CAROLCO PICTURES INC, SC 13D/A, 1994-08-22

CAROLCO PICTURES INC
SC 13D/A, 1994-08-22
MOTION PICTURE & VIDEO TAPE PRODUCTION

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 2)

Carolco Pictures Inc.
(Name of Issuer)

Common Stock, $.01 par value per share

(Title of Class of Securities)

143763-10-0

(CUSIP Number)
Mr. Rene-Claude with copies to:
Jouannet David G. Johnson, Esq.
Credit Lyonnais White & Case
19 Boulevard des 633 W. 5th Street,
Italiens Suite 1900
75002 Paris Los Angeles, CA 90071
France (213) 620-7700
011-331-42-95-7000

(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)

August 11, 1994
____________________________________________________________
(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box (__).
____________

Check the following box if a fee is being paid with this statement (__).

SCHEDULE 13D
<TABLE>

CUSIP No. 143763-10-0 Page 2 of __ Pages

<S> <C>

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MGM Holdings Corporation
<PAGE>
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (x)
(b) ( )

3 SEC USE ONLY

4 SOURCE OF FUNDS
AF; WC: See discussion in Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(E) ( )

6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware

<S> <C> <C>
NUMBER OF SHARES BENEFICIALLY 7 SOLE VOTING POWER
OWNED BY EACH REPORTING PERSON 0
WITH
8 SHARED VOTING POWER
Common Stock: 103,634,448
See discussion in Items 4 and 5

9 SOLE DISPOSITIVE POWER
0

10 SHARED DISPOSITIVE POWER
Common Stock: 103,634,448
See discussion in Items 4 and 5

<S> <C>

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Common Stock: 103,634,448
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Common Stock 42.5%

14 TYPE OF REPORTING PERSON
CO

</TABLE>

<TABLE>

SCHEDULE 13D

<CAPTION>
CUSIP No. 143763-10-0 Page 3 of __ Pages

<S> <C>

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Credit Lyonnais International Services
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (x)
(b) ( )

3 SEC USE ONLY
<PAGE>
4 SOURCE OF FUNDS

AF; WC: See discussion in Item 3

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED ( )
PURSUANT TO ITEMS 2(d) or 2(E)

6 CITIZENSHIP OR PLACE OF ORGANIZATION

France
<S> <C> <C>

NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 0
OWNED BY EACH
8 SHARED VOTING POWER
REPORTING PERSON
Common Stock: 103,634,448
WITH
See discussion in Items 4 and 5
9 SOLE DISPOSITIVE POWER
0

10 SHARED DISPOSITIVE POWER
Common Stock: 103,634,448
See discussion in Items 4 and 5

<S> <C>
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

Common Stock: 103,634,448

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ( )

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

Common Stock 42.5%

14 TYPE OF REPORTING PERSON

</TABLE>

<TABLE>

SCHEDULE 13D

CUSIP No. 143763-10-0 Page 4 of __ Pages

<S> <C>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Credit Lyonnais

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (x)
(b) ( )

3 SEC USE ONLY
<PAGE>
4 SOURCE OF FUNDS

AF; WC: See discussion in Item 3

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED ( )
PURSUANT TO ITEMS 2(d) or 2(E)

6 CITIZENSHIP OR PLACE OF ORGANIZATION

France
<S> <C> <C>

NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 0
OWNED BY EACH
8 SHARED VOTING POWER
REPORTING PERSON
Common Stock: 103,634,448
WITH
See discussion in Items 4 and 5
9 SOLE DISPOSITIVE POWER
0

10 SHARED DISPOSITIVE POWER
Common Stock: 103,634,448
See discussion in Items 4 and 5

<S> <C>
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

Common Stock: 103,634,448

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ( )

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

Common Stock 42.5%

14 TYPE OF REPORTING PERSON

</TABLE>

This Amendment No. 2 is filed on behalf of MGM Holdings
Corporation ("MGM Holdings"), Credit Lyonnais International Services
("CLIS") and Credit Lyonnais (collectively with MGM Holdings and CLIS, the
"Reporting Persons") and amends items 2, 3, 4, 5, 6 and 7 of the initial
Statement dated September 7, 1993, filed by the Reporting Persons with
respect to Series A Convertible Preferred Stock, par value $1.00 ("CPI
Preferred Stock"), and Common Stock, par value $.01 ("CPI Common Stock"),
of Carolco Pictures, Inc. ("CPI") as amended by Amendment No. 1 filed with
the Commission on November 1, 1993 (the "Schedule 13D"). This Amendment
No. 2 is filed to disclose material developments in regard to the
securities of Carolco resulting from the proposed merger of Carolco and
another corporation, as more fully described herein, and related matters.

Item 2. Identity and Background.

Schedules I and II are amended to read as the attached Schedules
I and II.

Item 3. Source and Amount of Funds or Other Consideration.

Item 3 is hereby amended and supplemented as follows:
<PAGE>
The information set forth in Item 4 hereof is hereby incorporated
herein by reference.

Item 4. Purpose of Transaction.

Item 4 is hereby amended and supplemented as follows:

Pursuant to an Agreement and Plan of Merger, dated as of August
10, 1994, among LIVE Entertainment Inc. ("LIVE"), CPI and Carolco
Acquisition Corp., a wholly-owned subsidiary of LIVE ("CAC"), a copy of
which is attached hereto as Exhibit A (the "Merger Agreement"), among other
things, (i) CAC will be merged with and into CPI and CPI will become a
wholly-owned subsidiary of LIVE (the "Merger"), (ii) LIVE will be renamed
"Carolco Entertainment Inc." ("CEI"), (iii) every 5.5 shares of CPI Common
Stock (subject to adjustments in certain events) will be converted into one
share of common stock, par value of $.01 per share, of CEI ("CEI Common
Stock"), (iv) every share of CPI Preferred Stock held by MGM Holdings will
be converted into a share of CEI Series D Preferred Stock, par value $1.00
("CEI Preferred Stock"), (v) the CPI Common Stock will be delisted from the
New York Stock Exchange and become eligible for termination of registration
pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (vi) the board of directors of CEI will
consist of 21 members as designated in the Merger Agreement, (vii) the
management of CEI will be as designated in the Merger Agreement and (viii)
the Certificate of Incorporation and Bylaws of each of CPI and LIVE will be
amended as provided in the Merger Agreement.

As a condition to LIVE, CAC and CPI entering into the Merger
Agreement, CPI requested and, on August 11, 1994, MGM Holdings agreed to
enter into an Investor Representation Agreement, dated as of August 10,
1994, a copy of which is attached hereto as Exhibit B (the "Investor
Representation Agreement"). In the Investor Representation Agreement, MGM
Holdings (i) represented to LIVE and CPI that, as of August 10, 1994, it
had no plan or intention to, and (ii) agreed that, prior to the effective
date of the Merger (the "Effective Date"), it will not form a plan or
intention to enter into an arrangement to sell, transfer or otherwise
dispose of any share of CEI Common Stock or CEI Preferred Stock to be
received in the Merger by MGM Holdings. The Investor Representation
Agreement also provides, among other things, that MGM Holdings (i) on or
prior to the Effective Date, will not sell, transfer or otherwise dispose
of any of its shares of CPI Common Stock or CPI Preferred Stock; (ii) until
the Effective Date, will not (A) grant a proxy with respect to, or
otherwise encumber, any of its shares of CPI Common Stock or CPI Preferred
Stock, (B) acquire any additional shares of CPI Common Stock or CPI
Preferred Stock unless MGM Holdings executes an amendment whereby such
additional shares become subject to the Investor Representation Agreement,
(C) deposit any of its shares of CPI Common Stock or CPI Preferred Stock
into a voting trust or similar arrangement; and (iii) will vote all of its
shares of CPI Common Stock or CPI Preferred Stock in favor of the Merger
and the transactions contemplated thereby. The Investor Representation
Agreement terminates upon the earlier to occur of (i) the Effective Date
and (ii) the termination of the Merger Agreement pursuant to its terms, but
in no event later than December 31, 1994, unless an extension of such date
is agreed to by MGM Holdings.

Pursuant to the Merger Agreement and the transactions
contemplated thereby, the 5% Notes, of which MGM Holdings owns $30,000,000
in aggregate principal amount (plus interest amounts paid in-kind, under
the terms of the issuance of the 5% Notes) will be assumed by CEI and CPI,
as joint and several obligors, pursuant to an Amended and Restated
Indenture. The 5% Notes will be convertible to CEI Common Stock pursuant
to the terms of such Amended and Restated Indenture.

In order to effectuate the transactions contemplated by the
Merger Agreement, MGM Holdings and the Strategic Investors entered into
several agreements amending and restating their agreements entered into in
<PAGE>
connection with the Restructuring in order to maintain similar corporate
governance controls in respect of CEI and to maintain their mutual
obligations in respect of the ownership and transfer of CEI securities.
Descriptions of such agreements are included herein in Item 6 and are
hereby incorporated by reference to this Item 4. These descriptions are
only a brief summary of such agreements, and are qualified in their
entirety by reference to the agreements which are attached hereto as
Exhibits and incorporated herein by reference.

Item 5. Interest in Securities of the Issuer.

Item 5 is hereby amended and supplemented as follows:

(a) Credit Lyonnais, CLIS and MGM Holdings may be deemed
beneficially to own:
<TABLE>

Title of Class Number of Shares Percent of Class

CPI Common Stock 51,770,390<F1> 21.2

CPI Common Stock 51,864,058<F2> 21.2

TOTAL 103,634,448 42.5<F3>

<F1> These shares may be acquired upon the conversion of 30,000 shares of CPI Preferred Stock and dividends accumulated as
of June 30, 1994.

<F2> These shares may be acquired upon the conversion of 5% Notes.

<F3> Does not foot due to rounding.
</TABLE>

<TABLE>

BY CANAL +

<CAPTION>
Title of Class Number of Shares Percent of Class

CPI Common Stock 26,100,032 15.8
CPI Common Stock 21,570,996<F1> 13.1

TOTAL 47,671,028 28.9

<F1> These shares may be acquired upon the conversion of 12,500 shares of CPI Preferred Stock and dividends accumulated as
of June 30, 1994.

</TABLE>

<TABLE>

BY PIONEER

<CAPTION>
<PAGE>
Title of Class Number of Shares Percent of Class

<S> <C> <C>
CPI Common Stock 46,420,574 22.5

CPI Common Stock 69,027,187<F1> 33.4

CPI Common Stock 2,643,109<F2> .1
CPI Common Stock 500,001<F3> .0

TOTAL 118,590,872 57.4<F4>
<F1> These shares may be acquired upon the conversion of 40,000 shares of CPI Preferred Stock and dividends accumulated as
of June 30, 1994.
<F2> These shares are subject to a pledge agreement which does not satisfy the conditions set forth in SEC Rule 13-3(d)(3).
<F3> These shares may be acquired upon the exercise of an option.
<F4> Does not foot due to rounding.

</TABLE>

(c) Since the date of the Restructuring, CPI has made three
interest payments on the 5% Notes issued to MGM Holdings in an aggregate
amount of $1,117,763.67. These included payments of $354,166.67,
$379,427.08 and $384,169.92 on January 15, 1994, April 15, 1994 and July
14, 1994, respectively. CPI has elected to make such payments in-kind in
the form of additional securities. By their terms, the securities are
convertible to approximately 1,864,058 shares of CPI Common Stock. The
payments were made by mail to the offices of MGM Holdings.

Since the date of the Restructuring, dividends have accrued, but
have not been paid, on the CPI Preferred Stock issued to MGM Holdings,
Canal+ and Pioneer. As of June 30, 1994, such accrued but unpaid dividends
would, if converted to CPI Common Stock, equal 1,770,390 shares for MGM
Holdings, 737,663 shares for Canal+ and 2,360,521 shares for Pioneer.

Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.

Item 6 is hereby amended and supplemented as follows:

The information set forth in Items 4 and 5 hereof is hereby
incorporated herein by reference.

(a) Amended and Restated Put and Call Agreement (Exhibit C).

MGM Holdings, Credit Lyonnais and Cinepole entered into the
Amended and Restated Put and Call Agreement, dated as of August 10, 1994,
the form of which is attached hereto as Exhibit C, (the "Amended Put and
Call Agreement"). The Amended Put and Call Agreement restates the
agreement set forth between the parties in the Put and Call Agreement in
respect of the CPI securities to be converted to CEI securities pursuant to
the Merger.

(b) 1994 Stockholders Agreement (Exhibit D).

MGM Holdings, Cinepole, Pioneer, RCS and New CIBV entered into an
amended and restated Stockholders Agreement, dated as of August 10, 1994,
the form of which is attached hereto as Exhibit D (the "1994 Stockholders
Agreement"). The 1994 Stockholders Agreement restates with respect to CEI
the corporate governance provisions agreed upon in the Stockholders
Agreement with respect to CPI. Each party to the 1994 Stockholders
Agreement agrees to form a Director Pool (as defined therein) to maintain
in the governance of CEI the corporate governance arrangements as agreed
among the parties therein in respect of CPI.
<PAGE>

The 1994 Stockholders Agreement also restates with respect to CEI
securities the provisions of the Stockholders Agreement regarding the
purchase and sale of CPI securities by the parties thereto.

MGM Holdings and the Strategic Investors entered into an
Agreement in respect of the Subordination Agreement, dated as of August 10,
1994, the form of which is attached hereto as Exhibit E (the "Subordination
Amendment"). The parties thereto agreed to apply the terms and conditions
of the Subordination Agreement to the CEI Common Stock to be acquired by
each of them in connection with the Merger.

Item 7. Material to be Filed as Exhibits.

EXHIBIT A Merger Agreement

EXHIBIT B Investor Representation Agreement

EXHIBIT C Amended and Restated Put and Call Agreement

EXHIBIT D 1994 Stockholders Agreement

EXHIBIT E Subordination Amendment

EXHIBIT F Joint Filing Statement Pursuant to Rule 13d-
1(f)1(iii)
Signature

After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.

August 22, 1994
(Date)

MGM HOLDINGS CORPORATION

/s/ G.E. Dufour
________________________________
(Signature)

G.E. Dufour Secretary
________________________________
(Name/Title)

Signature

After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.

August 22, 1994

(Date)
<PAGE>
CREDIT LYONNAIS INTERNATIONAL
SERVICES

/s/ Michel Severe
________________________________
(Signature)

M. Severe Attorney-in-fact
________________________________
(Name/Title)

Signature

After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.

August 22, 1994
(Date)

CREDIT LYONNAIS

/s/ G.E. Dufour
________________________________
(Signature)

G.E. Dufour Gen. Manager E.I.F.
________________________________
(Name/Title)

Schedule I

Each person named below is a director or executive officer of MGM
Holdings, whose principal business is described under Item 2 above. Except
as otherwise set forth below, the principal business address of each person
is the address of MGM Holdings set forth in Item 2 above.
<TABLE>

Present principal occupation or employment;
name, principal business and address of any
corporation or other organization in which
such employment is conducted if other than
Name Citizenship MGM Holdings.
<S> <C> <C>

Rene-Claude Jouannet France President and Treasurer of MGM Holdings,
Director of MGM Holdings, Directeur Adjoint
of International Affairs of Credit Lyonnais
<PAGE>
Guy-Etienne Dufour France Secretary of MGM Holdings, Directeur Adjoint
of International Affairs of Credit Lyonnais

</TABLE>

Schedule II

Each person named below is a director or executive officer of
CLIS, whose principal business is described under Item 2 above. Except as
otherwise set forth below, the principal business address of each person is
the address of CLIS set forth in Item 2 above.
<TABLE>

<CAPTION>
Present principal occupation or employment;
name, principal business and address of any
corporation or other organization in which
such employment is conducted if other than
Name Citizenship CLIS.

Michel Severe France Attorney-in-fact, Relationship Manager for
Subsidiaries Department of Credit Lyonnais

Genevieve Martin maiden France Director, Relationship Manager for
Jacquier Subsidiaries Department of Credit Lyonnais

Pierre Vanden Broeck France Director, Relationship Manager for
Subsidiaries Department of Credit Lyonnais

Josette Novel France Director, Relationship Manager for
Subsidiaries Department of Credit Lyonnais

Gabriel Apelojg France Attorney-in-fact, Relationship Manager for
Subsidiaries Department of Credit Lyonnias

Pascal Bloch France Attorney-in-fact, Relationship Manager for
Subsidiaries Department of Credit Lyonnias

</TABLE>

INDEX TO EXHIBITS
<TABLE>

Exhibit Title of Document

<S> <C>
A Agreement and Plan of Merger, dated as of August 10, 1994, among LIVE, CPI and
Carolco.

B MGM Inventor Representation Agreement, dated as of August 10, 1994, among MGM
Holdings, LIVE and CPI.

C Amended and Restated Put and Call Agreement, dated as of August 10, 1994, among MGM
Holdings, Credit Lyonnais and Cinepole.
<PAGE>
D 1994 Stockholders Agreement, dated as of August 10, 1994, among MGM Holdings,
Cinepole, Pioneer, RCS and New CIBV.

E Agreement in respect of the Subordination Agreement, dated as of August 10, 1994,
among MGM Holdings, Pioneer, Cinepole and RCS.

F Joint Filing Statement Pursuant to Rule 13d-1(f)1(iii).

</TABLE>

Appendices included pursuant to Regulation S-T
item 101(a)(2)(ii)

The Reporting Persons, pursuant to Regulation S-T item 101(a)(2)(ii),
hereby include in the filing of this Amendment No. 2 the original Schedule
13D ("Schedule 13D"), filed with the Commission September 7, 1993 and
Amendment No. 1 ("Amendment No. 1") filed with the Commission November 1,
1993.

Appendix I Schedule 13D

Appendix II Amendment No. 1

Appendix I
to Amendment
No. 2

Schedule 13D

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. __)

Carolco Pictures Inc.
(Name of Issuer)

Series A Preferred Convertible Preferred Stock, par value $1.00

Common Stock, par value $.01 par value per share

(Title of Class of Securities)

143763-10-0

(CUSIP Number)

Mr. Rene-Claude Jouannet
Credit Lyonnais
19 Boulevard des Italiens
75002 Paris
<PAGE>
France

(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)

* See below
____________________________________________________________
(Date of Event which Requires Filing of this Statement)

Check the following box if a fee is being paid with this statement (x).

*The reporting persons disclaim beneficial ownership and therefore any
obligation to file at this time and make this filing as a precautionary
manner in order to make their respective relationships to the issuer and
their membership in a group pursuant to Section 13(d)(3) of the Securities
Exchange Act of 1934 known.

<TABLE>

SCHEDULE 13D

CUSIP No. 143763-10-0 Page 2 of __ Pages

<S> <C>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

MGM Holdings Corporation

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (x)
(b) ( )

3 SEC USE ONLY

4 SOURCE OF FUNDS

WC; CO: See discussion in Item 3

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED ( )
PURSUANT TO ITEMS 2(d) or 2(E)

6 CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware

<S> <C> <C>
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH 0: See discussion in Items 4 and 5.
REPORTING PERSON WITH
8 SHARED VOTING POWER
0: See discussion in Items 4 and 5.
<PAGE>
9 SOLE DISPOSITIVE POWER
0: See discussion in Items 4 and 5.

10 SHARED DISPOSITIVE POWER
0: See discussion in Items 4 and 5.

<S> <C>
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

0: See discussion in Items 4 and 5.

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

14 TYPE OF REPORTING PERSON
CO

</TABLE>

<TABLE>

SCHEDULE 13D

CUSIP No. 143763-10-0 Page 3 of __ Pages

<S> <C>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Credit Lyonnais International Services

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (x)
(b) ( )

3 SEC USE ONLY
4 SOURCE OF FUNDS

WC; CO: See discussion in Item 3

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED ( )
PURSUANT TO ITEMS 2(d) or 2(E)

6 CITIZENSHIP OR PLACE OF ORGANIZATION

France
<S> <C> <C>

NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 0: See discussion in Items 4 and 5.
OWNED BY EACH
8 SHARED VOTING POWER
REPORTING PERSON
0: See discussion in Items 4 and 5.
WITH
9 SOLE DISPOSITIVE POWER
0: See discussion in Items 4 and 5.
<PAGE>
10 SHARED DISPOSITIVE POWER
0: See discussion in Items 4 and 5.

<S> <C>

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0: See discussion in Items 4 and 5.

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ( )

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

14 TYPE OF REPORTING PERSON
CO

</TABLE>

<TABLE>

SCHEDULE 13D

<CAPTION>
CUSIP No. 143763-10-0 Page 4 of __ Pages

<S> <C>

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Credit Lyonnais
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (x)
(b) ( )

3 SEC USE ONLY

4 SOURCE OF FUNDS

WC; CO: See discussion in Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED ( )
PURSUANT TO ITEMS 2(d) or 2(E)

6 CITIZENSHIP OR PLACE OF ORGANIZATION

France

<S> <C> <C>
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 0: See discussion in Items 4 and 5.
OWNED BY EACH
8 SHARED VOTING POWER
REPORTING PERSON
0: See discussion in Items 4 and 5.
WITH

9 SOLE DISPOSITIVE POWER
0: See discussion in Items 4 and 5.
10 SHARED DISPOSITIVE POWER
0: See discussion in Items 4 and 5.

<S> <C>
<PAGE>
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

0: See discussion in Items 4 and 5.

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ( )

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

14 TYPE OF REPORTING PERSON

</TABLE>

Item 1. Security and Issuer.

The titles of the classes of equity securities to which this
statement relates are as follows:

(i) Series A Convertible Preferred Stock, par value $1.00 ("New
Preferred"), of Carolco Pictures Inc. ("Carolco"); and

(ii) 5% Payment-in-kind Convertible Subordinated Notes due 2002
("5% Notes") of Carolco.

The name and address of the principal executive offices of
Carolco are:

Carolco Pictures Inc.
8800 Sunset Boulevard
Los Angeles, California 90069

All information contained in this Schedule 13D relating to Carolco, Pioneer
LCDA ("Pioneer"), Canal+ S.A. ("Canal+") or RCS Video International
Services B.V. ("RCS"), or any of their respective officers, directors,
stockholders, affiliates or subsidiaries is based upon publicly available
information or information provided by such person.

Item 2. Identity and Background.

The name, address and principal executive office of MGM Holdings
Corporation ("MGM Holdings") are:

MGM Holdings Corporation
19, boulevard des Italiens
75002 Paris
France

MGM Holdings is a holding company organized and existing under
the laws of the state of Delaware.

The attached Schedule I is a list of the executive officers and
directors of MGM Holdings which contains the following information with
respect to each such person: (i) name; (ii) business address; (iii)
present principal occupation or employment and the name, principal business
and address of any corporation or other organization in which such
employment is conducted; and (iv) place of citizenship.
<PAGE>
MGM Holdings is a wholly-owned subsidiary of Credit Lyonnais
International Services ("CLIS"), a corporation organized and existing under
the laws of France. The address of CLIS's principal executive office is:

19, boulevard des Italiens
75002 Paris
France

The attached Schedule II is a list of the executive officers and
directors of CLIS, which contains the following information with respect to
each such person: (i) name; (ii) business address; (iii) present principal
occupation or employment and the name, principal business and address of
any corporation or other organization in which such employment is
conducted; and (iv) place of citizenship.

CLIS is a wholly-owned subsidiary of Credit Lyonnais, a banking
institution organized and existing under the laws of France (collectively
with MGM Holdings and CLIS, the "Reporting Persons"). The address of
Credit Lyonnais' principal executive office is:

19, boulevard des Italiens
75002 Paris
France

During the last five years, none of the Reporting Persons or, to
the best knowledge of any of the Reporting Persons, any person named on
Schedule I, II or III hereto has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration.

The amount of funds to be used by MGM Holdings in making the
purchases of Preferred Stock and 5% Notes to which this statement relates
is, (i) with respect to Preferred Stock, $30,000,000, and (ii) with respect
to 5% Notes, $30,000,000. At this time, MGM Holdings has not determined
what the source of the funds to be used in making the purchases will be;
however, the source of funds will be CLIS, Credit Lyonnais or the working
capital of MGM Holdings.

Neither any reference herein to Preferred Stock or 5% Notes nor
the filing of this Schedule 13D shall be construed as an admission that at
this time any of the Reporting Persons is the beneficial owner of any
shares of Preferred Stock or any 5% Notes, and the Reporting Persons
disclaim beneficial ownership of any shares of Preferred Stock or any 5%
Notes at this time.

Item 4. Purpose of Transaction.

The purchases of Preferred Stock and 5% Notes to which this
statement relates are part of a financial restructuring that Carolco is
currently undertaking through either (i) the proposed exchange of certain
of Carolco's existing debt securities and preferred stock, as well as the
<PAGE>
cash sales of Preferred Stock and 5% Notes and the consummation of certain
related transactions (the "Restructuring"), or (ii) a prepackaged plan of
reorganization of Carolco pursuant to Chapter 11 of the United States
Bankruptcy Code, which would generally give effect to the same transactions
contemplated by the Restructuring (the "Prepackaged Plan"). It is
currently contemplated that the Restructuring will include the following
main elements:

(a) Carolco is offering to exchange up to an aggregate of (i)
$33,755,000 in principal amount of its 11.5%/10% Reducing Rate Senior
Notes due 2000, (the "New Senior Notes") for the $33,755,000 in
principal amount of the Company's 14% Senior Notes Due June 1, 1993
(the "14% Notes") outstanding and (ii) $16,145,000 in principal amount
of its 13%/12% Reducing Rate Senior Subordinated Notes due 1999, (the
"New Senior Subordinated Notes") for the $16,145,000 in principal
amount of Carolco's 13% Senior Subordinated Notes due December 1, 1996
(the "13% Notes") outstanding and not owned by Carolco. In connection
with the exchange, tendering holders of the 14% Notes will receive an
amount in cash equal to the amount of interest that would have accrued
on the New Senior Notes for the period of December 1, 1992, through
the date of issuance of the New Senior Notes. Tendering holders of
the 13% Notes will receive an amount 50% of which will consist of cash
and 50% of which will consist of additional New Senior Subordinated
Notes equal to the amount of interest that would have accrued on the
New Senior Subordinated Notes for the period of December 1, 1992
through the date of issuance of the new Senior Subordinated Notes.
Concurrently with the making of the offers to exchange the 13% Notes
and the 14% Notes, the Company is soliciting from the holders of the
13% Notes their consent to certain amendments to the indenture
pursuant to which the 13% Notes were issued and the wavier of certain
events of default under such indenture.

(c) Carolco, MGM Holdings, Cinepole Productions B.V. (an
affiliate of Canal+ ("Cinepole")), and Pioneer have entered into a
Securities Purchase Agreement, dated as of May 25, 1993 which was
amended by amendments dated as of July 29, 1993 and as of August 19,
1993 (the "Purchase Agreement"). A copy of the Purchase Agreement, as
amended is attached hereto as Exhibit A. Pursuant to the Purchase
Agreement, MGM Holdings will purchase from Carolco (i) 30,000 shares
of Preferred Stock at a purchase price of $1,000 per share and (ii)
$30,000,000 in aggregate principal amount of 5% Notes. Cinepole will
purchase 12,500 shares of Preferred Stock at a purchase price of
$1,000 per share. Pioneer will purchase 40,000 shares of Preferred
Stock at a purchase price of $1,000 per share. The consummation of
the purchase by MGM Holdings of Preferred Stock and 5% Notes
contemplated under the Purchase Agreement (the "Acquisition") is
subject to numerous conditions set forth in the Purchase Agreement.
See Item 6 below for a summary of such conditions.

Each share of Preferred Stock will be convertible at the
option of the holder of such share into that number of shares of
Common Stock obtained by dividing the sum of (i) $1,000 and (ii) the
amount of accrued but unpaid dividends with respect to such share by
$.60, which amount is subject to adjustment. Consequently, the 30,000
shares of Preferred Stock to be purchased by MGM Holdings will be
<PAGE>
convertible into 50,000,000 shares of Common Stock, subject to
adjustment. The holders of Preferred Stock will be entitled to the
same voting rights as such holders would be entitled to if such
holders converted their Preferred Stock into Common Stock.

The 5% Notes will be subject to mandatory conversion into
shares of Common Stock upon the following conditions:

(i) following the date upon which MGM Holdings' wholly-
owned subsidiary, Metro-Goldwyn-Mayer ("MGM"), receives
$100,000,000 in distribution fees pursuant to a proposed motion
picture distribution agreement with Carolco, relating to domestic
theatrical and non-theatrical rights, certain specified U.S.
television rights and certain specified foreign rights to take
effect, with respect to each of the rights granted, when
Carolco's current agreements or arrangements relating to such
rights expire (the "Distribution Agreement") (Carolco and MGM
have executed a term sheet with respect to the material terms of
the Distribution Agreement, a copy of which is attached hereto as
Exhibit B);

(ii) if Carolco terminates the Distribution Agreement
because of an uncured breach by MGM in accordance with its
termination rights set forth in the Distribution Agreement; or

(iii) if, after MGM receives $90,000,000 in distribution
fees pursuant to the Distribution Agreement, MGM fails to provide
certain informational reports to Carolco and fails to cure such
failure in accordance with the terms of the Distribution
Agreement.

The 5% Notes will be convertible at the option of the
holders thereof upon maturity and upon the occurrence of certain other
conditions set forth in the indenture relating to the %5 Notes.

In the event of a conversion, each $1,000 of principal
amount of 5% Notes will be converted into 1,666.667 shares of Common
Stock, which amount is subject to adjustment. In the event of a
mandatory conversion, each $1,000 of unpaid interest on the 5% Notes
being converted will also be converted into 1,666.667 shares of Common
Stock, which amount is subject to adjustment. Consequently, the
$30,000,000 in aggregate principal amount of 5% Notes to be purchased
by MGM Holdings will be convertible into approximately 50,000,000
shares of Common Stock, subject to adjustment.

(d) Carolco has agreed in principle with Pioneer, Le Studio
Canal+ (a wholly-owned subsidiary of Canal+ and the sole stockholder
of Cinepole ("Studio Canal+")), and RCS (collectively, the "Strategic
Investors") that the Strategic Investors will exchange certain of
their existing Carolco securities for shares of Common Stock and
discharge certain loan obligations of Carolco to them in exchange for
shares of Common Stock and all of the shares of the common stock of
Carolco's subsidiary, LIVE Entertainment Inc., owned by Carolco and
currently pledged to the Strategic Investors.

(e) Carolco and the Strategic Investors have agreed in principle
that (i) the Strategic Investors will exchange a portion of Carolco's
existing preferred stock and 10% Debentures held by the Strategic
Investors for an aggregate of 72,000,000 shares of Common Stock and
(ii) upon consummation of the Restructuring, each of the Strategic
Investors will transfer to Carolco as a capital contribution any
existing preferred stock or 10% Debentures held by them after the
exchanges are completed, together with certain other obligations of
Carolco to it.
<PAGE>
(f) The fifteen-member Board of Directors of Carolco (the
"Board") will be reconstituted.

In connection with the Restructuring, Carolco has taken or will
take the following actions:

(a) On December 24, 1992, Carolco filed with the Securities and
Exchange Commission (the "SEC") a Registration Statement on Form S-1,
Registration Number 33-56380, relating to the Restructuring and the
other actions taken by Carolco in connection with the Restructuring
(the "Registration Statement"). On August 27, 1993, the SEC declared
the Registration Statement, as amended, effective.

(b) Carolco has entered into a standby purchase and investment
agreement (the "Standby Agreement") with the Strategic Investors and
Tele-Communications, Inc. ("TCI"). Pursuant to the Standby Agreement
Pioneer, RCS and Cinepole will purchase an aggregate of up to
$27,5000,000 of Carolco's 7% Convertible Subordinated Notes due 2006
on the later to occur of December 30, 1994 or the date on which
certain conditions are met. Canal+ and TCI will invest an aggregate
of up to $27,500,000 in co-productions of Carolco's motion pictures
upon the satisfaction of certain conditions, but in no event prior to
December 30, 1994. The total amount invested pursuant to the Standby
Agreement will not exceed $47,500,000.

(c) Carolco will offer to purchase all of the outstanding shares
of common stock of The Vista Organization, Ltd. ("Vista") other than
shares owned by Carolco, together with all of the Carolco Series A
Common Stock Put Rights associated with and represented by such shares
(the "Vista Tender Offer").

(d) Carolco will solicit acceptances of the Prepackaged Plan.
Carolco will not seek confirmation of the Prepackaged Plan if all of
the conditions to the Restructuring are satisfied.

(e) Carolco will solicit proxies from the holders of Common
Stock for use at a special meeting of its stockholders, at which such
stockholders will consider and vote upon certain amendments to
Carolco's Restated Certificate of Incorporation (the "Restated
Certificate") to (i) delete a provision that divides the Board into
three classes with staggered terms, (ii) delete a provision that
restricts Carolco's ability to engage in certain transactions with
interested stockholders unless approvals of stockholders or the Board
are obtained, and (iii) to increase the number of shares of Common
Stock that Carolco is authorized to issue to 500,000,000. The
stockholders will also consider and vote upon a proposal to amend
Carolco's 1989 Stock Option and Stock Appreciation Rights Plan (the
"1989 Plan"). The proposed amendments to the 1989 Plan would (i)
increase the maximum number of shares of Common Stock that may be
issued under the 1989 Plan from 2,500,000 shares to 20,000,000 shares,
(ii) change the committees of the Board that administer the 1989 Plan
to consist of two or more directors of Carolco in accordance with Rule
16b-3(c)(2)(i) promulgated under the Securities Exchange Act of 1934
instead of three or more directors, and (iii) add a provision for
formula grants of options to directors of Carolco and members of
certain committees of the Board.

In connection with the Restructuring, it is contemplated that MGM
Holdings, Credit Lyonnais and Cinepole will enter into a Put and Call
Agreement (the "Put and Call Agreement"), the most recent draft of which is
attached hereto as Exhibit C. The Put and Call Agreement will contain
provisions granting MGM Holdings the right to put certain shares of Common
Stock to Cinepole and granting Cinepole a similar right to purchase certain
shares of Common Stock from MGM Holdings upon the conversion of 5% Notes
pursuant to the terms and conditions of the indenture relating to the 5%
<PAGE>
Notes. See Item 6 below for a summary of the provisions of the Put and
Call Agreement.

Following the Restructuring, it is currently contemplated that
MGM Holdings and the Strategic Investors will control a majority of the
Board. It is currently contemplated that MGM Holdings, the Strategic
Investors and New Carolco Investments, B.V. ("New CIBV") will enter into a
Stockholders Agreement (the "Stockholders Agreement"), the most recent
draft of which is attached hereto as Exhibit D, which shall contain
provisions relating to the composition of the Board, the election and
removal of directors and voting with respect to certain types of
transactions. See Item 6 below for a summary of the such provisions.

Upon the consummation of the Acquisition, MGM Holdings plans to
transfer to Bannon & Co., Inc., an investment banking firm, approximately
600 shares of Preferred Stock.

The agreements and arrangements described in this Item 4 to which
MGM Holdings or Credit Lyonnais is or will be a party have or will be
entered into by MGM Holdings and Credit Lyonnais to preserve the value of
MGM Holdings' subsidiary, MGM. Except as described above, none of the
Reporting Persons nor, to the best knowledge of any of the Reporting
Persons, any person identified in Schedule I, II or III has any plans or
proposals which relate to, or which result in, any of the matters referred
to in Paragraphs (a)-(j) of Item 4 of the Special Instructions for
Complying with Schedule 13D.

Item 5. Interest in Securities of the Issuer.

(a) Pursuant to the Purchase Agreement, MGM Holdings will
purchase 30,000 shares of Preferred Stock and $30,000,000 in aggregate
principal amount of 5% Notes. As stated in Item 4 above and more
particularly described in Item 6 below, the consummation of the Acquisition
is subject to numerous conditions. At this time, it is not known when such
consummation will occur. The Reporting Persons expressly disclaim
beneficial ownership of any Preferred Stock of 5% Notes covered by the
Purchase Agreement.

The Reporting Persons, Canal+, Studio Canal+, Cinepole Pioneer
and RCS may be deemed to have formed a group for the purpose of obtaining a
majority representation on the Board upon the consummation of the
Restructuring.

BY CANAL+

Canal+ may be deemed beneficially to own indirectly through
Studio Canal+:
<TABLE>

Title of Class Number of Shares Percent of Class

Common Stock 2,643,109<F1> 5.3

Common Stock 333,334<F2> 0.7
SUB-TOTAL 2,976,443 6.0
<F1> These shares are subject to a pledge agreement which does not satisfy the conditions set forth in SEC Rule 13d-
3(d)(3).

<F2> These shares may be acquired upon the exercise of an option.
<PAGE>
</TABLE>

Canal+ may be deemed beneficially to own indirectly through
Studio Canal+ (which owns such shares indirectly through Cinepole) the
following securities of Carolco:

<TABLE>

Title of Class Number of Shares Percent of Class

Common Stock 150,000<F1> 0.3

Common Stock 447,344<F2> 0.9
Common Stock 1,621,621<F3> 3.3

Common Stock 97,900 0.2
Common Stock 2,499,990<F4> 5.0

Common Stock 1,723,720<F5> 3.5

SUB-TOTAL 6,540,575 13.2

<FN>
<F1> These shares may be acquired upon the exercise of a warrant.
<F2> These shares may be acquired upon the exercise of an option.
<F3> These shares may be required upon the conversion of 30,000 shares of Series B Convertible Preferred Stock, which may
be converted at any time.
<F4> These shares may be acquired upon the conversion of 300,000 shares of Series D Preferred, which may be converted at
any time.
<f5) These shares may be acquired upon the conversion of 3,706 shares of Series E Convertible Preferred Stock ("Series E
Preferred"), which may be converted at any time.

</TABLE>

<TABLE>

BY PIONEER

<CAPTION>
Title of Class Number of Shares Percent of Class

Common Stock 3,243,243<F1> 6.5
Common Stock 2,500,000<F2> 5.0

Common Stock 2,451,627<F3> 4.9
Common Stock 977,447<F4> 2.0

Common Stock 300,000<F5> 0.6

Common Stock 2,643,109<F6> 5.3
Common Stock 333,334<F7> 0.7

SUB-TOTAL 12,448,760 25.1<F8>
<FN>
<F1> These shares may be acquired upon the conversion of 60,000 shares of Series C Convertible Exchangeable Preferred
Stock, which may be converted at any time.
<PAGE>
<F2> These shares may be acquired upon the conversion of $15,000,000 in principal amount of 10% Debentures, which may be
converted at any time.
<F3> These shares may be required upon the conversion of 5,271 shares of Series E Preferred, which may be converted at any
time.
<F4> These shares may be acquired upon the exercise of options.
<F5> These shares may be acquired upon the exercise of a warrant.
<F6> See Footnote 1 on page 9.
<F7> See Footnote 2 on page 9.
<F8> Does not foot due to rounding.
</TABLE>

<TABLE>

BY RCS

Title of Class Number of Shares Percent of Class

Common Stock 1,481,481 3.0

Common Stock 3,333,333<F1> 6.7
Common Stock 1,778,140<F2> 3.6

Common Stock 2,643,109<F3> 5.3
Common Stock 333,334<F4> 0.7

SUB-TOTAL 9,569,397 19.3

TOTAL 31,535,175 63.5
<FN>
<F1> These shares may be acquired upon the conversion of $20,000,000 in principal amount of 10% Debentures, which may be
converted at any time.
<F2> These shares may be acquired upon the conversion of 3,823 shares of Series E Preferred, which may be converted at any
time.
<F3> See Footnote 1 on page 9.
<F4> See Footnote 2 on page 9.

