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EXHIBIT 10.56
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EXHIBIT 10.56
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of this 6th day of October, 1995, is by
and among XXXXXX COMMUNICATIONS OF DAYTON-26, INC., a Florida corporation
having its principal offices at 000 Xxxxxxxxxx Xxxx Xxxx, Xxxx Xxxx Xxxxx, XX
00000 (the "Lender"), and CHANNEL 26 OF ORLANDO, INC., a Florida corporation
having its principal offices at 00000 00xx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx
00000 (the "Borrower").
W I T N E S S E T H:
WHEREAS, the Borrower is purchasing substantially all of the assets
and properties, including all broadcast licenses issued by the Federal
Communications Commission ("FCC Licenses") and other governmental authorities,
of Television Station WTJC-TV, Springfield, Ohio;
WHEREAS, the Lender is willing to lend the Borrower sufficient funds
to acquire the station on which Lender will provide programming pursuant to a
Time Brokerage Agreement;
WHEREAS, the Borrower and Lender have entered into an Option Agreement
dated as of the date hereof pursuant to which the Borrower has granted to the
Lender an exclusive and irrevocable option to acquire the assets of the Station
upon the terms and conditions specified therein (the "Option Agreement"); and
WHEREAS, the Borrower desires to borrow funds from the Lender to
finance the purchase and operation of the Station.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, the Lender and the Borrower agree as follows:
ARTICLE I
AMOUNT AND TERMS OF THE LOANS
Section 1.1 The Loan. The Lender agrees, upon the terms and
conditions hereinafter set forth, to make a loan or loans to the Borrower in an
aggregate principal amount not to exceed at any one time outstanding Three
Million Five Hundred Thousand Dollars ($3,500,000.00) plus such additional
amounts that are reasonably requested by Borrower for the purposes set forth in
Section 1.05 and are approved by Lender in its sole discretion (the "Loan").
Section 1.2 The Promissory Note. The outstanding principal amount of
the Loan shall be evidenced by and subject to the terms of a promissory note,
dated of even date herewith, substantially in the form set forth as Exhibit 1
hereto (as amended, renewed, restated, increased, consolidated or substituted
from time to time, the "Note") payable to the order of the Lender and
representing the
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obligation of the Borrower to pay the Lender the amount of the Loan, with
interest thereon, as prescribed in Section 1.04. All references to the "Note"
in this Loan Agreement, the Security Agreement, the Pledge Agreement, and the
Leasehold Mortgage or Mortgage (each as defined in this Loan Agreement), the
mortgages or deeds of trust referred to in Section 3.04 of the Loan Agreement
and in such other agreements and documents executed and delivered in connection
with this Loan Agreement shall be deemed to be references to the Note referred
to in this Section.
Section 1.3 Interest. The Loan shall bear interest on the unpaid
principal amount thereof at a rate per annum at all times equal to one-half
percent (1/2%) above the highest interest rate per annum paid by Lender or its
affiliates on outstanding debt, public or private, as such rate may be adjusted
from time to time. Interest shall be calculated on the basis of a year of
three-hundred and sixty (360) days and the actual number of days elapsed during
the period for which such interest is payable. Interest shall begin to accrue
on the outstanding principal amount of the Loan on the date of disbursement of
all or a portion of the Final Installment (as defined below) pursuant to
Section 1.05(b) (the "Final Installment Date"). The first payment of interest
to the Lender shall be due thirty (30) days after the acquisition of the
Station by the Borrower pursuant to Federal Communications Commission ("FCC")
authority, at which time all interest accrued from the Final Installment Date
shall become due and payable. Thereafter, accrued interest shall be paid
monthly on or before the first day of each month until all principal and
interest hereunder is paid in full and at the repayment or maturity of the
Loan. If any installment of principal or interest is not paid when due, that
installment shall bear interest at a rate per annum equal to the lower of the
highest rate permitted by law or eighteen percent (18%) from the date due
thereof until paid in full.
Section 1.4 Repayment of the Loan. In the event that any portion of
the Loan is used by the Borrower to fund an escrow deposit or similar payment
toward the purchase of the Station (the "Deposit"), and such Deposit is
returned to the Borrower, the amount of such Deposit shall be immediately
repaid to Lender, together with all interest earned on such Deposit and paid to
the Borrower. In the event that the Borrower does not acquire the Station,
Borrower shall repay to Lender the outstanding principal amount of the Loan no
later than one-hundred eighty (180) days after such other party acquires the
Station. The principal amount of the Loan plus any accrued and unpaid interest
shall be due and payable on the first day of the 84th month following the
acquisition of the Station by the Borrower (the "Term Date"). In the event of
a termination of the Time Brokerage Agreement dated as of October 6, 1995,
between Borrower and Lender, Borrower shall, in addition to payments of
interest required under Section 1.03
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hereof, repay the outstanding principal balance of the Loan in consecutive,
equal monthly installments commencing on the first day of the month following
such termination (the "Amortization Commencement Date") and ending on the Term
Date, with each such monthly principal installment payment equal to (x) the
principal amount of the Loans outstanding hereunder as of the first day of the
month following such termination divided by (y) the total number of consecutive
months included in the period commencing on the Amortization Commencement Date,
through and including the Term Date.
Section 1.5 Use of Proceeds and Advancement of Funds.
(a) The proceeds of the Loan are to be used by the
Borrower exclusively for financing the purchase of the Station and for working
capital and operating expenses relating to the Station.
(b) The Lender shall loan to the Borrower the funds
required to acquire the Station, less the Deposit (the "Final Installment"), at
the closing of the acquisition of the Station, following final and
nonappealable FCC approval of the assignment of the FCC licenses of the Station
to the Borrower.
Section 1.6 Information. The Borrower agrees to furnish to the
Lender such information as the Lender may reasonably request in connection with
the Loan or the Station.
Section 1.7 Prepayment. The Borrower may prepay the Note in whole at
any time, or from time to time in part, with accrued interest to the date of
prepayment on the amount prepaid, without penalty, provided that each payment,
other than that for the full amount of the outstanding balance, shall be in the
amount of Ten Thousand Dollars ($10,000.00) or an integral multiple thereof,
provided, however, that if any such prepayment is made within three years of
the Borrower's acquisition of the Station, Borrower shall reimburse Lender for
any prepayment penalty imposed on Lender or its affiliates under their debt
agreements or instruments as a result of Borrower's prepayment. Each
prepayment on the Note shall be applied to installments of principal payable on
the Note in the inverse order of maturity.
