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EXHIBIT 10.177
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LOAN AGREEMENT
BY AND BETWEEN
▇▇▇▇▇▇▇ BROADCASTING COMPANY
OF ALBUQUERQUE
AND
▇▇▇▇▇▇ COMMUNICATIONS OF
ALBUQUERQUE-14, INC.
RELATING TO
TELEVISION STATION _______ (CHANNEL 14)
ALBUQUERQUE, NEW MEXICO
* * *
JUNE 30, 1997
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TABLE OF CONTENTS
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ARTICLE I AMOUNT AND TERMS OF THE LOANS.........................................................................2
Section 1.1 The Loan......................................................................2
Section 1.2 The Promissory Note...........................................................2
Section 1.3 Interest......................................................................2
Section 1.4 Principal.....................................................................2
Section 1.5 Mandatory Prepayment..........................................................2
Section 1.6 Information...................................................................2
Section 1.7 Prepayment....................................................................2
Section 1.8 Payment on Non-Business Days..................................................3
Section 1.9 Taxes.........................................................................3
ARTICLE II CLOSING...............................................................................................3
Section 2.1 Closing Date..................................................................3
ARTICLE III SECURITY..............................................................................................3
Section 3.1 Security Interest.............................................................3
Section 3.2 Mortgages.....................................................................3
ARTICLE IV CONDITIONS OF LENDING.........................................................4
Section 4.1 Conditions Precedent to Loan..................................................4
Section 4.2 Compliance....................................................................5
Section 4.3 Loan Disbursement.............................................................5
Section 4.4 Settlement....................................................................5
ARTICLE V REPRESENTATIONS AND WARRANTIES........................................................................6
Section 5.1 Existence and Standing........................................................6
Section 5.2 Authorizations, Compliance with Laws..........................................6
Section 5.3 No Consent....................................................................6
Section 5.4 Binding Obligations...........................................................6
Section 5.5 Litigation....................................................................7
Section 5.6 No Default....................................................................7
Section 5.7 Compliance with Laws..........................................................7
Section 5.8 Taxes.........................................................................7
Section 5.9 Title to Properties...........................................................7
Section 5.10 Absence of Undisclosed Liabilities............................................7
Section 5.11 Solvency......................................................................8
Section 5.12 Material Misstatement.........................................................8
ARTICLE VI COVENANTS OF BORROWER.........................................................8
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Section 6.1 Affirmative Covenants.........................................................8
Section 6.2 Negative Covenants...........................................................10
Section 6.3 Reporting Requirements.......................................................12
ARTICLE VII EVENTS OF DEFAULT............................................................13
Section 7.1 Events of Default............................................................13
Section 7.2 Effect of Event of Default...................................................15
ARTICLE VIII MISCELLANEOUS................................................................15
Section 8.1 No Waiver; Cumulative Remedies...............................................15
Section 8.2 Amendments...................................................................16
Section 8.3 Conflicts....................................................................16
Section 8.4 Address for Notices..........................................................16
Section 8.5 Expenses.....................................................................16
Section 8.6 Binding Effect; Assignment...................................................17
Section 8.7 Governing Law................................................................17
Section 8.8 Severability of Provisions...................................................17
Section 8.9 Headings.....................................................................18
Section 8.10 Rights Affected by Extensions................................................18
Section 8.11 Survival of Representations and Warranties...................................18
Section 8.12 FCC Compliance...............................................................18
Section 8.13 Further Assurances...........................................................18
Section 8.14 Indemnification..............................................................19
Section 8.15 Waiver.......................................................................19
Section 8.16 Maximum Interest.............................................................19
LIST OF EXHIBITS
Exhibit 1 -- Promissory Note
Exhibit 2 -- Security Agreement
Exhibit 3 -- Pledge Agreement
Exhibit 4 -- Construction Agreement
Exhibit 5 -- Lease Agreement
Exhibit 6 -- Time Brokerage Agreement
Exhibit 7 -- Option Agreement
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of this 30th day of June, 1997, is by and
among ▇▇▇▇▇▇ COMMUNICATIONS OF ALBUQUERQUE-14, INC., a Florida corporation
having its principal offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lender"), and ▇▇▇▇▇▇▇ BROADCASTING COMPANY OF ALBUQUERQUE, a
Delaware corporation having its principal offices at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Borrower").
