Exhibit 10.34
LOAN AGREEMENT
DATED AS OF FEBRUARY 5, 2001
BETWEEN
CERTAIN LENDERS
AND
HISPANIC TELEVISION NETWORK, INC.
LOAN AGREEMENT
This Loan and Security Agreement (this "Agreement") is made and
entered into as of February 5, 2001, by and between Hispanic Television
Network, Inc., a Delaware corporation (the "Company"), and the lenders set
forth on the Lenders Schedule (each a "Lender" and collectively, the
"Lenders").
ARTICLE 1
AMOUNT AND TERMS OF CREDIT
1.1. SECURED TERM LOAN. Subject to the terms and conditions of this
Agreement, at the Closing, each Lender agrees to lend and the Company agrees
to borrow an amount equal to the amount set forth on the Lenders Schedule
opposite such Lender's name (herein called such Lender's "Loan") pursuant to
a promissory note in the form of Exhibit A, with appropriate insertions
(herein called such Lender's "Note") to be dated as of the Closing Date (as
defined herein). Additional amounts may be loaned, but are not required to,
to the Company by a Lender or new Lenders during the Commitment Period, so
long as the aggregate amount of the Loans outstanding at any time does not
exceed the Maximum Loan Amount. No additional amounts may be loaned to the
Company hereunder after the expiration of the Commitment Period. In the event
that additional amounts are loaned hereunder, the Company shall (a) amend the
Lender's Schedule accordingly, (b) append an additional signature page for
any new Lender, and (c) allow such new Lender to become a party to this
agreement and all ancillary documents or agreements contemplated herein or
hereby.
1.2 CLOSING. The funding of the initial Loans (the "Closing") shall occur
upon the satisfaction of all conditions to Closing specified in Article 4
hereof ("Closing Date"), and may be accomplished via the exchange of all
requisite documentation by overnight mail, messenger, e-mail or telecopy.
1.3. DOCUMENTATION EXPENSES. The Company shall pay all reasonable fees and
expenses relating to the negotiation and preparation of this Agreement and
the consummation of the transactions contemplated hereby including, without
limitation, (a) the cost of producing and re-producing this Agreement, the
Note and the Security Documents, (b) the fees and disbursements of Xxxx X.
Xxxxxx, counsel to borrower, (c) the fees and disbursements reasonable
out-of-pocket expenses, and (e) all expenses (including reasonable attorneys'
fees of counsel to Lenders at any time and all recording and filing fees)
incurred by any Lender relating to any amendments, supplements, waivers,
releases or consents pursuant to the provisions of this Agreement, the Notes
or the Security Documents (including in connection with any work-out,
restructuring or similar proceeding relating to the performance of the
obligations of the Company hereunder or
2
thereunder). To the extent the same are known, all such fees and expenses
shall be paid by the Company on the Closing Date.
ARTICLE 2
NOTE PAYMENTS AND WARRANT
2.1. INTEREST PAYMENTS. The principal balance due and owing on the Loans
shall bear interest as stated in the Note and shall be due and payable as
stated in the Note.
2.2. PRINCIPAL PAYMENTS. Principal payments shall be due and payable as
stated in the Note.
2.3. VOLUNTARY PREPAYMENT. The Company may from time to time, without premium
or penalty, prepay the Loans in whole or in part, so long as all prepayments
shall be made PRO RATA among the Lenders in accordance with the Percentage
Shares at the time of prepayment. Any prepayment of the full amount of the
Loans shall include all accrued interest thereon. All payments and
prepayments of the Loan shall be first applied to accrued and unpaid interest
on the unpaid principal balance of the Loan, and the remainder, if any, to
any unpaid principal balance.
2.4 PAYMENTS TO LENDERS. All payments, distributions, collections or
recoveries made hereunder and under the other Loan Documents shall be made
PRO RATA among the Lenders in accordance with the Percentage Shares at the
time of any such payment.
2.5 WARRANTS. For each $1.00 loaned, the Lenders shall be entitled to one
warrant with a maximum strike price of $.75 per share of restricted common
stock or 60% of the share price of any next financing event with piggy back
registration rights in the event of any registration filed by the Company.
2.6 Four (4) shares of stock with piggy back registration rights for each
$1.00 loaned except for Xxxxxxx Xxxxxx, who shall receive two (2) shares per
$1.00 loaned or advanced to the Company.
ARTICLE 3
WARRANTIES AND REPRESENTATIONS
The Company represents and warrants to each Lender as follows:
3.1. CORPORATE ORGANIZATION AND AUTHORITY. The Company,
(a) is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation;
(b) except as set forth on Schedule 3.1(b), has all requisite power and
authority and all necessary licenses and permits to own and operate its
properties and to carry on its business as now conducted and as presently
proposed to be conducted;
(c) has duly taken all action necessary to authorize the execution and
delivery by it of the Loan Documents and to authorize the consummation of the
transactions contemplated thereby and the performance of its obligations
thereunder;
(d) is duly authorized to borrow funds hereunder;
(e) except as set forth on Schedule 3.1(e), the Company is duly licensed or
qualified and is in good standing as a foreign corporation in each
jurisdiction wherein the nature of the business transacted by it or the
nature of the property owned or leased by it makes such licensing or
qualification necessary; and
(f) the Company discloses that it is desperate for cash, that the loan is
critical and necessary to maintain operations, and the company would be in an
untenable position without it.
3.2. FULL DISCLOSURE. Except to the extent set forth in Schedule 3.3 and
except to the extent that any previous filings have been corrected in the
Company's Form 10-KSB/A and Form 10-QSB/A filed with the Securities and
Exchange Commission and NASDAQ on June 30, 2000, all filings of the Company
with the Securities and Exchange Commission and the NASDAQ ("SEC Filings")
have been timely made, are true and correct and are not being investigated,
challenged or supplemented or amended in any way.
3.3. PENDING LITIGATION. Except as set forth in the SEC Filings or which do
not involve amounts in excess of $250,000 collectively and except as
disclosed on Schedule 3.4: (a) there are no proceedings or governmental
investigations pending or, to the best knowledge of the Company, threatened
against or affecting the Company in any court or before any governmental
authority or arbitration board or tribunal, (b) there are no outstanding
judgments, injunctions, writs, rulings or orders by any such court,
governmental authority, arbitration board or tribunal against the Company or
any of the Company's stockholders, partners, directors or officers and
counsel which could cause a Material Adverse Change, and (c) the Company is
in default with respect to contracts or agreement to which it is a party or
any order of any court or governmental authority or arbitration board or
tribunal. The company is a defendant in a matter pending in the Dist. Ct:
Xxxxxx Xxxxxx et xx x. HTVN et al.
3.4. NO CONFLICTS. The borrowing under the Loans and the issuance of the
Notes and compliance by the Company with all of the provisions of this
Agreement, the Notes and the other Loan Documents do not and will not (i)
violate any provisions of any law or any order of any court or governmental
authority or agency, (ii) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute a default under the
Certificate of Incorporation or Bylaws of the Company or any indenture or
other contract or agreement or instrument to which
the Company is a party or by which it may be bound, (iii) result in the
acceleration of any Indebtedness owed by the Company, or (iv) result in the
imposition of any liens or encumbrances on any property of the Company,
except as expressly contemplated or permitted in the Loan Documents.
3.5. The company has the following defaults and may have others:
a) KJLA
b) Xxxx Xxxxx note and it's covenants
c) Old AIN Bridge loans and delinquent trade debts
3.6. GOVERNMENTAL CONSENT. Except for the approvals and consents obtained and
disclosed on Schedule 3.1(b), no approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of
this Agreement, the Notes or the Loan Documents or compliance by the Company
with any of the provisions of this Agreement, the Notes or the Loan Documents.
3.7. USE OF PROCEEDS. The Company will use the Loan proceeds as follows:
(a) to pay trade debts and fund operations
3.8. ENFORCEABLE OBLIGATIONS. This Agreement is, and the other Loan Documents
when duly executed and delivered will be, legal, valid and binding
obligations of the Company, enforceable in accordance with their terms except
as such enforcement may be limited by bankruptcy, insolvency or similar laws
of general application relating to the enforcement of creditors' rights.
3.9. OTHER OBLIGATIONS AND RESTRICTIONS. The Company has outstanding
Liabilities of the following kind, including, but not limited to programming
contracts, LMA agreements, affiliation agreements, and satellite uplink
(including contingent obligations, tax assessments, and unusual forward or
long-term commitments) which are, in the aggregate, material to the Company
or material with respect to the Company's consolidated financial condition
which have been disclosed in the companies last 10Q.