Section 1.8 Payment on Non-Business Days. Whenever any payment to be
made hereunder or under the Note shall become due on a Saturday, Sunday or
public holiday, such payment may be made on the next succeeding business day,
and such extension of time in such case shall be included in the computation of
interest hereunder and under the Note.
Section 1.09 Preferred Contingent Facility Fee. In consideration for
Lender's agreement to make the Loan, Borrower
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agrees to pay Lender a preferred contingent facility fee (the "Contingent
Facility Fee") in an amount equal to twenty-five percent (25%) of the Loan
payable to the extent available out of the Net Sale Price received by Borrower
or any Affiliate of Borrower in connection with any Sale that is consummated at
any time prior to October 6, 2003, whether or not any portion of the Loan is
outstanding as of such date. The Contingent Facility Fee shall be due and
payable by Borrower to Lender by confirmed wire transfer of immediately
available funds on the date of closing of a Sale and prior to the payment by
Borrower of any other obligations or distributions. For the purpose of this
Section 1.09, the following terms shall have the following meanings:
"Affiliate", as applied to any entity or individual, means any other
entity or individual directly or indirectly controlling, controlled
by, or under common control with, that entity or individual. For the
purposes of this definition, "control" (including with correlative
meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any entity or individual, means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that entity or
individual, whether through the ownership of voting securities,
partnership interests or by contract or otherwise.
"Net Sale Price" means (a) the aggregate value of all
consideration of whatsoever nature (whether in cash, other
property, services or otherwise) directly or indirectly paid or payable
to the Borrower and any Affiliate of Borrower (or either of them) in
connection with a Sale and whether such amounts are payable as purchase
price (whether in cash at closing or on a deferred basis), non-compete
payments, payments for the provision of future services or the rental
of property or otherwise, or any combination thereof, plus (b) an
amount equal to the sum of all accounts receivable of the Station if
such accounts receivable are retained by Borrower or any Affiliate of
Borrower in connection with a Sale, minus (c) an amount equal to the
sum of all reasonable and necessary fees and expenses incurred by the
Borrower or any Affiliate of Borrower (other than any fee payable to an
Affiliate of the Borrower) in connection with the consummation of a
Sale, minus (d) an amount equal to all liabilities of the Station (as
determined in accordance with generally accepted principles
consistently applied) that are retained by Borrower or any Affiliate of
Borrower in connection with a Sale, and minus (e) an amount equal to
the sum of the principal balance of, and all accrued but unpaid
interest on, the Loans as of the date the Contingent Facility Fee is
due.
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"Sale" means any (a) sale, exchange, transfer or other disposition to
any third party unaffiliated with Borrower or any Affiliate of
Borrower of all or substantially all of the Station's assets or of the
equity of (i) Borrower or (ii) any Affiliate of Borrower that acquires
the Station's assets in accordance with the requirements of this Loan
Agreement and any collateral document executed and delivered in
connection with this Loan Agreement (a "WTJC Affiliate") or (b)
merger, consolidation or similar transaction between a third party
unaffiliated with Borrower and Borrower or any WTJC Affiliate, whether
or not Borrower or such WTJC Affiliate is the surviving corporation.
ARTICLE II
CLOSING
Section 2.1 Closing Date. Closing of this transaction shall occur on
a date agreed upon by the parties hereto (the "Closing Date").
ARTICLE III
SECURITY
Section 3.1 Security Interest. As security for the Loan, the
Borrower shall execute and deliver to the Lender, on or before the Closing
Date, a security agreement in the form of Exhibit 2 hereto (the "Security
Agreement").
Section 3.2 Pledge Agreement. As further security for the Loan, on
or before the Closing Date, the Borrower shall deliver to the Lender a pledge
agreement in the form of Exhibit 3 hereto, duly executed by The Christian
Network, Inc. (the "Shareholder"), the sole shareholder of the Borrower (the
"Pledge Agreement").
Section 3.3 Leasehold Mortgages. At such time as the Borrower enters
into or assumes the Lessee's interest under any lease, it shall execute with
respect to such lease a leasehold mortgage substantially in the form of Exhibit
4 hereto (a "Leasehold Mortgage"), granting the Lender a lien on its leasehold
interest under such lease. In particular, and without limiting the generality
of the foregoing, the Borrower shall execute a Leasehold Mortgage with respect
to each lease, if any, that it assumes as part of the acquisition of the
Station. The Borrower shall also deliver to the Lender with respect to any
lease to which the Borrower becomes a party the following documents, each of
which shall be in form and substance satisfactory to the Lender: (i) evidence
of the filing of the lease or a memorandum of lease, (ii) an estoppel
certificate executed by the landlord under such lease or any sublessee, (iii)
an executed landlord's consent and waiver, (iv) fixture filing UCC-1 financing
statements, (v) copies of such
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lease and any sublease, (vi) executed tenant subordination agreements, (vii) a
title encumbrance report with respect to the real property subject to such
lease, and (viii) any other document required by applicable law to create or
perfect a mortgage lien with respect to such lease or reasonably required by
the Lender.
Section 3.4 Mortgages. At such time as the Borrower acquires any
parcel of real estate, the Borrower shall execute a first mortgage or deed of
trust in favor of the Lender on such parcel, substantially in the form of
Exhibit 4 hereto (a "Mortgage"). The Borrower shall also deliver to the Lender
with respect to such property the following documents, each of which shall be
in form and substance satisfactory to the Lender: (i) fixture filing UCC-1
financing statements, (ii) copies of any lease relating to such property, if
any, (iii) executed tenant subordination agreements and estoppel certificates,
if applicable, (iv) a survey of such real property, (v) a mortgagee title
insurance policy, with such coverage and with such endorsements, including,
without limitation, usury, first loss, last dollar, revolving credit, variable
rate, doing business, zoning comprehensive, contiguity (as applicable) and
survey, to the extent available in the state where the property is located, as
the Lender may require, and (vi) any other document required by applicable law
to create or perfect a mortgage lien with respect to such property or
reasonably required by the Lender.
