Document:

sapx_ex1010.htm

EXHIBIT 10.10

ASSIGNMENT AGREEMENT

This Assignment Agreement (this “Agreement”), dated as of April 22, 2008, is entered into by and among Cheyne Specialty Finance Fund L.P. (“Seller”), Seven Arts Filmed Entertainment Limited (“Purchaser”), Peter Hoffman (“Hoffman”) and Seven Arts Pictures plc, Deal Investments, LLC, Deal Productions, LLC, Seven Arts Pictures, Inc., Seven Arts Future Flows I LLC, Rectifier Productions, LLC, and Pool Hall Productions, LLC (collectively, the “Seven Arts Parties”).

RECITALS

This Agreement is being entered into in reference to the following facts:

A.           Pursuant to the Assignment Agreements dated as of December 26, 2006 (“Assignment Agreements”) relating to the financing of the pre-production and production of these certain motion pictures currently entitled Noise, Pool Hall Prophets and Deal (“Pictures”), Seller has acquired certain “Loan Documents Rights” relating to the Pictures as defined in the Assignment Agreements.

B.           The Purchaser wishes to purchase from the Seller and the Seller desires to sell to the Purchaser all of the Seller’s right, title and interest in, to, and under the “Loan Documents” as referred in the Assignment Agreements upon and subject to the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto hereby agree as follows.

ARTICLE 1 - SALE

1.1           Purchase and Sale.  Effective upon the Closing, as hereinafter defined, and subject to and conditioned upon the terms hereof, the Seller hereby sells, transfers, grants, and assigns to the Purchaser, and the Purchaser hereby purchases and accepts from the Seller, in each case on and as of the Closing Date, the Loan Document Rights (the “Assignment”).

1.2           Closing Date.  The consummation of the transfer and assignment contemplated herein shall be effected at a closing (the “Closing”) which shall occur on April ____, 2008, or such other date as the Seller and the Purchaser may otherwise agree in writing (the “Closing Date”), at the offices of the Seller or at such other location upon which the Seller and the Purchaser may agree in writing.

1.3           Purchase Price.  On the Closing Date the Purchaser shall pay the Seller in full and final payment for the Assignment of the Loan Documents and the Loan Document Rights, the amount of £________ (the “Purchase Price”) in immediately available funds by wire transfer in accordance with the Purchaser’s instructions specified in Exhibit “A.”  The Purchaser shall pay the Purchase Price without recourse, defense, offset, counterclaim, withholding, deduction or reduction for any reason whatsoever.

1.4           No Continuing Liabilities.  As of the Closing, the Seller shall have no further obligations under or in connection with the Loan Documents or the Loan Document Rights.

1.5           No Warranties.                                The sale, transfer, grant, and assignment of the Loan Document Rights and the Loan Documents is and shall be on an “as is” basis, without recourse to the Seller of any kind or nature whatsoever, or any representation or warranty by the Seller of any kind or nature whatsoever, expressed or implied, except only such representations and warranties of the Seller expressly provided in Section 2.1 of this Agreement.  For the avoidance of doubt, even if the Assignment or this Agreement is found to be illegal, invalid, unenforceable, null, void or otherwise ineffective, the Seller shall be entitled to retain the Purchase Price.  The Purchaser shall not use the name or other business identification of the Seller.

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1.6           Repayment of Loan.  Pursuant to this Agreement, all obligations owed to the Seller under the Loan Documents will be deemed repaid in full and this Agreement is without prejudice to any other party under the Loan Documents.

ARTICLE 2 – REPRESENTATIONS AND WARRANTIES

2.1           Seller’s Representations and Warranties.  The Seller hereby represents and warrants to the Purchaser as follows:

2.1.1.                      The Seller has all requisite power and authority to execute, deliver and perform, all of its obligations under this Agreement and all other agreements, documents and instruments executed and delivered, or to be executed and delivered, by the Seller in connection herewith.

2.1.2.                      The Seller’s execution, delivery and performance of this Agreement has been duly authorized by all necessary action and does not and will not violate any provision of the Seller’s charter or by-laws.

2.1.3.                      Except as provided in this Agreement, the Seller has not sold, pledged, assigned, transferred, disposed or terminated, in whole or in part, or entered into any agreement to sell, pledge, assign, transfer, dispose of or terminate, in whole or in part, any of its right, title and interest in and to the Loan Document Rights or the Loan Documents or any rights under or in connection with the Loan Document Rights or the Loan Documents, or agreed to do any of the foregoing.

2.2           Purchaser’s and Seven Arts Parties’ Representations and Warranties.The Purchaser and each Seven Arts Party hereby represent and warrant to, and covenants with, the Seller as follows:

2.2.1.                      Each is duly organized, validly existing, and in good standing in the laws of the state of its organization.  Each has all requisite power and authority to execute and deliver, and to perform, all of its obligations under, this Agreement and under all other agreements, documents and instruments to be executed and delivered by each in connection herewith.

2.2.2.                      The execution, delivery and performance of this Agreement by the Purchaser and each Seven Arts Party has been duly authorized by all necessary organizational action and does not and will not: (i) require any consent or approval of any shareholder or member; (ii) violate any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to Purchaser or any Seven Arts Party or any provision of the Purchaser’s or any Seven Arts Party’s organizational documents; (iii) result in a breach or constitute a default under any indenture or loan or credit agreement or any other material agreement to which the Purchaser or any Seven Arts Party is a party or by which it is bound; or (iv) require any authorization, consent, approval, license, exemption by or from, or filing or registration with, any court, executive or legislative body, governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign.

2.2.3.                      This Agreement constitutes a legal, valid and binding obligation of the Purchaser, Hoffman and each Seven Arts Party enforceable against each in accordance with its terms, except as such enforceability may be limited by bankruptcy, reorganization, receivership, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity.

