<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 7, 1996
REGISTRATION NO. 33-64595
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
THE PRODUCERS ENTERTAINMENT GROUP LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 95-4233050
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
9150 Wilshire Boulevard
Beverly Hills, California 90212
(310) 285-0400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
Irwin Meyer, President and Chief Executive Officer
9150 Wilshire Blvd.
Beverly Hills, California 90212
(310) 285-0400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
Copies to:
Melvin Katz, Esq.
Maloney, Gerra, Mehlman & Katz
405 Lexington Avenue, 36th Floor
New York, New York 10174
(212) 973-6900
Approximate date of commencement of proposed sale to the public:
As soon as practicable after effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [x]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Each Class of Amount to Offering Price Aggregate Amount of
Securities to Be Registered Be Registered Per Share Offering Price Registration Fee
- --------------------------- ------------- --------- -------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 255,000 shares $.34375(1) $ 87,656(1) $ 30.23
Common Stock, $.001 par value, issuable
upon exercise of options and warrants 650,000 shares $.34375(1) $ 223,437(1) $ 77.05
Total 905,000 shares $.34375(1) $ 311,093(1) $107.28 (1)(2)
</TABLE>
(1) These shares are to be sold by the selling stockholders at prices not
presently determinable. The offering price is estimated solely for purposes of
calculating the registration fee in accordance with Rule 457(c) using the
$.34375 closing bid price of the Registrant's common stock on The NASDAQ Small
Cap Market on February 23, 1996. The registration fee represents the minimum
registration fee payable pursuant to Section 6(b) of the Securities Act of
1933.
(2) $100 filing fee paid with prior filing.
================================================================================
The Registrant hereby amends this Registration Statement on such dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE> 2
Subject to Completion, Preliminary Prospectus dated March ____, 1996
PROSPECTUS
THE PRODUCERS ENTERTAINMENT GROUP LTD.
905,000 Shares of Common Stock
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE AND INVOLVE A HIGH DEGREE
OF RISK. SEE "RISK FACTORS".
This Prospectus relates to an aggregate of 905,000 shares (the
"Shares") of Common Stock, $.001 par value per share (the "Common Stock"), of
The Producers Entertainment Group Ltd. (the "Company") which may be offered
from time to time by the Selling Stockholders named herein. Included within
the 905,000 shares of Common Stock to which this Prospectus relates are (i)
125,000 currently outstanding Shares which are held by a Selling Stockholder,
(ii) 130,000 shares of Common Stock to be issued to another Selling Stockholder
in connection with the proposed settlement of certain litigation among the
Company, such Selling Stockholder and others, (iii) 100,000 shares of Common
Stock issuable upon the exercise of a warrant to be granted to the same Selling
Stockholder in connection with such proposed settlement, which warrant will
have an exercise price per Share equal to the closing bid price of a share of
Common Stock on the NASDAQ SmallCap Market on the date immediately prior to the
date of grant of such warrant and (iv) an aggregate of 550,000 shares of Common
Stock issuable upon the exercise of currently outstanding options having
exercise prices per share of Common Stock ranging from $.50 to $.55. See
"Recent Developments -- Litigation and Related Matters" and "Selling
Stockholders."
The Common Stock is quoted on the NASDAQ Small Cap Market under the
symbol "TPEG" and is listed on the Boston Stock Exchange under the symbol
"PCG." The closing bid price of the Common Stock on the NASDAQ SmallCap Market
on February 23, 1996 was 11/32 ($.34375). Prospective purchasers of the Shares
are urged to obtain a current price quotation.
It is anticipated that the Selling Stockholders will offer the Shares
(when and if issued in the case of Shares underlying options and warrants and
Shares proposed to be issued as described above) for sale from time to time at
the prices prevailing on the NASDAQ Small Cap Market or the Boston Stock
Exchange on the date of sale. The Selling Stockholders also may sell the
Shares privately, ether directly to purchasers or through a broker or brokers.
The Company shall take such actions, including filing post-effective amendments
to the Registration Statement of which this Prospectus is a part and/or
preparing supplements to this Prospectus, as shall be required to enable the
Selling Stockholders lawfully to sell the Shares during a period terminating on
the second anniversary of the date hereof.
All selling and other expenses incurred by the Selling Stockholders
will be borne by the Selling Stockholders. See "Plan of Distribution." The
Selling Stockholders, and the brokers through whom sales of the Shares are
made, if any, may be deemed to be "underwriters" within the meaning of section
2(11) of the Securities Act of 1933, as amended (the "Securities Act"). In
addition, any profits realized by the Selling Stockholders or such brokers may
be deemed to be underwriting compensation within the meaning of the Securities
Act.
The Company will receive none of the proceeds from the sale of the
Shares offered hereby. The Company estimates that the expenses of this
registration, all of which will be paid by the Company, will not exceed
$10,000.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is March ____, 1996
<PAGE> 3
No person is authorized to give any information or to make any
representation not contained or incorporated by reference in this Prospectus
and, if given or made, such information or representation must not be relied
upon as having been authorized by the Company or by the Selling Stockholders.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities in any jurisdiction in which such offer or
solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to any person to whom it is unlawful
to make such offer or solicitation. Neither the delivery of this Prospectus
nor any sale made hereunder shall, under any circumstances, create any
implication that the information contained herein is correct as of any time
subsequent to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington D.C. 20549 and at the following Regional Offices of the
Commission: New York Regional Office, 7 World Trade Center, Suite 1300, New
York, New York 10048; Los Angeles Regional Office, 5757 Wilshire Boulevard,
Suite 500, Los Angeles, California 90036; and Chicago Regional Office,
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act (together with all amendments, exhibits and
documents incorporated therein by reference, the "Registration Statement") with
respect to the Shares offered hereby. This Prospectus does not contain all of
the information set forth in the Registration Statement, of which this
Prospectus is a part, or any amendments thereto, certain portions of which have
been omitted pursuant to the Commission's rules and regulations. The
information so omitted may be obtained from the Commission's principal office
in Washington, D.C. upon payment of the fees prescribed by the Commission. Any
statements contained herein concerning the provisions of any document are not
necessarily complete and in each instance reference is made to the copy of such
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission. Each such statement is qualified in its entirety by such
reference. For further information with respect to the Company and the Common
Stock, reference is made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the
Commission (File No. 0-18410) are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1995;
(ii) the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1995;
(iii) the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1995; and
(iv) the description of the Common Stock contained in the Company's
Registration Statement on Form 8-A and in the Company's
Restated Certificate of Incorporation filed June 24, 1993
included with the Company's current Report on Form 8-K dated
May 20, 1994.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the Shares
offered hereby shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute part of this Prospectus. The Company will provide
without charge to each person to whom this Prospectus is delivered, upon such
person's written or oral request, a copy of any and all of the documents that
have been
2
<PAGE> 4
incorporated by reference in this Prospectus or the Registration Statement
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference into such documents). Any such request should be
directed to the Corporate Secretary of The Producers Entertainment Group Ltd.,
9150 Wilshire Boulevard, Suite 205, Beverly Hills, California 90212 (telephone
number (310) 285-0400).
RISK FACTORS
The securities offered hereby are speculative in nature and involve a
high degree of risk. Prior to making an investment decision with respect to
securities of the Company, prospective investors should carefully consider,
along with the other matters discussed in this Prospectus, the following risk
factors:
FACTORS CONCERNING THE COMPANY'S LIQUIDITY AND CAPITAL RESOURCES. The
Company's cash commitments for the forthcoming 12 months include aggregate
minimum base compensation of approximately $1,771,000 to officers and key
independent contractors of the Company and minimum office rent of approximately
$220,000 (aggregating approximately $1,991,000). The Company also incurs
overhead and other costs such as salaries, related benefits, office expenses,
professional fees and similar expenses. For the Company's fiscal year ended
June 30, 1995, general and administrative expenses, which includes compensation
and rent, aggregated approximately $4,697,000. For the six months ended
December 31, 1995, general and administrative expenses, which includes
compensation and rent, aggregated approximately $1,784,035. The Company also
expends funds on the production and development of projects. Dividends on the
Company's Series A 8-1/2% Convertible Preferred Stock (the "Series A Stock")
aggregate $425,000 annually and, at the Company's option, may be paid in shares
of Common Stock or in cash. At December 31, 1995, the Company had cash and
cash equivalents of $188,282 and accounts receivable of $715,618 (aggregating
$903,900). At December 31, 1995, the Company also had accounts payable and
accrued expenses aggregating $310,759. The Company has no arrangements for
external sources of liquidity such as bank lines of credit. If the Company
continues to report losses and expends additional funds on development and
production of projects in excess of its current resources and future cash
receipts, the Company will be required to reduce its expenses to a level below
its revenues, raise additional capital and/or borrow funds to sustain its
operations for an additional 12 month period and any fiscal periods thereafter.