ARTICLE IV
CONDITIONS OF LENDING
Section 4.1 Conditions Precedent to Loan. The obligation of
the Lender to disburse from time to time any portion of the Loan hereunder is
subject to the condition precedent that the Lender shall have received all of
the following, on or before the Closing Date, in form and substance
satisfactory to the Lender:
(a) The Note, duly executed and delivered by the Borrower;
(b) The Security Agreement, together with appropriate
UCC-1 forms and, if applicable, landlord lien waivers, duly executed and
delivered by the Borrower;
(c) The Pledge Agreement, duly executed and delivered by
the Shareholder together with stock certificates and blank stock powers;
(d) Certified copies of the resolutions of (i) the Board
of Directors of Borrower evidencing approval of the execution, delivery and
performance of this Agreement, the Note and the Security Agreement and other
matters contemplated hereby, and (ii) the Board of Stewards of Shareholder
evidencing approval of the
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execution, delivery and performance of this Loan Agreement and the Pledge
Agreement;
(e) A Certificate of Good Standing for the Borrower and
Shareholder;
(f) A copy of the Asset Purchase Agreement dated as of
June 1, 1995, between Borrower and Video Mall Communications, Inc. (the
"Purchase Agreement"), pursuant to which Borrower is purchasing the Station;
(g) Copies of UCC, judgment and tax lien searches in each
jurisdiction in which collateral covered by the Security Agreement is located,
naming the Borrower and the Seller of the Station as debtor;
(h) Such other agreements, certificates, opinions of
counsel and documents that the Lender may reasonably require; and
(i) The Option Agreement, duly executed and delivered
by the Borrower.
Section 4.2 Conditions Precedent to Final Installment. The
obligation of the Lender to advance the Final Installment to the Borrower is
subject to the condition precedent that the Lender shall have received each of
the following, on or before the Final Installment Date, in form and substance
satisfactory to the Lender:
(a) With respect to each leased real property, the
documents required by Section 3.03, and with respect to each owned real
property, the documents required by Section 3.04;
(b) A Certificate of Good Standing for the Borrower in
the State of Florida as of a recent date prior to the Final Installment Date;
(c) Copies of the certificates evidencing the insurance
required to be maintained by the Borrower pursuant to Section 6.01(e);
(d) Evidence, in form and substance acceptable to Lender,
that Borrower has received the approval of the Federal Communications
Commission to be the licensee of the Station and that approval has become a
final, non- appealable order no longer subject to administrative or judicial
review, reconsideration or appeal;
(e) A copy of the Purchase Agreement and each other
contract, certificate and other document executed by the Borrower
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or the seller of the Station in connection with the Borrower's acquisition of
the Station; and
(f) Such other agreements, certificates, opinions of
counsel and documents that the Lender may reasonably require.
Section 4.3 Compliance. All of the representations and warranties of
the Borrower and Shareholder in this Loan Agreement shall be true and accurate
in all material respects on and as of the Closing Date and the date of any
subsequent disbursement of any portion of the Loan, as if made on and as of
such date and time. The Borrower shall be in compliance with all of the
applicable terms and provisions of this Agreement and no Event of Default or
any event which with the lapse of any applicable grace period or the giving of
notice or both would constitute an Event of Default shall have occurred and be
continuing. The Borrower shall have performed all obligations and taken all
actions to be performed or taken by it hereunder on or prior to such date. On
the Closing Date, the Borrower and Shareholder shall deliver to the Lender a
certificate, dated as of such date and signed by an executive officer of the
Borrower and Shareholder, certifying compliance with the conditions of this
Section 4.03. Each disbursement of all or a portion of the Loan to the
Borrower shall in and of itself, constitute a representation and warranty that
the Borrower and Shareholder as of the date of such Loan, is in compliance with
this Section and if the Borrower or Shareholder is not in compliance with this
Section, the Lender shall not be required to disburse such Loan to the
Borrower.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of Borrower. In order to
induce the Lender to enter into this Agreement and make the Loan, Borrower
represents and warrants as follows:
(a) Existence and Standing. Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Florida and is qualified to do business and in good standing under the
laws of any other jurisdiction in which it conducts its business, and has all
requisite power and authority, corporate or otherwise, to conduct its business,
to own its properties and to execute and deliver, and to perform all of its
obligations under this Agreement, the Note, any Mortgage or Leasehold Mortgage,
the Security Agreement, the Option Agreement, and all other documents that have
been or will be executed and delivered by the Borrower pursuant to this
Agreement.
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(b) Authorizations, Compliance with Laws. The execution,
delivery and performance by the Borrower of this Agreement, the Note, any
Mortgage or Leasehold Mortgage, the Security Agreement, the Option Agreement,
and all other documents required to be executed and delivered by the Borrower
pursuant to this Agreement have been duly authorized by all necessary corporate
action and do not and will not (i) violate (A) any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to the Borrower or (B) any provision
of the charter or by-laws of the Borrower; or (ii) result in a breach of or
constitute a default under any agreement or instrument to which the Borrower is
a party or by which its properties may be affected; or (iii) result in the
creation of a lien, charge or encumbrance of any nature upon the Borrower's
properties or assets other than as contemplated by this Agreement.
(c) No Consent. No authorization, consent, approval,
license, exemption of or filing or registration with any court or governmental
department or agency, except for filing with the FCC, is or will be necessary
to the valid execution, delivery and performance by the Borrower of this
Agreement, the Note, any Mortgage or Leasehold Mortgage, the Security
Agreement, the Option Agreement, or any other document required to be executed
and delivered by the Borrower pursuant to this Agreement.
(d) Binding Obligations. This Agreement, the Note, any
Leasehold Mortgage, any Mortgage, the Security Agreement, the Pledge Agreement
and all other documents required to be executed and delivered by the Borrower
(or, in the case of the Pledge Agreement, of the Shareholder) pursuant to this
Agreement have been or, on or prior to the Closing Date, will be executed and
delivered by duly authorized officers of the Borrower (or, in the case of the
Pledge Agreement, of the Shareholder) and constitute or, on or prior to the
Closing Date, will constitute, legal, valid and binding obligations of the
Borrower (or, in the case of the Pledge Agreement, of the Shareholder)
enforceable in accordance with their respective terms.
(e) Litigation. There are no actions, suits or
proceedings pending, or, to the knowledge of the Borrower, threatened against
or affecting the Borrower or its properties before any court or governmental
department or agency which materially adversely affects the transactions
contemplated by this Agreement or which would have a material adverse effect on
the business, properties, prospects, operation or condition (financial or
otherwise) of the Borrower.
(f) No Default. The Borrower is not in default in the
performance, observance or fulfillment of any of the obligations or
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conditions contained in any material agreement or instrument to which it is a
party, nor with respect to any order, judgment, writ, injunction or decree of
any court, governmental authority or arbitration board.