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2.2.4.                      The Purchaser has made such examination, review and investigation of the Loan Documents and of any and all facts and circumstances necessary to evaluate the Loan Documents and the Loan Document Rights it has deemed necessary or appropriate.  Except for the representations and warranties expressly made by the Seller in Section 2.1, above: (i) the Purchaser has been and will continue to be solely responsible for the Purchaser’s own independent investigations as to all aspects of the transactions contemplated hereby including, but not limited to: (1) the authorization, execution, legality, validity, effectiveness, genuineness, enforceability, collectibility or sufficiency of the Loan Document Rights and the Loan Documents; (2) the adequacy, condition or existence of any collateral, or the attachment, perfection or priority of any security interest or lien held by the Seller, in connection with the Loan Agreement and the Loan Document Rights; (3) the status, affairs, financial condition, operations, prospects, business, property, assets and creditworthiness of the borrower under the Loan Documents (the “Borrower”) and of any guarantor of any of the Borrower’s obligations or liabilities, and any actions taken or to be taken under or in connection with the Loan Document Rights and the Loan Documents; and (4) the legality, validity, effectiveness, and enforceability of the Assignment and this Agreement; and (ii) the Purchaser has not relied upon any express or implied, written or oral, representation, warranty or other statement by or on behalf of the Seller concerning any of the foregoing or otherwise with respect to the Loan, the Loan Document Rights, the Loan Documents, or the Assignment.

2.2.5.                      The Purchaser is acquiring the Loan Document Rights without any view either to participate in (other than as described in this Agreement), or to sell the Loan Document Rights in connection with, any public distribution thereof.  The Purchaser has no intention of making any distribution of the Loan Document Rights in a manner which would violate applicable securities laws; provided, however, that (i) nothing in this Agreement shall restrict or limit in any way the Purchaser’s ability and right to dispose of all or part of the Loan Document Rights in accordance with such laws at some future time if the Purchaser deems it advisable to do so; and, (ii) the Purchaser shall require any person acquiring all or any portion of the Loan Document Rights or any proceeds thereof from the Purchaser, other than the Seller or any successor, to agree in writing to be bound (or to continue to be bound) by the terms of this Agreement.

ARTICLE 3 – AFFIRMATIVE AND NEGATIVE COVENANTS

3.1           Remittance of Proceeds.                                                      If, after the Closing, the Seller receives (i) any note or other obligation issued by the Borrower in substitution or replacement of any of the Loan Documents, or (ii) any cash, securities or other property distributed or paid by the Borrower in connection with the obligations otherwise owing to the Seller in connection with the Loan Document Rights, including, without limitation, any amounts representing the proceeds of any of the collateral for the Loan deposited into any collection account maintained by the Seller for the Loan, then the Seller shall accept and hold the same in trust for such limited purpose on behalf and for the benefit of the Purchaser, and shall deliver the same promptly to the Purchaser in the same form received, with the Seller’s endorsement (without recourse, representation or warranty) when necessary or appropriate, or to any other person or entity identified by the Purchaser.

3.2           Further Assurances.                                           Effective upon the Closing, the Seller and the Purchaser each shall execute and deliver all such documents and instruments, and to take such further actions as may be reasonably necessary or appropriate, from time to time, and at the requesting party’s expense, to carry out the intent and purpose of this Agreement and to consummate the transactions contemplated hereby; provided, however, that all such documents and instruments executed, and actions taken, by the Seller shall be without recourse or, except as expressly provided in this Agreement, representation or warranty of any kind or nature whatsoever express or implied.  The Seller shall execute and deliver such assignments of copyright mortgages and UCC-1 financing statements as reasonably requested by the Purchaser and shall deliver the original promissory note as promptly as possible following the Closing.

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3.3           Lab Access.  Seller shall execute the laboratory instructions attached hereto as Exhibit “B” and the assignment of proceeds in the form attributed hereto as Exhibit “C” and deliver all such documents to Purchaser at Closing.

ARTICLE 4 - CONDITIONS

4.1           Conditions Precedent.

4.1.1.                      The Seller’s Conditions Precedent.  The Seller’s obligations under this Agreement shall be subject to the satisfaction (or specific and express waiver by the Seller in writing) of all of the following conditions precedent, on or prior to the Closing Date:

4.1.1.1.                      the Purchaser shall have paid the Seller the Purchase Price in full and Seller shall have indefensibly received the Purchase Price in full as provided herein;

4.1.1.2.                      the Purchaser shall have complied with all terms, covenants and conditions to be performed or complied with by the Purchaser as contemplated by this Agreement; and

4.1.1.3.                      all of the Purchaser’s representations and warranties shall be true and correct as of the Closing Date and shall not be misleading in any respect.

4.1.2.                      The Purchaser’s Conditions Precedent.  The Purchaser’s obligations under this Agreement shall be subject to the satisfaction (or specific and express waiver by Purchaser in writing) of all of the following conditions precedent, on or prior to the Closing Date:

4.1.2.1.                      the Seller shall have delivered to the Purchaser copyright mortgage assignments, financing statement assignments, and such other documents as the Purchaser may reasonably request in a form suitable for filing in the appropriate public records, as applicable, to evidence the conveyance to the Purchaser of all of the Seller’s right, title, and interest in and to the Loan Documents and the Loan Document Rights; and

4.1.2.2.                      All of the Seller’s and the Seven Arts Parties’ representations and warranties shall be true and correct as of the Closing Date and shall not be misleading in any respect.