3.10. LABOR DISPUTES AND ACTS OF GOD. Except as disclosed in the Disclosure
Schedule, neither the business nor the properties of the Company has been
affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the
public enemy or other casualty (whether or not covered by insurance), which
could cause a Material Adverse Change.
3.11. NAMES AND PLACES OF BUSINESS. The Company has not, during the
preceding five years, had, been known by, or used any other trade or
fictitious name, except as disclosed in the Disclosure Schedule. Except as
otherwise indicated in the Disclosure Schedule, the chief executive office
and principal place of business of the Company is (and for the preceding five
years has been) located at the address of the Company set out on the
signature pages hereto.
Except as indicated in the Disclosure Schedule, the Company does not have any
other office or place of business.
3.12. GOVERNMENT REGULATION. The Company is not subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940 (as any of the preceding acts have been
amended) or any other law which regulates the incurring by the Company of
Indebtedness, including laws relating to common contract carriers or the sale
of electricity, gas, steam, water or other public utility services.
3.13. SOLVENCY. Upon giving effect to the issuance of the Notes, the
execution of the Loan Documents by the Company and the consummation of the
transactions contemplated hereby, the Company will be insolvent (as such term
is used in applicable bankruptcy, liquidation, receivership, insolvency or
similar laws).
3.14. TITLE TO PROPERTIES; LICENSES. The Company has good and defensible
title to all of the Collateral and to all of its material properties and
assets, free and clear of all Liens, encumbrances, or adverse claims,
everything is free and clear of all impediments to the use of such properties
and assets in the Company's business. Except as set forth in Schedule 3.1(b),
the Company possesses all licenses, permits, franchises, patents, copyrights,
trademarks and trade names, and other intellectual property (or otherwise
possesses the right to use such intellectual property without violation of
the rights of any other Person) which are necessary to carry out its business
as presently conducted and as presently proposed to be conducted hereafter,
and the Company is not in violation in any material respect of the terms
under which it possesses such intellectual property or the right to use such
intellectual property.
3.15. SECURITY DOCUMENT REPRESENTATIONS AND WARRANTIES. Capitalized terms
used in this section, not otherwise defined in this Agreement, and defined in
the Security Documents shall when used in this section have the meanings
given them in the Security Documents.
(a) OWNERSHIP FREE OF LIENS. No effective financing statement,
other than Xxxx Xxxxx financing statement, or other registration or
instrument similar in effect covering all or any part of the Collateral
is on file in any recording office except any which have been filed in
favor of Lender relating to the Security Documents and any which have
been filed to perfect or protect any Permitted Lien. None of the
Collateral is in the possession of any Person other than the Company or
the Lenders, except for Collateral being transported in the ordinary
course of business.
(b) RECEIVABLES. Each Receivable represents the valid and
legally binding indebtedness of a bona fide account debtor arising from
the sale or lease by the Company of goods or the rendition by the
Company of services and is not subject to contra-accounts, setoffs,
defenses or counterclaims by or available to account debtors obligated
on the Receivables, except for those for which adequate reserves have
been taken in substantially the same amount as is shown on the Initial
Financial Statements.
(c) DOCUMENTS AND INSTRUMENTS. All Documents and Instruments
included within the Collateral are valid and genuine. Any such Document
or Instrument has only one original counterpart which constitutes
collateral within the meaning of the UCC or the law of any applicable
jurisdiction, and all such original counterparts (other than checks
delivered in payment of Receivables in the ordinary course of business)
have been delivered into the possession of such Person designated by
Majority Lenders as agent pursuant to the Security Agreement.
(d) ADDRESS. The chief executive office and principal place of
business and the office where all records concerning the Collateral are
kept at the Company's address set forth on its signature page hereto.
The representations and warranties contained in this Agreement, the Notes and
the other Loan Documents are made by the Company as an inducement to each Lender
to make its Loan, and the Company understands that each Lender is relying on
such representations and warranties, and that such representations and
warranties are true and correct at the time of the first disbursement hereunder
and shall remain true and correct at all times thereafter so long as any part of
the Loans shall remain outstanding.
ARTICLE 4
CONDITIONS TO DISBURSEMENT
4.1. DOCUMENTS TO BE DELIVERED. No Lender has any obligation to make its Loan
unless such Lender shall have received all of the following, at such Lender's
office as set forth on the Lenders Schedule, duly executed and delivered and
in form, substance and date satisfactory to Majority Lenders:
(a) This Agreement.
(b) The Notes.
(c) Each Security Document listed in the Security Schedule.
(d) Certain certificates of the Company including:
i. An "Omnibus Certificate" of the Secretary and of the
Chairman of the Board or President of the Company, which shall contain
the names and signatures of the officers of the Company authorized to
execute Loan Documents and which shall certify to the truth,
correctness and completeness of the following exhibits attached
thereto: (1) a copy of resolutions duly adopted by the Board of
Directors of the Company and in full force and effect at the time this
Agreement is entered into, authorizing the execution of this Agreement
and the other Loan Documents delivered or to be delivered in connection
herewith and the consummation of the transactions contemplated herein
and therein, a copy of the charter documents of the Company and all
amendments thereto, certified by
the appropriate official of the Company's state of organization, and
a copy of any bylaws of the Company; and
(e) Xxxxx Xxxxxx must be a Lender hereunder of not less than
$100,000.
(f) A warrant agreement duly executed by the Company and
substantially in the form as set forth in Exhibit C (the "Warrant").
4.2. ADDITIONAL CONDITIONS PRECEDENT. No Lender has any obligation to make
its Loan unless the following conditions precedent have been satisfied:
(a) All representations and warranties made by the Company in
any Loan Document shall be true on and as of the date of the Loan (except to
the extent that the facts upon which such representations are based have been
changed by the extension of credit hereunder) as if such representations and
warranties had been made as of the date of the Loan.
(b) No Material Adverse Change shall have occurred since the
date of last 10Q other than the Company does not have the requisite cash for
continued operations.
(c) The Company shall have performed and complied with all
agreements and conditions required in the Loan Documents to be performed or
complied with by it on or prior to the date of the Loan.
(d) The making of the Loan shall not be prohibited by any law
and shall not subject the Lender to any penalty or other onerous condition
under or pursuant to any such law.
(e) Lenders shall have received all documents and instruments
which any Lender has then requested, in addition to those described in
Section 4.1 (including corporate documents and records; documents evidencing
governmental authorizations, consents, approvals, licenses and exemptions;
certificates of public officials and of officers and representatives of the
Company; and all reports, records, certificates and other documents requested
in relation to any Security Document delivered pursuant hereto), as to the
accuracy and validity of or compliance with all representations, warranties
and covenants made by the Company in this Agreement and the other Loan
Documents, the satisfaction of all conditions contained herein or therein,
and all other matters pertaining hereto and thereto. All such additional
documents and instruments shall be satisfactory to Lenders in form, substance
and date.
ARTICLE 5
COMPANY COVENANTS
From and after the date hereof and continuing so long as any amount remains
unpaid on the Notes.
5.1. CORPORATE EXISTENCE, ETC. The Company will preserve and keep in force
and effect its corporate existence, its rights and franchises and all
licenses and permits that it currently has, which are necessary to the proper
conduct of its business and will qualify to do business in all states or
jurisdictions where required by applicable law, except where the failure to
so qualify will not cause a Material Adverse Change.
5.2. INSURANCE.
(a) The Company will at all times maintain casualty and
liability insurance coverage in accordance with the Insurance Schedule or by
financially sound and reputable insurers in such forms and amounts and
against such risks as are customary for corporations of established
reputation engaged in the same or a similar business and owning and operating
similar properties with limits and scope of coverage reasonably acceptable to
Majority Lenders. All policies evidencing such insurance shall name the
Lenders as an additional insured and shall contain a loss payable endorsement
to the Lenders in form and substance acceptable to Majority Lenders that will
become effective upon the occurrence of an Event of Default. Within seven
days after the occurrence of an Event of Default, the Company shall cause any
insurance policies covering Collateral to be endorsed to provide for payment
of losses to the Lenders, to provide that such policies may not be canceled
or reduced or affected in any material manner for any reason without fifteen
days prior notice to each Lender, to provide for any other matters specified
in any applicable Security Document or which Majority Lenders may reasonably
require, and to provide for insurance against fire, casualty and any other
hazards normally insured against, in the amount of the full value (less a
reasonable deductible not to exceed amounts customary in the industry for
similarly situated businesses and properties) of the property insured.
