SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 13, 1994
CAROLCO PICTURES INC.
(Exact name of registrant as specified in its charter)
Delaware 1-9264 95-406437
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
Incorporation)
8800 Sunset Boulevard, 90069
Los Angeles, California
(Address of principal
executive offices) (zip code)
Registrant's telephone number, including area code:
(310) 859-8800
N/A
(Former name or former address, if changed since last report)
Exhibit Index at page 6
Page 1 of 6 pages<PAGE>
Item 5. Other Events.
A. Termination of Proposed Merger with LIVE Entertainment Inc.
LIVE Entertainment Inc., a Delaware corporation ("LIVE"),
Carolco Acquisition Corp., a wholly owned subsidiary of LIVE
("CAC") and Carolco Pictures Inc., a Delaware corporation
("Carolco") entered into a Termination Agreement dated as of
October 13, 1994 (the "Termination Agreement") providing for
the termination of that certain Agreement and Plan of Merger
dated as of August 10, 1994 by and among LIVE, CAC and Carolco
(the "Merger Agreement") and the abandonment of the proposed
merger contemplated thereby. The Termination Agreement also
provides for the termination of all rights and obligations of
the parties under the Merger Agreement and the mutual release
by the parties of all claims of any kind or nature, by reason
of or with respect to the Merger Agreement.
B. Consummation of Interim Financing Arrangements.
Carolco has recently consummated certain interim financing
arrangements which provided Carolco with additional cash of
approximately $18.5 million. The arrangements consist of the
following transactions:
1. Carolco Production Services Inc., an indirect wholly-
owned subsidiary of Carolco ("CPSI"), and Chargetex 6,
S.A., an affiliate of the French company Chargeurs
("Chargetex"), entered into a Purchase and Sale Agreement
dated as of October 18, 1994 whereby CPSI transferred to
Chargetex all of its rights in the motion picture Showgirls,
which commenced principal photography on October 23. The
purchase price consisted of (i) the reimbursement of CPSI's
and/or Carolco's direct costs incurred in connection with the
development and production of the motion picture through the
date the rights in the picture were transferred to Chargetex
and (ii) the assumption by Chargetex of all of CPSI's and/or
Carolco's obligations relating to the development and
production of the motion picture. Approximately $8.9 million
was paid by Chargetex upon closing of the transaction with
additional amounts to be paid as accountings are provided to
Chargetex. CPSI will be entitled to a percentage of the
adjusted gross receipts from the exploitation of the completed
motion picture after Chargetex has recouped certain costs and
expenses incurred in connection with the motion picture plus
an additional $10 million. Pursuant to a separate agreement
between CPSI and Chargetex dated as of October 18, 1994, CPSI
was granted an option to purchase at any time until February
28, 1995 a 50% interest in all adjusted gross revenues that may
be derived by Chargetex from the distribution and exploitation
of the motion picture and the ancillary rights therein. CPSI
may exercise such option by paying Chargetex an amount equal to
50% of the direct out-of-pocket expenses (plus interest
thereon) incurred by Chargetex in connection with Showgirls
through the time CPSI exercises such option. Upon exercise of
such option, CPSI will assume an undivided 50% responsibility
for all Chargetex's executory obligations in connection with
Showgirls and will assume and pay 50% of all subsequent costs
relating to the production of the motion picture as and when
due. In addition,
Page 2 of 6 pages
<PAGE>
as a condition to CPSI's right to exercise such option, CPSI
will be required to post security reasonably adequate to
Chargetex to secure CPSI's obligations.
2. Pioneer LDCA, Inc. ("PLDCA"), Pioneer LDC, Inc., an
affiliate of PLDCA, and Carolco entered into an Agreement
dated as of October 14, 1994 pursuant to which Carolco received
approximately $6.7 million in payments that will be due under
licenses of Cliffhanger and Terminator 2: Judgment Day in
Japan. PLDCA and its affiliates own approximately 41.2% of
Carolco's voting stock.