ARTICLE 5 – GENERAL RELEASE AND INDEMNIFICATION

     5.1 General Release.

        5.1.1 General Release by Purchaser and Hoffman.  Effective as of the Closing Date, Hoffman, for himself, his heirs, executors, administrators, agents and assigns, and Purchaser and each Seven Arts Party, for themselves, and their respective parents, affiliates and subsidiaries, and their respective predecessors, successors and assigns (collectively the “Releasing Parties”), each hereby knowingly and voluntarily, irrevocably and unconditionally release and forever discharges Seller and its parent, affiliates and subsidiaries, their respective predecessors, successors and assigns, including, their respective present, former, and future officers, directors, shareholders, attorneys, agents and/or employees, and all persons acting by, through, under or in concert with any of the foregoing, in both their individual and representative capacities (collectively, the “Released Parties”), from any and all claims, controversies, actions, causes of action, cross-claims, counter-claims, rights, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity (“Claims”), which any Releasing Party had, has, or may have, against any of the Released Parties, whether known or unknown, suspected or unsuspected, fixed or contingent, or claimed, including, without limitation, all Claims which arise out of, relate to or are based on (i) this Agreement, (ii) the Assignment, (iii) the Loan Documents, (iii) the Loan Document Rights, (iv) the Pictures, or (v) the invalidity, illegality or unenforceability of the Assignment or this Agreement.

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        5.1.2. Paragraph 1542 Waiver.  Without limiting the generality of the foregoing, the Releasing Parties hereto release any and all past, present and future Claims in connection with the Claims released herein, but which said parties do not know of or suspect to exist in their favor, whether through ignorance, oversight, error, negligence or otherwise, and which, if known, would materially affect their decision to enter into this Agreement, and to this end they and each of them, therefore, waive all rights under Paragraph 1542 of the Civil Code of California which states in full as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

        The Releasing Parties represent, warrant and agree that in executing and entering into this Agreement, they are not relying on and have not relied upon any representation, promise or statement made by anyone which is not recited, contained or embodied in this Agreement.  The parties understand and expressly assume the risk that any fact not recited, contained or embodied herein or therein may turn out hereafter to be other than, different from, or contrary to the facts now known to them or believed by them to be true.  Nevertheless, the parties intend by this Agreement, and with the advice of their own independently selected counsel, to fully, finally and forever release all Claims released herein and agree that this Agreement shall be effective in all respects notwithstanding any such difference in facts, and shall not be subject to termination, modification or rescission by reason of any such difference in facts.

        5.1.3 No Assignment.  The Releasing Parties hereby represent and warrant that they have not heretofore assigned or transferred or purported to assign or transfer to any person or entity, whether by act, operation of law or otherwise, all or any part of any interest in any Claim, contention, demand or cause of action relating to any matter released herein.

        5.1.4  Covenant Not to Sue.  The Releasing Parties hereto acknowledge and agree that they will not file, commence, join in or in any manner prosecute or enforce, or assert any defense, offset or cross-claim with respect to, or otherwise assert, defend or seek relief through, any lawsuit, arbitration or action arising out of, based upon or relating to any Claim released herein by such party.

    5.2  Indemnification.  The Purchaser, Hoffman and the Seven Arts Parties hereby, jointly and severally, agree to indemnify, defend and hold the Seller and all Released Parties harmless, from and against any and all Claims brought or asserted against Seller or any Released Party resulting from any Claim arising out of, based upon or relating to (a) any breach of this Agreement by Purchaser, Hoffman or the Seven Arts Parties, (b) any Claim released herein, (c) any Claim by any party that the Assignment is invalid, illegal or unenforceable, (d) the Loan Documents, (e) the Loan Document Rights, (f) the Pictures, or (g) this Agreement.

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ARTICLE 6 – GENERAL PROVISIONS

6.1           Partial Invalidity.  If any provision of this Agreement, or of any other agreement, document or instrument contemplated hereby, is invalid, illegal or unenforceable in any jurisdiction then, as to such jurisdiction only, such provision shall, to the extent of such prohibition or unenforceability, be deemed severed from the remainder of such agreement, document or instrument and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.  For the avoidance of doubt, and without limitation, even if the Assignment provisions of the Agreement shall be deemed invalid, illegal or unenforceable, the Purchaser’s obligation to pay the Purchase Price, and the Seller’s right to retain the Purchase Price, shall be valid, legal and enforceable.

6.2           Governing Law.  This Agreement, and the other agreements, documents and instruments contemplated hereby, and the rights and obligations of the parties hereto and thereto, shall be governed by and construed and enforced in accordance with, the laws of the state of New York without reference to its conflict or choice of law principles.

6.3           Litigation.

6.3.1.                      All controversies, claims, disputes, or counterclaims between the parties hereto concerning, based in any way upon, arising under, relating to, or arising in connection with this Agreement, or any resulting transaction, including, without limitation, their respective obligations hereunder, a disagreement about the meaning, interpretation, application performance, breach, termination, enforceability, or validity of this Agreement, and whether based on statute, tort, contract, common law or otherwise, shall be subject to the jurisdiction of the state and federal courts located in New York, New York.  The Purchaser and the Seller waive any objection based on venue or forum non conveniens with respect to any action instituted therein.

6.3.2.                      Any judgment resulting from any court proceeding between the Purchaser and Seller shall also provide for payment by the losing party (i.e., the party or parties against whom an award is issued) of: (i) the fees and costs incurred in connection with such court proceeding, as well as the attorneys’ fees and costs incurred by the prevailing parties (i.e., all parties to the court proceeding other than the losing party), and (ii) shall further provide for the payment by the losing party of interest on the judgment.

6.3.3.                      Any claim or action of any kind (including, without limitation, any claims for breach of contract), against the Seller arising out of or connected with this Agreement shall be barred and waived unless asserted by the filing of a complaint within one hundred eighty (180)-days after the accrual of the action or claim.  This limitation shall also apply to claims that might otherwise be asserted against the Seller as a “set-off,” credit, cross-complaint, or defense.

