  and all  applications,  registrations,  and  renewals in  connection
therewith,  (c) all copyrightable  works, all copyrights,  and all applications,
registrations,  and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential  business  information  (including ideas,  research and
development,  know-how,  formulas,  compositions,  manufacturing  and production
processes and techniques,  technical data,  designs,  drawings,  specifications,
customer  and supplier  lists,  pricing and cost  information,  and business and
marketing plans and proposals),  (f) all computer  software  (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).

                                   ARTICLE VI
                             RESTRICTIVE COVENANT S

         (A)  In  the  event  of  the  Employee's  termination,  whether  by him
voluntarily or by the Company for Cause (as hereinafter defined),  except in the
event of the termination of this agreement pursuant to Article

<PAGE>

VII, the Employee  agrees that he will not, for a period of two years  following
such termination, directly enter into or become associated with or engage in any
other usiness (whether as a partner, officer, director,  shareholder,  employee,
consultant, or otherwise), which business is a direct competitor of the Company,
or any  current or future  subsidiary,  associate,  affiliate  or joint  venture
partner,  which is a direct  competitor  of the Company,  or any  subsidiary  or
Parent company.

         (B) If any court shall hold that the duration of non-competition or any
other  restriction  contained  in this  paragraph  is  unenforceable,  it is our
intention  that same shall not hereby be terminated  but shall be deemed amended
to delete  therefrom  such  provision  or portion  adjudicated  to be invalid or
unenforceable  or in the  alternative  such judicially  substituted  term may be
substituted therefor.

         (C) Employee agrees that during the term of this Restrictive  Covenant,
he will not,  directly or  indirectly,  (a)  contact,  induce or  influence  any
customer or clients with respect to the Company's proposed business as described
in  (a)  above,  joint  venture  partners,  mployee,  consultant,  associate  or
affiliate of the Company or its or their  successors for any reason  whatsoever,
without the written  consent of the Company,  signed by two executive  officers;
(b) request or advise any customer,  client,  joint venture partners,  supplier,
manufacturer, employee, consultant, associate or affiliate of the Company or its
or their  successors,  who may  contact or attempt to contact  the  Employee  to
withdraw,  curtail  or cancel  such  parties  business  with the  Company or its
successors;  (c)  disclose  to any  other  person  or  corporation  the  name or
addresses of any of the customers,  clients, joint venture partners,  suppliers,
manufacturers,  employees, consultants,  associates or affiliates of the Company
or its or their  successors of the Company or its  successors;  or (d) induce or
encourage any employee to terminate his relationship with the Company.

                                   ARTICLE VII
                                      TERM

         This  Agreement  shall be for a term of three  years,  subject to prior
termination,  until November 27, 1999. This agreement shall  automatically renew
for additional one year periods after its initial term,  unless terminated on 90
days prior notice by either party in writing.

                                  ARTICLE VIII
                         TERMINATION AND EFFECT THEREOF

         (A) The Company may terminate this Agreement:

                  (i) Upon the death of Employee during the term hereof,  except
that the Employee's legal representatives,  successors,  assigns and heirs shall
have  those  rights and  interests  as  otherwise  provided  in this  Agreement,
including the right to receive accrued but unpaid bonus compensation, if any.

                  (ii) Upon written  notice from the Company to the Empl yee, if
Employee becomes totally disabled and as a result of such total disability,  has
been  prevented  from and unable to perform  all of his duties  hereunder  for a
period of four (4) consecutive months.

<PAGE>

                  (iii) If the Employee  engages in fraud,  misappropriation  of
Company funds or gross negligence in the performance of his duties.

                  (iv) The Company shall have the right to terminate  Employee's
employment  hereunder for Cause.  For purposes of this Agreement,  "Cause" me ns
(a) a breach of the  covenants  herein,  (b)  failure to perform his duties in a
professional  and  competent  manner;  (c) failure by Employee to  substantially
perform his duties or obligations hereunder; (d) Employee engaging in misconduct
which is materially  injurious to the Company;  (e) Employee engaging in any act
that in any way has a direct,  substantial,  and adverse effect on the Company's
reputation;  (f) Employee  committing  involving crime of moral  turpitude;  (g)
Executive's conviction by, or entry of a plea of guilty or nolo contendere in, a
court of competent jurisdiction of a crime constituting a felony.