(b) Reimbursement under any liability insurance maintained by
the Company pursuant to this Section 5.2 may be paid directly to the Person
who has incurred the liability covered by such insurance. With respect to any
loss involving damage to Collateral as to which subsection (d) of this
Section 5.2 is not applicable, the Company will make or cause to be made the
necessary repairs to or replacements of such Collateral, and any proceeds of
insurance maintained by the Company pursuant to this Section 5.2 shall be
paid to the Company by Lenders as reimbursement for the costs of such repairs
or replacements as such repairs or replacements are made or acquired.
5.3. TAXES, CLAIMS FOR LABOR AND MATERIALS. The Company will pay or discharge
or cause to be paid or discharged, before the same shall become delinquent
(i) all taxes, assessments and governmental charges levied or imposed upon it
or upon the income, profits or property of the Company, and (ii) all lawful
claims for labor, materials and supplies which, if unpaid might by law become
a Lien upon the property of the Company; PROVIDED, HOWEVER, that the Company
shall not be required to pay or discharge or cause to be paid or discharged
any such tax, assessment, charge or claim whose amount, applicability or
validity is being contested in good faith by appropriate proceeding. The
Company will promptly pay and discharge when due all other Liabilities now or
hereafter owed by it.
5.4. MAINTENANCE, ETC. The Company will maintain, preserve and keep all
Collateral and all other property used or useful in the conduct of its
business in good repair and working order, ordinary wear and tear excepted,
in compliance with all applicable laws, and from time to time will, as
determined in the reasonable judgment of the Company, make all necessary
repairs, replacements, renewals and additions thereto needed to enable the
business and operations carried on in connection therewith to be promptly and
advantageously conducted at all times.
5.5. NATURE OF BUSINESS. The Company will not engage in any business if, as a
result, the general nature of the business which would then be engaged in by
the Company would be substantially changed from the general nature of the
business engaged in by the Company on the date of this Agreement.
5.6. SEC FILINGS. The Company shall at all times make all SEC Filings
required pursuant to the Securities Exchange Act of 1934, as amended, and the
rules of any stock exchange upon which the Company shall have listed its
securities, and shall notify each Lender of any inquiries from the SEC or any
stock exchange with respect to all of its SEC Filings. The Company shall
promptly prepare, file and pursue and keep effective, once filed, its S-1
registration statement with the SEC for its secondary offering, unless the
board of directors of the Company determines that keeping the S-1 effective
is not in the best interests of the stockholders of the Company. The Company
shall provide each Lender with copies of all such SEC Filings.
5.7. REPORTS. The Company will keep proper books of record and account in
which full and correct entries will be made of all dealings or transactions
of or in relation to the business and affairs of the Company in accordance
with GAAP.
(a) As soon as available, and in any event within ninety-one (91) days after
the end of each Fiscal Year, complete consolidated and consolidating
financial statements of the Company together with all notes thereto, prepared
in reasonable detail in accordance with GAAP based on an audit using
generally accepted auditing standards, by one of KPMG Peat Marwick L.L.P.,
Deloitte & Touche L.L.P., Ernst & Young L.L.P., Price Waterhouse Coopers,
Xxxxxx Xxxxxxxx & Co., S.C., BDO Xxxxxxx, or other independent certified
public accountants selected by the Company stating that such consolidated
financial statements have been so prepared. These financial statements shall
contain a consolidated and consolidating balance sheet as of the end of such
Fiscal Year and consolidated and consolidating statements of earnings, of
cash flows, and of changes in owners' equity for such Fiscal Year, each
setting forth in comparative form the corresponding figures for the preceding
Fiscal Year.
(b) As soon as available, and in any event within forty-five (45) days after
the end of each Fiscal Quarter, the Company's consolidated and consolidating
balance sheet as of the end of such Fiscal Quarter and consolidated and
consolidating statements of the Company's earnings and cash flows for the
period from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, all in reasonable detail and prepared in accordance with
GAAP, subject to changes resulting from normal year-end adjustments.
5.8. PAYMENT AND PERFORMANCE. The Company will pay all amounts due under the
Loan Documents in accordance with the terms thereof and will observe, perform
and comply with every covenant, term and condition expressed or implied in
the Loan Documents.
5.9. PERFORMANCE ON BORROWER'S BEHALF. If the Company fails to pay any taxes,
insurance premiums, expenses, attorneys' fees or other amounts it is required
to pay under any Loan Document, Lenders may pay the same. The Company shall
immediately upon written notice of any such payment reimburse any Lender for
any such payments and each amount paid by such Lender shall constitute an
Obligation owed hereunder which is due and payable on the date such amount is
paid by such Lender.
5.10. INTEREST. The Company hereby promises to each Lender to pay interest
at the Default Rate on all Obligations (including Obligations to pay fees or
to reimburse or indemnify any Lender) which the Company has in this Agreement
promised to pay to the Lenders and which are not paid when due. Such interest
shall accrue from the date such Obligations become due until they are paid.
(a) IMPAIRMENT OF SECURITY INTEREST. The Company will not take or fail
to take any action that would in any manner impair the value or
enforceability of the Lenders' first priority security interest in any
Collateral.
(b) COMPROMISE OF COLLATERAL. The Company will not adjust, settle,
compromise, amend or modify any of its rights in the Collateral.
(c) EQUIPMENT. The Company will use its best efforts to maintain,
preserve, protect and keep all Equipment included within the Collateral in
good condition, repair and working order and will use its best efforts to
cause such Equipment to be used and operated in a good and workmanlike manner
to the extent commercially reasonable, in accordance with applicable law and
in a manner which will not make void or cancelable any insurance with respect
to such Equipment. The Company will promptly make or cause to be made all
repairs, replacements and other improvements to or in connection with such
Equipment which are necessary or desirable or that Majority Lenders may
request to such end. The Company will promptly furnish to each Lender a
statement respecting any loss or damage to any of such Equipment with an
aggregate value in excess of $25,000. Except for transportation of Equipment
in the ordinary course of business, the Company will not allow any Equipment
included within the Collateral to be located in any jurisdiction other than
those in which is filed an effective financing statement which perfects
Lenders' security interest in such Equipment. The Company will not cause or
permit the removal of any item of Equipment from the Company's possession,
control and risk of loss, and the Company will not sell, assign (by operation
of law or otherwise), transfer, exchange, lease or otherwise dispose of any
Equipment, other than in connection with the following (which the Company may
elect to do).
ARTICLE 6
DEFAULTS AND REMEDIES
6.1. EVENTS OF DEFAULT. Any one or more of the following shall constitute an
"Event of Default" as the term is used herein:
(a) The Company fails to pay any Obligation when due and
payable, whether at a date for the payment of a fixed installment or as a
contingent or other payment becomes due and payable or as a result of
acceleration or otherwise, within five days after the same becomes due; or
(b) Default shall occur in the observance or performance of any
covenant or agreement contained herein or in the other Loan Documents which
is not remedied within 30 days after notice thereof to the Company by
Lender's Agent; or
(c) If any representation or warranty made by the Company herein
or in any Loan Document, or made by the Company in any
statement or certificate furnished by the Company pursuant
hereto, is untrue or incorrect in any material respect as of
the date of the making thereof or subsequently becomes untrue
or incorrect and such inaccuracy is not immediately disclosed
to each Lender; or
(d) The Company fails to pay any portion, when such portion is due,
of any of its Indebtedness in excess of $100,000, or breaches or defaults in
the performance of any agreement or instrument by which any such Indebtedness
is issued, evidences, governed, or secured, and any such failure, breach or
default continues beyond any applicable period of grace provided therefor; or
(e) The Company becomes insolvent or bankrupt, is generally not
paying its debts as they become due or makes an assignment for the benefit of
creditors, or the Company causes or suffers an order for relief to be entered
with respect to it under applicable Federal bankruptcy law or applies for or
consents to the appointment of a custodian, trustee, liquidator, or receiver
for the Company or for the major part of the property of either; or
(f) A custodian, trustee, liquidator, or receiver is appointed for
the Company or for the major part of the property of either and is not
discharged within 30 days after such appointment; or
(g) Final judgment or final judgments for the payment of money
aggregating in excess of $100,000 (except for payments of amounts which are
covered by insurance) is or are outstanding against the Company or against
any property or assets of either and any one of such judgments has remained
unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a period
of 60 days from the date of its entry; or
(h) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or similar
law or laws for the relief of debtors, are instituted by or against the
Company and, if instituted against the Company, are consented to or are not
dismissed within 60 days after such institution; or
6.2. REMEDIES. When any Event of Default described in Section 6.1 has
occurred and is continuing, the Lenders' obligation to make the Loans shall
terminate and the principal balance and all accrued interest as well as other
costs, fees and expenses due and owing on the Loans shall immediately become
due and payable, without presentment, demand, notice of acceleration, notice
of intent to accelerate, protest or further notice of any kind or nature
whatsoever, all of which are hereby expressly waived, and the Default Rate
shall commence to accrue. In addition, Lenders may pursue any or all of the
rights available to them at law or in equity or as provided herein and in the
Notes, including, without limitation, all rights and remedies of a secured
party under the UCC. In connection therewith, the Company agrees that a ten
(10) day notice period is commercially reasonable for the conduct of a public
or private sale under the UCC, and the Company hereby irrevocably makes,
constitutes and appoints any Lender or any other Person designated by
Majority Lenders for that purpose as the Company's true and lawful attorney
and agent-in-fact to sign the name of the Company on any continuation
statement or other document necessary to further perfect the Lenders'
security interest or foreclose and/or take possession of the Collateral.