If other external sources of funds are not available to the Company and future
cash revenues are not sufficient to meet the Company's cash needs, the Company
plans to reduce the compensation of its officers, office staff and other
personnel and the number of development projects that it will fund. The
Company has not made any specific plans or entered into any agreements to
reduce the level of its expenditures in the event that such reductions become
necessary. See "Potential Business Combination" under this caption.
HISTORY OF OPERATING LOSSES. For the years ended June 30, 1993, 1994
and 1995, the Company reported revenues of $7,180,569, $10,782,850 and
$5,290,745, respectively, and losses of $4,284,207, $5,489,523 and $3,593,252,
respectively, including the impact of the Company's acquisition of DSL
Productions Inc. and its affiliates (collectively, "DSL Productions") in May
1994 on a pooling of interests basis. For the six months ended December 31,
1995, the Company reported revenues of $1,674,894 and losses of $563,704.
There can be no assurance that the Company will become profitable in future
fiscal periods.
POTENTIAL BUSINESS COMBINATION. In February 1996, the Company
agreed in principal, pursuant to a non-binding letter of intent, to be acquired
by Dove Audio, Inc. ("Dove"), a publicly-traded company engaged primarily in
the business of producing and distributing books on tape and book publishing.
Pursuant to the letter of intent, the Company would be acquired for a purchase
price of $8 million payable in common stock of Dove. The Company and Dove are
currently conducting their due diligence investigations and working to resolve
various issues, including Dove's valuation of the Company, which may well
result in a reduction of the purchase price initially offered by Dove pursuant
to the above-noted letter of intent. In addition to resolving issues relating
to Dove's valuation of the Company (and whether the resulting purchase price
offered by Dove for the Company would be acceptable to the Company's management
or its shareholders), the consummation of the acquisition of the Company by
Dove is subject to the satisfaction of a number of conditions, including the
completion of the parties' respective due diligence investigations, resolution
of various accounting, tax and other structuring issues, negotiation and
execution of a definitive acquisition agreement and other documentation,
approval of the final terms of the transaction by the Board of Directors of the
Company and Dove and, depending upon the form of
3
<PAGE> 5
the transaction, approval of the transaction by the Company's stockholders to
the extent required. In light of these contingencies, no assurance can be
given that the above-described acquisition of the Company by Dove will
ultimately be consummated. Management of the Company is exploring alternative
courses of action, including the raising of additional capital needed to
operate the business, in the event the proposed transaction with Dove is not
consummated. As of the date of this Prospectus, management of the Company is
not able to determine whether any such alternative courses of action, including
any additional financing at an acceptable cost to the Company, would be
available to it in such event. See "Recent Developments -- Proposed Business
Combination".
TELEVISION AND FEATURE FILM INDUSTRY; INTENSE COMPETITION. The
television industry is highly competitive and involves a substantial degree of
risk. The Company competes with many other television and motion picture
producers which are significantly larger and have financial resources which are
far greater than those available to the Company now or in the foreseeable
future. The television industry is also subject to technological developments,
the effects of which management is unable to predict. The television industry
is subject to governmental regulation by the Federal Communications Commission
(the "FCC"). The networks are currently limited by the Financial Interest and
Syndication Rules of the FCC in the amount of programming they may produce and
the rights which they may retain in programs. These rules were recently
relaxed in favor of the networks. The relaxation in the Financial Interest and
Syndication Rules could adversely impact the Company as a result of potential
increased competition from the networks. The Company also expects to derive
revenues from the feature film industry. The feature film industry is also
highly competitive and involves a substantial degree of risk. The Company
competes with major film studios and other independent producers, most of which
are significantly larger and have financial resources which are far greater
than those available to the Company now or in the foreseeable future. The
Company's success depends upon its ability to produce programming for
television and theatrical release. There is no assurance that the Company will
continue to acquire and develop products which can be made into successful
made-for-television movies, television series or theatrical releases in light
of the competition which the Company faces.
RELIANCE ON KEY PERSONNEL. The Company is substantially dependent
upon the services of certain of its key executives, the loss of whose services
could have a material adverse affect on the Company and its operations.
CONTROL BY INSIDERS. The Company has agreed to issue an aggregate of
3,500,000 shares of Common Stock to certain executive officers and directors of
the Company or their affiliates which will, when issued, constitute
approximately 25% of the Company's issued and outstanding Common Stock. See
"Recent Developments--Stock Purchases" and "Recent Developments--Litigation and
Related Matters" elsewhere in this Prospectus. By virtue of their ownership of
such Common Stock, such executive officers and directors or their affiliates
may, collectively, be deemed to control the Company through the exercise of
sufficient voting power to effectively control (or, at least, exercise a
significant influence upon) the election of the Company's Board of Directors,
direct the appointment of the Company's officers and, in general, effectively
determine the outcome of any corporate transaction or other matter submitted to
the Company's stockholders for approval, including mergers, consolidations and
the sale of all or substantially all of the Company's assets, and to prevent or
cause a change in control of the Company.
EFFECT OF OUTSTANDING OPTIONS, WARRANTS AND CONVERTIBLE STOCK. For
the respective terms of the outstanding options and warrants granted by the
Company and the outstanding Series A Stock, the holders thereof are given an
opportunity to profit from a rise in the market price of the Company's Common
Stock. As of the date of this Prospectus, 11,247,444 shares of Common Stock
(or an additional 117% of the outstanding Common Stock) are issuable upon the
exercise or conversion of such securities at prices ranging from $.50 to $4.00
per share. In June 1995, the Company's Board of Directors (the "Board")
adopted the Company's 1995 Stock Option Plan, subject to approval of such plan
by the Company's stockholders, pursuant to which up to 3,000,000 shares of
Common Stock may be issued to officers and employees of the Company upon the
exercise of incentive stock options and nonqualified stock options. No options
have been granted under such plan as of the date of this Prospectus. The terms
on which the Company may obtain additional financing during the respective
terms of these stock options, warrants and convertible stock may be adversely
affected by their existence. The holders of such stock options, warrants and
convertible stock may exercise or convert such securities, as the case may be,
at a time when the Company might be able to obtain additional capital through a
new offering of securities or other form of financing on terms more favorable
than those provided by such stock options, warrants and convertible stock.
4
<PAGE> 6
POTENTIAL ANTI-TAKEOVER MEASURES. The Company is authorized to issue
"blank check" preferred stock. The Board has the authority, without
shareholder approval, to issue preferred stock in one or more series and to fix
the relative rights and preferences thereof including their redemption,
dividend and conversion rights. The ability of the Company to issue the
authorized but unissued shares of preferred stock could be utilized to impede
potential take-overs of the Company. In addition, the Company is governed by
the provisions of Section 203 of the General Corporation Law of the State of
Delaware. In general, that statute prohibits a public Delaware corporation
from engaging in a "business combination" with an "interested stockholder" for
a period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is approved
in a prescribed manner. "Business combination" includes mergers, asset sales
and other transactions potentially resulting in a financial benefit to
stockholders. An "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years did own) 15% or more of
the corporation's voting stock.
DIVIDEND POLICY. Holders of the Company's Series A Stock are entitled
to annual dividends of 8-1/2% (an aggregate of $425,000), payable quarterly in
cash or, at the Company's option, shares of Common Stock. The Company has
never paid cash dividends on its Common Stock and no cash dividends are
expected to be paid on the Common Stock in the foreseeable future.
RISKS OF LOW-PRICED STOCKS. The Commission has adopted regulations
which define a "penny stock" to be any equity security that has a market price
(as therein defined) of less than $5.00 per share or an exercise price of less
than $5.00 per share, subject to certain exceptions. For any transaction
involving a penny stock, unless exempt, the rules require the delivery, prior
to any transaction in a penny stock, of a disclosure schedule prepared by the
Commission relating to the penny stock market. Disclosure is also required to
be made about commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities. Finally, monthly
statements are required to be sent disclosing recent price information for the
penny stock held in the account and information on the limited market in penny
stocks. The foregoing penny stock restrictions will not apply to the Company's
securities if such securities continue to be listed on the NASDAQ Small Cap
Market, as to which there can be no assurance, and have certain price and
volume information provided on a current and continuing basis or meet certain
minimum net tangible assets or average revenue criteria. In any event, even if
the Company's securities were exempt from such restrictions, it would remain
subject to Section 15(b)(6) of the Exchange Act, which gives the Commission the
authority to prohibit any person engaged in unlawful conduct while
participating in a distribution of penny stock from associating with a
broker-dealer or participating in a distribution of penny stock, if the
Commission finds that such a restriction would be in the public interest. If
the Company's securities were to be removed from listing on the NASDAQ Small
Cap Market and/or the Boston Stock Exchange or otherwise become subject to the
existing rules on penny stocks, the market liquidity for the Company's
securities could be severely adversely affected.
