EXHIBIT 10.12
DATED 31 October 1996
DEED OF PRIORITIES
INSTAR HOLDINGS INC (1)
- and -
UNIVERSAL INDEPENDENT
HOLDINGS LIMITED (2)
- and -
CAPITAL MEDIA UK LIMITED (3)
TABLE OF CONTENTS
PARTIES 1
INTRODUCTION 1
1 Definitions and Interpretation 1
2 Confirmations 2
3 Priorities 2
4 Appointment of Receiver 3
5 Transferability 4
6 The Borrower 4
7 Law 4
SCHEDULE 1 6
SCHEDULE 2 7
SCHEDULE 3 8
ATTESTATIONS 9
DATE
31 October 1996
PARTIES
(1) INSTAR HOLDINGS INC whose registered office is at R.R.E. Commercial
Centre, Majuro Marshall Islands ("Instar");
(2) UNIVERSAL INDEPENDENT HOLDINGS, whose registered office is at PO box
438, Tropic Isle Building, Wickhams Cay, Road Town, Tortola, British
Virgin Islands ("Universal"); and
(3) CAPITAL MEDIA (UK) LIMITED registered in England under number 3025201,
whose registered office is at 25 James Street London W1M 5HY (the
"Borrower").
INTRODUCTION
The Parties have agreed to regulate their respective priorities in
respect of the security referred to in the Schedules in the manner set
out in this Deed.
OPERATIVE PROVISIONS
1 DEFINITIONS AND INTERPRETATION
1.1 In this Deed (including the Introduction), unless the context otherwise
requires, the following words and expressions shall have the following
meanings:
Capital Media Group Capital Media Group Limited a
company registered in the State of
Nevada United Sates of America and
having its principal office at 25
James Street London W1M 5HY
Instar Charges the mortgages or charges referred
to in Schedule 2 below and any other
security interest which at the date
of this Deed or at any later date
secures the Instar Debt
Instar Debt all monies, liabilities and
obligations, whether principal
interest or otherwise now or at any
time after the date hereof being or
becoming due, owing or incurred by
the Borrower or Capital Media Group
to Instar whether actual, contingent
present or future and whether done
severally or jointly with any other
person and whether as principal or
surety or in some other capacity,
together with interest legal and
other costs, charges and expenses
interest shall be calculated and
compounded in accordance with the
usual practice of Instar from time
to time as well after as before any
demand made or judgment ascertained
hereunder
Universal Charges the mortgages or charges referred
to in Schedule 1 below and any other
security interest which at the
date of this Deed or at any later
date secures any Universal Debt
Universal Debt all monies, liabilities and
obligations, whether principal
interest or otherwise nor or at any
time after the date hereof being or
becoming due, owing or incurred by
the Borrower or Capital Media Group
to Universal whether actual,
contingent present or future and
whether done severally or jointly
with any other person and whether as
principal or surety or in some other
capacity, together with interest
legal and other costs, charges and
expenses whatsoever or in a full
indemnity basis so that interest
shall be calculated and compounded
in accordance with the usual
practice of Universal from time to
time as well after as before any
demand made or judgment ascertained
hereunder
Priority Assets the property and assets described
in Schedule 3
Subordination Period the period beginning on the date
hereof and ending on the date
following which the Universal Debt
has been unconditionally and
irrevocably paid and discharged in
full and no liabilities remain
outstanding under the terms of the
Universal Debt.
2 CONFIRMATIONS
2.1 For the avoidance of doubt:
(a) Instar consents to the creation and registration of the
Universal Charges; and
(b) Universal consents to the creation and registration of the
Instar Charges.
2.2 Each of Universal and Instar confirm that they have taken no action to
crystallise any floating charge given by the Borrower to either of them
nor are they aware that any such floating charge has crystallised.
2.3 The Borrower hereby confirms and warrants to each of Universal and
Instar that:
(a) it has not ceased to carry on business;
(b) no floating charge given by it has at the date hereof
crystallised and that such party is aware of no event having
occurred or about to occur which could result directly in the
crystallisation of any such floating charge.