6.3 COSTS OF REMEDIES. Any and all costs and expenses (including reasonable
attorney's fees) incurred by any Lender in pursuing its remedies hereunder
shall be an additional indebtedness due and owing by the Company to such
Lender and shall be governed by this Agreement, the Notes and the other Loan
Documents.
ARTICLE 7
CERTAIN DEFINITIONS
"Affiliate" shall mean a Person (a) which, directly or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, another Person (b) which beneficially owns or holds 10% or more
of any class of the voting interests of such Person, or (c) 10% or more of
the voting interests of which is beneficially owned or held by such Person.
The term "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting interests, by contract or otherwise.
"Business Day" means a day. Other than a Saturday or Sunday, on which
commercial banks are open for business with the public in Dallas, Texas.
"Change of Control" means the occurrence of either of the following events:
(a) any Person or two or more Persons acting as a group shall acquire
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Act of 1934, as amended, and
including holding proxies to vote for the election of directors other than
proxies held by the Company's management or their designees to be voted in
favor of Persons nominated by the Company's Board of Directors) of 50% or
more of the outstanding voting securities of the Company, measured by voting
power (including both common stock and any preferred stock or other equity
securities entitling the holders thereof to vote with the holders of common
stock in elections for directors of the Company) or (b) one-third or more of
the directors of the Company
shall consist of Persons not nominated by the Company's Board of Directors
(not including as Board nominees any directors which the Board is obligated
to nominate pursuant to shareholders agreements, voting trust arrangements or
similar arrangements).
"Closing" and "Closing Date" are defined in Section 1.2.
"Collateral" means the specific property which is subject to a Lien in favor
of any Lender or which, under the terms of any Security Document, is
purported to be subject to such a Lien.
"Commitment Period" means the period from and including the Closing Date
until and including the date which is 10 Business Days after the Closing Date.
"Default" shall mean any event or condition, the occurrence of which would,
with the lapse of time or the giving of notice, or both, constitute an Event
of Default as defined in Section 6.1.
"Default Rate" shall mean 15% per annum calculated on the basis of a 360 day
year.
"Distribution" means (i) any dividend or other distribution made by the
Company on or in respect of any stock, partnership interest, or other equity
interest in the Company or any subsidiary of the Company (including any
option or warrant to buy such an equity interest), or (ii) any payment made
by the Company to purchase, redeem, acquire or retire any stock, partnership
interest, or other equity interest in the Company or any subsidiary of the
Company (including any such option or warrant).
"Existing Credit Facility" means that certain credit facility in the amount
of $8,500,000 between the Company and Xxxx Xxxxx Lending Group as evidenced
by a Business Loan Agreement, between the Company and Xxxx Xxxxx, together
with all promissory notes made by the Company thereunder and all other
agreements, documents, instruments and writings at any time delivered to Xxxx
Xxxxx in connection therewith.
"Fiscal Quarter" means a three-month period ending on March 31, June 30,
September 30 or December 31 of any year.
"Fiscal Year" means a twelve-month period ending on December 31 of any year.
"GAAP" means those generally accepted accounting principles and practices
which are recognized as such by the Financial Accounting Standards Board (or
any generally recognized successor) and which, in the case of the Company,
are applied for all periods after the date hereof in a manner consistent with
the manner in which such principles and practices were applied to the Initial
Financial Statements. If any change in any accounting principle or practice
is required by the Financial Accounting Standards Board (or any such
successor) in order for such principle or practice to continue as a generally
accepted accounting principle or practice, all reports and financial
statements required hereunder with respect to the Company shall be prepared
in accordance with such change.
"Indebtedness" of any Person means Liabilities in any of the following
categories:
(a) Liabilities for borrowed money,
(b) Liabilities constituting an obligation to pay the deferred
purchase price of property or services,
(c) Liabilities evidenced by a bond, debenture, note or similar
instrument,
(d) Liabilities which would under GAAP be shown on such
Person's balance sheet as a liability, and are payable more than one year
from the date of creation thereof (other than reserves for taxes and reserves
for contingent obligations),
(e) Liabilities owing under direct or indirect guaranties of
Liabilities of any other Person or otherwise constituting obligations to
purchase or acquire or to otherwise protect or insure a creditor against loss
in respect of Liabilities of any other Person (such as obligations under
working capital maintenance agreements, agreements to keep-well, or
agreements to purchase Liabilities, assets, goods, securities or services),
but excluding endorsements in the ordinary course of business of negotiable
instruments in the course of collection,
(f) Liabilities (for example, repurchase agreements, mandatorily
redeemable preferred stock and sale/leaseback agreements) consisting of an
obligation to purchase or redeem securities or other property, if such
Liabilities arises out of or in connection with the sale or issuance of the
same or similar securities or property,
(g) Liabilities with respect to letters of credit or
applications or reimbursement agreements therefor, or
(h) Liabilities with respect to other obligations to deliver
goods or services in consideration of advance payments therefor; provided,
however, that the "Indebtedness" of any Person shall not include (i)
Liabilities that were incurred by such Person on ordinary trade terms to
vendors, suppliers, or other Persons providing goods and services for use by
such Person in the ordinary course of its business, unless and until such
Liabilities are outstanding more than 90 days past the original invoice or
billing date therefor and (ii) indemnification's by such Person contained in
the Loan Documents or pursuant to the documents described on Schedule II.
"Investment" means any investment, made directly or indirectly, in any Person
or any property, whether by purchase, acquisition of shares of capital stock,
indebtedness or other obligations or securities or by loan, advance, capital
contribution or otherwise and whether made in cash, by the transfer of
property, or by any other means.
"Law" means any statute, law, regulation, ordinance, rule, treaty, judgment,
order, decree, permit, concession, franchise, license, agreement or other
governmental restriction of the United States or any state or political
subdivision thereof or of any foreign country or any department, province or
other political subdivision thereof.
"Lenders Schedule" means Schedule I hereto.
"Lenders Agent" shall be elected by the majority of the group.
"Liabilities" means, as to any Person, all indebtedness, liabilities and
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to GAAP.
"Lien" means, with respect to any property or assets, any right or interest
therein of a creditor to secure Liabilities owed to it or any other
arrangement with such creditor which provides for the payment of such
Liabilities out of such property or assets or which allows such creditor to
have such Liabilities satisfied out of such property or assets prior to the
general creditors of any owner thereof, including any lien, mortgage,
security interest, pledge, deposit, production payment, rights of a vendor
under any title retention or conditional sale agreement or lease
substantially equivalent thereto, tax lien, mechanic's or materialman's lien,
or any other charge or encumbrance for security purposes, whether arising by
Law or agreement or otherwise, but excluding any right of offset which arises
without agreement in the ordinary course of business. "Lien" also means any
filed financing statement, any registration of a pledge (such as with an
issuer of uncertificated securities), or any other arrangement or action
which would serve to perfect a Lien described in the preceding sentence,
regardless of whether such financing statement is filed, such registration is
made, or such arrangement or action is undertaken before or after such Lien
exists.
"Loans" has the meaning given to such term in Section 1.1.
"Loan Documents" means this Agreement, the Notes, the Security Documents, the
Warrant, the Registration Rights Agreement, the Letter Agreement, and all
amendments, modifications and restatements of such documents and instruments.
"Material Adverse Change" means a material and adverse change, from the state
of affairs presented in the Initial Financial Statements or as represented or
warranted in any Loan Document, to (a) the Company's financial condition, (b)
the Company's operations, properties or prospects, considered as a whole, (c)
the Company's ability to timely pay the Obligations, (d) the enforceability
of the material terms of any Loan Documents, or (e) the Collateral or
Lenders' Liens on the Collateral.
