EXHIBIT 10.1
SETTLEMENT AGREEMENT
This Settlement Agreement (the "Agreement") is made and entered into
this 23rd day of July, 1999, by and among Capital Media Group Limited
(the "Company"), Capital Media (UK) Limited ("CM (UK)") (a wholly-owned
subsidiary of the Company), Onyx Television GmbH ("Onyx") (a
wholly-owned subsidiary of CM (UK)), Instar Holdings Inc. ("Instar"),
Universal Independent Holdings Limited ("Universal"), Latitude
Investments Limited ("Latitude"), Xxxxxxx Xxxxxx ("Xxxxxx") and Xxxxxxx
Securities Limited ("Xxxxxxx").
In order to resolve pending disputes, and for other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
1 This settlement is final and satisfies in full any and all obligations
and amounts due from the Company and its subsidiaries to Instar and
Universal, including principal, interest and fees pursuant to all of
the agreements and understandings (whether legally binding or not)
between any or all of the parties in place at the date of this
Agreement. In full and final settlement of all amounts due, the Company
shall pay to Instar (on behalf of and for the benefit of Instar and
Universal, collectively the "Creditors") the following:
(a) US$1,000,000.00 upon signature of this Agreement by all the
parties hereto ("xxx Xxxxxxx") (as further defined below); and
(b) US$1,200,000.00, payable, without interest, in 12 instalments
of US$100,000.00 each over a twelve-month period, commencing
on 1 February 1999 with the first payment to be made on the
Closing (such payment being equal to all accrued but unpaid
instalments as at the date of the Closing), and with
subsequent instalments payable each month thereafter on, or
within 15 days from, the 1st business day of each month (such
15 day period shall be inclusive of the 1st and 15th days and
is described in this Agreement as "the Payment Period"). Each
such payment shall be made in United States dollars in cash by
wire transfer for value on the date of payment to such account
as Instar may nominate in writing from time to time. The
payments to be made hereunder shall not be subject to any
set-off, deduction or other withholding. If the Company fails
to make any instalment payment within the relevant Payment
Period for such payment pursuant to this clause 1(b), all
unpaid instalments (whether or not due) shall be accelerated
and shall be immediately due and payable to Instar in full,
without further demand by Instar, in the manner described in
this clause 1(b); and
(c) The Company shall allot and issue to Instar, credited as fully
paid and non-assessable and free of all liens, charges and
encumbrances, 2,000,000 shares (the "Shares") of the Company's
common stock. The Shares shall rank pari passu in all respects
with all other issued shares in the capital of the Company.
The issuance of such Shares shall take place (by the Company
delivering to Instar a duly issued definitive stock
certificate in respect of such shares) within 30 days of the
first date after the date of this Agreement on which the
shareholders of the Company approve any increase in the
Company's authorised share capital. However, should the
shareholders of the Company approve any increase in the
Company's authorised share capital yet fail to issue the
Shares to Instar within 30 days thereof the Company shall
forthwith upon the expiry of such 30 day period pay to Instar
the sum of US$800,000.00 in United States dollars in cash by
wire transfer for same day value to such account as Instar may
nominate in writing for this purpose, which payment shall be
in final satisfaction of the Company's obligations to issue
the Shares to Instar. Payment by the Company of the sum of
US$800,000.00 in
accordance with this clause shall comprise a complete
discharge of the Company's obligations to issue the Shares to
Instar. Instar may at any time before issue of the Shares
advise the Company as to a reallocation of these Shares to
third parties, including those persons who are parties to this
Agreement. The number of Shares issuable, as described above,
is prior to a contemplated reverse split of the Company's
shares on a 1 for 10 basis. If such reverse stock split is
approved and implement by the Company, the number of shares
issuable to Instar shall be adjusted pro rata fairly to
reflect any such stock split.
All payments to be made by the Company pursuant to this Agreement shall
be made in full on the due date and without any set-off, counter-claim
or deduction and without any withholding of whatsoever nature. For the
avoidance of doubt, any claim or counterclaim which the Company may in
future have or obtain against the Creditors shall be required to be
sued upon under a separate action and shall in no way affect or reduce
the Company's obligations hereunder.