3 PRIORITIES
3.1 During the Subordination Period in relation to the Priority Assets, the
Universal Debt and Universal Charges shall rank in priority to the
Instar Debt and Instar Charges.
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3.2 Save in relation to the Priority Assets, the Instar Debt and the Instar
Charges shall rank in priority to the Universal Debt and Universal
Charges.
3.3 Clauses 3.1, 3.2 and 3.4 apply:
(a) as between Universal and Instar; and
(b) as between the Borrower and each of Universal and Instar.
3.4 Nothing in this Deed shall affect the status of the Universal Charges
and the Instar Charges as continuing securities nor shall the ranking
of the Universal Charges and the Instar Charges contained in this
Clause 3 be affected by any of, or any combination of, the following:
(a) the nature of the various securities comprised in the
Universal Charges and the Instar Charges and the date of their
execution and registration;
(b) any provision contained in any of the Universal Charges and
the Instar Charges;
(c) the respective date or dates on which any person received
notice of the existence or creation of the Universal Charges
and the Instar Charges;
(d) the respective date or dates upon which moneys may be or have
been advanced or become owing or payable or secured under the
Universal Charges and the Instar Charges;
(e) any fluctuation from time to time in the amount of the moneys
secured by the Universal Charges and the Instar Charges (which
shall be continuing securities in favour of each chargee
respectively) and in particular, but without limitation, any
reduction to nil of the moneys so secured or any advance or
loans by Universal and Instar (as appropriate) to the Borrower
acting by a receiver or administrative receiver or any advance
or loan made by Universal or Instar to any receiver or
administrative receiver of the Borrower in a personal capacity
both before and after liquidation of the Borrower;;
(f) the existence at any time of a credit balance on any current
or other account of the Borrower; or
(g) the appointment of any liquidator or receiver, administrator
or other similar officer in respect of the Borrower or over
all or any part of the Borrower's assets.
4 APPOINTMENT OF RECEIVER
4.1 Universal and Instar agree that if either wishes to appoint an
administrative receiver or receiver of the Borrower or to exercise its
power of sale or otherwise enforce any of its security, it shall
forthwith inform the other of its intention and endeavour to agree with
the other on the method by which its security will be enforced.
Universal and Instar shall consult together with a view to agreeing
upon the method of enforcement and where appropriate upon a suitable
person to be appointed administrative receiver or receiver and shall
endeavour to co-operate with each other in realising the assets charged
to them and ensuring that the net proceeds
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after deduction of the expenses of realisation are paid in accordance
with the provisions of this Deed provided that nothing herein contained
shall prevent either of them from appointing an administrative receiver
or a receiver of the Borrower forthwith without such consultation or
agreement where the appointor believes that the immediate appointment
of the same is necessary to protect its interests. However, the
appointor shall as soon as practicable thereafter inform Universal or
Instar, as the case may be, of such appointment and consult with it
with a view to the retention in office of such an administrative
receiver or receiver or (if not agreed) to the appointment of others to
act jointly with him.
4.2 If Instar appoints a receiver or an administrative receiver pursuant to
the Instar Charges, such receiver or administrative receiver shall give
priority to any receiver or administrative receiver subsequently
appointed by Universal such priority to be in relation to the Priority
Assets only, and if Universal appoint such a receiver or administrative
receiver pursuant to the Universal Charges, it shall procure that such
receiver or administrative receiver gives priority to any receiver
subsequently appointed by Instar such priority to be in relation to all
assets of the Borrower other than the Priority Assets.
4.3 Instar will, at the request of Universal or any receiver or
administrative receiver appointed by Universal and at the cost of the
Borrower (or if the Borrower does not have sufficient funds to make the
appropriate payments, at the cost of Instar), join in such documents or
otherwise take such action as shall be reasonably required to
facilitate the disposal of the Priority Assets or any of them whether
or not there will be any balance of proceeds available for Instar
arising from a disposal of the Priority Assets or any of them.