"Maximum Loan Amount" means the amount equal to $1,500,000.
"Maximum Rate" means, at any time and with respect to any Lender, the maximum
rate of nonusurious interest under applicable law that such Lender may
contract for, take, charge or receive with respect to the Obligations.
"Note" has the meaning given to such term in Section 1.1.
"Obligations" means all Liabilities from time to time owing by the Company to
any Lender under or pursuant to this Agreement, the Notes or any Security
Document (including any modifications, amendments or restatements of any such
documents or instruments). "Obligation" means any part of the Obligations.
"Percentage Share" means, with respect to any Lender, the percentage obtained
by dividing (i) the sum of the unpaid principal balance of such Lender's
Loans at the time in question, by (ii) the sum of the aggregate unpaid
principal balance of all Loans at such time.
"Permitted Investments" means
(a) property used in the ordinary course of business of the
Company;
(b) current assets arising from the sale or lease of goods and
services in the ordinary course of business by the Company or from sales
permitted under Section 5.23; and
(c) Investments by the Company in any Additional Stations.
"Permitted Liens" means:
(a) statutory Liens for taxes, assessments or other
governmental charges or levies which are not yet delinquent or which are
being contested in good faith by appropriate action and for which adequate
reserves have been maintained in accordance with GAAP;
(b) landlords', operators', carriers', warehousemen's,
repairmen's, mechanics', materialmen's, or other like Liens which do not
secure Indebtedness, in each case only to the extent arising in the ordinary
course of business and only to the extent securing obligations which are not
delinquent or which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been maintained in
accordance with GAAP;
(c) minor defects and irregularities in title to any property,
so long as such defects and irregularities neither secure Indebtedness nor
materially impair the value of such property or the use of such property for
the purposes for which such property is held;
(d) deposits of cash or securities to secure the performance of
bids, trade contracts, leases, statutory obligations and other obligations of
a like nature (excluding appeal bonds) incurred in the ordinary course of
business;
(e) Liens under the Security Documents;
(f) Liens securing purchase money Indebtedness, provided that
such Indebtedness shall be secured only by the acquired asset;
(g) Liens securing Indebtedness outstanding under the
instruments and agreements described in Schedule II;
(h) with respect only to property subject to any particular
Security Document, Liens burdening such property which are expressly allowed
by such Security Document.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof.
"Security Agreement" means the security agreement of even date herewith
delivered by the Company to the Lenders in connection with this Agreement and
listed on the Security Schedule.
"Security Documents" means the instruments listed in the Security Schedule
and all other security agreements, deeds of trust, mortgages, chattel
mortgages, pledges, guaranties, financing statements, continuation
statements, extension agreements and other agreements or instruments now,
heretofore, or hereafter delivered by the Company to any Lender in connection
with this Agreement or any transaction contemplated hereby to secure or
guarantee the payment of any part of the Obligations or the performance of
the Company's other duties and obligations under the Loan Documents.
"Security Schedule" means Schedule II hereto.
"Stations" means the television station located in.
"Subsidiary" means, with respect to any Person, any corporation, association,
partnership, limited liability company, joint venture, or other business or
corporate entity, enterprise or organization which is directly or indirectly
(through one or more intermediaries) controlled by or owned fifty percent or
more by such Person.
"UCC" means the Uniform Commercial Code in effect in the State of Texas, as
amended.
ARTICLE 8
INTERCREDITOR PROVISIONS
8.1. PARI PASSU LIENS AND PRO RATA TREATMENT. All Liens on Collateral in
favor of any one or more Lenders shall, as between the Lenders, be PARI PASSU
and of equal rank and authority regardless of the order of filing of any
mortgages, financing statements or other documents with respect thereto or
the taking of any other action relevant to the determination of the
perfection or priority of such liens and security interests. The Lenders
hereby further agree that they will receive PRO RATA treatment, in accordance
with their Percentage Shares, in connection with all payments, distributions,
collections or recoveries and all other matters relating to the Obligations
and to the Collateral.
8.2. ENFORCEMENT OF LIENS. Each Lender hereby agrees that, pursuant to the
terms hereof all payments, distributions, collections, recoveries and all
other matters relating to the Collateral and the enforcement of the Liens as
well as any other matters specifically so stated in this Agreement. Each
Lender hereby agrees that if an Event of Default shall have occurred and be
continuing, (i) Lenders may exercise in respect of the Collateral all rights
and remedies allowed to the Lenders under the Security Documents and (ii)
Lenders shall appoint any one Person (including any Lender) as agent for the
Lenders, which such agent shall exercise any and all such rights and remedies
at Lenders' direction and discretion.
8.3. LIENS SECURE ALL DEBT. Each Lender and the Company hereby agree that
each Lien given to any Lender under any Security Document will henceforth
secure the payment of all of the Obligations, whether or not such Obligations
are named therein as so being secured, and each Security Document is hereby
amended accordingly. In furtherance of the foregoing, each Lender and the
Company hereby agree that enforcement of any security interest under any
Security Document shall provide a means of paying all Lenders.
8.4. EXCULPATION; LIABILITY OF LENDERS. Each Lender shall be entitled to rely
on any communication or document believed by it to be genuine and correct and
to have been communicated or signed by the person by whom it purports to be
communicated or signed and shall not be liable to any Lender for any other
consequence of such reliance. Neither any Lender nor any director, officer,
employee or agent of any Lender shall be liable for any action taken or not
taken by it, him or them under, or in connection with, any of the Loan
Documents in the absence of his or their negligence or willful misconduct.
Neither any Lender nor any director, officer, employee or agent of any Lender
shall be responsible for or have any duty to ascertain, inquire into or
verify (i) any statement, warranty or representation made in connection with
any of the Loan Documents or any payment thereunder; (ii) the performance or
observance of any of the covenants or agreements of the Company or any Lender
under any of the Loan Documents; (iii) the validity, effectiveness or
genuineness of the Loan Documents or any other instrument or writing
furnished in connection therewith; or (iv) the existence, genuineness or
value of any of the Collateral or the validity, perfection, priority or
enforceability of the Liens on any of the Collateral.
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1. WAIVERS AND AMENDMENTS; ACKNOWLEDGMENTS.
(a) WAIVERS AND AMENDMENTS. No failure or delay (whether by course
of conduct or otherwise) by any Lender in exercising any right, power or
remedy which such Lender may have under any of the Loan Documents shall
operate as a waiver thereof or of any other right, power or remedy, nor shall
any single or partial exercise by any Lender of any such right, power or
remedy preclude any other or further exercise thereof or of any other right,
power or remedy. No waiver of any provision of any Loan Document and no
consent to any departure therefrom shall ever be effective unless it is in
writing and signed as provided below in this section, and then
such waiver or consent shall be effective only in the specific instances and
for the purposes for which given and to the extent specified in such writing.
No notice to or demand on the Company shall in any case of itself entitle the
Company to any other or further notice or demand in similar or other
circumstances. This Agreement and the other Loan Documents set forth the
entire understanding between the parties hereto with respect to the
transactions contemplated herein and therein and supersede all prior
discussions and understandings with respect to the subject matter hereof and
thereof, and no waiver, consent, release, modification or amendment of or
supplement to this Agreement or the other Loan Documents shall be valid or
effective against any party hereto unless the same is in writing and signed
by (i) if such party is the Company, by the Company, and (ii) if such party
is a Lender, by such Lender on behalf of Lenders. Notwithstanding the
foregoing or anything to the contrary herein, Lenders shall not, without the
prior consent of each individual Lender, execute and deliver on behalf of
such Lender any waiver or amendment which would: (1) waive any of the
conditions specified in Article IV (provided that any Lender may in its
discretion withdraw any request it has made under Section 4.2(e)), (2)
increase the maximum amount which such Lender is committed hereunder to lend,
(3) reduce any fees payable to such Lender hereunder, or the principal of, or
interest on, such Lender's Note, (4) postpone any date fixed for any payment
of any such fees, principal or interest, (5) amend the definition herein of "
Lenders" or "Percentage Share" or otherwise change the aggregate amount of
Percentage Shares which is required for Lenders to take any particular action
under the Loan Documents or the provisions of Sections 2.3 and 2.4 or Article
8 hereof, (6) release the Company from its obligation to pay such Lender's
Note or (7) amend this Section 9.1(a).