2 The Company has previously alleged that Latitude has failed to pay
certain amounts due to CM (UK) in respect of subscriptions for shares
in CM (UK) by Latitude in 1995. Latitude has disputed this. Latitude,
the Company and CM (UK) hereby acknowledge and agree that this
Agreement and the settlement described herein shall constitute full and
final settlement of any amount(s) payable by Latitude to the Company or
CM (UK) which are hereby waived and released in all respects and for
all purposes, and that neither the Company nor CM(UK) shall have any
right to claim against Latitude in respect of any matter between them
as at the date hereof (any such right or claim being hereby released
and discharged in all respects).
3 As of the Closing, Instar and Universal shall release all charges which
they presently hold over the assets of the Company, CM (UK) and Onyx.
At the Closing, Instar and Universal shall execute the deeds of release
in the agreed form.
4 Instar agrees to pay X X Xxxxxx & Co for any fees and costs due to them
for legal services rendered to Instar and Universal in respect of the
US$2,000,000.00 loan facility agreement, and the transponder guarantee
agreement, between Instar and Universal on the one hand, and the
Company, CM (UK) and Onyx, on the other hand. The Company, CM (UK) and
Onyx shall no longer be obligated under the terms of such agreements to
reimburse Instar and Universal with respect to the payment of any such
fees and costs, and Instar and Universal shall indemnify the Company,
CM (UK) and Onyx from any liability to X X Xxxxxx & Co for any such
fees.
5 Closing of this Agreement shall take place immediately following its
signature and exchange. At the Closing:
(a) Instar and Universal shall deliver to the Company:
(i) irrevocable proxies in the agreed form from each of
Latitude, Transit, Xxxxxx, Telor International
Limited, Xxxx Xxxxxxxxx, Xxxxx Xxxxxxx, Xxxxx
Xxxxxxxx, Edgeport Nominees Limited (to the extent
that any shares in the capital of the Company held by
Edgeport Nominees Limited are beneficially owned by
Xxxxx Xxxxxxxx) and Xxxxxxx to vote all of the shares
of the Company's outstanding common stock which they
own in favor of all of the proposals reflected in the
proxy and to be presented by the Company's management
for consideration at a meeting of the Company's
stockholders (the "Meeting"), which Meeting is
expected to be held during the first half of 1999;
and
(ii) the deeds of release of the charges they presently
hold over the assets of the Company and/or CM (UK)
and/or Onyx in the agreed form duly executed; and
(b) the Company shall:
-2-
(i) pay to Instar the sum of US$1,000,000.00 referred to
in clause 1(a), and any unpaid instalments due
pursuant to clause 1(b), in United States dollars in
cash by wire transfer for same day value to such
account as Instar may nominate in writing for this
purpose;
(ii) deliver to Instar the letter in the agreed form from
Superstar Ventures Limited ("Superstar") to Instar,
inter alia, consenting to the Agreement; and
(iii) deliver to Instar the letter in the agreed form from
Capital Growth International LLC, as successor by
merger to U.S. Sachem Financial Consultants, L.P.,to
such persons as Instar may require, inter alia,
confirming the release of certain restrictions on
dealing in shares in the capital of the Company.
6 Subject to and except for the obligations arising under this Agreement,
with effect from the Closing:
(a) the Company, CM (UK) and Onyx each hereby knowingly,
voluntary, absolutely and unconditionally release and
discharge each of Instar, Universal, Latitude, Transit,
Xxxxxxx Xxxxxx, Xxxxxxx and each of their respective
subsidiaries, affiliates, officers, directors, trustees,
shareholders, agents, employees, consultants, attorneys,
successors and other legal representatives and permitted
assigns (both in their official and individual capacities)
from any and all obligations, claims or liabilities of
whatsoever nature (and whether actual, contingent or
otherwise) in connection with, arising from or relating to the
relationship and agreements (and disputes) between any of
Instar, Universal, and Latitude, on the one hand, and any of
the Company, CM (UK) and Onyx, on the other hand;
(b) Instar, Universal, Latitude, Transit, Xxxxxxx Xxxxxx and
Xxxxxxx each hereby knowingly, voluntary, absolutely and
unconditionally release and discharge each of the Company and
each and every of its respective subsidiaries (including CM
(UK) and Onyx), affiliates, officers, directors, trustees,
shareholders, agents, employees, consultants, attorneys,
successors and other legal representatives and permitted
assigns (both in their official and individual capacities)
from any and all obligations, claims or liabilities of
whatsoever nature (and whether actual, contingent or
otherwise) in connection with, arising from or relating to the
relationship and agreements (and disputes) between any of
Instar, Universal, and Latitude, on the one hand, and any of
the Company, CM (UK) and Onyx, on the other hand;
(c) the Company, CM (UK) and Onyx and each and every of their