</TABLE>

(b) Each of Canal+, Studio Canal+ and Cinepole are deemed to
have shared power to vote, to direct the vote, to dispose and to direct the
disposition of all shares listed as being beneficially owned by any of them
in paragraph (a) above.

Except as described above, each person named in paragraph (a)
above has the sole power to vote or direct the vote and to dispose or
direct the disposition of all of the shares listed as being beneficially
owned by such person in paragraph (a) above. The Reporting Persons
expressly disclaim beneficial ownership of any Preferred Stock or 5% Notes.

(c) None of the Reporting Persons nor, to the best knowledge of
any of the Reporting Persons, any person listed on Schedule I, II or III
hereto nor any person named in paragraph (a) above has effected any
transactions contemplated by the instructions to Item 5(c) of Schedule 13D
in Common Stock, Preferred Stock or 5% Notes during the past 60 days.

(d) Not applicable.

(e) Not applicable.
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.

Except as described in Item 4 above and this Item 6 and as set
forth in the agreements referred to in such Items, none of the Reporting
Persons or, to the best knowledge of any of the Reporting Persons, any of
the individuals identified in Schedule I, II or III has any contract,
arrangement, understanding or relationship with any person with respect to
any security of Carolco.

The discussion of the terms of the agreements referred to below
is only a brief summary and is qualified in its entirety by reference to
the agreements which are attached hereto as Exhibits and incorporated
herein by reference.

(a) Securities Purchase Agreement (Exhibit A).

Pursuant to the Purchase Agreement, MGM Holdings is purchasing
from Carolco (i) 30,000 shares of Preferred Stock at a purchase price of
$1,000 per share and (ii) $30,000,000 in aggregate principal amount of 5%
Notes. Cinepole is purchasing 12,500 shares of Preferred Stock at a
purchase price of $1,000 per share. Pioneer is purchasing 40,000 shares of
Preferred Stock at a purchase price of $1,000 per share.

The consummation of the transactions contemplated in the Purchase
Agreement shall occur upon (a) the latest to occur of (i) the expiration or
earlier termination of any applicable waiting period under the Hart-Scott-
Rodino Anti-Trust Improvements Act of 1976 (the "HSR Act"),
(ii) consummation of all of the elements of the Restructuring, or
(iii) issuance of an order or judgment of the United States Bankruptcy
Court confirming the Prepackaged Plan pursuant to Section 1129 of Title 11
of the United States Code (the "Confirmation Order") with respect to the
Prepackaged Plan that has become a Final Order (as defined in the Purchase
Agreement), or (b) at such other time as may be agreed to in writing by the
parties to the Purchase Agreement.

The consummation of the transactions contemplated in the Purchase
Agreement is subject to a number of conditions that have not occurred,
including, but not limited to, the following:

(a) filing of the Certificate of Designation and the Amendment
(as defined and described in the Purchase Agreement) with the
Secretary of State of the State of Delaware;

(b) execution and delivery of the Registration Rights Agreement
described below and the Distribution Agreement, and execution and
delivery of the Loan Agreement, the 5% Indenture, the 10% Indenture,
the Standby Note Purchase Agreement, the Pay-Per-View Agreement, the
Standby Co-Production Agreement and the Subordination Agreement (each
as defined and described in the Purchase Agreement);

(c) either (i) the holders of at least 85% in aggregate
principal amount of the 13% Notes and 75% of the 14% Notes shall have
validly tendered and not withdrawn such notes pursuant to the Exchange
Offers on or prior to the expiration date of the Exchange Offers, and
the holders of more than 50% in aggregate principal amount of the 13%
Notes shall have given and not revoked their consents to the proposed
amendments to the indenture relating thereto, or (ii) the Confirmation
Order with respect to the Prepackaged Plan shall have been issued and
shall be a Final Order;

(d) either (i) all 10% Debentures and shares of Series D
Preferred, other than those held by the Strategic Investors, shall
have been tendered and not withdrawn and the conditions to the
Debenture and Series D Exchange (as defined and described in the
Purchase Agreement), other than the closing under the Purchase
<PAGE>
Agreement, shall have been satisfied or waived, or (ii) the
Confirmation Order with respect to the Prepackaged Plan shall have
been issued and shall be a Final Order;

(e) either (i) the holders of at least a majority of the
combined voting power with respect to Carolco's voting securities
present at the special meeting of Carolco's stockholders to be held
shall have approved the proposal to approve the Restructuring and the
proposal to increase the authorized number of shares of Common Stock,
to 650,000,000 shares or (ii) Carolco shall have filed the Amendment
pursuant to the provisions of the Prepackaged Plan;

(f) Bear, Stearns & Co., Inc. ("Bear Stearns") shall have
delivered to Carolco an opinion that the Restructuring is fair from a
financial point of view to the holders of Common Stock other than the
Strategic Investors, and Bear Stearns shall have confirmed such
opinion on the effective date of the Registration Statement, as
amended, and, provided that the transactions comprising the
Restructuring are not effectuated pursuant to the Confirmation Order,
on the date of the consummation of the Purchase Agreement, in each
case without any material change in any conclusions or opinions
contained in such opinion;

(g) the Stockholders Agreement described below shall have been
executed and delivered by the parties thereto;

(h) either (i) the Vista Tender Offer shall have been
consummated or will be consummated concurrently with the transactions
contemplated in the Purchase Agreement, or (ii) the Confirmation Order
with respect to the Prepackaged Plan shall have been issued and shall
be a Final Order;

(i) the Put and Call Agreement described below shall have been
executed and delivered in substantially the form contemplated by the
Purchase Agreement; and

(j) Carolco shall have executed and delivered to MGM Holdings an
agreement between Carolco and Studio Canal+, with respect to certain rights
of first refusal granted to Studio Canal+, which agreement shall be in
substantially the form delivered to MGM Holdings under cover of letter
dated May 28, 1993.

The Purchase Agreement may be terminated and the transactions
contemplated therein abandoned (a) by Carolco if the Registration Statement
is withdrawn from the SEC, or (b) by any party to the Purchase Agreement if
the transactions contemplated therein have not been consummated by
December 31, 1993. Upon termination, the Purchase Agreement becomes void.

The Purchase Agreement contains certain other provisions
customary to an agreement of its nature.

(b) Put and Call Agreement (Exhibit C).

Pursuant to the Put and Call Agreement, MGM Holdings will have
the right to put to Cinepole at any one time during the 90-day period
immediately following the Trigger Date (as defined in the Put and Call
Agreement) 25,000,000 shares of Common Stock, which amount is subject to
adjustment, at a price to be determined according to a specified formula.
Cinepole will have a similar right to purchase once from MGM Holdings at
any time during the 90-day period immediately following the Trigger Date at
a purchase price to be determined according to a specified formula.
Cinepole may pay any or all of the put or purchase price by transferring 7%
Notes to MGM Holdings.

The amount of shares of Common Stock subject to the put or
purchase provisions will be reduced by an amount equal to 50% of the
<PAGE>
aggregate face amount of any 5% Notes or the aggregate amount of any
Preferred Stock sold or disposed by MGM Holdings prior to the date of the
exercise of such put or purchase, except for any transfer of 5% Notes or
Preferred Stock by MGM Holdings under certain limited circumstances. The
put and purchase rights granted in the Put and Call Agreement will
terminate in the event that MGM Holdings and Credit Lyonnais own less than
1% of the outstanding capital stock of MGM.

The Put and Call Agreement contains certain other provisions
customary to an agreement of its nature.

Pursuant to the Stockholders Agreement, Pioneer will have the
right to designate four directors to the Board, each of MGM Holdings and
Cinepole shall have the right to designate three directors and RCS shall
have the right to designate one director. Each of MGM Holdings, Cinepole,
Pioneer and RCS (individually, a "Designating Stockholder", and
collectively, the "Designating Stockholders") will agree to vote for the
designees of the other Designating Stockholders. Additionally, each
Designating Stockholder will agree to take all appropriate action to effect
the removal of any designee of another Designating Stockholder upon receipt
of a written request from such Designating Stockholder to do so. The
Stockholders Agreement provides for the reduction of the number of director
designees allocated to each Designating Stockholder upon the reduction of
the amount of Preferred Stock, 5% Notes and Common Stock held by such
Designating Stockholder below certain specified levels.

The Designating Stockholders will agree to cause their respective
designated directors to take the necessary corporate action to establish a
Supervisory Committee of the Board, if such action is consistent with such
director's fiduciary duty. Additionally, each Designating Stockholder will
agree to cause its designated directors to vote: (i) to adopt any
amendment to the Bylaws of Carolco (the "Bylaws") that may be proposed in
connection with the Registration Statement, if such adoption is consistent
with such director's fiduciary duty; (ii) against any proposal to amend the
Restated Certificate or Bylaws or change the composition of the Board
unless all of the Designating Stockholders agree to vote in favor of such
proposal; and (iii) to adopt resolutions requiring that any Major Decision
(as defined in the Stockholders Agreement) will require the affirmative
vote of at least 85% of the Board and of designated directors of at least
three of the Designating Stockholders.

The Stockholders Agreement will entitle MGM Holdings to
participate proportionately in certain sales or dispositions by any two or
more of the Strategic Investors of a required minimum amount of securities
of Carolco, subject to certain conditions. Pioneer, RCS and New CIBV will
be entitled to participate proportionately in certain sales and
dispositions by MGM Holdings and Cinepole of securities of Carolco, subject
to certain conditions. Cinepole, RCS and New CIBV will be entitled to
participate proportionately in certain sales and dispositions by MGM
Holdings and Pioneer of a required minimum amount of securities of Carolco,
subject to certain conditions.

The Stockholders Agreement contains certain other provisions
customary to an agreement of its nature.

(d) Registration Rights Agreement (Exhibit E).

In connection with the Restructuring, it is currently
contemplated that Carolco, MGM Holdings, Pioneer, Cinepole, and RCS
(collectively, the "Holders") will execute a Registration Rights Agreement
(the "Registration Rights Agreement") which will provide certain
registration rights to the parties thereto and certain successors-in-
interest thereof as holders of securities of Carolco (individually, a
"Holder", and collectively, the
<PAGE>
"Holders"). The Registration Rights Agreement applies to Preferred Stock
and 5% Notes acquired pursuant to the Purchase Agreement, any shares of
Common Stock into which Preferred Stock or 5% Notes are converted, any
shares of Common Stock acquired by RCS pursuant to the RCS Stock Purchase
Agreement (as defined in the Registration Rights Agreement), any shares of
Common Stock received by Pioneer, Cinepole or RCS pursuant to the
Contribution and Exchange Agreement (as defined in the Registration Rights
Agreement) or owned by Pioneer, Cinepole or RCS on the date of the
execution of the Purchase Agreement that are not exchangeable or
contributed pursuant to the Contribution and Exchange Agreement, and
certain securities received by the Holders as a result of holding such
securities (individually, a "Registrable Security", and collectively,
"Registrable Securities").

Pursuant to the Registration Rights Agreement, MGM Holdings or
its successors-in-interest may make up to two requests, subject to certain
limitations set forth therein, that Carolco effect the registration under
the Securities Act of Registrable Securities that are beneficially owned by
them during the time period beginning six months after the consummation of
the transactions contemplated in the Purchase Agreement and ending the
earlier of 18 months after such consummation or the date on which MGM
Holdings no longer owns any Registrable Securities (the "MGM Registration
Period"). During the MGM Registration Period, MGM Holdings' right to
demand registration shall be exclusive, and Carolco will not effect a
registration during the MGM Registration Period for itself or any other
Holders.

Upon the expiration of the MGM Registration Period, any Holder
may make up to two requests, subject to certain limitations set forth
therein, that Carolco effect the registration under the Securities Act of
Registrable Securities that are beneficially owned by it.

The Registration Rights Agreement requires that any request cover
a minimum amount of Registrable Securities in order for Carolco to be
obligated to effect a registration with respect thereto.

If at any time, Carolco proposes to file a registration statement
under the Securities Act with respect to any offering by Carolco of any of
its securities (other than a registration statement on Form S-4 or S-8),
the Company will offer (a) to MGM Holdings and Holders who are transferees
from MGM Holdings prior to the expiration of the MGM Registration Period
and (b) thereafter, to all Qualifying Holders (as defined in the
Registration Rights Agreement) the opportunity to register such number,
which must exceed a specified minimum amount, of Registrable Securities, as
each such holder may request. If such Registrable Securities exceed the
number of securities that can be sold in such offering, Carolco shall
reduce the number of Registrable Securities to be offered for the account
of such holders pro rata based upon the relative number of any Registrable
Securities requested to be included in such registration by each such
holder.

The total number of demand registrations available to any Holder
will be reduced for such Holder by the number of piggyback registrations in
which such Holder includes the minimum number of Registrable Securities
which such Holder would be entitled to include in a demand registration.

The Registration Rights Agreement contains certain other
provisions that are customary to an agreement of its nature.

(e) Subordination Agreement (Exhibit F).

In connection with the Restructuring, it is currently
contemplated that MGM Holdings, Pioneer, Cinepole, RCS and RCS
International Communications N.V. will enter into a Subordination Agreement
(the "Subordination Agreement"). Pursuant to the Subordination Agreement,
any proceeds to be received by any of the Strategic Investors upon a
<PAGE>
liquidation, dissolution or winding up of Carolco with respect to any
securities of Carolco held by such Strategic Investor prior to the
Restructuring ("Old Common") shall be subordinate, to the extent of the
Required Payment (as defined in the Subordination Agreement), to any
proceeds to be received with respect to any Common Stock resulting from the
conversion of Preferred Stock or 5% Notes held by any of the Strategic
Investors or MGM Holdings pursuant to the Purchase Agreement ("New
Common"). After the Required Payment has been paid to the holders of New
Common, all proceeds shall be payable pro rata to the Strategic Investors
with respect to Old Common in an amount equal to the Required Payment. To
the extent that any proceeds are then remaining, such proceeds shall be
allocated pro rata among MGM Holdings and the Strategic Investors and as
provided by Delaware law.

For purposes of the Subordination Agreement, each of the
Strategic Investors and MGM Holdings agree that the total amount of Carolco
Securities that it holds shall be allocated between Old Common and New
Common according with the following percentages:
Pioneer 35% Old Common
65% New Common

Cinepole 54% Old Common
46% New Common
RCS 100% Old Common
0% New Common

MGM Holdings 0% Old Common
100% New Common

Item 7. Material to be Filed as Exhibits.

EXHIBIT A Securities Purchase Agreement

EXHIBIT B Confidential Draft Term Sheet Proposed MGM Carolco
Distribution Agreement

EXHIBIT C Put and Call Agreement

EXHIBIT D Stockholders Agreement

EXHIBIT E Registration Rights Agreement

EXHIBIT F Subordination Agreement

EXHIBIT G Joint Filing Statement Pursuant to Rule 13d-
1(f)1(iii)

Signature

After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.

_____________________________
(Date)

MGM HOLDINGS CORPORATION

_____________________________
<PAGE>
(Signature)

_____________________________
(Name/Title)

Signature

After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.

_____________________________
(Date)

CREDIT LYONNAIS INTERNATIONAL
SERVICES

_____________________________
(Signature)

_____________________________
(Name/Title)

Signature

After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.

_____________________________
(Date)

CREDIT LYONNAIS

_____________________________
(Signature)

_____________________________
(Name/Title)

Appendix II
to Amendment No. 2

Amendment No. 1
<PAGE>

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 1)

Carolco Pictures Inc.
(Name of Issuer)

Common Stock, par value $.01
(Title of Class of Securities)

143763-10-0

(CUSIP Number)

Mr. Rene-Claude Jouannet
Credit Lyonnais -- Paris
19 Boulevard des Italiens
75002 Paris
France

(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)

October 20, 1993
____________________________________________________________
(Date of Event which Requires Filing of this Statement)

Check the following box if a fee is being paid with this statement (x).
<TABLE>

SCHEDULE 13D

CUSIP No. 143763-10-0 Page 2 of __ Pages

<S> <C>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

MGM Holdings Corporation

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (x)
(b) ( )
<PAGE>
3 SEC USE ONLY

4 SOURCE OF FUNDS

AF; WC: See discussion in Item 3

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED ( )
PURSUANT TO ITEMS 2(d) or 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION

State of Delaware

NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH 0
REPORTING PERSON WITH 8 SHARED VOTING POWER
Common Stock: 100,000,000;
See discussion in Items 4 and 5

9 SOLE DISPOSITIVE POWER
0

10 SHARED DISPOSITIVE POWER
Common Stock: 100,000,000;
See discussion in Items 4 and 5
<S> <C>

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Common Stock: 100,000,000

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Common Stock 41.7%
14 TYPE OF REPORTING PERSON
CO

</TABLE>

<TABLE>

SCHEDULE 13D

CUSIP No. 143763-10-0 Page 3 of __ Pages

<S> <C>

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Credit Lyonnais International Services

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (x)
(b) ( )
3 SEC USE ONLY
<PAGE>
4 SOURCE OF FUNDS

AF; WC: See discussion in Item 3

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED ( )
PURSUANT TO ITEMS 2(d) or 2(E)

6 CITIZENSHIP OR PLACE OF ORGANIZATION

France
<S> <C> <C>

NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 0
OWNED BY EACH
8 SHARED VOTING POWER
REPORTING PERSON
Common Stock: 100,000,000;
WITH
See discussion in Items 4 and 5
9 SOLE DISPOSITIVE POWER
0

10 SHARED DISPOSITIVE POWER
Common Stock: 100,000,000;
See discussion in Items 4 and 5

<S> <C>
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

Common Stock: 100,000,000;

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ( )

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

Common Stock 41.7%

14 TYPE OF REPORTING PERSON

</TABLE>

<TABLE>

SCHEDULE 13D

CUSIP No. 143763-10-0 Page 4 of __ Pages

<S> <C>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Credit Lyonnais

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (x)
(b) ( )

3 SEC USE ONLY
<PAGE>
4 SOURCE OF FUNDS

AF; WC: See discussion in Item 3

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED ( )
PURSUANT TO ITEMS 2(d) or 2(E)

6 CITIZENSHIP OR PLACE OF ORGANIZATION

France
<S> <C> <C>

NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 0
OWNED BY EACH
8 SHARED VOTING POWER
REPORTING PERSON
Common Stock: 100,000,000;
WITH
See discussion in Items 4 and 5
9 SOLE DISPOSITIVE POWER
0

10 SHARED DISPOSITIVE POWER
Common Stock: 100,000,000;
See discussion in Items 4 and 5

<S> <C>

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Common Stock: 100,000,000;

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ( )
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Common Stock 41.7%

14 TYPE OF REPORTING PERSON

</TABLE>

This Amendment No. 1 is filed on behalf of MGM Holdings
Corporation ("MGM Holdings"), Credit Lyonnais International Services
("CLIS") and Credit Lyonnais (collectively with MGM Holdings and CLIS, the
"Reporting Persons") and amends and restates in its entirety the initial
Statement dated September 7, 1993, filed by the Reporting Persons with
respect to Series A Convertible Preferred Stock, par value $1.00
("Preferred Stock"), and Common Stock, par value $.01 ("Common Stock"), of
Carolco Pictures, Inc. ("Carolco") (the "Schedule 13D"). This Amendment
No. 1 is filed to disclose transactions in the securities of Carolco
resulting from the previously disclosed financial restructuring of Carolco
and related matters.

Item 1. Security and Issuer.

The titles of the classes of equity securities to which this
statement relates are as follows:

(i) Preferred Stock of Carolco; and
<PAGE>
(ii) Common Stock of Carolco.

The name and address of the principal executive offices of
Carolco are:

Carolco Pictures Inc.
8800 Sunset Boulevard
Los Angeles, California 90069

All information contained in this Amendment No. 1 relating to Carolco,
Pioneer LCDA ("Pioneer"), Canal+ S.A. ("Canal+") or RCS Video International
Services B.V. ("RCS"), or any of their respective officers, directors,
stockholders, affiliates or subsidiaries is based upon publicly available
information or information provided by such person.

Item 2. Identity and Background.

The name, address and principal executive office of MGM Holdings
are:

MGM Holdings Corporation
19, boulevard des Italiens
75002 Paris
France

MGM Holdings is a holding company organized and existing under
the laws of the state of Delaware.

MGM Holdings is a wholly-owned subsidiary of CLIS, a corporation
organized and existing under the laws of France. The address of CLIS's
principal executive office is:

19, boulevard des Italiens
75002 Paris
France

CLIS is a wholly-owned subsidiary of Credit Lyonnais, a banking
institution organized and existing under the laws of France. The address
of Credit Lyonnais' principal executive office is:

19, boulevard des Italiens
75002 Paris
France

The attached Schedule III is a list of the executive officers and
directors of Credit Lyonnais, which contains the following information with
respect to each such person: (i) name; (ii) business address; (iii)
present principal occupation or employment and the name, principal business
and address of any other organization in which such employment is
conducted; and (iv) place of citizenship.
<PAGE>
During the last five years, none of the Reporting Persons or, to
the best knowledge of any of the Reporting Persons, any person named on
Schedule I, II or III hereto has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration.

The amount of funds to be used by MGM Holdings in making the
purchases of Preferred Stock and 5% Payment-in-Kind Convertible
Subordinated Notes due 2002 ("5% Notes") to which this statement relates
is, (i) with respect to Preferred Stock, $30,000,000, and (ii) with respect
to 5% Notes, $30,000,000. The source of the funds used to purchase the
Preferred Stock and 5% Notes initially was an overdraft from Credit
Lyonnais Bank Nederland N.V., which shall be replaced with a capital
contribution to MGM Holdings from CLIS.

Item 4. Purpose of Transaction.

The purchases of Preferred Stock and 5% Notes to which this
statement relates are part of a financial restructuring undertaken by
Carolco through the exchange of certain of Carolco's existing debt
securities and preferred stock, as well as the cash sales of Preferred
Stock and 5% Notes and the consummation of certain related transactions
(the "Restructuring"). The Restructuring included the following main
elements:

(a) Carolco exchanged an aggregate of (i) $22,496,000 in
principal amount of its 11.5%/10% Reducing Rate Senior Notes due 2000,
(the "New Senior Notes") for $22,496,000 in principal amount of the
Company's 14% Senior Notes Due June 1, 1993 (the "14% Notes")
outstanding and (ii) $12,700,000 in principal amount of its 13%/12%
Reducing Rate Senior Subordinated Notes due 1999, (the "New Senior
Subordinated Notes") for $12,700,000 in principal amount of Carolco's
13% Senior Subordinated Notes due December 1, 1996 (the "13% Notes")
outstanding and not owned by Carolco. In connection with the
exchange, tendering holders of the 14% Notes received an amount in
cash equal to the amount of interest that accrued on the New Senior
Notes for the period of December 1, 1992, through the date of issuance
of the New Senior Notes. Tendering holders of the 13% Notes received
an amount, 50% of which consisted of cash and 50% of which consisted
of additional New Senior Subordinated Notes, equal to the amount of
interest that accrued on the New Senior Subordinated Notes for the
period of December 1, 1992 through the date of issuance of the new
Senior Subordinated Notes. Concurrently with the making of the offers
to exchange the 13% Notes and the 14% Notes, the Company successfully
solicited from the holders of the 13% Notes their consent to certain
amendments to the indenture pursuant to which the 13% Notes were
issued and the wavier of certain events of default under such
indenture. The amendments were adopted, and the events of default
were waived.

(b) Certain holders of Carolco's 10% Convertible Subordinated
Debentures Due 2006 ("10% Debentures") and one holder of its Series D
Convertible Exchangeable Preferred Stock, par value $1.00 ("Series D
Preferred"), exchanged such securities for an aggregate of 22,500,000
shares of Common Stock. In connection with this exchange, the holder
of the Series D Preferred received $20,000 in cash, which represents a
portion of the accrued but unpaid dividends on the Series D Preferred.
<PAGE>
(c) Carolco, MGM Holdings, Cinepole Productions B.V. (an
affiliate of Canal+ ("Cinepole")), and Pioneer entered into a
Securities Purchase Agreement, dated as of May 25, 1993, which was
amended by amendments dated as of July 29, 1993, August 19, 1993 and
October 7, 1993 (the "Purchase Agreement"). A copy of the Purchase
Agreement, as amended, is attached hereto as Exhibit A. Pursuant to
the Purchase Agreement, MGM Holdings purchased from Carolco (i) 30,000
shares of Preferred Stock at a purchase price of $1,000 per share and
(ii) $30,000,000 in aggregate principal amount of 5% Notes. Cinepole
purchased 12,500 shares of Preferred Stock at a purchase price of
$1,000 per share. Pioneer purchased 40,000 shares of Preferred Stock
at a purchase price of $1,000 per share. Each of these purchases was
consummated on October 20, 1993.

Each share of Preferred Stock is convertible at the option
of the holder of such share into that number of shares of Common Stock
obtained by dividing the sum of (i) $1,000 and (ii) the amount of
accrued but unpaid dividends with respect to such share by $.60, which
amount is subject to adjustment. Consequently, the 30,000 shares of
Preferred Stock purchased by MGM Holdings are convertible into
50,000,000 shares of Common Stock, subject to adjustment. The holders
of Preferred Stock are entitled to the same voting rights as such
holders would be entitled to if they converted their Preferred Stock
into Common Stock.

The 5% Notes are subject to mandatory conversion into shares
of Common Stock upon the following conditions:

(i) following the date upon which MGM Holdings' subsidiary,
Metro-Goldwyn-Mayer ("MGM"), receives $100,000,000 in
distribution fees pursuant to motion picture distribution
agreements with Carolco, relating to domestic theatrical and non-
theatrical rights, certain specified U.S. television rights and
certain specified foreign rights to take effect, with respect to
each of the rights granted, when Carolco's current agreements or
arrangements relating to such rights expire (collectively, the
"Distribution Agreement") (Carolco and MGM have executed a term
sheet with respect to the material terms of the Distribution
Agreement, a copy of which is attached hereto as Exhibit B);

(ii) if Carolco terminates the Distribution Agreement
because of an uncured breach by MGM in accordance with its
termination rights set forth in the Distribution Agreement; or

The 5% Notes are convertible at the option of the holders
thereof upon maturity and upon the occurrence of certain other
conditions set forth in the indenture relating to the %5 Notes.

In the event of a conversion, each $1,000 of principal
amount of 5% Notes will be converted into 1,666.667 shares of Common
Stock, which amount is subject to adjustment. In the event of a
mandatory conversion, each $1,000 of unpaid interest on the 5% Notes
being converted will also be converted into 1,666.667 shares of Common
Stock, which amount is subject to adjustment. Consequently, the
$30,000,000 in aggregate principal amount of 5% Notes purchased by MGM
Holdings are convertible into approximately 50,000,000 shares of
Common Stock, subject to adjustment.

(d) Carolco, Pioneer, Le Studio Canal+ (a wholly-owned
subsidiary of Canal+ and the sole stockholder of Cinepole ("Studio
<PAGE>
Canal+")), and RCS (collectively, the "Strategic Investors") executed
a Contribution and Exchange Agreement, dated as of May 25, 1993, which
was amended by amendments dated as of July 29, 1993 and October 15,
1993 (the "Contribution and Exchange Agreement"). A copy of the
Contribution and Exchange Agreement is attached hereto as Exhibit C.
Pursuant to the Contribution and Exchange Agreement, the Strategic
Investors (i) exchanged certain of their existing Carolco securities
for shares of Common Stock, (ii) discharged certain loan obligations
of Carolco to them in exchange for shares of Common Stock and all of
the shares of the common stock of Carolco's subsidiary, LIVE
Entertainment Inc., owned by Carolco and currently pledged to the
Strategic Investors, (iii) exchanged a portion of Carolco's existing
preferred stock and 10% Debentures held by them for an aggregate of
72,000,000 shares of Common Stock, and (iv) transferred to Carolco as
a capital contribution any existing preferred stock or 10% Debentures
held by them after the exchanges are completed, together with certain
other obligations of Carolco to it.

(e) The fifteen-member Board of Directors of Carolco (the
"Board") will be reconstituted.

In connection with the Restructuring, Carolco has taken the
following actions:

(b) Carolco executed a Standby Purchase and Investment Agreement
(the "Standby Agreement") with the Strategic Investors and Tele-
Communications, Inc. ("TCI"), dated as of July 29, 1993, a copy of
which is attached hereto as Exhibit D. Pursuant to the Standby
Agreement, Pioneer, RCS and Cinepole will purchase an aggregate of up
to $27,500,000 of Carolco's 7% Convertible Subordinated Notes due 2006
on the later to occur of December 30, 1994 or the date on which
certain conditions are met. Canal+ and TCI will invest an aggregate
of up to $27,500,000 in co-productions of Carolco's motion pictures
upon the satisfaction of certain conditions, but in no event prior to
December 30, 1994. The total amount invested pursuant to the Standby
Agreement will not exceed $47,500,000.

(c) Carolco offered to purchase all of the outstanding shares of
common stock of The Vista Organization, Ltd. ("Vista") other than
shares owned by Carolco, together with all of the Carolco Series A
Common Stock Put Rights associated with and represented by such shares
(the "Vista Tender Offer"). 18,302,963 shares of common stock of
Vista were tendered to Carolco for purchase.

(d) At a special meeting, the stockholders of Carolco voted to
amend Carolco's Restated Certificate of Incorporation (the "Restated
Certificate") to (i) delete a provision that divides the Board into
three classes with staggered terms, (ii) delete a provision that
restricts Carolco's ability to engage in certain transactions with
interested stockholders unless approvals of stockholders or the Board
are obtained, and (iii) to increase the number of shares of Common
Stock that Carolco is authorized to issue to 500,000,000. The
stockholders also voted to amend Carolco's 1989 Stock Option and Stock
Appreciation Rights Plan (the "1989 Plan"). The amendments to the
1989 Plan (i) increased the maximum number of shares of Common Stock
that may be issued under the 1989 Plan from 2,500,000 shares to
20,000,000 shares, (ii) changed the committees of the Board that
administer the 1989 Plan to consist of two or more directors of
Carolco in accordance with Rule 16b-3(c)(2)(i) promulgated under the
<PAGE>
Securities Exchange Act of 1934 instead of three or more directors,
and (iii) added a provision for formula grants of options to directors
of Carolco and members of certain committees of the Board.

In connection with the Restructuring, MGM Holdings, Credit
Lyonnais and Cinepole have executed a Put and Call Agreement (the "Put and
Call Agreement"), dated October 20, 1993, a copy of which is attached
hereto as Exhibit E. The Put and Call Agreement contains provisions
granting MGM Holdings the right to put certain shares of Common Stock to
Cinepole and granting Cinepole a similar right to purchase certain shares
of Common Stock from MGM Holdings upon the conversion of 5% Notes pursuant
to the terms and conditions of the indenture relating to the 5% Notes. See
Item 6 below for a summary of the provisions of the Put and Call Agreement.

Following the Restructuring, MGM Holdings and the Strategic
Investors will control a majority of the Board. MGM Holdings, the
Strategic Investors and New Carolco Investments, B.V. ("New CIBV") have
executed a Stockholders Agreement (the "Stockholders Agreement"), dated
October 20, 1993, a copy of which is attached hereto as Exhibit F, which
contains provisions relating to the composition of the Board, the election
and removal of directors and voting with respect to certain types of
transactions. See Item 6 below for a summary of the such provisions.

The agreements and arrangements described in this Item 4 to which
MGM Holdings or Credit Lyonnais is a party have been entered into by MGM
Holdings and Credit Lyonnais to preserve the value of MGM Holdings'
subsidiary, MGM. Except as described above, none of the Reporting Persons
nor, to the best knowledge of any of the Reporting Persons, any person
identified in Schedule I, II or III has any plans or proposals which relate
to, or which result in, any of the matters referred to in Paragraphs (a)-
(j) of Item 4 of the Special Instructions for Complying with Schedule 13D.

Item 5. Interest in Securities of the Issuer.

(a) The Reporting Persons, Canal+, Studio Canal+, Cinepole,
Pioneer and RCS may be deemed to have formed a group for the purpose of
obtaining a majority representation on the Board upon the consummation of
the Restructuring.

Credit Lyonnais, CLIS and MGM Holdings may be deemed beneficially
to own:
<TABLE>

Title of Class Number of Shares Percent of Class

Common Stock 50,000,000<F1> 20.8

Common Stock 50,000,000<F2> 20.8
TOTAL 100,000,000 41.7<F3>

<FN>
<F1> These shares may be acquired upon the conversion of 30,000 shares of Preferred Stock.
<F2> These shares may be acquired upon the conversion of 5% Notes.
<F3> Does not foot due to rounding.

</TABLE>

<TABLE>
<PAGE>
BY CANAL+

Canal+ may be deemed beneficially to own indirectly through Studio Canal+:

Title of Class Number of Shares Percent of Class

Common Stock 2,643,109<F1> 1.6

Common Stock 333,334<F2> .2
TOTAL 2,976,443 1.8
<FN>
<F1> These shares are subject to a pledge agreement which does not satisfy the conditions set forth in SEC Rule 13d-
3(d)(3).
<F2> These shares may be acquired upon the exercise of an option.

</TABLE>

Canal+ may be deemed beneficially to own indirectly through Studio Canal+
(which owns such shares indirectly through Cinepole) the following
securities of Carolco:
<TABLE>

<CAPTION>
Title of Class Number of Shares Percent of Class

Common Stock 26,100,032 16.2
Common Stock 20,833,333<F1> 12.9

TOTAL 46,933,365 29.1

<FN>
<F1> These shares may be acquired upon the conversion of 12,500 shares of Preferred Stock.
</TABLE>

<TABLE>

BY PIONEER

Title of Class Number of Shares Percent of Class

Common Stock 46,420,574 22.4
Common Stock 66,666,666<F1> 32.2

Common Stock 2,643,109<F2> 1.3

Common Stock 333,334<F3> .2
TOTAL 116,063,683 56.1
<FN>
<F1> These shares may be acquired upon the conversion of 40,000 shares of Preferred Stock.
<F2> See Footnote 3 on page 14.
<F3> See Footnote 4 on page 14.
</TABLE>
<PAGE>
<TABLE>

BY RCS

Title of Class Number of Shares Percent of Class

Common Stock 15,960,316 11.4

Common Stock 2,643,109<F1> 1.9
Common Stock 333,334<F2> .2

TOTAL 18,936,759 13.5

<FN>
<F1> See Footnote 3 on page 14.
<F2> See Footnote 4 on page 14.

</TABLE>

(b) Each of the Reporting Persons is deemed to have shared power
to vote, to direct the vote, to dispose and to direct the disposition of
all shares listed as being owned by them in paragraph (a) above. Each of
Canal+, Studio Canal+ and Cinepole is deemed to have shared power to vote,
to direct the vote, to dispose and to direct the disposition of all shares
listed as being beneficially owned by any of them in paragraph (a) above.

(c) Except as otherwise disclosed in this Amendment No. 1, none
of the Reporting Persons nor, to the best knowledge of any of the Reporting
Persons, any person listed on Schedule I, II or III hereto nor any person
named in paragraph (a) above has effected any transactions contemplated by
the instructions to Item 5(c) of Schedule 13D in Common Stock, Preferred
Stock or 5% Notes during the past 60 days.

(d) Not applicable.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.

Pursuant to the Purchase Agreement, MGM Holdings purchased from
Carolco (i) 30,000 shares of Preferred Stock at a purchase price of $1,000
per share and (ii) $30,000,000 in aggregate principal amount of 5% Notes.
Cinepole purchased 12,500 shares of Preferred Stock at a purchase price of
$1,000 per share. Pioneer purchased 40,000 shares of Preferred Stock at a
purchase price of $1,000 per share.

The Purchase Agreement contains certain other provisions
customary to an agreement of its nature.

(b) Put and Call Agreement (Exhibit E).

Pursuant to the Put and Call Agreement, MGM Holdings has the
right to put to Cinepole at any one time during the 90-day period
immediately following the Trigger Date (as defined in the Put and Call
Agreement) 25,000,000 shares of Common Stock, which amount is subject to
adjustment, at a price to be determined according to a specified formula.
Cinepole has a similar right to purchase Common Stock once from MGM
Holdings at any time during the 90-day period immediately following the
Trigger Date at a purchase price to be determined according to a specified
formula. Cinepole may pay any or all of the put or purchase price by
transferring 7% Notes to MGM Holdings.

The amount of shares of Common Stock subject to the put or
purchase provisions will be reduced by an amount equal to 50% of the
aggregate face amount of any 5% Notes or the aggregate amount of any
Preferred Stock sold or disposed by MGM Holdings prior to the date of the
exercise of such put or purchase, except for any transfer of 5% Notes or
Preferred Stock by MGM Holdings under certain limited circumstances. The
put and purchase rights granted in the Put and Call Agreement will
terminate in the event that MGM Holdings and Credit Lyonnais own less than
1% of the outstanding capital stock of MGM.

The Put and Call Agreement contains certain other provisions
customary to an agreement of its nature.

Pursuant to the Stockholders Agreement, Pioneer has the right to
designate four directors to the Board, each of MGM Holdings and Cinepole
has the right to designate three directors and RCS has the right to
designate one director. Each of MGM Holdings, Cinepole, Pioneer and RCS
(individually, a "Designating Stockholder", and collectively, the
"Designating Stockholders") agree to vote for the designees of the other
Designating Stockholders. Additionally, each Designating Stockholder
agrees to take all appropriate action to effect the removal of any designee
of another Designating Stockholder upon receipt of a written request from
such Designating Stockholder to do so. The Stockholders Agreement provides
for the reduction of the number of director designees allocated to each
Designating Stockholder upon the reduction of the amount of Preferred
Stock, 5% Notes and Common Stock held by such Designating Stockholder below
certain specified levels.

