SALE AND PURCHASE AGREEMENT
among
1. LIVE Entertainment International Inc. (formerly organized and
existing under the laws of the Country of the Netherlands
Antilles as LEI-IVE Entertainment N.V.), a private company
incorporated and existing under the laws of the State of
Delaware, with registered seat in 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxx of New Castle, Delaware, and having its
principal place of business in Xxx Xxxx, Xxxxxxxxxx
00000,00000 Xxxxxxx Way, Suite 500
duly represented by its Senior Vice President
- hereinafter referred to as "Seller" -
2. Apricot Computer Gesellschaft mbH, a private company with limited
liability, incorporated and existing under the laws of
Germany, with registered seat in Heusenstamm and having its
principal place of business in 63150 Heusenstamm, Berliner
Str. 2-6, registered with the Commercial Register of the
Local Court Offenbach/Main under HRB 5512.
duly represented by its Managing Director
- hereinafter referred to as "Purchaser" -
3. VCL/Carolco Communications B.V., a private company with limited
liability, incorporated and existing under the laws of The
Netherlands, with registered seat in Rotterdam and having
its place of business in 3055 AE Xxxxxxxxx, Xxxxxxxxxx 000,
registered in the Commercial Register of the Chamber of
Commerce and Industries in Rotterdam under No. 183 242,
duly represented by its Managing Director
- hereinafter referred to as "LIVE B.V." -
4. VCL/Carolco Communications GmbH, a private company with limited
liability, incorporated and existing under the laws of
Germany, with registered seat in Munchen and having its
principal place of business in 00000 Xxxxxx,
Xxxxxx-Xxxxxx-Str. 1, registered with the Commercial
Register of the Local Court Munich under HRB 71394
duly represented by its Managing Director Xxxxxxx Xxxxxx Xxxx
- hereinafter referred to as "VCL" -
5. Xxxxxxx Xxxxxx Xxxx, 0, Xxx Xxxxxx Xxxxxxx, Xxxxx Xxxxx, Xxxxxx
- hereinafter referred to as "Xxxx" -
RECITALS
WHEREAS the parties to this Agreement and LIVE Entertainment Inc.
and LIVE Home Video Inc. have executed that certain Heads of
Agreement dated February 15/16, 1995, setting out the general
terms and conditions of, among other things, the sale and
purchase of the shares held by Seller in LIVE B.V. to Purchaser
and WHEREAS pursuant to the general terms and conditions set
forth in said Heads of Agreement, the parties hereto desire to
enter into this Agreement to govern certain of their rights,
duties and obligations with respect to the sale and purchase of
the shares of LIVE B.V. THEREFORE, the parties hereto enter into
the following Agreement:
Section 1
Object of the Sale and Purchase Agreement
The Seller is the sole shareholder of LIVE B.V., a private
company with limited liability, incorporated and existing under
the laws of The Netherlands, with registered seat in Rotterdam
and having its place of business in 3055 AE Xxxxxxxxx, Xxxxxxxxxx
000, registered in the Commercial Register of the Chamber of
Commerce and Industries in Rotterdam under No. 183 242. LIVE B.V.
has an authorized share capital of 500,000. -- NLG (in words:
Five Hundred Thousand Dutch Guilders. The entire issued share
capital of LIVE B.V. amounts to 100,000.-- NLG (in words: One
Hundred Thousand Dutch Guilders) divided into 1000 shares, each
with a par value of 100.-- NLG (in words: One Hundred Dutch
Guilders) and numbered one to 1000 inclusive. The share capital
of LIVE B.V. is fully paid up.
Section 2
Sale of Shares
(1) The Seller hereby agrees to sell all the issued shares held
by it in LIVE B.V. that are listed in Section 1 above to the
Purchaser, such sale to be effective as of the Closing Date
as defined in Section 4 below, subject to the satisfaction
of the conditions set forth in such Section.
(2) The Purchaser hereby accepts the offer to purchase contained
in Section 2 para (1).
(3) The transfer of the shares shall be effected at the Closing
Date by the signing of a transfer agreement to be signed and
notarized before a Dutch notary public which shall be
governed by the laws of The Netherlands in the form set out in
Exhibit 1
which forms an integral part of this Agreement.
(4) The sale and transfer of the shares shall be subject to the
conditions precedent of (a) the payment of the Purchase Price by
the Purchaser pursuant to Section 3 of this Agreement and (b) the
receipt by Seller of the Initial Purchase Price in the amount of
US $ 4,344,066.-- (in words: US Dollar Four Million Three Hundred
Forty-Four Thousand Sixty-Six) as set out in Section 3 para 2 lit
(a) of the Sale and Assignment of Accounts Receivable Agreement between
Seller, Xxxx and LIVE B.V. of even date herewith, and (c) the compliance
by VCL in all respects with all of VCL's obligations arising prior to the
Closing Date, including payment obligations, under those three (3)
certain Deal Memos, each dated February 16, 1995 between LIVE Film and
Mediaworks Inc. ("LFM") and VCL, relating to the motion pictures titled
"Wagons East!", "The Beans of Egypt, Maine" and "Goldy III: The Magic of
the Golden Bear", as each of the same shall have been restated, amended,
replaced or superseded from time to time, including VCL's unconditional
payment to LFM on or before the Closing Date of a portion of the minimum
guarantee due under each of (i) the aforesaid license of "Wagons East!"
