1
EXHIBIT 10.03
LOAN AGREEMENT
BETWEEN
XXXXXX COMMUNICATIONS CORPORATION
AND
XXXXXXX BROADCASTING COMPANY
OF RALEIGH-DURHAM, LTD.
DATED AS OF
OCTOBER 31, 1995
2
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of this 31st day of October, 1995, is
by and between XXXXXX COMMUNICATIONS CORPORATION, a Delaware corporation having
its principal offices at 000 Xxxxxxxxxx Xxxx Xxxx, Xxxx Xxxx Xxxxx, Xxxxxxx
00000, (the "Lender"), and XXXXXXX BROADCASTING COMPANY OF RALEIGH-DURHAM, LTD.
a Delaware limited partnership having its principal offices at 0000 X. Xxxxx
Xxxxxxx, Xxxxx 000, Xx. Xxxxx, Xxxxxxxx, 00000 (the "Borrower");
W I T N E S S E T H:
WHEREAS, the Borrower is seeking to purchase and modify the
facilities of Television Station WRMY, Rocky Mount, North Carolina (the
"Station"); and
WHEREAS, the Borrower desires to borrow funds from the Lender to
purchase and/or construct of the Station; and
WHEREAS, an affiliate of the Lender wishes to obtain an option to
acquire a 40% equity interest in Borrower as a limited partner.
NOW, THEREFORE, in consideration of the mutual promises and
agreements herein contained, the Lender and the Borrower agree as follows:
ARTICLE 1. 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 to the Borrower in an
aggregate principal amount not to exceed Four Million Dollars ($4,000,000) (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 (the "Note") payable to the order of the Lender and
representing the obligation of the Borrower to pay the Lender the amount of the
Loan, with interest thereon, as prescribed in Section 1.4. The Lender is
authorized to endorse the date and amount of the Loan and each repayment of
principal and/or interest with respect thereto on the Schedule A annexed to and
constituting a part of the Note, which endorsement shall constitute prima facie
evidence of the information endorsed.
Section 1.3 Interest. The loan shall bear interest on the
unpaid principal amount thereof at the rate per annum at all times equal to
eleven and seven/eighths (11 7/8%). Interest shall be calculated on the basis
of a year of three hundred sixty (360) days and 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
commencement of broadcast operations at the Station
3
- 2 -
by the Borrower pursuant to Federal Communications Commission ("FCC")
authorization and the first payment of interest to the Lender shall be due
sixty (60) days thereafter at which time all interest accrued shall become due
and payable; thereafter, accrued interest shall be paid monthly, on the same
date as the principal payments are due pursuant to Section 1.4 hereof. 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 due date thereof until paid
in full.
Section 1.4 Repayment of the Loan. One Hundred Twenty (120)
days after the commencement of broadcast operations at the Station by the
Borrower pursuant to Federal Communications Commission ("FCC") authorization,
the Borrower shall begin repayment to the lender of the loan in eighty-four
(84) consecutive equal monthly installments of principal and interest.
Notwithstanding anything to the contrary in the Loan Agreement, Promissory
Note, Security Agreement or Pledge Agreement, if the monthly time brokerage
payments payable to Borrower are not sufficient to allow Borrower to make
timely monthly payments of principal and interest under the Loan Agreement (as
well as pay the operating expenses of WRMY), Lender hereby agrees that (a) the
failure to make such payments (in the absence of any other event or
circumstance that constitutes an Event of Default under the Loan Agreement)
shall not constitute an Event of Default under the Loan Agreement and (b)
Lender shall make an additional payment to Borrower sufficient to allow
Borrower to pay those operating and debt expenses. Should Lender fail to make
such additional payment, the monthly Lender loan repayment of Borrower shall be
considered paid in full notwithstanding the amount of the shortfall.
Section 1.5 Use of Proceeds and Advancement of Funds.
(a) The proceeds of the Loans are to be used by Borrower
exclusively for the purpose of purchasing the Station and/or completing
construction of the Station pursuant to the Purchase Agreement or Construction
And Equipment Schedule attached hereto as Exhibit 2 and for working capital and
operating expenses.
(b) The Borrower agrees to furnish to the Lender such information
as the Lender may reasonably request in connection with the loans including the
submission of additional documentation involving invoices and other requests
for payment submitted 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 for the full amount of the outstanding
4
- 3 -
balance, shall be in the amount of Twenty Five Thousand Dollars ($25,000.00) or
an integral multiple thereof. 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.
