===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
JULY 11, 1997
-------------
CAPITAL MEDIA GROUP LIMITED
---------------------------
(Exact name of registrant as specified in its charter)
NEVADA 0-21051 87-0453100
------ ------- ----------
(State or other (Commission File (I.R.S. Employer
jurisdiction Number) Identification
of incorporation) No.)
25 JAMES STREET
LONDON W1M 5HY, ENGLAND
-----------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: 011-44-171-224-4141
===============================================================================
<PAGE>
ITEM 5. OTHER EVENTS.
Effective July 11, 1997, Capital Media Group Limited, a Nevada
corporation (the "Company") entered into Amendment No. 2 (the "Second
Amendment") to that certain Agreement and Plan of Reorganization (as amended,
the "Agreement"), dated effective as of March 4, 1997, with Unimedia, S.A., a
company organized under the laws of France ("Unimedia"), and certain of its
securities holders. The Company and Unimedia had previously entered into
Amendment No. 1 to the Agreement (the "First Amendment") which, among other
things, reinstated and amended the Agreement.
For information regarding the terms of the Agreement, see the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1996, which
contains, as Exhibit 2.2 thereto, a copy of the form of the Agreement. For
information regarding the terms of the First Amendment, see the Company's
Current Report on Form 8-K dated June 25, 1997, which contains, as Exhibit 2.2
thereto, a copy of the First Amendment.
Pursuant to the First Amendment, Unimedia, on behalf of several
investors, subscribed to purchase 7,017,543 shares of the Company's authorized
but unissued Common Stock, for an aggregate purchase price of $4.0 million
($0.57 per share) in a private placement (the "Subscription"). Of these funds,
$1.5 million was immediately made available to the Company (for which Unimedia
purchased an aggregate of 2,631,579 shares of Common Stock). The balance of the
proceeds of the private placement ($2.5 million) was to be placed in escrow and
made available to the Company at the closing of the Share Exchange (at which
time Unimedia will have purchased an additional 4,385,964 shares of Common
Stock).
On or about July 11, 1997, Unimedia deposited $2.0 million in escrow
(the "Proceeds Escrow") of the $2.5 million required to be deposited in the
escrow by the terms of the First Amendment and advised the Company that the
remaining $500,000 (the "Balance") would be available on or prior to the closing
of the Share Exchange. Pursuant to the Second Amendment, and as an additional
condition to the Company's obligation to close the Share Exchange, the Balance
is to be paid as follows: (i) prior to the closing of the Share Exchange,
Unimedia will deposit the Balance in the Proceeds Escrow to be released to the
Company at the Effective Time of the Share Exchange or (ii) at the Effective
Time of the Share Exchange Unimedia will pay $350,000 to the Company, together
with written evidence satisfactory to the Company that $150,000 has been paid by
Unimedia to the finder(s) entitled to such sum (in connection with the
Subscription, the Company agreed to pay Unimedia or its designee a fee of
$60,000 for each $1.0 million raised in the private placement ($240,000 in the
aggregate) for services with respect to the private placement).
In connection with the Proceeds Escrow, the Company and Unimedia
entered into an Escrow Agreement (the "Escrow Agreement") dated as of July 11,
1997 with Mr. Montaque Koppel, attorney-at-law (the "Escrow Agent"). Mr. Koppel
is the father of Charles Koppel, the Co-Chairman, President and Chief Executive
Officer of the Company. The Escrow Agreement provides that the Escrow Agent
shall disburse the escrow fund (including the amount representing the Balance
deposited therein, if applicable) upon (i) the joint written instruction of the
Company and Unimedia
<PAGE>
or (ii) if such instruction is not received by 5:00 p.m. (Paris, France time) on
July 31, 1997 (or such later date as is mutually agreed upon in writing by the
Company and Unimedia and communicated to the Escrow Agent prior to such date),
the Escrow Agent must disburse the funds contained in the Proceeds Escrow back
to Unimedia. The Escrow Agent is to receive no fees for its services under the
Escrow Agreement. The Escrow Agreement contains customary provisions including
indemnification by the parties of the Escrow Agent.