in an aggregate amount not less than US $ 466.666,-- (in words: US Dollar
Four Hundred Sixty-Six Thousand Six Hundred Sixty-Six), (ii) the aforesaid
license of "The Beans of Egypt, Maine" in the amount of US $53,333.-- (in
words: US Dollar Fifty-Three Thousand Three Hundred Thirty-Three), (iii)
the aforesaid license of "Goldy III: The Magic of the Golden Bear" in the
amount of US $ 46,666.-- (in words: US Dollar Forty-Six Thousand Six
Hundred Sixty-Six), and (d) the compliance by VCL in all respects with all
of VCL's obligations arising prior to the Closing Date, including payment
obligations under the LIVE International Video Distribution Agreement
dated as of November 1, 1995, effective retroactively to January 1, 1995
between LFM and VCL, and (e) the compliance by VCL, Purchaser and Xxxx
in all respects with all of their obligations under that certain Agreement
Related to Stock and Receivables Sale of even date herewith, among VCL,
Purchaser, Xxxx, Seller, LIVE B.V., LIVE Entertainment Inc. ("LIVE US")
and LIVE Home Video Inc. ("LHV") (all agreements referred to in lit. (b)
through lit. (e) above being hereinafter referred to as the "Related
Agreements").
(5) The Seller shall be entitled to the profits of the current business year
of LIVE B.V., if any, until the Closing Date and to undistributed
profits, if any, of preceding business years. The Purchaser shall be
entitled to the profits of LIVE B.V., if any, from the Closing Date
until the end of the current business year.
Section 3
Purchase Price
(1) In consideration for the sale and transfer of the shares,
the Purchaser shall pay the sum of US $1 (in words: US
Dollar One), payable on the Closing Date, to Seller ("the
Purchase Price"),:
(2) With respect to the Purchase Price, the Purchaser shall not
have any right of set-off, cross-collateralization or any
right of retention under this Agreement, under the Related
Agreements, or under any other Agreements between Seller and
Purchaser.
Section 4
Closing Date
Subject to the satisfaction of all of the conditions precedent
described in Section 2, para (4) above, the sale and purchase
shall be effective as of November 6, 1995, 12.00 hours, Central
European Time.
Section 5
Representations and Warranties
(1) The Seller represents and warrants that at the Closing Date
(a) LIVE B.V. is a duly incorporated and existing private
company with limited liability under the laws of The
Netherlands;
(b) The share capital of LIVE B.V. is fully paid up;
(c) The Articles of Association of LIVE B.V. which are
attached hereto as
Exhibit 2
are in their presently valid and binding form and no
shareholders' resolutions have been made which would
amend the Articles of Association.
(d) The shares in LIVE B.V. are not pledged, encumbered or
otherwise disposed of and - for the time prior to the
acquisition of the shares in LIVE B.V. by Seller, to
the best of the Seller's knowledge - no third parties
have any rights whatsoever regarding the shares in LIVE
B.V.
(e) The balance sheet of LIVE B.V. as of June 30, 1995,
which is attached hereto as
Exhibit 3,
has been established in accordance with U.S. generally
accepted accounting principles (GAAP) and that no
claims of and liabilities vis-a-vis third parties or
Seller or Seller's subsidiaries or associated companies
exist that are not reflected in such balance sheet.
Seller gives no other representations and warranties
with respect to the balance sheet of LIVE B.V. as of
June 30, 1995. It is specifically understood and agreed
between the parties to this Agreement that Seller in no
event shall be liable for the collectability of the
receivable shown in the balance sheet of LIVE B.V. as
of June 30, 1995, as "Intercompany Receivable - VCL"
and the valuation of LIVE B.V.'s shareholding in VCL
shown in the balance sheet as "Investment in
VCL/Carolco GmbH". Purchaser acknowledges and confirms
that he has positive knowledge of the fact that
pursuant to the Sale and Assignment of Accounts
Receivable Agreement between Seller, Xxxx and LIVE B.V.
of even date herewith, the receivable shown in the
balance sheet of LIVE B.V. as of June 30, 1995 as
"Intercompany Payable - LIVE" has been sold and
assigned to Xxxx.
(f) Subject to the full execution of the Supplementary Deed
referred to in Section 5 para 1 lit (g) below, LIVE
B.V. holds the following shares in VCL, domiciled in
Munich and registered with the Commercial Register of
the Local Court Munich under HRB 71394:
One share in the nominal amount of DM 102,000.-- (in
words: Deutsch Marks One Hundred Two Thousand);
One share in the nominal amount of DM 60,000.-- (in
words: Deutsch Marks Sixty Thousand);
One share in the nominal amount of DM 50,000.-- (in
words: Deutsch Marks Fifty Thousand);
One share in the nominal amount of DM 30,000.-- (in
words: Deutsch Marks Thirty Thousand); and
One share in the nominal amount of DM 1,000.-- (in
words: Deutsch Marks One Thousand).
(g) As of even date herewith, LIVE Entertainment Inc.,
Purchaser, LIVE B.V., Xxxx and Xx. Xxxxxxx Xxxx have signed
before a notary public that certain Supplementary Deed, to inter
alia, clarify the shareholding of Seller and Purchaser in VCL.
