SECURED PROMISSORY NOTE
$600,000 Los Angeles, California
September 13, 1996
FOR VALUE RECEIVED, the undersigned, TRADEWINDS TELEVISION, LLC, a
California limited liability company (the "Borrower") hereby promises to pay to
AFFINITY ENTERTAINMENT, INC., a Delaware corporation (the "Lender"), or order,
on the Maturity Date (as such term is defined herein) the principal sum of Six
Hundred Thousand Dollars ($600,000) or so much thereof as may be borrowed
hereunder, with interest thereon in accordance with the terms set forth herein.
The Maturity Date, unless mutually extended by Xxxxxxxx and Lender,
shall be the date upon which Xxxxxx makes written demand for payment to Borrower
which may be made after the date which is 90 days following receipt of written
notice (60 days following receipt of written notice on or after December 1,
1996) by Xxxxxxxx from Lender ("Demand Notice") that Lender has determined that
the conditions to the Transaction contemplated by that certain letter agreement
dated September 13,1996 among Borrower, Xxxxxx and Xxxx Xxxx could not be
satisfied, and the Transaction will not be consummated; provided, however, that
notwithstanding the foregoing, this Note shall become immediately due and
payable without any notice if either of the following conditions are not met at
any time prior to the Maturity Date: (i) all payments due from Borrower to third
parties with respect to the production, distribution, marketing and other
exploitation of the television series "Bounty Hunters" (the "Series") are not
made promptly when due or otherwise Borrower defaults in any monetary or
contractual obligation relating to the Series, or (ii) Borrower shall not have
(a) provided Lender with a two (2) week cash budget of expenditures, acceptable
to Lender, due with respect to the Series by the close of business on the date
of the "Demand Notice" and on each Friday thereafter, and (b) deposited in an
escrow account, approved by Lender, sufficient cash to meet the monetary
obligations set forth in the budget, initially for the next two (2) week period
and thereafter for the next one (1) week period. Advances may be made under this
Note prior to the Maturity Date on the condition that at the time of any such
borrowing, such borrowing has been approved by Lender in its sole discretion
regarding the use of such advances, and no Event of Default exists under the
Security Agreement referred to herein, and provided further that the aggregate
principal amount of all sums borrowed hereunder shall not exceed the sum of Six
Hundred Thousand Dollars ($600,000). Each borrowing hereunder shall be recorded
by the Lender and, prior to any transfer of this Note, shall be endorsed on the
schedule annexed to this Note. The aggregate unpaid amount of principal set
forth on the schedule annexed to this Note shall be presumptive evidence of the
principal amount owing and unpaid on this Note. However, the failure to record
any such amount on such schedule shall not limit or otherwise affect the
obligations of Borrower hereunder to repay the principal amount of all advances
hereunder together with interest accruing thereon. Amounts repaid hereunder may
not be reborrowed.
The undersigned promises to pay, on the Maturity Date, interest on the
unpaid principal balance hereof from time to time outstanding from the date of
the first disbursement hereunder until paid, at a rate per annum of eight
percent (8%).
This Note is entitled to the benefits and subject to all of the terms
and conditions of the Interim Financing and Security Agreement dated September
13,1996 among Lender, Borrower and Xxxx Xxxx, as amended from time to time
("Security Agreement").
The undersigned agrees to pay all expenses of Xxxxxx incurred in
collection of this Note, including reasonable attorneys' fees in connection
therewith, irrespective of whether suit is brought hereon.
All principal and interest hereunder shall be payable in lawful money
of the United States of America and shall be paid at such place as the holder
hereof may from time to time designate.
Upon the occurrence of any default in the payment of principal or
interest hereunder or upon any Event of Default under the Security Agreement or
any material breach of any other term or condition set forth in the Security
Agreement, the principal hereof with interest accrued thereon shall become, or
may be declared to be, at the option of the Lender, forthwith due and payable.
Borrower hereby waives diligence, presentment, demand, notice, protest
and all other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note and assents to extensions of time of
payment, or forbearance or other indulgence without notice. The right to plead
any and all statutes of limitation as a defense to any demand hereunder is
hereby waived to the full extent permitted by law.
Borrower shall have no right to prepay all or any portion of this Note
until the receipt by Borrower of the Demand Notice.
This Note shall be governed by and be construed in accordance with the
laws of the State of California.
IN WITNESS WHEREOF, this Note has been executed and delivered at Los
Angeles, California, on the date set forth above.
