EXHIBIT 10.17
SECURED PROMISSORY NOTE AND PLEDGE AGREEMENT
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$360,366.38 October 16, 0000
Xxx Xxxxxxx, Xxxxxxxxxx
FOR VALUE RECEIVED, the undersigned Xxxx X. Xxxxxx (the "Maker") promises
to pay to the order of Entravision Communications Company, L.L.C., a Delaware
limited liability company (the "Holder"), or order, at 00000 Xxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, or at such other place as may be
designated in writing by the Holder of this Promissory Note and Pledge Agreement
(the "Note and Pledge Agreement"), the principal sum of Three Hundred Sixty
Thousand Three Hundred Sixty-Six and 38/100 Dollars ($360,366.38), together with
interest on the unpaid balance at the rate of 5.625% per annum commencing on the
date first set forth above. Interest payable hereunder shall be calculated on
the basis of a three hundred and sixty-five (365) day year.
Subject to the provisions for acceleration herein, all principal and
interest due hereunder shall be due and payable in one (1) installment of
principal and all accrued interest on October 16, 2001. The foregoing sentence
notwithstanding, in the event that (i) Holder sells all or substantially all of
its assets and elects to liquidate and dissolve in connection with such sale or
(ii) Maker sells all or substantially all of its interest in Holder, then all
outstanding principal and all accrued but unpaid interest at such time shall be
immediately due and payable to Holder.
Maker may prepay, at any time, all or part of the principal balance due
under this Note and Pledge Agreement, without premium or penalty; provided,
however, that with each prepayment, Maker shall also pay the interest accrued on
the principal amount, to and including the date of such prepayment. All
principal and interest due hereunder is payable in lawful money of the United
States of America.
Interest not paid when due shall bear interest at the same rate as unpaid
principal, provided that in no event shall such interest exceed the maximum rate
permitted by law.
This Note and Pledge Agreement and all transactions hereunder shall be
governed by, construed under and enforced in accordance with the laws of the
State of Delaware as applied without reference to the principles of conflicts of
law.
Maker hereby delivers, pledges and grants a first priority security
interest to Holder in 18,029 Class A Units of the Holder (the "Units") and in
all rights or other distributions issued as an addition to, in substitution or
in exchange for, or on account of, the Units (collectively the "Rights"), and
all proceeds of the foregoing, now or hereafter acquired by Maker. Maker hereby
gives Holder the right to file financing statements in the State of California
and the District of
Columbia and to perform any other action necessary to perfect or protect such
security interest. The Units and the Rights and the proceeds of each of the
foregoing, are hereinafter collectively referred to as the "Collateral."
The security interest pursuant to this Note and Pledge Agreement is given
as security for the full and timely payment, performance and satisfaction of any
and all of Maker's obligations and liabilities owing to Holder pursuant to this
Note and Pledge Agreement, including all interest due under this Note and Pledge
Agreement and extensions, modifications and renewals hereof. All such
obligations and liabilities of Maker are hereafter collectively referred to as
the "Obligations." The Obligations shall include, without limitation, any and
all amounts expended by Holder in accordance with the terms of this Note and
Pledge Agreement, including reasonable attorneys' fees and costs.
Maker hereby appoints Holder as its attorney-in-fact to arrange, at any
time during the existence of, or after the occurrence of, a Default, and
pursuant to the exercise of Holder's remedies under the California Uniform
Commercial Code for the transfer of the Collateral on the books of Entravision
Communications Company, L.L.C., a Delaware limited liability company, to the
name of Holder or to the name of Holder's nominee.
In the event Maker shall become entitled to receive, or shall receive, in
connection with any of the Collateral, (i) any membership unit certificate,
including any certificate representing a membership unit dividend or any
certificate in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of
membership unit, membership unit split or spin-off, (ii) any option, warrant or
right, whether as an addition to or in substitution of any of the Collateral, or
otherwise, (iii) any dividend or distribution payable in property, including
securities issued as a dividend on the Collateral, or (iv) any other
distributions of any kind whatsoever, Maker shall accept same as encumbered by
the security interest created hereby, and shall deliver same forthwith to Holder
in the exact form received, including as appropriate, Maker's endorsement of
appropriate membership unit powers duly executed in blank, to be held as a part
of the Collateral, subject to the terms hereof, or, in the case of a cash
dividend payable with respect to the Units, to be applied as a payment of
principal due under this Note and Pledge Agreement; provided, however, that for
so long as no Default (defined below) is in existence and there is no condition
or event in existence which, with notice or lapse of time, or both, would become
a Default, Maker shall have sole voting rights with respect to the Collateral.