Purchaser is aware that such Supplementary Deed requires the
consent of VCL International Leisure B.V. to be in full force and
effect. Seller does not give any representation or warranty
whatsoever as to the willingness of VCL International Leisure
B.V. to consent to Supplementary Deed to clarify the shareholding
in VCL as aforesaid.
(h) No lawsuits or administrative proceedings are pending or - to the
best of the Seller's knowledge - threatened in which LIVE B.V. is a
party.
(i) The present directors of LIVE B.V. will be removed without undue
delay after the signing of this Agreement.
(2) The representations and warranties given in para (1) lit (a) - (i) of
this Section 5 are final and conclusive; Seller does not give any further
representations and warranties.
Section 6
Liability of Seller
(1) In the event that any representation and/or warranty given
in Section 5 of this Agreement is wholly or partly incorrect,
if the Purchaser was not aware of such incorrectness upon
conclusion of this Agreement or if Purchaser's ignorance of
such incorrectness was not the result of gross negligence,
and if Purchaser has incurred any losses through the
incorrectness of such representations and warranties, then
Purchaser, by sending a registered letter setting a deadline of
not less than four weeks upon receipt of such registered
letter by Seller, shall be entitled to demand Seller to comply
with its representations and warranties. In the event that
after the expiration of such deadline, Seller has not complied
with its representations or warranties, Purchaser shall be
entitled solely to demand damages in cash pursuant to the
provisions of the German Civil Code ("Burgerliches Gesetzbuch").
(2) The liability of Seller under this Agreement shall be
limited to the amounts received by Seller from Purchaser
pursuant to Section 3 of this Agreement and to the amounts
received by Seller under Section 3 of the Sale and Assignment of
Accounts Receivable Agreement among Seller, Xxxx and LIVE B.V.
of even date herewith, provided, however, that in no event
the liability of Seller under this Agreement shall exceed the
Purchase Price actually received under this Agreement and under
the Sale and Assignment of Accounts Receivable Agreement minus
any amount actually paid or to be paid by Seller under
Section 6 of the Sale and Assignment of Accounts Receivable
Agreement, i.e. the liability of Seller under both Agreements
shall be limited to the amount received by Seller from the sales
under both Agreements.
(3) In respect of all matters regulated in paras (1) and (2) of
this Section 6, all other statutory and contractual rights,
claims and remedies, including, but not limited to rescission, reduction
of the purchase price, revocation, damages for default, non-performance,
breach of contract ("Positive Vertragsverletzung"), culpa in
contrahendo, or any other legal ground whatsoever, as well as any claims
arising out of the doctrine clausula rebus sic stantibus shall be excluded
to the extent such exclusion is permitted by mandatory law.
(4) In respect of any mutual obligations arising out of this
Agreement and which are not regulated in paras (1) - (2) of
this Section 6, the respective claimant has a right to claim
specific performance or damages for default, non-performance or
for defective performance in accordance with statutory law,
provided this Agreement does not provide otherwise. However,
any rights to rescind or terminate this Agreement under
statutory law shall be excluded.
Section 7
Conditions
(1) Seller, but not Purchaser, shall have the right to waive any
of the conditions precedent to the Closing Date set forth
in Section 2, para (4) above.
(2) In the event that the Closing Date does not occur because of
the failure of any of the conditions precedent to the
Closing Date set forth in Section 2, para (4) above, and in
the event that such failure occurs as a result of the default by
any of Purchaser, VCL, or Xxxx or Apricel: hereunder or under any
of the Related Agreements, then Purchaser shall be deemed to have
defaulted in its obligations hereunder.
(3) In the event that the Closing Date does not occur because of
the failure of any of the conditions precedent to the Closing Date
set forth in Section 2, para (4) above, and in the event that such
failure occurs as a result of the default by any of Seller, LIVE US,
LHV, LFM or LIVE B.V. hereunder or under any of the Related Agreements,
then Seller shall be deemed to have defaulted in its obligation
hereunder.
Section 8
Consultation Rights/
Participation of Seller in In- and Out-of-Court Disputes
(1) From and after the Closing Date, all of the parties hereto
agree to remain reasonably available to consult with the
other parties hereto and to cooperate fully with any
reasonable requests for information from the other parties with
respect to, without limitation, any inquiries, investigations,
claims, demands, suits, actions or other proceedings which have been
brought or which may hereafter be brought by any third party against
any of the parties hereto. None of the parties hereto shall be obligated
to pay or incur any out-of-pocket costs in connection with their
consultation and cooperation obligations pursuant to this Section
8, para (1). Further, the parties hereto agree to provide
each other with all information and to cooperate in the
transaction of all business and legal acts necessary for the
implementation of this Agreement.
(2) Seller shall at its own cost be entitled to participate in
all disputes between Purchaser and third parties, to the
extent that these disputes pertain to the rights of third
parties in the issued shares listed in Section 1 of this Agreement,
or where the dispute could result in any claim for
damages by Purchaser vis-a-vis Seller.
Section 9
Change of Company Name
(1) Purchaser hereby obligates itself to change the company name
of LIVE B.V. after the Closing Date to remove the term
"Carolco" therefrom as soon as is reasonable practical, but
in any event effective and registered on or before March 31, 1996
and to cause the then managing director of LIVE B.V. to register such
name change with the Commercial Register of the Chamber of Commerce
and Industries.