Effective July 18, 1997, the Company entered into Amendment No. 3 to
the Agreement (the "Third Amendment"; the First Amendment, the Second Amendment
and the Third Amendment are hereinafter collectively referred to as the
"Amendments"). Pursuant to the Agreement, as amended by the Amendments, at a
closing to be held on or before July 31, 1997, the Company will, subject to
certain conditions, acquire all of Unimedia's outstanding securities (inclusive
of securities convertible into or exercisable for shares of Unimedia common
stock which are converted or exchanged prior to the Closing) in a share exchange
(the "Share Exchange") in return for up to 9,402,400 shares of the Company's
authorized but unissued common stock, $.001 par value ("Common Stock"), on the
basis of 700 shares of the Company's Common Stock for each share of outstanding
or (upon conversion or exchange) to-be-outstanding Unimedia common stock.
If the holders of more than 50% of Unimedia's common shares outstanding
at the Effective Time complete the Share Exchange on or before July 31, 1997,
the Share Exchange will be closed as to such holders, so long as the other
conditions to closing contained in the Agreement are either satisfied or waived
on or before the Closing. In such event, the Company will consummate the Share
Exchange on the terms set forth in the Agreement with the other common
shareholders and securities holders of Unimedia until September 5, 1997, upon
presentation to the Company on or prior to that date of completed documentation
with such holders. After September 5, 1997, the Company will be under no
obligation to continue to complete the Share Exchange on the terms set forth in
the Agreement with the Unimedia Shareholders who have not exchanged their
Unimedia shares in the Share Exchange on or before such date.
The descriptions contained herein of the Second Amendment, the Third
Amendment, the Escrow Agreement and the transactions contemplated thereunder are
qualified in their entirety by reference to the Second Amendment, the Third
Amendment and the Escrow Agreement, which are attached hereto as Exhibits 2.1,
2.2 and 2.3, respectively, and which are incorporated herein by this reference.
2
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
2.1 Amendment No. 2, dated as of July 11, 1997, to Agreement
and Plan of Reorganization.
2.2 Amendment No. 3, dated as of July 18, 1997 to Agreement
and Plan of Reorganization.
2.3 Escrow Agreement dated as of July 11, 1997, by and
among the Company, Unimedia and Montaque Koppel,
attorney-at-law.
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CAPITAL MEDIA GROUP LIMITED
By: /s/ CHARLES KOPPEL
------------------------------
Charles Koppel, President
Date: July 29, 1997
4
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- ----------
2.1 Amendment No. 2, dated as of July 11, 1997, to Agreement and Plan
of Reorganization.
2.2 Amendment No. 3, dated as of July 18, 1997 to Agreement and Plan of
Reorganization.
2.3 Escrow Agreement dated as of July 11, 1997, by and among the
Company, Unimedia and Montaque Koppel, attorney-at-law.
EXHIBIT 2.1
AMENDMENT NO. 2
This Amendment No.2 (the "Amendment") to Agreement and Plan of
Reorganization, dated as of March 4, 1997 (the "Agreement") is made and entered
into as of the 11th day of July, 1997, by and among Capital Media Group Limited,
a Nevada corporation ("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 holders of Unimedia securities listed on the signature page hereof
(sometimes hereinafter collectively referred to as the "Unimedia Shareholders").
WHEREAS, on March 14, 1997, the parties hereto entered into the
Agreement, which has been terminated and is presently not a binding agreement;
WHEREAS, on June 25, 1997, the parties entered into Amendment No. 1 to
the Agreement dated June 23, 1997 (the "First Amendment");
WHEREAS, as of the date hereof, of the $4 million that Unimedia was
required to pay to CMG for shares of CMG pursuant to the Offering, Unimedia has
released to CMG $1.5 million and has deposited $2 million in escrow instead of
$2.5 million as required by the First Amendment;
WHEREAS, Unimedia has advised CMG that the remaining $500,000 is
currently unavailable but will be available on or prior to the closing of the
Share Exchange;
WHEREAS, this Amendment sets forth the terms which the parties have
agreed to with respect to amending the First Amendment and therefore the
Agreement; and
WHEREAS, capitalized terms used herein but not otherwise defined herein
shall have the meanings given to them in the First Amendment and/or in the
Agreement, as the context requires.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree to the following:
1. The parties acknowledge that the Agreement, as amended by the First
Amendment, and this Amendment, has become effective as of this date.