THE COMPANY
The Company, directly and through its subsidiaries, is engaged in the
acquisition, development, production and distribution of dramatic, documentary,
instructional and comedy made-for-television movies, series and miniseries and
theatrical motion pictures. The Company also engages in personal management of
the careers of performers, writers and directors.
The Company has produced programming in various genre, including the
following:
REALITY/DOCUMENTARY PROGRAMMING
The Company's reality/documentary series include 22 episodes of
Future Quest, hosted by Jeff Goldblum, which aired on the Public Broadcasting
System ("PBS"); 13 episodes of Hollywood Stuntmakers I, hosted by James
Coburn, produced for the Discovery Channel; 13 episodes of FX Masters, hosted
by Christopher Reeve, produced for the Discovery Network's Learning Channel; 26
episodes of Superstars of Action, hosted by Robert Wagner, produced for the
German broadcaster Beta-Taurus and licensed to the Learning Channel; 26
episodes of Hollywood Babylon which is currently in syndication; and 26
episodes of Forces Beyond, a contemporary "In Search Of" which is a
co-production with the Learning Channel.
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"HOW TO" INSTRUCTIONAL PROGRAMMING
The Company has produced 65 episodes of Laurie Cooks Light & Easy, a
cooking show starring cookbook author Laurie Burrows Grad, which aired on the
Learning Channel; 60 episodes of Simply Style, a series about the world of
fashion and style hosted by Leah Feldon, currently airing on the Learning
Channel; and 10 episodes of Home Green Home, a series about home planting and
gardening hosted by Keely Shaye Smith, licensed to PBS.
DRAMATIC PROGRAMMING
The Company has produced the theatrical feature film What's Love Got
To Do With It for Disney's Touchstone Pictures, for which each of its stars,
Angela Bassett and Laurence Fishburne, was nominated for an Academy Award; and
five made-for-television movies, including The Price She Paid (CBS), The Secret
Passion of Robert Clayton (USA), When A Stranger Calls, Back (Showtime),
Against The Wall (HBO), which won an Emmy Award for Best Director, and, most
recently, Lily Dale (Showtime).
SITUATION COMEDY PROGRAMMING
The Company has produced 48 episodes of the CBS comedy series Dave's
World which airs on the CBS television network. Dave's World is currently
rated in the top 20 network television series. The Company received a renewal
for 22 new episodes of this series for the Fall 1995 television season. The
Company also produces Can't Hurry Love for CBS and has received an initial
order for 13 one-half hour episodes which began airing on CBS in September
1995.
The Company's offices are located at 9150 Wilshire Boulevard, Suite
205, Beverly Hills, California 90212. Its telephone number is (310) 285-0400.
RECENT DEVELOPMENTS
POTENTIAL BUSINESS COMBINATION
In February 1996, the Company agreed in principal, pursuant to a
nonbinding letter of intent, to be acquired by Dove Audio, Inc. ("Dove"), a
publicly-traded company engaged primarily in the business of producing and
distributing books on tape and book publishing. Pursuant to the letter of
intent, the Company would be acquired for a purchase price of $8 million
payable in common stock of Dove. The Company and Dove are currently conducting
their due diligence investigations and working to resolve various issues,
including Dove's valuation of the Company, which may well result in a reduction
of the purchase price initially offered by Dove pursuant to the above-noted
letter of intent. Dove has also agreed in principle to acquire Four Point
Entertainment, a privately-held producer of television pilots, series,
miniseries talk shows and other programs for the network, cable and syndicated
television markets, for a purchase price of $9 million in cash and common
stock.
In addition to resolving issues relating to Dove's valuation of the
Company (and whether the resulting purchase price offered by Dove for the
Company would be acceptable to the Company's management or its shareholders),
the consummation of the acquisition of the Company by Dove is subject to the
satisfaction of a number of conditions, including the completion of the
parties' respective due diligence investigations, resolution of various
accounting, tax and other structuring issues, negotiation and execution of a
definitive acquisition agreement and other documentation, approval of the final
terms of the transaction by the Board of Directors of the Company and Dove and,
depending upon the form of the transaction, approval of the transaction by the
Company's stockholders to the extent required. In light of the foregoing
contingencies, no assurance can be given that the above-described acquisition
of the Company by Dove will ultimately be consummated. Management of the
Company is exploring alternative courses of action, including the raising of
additional capital, in the event the proposed transaction with Dove is not
consummated. As of the date of this Prospectus, management of the Company is
not able to determine whether any such alternative courses of action, including
any additional financing at an acceptable cost to the Company, would be
available to it in such event. See "Risk Factors -- Proposed Business
Combination".
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MANAGEMENT
In December 1995, the Company terminated the employment of Ronald
Lightstone, the former Chairman of the Board of the Company, and he was removed
as the Company's Chairman of the Board. As of the date of this Prospectus, Mr.
Lightstone remains a member of the Company's Board of Directors. In connection
with the termination of Mr. Lightstone's employment, the Company has instituted
legal proceedings against Mr. Lightstone and Mr. Lightstone has filed a
cross-complaint against the Company and Irwin Meyer, the Company's President
and Chief Executive Officer. See "Stock Purchases" and "Litigation and Related
Matters" under this caption.
Charles J. Weber, a director of the Company, was elected as the
Company's Chairman of the Board in December 1995, replacing Mr. Lightstone.
In contemplation of the above-described proposed acquisition of the Company,
Dove, the Company and Mr. Weber have agreed that Mr. Weber will commence to
serve as Acting Chief Operating Officer of Dove on April 1, 1996. Dove will
continue to pay Mr. Weber the same compensation for his services to Dove which
he currently receives from the Company and it is anticipated that he will
continue to serve in such capacity following the acquisition of the Company by
Dove, if consummated.
STOCK PURCHASES
In November 1995 and January 1996, the Company agreed to sell, subject
to the vesting provisions described below, an aggregate of 3,500,000 shares of
its Common Stock to certain executive officers and directors of the Company or
their affiliates named below(1):
<TABLE>
<CAPTION>
Purchase Price ($)
-----------------------------------------------------------
Number of Shares
Name of Common Stock Recourse Non-Recourse Total
---- --------------- -------- ------------ -----
<S> <C> <C> <C> <C>
Mountaingate 2,000,000 250,000 750,000 1,000,000
Productions, LLC(2)
Charles J. Weber(3) 100,000 12,500 37,500 50,000
1,400,000 192,500 577,500 770,000
Totals 3,500,000 455,000 1,365,000 1,820,000
</TABLE>
(1) Does not include 1,500,000 shares of Common Stock sold by the Company
to Ronald Lightstone, its former Chairman of the Board, in November
1995. Pursuant to the terms of the agreements under which such shares
were sold to Mr. Lightstone, such shares were forfeited to the Company
and canceled in December 1995 in connection with the termination of
Mr. Lightstone's employment by the Company. The termination of Mr.
Lightstone's employment and the cancellation of the shares sold to him
in November 1995 are the subject of litigation between the Company and
Mr. Lightstone. See "Management" and "Litigation and Related Matters"
under this caption.
(2) Mountaingate Productions, LLC ("Mountaingate") is a California limited
liability company wholly-owned by Alison Meyer and Patricia Meyer, the
adult daughters of Irwin Meyer, President and Chief Executive Officer
of the Company. All of such shares were sold to Mountaingate in
November 1995 at a purchase price of $.50 per share. Mr. Meyer
disclaims beneficial ownership of the shares of Common Stock owned by
Mountaingate.
(3) In November 1995, the Company sold 100,000 shares of its Common Stock
to Mr. Weber at a purchase price of $.50 per share. Upon his election
as the Company's Chairman of the Board in January 1996, the Company
agreed to sell an additional 1,400,000 shares of its Common Stock to
Mr. Weber at a purchase price of $.55 per share.