3. Carolco and RCS Video International Services B.V. ("RCS")
entered into a Waiver, Assignment and Acknowledgment Agreement
dated as of October 14, 1994 (the "RCS Waiver Agreement")
whereby RCS waived certain conditions subject to which RCS was
required to purchase Carolco 7% Subordinated Notes (the "7%
Notes") in December 1994 under that certain Standby Agreement
by and among Carolco, RCS, Cinepole Productions B.V.
("Cinepole"), Le Studio Canal+ ("Le Studio"), PLDCA and Tele-
Communications, Inc. ("TCI") (the "Standby Agreement"). In
exchange for the accommodations by RCS, the parties agreed to
reduce the principal amount of 7% Notes to be purchased by RCS
under the Standby Agreement from $2.5 million to $1 million and
RCS agreed to purchase a portion of Carolco's interest in the
motion picture Cutthroat Island for $1.5 million on terms that
are no less favorable than those applicable to TCI and Le
Studio in that certain Co-Production Financing Commitment
Agreement dated as of August 9, 1993 by and among Carolco, Le
Studio and TCI.
Carolco obtained a bank loan from Credit Lyonnais Bank
Nederland N.V. ("CLBN") for approximately $1 million, and as
security for such loan, Carolco assigned to CLBN its right to
receive RCS' payment for 7% Notes due in December 1994. RCS
delivered a letter of credit to CLBN to secure its obligation
to purchase 7% Notes. RCS and its affiliates own approximately
5.7% of Carolco's voting stock.
4. Carolco and Le Studio Canal+ (U.S. ) ("Le Studio U.S.")
entered into an Amendment to Exclusive Agency Agreement dated
as of October 14, 1994 whereby Le Studio U.S. prepaid $2
million of sales commissions that are anticipated to be due to
Carolco in late 1994 for serving as the foreign sales agent for
the motion picture Stargate. Cinepole, an affiliate of Le
Studio Canal+, owns approximately 17% of Carolco's voting
stock.
A portion of the funds received from these interim financing
arrangements will be used to fund principal photography on
Cutthroat Island, which commenced in Malta at the end of
October. Carolco continues to work toward completing the steps
required to access the production loan for Cutthroat Island.
In the event Carolco is unable to access the Cutthroat Island
production loan on a timely basis and is unable to enter into
alternative financing arrangement for the production of the
film, it is likely that Carolco will be forced to cease
production of Cutthroat Island and Carolco may be unable to
meet its other obligations and may be unable to continue to
operate as a going concern.
Page 3 of 6 pages<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
The Exhibits listed below are filed as part of this Report.
Exhibit No. Description of Exhibit
10.1 Termination Agreement dated as of October 13,
1994 by and among LIVE Entertainment Inc.,
Carolco Acquisition Corp. and Carolco Pictures
Inc.
10.2 Waiver, Assignment and Acknowledgment Agreement
dated as of October 14, 1994 by and between
Carolco Pictures Inc. and RCS Video
International Services B.V.
99.1 Press Release dated October 13, 1994.
99.2 Press release dated October 24, 1994.
Page 4 of 6 pages<PAGE>
SIGNATURE
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.
CAROLCO PICTURES INC.
By: /s/ Robert W. Goldsmith
Robert W. Goldsmith,
Senior Vice President,
General Counsel and Secretary
Date: November 4, 1994
Page 5 of 6 pages <PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
10.1 Termination Agreement dated as of October 13,
1994 by and among LIVE Entertainment Inc.,
Carolco Acquisition Corp. and Carolco Pictures
Inc.
10.2 Waiver, Assignment and Acknowledgment Agreement
dated as of October 14, 1994 by and between
Carolco Pictures Inc. and RCS Video
International Services B.V.
99.1 Press Release dated October 13, 1994.
99.2 Press release dated October 24, 1994.
Page 6 of 6 pages
TERMINATION AGREEMENT
This Termination Agreement (the "Agreement") is entered into as
of this 13th day of October, 1994, by and among LIVE
Entertainment Inc., a Delaware corporation ("LIVE"), Carolco
Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of LIVE ("CAC"), and Carolco Pictures Inc., a
Delaware corporation ("Carolco").
