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EXHIBIT 10.49
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EXHIBIT 10.49
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of this 31st day of August, 1995, is by
and among XXXXXX COMMUNICATIONS OF ORLANDO-56, INC., a Florida corporation
having its principal offices at 000 Xxxxxxxxxx Xxxx Xxxx, Xxxx Xxxx Xxxxx, XX
00000 (the "Lender"), and CHANNEL 56 OF ORLANDO, INC., a Florida corporation
having its principal offices at 00000 00xx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx
00000 (the "Borrower").
W I T N E S S E T H:
WHEREAS, the Borrower is purchasing substantially all of the assets
and properties, including all broadcast licenses issued by the Federal
Communications Commission ("FCC Licenses") and other governmental authorities,
of Television Station WIRB-TV, Melbourne, Florida (the "Station");
WHEREAS, the Lender is willing to lend the Borrower sufficient funds
to acquire the station on which Lender will provide programming pursuant to a
Time Brokerage Agreement; and
WHEREAS, the Lender is obtaining the funds to make the Loan (as
defined below) to the Borrower pursuant to a Credit Agreement (as amended and
in effect from time to time, the "Credit Agreement") among the Lender, as
borrower, the lending institutions party thereto and one or more of such
lending institutions acting in the capacity of agent for and on behalf of such
lending institutions (the "Agents");
WHEREAS, the Agents (as defined in the Credit Agreement) and the
Lenders (as defined in the Credit Agreement) have agreed to make the loans
under the Credit Agreement in reliance upon the representations, warranties,
covenants and agreements of the Borrower herein and upon their status as third
party beneficiaries of such representations, warranties, covenants and
agreements; and
WHEREAS, the Borrower desires to borrow funds from the Lender to
finance the purchase and operation of the Station.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, the Lender and the Borrower agree as follows:
1. AMOUNT AND TERMS OF THE LOANS
1.1 The Loan. The Lender agrees, upon the terms and
conditions hereinafter set forth, to make a loan or loans to the Borrower in an
aggregate principal amount not to exceed at any one time outstanding Four
Million Three Hundred Thousand Dollars ($4,300,000.00) plus such additional
amounts that are reasonably
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requested by Borrower for the purposes set forth in Section 1.05 and are
approved by Lender in its sole discretion (the "Loan").
1.2 The Promissory Note. The outstanding principal
amount of the Loan shall be evidenced by and subject to the terms of a
promissory note, dated of even date herewith, substantially in the form set
forth as Exhibit 1 hereto (as amended, renewed, restated, increased,
consolidated or substituted from time to time, the "Note") payable to the order
of the Lender and representing the obligation of the Borrower to pay the Lender
the amount of the Loan, with interest thereon, as prescribed in Section 1.04.
All references to the "Note" in this Loan Agreement, the Security Agreement,
the Pledge Agreement, and the Leasehold Mortgage or Mortgage (each as defined
in this Loan Agreement), the mortgages or deeds of trust referred to in Section
3.04 of the Loan Agreement and in such other agreements and documents executed
and delivered in connection with this Loan Agreement shall be deemed to be
references to the Note referred to in this Section.
1.3 Interest. The Loan shall bear interest on the unpaid
principal amount thereof at a rate per annum at all times equal to one-half
percent (1/2%) above the highest interest rate per annum paid by Lender or its
affiliates on outstanding debt, public or private, as such rate may be adjusted
from time to time. Interest shall be calculated on the basis of a year of
three-hundred and sixty (360) days and the actual number of days elapsed during
the period for which such interest is payable. Interest shall begin to accrue
on the outstanding principal amount of the Loan on the date of disbursement of
all or a portion of the Final Installment (as defined below) pursuant to
Section 1.05(b) (the "Final Installment Date"). The first payment of interest
to the Lender shall be due thirty (30) days after the acquisition of the
Station by the Borrower pursuant to Federal Communications Commission ("FCC")
authority, at which time all interest accrued from the Final Installment Date
shall become due and payable. Thereafter, accrued interest shall be paid
monthly on or before the first day of each month until all principal and
interest hereunder is paid in full and at the repayment or maturity of the
Loan. If any installment of principal or interest is not paid when due, that
installment shall bear interest at a rate per annum equal to the lower of the
highest rate permitted by law or eighteen percent (18%) from the date due
thereof until paid in full.
1.4 Repayment of the Loan. In the event that any portion
of the Loan is used by the Borrower to fund an escrow deposit or similar
payment toward the purchase of the Station (the "Deposit"), and such Deposit is
returned to the Borrower, the amount of such Deposit shall be immediately
repaid to Lender, together with all interest earned on such Deposit and paid to
the Borrower. In the event that the Borrower does not acquire the Station,
Borrower
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shall repay to Lender the outstanding principal amount of the Loan no later
than one-hundred eighty (180) days after such other party acquires the Station.
The principal amount of the Loan plus any accrued and unpaid interest shall be
due and payable on the first day of the 84th month following the acquisition of
the Station by the Borrower (the "Term Date"). In the event of a termination
of the Time Brokerage Agreement dated as of August __, 1995, between Borrower
and Lender, Borrower shall, in addition to payments of interest required under
Section 1.03 hereof, repay the outstanding principal balance of the Loan in
consecutive, equal monthly installments commencing on the first day of the
month following such termination (the "Amortization Commencement Date") and
ending on the Term Date, with each such monthly principal installment payment
equal to (x) the principal amount of the Loans outstanding hereunder as of the
first day of the month following such termination divided by (y) the total
number of consecutive months included in the period commencing on the
Amortization Commencement Date, through and including the Term Date.
1.5 Use of Proceeds and Advancement of Funds.
(a) The proceeds of the Loan are to be used by
the Borrower exclusively for financing the purchase of the Station and for
working capital and operating expenses relating to the Station.
(b) The Lender shall loan to the Borrower the
funds required to acquire the Station, less the Deposit (the "Final
Installment"), at the closing of the acquisition of the Station, following
final and nonappealable FCC approval of the assignment of the FCC licenses of
the Station to the Borrower.
1.6 Information. The Borrower agrees to furnish to the
Lender such information as the Lender may reasonably request in connection with
the Loan or the Station.