(g) Compliance with Laws. The Borrower has complied with
all applicable federal, state and local laws. The Borrower has obtained all
necessary licenses and permits required for the conduct of its business and
operations or such licenses and permits have been applied for and are now being
diligently pursued.
(h) Taxes. The Borrower has filed all tax returns and
reports (federal, state and local) required to be filed by it, and has paid all
taxes shown thereon, including interest and penalties, and all assessments
received by it (except to the extent that the same are being contested in good
faith by appropriate proceedings diligently prosecuted and as to which adequate
reserves have been set aside on the books of the Borrower in conformity with
generally accepted accounting principles).
(i) Title to Properties. The Borrower has good and
marketable title to all of its property and assets and valid and enforceable
leasehold interests in the property which it holds under lease, all such
property, assets and leasehold interests being free and clear of any and all
mortgages, deeds of trust, assignments, liens, security interests, charges or
encumbrances of any nature whatsoever, except for those created hereby, and no
mortgages, deeds of trust, financing statements or other evidences of security
interests covering all or any of the aforesaid property are on file among the
records of any public office, except those evidencing a security interest in
favor of the Lender.
(j) Material Misstatement. No statement made herein or
information, exhibit or report furnished by the Borrower to the Lender in
connection with this Agreement or its negotiation, contains any material
misstatement of fact or omits to state a material fact or any fact necessary to
make the foregoing not misleading.
ARTICLE VI
COVENANTS OF THE BORROWER
Section 6.1 Affirmative Covenants. So long as the Note shall remain
unpaid, the Borrower hereby covenants and agrees that it will, unless the
Lender shall otherwise consent in writing:
(a) Payment of Obligations. Pay punctually and discharge
when due: (i) all indebtedness heretofore or hereafter incurred; (ii) all
taxes, assessments and governmental charges or levies imposed upon it or its
income or profits, or upon any
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properties belonging to it; (iii) claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like persons which, if unpaid might
become a lien or charge upon the property of the Borrower; provided that this
covenant shall not require the payment of any of the matters set forth in (i),
(ii) and (iii) above if the same shall be contested in good faith and by proper
proceedings diligently pursued and as to which adequate reserves have been set
aside on the books of the Borrower in accordance with generally accepted
accounting principles.
(b) Preservation of Existence. Preserve and maintain its
respective corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation.
(c) Maintenance of Properties. Maintain and preserve all
of its properties necessary or useful in the proper conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(d) Compliance with Laws. Comply in all material
respects with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority.
(e) Maintenance of Insurance. Maintain with responsible
and reputable insurance companies policies on all of its properties and
covering such risks, including public liability and workers' compensation, in
such amounts as are usually carried by companies engaged in similar businesses
and owning similar properties as the Borrower, and promptly upon execution
thereof provide to the Lender copies of all such policies and any riders or
amendments thereto. The policies of insurance required hereunder shall name
the Lender as an additional loss payee or additional insured, as applicable,
and shall provide that the Lender shall receive at least thirty (30) days'
written notice prior to the cancellation, termination or alteration of any such
policy.
(f) Operations in Ordinary Course. Continue to operate
its business in the ordinary course.
(g) Perfection of Liens. Do all things requested by the
Lender to preserve and perfect the liens and security interests of the Lender
arising pursuant to the Security Agreement, the Pledge Agreement, any Leasehold
Mortgage, any Mortgage or any other agreement required hereunder as first liens
and security interests.
(h) FCC Approval. If counsel to the Lender reasonably
determines that the consent of the FCC is required in connection with the
execution, delivery and performance of this Agreement, the Pledge Agreement,
the Security Agreement, any Mortgage or Leasehold Mortgage or any other
document delivered to the Lender in
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connection herewith or therewith or as a result of any action which may be
taken pursuant hereto or thereto, then the Borrower, at its sole cost and
expense, agrees to use its best efforts to secure such consent and to cooperate
with the Lender in any action commenced by the Lender to secure such consent.
(i) Purchase Agreement. Comply with its obligations
under the Purchase Agreement.
Section 6.2 Negative Covenants. So long as the Note shall remain
unpaid and the Agreement shall not have been terminated, the Borrower hereby
covenants that it will not, without the Lender's prior written approval:
(a) Indebtedness. Create or incur, assume or suffer to
exist any indebtedness, obligation or liability, whether matured or unmatured,
liquidated or unliquidated, direct or contingent, joint or several, except for:
(i) indebtedness evidenced by the Note; (ii) indebtedness (other than for
borrowed money) incurred in the ordinary course of business not to exceed Fifty
Thousand Dollars ($50,000.00) in the aggregate at any one time; (iii)
obligations or liabilities arising under the indemnification provisions of the
Purchase Agreement.
(b) Liens. Create, assume or suffer to exist, directly
or indirectly, any security interest, mortgage, deed of trust, pledge, lien,
charge or other encumbrance, of any nature whatsoever upon any of its
properties or assets, now owned or hereafter as acquired, excluding, however,
from the operation of this covenant with respect to property or assets other
than the Stock (as defined in the Pledge Agreement):
(i) any security interest or lien created
pursuant to or in connection with this Agreement or securing the Loan, the
Security Agreement, the Pledge Agreement, any Leasehold Mortgage or any
Mortgage;
(ii) liens for taxes or assessments either not
delinquent or the validity of which are being contested in good faith by
appropriate legal or administrative proceedings and as to which adequate
reserves shall have been set aside on its books, in conformity with generally
accepted accounting principles;
(iii) materialmen's, mechanics', carriers',
workmen's, repairmen's, warehousemen's or other like liens arising in the
ordinary course of business and either not yet due and payable or being
contested in good faith by appropriate legal proceedings and as to which
adequate reserves shall have been set aside on its books, in conformity with
generally accepted accounting principles;
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(iv) deposits or pledges to secure payment of
workers' compensation, unemployment insurance or other social security benefits
or obligations; or
(v) any judgment lien, singly or aggregated with
other judgment liens, in an amount less than $100,000, unless the judgment it
secures shall not, within thirty (30) days after the entry thereof, have been
discharged, vacated, reversed, or execution thereof stayed pending appeal, or
shall not have been discharged, vacated or reversed within thirty (30) days
after the expiration of any such stay.
(c) Disposition of Assets. Sell, transfer, lease or
otherwise dispose of any of its assets or properties other than sales of assets
in the ordinary course of business (which shall expressly not include any
transfer or assignment of any FCC License).