The Designating Stockholders agree to cause their respective
designated directors to take the necessary corporate action to establish a
Supervisory Committee of the Board, if such action is consistent with such
director's fiduciary duty. Additionally, each Designating Stockholder
agrees to cause its designated directors to vote: (i) to adopt any
amendment to the Bylaws of Carolco (the "Bylaws") that may be proposed in
connection with the Registration Statement, if such adoption is consistent
with such director's fiduciary duty; (ii) against any proposal to amend the
Restated Certificate or Bylaws or change the composition of the Board
unless all of the Designating Stockholders agree to vote in favor of such
proposal; and (iii) to adopt resolutions requiring that any Major Decision
<PAGE>
(as defined in the Stockholders Agreement) will require the affirmative
vote of at least 85% of the Board and of designated directors of at least
three of the Designating Stockholders.

The Stockholders Agreement entitles MGM Holdings to participate
proportionately in certain sales or dispositions by any two or more of the
Strategic Investors of a required minimum amount of securities of Carolco,
subject to certain conditions. Pioneer, RCS and New CIBV are entitled to
participate proportionately in certain sales and dispositions by MGM
Holdings and Cinepole of securities of Carolco, subject to certain
conditions. Cinepole, RCS and New CIBV are entitled to participate
proportionately in certain sales and dispositions by MGM Holdings and
Pioneer of a required minimum amount of securities of Carolco, subject to
certain conditions.

The Stockholders Agreement contains certain other provisions
customary to an agreement of its nature.

(d) Registration Rights Agreement (Exhibit G).

The Registration Rights Agreement (the "Registration Rights
Agreement") provides certain registration rights to MGM Holdings, Pioneer,
Cinepole, and RCS and certain successors-in-interest thereof as holders of
securities of Carolco (individually, a "Holder", and collectively, the
"Holders"). The Registration Rights Agreement applies to Preferred Stock
and 5% Notes acquired pursuant to the Purchase Agreement, any shares of
Common Stock into which Preferred Stock or 5% Notes are converted, any
shares of Common Stock acquired by RCS pursuant to the RCS Stock Purchase
Agreement (as defined in the Registration Rights Agreement), any shares of
Common Stock received by Pioneer, Cinepole or RCS pursuant to the
Contribution and Exchange Agreement (as defined in the Registration Rights
Agreement) or owned by Pioneer, Cinepole or RCS on the date of the
execution of the Purchase Agreement that are not exchangeable or
contributed pursuant to the Contribution and Exchange Agreement, and
certain securities received by the Holders as a result of holding such
securities (individually, a "Registrable Security", and collectively,
"Registrable Securities").

Pursuant to the Registration Rights Agreement, MGM Holdings or
its successors-in-interest may make up to two requests, subject to certain
limitations, that Carolco effect the registration under the Securities Act
of Registrable Securities that are beneficially owned by them during the
time period beginning six months after the consummation of the transactions
contemplated in the Purchase Agreement and ending the earlier of 18 months
after such consummation or the date on which MGM Holdings no longer owns
any Registrable Securities (the "MGM Registration Period"). During the MGM
Registration Period, MGM Holdings' right to demand registration shall be
exclusive, and Carolco will not effect a registration during the MGM
Registration Period for itself or any other Holders.

Upon the expiration of the MGM Registration Period, any Holder
may make up to two requests, subject to certain limitations, that Carolco
effect the registration under the Securities Act of Registrable Securities
that are beneficially owned by it.

The Registration Rights Agreement requires that any request cover
a minimum amount of Registrable Securities in order for Carolco to be
obligated to effect a registration with respect thereto.

If at any time, Carolco proposes to file a registration statement
under the Securities Act with respect to any offering by Carolco of any of
its securities (other than a registration statement on Form S-4 or S-8),
the Company will offer (a) to MGM Holdings and Holders who are transferees
from MGM Holdings prior to the expiration of the MGM Registration Period
and (b) thereafter, to all Qualifying Holders (as defined in the
Registration Rights Agreement) the opportunity to register such number,
<PAGE>
which must exceed a specified minimum amount, of Registrable Securities, as
each such holder may request. If such Registrable Securities exceed the
number of securities that can be sold in such offering, Carolco shall
reduce the number of Registrable Securities to be offered for the account
of such holders pro rata based upon the relative number of any Registrable
Securities requested to be included in such registration by each such
holder.

The Registration Rights Agreement contains certain other
provisions that are customary to an agreement of its nature.

(e) Subordination Agreement (Exhibit H).

Pursuant to the Subordination Agreement, any proceeds to be
received by any of the Strategic Investors upon a liquidation, dissolution
or winding up of Carolco with respect to any securities of Carolco held by
such Strategic Investor prior to the Restructuring ("Old Common") shall be
subordinate, to the extent of the Required Payment (as defined in the
Subordination Agreement), to any proceeds to be received with respect to
any Common Stock resulting from the conversion of Preferred Stock or 5%
Notes held by any of the Strategic Investors or MGM Holdings pursuant to
the Purchase Agreement ("New Common"). After the Required Payment has been
paid to the holders of New Common, all proceeds shall be payable pro rata
to the Strategic Investors with respect to Old Common in an amount equal to
the Required Payment. To the extent that any proceeds are then remaining,
such proceeds shall be allocated pro rata among MGM Holdings and the
Strategic Investors and as provided by Delaware law.

Cinepole 54% Old Common
46% New Common
RCS 100% Old Common
0% New Common

MGM Holdings 0% Old Common
100% New Common

Item 7. Material to be Filed as Exhibits.

EXHIBIT A Securities Purchase Agreement

EXHIBIT B Confidential Draft Term Sheet Proposed MGM Carolco
Distribution Agreement

EXHIBIT C Contribution and Exchange Agreement

EXHIBIT D Standby Purchase Agreement

EXHIBIT E Put and Call Agreement

EXHIBIT F Stockholders Agreement

EXHIBIT G Registration Rights Agreement
<PAGE>
EXHIBIT H Subordination Agreement

EXHIBIT I Joint Filing Statement Pursuant to Rule 13d-
1(f)1(iii)
Signature

After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.

______________________________
(Date)

MGM HOLDINGS CORPORATION

______________________________
(Signature)

______________________________
(Name/Title)

Signature

After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.

______________________________
(Date)

CREDIT LYONNAIS INTERNATIONAL
SERVICES

______________________________
(Signature)

______________________________
(Name/Title)

Signature

After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.

______________________________
(Date)

CREDIT LYONNAIS
<PAGE>

______________________________
(Signature)

______________________________
(Name/Title)

Schedule I

Rene-Claude Jouannet France President and Treasurer of MGM Holdings,
Director of MGM Holdings,
Directeur Adjoint of International Affairs of
Credit Lyonnais
</TABLE>

Schedule II

<S> <C> <C>
Dominique Ogee France Chairman of the Board and Chief Executive
Officer,
Relationship Manager for Subsidiaries
Department of Credit Lyonnais

Genevieve Martin France Director,
maiden Jacquier Relationship Manager for Subsidiaries
Department of Credit Lyonnais

Pierre Vanden France Director,
Broeck Relationship Manager for Subsidiaries
Department of Credit Lyonnais
Josette Novel France Director,
Relationship Manager for Subsidiaries
Department of Credit Lyonnais
<PAGE>
Gabriel Apelojg France Attorney-in-fact,
Relationship Manager for Subsidiaries
Department of Credit Lyonnais

Pascal Bloch France Attorney-in-fact,
Relationship Manager for Subsidiaries
Department of Credit Lyonnais
</TABLE>

Schedule III

Each person named below is a director or executive officer of
Credit Lyonnais, whose principal business address is described under Item 2
above. Except as otherwise set forth below, the principal business address
of each person is the address of Credit Lyonnais set forth in Item 2 above.
<TABLE>

<S> <C> <C>
Jean Yves Haberer France Chairman of the Board,
Chief Executive Officer and President

Christian Babusiaux France Director,
General Manager of the Office for Consumer
Affairs, Price Supervision and Fraud
Control of the Ministry of Economy
59, boulevard v. Ariol
75013 Paris
France
Jean-Pascal Beaufret France Director,
Head of Department for Monetary and Financial
Affairs and Head of Department for
Insurance Affairs of the Ministry of
Economy
139, rue de Bercy
75012 Paris
France

Georges Begot France Director,
Credit Lyonnais employee

Pierre de Boissieu France Director,
Head of Economic and Foreign Affairs to the
Ministry of Foreign Affairs
37, quai d'Orsay
75007 Paris
France
Michel Covet France Director,
Credit Lyonnais employee

Jean-Claude Cuny France Director,
Credit Lyonnais employee
Denise Gerlat France Director,
Credit Lyonnais employee
<PAGE>
Pierre Gisserot France Director,
Head of General Inspection of Finance of the
Ministry of Economy
139, rue de Bercy
75012 Paris
France

Daniel Houri France Director,
Chief Counsellor of the Government Audit
Office
26, rue de la Pepiniere
75008 Paris
France
Jacques Journoud France Director,
Credit Lyonnais employee

Marc de Lacharriere France Director,
Chairman of Fimalac
97, rue de Lille
75007 Paris
France

Jean Lavergne France Director,
Advisor for Social Affairs to the Presidency
of the French Republic
55-57, rue du Faubourg
Saint-Honore
75008 Paris
France
Raymond Levy France Director,
Honorary Chairman of Renault SA
34, quai le Gallo
92109 Boulogne-Billancourt
France

Didier Lombard France Director,
General Manager of the Industry to the
Ministry of Industry
3/5, rue Barbet de Jouy
75007 Paris
France
Jean Pierson France Director,
Director and Chief Executive Officer of
Airbus Industries
1, Rond point M. Bellonte
31707 Blagnac Cedex
France

Jean-Jacques Pouyadoux France Director,
Credit Lyonnais employee

Gilbert Trigano France Director,
Honorary Chairman of Club Mediterranee
2, rue de 4 Septembre
75002 Paris
France
Michel Renault France General Manager,
Member of the Executive Committee

Francois Gille France General Manager,
Member of the Executive Committee
Claude Rubinowicz France Deputy General Manager,
Member of the Executive Committee
<PAGE>
Pierre Laurent France Deputy General Manager,
Member of the Executive Committee

Jean Yves Durance France Deputy General Manager,
Member of the Executive Committee
Serge Boutissou France Deputy General Manager,
Member of the Executive Committee

Chantal Lanchon France Deputy General Manager,
Member of the Executive Committee

Joseph Musseau France Executive Vice-President,
Member of the Executive Committee
Jean Cedelle France Executive Vice-President,
Member of the Executive Committee

Sylvain Carnot France Executive Vice-President,
Member of the Executive Committee

</TABLE>

<TABLE>

INDEX TO EXHIBITS

Sequentially
Numbered
Exhibit Title of Document Page
<S> <C> <C>

A Securities Purchase Agreement, dated
as of May 25, 1993, among Carolco, MGM
Holdings, Cinepole and Pioneer, as
amended by amendments dated as of July
29, 1993, August 19, 1993 and October
7, 1993.
B Confidential Draft Term Sheet Proposed
MGM Carolco Distribution Agreement,
dated as of April 23, 1993, between
Carolco and Metro-Goldwyn-Mayer Inc.

C Contribution and Exchange Agreement,
dated as of May 25, 1993, as amended
by amendments dated as of July 29,
1993, and October 15, 1993, among
Carolco, Pioneer, Le Studio Canal+ and
RCS.

D Standby Purchase and Investment
Agreement, dated as of July 29, 1993,
among Carolco, Pioneer, Le Studio
Canal+, RCS and TCI.
E Put and Call Agreement, dated October
20, 1993 among MGM Holdings, Credit
Lyonnais and Cinepole.

F Stockholders Agreement, dated October
20, 1993, among MGM Holdings, Pioneer,
Studio Canal+, RCS and New CIBV.
<PAGE>
G Registration Rights Agreement, dated
October 20, 1993, among Carolco, MGM
Holdings, Pioneer, Cinepole and RCS.

H Subordination Agreement, dated as of
October 20, 1993, among MGM Holdings,
Pioneer, Cinepole, RCS and RCS
International Communications N.V.
I Joint Filing Statement Pursuant to
Rule 13D-1 dated October 29, 1993,
among MGM Holdings, CLIS and Credit
Lyonnais.
</TABLE>

AGREEMENT AND PLAN OF MERGER

Dated as of August 10, 1994

by and among

LIVE Entertainment Inc.

Carolco Acquisition Corp.

and

Carolco Pictures Inc.

TABLE OF CONTENTS

Page

ARTICLE 1

THE MERGER . . . . . . . . . . . . . . 2
Section 1.1 The Merger. . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Effective Date of the Merger; Closing. . . . . . . 2

ARTICLE 2

THE SURVIVING CORPORATION . . . . . . . . . . 2
Section 2.1 Certificate of Incorporation. . . . . . . . . . . . 2
Section 2.2 Bylaws. . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.3 Board of Directors and Officers. . . . . . . . . . 3

ARTICLE 3

CHANGES AT LIVE AT OR BEFORE EFFECTIVE DATE . . . . . . 3
Section 3.1 Certificate of Incorporation. . . . . . . . . . . . 3
<PAGE>
Section 3.2 Bylaws. . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.3 Board of Directors and Officers. . . . . . . . . . 4
Section 3.4 LIVE Home Video Inc. . . . . . . . . . . . . . . . 4

ARTICLE 4

CONVERSION AND EXCHANGE OF SHARES AND CERTIFICATES . . . . 4
Section 4.1 Conversion. . . . . . . . . . . . . . . . . . . . . 4
Section 4.2 LIVE to Make Certificates Available. . . . . . . . 6
Section 4.3 Dividends; Transfer Taxes. . . . . . . . . . . . . 8
Section 4.4 No Further Ownership Rights in Carolco Common
Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.5 Closing of Carolco Transfer Books. . . . . . . . . 9

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF LIVE . . . . . . . 10
Section 5.1 Organization, Standing and Power. . . . . . . . . . 10
Section 5.2 Subsidiaries. . . . . . . . . . . . . . . . . . . . 10
Section 5.3 Capital Structure and Commitments. . . . . . . . . 11
Section 5.4 Authority; Non-Contravention. . . . . . . . . . . . 12
Section 5.5 LIVE SEC Documents. . . . . . . . . . . . . . . . . 14
Section 5.6 No Material Adverse Change. . . . . . . . . . . . . 15
Section 5.7 Absence of Undisclosed Liabilities. . . . . . . . . 15
Section 5.8 Absence of Certain Events. . . . . . . . . . . . . 15
Section 5.9 No Solicitation . . . . . . . . . . . . . . . . . . 15
Section 5.10 Registration Statement and Proxy Statement. . . . . 16
Section 5.11 Reorganization. . . . . . . . . . . . . . . . . . . 16
Section 5.12 Litigation. . . . . . . . . . . . . . . . . . . . . 16
Section 5.13 Loan Agreements, Customers and Suppliers. . . . . . 16
Section 5.14 Permits. . . . . . . . . . . . . . . . . . . . . . 17
Section 5.15 Absence of Changes in LIVE Benefit Plans. . . . . . 17
Section 5.16 Intellectual Property. . . . . . . . . . . . . . . 18
Section 5.17 Environmental Matters. . . . . . . . . . . . . . . 18
Section 5.18 Taxes. . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.19 Foreign Corrupt Practices Act. . . . . . . . . . . 19
Section 5.20 Brokers. . . . . . . . . . . . . . . . . . . . . . 19
Section 5.21 Officers, Directors and Key Employees. . . . . . . 19
Section 5.22 State Takeover Statutes. . . . . . . . . . . . . . 19
Section 5.23 Insurance. . . . . . . . . . . . . . . . . . . . . 20
Section 5.24 Title to Properties and Related Matters. . . . . . 20
Section 5.25 Accuracy of LIVE Disclosure. . . . . . . . . . . . 20

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF CAROLCO . . . . . . 21
Section 6.1 Organization, Standing and Power. . . . . . . . . . 21
Section 6.2 Subsidiaries. . . . . . . . . . . . . . . . . . . . 21
Section 6.3 Capital Structure and Commitments. . . . . . . . . 21
Section 6.4 Authority; Non-Contravention. . . . . . . . . . . . 23
Section 6.5 Carolco SEC Documents. . . . . . . . . . . . . . . 24
Section 6.6 No Material Adverse Change. . . . . . . . . . . . . 25
Section 6.7 Absence of Undisclosed Liabilities. . . . . . . . . 25
Section 6.8 Absence of Certain Events. . . . . . . . . . . . . 25
Section 6.9 No Solicitation . . . . . . . . . . . . . . . . . . 25
Section 6.10 Registration Statement and Proxy Statement. . . . . 26
Section 6.11 Reorganization. . . . . . . . . . . . . . . . . . . 26
Section 6.12 Litigation. . . . . . . . . . . . . . . . . . . . . 26
Section 6.13 Loan Agreements, Customers and Suppliers. . . . . . 26
Section 6.14 Permits. . . . . . . . . . . . . . . . . . . . . . 27
Section 6.15 Absence of Changes in Carolco Benefit Plans. . . . 27
Section 6.16 Intellectual Property. . . . . . . . . . . . . . . 27
Section 6.17 Environmental Matters. . . . . . . . . . . . . . . 28
Section 6.18 Taxes. . . . . . . . . . . . . . . . . . . . . . . 28
Section 6.19 Foreign Corrupt Practices Act. . . . . . . . . . . 28
<PAGE>
Section 6.20 Brokers. . . . . . . . . . . . . . . . . . . . . . 28
Section 6.21 Officers, Directors and Key Employees. . . . . . . 29
Section 6.22 State Takeover Statutes. . . . . . . . . . . . . . 29
Section 6.23 Insurance. . . . . . . . . . . . . . . . . . . . . 29
Section 6.24 Title to Properties and Related Matters. . . . . . 29
Section 6.25 Accuracy of Carolco Disclosure. . . . . . . . . . . 30

ARTICLE 7

REPRESENTATIONS AND WARRANTIES REGARDING CAC . . . . . 30
Section 7.1 Organization and Standing. . . . . . . . . . . . . 30
Section 7.2 Capital Structure. . . . . . . . . . . . . . . . . 30
Section 7.3 Authority. . . . . . . . . . . . . . . . . . . . . 31

ARTICLE 8

COVENANTS RELATING TO CONDUCT OF BUSINESS . . . . . . 31
Section 8.1 Conduct of Business by LIVE Pending the Merger. . . 31
Section 8.2 Conduct of Business by Carolco Pending the
Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 8.3 Competing Offers . . . . . . . . . . . . . . . . . 39
Section 8.4 Reorganization. . . . . . . . . . . . . . . . . . . 39
Section 8.5 Conduct of Business of CAC Pending the Merger. . . 40
Section 8.6 Update of LIVE LETTER and CAROLCO LETTER. . . . . . 40
Section 8.7 Bringdown of Fairness Opinion. . . . . . . . . . . 40

ARTICLE 9

ADDITIONAL AGREEMENTS . . . . . . . . . . . 40
Section 9.1 Carolco and LIVE Stockholder Approvals. . . . . . . 40
Section 9.2 Registration Statement and Proxy Statement . . . . 41
Section 9.3 Amendment to Indentures . . . . . . . . . . . . . . 42
Section 9.4 Listing Application. . . . . . . . . . . . . . . . 43
Section 9.5 Access to Information. . . . . . . . . . . . . . . 43
Section 9.6 Affiliates . . . . . . . . . . . . . . . . . . . . 43
Section 9.7 Fees and Expenses. . . . . . . . . . . . . . . . . 43
Section 9.8 Carolco Stock Options. . . . . . . . . . . . . . . 44
Section 9.9 Other Obligations of Carolco and LIVE . . . . . . . 45
Section 9.10 Registration Rights. . . . . . . . . . . . . . . . 46
Section 9.11 Best Efforts. . . . . . . . . . . . . . . . . . . . 46
Section 9.12 Public Announcements. . . . . . . . . . . . . . . . 47
Section 9.13 State Takeover Laws. . . . . . . . . . . . . . . . 47
Section 9.14 Indemnification. . . . . . . . . . . . . . . . . . 47
Section 9.15 [Intentionally Deleted.] . . . . . . . . . . . . . 48
Section 9.16 [Intentionally Deleted.] . . . . . . . . . . . . . 48
Section 9.17 LIVE Rights. . . . . . . . . . . . . . . . . . . . 48
Section 9.18 Continuation of Business or Business Assets. . . . . 48

ARTICLE 10

CONDITIONS PRECEDENT . . . . . . . . . . . 48
Section 10.1 Conditions to Each Party's Obligation to Effect
the Merger. . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.2 Conditions to Obligation of Carolco to Effect the
Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 10.3 Conditions to Obligations of LIVE and CAC to
Effect the Merger. . . . . . . . . . . . . . . . . . . . . . 52

ARTICLE 11

TERMINATION, AMENDMENT AND WAIVER . . . . . . . . 53
Section 11.1 Termination. . . . . . . . . . . . . . . . . . . . 53
Section 11.2 Effect of Termination. . . . . . . . . . . . . . . 55
Section 11.3 Amendment. . . . . . . . . . . . . . . . . . . . . 55
Section 11.4 Waiver. . . . . . . . . . . . . . . . . . . . . . . 55
Section 11.5 Approval by LIVE Special Committee . . . . . . . . 56
<PAGE>
ARTICLE 12

GENERAL PROVISIONS . . . . . . . . . . . . 56
Section 12.1 Non-Survival of Representations and Warranties. . . 56
Section 12.2 Notices. . . . . . . . . . . . . . . . . . . . . . 56
Section 12.3 Interpretation. . . . . . . . . . . . . . . . . . . 60
Section 12.4 Counterparts. . . . . . . . . . . . . . . . . . . . 60
Section 12.5 Entire Agreement; No Third-Party Beneficiaries. . . 60
Section 12.6 Governing Law. . . . . . . . . . . . . . . . . . . 60
Section 12.7 Assignment. . . . . . . . . . . . . . . . . . . . . 60

Glossary

Amended and Restated Carolco 5% Indenture . . . . . . . . . . . . . . . 45
Amended and Restated Standby Purchase and Investment Agreement . . . . 45
1986 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
1989 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Advisory Committee . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Amended and Restated Bylaws of Carolco . . . . . . . . . . . . . . . . . 3
Amended and Restated Bylaws of LIVE . . . . . . . . . . . . . . . . . . . 3
Amended and Restated Certificate of Incorporation of LIVE . . . . . . . . 3
Average Trading Price . . . . . . . . . . . . . . . . . . . . . . . . . . 5
blue sky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
CAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CAC Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Carolco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Carolco 5% Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Carolco 7% Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Carolco 11.5%/10% Notes . . . . . . . . . . . . . . . . . . . . . . . . 45
Carolco 13% Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Carolco 13%/12% Notes . . . . . . . . . . . . . . . . . . . . . . . . . 45
Carolco Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . 25
Carolco Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . 27
Carolco Common Certificates . . . . . . . . . . . . . . . . . . . . . . . 6
Carolco Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Carolco Entertainment Inc. . . . . . . . . . . . . . . . . . . . . . . . 3
Carolco Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
CAROLCO LETTER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Carolco Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . 1
Carolco Proprietary Rights . . . . . . . . . . . . . . . . . . . . . . 27
Carolco Registration Rights Agreements . . . . . . . . . . . . . . . . 23
Carolco SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . 24
Carolco Series A Preferred Stock . . . . . . . . . . . . . . . . . . . . 6
Carolco Stock Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Carolco Stockholder Meeting . . . . . . . . . . . . . . . . . . . . . . 40
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Certificate of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Chemical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Chemical Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . 13
Cinepole . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
competing proposal . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Constituent Corporations . . . . . . . . . . . . . . . . . . . . . . . . 1
Contingent Payment Rights . . . . . . . . . . . . . . . . . . . . . . . 12
control share acquisition . . . . . . . . . . . . . . . . . . . . . . . 19
D&O Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
date hereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
date of this Agreement, . . . . . . . . . . . . . . . . . . . . . . . . 60
DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
<PAGE>
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
fair price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . 14
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
include . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Investor Representation Agreement . . . . . . . . . . . . . . . . . . . 13
Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
LHV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
LHV Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
LIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LIVE 12% Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . 42
LIVE 12% Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
LIVE Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . 15
LIVE Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 18
LIVE Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
LIVE Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . 52
LIVE Increasing Rate Notes . . . . . . . . . . . . . . . . . . . . . . 42
LIVE Increasing Rate Notes Indenture . . . . . . . . . . . . . . . . . 42
LIVE Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
LIVE LETTER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
LIVE Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 9
LIVE Proprietary Rights . . . . . . . . . . . . . . . . . . . . . . . . 18
LIVE Registration Rights Agreements . . . . . . . . . . . . . . . . . . 12
LIVE Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
LIVE Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 11
LIVE SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 14
LIVE Series A Common Stock . . . . . . . . . . . . . . . . . . . . . . 11
LIVE Series D Preferred Stock . . . . . . . . . . . . . . . . . . . . . . 6
LIVE Series B Preferred Stock . . . . . . . . . . . . . . . . . . . . . 11
LIVE Series C Preferred Stock . . . . . . . . . . . . . . . . . . . . . . 6
LIVE Series R Preferred Stock . . . . . . . . . . . . . . . . . . . . . 11
LIVE Special Committee . . . . . . . . . . . . . . . . . . . . . . . . 13
LIVE Stockholder Meeting . . . . . . . . . . . . . . . . . . . . . . . 41
Mailing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . 10
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . 10
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
MGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
MGM Distribution Agreements . . . . . . . . . . . . . . . . . . . . . . 45
moratorium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
New Carolco Entertainment Inc. Registration Rights Agreement . . . . . 46
New LIVE Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 7
New Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
New Stock Option . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Old LIVE Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Option Registration Statement . . . . . . . . . . . . . . . . . . . . . 42
Pay-Per-View Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Pioneer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Plan Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
RCS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . 16
Restated Certificate of Incorporation of Carolco . . . . . . . . . . . . 2
Restated Certificate of Incorporation of LIVE . . . . . . . . . . . . . . 3
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Seidler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Seidler Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . 23
Series A Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Series C Certificate of Designations . . . . . . . . . . . . . . . . . . 6
Significant Carolco Employees . . . . . . . . . . . . . . . . . . . . . 29
Significant LIVE Employees . . . . . . . . . . . . . . . . . . . . . . 19
Stockholder Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 41
Strawberries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
<PAGE>
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 2
takeover proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
TCI Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . 22
Trading Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trading Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
VCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
without limitation. . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Exhibits

Exhibit 1.2 Certificate of Merger
Exhibit 2.1 Restated Certificate of Incorporation of
Carolco
Exhibit 2.2 Amended and Restated Bylaws of Carolco
Exhibit 2.3 Board of Directors of Carolco at Effective
Date
Exhibit 3.1 Amended and Restated Certificate of
Incorporation of Carolco Entertainment Inc.
Exhibit 3.2 Amended and Restated Bylaws of Carolco
Entertainment Inc.
Exhibit 3.3A Board of Directors and Committees of Carolco
Entertainment Inc. at Effective Date
Exhibit 3.3B Officers of Carolco Entertainment Inc. at
Effective Date
Exhibit 3.4 Amended Bylaws of LHV
Exhibit 5.3A Warrant Agreements and Options for LIVE
Common Stock
Exhibit 5.3B LIVE Registration Rights Agreements
Exhibit 5.4(c) Investor Representation Agreement
Exhibit 6.3A Options for Carolco Common Stock
Exhibit 6.3B Carolco Registration Rights Agreements
Exhibit 9.3(a) Amendment to LIVE 12% Indenture
Exhibit 9.3(b) Amendment to LIVE Increasing Rate Notes
Indenture
Exhibit 9.8(d) 1994 Stock Option and Stock Appreciation
Rights Plan
Exhibit 9.9(a) Assumption Agreement with respect to Carolco-
Mario Kassar Employment Agreement
Exhibit 9.9(b) Amended and Restated Carolco 5% Indenture
Exhibit 9.9(c) Amended and Restated Standby Purchase and
Investment Agreement with respect to the
Carolco 7% Notes
Exhibit 9.9(d) First Supplemental Indenture with respect to
the Carolco 11.5%/10% Notes
Exhibit 9.9(e) First Supplemental Indenture with respect to
the Carolco 13%/12% Notes
Exhibit 9.9(f) First Supplemental Indenture with respect to
the Carolco 13% Notes
Exhibit 9.9(g) Assumption Agreement with respect to the MGM
Distribution Agreements
Exhibit 9.9(h) Assumption Agreement with respect to RCS
Agreements
Exhibit 9.9(i) Assumption Agreement with respect to Canal+
Agreements
Exhibit 9.9(j) Assumption Agreement with respect to Pioneer
Agreements
Exhibit 9.10 New Carolco Entertainment Inc. Registration
Rights Agreement
Exhibit 10.1(f) Terms of Aggregate Working Capital
Commitments
Exhibit 10.2(d) Form of Opinion of Counsel to LIVE and CAC
Exhibit 10.3(d) Form of Opinion of Counsel to Carolco

AGREEMENT AND PLAN OF MERGER
<PAGE>

AGREEMENT AND PLAN OF MERGER, dated as of August 10, 1994 (this
"Agreement"), 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") (CAC and Carolco being hereinafter
collectively referred to as the "Constituent Corporations").

W I T N E S S E T H:

WHEREAS, LIVE is a corporation duly organized and existing under the laws
of the State of Delaware with an authorized capitalization as set forth in
Section 5.3 hereof;

WHEREAS, Carolco is a corporation duly organized and existing under the
laws of the State of Delaware with an authorized capitalization as set
forth in Section 6.3 hereof;

WHEREAS, CAC is a corporation duly organized and existing under the laws
of the State of Delaware with an authorized capitalization as set forth in
Section 7.2 hereof and is a wholly-owned subsidiary of LIVE;

WHEREAS, the respective Boards of Directors of LIVE, CAC and Carolco have
approved and declared fair to and in the best interests of their respective
corporations and stockholders, and LIVE acting as the sole stockholder of
CAC has approved, the merger of CAC with and into Carolco (the "Merger"),
upon the terms and subject to the conditions set forth herein, whereby each
issued and outstanding share of the common stock, par value $.01 per share,
of Carolco ("Carolco Common Stock") and each issued and outstanding share
of the preferred stock, par value $1.00 per share, of Carolco ("Carolco
Preferred Stock"), will be cancelled and converted into the right to
receive such consideration as is hereinafter described;

WHEREAS, for federal income tax purposes, the parties hereto intend that
the Merger shall qualify as a tax free reorganization within the meaning of
the Internal Revenue Code of 1986, as amended (the "Code");

WHEREAS, LIVE, CAC and Carolco desire to make certain representations,
warranties and agreements in connection with the Merger and also to
prescribe various conditions to the Merger;

NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, the parties hereto
agree as follows:

ARTICLE 1

THE MERGER

Section 1.1 The Merger. At the Effective Date (as defined in Section
1.2), CAC shall be merged with and into Carolco in accordance with the
applicable provisions of the General Corporation Law of the State of
Delaware (the "DGCL") with Carolco as the surviving corporation in the
Merger (the "Surviving Corporation"), the separate existence of CAC shall
thereupon cease, and Carolco, as the Surviving Corporation, shall continue
its corporate existence under the laws of the State of Delaware. From and
after the Effective Date, the Merger shall have all the effects provided in
Section 259(a) of the DGCL.

Section 1.2 Effective Date of the Merger; Closing.

(a) The Merger shall become effective when a properly executed
Certificate of Merger in the form attached hereto as Exhibit 1.2 is duly
filed with the Secretary of State of the State of Delaware in accordance
with the relevant provisions of the DGCL (the "Certificate of Merger"),
<PAGE>
which filing shall be made as soon as practicable after the Closing
hereinafter contemplated; provided, however, that, upon mutual consent of
the Constituent Corporations, the Certificate of Merger may provide for a
later date and time of effectiveness of the Merger in accordance with the
DGCL, in which case the Merger shall become effective at the date and time
specified in the Certificate of Merger. When used in this Agreement, the
term "Effective Date" shall mean the date and time at which such actions
are completed and such Merger becomes effective.

(b) The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place (i) at the offices of Sidley & Austin,
2049 Century Park East, Los Angeles, California, at 10:00 A.M. local time
on the later of (A) the next business day after the date of the later of
the stockholders' meetings referred to in Section 9.1 and (B) the day on
which the last of the conditions set forth in Article 9 is fulfilled or
waived or (ii) at such other time and place as LIVE and Carolco shall
agree.

ARTICLE 2

THE SURVIVING CORPORATION

Section 2.1 Certificate of Incorporation. The Certificate of
Incorporation of Carolco as in effect immediately prior to the Effective
Date ("Restated Certificate of Incorporation of Carolco"), attached hereto
as Exhibit 2.1, as amended by the Certificate of Merger, at and after the
Effective Date shall become the Certificate of Incorporation of the
Surviving Corporation unless and until thereafter amended in accordance
with its terms and applicable law.

Section 2.2 Bylaws. At or immediately prior to the Effective Date,
the Board of Directors of Carolco shall repeal the Bylaws of Carolco as in
effect immediately prior to the Effective Date and adopt new Bylaws
("Amended and Restated Bylaws of Carolco") substantially in the form
attached hereto as Exhibit 2.2 and at and after the Effective Date, such
Amended and Restated Bylaws of Carolco shall become the Bylaws of the
Surviving Corporation, and shall continue in full force as the Bylaws of
the Surviving Corporation until amended or repealed in accordance with the
terms of the Bylaws and the Certificate of Incorporation of the Surviving
Corporation and in accordance with applicable law.

Section 2.3 Board of Directors and Officers. At the Effective Date,
the members of the Board of Directors of Carolco shall resign from their
positions as and cease being directors of Carolco, and the persons named on
Exhibit 2.3 shall become the directors of the Surviving Corporation, each
of whom shall serve until the earlier of his resignation or removal or
until his respective successor is duly elected and qualified in accordance
with the terms of the Bylaws and the Certificate of Incorporation of the
Surviving Corporation as then in effect and in accordance with applicable
law. At the Effective Date, the officers of Carolco immediately prior to
the Effective Date shall become the officers of the Surviving Corporation
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified in accordance with the terms of
the Bylaws and the Certificate of Incorporation of the Surviving
Corporation as then in effect and in accordance with applicable law.

ARTICLE 3

CHANGES AT LIVE AT OR BEFORE EFFECTIVE DATE

Section 3.1 Certificate of Incorporation. The Certificate of
Incorporation of LIVE as in effect immediately prior to the Effective Date
("Restated Certificate of Incorporation of LIVE") shall be amended and,
immediately before the Effective Date, the Restated Certificate of
Incorporation of LIVE, as amended ("Amended and Restated Certificate of
<PAGE>
Incorporation of LIVE") substantially in the form attached hereto as
Exhibit 3.1 shall be filed with the Secretary of State of the State of
Delaware. At and after the Effective Date, the Amended and Restated
Certificate of Incorporation of LIVE shall continue in full force as the
Certificate of Incorporation of LIVE unless and until thereafter amended in
accordance with its terms and applicable law. At the Effective Date,
pursuant to the Amended and Restated Certificate of Incorporation of LIVE,
the name of LIVE shall be changed to "Carolco Entertainment Inc."

Section 3.2 Bylaws. At or immediately prior to the Effective Date,
the Board of Directors of LIVE shall repeal the Bylaws of LIVE as in effect
immediately prior to the Effective Date and adopt new Bylaws ("Amended and
Restated Bylaws of LIVE") substantially in the form attached hereto as
Exhibit 3.2 and at and after the Effective Date, such Amended and Restated
Bylaws of LIVE, shall continue in full force as the Bylaws of LIVE until
amended or repealed in accordance with the terms of the Bylaws and the
Certificate of Incorporation of LIVE and in accordance with applicable law.

Section 3.3 Board of Directors and Officers. At the Effective Date,
the members of the board of directors of LIVE shall resign, seriatim, from
their positions as and cease being directors of LIVE and as each such
person resigns, the persons named on Exhibit 3.3A shall become, seriatim,
the directors of LIVE and members of the committees of the board of
directors of LIVE as indicated on Exhibit 3.3A, each of whom shall serve
until the earlier of his resignation or removal or until his respective
successor is duly elected and qualified in accordance with the terms of the
Bylaws and the Certificate of Incorporation of LIVE as then in effect and
in accordance with applicable law. At the Effective Date, the officers of
LIVE immediately prior to the Effective Date shall resign from their
positions as and cease being officers of LIVE, and the persons named on
Exhibit 3.3B shall become the officers of LIVE until the earlier of their
resignation or removal or until their respective successors are duly
elected and qualified in accordance with the terms of the Bylaws and the
Certificate of Incorporation of LIVE as then in effect and in accordance
with applicable law.

Section 3.4 LIVE Home Video Inc. The Certificate of Incorporation of
LIVE Home Video Inc., a Delaware corporation and a wholly-owned subsidiary
of LIVE ("LHV"), as in effect immediately prior to the Effective Date shall
continue in full force as the Certificate of Incorporation of LHV unless
and until thereafter amended in accordance with its terms and applicable
law. At or immediately prior to the Effective Date, the Board of Directors
of LHV shall repeal the Bylaws of LHV as in effect immediately prior to the
Effective Date and adopt new Bylaws substantially in the form attached
hereto as Exhibit 3.4 (as amended, the "LHV Bylaws"), and at and after the
Effective Date, such LHV Bylaws shall become the Bylaws of LHV, and shall
continue in full force as the Bylaws of LHV until amended or repealed in
accordance with their terms and the terms of the Certificate of
Incorporation of LHV as then in effect and in accordance with applicable
law. The Board of Directors of LHV shall not change in connection with the
Merger and each member of the Board of Directors of LHV shall continue to
serve until the earlier of his resignation or removal or until his
respective successor is duly elected and qualified in accordance with the
terms of the Bylaws and the Certificate of Incorporation of LHV as then in
effect and in accordance with applicable law.

ARTICLE 4

CONVERSION AND EXCHANGE OF SHARES AND CERTIFICATES

Section 4.1 Conversion. At the Effective Date, by virtue of the
Merger and without any action on the part of any holder of any capital
stock of Carolco, LIVE or CAC:

(a) Conversion of Carolco Common Stock.
<PAGE>
(i) Subject to the provisions of clause (ii) of this
Section 4.1(a), every 5.5 shares of Carolco Common Stock issued and
outstanding immediately prior to the Effective Date (other than any such
shares held in Carolco's treasury) shall be converted into one share of
common stock of LIVE, par value $.01 per share ("LIVE Common Stock")
(hereinafter the number of shares of Carolco Common Stock which shall be
converted into one share of LIVE Common Stock shall be referred to as the
"Exchange Ratio"). All such shares of Carolco Common Stock, when so
converted, shall no longer be outstanding and shall automatically be
cancelled and retired and each holder of a Carolco Common Certificate (as
defined in Section 4.2(a)) representing any such shares shall cease to
have any rights with respect thereto, except as provided in Section 4.2.
All shares of LIVE Common Stock to be received by holders of Carolco
Common Stock upon conversion of such Carolco Common Stock pursuant to the
Merger shall be duly authorized, validly issued and outstanding, fully
paid and nonassessable, free of preemptive rights, and will not be liable
to any further call, nor shall the holder thereof be liable for any
further payments with respect thereto. Each share of Carolco Common
Stock held in Carolco's treasury shall be cancelled and cease to exist at
and after the Effective Date and no consideration shall be delivered with
respect thereto.