respective subsidiaries (collectively, "the Companies") each
hereby knowingly, voluntary, absolutely and unconditionally
release and discharge Xxxxxxx Xxxxxx from any and all
obligations, claims or liabilities of whatsoever nature (and
whether actual, contingent or otherwise) in connection with,
arising from or relating to any cause or circumstances
whatsoever (including, without limitation, the activities of
the Company and its subsidiaries or arising out of Xxxxxxx
Xxxxxx'x service as an officer or director of the Company or
its subsidiaries); provided however, for the avoidance of
doubt, that this release shall not be deemed to be, or
constitute for any purpose, a release or discharge by any
director, officer or employee of any of the Companies of any
claims or rights which any such director, officer or employee
may have against Xxxxxxx Xxxxxx whether or not relating to the
activities of the Companies;
(d) Xxxxxxx Xxxxxx hereby knowingly, voluntary, absolutely and
unconditionally releases and discharges each of the Companies
from any and all obligations, claims or liabilities of such
companies of whatsoever nature (and whether actual, contingent
or otherwise) in connection with, arising from or relating to
any cause or circumstances whatsoever
-3-
(including, without limitation, the activities of the Company
and its subsidiaries or Xxxxxxx Xxxxxx'x service as a director
or officer of the Company or its subsidiaries); provided
however, for the avoidance of doubt, that this release shall
not be deemed to be, or constitute for any purpose, a release
or discharge of any director, officer or employee of any of
the Companies, from any claims or rights Xxxxxxx Xxxxxx may
have against any such person whether or not relating to the
activities of the Companies; and
(e) the Company, CM (UK) and Onyx shall forthwith dismiss with
prejudice any and all lawsuits which they have filed against
Xxxxxxx Xxxxxx, and Xxxxxxx Xxxxxx shall forthwith dismiss
with prejudice any and all lawsuits which he has filed against
the Company, CM (UK) or Onyx, and no party to any such
litigation or proceedings shall have any liability to any
party thereunder whether for costs or otherwise,
(references in this clause to directors of the Company or its
subsidiaries shall include any and all past, present or future
directors and other officers of the Company or any of its
subsidiaries).
6A As soon as possible following the date of this Agreement, and in any
event prior to the close of business on the date 30 days after the date
of this Agreement ("the Delivery Date"), the Company shall deliver, or
procure the delivery by Groupe AB, to Instar of the Deed of Guarantee
and Undertaking to Pay ("the Guarantee") in the agreed form duly
executed by Groupe AB. As soon as possible following the date of this
Agreement, and in any event prior to the close of business on the date
30 days after the Delivery Date ("the Opinion Date"), the Company shall
deliver, or procure the delivery by Groupe AB, to Instar of a legal
opinion in terms, and from French legal counsel, in each case
reasonably satisfactory to Instar stating that the Guarantee is duly
executed by Groupe AB, and is valid and binding upon Groupe AB, and is
enforceable against Groupe AB in accordance with its terms. In the
event that the Company commits any breach of its obligations hereunder,
or fails to deliver or procure the delivery of the documents described
in this clause 6A, on or prior to the Delivery Date, or the Opinion
Date as the case may be, all outstanding obligations of the Company
under this Agreement (including, for the avoidance of doubt, all unpaid
instalment payments due under clause 1(b)) shall be accelerated and
shall be immediately due and payable to Instar in full, without further
demand by Instar, in the manner contemplated by this Agreement.
7 If at any time after the date of this Agreement the Company files a
registration statement to register for resale any shares or other
securities of, or in the capital of, the Company (other than solely to
register shares of common stock in the capital of the Company the
subject of warrants to subscribe for such shares subsisting as at the
date of this Agreement, which the Company represents to Instar and
Universal are required to be registered by the Company as soon as
practicable pursuant to the terms of such warrants), the Company shall
register the Shares for resale pursuant to the same registration
statement. Issuance of the Shares shall not initially be registered
under the United States Securities Act of 1933, as amended, and the
Shares shall bear the following restrictive transfer legend (and stop
transfer instructions shall be placed against the certificates
representing the Shares):
"THE SHARES OF THE COMPANY'S COMMON STOCK REPRESENTED BY THIS STOCK
CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF
1933 AND MAY NOT BE TRANSFERRED OR SOLD UNLESS PURSUANT TO A VALID
EXEMPTION, OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR ON THE
BASIS OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY'S
COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED."