2. The parties acknowledge that Unimedia has delivered the following in
accordance with the First Amendment: (i) the executed subscription agreement
from the Subscriber, (ii) $1.5 million, which was previously released to CMG and
(iii) $2 million, which was deposited on this date in escrow pursuant to an
escrow agreement among CMG, Unimedia and the escrow agent.
3. The parties agree that the balance of the $4 million proceeds of the
Subscription ($500,000) shall be paid as follows: (i) prior to the Effective
Time of the Share Exchange, Unimedia shall deposit $500,000 in escrow to be
released to CMG at the Effective Time of the Share Exchange or (ii) $350,000
shall be paid to CMG at the Effective Time of the Share
1
<PAGE>
Exchange, together with written evidence satisfactory to CMG that $150,000 has
been paid by Unimedia to the finder(s) entitled to such sum and a copy of the
same, as well as a representation from Unimedia and the Unimedia Principal
Shareholders that no further finders fees are due in connection with the
transactions contemplated by the Agreement, the First Amendment and this
Amendment. Additionally, the delivery of the funds to CMG as described in this
Section 3 shall be an additional condition to CMG's obligation to close the
Share Exchange.
4. REMAINDER OF AGREEMENT UNMODIFIED. Except for the changes to the
First Amendment referred to in Sections 1, 2 and 3 of this Amendment, all of the
other provisions of the Agreement, as modified by the First Amendment, remain in
full force and effect and continue to be part of the Agreement as if fully set
forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
CAPITAL MEDIA GROUP LIMITED
By: /s/ CHARLES KOPPEL
-------------------------------
Charles Koppel, Co-Chairman
By: /s/ STEPHEN KORNFELD
-------------------------------
Stephen Kornfeld, Co-Chairman
UNIMEDIA S.A.
By: /s/ GILLES ASSOULINE
-------------------------------
Name: GILLES ASSOULINE
-------------------------
Title: CHAIRMAN AND CEO
-------------------------
2
<PAGE>
The undersigned hereby join in this Amendment for the limited purpose
of agreeing that they will comply with those sections of this Agreement and the
Amendment which are applicable to such parties.
UNIMEDIA PRINCIPAL SHAREHOLDERS
-------------------------------
Gilles Assouline, individually
-------------------------------
Michel Assouline, individually
Diamond Productions SARL
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
UNIMEDIA OTHER SHAREHOLDERS
BIMAP
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
Multimedia Investissements
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
3
<PAGE>
Media Venture
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
------------------------------------
Anne-Marie Assouline, individually
------------------------------------
Jean Jacques Assouline, individually
HIP Fenelon
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
Souviron Industrie Conseil Sarl
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
Horizons Sarl
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
4
<PAGE>
Oradea, Inc.
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
-----------------------------------
Roland Pardo, individually
Reseau Asta International
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
Tarbella Enterprises Ltd.
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
-------------------------------------
Francois de Montseignat, individually
-------------------------------------
Name of corporation (print)
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
-------------------------------
______________________, individually
------------------------------------
Name of corporation (print)
5
<PAGE>
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
-------------------------------
______________________, individually
6
EXHIBIT 2.2
AMENDMENT NO. 3
This Amendment No. 3 (the "Amendment") to Agreement and Plan of
Reorganization, dated as of March 4, 1997, as amended (the "Agreement") is made
and entered into as of the 18th day of July, 1997, by and among Capital Media
Group Limited, a Nevada corporation ("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 holders of Unimedia securities listed on the signature
page hereof (sometimes hereinafter collectively referred to as the "Unimedia
Shareholders").