7
<PAGE> 9
The purchase price for these shares of Common Stock was paid by the
above-named purchasers by delivery of a promissory note (a "Note") by each such
purchaser to the Company. Each Note bears interest at the rate of 7% per
annum. Twenty five percent (25%) of the principal amount of each Note is with
recourse to the purchaser and the remaining seventy five percent (75%) of such
principal amount is without personal recourse against the purchaser. The
entire amount of principal and accrued interest under each Note is secured by a
pledge to the Company of the Common Stock purchased with such Note. Twelve and
one-half percent (12.5%) of the principal amount of each Note, together with
interest thereon is due and payable on April 1, 1997; twelve and one-half
percent (12.5%) of the original principal amount of each Note, together with
interest thereon, will be due and payable on October 1, 1998; and the balance
of the principal of and interest on each Note will be due and payable on
October 1, 2000.
The shares of Common Stock acquired by Mountaingate and Mr. Weber are
subject to forfeiture to the Company (with a corresponding reduction in the
applicable Note) in the event the employment of Mr. Meyer or Mr. Weber,
respectively, is terminated (other than termination as a result of such
person's death or disability or termination by the Company without cause) prior
to the applicable vesting date of such shares. The Common Stock purchased by
Mountaingate and Mr. Weber will vest as follows: 50% (aggregating 1,750,000
shares) on April 1, 1996, 25% (aggregating 875,000 shares) on June 30, 1996,
and 25% (aggregating 875,000 shares) on June 30, 1997. Notwithstanding such
vesting schedule, the purchasers thereof are entitled to vote all of such
shares immediately upon the issuance thereof.
LITIGATION AND RELATED MATTERS
In December 1995, the Company's Board of Directors terminated the
employment of Ronald Lightstone and removed him as the Company's Chairman of
the Board. As of the date of this Prospectus, Mr. Lightstone remains a member
of the Company's Board of Directors. On January 4, 1996, the Company
instituted legal proceedings against Mr. Lightstone in Superior Court of the
State of California, County of Los Angeles (the "California Superior Court"),
seeking, among other relief, compensatory damages arising out alleged breaches
by Mr. Lightstone of his fiduciary duties to the Company, rescission of the
Stock Purchase Agreement and related documents executed in connection with Mr.
Lightstone's purchase in November 1995 of 1,500,000 shares of the Company's
Common Stock (and the cancellation of such shares), declaratory relief with
respect to the Company's rights and duties and the terms of Mr. Lightstone's
employment, and return of certain payments made by the Company to Mr.
Lightstone during the terms of his employment.
In January 1996, Mr. Lightstone filed a cross-complaint in the
California Superior Court against the Company and Irwin Meyer, the Company's
President and Chief Executive Officer, seeking an unspecified amount for
damages in excess of $3,000,000 for breach of an alleged written employment
agreement. Mr. Lightstone contends, among other matters, that the terms of
his employment by the Company are governed by a written agreement between him
and the Company and that, pursuant to such agreement, his employment was
wrongfully terminated by the Company. The Company denies that a binding
written employment agreement was entered into with Mr. Lightstone, alleging
instead that the agreement to which Mr. Lightstone refers was never properly
authorized and was expressly rejected by the Company's Board of Directors at a
meeting of the Board. See "Management" and "Stock Purchases" under this
caption.
The Company and its affiliates have agreed to a settlement of all
disputes and litigation with Drew S. Levin, Joseph Cayre (one of the Selling
Stockholders), DSL Entertainment Group, Ltd. ("DSL") and Simply Style
Productions, Inc. (collectively, the DSL Parties). Pursuant to the terms of
the settlement, DSL has agreed to pay the Company an aggregate of $258,000
(subject to increase to $308,000 in the event certain payments are not timely
made to the Company), including $130,000 due to DSL from a third party. Final
payment of all such amounts is due not later than June 30, 1996 (subject to
extension to August 1996 in the event DSL files a registration statement with
respect to an initial public offering of its shares prior to June 30, 1996).
TPEG's right to payment of these amounts is secured by a pledge of shares of
DSL representing a 14.9% interest in DSL. TPEG will retain an additional 5%
interest in DSL, which percentage interest shall be protected against dilution
in the event of an initial public offering of DSL's shares. Pursuant to the
settlement, TPEG has also agreed to cause the cancellation of a $383,000
promissory note of Drew S. Levin currently held by DSL Productions, Inc. (a
subsidiary of the Company). Joseph Cayre will retain ownership of 125,000
shares of the Company's Common Stock which Mr. Cayre received in connection
with the acquisition of DSL Productions, Inc. by the Company in May 1994.
Mr. Cayre's Shares are being registered pursuant to the registration statement
of which this Prospectus is a part.
8
<PAGE> 10
The Company has also agreed in principle to settle the lawsuit
entitledDSL Entertainment, Joint Venture, a California Joint Venture v. DSL
Productions, Inc. In connection with such settlement, the Company has agreed
to pay to DSL Entertainment, Joint Venture, a California Joint Venture
("DSLJV") $50,000 in equal monthly installments of $5,000, to issue to DSLJV
130,000 shares of its Common Stock (the "Kagan Shares"), and to grant to DSLJV
warrants (having a term of two years) to purchase an additional 100,000 shares
of its Common Stock (the "Warrants") for an exercise price equal to the market
price of the Company's Common Stock on the day immediately preceding the date
of issuance of such Warrants. The Kagan Shares and the shares of the Company's
Common Stock underlying the Warrants are being registered pursuant to the
registration statement of which this Prospectus is a part. See "Selling
Stockholders". The settlement of this action is subject to execution by the
parties of a definitive settlement agreement and related documentation.
In February 1996 the Company and Harvey Bibicoff, on behalf of himself
and Bibicoff & Associates, agreed to settle certain disputes which had arisen
under certain agreements pursuant to which the Company had granted options or
other rights to acquire Common Stock to Mr. Bibicoff or Bibicoff & Associates
(the "Bibicoff Option Agreements"). In connection with such settlement, (A)
the Company agreed to grant to Mr. Bibicoff immediately exercisable options
having a term of three years from the date of grant to purchase up to 400,000
shares of Common Stock at an exercise price of $.50 per share, and (B) Mr.
Bibicoff agreed, on behalf of himself and Bibicoff & Associates (i) to waive
any breaches by the Company under any of the Bibicoff Option Agreements prior
to the date of such settlement and (ii) to terminate and cancel the Bibicoff
Option Agreements and all options and other rights granted thereunder to either
of Harvey Bibicoff or Bibicoff & Associates. Immediately prior to such
settlement, Mr. Bibicoff and Bibicoff & Associates collectively held options to
purchase an aggregate of 846,667 shares of Common Stock at exercise prices
ranging from $1.50 to $3.25 and having expiration dates between June 1996 and
February 1998. See "Selling Stockholders."
SELLING STOCKHOLDERS
The Shares which are the subject of this Prospectus are owned by
certain stockholders of the Company or are issuable upon the execution of
certain options and warrants to purchase shares of the Company's Common Stock
or in connection with a proposed settlement of certain litigation between the
Company and a Selling Stockholder, as follows:
<TABLE>
<CAPTION>
Selling Stockholder Number of Shares
------------------- ----------------
<S> <C>
Joseph Cayre (1) 125,000
DSL Entertainment, Joint Venture,
a California Joint Venture (2) 230,000
Michael Levy (3) 55,000
Arthur Bernstein (4) 100,000
Harvey Bibicoff (5) 400,000
</TABLE>
_______________________________
(1) See "Recent Developments -- Litigation and Related Matters". Mr.
Cayre has not held any position or office with the Company or any of
its predecessors or affiliates within the past three years.
(2) The Company has agreed in principle to issue to DSLJV 130,000 of such
shares and to grant DSLJV a warrant to purchase an additional 100,000
of such shares in connection with a proposed settlement of certain
litigation among the Company, DSLJV and others, which settlement is
subject, among other matters, to completion and execution of a
definitive settlement agreement among such parties. See "Recent
Developments -- Litigation and Related Matters".
(3) All such shares are issuable to Mr. Levy upon the exercise of options
granted to him in January 1996, which options have a term of three
years from the date of grant and are currently exercisable at a price
of $.55 per share. Mr. Levy is a director of the Company.
9
<PAGE> 11
(4) All such shares are issuable to Mr. Bernstein upon the exercise of
options granted to him in June 1995, which options have a term of five
years from the date of grant and are exercisable at a price of $.50
per share. Fifty percent (50%) of such options are currently
exercisable, twenty five percent (25%) vest and become exercisable in
June 1996 and twenty five percent (25%) vest and become exercisable in
June 1997. Mr. Bernstein is a Senior Vice President and a director of
the Company.