(ii) If the Average Trading Price (as defined below) (A) is
less than 54.5 cents per share, the Exchange Ratio shall not be 5.5
shares and instead shall be equal to the number obtained by dividing
$3.00 by the Average Trading Price; provided, however, that in no event
shall the Exchange Ratio exceed 6.5 shares; or (B) is greater than 72.7
cents per share, the Exchange Ratio shall not be 5.5 shares and instead
shall be equal to the number obtained by dividing $4.00 by the Average
Trading Price; provided, however, that in no event shall the Exchange
Ratio decrease below 4.5 shares.

For purposes of this Agreement:

(A) "Average Trading Price" means the average Trading Price
(as defined below) for the 20 consecutive Trading Days (as defined
below) ending on a date that is three Trading Days prior to the date
of the Carolco Stockholder Meeting and the LIVE Stockholder Meeting
(or in the event the Carolco Stockholder Meeting and LIVE
Stockholder Meeting are not on the same date, the date of the later
Stockholder Meeting), or ending on such earlier date as may be
required by the Securities and Exchange Commission,

(B) "Trading Price" means, on any day, the last reported sale
price of one share of Carolco Common Stock regular way on the New
York Stock Exchange or, if such security is not listed on the New
York Stock Exchange, the last sale price of such security regular
way, as reported in a composite published report of transactions
which includes transactions on the exchange or other principal
markets on which such security is traded or, if there is no such
composite report as to any day, the last reported sale price,
regular way (or if there is no such reported sale on such day, the
average of the closing reported bid and asked prices) on the
principal United States securities trading market (whether a stock
exchange, National Association of Securities Dealers Automated
Quotation System or otherwise) on which such security is traded, and

(C) "Trading Day" means a day on which the New York Stock
Exchange is open for at least one-half of its normal business hours.

(iii) Stockholders of Carolco entitled to receive a
fractional share of LIVE Common Stock upon the conversion of the Carolco
Common Stock shall receive in lieu thereof cash in an amount equal to the
Average Trading Price times the number of shares of Carolco Common Stock
<PAGE>
not converted (which number shall be less than the Exchange Ratio). All
checks issued in payment for fractional interests shall be denominated in
U.S. dollars and drawn on a United States bank.

(b) Conversion of Carolco Preferred Stock. Each share of Series A
Convertible Preferred Stock of Carolco, par value $1.00 ("Carolco Series A
Preferred Stock"), issued and outstanding immediately prior to the
Effective Date shall be converted into one share of Series D Convertible
Preferred Stock of LIVE, par value $1.00 ("LIVE Series D Preferred Stock"),
the statement of designations, rights, preferences and powers of which is
included in Exhibit 3.1. All such shares of Carolco Series A Preferred
Stock, when so converted, shall no longer be outstanding and shall
automatically be cancelled and retired and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except as provided in Section 4.2. All shares of the LIVE Series
D Preferred Stock to be received by holders of Carolco Series A Preferred
Stock upon conversion of such Carolco Series A Preferred Stock pursuant to
the Merger shall be duly authorized, validly issued and outstanding, fully
paid and nonassessable, free of preemptive rights, and will not be liable
to any further call, nor shall the holder thereof be liable for any further
payment with respect thereto.

(c) LIVE Stock and CAC Stock. Each Share of LIVE Common Stock
issued and outstanding immediately prior to the Effective Date shall remain
unchanged by virtue of the Merger. Each Share of Series C Convertible
Preferred Stock of LIVE, par value $1.00 ("LIVE Series C Preferred Stock")
shall remain unchanged except as the Amended Certificate of Designations,
Preferences and Rights of LIVE Series C Preferred Stock ("Series C
Certificate of Designations") shall be amended by the Amended and Restated
Certificate of Incorporation of LIVE to be filed as provided herein. Each
Share of common stock of CAC, par value $0.01 per share ("CAC Common
Stock") issued and outstanding immediately prior to the Effective Date
shall be converted into one share of common stock, par value $0.01 per
share, of the Surviving Corporation.

Section 4.2 LIVE to Make Certificates Available.

(a) Exchange of Common Stock Certificates. Prior to the Effective
Date, LIVE shall authorize American Stock Transfer & Trust Company (or such
other person or persons as shall be acceptable to LIVE and Carolco) to act
as Exchange Agent hereunder (the "Exchange Agent"). At or prior to the
Effective Date, LIVE shall deposit with the Exchange Agent in trust for the
holders of certificates which immediately prior to the Effective Date
represented shares of Carolco Common Stock (the "Carolco Common
Certificates"), and, subject to Section 4.3, each such holder will be
entitled to receive, upon surrender to the Exchange Agent in the manner set
forth in subsection (d) below of one or more Carolco Common Certificates
for cancellation, certificates representing the number of shares of LIVE
Common Stock into which the shares represented by such Carolco Common
Certificates were converted in the Merger. LIVE Common Stock into which
Carolco Common Stock shall be converted in the Merger shall be deemed to
have been issued at the Effective Date, and Carolco Common Certificates
shall, at and after the Effective Date, be deemed to represent only the
right to receive, upon surrender of such Carolco Common Certificates, the
certificates contemplated by the preceding sentence.

(b) Exchange of Series A Certificates. At or prior to the
Effective Date, LIVE shall deposit with the Exchange Agent in trust for the
holders of certificates which immediately prior to the Effective Date
represented shares of Carolco Series A Preferred Stock ("Series A
Certificates"), and, subject to Section 4.3, each such holder will be
entitled to receive, upon surrender to the Exchange Agent in the manner set
forth in subsection (d) below of one or more Series A Certificates for
cancellation, certificates representing the number of shares of LIVE Series
D Preferred Stock into which the shares represented by such Series A
Certificates were converted in the Merger. LIVE Series D Preferred Stock
<PAGE>
into which Carolco Series A Preferred Stock shall be converted in the
Merger shall be deemed to exist as of the Effective Date, and Series A
Certificates shall, at and after the Effective Date, be deemed to represent
only the right to receive, upon surrender of such Series A Certificates,
the certificates contemplated by the preceding sentence.

(c) Exchange of Old LIVE Certificates. At or prior to the
Effective Date, LIVE shall deposit with the Exchange Agent in trust for the
holders of certificates which immediately prior to the Effective Date
represented shares of LIVE Common Stock or LIVE Series C Preferred Stock or
of certificates which immediately prior to the Effective Date represented
Contingent Payment Rights (as defined in Section 5.3) (collectively, "Old
LIVE Certificates"), and, subject to Section 4.3, each such holder will be
entitled to receive, upon surrender to the Exchange Agent in the manner set
forth in subsection (d) below of one or more Old LIVE Certificates for
cancellation, certificates representing the number of shares of LIVE Common
Stock or LIVE Series C Preferred Stock or Contingent Payment Rights
(reflecting the change of LIVE's name at the Effective Date), equal to the
number of shares or rights represented by the Old LIVE Certificates so
exchanged ("New LIVE Certificates"). Notwithstanding the foregoing, at and
after the Effective Date, until the holder of an Old LIVE Certificate
surrenders such Old LIVE Certificate to the Exchange Agent for cancellation
in the manner set forth in subsection (d) below, each Old LIVE Certificate
shall continue to represent the same number of shares of LIVE Common Stock,
LIVE Series C Preferred Stock or Contingent Payment Rights as such Old LIVE
Certificate represented immediately prior to the Effective Date.

(d) Exchange Procedures. As soon as practicable after the
Effective Date, but in any event no later than five business days
thereafter, the Exchange Agent shall mail to each holder of record (at such
address as appears on the books of LIVE or Carolco or as such holder shall
otherwise designate) of a Carolco Common Certificate, a Series A
Certificate and/or an Old LIVE Certificate, as the case may be (any such
certificates are sometimes referred to hereinafter individually as a
"Certificate," and collectively as "Certificates"), (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to such Certificates shall pass, only upon actual
delivery of such Certificates to the Exchange Agent and shall be in such
form and have such other provisions as LIVE and Carolco shall mutually
specify, including procedures to be followed in the event a holder has lost
his certificates) and (ii) instructions for use in effecting the surrender
of the Certificates in exchange for certificates representing shares of
LIVE Common Stock and/or LIVE Series D Preferred Stock and/or for New LIVE
Certificates (the "Mailing"). Upon surrender of such a Certificate for
cancellation to the Exchange Agent, at the offices of the Exchange Agent
and as otherwise specified in the transmittal letter from the Exchange
Agent, together with such letter of transmittal, duly executed, the holder
of such Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of LIVE Common Stock,
or that number of whole shares of LIVE Series D Preferred Stock, which such
holder has the right to receive pursuant to this Article 4, or New LIVE
Certificates in accordance with the provisions of Section 4.2(c), and the
Certificate so surrendered shall be cancelled.

Section 4.3 Dividends; Transfer Taxes.

(a) Dividends. No dividends or other distributions, if any, that
are declared on or after the Effective Date on LIVE Common Stock (other
than LIVE Common Stock represented by an Old LIVE Certificate) or LIVE
Series D Preferred Stock or are payable to the holders of record thereof
will be paid with respect to shares of such LIVE Common Stock (other than
LIVE Common Stock represented by an Old LIVE Certificate) or LIVE Series D
Preferred Stock, until the holders thereof surrender their Carolco Common
Certificates or Series A Certificates, as applicable, as provided in
Section 4.2. Nothing in this Agreement shall require holders of Old LIVE
Certificates to surrender such Old LIVE Certificates, as permitted in
<PAGE>
Section 4.2, as a condition to receipt of any dividend or other
distribution, if any, payable to such holder with respect to shares of LIVE
Common Stock, LIVE Series C Preferred Stock or Contingent Payment Rights
represented by such Old LIVE Certificate. Subject to the effect of any
applicable laws, there shall be paid to such record holder of the
certificates representing such LIVE Common Stock or LIVE Series D Preferred
Stock at the time of such surrender, if required, or the appropriate
payment date, if later, or as promptly as practicable thereafter, the
amount of any dividends or other distributions theretofore paid with
respect to whole shares of such LIVE Common Stock or LIVE Series D
Preferred Stock and having a record date on or after the Effective Date.
In no event shall the person entitled to receive any such dividends or
other distributions be entitled to receive interest on such dividends or
other distributions.

(b) Transfer Taxes. No transfer taxes shall be payable by a (i)
holder of Carolco Common Stock or Carolco Series A Preferred Stock in
connection with such holder's receipt of shares of LIVE Common Stock or
LIVE Series D Preferred Stock, as the case may be, upon surrender of a
Carolco Common Certificate or Series A Certificate or (ii) holder of LIVE
Common Stock, LIVE Series C Preferred Stock or Contingent Payment Rights in
connection with such holder's exchange of an Old LIVE Certificate for a New
LIVE Certificate, except in any event if any certificate representing
shares of LIVE Common Stock, LIVE Preferred Stock or Contingent Payment
Rights is to be paid to or issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it shall be a
condition of such exchange that the Certificate so surrendered shall be
properly endorsed and otherwise in proper form for transfer (including any
signature guarantees necessary) and that the person requesting such
exchange shall pay to the Exchange Agent any transfer or other taxes
required by reason of the issuance of certificates for such shares of LIVE
Common Stock or LIVE Preferred Stock in a name other than that of the
registered holder of the Carolco Common Certificate, Series A Certificate,
or Old LIVE Certificate surrendered, or shall establish to the satisfaction
of the Exchange Agent or LIVE, as appropriate, that such tax has been paid
or is not applicable. For purposes of this Agreement, "LIVE Preferred
Stock" means, collectively, the LIVE Series C Preferred Stock and the LIVE
Series D Preferred Stock.

(c) Delay in Delivery. Any certificates delivered to the Exchange
Agent by LIVE pursuant to Sections 4.2(a) or 4.2(b) representing shares of
LIVE Common Stock or LIVE Series D Preferred Stock (or any dividends or
distributions thereon) which remain undistributed to the previous
stockholders of Carolco for six months after the date of the Mailing (as
defined above in Section 4.2(e)) shall be returned to LIVE, upon demand.
Any persons who were previously stockholders of Carolco who have not
theretofore complied with this Article 4 shall thereafter look only to LIVE
(subject to abandoned property, escheat and other similar laws) for payment
of their claim for LIVE Common Stock or LIVE Series D Preferred Stock (or
any dividends or distributions thereon). Notwithstanding the foregoing,
neither the Exchange Agent nor any party hereto shall be liable to a holder
of a Carolco Common Certificate or Series A Certificate for any shares of
LIVE Common Stock or LIVE Series D Preferred Stock (or any dividends or
distributions thereon) delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.

Section 4.4 No Further Ownership Rights in Carolco Common Stock. All
shares of LIVE Common Stock or LIVE Series D Preferred Stock issued upon
the surrender for exchange of shares of Carolco Common Stock or Carolco
Series A Preferred Stock in accordance with the terms hereof shall be
deemed to have been issued in full satisfaction of all rights pertaining to
such shares of Carolco Common Stock or Carolco Series A Preferred Stock,
subject, however, to the Surviving Corporation's obligation to pay any
dividends or make any other distribution with a record date prior to the
Effective Date which may have been declared or made by Carolco on such
<PAGE>
shares of Carolco Common Stock or Carolco Series A Preferred Stock in
accordance with the terms of this Agreement.

Section 4.5 Closing of Carolco Transfer Books. Upon the Effective
Date, the stock transfer books of Carolco shall be closed and no transfer
of Carolco Common Stock or Carolco Preferred Stock shall thereafter be
made. If, after the Effective Date, Certificates are presented to the
Surviving Corporation, they shall be cancelled and exchanged as provided in
this Article 4.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF LIVE

LIVE represents and warrants to Carolco as follows:

Section 5.1 Organization, Standing and Power.

(a) LIVE is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the requisite
corporate power and authority to own its property and carry on its business
as now being conducted. LIVE and each of its Subsidiaries is duly
qualified to do business, and is in good standing, in each jurisdiction
where the character of its properties owned or held under lease or the
nature of its activities makes such qualification necessary, except where
the failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect on LIVE.

(b) For purposes of this Agreement (i) "Material Adverse Change" or
"Material Adverse Effect" means, when used with respect to LIVE or Carolco,
as the case may be, any change or effect that is or may be materially
adverse to the assets, properties, business, condition (financial or
otherwise) or results of operations of LIVE and its Subsidiaries taken as a
whole or Carolco and its Subsidiaries taken as a whole, as the case may be,
and (ii) "Subsidiary" means any corporation or other legal entity of which
LIVE or Carolco, as the case may be (either alone or through or together
with any other Subsidiary), owns, directly or indirectly, 50% or more of
the stock or other equity interests the holders of which are generally
entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity, or otherwise
directly or indirectly controls the operations of such corporation or other
legal entity, except that in the case of LIVE, Subsidiaries shall not
include Strawberries, Inc. ("Strawberries") or VCL/Carolco Communications
GmbH ("VCL"), or any subsidiaries of Strawberries or VCL.

(c) LIVE has disclosed to Carolco in writing all information
regarding Strawberries and/or VCL (i) which should have been disclosed in
the LIVE LETTER had Strawberries and/or VCL been included within the
definition of "Subsidiary" in Section 5.1(b) hereof and (ii) which,
individually or in the aggregate, has, had or could reasonably be expected
to have a Material Adverse Effect on LIVE or the Surviving Corporation.

Section 5.2 Subsidiaries. LIVE has delivered to Carolco a disclosure
letter of even date herewith (together with the exhibits included as a part
thereof, the "LIVE LETTER") which lists, among other things, each
Subsidiary of LIVE. All the outstanding shares of capital stock or other
ownership interests of each such Subsidiary have been duly authorized,
validly issued and are fully paid and nonassessable and are, except as set
forth in the LIVE LETTER, owned by LIVE, by another Subsidiary of LIVE or
by LIVE and another such Subsidiary, free and clear of all liens, charges,
claims and encumbrances except as set forth in the LIVE LETTER. Except as
set forth in the LIVE LETTER, there are no outstanding options, rights or
agreements of any kind relating to the issuance, sale or transfer of any
capital stock or other equity securities or ownership interests of any such
Subsidiary of LIVE to any person. Each Subsidiary of LIVE (i) is a
corporation duly organized, validly existing and in good standing under the
<PAGE>
laws of the jurisdiction of its organization, (ii) has the requisite
corporate power and authority to own its properties and carry on its
business as now being conducted, and (iii) is duly qualified to do
business, and is in good standing, in each jurisdiction where the character
of its properties owned or held under lease or the nature of its activities
make such qualification necessary, except where the failure to be so
qualified would not, individually or in the aggregate, have a Material
Adverse Effect on LIVE. Except for the capital stock of its Subsidiaries
and except as disclosed in LIVE's Annual Report on Form 10-K for the year
ended December 31, 1993, and in LIVE's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1994, LIVE does not own, directly or
indirectly, any capital stock or other ownership interest in any
corporation, partnership or other entity which is material to LIVE.

Section 5.3 Capital Structure and Commitments. As of the date hereof,
the authorized capital stock of LIVE consists of 120,000,000 shares of LIVE
Common Stock, 15,000,000 shares of LIVE Series A Common Stock, par value
$.01 per share ("LIVE Series A Common Stock") (none of which LIVE Series A
Common Stock is issued and outstanding) and 15,000,000 shares of LIVE
preferred stock (of the authorized LIVE preferred stock, 9,000,000 shares
have been designated as LIVE Series B Cumulative Convertible Preferred
Stock ("LIVE Series B Preferred Stock") (which LIVE Series B Preferred
Stock shall be redeemed as provided in Section 10.2(e) herein), 15,000
shares have been designated as LIVE Series C Preferred Stock and 500,000
shares have been designated as LIVE Series R Junior Participating
Cumulative Preferred Stock ("LIVE Series R Preferred Stock") (none of which
LIVE Series R Preferred Stock is issued and outstanding)). As of the date
hereof, each share of LIVE Common Stock outstanding includes a LIVE Right
(which LIVE Right shall be terminated as provided in Section 9.17 herein).
For purposes of this Agreement, a "LIVE Right" is a right to purchase LIVE
Common Stock pursuant to the Rights Agreement (the "LIVE Rights Agreement")
dated as of July 19, 1990, as amended, between LIVE and American Stock
Transfer and Trust Company, as Rights Agent. As of the date of this
Agreement:

(a) approximately 12,000,000 shares of LIVE Common Stock are duly
authorized, validly issued and outstanding, fully paid and nonassessable,

(b) approximately 1,900,000 shares of LIVE Common Stock are
reserved for issuance upon the exercise of outstanding options to purchase
LIVE Common Stock, which options are listed in Exhibit 5.3A,

(c) approximately 2,400,000 shares of LIVE Common Stock are
reserved for issuance upon the exercise of warrants issued under the
warrant agreements listed in Exhibit 5.3A,

(d) approximately 6,000,000 shares of LIVE Series B Preferred Stock
are duly authorized, issued and outstanding, fully paid and nonassessable,

(e) 15,000 shares of LIVE Series C Preferred Stock are duly
authorized, issued and outstanding, fully paid and nonassessable,

(f) up to 60,000,000 shares of LIVE Common Stock are reserved for
issuance upon conversion of the LIVE Series B Preferred Stock, and

(g) approximately 5,100,000 shares of LIVE Common Stock are
reserved for issuance upon conversion of the LIVE Series C Preferred Stock.

As of the date of this Agreement, except for this Agreement, the stock
options referred to in clause (b) of this Section 5.3 and listed on Exhibit
5.3A, the warrant agreements referred to in clause (c) of this Section 5.3
and listed on Exhibit 5.3A, the Contingent Payment Rights issued in
connection with the acquisition by LIVE of certain of the assets of Vestron
Inc. in July 1991 ("Contingent Payment Rights"), the shares of LIVE Common
Stock underlying the LIVE Series B Preferred Stock and the LIVE Series C
Preferred Stock, the shares of LIVE Series A Common Stock underlying the
<PAGE>
LIVE Series C Preferred Stock, the LIVE Rights, and other agreements and
transactions relating to capital stock described in the LIVE SEC Documents
or in the LIVE LETTER, there are no options, warrants, rights, contracts,
commitments, agreements, arrangements or undertakings of any kind to which
LIVE or any of its Subsidiaries is a party or by which any of them is bound
relating to the issuance of any capital stock or other voting securities of
LIVE or of any of its Subsidiaries or any securities convertible into or
exchangeable for any capital stock or other voting securities of LIVE or of
any of its Subsidiaries, or any options, warrants or other rights to
purchase capital stock or other voting securities of LIVE or any of its
Subsidiaries, nor has LIVE or any of its Subsidiaries granted any stock
appreciation rights to any person or entity. As of March 31, 1994, there
are approximately 1,281 holders of record of LIVE Common Stock,
approximately 281 holders of record of LIVE Series B Preferred Stock and
one (1) holder of record of LIVE Series C Preferred Stock.

Exhibit 5.3B lists all agreements of LIVE as of the date hereof by
which LIVE may be required to register any of its securities ("LIVE
Registration Rights Agreements").

Section 5.4 Authority; Non-Contravention.

(a) Each of LIVE and CAC has all requisite corporate power and
authority to enter into and execute this Agreement and, subject to any
approval by the stockholders of LIVE of the Merger and the related
amendments to the Restated Certificate of Incorporation of LIVE, to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by LIVE and CAC, the performance by LIVE and CAC
of their respective obligations hereunder and the consummation by LIVE and
CAC of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of LIVE and CAC, except for the
approval of LIVE's stockholders, which will be solicited in accordance with
the provisions of Section 9.1 hereof, and no other act or proceeding on the
part of LIVE or CAC is necessary to authorize the execution, delivery and
consummation of this Agreement or the transactions contemplated hereby.

(b) The Board of Directors of LIVE has received the opinion of
Chemical Securities Inc. ("Chemical"), the financial advisor to the Board,
dated July 1, 1994, to the effect that in Chemical's opinion the financial
terms of the Merger are fair, from a financial point of view, to the
holders of LIVE Common Stock, other than the LIVE Investors (as defined
below). A true, correct and complete copy of such opinion (the "Chemical
Fairness Opinion") has been delivered to Carolco. For purposes of this
Agreement, "LIVE Investors" means, collectively, Pioneer, Cinepole, and
RCS, where "Pioneer" refers to Pioneer LDCA, Inc., "Cinepole" refers to
Cinepole Productions B.V. and "RCS" refers, collectively, to RCS
International Communications N.V. and RCS Video International Services B.V.

(c) LIVE has received a letter agreement (the "Investor
Representation Agreement") from each LIVE Investor and each such Investor
Representation Agreement, substantially in the form of Exhibit 5.4(c)
hereto, has been executed by such LIVE Investor.

(d) This Agreement has been duly and validly executed and delivered
by each of LIVE and CAC and (assuming the valid authorization, execution
and delivery of this Agreement by Carolco) constitutes a valid and binding
obligation of each of LIVE and CAC enforceable against LIVE and CAC in
accordance with its terms, except (i) as their respective 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.
<PAGE>
(e) The Board of Directors of LIVE has approved the terms of this
Agreement and of the transactions contemplated hereby, and the Advisory
Committee of the Board of Directors of LIVE (the "Advisory Committee") has
approved and declared advisable and in the best interests of LIVE and its
stockholders the Merger, upon the terms and subject to the conditions
herein; the Special Committee (the "LIVE Special Committee") formed
pursuant to and in accordance with Section 3.6 of the Certificate of
Designations, Preferences and Relative, Participating, Optional or other
Special Rights of the Series B Preferred Stock of LIVE has approved the
terms of this Agreement and of the transactions contemplated hereby.

(f) Except as set forth in the LIVE LETTER, 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, or default (with or
without notice or lapse of time, or both) under, or result in or give rise
to a right of termination, cancellation or acceleration of any liability or
obligation or to the loss of a material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of
the properties or assets of LIVE or any of its Subsidiaries under, any
provision of (i) the Restated Certificate of Incorporation of LIVE or
Bylaws of LIVE (true and complete copies of which as of the date hereof
have been delivered to Carolco) or any provision of the comparable charter
or organizational documents of any of its Subsidiaries, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license applicable
to LIVE or any of its Subsidiaries or (iii) any judgment, order, decree,
statute, law, ordinance, injunction, writ, or authorization, consent,
approval, rule or regulation of any court or governmental authority
applicable to LIVE or any of its Subsidiaries or any of their respective
properties or assets, other than, in the case of clauses (ii) or (iii), any
such conflicts, violations, defaults, rights, liens, security interests,
charges or encumbrances that, individually or in the aggregate, would not
(A) have a Material Adverse Effect on LIVE, (B) materially impair the
ability of LIVE or CAC to perform their respective obligations hereunder or
(C) prevent the consummation of any of the transactions contemplated
hereby. The redemption of the LIVE Series B Preferred Stock as
contemplated in Section 10.2(c) herein and the termination of the LIVE
Rights as contemplated in Section 9.17 herein shall have complied with, and
shall not have resulted in a violation of, either the Certificate of
Designations, Preferences and Rights governing the LIVE Series B Preferred
Stock or the LIVE Rights Agreement, respectively, or any applicable
securities laws.

(g) No filing or registration with, or authorization, consent or
approval of, any domestic (federal and state), foreign or international
court, commission, governmental body, regulatory agency, authority or
tribunal (a "Governmental Entity") is required by or with respect to LIVE
or any of its Subsidiaries in connection with the execution and delivery of
this Agreement by LIVE or is necessary for the consummation by LIVE of the
Merger or the other transactions contemplated by this Agreement, except (i)
in connection, or in compliance with, the provisions of the Securities Act
of 1933, as amended (together with the rules and regulations promulgated
thereunder, the "Securities Act") and the Securities Exchange Act of 1934,
as amended (together with the rules and regulations promulgated thereunder,
the "Exchange Act"), (ii) in connection with, or in compliance with, the
provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (iii) the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware and appropriate documents
with the relevant authorities of other states in which LIVE is qualified to
do business, (iv) the amendments to the Restated Certificate of
Incorporation of LIVE as provided in Section 3.1, (v) any required filings
under state securities or "blue sky" laws and (vi) filings, registrations,
authorizations, consents or approvals which if not made or obtained would
have a Material Adverse Effect on LIVE or would prevent or materially
adversely affect the transactions contemplated hereby.
<PAGE>
Section 5.5 LIVE SEC Documents. LIVE has filed all required reports,
statements, forms and documents with the SEC that LIVE was required to file
during the three-year period immediately preceding the date hereof (the
"LIVE SEC Documents"). As of their respective dates, and as subsequently
revised, amended or superseded by later-filed LIVE SEC Documents through
and including the date of this Agreement, the LIVE SEC Documents complied
in all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and as so revised, superseded or amended
none of the LIVE SEC Documents including the financial information
contained therein contained or currently contain any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of LIVE included in the LIVE SEC Documents comply as to form in
all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles
(except, in the case of the unaudited statements, as permitted by
Regulation S-X promulgated by the SEC) applied on a consistent basis during
the periods involved (except as may be indicated therein or in the notes
thereto) and fairly present the consolidated financial position of LIVE and
its consolidated Subsidiaries as at the dates thereof and the consolidated
results of their operations and statements of cash flows for the periods
included therein (subject, in the case of unaudited statements, to normal
year-end audit adjustments and to any other adjustments described therein).
Notwithstanding the foregoing, LIVE makes no representation or warranty in
this Agreement regarding any information (including financial information
and financial statements) supplied by Carolco for inclusion in the LIVE SEC
Documents.

Section 5.6 No Material Adverse Change. Except as set forth in the
LIVE LETTER, since the date of the most recent balance sheet and notes to
consolidated financial statements contained in LIVE's Annual Report on Form
10-K for the year ended December 31, 1993, or LIVE's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994, as filed with the SEC (the
"LIVE Balance Sheet"), there has been no Material Adverse Change in LIVE,
and neither LIVE nor any of its Subsidiaries knows of any such Material
Adverse Change that is threatened, nor has there been any damage,
destruction or loss affecting the assets, properties, business, operations
or condition (financial or otherwise) of LIVE or any of its Subsidiaries,
whether or not covered by insurance, which would have a Material Adverse
Effect on LIVE, and which has not been subsequently reported in any of the
LIVE SEC Documents filed with the SEC prior to the date hereof.

Section 5.7 Absence of Undisclosed Liabilities. Except as set forth
in the LIVE SEC Documents or the LIVE LETTER, as of the date of the LIVE
Balance Sheet neither LIVE nor any of its Subsidiaries had any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise) required by generally accepted accounting principles to be set
forth on a financial statement or in the notes thereto and which,
individually or in the aggregate, would have a Material Adverse Effect on
LIVE, which were not set forth on the LIVE Balance Sheet.

Section 5.8 Absence of Certain Events. Except as disclosed in the
LIVE SEC Documents or the LIVE LETTER, since the date of the LIVE Balance
Sheet, LIVE and its Subsidiaries have conducted their business only in the
ordinary course.

Section 5.9 No Solicitation. LIVE is not now engaged in any
activities, discussions or negotiations with any parties (other than
Carolco) in respect of a "takeover proposal" or an "offer" (both as defined
in Section 8.3), except with respect to Strawberries and VCL.

Section 5.10 Registration Statement and Proxy Statement. None of the
information to be supplied by LIVE or CAC for inclusion or incorporation by
reference in the registration statement on Form S-4 under the Securities
<PAGE>
Act to be filed with the SEC pursuant to Section 9.2 (the "Registration
Statement"), or the joint proxy statement/prospectus together with any
amendments or supplements thereto included within the Registration
Statement (the "Proxy Statement") will (a) in the case of the Registration
Statement, at the time it becomes effective, contain any statement which,
at the time and in the light of the circumstances under which it is made,
is false or misleading with respect to any material fact, or which omits to
state any material fact required to be stated therein or necessary in order
to make the statements therein not false or misleading, or (b) in the case
of the Proxy Statement, at the time of the mailing of the Proxy Statement
and at the times of the Stockholder Meetings, contain any statement which,
at the time and in the light of the circumstances under which it is made,
is false or misleading with respect to any material fact, or which omits to
state any material fact required to be stated therein or necessary in order
to make the statements therein not false or misleading. The Registration
Statement will comply (with respect to LIVE and CAC) as to form in all
material respects with the provisions of the Securities Act and the Proxy
Statement will comply (with respect to LIVE and CAC) as to form in all
material respects with the provisions of the Exchange Act. Notwithstanding
the foregoing, neither LIVE nor CAC, individually or collectively, makes
any representation or warranty regarding any information (including
financial information and financial statements) supplied by Carolco for
inclusion in the Registration Statement or the Proxy Statement.

Section 5.11 Reorganization. Neither LIVE nor any of its Subsidiaries
has taken any action or failed to take any action which action or failure
to take action would jeopardize the qualification of the Merger as a tax
free reorganization under the Code.

Section 5.12 Litigation. Except as set forth in the LIVE LETTER or the
LIVE SEC Documents, as of the date hereof, there is no claim, suit, action
or proceeding pending or, to the knowledge of LIVE, threatened against or
affecting LIVE or any of its Subsidiaries (whether or not covered by
insurance) which (i) could reasonably be expected to have a Material
Adverse Effect on LIVE (and LIVE is not aware of any reasonable basis for
any such suit, action or proceeding), or (ii) challenge the transactions
contemplated hereby at law or in equity or before or by any federal, state,
local, foreign or other governmental department, commission, board, agency,
instrumentality, or authority; nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator
outstanding against LIVE or any of its Subsidiaries having, or which,
insofar as reasonably can be foreseen, in the future would have, any such
effect.

Section 5.13 Loan Agreements, Customers and Suppliers.

(a) Neither LIVE nor any of its Subsidiaries is in violation of or
in default under (nor does there exist any condition which upon the passage
of time, the giving of notice or both would cause such a violation of or
default under) any loan or credit agreement, note, bond, mortgage,
indenture, lease instrument, permit, concession, franchise, license or any
other contract, agreement, arrangement or understanding, to which it is a
party or by which it or any of its properties or assets is bound, except
for violations or defaults that could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect on
LIVE or except as are set forth in the LIVE LETTER. Set forth in the LIVE
LETTER is a list of each loan or credit agreement, note, bond, mortgage,
indenture and other agreement and instrument pursuant to which any
indebtedness of LIVE or any of its Subsidiaries (other than indebtedness
solely among or between LIVE and/or any of its Subsidiaries), in an
aggregate principal amount in excess of $3,000,000 is outstanding or may be
incurred and the respective principal amounts currently outstanding
thereunder. For purposes of this Agreement, "indebtedness" shall mean,
with respect to any person, without duplication, (i) any liability,
contingent or otherwise, (x) for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of the person or only
<PAGE>
to a portion thereof), (y) evidenced by a note, debenture or similar
instrument (including a purchase money obligation), or (z) for the payment
of money relating to a capitalized lease obligation; (ii) any liability of
others of the kind described in the preceding clause which the person has
guaranteed or which is otherwise its legal liability; (iii) any obligation
secured by a lien to which the property or assets of the person are
subject, whether or not the obligations secured thereby shall have been
assumed by or shall otherwise be the person's legal liability, and (iv) any
and all deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any liability of the kind described in any
of the preceding clauses (i), (ii) or (iii).

(b) Neither LIVE nor any of its Subsidiaries is in default under
(nor does there exist any condition which upon the passage of time, the
giving of notice or both would cause such a violation of or default under)
any material agreement with any of its customers or suppliers of products
or services which are of material importance to LIVE or any of its
Subsidiaries, and no such customer or supplier, to the knowledge of LIVE or
any of its Subsidiaries, is in default under (nor does there exist any
condition which upon the passage of time, the giving of notice or both
would cause such customer or supplier to be in violation of or default
under) any of such material agreements or except as are set forth in the
LIVE LETTER.

Section 5.14 Permits. LIVE and each of its Subsidiaries possess all
franchises, permits, licenses, certificates, approvals or other
authorizations necessary to own or lease and operate their properties and
to conduct their businesses, except for incidental franchises, permits,
licenses, certificates, approvals and other authorizations that would be
readily obtainable by any qualified applicant without undue burden in the
event of any lapse, termination, cancellation or forfeiture or which if not
obtained would not, in the aggregate, have a Material Adverse Effect on
LIVE.

Section 5.15 Absence of Changes in LIVE Benefit Plans. Except as
disclosed in the LIVE SEC Documents or the LIVE LETTER, since the date of
the most recent audited financial statements included in the LIVE SEC
Documents, there has not been any adoption or amendment by LIVE or any of
its Subsidiaries of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, medical
fringe benefit or other plan, arrangement or understanding (whether or not
legally binding) providing benefits to any current or former employee or
director of, or any other person providing services to, LIVE or any of its
Subsidiaries (collectively, "LIVE Benefit Plans") which will have a
Material Adverse Effect on LIVE. LIVE has delivered to Carolco true,
correct and complete copies of all LIVE Benefit Plans. Each of the LIVE
Benefit Plans is in material compliance with all applicable laws including
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")
and the Code.

Section 5.16 Intellectual Property. LIVE and its Subsidiaries own, or
are licensed or otherwise have the right to use, all patents, patent
rights, trademarks, trademark rights, trade names, trade name rights,
service marks, service mark rights, copyrights and other proprietary
intellectual property rights and computer programs (collectively, the "LIVE
Proprietary Rights") which are material to the conduct of the business of
LIVE and its Subsidiaries taken as a whole. No claims are pending or, to
the knowledge of LIVE, threatened that LIVE or any Subsidiary is infringing
or otherwise adversely affecting the rights of any person with regard to
any LIVE Proprietary Right, except for such claims or threats which could
not reasonably be expected to have a Material Adverse Effect on LIVE. To
the knowledge of LIVE, no person is infringing the rights of LIVE with
respect to any LIVE Proprietary Right that would have a Material Adverse
Effect on LIVE. No lien, encumbrance or restriction with respect to any
<PAGE>
LIVE Proprietary Right has a Material Adverse Effect on LIVE, or so far as
LIVE can now foresee could reasonably be expected to have a Material
Adverse Effect on LIVE.

Section 5.17 Environmental Matters. To the knowledge of LIVE, LIVE and
each of its Subsidiaries are in compliance with all applicable federal,
state, regional and local laws, statutes, ordinances, judgments, rulings
and regulations relating to any matters of pollution, protection of the
environment or environmental regulation or control (collectively,
"Environmental Laws"), except for violations of the Environmental Laws that
could not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect on LIVE.

Section 5.18 Taxes. Except as set forth in the LIVE LETTER or the LIVE
SEC Documents: (a) each of LIVE and its Subsidiaries has timely filed all
federal, state, local or foreign tax returns required to be filed by it
(except for all such returns the failure of which timely filing would,
individually or in the aggregate, not have a Material Adverse Effect on
LIVE), and has paid (or LIVE has paid on its behalf) all taxes shown as due
on the returns in respect of the periods covered by such returns; (b) there
are no tax liens upon any property or assets of LIVE or any of its
Subsidiaries which would have a Material Adverse Effect on LIVE, except
liens for current taxes not yet due; (c) neither LIVE nor any of its
Subsidiaries is delinquent in the payment of any material tax, assessment
or governmental charge which would have a Material Adverse Effect on LIVE;
(d) no deficiencies for any taxes have been proposed, asserted or assessed
against LIVE or any of its Subsidiaries which would have a Material Adverse
Effect on LIVE or its Subsidiaries, and no requests for waivers of the time
to assess any such taxes are pending; and (e) no audits of the tax returns
of LIVE or any of its Subsidiaries are currently being conducted by a
taxing authority and neither LIVE nor its Subsidiaries have received any
notices of pending or proposed audits from a taxing authority.

Section 5.19 Foreign Corrupt Practices Act. To the best knowledge of
the officers of LIVE, neither LIVE, any Subsidiary of LIVE nor any
director, officer, agent, employee or other person associated with or
acting on behalf of any of them has (i) used any corporate or other funds
for unlawful contributions, payments, gifts or entertainment or made any
unlawful expenditures relating to political activity, or made any direct or
indirect unlawful payments to governmental officials or others or
established or maintained any unlawful or unrecorded funds in violation of
Section 30A of the Exchange Act or (ii) accepted or received any unlawful
contributions, payments, gifts or expenditures. LIVE is in compliance in
all material respects with the provisions of Section 13(b) of the Exchange
Act and to the best knowledge of the officers of LIVE, there is no failure
of compliance with such provisions.