WITNESETH:
WHEREAS, Borrower has an application pending at the Federal
Communications Commission ("FCC") for a construction permit to construct a new
television station to operate on Channel 14 at Albuquerque, New Mexico (the
"Station").
WHEREAS, competing applications have been filed at the FCC
by KM Communications, Inc., Albuquerque Channel 14, Inc. and
Venture Technologies Group, Inc. that are mutually exclusive with
Borrower's application (the "Competing Applicants");
WHEREAS, Lender has agreed to make a loan to Borrower up to the
principal amount of Four Million Nine Hundred Thousand Dollars ($4,900,000) to
be used to obtain Settlement Agreements with the Competing Applicants subject to
the approval of the FCC that will provide for the FCC grant of Borrower's
application;
WHEREAS, such Loan shall be evidenced by a promissory note in the same
amount, which shall be issued by Borrower and dated as of the date hereof;
WHEREAS, the Borrower has agreed to guarantee its obligations under
this Agreement and the Note and to secure such guarantee by granting Lender a
first party security interest in the Station's assets and a pledge of the
Borrower's Stock;
WHEREAS, Lender and the Borrower have agreed to enter into a
Construction Agreement, Lease Agreement and a Time Brokerage Agreement relating
to the Station;
WHEREAS, Lender and the Borrower have agreed to enter into an Option
Agreement (the "Option Agreement"), pursuant to which, among other things,
Borrower would sell and Lender would purchase all of the assets used or useful
in the operations of the Station subject to the prior approval of the Federal
Communications Commission ("FCC") and the terms and conditions set forth in the
Option Agreement;
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, Lender and Borrower agree as follows:
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ARTICLE I AMOUNT AND TERMS OF THE LOANS
Section 1.1 The Loan. Lender agrees, upon the terms and conditions
hereinafter set forth, to make a loan or loans to Borrower in an aggregate
principal amount not to exceed at any one time outstanding Four Million Nine
Hundred Thousand Dollars ($4,900,000) (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 (as amended, renewed, restated, increased, consolidated or substituted
from time to time, the "Note"), payable to the order of Lender and representing
the obligation of Borrower to pay Lender the amount of the Loan, with interest
thereon, as prescribed in Section 1.4. All references to the "Note" in this Loan
Agreement and the Security Agreement (each as defined in this 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 eight percent
(8%). 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 Loan and shall be repaid pursuant to Section 1.4 hereof.
Section 1.4 Principal. The outstanding principal balance of the Loan
plus any accrued interest thereon shall be due and payable on [12 months after
Closing Date] (the "Maturity Date") except that upon the Closing pursuant to the
Option Agreement, all unpaid Principal and Accrued Interest shall be forgiven.
Section 1.5 Mandatory Prepayment. Notwithstanding anything in this
Agreement to the contrary, upon a termination of the Option Agreement for any
reason the entire outstanding principal balance and all accrued interest thereon
shall immediately be due and payable.
Section 1.6 Information. Borrower agrees to furnish to Lender such
information as Lender may reasonably request in connection with the Loan or the
Station.
Section 1.7 Prepayment. 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
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the outstanding balance, shall be in the amount of Ten Thousand Dollars
($10,000) or an integral multiple thereof, provided, however, that 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 be 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 1.9 Taxes. All sums payable by Borrower hereunder or under the
Note, whether of principal, interest, fees, expenses or otherwise, shall be paid
in full, free of any deductions or withholdings for any and all present and
future taxes, levies, imposts, stamps, duties, fees, assessments, deductions,
withholdings, and other governmental charges and all liabilities with respect
thereto. If Borrower is prohibited by law from making payments hereunder or
under the Note free of such deductions or withholdings, then Borrower shall pay
such additional amount as may be necessary in order that the actual amount
received by Lender after such deduction or withholding shall equal the full
amount stated to be payable hereunder or under the Note.