8 The parties expressly agree that neither this Agreement nor the
negotiations or proceedings leading up to this Agreement, nor the
payment of any consideration pursuant to this Agreement, shall be taken
to be an admission of any kind by any party.
-4-
9 This Agreement shall be considered to have been jointly drafted and
shall not be construed against any party.
10 This Agreement shall inure to and shall be binding on all heirs,
successors and interests, assigns and legal representatives of the
parties.
11 By executing this Agreement, each party expressly acknowledges that it
has had the advice of counsel regarding the effect of the execution and
delivery of this Agreement, the releases and the consequences of all of
the provisions of the Agreement and the releases.
12 Each party represents and warrants to each other party that it is fully
empowered and authorised to enter into this Agreement, which
constitutes valid and binding obligations upon it, and to perform and
discharge the obligations hereunder.
13 This Agreement may not be modified or amended except by an agreement in
writing signed by the Company, Instar and Universal.
14 Any headings, sections, paragraph numbers or other descriptions are
inserted in this Agreement for convenience only and shall not control
or affect the meaning or construction of any of the provisions herein.
15 This Agreement constitutes the entire agreement among the parties
pertaining to the subject matter and supersedes all prior and
contemporaneous agreements and understandings of the parties, unless
expressly adopted and referred to in this Agreement.
16 For the convenience of the parties, this Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute the same binding agreement
of the parties.
17 This Agreement shall be governed by and construed in accordance with
English law and the parties hereby irrevocably submit for all purposes
to the exclusive jurisdiction of the High Court of Justice in London,
England.
18 In the event that any of the provisions of this Agreement shall be held
to be invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect any other provision hereof and this
Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
19 The "effective date" of this Agreement shall be the date of the
Closing.
20 Should it become necessary for any party to institute legal action to
enforce the terms and conditions of this Agreement, the successful
party will be awarded all its legal fees and expenses calculated on the
indemnity basis.
21 Any communication to be given in connection with this Agreement shall
except where expressly provided otherwise be in writing and shall
either by delivered by hand or sent by first class pre-paid post within
the United Kingdom or sent by facsimile transmission. Delivery by
courier shall be regarded as delivery by hand.
22 Any such communication shall be sent to the address of the relevant
party referred to below or to the facsimile number set out below or to
such other address or facsimile number as may previously have been
communicated to each other party in accordance with this clause. Each
communication shall be marked for the attention of the relevant person
identified below:
(a) Instar Holdings Inc
The Company Complex
Ajeltake Islands
X X Xxx 0000
-0-
Xxxxxx
Xxxxxxxx Xxxxxxx
XX00000
For the urgent attention of the Company Secretary
with a copy to:
Merlin Group Securities
Limited Facsimile number 00 44 1481 244299
Mont Xxxxxxx Xxxxx
Xxxxx Xxxx
Xx Xxxxxxx'x
Xxxxxxxx XX0 0XX
For the urgent attention of Xxxx Xxxxxxxxx
and to
X X Xxxxxx & Co Facsimile number 00 44 171 533 2222
000 Xxxxx Xxx Xxxx
Xxxxxx XX0X 0XX
Xxxxxxx
For the urgent attention of Xxxxxx X Xxxxx
(b) Universal Independent
Holdings Limited
Tropic Isle Building
Wickhams Cay
Road Town
Tortola
British Virgin Islands
For the urgent attention of the Company Secretary
with a copy to:
Kestrel SA Facsimile number 00 41 32 724 63 21
Pausilippe
Xxxxxx xxx Xxxxx-Xxxxxx xx
0000 Xxxxxxxxx
Xxxxxxxxxxx
For the urgent attention of Xxxxxxx Screech
and to:
X X Xxxxxx & Co Facsimile number 00 44 171 533 2222
000 Xxxxx Xxx Xxxx
Xxxxxx XX0X 0XX
Xxxxxxx
For the urgent attention of Xxxxxx X Xxxxx
-6-
(c) Capital Media Group
Limited, Facsimile number 00 33 1 4375 1237
Capital Media (UK) Limited
and Onyx Television GmbH
0 Xxx xx Xxxxxxx Xxxxx
00000, Xxxxxxxxx, Xxxxxx
For the urgent attention of Xxxxxx Xxxxxxxxx
with a copy to:
Akerman Senterfitt & Xxxxxx Facsimile number 00 1 305 374 5095
One Xxxxxxxxx Xxxxx Xxxxxx,
00xx Xxxxx
Xxxxx
Xxxxxxx 00000 - 1704
USA
For the urgent attention of Xxxxxx X Xxxxxxxx
(d) to any other party at its principal place of business from
time to time.