         (B) Upon termination of this Agreement Employee's  employment hereunder
and all  compensation  and benefits  payable by the Company  hereunder  shall be
immediately terminated, and all options shall be terminated;  provided, however,
Employee  or his  estate,  as the case may be,  shall be entitled to receive any
payments under any applicable life or disability insurance plans. Such pay ents,
if any,  shall  be  made at the  time  and in  accordance  with  the  terms  and
conditions  of such plans.  All shares of the Parent which have not vested shall
be returned to the Parent.

                                   ARTICLE IX
                            STOCK ISSUANCES OF PARENT

         On the date hereof and on each of November  27, 1997 and  November  27,
1998, the Employee  shall receive such numbers of shares of the Parent's  common
stock equal to a Market Value (as hereinafter defined) of $25,000 on the date of
issuance,  subject  to a vesting  schedule.  The  vesting  schedule  shall be as
follows;  (i) 1/2 of the shares rece ved on the date  hereof  shall vest 90 days
from the date hereof with the balance  vesting 270 days from the date hereof and
(ii) on each subsequent annual issuance commencing November 27, 1997, 1/2 of the
shares  shall vest six months  from  issuance  with the  balance  vesting on the
following  anniversary.  The shares shall vest  pursuant to a  restricted  share
agreement as annexed  hereto as Appendix A. "Market  Value" shall mean (i) $5.00
per share with respect to the shares to be issued as of the date hereof and (ii)
the average of the closing bid and asked  prices for a share of Parent's  common
stock for a period of 30 days ending five days prior to the date of issuance, as
officially  reported by the  principal  securities  exchange on which the common
stock is quoted or  admitted  to trading or by the Nasdaq  National  or SmallCap
Stock  Market,  or, if the Common  Stock is not listed or admitted to trading on
any securities  exchange or quoted by Nasdaq,  the average  closing bid price as
listed on the OTC Bulletin  Board,  as determined in good faith by resolution of
the Board of Directors of the Parent, based on the best information available to
it.

                                    ARTICLE X
                         TERMINATION OF PRIOR AGREEMENTS
<PAGE>
         This Agreement sets forth the entire agreement  between the parties and
supersedes all prior  agreements  between the parties,  whether oral or written,
without prejudice to Employee's right to all accrued  compensation  prior to the
effective date of this Agreement.

                                   ARTICLE XI
                                   ARBITRATION

     Any  dispute  arising  out  of  the   interpretation,   application  and/or
performance of this  Agreement  with the sole exception of any claim,  breach or
viol tion arising under  Articles V or VI hereof shall be settled  through final
and binding  arbitration before a single arbitrator in the City of New York, the
State  of New York in  accordance  with the  rules of the  American  Arbitration
Association. The arbitrator shall be selected by the Association and shall be an
attorney at law experienced in the field of corporate law. Any judgment upon any
arbitration  award  may be  entered  in any  court,  federal  or  state,  having
competent jurisdiction of the parties.

                                   ARTICLE XII
                                  SEVERABILITY

         If  any  provision  of  this   Agreement   hall  be  held  invalid  and
unenforceable,  the remainder of this  Agreement  shall remain in full force and
effect.  If any  provision  is held  invalid or  unenforceable  with  respect to
particular circumstances,  it shall remain in full force and effect in all other
circumstances.

                                  ARTICLE XIII
                                     NOTICE

         All  notices  required  to be given  under the terms of this  Agreement
shall be in  writing  and  shall be  deemed  to have  been  duly  given  only if
delivered to the addressee in person or mailed by certified mail, return receipt
requested,  to the address as  included in the Comp ny's  records or to any such
other  address as the party to receive  the  notice  shall  advise by due notice
given in accordance with this paragraph.

                                   ARTICLE XIV
                                     BENEFIT

         This  Agreement  shall inure to, and shall be binding upon, the parties
hereto,  the successors  and assigns of the Company,  and the heirs and personal
representatives of the Employee.

                                   ARTICLE XV
                                     WAIVER

         The waiver by either party of any breach or violation of any  provision
of  this  Agreement  shall  not  operate  or be  construed  as a  waiver  of any
subsequent breach of construction and validity.

<PAGE>
                                   ARTICLE XVI
                                  GOVERNING LAW

         This  Agreement  has been  negotiated  and executed in the State of New
York, and New York law shall govern its construction and validity.

                                  ARTICLE XVII
                                  JURISDICTION

         Any or all actions or  proceedings  which may be brought by the Company
or  Employee  under this  Agreement  shall be  brought in courts  having a situs
within the State of New York and Employee hereby consents to the jurisdiction of
any local, state or federal court located within the State of New York.