Maker warrants and represents to Holder that (a) Maker has power and
authority to enter into this Note and Pledge Agreement and to pledge the Units
for the purposes described herein, (b) Maker is the legal record and beneficial
owner of all of the Units, (c) except as set forth in that certain Pledge
Agreement dated as of December 31, 1996 between Maker and Union Bank of
California, N.A. ("Union Bank") (the "Union Bank Pledge Agreement"), all of the
Units are owned by Maker free of any pledge, mortgage, lien or security interest
of any kind, except as created hereby or other junior liens consented to in
writing by Holder, (d) the execution and delivery by Maker of this Note and
Pledge Agreement, and subject to the Union Bank Pledge
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Agreement, the performance of its terms, will not result in any violation or
default under the terms of any agreement or instrument, or any law or
governmental rule or regulation applicable to Maker or the Units, including,
without limitation, securities registration, securities disclosure or similar
laws, (e) upon execution and delivery by Maker of this Note and Pledge Agreement
and upon the filing of financing statements in the State of California and the
District of Columbia (which financing statements may be filed only after Union
Bank files its financing statements pursuant to the Union Bank Pledge
Agreement), this Note and Pledge Agreement shall create a valid and perfected
first priority security interest (subject to the rights of Union Bank under the
Union Bank Pledge Agreement) in the Units and the proceeds thereof, subject to
no other prior or subordinate security interest and (f) there are no
restrictions upon the rights or affecting the transfer of any of the Collateral
except for junior liens consented to in writing by Holder and the rights of
Union Bank under the Union Bank Pledge Agreement.
Maker hereby covenants that, until such time as the Obligations have been
fully paid, performed and satisfied: (a) except as set forth in the Union Bank
Pledge Agreement, Maker will not sell, convey or otherwise dispose of any of the
Collateral or any interest therein, or create, incur or permit to exist any
pledge, mortgage, lien, charge, encumbrance or any security interest whatsoever
in or with respect to any of the Collateral, or the proceeds thereof, other than
the security interest created hereby and junior liens consented to in writing by
Holder; (b) Maker will defend Holder's right, title and security interest in and
to the Collateral (subject to the rights of Union Bank under the Union Bank
Pledge Agreement) against the claims of any person or entity; (c) Maker will
promptly deliver to Holder a copy of all written notices or correspondence
received by Maker with respect to the Collateral; and (d) Maker shall, at
Maker's own expense, promptly execute, acknowledge and deliver all such
instruments and take all such actions as Holder from time to time may reasonably
request in order to ensure to Holder the benefits of the lien in and to the
Units intended to be created by this Note and Pledge Agreement.
As used herein, the term "Default" shall mean the occurrence of any one or
more of the following events or conditions: (a) the failure of full and timely
payment, or full and timely performance and satisfaction, whether by
acceleration or otherwise, of any of the Obligations in accordance with their
terms; (b) Maker admits in writing its inability to pay its debts as they become
due or makes a general assignment for the benefit of creditors or files any
petition or action for relief under any bankruptcy, reorganization, insolvency
or moratorium law, or any other law or laws for the relief of, or relating to,
debtors; or (c) an involuntary petition is filed against Maker under any
bankruptcy, reorganization, insolvency or moratorium law, or any other law or
laws for the relief of, or relating to, debtors unless such petition shall be
dismissed or vacated within sixty (60) days of the date thereof.
Upon the occurrence or existence of a Default, Holder shall have, in
addition to any other rights given by law or the rights hereunder (subject to
the rights of Union Bank under the Union Bank Pledge Agreement) (a) the right to
declare immediately due and payable the entire unpaid principal amount of this
Note and Pledge Agreement, together with all interest thereon, plus any other
amounts payable at the time of such declaration pursuant to this Note and Pledge
Agreement,
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and (b) all of the rights and remedies with respect to the Collateral of a
secured party under the California Uniform Commercial Code. Holder's rights
shall include, without limitation, the right to proceed immediately to have any
or all of the Collateral registered in Holder's name or in the name of a
nominee, to exercise all voting rights with respect to the Collateral and all
other corporate rights, privileges or options pertaining thereto as if Holder
were the absolute owner thereof, and to receive any, and to continue to apply,
all cash dividends against the Obligations. In addition, with respect to the
Collateral, or any part thereof, which shall then be or shall thereafter come
into the possession or custody of Holder, Holder may sell or cause the same to
be sold at any broker's board or at public or private sale, in one or more sales
or lots, at such price as Holder may deem best, and for cash or on credit or for
future delivery, without assumption of any credit risk, and the purchaser of any
or all of the Collateral so sold shall thereafter hold the same absolutely, free
from any claim, encumbrance or right of any kind whatsoever. Unless the
Collateral threatens to decline speedily in value or becomes of a type sold on a
recognized market, Holder will give Maker reasonable notice of the time and
place of any public sale thereof, or of the time after which any private sale or
other intended disposition is to be made. Any sale of the Collateral conducted
in conformity with reasonable commercial practices of banks, insurance companies
or other financial institutions disposing of property similar to the Collateral,
whether conducted solely by Holder or in concert with other creditors of Maker,
shall be deemed to be commercially reasonable. Any requirements of reasonable
notice shall be met if such notice is mailed to Maker, at 0000 Xxxxxxxxxxxx Xxx.