W I T N E S S E T H
WHEREAS, the parties hereto have entered into that certain
Agreement and Plan of Merger dated as of August 10, 1994 (the
"Merger Agreement");
WHEREAS, Section 11.1(a) of the Merger Agreement provides that
the Merger Agreement may be terminated and the proposed merger
contemplated (the "Merger") thereby abandoned by mutual consent
of LIVE and Carolco, as authorized by their respective Boards
of Directors; and
WHEREAS, the Boards of Directors of LIVE and Carolco deem it
desirable and in the best interest of their respective
corporations to terminate the Merger Agreement and abandon the
Merger.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants, and agreements herein
contained, the parties hereto hereby agree as follows:
1. Termination. Upon execution of this Agreement, each of
the parties hereto agrees that (i) the Merger Agreement shall,
automatically and without further action, terminate and be void
and of no further force and effect, (ii) all rights and
obligations of the parties under the Merger Agreement shall be
terminated, (iii) the Merger shall be abandoned, and (iv)
notwithstanding anything to the contrary contained in the
Merger Agreement, there shall be no further liability
thereunder on the part of Carolco, LIVE or CAC or their
respective officers or directors, except as set forth herein.
2. Fees and Expenses. All costs and expenses incurred in
connection with the Merger Agreement and the transactions
contemplated thereby shall be paid by the party which incurred
such costs and expenses, except that the legal fees and
expenses incurred through the date of this Agreement in
connection with the preparation of the draft registration
statement and proxy statement/prospectus relating to the Merger
will be shared equally by LIVE and Carolco. Promptly after
execution hereof, LIVE and Carolco shall agree on the total
amount of such fees and expenses.
3. Confidentiality; Return of Documents. Notwithstanding
the termination of the Merger Agreement, the parties hereto
agree to continue to abide by and be bound by the provisions
concerning confidentiality of non-public information and return
of documents set forth in Section 9.5 of the Merger Agreement.
4. Representations and Warranties. Each of LIVE and CAC
hereby, jointly and severally, represent and warrant to
Carolco, and Carolco hereby represents and warrants to LIVE and
CAC, as follows:
(a) Such corporation is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, has the requisite corporate power and authority to
own its property and carry on its business as now being
conducted, and is duly qualified to do business, and is in good
standing, in California.
(b) Such corporation has all requisite corporate power and
authority to enter into and execute this Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by such corporation, the
performance by such corporation of its obligations hereunder,
and the consummation by such corporation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of such corporation including,
without limitation, the approval of its Board of Directors, and
no other act or proceeding on the part of such corporation is
necessary to authorize the execution, delivery and consummation
of this Agreement or the transactions contemplated hereby.
(c) This Agreement has been duly and validly executed and
delivered by such corporation and (assuming the valid
authorization, execution and delivery of this Agreement by the
other parties hereto) constitutes a valid and binding
obligation of such corporation enforceable against such
corporation in accordance with its terms, except (i) as its
obligations may be affected by bankruptcy, insolvency,
reorganization, moratorium or similar laws, or by equitable
principles relating to or limiting creditors' rights generally,
and (ii) that the remedies of specific performance, injunction
and other forms of equitable relief are subject to certain
tests of equity jurisdiction, equitable defenses and the
discretion of the court before which any proceeding therefor
may be brought.
(d) The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, breach,
conflict with, or result in any violation of, any provision of
the Certificate of Incorporation or Bylaws of such corporation
(e) Such corporation has not assigned or in any other way
conveyed, transferred or encumbered all or any portion of any
Claims (as defined in Section 5 below) covered by the Mutual
Releases set forth in Section 5 below.