1.7 Prepayment. The Borrower may prepay the Note in
whole at any time, or from time to time in part, with accrued interest to the
date of prepayment on the amount prepaid, without penalty, provided that each
payment, other than that for the full amount of the outstanding balance, shall
be in the amount of Ten Thousand Dollars ($10,000.00) or an integral multiple
thereof, provided, however, that if any such prepayment is made within three
years of the Borrower's acquisition of the Station, Borrower shall reimburse
Lender for any prepayment penalty imposed on Lender or its affiliates under
their debt agreements or instruments as a result of Borrower's prepayment.
Each prepayment on the Note shall be applied to installments of principal
payable on the Note in the inverse order of maturity.
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1.8 Payment on Non-Business Days. Whenever any payment
to be made hereunder or under the Note shall become due on a Saturday, Sunday
or public holiday, such payment may be made on the next succeeding business
day, and such extension of time in such case shall be included in the
computation of interest hereunder and under the Note.
1.9 Preferred Contingent Facility Fee. In consideration
for Lender's agreement to make the Loan, Borrower agrees to pay Lender a
preferred contingent facility fee (the "Contingent Facility Fee") in an amount
equal to twenty-five percent (25%) of the Loan payable to the extent available
out of the Net Sale Price received by Borrower or any Affiliate of Borrower in
connection with any Sale that is consummated at any time prior to August __,
2003, whether or not any portion of the Loan is outstanding as of such date.
The Contingent Facility Fee shall be due and payable by Borrower to Lender by
confirmed wire transfer of immediately available funds on the date of closing
of a Sale and prior to the payment by Borrower of any other obligations or
distributions. For the purpose of this Section 1.09, the following terms shall
have the following meanings:
"Affiliate", as applied to any entity or individual, means any other
entity or individual directly or indirectly controlling, controlled
by, or under common control with, that entity or individual. For the
purposes of this definition, "control" (including with correlative
meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any entity or individual, means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that entity or
individual, whether through the ownership of voting securities,
partnership interests or by contract or otherwise.
"Net Sale Price" means (a) the aggregate value of all consideration of
whatsoever nature (whether in cash, other property, services or
otherwise) directly or indirectly paid or payable to the Borrower and
any Affiliate of Borrower (or either of them) in connection with a
Sale and whether such amounts are payable as purchase price (whether
in cash at closing or on a deferred basis), non-compete payments,
payments for the provision of future services or the rental of
property or otherwise, or any combination thereof, plus (b) an amount
equal to the sum of all accounts receivable of the Station if such
accounts receivable are retained by Borrower or any Affiliate of
Borrower in connection with a Sale, minus (c) an amount equal to the
sum of all reasonable and necessary fees and expenses incurred by the
Borrower or any Affiliate of Borrower (other than any fee payable to
an Affiliate of the Borrower) in connection with the consummation of a
Sale, minus
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(d) an amount equal to all liabilities of the Station (as determined
in accordance with generally accepted principles consistently applied)
that are retained by Borrower or any Affiliate of Borrower in
connection with a Sale, and minus (e) an amount equal to the sum of
the principal balance of, and all accrued but unpaid interest on, the
Loans as of the date the Contingent Facility Fee is due.
"Sale" means any (a) sale, exchange, transfer or other disposition to
any third party unaffiliated with Borrower or any Affiliate of
Borrower of all or substantially all of the Station's assets or of the
equity of (i) Borrower or (ii) any Affiliate of Borrower that acquires
the Station's assets in accordance with the requirements of this Loan
Agreement and any collateral document executed and delivered in
connection with this Loan Agreement (a "WIRB Affiliate") or (b)
merger, consolidation or similar transaction between a third party
unaffiliated with Borrower and Borrower or any WIRB Affiliate, whether
or not Borrower or such WIRB Affiliate is the surviving corporation.
2. CLOSING
2.1 Closing Date. Closing of this transaction shall
occur on a date agreed upon by the parties hereto (the "Closing Date").
3. SECURITY
3.1 Security Interest. As security for the Loan, the
Borrower shall execute and deliver to the Lender, on or before the Closing
Date, a security agreement in the form of Exhibit 2 hereto (the "Security
Agreement").
3.2 Pledge Agreement. As further security for the Loan,
on or before the Closing Date, the Borrower shall deliver to the Lender a
pledge agreement in the form of Exhibit 3 hereto, duly executed by The
Christian Network, Inc. (the "Shareholder"), the sole shareholder of the
Borrower (the "Pledge Agreement").
3.3 Leasehold Mortgages. At such time as the Borrower
enters into or assumes the Lessee's interest under any lease, it shall execute
with respect to such lease a leasehold mortgage substantially in the form of
Exhibit 4 hereto (a "Leasehold Mortgage"), granting the Lender a lien on its
leasehold interest under such lease. In particular, and without limiting the
generality of the foregoing, the Borrower shall execute a Leasehold Mortgage
with respect to each lease, if any, that it assumes as part of the acquisition
of the Station. The Borrower shall also deliver to the Lender with respect to
any lease to which the Borrower becomes a party the following documents, each
of which
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shall be in form and substance satisfactory to the Lender: (i) evidence of the
filing of the lease or a memorandum of lease, (ii) an estoppel certificate
executed by the landlord under such lease or any sublessee, (iii) an executed
landlord's consent and waiver, (iv) fixture filing UCC-1 financing statements,
(v) copies of such lease and any sublease, (vi) executed tenant subordination
agreements, (vii) a title encumbrance report with respect to the real property
subject to such lease, and (viii) any other document required by applicable law
to create or perfect a mortgage lien with respect to such lease or reasonably
required by the Lender.
3.4 Mortgages. At such time as the Borrower acquires any
parcel of real estate, the Borrower shall execute a first mortgage or deed of
trust in favor of the Lender on such parcel, substantially in the form of
Exhibit 4 hereto (a "Mortgage"). The Borrower shall also deliver to the Lender
with respect to such property the following documents, each of which shall be
in form and substance satisfactory to the Lender: (i) fixture filing UCC-1
financing statements, (ii) copies of any lease relating to such property, if
any, (iii) executed tenant subordination agreements and estoppel certificates,
if applicable, (iv) a survey of such real property, (v) a mortgagee title
insurance policy, with such coverage and with such endorsements, including,
without limitation, usury, first loss, last dollar, revolving credit, variable
rate, doing business, zoning comprehensive, contiguity (as applicable) and
survey, to the extent available in the state where the property is located, as
the Lender may require, and (vi) any other document required by applicable law
to create or perfect a mortgage lien with respect to such property or
reasonably required by the Lender.