(2) Purchaser shall exercise its corporate powers to cause LIVE B.V.,
and LIVE B.V. and Xxxx hereby obligate themselves, to vote in a
shareholder's meeting to change the company name of VCL to remove
the term "Carolco" therefrom as soon as is reasonable practical, but
in any event effective and registered on or before March 31, 1996 and
to cause the then managing director of VCL to register such name
change with the Commercial Register of the Local Court.
(3) Purchaser, LIVE B.V. and Xxxx herewith acknowledge
explicitly that they are jointly and severally obligated
to indemnify Seller and/or the shareholders of Seller, as the
case may be, from and against any losses, including, but not
limited to the payment of damages, resulting from any
violation of the obligations contained in the foregoing paras
(1) and (2) of this Section 9.
Section 10
Statutory Limitation
(1) All rights of Purchaser vis-a-vis Seller arising from breach
of a representation or warranty given in Section 5 of this
Agreement shall be time-barred 1 year after the Closing
Date. All other rights of Purchaser vis-a-vis Seller arising out
of this Agreement shall be time-barred in accordance with the
relevant statutory provisions of the German Civil Code, but
not earlier than one year after the Closing Date.
(2) All rights of Seller vis-a-vis Purchaser arising out of this
Agreement shall be time-barred in accordance with the relevant
statutory provisions of the German Civil Code, but not earlier
than one year after the Closing Date.
(3) The provisions of the German Civil Code shall apply with
respect to the suspension and interruption of the period of
limitation ("Hemmung oder Unterbrechung der Verjahrung").
Section 11
Costs
Each party shall bear its own costs as well as the cost of its
advisors incurred in connection with the signing and execution of
this Agreement, except for the costs of the notarization of the
transfer of the shares in LIVE B.V, which shall be borne by
Purchaser.
Section 12
Notices
Save as provided otherwise herein, all notices, requests, demands
and other communication required or permitted hereunder shall be
in writing (including facsimile transmissions) and delivered to
the following addressees:
(a) If to Seller:
LIVE Entertainment International Inc.
00000 Xxxxxxx Xxx, Xxxxx 000,
Xxx Xxxx, Xxxxxxxxxx 00000, XXX
Attention: General Counsel
with copy to
Beiten Xxxxxxxxx Xxxxx & Xxxxxxx
Attn: Xx. Xxxxxxx Xxxxxxx/Xx. Xxxxxxx Xxxxxx
Xxxxxxxx. 00
00000 Xxxxxxxxx/Xxxx, Xxxxxxx
(x) If to Purchaser:
Apricot Computer Gesellschaft mbH
Xxxxxxxx Xxx. 0-0,
00000 Xxxxxxxxxxx, Xxxxxxx
Attn: Managing Director
(c) VCL/Carolco Communications X.X.,
Xxxxxxxxxx 000
0000 XX Xxxxxxxxx, Xxx Xxxxxxxxxxx
Attn: Managing Director
with copy to
Xxxxxxx & Xxxxx
Xxxxxxxx 00
0000 XX Xxxxxxxxx, Xxx Xxxxxxxxxxx
Attn: Xx. Xxxx Xxxxxxx
(d) VCL/Carolco Communications GmbH
Xxxxxx-Xxxxxx-Xxx. 0
00000 Xxxxxx, Xxxxxxx
Attn: Managing Director
(e) Xxxxxxx Xxxxxx Xxxx
0, Xxx Xxxxxx Xxxxxxx
Xxxxx Xxxxx, Xxxxxx
with copy to
Xxxxx & Partner
Attn: Xx. Xxxxxxxxx Xxxx
Xxxxxxxx Xxx. 0
00000 Xxxxxxx, Xxxxxxx
or at such other place or places or to such other person or
persons as such party shall designate by 7 (in words: seven)
days' prior written notice to the other parties hereto.
Section 13
Assignment
This Sale and Purchase Agreement shall be binding upon, and inure
to the benefit of, all of the parties hereto and their respective
heirs, executors, personal administrators, successors and
assignees, and the provisions hereof that are required and/or
permitted to be performed following the Closing Date shall
specifically survive the Closing Date.
Section 14
Form/Counterparts
(1) Amendments and supplements to this Agreement shall be made
in writing, unless there is a statutory requirement for the
legal form of notarization. This shall also apply to the waiver
of this written form requirement.
(2) This Sale and Purchase Agreement may be executed in two or
more counterparts, all of which taken together shall constitute
an original document.
Section 15
Governing Law Clause/Jurisdiction
(1) This Sale and Purchase Agreement shall be governed by and
construed in accordance with the laws of the Federal
Republic of Germany, except for the transfer of the shares in
LIVE B.V. which shall be governed by and construed in accordance
with the laws of The Netherlands. For the avoidance of doubt, the
parties to this Agreement herewith agree that the question
as to whether the balance sheet of LIVE B.V. as of June 30, 1995
has been established in accordance with U.S. generally
accepted accounting principles (GAAP) shall be governed by and
construed in accordance with California law.