ARTICLE 2. CLOSING
Section
2.1 Closing Date. Closing of this transaction shall occur on a
date set by Lender upon five (5) days written notice to Borrower, or such other
date agreed upon by the parties hereto (the "Closing Date").
ARTICLE 3. 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 3 hereto (the "Security Agreement").
Section 3.2 Pledge Agreements. 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 4, duly executed by the partners of
Xxxxxxx Broadcasting Company of Raleigh-Durham, Ltd. (the "Partners"), (the
"Pledge Agreement").
Section 3.3 Leasehold Mortgages. At such time as the Borrower
enters into any lease, including any leases for the station's studio and
transmitter sites, it shall execute with respect to such lease a leasehold
mortgage in the form of Exhibit 5 (the "Leasehold Mortgage"), granting the
lender a lien on its leasehold interest under such lease. If requested by the
Lender, the Borrower shall also deliver to the lender in form and substance
satisfactory to the Lender with respect to any lease to which the Borrower
becomes a party (i) evidence of the filing of a memorandum of lease, (ii) an
executed estoppel certificate, (iii) an executed landlord's consent and waiver
and (iv) an alta mortgagee's policy of title insurance in customary form with
respect to such lease.
Section 3.4 Mortgages. The Borrower shall execute a first
mortgage or deed of trust in favor of the Lender covering any real estate
acquired by Borrower in form and substance satisfactory to the Lender. If
requested by the Lender, the Borrower shall also deliver to the Lender an ALTA
mortgagee's policy of title insurance in customary form with respect to such
parcel.
5
- 4 -
ARTICLE 4. CONDITIONS OF LENDING
Section 4.1 Conditions Precedent to Loan Funds. The obligation
of the Lender to Loan the funds pursuant to Section 1.5 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, duly executed and delivered by the Borrower;
(c) The Pledge Agreements, duly executed and
delivered by the Partners;
(d) Leasehold Mortgages to the extent applicable;
(e) Xxxxxxx Broadcasting Company of
Raleigh-Durham, Ltd.'s Certificate of Limited Partnership in the form of
Exhibit 6 and the executed Option Agreement in the form of Exhibit 6A;
(f) A certified copy of the resolutions of the
Partners of the Borrower evidencing approval of the execution, delivery and
performance of this Agreement, the Note and the Security Agreement and other
matters contemplated hereby;
(g) Certificates of Good Standing for the
Borrower as of a recent date prior to the Closing Date from the State of
Delaware;
(h) A certificate of an officer of Borrower
attaching the executed Purchase Agreement and/or Construction And Equipment
Schedule for the Station and evidence of FAA approval for the Station's new
tower;
(i) Copies of the certificates evidencing the
insurance required to be maintained by the Borrower pursuant to Section 6.1(e);
(j) Evidence of the filing of any memorandum of
lease to the extent required by Section 3.3;
(k) Executed estoppel certificates to the extent
required by Section 3.3;
6
- 5 -
(l) Executed landlord's consents and waivers to
the extent required by Section 3.3;
(m) Such documentation, as required by Section
1.5; and
(n) The executed Time Brokerage Agreement between
the Station and Xxxxxx Communications of Raleigh-Durham-47, Inc. in the form of
Exhibit 7.
Section 4.2 Compliance. All of the representations and
warranties of the Borrower in this 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 shall deliver to the Lender a certificate, dated as of such
date and signed by an executive officer of the Borrower, certifying compliance
with the conditions of this Section 4.02. 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 as of the date of such Loan, is
in compliance with this Section and if the Borrower is not in compliance with
this Section, the Lender shall not be required to disburse such Loan to the
Borrower.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Borrower.
In order to induce the Lender to enter into this Agreement and make the Loan,
the Borrower represents and warrants as follows:
(a) Existence and Standing. The Borrower is a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware and is qualified to do business and in good
standing under the laws of the State of North Carolina and 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 Leasehold Mortgage, the Security Agreement
and all other documents that have been or will be executed and delivered by the
Borrower pursuant to this Agreement.