4. CONDITIONS OF LENDING
4.1 Conditions Precedent to Loan. The obligation of the
Lender to disburse from time to time any portion of the Loan hereunder is
subject to the condition precedent that the Lender shall have received all of
the following, on or before the Closing Date, in form and substance
satisfactory to the Lender:
(a) The Note, duly executed and delivered by the
Borrower;
(b) The Security Agreement, together with
appropriate UCC-1 forms and, if applicable, landlord lien waivers, duly
executed and delivered by the Borrower;
(c) The Pledge Agreement, duly executed and
delivered by the Shareholder together with stock certificates and blank stock
powers;
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(d) Certified copies of the resolutions of (i)
the Board of Directors of Borrower evidencing approval of the execution,
delivery and performance of this Agreement, the Note and the Security Agreement
and other matters contemplated hereby, and (ii) the Board of Stewards of
Shareholder evidencing approval of the execution, delivery and performance of
this Loan Agreement and the Pledge Agreement;
(e) A Certificate of Good Standing for the
Borrower and Shareholder;
(f) A copy of the Asset Purchase Agreement dated
as of December 23, 1994, between Borrower and Treasure Coast Communications,
Inc. (the "Purchase Agreement"), pursuant to which Borrower is purchasing the
Station;
(g) Copies of UCC, judgment and tax lien searches
in each jurisdiction in which collateral covered by the Security Agreement is
located, naming the Borrower and the Seller of the Station as debtor; and
(h) Such other agreements, certificates, opinions
of counsel and documents that the Lender may reasonably require.
4.2 Conditions Precedent to Final Installment. The obligation
of the Lender to advance the Final Installment to the Borrower is subject to
the condition precedent that the Lender shall have received each of the
following, on or before the Final Installment Date, in form and substance
satisfactory to the Lender:
(a) With respect to each leased real property,
the documents required by Section 3.03, and with respect to each owned real
property, the documents required by Section 3.04;
(b) A Certificate of Good Standing for the
Borrower in the State of Florida as of a recent date prior to the Final
Installment Date;
(c) Copies of the certificates evidencing the
insurance required to be maintained by the Borrower pursuant to Section
6.01(e);
(d) Evidence, in form and substance acceptable to
Lender, that Borrower has received the approval of the Federal Communications
Commission to be the licensee of the Station and that approval has become a
final, non-appealable order no longer subject to administrative or judicial
review, reconsideration or appeal;
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(e) A copy of the Purchase Agreement and each
other contract, certificate and other document executed by the Borrower or the
seller of the Station in connection with the Borrower's acquisition of the
Station; and
(f) Such other agreements, certificates, opinions
of counsel and documents that the Lender may reasonably require.
4.3 Compliance. All of the representations and warranties of the
Borrower and Shareholder in this Loan Agreement shall be true and accurate in
all material respects on and as of the Closing Date and the date of any
subsequent disbursement of any portion of the Loan, as if made on and as of
such date and time. The Borrower shall be in compliance with all of the
applicable terms and provisions of this Agreement and no Event of Default or
any event which with the lapse of any applicable grace period or the giving of
notice or both would constitute an Event of Default shall have occurred and be
continuing. The Borrower shall have performed all obligations and taken all
actions to be performed or taken by it hereunder on or prior to such date. On
the Closing Date, the Borrower and Shareholder shall deliver to the Lender and
to the Agents and the Lenders under the Credit Agreement a certificate, dated
as of such date and signed by an executive officer of the Borrower and
Shareholder, certifying compliance with the conditions of this Section 4.03.
Each disbursement of all or a portion of the Loan to the Borrower shall in and
of itself, constitute a representation and warranty that the Borrower and
Shareholder as of the date of such Loan, is in compliance with this Section and
if the Borrower or Shareholder is not in compliance with this Section, the
Lender shall not be required to disburse such Loan to the Borrower.
5. REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of Borrower. In order to
induce the Lender to enter into this Agreement and make the Loan, Borrower
represents and warrants as follows:
(a) Existence and Standing. Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Florida and is qualified to do business and in good
standing under the laws of any other jurisdiction in which it conducts its
business, and has all requisite power and authority, corporate or otherwise, to
conduct its business, to own its properties and to execute and deliver, and to
perform all of its obligations under this Agreement, the Note, any Mortgage or
Leasehold Mortgage, the Security Agreement and all other documents that have
been or will be executed and delivered by the Borrower pursuant to this
Agreement.
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(b) Authorizations, Compliance with Laws. The
execution, delivery and performance by the Borrower of this Agreement, the
Note, any Mortgage or Leasehold Mortgage, the Security Agreement and all other
documents required to be executed and delivered by the Borrower pursuant to
this Agreement have been duly authorized by all necessary corporate action and
do not and will not (i) violate (A) any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to the Borrower or (B) any provision of the charter
or by-laws of the Borrower; or (ii) result in a breach of or constitute a
default under any agreement or instrument to which the Borrower is a party or
by which its properties may be affected; or (iii) result in the creation of a
lien, charge or encumbrance of any nature upon the Borrower's properties or
assets other than as contemplated by this Agreement.
(c) No Consent. No authorization, consent,
approval, license, exemption of or filing or registration with any court or
governmental department or agency, except for filing with the FCC, is or will
be necessary to the valid execution, delivery and performance by the Borrower
of this Agreement, the Note, any Mortgage or Leasehold Mortgage, the Security
Agreement or any other document required to be executed and delivered by the
Borrower pursuant to this Agreement.
(d) Binding Obligations. This Agreement, the
Note, any Leasehold Mortgage, any Mortgage, the Security Agreement, the Pledge
Agreement and all other documents required to be executed and delivered by the
Borrower (or, in the case of the Pledge Agreement, of the Shareholder) pursuant
to this Agreement have been or, on or prior to the Closing Date, will be
executed and delivered by duly authorized officers of the Borrower (or, in the
case of the Pledge Agreement, of the Shareholder) and constitute or, on or
prior to the Closing Date, will constitute, legal, valid and binding
obligations of the Borrower (or, in the case of the Pledge Agreement, of the
Shareholder) enforceable in accordance with their respective terms.
(e) Litigation. There are no actions, suits or
proceedings pending, or, to the knowledge of the Borrower, threatened against
or affecting the Borrower or its properties before any court or governmental
department or agency which materially adversely affects the transactions
contemplated by this Agreement or which would have a material adverse effect on
the business, properties, prospects, operation or condition (financial or
otherwise) of the Borrower.