                                  ARTICLE XVIII
                                ENTIRE AGREEMENT

     This Agreement contains the entire agreement between the parties hereto. No
change,  addition or amendment shall be made hereto, except by written agreement
signed by the parties hereto.

     s  agreement  to be  construed,  interpreted,  and  enforced to the maximum
extent  permitted by law. The parties  acknowledge and agree that they have both
participated  in the preparation of this Agreement and it shall not be construed
or  interpreted  against  either party on the basis that it was prepared by such
party.  In the event that any  provision  of Articles V or VI, or part  thereof,
shall be  determined  by any  court of  competent  jurisdiction  to be  invalid,
illegal, or unenforceable in any respect for any reason, such provision shall be
revised  and/or  interpreted to make it enforceable to the maximum extent in all
other  respects as to which it may be  enforceable,  all as  determined  by such
court in such action.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
affixed their hands and seals the day and year first above written.

                               AGREED AS TO SHARES
                          HOLLYWOOD PRODUCTIONS, INC.
                              BREAKING WAVES, INC.

                                      By:
                              ---------------------

      By: Harold Rashbaum
          Harold Rashbaum
          Secretary
          President

          EMPLOYEE
          Michael Friedland
<PAGE>

                                  Exhibit 10.17

                    Employment agreement with Malcolm Becker

                              EMPLOYMENT AGREEMENT

          AGREEMENT  made as of the 27th day of November,  1996,  by and between
Malcolm Becker, an individual who resides at 82 Coleridge Street,  Brooklyn, New
York 11235 (hereinafter referred to as the "Employee") and Breaking Waves, Inc.,
a New York corporation  with principal  offices located at 112 West 34th Street,
New York, New York (hereinafter referred to as the "Company").

                              W I T N E S S E T H :

     WHEREAS,  the  Company  designs,  manufactures  and  distributes  a line of
private label,  including  "Breaking Waves," "All Waves," "Making Waves," "Small
Waves"  and  "Huk-A-Poo"  and  a  line  of a  brand  name  label  called  "Daffy
Waterwear", irls swim wear and accessory items; and

     WHEREAS,  Hollywood Productions,  Inc., a Delaware corporation and publicly
traded company, is the parent company of the Company (the "Parent"); and

     WHEREAS,  the Company  desires to retain the  services  of the  Employee as
vice-president of merchandising and manufacturing sourcing; and

     WHEREAS,  Employee  acknowledges  that all work  product,  inclusive of all
Intellectual  Property (as hereinafter defined) developed by the Employee during
Employees tenure with the Company shall be the sole property of the Company; and

     WHEREAS,  the Employee  desires to be employed by the Company,  pursuant to
the terms and  conditions  herein set forth,  superseding  all prior  agreements
between the Company and Employee, if any;

     NOW, THEREFORE,  it is mutually agreed by and between the parties hereto as
follows:

                                    ARTICLE I
                                   EMPLOYMENT

         Subject to and upon the terms and  conditions  of this  Agreement,  the
Company  hereby  employs and agrees to continue the em loyment of the  Employee,
and  the  Employee   hereby   accepts  such   employment   in  his  capacity  as
vice-president of merchandising and  manufacturing  sourcing.  In this capacity,
Employee will report  directly to the Chief  Executive  Officer and President of
the Company. The Employee's principal place of employment is New York City.

                                   ARTICLE II
                           DUTIES AND ACKNOWLEDGMENTS

         (A) The  Employee  shall,  during the term of his  employment  with the
Company,  and subject to the  direction  and control of the  Company's  Board of
Directors, perform such duties and functions relate to his

<PAGE>
position as vice-president of merchandising and manufacturing sourcing as he may
be called upon to perform by the Company's Board of Directors during the term of
this Agreement.

         (B) The Employee  agrees to devote 100% of his normal  business time to
the  business  of the  Company.  Employee  shall  use his  best  efforts  in the
performance of his duties for the Company as stated herein.

         (C) The Employee  shall  perform,  in  conjunction  with the  Company's
 Senior Management,  to the est of his ability the following services and duties
 for the Company and its subsidiary corporations (by way
of example, and not by way of limitation):

     (i) Those duties attendant to the position with the Company for which he is
hired;

     (ii) Providing  merchandising and  manufacturing  sourcing of the Company's
product lines; and

         (D) Employee  acknowledges that all Intellectual  Property developed by
the  Employee  during the  Employees  tenure with the Company  shall be the sole
property of the  Company  and that any  Intellectual  Property  (as  hereinafter
defined) filed by the Employee with any federal,  state,  city, local or foreign
government  agency or authority shall be immediately upon filing assigned to the
Company.