5. Mutual Release.
(a) As a condition of the termination of the Merger Agreement
and as a material inducement for the parties hereto to enter
into this Agreement:
(i) Each of LIVE and CAC, for themselves, their successors,
agents, affiliates and assigns, hereby fully and forever
waives, remises, releases, and discharges Carolco and its
affiliates, successors and assigns, agents, employees,
consultants, representatives, stockholders, officers, and
directors, past and present, from any and all rights,
obligations, claims, liabilities, losses, damages, causes of
action, actions, suits, demands, judgments, choses in action,
residual claims or other claims or actions of any kind
(collectively, "Claims"), if any, LIVE or CAC has had, may have
had, now has or hereafter can, shall or may have against
Carolco, of any kind or nature, by reason of or with respect to
(a) the Merger Agreement, (b) the Merger, (c) any and all
documents, filings, announcements or releases related to the
Merger Agreement or the Merger, and (d) any alleged third-party
beneficiary rights arising from the Merger Agreement or the
Merger (collectively, (a), (b), (c) and (d) are sometimes
referred to herein as the "Released Matters"); and
(ii) Carolco, for itself, its successors, agents, affiliates
and assigns, hereby fully and forever waives, remises,
releases, and discharges LIVE and CAC and their respective
affiliates, successors and assigns, agents, employees,
consultants, representatives, stockholders, officers, and
directors, past and present, from any and all Claims Carolco
has had, may have had, now has or hereafter can, shall or may
have against LIVE or CAC, of any kind or nature, by reason of
or with respect to the Released Matters.
(b) Notwithstanding anything to the contrary contained in
(a)(i) or (a)(ii) above, the Released Matters shall not include
any Claims in connection with or arising out of the litigation
currently pending in the Court of Chancery in the State of
Delaware, known as Ballan v. F.J. Afman, et al., Civil Action
No. 13435.
(c) Each of LIVE, CAC and Carolco acknowledges and agrees
that the releases set forth in (a)(i) and (a)(ii) above (the
"Mutual Releases") apply to all claims for losses, whether the
losses are known or unknown, foreseen or unforeseen, patent or
latent. Each of LIVE, CAC and Carolco expressly understands
and acknowledges that Section 1542 of the Civil Code of
California provides as follows:
"A general release does not extend to claims which
the creditor does not know or suspect to exist in
his favor at the time of executing the release
which, if known by him, must have materially
affected his settlement with the debtor."
(d) Each of LIVE, CAC and Carolco hereby specifically waives
any rights it may have under Section 1542 of the Civil Code of
California to the extent such section may be deemed applicable
to such party, as well as the provisions of all comparable,
equivalent, or similar statutes and principles of common law of
California, Delaware or any other jurisdiction and acknowledges
and agrees that this waiver is an essential term of this
Agreement. Each of LIVE, CAC and Carolco has been advised by
legal counsel and understands and acknowledges the significance
and consequences of the Mutual Releases and the specific waiver
of Section 1542 and similar laws. Each of LIVE, CAC and
Carolco understands and acknowledges that the significance and
consequence of the waiver of Section 1542 and similar laws is,
among other things, that even if it should suffer additional
losses arising out of the Released Matters, it will not be able
to make any claim for such losses. Furthermore, each of LIVE,
CAC and Carolco acknowledges that it intends these consequences
even as to claims for losses that may exist as of the date of
this Agreement but which it does not know exist, and which, if
known, would materially affect its decision to enter into the
Mutual Releases, regardless of whether its lack of knowledge is
the result of oversight, error, negligence, or any other cause.
(e) If any term or provision of the Mutual Releases is held
by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, (i) the remainder of the terms
and provisions of the Mutual Releases shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated, and (ii) to the fullest extent possible, the
provisions of the Mutual Releases (including, without
limitation, all portions of any section of the Mutual Releases
containing such provision held to be invalid, illegal or
unenforceable that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or
unenforceable; provided, however, that LIVE and CAC, on the one
hand, and Carolco, on the other hand, acknowledge and agree
that the releases set forth in (a)(i) and (a)(ii) above are
mutual, and in no event shall either the release set forth in
(a)(i) or the release set forth in (a)(ii) be construed in a
manner broader or more limited than the other release.
6. Governing Law. This Agreement and the rights of the
parties hereunder shall be governed by, and interpreted in
accordance with, the laws of the State of Delaware, regardless
of the laws of choice of law, or conflicts of law, of that or
any other jurisdiction.
7. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an
original; but such counterparts together shall constitute but
one and the same instrument.
8. Entire Agreement. This Agreement contains the entire
understanding of the parties hereto with respect to the subject
matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect
to such subject matter.