(5) All such shares are issuable to Mr. Bibicoff upon the exercise of
options granted to him in February 1996 in connection with a
settlement of certain disputes between the Company and Mr. Bibicoff.
See "Recent Developments -- Litigation and Related Matters."
PLAN OF DISTRIBUTION
It is anticipated that the Selling Stockholders will offer the Shares
(when and if issued in the case of Shares underlying options and warrants and
Shares proposed to be issued as described above) for sale from time to time at
the prices prevailing on the NASDAQ Stock Market or the Boston Stock Exchange
on the date of sale. The Selling Stockholders also may sell the Shares
privately, either directly to purchasers or through a broker or brokers. The
Company shall take such actions, including the filing of such post-effective
amendments to the Registration Statement of which this Prospectus is a part
and/or preparing supplements to this Prospectus, as shall be required to enable
the Selling Stockholders lawfully to sell the Shares for a period of two years
from the date hereof [or such lesser period as shall be required to complete the
distribution of the Shares as described herein.]
All selling and other expenses incurred by the Selling Stockholders
will be borne by the Selling Stockholders. All costs, expenses and fees
incurred in connection with the registration of the Shares, including but not
limited to all registration and filing fees, printing expenses and fees of the
Company's counsel and accountants are being borne by the Company.
The Selling Stockholders, and the brokers through whom sales of the
Shares are made, may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act of 1933, as amended. In addition, any
profits realized by the Selling Stockholders or such brokers may be deemed to
be underwriting commissions.
The Company has informed the Selling Stockholders that the
anti-manipulative Rules 10b-6 and 10b-7 promulgated under the Exchange Act may
apply to his sales of Shares and has furnished the Selling Stockholders with a
copy of these rules and has informed the Selling Stockholders of the need for
delivery of a copy of this Prospectus.
There is no assurance that the Selling Stockholders will offer for
sale or sell any or all of the Shares offered by any of them pursuant to this
Prospectus. In the event Shares are sold by the Selling Stockholders, the
Company will receive none of the proceeds from any such sale.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The Company's Bylaws provide that the Company will indemnify its
directors and executive officers and may indemnify its other officers,
employees and agents to the fullest extent permitted by Delaware law. The
Company is also empowered under its Bylaws to enter into indemnification
agreements with any of such persons and to purchase insurance on behalf of any
person whom it is required or permitted to indemnify.
In addition, the Company's Certificate of Incorporation provides that,
pursuant to Delaware law, its directors shall not be liable for monetary
damages for breach of the directors' fiduciary duty of care to the Company and
its stockholders. Such provision does not eliminate the duty of care and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of non-monetary relief will remain available under Delaware law. In addition,
each director will continue to be subject to liability for breach of the
director's duty of loyalty to the Company, for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
actions leading to improper personal benefit to the director, and for payment
of dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware
10
<PAGE> 12
law. The provision also does not affect a director's responsibilities under
any other law, such as the federal securities laws or federal environmental
laws.
At present, there is no pending litigation or proceeding involving a
director, officer, employee or other agent of the Company as to which
indemnification is being sought nor is the Company aware of any threatened
litigation that may result in claims for indemnification by any director,
officer, employee or other agent.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for
the Company by Dempsey & Johnson P.C., Los Angeles, California.
EXPERTS
The consolidated balance sheets at June 30, 1994 and 1995 of the
Company and the consolidated statements of operations, cash flows and
stockholders' equity for the years ended June 30, 1994 and 1995 included in the
Company's Annual Report on Form 10-K for its fiscal year ended June 30, 1995
and incorporated by reference in this Prospectus and the Registration
Statement, have been included herein in reliance on the report of Kellogg &
Andelson, independent accountants, given on the authority of that firm as
experts in accounting and auditing.
11
<PAGE> 13
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses in connection
with the issuance and distribution of the securities being registered:
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . $ 107.28
Legal fees and expenses . . . . . . . . . $6,000
Printing and filing expenses . . . . . . $2,000
Miscellaneous . . . . . . . . . . . . . . $1,000
Total . . . . . . . . . . . . . . . . . . $9,107.28
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
permits a corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation), by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
A corporation also may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation. However, in such an action by or in
behalf of a corporation, no indemnification may be made in respect of any
claim, issue or matter as to which the person is adjudged liable to the
corporation unless and only to the extent that the court determines that,
despite the adjudication of liability but in view of all the circumstances, the
person is fairly and reasonably entitled to indemnity for such expenses which
the court shall deem proper.
In addition, the indemnification provided by Section 145 shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under any bylaw, agreement, vote of shareholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
The Company's Certificate of Incorporation provides that the Company
shall indemnify, in the manner and to the full extent permitted by law, any
person (or the estate of any person) who was or is a party to, or is threatened
to be made a party to, any threatened, pending or completed action, suit or
proceeding, whether or not by or in the right of the Company and whether civil,
criminal, administrative, investigative or otherwise, by reason of the fact
that such person is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or enterprise. The Company's Certificate of Incorporation also provides
that the indemnification provided thereunder shall not be deemed exclusive of
any other rights to which any person seeking indemnification from the Company
may be entitled under any agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
II-1
<PAGE> 14
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
5.1 Opinion of Dempsey & Johnson, P.C.
10.1 Letter Agreement with respect to settlement of litigation involving,
among others, the Company, DSL Entertainment Group, Ltd.,
Drew S. Levin and Joseph Cayre.
10.2 Stock Purchase Agreement and Promissory Note dated as of November
14, 1995 between the Company and Mountaingate (incorporated by
reference to Exhibit 10.23 to the Company's Quarterly Report on Form
10-Q for its fiscal quarter ended December 31, 1995).
10.3 Stock Purchase Agreement and Promissory Note dated as of November
14, 1995 between the Company and Charles Weber (incorporated
by reference to Exhibit 10.24 to the Company's Quarterly Report on
Form 10-Q for its fiscal quarter ended December 31, 1995).
10.4 Stock Purchase Agreement and Promissory Note dated as of January
25, 1996 between the Company and Charles Weber.
10.5 Stock Option Agreement dated as of February 15, 1996 between the
Company and Harvey Bibicoff.
23.1 Consent of Dempsey & Johnson, P.C. (included in Exhibit 5.1)
23.2* Consent of Kellogg & Andelson
24.1* Powers of Attorney (see page II-3 of this Registration Statement)
</TABLE>
__________________________
* Previously filed
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for the purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this Registration Statement shall be deemed to be
a new Registration Statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) To deliver or cause to be delivered with the prospectus, to
each person to whom the prospectus is sent or given, the latest annual report
to security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X is not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described in Item 15, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable. In the event
that a claim for indemnification against such liabilities
II-2
<PAGE> 15
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-3
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Beverly Hills, State of California, on March 7,
1996.
THE PRODUCERS ENTERTAINMENT GROUP LTD.
By: /s/ Irwin Meyer
-------------------------------------
Irwin Meyer
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed on the 7th day
of March, 1996 by the following persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Irwin Meyer President, Chief Executive
- ------------------------------- Officer (Principal Executive
Irwin Meyer Officer) and Director
/s/ Charles J. Weber* Chairman of the Board
- ------------------------------ (Principal Financial and
Charles J. Weber Accounting Officer) and
Director
/s/ Arthur Bernstein* Senior Vice President
- ----------------------------- and Director
Arthur Bernstein
/s/ Michael Levy*
- ------------------------------ Director
Michael Levy
/s/ Ronald Lightstone*
- ------------------------------ Director
Ronald Lightstone
__________________
* By: /s/ Irwin Meyer
---------------------------------
Irwin Meyer
Attorney-in-fact
</TABLE>
II-4
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Document Page
-------- ----
<S> <C> <C>
5.1 Opinion of Dempsey & Johnson, P.C.
10.1 Letter Agreement with respect to settlement of litigation involving,
among others, the Company, DSL Entertainment Group, Ltd., Drew S.
Levin and Joseph Cayre.
10.2 Stock Purchase Agreement and Promissory Note dated as of November
14, 1995 between the Company and Mountaingate (incorporated by
reference to Exhibit 10.23 to the Company's Quarterly Report on
Form 10-Q for its fiscal quarter ended December 31, 1995).
10.3 Stock Purchase Agreement and Promissory Note dated as of November
14, 1995 between the Company and Charles Weber (incorporated by
reference to Exhibit 10.24 to the Company's Quarterly Report
on Form 10-Q for its fiscal quarter ended December 31, 1995).