Section 5.20 Brokers. No broker, investment banker or other person,
other than Chemical or Jefferson Capital Corporation, the fees and expenses
of which will be paid by LIVE in accordance with LIVE's written agreements
with Chemical and Jefferson Capital Corporation (copies of which have been
delivered by LIVE to Carolco prior to the date hereof), is entitled to any
broker's, finder's or other similar fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of LIVE, any Subsidiary of LIVE or CAC.

Section 5.21 Officers, Directors and Key Employees. The LIVE LETTER
sets forth (i) the name and total compensation of each officer and director
of LIVE; (ii) the name of each officer and director of any of LIVE's
Subsidiaries; (iii) the name and total compensation of each other officer,
director, employee, consultant, agent or other representative of LIVE or
any of its Subsidiaries whose current annual rate of compensation
(including bonuses and commissions) exceeds $150,000; (iv) all wage or
salary increases or bonuses received by the persons identified in
Section 5.21(i) and (iii) ("Significant LIVE Employees") since December 31,
1993, and any accrual for or commitment or agreement by LIVE or any of its
<PAGE>
Subsidiaries to pay such increases or bonuses; and (v) a notation with
respect to each of such Significant LIVE Employees, whether they have an
employment agreement with LIVE or any of its Subsidiaries and, if so, the
date and term of such agreement. Except as set forth in the LIVE LETTER,
(x) to the knowledge of LIVE or any of its Subsidiaries, none of such
Significant LIVE Employees has made a threat to LIVE or any of its
Subsidiaries or to any of their officers or directors to cancel or
otherwise terminate such Significant LIVE Employee's relationship with LIVE
or any of its Subsidiaries and (y) none of such Significant LIVE Employees
have "change of control" clauses or agreements with LIVE or any of its
Subsidiaries (or similar clauses or agreements permitting such Significant
LIVE Employees to terminate their employment relationship with LIVE or any
of its Subsidiaries) that would be triggered by the Merger which have not
been waived on the date hereof.

Section 5.22 State Takeover Statutes. Neither Section 203 of the DGCL
nor any other "fair price," "moratorium," "control share acquisition" or
other state takeover statute or similar statute or regulation applies to
the Merger by virtue of LIVE and CAC engaging in the transactions
contemplated hereby.

Section 5.23 Insurance. LIVE and each of its Subsidiaries have been
and are insured by financially sound and reputable insurers with respect to
their properties and the conduct of their business in such amounts and
against such risks as are reasonable in relation to their respective
businesses, and each will use its best efforts to maintain such insurance.
Such insurance is in full force and effect and no notice of cancellation or
termination has been received with respect to any of said insurance.
Except as disclosed in the LIVE LETTER, there are no claims pending
thereunder except where such claim would not, individually or in the
aggregate, have a Material Adverse Effect on LIVE.

Section 5.24 Title to Properties and Related Matters. Except with
respect to the LIVE Proprietary Rights, LIVE and each of its Subsidiaries
have good and marketable title (or valid and subsisting leasehold
interests) to all of the personal properties and assets (tangible and
intangible) and the real properties utilized in their businesses or
reflected in the LIVE SEC Documents or acquired after the date thereof
(other than properties sold or otherwise disposed of in the ordinary course
of business), which are material to them, free and clear of all title
defects, liens, encumbrances and restrictions, except (i) as reflected in
the LIVE SEC Documents, (ii) to the extent not described in clause (i),
those described in the LIVE LETTER, (iii) to the extent not described in
clause (i), statutory liens not yet due or delinquent or the validity of
which are being contested or litigated in good faith by appropriate
proceedings and for which LIVE has set aside on its books reserves that are
adequate with respect thereto; and (iv) liens, encumbrances, covenants,
rights of way, building or use restrictions, easements, exceptions,
variances, reservations and other matters or limitations of any kind, if
any, which, when considered together with the liens described in clauses
(i), (ii) and (iii), do not have a Material Adverse Effect on LIVE's
business or operations. All properties of LIVE and each of its
Subsidiaries are reflected in the LIVE SEC Documents in the manner and to
the extent required by generally accepted accounting principles
consistently applied. Neither the whole nor any portion of the leaseholds
or any other assets of LIVE or any of its Subsidiaries is subject to any
governmental decree or order to be sold or is being condemned, expropriated
or otherwise taken by any public authority with or without payment of
compensation therefor, nor to the knowledge of LIVE or any of its
Subsidiaries has any such condemnation, expropriation or taking been
proposed, which would have a Material Adverse Effect on LIVE and its
Subsidiaries taken as a whole.

Section 5.25 Accuracy of LIVE Disclosure. Neither this Agreement, nor
any document or other paper furnished (or to be furnished pursuant hereto
at the Closing) by or on behalf of LIVE or CAC to Carolco pursuant to this
<PAGE>
Agreement or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make
the statements made, in the context in which made, not false or misleading.
There is no fact that LIVE has not disclosed to Carolco in writing that has
a Material Adverse Effect on LIVE, or so far as LIVE can now foresee will
have a Material Adverse Effect on LIVE or on the ability of LIVE to perform
this Agreement.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF CAROLCO

Carolco represents and warrants to LIVE and CAC as follows:

Section 6.1 Organization, Standing and Power. Carolco is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
authority to own its property and carry on its business as now being
conducted. Carolco and each of its Subsidiaries is duly qualified to do
business, and is in good standing, in each jurisdiction where the character
of its properties owned or held under lease or the nature of its activities
makes such qualification necessary, except where the failure to be so
qualified would not, individually or in the aggregate, have a Material
Adverse Effect on Carolco.

Section 6.2 Subsidiaries. Carolco has delivered to LIVE a disclosure
letter of even date herewith (together with the exhibits included as a part
thereof, the "CAROLCO LETTER") which lists, among other things, each
Subsidiary of Carolco. All the outstanding shares of capital stock of each
such Subsidiary have been duly authorized, validly issued and are fully
paid and nonassessable and are, except as set forth in the CAROLCO LETTER,
owned by Carolco, by another Subsidiary of Carolco or by Carolco and
another such Subsidiary, free and clear of all liens, charges, claims and
encumbrances. Except as set forth in the CAROLCO LETTER, there are no
outstanding options, rights or agreements of any kind relating to the
issuance, sale or transfer of any capital stock or other equity securities
or ownership interests of any such Subsidiary of Carolco to any person.
Each Subsidiary of Carolco (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (ii) has the requisite corporate power and authority to own
its properties and carry on its business as now being conducted, and
(iii) is duly qualified to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under
lease or the nature of its activities make such qualification necessary,
except where the failure to be so qualified would not, individually or in
the aggregate, have a Material Adverse Effect on Carolco. Except for the
capital stock of its Subsidiaries and except as disclosed in Carolco's
Annual Report on Form 10-K for the year ended December 31, 1993 and
Carolco's Quarterly Report on Form 10-Q for the quarter ended March 31,
1994, Carolco does not own, directly or indirectly, any capital stock or
other ownership interest in any corporation, partnership or other entity
which is material to Carolco.

Section 6.3 Capital Structure and Commitments. As of the date hereof,
the authorized capital stock of Carolco consists of 650,000,000 shares of
Carolco Common Stock and 10,000,000 shares of Carolco preferred stock (of
the Carolco preferred stock, 120,000 shares have been designated as Carolco
Series A Preferred Stock). As of the date of this Agreement:

(a) approximately 137,687,728 shares of Carolco Common Stock are
duly authorized, validly issued and outstanding, fully paid and
non-assessable (excluding 2,327,381 treasury shares),
<PAGE>
(b) approximately 31,222,000 shares of Carolco Common Stock are
reserved for issuance upon the exercise of outstanding options to purchase
Carolco Common Stock, which options are listed in Exhibit 6.3A.

(c) 82,500 shares of Carolco Series A Preferred Stock are duly
authorized, validly issued and are outstanding, fully paid and non-
assessable,

(d) 37,500 shares of Carolco Series A Preferred Stock are reserved
for issuance upon the distribution of payment-in-kind dividends;

(e) approximately 137,500,000 shares of Carolco Common Stock are
reserved for issuance upon conversion of the Carolco Series A Preferred
Stock;

(f) approximately 50,000,000 shares of Carolco Common Stock are
reserved for issuance upon conversion of $30,000,000, in aggregate, of 5%
Payment-in-Kind Convertible Subordinated Notes of Carolco (the "Carolco 5%
Notes") due 2002;

(g) approximately 66,666,666 shares of Carolco Common Stock are
reserved for issuance upon conversion of $50,000,000, in aggregate, of 7%
Convertible Subordinated Notes of Carolco (the "Carolco 7% Notes") due
2006; and

(i) approximately 74,074,074 shares of Carolco Common Stock are
reserved for issuance ("Pay-Per-View Shares") in connection with the
Purchase Agreement dated as of August 19, 1993, by and between Carolco and
TCI (the "TCI Purchase Agreement").

As of the date of this Agreement, except for this Agreement, the stock
options referred to in clause (b) of this Section 6.3 and listed on Exhibit
6.3A, the shares of Carolco Common Stock underlying the Carolco Series A
Preferred Stock, the Carolco 5% Notes and the Carolco 7% Notes and the Pay-
Per-View Shares, and other agreements and transactions relating to capital
stock described in the Carolco SEC Documents or in the CAROLCO LETTER,
there are no options, warrants, rights, commitments, agreements,
arrangements or undertakings of any kind to which Carolco or any of its
Subsidiaries is a party or by which any of them is bound relating to the
issuance of any capital stock or other voting securities of Carolco or of
any of its Subsidiaries or any securities convertible into or exchangeable
for any capital stock or other voting securities of Carolco or any of its
Subsidiaries, or any options, warrants or other rights to purchase capital
stock or other voting securities of Carolco or any of its Subsidiaries. As
of the date of this Agreement, there were approximately 1,040 holders of
record of Carolco Common Stock, and three (3) holders of record of Carolco
Series A Preferred Stock.

Exhibit 6.3B lists all agreements of Carolco by which Carolco may be
required to register any of its securities ("Carolco Registration Rights
Agreements").

Section 6.4 Authority; Non-Contravention.

(a) Carolco has all requisite corporate power and authority to
enter into this Agreement and, subject to any approval by the stockholders
of Carolco to consummate the Merger, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by
Carolco, the performance by Carolco of its obligations hereunder and the
consummation by Carolco of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Carolco,
except for the approval of Carolco's stockholders, which will be solicited
in accordance with the provisions of Section 9.1 hereof, and no other act
or proceeding on the part of Carolco is necessary to authorize the
execution, delivery and consummation of this Agreement or the transactions
contemplated hereby.
<PAGE>
(b) The Board of Directors of Carolco has received the opinion of
The Seidler Companies Incorporated ("Seidler"), Carolco's financial
advisor, dated June 30, 1994, to the effect that in Seidler's opinion the
financial terms of the Merger are fair, from a financial point of view, to
the holders of Carolco Common Stock, other than the Carolco Investors (as
defined below). A true, correct and complete copy of such opinion (the
"Seidler Fairness Opinion") has been delivered to LIVE. For purposes of
this Agreement, the "Carolco Investors" are Pioneer, Cinepole, RCS, MGM
Holdings Corporation and New Carolco Investments B.V.

(c) Carolco has received an Investor Representation Agreement from
each Carolco Investor and each such Investor Representation Agreement,
substantially in the form of Exhibit 5.4(c) hereto, has been executed by
such Carolco Investor.

(d) This Agreement has been duly and validly executed and delivered
by Carolco and (assuming the valid authorization, execution and delivery of
this Agreement by LIVE and CAC) constitutes a valid and binding obligation
of Carolco enforceable against Carolco in accordance with its terms, except
(i) as such obligation 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.

(e) The Board of Directors of Carolco has approved the terms of
this Agreement and of the transactions contemplated hereby.

(f) Except as set forth in the CAROLCO LETTER, 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, or default (with or
without notice or lapse of time, or both) under, or result in or give rise
to a right of termination, cancellation or acceleration of any liability or
obligation or to the loss of a material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of
the properties or assets of Carolco or any of its Subsidiaries under, any
provision of (i) the Restated Certificate of Incorporation of Carolco or
Restated Bylaws of Carolco (true and complete copies of which as of the
date hereof have been delivered to LIVE) or any provision of the comparable
charter or organizational documents of any of its Subsidiaries, (ii) any
loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license applicable
to Carolco or any of its Subsidiaries or (iii) any judgment, order, decree,
statute, law, ordinance, injunction, writ, or authorization, consent,
approval, rule or regulation of any court or governmental authority
applicable to Carolco or any of its Subsidiaries or any of their respective
properties or assets, other than, in the case of clauses (ii) or (iii), any
such conflicts, violations, defaults, rights, liens, security interests,
charges or encumbrances that, individually or in the aggregate, would not
(A) have a Material Adverse Effect on Carolco, (B) materially impair the
ability of Carolco to perform its obligations hereunder or (C) prevent the
consummation of any of the transactions contemplated hereby.

(g) No filing or registration with, or authorization, consent or
approval of, any Governmental Entity is required by or with respect to
Carolco or any of its Subsidiaries in connection with the execution and
delivery of this Agreement by Carolco or is necessary for the consummation
by Carolco of the Merger or the other transactions contemplated by this
Agreement, except (i) in connection, or in compliance, with the provisions
of the Securities Act and the Exchange Act, (ii) in connection with, or in
compliance with, the provisions of the HSR Act, (iii) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware
and appropriate documents with the relevant authorities of other states in
<PAGE>
which Carolco is qualified to do business, (iv) any required filings under
state securities or "blue sky" laws, and (v) filings, registrations,
authorizations, consents or approvals which if not made or obtained would
have a Material Adverse Effect on Carolco or would prevent or materially
adversely affect the transactions contemplated hereby.

Section 6.5 Carolco SEC Documents. Carolco has filed all required
reports, statements, forms and documents with the SEC that Carolco was
required to file during the three-year period immediately preceding the
date hereof (the "Carolco SEC Documents"). As
of their respective dates, and as subsequently revised, amended or
superseded by later-filed Carolco SEC Documents through and including the
date of this Agreement, the Carolco SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act,
as the case may be, and as so revised, superseded or amended none of the
Carolco SEC Documents including the financial information contained therein
contained or currently contain any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of Carolco
included in Carolco SEC Documents comply as to form in all material
respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the
case of the unaudited statements, as permitted by Regulation S-X
promulgated by the SEC) applied on a consistent basis during the periods
involved (except as may be indicated therein or in the notes thereto) and
fairly present the consolidated financial position of Carolco and its
consolidated Subsidiaries as at the dates thereof and the consolidated
results of their operations and statements of cash flows for the periods
included therein (subject, in the case of unaudited statements, to normal
year-end audit adjustments and to any other adjustments described therein).
Notwithstanding the foregoing, Carolco makes no representation or warranty
in this Agreement regarding any information (including financial
information and financial statements) supplied by LIVE for inclusion in any
Carolco SEC Documents.

Section 6.6 No Material Adverse Change. Except as set forth in the
CAROLCO LETTER, since the date of the most recent balance sheet and notes
to consolidated financial statements contained in Carolco's Annual Report
on Form 10-K for the year ended December 31, 1993, or Carolco's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1994, as filed with the
SEC ("Carolco Balance Sheet"), there has been no Material Adverse Change in
Carolco and neither Carolco nor any of its Subsidiaries knows of any such
Material Adverse Change that is threatened, nor has there been any damage,
destruction or loss affecting the assets, properties, business, operations
or condition (financial or otherwise) of Carolco or any of its
Subsidiaries, whether or not covered by insurance which would have a
Material Adverse Effect on Carolco, and which has not been subsequently
reported in any of the Carolco SEC Documents filed with the SEC prior to
the date hereof.

Section 6.7 Absence of Undisclosed Liabilities. Except as set forth
in the Carolco SEC Documents or the CAROLCO LETTER, as of the date of the
Carolco Balance Sheet neither Carolco nor any of its Subsidiaries had any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by generally accepted accounting
principles to be set forth on a financial statement or in the notes thereto
and which, individually or in the aggregate, would have a Material Adverse
Effect on Carolco, which were not set forth on the Carolco Balance Sheet.

Section 6.8 Absence of Certain Events. Except as disclosed in Carolco
SEC Documents or the CAROLCO LETTER, since the date of the Carolco Balance
Sheet, Carolco and its Subsidiaries have conducted their business only in
the ordinary course.
<PAGE>
Section 6.9 No Solicitation. Carolco is not now engaged in any
activities, discussions or negotiations with any parties (other than LIVE)
in respect of a "takeover proposal" or an "offer" (both as defined in
Section 8.3).

Section 6.10 Registration Statement and Proxy Statement. None of the
information to be supplied by Carolco for inclusion or incorporation by
reference in the Registration Statement or the Proxy Statement will (a) in
the case of the Registration Statement, at the time it becomes effective,
contain any statement which, at the time and in the light of the
circumstances under which it is made, is false or misleading with respect
to any material fact, or which omits to state any material fact required to
be stated therein or necessary in order to make the statements therein not
false or misleading, or (b) in the case of the Proxy Statement, at the time
of the mailing of the Proxy Statement and at the times of the Stockholder
Meetings, contain any statement which, at the time and in the light of the
circumstances under which it is made, is false or misleading with respect
to any material fact, or which omits to state any material fact required to
be stated therein or necessary in order to make the statements therein not
false or misleading. The Registration Statement will comply (with respect
to Carolco) as to form in all material respects with the provisions of the
Securities Act and the Proxy Statement will comply (with respect to
Carolco) as to form in all material respects with the provisions of the
Exchange Act. Notwithstanding the foregoing, Carolco makes no
representation or warranty regarding any information (including financial
information and financial statements) supplied by LIVE or CAC for inclusion
in the Registration Statement or the Proxy Statement.

Section 6.11 Reorganization. Neither Carolco nor any of its
Subsidiaries has taken any action nor failed to take any action which
action or failure to take action would jeopardize the qualification of the
Merger as a tax free reorganization under the Code.

Section 6.12 Litigation. Except as set forth in the CAROLCO LETTER or
the Carolco SEC Documents, as of the date hereof, there is no claim, suit,
action or proceeding pending or, to the knowledge of Carolco, threatened
against or affecting Carolco or any of its Subsidiaries (whether or not
covered by insurance) which (i) could reasonably be expected to have a
Material Adverse Effect on Carolco (and Carolco is not aware of any
reasonable basis for any such suit, action or proceeding), or (ii)
challenge the transactions contemplated hereby at law or in equity or
before or by any federal, state, local, foreign or other governmental
department, commission, board, agency, instrumentality, or authority; nor
is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Carolco or any of its
Subsidiaries having, or which, insofar as reasonably can be foreseen, in
the future would have, any such effect.

Section 6.13 Loan Agreements, Customers and Suppliers.

(a) Neither Carolco nor any of its Subsidiaries is in violation of
or in default under (nor does there exist any condition which upon the
passage of time, the giving of notice or both would cause such a violation
of or default under) any loan or credit agreement, note, bond, mortgage,
indenture, lease instrument, permit, concession, franchise, license or any
other contract, agreement, arrangement or understanding, to which it is a
party or by which it or any of its properties or assets is bound, except
for violations or defaults that could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect on
Carolco or except as are set forth in the CAROLCO LETTER. Set forth in the
CAROLCO LETTER is a list of each loan or credit agreement, note, bond,
mortgage, indenture and other agreement and instrument pursuant to which
any indebtedness of Carolco or any of its Subsidiaries (other than
indebtedness solely among or between Carolco and/or any of its
Subsidiaries) in an aggregate principal amount in excess of $3,000,000 is
<PAGE>
outstanding or may be incurred and the respective principal amounts
currently outstanding thereunder.

(b) Neither Carolco nor any of its Subsidiaries is in default under
(nor does there exist any condition which upon the passage of time, the
giving of notice or both would cause such a violation of or default under)
any material agreement with any of its customers or suppliers of products
or services which are of material importance to Carolco or any of its
Subsidiaries, and no such customer or supplier, to the knowledge of Carolco
or any of its Subsidiaries, is in default under (nor does there exist any
condition which upon the passage of time, the giving of notice or both
would cause such customer or supplier to be in violation of or default
under) any of such material agreements or except as are set forth in the
CAROLCO LETTER.

Section 6.14 Permits. Carolco and each of its Subsidiaries possess all
franchises, permits, licenses, certificates, approvals or other
authorizations necessary to own or lease and operate their properties and
to conduct their businesses, except for incidental franchises, permits,
licenses, certificates, approvals and other authorizations that would be
readily obtainable by any qualified applicant without undue burden in the
event of any lapse, termination, cancellation or forfeiture or which if not
obtained would not have a Material Adverse Effect on Carolco.

Section 6.15 Absence of Changes in Carolco Benefit Plans. Except as
disclosed in the Carolco SEC Documents or the CAROLCO LETTER, since the
date of the most recent audited financial statements included in the
Carolco SEC Documents, there has not been any adoption or amendment by
Carolco or any of its Subsidiaries of any collective bargaining agreement
or any bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death benefit,
hospitalization, medical fringe benefit or other plan, arrangement or
understanding (whether or not legally binding) providing benefits to any
current or former employee or director of, or any other person providing
services to, Carolco or any of its Subsidiaries (collectively, "Carolco
Benefit Plans") which will have a Material Adverse Effect on Carolco.
Carolco has delivered to LIVE true, correct and complete copies of all
Carolco Benefit Plans. Each of the Carolco Benefit Plans is in material
compliance with all applicable laws including ERISA and the Code.

Section 6.16 Intellectual Property. Carolco and its Subsidiaries own,
or are licensed or otherwise have the right to use, all patents, patent
rights, trademarks, trademark rights, trade names, trade name rights,
service marks, service mark rights, copyrights and other proprietary
intellectual property rights and computer programs (collectively, the
"Carolco Proprietary Rights") which are material to the conduct of the
business of Carolco and its Subsidiaries taken as a whole. No claims are
pending or, to the knowledge of Carolco, threatened that Carolco or any of
its Subsidiaries is infringing or otherwise adversely affecting the rights
of any person with regard to any Carolco Proprietary Right, except for such
claims or threats which could not reasonably be expected to have a Material
Adverse Effect on Carolco. To the knowledge of Carolco, no person is
infringing the rights of Carolco with respect to any Carolco Proprietary
Right that would have a Material Adverse Effect on Carolco. No lien,
encumbrance or restriction with respect to any Carolco Proprietary Right
has a Material Adverse Effect on Carolco, or so far as Carolco can now
foresee could reasonably be expected to have a Material Adverse Effect on
Carolco.

Section 6.17 Environmental Matters. To the knowledge of Carolco,
Carolco and each of its Subsidiaries are in compliance with all applicable
Environmental Laws, except for violations of the Environmental Laws that
could not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect on Carolco.
<PAGE>
Section 6.18 Taxes. Except as set forth in the CAROLCO LETTER or the
Carolco SEC Documents: (a) each of Carolco and its Subsidiaries has timely
filed all federal, state, local or foreign tax returns required to be filed
by it (except for all such returns the failure of which timely filing
would, individually or in the aggregate, not have a Material Adverse Effect
on Carolco), and has paid (or Carolco has paid on its behalf) all taxes
shown as due on the returns in respect of the periods covered by such
returns; (b) there are no tax liens upon any property or assets of Carolco
or any of its Subsidiaries which would have a Material Adverse Effect on
Carolco, except liens for current taxes not yet due; (c) neither Carolco
nor any of its Subsidiaries is delinquent in the payment of any material
tax, assessment or governmental charge which would have a Material Adverse
Effect on Carolco; (d) no deficiencies for any taxes have been proposed,
asserted or assessed against Carolco or any of its Subsidiaries which would
have a Material Adverse Effect on Carolco or its Subsidiaries, and no
requests for waivers of the time to assess any such taxes are pending; and
(e) no audits of the tax returns of Carolco or any of its Subsidiaries are
currently being conducted by a taxing authority, and neither Carolco nor
its Subsidiaries have received any notices of pending or proposed audits
from a taxing authority.

Section 6.19 Foreign Corrupt Practices Act. To the best knowledge of
the officers of Carolco, neither Carolco, any Subsidiary of Carolco nor any
director, officer, agent, employee or other person associated with or
acting on behalf of any of them has (i) used any corporate or other funds
for unlawful contributions, payments, gifts or entertainment or made any
unlawful expenditures relating to political activity, or made any direct or
indirect unlawful payments to governmental officials or others or
established or maintained any unlawful or unrecorded funds in violation of
Section 30A of the Exchange Act or (ii) accepted or received any unlawful
contributions, payments, gifts or expenditures. Carolco is in compliance
in all material respects with the provisions of Section 13(b) of the
Exchange Act and to the best knowledge of the officers of Carolco, there is
no failure of compliance with such provisions.

Section 6.20 Brokers. No broker, investment banker or other person,
other than Seidler or Daniels & Associates, the fees and expenses of which
will be paid by Carolco in accordance with Carolco's written agreement with
Seidler and Daniels & Associates (copies of which have been delivered by
Carolco to LIVE prior to the date hereof), is entitled to any broker's,
finder's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Carolco.

Section 6.21 Officers, Directors and Key Employees. The CAROLCO LETTER
sets forth (i) the name and total compensation of each officer and director
of Carolco; (ii) the name of each officer and director of any of Carolco's
Subsidiaries; (iii) the name and total compensation of each other officer,
director, employee, consultant, agent or other representative of Carolco or
any of its Subsidiaries whose current annual rate of compensation
(including bonuses and commissions) exceeds $150,000; (iv) all wage or
salary increases or bonuses received by the persons identified in
Section 6.21(i) and (iii) ("Significant Carolco Employees") since
December 31, 1993, and any accrual for or commitment or agreement by
Carolco or any of its Subsidiaries to pay such increases or bonuses; and
(v) a notation with respect to each of such Significant Carolco Employees,
whether they have an employment agreement with Carolco or any of its
Subsidiaries and, if so, the date and term of such agreement. Except as
set forth in the CAROLCO LETTER, (x) to the knowledge of Carolco or any of
its Subsidiaries, none of such Significant Carolco Employees has made a
threat to Carolco or any of its Subsidiaries or to any of their officers or
directors to cancel or otherwise terminate such Significant Carolco
Employee's relationship with Carolco or any of its Subsidiaries and (y)
none of such Significant Carolco Employees have "change of control" clauses
or agreements with Carolco or any of its Subsidiaries (or similar clauses
or agreements permitting such Significant Carolco Employees to terminate
<PAGE>
their employment relationship with Carolco or any of its Subsidiaries) that
would be triggered by the Merger which have not been waived on the date
hereof.

Section 6.22 State Takeover Statutes. Neither Section 203 of the DGCL
nor any other "fair price," "moratorium," "control share acquisition" or
other state takeover statute or similar statute or regulation applies to
the Merger by virtue of Carolco engaging in the transactions contemplated
hereby.

Section 6.23 Insurance. Carolco and each of its Subsidiaries have been
and are insured by financially sound and reputable insurers with respect to
their properties and the conduct of their business in such amounts and
against such risks as are reasonable in relation to their respective
businesses, and each will use its best efforts to maintain such insurance.
Such insurance is in full force and effect and no notice of cancellation or
termination has been received with respect to any of said insurance.
Except as disclosed in the CAROLCO LETTER, there are no claims pending
thereunder except where such claim would not, individually or in the
aggregate, have a Material Adverse Effect on Carolco.

Section 6.24 Title to Properties and Related Matters. Except with
respect to the Carolco Proprietary Rights, Carolco and each of its
Subsidiaries have good and marketable title (or valid and subsisting
leasehold interests) to all of the personal properties and assets (tangible
and intangible) and the real properties utilized in their businesses or
reflected in the Carolco SEC Documents or acquired after the date thereof
(other than properties sold or otherwise disposed of in the ordinary course
of business) which are material to them, free and clear of all title
defects, liens, encumbrances and restrictions, except (i) as reflected in
the Carolco SEC Documents, (ii) to the extent not described in clause (i),
those described in the CAROLCO LETTER, (iii) to the extent not described in
clause (i), statutory liens not yet due or delinquent or the validity of
which are being contested or litigated in good faith by appropriate
proceedings and for which Carolco has set aside on its books reserves that
are adequate with respect thereto; and (iv) liens, encumbrances, covenants,
rights of way, building or use restrictions, easements, exceptions,
variances, reservations and other matters or limitations of any kind, if
any, which, when considered together with the liens described in clauses
(i), (ii) and (iii), do not have a Material Adverse Effect on Carolco's
business or operations. All properties of Carolco and each of its
Subsidiaries are reflected in the Carolco SEC Documents in the manner and
to the extent required by generally accepted accounting principles
consistently applied. Neither the whole nor any portion of the leaseholds
or any other assets of Carolco or any of its Subsidiaries is subject to any
governmental decree or order to be sold or is being condemned, expropriated
or otherwise taken by any public authority with or without payment of
compensation therefor, nor to the knowledge of Carolco or any of its
Subsidiaries has any such condemnation, expropriation or taking been
proposed, which would have a Material Adverse Effect on Carolco and its
Subsidiaries taken as a whole.

Section 6.25 Accuracy of Carolco Disclosure. Neither this Agreement,
nor any document or other paper furnished (or to be furnished pursuant
hereto at the Closing) by or on behalf of Carolco to LIVE pursuant to this
Agreement or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make
the statements made, in the context in which made, not false or misleading.
There is no fact that Carolco has not disclosed to LIVE in writing that has
a Material Adverse Effect on Carolco or so far as Carolco can now foresee
will have a Material Adverse Effect on Carolco or on the ability of Carolco
to perform this Agreement.

ARTICLE 7
<PAGE>
REPRESENTATIONS AND WARRANTIES REGARDING CAC

LIVE and CAC jointly and severally represent and warrant to Carolco
as follows:

Section 7.1 Organization and Standing. CAC is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. CAC was organized solely for the purpose of engaging in
the transactions contemplated by this Agreement and has not engaged in any
business or entered into any agreements since it was incorporated which is
not in connection with this Agreement, has not incurred any liabilities
since it was incorporated, and (except as set forth in the LIVE LETTER)
does not own any properties.

Section 7.2 Capital Structure. As of the date of this Agreement, the
authorized capital stock of CAC consists of one share of CAC Common Stock,
which is validly issued and outstanding, fully paid and nonassessable. As
of the date of this Agreement, except for this Agreement, there are no
options, warrants, rights, commitments, agreements, arrangements or
undertakings of any kind to which CAC is a party or by which it is bound
relating to the issuance of any capital stock or other voting securities of
CAC or any securities convertible into or exchangeable for any capital
stock or other voting securities of CAC, or any options, warrants or other
rights to purchase capital stock or other voting securities of CAC.

Section 7.3 Authority.

(a) CAC 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, the
performance by CAC of its obligations hereunder and the consummation of the
transactions contemplated hereby have been duly authorized by its Board of
Directors and LIVE as its sole stockholder, and no other corporate
proceedings on the part of CAC are necessary to authorize this Agreement
and the transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by CAC and (assuming the due authorization,
execution and delivery hereof by Carolco) constitutes a valid and binding
obligation of CAC enforceable against CAC in accordance with its terms,
except (i) as such obligation 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.

(b) The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby in compliance with the
provisions hereof will not, breach, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under or result in or give rise to a right of termination, cancellation or
acceleration of any liability or obligation or to the loss of a material
benefit under, any provision of the Certificate of Incorporation or Bylaws
of CAC, true and complete copies of which as of the date hereof have been
delivered to Carolco.

ARTICLE 8

COVENANTS RELATING TO CONDUCT OF BUSINESS

Section 8.1 Conduct of Business by LIVE Pending the Merger.

(a) Ordinary Course. During the period from the date of this
Agreement through the Effective Date or earlier termination of this
Agreement, LIVE shall, and shall cause its Subsidiaries to, in all material
respects carry on their respective businesses in the usual, regular and
<PAGE>
ordinary course in substantially the same manner as heretofore conducted
and, to the extent consistent therewith, use all reasonable best efforts to
preserve intact their current business organizations, keep available the
services of their current officers and employees necessary to its business
and preserve their relationships with customers, suppliers and others
having business dealings with them to the end that their goodwill and
ongoing businesses shall be unimpaired at the Effective Date. Without
limiting the generality of the foregoing, and, except as otherwise
expressly contemplated by this Agreement, LIVE shall not, and shall not
permit any of its Subsidiaries to, without the prior written consent of
Carolco or except as disclosed in the LIVE LETTER:

(i) (A) declare, set aside or pay any dividends on, or make
any other actual, constructive or deemed distributions in respect
of, any of its capital stock, except for dividends from Subsidiaries
to LIVE, and except for dividends declared, set aside or paid with
respect to the LIVE Series B Preferred Stock and LIVE Series C
Preferred Stock in accordance with their current terms;

(B) split, combine or reclassify any of its capital stock
or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital
stock;

(C) purchase, redeem or otherwise acquire any shares of
capital stock of LIVE or any other debt or equity securities thereof
or any rights, warrants or options to acquire any such shares or
other securities, except that LIVE may, before the Effective Date,
redeem all outstanding shares of the LIVE Series B Preferred Stock
as contemplated in Section 10.2(e) herein, and except that LIVE may,
before the Effective Date, redeem or repay up to $6,000,000, in
aggregate, of its $37,000,000, in aggregate, 12% Senior Subordinated
Secured Notes due 1994 ("LIVE 12% Notes");

(D) amend the terms of any LIVE capital stock or any
other securities of LIVE, except as contemplated herein.

(ii) issue, deliver, sell, pledge, dispose of or otherwise
encumber (or propose to do any of the foregoing) any shares of its
capital stock, any other voting securities or equity equivalent or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities or
equity equivalent (other than, in the case of LIVE, the issuance of LIVE
Common Stock or LIVE Series A Common Stock during the period from the
date of this Agreement through the Effective Date upon the exercise of
existing LIVE stock options or warrants or conversion of LIVE Series B
Preferred Stock or LIVE Series C Preferred Stock outstanding on the date
of this Agreement in accordance with their current terms, and actions
with respect to the LIVE Rights in accordance with their current terms);

(iii) other than as provided herein or contemplated hereby,
amend the Restated Certificate of Incorporation of LIVE or Bylaws of LIVE
or comparable charter or organizational documents of any of its
Subsidiaries;

(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of or equity
in, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets, in each case that are
material, individually or in the aggregate, to LIVE and its Subsidiaries
taken as a whole or which would make it impossible or a violation of
applicable laws, rules or regulations for Carolco to effect the Merger;

(v) except with respect to plans previously disclosed to
Carolco with respect to Strawberries and VCL, sell, lease, assign or
<PAGE>
otherwise dispose of or agree to sell, lease, assign or otherwise dispose
of any of its assets that are material, individually or in the aggregate,
to LIVE and its Subsidiaries taken as a whole or which would make it
impossible or a violation of applicable laws, rules or regulations for
Carolco to effect the Merger;

(vi) except as permitted in Section 10.2(f) hereof, incur any
indebtedness (as defined in Section 5.13(a)).

(vii) make or incur any capital expenditure or expenditures
exceeding $100,000 in the aggregate, other than in the ordinary course of
business consistent with past practice;

(viii) except as disclosed in the LIVE SEC Documents, pay,
discharge or satisfy any material claims, litigation, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities (a) reflected or reserved
against in, or contemplated by, the most recent consolidated financial
statements (or the notes thereto) of LIVE included in LIVE SEC Documents
or (b) incurred in the ordinary course of business consistent with past
practice;

(ix) take any action with respect to the grant of any severance
or termination pay to any director, officer or employee of LIVE or any of
its Subsidiaries or with respect to any increase of benefits payable
under its severance or termination pay practices in effect on the date
hereof, except for actions involving expenditures by LIVE or any of its
Subsidiaries of (a) individually, no more than $100,000 in excess of the
amount of compensation that would have been paid during the remainder of
the term had the contract not been terminated, or (b) in the aggregate,
no more than $500,000 in excess of the amount of compensation that would
have been paid during the remainder of the term of all terminated
contracts had they not been terminated;

(x) except as may be required by law or this Agreement, enter
into, adopt or increase in any material manner the benefits payable under
any bonus, profit sharing, compensation, termination, stock option, stock
appreciation right, restricted stock, performance unit, pension,
retirement, deferred compensation, employment, severance or other
employee benefit agreements, trusts, plans, funds or other arrangements
for the benefit or welfare of any director, officer or employee, or
(except for increases in the ordinary course of business consistent with
past practice) increase in any manner the compensation or fringe benefits
of any director or officer or pay any benefit not required by any
existing plan and arrangement (including the granting of stock options,
stock appreciation rights, shares of restricted stock or performance
units) or enter into any contract, agreement, commitment or arrangement
to do any of the foregoing;

(xi) except as may be required as a result of a change in law
or in generally accepted accounting principles, change any of the
accounting principles or practices used by it;

(xii) write down the value of any inventory or write off as
uncollectible any notes or accounts receivable, except with respect to
plans previously disclosed to Carolco with respect to Strawberries and
VCL and except for immaterial write-downs and write-offs in the ordinary
course of business and consistent with past practice;

(xiii) dispose of or permit to lapse any LIVE Proprietary
Rights or disclose to any person any LIVE Proprietary Rights except where
such disposal, lapse or disclosure would not, individually or in the
aggregate, have a Material Adverse Effect on LIVE;
<PAGE>
(xiv) pay, loan or advance any amount to, or sell, transfer
or lease any properties or assets to, or enter into any agreement or
arrangement with, any of its officers or directors or any affiliate
thereof, except pursuant to existing agreements with such persons, except
for directors' fees and compensation to officers at rates not exceeding
the rates of compensation paid during the six-month period ended
December 31, 1993, or except for transactions in the ordinary course of
business, or except as disclosed in the LIVE SEC Documents or except as
otherwise permitted or contemplated hereunder; or

(xv) enter into any contract, agreement, commitment or
arrangement with respect to any of the foregoing.

(b) No Default. Other than with Carolco's prior written consent or
as disclosed in the LIVE LETTER, neither LIVE nor any of its Subsidiaries
shall do any act or omit to do any act, or knowingly permit any act or
omission to act, which will cause a breach of any material contract or
commitment of LIVE or any of its Subsidiaries, except for such breaches
(other than of the provisions of this Agreement) as would not, individually
or in the aggregate, have a Material Adverse Effect on LIVE.

(c) Compliance with Laws. LIVE and each of its Subsidiaries shall
duly comply with all laws applicable to it and its properties, operations,
business and employees, except where the breach thereof would not,
individually or in the aggregate, have a Material Adverse Effect on LIVE.