(2) To the extent permitted by mandatory law, exclusive place of
jurisdiction for all disputes arising out of or in connection
with this Agreement shall be Munich.
Section 16
Severability Clause
Should any provision of this Agreement or an application thereof
be or become invalid, illegal or unenforceable, in whole or in
part, or if there is an omission in this Agreement, then the
validity of the remaining provisions shall not in any way be
affected or impaired thereby. The invalid, illegal or
unenforceable provision or the omission shall be replaced by such
valid and enforceable provision that comes - to the extent legally
permissible - as close as possible to what the parties would have
intended if they had considered the matter.
IN WITNESS WHEREOF, the parties hereto have executed this Sale
and Purchase Agreement as of the dates set forth opposite their
respective signatures.
Munich, November 6, 1995 Munich, November 6, 1995
LIVE Entertainment Apricot Computer GmbH
International Inc.
By: ______________________ By: _____________________
Xxxxxx X. Xxxxxx Managing Director
Senior Vice President
Xxxxxxxxx, Xxxxxxxx 0, 0000 Xxxxxx, November 6, 1995
VCL/Carolco Communications B.V. VCL/Carolco Communications
GmbH
By: _____________________ By:______________________
Arie Mout Xxxxxxx X. Xxxx
Managing Director Managing Director
Munich, November 6, 1995
Xxxxxxx Xxxxxx Xxxx
_________________________
TRANSFER OF SHARES WvE/KB
Draft
This _ day of _ nineteen hundred and ninety-five, appeared
before me, "Meester" Theodorus Sijbrand Xxxxxx Xxxxx van Eijck,
civil law notary, practising at Rotterdam:
Mr. _ , according to his statement hereby acting as proxy,
authorized in writing of :
1. LIVE Entertainment International Inc., a company organized
and existing under the laws of the state of Delaware (United
States of America), with registered office in Wilmington,
County of New Castle, Delaware (United States of America),
having its principal place of business in Xxx Xxxx, Xxxxxxxxxx
00000 (Xxxxxx Xxxxxx of America), 00000 Xxxxxxx Xxx, Xxxxx
000, and as such hereby representing this company; hereinafter
also to be referred to as: "the Transferor";
2. Apricot Computer Gesellschaft mbH, a company organized and
existing under the laws of Germany, with registered office
in Heusenstamm (Germany), having its principal place of
business in 63150 Heusenstamm (Germany), Xxxxxxxx Xxxxxxx 0-
6, and as such hereby representing this company; hereinafter
also to be referred to as: "the Transferee";
3. VCL/Carolco Communications B.V., a private company with
limited liability, organized and existing under the laws of the
Netherlands, with registered office in Rotterdam (The
Netherlands), having its place of business in 3055 AE Rotterdam
(The Netherlands), Chabotlaan 165, and as such hereby
representing this company; hereinafter also to be referred to
as: "the Company".
The person appearing as aforesaid made the following statements:
I PURCHASE, SALE AND TRANSFER
The Transferor has sold and hereby transfers to the
Transferee, and the Transferee has bought and hereby accepts
from the Transferor: one thousand (1,000) shares, numbers 1 up
to and including 1,000, of a nominal value of ONE HUNDRED DUTCH
GUILDERS (NLG 100.--) each -hereinafter jointly to be referred to
as: "the Shares"- in the capital of the Company. The
Shares are fully paid up and constitute the entire issued share
capital of the Company.
The aforesaid agreement of sale and purchase has been laid
down in a private instrument, dated _ nineteen hundred and
ninety-five. Any and all provisions therein which may still
have effect shall remain in force.
II PURCHASE PRICE
The Shares have been purchased for the aggregate price of
ONE UNITED STATES DOLLAR (US$. 1.--), which purchase price has
been received by the Transferor and for which payment
acquittance is hereby given and accepted.
III ACQUISITION BY TRANSFEROR
The Shares were acquired by the Transferor (formerly a
limited company organised and existing under the laws of the
Netherlands Antilles, named: LEI-IVE Entertainment N.V.) on
the twenty-fifth day of April nineteen hundred and ninety, by
means of a private instrument of which a photostatic copy has
been attached to the original of this deed. As appears from
the last mentioned private instrument, the Company
acknowledged that transfer on the same date.
IV COSTS
All notarial costs incidental to this transfer of the Shares
shall be for the account of the Transferee.
V WAIVER
The Transferor and the Transferee hereby waive the right to
seek and/or obtain rescission or avoidance of this transfer of
shares.
VI RESTRICTIONS ON SHARE TRANSFERS
The restrictions on share transfers contained in the
articles of association of the Company are of no effect since
the Transferor is the sole shareholder of the Company and the
aforesaid restrictions do not contain a prior approval requirement.
ACKNOWLEDGEMENT
Thereupon, the appearer, acting herein in his capacity of proxy
of the Company, stated that the Company hereby acknowledges this
transfer of shares in its capital as recorded in this deed and
that the Company shall ensure that the transfer of the Shares and
the acknowledgment of this transfer shall forthwith be entered in
the register of shareholders.
POWERS OF ATTORNEY
I, civil-law notary, have been shown sufficient evidence to prove
the existence of the aforesaid powers of attorney. Said powers
of attorney have been issued in writing and will be appended to
the original of this deed.