(f) No Default. The Borrower is not in default
in the performance, observance or fulfillment of any of the obligations or
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conditions contained in any material agreement or instrument to which it is a
party, nor with respect to any order, judgment, writ, injunction or decree of
any court, governmental authority or arbitration board.
(g) Compliance with Laws. The Borrower has
complied with all applicable federal, state and local laws. The Borrower has
obtained all necessary licenses and permits required for the conduct of its
business and operations or such licenses and permits have been applied for and
are now being diligently pursued.
(h) Taxes. The Borrower has filed all tax
returns and reports (federal, state and local) required to be filed by it, and
has paid all taxes shown thereon, including interest and penalties, and all
assessments received by it (except to the extent that the same are being
contested in good faith by appropriate proceedings diligently prosecuted and as
to which adequate reserves have been set aside on the books of the Borrower in
conformity with generally accepted accounting principles).
(i) Title to Properties. The Borrower has good
and marketable title to all of its property and assets and valid and
enforceable leasehold interests in the property which it holds under lease, all
such property, assets and leasehold interests being free and clear of any and
all mortgages, deeds of trust, assignments, liens, security interests, charges
or encumbrances of any nature whatsoever, except for those created hereby, and
no mortgages, deeds of trust, financing statements or other evidences of
security interests covering all or any of the aforesaid property are on file
among the records of any public office, except those evidencing a security
interest in favor of the Lender.
(j) Material Misstatement. No statement made
herein or information, exhibit or report furnished by the Borrower to the
Lender in connection with this Agreement or its negotiation, contains any
material misstatement of fact or omits to state a material fact or any fact
necessary to make the foregoing not misleading.
6. COVENANTS OF THE BORROWER
6.1 Affirmative Covenants. So long as the Note shall
remain unpaid, the Borrower hereby covenants and agrees that it will, unless
the Lender shall otherwise consent in writing:
(a) Payment of Obligations. Pay punctually and
discharge when due: (i) all indebtedness heretofore or hereafter incurred;
(ii) all taxes, assessments and governmental charges or levies imposed upon it
or its income or profits, or upon any properties belonging to it; (iii) claims
or demands of materialmen,
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mechanics, carriers, warehousemen, landlords and other like persons which, if
unpaid might become a lien or charge upon the property of the Borrower;
provided that this covenant shall not require the payment of any of the matters
set forth in (i), (ii) and (iii) above if the same shall be contested in good
faith and by proper proceedings diligently pursued and as to which adequate
reserves have been set aside on the books of the Borrower in accordance with
generally accepted accounting principles.
(b) Preservation of Existence. Preserve and
maintain its respective corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation.
(c) Maintenance of Properties. Maintain and
preserve all of its properties necessary or useful in the proper conduct of its
business in good working order and condition, ordinary wear and tear excepted.
(d) Compliance with Laws. Comply in all material
respects with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority.
(e) Maintenance of Insurance. Maintain with
responsible and reputable insurance companies policies on all of its properties
and covering such risks, including public liability and workers' compensation,
in such amounts as are usually carried by companies engaged in similar
businesses and owning similar properties as the Borrower, and promptly upon
execution thereof provide to the Lender copies of all such policies and any
riders or amendments thereto. The policies of insurance required hereunder
shall name the Lender as an additional loss payee or additional insured, as
applicable, and shall provide that the Lender shall receive at least thirty
(30) days' written notice prior to the cancellation, termination or alteration
of any such policy.
(f) Operations in Ordinary Course. Continue to
operate its business in the ordinary course.
(g) Perfection of Liens. Do all things requested
by the Lender to preserve and perfect the liens and security interests of the
Lender arising pursuant to the Security Agreement, the Pledge Agreement, any
Leasehold Mortgage, any Mortgage or any other agreement required hereunder as
first liens and security interests.
(h) FCC Approval. If counsel to the Lender
reasonably determines that the consent of the FCC is required in connection
with the execution, delivery and performance of this Agreement, the Pledge
Agreement, the Security Agreement, any Mortgage or Leasehold Mortgage or any
other document delivered to the Lender in connection herewith or therewith or
as a result of any action which
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may be taken pursuant hereto or thereto, then the Borrower, at its sole cost
and expense, agrees to use its best efforts to secure such consent and to
cooperate with the Lender in any action commenced by the Lender to secure such
consent.
(i) Purchase Agreement. Comply with its obligations
under the Purchase Agreement.
6.2 Negative Covenants. So long as the Note shall remain
unpaid and the Agreement shall not have been terminated, the Borrower hereby
covenants that it will not, without the Lender's prior written approval:
(a) Indebtedness. Create or incur, assume or suffer to
exist any indebtedness, obligation or liability, whether matured or unmatured,
liquidated or unliquidated, direct or contingent, joint or several, except for:
(i) indebtedness evidenced by the Note; (ii) indebtedness (other than for
borrowed money) incurred in the ordinary course of business not to exceed Fifty
Thousand Dollars ($50,000.00) in the aggregate at any one time; (iii)
obligations or liabilities arising under the indemnification provisions of the
Purchase Agreement.
(b) Liens. Create, assume or suffer to exist, directly
or indirectly, any security interest, mortgage, deed of trust, pledge, lien,
charge or other encumbrance, of any nature whatsoever upon any of its
properties or assets, now owned or hereafter as acquired, excluding, however,
from the operation of this covenant with respect to property or assets other
than the Stock (as defined in the Pledge Agreement):
(i) any security interest or lien
created pursuant to or in connection with this Agreement or securing the Loan,
the Security Agreement, the Pledge Agreement, any Leasehold Mortgage or any
Mortgage;
(ii) liens for taxes or assessments
either not delinquent or the validity of which are being contested in good
faith by appropriate legal or administrative proceedings and as to which
adequate reserves shall have been set aside on its books, in conformity with
generally accepted accounting principles;
(iii) materialmen's, mechanics',
carriers', workmen's, repairmen's, warehousemen's or other like liens arising
in the ordinary course of business and either not yet due and payable or being
contested in good faith by appropriate legal proceedings and as to which
adequate reserves shall have been set aside on its books, in conformity with
generally accepted accounting principles;
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(iv) deposits or pledges to secure payment of
workers' compensation, unemployment insurance or other social security benefits
or obligations; or
(v) any judgment lien, singly or aggregated
with other judgment liens, in an amount less than $100,000, unless the judgment
it secures shall not, within thirty (30) days after the entry thereof, have
been discharged, vacated, reversed, or execution thereof stayed pending appeal,
or shall not have been discharged, vacated or reversed within thirty (30) days
after the expiration of any such stay.