5 TRANSFERABILITY
5.1 All references in this Deed to Universal, Instar and the Borrower shall
in each case be deemed to include their successors in title and
assigns, provided always that any successor and assign shall enter into
a deed in form and substance satisfactory to Universal and Instar
confirming that such successor and assign shall be bound by the
provisions of this Deed.
5.2 Universal and Instar acknowledge the right of each other to copies of
the Universal Security and the Instar Security, respectively.
6 THE BORROWER
The Borrower acknowledges the terms of this Deed and that nothing
contained contracted in this Deed shall in any way affect or prejudice
its liability to or the rights and remedies of Universal and Instar
under their respective security all of which shall remain in full force
and effect subject only to the priorities established by this Deed.
7 LAW
7.1 This Deed is governed by English law.
7.2 Universal and Instar irrevocably agree for the exclusive benefit of
Universal and Instar respectively that the courts of England shall have
jurisdiction to hear and determine any suit action or proceeding, and
to settle any disputes, which may arise
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out of in connection with this Agreement and for such purposes hereby
irrevocably submits to the jurisdiction of such courts.
7.3 Nothing contained in this Clause shall limit the right of Instar or
Universal to take proceedings against the Borrower in any other court
of competent jurisdiction, nor shall the taking of any such proceedings
in one or more jurisdictions preclude the taking of proceedings in any
other jurisdiction, whether concurrently or not (unless precluded by
applicable law).
7.4 Universal hereby authorises and appoints _______________________ of
___________________ and Instar hereby authorises and appoints
___________________ of _______________ (or such other person being a
firm of solicitors or authorised institution in England as it may
substitute by notice to Instar and Universal as the case may be to
accept service of all legal process arising out of or connected with
this Deed. Service on such person(s) (or substitute) shall be deemed to
be service on Instar whether or not process is forwarded to or received
by it.
IN WITNESS whereof the parties hereto have executed and delivered this
Deed on the date first above written.
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SCHEDULE 1
1 The Facility dated __ 1996 and made between Instar (1) and the Borrower
(2).
2 A Debenture dated __ 1996 and made between Instar (1) and the Borrower
(2).
3 A Security Assignment dated __ 1996 and made between Instar (1) and the
Borrower.
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SCHEDULE 2
1 A Counter Indemnity dated __1996 and made between Universal and the
Borrower
2 A Debenture dated __ and made between Universal (1) and the Borrower
(2)(the "Universal Debenture")
3 Each and every other security document created by the Borrower in
favour of Universal relating to the Priority Assets.
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SCHEDULE 3
All the rights title and interest of the Borrower of whatever kind
whatsoever in respect of an agreement dated 25 September 1995 made
between PTT Telecom BV and the Borrower whereby the PTT Telecom BV
agreed to lease to the Borrower transporter capacity (the "PTT
Lease")and in addition thereto all such items charged by the floating
charge contained in Clause 2.2.(j) of the Universal Debenture which
relate to or form any part of the PTT Lease.
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ATTESTATIONS
EXECUTED as a Deed on behalf of )
INSTAR HOLDINGS INC a company )
incorporated in the Marshall islands )
by Anthony Michael Bousfield, Director ) /s/ ANTHONY MICHAEL BOUSFIELD
and Philip Oscal Gallienne, Secretary ) /s/ PHILIP OSCAR GALLIENNE
being a person/persons who in )
accordance with the laws of that )
territory is/are empowered to sign )
this document on behalf of the Company )
EXECUTED as a Deed on behalf of )
UNIVERSAL INDEPENDENT )
HOLDINGS LIMITED incorporated )
in the British Virgin Islands )
by ) /s/
and ) /s/
being a person/persons who in )
accordance with the laws of that )
territory is/are empowered to sign the )
document on behalf of the Company )
EXECUTED and delivered as a deed )
by CAPITAL MEDIA (UK) LIMITED )
acting by: )
/s/ BARRY LLEWELLYN Director
/S/ CHARLES KOPPEL Secretary
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