The appearer is known to me, civil-law notary. Whereof this deed
has been passed in original at Rotterdam on the date figuring in
the beginning of this deed.
After the substance of this deed had been made known to the
appearer, the latter has declared to have taken notice of the
contents of this deed and not to wish the deed to be read out in
full.
Thereupon this deed, after having been read out partly, was
signed by the appearer and by me, the notary.
I, Xxxxxx Xxxxxxx XXXXXX, a sworn English translator, of 000 Xx
Xxxxxxxxxxxxxx, 0000 XX Xxxxxxxxx Xxx Xxxxxxxxxxx, CERTIFY that
the document in English attached hereto is a full, true and
faithful translation of the continuous text of the Articles of
Association of VCL/Carolco Communications B.V., a copy of the
Dutch original of which is attached to the translation.
WITNESS my hand and seal, this 21st day of November 1991.
A.M. Mellon
216.23.7006/rjfb
Full and continuous text of the Articles of Association of
VCL/Carolco Communications B.V., whose registered office is in
Amterdam,
as altered by instrument of 17 January 1991 executed before
R.J.F. Blokhuis, LL.M., Civil Law Notary in the city of
Amsterdam.
no. B.V. 84.967
Name and registered office
Article 1
The name of the Company is:
VCL/Carolco Communications B.V.
It has its registered office in Rotterdam.
Objects
1. The objects for which the Company has been established are:
a. to participate in, cooperate with, acquire, to hold and
dispose of, and to conduct the management of or otherwise take
an interest in and to finance companies and enterprises, to act
as holding company, to grant and contract loans, to perform all
types of financial transactions, and to grant securities for debts
of other companies and enterprises, irrespective of whether or not
they are affiliated with the Company in a group;
b. to purchase and sell, hold, manage and commercially exploit, to
acquire and grant licenses and sub-licenses relating to films,
video films and video-cassettes and other picture and sound carriers
and the attendant rights, and to rent and lease films, video-films
and video-cassettes and other picture and sound carriers
and programmes for showings in cinemas and on video
screens, both indoors and outdoors, broadcasting on
television or commercial exploitation through other
means of communication.
2. The objects described in the preceding paragraph shall include any other
activity or business which may in the widest sense pertain or relate
to or serve to further any of these objects.
3. In pursuing its objects, the Company shall also take into account the
interests of the group of companies and enterprises with which it is
affiliated.
Duration
Article 3
The Company has been established for an indefinite period of time.
Capital
Article 4
The authorized capital of the Company is five hundred thousand
Dutch Guilders (NLG 500,000), divided into five thousand (5,000)
shares of one hundred Dutch Guilders (NLG 100) each, one thousand
shares of which have been issued.
Shares; Register of Shareholders
Article 5
1. The shares shall be registered shares and shall be numbered
consecutively from 1 upwards.
2. No share certificates shall be issued.
3. The Board of Directors shall keep a register of shareholders
as referred to in Section 194 of Book 2 of the Netherlands Civil Code.
Issue of shares
Article 6
1. Shares held by the Company in its own capital shall be issued and
transferred by resolution of the General Meeting of Shareholders,
which shall also determine the conditions.
2. The preceding paragraph shall mutatis mutandis apply to the
granting of rights to take shares, but shall not apply to the issue of
shares to persons exercising a previously acquired right to take shares.
3. Upon the taking of shares the nominal amount must be paid in respect
thereof. It may be stipulated that part, three-quarters maximum, of the
nominal amount does not need be paid until the Company so demands; the
resolution thereto shall be taken by the General Meeting of Shareholders.
4. The General Meeting of Shareholders may determine that payment on shares
may be made in kind.
Pre-emptive right
Article 7
Upon the issue of shares and upon the transfer of shares held by
the Company in its own capital, the shareholders shall have a
pre-emptive right pro rata to the number of shares held by each
shareholder. The shareholders shall not have a pre-emptive right
in those cases in which they are denied this right by provisions
of peremptory law.
Acquisition and withdrawal of shares
Article 8
1. The acquisition by the Company of partly-paid shares in its own capital
is null and void.
2. The Company may acquire fully paid shares in its own capital, but either
for no consideration or if:
a. its shareholders' equity, reduced by the acquisition price, is not
less than the paid-up share capital together with the amount of
such reserves as it is required to maintain by law or by these
Articles of Association; and
b. the nominal value of the shares to be acquired and the shares in its
capital already held by the Company and its subsidiaries does not
exceed one half of the issued capital of the Company.
The validity of an acquisition shall be decided on the basis
of the shareholders' equity of the Company as shown in its most recently
adopted balance sheet, less the aggregate of the acquisition price
of shares in the capital of the Company and distributions of
profits or reserves to third parties which became due by the
Company and its subsidiaries after the balance sheet date.
In the event that more than six months of a financial year
have passed without the annual accounts having been
adopted, the Company shall not be allowed to acquire its own
shares in accordance with this Article. In this Article the
term shares shall also include receipts thereof.
3. The preceding paragraphs of this Article 8 shall not apply
to shares which the Company shall acquire by universal
succession of title.
4. Loans with a view to the taking or acquiring of shares in
its capital may be granted by the Company up to the amount
of its distributable reserves.