                                   ARTICLE III
                                  COMPENSATION

         (A) Commencing with the commencement date hereof, the Company shall pay
to Employee a salary at the rate of $110,000  per annum until  November 27, 1999
(payable in equal  weekly  installments  or pursuant to such regular pay periods
adopted by the Company) (the "Base Salary").

         (B) The Company shall deduct from Employee's  compensation all federal,
state and local taxes which it may now or may hereafter be required to deduct.

                                   ARTICLE IV
                                    BENEFITS

         (A) During the term hereof, (i) the Company shall provide Employee with
Blue Cross/Blue Shield or equivalent health insurance benefits and major medical
insurance;   and  (ii)  Employee   shall  be  reimbursed  by  the  Company  upon
presentation of appropriate  vouchers for all business  expenses incurred by the
Employee on behalf of the Company.

         (B) In the event the Company wis es to obtain Key Man life insurance on
the  life of  Employee,  Employee  agrees  to  cooperate  with  the  Company  in
completing any applications necessary to obtain such
<PAGE>

insurance  and promptly  submit to such physical  examinations  and furnish such
information as any proposed insurance carrier may request.

         (C) For each year of the term  hereof,  Employee  shall be  entitled to
sick days and fifteen (15) days paid vacation.

                                    ARTICLE V
                                 NON-DISCLOSURE

         The Employee shall not, at any time during or after the  termination of
his  employment  hereunde  ,  except  when  acting  on  behalf  of and  with the
authorization  of  the  Company,   make  use  of  or  disclose  to  any  person,
corporation,  or other entity, for any purpose  whatsoever,  any trade secret or
other  confidential  information  concerning the Company's  business,  finances,
proposed and current services and pricing,  and any information  relating to the
Company's business (collectively referred to as the "Proprietary  Information").
For the purposes of this Agreement,  trade secrets and confidential  information
shall  mean  information  disclosed  to  the  Employee  or  known  by  him  as a
consequence  of his  employment by the Company,  whether or not pursuant to this
Agreement,  and not generally  known in the industry,  concerning  the Company's
Intellectual  Property,  business,  finances,  methods,  operations,   marketing
information,  pricing and  information  relating to  proposed  expansion  of the
Company or the Company's  business plans. The Employee  acknowledges  that trade
secrets and other items of confidential information, as they may exist from time
to time, are valuable and unique assets of the Company,  and that  disclosure of
any  such  information  would  cause  substantial  injury  to the  Company.  The
foregoing is intended to be confirmatory of the common laws of the states of New
York,  and  Delaware  relating to trade  secrets and  confidential  information.
"Intellectual   Property"  means  (a)  all  inventions  (whether  patentable  or
unpatentable and whether or not reduced to practice),  all improvements thereto,
and all patents, patent applications, and patent disclosures,  together with all
re-issuances, continuations,  continuations- in-part, revisions, extensions, and
reexaminations  thereof, (b) all trademarks,  service marks, trade dress, logos,
trade names, and corporate names,  together with all translations,  adaptations,
derivations,  and  combinations  thereof and including  all goodwill  associated
therewith,  and all  applications,  registrations,  and  renewals in  connection
therewith,  (c) all copyrightable  works, all copyrights,  and all applications,
registrations,  and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential  business  information  (including ideas,  research and
development,  know-how,  formulas,  compositions,  manufacturing  and production
processes and techniques,  technical data,  designs,  drawings,  specifications,
customer  and supplier  lists,  pricing and cost  information,  and business and
marketing plans and proposals),  (f) all computer  software  (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).

                                   ARTICLE VI
                             RESTRICTIVE COVENANT S
<PAGE>
        (A)  In  the  event  of  the  Employee's  termination,  whether  by him
voluntarily or by the Company for Cause (as hereinafter defined),  except in the
event of the termination of this agreement pursuant to Article VII, the Employee
agrees that he will not, for a period of two years  following such  termination,
directly  enter into or become  associat d with or engage in any other  business
(whether as a partner, officer, director, shareholder,  employee, consultant, or
otherwise), which business is a direct competitor of the Company, or any current
or future subsidiary,  associate, affiliate or joint venture partner, which is a
direct competitor of the Company, or any subsidiary or Parent company.