WHEREAS, on March 14, 1997, the parties hereto entered into the
Agreement;
WHEREAS, on June 25, 1997 and July 11, 1997, respectively, the parties
entered into Amendment No. 1 to the Agreement and Amendment No. 2 to the
Agreement (the "Prior Agreements");
WHEREAS, this Amendment sets forth the terms which the parties have
agreed to with respect to amending the Agreement and the Prior Agreements; and
WHEREAS, capitalized terms used herein but not otherwise defined herein
shall have the meanings given to them in the Agreement and/or in the Prior
Amendments, as the context requires.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree to the following:
1. The first paragraph of Section 1.3, as amended in Amendment No. 1,
is deleted in its entirety and the following paragraph is added in its place:
1. EXCHANGE OF SECURITIES. At the Effective Time, CMG
will issue an aggregate of up to 9,402,400 shares of
its authorized but unissued common stock, $0.001 par
value per share of CMG ("CMG Common Stock" or "Common
Stock"), to the Unimedia Shareholders (and the
holders of Unimedia securities convertible into or
exercisable for shares of Unimedia common stock which
are converted or exchanged prior to the Closing and
are thereafter exchanged in the Share Exchange)
identified in SCHEDULE 1.3(A) in exchange for all of
the outstanding securities of Unimedia, all on the
basis of 700 CMG Shares for each share of Unimedia
common stock and all as more particularly set forth
in the schedule attached to this Amendment. If less
than all of Unimedia outstanding securities are
exchanged in the Share Exchange, then a
proportionately lower number of shares of CMG Common
Stock will be issued in the Share Exchange. For
example, if the holders of 75% of Unimedia's
currently outstanding
<PAGE>
common stock exchange their shares of Unimedia common
stock in the Share Exchange, then CMG would issue
6,458,550 shares of CMG Common Stock in the Share
Exchange, as opposed to the number of shares set
forth above.
2. The parties have agreed that so long as the holders of more than 50%
of Unimedia's common shares outstanding at the Effective Time complete the Share
Exchange on or before July 31, 1997, the Share Exchange will be closed as to
such holders, so long as the other conditions to closing contained in the
Agreement, as amended, are either satisfied or waived on or before the Closing.
In such event, CMG will consummate the Share Exchange on the terms set forth in
the Agreement, as amended, with the other common shareholders and securities
holders of Unimedia until September 5, 1997, upon presentation to CMG on or
prior to that date of completed documentation with such holders. The parties
agree that after September 5, 1997, CMG shall be under no obligation to continue
to complete the Share Exchange on the terms set forth herein with the Unimedia
Shareholders who have not completed the Share Exchange on or before such date.
3. REMAINDER OF AGREEMENT UNMODIFIED. Except for the changes referred
to in Sections 1 and 2 of this Amendment, all of the other provisions of the
Agreement, as modified by the Prior Amendments, remain in full force and effect
and continue to be part of the Agreement, as previously amended, as if fully set
forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
CAPITAL MEDIA GROUP LIMITED
By: /s/ CHARLES KOPPEL
-------------------------------
Charles Koppel, Co-Chairman
By: /s/ STEPHEN KORNFELD
-------------------------------
Stephen Kornfeld, Co-Chairman
UNIMEDIA S.A.
By: /s/ GILLES ASSOULINE
-------------------------------
Name: GILLES ASSOULINE
-------------------------
Title: CHAIRMAN AND CEO
-------------------------
<PAGE>
The undersigned hereby join in this Amendment for the limited purpose
of agreeing that they will comply with those sections of this Agreement, the
Prior Agreements and the Amendment which are applicable to such parties.
UNIMEDIA PRINCIPAL SHAREHOLDERS
-------------------------------
Gilles Assouline, individually
-------------------------------
Michel Assouline, individually
Diamond Productions SARL
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
UNIMEDIA OTHER SHAREHOLDERS
BIMAP
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
Multimedia Investissements
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
<PAGE>
Media Venture
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
------------------------------------
Anne-Marie Assouline, individually
------------------------------------
Jean Jacques Assouline, individually
HIP Fenelon
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
Souviron Industrie Conseil Sarl
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
Horizons Sarl
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
<PAGE>
Oradea, Inc.
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
-----------------------------------
Roland Pardo, individually
Reseau Asta International
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
Tarbella Enterprises Ltd.
BY:
-------------------------------
Name (print):
-------------------------------
Title:
-------------------------------
-------------------------------------
Francois de Montseignat, individually
EXHIBIT 2.3
ESCROW AGREEMENT
ESCROW AGREEMENT dated July 11, 1997, by and among CAPITAL MEDIA GROUP
LIMITED, a Nevada corporation ("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 MONTAQUE KOPPEL, ESQ. (the "Escrow Agent").