5. The General Meeting of Shareholders may decide to reduce the
issued capital by withdrawing shares or by reducing the
amount of shares by alteration of the Articles of
Association. This resolution should designate the shares to
which the resolution relates and it should regulate the
implementation of the shares. The sum of the paid and
called-up part of the capital may not be less than the
minimum capital prescribed at the time of the resolution.
Undivided rights to a share
Article 9
If several persons have undivided rights to a share, such persons
may only exercise those rights by having themselves represented
vis-a-vis the Company by one person.
Delivery of title to shares
Article 10
Delivery of title to shares shall require a deed of transfer
which must either be served on the Company, or acknowledged by
the Company in writing on the submission of such deed to the
Company. The transfer of partly-paid shares may only be
acknowledged if there is a deed of transfer with an officially
recorded or otherwise fixed date.
Transfer of shares
Article 11
1. A shareholder who wishes to transfer shares shall offer
these for sale to the other shareholders, all of whom have a
pre-emptive right.
2. If more shares are applied for than the number of shares
offered the Board of Directors shall allot the shares in
proportion to the existing shareholding of each prospective
purchaser, to the extent possible.
3. The transferor and the shareholder(s) to whom shares were
allotted shall consult about the price to be paid for all
shares offered. If within six weeks this consultation has
not resulted in full agreement on all shares, the price for
all those shares shall be determined by three experts, one of
which shall be a chartered accountant or another expert as
referred to in Section 393 of Book 2 of the Netherlands
Civil Code or accountant-consultant, to be appointed, at the
request of the initiating party, by the County Court in
whose district the Company has its registered office, save
for the appointment of one or more experts by the parties by
mutual agreement.
4. The transferor shall at all times have the right to withdraw
his offer, provided he shall do so no later than one month
after he has been notified of the prospective purchasers to
whom he can sell all shares to which the offer relates and
at which price.
5. As soon as it has been established that not all shares
offered will be purchased against payment in cash by the
person(s) to whom these shares were offered under the
provisions of this Article 11, the transferor shall be free
to dispose of the shares to one or more third parties,
provided that it concerns all shares and that they are
transferred within three months after this has been
established and provided that the transferor has not
withdrawn his offer prior thereto.
6. If:
a. a shareholder dies;
b. a shareholder is wound up or is declared bankrupt or is
granted a moratorium of payments, is placed under
compulsory guardianship or in any other way loses the
free control of his property;
c. the community of property into which a shareholder was
married and which includes his shares is dissolved and
the shares are not within twenty-four months thereafter
allotted and delivered to the original shareholder;
d. upon the division of any other community of property
which includes the shares, the shares are allotted to
another person than in whose name the shares were
wholly or partially registered;
e. a legal person, general partnership, limited
partnership or any other company which owns one or
several shares is wound up, ceases to exist or is
dissolved by court order;
the shares must be offered for sale to the other shareholders.
The provisions of the preceding paragraphs of this Article
shall mutatis mutandis apply to the extent possible,
however, it being understood that the transferor shall never
have the right to withdraw his offer and that, if the event
occurs mentioned in the preceding paragraph, the transferor
shall only be free to transfer the shares offered as
determined in that paragraph, if upon offering the shares he
stated that he did not wish to retain the shares; failing
such statement the transferor shall only have the right to
retain the shares.
7. If a shareholder who is obliged to offer shares for sale
fails to comply with any obligation under this Article,
despite being demanded thereto by the Company, including
that to transfer shares, the Company shall be irrevocably
authorized to fulfill these obligation(s) for and on behalf
of the person concerned. From the moment that and as long
as a shareholder is in default, the right to vote and the
right to attend meetings attached to his shares may not be
exercised and the attached right to dividend shall be
suspended; if the Company uses the authorization granted to
it, the shareholder can again exercise the said rights.
8. The preceding paragraphs of this Article shall apply to all
cases of transfer and devolution of shares, except the
devolution of shares as a result of the joining of estates
by virtue of the law of matrimonial property.
Management
Article 12
1. The Company is managed by a Board of Directors consisting of
one or several Directors.
2. The Directors shall be appointed by the General Meeting of
Shareholders.
3. Directors may be suspended or removed from office by that
Meeting at any time.
Resolutions concerning the suspension or removal from office
of Directors shall be passed by the General Meeting of
Shareholders by a majority of at least two-thirds of the
votes cast, representing more that one half of the issued
capital.
Article 13
1. Each Director shall be authorised to represent the Company.
However, in the event that a Director has a conflict of
interest with the Company, a person to be designated by the
General Meeting shall be authorized to represent the
Company.
2. In the event that one or more Directors shall cease to hold
office from any cause or be unable to act, the remaining
Directors or Director shall be temporarily entrusted with
the entire management. In the event that all Directors or
the only Director shall cease to hold office from any cause
or be unable to act, the management shall temporarily be
entrusted to the person designated for an indefinite period
of time for that purpose by the General Meeting of
Shareholders.
3. The General Meeting of Shareholders has the power to
determine that certain executive decisions shall require its
prior approval. The executive decisions concerned shall be
carefully described in the resolution by the General Meeting
of Shareholders.
4. The General Meeting of Shareholders shall decide on the
performance of legal acts as referred to in Section 204,
subsection 2 of Book 2 of the Netherlands Civil Code.