10.4 Stock Purchase Agreement and Promissory Note dated as of January
25, 1996 between the Company and Charles Weber.
10.5 Stock Option Agreement dated as of February 15, 1996 between
the Company and Harvey Bibicoff.
23.1 Consent of Dempsey & Johnson, P.C. (included in Exhibit 5.1)
23.2* Consent of Kellogg & Andelson
24.1* Powers of Attorney
</TABLE>
__________________________
* Previously filed
<PAGE> 1
EXHIBIT 5.1
DEMPSEY & JOHNSON, P.C.
1925 CENTURY PARK EAST, SUITE 2350
LOS ANGELES, CALIFORNIA 90067-2724
TELEPHONE: (310) 551-2300
FACSIMILE: (310) 556-2021
Of Counsel: MICHAEL A. CROSS Direct Dial No. (310) 551-2345
March 6, 1996
The Producers Entertainment Group Ltd.
9150 Wilshire Boulevard
Suite 205
Beverly Hills, California 90212
Re: REGISTRATION STATEMENT ON FORM S-3
Gentlemen:
We have acted as counsel to The Producers Entertainment Group
Ltd., a Delaware corporation (the "Company"), with respect to certain matters
relating to the registration statement on Form S-3 (the "Registration
Statement"), and amendments thereto, filed with the Securities and Exchange
Commission for the purpose of registering for sale under the Securities Act of
1933, as amended, 125,000 shares of Company Common Stock to be owned by one Joe
Cayre.
Based on our review of the Restated Certificate of
Incorporation of the Company, the By-Laws of the Company, the minutes of
meetings of the Board of Directors and of the stockholders of the Company and
written consents in lieu of such meetings, the stock ledger of the Company and
such other documents and records as we have deemed necessary and appropriate,
we are of the opinion that the Common Stock has been duly authorized and
validly issued and is fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement including the amendments thereto and to the reference to
us under the caption "Legal Matters" in the prospectus which is part of the
Registration Statement.
Very truly yours,
/s/ DEMPSEY, & JOHNSON
DEMPSEY, & JOHNSON, P.C.
MDD/srs
<PAGE> 1
EXHIBIT 10.4
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), by and between THE
PRODUCERS ENTERTAINMENT GROUP, LTD. (the "Company"), a Delaware corporation,
and Charles Weber (the "Executive"), dated as of the 25th day of January, 1996.
W I T N E S S E T H
-------------------
WHEREAS, the County employs the Executive and desires to provide to the
Executive the opportunity to purchase shares of the Company's common stock, par
value $.001 per share (the "Common Stock"), in consideration of the past
services rendered by the Executive, and other good and valuable consideration
as provided herein; and
WHEREAS, the Executive desires to purchase certain shares of Common
Stock from the Company;
NOW THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties agree as follows:
1. Sale And Purchase of Common Stock. Subject to the terms and
conditions of this Agreement and the Note (as defined below), (i) the Company
hereby sells to the Executive One Million Four Hundred Thousand (1,400,000)
shares of Common Stock (the "Shares") at a purchase price of $0.55 per share
(the "Purchase Price"), (ii) and the Executive hereby purchases such Shares
from the Company for such Purchase Price. The Executive shall pay the Purchase
Price by issuing to the Company, concurrently with the execution and delivery
of this Agreement, a promissory note substantially in the form attached as
Exhibit A hereto (the "Note"), and the Executive's sole liability to make
payments to the Company under this Agreement shall be his liability under the
Note. The Shares are duly authorized, validly issued, fully paid and
nonassessable, but the Shares are subject to the terms and conditions of this
Agreement. The Company issues concurrently herewith a duly executed
certificate evidencing the Shares purchased hereunder, with the legends
provided for herein, in exchange for the delivery by the Executive of the duly
executed Note.
2. Pledge.
(a) As security for the fulfillment of his obligations under
the Note, the Executive hereby pledges, hypothecates, assigns, transfers, set
over, delivers and grants to the Company a security interest and (i) the
Shares, (ii) all dividends, interest, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of the Shares, (iii) subject to the provisions of
Section 4 hereof, all rights and privileges of the Executive with respect to
the Shares and the other property referred to in clause (ii), and (iv) subject
to the provisions of Section 4 hereof, all proceeds of any of the foregoing and
any property of any character whatsoever into which any of the foregoing may be
converted (all items referrred to in clauses (i) through (iv) above being
transfer hereinafter collectively called the "Pledged Collateral").
TO HAVE AND TO HOLD the Pledged Collateral, together with all rights,
title, interests, powers, privileges and preferences pertaining or incidential
thereto, unto the Company, its successors and assigns, forever, subject,
however, to the terms, covenants and conditions hereinafter set forth; and
provided that such Pledged Collateral or a proportional amount thereof (based on
the ratio of the payments or principal on the Note to the total Purchase Price)
shall be released by the Company and returned to the Executive, without
representation to recourse, as the Executive shall make the payments required
to be made under the Note.
(b) the Executive hereby delivers, and agrees promptly to
deliver, to the Company any and all Pledged Collateral, and any and all
certificates or other instruments or documents
<PAGE> 2
representing any of the Pledged Collateral, which shall be in or come into the
Executive's possession during the term of this Agreement.
(c) If the Executive shall not make any payment required to
be made on the Note at the time such payment is due, the Company may sell,
assign, transfer, endorse and deliver all, from time to time, any part of the
Pledged Collateral to any third party or to the Company at a price per Share
equal to $770,000.00 or, if less than $0.55 per share, at the fair market
value of a Share as determined in good faith by the Company. The proceeds of
the sale of all or any part of the Pledged Collateral shall be applied by the
Company first to accrued interest then to the then-outstanding principal amount
of the Note. Any remaining amount from such sale shall be paid over to the
Executive.
3. Executive's Representations; Sources of Funds.
(a) The Executive represents to the Company that he is
purchasing the Shares being purchased hereunder for his own account and not as
nominee or agent for any other person and not with a view to, or for offer or
sale in connection with, any distribution thereof (within the meaning of the
Securities Act of 1933 (the "Securities Act") which would be in violation of
the securities laws of the United States of America or any state thereof,
without prejudice, however, to his rights at all times to sell or otherwise
dispose of all or any part of said Shares under an effective registration
statement under the Securities Act, or under an exemption from such
registration available under the Securities Act and subject, nevertheless, to
the disposition of his property being at all times within his control (subject
to the restrictions of this Agreement).
(b) The Executive further represents that he is
knowledgeable, sophisticated and experienced in business and financial
matters; that he fully understands the limitations on transfer described
herein; that he is able to bear the economic risks of his investment in the
Shares and is presently able to afford the complete loss of such investment;
and that he has been afforded access to information about the Company, the
Company's financial condition, results of operations, business, property,
management and prospects sufficient to enable him to evaluate his investment
in the Shares.
(c) The Executive further represents that he is an
"accredited investor" as such term is defined in Rule (501(a) of Regulation D
under the Securities Act.
(d) The Purchaser will not Transfer the Shares in violation
of any federal or state securities law. For purposes of this Agreement,
"Transfer" shall mean any transfer, sale, assignment, pledge or other
disposition. If the Purchaser desires to sell or otherwise dispose of all or
any part of the Shares (other than a Transfer to the Company or a Transfer
pursuant to an effective registration statement under the Securities Act and
pursuant to registration or qualification under any applicable state securities
laws), if requested by the Company, it will deliver to the Company an opinion
of counsel, reasonably in form and substance to the Company, that an exemption
from registration is available. The stock certificate for the Shares shall
bear an appropriate legend reflecting such restriction.
4. Restrictions Applicable to the Shares.
(a) Unless vested earlier upon the happening of certain
events, as provided in section 4(c) hereof, the Purchaser's rights to retain
the Shares free of any rights of the Company with respect to the Shares (other
than the Company's rights to such portion of the Shares that is pledged as
security for the Note) shall vest in accordance with the following schedule if
the Purchaser is engaged to render services to the Company pursuant to the
Production Agreement between the Purchaser and Company (the "Production
Agreement") as of such date;
<PAGE> 3
<TABLE>
<CAPTION>
CUMULATIVE PERCENTAGE OF SHARES DATE OF VESTING
------------------------------- ---------------
<S> <C>
50% April 1, 1996
75% June 30, 1996
100% June 30, 1997
</TABLE>
Until the Shares have vested, the Purchaser may not Transfer the Shares and the
stock certificate representing the Shares shall bear an appropriate legend to
that effect.
(b) All cash dividends payable with respect to the Shares
will be paid directly to the Purchaser at the same time that dividends are paid
with respect to all other shares of Common Stock. The Purchaser will have the
right to vote the Shares.