9. Additional Assurances. The parties hereto hereby
expressly agree to sign and execute any and all additional
documents and to use their best efforts to take any other
actions as may be reasonably necessary or appropriate to carry
out the intent of this Agreement.
IN WITNESS WHEREOF, LIVE, CAC and Carolco have caused this
Agreement to be signed by their respective officers thereunto
duly authorized all as of the date first written above.
LIVE ENTERTAINMENT INC.
By: /s/ Robert Denton
Name: Robert Denton
Title: Vice President
ATTEST:
/s/ Michael J. White
Name: Michael J. White
Title: Secretary
CAROLCO ACQUISITION CORP.
By: /s/ Steven E. Mangel
Name: Steven E. Mangel
Title: Senior Vice President
ATTEST:
/s/ Michael J. White
Name: Michael J. White
Title: Secretary
CAROLCO PICTURES INC.
By: /s/ Robert W. Goldsmith
Name: Robert W. Goldsmith
Title: Senior Vice President
ATTEST:
/s/ William Shpall
Name: William Shpall
Title: Executive Vice President
WAIVER, ASSIGNMENT AND ACKNOWLEDGMENT AGREEMENT
This Waiver, Assignment and Acknowledgment Agreement (the
"Agreement") is entered into as of the 14th day of October,
1994, by and between CAROLCO PICTURES INC., a Delaware
corporation (the "Company"), and RCS VIDEO INTERNATIONAL
SERVICES B.V., a Netherlands corporation ("RCS"), and is made
with reference to that certain Standby Purchase and Investment
Agreement dated as of July 29, 1993 (the "Standby Agreement")
by and among the Company, RCS, Cinepole Productions B.V.
("Cinepole"), Le Studio Canal+ ("Le Studio"), Pioneer LDCA,
Inc. ("Pioneer") and Tele-Communications, Inc. ("TCI").
Capitalized terms used herein without definition shall have the
respective meanings assigned such terms in the Standby
Agreement.
RECITALS
WHEREAS, the Company intends to sell all of its rights and
interests in and to the motion picture currently entitled
"Showgirls" pursuant to that certain Purchase Agreement
substantially in the form attached hereto as Exhibit "A" (the
"Showgirls Purchase Agreement"); and
WHEREAS, pursuant to that certain Agreement substantially in
the form attached hereto as Exhibit "B" (the "Pioneer
Agreement"), Pioneer LDC, Inc., a Japanese corporation and an
affiliate of Pioneer ("PLDC") has agreed to pay in advance
certain overages anticipated to be due from it pursuant to that
certain Lease Agreement dated as of November 25, 1991 (Contract
No. 3580/91) between PLDC and Atalanta Films Japan B.V.
("Atalanta") with respect to the motion picture entitled
"Cliffhanger" and certain overages anticipated to be due from
it pursuant to that certain Lease Agreement dated as of April
26, 1990 (Contract No. 2337/90) between PLDC and Atalanta with
respect to the motion picture entitled "Terminator 2: Judgment
Day"; and
WHEREAS, RCS Video Services Antilles N.V., a Netherlands
Antilles corporation, Pioneer, Cinepole and certain other
parties have agreed to enter into that certain Third Amended
and Restated Escrow Agreement substantially in the form
attached hereto as Exhibit "C" (the "Escrow Agreement"); and
WHEREAS, Le Studio Canal+ (U.S.), a California corporation, has
agreed to pay in advance certain commissions anticipated to be
due to the Company in its capacity as sales subagent with
respect to the motion picture entitled "Stargate" pursuant to
that certain Amendment to Exclusive Agency Agreement
substantially in the form attached hereto as Exhibit "D" (the
"Le Studio Agreement"); and
WHEREAS, pursuant to the Standby Agreement, RCS agreed to
purchase, and the Company agreed to issue and sell to RCS,
$2,500,000 in aggregate principal amount of the Company's 7%
Convertible Subordinated Notes due June 30, 2006 (the "7%
Notes") on December 30, 1994 subject to certain conditions; and
WHEREAS, the parties hereto desire to reduce the amount of RCS'
commitment to purchase $1,000,000 in aggregate principal amount
of 7% Notes, waive the conditions to funding set forth in the
Standby Agreement in order to enable the Company to obtain a
bank loan from Credit Lyonnais Bank Nederland N.V. ("CLBN") to
be repaid by RCS' payment for the 7% Notes and agree that RCS
will provide funding of $1,500,000 to the Company in the form
of a co-production commitment.