(d) Merger. Enter into any consolidation or merger with,
or into any acquisition of all or substantially all of the properties or assets
of any person or entity.
(e) Transfer or Issuance of Shares. Issue or permit the
transfer of any shares of the capital stock of the Borrower, or any options,
warrants, convertible securities or other rights to purchase the Borrower's
stock. The preceding sentence shall not apply to issuances or transfers to the
Lender.
(f) Change of Business. Change, in any material respect,
the nature or character of its business as intended, or engage in any activity
not reasonably related to such business.
(g) Remove Assets. Remove any of the assets procured
with the proceeds of the borrowings provided for herein, or any replacements
for such assets, to a jurisdiction in which no financing statement on Form
UCC-1 has been filed by the Lender with respect to such assets.
(h) Distributions or Dividends. Declare or make,
directly or indirectly, any payment or distribution, or incur any liability for
the purchase, acquisition, redemption or retirement of any capital stock of the
Borrower or as a dividend, return of capital or other payment or distribution
of any kind to a shareholder of the Borrower or any affiliate of the Borrower
(other than any stock dividend or stock split or similar distribution payable
only in capital stock of the Borrower) in respect of the Borrower's capital
stock.
(i) Transactions with Affiliates. Enter into any
transaction or agreement with any affiliate of the Borrower.
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(j) Contracts. Enter into any contract or commitment
relating to its stock or assets except for contracts involving aggregate
payments of less than Five Thousand Dollars ($5,000.00) and contracts which can
be terminated without penalty on thirty (30) days' notice or less, or amend or
terminate any material contract (or waive any substantial right thereunder), or
incur any obligation (including obligations relating to the borrowing of money
or guarantee of indebtedness).
(k) Adverse Change. Suffer any material adverse change
in the business, assets, properties, prospects or condition (financial or
otherwise) of the Borrower or the Station, or any damage, destruction or loss
affecting any assets used or useful in the conduct of the business of the
Borrower.
(l) Employee Compensation. Suffer any material increase
in excess of the reasonable range in the broadcast industry in the same or
similar markets in compensation payable or to become payable to any employees,
or any bonus payment made or promised to any employee, or any material change
in personnel policies, insurance benefits or other compensation arrangements
affecting any employees, provided that nothing in this clause shall be
construed to limit or restrict the commission compensation of employees who may
be selling brokered time for the Borrower.
(m) Cancellation of Debts. Cancel any debts owed to or
claims held by the Borrower.
(n) Write-Down. Suffer any significant write-down of the
value of any assets or any significant write-off as uncollectible of any
accounts receivable without the prior written consent of the Lender except and
as required by generally accepted accounting principles as required to present
accurate financial information on the Borrower.
(o) Rights. Transfer or grant any right under, or enter
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, service xxxx, trade name, franchise, or similar
right, or modify any existing right relating to the Borrower.
(p) Television Affiliation Agreement. In the event
Borrower acquires the Station, terminate, amend or waive any provision of the
Television Affiliation Agreement (as defined in Section 7.01(d) below), if any,
to which the Station is a party.
(q) Purchase Agreement. Terminate, amend, commit any
material breach or default under or waive any term of the Purchase Agreement or
Option Agreement.
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(r) Subsidiaries. Create or acquire any subsidiary of
Borrower, unless Lender shall have approved such action in advance and Borrower
shall have taken all actions required by Lender to grant Lender a first
priority security interest in all of the issued and outstanding stock of such
subsidiary. Borrower acknowledges and agrees that until such time as such
security interest is granted and perfected, Lender shall have an equitable lien
in the stock of any subsidiary created or acquired by Borrower.
Section 6.3 Reporting Requirements. So long as the Note shall remain
unpaid and the Agreement shall not have been terminated, the Borrower shall,
unless the Lender shall otherwise consent in writing, furnish to the Lender and
to the Agents:
(a) Default Certificate. As soon as possible and in any
event within five (5) business days after the occurrence of each Event of
Default (as defined in Section 7.01) of which the Borrower has knowledge, the
statement of the President of the Borrower setting forth details of such Event
of Default and the action which the Borrower proposes to take with respect
thereto.
(b) Financial Statements. Beginning with the making of
the Final Installment, quarterly financial statements within thirty (30) days
after the end of each fiscal quarter; within ninety (90) days after the end of
each fiscal year of the Borrower, a copy of the audited financial statements
for such year for the Borrower, including therein a balance sheet of the
Borrower as of the end of such fiscal year, statements of income and expense of
the Borrower for such fiscal year, and a statement of cash flow of the Borrower
for such fiscal year, in each case prepared by an independent public accountant
of recognized standing acceptable to the Lender, except that the Lender may
waive the audit requirement and accept a review of the Borrower's financial
records.
(c) Notice of Litigation. Promptly give written notice
of all actions, suits and proceedings before any court or governmental agency,
domestic or foreign, which may be commenced or threatened against the Borrower
in which the claim involved is Five Thousand Dollars ($5,000.00) or more and of
any other matter of the type described in Section 5.01(e).
(d) Budget. An annual budget within thirty (30) days of
the beginning of each fiscal year of the Borrower. Such budget shall be
satisfactory in form to the Lender.
(e) Other Information. Such other information respecting
the business, properties, operations or the condition, financial or otherwise,
of the Borrower as the Lender or the Administrative Agents may from time to
time reasonably request.