General Meeting of Shareholders
1. The General Meetings of Shareholders shall be held in the
municipality where the Company has its registered office.
2. Each year at least one Annual General Meeting of
Shareholders shall be held within six months after the end
of the financial year.
Article 15
1. Each share carries the right to cast one vote.
2. Votes on business matters shall be taken by voice, but votes
concerning persons shall be taken by secret ballot,
unless the Chairman adopts another manner of voting and none of
the persons present at the Meeting objects thereto.
3. Unless depositary receipts for shares have been issued with
the cooperation of the Company or unless there are persons
who have the same rights as the law confers upon holders of
such receipts, resolutions may also be passed outside
Meetings. A resolution passed outside a Meeting may be
passed only by unanimous vote of all shareholders. The
votes may only be cast in writing - by telegram or telex
included.
Financial year, annual accounts and distribution of profit
Article 16
1. The financial year of the Company shall coincide with the
calendar year.
2. Each year within five months after the end of the financial
year, save where this period is extended by a maximum of six
months by the General Meeting of Shareholders on account of
special circumstances, the Board of Directors shall draw up
annual accounts, and shall submit these to the General
Meeting of Shareholders. Unless Section 403 of Book 2 of
the Netherlands Civil Code applies to the Company, the Board
of Directors shall also draw up the annual report within
this period.
3. The annual accounts shall be adopted by the General Meeting
of Shareholders. The adoption by the General Meeting
without reservation shall constitute a discharge from
liability of the Directors, without prejudice to the
provisions of Section 248 of Book 2 of the Netherlands Civil
Code.
4. The profit shall be at the disposal of the General Meeting
of Shareholders.
5. The Company may make distributions to its shareholders only
if and to the extent that the Company's equity capital
exceeds its paid and called-up capital increased by the
amount of the reserves which it is required to maintain by
law or by these Articles of Association.
6. Profit may be distributed only after adoption of the annual
accounts evidencing that such distribution is allowed.
7. The Company may decide to pay an interim dividend, provided
always that paragraph 5 of this Article 16 is complied with.
Resolutions to pay an interim-dividend shall be passed by
the Board of Directors.
Alteration of Articles of Association; Winding-up and Liquidation
1. Motions to alter these Articles of Association or to wind up
the Company must be passed by a majority of at least two-thirds of
the votes cast, representing more than one half of the issued capital.
2. If the Company is wound up its liquidation shall be carried
out by the Board of Directors, unless determined otherwise
by the General Meeting of Shareholders pro rata to the
amount paid up on each one's shares.
(signed by R.J.F. Blokhuis)
Amsterdam, February 1991
Exhibit 3
13-Jul-95
VCL/CAROLCO COMMUNICATIONS B.V.
AMOUNTS DENOMINATED IN NETHERLAND GUILDER'S
ASSETS BALANCE AT BALANCE AT
DECEMBER 31,1994 1995 ACTIVITY JUNE 30, 1995
CASH 97,295 (97,295) 0
INVESTMENT IN VCL/CAROLCO Gmbh (13,595,979) 8,527,788 (5,068,191)
INTERCOMPANY RECEIVABLE - VCL 31,424,480 131,361 31,555,841
TOTAL ASSETS 17,925,796 8,561,854 26,487,650
LIABLITIES AND EQUITY
INTERCOMPANY PAYABLE - LIVE 35,294,598 246,002 35,540,600
COMMON STOCK 100,000 100,000
RETAINED EARNINGS (17,468,802) 8,315,851 (9,152,951)
TOTAL EQUITY (17,368,802) 8,315,851 (9,052,951)
TOTAL LIABLITIES AND EQUITY 17,925,796 8,561,853 26,487,649
0 (0) (0)
INVESTMENT INCOME/(LOSS) - VCL 8,527,788
INTEREST INCOME
MANAGEMENT FEES
MISC./OTHER 211,937
INCOME/(LOSS) 8,315,851
us dollars
ASSETS BALANCE AT BALANCE AT
DECEMBER 31, 1994 1995 ACTIVITY JUNE, 30 1995
CASH 58,183 ($58,183) $0
INVESTMENT IN VCL/CAROLCO Gmbh (7,124,436) 5,501,799 (1,622,637)
INTERCOMPANY RECEIVABLE - VCL 17,798,247 84,749 17,882,996
TOTAL ASSETS $10,731,994 $5,528,365 $16,260,359
LIABLITIES AND EQUITY
INTERCOMPANY PAYABLE - LIVE $20,089,068 163,237 $20,252,305
COMMON STOCK 59,200 59,200
RETAINED EARNINGS (9,416,274) 5,365,128 (4,051,146)
TOTAL EQUITY (9,357,074) 5,365,128 (3,991,946)
TOTAL LIABLITIES AND EQUITY $10,731,994 $5,528,365 $16,260,359
0 (0) (0)
INVESTMENT INCOME/(LOSS) - VCL $5,501,799
INTEREST INCOME
MANAGEMENT FEES
MISC./OTHER 136,671
INCOME/(LOSS) $5,365,128
NOTES
The income statement includes VCL/CAROLCO Communication GmbH
activity for the seven months ended JUNE 30, 1995.
The receivable balance from VCL GmbH represents the JUNE 30, 1995
balance.