(b) Authorizations, Compliance with Laws. The
execution, delivery and performance by the Borrower of this Agreement, the
Note, any Leasehold Mortgage, the Security
7
- 6 -
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
partnership 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 Certificate of Limited Partnership 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 Leasehold Mortgage, the Security Agreement or
any other document required to be executed and delivered by the Borrower
pursuant to this Agreement.
(d) Binding Obligations. This Agreement, the
Note, any Leasehold Mortgage, the Security Agreement and all other documents
required to be executed and delivered by the Borrower pursuant to this
Agreement have been or will be executed and delivered by duly authorized
officers of the Borrower and constitute or will constitute, legal, valid and
binding obligations of the Borrower 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, operation or condition of the Borrower.
(f) No Default. The Borrower is not in default
in the performance, observance or fulfillment of any of the obligations or
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. All necessary
licenses and permits related to the Station have either been obtained and are
currently valid or 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
8
- 7 -
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 liens 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 6. 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 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 Partnership Existence.
Preserve and maintain its partnership existence, rights, franchises and
privileges in the jurisdiction of its creation and act in full compliance with
its Certificate of Limited Partnership.
(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.
9
- 8 -
(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 Agreements, any
Leasehold 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
Agreements, the Security Agreement or any other document delivered to the
Lender in 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.
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; and (ii) indebtedness
(other than for borrowed money) incurred in the ordinary course of business not
to exceed Twenty Five Thousand Dollars ($25,000.00) in the aggregate at any one
time.
(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
10
- 9 -
upon any of its properties or assets, now owned or hereafter as acquired,
excluding, however, from the operation of this covenant:
(i) any security interest or lien
created pursuant to this Agreement;
(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;
(iv) deposits or pledges to secure
payment of workers' compensation, unemployment insurance or other social
security benefits or obligations;
(v) any judgment lien, 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; or
(vi) the Subordinated Liens.
(c) Disposition of Assets. Sell, transfer, lease
or otherwise dispose of all or any material part of its assets other than in
the ordinary course of business and in exchange for collateral of like value in
which the Lender shall have a security interest.
(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 Interests. Permit
the issuance or transfer of any partnership interests in the Borrower, or any
options or other rights to purchase partnership interests in the Borrower.
(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.
11
- 10 -
(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 county 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 partnership interest
of the Borrower or a return of capital or other payment or distribution of any
kind to a partner of the Borrower or any affiliate of the Borrower in respect
of the Borrower's capital.
(i) Transactions with Affiliates. Enter into any
transaction or agreement with any affiliate of the Borrower (other than the
Lender).
(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
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.
12
- 11 -
(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) Construction Schedule. Make any material
changes in or departures from the Construction And Equipment Schedule for the
Station.
(q) Time Brokerage Agreement. Terminate, amend
or waive any provision of the Station's Time Brokerage Agreement.
(r) Programming. Make any changes in the
Station's programming except for changes in the Station's non-entertainment,
public affairs programming of less than ten percent (10%) of the weekly hours
between 6 a.m. and midnight.
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:
(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 7.1) of which the Borrower has knowledge, the
statement of the chief financial officer 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 initial Loan disbursement, 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 5.1(e).
13
- 12 -
(d) Budget. An annual budget to the Lender to be
reviewed semi-annually. Such budgets shall cover all operating expenses and
capital expenditures for the Station and must be satisfactory to Lender.
(e) Other Information. Such other information
respecting the business, properties, operations or the condition, financial or
otherwise, of the Borrower as the Lender may from time to time reasonably
request.
ARTICLE 7. 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 when due whether at the due date thereof or by acceleration or
otherwise, and such default shall remain unremedied for a period of five (5)
days after the due date thereof; 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 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 any of its Partners) herein, in the Security 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 the Security Agreement, its Certificate of Limited
Partnership or by the Partners 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, its Certificate of Limited
Partnership or the Partners 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 its partners shall fail to
pay any indebtedness for borrowed money owing by the Borrower or its partners
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 its partners shall fail to perform any
term, covenant or
14
- 13 -
agreement under any agreement or instrument evidencing or securing or relating
to any such indebtedness owing by the Borrower or its partners 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 as set forth in Section 1.5 hereof, without the
prior written consent of the Lender, which may be withheld in the Lender's sole
discretion; or
(g) The Borrower shall (i) fail to pay its debts
as they mature in the ordinary course of business; (ii) file a petition
commencing a voluntary case concerning it under any Chapter of Title 11 of the
United States Code entitled "Bankruptcy"; or (iii) the Borrower 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 and such appointment shall continue
undischarged for a period of thirty (30) days; or (v) an involuntary case is
commenced against the Borrower 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 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 and shall remain undismissed for a period of thirty (30) days; or
(viii) the Borrower 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 event constituting an Event of Default
under Section 6.1(i) shall occur.