(c) The Shares will be subject to the following provisions
upon a Change in Control of the Company or upon any other termination of the
Purchaser's engagement by the Company under the Production Agreement which may
occur before the Shares have vested in accordance with Section 4(a).
(i) Change in Control. Upon a Change in Control during the
Purchaser's engagement by the Company, all of the Shares which
have not vested in accordance with Section 4(a) shall
immediately vest in, and shall not be subject to forfeiture by,
the Purchaser. For purposes of this Agreement, a Change in
Control shall have the meaning provided in the Production
Agreement.
(ii) Death or Disability. If the Executive's employment by the
Company is terminated by reason of his death or Disability, all
of the Shares which have not previously vested in accordance
with Section 4(a) or Section 4(c)(i) shall immediately vest in,
and shall not be subject to forfeiture by, the Executive. For
purposes of this Agreement, "Disability" shall have the meaning
provided in the Employment Agreement.
(iii) Termination by the Company without Cause or by the Executive
for Good Reason or upon Retirement. If the Company terminates
the Executive's employment without Cause or if the Executive
terminates his employment for Good Reason or upon Retirement,
all of the Shares which have not vested in accordance with
Section 4(a) or Section 4(c)(i) shall immediately vest in, and
shall not be subject to forfeiture by, the Executive. For
purposes of this Agreement, "Cause" and "Good Reason" shall
have the meanings provided in the Employment Agreement and
"Retirement" shall mean retirement in accordance with any
retirement plan or policy of the Company.
(iv) Other Termination of Employment. If the Executive's
employment terminates before a Change in Control shall have
occurred for any reason other than death, Disability,
termination by the Company other than for Cause or termination
by the Executive for Good Reason or upon
<PAGE> 4
Retirement, then the Executive shall forfeit to the Company
the Shares which have not previously vested in accordance
with Section 4(a), and the Executive's obligation under the
Note with respect to the payment of the Purchase Price (at
$0.50 per share plus interest accrued thereon in accordance
with the terms of the Note) for the number of Shares so
forfeited shall be forgiven by the Company and the Executive
shall have no further liability under the Note with respect to
the amount so forgiven.
5. Successors.
This Agreement is personal to the Executive and, without the prior
written consent of the Company, shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of the Company and its successors.
6. Miscellaneous.
(a) Applicable Law. This Agreement shall be governed by
and construed in accordance with laws of New York, applied without reference to
principles of conflict of laws.
(b) Amendments. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto
or their respective successors and legal representatives.
(c) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered or mailed to the other party by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Charles Weber
120 S. Carmelina Avenue
Los Angeles, CA 90049
If to the Company:
The Producers Entertainment Group Ltd.
9150 Wilshire Boulevard, Suite 205
Beverly Hills, CA 90212
or to such other address as either party shall have furnished to the other in
writing in accordance herewith, except that notice of change of address shall
be effective only when actually received by the addressee.
(d) Severability. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
(e) Waiver. Waiver by any party hereto of any breach or
default by any other party of any of the terms of this Agreement shall not
operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived.
<PAGE> 5
(f) Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters referred to
herein other than the Employment Agreement, and no other agreement, verbal or
otherwise, shall be binding as between the parties unless it is in writing and
signed by the party against whom enforcement is sought. All prior and
contemporaneous agreements and understandings between the parties with respect
to the subject matter of this Agreement other than the Employment Agreement are
superseded by this Agreement.
(g) Survival. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
(h) Captions and References. The captions of the Agreement
are not part of the provisions hereof and shall have no force or effect.
References in this Agreement to a section number are references to sections of
the Agreement unles otherwise specified.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and
the Company has caused this Agreement to be duly executed in its name on its
behalf all as of the day and year first above written.
THE PRODUCERS ENTERTAINMENT
GROUP LTD.
By:
--------------------------
Its: President and CEO
-------------------------
EXECUTIVE
Charles Weber
------------------------------
<PAGE> 6
EXHIBIT A
PROMISSORY NOTE
Los Angeles, California
$_____________________ ______________ __, 19__
FOR VALUE RECEIVED, the undersigned, CHARLES WEBER, (the "Promisor"),
hereby promises to pay to the order of THE PRODUCERS ENTERTAINMENT GROUP LTD.,
a Delaware corporation or its successors (the "Holder"), the principal sum of
SEVEN HUNDRED SEVENTY THOUSAND DOLLARS ($770,000.00) or such lesser amount as
may then be the unpaid principal balance hereof (the "Principal Amount"),
together with interest thereon, payable by certified or official bank check or
wire transfer of immediately available funds to an account designated by the
Holder in accordance with the following schedule: twelve and one-half pecent
(12-1/2%) of the Principal Amount plus all accrued but unpaid interest thereon
will be payable on April 1, 1997, twelve and one-half percent (12-1/2%) of the
Principal Amount (as calculated without regard to any prior payments thereof)
plus all accrued but unpaid interest thereon will be payable on October 1,
1998, and the balance of the Principal Amount plus all accrued but unpaid
interest thereon will be payable on October 1, 2000.
The Promisor promises to pay interest on the Principal Amount of this
promissory note (this "Note") for the date hereof until such Principal Amount
is paid in full at the fixed rate of 7% per annum compounded semiannually,
such interest payable in accordance with the foregoing schedule; provided,
however, that any Principal Amount hereof not paid when due and, to the fullest
extent permitted by applicable law, any overdue interest shall bear interest at
a rate per annum equal to 10% (after, as well as before, any judgment), payable
on demand. Interest shall be calculated on the basis of a 360-day year for the
actual number of days elapsed.
This Note is issued in connection with the transaction contemplated by
the Stock Purchase Agreement, dated as of the date hereof, between the Promisor
and the Holder.
This Note shall be binding upon the Promisor and his successors and
shall inure to the benefit of the Promisor and his successors; provided,
however, that the Promisor shall be personally liable to the Holder only with
respect to twenty-five percent (25%) of the portion of the Principal Amount
which shall remain unpaid at any time, plus accrued but unpaid interest
thereon. The Promisor shall not have any personal liability to the Company
with respect to the payment of the remaining portion of the Principal Amount
of accrued but unpaid interest thereon.
The Promisor hereby waives presentment, demand, notice, protest and all
other demands and notices in connection with the delivery, acceptance,
performance or enforcement of this Note.
The provisions of this Note may be amended, modified, changed or
terminated only by an agreement in writing signed by the Promisor and the
Holder.
If at any time the indebtedness evidenced by this Note is collected
through legal proceedings or this Note is placed in the hands of attorneys for
collection, the Promisor hereby agrees to pay all costs and expenses (including
attorneys' fees) incurred by the Holder in collecting or attempting to collect
such indebtedness.
If any payment on this Note becomes due and payable on a day other than
a Business Day (as hereinafter defined), the maturity thereof shall be extended
to the immediately following Business Day and interest shall continue to accrue
during such extension. "Business Day" means any day other than a Saturday or
<PAGE> 7
Sunday or any other day on which commercial banks in New York, New York are
authorized or obligated by law to close.
This Note is non-transferable except to a person or entity that succeeds
(by transfer of assets, other reorganization or otherwise) to all or
substantially all of the business of Holder.
THE PROMISOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHT HE MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO
THIS NOTE AND AGREES THAT ANY SUCH DISPUTES SHALL BE TRIED BEFORE A JUDGE
SITTING WITHOUT A JURY.
THIS NOTE IS GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF CALIFORNIA WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
--------------------------
Charles Weber
<PAGE> 1
EXHIBIT 10.5
[FORM OF STOCK OPTION AGREEMENT]
STOCK OPTION AGREEMENT
This Stock Option Agreement is made and entered into as of the
15TH day of FEBRUARY, 1996, by and between THE PRODUCERS ENTERTAINMENT GROUP
LTD., a Delaware corporation ("Company") and HARVEY BIBICOFF ("Grantee").
1. Grant of Option. The Company wishing to provide Grantee
an opportunity to purchase shares of the Company's Common Stock par value,
$.001 per share ("Common Stock") hereby grants to Grantee and Grantee hereby
accepts an option to purchase 400,000 shares of Common Stock ("Option Shares")
which shall become vested immediately at a price of $0.50 per share ("Exercise
Price") on the terms and conditions stated herein.
2. Option Dates, Term of Option. Grantee shall be entitled
to purchase the Option Shares in whole or in part at any time and from time to
time prior to 5:00 p.m. Los Angeles time on the third anniversary from the date
on which the shares become vested.