BACKGROUND
CMG and Unimedia are parties to a certain Agreement and Plan of
Reorganization entered into and effective as of March 4, 1997, as amended by
Amendment No. 1 thereto dated June 23, 1997 and Amendment No. 2 thereto of even
date herewith (as amended, the "Agreement"). Upon consummation of the
transactions contemplated by the Agreement (the "Share Exchange"), including,
without limitation, the exchange of Unimedia shares for shares of CMG Common
Stock, CMG will acquire at least 66 2/3% of the issued and outstanding shares of
capital stock of Unimedia.
Pursuant to the Agreement, Unimedia has executed subscription materials
pursuant to which Unimedia has subscribed to purchase shares of Common Stock of
CMG in a private placement for an aggregate purchase price of $4 million. Of the
aggregate purchase price, USD$1.5 million has been released to CMG and the
balance of USD$2.5 million is to be released to CMG upon consummation of the
Share Exchange. Of such USD$2.5 million, $2 million is to be deposited with the
Escrow Agent, subject to the possibility that an additional amount up to
USD$500,000 may be deposited prior to the closing of the Share Exchange (in the
aggregate, the "Escrowed Proceeds").
Accordingly, the parties now wish to provide for the holding of the
Escrowed Proceeds in escrow until the Share Exchange is consummated, all under
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the above premises and the mutual
promises herein contained, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. ESTABLISHMENT OF ESCROW FUND.
On the date hereof, Escrow Agent acknowledges that Unimedia
has delivered to Escrow Agent the sum of USD$2,000,000 (the "Escrow Fund").
The amount placed in escrow (including, without limitation, any
additional amounts deposited with the Escrow Agent prior to the closing of the
Share Exchange), together with any and all accrued interest, dividends and
earnings thereon (collectively, the "Escrow Fund") shall be held subject to the
terms and conditions of this Escrow Agreement.
<PAGE>
2. APPOINTMENT OF ESCROW AGENT.
CMG and Unimedia hereby appoint the Escrow Agent as their
agent hereunder solely for the retention, investment and disbursement of the
Escrow Fund and Escrow Agent hereby accepts such appointment under and subject
to the terms hereinafter set forth. During the term hereof, the Escrow Agent
shall maintain complete and accurate records of all transactions in the Escrow
Fund hereby created. The parties acknowledge that (i) the Escrow Agent did not
seek the role of Escrow Agent and is serving as an accommodation, (ii) Charles
Koppel, the son of Escrow Agent, is Co-Chairman and a Director of CMG and
Unimedia (having been advised by its counsel) hereby waives and releases any or
differing conflicts or differing interests arising out of the Escrow Agent's
acceptance and performance in its capacity hereunder, and (iii) Escrow Agent is
not being paid specially for escrow services. Neither the acceptance hereof nor
performance hereunder shall affect the right of Escrow Agent to have business or
other relationships with any party hereto or any relative or affiliate thereof.
3. INVESTMENT OF ESCROW FUND.
The Escrow Agent shall invest and reinvest the Escrow Fund (as
soon as practicable after its receipt thereof) in a money market account at
Merrill Lynch. The Escrow Agent shall not be accountable for any loss sustained
by reason of any investment made pursuant to the foregoing authorization so long
as it is not guilty of gross negligence or willful misconduct. The record or
registered owner of the money market account in which the Escrow Fund is
invested shall be the Escrow Agent or its nominee.
4. RELEASE OF THE ESCROW FUND.
4.1 Except as otherwise provided herein, the Escrow Agent
shall only make disbursement of the Escrow Fund (i) upon receipt by the Escrow
Agent of the joint written instruction of CMG and Unimedia in the form attached
hereto as Exhibit "A" (the "Joint Instruction") or (ii) if the Joint Instruction
is not received by 5:00 p.m. (Paris, France time) on July 31, 1997 (or such
later date as is mutually agreed upon in writing by CMG and Unimedia and
communicated to the Escrow Agent in writing prior to such date) (the "Automatic
Disbursement Date"), the Escrow Agent shall promptly disburse the Escrow Fund to
Unimedia.
4.2 The Escrow Agent shall make any disbursement of the Escrow
Fund hereunder promptly upon receipt of the Joint Instruction or after the
Automatic Disbursement Date.