Section 7.2 Effect of Event of Default. Should any Event of
Default occur, the Lender may at its option by written notice to the Borrower
declare the entire unpaid principal amount of the Note, together with all
unpaid interest and all other amounts payable under this Agreement and every
other obligation of the Borrower to the Lender, immediately due and payable,
whereupon the Note and all such obligations shall become and be forthwith due
and payable, without presentment,
15
- 14 -
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 7.1(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 Leasehold
Mortgage, which provisions are hereby incorporated by reference.
ARTICLE 8. MISCELLANEOUS
Section 8.1 No Waiver; Cumulative Remedies. No failure or
delay on the part of the Lender in exercising any right, power or remedy
hereunder shall operate as a waiver, nor shall any single or partial exercise
of any such right, power or remedy hereunder. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 8.2 Amendments. No amendment, modification,
termination or waiver of any provision of this Agreement, the Note, the
Security Agreement, the Escrow Agreement or any 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 8.3 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 Leasehold Mortgage, the provisions of this
Agreement shall control.
Section 8.4 Address for Notices. All notices and other
communications under this Agreement shall be in writing and shall be served by
personal service or by mailing a copy thereof by registered or certified mail,
return receipt requested, to the applicable party at the addresses indicated
below:
16
- 15 -
If to the Borrower:
Xxxxxxx Broadcasting Company of Raleigh-Durham, Ltd.
0000 X. Xxxxx Xxxxxxx
Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
If to the Lender:
Xxxxxx Communications Corporation
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, XX 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 on the date of
personal delivery or the date set forth on the return receipt.
Section 8.5 Expenses. The Lender shall pay any and all taxes
and fees payable or determined to be payable in connection with the execution,
delivery and recordation of any instruments and documents to be delivered
hereunder. In addition, Lender agrees to pay (i) the costs and expenses in
connection with the negotiation, preparation and execution of the Loan
Agreement, the Note, the Security Agreement, the Pledge Agreement and all other
documents and instruments to be delivered hereunder (collectively, the "Loan
Documents"); (ii) the fees, expenses and disbursements of 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 costs and expenses of
creating and perfecting liens in favor of Lender pursuant to any loan document.
Section 8.6 Binding Effect; Assignment. This Agreement shall
become effective when executed and thereafter shall be binding upon and inure
to the benefit of the Borrower, the Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign any rights
or obligations hereunder without the prior written consent of the Lender. The
Lender shall be permitted to assign any of its rights, interest and obligations
hereunder, whereupon the Lender shall be released from performing all
obligations so assigned which arise after the effective date of such
assignment.
Section 8.7 Governing Law. This Agreement, the Note, the
Security Agreement and related documents shall be governed by, and construed in
accordance with, the laws of the State of Florida with the exception of its
conflicts of laws provisions; provided that the effect of any
17
- 16 -
recordation shall be determined by the State thereof. The Borrower hereby
irrevocably submits to the jurisdiction of the state and federal district
courts for the district including Palm Beach, Florida for the purposes of any
action or proceeding arising out of or relating to this Agreement or the
subject matter hereof or thereof; waives and agrees not to assert, by way of
motion, as a defense or otherwise, in any such action or proceeding, any claim
that (A) it is not personally subject to the jurisdiction of such courts, (B)
the action or proceeding is brought in an inconvenient forum or (C) the venue
of the action or proceeding is improper; and agrees that, notwithstanding any
right or privilege it may possess at any time, the Borrower and its property
are and shall be generally subject to suit on account of the obligations
assumed by it hereunder.
The Borrower agrees that service in person or by certified or
registered U.S. mail to its address set forth in Section 8.04 shall constitute
valid in personam service upon the Borrower and its successors and assigns in
any action or proceeding with respect to any matter as to which it has
submitted to jurisdiction hereunder.