(b) ACKNOWLEDGMENTS AND ADMISSIONS. The Company hereby represents,
warrants, acknowledges and admits that (i) it has been advised by counsel in
the negotiation, execution and delivery of the Loan Documents, (ii) it has
made an independent decision to enter into this Agreement and the other Loan
Documents, without reliance on any representation, warranty, covenant or
undertaking by any Lender, whether written, oral or implicit, other than as
expressly set out in this Agreement or in another Loan Document delivered on
or after the date hereof, (iii) there are no representations, warranties,
covenants, undertakings or agreements by any Lender as to the Loan Documents
except as expressly set out in this Agreement or in another Loan Document
delivered on or after the date hereof, (iv) no Lender has any fiduciary
obligation toward the Company with respect to any Loan Document or the
transactions contemplated thereby, (v) the relationship pursuant to the Loan
Documents between the Company and the Lenders is and shall be solely that of
debtor and creditor, respectively, (vi) no partnership or joint venture
exists with respect to the Loan Documents between the Company and the
Lenders, (vii) should an Event of Default occur or exist, Lenders will
determine in their sole discretion and for their own reasons what remedies
and actions it will or will not exercise or take at that time, (viii) without
limiting any of the foregoing, the Company is not relying upon any
representation or covenant by any Lender, or any representative thereof, and
no such representation or covenant has been made, that any Lender will, at
the time of an Event of Default, or at any other time, waive, negotiate,
discuss, or take or refrain from taking any action permitted under the Loan
Documents with respect to any such Event of Default or any other provision of
the Loan Documents, and (ix) each Lender has relied upon the truthfulness of
the acknowledgments in this section in deciding to execute and deliver this
Agreement and to become obligated hereunder.
(c) JOINT ACKNOWLEDGMENT. THIS WRITTEN AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
9.2. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and continuance of any Event of Default or any condition, event or
act which, with the giving of notice or lapse of time, or both, would
constitute such an Event of Default, the Lenders are hereby authorized at any
time or from time to time, without prior notice to the Company or to any
other Person, any such prior notice being hereby expressly waived, to set-off
and to appropriate and apply any and all deposits (general or special) and
any other indebtedness at any time held or owing by any office of the Lenders
or their Affiliates to or for the credit of the account of the Company,
regardless of the currency of such deposits or other indebtedness, against
and on account of the obligations and liabilities of the Company to the
Lenders under this Agreement and the other Loan Documents, including, without
limitation, all claims of any nature or description arising out of or
connected with this Agreement and the other Loan Documents, irrespective of
whether or not the Lenders shall have made any demand hereunder and although
such obligations, liabilities or claims, or any of them, shall be contingent
or unmatured. The Lenders shall provide Company with notice of such set-off
within a reasonable time after the occurrence of any such set-off.
9.3. SURVIVAL OF AGREEMENTS; CUMULATIVE NATURE. The Company's various
representations, warranties, covenants and agreements in the Loan Documents
shall survive the execution and delivery of this Agreement and the other Loan
Documents and the performance hereof and thereof, including the making or
granting of the Loan and the delivery of the Notes and the other Loan
Documents, and shall further survive until all of the Obligations are paid in
full to the Lenders and all of Lenders' obligations to the Company are
terminated. All statements and agreements contained in any certificate or
other instrument delivered by the Company to any Lender under any Loan
Document shall be deemed representations and warranties by the Company or
agreements and covenants of the Company under this Agreement. The
representations, warranties, indemnities, and covenants made by the Company
in the Loan Documents, and the rights, powers, and privileges granted to the
Lenders in the Loan Documents, are cumulative, and, except for expressly
specified waivers and consents, no Loan Document shall be construed in the
context of another to diminish, nullify, or otherwise reduce the benefit to
the Lenders of any such representation, warranty, indemnity, covenant, right,
power or privilege. In particular and without limitation, no exception set
out in this Agreement to any representation, warranty, indemnity, or covenant
herein contained shall apply to any similar representation, warranty,
indemnity, or covenant contained in any other Loan Document, and each such
similar representation, warranty, indemnity, or covenant shall be subject
only to those exceptions which are expressly made applicable to it by the
terms of the various Loan Documents.
9.4. INDEMNITY. THE COMPANY AGREES TO INDEMNIFY EACH LENDER, UPON DEMAND,
FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, BROKER'S FEES, CLAIMS,
LOSSES, DAMAGES, PENALTIES, FINES, ACTIONS, JUDGMENTS, SUITS, SETTLEMENTS,
COSTS, EXPENSES OR DISBURSEMENTS (INCLUDING REASONABLE FEES OF ATTORNEYS,
ACCOUNTANTS, EXPERTS AND ADVISORS) OF ANY KIND OR NATURE WHATSOEVER (IN THIS
SECTION COLLECTIVELY CALLED "LIABILITIES AND COSTS") WHICH TO ANY EXTENT (IN
WHOLE OR IN PART) MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY
LENDER GROWING OUT OF, RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH ANY
OF THE COLLATERAL, THE LOAN DOCUMENTS AND THE TRANSACTIONS AND EVENTS
(INCLUDING THE ENFORCEMENT OR DEFENSE THEREOF) AT ANY TIME ASSOCIATED
THEREWITH OR CONTEMPLATED THEREIN (WHETHER ARISING IN CONTRACT OR IN TORT OR
BY STATUTE OR OTHERWISE). AMONG OTHER THINGS, THE FOREGOING INDEMNIFICATION
COVERS ALL LIABILITIES AND COSTS INCURRED BY ANY LENDER RELATED TO ANY BREACH
OF A LOAN DOCUMENT BY THE COMPANY, ANY BODILY INJURY TO ANY PERSON OR DAMAGE
TO ANY PERSON'S PROPERTY, OR ANY VIOLATION OR NONCOMPLIANCE WITH ANY
ENVIRONMENTAL LEGAL REQUIREMENTS BY ANY LENDER OR ANY OTHER PERSON OR ANY
LIABILITIES OR DUTIES OF ANY LENDER OR ANY OTHER PERSON WITH RESPECT TO
HAZARDOUS MATERIALS FOUND IN OR RELEASED INTO THE ENVIRONMENT.
THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY
CLAIM OR THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY LENDER,
provided only that no Lender shall be entitled under this section to receive
indemnification for that portion, if any, of any liabilities and costs which
is proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment. If any Person (including the
Company or any of its Affiliates) ever alleges such gross negligence or
willful misconduct by any Lender, the indemnification provided for in this
section shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction enters a
final judgment as to the extent and effect of the alleged gross negligence or
willful misconduct. As used in this section the term "Lender" shall include
each director, officer, agent, trustee, attorney, employee, representative
and Affiliate of or for any Lender.
9.5. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties hereto or thereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute one and the
same instrument.
9.6. NOTICES. Any notices to be served pursuant hereto shall be deemed
properly delivered if delivered personally, by United States certified or
registered mail, postage prepaid, or by Federal Express or comparable
overnight courier service fare prepaid, or by legible facsimile transmission,
to set forth on its signature page hereto or to such other address as the
Company may direct in writing and to each Lender at its address set forth on
the Lenders Schedule or at
such other address as such Lender may direct in writing. Such notices shall
be deemed received the same day if delivered personally or by legible
facsimile, three business days after delivery by certified or registered
mail, and the next business day if delivered by overnight courier.
9.7. GOVERNING LAW; SUBMISSION TO PROCESS.. EXCEPT TO THE EXTENT THAT THE LAW
OF ANOTHER JURISDICTION IS EXPRESSLY ELECTED IN A LOAN DOCUMENT, THE LOAN
DOCUMENTS SHALL BE DEEMED CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS OF
THE STATE OF TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES
OF AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. CHAPTER 346 OF
THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN
ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) DOES NOT APPLY TO THIS AGREEMENT
OR TO THE NOTE. THE COMPANY HEREBY IRREVOCABLY SUBMITS ITSELF TO THE
NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE
STATE OF TEXAS AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE
UPON IT IN ANY LEGAL PROCEEDING RELATING TO THE LOAN DOCUMENTS OR THE
OBLIGATIONS BY ANY MEANS ALLOWED UNDER TEXAS OR FEDERAL LAW. IN ADDITION TO
THE PLACES OF PAYMENT SPECIFIED IN THE NOTES, THE COMPANY AND EACH LENDER
STIPULATE AND AGREE THAT DALLAS COUNTY, TEXAS IS AN APPROPRIATE AND
ACCEPTABLE VENUE FOR ANY STATE OR FEDERAL COURT ACTION CONCERNING THE LOAN
DOCUMENTS.