4.3 Any disbursements by the Escrow Agent shall be made by
cashiers or bank check and shall be sent via Federal Express or by similar
recognized courier service which guarantees delivery overnight to the person at
the address set forth in the Joint Instruction (or in the case of an Automatic
Disbursement, in accordance with the written instruction of Unimedia) or by wire
transfer in immediately available federal funds to an account designated in the
Joint
2
<PAGE>
Instruction or, in the case of an Automatic Disbursement, to Unimedia in
accordance with its written instruction.
5. COMPENSATION AND REIMBURSEMENT.
5.1 CMG and Unimedia shall pay no fee to the Escrow Agent for
its services hereunder.
5.2 Escrow Agent shall be fully indemnified by Unimedia and
CMG, share and share alike, for any fees (including reasonable attorneys' fees)
and/or costs suffered or incurred by it, directly or indirectly, in connection
with any matter whatsoever hereunder including, without limitation, if (i) the
conditions of this Escrow Agreement are not promptly fulfilled due to an act or
omission of CMG or Unimedia, (ii) upon the written request of Unimedia or CMG,
Escrow Agent renders any services that are not required to be performed by it
pursuant to the terms of this Escrow Agreement (in which case the requesting
party shall be responsible for the applicable fees), (iii) there is any
modification hereof, (iv) any controversy arises hereunder, or (v) the Escrow
Agent is made a party to, or intervenes in, any litigation pertaining to this
Escrow Agreement or the subject matter hereof; and the Escrow Agent and its
legal counsel shall be reasonably compensated for such services and reimbursed
for all claims, liabilities, costs and expenses occasioned by or resulting from
any of the foregoing (unless, in the case of litigation, the Escrow Agent is
found to have been guilty of gross negligence or willful misconduct).
5.3 Unimedia and CMG, share and share alike, shall indemnify
the Escrow Agent for any compensation, expense reimbursement or other sums
(including counsel fees) incurred by Escrow Agent under this Agreement and shall
be paid in full within thirty (30) days after receipt by either of them of any
statement therefor from the Escrow Agent.
6. LIABILITY OF THE ESCROW AGENT.
6.1 The Escrow Agent's sole obligations hereunder shall be to
hold and deliver the Escrow Fund in accordance with the terms of this Escrow
Agreement, and it shall have no duties or responsibilities except those
expressly set forth herein.
6.2 Unimedia and CMG, share and share alike, shall indemnify
Escrow Agent and hold it harmless from and against any loss, claim, debt,
liability, proceeding, action, suit, or damage of any kind whatsoever and any
cost and expense (including reasonable attorneys' fees) suffered or incurred by
Escrow Agent, directly or indirectly, in connection therewith arising from,
under, out of, or relating to any act or omission of Escrow Agent in connection
with its service hereunder, except for the consequences of its gross negligence
or willful misconduct. Escrow Agent shall give prompt written notice to Unimedia
and CMG of any claims made against it for which it is entitled to
indemnification hereunder, and Unimedia and CMG shall undertake the defense of
any such claims on behalf of Escrow Agent and otherwise cooperate fully in any
such action, provided, however, that Escrow Agent shall have the sole right to
direct such defense.
3
<PAGE>
6.3 Escrow Agent shall incur no liability in the event that
Escrow Agent distributes the Escrow Fund, if any, pursuant to the provisions
hereof.
6.4 Escrow Agent is authorized to act and rely on any document
believed by it to be genuine and to be signed or presented by the proper party
or parties and will incur no liability in so acting. Escrow Agent may assume
that any person purporting to give any writing, notice or instructions in
connection with this Escrow Agreement as an officer of a party hereto has been
duly authorized to do so by such party.
6.5 If Escrow Agent is required to take any action in
connection herewith and such action involves any expense or potential liability,
Escrow Agent shall not be required to take any such action unless it is
specifically indemnified against such expense or liability in a manner
satisfactory to it and Unimedia and CMG shall execute such documents as Escrow
Agent shall determine, in its discretion, accomplish such purpose.
6.6 Escrow Agent shall be absolved of all responsibilities and
obligations hereunder once the Escrow Fund has been distributed hereunder.
Notwithstanding the foregoing, the provisions hereof inuring to the benefit of
Escrow Agent shall continue without limit.
6.7 If Escrow Agent shall have given notice to any party of
any intended action and such party shall not have objected in writing promptly
within no more than ten (10) days of the giving of such notice, such party shall
be deemed to have consented to such action.