6.4           WAIVER OF JURY TRIAL.  THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY.

6.5           Notices.  Except as otherwise expressly provided herein, any notice, request, demand or other communication provided for hereunder shall be in writing to be effective, and shall be delivered personally, by certified mail, return receipt requested, postage prepaid, or by transmission by a telecommunications device, and shall be effective (i) on the day when personally served, including delivery by overnight mail and courier service, (ii) on the third day after its deposit in the United States mail, or (iii) on the business day of confirmed transmission by telecommunications device.  The addresses of the parties hereto (until notice of a change thereof is served as provided in this section) shall be as follows:

 

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If to the Purchaser, Hoffman or any Seven Arts Party:

Seven Arts Filmed Entertainment Ltd.

43 Hertford Street

London W1J 7SG

United Kingdom

Fax. No. 1 (323) 372 3790

	
If to the Seller:

Cheyne Specialty Finance

Stornoway House

13 Cleveland Row

London SW1A 1DH

United Kingdom

 

6.6           Successors and Assigns.  This Agreement shall be binding upon the parties hereto and their respective successors and assigns, and shall inure to the benefit of the parties hereto and the successors and assigns.

6.7           Integration; Amendments.  This Agreement and the other agreements, documents and instruments contemplated hereby are intended by the parties to be the final, complete and exclusive expression of the agreement between them.  This Agreement and such other agreements, documents and instruments supersede any and all prior oral or written agreements relating to the subject matter hereof between the Purchaser, Hoffman and the Seven Arts Parties, on the one hand, and the Seller, on the other hand.  No modification, rescission, waiver, release, or amendment of any provision of this Agreement or any such other agreement, document or instrument shall be made, except by a written agreement signed by the parties hereto.

6.8           Counterparts.  This Agreement and the other agreements, documents and instruments contemplated hereby may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same instrument, respectively.  Delivery of an executed counterpart of this Agreement, or any such other agreement, document or instrument, by facsimile shall be equally effective as delivery of a manually executed counterpart hereof and thereof.  Any party delivering an executed counterpart by facsimile shall also deliver a manually executed counterpart, but failure to do so shall not affect the validity, enforceability, of binding effect of this Agreement or any such other agreement, document or instrument.

6.9           Headings.  The various headings used in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement or any provision hereof.

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date above first written.

	
CHEYNE SPECIALTY FINANCE FUND L.P

	  	  
	  	  
	
By:

	
  /s/ Andrew Galloway, Director

	
Print Name:

	  
	
Title:

	  

	
SEVEN ARTS PICTURES PLC

	  	  
	  	  
	
By:

	  
	
Print Name:

	
/s/ Peter Hoffman

	
Title:

	  

	
SEVEN ARTS FILMED ENTERTAINMENT, LTD.

	  	  
	  	  
	
By:

	
  /s/ Peter Hoffman

	
Print Name:

	  
	
Title:

	  

	
DEAL INVESTMENTS, LLC

	  	  
	  	  
	
By:

	  
	
Print Name:

	
  /s/ Peter Hoffman

	
Title:

	  

	
DEAL PRODUCTIONS, LLC

	  	  
	  	  
	
By:

	
  /s/ Peter Hoffman

	
Print Name:

	  
	
Title:

	  

	
SEVEN ARTS PICTURES, INC.

	  	  
	  	  
	
By:

	  
	
Print Name:

	
  /s/ Peter Hoffman

	
Title:

	  

	
SEVEN ARTS FUTURE FLOWS I LLC

	  	  
	  	  
	
By:

	
  /s/ Peter Hoffman

	
Print Name:

	  
	
Title:

	  

	
 

POOL HALL PRODUCTIONS, LLC

	  	  
	  	  
	
By:

	
  /s/ Peter Hoffman

	
Print Name:

	  
	
Title:

	  

	
 

RECTIFIER PRODUCTIONS, LLC

	  	  
	  	  
	
By:

	
  /s/ Peter Hoffman

	
Print Name:

	  
	
Title:

	  

	
PETER HOFFMAN

/s/ Peter Hoffman

 

Assignment Agreement

NY 71398774v4

 

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EXHIBIT A

TO

ASSIGNMENT AGREEMENT

PAYMENT INSTRUCTIONS

 

 

	
Account:

 Bank:

Account number:   

SWIFT:  

 

For further credit to:

Account name:  

Account Number: 

Reference:   

 

 

 

Assignment Agreement

NY 71398774v4

	
 The Royal Bank of Scotland International Limited

Wachovia Bank, NA, New York

2000193009149 (CHIPS; 155424)

PNBPUS3NNYC

 

 

Cheyne Specialty Finance Fund

1028-50554606

"Senior Loan Payment"

 

 

 

 

 

 

          

 

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EXHIBIT B

TO

ASSIGNMENT AGREEMENT

LAB INSTRUCTIONS

 

www.7artspictures.com

As of 22 April 2008

Technicolor East Coast, Inc,

Attention: Ms. Ellen Pomerantz

110 Leroy Street, 3th Floor

New York, NY 10014

United States of America

Dear Sirs

 

This letter serves to confirm the following:

 

I)    Unless defined otherwise, words and phrases in this release letter ("Releas Letter") shall have the same meaning and definitions, as provided in the Laboratory Pledge Holder Agreement dated as of 16 October 2006 regarding 'the Picture NOISE ("Agreement”).

 

2)    Subsequent to the Agreement, Lender entered into an assignment agreement dated as of 27_December 2006 as attached hereto (“Assignment Agreement") wherein lender sold its' rights, title, and interest in, to, and under the Loan Documents (as defined therein) to Cheyne Specialty Finance Fund L.P,("Cheyne”).