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ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 Events of Default. Under this Agreement, an Event of
Default shall be any of the following:
(a) The Borrower shall fail to pay any installment of
principal or interest on the Note, or any other obligation to the Lender
including, without limitation, the obligation to pay the Contingent Facility
Fee as set forth in Section 1.09 hereof, when due whether at the due date
thereof or by acceleration or otherwise, and, in the case of any installment of
interest, such default shall remain unremedied for a period of five (5) days;
or
(b) The security interest or lien of the Lender in any
material portion of the collateral covered by the Security Agreement, Pledge
Agreement or any Leasehold Mortgage or Mortgage shall at any time not
constitute a legal, valid and enforceable security interest or lien; or
(c) Any representation or warranty made by the Borrower
or Shareholder (or any of its officers) herein, in the Security Agreement, any
Leasehold Mortgage or Mortgage or the Option Agreement, or by the Shareholder
in the Pledge Agreement or in any certificate, agreement, instrument or
statement contemplated by or made or delivered pursuant to or in connection
with this Agreement, the Note, any Leasehold Mortgage or Mortgage, the Security
Agreement or the Option Agreement, or by the Shareholder in the Pledge
Agreement, shall prove to have been incorrect in any material respect when
made; or
(d) The Borrower shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement, the Note, the
Security Agreement, any Leasehold Mortgage or Mortgage, the Option Agreement or
any Television Affiliation Agreement relating to the Station (the "Television
Affiliation Agreement"), or the Shareholder shall fail to perform or observe
any term, covenant or agreement contained in the Pledge Agreement, and any such
failure remains unremedied for thirty (30) days after written notice thereof
shall have been given to the Borrower by the Lender; or
(e) The Borrower or the Shareholder shall fail to pay any
indebtedness for borrowed money owing by the Borrower or the Shareholder or any
interest or premium thereon, when due, whether such indebtedness shall become
due by scheduled maturity, by required prepayment, by acceleration, by demand
or otherwise, or the Borrower or the Shareholder shall fail to perform any
term, covenant or agreement under any agreement or instrument evidencing or
securing or relating to any such indebtedness owing by the
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Borrower or the Shareholder if the effect of such failure is to accelerate, or
to permit the holder of such indebtedness to accelerate the maturity of such
indebtedness; or
(f) The Borrower shall expend the proceeds of the Loan
for any purpose other than the purchase of the Station and the operation of
the Station's business without the prior written consent of the Lender, which
may be withheld in the Lender's sole discretion; or
(g) Either (i) Borrower or the Shareholder shall fail to
pay its debts as they mature in the ordinary course of business; or (ii)
Borrower or the Shareholder shall file a petition commencing a voluntary case
concerning it under any Chapter of Title 11 of the United States Code entitled
"Bankruptcy"; or (iii) Borrower or the Shareholder shall apply for or consent
to the appointment of any receiver, trustee, custodian or similar officer for
it or for all or any substantial part of its property; or (iv) such receiver,
trustee, custodian or similar officer shall be appointed without the
application or consent of the Borrower or the Shareholder and such appointment
shall continue undischarged for a period of thirty (30) days; or (v) an
involuntary case is commenced against the Borrower or the Shareholder under any
Chapter of the aforementioned Title 11 and an order for relief under such Title
11 is entered or the petition commencing the case is controverted but is not
dismissed within thirty (30) days after the commencement of the case; or (vi)
the Borrower or the Shareholder shall institute (by petition, application,
answer, consent or otherwise) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, dissolution, liquidation or similar
proceeding relating to it under the laws of any jurisdiction; or (vii) any such
proceeding shall be instituted against the Borrower or the Shareholder and
shall remain undismissed for a period of thirty (30) days; or (viii) the
Borrower or the Shareholder shall take any action for the purpose of
effectuating the foregoing; or
(h) Any court, government, or government agency shall
condemn, seize or otherwise appropriate or take custody or control of all or a
substantial portion of the property or assets of the Borrower; or
(i) There shall be a cancellation, denial or revocation
of any material broadcast license for the Station, the Borrower shall be
finally denied renewal of any such license, or any such license shall be
renewed on terms that materially adversely affect the economic or commercial
value or usefulness thereof; or
(j) Any money judgment, writ or warrant of attachment, or
similar process involving (i) in any individual case an amount in excess of One
Hundred Thousand Dollars ($100,000.00), or (ii) in the aggregate at any time an
amount in excess of One Hundred
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Thousand Dollars ($100,000.00), and in either case not adequately covered by
insurance as to which the insurance company has acknowledged coverage, shall be
entered or filed against Borrower or its assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 30 days or in any event later
than five days prior to the date of any proposed sale thereunder; or
(k) The Shareholder shall default in the due performance
or observance of any term, covenant or agreement on its part to be performed or
observed pursuant to Article IX hereof or any obligation of the Shareholder
under Article IX hereof shall, for any reason other than the full satisfaction
thereof, not be or shall cease to be in full force and effect or is, or is
declared to be, null and void, or the Shareholder shall, or shall purport to,
terminate, revoke, repudiate, declare voidable or void, deny, disaffirm or
otherwise contest Article IX hereof or any term or provision thereof or any of
its obligations or liabilities under Article IX hereof.
Section 7.02 Effect of Event of Default. Should any Event of Default
occur, the Lender may at its option by written notice to the Borrower declare
the entire unpaid principal amount of the Note, together with all unpaid
interest and all other amounts payable under this Agreement and every other
obligation of the Borrower to the Lender, immediately due and payable,
whereupon the Note and all such obligations shall become and be forthwith due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower, anything contained
herein or in the Note or in such other note or evidence of indebtedness to the
contrary notwithstanding; provided, however, that in case of an Event of
Default under Section 7.01(g), all the obligations of the Borrower under this
Agreement and the Note shall become immediately due and payable as of the date
of any such Event of Default regardless of the cause of such Event of Default
and without any notice to the Borrower required from the Lender. The Lender
shall have, in addition to all other rights and remedies allowed by law, the
rights and remedies of a secured party under the Uniform Commercial Code as in
effect in the State of Florida and, without limiting the generality of the
foregoing, the rights and remedies provided for in the Security Agreement,
Pledge Agreements, and any Mortgage or Leasehold Mortgage, which provisions are
hereby incorporated by reference.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 No Waiver; Cumulative Remedies. No failure or delay on
the part of the Lender in exercising any right, power or remedy hereunder shall
operate as a waiver, nor shall any single or partial exercise of any such
right, power or remedy hereunder. The
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remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
Section 8.02 Amendments. No amendment, modification, termination or
waiver of any provision of this Agreement, the Note, the Security Agreement or
any Mortgage or Leasehold Mortgage, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless in writing, signed
by the Lender and then only in the specific instance and for the specific
purpose for which given. No notice to or demand on the Borrower in any case
shall entitle it to any other or further notice or demand in similar or other
circumstances.
Section 8.03 Conflicts. In the event of any conflict or
inconsistency between any provision of this Agreement and a provision of the
Note, the Security Agreement or any Mortgage or Leasehold Mortgage, the
provisions of this Agreement shall control.
Section 8.04 Address for Notices. All notices and other
communications under this Agreement shall be in writing and shall be served by
personal service or by mailing a copy thereof by registered or certified mail,
return receipt requested, to the applicable party at the addresses indicated
below:
If to the Borrower: Xxxxx X. Xxxx
The Christian Network, Inc.
00000 00xx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
If to the Lender: Xxxxxx X. Xxxxxx
Xxxxxx Communications of Dayton-26, Inc.