6.8 No action may be instituted against Escrow Agent except in
the commercial court located in Paris, France.
7. RESIGNATION AND DISCHARGE.
7.1 Notwithstanding anything to the contrary contained in this
Escrow Agreement, the Escrow Agent (i) may resign from its duties under this
Escrow Agreement at any time and without assigning any reason therefor by giving
ten (10) days' prior written notice of such resignation to CMG and Unimedia; and
(ii) may be discharged from its duties under this Escrow Agreement upon its
receipt of a joint written request from CMG and Unimedia of ten (10) days' prior
written notice of such discharge. If CMG and Unimedia do not designate a
successor escrow holder by joint written notice to Escrow Agent within the
period aforesaid, Escrow Agent may petition a court of competent jurisdiction
for the appointment of a successor and deliver the Escrow Fund, if any, to such
successor. Upon the death, disability or bankruptcy of Escrow Agent, it shall be
deemed to have resigned and neither its heirs nor personal representatives shall
have any responsibility subsequent thereto, except as set forth in Section 7.2
hereof.
7.2 Except as provided in Section 7.1 hereof, upon the
resignation or discharge
4
<PAGE>
of the Escrow Agent, the Escrow Agent (or his personal representative) shall
deliver the Escrow Fund, if any, in its possession, to the successor escrow
holder. Contemporaneously therewith, the successor escrow holder shall deliver
to Escrow Agent (or his personal representative) a receipt for the Escrow Fund,
if any, delivered to it, and CMG and Unimedia shall deliver to Escrow Agent (or
his personal representative) (i) a complete release, in form satisfactory to the
Escrow Agent (or his personal representative) and its counsel, of all claims or
liability which CMG and Unimedia might have or assert against the Escrow Agent
(or his personal representative) arising hereunder (except for claims arising
prior to such time based on the gross negligence or willful misconduct of the
Escrow Agent); (ii) such documentation as the Escrow Agent (or his personal
representative) may, from time to time request, confirming that the Escrow Agent
(or his personal representative) is not continuing to serve in that capacity and
that a new escrow holder has been named and has assumed all of the duties and
responsibilities of the Escrow Agent hereunder; and (iii) a sum sufficient to
pay to the Escrow Agent all compensation, reimbursements and other amounts to
which it is entitled under Section 5.
8. NOTICES.
All notices, requests, demands, claims, and other communications
hereunder shall be in writing and shall be delivered by certified or registered
mail (first class postage pre-paid), guaranteed overnight delivery, or facsimile
transmission if such transmission is confirmed by delivery by certified or
registered mail (first class postage pre-paid) or guaranteed overnight delivery,
to the following addresses and telecopy numbers (or to such other addresses or
telecopy numbers which such party shall designate in writing to the other
party):
(a) If to the Escrow Agent:
Montaque Koppel, Esq.
c/o Marc Louis Sage
Chaintrier & Associes
5, Avenue Group V
75008 Paris, France
Telecopy: 011-33-147-236-879
Attorney at Law
20 Chapel Street
Belgravia, London SW1 X7BY
Telecopy: 011-44-171-499-7553
(b) if to CMG to:
Capital Media Group Limited
25 James Street
London, United Kingdom W1M 5HY
5
<PAGE>
Attention: Stephen Kornfeld and Charles Koppel
Telecopy: 011 44 171 244 4455
with a copy to:
Akerman, Senterfitt & Eidson, P.A.
SunTrust International Center, 28th Floor
One Southeast Third Avenue
Miami, Florida 33131-1704
Attention: Philip B. Schwartz, Esq.
Telecopy: (305) 374-5095
(c) if to Unimedia to:
Unimedia S.A.
2 rue du Nouveau Bercy
94220 Charenton, France
Attention: Gilles Assouline
Telecopy: +33-1-43-53-69-99
with a copy to:
Darrois Villey Maillot Brochier
69, Avenue Victor Hugo
75783 Paris Cedex 16
Telecopy: +33-1-45-01-50-47
Notice shall be deemed given on the date sent if sent by overnight
delivery or facsimile transmission and on the date delivered (or the date of
refusal of delivery) if sent by certified or registered mail.