 

3)    Cheyne hereby notifies Laboratory that all of Borrowers' Obligations to Cheyne under the Loan Documents as assigned have been paid and Cheyne has no further obligation to make any advances under the Loan, The repayment of the Borrowers' Obligation to Cheyne and the terms relating thereto, were intended to be without prejudice to any other party under the related loan documents.

 

4)    Guarantor hereby notifies Laboratory that the Picture has been completed and delivered, and Guarantor has been release from its obligations, if any, with respect to the Picture and has recouped all sums, if any, which it is entitled to recoup in connection therewith and consents to the materials being moved from the Laboratory into Borrowers possession.

 

NOISE-Technicolor Release Letter - 21 April 2006

 

	 Cheyne Speciality Finance Group	 	 	 
	 /s/ Andrew Galloway	 	 	 
	 	 	 	 
	 International Film Guarantors, LLC ("Guarantor") 	 	Fireman's Fund Insurance Company ("FFIC")	 
	 /s/ Frank Isaac	 	/s/ Frank Isaac	 
	 	 	 	 
	 Rectifier Productions, LLC ("Borrower")   	 	Seven Arts Pictures, Inc ("Borrower")    	 
	 /s/ Peter Hoffman 	 	 /s/ Peter Hoffman   	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 Assignment Agreement	 	 	 
	 NY 71398774v4	 	 	 

 

 

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EXHIBIT C

TO

ASSIGNMENT AGREEMENT

ASSIGNMENT OF PROCEEDS

DIRECTION TO PAY

                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                            Dated as of                          

Please make reference to the direction to pay entered into between SEVEN ARTS INTERNATIONAL, a 

United Kingdom corporation ("Licensor"), ................................a ............................corporation ("Licensee")

nd CHEYNE SPECIALTY FINANCE FUND LP ("Financier") dated ...for the payment

of certain funds for the motion picture " .........................................................." (the "First Direction to Pay"),

Unless defined herein, words and phrases appearing in this second direction to pay ("Second Direction to

Pay") shall have the meaning as defined in the aforesaid First Direction to Pay.

 

The Licensor, Licensee and Financier hereby agree that, until further notice, the account referred to in

clause 6 of the Agreement shall be that of SEVEN ARTS INTERNATIONAL ("Licensor") and receipts

due to Licensor under the Agreement shat! hereafter be "Licensor's Receipts".

Licensor's Receipts shall be paid as and when due and payable, if by wire transfer, to:

        Coutts & Co.

        440 Strand

        London WC2R OQS

        Sort Code: 18-00-02

        Swift Code: COUT GB22

        IBAN: GB66 COUT 1800 91 10 3462 87

        Account #10346287

        Reference"......................"                               

(or to such other address or account as the Licensor may designate in writing);"

All other clauses and conditions set forth in the Agreement, not herein amended, for any legal purposes

shall remain in full force and effect and bind the parties and are hereby ratified and confirmed.

 

IN WITNESS HEREOF, the parties hereto have agreed and caused this Second Direction to Pay to be

executed by their duly authorized representatives:

"...................."                                          SEVEN ARTSCHEYNE SPECIALTY

("Licensee")                                            INTERNATIONAL                                            FINANCE FUND LP

("Licensor")                                            ("Financier")

By:                                                            By:                                                                        By:

Its:                                                            Its:                                                                         Its:

Date:                                                        Date:                                                                     Date:

38 Hertford Street, London WIJ 7SG, United Kingdom

Main: +44 20 3006 8222, Fax: +44 20 3006 8220

www.7artspictures comCompany number: 5160597, V.A.T. no.: 820 7673

 

 

Assignment Agreement

NY 71398774v4

 

11sapx_ex1011.htm

EXHIBIT 10.11

Acquisition Agreement For 3,000,000 Armadillo Preferred Shares

DATED    OCTOBER 2008

 

 

 

 

 

 

 

 

 

 

(1) SEVEN ARTS PICTURES plc

 

(2) SMITH & WILLIAMSON TRUSTEES (JERSEY) LIMIT

 

(3) ARMADILLO INVESTMENTS LIMITED (in liquidation)

 

 

 

 

 

 

 

 

 

 

 

              STOCK SALE AGREEMENT

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THIS AGREEMENT is made on          October 2008

 

BETWEEN

 

	
(1)  

	
SEVEN ARTS PICTURES plc a company incorporated in England & Wales under company number 4276617 and whose registered office is at One America Square, Crosswall, London EC3N 2SG ("Company");

 

	
(2)  

	
SMITH & WILLIAMSON TRUSTEES (JERSEY) LIMITED, whose registered office is at IFG House, 15 Union Street, St. Helier, Jersey JE1 1FG ("Buyer") as trustee of the Seven Arts Pictures Employee Benefit Trust established by a deed of trust dated 21 October 2008 and made between the Company and the Buyer; and

 

	
(3)  

	
ARMADILLO INVESTMENTS LTD. (in members voluntary liquidation), a company incorporated in England and Wales under Company Number 4977138 whose registered office is at 30 Farringdon Street, London EC4A 4HJ acting by its liquidator, Michael James Meston Reid of Meston Reid & Co., of 12 Carden Place, Aberdeen AB10 1UR ("Seller")

 

RECITALS

 

	
(A)  

	
The Company, then known as Cabouchon plc, and Seller entered into that certain Subscription Agreement dated August, 2004 ("Subscription Agreement"), a copy of which is attached hereto as Exhibit "A," under which Company issued to Seller and Seller acquired from Company 3,000,000 convertible redeemable preference shares with a par value of £1.00 each (the "Preference Shares"). As consideration for the issue of the Preference Shares pursuant to the Subscription Agreement, the Company received 3,000,000 ordinary shares of £0.10 in the capital of the Seller of which it now holds 1,600,000 such Ordinary Shares.