(c) Disposition of Assets. Sell, transfer, lease
or otherwise dispose of any of its assets or properties other than sales of
assets in the ordinary course of business (which shall expressly not include
any transfer or assignment of any FCC License).
(d) Merger. Enter into any consolidation or merger with,
or into any acquisition of all or substantially all of the properties or
assets of any person or entity.
(e) Transfer or Issuance of Shares. Issue or permit the
transfer of any shares of the capital stock of the Borrower, or any options,
warrants, convertible securities or other rights to purchase the Borrower's
stock. The preceding sentence shall not apply to issuances or transfers to the
Lender.
(f) Change of Business. Change, in any material respect,
the nature or character of its business as intended, or engage in any activity
not reasonably related to such business.
(g) Remove Assets. Remove any of the assets procured
with the proceeds of the borrowings provided for herein, or any replacements
for such assets, to a jurisdiction in which no financing statement on Form UCC-
1 has been filed by the Lender with respect to such assets.
(h) Distributions or Dividends. Declare or make,
directly or indirectly, any payment or distribution, or incur any liability for
the purchase, acquisition, redemption or retirement of any capital stock of the
Borrower or as a dividend, return of capital or other payment or distribution
of any kind to a shareholder of the Borrower or any affiliate of the Borrower
(other than any stock dividend or stock split or similar distribution payable
only in capital stock of the Borrower) in respect of the Borrower's capital
stock.
(i) Transactions with Affiliates. Enter into any
transaction or agreement with any affiliate of the Borrower.
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(j) Contracts. Enter into any contract or
commitment relating to its stock or assets except for contracts involving
aggregate payments of less than Five Thousand Dollars ($5,000.00) and contracts
which can be terminated without penalty on thirty (30) days' notice or less, or
amend or terminate any material contract (or waive any substantial right
thereunder), or incur any obligation (including obligations relating to the
borrowing of money or guarantee of indebtedness).
(k) Adverse Change. Suffer any material adverse
change in the business, assets, properties, prospects or condition (financial
or otherwise) of the Borrower or the Station, or any damage, destruction or
loss affecting any assets used or useful in the conduct of the business of the
Borrower.
(l) Employee Compensation. Suffer any material
increase in excess of the reasonable range in the broadcast industry in the
same or similar markets in compensation payable or to become payable to any
employees, or any bonus payment made or promised to any employee, or any
material change in personnel policies, insurance benefits or other compensation
arrangements affecting any employees, provided that nothing in this clause
shall be construed to limit or restrict the commission compensation of
employees who may be selling brokered time for the Borrower.
(m) Cancellation of Debts. Cancel any debts owed
to or claims held by the Borrower.
(n) Write-Down. Suffer any significant
write-down of the value of any assets or any significant write-off as
uncollectible of any accounts receivable without the prior written consent of
the Lender except and as required by generally accepted accounting principles
as required to present accurate financial information on the Borrower.
(o) Rights. Transfer or grant any right under,
or enter into any settlement regarding the breach or infringement of, any
license, patent, copyright, trademark, service xxxx, trade name, franchise, or
similar right, or modify any existing right relating to the Borrower.
(p) Television Affiliation Agreement. In the
event Borrower acquires the Station, terminate, amend or waive any provision of
the Television Affiliation Agreement (as defined in Section 7.01(d) below), if
any, to which the Station is a party.
(q) Purchase Agreement. Terminate, amend, commit
any material breach or default under or waive any term of the Purchase
Agreement.
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(r) Subsidiaries. Create or acquire any
subsidiary of Borrower, unless Lender shall have approved such action in
advance and Borrower shall have taken all actions required by Lender to grant
Lender a first priority security interest in all of the issued and outstanding
stock of such subsidiary. Borrower acknowledges and agrees that until such
time as such security interest is granted and perfected, Lender shall have an
equitable lien in the stock of any subsidiary created or acquired by Borrower.
6.3 Reporting Requirements. So long as the Note shall remain
unpaid and the Agreement shall not have been terminated, the Borrower shall,
unless the Lender shall otherwise consent in writing, furnish to the Lender and
to the Agents:
(a) Default Certificate. As soon as possible and
in any event within five (5) business days after the occurrence of each Event
of Default (as defined in Section 7.01) of which the Borrower has knowledge,
the statement of the President of the Borrower setting forth details of such
Event of Default and the action which the Borrower proposes to take with
respect thereto.
(b) Financial Statements. Beginning with the
making of the Final Installment, quarterly financial statements within thirty
(30) days after the end of each fiscal quarter; within ninety (90) days after
the end of each fiscal year of the Borrower, a copy of the audited financial
statements for such year for the Borrower, including therein a balance sheet of
the Borrower as of the end of such fiscal year, statements of income and
expense of the Borrower for such fiscal year, and a statement of cash flow of
the Borrower for such fiscal year, in each case prepared by an independent
public accountant of recognized standing acceptable to the Lender, except that
the Lender may waive the audit requirement and accept a review of the
Borrower's financial records.
(c) Notice of Litigation. Promptly give written
notice of all actions, suits and proceedings before any court or governmental
agency, domestic or foreign, which may be commenced or threatened against the
Borrower in which the claim involved is Five Thousand Dollars ($5,000.00) or
more and of any other matter of the type described in Section 5.01(e).
(d) Budget. An annual budget within thirty (30)
days of the beginning of each fiscal year of the Borrower. Such budget shall
be satisfactory in form to the Lender.
(e) Other Information. Such other information
respecting the business, properties, operations or the condition, financial or
otherwise, of the Borrower as the Lender or the Administrative Agents may from
time to time reasonably request.