(d) Tax Returns. LIVE and each of its Subsidiaries shall prepare,
file and pay amounts shown as due on all federal, state, local and foreign
tax returns and amendments thereto required to be filed by it, except that
the failure to file those state, local or foreign returns which
individually or in the aggregate would not have a Material Adverse Effect
on LIVE shall not be deemed a breach of this Section 8.1(d).

(e) Other Actions. LIVE shall not, and shall not permit any of its
Subsidiaries to, take any action that would, or that could reasonably be
expected to, result in (i) any of the representations and warranties of
LIVE or CAC set forth in this Agreement that are qualified as to
materiality becoming untrue, (ii) any of such representations and
warranties that are not so qualified becoming untrue in any material
respect or (iii) any of the conditions set forth in Article 10 not being
satisfied.

(f) Advice of Changes; SEC Filings. LIVE shall promptly advise
Carolco in writing of any change or event having, or which, insofar as can
reasonably be foreseen, would have, a Material Adverse Effect on LIVE
without regard to whether such change or event would be permitted
hereunder. LIVE shall promptly advise Seidler in writing of any change or
event or any other information which would materially impact the Seidler
Fairness Opinion including material write-downs, litigation or changes in
financial condition or capitalization without regard to whether such change
or event would be permitted hereunder. LIVE shall promptly provide Carolco
(or its counsel) with copies of all filings made by LIVE or CAC with the
SEC or any other Governmental Entity in connection with this Agreement and
the transactions contemplated hereby and thereby.

Section 8.2 Conduct of Business by Carolco Pending the Merger.

(a) Ordinary Course. During the period from the date of this
Agreement through the Effective Date or earlier termination of this
Agreement, Carolco shall, and shall cause its Subsidiaries to, in all
material respects carry on their respective businesses in the usual,
regular and ordinary course in substantially the same manner as heretofore
conducted and, to the extent consistent therewith, use all reasonable best
efforts to preserve intact their current business organizations, keep
available the services of their current officers and employees necessary to
its business and preserve their relationships with customers, suppliers and
<PAGE>
others having business dealings with them to the end that their goodwill
and ongoing businesses shall be unimpaired at the Effective Date. Without
limiting the generality of the foregoing, and, except as otherwise
expressly contemplated by this Agreement, Carolco shall not, and shall not
permit any of its Subsidiaries to, without the prior written consent of
LIVE or except as disclosed in the CAROLCO LETTER:

(i) (A) declare, set aside or pay any dividends on, or make
any other actual, constructive or deemed distributions in respect
of, any of its capital stock, except for dividends from Subsidiaries
to Carolco, and except for payment-in-kind dividends declared, set
aside or paid on the Carolco Series A Preferred Stock,

(B) split, combine or reclassify any of its capital stock
or issue or authorize the issuance of any other securities in
respect of, in lieu of, or in substitution for shares of its capital
stock,

(C) purchase, redeem or otherwise acquire any shares of
capital stock of Carolco or any of its Subsidiaries or any other
debt or equity securities thereof or any rights, warrants or options
to acquire any such shares or other securities, or

(D) amend the terms of any Carolco capital stock or any
other securities of Carolco.

(ii) issue, deliver, sell, pledge, dispose of or otherwise
encumber (or propose to do any of the foregoing) any shares of its
capital stock, any other voting securities or equity equivalent or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities or
equity equivalent (other than, in the case of Carolco, the issuance of
Carolco Common Stock during the period from the date of this Agreement
through the Effective Date upon the exercise of existing Carolco stock
options or warrants, the conversion of Carolco Series A Preferred Stock,
the Carolco 5% Notes or the Carolco 7% Notes in accordance with their
current terms or the issuance of Pay-Per-View Shares during the period
from the date of this Agreement through the Effective Date);

(iii) other than as provided herein, amend the Restated
Certificate of Incorporation of Carolco or Restated Bylaws of Carolco or
comparable charter or organizational documents of any of its
Subsidiaries;

(iv) enter into any contract, agreement, commitment or
arrangement with respect to United States and Canadian video rights;

(v) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of or equity
in, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets, in each case that are
material, individually or in the aggregate, to Carolco and its
Subsidiaries taken as a whole or which would make it impossible or a
violation of applicable laws, rules or regulations for LIVE to effect the
Merger;

(vi) sell, lease, assign or otherwise dispose of or agree to
sell, lease, assign or otherwise dispose of any of its assets that are
material, individually or in the aggregate, to Carolco and its
Subsidiaries taken as a whole or which would make it impossible or a
violation of applicable laws, rules or regulations for LIVE to effect the
Merger;

(vii) incur any indebtedness (as defined in Section
5.13(a)), except for indebtedness incurred in the ordinary course of
<PAGE>
business consistent with past practice; or make any material loans,
advances or capital contributions to, or investments in, any other
person, other than to any wholly-owned Subsidiary of Carolco; and other
than loans, advances, capital contributions, and investments made in the
ordinary course of business, consistent with past practice;

(viii) make or incur any capital expenditure or expenditures
exceeding $100,000 in the aggregate other than in the ordinary course of
business consistent with past practice;

(ix) except as disclosed in the Carolco SEC Documents, pay,
discharge or satisfy any material claims, litigation, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities (a) reflected or reserved
against in, or contemplated by, the most recent consolidated financial
statements (or the notes thereto) of Carolco included in Carolco SEC
Documents or (b) incurred in the ordinary course of business consistent
with past practice;

(x) take any action with respect to the grant of any severance
or termination pay to any director, officer or employee of Carolco or any
of its Subsidiaries or with respect to any increase of benefits payable
under its severance or termination pay practices in effect on the date
hereof, except for actions involving expenditures by Carolco or any of
its Subsidiaries of (a) individually, no more than $100,000 in excess of
the amount of compensation that would have been paid during the remainder
of the term had the contract not been terminated, or (b) in the
aggregate, no more than $500,000 in excess of the amount of compensation
that would have been paid during the remainder of the term of all
terminated contracts had they not been terminated;

(xi) except as may be required by law or this Agreement, enter
into, adopt or increase in any material manner the benefits payable under
any bonus, profit sharing, compensation, termination, stock option, stock
appreciation right, restricted stock, performance unit, pension,
retirement, deferred compensation, employment, severance or other
employee benefit agreements, trusts, plans, funds or other arrangements
for the benefit or welfare of any director, officer or employee, or
(except for increases in the ordinary course of business consistent with
past practice) increase in any manner the compensation or fringe benefits
of any director or officer or pay any benefit not required by any
existing plan and arrangement (including the granting of stock options,
stock appreciation rights, shares of restricted stock or performance
units) or enter into any contract, agreement, commitment or arrangement
to do any of the foregoing;

(xii) except as may be required as a result of a change in
law or in generally accepted accounting principles, change any of the
accounting principles or practices used by it;

(xiii) write down the value of any inventory or write off as
uncollectible any notes or accounts receivable, except for immaterial
write-downs, and write-offs in the ordinary course of business and
consistent with past practice;

(xiv) dispose of or permit to lapse any Carolco Proprietary
Rights or disclose to any person any Carolco Proprietary Rights except
where such disposal, lapse or disclosure would not, individually or in
the aggregate, have a Material Adverse Effect on Carolco;

(xv) pay, loan or advance any amount to, or sell, transfer or
lease any properties or assets to, or enter into any agreement or
arrangement with, any of its officers or directors or any affiliate
thereof, except pursuant to existing agreements with such persons, except
<PAGE>
for directors' fees and compensation to officers at rates not exceeding
the rates of compensation paid during the six-month period ended
December 31, 1993, or except for transactions in the ordinary course of
business or except as otherwise permitted or contemplated hereunder; or

(xvi) enter into any contract, agreement, commitment or
arrangement with respect to any of the foregoing.

(b) No Default. Other than with LIVE's prior written consent or as
disclosed in the CAROLCO LETTER, neither Carolco nor any of its
Subsidiaries shall do any act or omit to do any act, or knowingly permit
any act or omission to act, which will cause a breach of any material
contract or commitment of Carolco or any of its Subsidiaries, except for
such breaches (other than of the provisions of this Agreement) as would
not, individually or in the aggregate, have a Material Adverse Effect on
Carolco.

(c) Compliance with Laws. Carolco and each of its Subsidiaries
shall duly comply with all laws applicable to it and its properties,
operations, business and employees, except where the breach thereof would
not, individually or in the aggregate, have a Material Adverse Effect on
Carolco.

(d) Tax Returns. Carolco and each of its Subsidiaries shall
prepare, file and pay amounts shown as due on all federal, state, local and
foreign tax returns and amendments thereto required to be filed by it,
except that the failure to file those state, local or foreign returns which
individually or in the aggregate would not have a Material Adverse Effect
on Carolco shall not be deemed a breach of this Section 8.2(d).

(e) Other Actions. Carolco shall not, and shall not permit any of
its Subsidiaries to, take any action that would, or that could reasonably
be expected to, result in (i) any of the representations and warranties of
Carolco set forth in this Agreement that are qualified as to materiality
becoming untrue, (ii) any of such representations and warranties that are
not so qualified becoming untrue in any material respect, or (iii) any of
the conditions set forth in Article 10 not being satisfied.

(f) Advice of Changes; SEC Filings. Carolco shall promptly advise
LIVE in writing of any change or event having, or which, insofar as can
reasonably be foreseen, would have, a Material Adverse Effect on Carolco
without regard to whether such change or event would be permitted
hereunder. Carolco shall promptly advise Chemical in writing of any change
or event or any other information which would materially impact the
Chemical Fairness Opinion, including material write-downs, litigation or
changes in financial condition or capitalization without regard to whether
such change or event would be permitted hereunder. Carolco shall promptly
provide LIVE (or its counsel) with copies of all filings made by Carolco
with the SEC or any other Governmental Entity in connection with this
Agreement and the transactions contemplated hereby.

Section 8.3 Competing Offers. Either LIVE or Carolco may accept a
competing "takeover proposal" or "offer" if the Board of Directors of LIVE
or Carolco, as the case may be, declare such "takeover proposal" or "offer"
advisable, in the best interest of LIVE or Carolco, as the case may be, and
that the terms, in the aggregate, of such "takeover proposal" or "offer"
are better than the terms of the Merger as provided herein, provided,
however, that LIVE or Carolco, as the case may be, shall pay the costs and
expenses incurred in connection with the Merger in accordance with Section
9.7 hereof. In the case of Carolco, "takeover proposal" or "offer" shall
mean any proposal or offer, other than a proposal or offer by LIVE or any
of its affiliates, for a tender or exchange offer, a merger, consolidation
or other business combination involving Carolco or any Subsidiary of
Carolco or any proposal to acquire in any manner all or a substantial
equity interest in, or all or a substantial portion of the assets of,
Carolco or any of its Subsidiaries other than the transactions contemplated
<PAGE>
by this Agreement. In the case of LIVE, "takeover proposal" or "offer"
shall mean any proposal or offer, other than a proposal or offer by Carolco
or any of its affiliates, for a tender or exchange offer, a merger,
consolidation or other business combination involving LIVE or any
Subsidiary of LIVE (other than Strawberries or VCL) or any proposal to
acquire in any manner all or a substantial equity interest in, or all or a
substantial portion of the assets of, LIVE or any of its Subsidiaries
(other than Strawberries or VCL) other than the transactions contemplated
by this Agreement. Nothing herein shall prevent LIVE from selling all or
any part of its Strawberries or VCL subsidiaries on terms previously
disclosed to Carolco or otherwise acceptable to Carolco.

Section 8.4 Reorganization. During the period from the date of this
Agreement through the Effective Date, unless the other parties hereto shall
otherwise agree in writing, none of LIVE, CAC, any other Subsidiary of
LIVE, Carolco nor any Subsidiary of Carolco shall knowingly take or fail to
take any action which action or failure to act would jeopardize
qualification of the Merger as a tax free reorganization under the Code.

Section 8.5 Conduct of Business of CAC Pending the Merger. During the
period from the date of this Agreement through the Effective Date, CAC
shall not engage in any activities of any nature except as provided in or
contemplated by this Agreement.

Section 8.6 Update of LIVE LETTER and CAROLCO LETTER. LIVE will
update the LIVE LETTER and Carolco will update the CAROLCO LETTER (the
CAROLCO LETTER and the LIVE LETTER are sometimes referred to herein
collectively as the "Letters" and individually as a "Letter") from time to
time hereafter until the Closing, including as of the date of the mailing
of the Proxy Statement and as of the date of the Closing, to the extent any
information disclosed on such Letters requires updating because of a change
in facts or circumstances, and to the extent any new information that would
have been included in either of such Letters on the date hereof had such
information existed or been known on the date hereof later comes to the
knowledge of LIVE or Carolco, as the case may be. The update of such
Letters shall not modify or add additional exceptions to representations,
warranties or covenants contained herein; any updating of the LIVE LETTER
or CAROLCO LETTER which subsequently makes materially inaccurate as of the
date of this Agreement any representation or warranty that is qualified as
to materiality, or makes inaccurate as of the date of this Agreement any
representation or warranty that is not qualified as to materiality, shall
be deemed a material breach of this Agreement by the party whose
representation or warranty was so made inaccurate; and neither party shall,
by any update of its respective Letter, be relieved from the conditions set
forth in Sections 10.2(a) and 10.2(b) and 10.3(a) and 10.3(b) concerning
the truth and correctness of such parties' respective representations and
warranties contained herein on and as of the Effective Date.

Section 8.7 Bringdown of Fairness Opinion. LIVE will request that
Chemical confirm the Chemical Fairness Opinion and Carolco will request
that Seidler confirm the Seidler Fairness Opinion each as of the day
immediately preceding the Effective Date without any material change in any
conclusions or opinions contained therein.

ARTICLE 9

ADDITIONAL AGREEMENTS

Section 9.1 Carolco and LIVE Stockholder Approvals.

(a) Carolco shall promptly call a meeting of its stockholders (the
"Carolco Stockholder Meeting") for the purpose of voting upon this
Agreement and the transactions contemplated hereby and, subject to the
fiduciary duties of Carolco's Board of Directors under applicable law,
shall use its best efforts to obtain stockholder approval of this Agreement
<PAGE>
and the transactions contemplated hereby. The Carolco Stockholder Meeting
shall be held as soon as practicable following the date upon which the
Registration Statement becomes effective and Carolco will, through its
Board of Directors but subject to the fiduciary duties of its Board of
Directors under applicable law as advised in writing by outside counsel,
recommend to its stockholders the approval of this Agreement and the
transactions contemplated hereby and not rescind its declaration that the
Merger is advisable. This Agreement and the transactions contemplated
hereby shall be approved on behalf of Carolco's stockholders if (i) holders
of at least a majority of the combined voting power with respect to
Carolco's voting securities entitled to vote and present at the Carolco
Stockholder Meeting (other than the Carolco Investors) vote in favor of
this Agreement and the transaction contemplated hereby, (ii) holders of at
least a majority of the combined voting power with respect to Carolco's
voting securities entitled to vote at the Carolco Stockholder Meeting
(including the Carolco Investors) vote in favor of this Agreement and the
transactions contemplated hereby, and (iii) holders of 100% of the Carolco
Series A Preferred Stock, voting as a class, vote in favor of this
Agreement and the transactions contemplated hereby.

(b) LIVE shall promptly call a meeting of its stockholders (the
"LIVE Stockholder Meeting" and, together with Carolco Stockholder Meeting,
the "Stockholder Meetings") for the purpose of voting upon this Agreement
and the transactions contemplated hereby, including the amendments to the
Restated Certificate of Incorporation of LIVE referred to in Article 3
above, the issuance of LIVE Common Stock and LIVE Series D Preferred Stock
in connection with the Merger, and taking such other actions as are
reasonably required to consummate the Merger and, subject to the fiduciary
duties of LIVE's Board of Directors under applicable law, shall use its
best efforts to obtain stockholder approval of such issuance and action.
The LIVE Stockholder Meeting shall be on the date of the Carolco
Stockholder Meeting or, if such date is not practicable, on the closest
date practicable. LIVE will, through its Board of Directors but subject to
the fiduciary duties of its Board of Directors under applicable law as
advised in writing by outside counsel, recommend to its stockholders the
approval of this Agreement and the transactions contemplated hereby and not
rescind its declaration that the Merger is advisable. This Agreement and
the transactions contemplated hereby shall be approved on behalf of LIVE's
stockholders if (i) holders of at least a majority of the combined voting
power with respect to LIVE's voting securities entitled to vote and present
at the LIVE Stockholder Meeting (other than the LIVE Investors) vote in
favor of this Agreement and the transactions contemplated hereby, (ii)
holders of at least 66-2/3% of the combined voting power with respect to
LIVE's voting securities entitled to vote at the LIVE Stockholder Meeting
(including the LIVE Investors) vote in favor of the Agreement and the
transactions contemplated hereby and (iii) holders of 100% of the LIVE
Series C Preferred Stock, voting as a class, vote in favor of the Agreement
and the transactions contemplated hereby.

Section 9.2 Registration Statement and Proxy Statement

(a) LIVE and Carolco shall jointly prepare and file with the SEC as
soon as practicable the Registration Statement and the Proxy Statement.
The Registration Statement will provide for the registration of all shares
of LIVE capital stock to be issued pursuant to the Merger, including
without limitation, any shares of LIVE Common Stock underlying any LIVE
Series D Preferred Stock to be issued pursuant to the Merger, any shares of
LIVE Common Stock underlying any convertible debt of Carolco disclosed in
the CAROLCO LETTER or herein, any shares of LIVE Common Stock underlying
any warrants previously issued by Carolco as described herein or in the
CAROLCO LETTER, and, as LIVE and Carolco mutually agree, any other security
of LIVE. Each of LIVE and Carolco shall use all reasonable efforts to (i)
have the Registration Statement declared effective by the SEC as soon as
practicable and (ii) respond to and/or comply with any SEC staff comments
on the Proxy Statement. LIVE shall also take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
<PAGE>
qualified) required to be taken under state blue sky or securities laws in
connection with the issuance of the LIVE Common Stock and LIVE Series D
Preferred Stock pursuant to the Merger and the exercise after the Effective
Date of the New Stock Options issuable in respect of Carolco Stock Options
as contemplated by Section 9.8. LIVE shall also prepare and timely file
with the SEC one or more registration statements on Form S-8 for the
purpose of registering the shares of LIVE Common Stock issuable after the
Effective Date upon exercise of any Carolco Stock Options theretofore
granted (collectively, the "Option Registration Statement"), and LIVE shall
use its best efforts to cause the Option Registration Statement to become
effective as soon as practicable after the Effective Date. LIVE and
Carolco shall each furnish the other company all information concerning
their respective companies and all such other information required for use
in the Registration Statement, the Option Registration Statement and the
Proxy Statement and both LIVE and Carolco shall each take such other action
as the other company may reasonably request (and in the case of the Proxy
Statement as required by the Exchange Act) in connection with the
preparation of such Registration Statement, Option Registration Statement
and Proxy Statement and the actions to be taken by LIVE pursuant to this
Section 9.2.

(b) If at any time prior to the Effective Date any event with
respect to LIVE or Carolco, their officers and directors or any of their
Subsidiaries (including CAC) shall occur which is required at that time to
be described in the Proxy Statement or the Registration Statement, the
party with respect to whom the event occurs shall promptly notify the other
party, and to the extent required by law, Carolco and LIVE will promptly
file an amendment or supplement with the SEC and disseminate such amendment
to the stockholders of LIVE and the stockholders of Carolco.

Section 9.3 Amendment to Indentures.

(a) LIVE Note Indenture. LIVE shall take all action necessary to
amend the Indenture ("LIVE Increasing Rate Notes Indenture") governing its
$40,000,000, in aggregate, Increasing Rate Secured Senior Subordinated
Notes due 1999 ("LIVE Increasing Rate Notes"), in form, scope and substance
and on terms set forth in Exhibit 9.3(a).

(b) LIVE 12% Indenture. LIVE shall take all action necessary to
amend the Indenture ("LIVE 12% Indenture") governing its $37,000,000, in
aggregate, 12% Notes due 1994, in form, scope and substance and on terms
set forth in Exhibit 9.3(b) and in accordance with the actions contemplated
by Section 8.1(a)(i)(C) hereof with respect to the LIVE 12% Notes.

Section 9.4 Listing Application. LIVE will use its best efforts to
obtain, prior to the Effective Date, approval for listing the Shares of
LIVE Common Stock registered pursuant to the Registration Statement on the
New York Stock Exchange, upon official notice of issuance.

Section 9.5 Access to Information. Each of the parties hereto shall,
and shall cause each of their respective Subsidiaries to, afford to the
other party and to such other party's accountants, counsel, financial
advisers and other representatives, reasonable access, and permit them to
make such inspections as they may reasonably require, during normal
business hours during the period from the date of this Agreement through
the Effective Date to all their respective properties, books, contracts,
commitments and records and, during such periods, Carolco and LIVE, as the
case may be, shall, and shall cause each of their respective Subsidiaries
to, furnish promptly to LIVE or Carolco, as the case may be, all other
information concerning its business, properties and personnel as LIVE or
Carolco, as the case may be, may reasonably request. Except as required by
law, each of LIVE and Carolco will hold, and will cause its affiliates,
associates, agents and representatives to hold, any nonpublic information
in confidence unless disclosure of such material is compelled by judicial
or administrative process, or, in the reasonable opinion of LIVE's and
Carolco's respective outside counsel, by other requirements of law (in
<PAGE>
which cases the party compelled to disclose shall give reasonable notice to
the other party prior to making the compelled disclosure), until such time
as such information becomes publicly available otherwise than through the
actions of such person, and each of Carolco and LIVE shall use its best
efforts to ensure that such affiliates, associates and representatives do
not disclose such information to others without the prior written consent
of Carolco or LIVE, as appropriate. In the event of termination of this
Agreement for any reason, LIVE shall promptly return all documents
containing nonpublic information so obtained from Carolco or any of its
Subsidiaries and any copies made of such documents for LIVE, and Carolco
shall promptly return all documents containing nonpublic information so
obtained from LIVE or any of its Subsidiaries and any copies made of such
documents for Carolco. No investigation pursuant to this Section 9.5 shall
add to or subtract from any representations or warranties of Carolco or
LIVE, as the case may be, or the conditions to the respective obligations
of Carolco or LIVE or CAC to consummate the Merger. Nothing herein shall
limit or release any of the confidentiality agreements previously entered
in by the parties.

Section 9.6 Affiliates. Prior to the Effective Date, Carolco and
LIVE, after consultation with Gipson Hoffman & Pancione and Sidley &
Austin, shall each cause to be prepared and delivered to the other a list
(reasonably satisfactory to each other's counsel) identifying all persons
who, at the time of the respective Stockholder Meetings, may be deemed to
be "affiliates" of Carolco as that term is used in paragraphs (c) and (d)
of Rule 145 under the Securities Act (the "Affiliates"). Carolco and LIVE,
through its counsel, shall advise each such possible Affiliate of its
obligations under Rule 145 with respect to shares of LIVE Common Stock
issued to each such possible Affiliate pursuant to the Merger.

Section 9.7 Fees and Expenses. Whether or not the Merger is
consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses, except that the legal fees and
expenses incurred in connection with printing and mailing the Registration
Statement and related materials, the Option Registration Statement and the
Proxy Statement will be shared equally by LIVE and Carolco, except that in
the event this Agreement shall terminate by virtue of either of the
provisions of subsections (b)(i) or (ii) or (c)(i) or (ii) of Section 11.1
hereof, then Carolco, in the case of subsection (b), and LIVE, in the case
of subsection (c), shall reimburse the other party for all such legal fees
and expenses. In the event this Agreement shall terminate by virtue of
Subsection (d) of Section 11.1 hereof, then the party who accepts the
"competing proposal" or "offer" shall reimburse the other party for all
out-of-pocket expenses incurred by the other party in connection with the
Merger through the date of termination of this Agreement.

Section 9.8 Carolco Stock Options.

(a) As of the Effective Date, LIVE shall assume (pursuant to an
assumption agreement satisfactory to LIVE and Carolco) Carolco's
obligations under the 1986 Non-Employee Stock Option Plan of Carolco and
the 1986 Employee Stock Option Plan of Carolco (collectively, the "1986
Plan") and the 1989 Stock Option and Stock Appreciation Rights Plan of
Carolco (the "1989 Plan") (the 1986 Plan and the 1989 Plan are sometimes
referred to hereinafter collectively as the "Carolco Stock Plans"). Each
option to purchase shares of Carolco Common Stock outstanding immediately
prior to the Effective Date pursuant to the Carolco Stock Plans (a "Plan
Option") shall become and represent an option to purchase that number of
shares of LIVE Common Stock (a "New Stock Option") as the holder of such
Plan Option would have been entitled to receive by virtue of the Merger had
it exercised such Plan Option immediately prior to the Effective Date, at
an exercise price per share equal to the exercise price per share of such
Plan Option immediately prior to the Effective Date multiplied by the
Exchange Ratio. After the Effective Date, except as provided in this
Section 9.8, each New Stock Option shall be exercisable upon the same terms
<PAGE>
and conditions as were applicable under the related Plan Option prior to
the Effective Date.

(b) All time elapsed since the grant of a Plan Option shall be
credited to the applicable successor option for purposes of determining
when such successor option vests.

(c) In the event of any reclassification, stock split or stock
dividend with respect to LIVE Common Stock (or if a record date with
respect to any of the foregoing) should occur after the date of this
Agreement and before the Effective Date, appropriate and proportionate
adjustments shall be made in the exchange ratios for Plan Options.

(d) After the Effective Date, LIVE shall grant no New Stock Options
or Carolco stock appreciation rights under the Carolco Stock Plans as
assumed by LIVE or any LIVE stock options or LIVE stock appreciation rights
under LIVE's 1988 Stock Option and Stock Appreciation Rights Plan. After
the Effective Date, LIVE may grant LIVE stock options or LIVE stock
appreciation rights only pursuant to a 1994 Stock Option and Stock
Appreciation Rights Plan for LIVE substantially in the form attached hereto
as Exhibit 9.8(d) ("New Plan"), subject to approval of such New Plan by a
majority of the voting power of LIVE entitled to vote and voting at the
LIVE Stockholder Meeting.

Section 9.9 Other Obligations of Carolco and LIVE.

(a) As of the Effective Date, LIVE shall assume (pursuant to an
assumption agreement in the form of Exhibit 9.9(a) hereto) each of
Carolco's obligations under that certain Employment Agreement dated as of
August 10, 1994, by and between Carolco and Mario Kassar. The agreement of
LIVE under this Section 9.9(a) is also made for the benefit of Mario
Kassar, who is intended to be, and hereby expressly is constituted, a third
party beneficiary of such agreement.

(b) As of the Effective Date, LIVE shall become co-obligor with
Carolco (pursuant to an amendment to the Indenture dated as of October 20,
1993, by and between Carolco and First Trust of California, National
Association, as Indenture Trustee, governing the Carolco 5% Notes in the
form of Exhibit 9.9(b) hereto ("Amended and Restated Carolco 5%
Indenture")), with respect to certain of Carolco's obligations with respect
to the Carolco 5% Notes.

(c) As of the Effective Date, LIVE shall become co-obligor with
Carolco (pursuant to an amendment to the Standby Purchase and Investment
Agreement dated as of July 29, 1993, by and among Carolco, Cinepole, Le
Studio Canal+, RCS, Pioneer and Tele-Communications, Inc. in the form of
Exhibit 9.9(c) hereto ("Amended and Restated Standby Purchase and
Investment Agreement")) with respect to certain of Carolco's obligations
with respect to the Carolco 7% Notes.
(d) As of the Effective Date, LIVE, Carolco and American Stock
Transfer & Trust Company shall have entered into that certain First
Supplemental Indenture in the form of Exhibit 9.9(d) hereto with respect to
the Indenture governing the 11.5%/10% Reducing Rate Senior Notes of Carolco
(the "Carolco 11.5%/10% Notes").

(e) As of the Effective Date, LIVE, Carolco and American Stock
Transfer & Trust Company shall have entered into that certain First
Supplemental Indenture in the form of Exhibit 9.9(e) hereto with respect to
the Indenture governing the 13%/12% Reducing Rate Senior Subordinated Notes
of Carolco (the "Carolco 13%/12% Notes").

(f) As of the Effective Date, LIVE, Carolco and IBJ Schroder Bank &
Trust Company shall have entered into that certain First Supplemental
Indenture in the form of Exhibit 9.9(f) hereto with respect to the Amended
and Restated Indenture governing the 13% Senior Subordinated Notes of
Carolco (the "Carolco 13% Notes").
<PAGE>
(g) As of the Effective Date, LIVE shall become a party (pursuant
to an assumption agreement in the form of Exhibit 9.9(g) hereto to that
certain Domestic Output Agreement dated as of May 1, 1993 by and between
Carolco and Metro-Goldwyn-Mayer Inc. ("MGM") and with respect to that
certain Confidential Draft Term Sheet dated as of April 23, 1993 by and
between Carolco and MGM (together, the "MGM Distribution Agreements").

(h) As of the Effective Date, LIVE (as Carolco Entertainment Inc.)
shall become a party (pursuant to an assumption agreement in the form of
Exhibit 9.9(h) hereto) to that certain Output Agreement dated as of May 8,
1991, by and between RCS Video Services Antilles N.V. and Carolco
International Inc. (formerly known as Carolco International N.V.), as
amended and to that certain Inducement Letter dated as of May 8, 1991, by
and among RCS Video Services Antilles N.V., Carolco, Carolco International
Inc. (formerly known as Carolco International N.V.), RCS Editori SpA and
RCS International Communications N.V.

(i) As of the Effective Date, LIVE (as Carolco Entertainment Inc.)
shall become a party (pursuant to an assumption agreement in the form of
Exhibit 9.9(i) hereto) to that certain First Refusal Agreement dated
effective as of October 30, 1991, by and between Carolco and Le Studio
Canal+ S.A. and agreed to by Carolco International Inc. (formerly known as
Carolco International N.V.).

(j) As of the Effective Date, LIVE (as Carolco Entertainment Inc.)
shall become a party (pursuant to an assumption agreement in the form of
Exhibit 9.9(j) hereto) to that certain Ancillary Agreement Concerning Japan
and Laser Disc Rights of Pioneer, dated as of July 3, 1990 by and between
Carolco and Pioneer and agreed to by Carolco International Inc. (formerly
known as Carolco International N.V.) and LIVE.

Section 9.10 Registration Rights. After the Effective Date, all
registration rights in favor of the LIVE Investors with respect to any
equity securities of LIVE (other than the LIVE Series C Preferred Stock and
the LIVE Common Stock underlying such LIVE Series C Preferred Stock, as to
which the registration rights agreement currently in effect with respect
thereto shall continue to remain in full force and effect after the
Effective Date) held by them as of the Effective Date, or in favor of the
Carolco Investors (other than New Carolco Investments B.V.) with respect to
any equity securities of Carolco held by them as of the Effective Date,
shall be cancelled and replaced by a registration rights agreement (the
"New Carolco Entertainment Inc. Registration Rights Agreement")
substantially in the form of Exhibit 9.10 hereto.

Section 9.11 Best Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, and further subject to the
fiduciary obligations of the respective Boards of Directors of LIVE, CAC
and Carolco under applicable law as advised in writing by outside counsel,
each of the parties agrees to use its best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger, and the other transactions contemplated by this
Agreement, including (a) the obtaining of all necessary actions or
non-actions, waivers, consents and approvals from Governmental Entities and
the making of all necessary registrations and filings (including filings
with Governmental Entities) and the taking of all reasonable steps as may
be necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (b) the obtaining of all necessary
consents, approvals or waivers from third parties including those entities
identified in the LIVE LETTER and the CAROLCO LETTER, (c) the defending of
any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement, or the consummation of the
transactions contemplated hereby and thereby, including seeking to have any
stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed, and (d) the execution and delivery
<PAGE>
of any additional instruments necessary to consummate the transactions
contemplated by this Agreement. Copies of all third-party consents
obtained hereunder by LIVE (or any of its Subsidiaries) or Carolco (or any
of its Subsidiaries) shall be provided to LIVE or Carolco, respectively,
promptly after any such consent is obtained. In case at any time after the
Effective Date any further action is necessary or desirable to carry out
the purposes of this Agreement, the proper officers and/or directors of
LIVE, Carolco or CAC shall take all such necessary action.

Section 9.12 Public Announcements. LIVE and CAC, on the one hand, and
Carolco, on the other hand, will consult with each other before issuing any
press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement, and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by applicable law. Nothing herein shall limit or
release any of the confidentiality agreements previously entered into by
the parties.

Section 9.13 State Takeover Laws. If any "fair price" or "control
share acquisition" statute or other similar statute or regulation is or
shall become applicable to the transactions contemplated hereby, Carolco
and the members of the Board of Directors of Carolco and LIVE and the
members of the Board of Directors of LIVE shall use their best efforts to
grant such approvals and take such actions as are necessary so that the
transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated hereby and otherwise act to minimize
the effects of such statute or regulation on the transactions contemplated
hereby.

Section 9.14 Indemnification. LIVE and CAC agree that all rights to
indemnification from Carolco for acts or omissions occurring prior to the
Effective Date now existing shall continue in full force and effect, as
obligations of the Surviving Corporation, in accordance with their terms.
LIVE will provide, or cause the Surviving Corporation to provide, for a
period of not less than seven years from the Effective Date, Carolco's
current directors and officers an insurance and indemnification policy that
provides coverage for events occurring prior to the Effective Date (the
"D&O Insurance") that is no less favorable to them than Carolco's existing
policy or, if substantially equivalent insurance coverage is unavailable or
is only available on terms which LIVE believes are not commercially
reasonable, the best available coverage. At and after the Effective Date,
LIVE shall indemnify, defend and hold harmless each person who is now or
has been at any time prior to the date hereof or who becomes prior to the
Effective Date an officer, director, employee, agent or representative of
Carolco or any of its Subsidiaries and all defendants in their capacity as
such in the same manner and to the same extent required by the Restated
Certificate of Incorporation of Carolco and the Restated Bylaws of Carolco
and/or the comparable charter or organizational documents of any of its
Subsidiaries as of the date hereof and in the same manner and to the same
extent required by any Indemnity Agreements existing as of the date hereof
between Carolco or any of its Subsidiaries whereby Carolco or any of its
Subsidiaries has agreed to indemnify, defend or hold harmless any officers,
directors, employees or agents thereof (a list of such indemnity agreements
is included in the CAROLCO LETTER).

Section 9.15 [Intentionally Deleted.]

Section 9.16 [Intentionally Deleted.]

Section 9.17 LIVE Rights. In satisfaction of Section 10.2(i) hereof,
before the Effective Date LIVE will take all actions necessary to terminate
the existing LIVE Rights Agreement and cancel all outstanding LIVE Rights.

Section 9.18 Continuation of Business or Business Assets. After the
Effective Date, LIVE will continue at least one significant historic
business line of Carolco or use at least a significant portion of Carolco's
<PAGE>
historic business assets in a business, in each case within the meaning of
Treasury Regulation Section 1.368-1(d).

ARTICLE 10

CONDITIONS PRECEDENT

Section 10.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger
shall be subject to the fulfillment at or prior to the Effective Date of
the following conditions:

(a) Stockholder Approvals. (i) This Agreement and the transactions
contemplated hereby shall have been approved by the requisite vote of the
holders of Carolco capital stock as set forth in Section 9.1 above and (ii)
this Agreement and the transactions contemplated hereby, including the
issuance of LIVE Common Stock and LIVE Series D Preferred Stock pursuant to
the Merger, the amendments to the Restated Certificate of Incorporation of
LIVE and related matters shall have been approved by the requisite vote of
the holders of LIVE capital stock as set forth in Section 9.1 above.

(b) Bringdown of Fairness Opinions. The Chemical Fairness Opinion
and the Seidler Fairness Opinion shall have been confirmed as of the date
immediately preceding the Effective Date without any material change in any
conclusions or opinions contained therein.

(c) Registration Statements. The Registration Statement shall have
become effective in accordance with the provisions of the Securities Act.
No stop order suspending the effectiveness of the Registration Statement
shall have been issued by the SEC and remain in effect and no proceedings
for such purpose shall be pending before the SEC.

(d) Stock Exchange Listing. The shares of LIVE Common Stock
registered pursuant to the Registration Statement shall be approved for
listing on the New York Stock Exchange, upon official notice of issuance,
or on such other principal United States trading market (whether a stock
exchange or the National Association of Securities Dealers Automated
Quotation System) as the LIVE Common Stock is listed immediately prior to
the Effective Date or as the parties may mutually agree.

(e) Reorganization. Each of Carolco and LIVE shall be reasonably
satisfied that none of Carolco, LIVE and CAC will recognize material
taxable gain as a result of the Merger and that its stockholders will not
recognize any taxable gain as a result of the Merger.

(f) Adequate Financing Commitments. Aggregate financing
commitments shall have been received by Carolco and LIVE, the terms of
which shall be set out more fully on Exhibit 10.1(f) hereto.

(g) No Material Adverse Change. There shall not have occurred any
change or development in or affecting the assets, liabilities, business,
operations, condition (financial or other) or prospects of Carolco or LIVE
which, in the aggregate, could be reasonably expected to have a Material
Adverse Effect on such party, except for (i) such changes at LIVE with
respect to plans previously disclosed to Carolco with respect to
Strawberries and VCL, or (ii) such changes resulting from facts disclosed
as of the date of the Merger Agreement in the CAROLCO LETTER or Carolco SEC
Documents or the LIVE LETTER or LIVE SEC Documents, as the case may be.

(h) Governmental Approvals. All consents and approvals of, and
notices to and filings with, any governmental authority or agency as are
required in connection with the consummation of the Merger and the
transactions contemplated hereby shall have been obtained, given and made,
and all waiting periods, if any, applicable to the consummation of the
Merger imposed by any applicable law, rule or regulation (including, but
<PAGE>
not limited to, the HSR Act) shall have expired without any action,
proceeding or investigation being commenced or threatened which seeks to
enjoin or delay consummation of the Merger or to impose any material
restrictions or onerous requirements on Carolco, LIVE or their respective
stockholders.

(i) Third Party Consents. All consents and approvals of, and
notices to and filings with, any non-governmental persons required in
connection with the consummation of the Merger and the transactions
contemplated hereby shall have been obtained, given or made, except for any
thereof which, if not obtained, given or made would not, in the aggregate,
have a Material Adverse Effect on the ability of any party to consummate
the transactions contemplated hereby or on the assets, liabilities,
business, operations, condition (financial or other) or prospects of any
party or any of its direct or indirect subsidiaries.