X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, at least ten (10) days before the time
of the sale or disposition. Any other requirement of notice, demand or
advertisement for sale, is, to the extent permitted by law, hereby waived by
Maker. Holder may, in its own name, or in the name of a designee or nominee, buy
the Collateral at any public sale of the Collateral. Maker will pay to Holder
all expenses (including court costs and reasonable attorneys' fees and expenses)
of, or incident to, the enforcement of any of the provisions hereof. In
connection with any sale of Collateral by Holder, Holder shall have the right to
execute any document or form, in its name or the name of Maker, which may be
necessary or desirable in connection with such sale. Upon the occurrence or
existence of any event of Default and all times thereafter, Holder shall be
entitled to receive and retain for its own account any and all dividends at any
time declared upon any of the Collateral.
In view of the fact that federal and state securities laws may impose
certain restrictions on the method by which a sale of the Collateral may be
effected after an event of Default and prohibit or prevent the advertising for
sale of all or any part of the Collateral as required by the California Uniform
Commercial Code, Maker agrees that upon the occurrence or existence of a
Default, Holder may, from time to time, attempt to sell all or any part of the
Collateral by one or more private placements or sales restricting the bidder and
prospective purchasers to those who will represent and agree that they are
purchasing for investment only and not for distribution or resale. In so doing,
Holder may solicit offers to buy the Collateral, or any part of it for cash,
from a limited number of investors deemed by Holder, in its reasonable judgment,
to be respectable parties who might be interested in purchasing the Collateral,
and if Holder solicits such offers from not less than four (4) such investors,
then the acceptance by Holder of the highest offer
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obtained therefrom shall be deemed to be a commercially reasonable method of
disposition of such Collateral.
The proceeds of any disposition of all or any part of the Collateral, as
provided above, shall be applied as follows: (i) first, to the costs and
expenses incurred in connection therewith or incidental thereto, including
reasonable attorneys' fees and legal expenses; (ii) second, to the satisfaction
of the Obligations; (iii) third, to the payment of any other amounts required by
applicable law; (iv) fourth, to satisfy any amounts owing which are secured by
junior liens consented to in writing by Holder; and (v) fifth, to Maker to the
extent of any surplus remaining.
Upon full payment and performance of all of the Obligations by Maker and
upon payment of all additional costs and expenses provided herein, this Note and
Pledge Agreement shall terminate and Holder shall deliver to Maker, at Maker's
expense, such of the Units as shall not have been sold, or otherwise disposed of
pursuant to this Note and Pledge Agreement.
If an action is instituted for collection of this Note and Pledge
Agreement, the Maker agrees to pay court costs and reasonable attorneys' fees
incurred by the Holder.
This Note and Pledge Agreement may be changed, modified, amended or
terminated only by a written instrument duly executed by Holder and Maker,
except as expressly provided to the contrary herein.
Except as expressly provided herein, Maker of this Promissory Note and
Pledge Agreement waive diligence, presentment, protest and demand and also
notice of protest, demand, dishonor and nonpayment of this Promissory Note and
Pledge Agreement, and expressly agree that this Promissory Note and Pledge
Agreement, or any payment hereunder, may be extended from time to time and
consent to the acceptance of security, if any, or the release of security, if
any, from this Promissory Note and Pledge Agreement, all without in any way
affecting the liability of the Maker and endorsers or guarantors hereof, if any.
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IN WITNESS WHEREOF, the undersigned has caused this Note and Pledge
Agreement to be duly executed, effective the day and year first above written.
"MAKER" /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
ACKNOWLEDGED AND AGREED TO:
Entravision Communications Company, L.L.C.,
a Delaware limited liability company
By:/s/ Xxxxxx X. Xxxxx
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Print Name:____________________________
Title:_________________________________
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