EXHIBIT 2.1
AMENDMENT NO. 1
This Amendment No. 1 (the "Amendment") to Agreement and Plan of
Reorganization, dated as of March 4, 1997 (the "Agreement") is made and entered
into this 23rd day of June, 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").
Terms defined in the Agreement have the same meaning herein, unless the context
otherwise requires, and references to Section numbers contained herein refer to
the corresponding sections of the Agreement.
WHEREAS, on March 14, 1997, the parties hereto entered into the
Agreement, which has been terminated and is presently not a binding agreement;
WHEREAS, CMG and Unimedia have been having discussions regarding
amending and reinstating the Agreement;
WHEREAS, this Amendment sets forth the terms which the parties have
agreed to with respect to amending and reinstating the Agreement;
WHEREAS, Unimedia has arranged to purchase on behalf of investors
("Investors") an aggregate of 7,017,543 shares of CMG's authorized but unissued
common stock (the "Subscription") for an aggregate purchase price of $4,000,000
($.57 per share) in a private placement (the "Offering"), which Offering is
currently being made by CMG;
WHEREAS, as part of that Offering, CMG has agreed to take certain
actions, all as more particularly set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree to the following:
1. EFFECTIVE TIME OF THE AMENDMENT. This Amendment shall become
effective (the "Amendment Effective Time") upon the delivery to CMG of: (i) an
executed subscription agreement from the Subscriber(s); and (ii) the $4.0
million proceeds of the Subscription (at least $1.5 million of which will be
immediately available to CMG and the balance of which will be placed in escrow
to be released to CMG at the Effective Time of the Share Exchange).
Notwithstanding the foregoing, if the conditions of this Paragraph 1 are not
satisfied by the close of business on June 30, 1997, this Amendment shall be
null and void and of no further force and effect.
2. USE OF PROCEEDS OF THE OFFERING. CMG agrees that it will only use
the proceeds of the Subscription for the working capital needs of its business
in the ordinary course without the prior agreement of the Subscriber.
1
3. APPOINTMENT OF BOARD MEMBER UPON COMPLETION OF THE OFFERING.
Simultaneous with the funding and completion of the Offering as described in
Paragraph 1 hereof, the Board shall be expanded to nine members and ▇▇▇▇▇ ▇▇
shall be appointed as a new member of the Board, to serve until the next annual
meeting of shareholders; provided, however, that prior to being appointed to the
Board, ▇▇. ▇▇ will provide CMG with a completed Director's Questionnaire with
respect to his background in the form provided by CMG's U.S. securities counsel.
4. REINSTATEMENT OF THE AGREEMENT. The parties have agreed that at the
Amendment Effective Time, the Amendment shall reinstate the Agreement as a
binding contract among the parties hereto.
5. AMENDMENTS TO THE AGREEMENT. The parties hereby agree to the
following amendments to the Agreement (unless otherwise stated, changes made
herein modify particular Sections of the Agreement and to the extent unmodified,
the remaining provisions (or portions of provisions which are not dealt with
herein) remain part of the Agreement and continue to apply in all respects):
(a) Section 1.1 of the Agreement is modified to reflect
that the 90% referred twice in that section shall be
changed to 66 2/3% (in all other respects, Section
1.1 is unmodified);
(b) The parties agree that they will use their best
efforts to complete the Share Exchange as soon as
possible, but have agreed to an outside closing date.
To accomplish this objective, Section 1.2 is hereby
modified to change the closing date referred to in
that section from March 31, 1997 to July 31, 1997 (in
all other respects, Section 1.2 is unmodified);
(c) The first paragraph of Section 1.3 is deleted in its
entirety and the following paragraph is added in its
place:
1.3 EXCHANGE OF SECURITIES. At the Effective Time,
CMG will issue an aggregate of 8,611,400 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 identified in
SCHEDULE 1.3(A) in exchange for all of the
outstanding securities of Unimedia, all as more
particularly set forth in the schedule. 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 70% of
Unimedia's outstanding securities are exchanged in
the Share Exchange, then CMG would issue 6,027,980
shares of CMG Common Stock in the Share Exchange, as
opposed to the number of shares set forth above.
2
In all other respects, Section 1.3 is unmodified;
(d) Section 1.5 is hereby deleted in its entirety;
(e) Section 2.6 is modified to reflect that the number
of shares of CMG Common Stock outstanding on the
date of this Amendment is 25,056,661 shares. In all
other respects, Section 2.6 is unmodified;
(f) Section 2.8 is modified to change the definition of
"CMG Reports" from the documents described in the
Agreement as constituting the CMG Reports to the
following reports filed by CMG with the SEC after the
date of the Agreement: (i) CMG's Annual Report on
Form 10-KSB for the year ended December 31, 1996, and
(ii) CMG's Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1997 (in all other respects,
Section 2.8 is unmodified);
(g) Section 2.12 is modified to change the date set forth
in this section from September 30, 1996 to March 31,
1997 (in all other respects, Section 2.12 is
unmodified);
(h) Section 3.9 is modified to add as an additional
"Unimedia Financial Statement" (in addition to the
other financial statements referred to therein), to
be delivered as a condition to closing, the unaudited
financial statements of Unimedia for the quarter
ended March 31, 1997, including therein a balance
sheet at March 31, 1997, and statements of operations
and cash flow for the quarter ended March 31, 1997
(in all other respects, Section 3.9 is unmodified);
(i) Section 4.2 is modified to delete the reference in
subsection (b) to the proposed acquisition of Pixel
(in all other respects, Section 4.2 is unmodified);
(j) Section 5.3 is modified to reflect that one of
Unimedia's directors for purposes of this section
shall be ▇▇. ▇▇ (in all other respects, Section 5.3
is unmodified);
(k) Section 6.12 is hereby deleted in its entirety;
(l) Section 6.13 is amended to provide that in addition
to providing the financial statements described in
that section, Unimedia shall also deliver, as a
condition to closing, its unaudited financial
statements for the quarter ended March 31, 1997 (in
all other respects, Section 6.13 is unmodified);
3
(m) Section 8.1 is modified to change the date prior to
which CMG is obligated to file a registration
statement to register the Registrable Shares from
April 30, 1997 to the date which is 30 days after the
Effective Date of the closing of the Share Exchange
(in all other respects, Section 8.1 is unmodified);
(n) Section 12.1(d) is hereby deleted in its entirety
and the following new subsections (d) is added in
its place:
(d) by Unimedia or CMG, by notice to the
others consistent with the notice provisions
contained herein, if the Closing shall not
have occurred by July 31, 1997 or by CMG if
the holders of 66 2/3% or more of Unimedia's
then outstanding securities have not entered
into this Agreement by July 20, 1997;
Additionally, subparagraph (e) of Section 12.1 is
modified to change the date on which the parties are
required to deliver the schedules required to be
delivered under the Agreement and this Amendment
until July 4, 1997.
