Exhibit 10.3
September 20, 2006
Urban Television Network Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: Bridge Loan Agreement
Gentlemen:
You have requested that ▇.▇. ▇▇▇▇▇▇ HOLDINGS, INC. a Texas corporation, provide
a bridge loan (the "Bridge Loan" or "the Bridge Loan Agreement")) to Urban
Television Network Corporation ("the Borrower"), in addition to previous
advances. Subject to and upon the terms and conditions hereinafter set forth,
LENDER is hereby pleased to firmly commit to provide to the Borrower a Bridge
Loan as follows on or before October 15, 2006 (the "Closing Date"):
1. Commitment Amount and Funding. The Bridge Loan will be in the amount of
ONE HUNDRED EIGHTY-NINE THOUSAND NINE HUNDRED AND NO/100 DOLLARS ($189,900) (the
"Commitment Amount"), as to which the amount of thirty-five thousand five
hundred sixteen and 07/100 dollars ($35,516.07) has heretofore been advanced.
The Commitment Amount will be added to as "additional indebtedness" under the
secured note heretofore advanced of three hundred two thousand five-hundred and
no/100 dollars ($302,500.00), for an aggregate total of four hundred ninety-two
thousand four hundred and no/100 dollars ($492,400). The Bridge Loan will have a
promissory note ("Note") attached hereto as Exhibit "A" which will be delivered,
and the original secured note(s) which aggregate to the original amount of three
hundred two thousand five-hundred ($302,500) will be returned and marked
"CANCELLED".
2. Maturity Date. The Bridge Loan will mature the earlier of: (i) the
closing of the acquisition of the controlling interest of UATV (the
"Transaction), and the receipt of proceeds therefrom; or (ii) ninety (90) days
from date of the Bridge Loan. However, at the election of Borrower, the proceeds
of the Bridge Loan may be used to partially provide the consideration for the
Transaction.
3. Interest Rate. Twenty percent (20%) per annum. Fixed until paid.
4. Source of Repayment of Loan. Proceeds of closing of the Transaction,
secured by blanket lien on any and all assets of the Borrower, or any other
proceeds therefrom. Borrower represents and warrants that the assets are free
and clear of any claims, liens and encumbrances, save and except the liens
("Permitted Liens") as follows:
a. Lien with respect to Westar Satellite Services, LP, ("Westar") which
secures the payment for satellite services provided to the Borrower, with
amounts outstanding as of one hundred forty-six thousand and no/100 dollars as
of July 17, 2006, which Borrower warrants and represents will be reduced by
twenty-thousand and no/100 dollars ($20,000) from the proceeds of the Bridge
Loan on the Closing Date.
▇. ▇▇▇▇ with respect to a note held by ▇.▇. ▇▇▇▇▇▇ Holdings, Inc.,
("▇.▇. ▇▇▇▇▇▇") above referenced which has been consolidated and restated with
the Bridge Loan.
5. Security for Repayment of the Loan. The Company has heretofore provided
a security agreement to ▇.▇. ▇▇▇▇▇▇ to secure repayment of the loan and after
acquired indebtedness. The Security Agreement, together with UCC-1 financing
statement, perfect a subsisting lien on the following collateral, inferior only
to the lien of Westar on : (i) all assets, including accounts, and the proceeds
arising therefrom in any manner; and (ii) tax credits arising from the qualified
sale of the coal to Geotec and/or its subsidiaries for the purpose(s) of
generating steam for electricity production utilizing coal that has been
processed to qualify for such credits under applicable provisions of the
Internal Revenue Code (collectively, "the Collateral").
6. Conditions Precedent. The extension of the Bridge Loan by LENDER is
subject to the execution and delivery, in form and substance acceptable to
LENDER, on the Closing Date of the Note.
7. Default. This Bridge Loan will be in default when Borrower fails to
punctually pay the principal and accrued interest prior to the Maturity Date. In
that event, LENDER may accelerate under the terms of the Note, and demand
payment therefore. Interest will then accrue at the Default Rate of twenty-five
percent (25%) per annum until paid, inclusive of reasonable attorney's fees and
costs of collections. LENDER will have its other remedies under the terms of the
Note and the Security Agreement.
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By acceptance of this letter, you agree to indemnify and hold LENDER,
his agents, servants, employees, successors, and assigns, harmless from any and
all losses, claims, damages, liabilities, and expenses (including fees and
disbursements of counsel) that may be incurred by or asserted against any such
indemnitee arising out of any documentation, investigation, litigation, or
proceeding relating to the financing transactions herein described, this
commitment letter, or the credit facilities discussed herein; provided, however,
that no person shall have the right to be so indemnified hereunder for matters
arising solely from its own willful misconduct or bad faith.
This Loan will be funded by certified or cashier's check for good funds
or wire transfer per the wire transfer instructions referenced in Exhibit "B".
This letter supercedes and replaces all previous communications between
the parties, written or oral. This letter may not be modified or amended except
by a writing executed by all parties hereto. This letter shall be governed by
Texas law.
This letter must be executed by you and returned to LENDER no later
than 5:00 p.m., C.S.T. on September 20, 2006. LENDER reserves the right to
terminate this commitment at any time prior to receipt by LENDER of a copy of
this letter executed by you. This letter, unless previously terminated as
provided above, shall expire at 5:00 p.m. on September 20, 2006 unless such date
is extended in writing by LENDER in its sole discretion.
Sincerely,
LENDER
▇.▇. ▇▇▇▇▇▇ Holdings, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Office: President/CEO
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Acknowledged and accepted: September 20, 2006
Urban Television Network Corporation
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President/CFO
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