NOW, THEREFORE, in consideration of the mutual promises set
forth in this Agreement, the parties to this Agreement mutually
agree as follows:
1. Amendment, Waiver and Acknowledgment.
(a) Paragraph 2(a) of the Standby Agreement is hereby
amended in the following ways: (i) the number "$2,500,000"
set forth opposite "RCS" is hereby deleted and replaced with
the number "$1,000,000"; and (ii) the number "$20,000,000" set
forth opposite the term "Total" is hereby deleted and replaced
with the number "$18,500,000".
(b) RCS and the Company hereby acknowledge that the
conditions set forth in Paragraphs 6(a)(i), 6(a)(ii), 6(a)(iii)
and 6(b)(ii) of the Standby Agreement have been satisfied.
(c) RCS agrees to execute and deliver on the Effective
Date (as defined in Paragraph 6 below) an investment letter to
the Company in the form attached hereto as Exhibit "E". RCS
and the Company hereby acknowledge and agree that upon receipt
by the Company of such investment letter signed by RCS on the
Effective Date, the conditions set forth in Paragraphs 6(a)(iv)
and 6(c)(i) of the Standby Agreement will have been satisfied.
(d) Notwithstanding anything to the contrary in Paragraph
2(a) of the Standby Agreement or otherwise, (i) the sale to RCS
of 7% Notes that is contemplated pursuant to Paragraph 2(a) of
the Standby Agreement (as amended by this Agreement) shall
occur on the Effective Date, at which time such sale shall be
fully and completely effective, and (ii) the payment by RCS for
the 7% Notes in the amount of RCS' Note Commitment (the
"Payment Obligation") shall be due and payable from RCS on
December 30, 1994 (and RCS expressly waives the conditions to
the payment of such purchase price that are contained in
Paragraph 6(b)(i) of the Standby Agreement.)
2. Assignment of the Payment Obligation.
(a) The Company hereby assigns, transfers, conveys and
sets over unto CLBN for collateral purposes all of its right,
title and interest (but none of its obligations) in and to its
right to receive under Section 2(a) and 3 of the Standby
Agreement the sum equal to RCS' Note Commitment in respect of
the Payment Obligation. Each of the Company and RCS agrees to
execute and deliver to CLBN a Notice of Assignment and
corresponding Acknowledgment in substantially the forms
attached hereto as Exhibits "F" and "G", respectively
(collectively, the "Payment Instructions"), pursuant to which
the Company authorizes and directs RCS (and RCS agrees) to
remit the amounts due under the Payment Obligation directly to
CLBN in accordance with the Payment Instructions.
(b) The Company hereby constitutes and appoints CLBN as
its true, lawful and irrevocable attorney-in-fact with respect
to the Payment Obligation, to demand, receive and enforce
payments and to give receipts, releases and satisfactions and
to sue for all sums payable either in the name of the Company
or in the name of CLBN with respect to the Payment Obligation,
with the same force and effect that the Company could do if
this Paragraph 2 did not exist. Such power of attorney is
coupled with an interest and is therefore irrevocable without
the express prior written consent of CLBN. Each of the Company
and RCS further agrees that (i) CLBN has not assumed (and shall
not have any liability for) any obligations or liabilities of
the Company or any other person or entity under or arising out
of the Standby Agreement (as amended hereby), any related
agreements and/or the sale and purchase of the 7% Notes, and
(ii) CLBN shall have no obligation to exercise the power of
attorney set forth above (including without limitation for the
purpose of enforcing RCS' obligation to timely remit amounts
due under the Payment Obligation).
3. Letter of Credit. RCS hereby agrees to cause to be issued
and delivered to CLBN on the Effective Date a letter of credit
substantially in the form attached hereto as Exhibit "H" (the
"Letter of Credit") in connection with the collateral
assignment of the Payment Obligation to CLBN.