 

	
(B)  

	
Buyer has agreed to acquire from Seller and Seller has agreed to sell to Buyer the Preference Shares for the Consideration.

 

	
(C)  

	
The Company has agreed to deliver to Seller the Armadillo Shares and the Stock Option Agreement.

 

	
(D)  

	
Buyer has agreed to convert certain of the Preference Shares into Ordinary Shares of the Company in accordance with the terms of the Subscription Agreement. The Company has agreed to transfer the Armadillo Shares to Seller and to issue to Seller an option to acquire five hundred thousand Ordinary Shares of Company at a price of £0.20 per Ordinary Share pursuant to the terms of the Stock Option Agreement attached hereto as Exhibit "B."

 

	
(E)  

	
Company and Seller have agreed that this Agreement is in full and final settlement and release of any claims, demands or causes of action of any nature or kind whatsoever based upon or arising out of the Subscription Agreement or the Preference Shares that either of Company, Seller or their respective directors, shareholders, associated companies, officers, directors, or agents ("Parties") may have against any other Party.

 

IT IS AGREED as follows: 

1. INTERPRETATION

 

1.1    In this Agreement:

 

'Act' means the Companies Act 1985 together with such provisions of the Companies Act 2006 as are in force at the date of this Agreement;

 

'Armadillo Shares' means 1,600,000 ordinary shares of £0.10 each in the capital of Seller now owned by Company together with all rights accrued thereon;

 

'Articles' means the articles of association for the time being of the Company;

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'Business Day' means any day (other than a Saturday) when banks in London are open for the transaction of normal banking business;

 

'Charge' means the charge over shares to be issued by the Buyer to the Seller in terms of Clause 3.4.2 and in the form attached hereto as Exhibit 'C';

 

'Completion Date' means 23 October 2008;

 

'Consideration' shall have by the meaning set forth in clause 2.2 below;

 

'Conversion' shall mean the conversion of certain of the Preference Shares by Buyer into Ordinary Shares pursuant to the terms hereof;

 

'Encumbrance' means any mortgage, pledge, lien, charge, assignment, hypothecation or other agreement or arrangement which has the same or a similar effect to the granting of security;

 

'Liquidator' means Michael James Meston Reid in his capacity as liquidator of the Seller;

 

'Ordinary Shares' means ordinary shares of £0.05 each in the share capital of the Company;

 

'Preference Shares' shall mean 3,000,000 convertible redeemable preference shares of £1.00 each in the capital of the Company issued to Seller pursuant to the Subscription Agreement;

 

'Stock Option Agreement' means that certain stock option agreement between Company and Seller dated as of the Completion Date under which Company grants to Seller the right and option to acquire Ordinary Shares for £0.20 per Ordinary Share;

 

'Subscription Agreement' means that certain subscription agreement between Company and Seller dated August, 2004 attached hereto as Exhibit "A".

 

1.2    In this Agreement, a reference to:

 

    1.2.1    a 'subsidiary' or 'holding company' shall be construed in accordance with section 1159 of the Companies Act 2006;

 

    1.2.2    an 'associated company' and 'control' shall be construed in accordance with section 416 of the Income and Corporation Taxes Act 1988;

 

    1.2.3    a statutory provision includes a reference to:

 

	
(a)  

	
the statutory provision as modified or re-enacted or both from time to time (whether before or after the date of this Agreement); and

 

	
(b)  

	
any subordinate legislation made under the statutory provision (whether before or after the date of this Agreement);

 

 

    1.2.4    persons includes a reference to any body corporate, unincorporated association or partnership;

 

    1.2.5    a person includes a reference to that person's legal personal representatives or successors.

 

1.3     The headings in this Agreement shall not affect the interpretation of this Agreement.

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2. ACQUISITION AND CONSIDERATION

 

2.1    On the Completion Date Seller shall sell to Buyer and Buyer shall acquire from Seller the Preference Shares for the Consideration. The Preference Shares shall be sold with the full title and interest held by the Liquidator and with all rights attaching to them and available to the Liquidator at the Completion Date and subsequently.

 

2.2    The consideration payable for the Preference Shares shall be the payment to Seller by Buyer of £1,500,000 in cash ("Consideration") payable as to:

 

    2.2.1    £500,000 on the Completion Date;

 

    2.2.2    £500,000 six (6) months after the Completion Date ("First Deferred Payment"); and

 

    2.2.3    £500,000 twelve (12) months after the Completion Date ("Second Deferred Payment").

 

         Any Deferred Payments not paid when due shall bear interest at the rate of 10% per annum.

3. COMPLETION

 

3.1    Subject always to the provisions of this clause, Completion shall take place at 5 Chancery Lane, Clifford's Inn, London EC4A 1 BL on the Completion Date at such time as the Buyer and Seller agree.

 

3.2    The Company shall procure that a board meeting of the Company is held at Completion at which:

 

    3.2.1     the transfer referred to in clause 3.3.1 is (subject only to it being duly stamped) approved for registration;

 

    3.2.2     the Stock Option Agreement is approved and executed by the Company;

 

    3.2.3     issue to the Buyer 10,000,000 Ordinary Shares pursuant to the Conversion.

 

3.3    At Completion, the Seller shall deliver or procure delivery to the Buyer of:

 

    3.3.1    a transfer of the Preference Shares in favour of the Buyer or its nominee duly executed by the Seller;

 

    3.3.2    the share certificate representing the Preference Shares in the name of the Seller (or an indemnity for a lost certificate in usual terms);

 

    3.3.3    the Stock Option Agreement duly signed by the Seller; and

 

    3.3.4    the Charge over Shares duly executed by the Seller.