TRADEWINDS TELEVISION, LLC
By: Xxx Xxxx
---------------------
Its: President/CEO
---------------------
SCHEDULE OF ADVANCES OF PRINCIPAL
==============================================================================================
Unpaid
Amount of Interest Rate Principal Notation
Date Advance (8%) Balance Made by
==============================================================================================
9/16/96 $118,249.76 (BHP)
----------------------------------------------------------------------------------------------
9/16/96 47,552.40 (Xxxx.Xxx)
----------------------------------------------------------------------------------------------
9/16/96 104,050.75 (Contractors)
----------------------------------------------------------------------------------------------
9/16/96 36,161.61 (ADP)
----------------------------------------------------------------------------------------------
9/16/96 19,240.00 (Stations)
----------------------------------------------------------------------------------------------
9/17-10/3/96 211,478.71
----------------------------------------------------------------------------------------------
10/4-10/17/96 48,437.12 (Payables)
----------------------------------------------------------------------------------------------
10/4-10/17/96 14,829.65 (PayroLL)
----------------------------------------------------------------------------------------------
TOTAL $600,000.00
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
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TRADEWINDS TELEVISION & BPH PRODUCTIONS
Tradewinds' payables 152,641.05
Tradewinds' contractors 191,293.13
Tradewinds'employees 50,816.00
BHP Productions 141,983.05
----------
Grand total 536,733.23
==========
Tradwinds' Payables
Xxxx Xxxxxx Graphics 431.65
Airtouch Cellular 368.36
All Post 9,987.59
Ameritech 88.74
Arrowhead Mt Spring Water 212.30
AT&T 68.31
Camerry Consultants 3,000.00
Century Parking 148.50
Coast Communications 135.00
Compuserve 50.04
Designatory 11,250.00
Entertainment Comm Network 1,136.71
Federal Express 1,077.00
Xxxxx Group 933.39
General Parking 480.00
Guardian Insurance 9,661.00
Xxx Xxxxxxx 729.29
NAPTE 11,000.00
Neopost Leasing 448.18
Xxxxxx Color Lab 946.32
Nielsen 42,650.00
Omni-Ch 12,272.34
Omni-Ny 9,243.47
Pacific Bell 2,315.01
Pacific Communications 1,008.61
Xxxxx & Associates 3,500.00
Xxxxx Xxxxxxxx 21.60
Sharp Electronics 470.31
Silver Star Information Systems 270.00
Topanga Warner 10,320.00
Video Central 10,467.25
WCIU-TV 6,500.00
Western Office Interiors 911.10
Woodland Printing 351.71
Xerox 187.27
----------
152,641.05
==========
Tradewinds' contractors
Xxxxx Xxxxxx 43,250.00
expenses 1,167.94
Xxxxx Xxxxxxx 14,000.00
expenses 408.43
Xxxxx Xxxxxx 7,000.00
expenses 554.33
Xxx Xxxxx 13,333.32
expenses 249.35
bonus 7,500.00
Xxx Xxxxxxxxx 6,000.00
expenses 829.76
Xxxx Xxxxxx 10,000.00
Xxxx Xxxxxxxxxx 12,000.00
Xxxx Xxxx 75,000.00
----------
191,293.13
==========
Tradewind Employees
Xxxxx Xxxxxxxxxx 4,506.00
Xxxxx Xxxx 4,374.99
Xxxxx Xxxxxxxx 3,500.00
vacation 184.13
Xxxxx Xxxxxx 590.00
Xxxxxxx Xxxxxx 3,912.48
Xxx Xxxxxxx 18,124.98
Xxxxxxx Xxxxxx-BHP 3,400.00
Xxxx Xxxxxx 2,200.00
Xxxxxxxx Xxxxxxx 2,250.00
---------
43,042.58
Payroll taxes 7,773.42
---------
Total to ADP 50,816.00
=========
BHP Productions
AGK Studios 1,315.00
Band Pr 216.50
Xxxxxxx Xxxxx 100.00
Courtesy Printing 244.65
Crystal Patent 169.50
Xxx Xxxxx 1,264.50
Flower Power 4,200.00
Forever Blue 51,153.31
Fresno Shoot 3,975.25
Xxxxxxx Xxxxxx 150.00
Xxxx Xxxxx 600.00
Xxxxxx Xxxxxxx 1,500.00
Xxxxx Xxxxxxx 10,575.00
Xxxx Xxxxx 600.00
Xxxx & Xxxxxx 2,010.00
Xxxxxxxx Xxxxxx 1,960.45
Logo Edition 4,800.00
Xxxx Xxxxxxxx 5,548.00
Xxxxxxx Xxxxx 800.00
Xxxxxxxx Xxxxx 1,167.00
Xxxx Xxxxxxxx Ent. 3,500.00
NK & Associates 567.00
Outlaw Hunter 3,922.00
Xxxxx Xxxxxx 150.00
Xxxxxx Xxxxx 300.00
Xxxxx Xxxxxxxxx 300.00
Sharpshooters 32,902.84
Sherwood Animatiori 125.00
Xxxxx Xxxxxxx 1,965.23
Xxx Xxxx 250.00
Video Central 3,409.72
Visionary Music 202.10
Xxxxxxx Xxxxxx 2,040.00
------------
141,983.05
============
SCHEDULE OF ADVANCES OF PRINCIPAL
=================================================================================================================
Unpaid
Amount of Interest Rate Principal Notation
Date Advance (8%) Balance Made by
=================================================================================================================
9/16/96 $118,249.76 (BHP)
-----------------------------------------------------------------------------------------------------------------
9/16/96 47,552.40 (Xxxx.Xxx)
-----------------------------------------------------------------------------------------------------------------
9/16/96 104,050.75 (Contractors)
-----------------------------------------------------------------------------------------------------------------
9/16/96 36,161.61 (ADP)
-----------------------------------------------------------------------------------------------------------------
9/16/96 19,240.00 (Stations)
-----------------------------------------------------------------------------------------------------------------
9/17-10/3/96 211,478.71
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