3. Adjustments.
3.1 Subdivisions of Combinations. If, at any time
during the term hereof, the number of shares of Common Stock outstanding is
increased by a stock dividend payable in shares of Common Stock or by a
subdivision of split-up of shares of Common Stock, then, immediately following
the record date fixed for the determination of holders of Common Stock subject
to such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Option shall be increased and the Exercise
Price shall be decreased in proportion to such increase in outstanding shares.
If, at any time during the term hereof, the number of shares of Common Stock
outstanding is decreased by a combination of the outstanding shares of Common
Stock, then, immediately following the record day for such combination, the
number of shares of Common Stock issuable upon exercise of this Option shall be
decreased and the Exercise Price shall be increased in proportion to such
decrease in the outstanding shares.
3.2 Reorganization; Merger; Sale of Assets. If any
capital reorganization or reclassification of the capital stock of the Company,
or consolidation or merger of the Company with another corporation, or the sale
of all or substantially all of the Company's assets to another corporation
shall be effected in such a way that holders to Common Stock shall be entitled
to receive stock, securities or assets with respect to or in exchange for
Common Stock, then, as a condition of such
<PAGE> 2
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the holder of this Option shall
thereafter have the right to purchase and receive, upon exercise of this Option
and payment of the Exercise Price than in effect in lieu of the shares of the
Common Stock then subject to this Option such shares of stock, securities or
assets to which a holder of Common Stock deliverable upon exercise of this
Option would have been entitled on such capital reorganization,
reclassification, consolidation, merger or sale if this Option had been
exercised immediately before such event. In any such case appropriate
provision shall be made with respect to the rights and interests of the holder
of this Option to the end that the provisions hereof (including without
limitation provisions for adjustments of the Exercise Price and of the number
of shares purchasable upon the exercises of this Option) shall thereafter be
applicable, as nearly as may be practicable, in relation to any shares of
stock, securities or assets thereafter deliverable upon the exercise hereof.
3.3 Determination of Issuance Date in Certain Events. In
case the Company shall not set a record date of the holders of its Common Stock
with respect to a dividend or other distribution payable in Common Stock or a
subdivision, combination, reorganization, merger or other event specified in
this Section 3, then the record date shall be deemed to be the date of the
issuance of the shares of Common Stock deemed to have been issued or the
effective date of such subdivision, combination, reorganization, merger or
other event (as the case may be) specified in this Section 3.
3.4 Minimum Adjustment. The Exercise Price shall be subject
to adjustment from time to time as hereinabove provided. No adjustment shall
be made in an amount less than $.01 per share in the case of an adjustment to
the Exercise Price of one tenth of a share in the case of an adjustment to the
number or shares purchasable hereunder, but any such lesser adjustment shall be
carried forward and shall be made at the time and together with the next
subsequent adjustment which together with any adjustments so carried forward
shall amount to $.01 per share or more or one tenth of a share, as the case may
be; provided, however, no fractional shares shall be issuable hereunder. The
adjustment provisions hereunder shall similarly apply to successive
combinations, stock splits, reorganizations, reclassifications, consolidations
and mergers.
4. Registration of Company Options. Company shall file a
registration statement covering the shares of the underlying Company Options
granted to Grantee hereunder in the company's next registration statement.
Furthermore, Company shall use its best efforts to have said registration
statement become effective and to maintain such effectiveness, if necessary,
throughout the life of the All Options.
2
<PAGE> 3
5. Mechanics. This Option may be exercised by the Grantee by
giving written notice of exercise to the Company specifying the number of
shares to be purchased and the total purchase price, accompanied by payment of
such purchase price, in cash or by check payable to Company.
6. Withholding Taxes. Company shall have the right to require
Grantee to pay to Company any and all sums equal to any taxes which Company may
be required to withhold by reason of the Option or the Option Shares.
7. Rights Before Issuance and Delivery. Grantee shall not be
entitled to the privileges of stock ownership with respect to the Option Shares
unless and until such shares have been issued to Grantee as fully paid shares.
8. Sale or Disposition of Option Shares.
8.1 By accepting this Option, the Grantee represents that,
unless a registration statement under the Securities Act of 1933 is in effect
as to the Option Shares purchased upon any exercise of this Option, any and all
Option Shares so purchased shall be acquired for Grantee's account and not for
sale or for distribution, and each notice of the exercise of any portion of
this Option shall be accompanied by a representation and warranty in writing,
signed by Grantee that the Option Shares are being so acquired in good faith
for Grantee's account and not for sale or distribution.
8.2 All stock certificates representing shares of Option
Stock, if the Option is exercised, may bear a legend in a form substantially
similar to the following:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE BEEN ISSUED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR REGISTRATION
OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES
LAWS AND MAY NOT BE TRANSFERRED OR SOLD, IN THE
ABSENCE OF SUCH REGISTRATION AND QUALIFICATION OR
UNLESS AN EXEMPTION THEREFROM IS AVAILABLE."
9. Employment Obligation. Nothing in this Agreement shall be
construed to confer upon the Grantee any right to continued engagement by the
Company or its affiliates or to restrict in any way the right of the Company or
its affiliates to terminate Grantee's engagement or modify the terms and
conditions thereof.
10. Notices. Any notice to be give to the Company shall be
addressed to the Company at its principal office and any notice to be given to
the Grantee shall be addressed to it at the address given beneath the signature
hereto or at such other
3
<PAGE> 4
address as the Grantee may hereafter designate in writing to the Company. Any
such notice shall be deemed duly given when personally delivered or deposited
in the United States mail.
11. Applicable Law and Severability. This document shall, in all
respects, be governed by the laws of the State of California applicable to
agreements executed and to be wholly performed within the State of California.
Nothing contained herein shall be construed so as to require the commission of
any act contrary to law, and wherever there is any conflict between any
provision contained herein and any present or future statute, law, ordinance or
regulation contrary to which the parties have no legal right to contract, the
latter shall prevail but the provision of this document which is affected shall
be curtailed and limited only to the extent necessary to bring it within the
requirements of the law.
IN WITNESS WHEREOF, the parties have entered into this Stock
Option Agreement on the day and year first written above.
HARVEY BIBICOFF
______________________________
THE PRODUCERS ENTERTAINMENT GROUP LTD.,
a Delaware corporation
By_______________________________
9150 Wilshire Boulevard, Ste 205
Beverly Hills, CA 90212
4
<PAGE> 5
[FORM OF FINAL AGREEMENT]
February 15, 1996
Mr. Harvey Bibicoff
4101 Clarinda Drive
Tarzana, CA 91356
RE: THE PRODUCERS ENTERTAINMENT GROUP LTD. \ STOCK OPTION
AGREEMENT
Dear Harvey:
Reference is hereby made to all Stock Purchase Agreements entered into by
either Harvey Bibicoff ("Bibicoff") or Bibicoff & Associates ("B&A"), on one
hand, and either The Producers Entertainment Group Ltd. ("TPEG") or Ventura
Motion Picture Group Ltd. ("VMPG"), on the other, on various dates prior to the
date hereof (the "Existing Agreements").
In consideration of the mutual covenants and promises contained herein, as well
as, other good and valuable consideration, the sufficiency and receipt of which
is hereby acknowledged, Bibicoff and B&A agree to immediately terminate the
Existing Agreements and all rights granted to either Bibicoff or B&A
thereunder.
Contemporaneously, TPEG shall grant to Bibicoff the option to purchase 400,000
shares of TPEG common stock pursuant to a certain Stock Option Agreement Dated
February 15, 1996, attached hereto, and by this reference made a part hereof.
Bibicoff, B&A, TPEG and VMPG each hereby and forever release the other from and
against all claims, demands, or causes of action which were or could have been
asserted against the other party in connection with the Existing Agreements.
This release shall extend to the officers, directors, employees, attorneys,
agents, parents, affiliates, subsidiaries, successors and assigns of each of
the parties.
The parties acknowledge they have been advised by their legal counsel
of California Civil Code Section 1542, which provides as follows:
5
<PAGE> 6
Mr. Bibicoff
February 15, 1996
Page 2
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
If the aforementioned is accepted and agreed to, please indicate such by
affixing your signature as indicated below, and together with ours shall
represent the complete Agreement.
Sincerely,
THE PRODUCERS ENTERTAINMENT GROUP LTD.
Arthur H. Bernstein
Accepted & Agreed:
Bibicoff & Associates
By:________________________
Its:_______________________
___________________________
Harvey Bibicoff
/AHB
cc: Irwin Meyer
Charles Weber
6