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7. EVENTS OF DEFAULT
7.1 Events of Default. Under this Agreement, an Event of Default
shall be any of the following:
(a) The Borrower shall fail to pay any
installment of principal or interest on the Note, or any other obligation to
the Lender including, without limitation, the obligation to pay the Contingent
Facility Fee as set forth in Section 1.09 hereof, when due whether at the due
date thereof or by acceleration or otherwise, and, in the case of any
installment of interest, such default shall remain unremedied for a period of
five (5) days; or
(b) The security interest or lien of the Lender
in any material portion of the collateral covered by the Security Agreement,
Pledge Agreement or any Leasehold Mortgage or Mortgage shall at any time not
constitute a legal, valid and enforceable security interest or lien; or
(c) Any representation or warranty made by the
Borrower or Shareholder (or any of its officers) herein, in the Security
Agreement, any Leasehold Mortgage or Mortgage, or by the Shareholder in the
Pledge Agreement or in any certificate, agreement, instrument or statement
contemplated by or made or delivered pursuant to or in connection with this
Agreement, the Note, any Leasehold Mortgage or Mortgage or the Security
Agreement, or by the Shareholder in the Pledge Agreement, shall prove to have
been incorrect in any material respect when made; or
(d) The Borrower shall fail to perform or observe
any other term, covenant or agreement contained in this Agreement, the Note,
the Security Agreement, any Leasehold Mortgage or Mortgage or any Television
Affiliation Agreement relating to the Station (the "Television Affiliation
Agreement"), or the Shareholder shall fail to perform or observe any term,
covenant or agreement contained in the Pledge Agreement, and any such failure
remains unremedied for thirty (30) days after written notice thereof shall have
been given to the Borrower by the Lender; or
(e) The Borrower or the Shareholder shall fail to
pay any indebtedness for borrowed money owing by the Borrower or the
Shareholder or any interest or premium thereon, when due, whether such
indebtedness shall become due by scheduled maturity, by required prepayment, by
acceleration, by demand or otherwise, or the Borrower or the Shareholder shall
fail to perform any term, covenant or agreement under any agreement or
instrument evidencing or securing or relating to any such indebtedness owing by
the Borrower or the Shareholder if the effect of such failure is to accelerate,
or to permit the holder of such indebtedness to accelerate the maturity of such
indebtedness; or
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(f) The Borrower shall expend the proceeds of the
Loan for any purpose other than the purchase of the Station and the operation
of the Station's business without the prior written consent of the Lender,
which may be withheld in the Lender's sole discretion; or
(g) Either (i) Borrower or the Shareholder shall
fail to pay its debts as they mature in the ordinary course of business; or
(ii) Borrower or the Shareholder shall file a petition commencing a voluntary
case concerning it under any Chapter of Title 11 of the United States Code
entitled "Bankruptcy"; or (iii) Borrower or the Shareholder shall apply for or
consent to the appointment of any receiver, trustee, custodian or similar
officer for it or for all or any substantial part of its property; or (iv) such
receiver, trustee, custodian or similar officer shall be appointed without the
application or consent of the Borrower or the Shareholder and such appointment
shall continue undischarged for a period of thirty (30) days; or (v) an
involuntary case is commenced against the Borrower or the Shareholder under any
Chapter of the aforementioned Title 11 and an order for relief under such Title
11 is entered or the petition commencing the case is controverted but is not
dismissed within thirty (30) days after the commencement of the case; or (vi)
the Borrower or the Shareholder shall institute (by petition, application,
answer, consent or otherwise) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, dissolution, liquidation or similar
proceeding relating to it under the laws of any jurisdiction; or (vii) any such
proceeding shall be instituted against the Borrower or the Shareholder and
shall remain undismissed for a period of thirty (30) days; or (viii) the
Borrower or the Shareholder shall take any action for the purpose of
effectuating the foregoing; or
(h) Any court, government, or government agency
shall condemn, seize or otherwise appropriate or take custody or control of all
or a substantial portion of the property or assets of the Borrower; or
(i) There shall be a cancellation, denial or
revocation of any material broadcast license for the Station, the Borrower
shall be finally denied renewal of any such license, or any such license shall
be renewed on terms that materially adversely affect the economic or commercial
value or usefulness thereof; or
(j) Any money judgment, writ or warrant of
attachment, or similar process involving (i) in any individual case an amount
in excess of One Hundred Thousand Dollars ($100,000.00), or (ii) in the
aggregate at any time an amount in excess of One Hundred Thousand Dollars
($100,000.00), and in either case not adequately covered by insurance as to
which the insurance company has acknowledged coverage, shall be entered or
filed against Borrower
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or its assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 30 days or in any event later than five days prior to the date
of any proposed sale thereunder.
7.2 Effect of Event of Default. Should any Event of
Default occur, the Lender may at its option by written notice to the Borrower
declare the entire unpaid principal amount of the Note, together with all
unpaid interest and all other amounts payable under this Agreement and every
other obligation of the Borrower to the Lender, immediately due and payable,
whereupon the Note and all such obligations shall become and be forthwith due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower, anything contained
herein or in the Note or in such other note or evidence of indebtedness to the
contrary notwithstanding; provided, however, that in case of an Event of
Default under Section 7.01(g), all the obligations of the Borrower under this
Agreement and the Note shall become immediately due and payable as of the date
of any such Event of Default regardless of the cause of such Event of Default
and without any notice to the Borrower required from the Lender. The Lender
shall have, in addition to all other rights and remedies allowed by law, the
rights and remedies of a secured party under the Uniform Commercial Code as in
effect in the State of Florida and, without limiting the generality of the
foregoing, the rights and remedies provided for in the Security Agreement,
Pledge Agreements, and any Mortgage or Leasehold Mortgage, which provisions are
hereby incorporated by reference.
8. MISCELLANEOUS
8.1 No Waiver; Cumulative Remedies. No failure or delay
on the part of the Lender in exercising any right, power or remedy hereunder
shall operate as a waiver, nor shall any single or partial exercise of any such
right, power or remedy hereunder. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
8.2 Amendments. No amendment, modification, termination
or waiver of any provision of this Agreement, the Note, the Security Agreement
or any Mortgage or Leasehold Mortgage, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless (x) in writing,
signed by the Lender and then only in the specific instance and for the
specific purpose for which given and (y) not adverse in any material respect to
the Agents and the Lenders under the Credit Agreement. No notice to or demand
on the Borrower in any case shall entitle it to any other or further notice or
demand in similar or other circumstances.
8.3 Conflicts. In the event of any conflict or
inconsistency between any provision of this Agreement and a provision of the
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Note, the Security Agreement or any Mortgage or Leasehold Mortgage, the
provisions of this Agreement shall control.
8.4 Address for Notices. All notices and other
communications under this Agreement shall be in writing and shall be served by
personal service or by mailing a copy thereof by registered or certified mail,
return receipt requested, to the applicable party at the addresses indicated
below:
If to the Borrower:
Xxxxx X. Xxxx
The Christian Network, Inc.
00000 00xx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
If to the Lender:
Xxxxxx X. Xxxxxx
Xxxxxx Communications of Orlando-56, Inc.