9.8. CONSTRUCTION. This Agreement shall not be construed more strictly
against any Lender than against the Company or any other Lender merely by
virtue of the fact that the same has been prepared by counsel for any Lender,
it being recognized that both the Company and the Lenders have contributed
substantially and materially to the preparation of this Agreement.
9.9. CAPTIONS. The captions of various articles herein are for convenience
only and are not to be utilized in construing the content or meaning of the
substantive provisions hereof.
9.10. POTENTIAL INVALIDITY. In the event of any inconsistency among the terms
hereof (including incorporated terms) or between such terms and the terms of
the Notes, the terms of this Agreement shall govern and prevail. The whole or
partial invalidity, illegality or unenforceability of any provision hereof or
the Notes at any time, whether pursuant to the terms of then applicable law
or otherwise, shall not affect:
(a) in the instance of partial invalidity, illegality or unenforceability,
the validity, legality or enforceability of such provision at such time
except to the extent of such partial invalidity, illegality or
unenforceability; or
(b) the validity, legality or enforceability of such provision at any other
time or of any other provision hereof at that or any other time.
9.11. INTERPRETATION. All words herein which are expressed in the masculine
or neuter gender shall be deemed to include the masculine, feminine and
neuter genders. Any word herein which is expressed in the singular or plural
shall be deemed, whenever appropriate in the context, to include the plural
and the singular.
9.12. AGREEMENT BINDING ON SUCCESSORS. This Agreement shall be binding upon
and shall inure to the benefit of the Company and the Lenders, their
respective successors, permitted assigns, grantees and legal representatives.
The Company may not assign any of its rights or delegate any of its duties
under this Agreement, Notes or any other Loan Documents.
9.13. LIMITATION ON INTEREST. The Lenders and the Company and any other
parties to the Loan Documents intend to contract in strict compliance with
applicable usury law from time to time in effect. In furtherance thereof such
Persons stipulate and agree that none of the terms and provisions contained
in the Loan Documents shall ever be construed to create a contract to pay,
for the use, forbearance or detention of money, interest in excess of the
maximum amount of interest permitted to be charged by applicable law from
time to time in effect. Neither the Company nor any present or future
guarantors, endorsers, or other Persons hereafter becoming liable for payment
of any Obligation shall ever be liable for unearned interest thereon or shall
ever be required to pay interest thereon in excess of the maximum amount that
may be lawfully contracted for, charged, or received under applicable law
from time to time in effect, and the provisions of this section shall control
over all other provisions of the Loan Documents which may be in conflict or
apparent conflict herewith. The Lenders expressly disavow any intention to
contract for, charge, or collect excessive unearned interest or finance
charges in the event the maturity of any Obligation is accelerated. If
maturity of any Obligation is accelerated for any reason, any Obligation is
prepaid and as a result any amounts held to constitute interest are
determined to be in excess of the legal maximum, or any Lender or any other
holder of any or all of the Obligations shall otherwise collect moneys which
are determined to constitute interest which would otherwise increase the
interest on any or all of the Obligations to an amount in excess of that
permitted to be charged by applicable law then in effect, then all sums
determined to constitute interest in excess of such legal limit shall,
without penalty, be promptly applied to reduce the then outstanding principal
of the related Obligations or, at such Lender's or such holder's option,
promptly returned to the Company or the other payor thereof upon such
determination. In determining whether or not the interest paid or payable,
under any specific circumstance, exceeds the maximum amount permitted under
applicable law, the Lenders and the Company (and any other payors thereof)
shall to the greatest extent permitted under applicable law, characterize any
non-principal payment as an expense, fee or premium rather than as interest,
exclude voluntary prepayments and the effects thereof, and amortize, prorate,
allocate, and spread the total amount of interest throughout the entire
contemplated term of the instruments evidencing the Obligations in accordance
with the amounts outstanding from time to time thereunder and the maximum
legal rate of interest from time to time in effect under applicable law in
order to lawfully contract for, charge, or receive the maximum amount of
interest permitted under applicable law. In the event applicable law provides
for an interest ceiling under Chapter 303 of the Texas Finance Code (the
"Texas Finance Code") as amended, for that day, the ceiling shall be the
"weekly ceiling" as defined in the Texas Finance Code, provided that if any
applicable Law permits greater interest, the Law permitting the greatest
interest shall apply. As used in this section the term "applicable law" means
the laws of the State of Texas or the Laws of the United States of America,
whichever laws allow the greater interest, as such laws now exist or may be
changed or amended or come into effect in the future.
9.14. CREDIT DECISIONS; EXCULPATION. Each Lender acknowledges that it has,
independently and without reliance upon any other Lender, made its own
analysis of the Company and the transactions contemplated hereby and its own
independent decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Loan Documents.
Nothing in the Loan Documents shall be construed to constitute any Lender a
trustee or other fiduciary for any other Lender or participant. Each Lender
acknowledges that Lenders may take such actions and exercise such powers that
are granted to Lenders in the Loan Documents without notice to the other
Lenders after a designated Lender has been chosen by the Lenders. Each
Lender, its directors, officers, agents, attorneys and employees shall not be
liable to any other Lender for any action taken or omitted to be taken by any
of them under or in connection with the Loan Documents, INCLUDING THEIR
NEGLIGENCE OF ANY KIND AND ANY CLAIM ARISING UNDER A THEORY OF STRICT
LIABILITY, except that each shall be liable for its own gross negligence or
willful misconduct.
9.15. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES. THE COMPANY AND EACH LENDER
HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY AT
ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR
ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH, BEFORE OR AFTER
MATURITY; WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY "SPECIAL DAMAGES", AS
DEFINED BELOW, CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT
OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR
IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS, AND ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS CONTAINED IN THIS SECTION. AS USED IN THIS SECTION,
"SPECIAL DAMAGES" INCLUDES ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE
DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS
WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER
PARTY HERETO.
[Balance of Page is Intentionally Left Blank]
IN WITNESS OF THE FOREGOING, the Company and each Lender have executed or caused
this Agreement to be executed by their duly authorized officers as of the day
and year first above written.
LENDERS:
HTVN BRIDGE LOAN #2
By: /s/ Xxxxx Xxxxxxx
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
/s/ Xxxx X. Xxxxxxxx
----------------------------------------
Xxxx X. Xxxxxxxx
/s/ Xxxxx Xxxxxxx
----------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxx Family Partnership
----------------------------------------
Xxxxx Family Partnership Limited
----------------------------------------
7175 Partners Ltd.
/s/ Xxxx X. Xxxxxxxx
----------------------------------------
Xxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxx
----------------------------------------
Xxxxx X. Xxxx
/s/ New Summit Partners
----------------------------------------
New Summit Partners
/s/ Xxxxx X. Xxxxx
----------------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxx
----------------------------------------
Xxxxxx X. Xxxx
/s/ Xxxx and Xxxxxx Xxxxxxx
----------------------------------------
Xxxx and Xxxxxx Xxxxxxxx
as tenants by entireties
/s/ Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Finely
----------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxx X. Xxxxxx
----------------------------------------
Xxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx
/s/ Sorokolit Ventures
----------------------------------------
Sorokolit Ventures
/s/ Sorokolit Investment
----------------------------------------
Sorokolit Investment Co., Ltd Partnership
BORROWER:
HISPANIC TELEVISION NETWORK, INC.
By: /s/ Xxxxxxxx Xxxx
---------------------------------------
Xxxxxxxx Xxxx
Chief Financial Officer and Secretary
Address:
Hispanic Television Network, Inc.
