EXHIBIT 10.23
Instar Holdings Inc
R.R.E. Commercial Centre
Majuro
Xxxxxxxx Islands ("Instar")
and
Universal Independent Holding Limited
PO Box 438
Tropic Isle Building
Wickams Cay
Road Town
Tortola
British Virgin Islands ("Universal")
To: Capital Media (UK) Limited
("Capital Media")
and Capital Media Group Limited
("Capital Media Group")
and Onyx Television GmbH
("Onyx")
and Superstar Ventures Limited
("Superstar")
Date: 1998
Dear Sirs
CAPITAL MEDIA GROUP LIMITED
1 We refer to
(i) certain financing arrangements pursuant to which Instar has
made available a loan to Capital Media of US$2,000,000 (the
"Instar Loan") and Universal has received a counter-indemnity
from Capital Media in respect of certain obligations
undertaken by Universal on behalf of Capital Media (the
"Universal Obligations") and in respect of which we were
granted certain guarantees and security by Capital Media,
Capital Media Group and Onyx; and
(ii) a letter of undertaking dated on or about 12 January 1998 and
made between us which you confirm by signing and agreeing to
the terms of this letter is a complete and accurate record of
the arrangements existing between us notwithstanding that the
documentation existing in respect of (i) has not been amended
to reflect such letter. (together the "Documentation")
2 We note that under the Documentation our consent is required to any
amendment of the terms thereto.
3 We hereby confirm that, subject to the matters described in paragraph 4
below, we
consent to:
(a) the amendment of the Instar Loan such that:
(i) the loan together with all interest whether accruing
or accrued thereon (the "Debt") shall be repaid in 6
instalments of US$50,000 payable on the 15th of each
month commencing on the 15th July 1998 and thereafter
in instalments of US$200,000 on the 15th of each
month until such time as the Debt together with all
obligations (including costs) arising under the
Instar Loan (together the "Instar Obligations") are
discharged in terms of the Instar Loan and certain of
the Documentation, save that in the event Capital
Media and/or Capital Media Group raises any funding
(from whatever source including debt and/or equity)
at any time prior to the repayment in full of the
Instar Obligations in any amount greater than or
equal to US$1,000,000 in addition to the funding of
US$11,640,000 (financed by A.B. Group and/or
Superstar in accordance with the cashflows notified
at the date hereof to Instar committed at the date of
this letter) (the date of receipt of any such funds
being referred to as the "Funding Date");
(A) to the extent not previously amended the
scheduled repayments of US$200,000 shall be
increased to US$250,000 with effect from the
Funding Date;
(B) an amount of the Instar Obligations equal to
US$50,000 multiplied by the number of
payments of US$200,000 made and/or due and
remaining unpaid up to the Funding Date
shall be immediately due and repayable; and
(C) if the amount of funding raised is greater
than an amount of US$1,000,000 an amount of
the Instar Obligations equal to forty per
cent (40%) of the amount raised in excess of
US$1,000,000 shall be immediately due and
repayable;
(ii) Instar's rights to convert the Instar Obligations (or
any part thereof) to shares in Capital Media Group
shall only be at such rate as is offered from time to
time to any existing or potential investors in
Capital Media Group. Instar is to be notified at
least ten business days prior to any Capital Media
Group share offer being closed or in the event there
is no closing date at least 10 business days but not
more than 15 business days prior to the placing
documentation being effected (which for the avoidance
of doubt shall mean the date the investment is made
by the investor and the shares are issued) or such
lesser period as Instar may in its absolute
discretion agree;
(iii) Capital Media shall pay to KPN Telecom (previously
PTT Telecom) all
amounts as may from time to time be required by KPN
Telecom and/or Universal to reduce and/or discharge
the guarantee in respect of the Transponder Lease
given by Universal in accordance with its terms; and
(iv) Capital Media shall pay all outstanding costs under
the Instar Facility by 31 December 1998 including
/pound sterling/30,000 being the balance of costs
outstanding at such date, as per the invoices issued
to Instar by XX Xxxxxx & Co prior to such date.