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
or at such other address as may be designated by either party in a written
notice to the other complying as to delivery with the terms of this Section.
All such notices and other communications shall be effective when deposited in
the mails.
8.5 Expenses. The Borrower agrees to pay on demand all
costs and expenses incurred by the Lender directly in the enforcement of this
Agreement, the Note, the Security Agreement, any Mortgage or Leasehold
Mortgage, the Pledge Agreement and other instruments and documents to be
delivered hereunder, including, without limitation, the reasonable fees and
expenses of any attorney to whom the Note is referred for collection (whether
or not litigation is commenced) or for representation out of court, in trial,
on appeal or in proceedings under any bankruptcy or insolvency law or
otherwise. In addition, the Borrower shall pay any and all taxes and fees
payable or determined to be payable in connection with the execution, delivery
or recordation of any instruments and documents to be delivered hereunder. In
addition, Borrower agrees to pay (i) all the actual and reasonable costs and
expenses of Lender in connection with the negotiation, preparation and
execution of this Loan Agreement, the Note, the Security Agreement, the Pledge
Agreement, any Mortgage or Leasehold Mortgage and all other documents and
instruments to be delivered hereunder (collectively, the "Loan Documents") and
all the costs of furnishing all opinions by counsel for Borrower, and of
Borrower's performance of and compliance with all agreements and conditions
contained herein and in the other Loan Documents on its part to be performed or
complied
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with including, without limitation, confirming compliance with environmental
and insurance requirements; (ii) the reasonable fees, expenses and
disbursements of counsel to Lender (including allocated costs of internal
counsel) in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loan and any consents, amendments,
waivers or other modifications hereto or thereto; and (iii) all the actual and
reasonable costs and expenses of creating and perfecting liens in favor of
Lender pursuant to any Loan Document.
8.6 Binding Effect; Assignment. This Agreement shall
become effective when executed and thereafter shall be binding upon and inure
to the benefit of the Borrower, the Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign any rights
or obligations hereunder without the prior written consent of the Lender and
the Agents. Lender shall be permitted to assign, without Borrower's consent,
all or any portion of Lender's rights and interests hereunder and under each
other document executed in connection with this Loan Agreement (x) to one or
more other Affiliates (as defined in Section 1.09) of Lender, and, upon any
such assignment, each reference herein or in such other document to "Lender"
shall be deemed to be and include a reference to such other Affiliate and (y)
to creditors of Lender or its Affiliates as security for indebtedness of Lender
or such Affiliates.
8.7 Governing Law. This Agreement, the Note, the
Security Agreement and related documents shall be governed by, and construed in
accordance with, the laws of the State of Florida with the exception of its
conflicts of laws provisions; provided that the effect of any recordation shall
be determined by the State thereof.
8.8 Severability of Provisions. Any provision of this
Agreement, the Note, the Security Agreement, or any Mortgage or Leasehold
Mortgage that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions or affecting the
validity or enforceability of any provisions in any other jurisdiction.
8.9 Headings. Article and Section headings in this
Agreement are including for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
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8.10 Rights Affected by Extensions. The rights of the
Lender and its assigns shall not be impaired by any indulgence, release,
renewal, extension or modification which the Lender may grant with respect to
the indebtedness or any part thereof, or with respect to the collateral or with
respect to any endorser, guarantor, or surety without notice or consent of the
Borrower or any endorser, guarantee, or surety.
8.11 Survival of Representations and Warranties. All
representations and warranties made in this Agreement and in any documents or
certificates delivered pursuant hereto or thereto shall survive the execution
and delivery of this Agreement and the Note and the making of the Loan
hereunder and continue in full force and effect, as of the respective dates as
of which they were made, until all of the obligations of the Borrower to the
Lender hereunder have been paid in full.
8.12 [INTENTIONALLY OMITTED]
8.13 Further Assurances. From time to time, the Borrower
shall execute and deliver to the Lender such additional documents as the Lender
may reasonably require to carry out the purposes of this Agreement or any of
the documents entered into in connection herewith, or to preserve and protect
the rights of the Lender hereunder or thereunder.
8.14 Indemnification. The Borrower hereby indemnifies and
holds harmless the Lender, the Agents and the Lenders under the Credit
Agreement and their respective directors, officers, shareholders, employees,
agents, counsel, subsidiaries and affiliates (the "Indemnified Persons") from
and against any and all losses, liabilities, obligations, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against any
Indemnified Person in any way relating to or arising out of this Agreement, the
documents entered into in connection herewith, or any of them or any of the
transactions contemplated hereby or thereby; provided, however, that the
Borrower shall not be liable to any Indemnified Person, if there is a judicial
determination that such losses, liabilities, obligations, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the gross negligence or willful misconduct of such Indemnified Person.
8.15 Waiver. EACH OF LENDER, BORROWER AND SHAREHOLDER
HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE LOAN
DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
LOAN TRANSACTION AND THE LENDER/BORROWER RELATIONSHIP THAT IS BEING
ESTABLISHED. THIS WAIVER IS
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IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
REPLACEMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE LOAN
DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOAN.
8.16 Maximum Interest. Lender and Borrower intend that
this Agreement and the other Loan Documents conform to all applicable usury
laws. Accordingly, no provisions of the Loan Documents shall require the
payment or permit the collection of interest in excess of the maximum rate
permitted by applicable law ("Maximum Rate"), or obligate Borrower to pay any
taxes, assessments, charges, insurance premiums or other amounts which are held
to constitute interest to the extent that such payments, when added to the
other obligations under the Loan Documents, would be held to constitute
contracting for, or the payment by Borrower of, interest at a rate greater than
the Maximum Rate. Lender and Borrower further agree that:
(i) if any excess of interest in such
respect is herein or in any such other instrument provided for, or shall be
adjudicated to be so provided for herein or in any such instrument, the
provisions of this subsection 8.16 shall govern, and neither Borrower nor its
successors or assigns shall be obligated to pay the amount of such interest to
the extent it is in excess of the Maximum Rate;
(ii) if at any time the amount of
interest under any of the Loan Documents for a calendar year exceeds the
Maximum Rate had the Maximum Rate at all times been in effect, the interest
chargeable under any such Loan Document shall be limited to the amount of
interest that could have been charged if the Maximum Rate had at all times been
in effect, but any subsequent reductions in the interest due shall not reduce
the rate of interest chargeable under any such Loan Document below the Maximum
Rate until the total amount of interest accrued under any such Loan Document
equals the amount of interest that would have accrued if the interest provided
for in any such Loan Document had at all times been in effect and collectible;
(iii) if the maturity of any Loan Document
is accelerated for any reason, or in the event of any prepayment by Borrower,
or in any other event, earned interest may never include more than the Maximum
Rate, computed from the date of disbursement of the funds evidenced by such
Loan Document until payment, and any interest otherwise payable under such Loan
Document that is in excess of the Maximum Rate shall be canceled automatically
as of such acceleration or such other event and (if theretofore paid) shall be
credited against principal;
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(iv) if it should be held that any
interest payable or chargeable under any Loan Document is in excess of the
Maximum Rate, the interest payable or chargeable under such Loan Document shall
be reduced to the maximum amount permitted by applicable federal or state law,
whichever shall permit the higher lawful interest, as construed by courts
having jurisdiction thereof; and
(v) the spreading, prorating and
amortizing of interest over the term of the Loan Documents shall be allowed to
the fullest extent permitted by applicable law.