In all other respects, Section 12.1 is unmodified.
6. REMAINDER OF AGREEMENT UNMODIFIED. Except for the changes to the
Agreement referred in Section 5 of this Amendment, all of the other provisions
of the Agreement remain in full force and effect and continue to be part of the
Agreement as if fully set forth herein.
7. UPDATES OF SCHEDULES. The parties shall update each of the Schedules
to reflect true and accurate information at the date of this Amendment, and to
provide the financial statements and other information required to be provided
hereunder, on or before July 4, 1997.
8. SIGNATURES OF UNIMEDIA SHAREHOLDERS. Unimedia shall obtain the
signatures of not less than 66 2/3 of the outstanding securities of Unimedia on
or before July 20, 1997.
9. FAIRNESS OPINIONS. Pursuant to Section 6.10 and 7.8, the receipt of
a fairness opinion from an investment banking firm is a condition to the closing
of the Share Exchange for CMG and Unimedia, respectively. The parties have
agreed that they will immediately commence the steps necessary to obtain such
fairness opinion with respect to the Share Exchange as they intend to procure
and to use their best efforts to obtain such fairness opinions as soon as
possible. In that regard, Unimedia and CMG agree to cooperate fully with the
persons preparing the fairness opinions to provide such information as they
request with respect to Unimedia, its business, financial condition, results of
operations, management and prospects and CMG, its business, financial condition,
results of operations, management and prospects.
10. SHARES OF CMG COMMON STOCK OWNED BY UNIMEDIA. Unimedia presently
owns 4.0 million shares of CMG Common Stock. It is contemplated by this
Amendment that such shares (or
4
a portion thereof) will be transferred as part of the closing of the Share
Exchange to the securities holders of Unimedia.
11. EFFECT OF TERMINATION OF THE AGREEMENT. If after this Amendment
becomes effective, the Board of Directors of CMG terminates the Agreement, as
amended by this Amendment, for any reason (whether or not permitted by the
Agreement or this Amendment), then CMG agrees that such action shall
automatically be deemed to be a demand by Unimedia, as a more than 10%
stockholder of CMG, to call a meeting of the shareholders of CMG to consider and
vote upon the composition of the Board of Directors of CMG. CMG agrees that in
such event, it will call such a shareholders meeting as soon thereafter as
practicable thereafter as required by and in accordance with applicable Nevada
law and CMG's articles of incorporation and bylaws.
12. MODIFICATION OF THE INSTAR LOAN. It shall be a condition to the
closing of the Share Exchange by Unimedia that Instar shall have agreed that,
based upon the closing of the Share Exchange, they will extend the principal
repayment date of the Instar Loan until six months after the closing of the
Exchange. In that regard, the parties have been advised by Instar that an
extension of the Instar Loan on these terms will be acceptable.
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/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Co-Chairman
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Co-Chairman
UNIMEDIA S.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: CHAIRMAN AND CEO
5
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
__________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, individually
__________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, individually
Diamond Productions SARL
BY: ______________________________
Name (print): ____________________
Title: ___________________________
UNIMEDIA OTHER SHAREHOLDERS
BIMAP
BY: ______________________________
Name (print): ____________________
Title: ___________________________
Multimedia Investissements
BY: ______________________________
Name (print): ____________________
Title: ___________________________
6
Media Venture
BY: ______________________________
Name (print): ____________________
Title: ___________________________
__________________________________
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, individually
__________________________________
▇▇▇▇ ▇▇▇▇▇▇▇ Assouline, individually
HIP ▇▇▇▇▇▇▇
BY: ______________________________
Name (print): ____________________
Title: ___________________________
Souviron Industrie Conseil Sarl
BY: ______________________________
Name (print): ____________________
Title: ___________________________
Horizons Sarl
BY: ______________________________
Name (print): ____________________
Title: ___________________________
7
Oradea, Inc.
BY: ______________________________
Name (print): ____________________
Title: ___________________________
__________________________________
▇▇▇▇▇▇ ▇▇▇▇▇, 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: ___________________________
8
_____________________________________
________________________, individually
_____________________________________
Name of corporation (print)
BY: ______________________________
Name (print): ____________________
Title: ___________________________
_____________________________________
________________________, individually
9