(j) No Order. No Governmental Entity or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any law, rule, regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) which is then in effect
and has the effect of preventing the consummation of the Merger or making
the transactions contemplated hereby illegal (each party hereto agreeing to
use its best efforts to have any such order, injunction or the like lifted
or waived).

(k) Approval of Counsel to Carolco and LIVE. All actions,
proceedings, instruments and documents required to carry out the
transactions contemplated hereby or incidental hereto and all other related
legal matters shall be reasonably satisfactory to and approved by counsel
for each of Carolco and LIVE and such counsel shall have been furnished
with such certified copies of such corporate actions and proceedings and
such other instruments and documents as it shall have reasonably requested.

(l) Registration Rights. The Carolco Investors (other than New
Carolco Investments B.V.) and the LIVE Investors shall have entered into
the registration rights agreement contemplated in Section 9.10 hereof.

(m) Amended and Restated Certificate of Incorporation of LIVE. The
Amended and Restated Certificate of Incorporation of LIVE shall have been
filed with the Secretary of State of the State of Delaware.

Section 10.2 Conditions to Obligation of Carolco to Effect the Merger.
The obligation of Carolco to effect the Merger shall be subject to the
fulfillment at or prior to the Effective Date of the following additional
conditions, any or all of which may be waived by Carolco at its option,
except as may be required by law:

(a) Performance of Obligations; Representations and Warranties; No
Material Adverse Change. LIVE and CAC shall have performed and satisfied
in all material respects each of their covenants and agreements required or
contemplated by this Agreement to be performed by them on or prior to the
Effective Date; each of the representations and warranties of LIVE and CAC
contained in this Agreement that is qualified by materiality shall be true
and correct on and as of the Effective Date as if made on and as of such
date and each of the representations and warranties that is not so
qualified shall be true and correct in all material respects on and as of
the Effective Date as if made on and as of such date, in each case except
as contemplated or permitted by this Agreement; there shall have been no
Material Adverse Change with respect to LIVE after the date of this
Agreement; and Carolco shall have received a certificate of LIVE, signed by
the Chief Executive Officer and the Chief Financial Officer of LIVE, to
that effect.

(b) [Intentionally Deleted.]
<PAGE>
(c) Tax Opinion. Carolco shall receive an opinion of Gipson
Hoffman & Pancione, in form and substance satisfactory to Carolco, dated
the Effective Date, substantially to the effect that on the basis of facts,
representations and assumptions set forth in such opinion which are
consistent with the state of facts existing as of the Effective Date:

(i) The Merger will constitute a reorganization for federal
income tax purposes within the meaning of Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code, and Carolco, LIVE and CAC will each be a party
to that reorganization within the meaning of Section 368(b) of the Code.

(ii) No gain or loss will be recognized by LIVE, Carolco or CAC
as a result of the Merger.

(iii) No gain or loss will be recognized by the holders of
Carolco Common Stock or Carolco Series A Preferred Stock upon the
conversion of such Carolco Common Stock or Carolco Series A Preferred
Stock into shares of LIVE Common Stock or LIVE Series D Preferred Stock,
respectively, by reason of the consummation of the Merger, except with
respect to cash, if any, received in lieu of fractional shares of LIVE
Common Stock.

(iv) The aggregate tax basis of the shares of LIVE Common Stock
or LIVE Series D Preferred Stock into which shares of Carolco Common
Stock or Carolco Series A Preferred Stock are converted pursuant to the
Merger will be the same as the aggregate tax basis of shares of Carolco
Common Stock or Carolco Series A Preferred Stock converted into such LIVE
Common Stock or LIVE Series D Preferred Stock in the Merger, decreased by
the amount of any tax basis allocable to the fractional shares of LIVE
Common Stock in lieu of which cash was received.

(v) The holding period for shares of LIVE Common Stock or LIVE
Series D Preferred Stock into which shares of Carolco Common Stock or
Carolco Series A Preferred Stock are converted pursuant to the Merger
will include the period that such shares of Carolco Common Stock or
Carolco Series A Preferred Stock were held, provided such shares of
Carolco Common Stock or Carolco Series A Preferred Stock were held as
capital assets on the Effective Date.

In rendering such opinion, Gipson Hoffman & Pancione may receive and rely
upon representations of fact contained in certificates of Carolco, LIVE,
CAC and others, and the obligation of Gipson Hoffman & Pancione to deliver
the opinion contemplated in this Section 10.2(c) shall be subject to the
receipt by Gipson Hoffman & Pancione of the Investor Representation
Agreements contemplated by Section 6.4(c).

(d) Opinion of Counsel to LIVE and CAC. Carolco shall have
received the opinion of Sidley & Austin, counsel to LIVE, dated the
Effective Date, addressed to Carolco, in the form attached hereto as
Exhibit 10.2(d).

(e) Redemption of LIVE Series B Preferred Stock. LIVE shall have
redeemed all outstanding shares of the LIVE Series B Preferred Stock in
accordance with the provisions of the Certificate of Designations,
Preferences and Rights governing the LIVE Series B Preferred Stock.

(f) No Additional Indebtedness. LIVE shall not have incurred any
indebtedness (as defined in Section 5.13(a)) from the date hereof through
the Effective Date other than (i) borrowings under its existing credit
facility with Chemical Bank and any extensions or replacements thereof (the
"LIVE Credit Facility") which borrowings may be used solely for working
capital purposes or for the partial repayment of amounts owed on the LIVE
12% Notes as permitted by Section 8.1(a)(i)(C) or for the redemption of the
LIVE Series B Preferred Stock as contemplated in Section 10.2(e) hereof and
(ii) other borrowings of up to $17,000,000 which may be used solely for the
<PAGE>
redemption of the LIVE Series B Preferred Stock as contemplated in
Section 10.2(e) hereof.

(g) Amendments to LIVE Increasing Rate Notes Indenture. LIVE shall
have received amendments to the LIVE Increasing Rate Notes Indenture in
form, scope and substance and on terms set forth in Exhibit 9.3(a).

(h) Amendments to LIVE 12% Indenture. The LIVE 12% Indenture shall
have been amended to extend the maturity date to at least ninety days after
the maturity date of the LIVE Credit Facility and LIVE shall have received
other amendments to such indenture in form, scope and substance and on
terms set forth in Exhibit 9.3(b).

(i) LIVE Rights Agreement. The LIVE Rights shall no longer be
outstanding.

(j) Assets of LIVE. Neither LIVE nor its Subsidiaries shall have
disposed of or written-down the carrying value of any assets of LIVE or its
Subsidiaries except with respect to plans previously disclosed to Carolco
with respect to Strawberries and VCL and except for immaterial write-downs
and write-offs in the ordinary course of business and consistent with past
practice.

(k) Sale of Strawberries and VCL. If LIVE shall have sold
Strawberries or VCL, the terms of such sales shall have been on terms and
conditions reasonably satisfactory to Carolco.

Section 10.3 Conditions to Obligations of LIVE and CAC to Effect the
Merger. The obligations of LIVE and CAC to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Date of the
following additional conditions, any or all of which may be waived by LIVE
and CAC at their option, except as may be required by law:

(a) Performance of Obligations; Representations and Warranties; No
Material Adverse Change. Carolco shall have performed and satisfied in all
material respects each of its covenants and agreements required or
contemplated by this Agreement to be performed on or prior to the Effective
Date; each of the representations and warranties of Carolco contained in
this Agreement that is qualified by materiality shall be true and correct
on and as of the Effective Date as if made on and as of such date and each
of the representations and warranties that is not so qualified shall be
true in all material respects on and as of the Effective Date as if made on
and as of such date, in each case except as contemplated or permitted by
this Agreement; there shall have been no Material Adverse Change with
respect to Carolco after the date of this Agreement; and LIVE and CAC shall
have received a certificate of Carolco, signed by the Chief Executive
Officer and Chief Financial Officer of Carolco, to that effect.

(b) [Intentionally Deleted.]

(c) Tax Opinion. LIVE shall have received an opinion of Sidley &
Austin, in form and substance satisfactory to LIVE, dated the Effective
Date, substantially to the effect that on the basis of facts,
representations and assumptions set forth in such opinion which are
consistent with the state of facts existing as of the Effective Date:

(ii) No gain or loss will be recognized by Carolco, LIVE or CAC
as a result of the Merger.
<PAGE>
(iii) No gain or loss will be recognized by the holders of
LIVE Common Stock or LIVE Series C Preferred Stock as a result of the
Merger.

In rendering such opinion, Sidley & Austin may receive and rely upon
representations of fact contained in certificates of Carolco, LIVE, CAC and
others.

(d) Opinion of Counsel to Carolco. LIVE and CAC shall have
received the opinion of Gipson Hoffman & Pancione, counsel to Carolco,
dated the Effective Date, addressed to LIVE and CAC, in the form of Exhibit
10.3(d).

(e) Assets of Carolco. Neither Carolco nor its Subsidiaries shall
have disposed of or written-down the carrying value of any assets of
Carolco or its Subsidiaries except for immaterial write-downs and write-
offs in the ordinary course of business and consistent with past practice.

ARTICLE 11

TERMINATION, AMENDMENT AND WAIVER

Section 11.1 Termination. This Agreement may be terminated and the
Merger herein contemplated may be abandoned at any time prior to the
Effective Date, whether before or after any approval by the stockholders of
LIVE and the stockholders of Carolco:

(a) by mutual consent of LIVE and Carolco, as authorized by the
boards of directors of each of them;

(b) by LIVE if (i) Carolco shall have failed to comply in any
material respect with any of its material covenants or agreements contained
in this Agreement required to be complied with by Carolco prior to the date
of such termination, which failure to comply has not been cured within five
(5) business days following receipt by Carolco of notice of such failure to
comply; (ii) there has occurred (A) a material breach by Carolco of any
representation or warranty that is qualified as to materiality either when
made or at the Effective Date or (B) a breach by Carolco of any
representation or warranty that is not qualified as to materiality when
made or at the Effective Date, in each case which breach has not been cured
within five (5) business days following receipt by Carolco of notice of the
breach; or (iii) the stockholders of Carolco voting at the Carolco
Stockholder Meeting shall have failed to approve this Agreement and the
transactions contemplated hereby as contemplated in Section 9.1(a) hereof;

(c) by Carolco if (i) LIVE or CAC or any of their Subsidiaries
shall have failed to comply in any material respect with any of their
material covenants or agreements contained in this Agreement required to be
complied with by LIVE or CAC or any of their Subsidiaries prior to the date
of such termination, which failure to comply has not been cured within five
(5) business days following receipt by LIVE or CAC, as the case may be, of
notice of such failure to comply; or (ii) there has occurred (A) a material
breach by LIVE or CAC of any representation or warranty that is qualified
as to materiality either when made or at the Effective Date or (B) a breach
by LIVE or CAC of any representation or warranty that is not qualified as
to materiality when made or at the Effective Date, in each case which
breach has not been cured within five (5) business days following receipt
by LIVE or CAC, as the case may be, of notice of the breach; or (iii) the
stockholders of LIVE voting at the LIVE Stockholder Meeting shall have
failed to approve this Agreement and the transactions contemplated hereby
as contemplated in Section 9.1(b) hereof;

(d) by either LIVE or Carolco, if the other party accepts a
competing "takeover proposal" or "offer" as provided in Section 8.3 hereof;
<PAGE>
(e) by either LIVE or Carolco, if such party shall have exercised
its best efforts to effect the Merger and, notwithstanding such best
efforts, if the Merger has not been effected on or prior to the close of
business on December 31, 1994, unless an extension of such date is agreed
to by the parties in writing on or before such date;

(f) by LIVE, if the Board of Directors of Carolco shall have
modified or withdrawn its recommendation of the Merger or declaration that
the Merger is advisable or if the Board of Directors of Carolco shall have
recommended to stockholders of Carolco any takeover proposal of any other
person or shall have resolved to do any of the foregoing, in which case
costs shall be shared as set forth in Section 9.7;

(g) by Carolco, if the Board of Directors of LIVE and its Advisory
Committee considering the Merger shall have modified or withdrawn its
recommendation of the Merger or declaration that the Merger is advisable or
if the Board of Directors of LIVE shall have recommended to stockholders of
LIVE any takeover proposal of any other person or shall have resolved to do
any of the foregoing, in which case costs shall be shared as set forth in
Section 9.7; or

(h) by either LIVE or Carolco if any permanent injunction or other
order of a court or other competent authority preventing the consummation
of the Merger shall have become final and non-appealable.

Section 11.2 Effect of Termination. In the event of termination of
this Agreement by either LIVE or Carolco or both, as provided in Section
11.1, this Agreement shall forthwith become void and there shall be no
further liability hereunder on the part of Carolco, LIVE or CAC or their
respective officers or directors except with respect to the provisions
concerning fees and expenses contained in Section 9.7, and except with
respect to provisions concerning confidentiality and the return of
documents contained in Section 9.4, which shall survive the termination;
provided, however, that nothing contained in this Section 11.2 shall
relieve any party hereto from any liability for any breach of this
Agreement occurring on or prior to the date of termination hereof.

Section 11.3 Amendment. This Agreement may be amended by the parties
hereto, by or pursuant to action taken by their respective Boards of
Directors (and in the case of LIVE, with the consent of its Advisory
Committee), at any time before or after approval of the Merger and the
transactions contemplated hereby by the stockholders of Carolco or the
approval of the Merger and the transactions contemplated hereby by the
stockholders of LIVE, but, after any such approval by stockholders of
Carolco or LIVE, no amendment shall be made which (i) alters or changes the
amount or kind of shares of any class or series of capital stock of LIVE,
(ii) alters or changes any terms of the Certificate of Incorporation of
LIVE or the Surviving Corporation to be effected by the Merger, (iii)
alters or changes any of the terms and conditions of the Agreement if such
alteration or change would adversely affect the holders of any class or
series of capital stock of LIVE, Carolco or CAC, (iv) changes the Exchange
Ratio provided in Section 4.1 or (v) in any way materially adversely
affects the rights of such stockholders, without the further approval of
such stockholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.

Section 11.4 Waiver. At any time prior to the Effective Date, the
parties hereto pursuant to action taken by their respective Boards of
Directors (and in the case of LIVE, with the consent of its Advisory
Committee of the Board of Directors) may (i) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto by the other
parties hereto and (iii) waive compliance by the other parties hereto with
any of the agreements or conditions contained herein which may legally be
waived (except that neither CAC nor LIVE may waive any material breach
<PAGE>
hereunder by the other and except that in the event of a waiver of any
material condition, covenant or breach, each of the Carolco Investors, in
the event of a waiver by Carolco, and each of the LIVE Investors, in the
event of a waiver by LIVE, shall be entitled to rescind such Carolco
Investor's or LIVE Investor's Investor Representation Agreement within five
(5) business days of such waiver). Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party. The failure of
any party hereto to enforce at any time any provision of this Agreement
shall not be construed to be a waiver of such provision, nor in any way to
affect the validity of this Agreement or any part hereof or the right of
any party thereafter to enforce each and every such provision. No waiver
of any breach of this Agreement shall be held to constitute a waiver of any
other or subsequent breach.

Section 11.5 Approval by LIVE Special Committee. The approval of the
LIVE Special Committee shall be required for any amendment or waiver which
has the effect of reducing or eliminating the requirement that 100% of the
LIVE Series B Preferred Stock be redeemed as a condition to the Merger.

ARTICLE 12

GENERAL PROVISIONS

Section 12.1 Non-Survival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Date.

Section 12.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, sent
by overnight courier or telecopied (with a confirmatory copy sent by
overnight courier) to the parties (with courtesy copies to the LIVE
Investors and Carolco Investors) at the following addresses (or at such
other address for a party as shall be specified by like notice):

(a) if to LIVE or CAC, to

LIVE Entertainment Inc.
15400 Sherman Way, Suite 500
Van Nuys, California 91406
Attention: Michael J. White, General Counsel
Facsimile: (818) 908-9539

with a copy to:

Sidley & Austin
2049 Century Park East
39th Floor
Los Angeles, California 90067
Attention: Gary J. Cohen, Esq.
Facsimile: (310) 556-6502

(b) if to Carolco, to

Carolco Pictures Inc.
8800 Sunset Boulevard
Los Angeles, California 90069
Attention: Robert W. Goldsmith, General Counsel
Facsimile: (310) 652-1343

with a copy to:

Gipson Hoffman & Pancione
1901 Avenue of the Stars
Suite 1100
Los Angeles, California 90067
<PAGE>
Attention: Lawrence R. Barnett, Esq.
Facsimile: (310) 556-8945

Pioneer LDCA, Inc.
2265 East 220th Street
Long Beach, California 90810
Attention: Tetsuro Kudo
Facsimile: (310) 952-2420

with a copy to:

Pioneer LDC, Inc.
1-20-6 Ebisuminami
Shibuya-ku, Tokyo 150
JAPAN
Attention: Mr. Ryuichi Noda
Facsimile: 011 813 5721 2040

and

Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: Blake Hornick, Esq.
Facsimile: (212) 326-0806

(d) if to Cinepole, to

Cinepole Productions B.V.
P.O. Box 990
1000 AZ Amsterdam
THE NETHERLANDS
Facsimile:

with a copy to:

Coudert Brothers
52, Avenue Des Champs-Elysees
75008 Paris
FRANCE
Attention: Jonathan M. Wohl, Esq.
Facsimile: 011 331 4359 6655

and

Le Studio Canal+ (U.S.)
301 North Canon Drive, Suite 228
Beverly Hills, California 90210
Attention: Richard J. Garzilli, Esq.
Facsimile: (310) 246-9772

and

Coudert Brothers
1055 West 7th Street, 20th Floor
Los Angeles, California 90017-2503
Attention: John A. St. Clair, Esq.
Facsimile: (213) 689-4467

(e) if to RCS, to

RCS Video International Services B.V.
Avv. Enzo Pulitano
Affari Legali e Societari
<PAGE>
RCS Editori SpA
Corso Garibaldi 86
20121 Milan ITALY
Facsimile: 011 392 2584 3073

with a copy to:

Werbel McMillin & Carnelutti
711 Fifth Avenue
New York, New York 10022
Attention: Paul D. Downs, Esq.
Facsimile: (212) 832-3353

(f) if to MGM Holdings Corporation, to

MGM Holdings Corporation
c/o Metro-Goldwyn-Mayer Inc.
2500 Broadway Street
Santa Monica, California 90404
Attention: Michael S. Hope
Facsimile: (310) 449-3090

with a copy to:

White & Case
633 West Fifth Avenue, Suite 1900
Los Angeles, California 90071
Attention: David G. Johnson, Esq.
Facsimile: (213) 620-0758

(g) if to New Carolco Investments B.V., to

New Carolco Investments B.V.
c/o Schutte, Zewald & Jorna
Parklaan 46, 3016 BC Rotterdam
THE NETHERLANDS
Facsimile: 011 3110 4361 880
with a copy to:

Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Suite 3400
Los Angeles, California 90071
Attention: Brian J. McCarthy, Esq.
Facsimile: (213) 687-5600

Section 12.3 Interpretation. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." The phrases "date of this Agreement," the "date hereof" and
words of similar impact, unless the context otherwise requires, shall be
deemed to refer to August 10, 1994. Unless expressly indicated herein to
the contrary, and when the context so dictates, the masculine includes the
feminine and the singular includes the plural.

Section 12.4 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed
by each of the parties and delivered to the other parties.

Section 12.5 Entire Agreement; No Third-Party Beneficiaries. This
Agreement, including the documents and instruments referred to herein, (a)
<PAGE>
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to
the subject matter hereof, and there are no other covenants, promises,
agreements, conditions or understandings, whether oral or written, among
the parties hereto, and (b) except for the provisions of Sections 9.9(a)
and 9.14, is not intended to confer upon any person other than the parties
any rights or remedies hereunder.

Section 12.6 Governing Law. 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 laws thereof.

Section 12.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that CAC may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to LIVE or to any direct wholly-owned
subsidiary of LIVE, but no such assignment shall relieve CAC of any of its
obligations hereunder. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.

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:_____________________________
Name:
Title:
Attest:

______________________________
Name:
Title:

CAROLCO ACQUISITION CORP.

By:_____________________________
Name:
Title:
Attest:

______________________________
Name:
Title:

CAROLCO PICTURES INC.

By:_____________________________
Name:
Title:
Attest:

_______________________________
Name:
Title:

EXHIBIT 5.4(c)

MGM INVESTOR REPRESENTATION AGREEMENT

As a condition to 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"), entering into an Agreement and Plan of Merger
dated as of August , 1994 (the "Merger Agreement"), the undersigned
Carolco shareholder ("Significant Shareholder") hereby enters into this
Investor Representation Agreement (this "Agreement").

WHEREAS, pursuant to the Merger Agreement and in accordance with the
applicable provisions of the General Corporation Law of the State of
Delaware (the "DGCL"), CAC will merge with and into Carolco with Carolco
surviving (the "Merger") and, pursuant to the Merger, (i) the issued and
outstanding shares of common stock, par value $.01 per share, of Carolco
("Carolco Common Stock") shall be converted into, and become exchangeable
for, shares of common stock, $.01 par value per share, of LIVE ("LIVE
Common Stock") as set forth in the Merger Agreement; and (ii) each issued
and outstanding share of Series A Convertible Preferred Stock of Carolco
("Carolco Series A Preferred Stock") shall be converted into, and become
exchangeable for, one share of Series D Convertible Preferred Stock of
LIVE, par value $1.00 ("LIVE Series D Preferred Stock"); and

WHEREAS, Carolco, LIVE, and CAC are willing to consummate the Merger
only if such transaction will qualify as a tax free transaction under the
Internal Revenue Code of 1986, as amended.

NOW, THEREFORE, THE SIGNIFICANT SHAREHOLDER AGREES AS FOLLOWS:

A. The Significant Shareholder represents to LIVE and Carolco as
follows:

1. The Significant Shareholder represents that as of the date
hereof it (a) is the record and beneficial owner of (x) no shares of
Carolco Common Stock and 30,000 of Carolco Series A Preferred Stock
(collectively, the "Carolco Shares") and (y) no shares of LIVE Common
Stock and no shares of Series C Convertible Preferred Stock of LIVE,
par value $1.00 per share (collectively, the "LIVE Shares") and (b)
has the power to vote or consent as to matters concerning the Carolco
Shares.

2. The Significant Shareholder (a) represents that, as of the
date hereof, it has no plan or intention to, and (b) agrees that,
prior to the Effective Date as defined in Section 1.2 of the Merger
Agreement, it will not form a plan or intention or enter into an
arrangement to sell, transfer or otherwise dispose of any of the
shares of LIVE Common Stock and/or LIVE Series D Preferred Stock to be
received in the Merger by the Significant Shareholder.

B. The Significant Shareholder agrees as follows:

1. On or prior to the Effective Date, it will not sell,
transfer or otherwise dispose of any of its shares of Carolco Common
Stock or Carolco Series A Preferred Stock.

2. Until the Effective Date, it will not grant a proxy with
respect to, or otherwise encumber, any of its Carolco Shares, nor will
<PAGE>
it acquire any additional Carolco Shares unless the Significant
Shareholder executes an amendment whereby such additional shares
become subject to this Agreement. The Significant Shareholder agrees
that until the Effective Date it will not (i) deposit any Carolco
Shares into any voting trust or similar arrangement, (ii) enter into
any discussions, negotiations, arrangements or understandings with any
third party with respect to any of the foregoing, or (iii) take any
action inconsistent with any of the foregoing. The Significant
Shareholder further agrees that, subject to its receipt of the
Prospectus and Joint Proxy Statement pursuant to which Carolco and
LIVE propose to solicit proxies from their respective shareholders in
connection with the Merger and the transactions contemplated thereby
(the "Prospectus"), it will vote all of the Carolco Shares in favor of
the Merger and the transactions contemplated hereby.

3. The Significant Shareholder consents to disclosure in the
Prospectus of its intention to vote for the Merger and the
transactions contemplated in the Merger Agreement.

4. The Significant Shareholder agrees to proceed with the
proposed transactions on a prompt basis and to use its reasonable best
efforts to prepare all documentation, obtain all necessary consents,
authorizations, approvals and waivers required in connection with the
consummation of the Merger (including any filings required pursuant to
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
with respect to such Significant Shareholder) and take all other
actions necessary to consummate the transactions contemplated hereby
in a manner consistent with applicable law, including, but not limited
to, executing the Carolco Entertainment Registration Rights Agreement
attached to the Merger Agreement as Exhibit 9.10 (the "Carolco
Entertainment Registration Rights Agreement").

5. The Significant Shareholder accepts and agrees to the terms
of the Carolco Entertainment Registration Rights Agreement and agrees
that such agreement shall supersede and replace all registration
rights existing as of the Effective Date with respect to all Carolco
securities owned by it as of the Effective Date.

C. This Agreement will terminate upon the earlier to occur of (i)
the Effective Date (other than with regard to Paragraph A.2 of this
Agreement) and (ii) the termination of the Merger Agreement pursuant to the
terms of Section 11.1 thereof, but in no event later than December 31, 1994
unless an extension of such date is agreed to by the Significant
Shareholder.

D. In the event of a waiver by Carolco of any material condition,
covenant or breach, or in the event of an amendment of any material term,
of the Merger Agreement without the consent of the Significant Shareholder,
then the Significant Shareholder shall be entitled to rescind this
Agreement within five (5) business days of receipt of notice of such waiver
or amendment.

IN WITNESS WHEREOF, the undersigned has duly executed this Agreement
on August , 1994.

MGM HOLDINGS CORPORATION

By: _____________________
Name:
Its:

Agreed to and accepted as of
<PAGE>
the date first written above:

CAROLCO PICTURES INC.

By:____________________________
Name:
Its:

EXECUTION COPY

STOCKHOLDERS AGREEMENT

This STOCKHOLDERS AGREEMENT (this "Agreement") is made and
entered into on this 10th day of August, 1994, by and among Pioneer LDCA,
Inc., a Delaware corporation ("Pioneer"), Cinepole Productions B.V., a
Netherlands company ("Cinepole"), RCS Video International Services B.V., a
Netherlands company (acting for itself and on behalf of its Affiliates,
hereinafter referred to as "RCS"), MGM Holdings Corporation, a Delaware
corporation ("MGM H") and New Carolco Investments, B.V., a Netherlands
company ("New CIBV").
W I T N E S S E T H:
WHEREAS, Pioneer, Cinepole, RCS, MGM H and New CIBV own certain
of the capital stock (the "Existing Carolco Stock") of Carolco Pictures
Inc., a Delaware corporation (the "Carolco");
WHEREAS, Pioneer, Cinepole and RCS own certain of the capital
stock (the "Existing LIVE Stock") of LIVE Entertainment Inc., a Delaware
corporation ("Company");
WHEREAS, Carolco, the Company and Carolco Acquisition Corp., a
Delaware corporation ("Acquisition Corp.") and a wholly-owned subsidiary of
the Company, have entered into an Agreement and Plan of Merger, dated as of
August 10, 1994 (the "Merger Agreement");
WHEREAS, pursuant to the terms of the Merger Agreement,
Acquisition Corp. will be merged into Carolco and, in connection therewith,
the Existing Carolco Stock will be exchanged for certain capital stock of
the Company (the "CEI Stock"); and
WHEREAS, the parties wish to enter into this Agreement to
establish certain rights and obligations of the parties with respect to the
voting of the Existing LIVE Stock and the CEI Stock, the management of the
Company, the disposition of their respective interests in the Company and
other matters;
NOW, THEREFORE, the parties hereby agree as follows:
Section 1. Definitions. As used in this Agreement, the following
terms have the meanings indicated:
"5% Notes" means the 5% Payment-in-Kind Convertible Subordinated
Notes due 2002 of the Company and Carolco as co-obligors.
"7% Notes" means the 7% Convertible Subordinated Notes due 2006
of the Company and Carolco as co-obligors.
"Affiliate", as to any Person, means any other Person directly or
indirectly controlling, controlled by or under direct or indirect
common control with, such Person and shall include, without
limitation, any director or executive officer of such Person,
provided, however, that for purposes of this Agreement the Company
shall not be deemed an Affiliate of any of the Strategic Investors,
MGM H, or any of their respective Affiliates. For purposes of this
definition, "control" when used with respect to any specified Person
means the power to direct or cause the direction of the management or
<PAGE>
policies of such Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise.
"Agreement" means this Agreement as the same may be amended or
modified from time to time in accordance with the provisions hereof.
"Board" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which commercial banks in Los Angeles, California are
authorized by law to be closed for business.
"Bylaws" means the Amended and Restated Bylaws of the Company,
the form of which is attached as Exhibit 3.2 to the Merger Agreement,
together with all amendments thereto made pursuant to the terms hereof
and applicable law.
"Common Stock" means the Company's common stock par value $0.01
per share.
"Common Stock Equivalent" means the number of shares of Common
Stock into which any shares of Series C Preferred Stock, Series D
Preferred Stock, 5% Notes or 7% Notes are convertible, taking into
account at the time such Common Stock Equivalent is calculated,
adjustments for distributions-in-kind and any other dilutive
transactions.
"Common Stock Equivalent Price" means the highest aggregate
number of shares of Common Stock into which Securities could have been
converted during the course of the transactions triggering Tag-along
Rights multiplied by the fair market value per share of Common Stock
(or Common Stock Equivalent, in the event the Strategic Investors have
sold shares of Series C Preferred Stock or Series D Preferred Stock)
to be sold.
"Director Designee" means any director designated for election to
the Board by each of the Stockholders other than New CIBV.
"Director Pool" shall mean a group of directors of the Company
composed of the Director Designees, the Management Director Designees
and the two Independent Directors listed on Schedule 1.1, whose
designation as members of the Director Pool may be changed by New CIBV
by letter delivered to the other Stockholders. Such directors
designated by New CIBV as set forth in the preceding sentence shall
remain members of the Director Pool until they cease to be members of
the Board. When either of the directors designated by New CIBV ceases
to be a member of the Board, the director's successor shall be deemed
to be the designated member of the Director Pool unless New CIBV shall
notify each of the other Stockholders by letter designating another
director, not a Director Designee or Management Director Designee, as
a member of the Director Pool.
"Distribution Agreement" means the Domestic Output Agreement,
dated as of May 1, 1993, between Metro-Goldwyn-Mayer Inc. and Carolco
and the Confidential Draft Term Sheet, dated as of April 23, 1993,
between Metro-Goldwyn-Mayer Inc. and Carolco, setting forth, among
other matters, the terms and conditions of MGM H's international
distribution of certain Carolco motion pictures (the "International
Output Agreement"), each as assumed by the Company by the Agreement
substantially in the form of Exhibit 9.9(g) to the Merger Agreement,
as the same may be further amended, modified or supplemented from time
to time.
"Holder" means any holder of Securities with voting rights.
"Independent Directors" means directors elected to the Board by
the shareholders at large in accordance with the Restated Certificate
and Bylaws and who are not Director Designees or Management Director
Designees and who would qualify as a member of the audit committee of
the Board of the Company pursuant to the rules of the New York Stock
Exchange, or in the case of any Independent Director vacancy, a
director appointed in accordance with the Bylaws and this Agreement,
provided that, no Independent Director shall be an officer, director,
employee, agent or Affiliate (for purposes of this definition, as
defined under Rule 12b-2 of the Securities and Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder) of
the Company or any of the Stockholders or their Affiliates.
"Kassar" means Mario F. Kassar.
<PAGE>
"Kassar Employment Agreement" means the employment agreement,
dated as of August 10, 1994, between Carolco and Kassar which will be
assumed by the Company on the Effective Date of the Merger (as defined
in the Merger Agreement).
"Management Director Designee" means any director nominated by
the Chairman of the Board of the Company.
"Permitted Indebtedness" means, without duplication, (i) film
production financing incurred by the Company or by special purpose
Subsidiaries engaged solely in motion picture production, (ii) "pay or
play" obligations related directly to motion picture production and
(iii) bank financing used for general corporate purposes of the
Company and its Subsidiaries in an aggregate amount not exceeding the
amount of bank financing available to be drawn pursuant to its terms
at the closing of the Securities Purchase Agreement dated as of May
25, 1993 among the Company, Pioneer, Cinepole and MGM H, plus
$10,000,000.
"Permitted Interested Transaction" means (i) existing contractual
relationships with the Stockholders or their Affiliates, (ii) the MGM
H Distribution Agreement (other than any material amendment,
modification or supplement thereto, other than a long-form agreement
in respect of the International Output Agreement), (iii) the Kassar
Employment Agreement and (iv) transactions to be consummated in the
Merger.
"Permitted Investments" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government
or issued by any agency thereof and backed by the full faith and
credit of the United States, (ii) marketable direct obligations issued
by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof,
(iii) commercial paper or other corporate obligations provided that,
at the time of acquisition, if the security has less than an
investment grade rating obtainable from either Standard & Poor's Corp.
or Moody's Investors Services, Inc., then the Company shall not
purchase the security if the result would be that the Company would
(A) have invested more than 20% of its assets in the obligations of
one issuer or (B) own more than 10% of a single issue of securities,
(iv) demand deposits, certificates of deposit (including Eurodollar
certificates of deposit) or bankers' acceptances issued by commercial
banks, savings and loans or other financial institutions organized
under the laws of the United States of America or any state thereof or
the District of Columbia, each having capital and surplus of, in the
case of any such institution organized under the laws of the United
States or any political subdivision thereof, not less than
$100,000,000 or, in the case of any such institution organized under
the laws of any foreign jurisdiction, not less than $500,000,000 or
whose commercial paper is rated "A-1" by Standard & Poor's Corp. or
"P-1" by Moody's Investors Services, Inc. ("Qualifying Banks"), (v)
repurchase agreements and reverse repurchase agreements with
Qualifying Banks, (vi) money market funds organized under the laws of
the United States of America or any state thereof and administered by
securities dealers of recognized national standing, (vii) any
investment in Persons that are Subsidiaries of the Company and at
least 95% of the Capital Stock of which is owned by the Company,
(viii) negotiable instruments endorsed for deposit or collection or
similar instruments in the ordinary course of business, and (ix) any
investment outstanding on the Effective Date of the Merger Agreement
and any extension, renewal refinancing or deferral of such investment
provided that such extension, renewal, refinancing or deferral does
not increase the amount of such investment outstanding on the date of
such extension, renewal, refinancing or deferral.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
<PAGE>
"Put and Call Agreement" means the Amended and Restated Put and
Call Agreement, dated as of August 10, 1994, between MGM H and
Cinepole.
"Restated Certificate" means the Amended and Restated Certificate
of Incorporation of the Company, the form of which is attached as
Exhibit 3.1 to the Merger Agreement, together with all amendments
thereto made pursuant to the terms hereof and applicable law.
"Restructuring" has the meaning specified in the Securities
Purchase Agreement.
"Securities" means the 5% Notes, the 7% Notes, the Common Stock
(including any Common Stock issued pursuant to a conversion of the
Series C Preferred Stock, the Series D Preferred Stock, the 5% Notes
or the 7% Notes), the Series C Preferred Stock and the Series D
Preferred Stock.
"Series C Preferred Stock" means the Company's Series C
Convertible Preferred Stock, par value $1.00 per share.
"Series D Preferred Stock" means the Company's Series D
Convertible Preferred Stock, par value $1.00 per share.
"Stockholders" means Pioneer, Cinepole, RCS, MGM H and New CIBV.
"Strategic Investors" means Pioneer, Cinepole and RCS.
"Subsidiary" means, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time stock of
any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the
time owned by such Person and/or one or more Subsidiaries of such
Person and (ii) any partnership, association, joint venture or other
entity in which such Person and/or one or more Subsidiaries of such
Person have more than a 50% equity interest at the time.
"Tag-along Rights" has the meaning specified in Section 6 hereof.
Section 2. Effectiveness. This Agreement shall become effective on
the Effective Date of the Merger (as defined in the Merger Agreement).
Section 3. Board of Directors.
(a) Composition of the Board. As of the Effective Date of the
Merger, the Board of the Company will consist of twenty-one (21) directors.
For purposes of this Agreement, the parties hereby agree that until the
stockholdings of any of the Stockholders in the Company change, in
accordance with subsection (c) hereof, Pioneer shall be entitled to
nominate five (5) Director Designees, Cinepole shall be entitled to
nominate three (3) Director Designees, RCS shall be entitled to nominate
one (1) Director Designee and MGM H shall be entitled to nominate three (3)
Director Designees. Kassar shall be entitled to nominate two (2)
Management Director Designees.
(b) Election and Removal. (i) Subject to the provisions of the
Restated Certificate and Bylaws, each Stockholder agrees to vote, or to
cause its Director Designees to vote, consistent with their fiduciary
duties, for the election of the Director Designees of each of the other
Stockholders and for the election of the two (2) Management Director
Designees and two (2) Independent Directors referred to in the definition
of "Director Pool".
(ii) As soon as practicable after receipt of a written request
from any Stockholder to remove a Director Designee designated by the
Stockholder making such request, the other Stockholders agree to take, or
cause to be taken, all appropriate action to effect the removal and
replacement of such Management Director Designee or Director Designee, as
the case may be.
(c) Reduction in Number of Director Designees. The number of
Director Designees allocated to each of the Strategic Investors and MGM H
as provided in subsection (a) of this Section 3 shall be reduced as
follows: (i) in the case of Pioneer, upon each incremental reduction of at
least twenty percent (20%) of the Securities it holds upon the
effectiveness of the Merger, the number of Pioneer Director Designees shall
be reduced by one (1); (ii) in the case of Cinepole, upon each incremental
reduction of at least thirty-three percent (33%) of the Securities it holds
upon the effectiveness of the Merger, the number of Cinepole Director
<PAGE>
Designees shall be reduced by one (1); (iii) in the case of MGM H, upon
each incremental reduction of at least thirty-three percent (33%) of the
Securities it holds upon the effectiveness of the Merger, the number of MGM
H Director Designees shall be reduced by one (1); and (iv) in the case of
RCS, upon the reduction of at least fifty percent (50%) of the Securities
it holds upon the effectiveness of the Merger, the RCS Director Designee
position shall be eliminated.
(d) Committees. Each of the Stockholders agrees to cause its Director
Designees to vote, if consistent with such director's fiduciary duty, to
take appropriate corporate action to establish a Supervisory Committee of
the Board, and to cause the election of such Supervisory Committee composed
of the Directors listed on Schedule 3.1. All Director Designees appointed
to the Supervisory Committee and Kassar shall constitute a quorum at
meetings of the Supervisory Committee. No action shall be taken by the
Supervisory Committee without the unanimous affirmative vote of each of the
Director Designees on the Supervisory Committee or the unanimous written
consent of the Supervisory Committee. Notwithstanding the foregoing, if
any member of the Supervisory Committee is not present or represented at
any meeting of the Supervisory Committee, the attendance of such member
shall not be required for purposes of determining a quorum or unanimous
voting on any action to be taken, provided any such absent member shall
have been given five Business Days prior written notice of such meeting.
Any such absent Supervisory Committee member may designate a representative
to attend such meeting, provided that if the representative of such absent
member objects to any action proposed to be taken by the Supervisory
Committee, the meeting shall be adjourned for two Business Days to allow
the absent member to attend, provided further, however, that the continued
absence of such member shall not affect the validity of any actions taken
at the adjourned meeting. In the event any Strategic Investor or MGM H
sells or otherwise disposes of more than 50% of the Securities it holds
upon the effectiveness of the Merger, such party shall no longer be
entitled to a seat on the Supervisory Committee. All other committees of
the Board shall be formed in accordance with the Restated Certificate and
Bylaws, subject to Section 5(a)(i) hereof.
Section 4. Undertakings; Condition Precedent. Each of the
Stockholders undertakes and agrees as follows:
(a) Each Stockholder agrees to cause its Director Designee to
vote, if consistent with such director's fiduciary duty, to adopt the
Bylaws as amended in accordance with the Merger Agreement.
(b) Each Stockholder will vote against any proposal to amend the
Restated Certificate or the Bylaws and any proposal to change the
composition or character of the Board as set forth in Section 3 hereof,
unless all of the Stockholders agree to vote in favor of such proposal.
(c) The Stockholders agree to execute and deliver all documents
and instruments, to share all relevant information and to do all things
necessary to give effect to the provisions of this Agreement.
(d) The obligations of the Stockholders under this Agreement and
the effectiveness of this Agreement are subject to the satisfaction of the
following conditions:
(i) the Restated Certificate and By-laws shall have been amended
in accordance with the Merger Agreement and the By-laws shall include
provisions implementing Section 5 hereof and establishing the
Supervisory Committee, each in form and substance satisfactory to each
of the Stockholders;
(ii) the Merger shall have become effective in accordance with
the terms of the Merger Agreement; and
(iii) the bylaws of Carolco and LIVE Home Video Inc. ("LHV")
shall have been amended to provide that shareholder consent shall be
required for Carolco or LHV to enter into, terminate, amend or modify
any agreement or incur any liability or obligation, not made in the
ordinary course of business, that is material to the business or
operations of Carolco or LHV, as the case may be.
Section 5. Restrictions on Certain Actions.
(a) Major Decisions. Each Stockholder agrees that the following
actions, decisions, expenditures and obligations to be taken, made or
incurred by the Company (each a "Major Decision") shall require the
<PAGE>
affirmative vote of (i) at least eighty-five percent (85%) of the Director
Pool and (ii) Director Designees representing at least three of the
Stockholders (other than New CIBV). Each Stockholder also agrees that it
shall not exercise its voting rights as a Holder to take, make or incur any
of the following actions, decisions, expenditures and obligations, and
shall not call a special meeting of Holders to vote on any such matter,
without the agreement of (A) Holders entitled to cast at least 80% of the
votes entitled to be cast and (B) at least three Stockholders (other than
New CIBV):
(i) any amendments to the Restated Certificate or the Bylaws
which would alter (A) the voting rights of the Holders, (B) the number
or classes of directors on the Board, (C) the notice and quorum
requirements for meetings of the Board or shareholders of the Company,
(D) the constitution, powers or proceedings of the Supervisory
Committee or (E) the constitution of the Director Pool;
(ii) any merger, consolidation, liquidation, dissolution or
winding up of the Company or any Subsidiary which is material to the
business and operations of the Company and its Subsidiaries taken as a
whole;
(iii) the disposition of any asset or assets, of the Company or
any Subsidiary, other than in the ordinary course of business, with an
aggregate fair market value in excess of $10,000,000;
(iv) any acquisition by the Company or any Subsidiary of any
business of another person, or any property, securities, rights or
other assets in one or a series of related transactions for a
consideration in excess of $10,000,000; provided, that the Company may
acquire rights to motion pictures or other related properties or
assets in the ordinary course of business, or as permitted under the
Kassar Employment Agreement or pursuant to a resolution of the Board
existing on the date of the Restructuring;
(v) the creation, incurrence, assumption or guaranty by the
Company or any Subsidiary of any indebtedness, obligation or
liability, whether direct or contingent, in excess of $10,000,000,
except for Permitted Indebtedness.
(vi) the creation, incurrence, or assumption of any lien,
mortgage, pledge, security interest, charge or encumbrance by the
Company or any Subsidiary with respect to any property, capital stock
or asset of the Company or any Subsidiary, which secures payment of
indebtedness of the Company in excess of $10,000,000, except for liens
or pledges securing Permitted Indebtedness;
(vii) the declaration or payment by the Company or any Subsidiary
(other than special purpose subsidiaries engaged solely in motion
picture production) of any dividend on its Common Stock or any other
capital stock junior to the Series C Preferred Stock and the Series D
Preferred Stock (except that (A) any Subsidiary may declare and pay
dividends to the Company and (B) the Company may declare and pay
dividends on the Series C Preferred Stock or the Series D Preferred
Stock in accordance with the terms of the Restated Certificate and
applicable law);
(viii) the termination of, or material amendment, modification or
supplement to, the Kassar Employment Agreement; the Co-Production
Financing Commitment Agreement dated as of August 19, 1993 among
Carolco, an affiliate of Cinepole and Tele-Communications, Inc.
("TCI") and the Standby Purchase and Investment Agreement dated as of
July 29, 1993 among Carolco, Cinepole, an affiliate of Cinepole,
Pioneer, RSC and TCI, as amended as of the Effective Date of the
Merger Agreement;
(ix) any investments, or series of investments, by the Company or
any Subsidiary in excess of $3,000,000, other than Permitted
Investments; and
(x) any agreement, understanding or arrangement by the Company or
any Subsidiary, or the amendment of any agreement, understanding or
arrangement of the Company or any Subsidiary, with respect to any of
the foregoing matters.
(b) Interested Transactions. Subject to the provisions of Section
5(a) hereof, any transaction between the Company or any of its Subsidiaries
<PAGE>
and any Stockholder or any Affiliate of a Stockholder, other than Permitted
Interested Transactions, shall be approved by a majority of the
disinterested directors on the Board.
Section 6. Tag-Along Rights. (a) At such time as any two or more of
the Strategic Investors enter into a joint privately negotiated transaction
or series of related transactions to sell or otherwise dispose for value to
any person (other than the Company or its Subsidiaries, or any Strategic
Investor, MGM H or their respective Affiliates), at least
(i) 50% of the aggregate amount of Securities beneficially owned
by the Strategic Investors as of the date of the effectiveness of the
Merger (which amount is subject to adjustment for, among other things,
in-kind interest or dividends and/or any other anti-dilution
adjustments) and
(ii) 10% of Securities beneficially owned by each of Pioneer and
Cinepole, respectively, as of the date of such sale or disposal,
such other purchasers shall afford MGM H Tag-along Rights (the "Tag-along
Rights"). The Tag-along Rights shall entitle MGM H to participate
proportionately in the above-referenced transaction or series of
transactions by selling, at an equivalent price and on the same terms, up
to the number of Securities beneficially owned by MGM H as of the date of
the effectiveness of the Merger (which amount will be subject to adjustment
for, among other things, in-kind interest or dividends and/or any other
anti-dilution adjustments) multiplied by a fraction, the numerator of which
is the number of Securities sold by the Strategic Investors in such
transaction or series of transactions and the denominator of which is the
aggregate number of Securities originally held by all Strategic Investors,
as adjusted for, among other things, in-kind interest or dividends and/or
any other anti-dilution adjustments.
(b) In the event that the Strategic Investors sell Securities
which are of a different class, designation or type than those of which MGM
H desires to exercise Tag-along Rights, (i) the number of Securities which
may be sold by MGM H shall be equal to the Common Stock Equivalent of all
Securities held by MGM H as of the date of the effectiveness of the Merger
and (ii) all Securities shall be valued, for the purpose of determining the
price at which MGM H is entitled to exercise its Tag-along Rights, at the
"Common Stock Equivalent Price".
(c) The Strategic Investors shall be required to provide MGM H
with 25 days' written notice of any proposed sale of Securities. MGM H
shall have 20 days following such notification in which to notify the
Strategic Investors of its exercise of Tag-along Rights.
(d) In the event that the Strategic Investors and MGM H enter
into a joint privately negotiated transaction or series of related
transactions to sell or dispose for value to any Person (other than the
Company or its Subsidiaries, or any Strategic Investor or MGM H, or their
respective Affiliates) at least (i) 50% of the aggregate amount of
Securities beneficially owned by them as of the date of the effectiveness
of the Merger (which amount will be subject to adjustment for, among other
things, in-kind interest or dividends and/or any other anti-dilution
adjustments), (ii) 10% of the Securities beneficially owned by each of
Pioneer, Cinepole and MGM H, respectively, as of the date of such sale or
disposal, then New CIBV shall be afforded Tag-along Rights in the same
manner as the Tag-along Rights afforded to MGM H under this Section 6;
provided, however, that if any reduction in the aggregate amount of
Securities to be sold by the Strategic Investors and MGM H in such
transaction becomes necessary as a result of the exercise by New CIBV of
its Tag-along Rights, such reduction shall apply solely to the Securities
to be sold by the Strategic Investors.
(e) In the event that MGM H and Cinepole enter into a joint
privately negotiated transaction or series of related transactions to sell
or dispose for value to any Person (other than the Company or its
Subsidiaries, or any Strategic Investor or MGM H, or their respective
Affiliates) at least (i) 50% of the aggregate amount of Securities
beneficially owned by them as of the date of the effectiveness of the
Merger (which amount will be subject to adjustment for, among other things,
in-kind interest or dividends and/or any other anti-dilution adjustments),
and (ii) 10% of the Securities beneficially owned by each of them,
<PAGE>
respectively, as of the date of such sale or disposal, then Pioneer, RCS
and New CIBV shall be afforded Tag-along Rights in the same manner as the
Tag-along Rights afforded to MGM H under this Section 6.
(f) In the event that MGM H and Pioneer enter into a joint
privately negotiated transaction or series of related transactions to sell
or dispose for value to any Person (other than the Company or its
subsidiaries, or any Strategic Investor or MGM H, or their respective
Affiliates) at least (i) 50% of the aggregate amount of Securities
beneficially owned by them as of the date of the effectiveness of the
Merger (which amount will be subject to adjustment for, among other things,
in-kind interest or dividends and/or any other anti-dilution adjustments),
and (ii) 10% of the Securities beneficially owned by each of them,
respectively, as of the date of such sale or disposal, then Cinepole, RCS
and New CIBV shall be afforded Tag-along Rights in the same manner as the
Tag-along Rights afforded to MGM H under this Section 6; provided, however,
that if any reduction in the aggregate amount of Securities to be sold by
MGM H and Pioneer in such transaction becomes necessary as a result of the
exercise by Cinepole, RCS or New CIBV of their respective Tag-along Rights,
such reduction shall apply solely to the Securities to be sold by Pioneer.
Section 7. Representations and Warranties. Each of the parties
hereto represents and warrants to all the other parties that:
(a) Such party has full power and authority to enter into this
Agreement and all corporate or other action required to authorize the
entering into of this Agreement and the performance by such party of all
its obligations hereunder has been duly taken;
(b) All acts, conditions and things required to be done, fulfilled
and performed and (except as disclosed in writing by any of the parties to
the others prior to the signing of this Agreement) all consents,
permissions, authorizations or other approval of, notice to, or
registration with, any regulatory authority or other person required to be
obtained or made, in order (i) to enable such party lawfully to enter into,
exercise its rights under, and perform the obligations expressed to be
assumed by it in this Agreement, (ii) to ensure that the obligations
expressed to be assumed by such party in this Agreement are legal, valid
and enforceable;
(c) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby do not and will not
(i) violate any provision of the charter instruments of such party; (ii)
violate, conflict with or result in the breach of any of the terms of,
result in a modification of the effect of, otherwise give any other
contracting party the right to terminate, or constitute (with notice or
otherwise) a default under, any contract by which each such party, its
assets, properties or business, or the assets, properties or business of
any of its subsidiaries, may be bound or subject; (iii) violate any order,
judgment, injunction, award or decree of any regulatory authority against,
or binding upon, such party or its assets, properties or business, or the
assets, properties or business of any of its subsidiaries; or (iv) except
as disclosed in writing by any of the parties to the others prior to the
signing of this Agreement violate any applicable law or regulation or any
permit, license, franchise, registration or similar authorization with
respect to, or binding upon, its assets, properties or business or the
assets, properties or business of any of its subsidiaries.
Section 8. Confidentiality. Each Stockholder agrees, and will cause
each of its respective Director Designees, officers, directors,
subsidiaries, employees, agents and other affiliates, to keep confidential
all material non-public information obtained by any of them, and refrain
from causing material non-public information to become public information,
provided that, such information may be disseminated by the Stockholders and
the Director Designees to their respective officers, directors,
subsidiaries, employees, agents and other affiliates and to other
unaffiliated parties (if each such unaffiliated party enters into a
confidentiality agreement with such Stockholder or with the Director
Designee, as the case may be, with regard to such information) to the
extent necessary for each Stockholder to evaluate the operations of the
Company and for other corporate purposes.
<PAGE>
Section 9. Competition. None of the terms herein shall be construed
to restrict the rights of the Stockholders (other than New CIBV as long as
the Kassar Employment Agreement remains in effect) or Director Designees to
form, invest in or otherwise participate in business activities or ventures
which may at any time compete with the Company.
Section 10. Miscellaneous.
(a) Legends on Certificates. Each certificate representing any of
the Securities, and each share of Common Stock issued upon the conversion
of either the Series C Preferred Stock, the Series D Preferred Stock, the
7% Notes or the 5% Notes, shall bear appropriate legends alerting the
holder thereof of the existence of this Agreement.
(b) Superseding Agreement. This Agreement replaces and supersedes any
and all agreements, arrangements or understandings among any of the parties
hereto concerning the subject matter hereof, including (i) the Stockholders
Agreement dated March 23, 1992 among Pioneer, Le Studio Canal+ S.A., RCS
and New CIBV and (ii) the Stockholders Agreement dated October 20, 1993
among Pioneer, Cinepole, RCS, MGM H and New CIBV, except for other
agreements entered into in connection with the Restructuring or the Merger.
(c) Amendments and Waivers. No amendment to this Agreement shall be
valid or binding unless set forth in writing, specifically referring to the
provision to be amended, and duly executed by all of the parties hereto.
No waiver of any provision of this Agreement, or of any breach thereof,
shall be effective or binding unless made in writing and signed by the
party purporting to grant such waiver and, unless provided otherwise, shall
be limited to the specific matter waived.
(d) Assignment; Termination. Except as expressly provided herein,
none of the parties may assign its rights or obligations hereunder without
prior written consent of all the other parties hereto. This Agreement
shall terminate, with respect to any Stockholder, at such time as any
Stockholder (or its Affiliates) no longer beneficially owns an amount of
Securities which would entitle such Stockholder to appoint a Director
Designee in accordance with Section 2(c) hereof, provided, that with
respect to New CIBV, this Agreement shall terminate upon termination of the
Kassar Employment Agreement.
(e) Notices. Any demand, notice or other communication given in
connection with this Agreement shall be in writing and shall be delivered
personally or sent by facsimile to the parties at the following addresses
(or at such other address, facsimile number or individual for a party as
may be designated by notice by such party to the others):
Pioneer: Pioneer LDCA, Inc.
2265 East 220th Street
Long Beach, California 90810

Attention: Mr. Tetsuro Kudo
With a copy to:
Pioneer LDC, Inc.
Arco Tower, 8-1
Shimomeguro 1-chome
Meguro-ku
Tokyo 153, Japan

Attention: Mr. Ryuichi Noda
and
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022

Attention: Blake Hornick, Esq.

Cinepole: Cinepole Productions B.V.
P.O. Box 990
1000 AZ Amsterdam
The Netherlands
With a copy to:
Coudert Freres
52, Avenue des Champs-Elysees
<PAGE>
75008 Paris
France

Attention: Jonathan M. Wohl, Esq.
and
Le Studio Canal+ (U.S.)
301 North Canon Drive, Suite 228
Beverly Hills, California 90210

Attention: Richard J. Garzilli, Esq.
and
Coudert Brothers
1055 West Seventh Street, 20th Fl.
Los Angeles, California 90017

Attention: John St. Clair, Esq.

MGM H: c/o Metro-Goldwyn-Mayer
2500 Broadway
Santa Monica, California 90404

Attention: Mr. Michael S. Hope
and
c/o Credit Lyonnais
19 boulevard des Italiens
75002 Paris, France

Attention: Mr. Rene-Claude Jouannet
With a copy to:
White & Case
633 West Fifth Street
Los Angeles, California 90071

Attention: David G. Johnson, Esq.

RCS: Museumplein 11
1071 DJ Amsterdam
Netherlands

Attention: Mr. Koopsman or
Mr. Peters
With a copy to:
Avv. Enzo Pulitano
Affari Legali e Societari
RCS Editori SpA
Corso Garibaldi 86
20121 Milan
Italy
and
Werbel, McMillin & Carnelutti
711 Fifth Avenue
New York, New York 10022

Attention: Paul D. Downs, Esq.

New CIBV: Parklaan 46
3016 BC Rotterdam
The Netherlands

Attention: Mr. Hans Schutte
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
300 S. Grand Avenue
Suite 3400
Los Angeles, California 90071-3144
<PAGE>
Attention: Brian J. McCarthy, Esq.

(f) Governing Law; Jurisdiction. THE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO THOSE LAWS RELATING TO CONFLICTS OF LAWS. Each
party irrevocably agrees that any suit, action, or other legal proceeding
arising from or relating to this Agreement shall be brought in the courts
of the State of New York or the United States of America located in New
York County, or the courts of the State of California or the United States
of America located in Los Angeles County.
(g) Counterparts. This Agreement may be entered into in any number
of counterparts and by the parties to it on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument.
(h) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect
and of the remaining provisions hereof shall not be in any way impaired, it
being intended that all of the rights of the parties hereto shall be
enforceable to the fullest extent permitted by law.
IN WITNESS WHEREOF, the parties have executed this Agreement this
____ day of August, 1994.

PIONEER LDCA, INC.

By:__________________________
Title:

CINEPOLE PRODUCTIONS B.V.

By:__________________________
Title:

RCS VIDEO INTERNATIONAL
SERVICES B.V.

By:__________________________
Title:

MGM HOLDINGS CORPORATION

By:__________________________
Title:

NEW CAROLCO INVESTMENTS, B.V.

By:__________________________
Title:
Schedule 1.1

New CIBV Directors

Schedule 3.1

Supervisory Committee
<PAGE>

Mario F. Kassar
Olivier Granier
Michael S. Hope
Ryuichi Noda
Paolo Glisenti
Michael E. Garstin

EXECUTION COPY

AMENDED AND RESTATED PUT AND CALL AGREEMENT

This Amended and Restated Put and Call Agreement (this
"Agreement") dated August ___, 1994 is entered into by and among MGM
HOLDINGS CORPORATION, a Delaware corporation ("MGM H"), CREDIT LYONNAIS
S.A., a French banking institution, ("CL"), and CINEPOLE PRODUCTIONS B.V.,
a Netherlands company ("Cinepole").

W I T N E S S E T H :

WHEREAS, MGM H, CL (MGM H and CL are collectively referred to
herein as the "CL Group") and Cinepole have previously entered into that
certain Put and Call Agreement, dated October 20, 1993 (the "Existing
Agreement"), pursuant to which (i) Cinepole granted MGM H certain put
rights and (ii) MGM H granted Cinepole certain call rights, in each case
with respect to certain of the securities of Carolco Pictures Inc., a
Delaware corporation ("Carolco");

WHEREAS, MGM H has previously acquired (i) $30,000,000 aggregate
principal amount of the 5% Payment-in-Kind Convertible Subordinated Notes
due 2002 (the "Notes") of Carolco issued pursuant to an Indenture dated as
of October 5, 1993 between Carolco and First Trust of California, National
Association as Trustee (the "Trustee") (the "Existing Indenture"), and (ii)
30,000 shares of Carolco's Series A Convertible Preferred Stock, par value
$1.00 (the "Existing Preferred Stock");

WHEREAS, Cinepole (i) has agreed to purchase $7,500,000 aggregate
principal amount of Carolco's 7% Convertible Subordinated Notes due 2006
(the "7% Notes") from Carolco pursuant to a Standby Note Purchase Agreement
dated October 5, 1993 (the "Existing Standby Agreement") and (ii) has been
granted the right to purchase an additional $7,500,000 of 7% Notes in
accordance with the terms of the Existing Standby Agreement;

WHEREAS, the acquisition of the Notes, the Existing Preferred
Stock and the agreement to purchase the 7% Notes were part of a series of
transactions intended to restructure Carolco's indebtedness and
shareholders' equity (all as more fully described in Carolco's Form S-1
Registration Statement which became effective on August 27, 1993) (such
transactions, the "Restructuring"); WHEREAS, in connection with an
Agreement and Plan of Merger (the "Merger Agreement"), dated as of August
10, 1994, (i) Carolco has agreed to merge with a subsidiary of LIVE
Entertainment Inc., a Delaware corporation ("LIVE"), and (ii) LIVE will
amend its certificate of incorporation to change its name to Carolco
<PAGE>
Entertainment Inc. ("CEI"; such transactions and related transactions, the
"Merger");

WHEREAS, pursuant to the Merger, the Existing Preferred Stock
will be exchanged for Series D Convertible Preferred Stock of CEI, par
value $1.00 (the "Preferred Stock");

WHEREAS, prior to the effectiveness of the Merger, the Notes and
the 7% Notes were convertible into the common stock of Carolco;

WHEREAS, in connection with the Merger, MGM H and Cinepole desire
to amend the conversion rights of the Notes and the 7% Notes so that upon
the exercise of such conversion rights the Notes or 7% Notes, as the case
may be, will be converted into common stock, par value $.01, of CEI (the
"Common Stock");

WHEREAS, in connection with the Merger and in order to effect the
amendment of the conversion rights of the 7% Notes, Carolco, CEI and
Cinepole will enter into an Amended and Restated Standby Note Purchase
Agreement which, upon the effectiveness of the Merger, will amend and
restate the Existing Standby Agreement in its entirety (the Existing
Standby Agreement as so amended and restated, the "Standby Agreement");

WHEREAS, in connection with the Merger and in order to effect the
amendment of the conversion rights of the Notes, Carolco, CEI and the
Trustee will enter into an Amended and Restated Indenture which, upon the
effectiveness of the Merger, will amend and restate the Existing Indenture
in its entirety (the Existing Indenture as so amended and restated, the
"Indenture");

WHEREAS, under the terms of the Indenture the Notes shall
automatically be converted into Common Stock upon the occurrence of certain
events described therein and may be converted into Common Stock at the
option of the holders thereof on the Maturity Date (as defined in Section
3.02(a) of the Indenture) or upon the occurrence of certain other events
described in the Indenture, in either case, at the "Conversion Ratio" (as
hereinafter defined); and

WHEREAS, in connection with the Merger, the parties hereto hereby
desire to amend and restate the Existing Agreement in its entirety;

NOW THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:

1. Certain Definitions. The following terms shall have the following
meanings when used herein:

"Conversion Ratio" shall mean the number of shares of Common
Stock issuable upon conversion of each $1,000 principal amount of Notes,
which (i) shall be the quotient of 1,666.67 divided by the Exchange Ratio
(as such term is defined in Section 4.1(a)(i) of the Merger Agreement) and
(ii) shall be subject to adjustment in accordance with the terms of the
Indenture.

"Conversion Shares" shall mean the Common Stock issued upon any
conversion of the Notes.

"Trigger Date" shall mean the earlier of (i) the Mandatory
Conversion Date (as defined in the Indenture) or (ii) the Maturity Date (as
defined in Section 3.02(a) of the Indenture). Cinepole and MGM H
acknowledge and agree that the Trigger Date shall only include the events
described in (i) and (ii) of this paragraph and shall not include any other
optional conversion event.
<PAGE>
2. Effectiveness of this Agreement. This Agreement shall become
effective, and the Existing Agreement shall be amended in its entirety to
read as follows, at the time the Merger becomes effective in accordance
with the terms of the Merger Agreement. If the Merger is not consummated
in accordance with the terms of the Merger Agreement, the Existing
Agreement shall remain in full force and effect.

3. Put Option.

(a) MGM H shall have the right, at any one time (and only once)
during the 90-day period immediately following the Trigger Date, to sell to
Cinepole (the "put") a number of shares of Common Stock equal to 50% of the
number of Conversion Shares produced by application of the Conversion Ratio
in effect at such time to (i) the original aggregate principal amount of
the Notes and (ii) the principal amount of any Notes issued in lieu of cash
interest on the Notes through the Put Exercise Date (as defined below) (the
"Put/Call Amount"), such amount to be subject to adjustment in accordance
with Section 5 hereof, by delivering to Cinepole a written notice
specifying (i) the number of Conversion Shares that are subject to the put,
(ii) the aggregate Put Price (as defined below) and (iii) the date, not
earlier than 30 days, and not later than 60 days, after the Notice Date (as
defined in Section 6(e) below), on which the put shall be exercised (the
"Put Exercise Date").

(b) On the Put Exercise Date, (i) MGM H shall deliver to
Cinepole the share certificates, properly endorsed, representing the number
of shares of Common Stock subject to the put and (ii) Cinepole shall
deliver to MGM H, in immediately available funds or as provided in
paragraph 3(c), the applicable Put Price. For purposes of this Section
3(b) the "Put Price" shall be an amount equal to (A) the number of
Conversion Shares subject to the put multiplied by the product of (x) $0.60
and (y) the Exchange Ratio, plus (B) the amount of any cash interest which
shall have accrued in respect of the Notes converted into the Conversion
Shares which are subject to the put to the extent such interest shall have
remained unpaid as of the Put Exercise Date, plus (C) any dividends on the
Conversion Shares which have been declared but not paid as of the Put
Exercise Date.

(c) Cinepole shall have the right to effect all or a portion of
the payment required under paragraph 3(b) by transferring, in lieu of
paying cash, an amount of 7% Notes originally purchased by Cinepole from
Carolco pursuant to the Standby Agreement valued on the basis of the
initial purchase price thereof, plus any accrued and unpaid interest
thereon.

4. Call Option.

(a) Cinepole or any of its affiliates (it being understood that
any entity which could be construed as an affiliate of Cinepole solely as a
result of its investment in Carolco or CEI shall not be construed as
affiliate for purposes of this Agreement) shall have the right, at any one
time (and only once) for the 90-day period immediately following the
Trigger Date, to purchase from MGM H (the "call") up to a number of shares
of Common Stock equal to the Put/Call Amount, by delivering to MGM H a
written notice specifying (i) the number of Conversion Shares that are
subject to the call, (ii) the Call Price (as defined below) and (iii) the
date, not earlier than 30 days, and not later than 60 days, after the
Notice Date, on which the call shall be exercised (the "Call Exercise
Date").

(b) On the Call Exercise Date (i) MGM H shall deliver to
Cinepole the share certificates, properly endorsed, representing the number
of shares of Common Stock subject to the call and (ii) Cinepole shall
deliver to MGM H, in immediately available funds or as provided in
paragraph 4(c), the applicable Call Price. For purposes of this paragraph
4(b) the "Call Price" shall be an amount (subject to adjustments for stock
<PAGE>
splits or other similar modifications to CEI's capital structure) equal to
(A) the number of Conversion Shares subject to the call multiplied by the
product of (x) $0.60 and (y) the Exchange Ratio, plus (B) the amount of any
cash interest which shall have accrued in respect of the Notes converted
into the Conversion Shares which are subject to the call to the extent such
interest shall have remained unpaid as of the Call Exercise Date, plus (C)
any dividends on the Conversion Shares which have been declared but not
paid as of the Call Exercise Date.

(c) Cinepole or any of its affiliates shall have the right to
effect all or a portion of the payment required under paragraph 4(b) by
transferring, in lieu of paying cash, an amount of 7% Notes originally
purchased by Cinepole from Carolco pursuant to the Standby Agreement valued
on the basis of the initial purchase price thereof, plus any accrued and
unpaid interest thereon.

5. Put/Call Reduction.

(a) If the CL Group, directly or indirectly, sells or disposes
(including, without limitation, by means of the sale or disposal of any
interest in MGM H or otherwise), of any Notes, Preferred Stock or Common
Stock resulting from the conversion of any Notes or Preferred Stock prior
to the Put Exercise Date or the Call Exercise Date, as the case may be,
then the Put/Call Amount shall be reduced (but in no event to less than
zero (0)) as follows: (i) in the case of the sale or disposition of Notes,
by an amount equal to 50% of the number of Conversion Shares that would
result if such Notes were converted into Common Stock at the Conversion
Ratio then in effect; (ii) in the case of the sale or disposition of
Preferred Stock, by an amount equal to 50% of the number of shares of
Common Stock that would result if such Preferred Stock were converted into
Common Stock at the conversion rate then in effect; and (iii) in the case
of the sale or disposition of Common Stock resulting from the conversion of
any Notes or Preferred Stock, by an amount equal to the number of shares of
Common Stock sold or disposed of.

(b) If Cinepole or any of its affiliates purchases or otherwise
acquires any 7% Notes, shares of Common Stock (including shares of Common
Stock resulting from the conversion of any 7% Notes but excluding shares of
Common Stock resulting from the conversion of any Preferred Stock) or any
other security convertible into Common Stock (other than Common Stock or
Preferred Stock acquired as a result of the Merger) prior to the Put
Exercise Date or the Call Exercise Date, as the case may be, then the
Put/Call Amount shall be reduced (but in no event to less than zero (0)) as
follows: (i) in the case of the purchase or acquisition of 7% Notes, by an
amount equal to 50% of the number of shares of Common Stock that would
result if such 7% Notes held by Cinepole and/or any of its affiliates on
the Put Exercise Date or the Call Exercise Date, as the case may be, were
converted into Common Stock at the conversion rate then in effect; (ii) in
the case of the purchase or acquisition of Common Stock (including shares
of Common Stock resulting from the conversion of any 7% Notes but excluding
shares of Common Stock resulting from the conversion of any Preferred
Stock), by an amount equal to the number of shares of Common Stock held by
Cinepole or any of its affiliates on the Put Exercise Date or the Call
Exercise Date, as the case may be; and (iii) in the case of the purchase or
acquisition of securities convertible into Common Stock (other than Common
Stock or Preferred Stock acquired as a result of the Merger), by an amount
equal to the number of shares of Common Stock that would result if such
securities held by Cinepole and/or any of its affiliates on the Put
Exercise Date or the Call Exercise Date, as the case may be, were converted
into Common Stock at the conversion rate then in effect.

(c) In the event that, at any time, (i) the Put/Call Amount
shall have been reduced to zero (0) pursuant to the provisions of
paragraphs 5(a) or (b) determined on the basis of each party's respective
holdings of Carolco and CEI securities at that time, (ii) the number of
shares of Common Stock or other securities of CEI or Carolco convertible
<PAGE>
into Common Stock held by Cinepole and its affiliates shall be equal to or
greater than the amount of Notes, Preferred Stock and Common Stock held by
the CL Group (the "CL Securities"), with each party's holdings determined
on a fully converted basis, and (iii) the CL Group sells or disposes of,
directly or indirectly, (including, without limitation, by means of the
sale or disposal of any interest in MGM H or otherwise), all or part of the
CL Securities, then the CL Group shall purchase or cause to be purchased,
and Cinepole or its affiliates shall sell to the CL Group or any member
thereof, an amount of 7% Notes originally purchased by Cinepole from
Carolco or CEI and then held by Cinepole or its affiliates equal to the
number of CL Securities sold at such time, with each party's holdings
determined on a fully converted basis at the then applicable conversion
rates. For purposes of this paragraph 5(c), the amount to be paid to
Cinepole or its affiliates in exchange for such 7% Notes shall be the face
amount of such 7% Notes plus accrued and unpaid interest thereon; provided,
however, that the amount to be paid to Cinepole and its affiliates shall in
no event exceed $15,000,000 of the face amount of 7% Notes plus the amount
of such accrued and unpaid interest.

6. General Provisions.

(a) Maximum Put/Call. The total aggregate amount of shares of
Common Stock subject to (i) the put provided in Section 3 hereof, (ii) the
call provided in Section 4 hereof or (iii) any combination of the put and
the call, shall not exceed the Put/Call Amount, subject to any adjustments
made pursuant to Section 5 hereof.

(b) Termination. In the event either Carolco or CEI is subject
to any voluntary or involuntary bankruptcy proceeding at any time after the
Merger is consummated, the put and the call, respectively, shall terminate.

(c) Payment Method. The place of payment of the Put Price or
the Call Price, as the case may be, shall be made pursuant to the written
instructions of MGM H. Such instructions shall be delivered to Cinepole no
later than 24 hours prior to the time of payment.

(d) No Assignment or Transfer. Neither this Agreement, nor the
put option or the call option granted hereby, nor any other rights under
this Agreement, shall be assignable or transferable, directly or
indirectly, including in the event of the sale of MGM H.

(e) Notices. All notices, requests and demands to or upon the
parties hereto shall be in writing and shall be delivered by any method
that shall provide a written acknowledgement of receipt at the addresses
shown below.

If to the CL Group: MGM Holdings Corporation
c/o RLF Service Corp.
1 Rodney Square
Wilmington, Delaware
Attention: Mr. Rene-Claude Jouannet

with a copy to: White & Case
633 West Fifth Street
Los Angeles, California 90071
Attention: David G. Johnson, Esq.

If to Cinepole: Cinepole Productions B.V.
P.O. Box 990
1000 AZ Amsterdam
The Netherlands

with a copy to: Coudert Freres
52, Avenue des Champs-Elysees
75008 Paris, France
Attention: Jonathan M. Wohl, Esq.
<PAGE>
and
Le Studio Canal+ (U.S.)
301 North Canon Drive, Suite 228
Beverly Hills, California 90210
Attention: Richard J. Garzilli, Esq.
and
Coudert Brothers
1055 West Seventh Street
Los Angeles, California 90017
Attention: John A. St. Clair, Esq.

For purposes of this Agreement, a "Notice Date" shall be the date
which is two business days after the date on which any notice hereunder is
given or sent.

(f) Further Assurances. The parties agree to do all things and
to deliver all instruments and documents necessary to accomplish the
purposes of this Agreement, and to provide to one another such information
and assistance necessary to enable one another to do the same.

(g) Governing Law. This Agreement and the rights and
obligations of the parties hereunder shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.

MGM HOLDINGS CORPORATION

By:_________________________

CREDIT LYONNAIS, S.A.

By:_________________________

CINEPOLE PRODUCTIONS B.V.

By:__________________________

ACCEPTED AND ACKNOWLEDGED:

CAROLCO PICTURES INC.

By:_____________________

LIVE ENTERTAINMENT, INC.

By:_____________________
<PAGE>
By:_____________________

EXECUTION COPY

AGREEMENT

This AGREEMENT (this "Agreement") is made and entered into on
this 10th day of August, 1994, by and among Pioneer LDCA, Inc., a Delaware
corporation ("Pioneer"), Cinepole Productions B.V., a Netherlands company
("Cinepole"), RCS Video International Services B.V., a Netherlands company
("RCS BV"), RCS International Communications N.V. ("RCS NV", and
collectively with RCS BV, hereinafter referred to as "RCS") and MGM
Holdings Corporation, a Delaware corporation ("MGM"). Capitalized terms
used herein and not otherwise defined shall have the meanings specified in
the Amended and Restated Stockholders' Agreement dated as of August 10,
1994 by and among Pioneer, Cinepole, RCS and MGM.

W I T N E S S E T H

WHEREAS, the parties hereto have entered into a Subordination
Agreement (the "Subordination Agreement") dated October 20, 1993, pursuant
to which certain rights of the Strategic Investors to the proceeds of a
liquidation of Carolco Pictures Inc. ("Carolco") with respect to certain
then existing investments were subordinated to new investments made by MGM
and certain of the Strategic Investors on such date;
WHEREAS, Carolco has agreed to merge (the "Merger") with Carolco
Acquisition Corp., a wholly owned subsidiary of Live Entertainment, Inc.
("LIVE");
WHEREAS, pursuant to the Merger, LIVE will change its name to Carolco
Entertainment Inc. ("CEI") and each Carolco shareholder will receive CEI
stock as a result of the Merger; and
WHEREAS, each of the parties hereto wishes to preserve the mutual
arrangements set forth in the Subordination Agreement with regard to
certain securities received as a consequence of the Merger;
NOW, THEREFORE, the parties hereby agree as follows:
1. After the Effective Date of the Merger (as defined in the
Merger Agreement), references in the Subordination Agreement to any type of
securities of Carolco shall be deemed, where appropriate, to be references
to such securities of CEI.
2. THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THOSE LAWS RELATING TO CONFLICTS OF LAWS. Each party irrevocably agrees
that any suit, action, or other legal proceeding arising from or relating
to this Agreement shall be brought in the courts of the State of New York
or the United States of America located in New York County, or the courts
of the State of California or the United States of America located in Los
Angeles County.
3. This Agreement may be entered into in any number of
counterparts and by the parties to it on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument.
4. This Agreement shall become effective upon the consummation
of the Merger. In the event the Merger is not consummated this Agreement
will be of no force or effect.
5. Except as expressly modified by this Agreement, the
Subordination Agreement shall continue to be in full force and effect in
accordance with its terms.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement this
____ day of August, 1994.

PIONEER LDCA, INC.

By:__________________________
Title:

CINEPOLE PRODUCTIONS B.V.

By:__________________________
Title:

RCS VIDEO INTERNATIONAL
SERVICES B.V.

By:__________________________
Title:

RCS INTERNATIONAL
COMMUNICATIONS N.V.

By:__________________________
Title:

MGM HOLDINGS CORPORATION

By:__________________________
Title:

JOINT FILING STATEMENT PURSUANT
TO RULE 13-d-1(f)1(iii)

The undersigned hereby agree that this statement shall be filed
on behalf of each of them.

August 22, 1994
(Date)

CREDIT LYONNAIS

/s/ G.E. Dufour
_____________________________
(Signature)

G.E. Dufour Directeur
<PAGE>
_____________________________
(Name/Title)

August 22, 1994
(Date)

CREDIT LYONNAIS
INTERNATIONAL SERVICES

/s/ Michel Severe
_____________________________
(Signature)

M. Severe Attorney-in-fact
_____________________________
(Name/Title)

August 22, 1994
(Date)
MGM HOLDINGS CORPORATION

/s/ G.E. Dufour
_____________________________
(Signature)

G.E. Dufour Secretary
_____________________________
(Name/Title)
<PAGE>