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx
SCHEDULE I
HTVN BRIDGE LOAN #2 LENDERS SCHEDULE
Name and Address Amount
Xxxx X. Xxxxxxxx $ 50,000
0000X X. Xxxxxxx, Xxxxxxx, XX 00000 (200,000 shares)
Xxxxx Xxxxxxx 50,000
XX Xxx 000/0000 Xxxxx Xxxx, Xxxxxx, XX 00000 (200,000 shares)
Xxxxxxx X. Xxxxxxx 50,000
0000 Xxxxx Xxxxx, Xxxxxxxx, XX 00000 (200,000 shares)
Xxxxxxx X. Xxxxxx 400,000
000 Xxxxxxxx Xx., Xx. Xxxxx, XX 00000 (800,000 shares)
Xxxxx Family Partnership Limited 100,000
0000 X. Xxxxx-Xxxxx, #000, Xxxxxxxxx, XX 00000 (400,000 shares)
7175 Partners Limited 100,000
0000 X. Xxxxx-Xxxxx, #000, Xxxxxxxxx, XX 00000 (400,000 shares)
Xxxx X. Xxxxxxxx 25,000
000 Xxxxxxxx Xx., #0000, Xx. Xxxxx, XX 00000 (100,000 shares)
Xxxxx X. Xxxx 50,000
000 Xxxxxxxx Xx., #0000, Xx. Xxxxx, XX 00000 (200,000 shares)
New Summit Partners 25,000
000 Xxxxxxxx Xx., #0000, Xx. Xxxxx, XX 00000 (100,000 shares)
Xxxxx X. Xxxxx 25,000
000 Xxxxxxxx Xx., #0000, Xx. Xxxxx, XX 00000 (100,000 shares)
Xxxxx X. Xxxxxx 25,000
000 Xxxxxxxx Xx., #0000, Xx. Xxxxx, XX 00000 (100,000 shares)
Xxxxxx X. Xxxx 25,000
000 Xxx Xxxx Xxxxxxx, Xxxxxx, XX 00000 (100,000 shares)
Xxxx and Xxxxxx Xxxxxxxx as tenants by entireties 25,000
000 X. Xxxxxxxxx Xxx., Xxxxxx, XX 00000 (100,000 shares)
Xxxxx X. Xxxxxx 100,000
0000 X. Xxxxxxxxxx Xx., #000, Xx. Xxxxx, XX 00000 (400,000 shares)
Xxxxxxx X. Xxxxxxx 75,000
00 Xxx Xx., Xxx Xxxxxxx, XX 00000 (300,000 shares)
Xxxxx X. Xxxxxx 100,000
0000 Xxxx Xx., #000, Xx. Xxxxx, XX 00000 (400,000 shares)
Xxx X. Xxxxxx 50,000
0000 Xxxxx Xxxx Xxxxxx, Xx. Xxxxx, XX 00000 (200,000 shares)
Xxxxxx X. Xxxxxx 50,000
000 Xxxx Xxx., #000X, Xxxxxxx, XX 00000 (200,000 shares)
Sorokolit Ventures 20,000
0000 Xxxxx Xx., Xx. Xxxxx, XX 00000 (80,000 shares)
Sorokolit Investment Co., Ltd Partnership 50,000
00 Xxxxxx Xx. X., Xx. Xxxxx, XX 00000 (200,000 shares)
SCHEDULE II
SECURITY SCHEDULE
1. UCC-1 Financing Statement naming the Company as debtor and Lenders as
secured party, covering all personal property of the Company, to be
filed with the Secretary of State of Texas.
2. UCC-1 Financing Statements naming the company as debtor and Lenders as
secured party, covering the stock of the Company's Subsidiaries, to be
filed with the Secretary of State of Texas.
EXHIBIT A
PROMISSORY NOTE
$____________ February 5, 2001
FOR VALUE RECEIVED, the undersigned, Hispanic Television Network,
Inc., a Delaware corporation ("Borrower"), hereby promises to pay to the
order of ________________________ ("Payee"), in lawful money of the United
States of America in immediately available funds, the principal sum of
_________ Dollars ($_____________), together with interest on the unpaid
principal balance thereof as hereinafter set forth, both principal and
interest payable as herein provided in lawful money of the United States of
America at the offices of Xxxx Xxxxxx at 0000 X. Xxxxxx Xxxx Xxxxxxxxx, Xxxxx
or at such other place within Tarrant County, Texas, as from time to time may
be designated by the holder of this Note.
All principal and interest on the outstanding principal balance
shall be payable at the expiration of the first to occur of the following:
(a) July 5, 2001; (b) the closing by Borrower of a public offering or
offerings (whether debt or equity or a combination) raising in the aggregate
at least $15,000,000 of gross proceeds (i.e. prior to the payment of
underwriting expenses and commissions) to Borrower; and (c) the closing of a
private placement or placements (whether debt or equity or a combination)
whereby Borrower receives gross proceeds of at least $15,000,000 in the
aggregate (i.e. prior to the payment of sales expenses and commissions). The
principal amount of this Note (exclusive of any past due principal or
interest) from time to time outstanding shall bear interest on each day
outstanding at the rate of twelve percent (12.0%) per annum, calculated at on
the basis of actual days elapsed and a year of 360 days. All past due
principal of and interest on this Note shall bear interest on each day
outstanding at the rate of fifteen percent (15.0%) per annum, calculated at
on the basis of actual days elapsed and a year of 360 days, and such interest
shall be due and payable daily as it accrues.
Borrower shall have the right to prepay, without premium or penalty,
at any time, any part or all of the indebtedness evidenced by this Note upon
five (5) days advance notice to Payee. Any prepayment shall include interest
accrued to the date of such prepayment, and all prepayments of principal
shall be applied first against accrued interest and then principal.
1. This Note is is issued and delivered under that certain Loan Agreement of
even date herewith among Borrower and Lenders (as defined therein; including
Payee) (herein, as from time to time supplemented, amended or restated,
called the "Loan Agreement"), and is a "Note" as defined therein, (b) is
subject to the terms and provisions of the Loan Agreement, which contains
provisions for payments and prepayments hereunder and acceleration of the
maturity hereof upon the happening of certain stated events, and (c) is
secured by and entitled to the benefits of certain Security Documents (as
identified and defined in the Loan Agreement). Payments on this Note shall be
made and applied as provided herein and in the Loan Agreement. Reference is
hereby made to the Loan Agreement for a description of certain rights,
limitations of rights, obligations and duties of the parties hereto and for
the meanings assigned to terms used
and not defined herein and to the Security Documents for a description of the
nature and extent of the security thereby provided and the rights of the
parties thereto.
All remedies afforded by law shall be cumulative, and all shall be
available to Payee at all times until this Note has been paid and performed
in full. No delay or omission of Payee to exercise any right or power under
this Note shall impair such right or power or be construed to be a waiver of
any Default or Event of Default or acquiescence therein, and any single or
partial exercise of any such right or power shall not preclude any other or
further exercise thereof or the exercise of any other right or power, and no
waiver whatsoever shall be valid unless it is in a writing signed by Payee
and then only to the extent specifically set forth in such writing.
The terms and provisions of this Note shall inure to the benefit of
any assignee, transferee, or holder of this Note, and in the event of such
transfer or assignment, each of the rights, powers, privileges and benefits
conferred upon Payee by this Note shall automatically be vested in such
transferee, assignee, or holder.
The terms and provisions of this Note shall be binding upon Borrower
and its successors, assigns, and transferees, but any such assignment or
transfer shall not relieve Borrower of its obligations under this Note.
The invalidity or unenforceability of any of the provisions of this
Note shall not affect the validity or enforceability of the remainder hereof.
If this Note is placed in the hands of an attorney for collection
after default, or if all or any part of the indebtedness represented hereby
is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, Borrower and
all endorsers, sureties and guarantors of this Note jointly and severally
agree to pay reasonable attorneys' fees and collection costs to the holder
hereof in addition to the principal and interest payable hereunder.
Borrower and all endorsers, sureties and guarantors of this Note
hereby severally waive demand, presentment, notice of demand and of dishonor
and nonpayment of this Note, protest, notice of protest, notice of intention
to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on
account of any extensions, renewals, partial payments or changes in any
manner of or in this Note or in any of its terms, provisions and covenants,
or any releases or substitutions of any security, or any delay, indulgence or
other act of any trustee or any holder hereof, whether before or after
maturity.
Notwithstanding the foregoing paragraph and all other provisions of
this Note, in no event shall the interest payable hereon, whether before or
after maturity, exceed the maximum amount of interest which, under applicable
law, may be contracted for, charged, or received on this Note, and this Note
is expressly made subject to the provisions of the Loan Agreement
which more fully set out the limitations on how interest accrues hereon. In
the event applicable law provides for an interest ceiling under Chapter 303
of the Texas Finance Code (the "Texas Finance Code") as amended, for that
day, the ceiling shall be the "weekly ceiling" as defined in the Texas
Finance Code and shall be used in this Note for calculating the Maximum Rate
and for all other purposes. The term "applicable law" as used in this Note
shall mean the laws of the State of Texas or the laws of the United States,
whichever laws allow the greater interest, as such laws now exist or may be
changed or amended or come into effect in the future.
This Note and the rights and duties of the parties hereto shall be
governed by the laws of the State of Texas (without regard to principles of
conflicts of law), except to the extent the same are governed by applicable
federal law.
BORROWER:
HISPANIC TELEVISION NETWORK, INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------
Its:
---------------------------
EXHIBIT C
WARRANT AGREEMENT