9. AMENDMENTS.
No amendment to this Escrow Agreement shall be effective
unless in writing and signed by all the parties hereto.
10. INDULGENCES.
Neither the failure nor any delay on the part of any party
hereto to exercise or partially exercise any right, remedy, power or privilege
under this Escrow Agreement shall operate as a waiver thereof, nor shall it
preclude any other or further exercise of the same or of any other right,
remedy, power or privilege, nor shall any waiver of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver with respect
to any other
6
<PAGE>
occurrence. No waiver shall be effective unless it is in writing and is signed
by the party asserted to have granted such waiver.
11. CONTROLLING LAW.
This Escrow Agreement and all questions relating to its
validity, interpretation, performance and enforcement, shall be governed by and
construed in accordance with the laws of France, notwithstanding any
conflict-of-law provisions to the contrary.
12. BINDING NATURE OF AGREEMENT.
This Escrow Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns. The rights and obligations of
this Agreement may not be assigned by any of the parties without the prior
written consent of the other parties.
13. EXECUTION IN COUNTERPARTS.
This Escrow Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Escrow Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected herein.
14. PROVISIONS SEPARABLE.
The provisions of this Escrow Agreement are independent of and
separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other
provision or provisions may be invalid or unenforceable, in whole or in part.
15. ENTIRE AGREEMENT.
This Escrow Agreement sets forth exclusively the Escrow
Agent's duties and responsibilities with respect to any and all matters
pertinent hereto, contains the entire understanding among the parties hereto
with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as herein contained. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof.
7
<PAGE>
16. NUMBER OF DAYS.
In computing the number of days for purposes of this Escrow
Agreement, all days shall be counted, including Saturdays, Sundays and holidays;
provided, however, that if the final day of any time period falls on a Saturday,
Sunday or holiday, then the final days shall be deemed to be the next business
day.
17. THIRD-PARTY BENEFICIARIES.
Notwithstanding anything to the contrary contained herein, no
provision of this Escrow Agreement is intended to benefit any party other than
the parties hereto and their successors and assigns.
8
<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered this Escrow
Agreement on the day and year first above written.
CAPITAL MEDIA GROUP LIMITED, a Nevada
corporation
By: /s/ STEPHEN KORNFELD
-----------------------------------
Name: Stephen Kornfeld
Title: Co-Chairman
UNIMEDIA S.A., a company organized under
the laws of the Republic of France
By: /s/ GILLES ASSOULINE
----------------------------------
Name: Gilles Assouline
Title: Chairman and CEO
/s/ MONTAQUE KOPPEL
-------------------------------------
MONTAQUE KOPPEL, ESQ.
9
<PAGE>
EXHIBIT A
__________, 1997
Montaque Koppel, Esq.
Attorney at Law
20 Chapel Street
Belgravia, London SW1 X7BY
Telecopy: 011-44-171-499-7553
RE: ESCROW AGREEMENT (THE "ESCROW AGREEMENT") DATED JULY , 1997,
BY AND AMONG CAPITAL MEDIA GROUP LIMITED, A NEVADA CORPORATION
("CMG"), UNIMEDIA SA, A COMPANY ORGANIZED UNDER THE LAWS OF
THE REPUBLIC OF FRANCE ("UNIMEDIA") AND MONTAQUE KOPPEL
("ESCROW AGENT")
Dear Mr. Koppel:
Reference is made to the Escrow Agreement described above. You are
hereby instructed to disburse the Escrow Funds which you are holding in escrow
from your escrow account and to pay that sum to the persons or entities and in
the amounts set forth below:
NAME ADDRESS/WIRE INSTRUCTIONS AMOUNT
---- ------------------------- ------
Upon disbursement of the Escrow Fund as set forth above, the
undersigned acknowledge that you will have fully and satisfactorily discharged
your obligations as escrow agent pursuant to the Escrow Agreement, which shall
then be deemed terminated as to your obligations thereunder.
CAPITAL MEDIA GROUP LIMITED, a Nevada
corporation
By:
----------------------------------
Name:
-----------------------------
Title:
-----------------------------
UNIMEDIA S.A., a company organized under the
10
<PAGE>
laws of the Republic of France
By:
----------------------------------
Name:
-----------------------------
Title:
-----------------------------
11