23 A communication shall be deemed to have been served:
(a) if delivered by hand at the address referred to in clause 22,
at the time of delivery;
(b) if send by first class pre-paid post within the United Kingdom
to the address referred to in clause 22, at the expiration of
two clear days after the time of posting; and
(c) if sent by facsimile to the number referred to in clause 23,
at the time of completion of transmission by the sender.
If a communication would otherwise be deemed to have been delivered
outside of normal business hours (being 9.30 am to 5.30 pm on a
Business Day) in the time zone of the territory of the recipient under
the preceding provisions of this clause, it shall be deemed to have
been delivered at the opening of business on the next Business Day.
24 In proving service of the communication, it shall be sufficient to show
that delivery by hand was made or that the envelope containing the
communication was properly addressed and posted as a first class
pre-paid letter within the United Kingdom or that the facsimile was
despatched and a confirmatory transmission report produced.
25 A party may notify the other parties to this Agreement of a change to
its name, relevant person, address or facsimile number for the purposes
of clause 23 and such notification shall only be effective on the date
specified in the notification as the date on which the change is to
take place.
26 Save as expressly provided herein, the terms and existence of this
Agreement shall be strictly confidential and no party shall divulge to
any person (other than their respective professional advisers) the fact
that this Agreement or any of the documents referred to herein has been
entered into or any information regarding its terms or any matters
contemplated by this Agreement or make any announcement relating to it
without the prior agreement of Instar and the Company. This clause
shall not prevent any party from making any announcement or disclosure
which such party is required to make pursuant to applicable law or
pursuant to the rules and regulations of the United States Securities &
Exchange Commission ("SEC") or any other governmental or regulatory
authority to which such party is subject. Each party agrees that any
announcement or disclosure which it is required to make regarding the
subject matter of this Agreement shall not include any
-7-
information other than the fact this Agreement has been entered into
and reasonable details of its terms stated herein. Additionally, a copy
of this settlement agreement may be filed as an exhibit to the
Company's filings with the SEC if so required by the rules and
regulations of the SEC.
IN WITNESS whereof this Deed has been entered into by each of the
parties on the date written at the beginning of this document.
THE COMMON SEAL of )
CAPITAL MEDIA GROUP LIMITED )
was hereunto affixed in the presence of )
two of its directors: )
/s/
..........................................................
Director
/s/
..........................................................
Director
THE COMMON SEAL of )
CAPITAL MEDIA (UK) LIMITED )
was hereunto affixed in the presence of )
two of its directors: )
/s/
..........................................................
Director
/s/
..........................................................
Director
-8-
THE COMMON SEAL of )
ONYX TELEVISION GmbH )
was hereunto affixed in the presence of )
two of its directors: )
/s/
..........................................................
Director
..........................................................
Director
THE COMMON SEAL of )
INSTAR HOLDINGS, INC. )
was hereunto affixed in the presence of )
two of its directors: )
/s/
..........................................................
Director
/s/
..........................................................
Director
THE COMMON SEAL of )
UNIVERSAL INDEPENDENT HOLDINGS )
LIMITED was hereunto affixed in the presence )
of two of its directors: )
/s/
..........................................................
Director
/s/
..........................................................
Director
-9-
THE COMMON SEAL of )
LATITUDE INVESTMENTS LIMITED )
was hereunto affixed in the presence of )
two of its directors: )
/s/
..........................................................
Director
/s/
..........................................................
Director
THE COMMON SEAL of )
XXXXXXX SECURITIES LIMITED )
was hereunto affixed in the presence of )
two of its directors: )
/s/
..........................................................
Director
/s/
..........................................................
Director
EXECUTED AS A DEED by )
XXXXXXX XXXXXX ) /s/
in the presence of )
-10-