4. Satisfaction of Payment Obligation. The Company hereby
agrees, and CLBN hereby acknowledges, that in the event the
Letter of Credit is drawn in its entirety, RCS shall be deemed
to have fully and completely satisfied the Payment Obligation,
which Payment Obligation shall thereupon be extinguished.
5. Additional Investment. RCS hereby commits to make available
$1,500,000 as a co-production investment in the motion picture
entitled "Cutthroat Island" on December 30, 1994 on terms that
are no less favorable than those applicable to TCI and Le
Studio in that certain Co-Production Financing Commitment
Agreement dated as of August 19, 1993 by and among the Company,
Le Studio and TCI.
6. Effective Date. This Agreement shall become effective when
all of the following conditions have been satisfied (the
"Effective Date"):
(a) The Showgirls Purchase Agreement shall have been
executed and delivered by the parties thereto;
(b) The Pioneer Agreement shall have been executed and
delivered by the parties thereto;
(c) The Escrow Agreement shall have been executed and
delivered by the parties thereto;
(d) The Le Studio Agreement shall have been executed and
delivered by the parties thereto; and
(e) RCS shall have received an executed and authenticated
certificate for $1,000,000 in aggregate principal amount of 7%
Notes in its name, which certificate shall contain the terms
and conditions referred to in the Standby Agreement.
7. Miscellaneous.
(a) This Agreement may be executed in any number of
counterparts, and by the parties hereto in separate
counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument.
(b) On and after the date hereof, each reference in the
Standby Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Standby
Agreement shall mean and be a reference to the Standby
Agreement as amended by the Agreement.
(c) It is hereby agreed that, except as specifically
provided herein, this Agreement does not in any way affect or
impair the terms and conditions of the Standby Agreement, and
all terms and conditions of the Standby Agreement are to remain
in full force and effect unless otherwise specifically amended,
waived or changed pursuant to the terms and conditions of this
Agreement.
(d) The descriptive headings of the several Paragraphs of
this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
(e) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable
principles of conflicts of law.
(f) Subject to the immediately succeeding sentence, this
Agreement is entered into for the express benefit of the
parties hereto only and is not intended, and shall not be
deemed, to create in any other person any rights or interest
whatsoever, including any rights as third party beneficiary.
Notwithstanding the foregoing, CLBN is an express third party
beneficiary of this subparagraph (f), Paragraphs 1, 2, 3 and
7(g) hereof.
(g) This Agreement may not be amended, supplemented,
waived or otherwise modified other than pursuant to a written
instrument executed by the Company and RCS (and consented to by
CLBN in its sole and absolute discretion); provided, however,
that amendments to Paragraphs 1(a), 2 and 5 of this Agreement
must also be consented to by Le Studio, Pioneer, Cinepole and
TCI.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
CAROLCO PICTURES INC.
By: /s/ Robert W. Goldsmith
Title: Senior Vice President
RCS VIDEO INTERNATIONAL SERVICES B.V.
By: /s/ Paul D. Downs
Title: Attorney-in-fact
The undersigned hereby consent to the assignments of rights
under and the modifications, waivers and amendments of the
Standby Agreement effectuated by this Agreement and to the
additional investment contemplated by Paragraph 5:
LE STUDIO CANAL+
By: /s/ Olivier Granier
Title: President and COO
PIONEER LDCA, INC.
By: /s/ Yosuke Kobayashi
Title: President
CINEPOLE PRODUCTIONS B.V.
By: /s/ Dominique Jeunot
Title: Co-Managing Director
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
Title: Executive Vice President
ACKNOWLEDGED AND AGREED:
CREDIT LYONNAIS BANK NEDERLAND N.V.
By: /s/ Henk Dekejizer
Title: Executive Vice President
<PAGE>
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.
CAROLCO PICTURES INC.
By:
Title:
RCS VIDEO INTERNATIONAL SERVICES B.V.
By:
Title:
The undersigned hereby consent to the assignments of rights
under and the modifications, waivers and amendments of the
Standby Agreement effectuated by this Agreement and to the
additional investment contemplated by Paragraph 5:
LE STUDIO CANAL+
By:
Title:
PIONEER LDCA, INC.
