EXHIBIT 10.2
INSTAR HOLDINGS INC.
R.R.E. COMMERCIAL CENTRE
MAJURO
MARSHALL ISLANDS
TO: Capital Media (UK) Limited
25 James Street
London W1M5HY July 31, 1997
Dear Sirs
We refer to the US$2,000,000 cash advance facility dated 31 October 1996 between
you and us as amended by a letter of variation and amendment dated 14 January
1997, a letter of variation and amendment dated 31 January 1997, a letter of
variation and amendment dated 3 March 1997 a letter of variation and amendment
dated 10 March 1997 and a letter of variation and amendment dated 25 June 1997
(together the "Facility").
We hereby confirm our agreement that with effect from the date of this letter:
(b) at clause 1.1
(i) the definition of "Repayment Date" shall be
supplemented and amended by deleting after "the" in
line 1 "1 December 1997" and inserting "20 January
1998"; and
(ii) shall be inserted the definition of "CMG" Capital
Media Group Limited (registered in the State of
Nevada United States of America) whose principal
office is at 25 James Street, London W1M 5HY".
(c) at clause 9(b) shall be inserted:
"(6) In the event that CMG consummates the share exchange
contemplated by the agreement and plan of reorganization dated
March 4, 1997, by and among CMG, Unimedia S.A., a company
organized under the laws of the Republic of France, Company
No. RCS Paris B 401 988 308 ("Unimedia") and those
shareholders of Unimedia a party thereto, as amended by that
certain Amendment No. 1 dated June 23, 1997, Amendment No. 2
dated as of July 11, 1997 and Amendment No. 3 dated as of July
18, 1997 (the "Unimedia Agreement") on or around 25 July 1997;
(a) CMG shall prior to or simultaneously create a series of
Preferred Stock called "Series A Preferred Stock" with the
rights, preferences and limitations described in the
Certificate of Designations (the "Designation") required to be
filed with the Secretary of State of Nevada in the form
attached to this this letter hereto as Exhibit "A";
(b) Notwithstanding anything to the contrary contained in this
clause 9 with respect to the convertibility of the Loan into
Shares;
(i) In the event that Stockholder Approval (as hereinafter
defined) has not been obtained, Instar shall have the right at
any time by notice in writing to convert to shares of Series A
Preferred Stock at the rate of US$0.50 of Loan per share of
Series A Preferred Stock; provided however if Stockholders
Approval is obtained following the aforementioned conversion
to Series A Preferred Stock, the Series A Preferred Stock then
issued shall immediately automatically convert (as set fort in
the Designation) into Shares on a one-for-one basis in
accordance with the terms and conditions of the Series A
Preferred Stock; and
(ii) In the event that Stockholder Approval has been obtained, the
Lender shall have the right at any time to convert the Loan
into Shares at the Conversion Rate.
The term "Stockholder Approval" shall have the meaning given
to such term in the Designation.
Shares issuable upon conversion of the Loan are hereinafter
referred to as "Conversion Shares", whether consisting of
Shares or Series A Preferred Stock.
(7) CMG shall use its best good faith efforts to cause a meeting
of the stockholders of CMG to be held on or prior to December
1, 1997 for the purpose of obtaining, among other things,
Stockholder Approval. Upon Stockholder Approval, the Company
shall reserve for issuance that number of shares equal to the
number of Conversion Shares.
(8) CMG hereby grants to the Lender the same rights of
registration with respect to the Conversion Shares as were
granted to the shareholders of Unimedia, who are a party to
the share exchange contemplated by the Unimedia Agreement. CMG
shall include the Conversion Shares in the first registration
statement filed by CMG in respect of any of it shares
including but not limited to the common stock (unless
prohibited by law or by the Securities and Exchange
Commission)."
(c) at clause 15.1 shall be inserted after (p)
"(q) Stockholder Approval (as defined in the Designation) is
not obtained by close of business on the 1 December and/or CMG
breaches any of its obligation under this letter".
Save as stated above, the Facility shall continue in full force and
effect in accordance with its terms and all references in the Facility
to "this Facility Letter", "hereunder" or cognate expressions shall be
deemed to be references to the Facility Letter as amended by this
letter and the Facility Letter shall be read together with this letter.
Terms defined in the Facility shall have the same meaning in this
letter.
Could you please confirm your agreement to the terms of this letter by
signing and returning the enclosed copy.
This letter shall be governed by and construed in accordance with the
laws of England.
Yours faithfully
-2-
/s/ A.M. BOUSFIELD, DIRECTOR
- -----------------------------
For and on behalf
Instar Holdings Inc
-3-
We confirm our agreement to the terms of this letter and confirm that the terms
set out shall be part of the Facility
/s/ CHARLES KOPPEL
- ------------------------------
For and on behalf of
Capital Media (UK) Limited
-4-
We confirm our agreement to the terms of this letter and that the terms set out
shall be part of the Facility
/s/ CHARLES KOPPEL
- ------------------------------
For and on behalf of
Capital Media Group Limited
-5-