 

3.4    At Completion, the Buyer shall deliver:

 

    3.4.1    a duly signed conversion notice on the Company in respect of the Preference Shares in accordance with the terms of the Subscription Agreement; and

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    3.4.2    to the Seller the Charge over Shares duly executed by the Buyer and shall pay the cash sum of £500,000 to the Seller in respect of the first tranche of Consideration.

 

3.5    At Completion, the Company shall deliver or procure delivery to the Seller of:

 

    3.5.1    a transfer or transfers of the Armadillo Shares in favour of such persons as the Seller shall direct duly executed by the Company (or an indemnity for a lost certificate in usual terms);

 

    3.5.2    the share certificate representing the Armadillo Shares in the name of the Company; and

 

    3.5.3    the Stock Option Agreement duly signed by the Company.

 

3.6    For the avoidance of doubt the Armadillo Shares will be transferred with the benefit of all accrued rights including any outstanding dividends or distributions.

4. WAIVER AND RELEASE

 

4.1    Each of Company and Seller agree that on Completion the Subscription Agreement shall terminate, the parties shall be fully released from all obligations under the Subscription Agreement and that neither the Company nor the Seller shall have any claims, demands or causes of actions of any nature or kind whatsoever based upon or arising out of the Subscription Agreement and that each of them shall release all claims, rights or remedies they may have against the other (including their respective directors, officers and employees) arising from or in connection with the Subscription Agreement.

5. WARRANTIES

 

5.1    Company hereby warrants in this capacity ("Warrantor") for the benefit of Seller and Buyer ("Beneficiary") with respect to itself and its actions:

 

    5.1.1    Warrantor is properly established and validly existing under the laws of England with all necessary corporate power and authority to own and use its properties and assets and carry on its business as currently conducted.

 

    5.1.2    Warrantor has all necessary corporate power and authority to enter into and undertake the transaction contemplated hereby and to otherwise carry out its obligations hereunder. The execution and delivery of the Agreement by Warrantor and the undertaking of the transactions contemplated hereby has been duly authorized by all necessary actions by Warrantor. This Agreement is or will be a valid and binding obligation of Warrantor enforceable against it in accordance with its terms.

 

    5.1.3    The execution and performance of the Agreement by Warrantor does not and will not (i) conflict with or violate any provisions of the Warrantor's Articles of Association; (ii) constitute a default under, or give to others any rights of termination of, any agreement to which Warrantor is a party, including any indenture, loan or credit agreement; or (iii) result in a breach of any law, regulation, or other restriction of any kind. The business of the Warrantor is not being conducted in violation of any law, ordinance or regulation of any governmental authority.

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    5.1.4    Warrantor is not required to obtain any consent or approval from any person in connection with the execution and performance by Warrantor of this Agreement.

 

    5.1.5    Warrantor is not involved in any proceedings and no proceedings or investigations are pending or, to the best knowledge of Warrantor, threatened which could materially affect the ability of Warrantor to perform its obligations hereunder on a timely basis.

 

5.2    By its signature hereto, the Company agrees and warrants that the Form 20-F filed by the Company with the Securities and Exchange Commission ("SEC") and provided to Seller and Buyer is true and correct in all material respects and includes all the facts and information required by the SEC's rules and regulations and all applicable laws.

 

5.3    It is an essential condition of this agreement:

 

    5.3.1    that the Liquidator contracts solely as agent of the Seller and shall incur nopersonal liability of whatsoever nature (whether directly or indirectly, express or implied) and howsoever arising including without prejudice to the foregoing generality, personal liability in respect of any action or actions of whatsoever nature and howsoever arising in pursuance of the Seller's rights and/or obligations under this agreement and whether such claim is formulated in contract and/or delict and/or tort and/or restitution or by reference to any other remedy or right, and in whatever jurisdiction or forum;

 

    5.3.2    that no claim which may be or become competent to the Buyer or the Company arising directly or indirectly from this agreement (or under any deed or other document executed in consequence hereof or on or under any associated or collateral agreement or arrangement) will lie against the Liquidator personally and the Liquidator shall be entitled at any time to have any such deeds, documents or others amended to include an exclusion of personal liability in terms of this clause 5.3; and

 

    5.3.3    that any personal liability of the Liquidator which would in terms of the Insolvency Act 1986 arise but for the provisions of this clause 5.3 is hereby expressly excluded.

 

5.4    The Liquidator has joined in as a party to this agreement solely for the purpose of obtaining the benefit of the provisions of this clause 5.3 and any other provisions of this agreement in his favour.

 

5.5    Nothing in this agreement shall constitute a waiver of any right of the Liquidator to be indemnified, or to exercise a lien, whether under the provisions of the Insolvency Act 1986 or otherwise howsoever.

 

5.6      For the purpose of this clause 5.3 references to "the Liquidator" where the context so permits shall mean and include his present and future firm or firms, partners and employees and any legal entity or partnership using in its name the words "Meston Reid", and the partners, members, officers, employees, advisers, representatives and agents of any such entity or partnership.

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6.  DEALING IN SHARES

 

6.1    Seller and Buyer each hereby undertake that it shall not (save in the event of an intervening court order, or an offer for the entire share capital of the Company becoming or being declared unconditional):

 

    6.1.1    dispose of any interest in any Ordinary Shares before 30 June 2009; and

 

    6.1.2    save as set out in this Agreement, acquire any interest in any or charge Ordinary Shares before 30 June 2009

 

save, in either case, for any Ordinary Shares acquired pursuant to the exercise of the Charge or the Share Option Agreement.

 

  6.2    For these purposes, the expression 'dispose' shall extend to any sale, transfer, charge, pledge, encumbrance or grant of any option over or in respect of or an agreement to do any of these things (whether oral or in writing).