By:
Title:
CINEPOLE PRODUCTIONS B.V.
By:
Title:
TELE-COMMUNICATIONS, INC.
By:
Title:
ACKNOWLEDGED AND AGREED:
CREDIT LYONNAIS BANK NEDERLAND N.V.
By: /s/ Charles Rosner
Title: Managing Director
For Immediate Release:
10.13.94
Contacts:
LIVE
Michael J. White
Executive Vice President and
General Counsel
818-778-3202
CAROLCO
Mitch Stoller
Ogilvy Adams & Rinehart
212-880-5285
CAROLCO PICTURES INC. AND LIVE ENTERTAINMENT INC.
ANNOUNCE TERMINATION OF MERGER AGREEMENT
Los Angeles, California - Carolco Pictures Inc. and LIVE
Entertainment Inc. jointly announced today (13) that they had
agreed to terminate the Merger Agreement between the two
companies and all discussions regarding a possible business
combination.
In a joint statement, Mario Kassar, Chairman of the Board and
Chief Executive Officer of Carolco, and Roger Burlage,
President and Chief Executive Officer of LIVE, commented, "We
are disappointed that a number of factors, many of which were
beyond our control, have resulted in our joint agreement to
call off the merger of our two companies. Our focus now will
be to concentrate our efforts on the continuing operations and
finances of our separate businesses."
Carolco Pictures Inc. is an entertainment company engaged in
the financing, production and leasing of motion pictures
worldwide.
LIVE Entertainment Inc. is a diversified entertainment software
supplier, distributor and retailer, headquartered in Los
Angeles, California. LIVE is the parent company of L.A.-based
LIVE Home Video, a leading supplier of home video entertainment
products.
###
Contact: Mitch Stoller
Ogilvy Adams & Rinehart
(212) 557-0100
CAROLCO PICTURES ANNOUNCES CONSUMMATION OF
INTERIM FINANCING ARRANGEMENTS
LOS ANGELES, October 24, 1994 -- Carolco Pictures Inc.
announced today that it has consummated its previously
announced interim financing arrangements. As part of such
interim financing, Carolco transferred its rights in the motion
picture Showgirls, which is scheduled to commence principal
photography within the next week, to an affiliate of the French
company Chargeurs. In addition, an affiliate of Pioneer LDCA,
Inc. pre-paid certain payments that will be due under licenses
of "Cliffhanger" and "Terminator 2: Judgment Day" in Japan;
RCS Video International Services B.V. waived certain conditions
subject to which RCS is required to purchase Carolco's 7%
Convertible Subordinated Notes in December 1994 which enabled
Carolco to borrow against a portion of the anticipated proceeds
from such sale and Le Studio Canal+ prepaid certain sales
commissions that will be due to Carolco later this year for
serving as the foreign sales agent for the motion picture
Stargate. The combination of all of these transactions will
provide Carolco with additional cash of approximately $18.5
million.
Carolco is currently in active pre-production on Cutthroat
Island which is scheduled to start principal photography on
location in Malta at the end of October. In addition to
closing the interim financing arrangements, Carolco continues
to work toward completing the steps required to access the
production loan for Cutthroat Island. In the event Carolco is
unable to access the Cutthroat Island production loan on a
timely basis and is unable to enter into alternative financing
arrangement for the production of the film, it is likely that
Carolco will be forced to cease production of Cutthroat Island
and Carolco may be unable to meet its other obligations and may
be unable to continue to operate as a going concern.
Pioneer LDCA, Inc. and its affiliates own approximately 41.2%
of Carolco's voting stock; Cinepole Productions B.V., an
affiliate of Le Studio Canal+, owns approximately 17% of
Carolco's voting stock and RCS and its affiliates own
approximately 5.7% of Carolco's voting stock. MGM Holdings
Corporation, an affiliate of Metro-Goldwyn-Mayer Inc., owns
approximately 18.5% of Carolco's voting stock.
Carolco is an entertainment company engaged in the financing,
production and leasing of motion picture properties worldwide
and is headquartered in Los Angeles, California.
# # #