         (B) If any court shall hold that the duration of non-competition or any
other  restriction  contained  in this  paragraph  is  unenforceable,  it is our
intention  that same shall not thereby be terminated but shall be deemed amended
to delete  therefrom  such  provision  or portion  adjudicated  to be invalid or
unenforceable  or in the  alternative  such judicially  substituted  term may be
substituted therefor.

         (C) Employee agrees that during the term of this Restrictive  Covenant,
he will not,  directly or  indirectly,  (a)  contact,  induce or  influence  any
customer or clients with respect to the Company's proposed business as described
in  (a)  bove,  joint  venture  partners,  employee,  consultant,  associate  or
affiliate of the Company or its or their  successors for any reason  whatsoever,
without the written  consent of the Company,  signed by two executive  officers;
(b) request or advise any customer,  client,  joint venture partners,  supplier,
manufacturer, employee, consultant, associate or affiliate of the Company or its
or their  successors,  who may  contact or attempt to contact  the  Employee  to
withdraw,  curtail  or cancel  such  parties  business  with the  Company or its
successors;  (c)  disclose  to any  other  person  or  corporation  the  name or
addresses of any of the customers,  clients, joint venture partners,  suppliers,
manufacturers,  employees, consultants,  associates or affiliates of the Company
or its or their  successors of the Company or its  successors;  or (d) induce or
encourage any employee to terminate his relationship with the Company.

                                   ARTICLE VII
                                      TERM

         This  Agreement  shall be for a term of three  years,  subject to prior
termination,  until November 27, 1999. This agreement shall  automatically renew
or additional one year periods after its initial term,  unless  terminated on 90
days prior notice by either party in writing.

                                  ARTICLE VIII
                         TERMINATION AND EFFECT THEREOF

         (A) The Company may terminate this Agreement:

                  (i) Upon the death of Employee during the term hereof,  except
that the Employee's legal representatives,  successors,  assigns and heirs shall
have  those  rights and  interests  as  otherwise  provided  in this  Agreement,
including the right to receive accrued but unpaid bonus compensation, if any.

<PAGE>
                  (ii) Upon written noti e from the Company to the Employee,  if
Employee becomes totally disabled and as a result of such total disability,  has
been  prevented  from and unable to perform  all of his duties  hereunder  for a
period of four (4) consecutive months.

                  (iii) If the Employee  engages in fraud,  misappropriation  of
Company funds or gross negligence in the performance of his duties.

                  (iv) The Company shall have the right to terminate  Employee's
employment hereunder for Cause. For purpose of this Agreement, "Cause" means (a)
a breach of the  covenants  herein,  (b)  failure  to  perform  his  duties in a
professional  and  competent  manner;  (c) failure by Employee to  substantially
perform his duties or obligations hereunder; (d) Employee engaging in misconduct
which is materially  injurious to the Company;  (e) Employee engaging in any act
that in any way has a direct,  substantial,  and adverse effect on the Company's
reputation;  (f) Employee  committing  involving crime of moral  turpitude;  (g)
Executive's conviction by, or entry of a plea of guilty or nolo contendere in, a
court of competent jurisdiction of a crime constituting a felony.

         (B) Upon termination of this Agreement Employee's  employment hereunder
and all  compensation  and benefits  payable by the Company  hereunder  shall be
immediately terminated, and all options shall be terminated;  provided, however,
Employee  or his  estate,  as the case may be,  shall be entitled to receive any
payments under any applicable life or disab lity insurance plans. Such payments,
if any,  shall  be  made at the  time  and in  accordance  with  the  terms  and
conditions  of such plans.  All shares of the Parent which have not vested shall
be returned to the Parent.

                                   ARTICLE IX
                            STOCK ISSUANCES OF PARENT

         On the date hereof and on each of November  27, 1997 and  November  27,
1998, the Employee  shall receive such numbers of shares of the Parent's  common
stock equal to a Market Value (as hereinafter defined) of $25,000 on the date of
issuance,  subject to a vesting schedule. The vesting schedule shall be as follo
s; (i) 1/2 of the shares received on the date hereof shall vest 90 days from the
date hereof  with the balance  vesting 270 days from the date hereof and (ii) on
each subsequent annual issuance  commencing November 27, 1997, 1/2 of the shares
shall vest six months from  issuance  with the balance  vesting on the following
anniversary.  The shares shall vest pursuant to a restricted  share agreement as
annexed hereto as Appendix A. "Market Value" shall mean (i) $5.00 per share with
respect to the shares to be issued as of the date hereof and (ii) the average of
the closing  bid and asked  prices for a share of  Parent's  common  stock for a
period of 30 days ending five days prior to the date of issuance,  as officially
reported  by the  principal  securities  exchange  on which the common  stock is
quoted or  admitted  to trading  or by the Nasdaq  National  or  SmallCap  Stock
Market,  or, if the  Common  Stock is not listed or  admitted  to trading on any
securities exchange or quoted by Nasdaq, the average closing bid price as listed
on the OTC Bulletin  Board,  as  determined  in good faith by  resolution of the
Board of Directors of the Parent, based on the best information available to it.