 

  6.3    Seller and Buyer each further undertake that:

 

    6.3.1    it will procure that no associated company of Seller or Buyer shall deal in Ordinary Shares in breach of clause 3.1; and

 

    6.3.2    it shall not directly or indirectly either on its own account or through the agency of another seek to manipulate the market in Ordinary Shares.

 

  6.4    Upon the issue and allotment of all of the Ordinary Shares pursuant to the Conversion, Buyer shall not own 30% or more of the issued share capital of the Company.

 

7.  GUARANTEE

 

7.1      In consideration of the Seller entering into this Agreement the Company, at the request of the Seller, hereby unconditionally guarantees to the Seller and its successors, transferees and assigns the payment by the Buyer of the First Deferred Payment and the Second Deferred Payment (together, the "Deferred Payments").

 

7.2      If the Buyer shall make default in the payment when due of the Deferred Payments, the Company shall, forthwith on demand by the Seller, unconditionally pay to the Seller in the manner prescribed in this Agreement an amount equal to the amount payable by the Buyer.

 

7.3      The guarantee contained in this Clause 7 shall be a continuing guarantee and shall continue in full force and effect until the Deferred Payments have been paid in full.

 

7.4      The Company shall not be exonerated or discharged nor shall its liability be affected by any forbearance, whether as to payment, time, performance or otherwise, or by any other indulgence being given to the Buyer or by any variation of the terms of this Agreement or by any act, thing, omission or means whatever which, but for this provision, might operate to exonerate or discharge the Company from its obligations under the guarantee contained in this Clause 7.

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8. NOTICES

 

8.1    Any notice or other communication to be given by one party to another under, or in connection with the matters contemplated by this Agreement shall be addressed to the recipient and sent to the address or facsimile number of such other party given in this clause 5.1; and marked for the attention of the person so given or sent to such other address or facsimile number and/or marker for such other attention as such other party may from time to time specify by notice given in accordance with this clause to the party giving the relevant notice or communication to it. As at the date of this Agreement such details are:

 

          For the Company:

    Address:         38 Hertford Street, London W1J 7SG, UK

 

    Facsimile number:   323-372-3790

 

    For the attention of:   Elaine New

 

        For Buyer:

    Address:        38 Hertford Street

 

    Facsimile number:    323-372-3790

 

    For the attention of:   Elaine New

 

        For Seller:

    Address:        12 Carden Place, Aberdeen AB10 1UR

 

    Facsimile number:    01224 626 089

 

    For the attention of:   Michael Reid

 

8.2    Any notice or other communication to be given by any party to any other party under or in connection with the matters contemplated by this Agreement shall be in writing and shall be given by letter delivered by hand and by facsimile, and shall be deemed to have been received:

 

    8.2.1    in the case of delivery by hand, when delivered; or

 

    8.2.2    in the case of a facsimile, on acknowledgement of the addressee'sfacsimile receiving equipment (where such acknowledgement occurs before 17:00 on the day of acknowledgement) and in any other case on the day following the day of acknowledgement.

 

Any notice or other communication not received on a Business Day or received after 17:00 local time on any Business Day in the place of receipt shall be deemed to be received on the next following Business Day.

 

9.GENERAL

 

9.1    In entering into this Agreement and in any subsequent dealing with the Preference Shares, Buyer undertakes to the Company that it shall comply in all respects with all applicable laws, rules and regulations to which it is subject in its jurisdiction of incorporation and in any jurisdiction in which the Ordinary Shares are traded.

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9.2    Nothing in this Agreement or in any document referred to in it shall constitute any of the parties a partner of any other, nor shall the execution, completion and implementation of this Agreement confer on any party any power to bind or impose any obligations to any third parties on any other party or to pledge the credit of any other party.

 

9.3    None of the parties may assign any of their respective rights or obligations under this Agreement in whole or in part.

 

9.4    This Agreement represents the entire understanding, and constitutes the whole agreement, in relation to its subject matter and supersedes any previous agreement between the parties with respect thereto and, without prejudice to the generality of the foregoing, excludes any warranty, condition or other undertaking implied at law or by custom.

 

9.5    No variation of this Agreement shall be effective unless made in writing and signed by or on behalf of the parties.

 

9.6    Nothing in this Agreement is intended to confer on any person any right to enforce any term of this Agreement which that person would not have had but for the Contract (Rights of Third Parties) Act 1999.

 

10. COUNTERPARTS

 

10.1 This Agreement may be executed in any number of counterparts and by the different parties on separate counterparts, each of which when executed and delivered shall constitute an original but all the counterparts shall together constitute but one and the same instrument.

 

11. GOVERNING LAW AND JURISDICTION

 

11 1 This Agreement shall be governed by, and construed in accordance with, English Law.

 

11.2 Each party irrevocably agrees that the Courts of England shall have exclusive jurisdiction in relation to any claim, dispute or difference concerning this Agreement and any matter arising therefrom.

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IN WITNESS whereof the parties have executed this Agreement on the day and year first above written.

 

SIGNED on behalf of

SEVEN ARTS PICTURES plc                                  /s/ Elaine New                             

Director

 

	
SIGNED on behalf of

SMITH & WILLIAMSON TRUSTEES (JERSEY) LIMITED in its capacity as trustee of

THE SEVEN ARTS PICTURES EMPLOYEE BENEFIT TRUST

	  

 

	
EXECUTED for and on behalf of

	
)

	
ARMADILLO INVESTMENTS

	
)

	
LIMITED (in liquidation)

	
)

 

/s/ Authorised Signatory

at

 

on the day of Two thousand and eight by the Liquidator (without incurring personal liability on the part of the Liquidator) in the presence of this witness:

 

Witness

 

Full Name

 

Address

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