9. GUARANTY
9.1 Guaranty. In consideration for Lender's execution and
delivery of this Loan Agreement and Lender's agreement to make the Loan,
Shareholder agrees as follows:
(a) Shareholder hereby guarantees the full, complete and
timely payment and performance by Borrower of each and every obligation of
Borrower under this Loan Agreement, the Note, the Security Agreement, each
Mortgage and Leasehold Mortgage executed and delivered pursuant to this Loan
Agreement and each other agreement or instrument executed and delivered by
Borrower in connection with this Loan Agreement (individually, a "Loan
Document" and collectively, the "Loan Documents"). If any default shall be
made by Borrower in the payment or performance of any of such obligations, then
Shareholder will itself pay or perform or cause to be paid or performed such
obligation upon receipt of notice from Lender specifying in summary form the
default. Lender may proceed to enforce its rights against Shareholder from
time to time prior to, contemporaneously with, or after any enforcement against
Borrower, or without any enforcement against Borrower. The obligations of
Shareholder under this Guaranty shall be absolute and unconditional and shall
remain in full force and effect without regard to and shall not be released,
discharged, or in any way affected by (and Shareholder expressly waives any and
all defenses arising out of, or based on): (i) any amendment or modification
of or supplement to any Loan Document; (ii) any exercise or non-exercise of, or
delay in exercising any, right, remedy, power, or privilege under or in respect
of any Loan Document; (iii) any bankruptcy, insolvency, arrangement,
composition, assignment for the benefit of creditors, or similar proceeding
commenced by or against Borrower or Shareholder; (iv) the dissolution
(voluntarily or involuntarily) of Lender; (v) the genuineness, validity, or
enforceability of any Loan Document; or (vi) any other circumstance which might
otherwise constitute a legal or equitable discharge of a guarantor or surety.
If payment of any sum by Borrower pursuant to any Loan Document is recovered as
a preference or fraudulent transfer under any applicable bankruptcy or
insolvency law, the
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liability of Shareholder under such Loan Document shall continue and remain in
full force and effect notwithstanding such recovery.
(b) Shareholder waives presentment, protest,
demand, or action or delinquency in respect of any of the obligations of
Borrower under the Loan Documents. Shareholder waives all set-offs and
counterclaims and all notices of nonperformance, notices of protest, notices of
dishonor, and notices of acceptance of this guaranty.
(c) This guaranty shall be deemed a continuing
guaranty, and the above consents and waivers of Shareholder shall remain in
full force and effect until the satisfaction in full of all obligations of
Borrower under the Loan Documents.
(d) Shareholder agrees that any and all claims in
its favor against Borrower, any endorser or any other guarantor of all or any
part of the obligations of Borrower under the Loan Documents, or against any of
their respective properties, arising by reason of any payment by Shareholder to
Lender pursuant to the provisions hereof or otherwise, shall be subordinate and
subject in right of payment to the prior payment, in full in cash, of all
obligations of Borrower under the Loan Documents. Shareholder agrees that any
right of subrogation arising as a result of its performance hereunder shall not
exist unless and until all obligations of the Borrower under the Loan Documents
are paid in full in cash.
9.2 Representations and Warranties. Shareholder hereby represents
and warrants to Lender as follows:
(a) This Loan Agreement has been duly and validly
executed and delivered by Shareholder and constitutes its legal, valid, and
binding agreement with respect to the provisions contained in Article IX,
enforceable in accordance with its terms, except as the enforceability of this
Loan Agreement may be affected by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally, and by judicial discretion in the
enforcement of equitable remedies.
(b) The execution, delivery, and performance by
Shareholder of this Loan Agreement: (i) do not require the consent of any third
party; (ii) will not conflict with any provision of the Articles of
Incorporation or Bylaws of Shareholder; (iii) will not conflict with, result in
a breach of, or constitute a default under, any law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; and (iv) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any
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performance required by the terms of, any agreement, instrument, license, or
permit to which Shareholder is a party or by which Shareholder may be bound.
9.3 Limited Recourse. Notwithstanding anything to the
contrary contained in this Article IX, in any action or proceeding commenced
with reference to any Loan Document, no judgment obtained against Shareholder
shall be enforced against any of its separate assets, other than Shareholder's
interest in all of the issued and outstanding capital stock of Borrower
(whether outstanding on the date hereof or hereafter), and Shareholder's
liability under any Loan Document shall be limited to such interest. In any
legal action or suit in equity which the Lender may undertake against
Shareholder to enforce its rights and remedies under any Loan Document, any
judgment obtained by Lender may be satisfied by recourse only to Shareholder's
interest in all of the issued and outstanding capital stock of Borrower
(whether outstanding on the date hereof or hereafter) and not by recourse to
any other assets of Shareholder.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized officers, as of
the date first above written.
XXXXXX COMMUNICATIONS OF
ORLANDO-56, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
Secretary
CHANNEL 56 OF ORLANDO, INC.
By: /s/ Xxxxx X. Xxxx
-------------------------
Xxxxx X. Xxxx
Chairman
THE CHRISTIAN NETWORK, INC. HEREBY
JOINS IN THE EXECUTION OF THE FOREGOING
AGREEMENT TO AGREE TO THE PROVISIONS OF
ARTICLE IX ONLY, AS OF THE DATE FIRST
ABOVE WRITTEN.
THE CHRISTIAN NETWORK, INC.
By: /s/ Xxxxx X. Xxxx
-------------------------
Xxxxx X. Xxxx
Chairman