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
or at such other address as may be designated by either party in a written
notice to the other complying as to delivery with the terms of this Section.
All such notices and other communications shall be effective when deposited in
the mails.
Section 8.05 Expenses. The Borrower agrees to pay on demand all
costs and expenses incurred by the Lender directly in the enforcement of this
Agreement, the Note, the Security Agreement, any Mortgage or Leasehold
Mortgage, the Pledge Agreement and other instruments and documents to be
delivered hereunder, including, without limitation, the reasonable fees and
expenses of any attorney to whom the Note is referred for collection (whether
or not litigation is commenced) or for representation out of court, in trial,
on appeal or in proceedings under any bankruptcy or insolvency law or
otherwise. In addition, the Borrower shall pay any and all taxes and fees
payable or determined to be payable in
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connection with the execution, delivery or recordation of any instruments and
documents to be delivered hereunder. In addition, Borrower agrees to pay (i)
all the actual and reasonable costs and expenses of Lender in connection with
the negotiation, preparation and execution of this Loan Agreement, the Note,
the Security Agreement, the Pledge Agreement, any Mortgage or Leasehold
Mortgage and all other documents and instruments to be delivered hereunder
(collectively, the "Loan Documents") and all the costs of furnishing all
opinions by counsel for Borrower, and of Borrower's performance of and
compliance with all agreements and conditions contained herein and in the other
Loan Documents on its part to be performed or complied with including, without
limitation, confirming compliance with environmental and insurance
requirements; (ii) the reasonable fees, expenses and disbursements of counsel
to Lender (including allocated costs of internal counsel) in connection with
the negotiation, preparation, execution and administration of the Loan
Documents and the Loan and any consents, amendments, waivers or other
modifications hereto or thereto; and (iii) all the actual and reasonable costs
and expenses of creating and perfecting liens in favor of Lender pursuant to
any Loan Document.
Section 8.06 Binding Effect; Assignment. This Agreement shall become
effective when executed and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign any rights
or obligations hereunder without the prior written consent of the Lender and
the Agents. Lender shall be permitted to assign, without Borrower's consent,
all or any portion of Lender's rights and interests hereunder and under each
other document executed in connection with this Loan Agreement (x) to one or
more other Affiliates (as defined in Section 1.09) of Lender, and, upon any
such assignment, each reference herein or in such other document to "Lender"
shall be deemed to be and include a reference to such other Affiliate and (y)
to creditors of Lender or its Affiliates as security for indebtedness of Lender
or such Affiliates.
Section 8.07 Governing Law. This Agreement, the Note, the Security
Agreement and related documents shall be governed by, and construed in
accordance with, the laws of the State of Florida with the exception of its
conflicts of laws provisions; provided that the effect of any recordation shall
be determined by the State thereof.
Section 8.08 Severability of Provisions. Any provision of this
Agreement, the Note, the Security Agreement, or any Mortgage or Leasehold
Mortgage that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating
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the remaining provisions or affecting the validity or enforceability of any
provisions in any other jurisdiction.
Section 8.09 Headings. Article and Section headings in this
Agreement are including for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 8.10 Rights Affected by Extensions. The rights of the
Lender and its assigns shall not be impaired by any indulgence, release,
renewal, extension or modification which the Lender may grant with respect to
the indebtedness or any part thereof, or with respect to the collateral or with
respect to any endorser, guarantor, or surety without notice or consent of the
Borrower or any endorser, guarantee, or surety.
Section 8.11 Survival of Representations and Warranties. All
representations and warranties made in this Agreement and in any documents or
certificates delivered pursuant hereto or thereto shall survive the execution
and delivery of this Agreement and the Note and the making of the Loan
hereunder and continue in full force and effect, as of the respective dates as
of which they were made, until all of the obligations of the Borrower to the
Lender hereunder have been paid in full.
Section 8.12 [INTENTIONALLY OMITTED]
Section 8.13 Further Assurances. From time to time, the Borrower
shall execute and deliver to the Lender such additional documents as the Lender
may reasonably require to carry out the purposes of this Agreement or any of
the documents entered into in connection herewith, or to preserve and protect
the rights of the Lender hereunder or thereunder.
Section 8.14 Indemnification. The Borrower hereby indemnifies and
holds harmless the Lender and its directors, officers, shareholders, employees,
agents, counsel, subsidiaries and affiliates (the "Indemnified Persons") from
and against any and all losses, liabilities, obligations, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against any
Indemnified Person in any way relating to or arising out of this Agreement, the
documents entered into in connection herewith, or any of them or any of the
transactions contemplated hereby or thereby; provided, however, that the
Borrower shall not be liable to any Indemnified Person, if there is a judicial
determination that such losses, liabilities, obligations, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the gross negligence or willful misconduct of such Indemnified Person.
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Section 8.15 Waiver. EACH OF LENDER, BORROWER AND SHAREHOLDER HEREBY
AGREES TO WAIVE ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS,
OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION AND THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY
OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, REPLACEMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE
LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOAN.
Section 8.16 Maximum Interest. Lender and Borrower intend that this
Agreement and the other Loan Documents conform to all applicable usury laws.
Accordingly, no provisions of the Loan Documents shall require the payment or
permit the collection of interest in excess of the maximum rate permitted by
applicable law ("Maximum Rate"), or obligate Borrower to pay any taxes,
assessments, charges, insurance premiums or other amounts which are held to
constitute interest to the extent that such payments, when added to the other
obligations under the Loan Documents, would be held to constitute contracting
for, or the payment by Borrower of, interest at a rate greater than the Maximum
Rate. Lender and Borrower further agree that:
(i) if any excess of interest in such respect is
herein or in any such other instrument provided for, or shall be
adjudicated to be so provided for herein or in any such instrument,
the provisions of this subsection 8.16 shall govern, and neither
Borrower nor its successors or assigns shall be obligated to pay the
amount of such interest to the extent it is in excess of the Maximum
Rate;
(ii) if at any time the amount of interest under
any of the Loan Documents for a calendar year exceeds the Maximum Rate
had the Maximum Rate at all times been in effect, the interest
chargeable under any such Loan Document shall be limited to the amount
of interest that could have been charged if the Maximum Rate had at
all times been in effect, but any subsequent reductions in the
interest due shall not reduce the rate of interest chargeable under
any such Loan Document below the Maximum Rate until the total amount
of interest accrued under any such Loan Document equals the amount of
interest that would have accrued if the interest provided for in any
such Loan Document had at all times been in effect and collectible;
(iii) if the maturity of any Loan Document is
accelerated for any reason, or in the event of any prepayment by
Borrower, or in any other event, earned interest may never
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include more than the Maximum Rate, computed from the date of
disbursement of the funds evidenced by such Loan Document until
payment, and any interest otherwise payable under such Loan Document
that is in excess of the Maximum Rate shall be canceled automatically
as of such acceleration or such other event and (if theretofore paid)
shall be credited against principal;
(iv) if it should be held that any interest
payable or chargeable under any Loan Document is in excess of the
Maximum Rate, the interest payable or chargeable under such Loan
Document shall be reduced to the maximum amount permitted by
applicable federal or state law, whichever shall permit the higher
lawful interest, as construed by courts having jurisdiction thereof;
and
(v) the spreading, prorating and amortizing of
interest over the term of the Loan Documents shall be allowed to the
fullest extent permitted by applicable law.