Notwithstanding the foregoing, the Lender may at its option bring
any action or other proceeding arising out of or relating to this Agreement or
the subject matter hereof or thereof against the Borrower or any of its assets
in the courts of any jurisdiction or place where the Borrower or such assets
may be found or where the Borrower may be subject to personal jurisdiction, and
may effect service of process as provided under any applicable Governmental
Rule.
The obligations of the Borrower under this Section shall survive any
termination of this Agreement.
Section 8.8 Severability of Provisions. Any provision of this
Agreement, the Note, the Security Agreement, or any Leasehold Mortgage that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions or affecting the validity or
enforceability of any provisions in any other jurisdiction.
Section 8.9 Headings. Article and Section headings in this
Agreement are including for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
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.
18
- 17 -
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 Attorneys' Fees. If any litigation arises between
the parties in connection with the transactions contemplated by this Agreement,
the prevailing party shall be entitled to recover reasonable attorneys' fees in
addition to all other damages and remedies.
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.
Section 8.15 Counterparts. This agreement may be executed in
any number of counterparts, and by each of the parties on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all of which shall constitute but one and the same instrument.
Section 8.16 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 8.17 Waiver. EACH OF LENDER AND BORROWER 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
19
- 18 -
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 8.18 Maximum Interest. Lender and Borrower intend that
this Agreement and the other Loan Documents conform to all applicable usury
laws. Accordingly, no provisions of the Loan Documents shall require the
payment or permit the collection of interest in excess of the maximum rate
permitted by applicable law ("Maximum Rate"), or obligate Borrower to pay any
taxes, assessments, charges, insurance premiums or other amounts which are held
to constitute interest to the extent that such payments, when added to the
other obligations under the Loan Documents, would be held to constitute
contracting for, or the payment by Borrower of, interest at a rate greater than
the Maximum Rate. Lender and Borrower further agree that:
(i) if any excess of interest in
such respect is herein or in any such other instrument provided for, or shall
be adjudicated to be so provided for herein or in any such instrument, the
provisions of this subsection 8.16 shall govern, and neither Borrower nor its
successors or assigns shall be obligated to pay the amount of such interest to
the extent it is in excess of the Maximum Rate;
(ii) if at any time the amount of
interest under any of the Loan Documents for a calendar year exceeds the
Maximum Rate had the Maximum Rate at all times been in effect, the interest
chargeable under any such Loan Document shall be limited to the amount of
interest that could have been charged if the Maximum Rate had at all times been
in effect, but any subsequent reductions in the interest due shall not reduce
the rate of interest chargeable under any such Loan Document below the Maximum
Rate until the total amount of interest accrued under any such Loan Document
equals the amount of interest that would have accrued if the interest provided
for in any such Loan Document had at all times been in effect and collectible;
(iii) if the maturity of any Loan
Document is accelerated for any reason, or in the event of any prepayment by
Borrower, or in any other event, earned interest may never include more than
the Maximum Rate, computed from the date of disbursement of the funds evidenced
by such Loan Document until payment, and any interest otherwise payable under
such Loan Document that is in excess of the Maximum Rate shall be canceled
automatically as of such acceleration or such other event and (if theretofore
paid) shall be credited against principal;
(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
20
- 19 -
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.
21
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.
WITNESS: XXXXXXX BROADCASTING COMPANY OF
RALEIGH-DURHAM, LTD.
By: Xxxxxxx Broadcasting L.L.C., as
general partner
By:
-------------------------- ------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
WITNESS: XXXXXX COMMUNICATIONS
CORPORATION
By:
-------------------------- ------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
22
LOAN AGREEMENT
Index to Exhibits
No. Document
1. Promissory Note
2. Asset Purchase Agreement
3. Security Agreement
4. Pledge Agreement
5. Leasehold Mortgage
6. Limited Partnership Agreement
6A. Option Agreement
7. Time Brokerage Agreement
23
EXHIBIT 1
PROMISSORY NOTE
24
EXHIBIT 2
ASSET PURCHASE AGREEMENT
25
EXHIBIT 3
SECURITY AGREEMENT
26
EXHIBIT 4
PLEDGE AGREEMENT
27
EXHIBIT 5
LEASEHOLD MORTGAGE
28
EXHIBIT 6
LIMITED PARTNERSHIP AGREEMENT
29
EXHIBIT 6A
OPTION AGREEMENT
30
EXHIBIT 7
TIME BROKERAGE AGREEMENT