<PAGE>
                                    ARTICLE X
                         TERMINATION OF PRIOR AGREEMENTS

         This Agreement sets forth the entire agreement  between the parties and
supersedes all prior  agreements  between the parties,  whether oral or written,
without prejudice to Employee's right to all accrued  compensation  prior to the
effective date of this Agreement.

                                   ARTICLE XI
                                   ARBITRATION

         Any  dispute  arising  out of the  interpretation,  application  and/or
performance of this  Agreement  with the sole excepti n of any claim,  breach or
violation  arising under Articles V or VI hereof shall be settled  through final
and binding  arbitration before a single arbitrator in the City of New York, the
State  of New York in  accordance  with the  rules of the  American  Arbitration
Association. The arbitrator shall be selected by the Association and shall be an
attorney at law experienced in the field of corporate law. Any judgment upon any
arbitration  award  may be  entered  in any  court,  federal  or  state,  having
competent jurisdiction of the parties.

                                   ARTICLE XII
                                  SEVERABILITY

         If  a  y  provision  of  this  Agreement  shall  be  held  invalid  and
unenforceable,  the remainder of this  Agreement  shall remain in full force and
effect.  If any  provision  is held  invalid or  unenforceable  with  respect to
particular circumstances,  it shall remain in full force and effect in all other
circumstances.

                                  ARTICLE XIII
                                     NOTICE

         All  notices  required  to be given  under the terms of this  Agreement
shall be in  writing  and  shall be  deemed  to have  been  duly  given  only if
delivered to the addressee in person or mailed by certified mail, return receipt
requested,  to the ddress as  included in the  Company's  records or to any such
other  address as the party to receive  the  notice  shall  advise by due notice
given in accordance with this paragraph.

                                   ARTICLE XIV
                                     BENEFIT

         This  Agreement  shall inure to, and shall be binding upon, the parties
hereto,  the successors  and assigns of the Company,  and the heirs and personal
representatives of the Employee.

                                   ARTICLE XV
                                     WAIVER
<PAGE>

         The waiver by either party of any breach or violation of any  provision
of  this  Agreement  shall  not  operate  or be  construed  as a  waiver  of any
subsequent breach of construction and validity.

                                   ARTICLE XVI
                                  GOVERNING LAW

         This  Agreement  has been  negotiated  and executed in the State of New
York, and New York law shall govern its construction and validity.

                                  ARTICLE XVII
                                  JURISDICTION

         Any or all actions or  proceedings  which may be brought by the Company
or  Employee  under this  Agreement  shall be  brought in courts  having a situs
within the State of New York and Employee hereby consents to the jurisdiction of
any local, state or federal court located within the State of New York.


                                  ARTICLE XVIII
                                ENTIRE AGREEMENT

         This  Agreement  contains  the entire  agreement  between  the  parties
hereto. No change, addition or amendment shall be made hereto, except by written
agreement sign d by the parties hereto.

                                   ARTICLE XIX
                                  CONSTRUCTION

          he parties  intend  for the  provisions  of  Articles V and VI of this
agreement  to be  construed,  interpreted,  and  enforced to the maximum  extent
permitted  by law.  The  parties  acknowledge  and  agree  that  they  have both
participated  in the preparation of this Agreement and it shall not be construed
or  interpreted  against  either party on the basis that it was prepared by such
party.  In the event that any  provision  of Articles V or VI, or part  thereof,
shall be  determined  by any  court of  competent  jurisdiction  to be  invalid,
illegal, or unenforceable in any respect for any reason, such provision shall be
revised  and/or  interpreted to make it enforceable to the maximum extent in all
other  respects as to which it may be  enforceable,  all as  determined  by such
court in such action.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
affixed their hands and seals the day and year first above written.

AGREED AS TO SHARES
HOLLYWOOD PRODUCTIONS, INC.
BREAKING WAVES, INC.
By:
        ---------------------

By:
Harold Rashbaum
Harold Rashbaum

Secretary
President

tion of Employment Agreement with Robert Melillo.
<PAGE>