ARTICLE IX
GUARANTY
Section 9.1. Guaranty. In consideration for Lender's execution and
delivery of this Loan Agreement and Lender's agreement to make the Loan,
Shareholder agrees as follows:
(a) Shareholder hereby guarantees the full, complete and timely
payment and performance by Borrower of each and every obligation of Borrower
under this Loan Agreement, the Note, the Security Agreement, each Mortgage and
Leasehold Mortgage executed and delivered pursuant to this Loan Agreement and
each other agreement or instrument executed and delivered by Borrower in
connection with this Loan Agreement (individually, a "Loan Document" and
collectively, the "Loan Documents"). If any default shall be made by Borrower
in the payment or performance of any of such obligations, then Shareholder will
itself pay or perform or cause to be paid or performed such obligation upon
receipt of notice from Lender specifying in summary form the default. Lender
may proceed to enforce its rights against Shareholder from time to time prior
to, contemporaneously with, or after any enforcement against Borrower, or
without any enforcement against Borrower. The obligations of Shareholder under
this Guaranty shall be absolute and unconditional and shall remain in full
force and effect without regard to and shall not be released, discharged, or in
any way affected by (and Shareholder expressly waives any and all defenses
arising out of, or based on): (i) any amendment or modification of or
supplement to any Loan Document; (ii) any exercise or non-exercise of, or delay
in exercising any, right, remedy, power, or privilege under or in respect of
any Loan Document; (iii) any
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bankruptcy, insolvency, arrangement, composition, assignment for the benefit of
creditors, or similar proceeding commenced by or against Borrower or
Shareholder; (iv) the dissolution (voluntarily or involuntarily) of Lender; (v)
the genuineness, validity, or enforceability of any Loan Document; or (vi) any
other circumstance which might otherwise constitute a legal or equitable
discharge of a guarantor or surety. If payment of any sum by Borrower pursuant
to any Loan Document is recovered as a preference or fraudulent transfer under
any applicable bankruptcy or insolvency law, the liability of Shareholder under
such Loan Document shall continue and remain in full force and effect
notwithstanding such recovery.
(b) Shareholder waives presentment, protest, demand, or action or
delinquency in respect of any of the obligations of Borrower under the Loan
Documents. Shareholder waives all set-offs and counterclaims and all notices
of nonperformance, notices of protest, notices of dishonor, and notices of
acceptance of this guaranty.
(c) This guaranty shall be deemed a continuing guaranty, and the
above consents and waivers of Shareholder shall remain in full force and effect
until the satisfaction in full of all obligations of Borrower under the Loan
Documents.
(d) Shareholder agrees that any and all claims in its favor
against Borrower, any endorser or any other guarantor of all or any part of the
obligations of Borrower under the Loan Documents, or against any of their
respective properties, arising by reason of any payment by Shareholder to
Lender pursuant to the provisions hereof or otherwise, shall be subordinate and
subject in right of payment to the prior payment, in full in cash, of all
obligations of Borrower under the Loan Documents. Shareholder agrees that any
right of subrogation arising as a result of its performance hereunder shall not
exist unless and until all obligations of the Borrower under the Loan Documents
are paid in full in cash.
Section 9.2 Representations and Warranties. Shareholder hereby
represents and warrants to Lender as follows:
(a) This Loan Agreement has been duly and validly executed and
delivered by Shareholder and constitutes its legal, valid, and binding
agreement with respect to the provisions contained in Article IX, enforceable
in accordance with its terms, except as the enforceability of this Loan
Agreement may be affected by bankruptcy, insolvency, or similar laws affecting
creditors' rights generally, and by judicial discretion in the enforcement of
equitable remedies.
(b) The execution, delivery, and performance by Shareholder of
this Loan Agreement: (i) do not require the consent of any
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third party; (ii) will not conflict with any provision of the Articles of
Incorporation or Bylaws of Shareholder; (iii) will not conflict with, result in
a breach of, or constitute a default under, any law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; and (iv) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of, any agreement, instrument, license, or permit to which Shareholder is
a party or by which Shareholder may be bound.
Section 9.3 Limited Recourse. Notwithstanding anything to the
contrary contained in this Article IX, in any action or proceeding commenced
with reference to any Loan Document, no judgment obtained against Shareholder
shall be enforced against any of its separate assets, other than Shareholder's
interest in all of the issued and outstanding capital stock of Borrower
(whether outstanding on the date hereof or hereafter), and Shareholder's
liability under any Loan Document shall be limited to such interest. In any
legal action or suit in equity which the Lender may undertake against
Shareholder to enforce its rights and remedies under any Loan Document, any
judgment obtained by Lender may be satisfied by recourse only to Shareholder's
interest in all of the issued and outstanding capital stock of Borrower
(whether outstanding on the date hereof or hereafter) and not by recourse to
any other assets of Shareholder.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized officers, as of
the date first above written.
XXXXXX COMMUNICATIONS OF DAYTON-26, INC.
By:
--------------------------------------
Xxxxxxx X. Xxxxxx
Secretary
CHANNEL 26 OF DAYTON, INC.
By:
-------------------------------------
Xxxxx X. Xxxx
Chairman
THE CHRISTIAN NETWORK, INC.
HEREBY JOINS IN THE EXECUTION
OF THE FOREGOING AGREEMENT TO
AGREE TO THE PROVISIONS OF
ARTICLE IX ONLY, AS OF THE DATE
FIRST ABOVE WRITTEN.
THE CHRISTIAN NETWORK, INC.
By:
-------------------------------------
Xxxxx X. Xxxx
Chairman