(b) Superstar having the right at any time (subject to reasonable
notice) to pay us an amount equal to all (but not part) of the
obligations (of whatever kind) of Capital Media, Capital Media
Group and Onyx owing to us pursuant to the Documentation and
on payment we shall transfer (so far as we are able) any
security that we have for such obligations.
4 PROVIDED ALWAYS THAT our consent hereunder in respect of the matters
described in paragraphs 3(a) and (b) above is conditional upon, and
shall not be effective until, the date the following conditions are
confirmed in writing by ourselves as satisfied:
(i) Superstar, Capital Media, Capital Media Group and
Onyx executing such documentation as we may require
(including a deed or priority) confirming that any
monies owed to Superstar by Capital Media, Capital
Media Group and Onyx shall rank and be paid out after
satisfaction of all liabilities and obligations (of
whatever type) to ourselves pursuant to the
Documentation by Capital Media, Capital Media Group
and Onyx. For the avoidance of doubt, the deed of
priority will include restrictions (of a type
customarily found in a subordination deed for full
subordination under English law) on Superstar
exercising its rights (without the consent of Instar
and Universal (as the case maybe) pursuant to the
security which it has in respect of Capital Media,
Capital Media Group and Onyx or otherwise against
Capital Media Group, Capital Media and Onyx in
accordance with the priority of Instar and Universal
(as the case maybe) as first chargee of Capital Media
and Capital Media Group;
(ii) execution by Capital Media, Onyx and Capital Media
Group of an amendment letter amending the Instar Loan
as per paragraph 3(a) above:
(iii) confirmation from XX Xxxxxx & Co that part of the
legal costs of Instar pursuant to its on-going
financing arrangements with Capital Media and Capital
Media Group in the amount of /pound sterling/10,000
have been paid by Capital Media to the client account
of XX Xxxxxx & Co at Barclays Bank PLC 0/0 Xxxxxxx
Xxxxxx, Xxxxxx Account Number 00000000, Sort Code
20-30-47;
(iv) receipt by Instar of the duly executed original share
certificates relating to
all the issued shares of Capital Media (the
"Shares"); and
(v) duly executed blank stock transfers in respect of the
Shares.
5 This letter shall be governed by and construed in accordance with
English law and, for the exclusive benefit of ourselves, each of
Capital Media, Capital Media Group, Onyx and Superstar irrevocably
submits to the exclusive jurisdiction of the courts of England and
appoints Xxxxxxx Xxxxxxx of 00 Xxxxxxxxx Xxxxxx, Xxxxxx X0 0XX to
accept service of all legal process arising out of or connected with
this letter.
6 Superstar, Capital Media and Capital Media Group confirm that, in
consideration of our consent to the variation to the Documentation
described above, that from the date of this letter they shall not cause
or allow anything to be done which may prejudice the terms of this
letter and or Instar's security for the Instar Loan.
7 It is acknowledged by Capital Media that non-performance (other than by
reason of non-performance by Instar or Universal of their obligations
under this letter) by Superstar, Capital Media, Capital Media Group and
Onyx of any actions required to give effect to the transactions
contemplated by this letter shall be a breach of the terms of the
Instar Loan and constitute an event of default under clause 15 of the
facility letter of 31 October 1996 relating to the Instar Loan.
8 Capital Media shall be liable for all costs and fees of Instar and/or
Universal arising from this letter and/or the actions contemplated by
this letter.
9 This letter maybe executed in any number of counterparts and all of
such counterparts shall be deemed to constitute one instrument.
10 Could you please confirm your agreement to the terms of this letter by
signing and returning the enclosed copy.
Yours faithfully
/s/__________________________
For and on behalf of
Instar Holdings Inc
/s/__________________________
for and on behalf of
Universal Independent Holdings Limited
We confirm our agreement to the terms of this letter.
/s/
---------------------------------
For and on behalf of
Capital Media (UK) Limited
We confirm our agreement to the terms of this letter.
/s/
---------------------------------
For and on behalf of
Capital Media Group Limited
We confirm our agreement to the terms of this letter.
/s/
---------------------------------
For and on behalf of
Onyx Television GmbH
We confirm our agreement to the terms of this letter.
/s/
---------------------------------
For and on behalf of
Superstar Ventures Limited