ARTICLE II CLOSING
Section 2.1 Closing Date. Closing of the transactions contemplated by
this Agreement shall occur, subject to the satisfaction of all of the conditions
set forth in Article IV, within five business days following FCC approval of the
Settlement Agreements with the Competing Applicants (the "Closing Date").
ARTICLE III SECURITY
Section 3.1 Security Interest. As partial security for the Loan,
Borrower shall execute and deliver to Lender, on or before the Closing Date, a
security agreement in the form of Exhibit 2 hereto (the "Security Agreement")
and a pledge agreement in the form of Exhibit 3 hereto (the "Pledge Agreement").
Section 3.2 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 Lender on such parcel, in form and substance acceptable to Lender (a
"Mortgage"). If requested by Lender, the Borrower shall also deliver to Lender
with respect to such property one or more of the following documents, each of
which shall be in form and substance satisfactory to
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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 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 Lender.
ARTICLE IV CONDITIONS OF LENDING
Section 4.1 Conditions Precedent to Loan. The obligation of Lender to
disburse the Loan hereunder is subject to the following conditions precedent:
(a) The Construction Agreement, Lease Agreement, Time
Brokerage Agreement and Option Agreement, in the form of Exhibits 4, 5, 6 and 7
hereto, shall be duly executed by Lender and the Borrower and shall be in full
force and effect;
(b) Lender shall have received all of the following, on or
before the Closing Date, in form and substance satisfactory to Lender:
(i) The Note, duly executed and delivered by Borrower;
(ii) The Pledge Agreement and Security Agreement,
together with appropriate UCC-1 forms duly executed and delivered by the
Borrower;
(iii) Copies of UCC, judgment and tax lien
searches in each jurisdiction in which Collateral covered by the Security
Agreement is located;
(iv) With respect to owned real property, if any,
the documents required by Section 3.2;
(v) Copies of the certificates evidencing the
insurance required to be maintained by the Borrower pursuant to Section 6.1(e);
(vi) Written evidence, satisfactory to Lender,
that the Borrower has been granted a construction permit by the FCC authorizing
construction of the Station and that Borrower has obtained all necessary FAA and
zoning approvals/permits for the site;
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(vii) Written evidence, satisfactory to Lender, that the
Borrower owns or holds a valid Lease for the Station's transmitter site
acceptable to Lender;
(viii) Such other agreements, certificates, opinions of
counsel and documents that Lender may reasonably require.
Section 4.2 Compliance. All of the representations and warranties of
Borrower 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. 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. 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, Borrower
shall deliver to Lender a certificate, dated as of such date and signed by
Borrower, certifying compliance with the conditions of this Section 4.2. Each
disbursement of all or a portion of the Loan to Borrower shall in and of itself,
constitute a representation and warranty that Borrower as of the date of such
Loan, are in compliance with this Section and if Borrower is not in compliance
with this Section, Lender shall not be required to disburse such Loan to
Borrower.
Section 4.3 Loan Disbursement. On the Closing Date, Lender shall
deposit into an Escrow Account or Accounts, pursuant to Escrow Agreements
acceptable in form and substance to Lender, the funds necessary to pay the
Competing Applicants as approved by the FCC up to the amount of the Loan, with
the provision that such funds shall be released only upon the FCC approval of
the Settlement Agreements and the issuance of Borrower's construction permit for
the Station becoming Final Orders as defined in the Asset Purchase Agreement
attached to the Option Agreement.
Section 4.4 Settlement. The Borrower shall use its best efforts to
reach Settlement Agreements with the Competing Applicants and shall prepare and
file with the FCC the necessary documentation seeking FCC approval of such
Settlement Agreements and the FCC grant of Borrower's construction permit
application for the Station. The Borrower will further agree not to take any
action that is inconsistent with its obligations under this Agreement, or the
agreements contemplated hereby, or that could hinder or delay the consummation
of the transactions contemplated by this Agreement, or the agreements
contemplated hereby, including any actions that would interfere with its efforts
to reach a settlement with the Competing Applicants.
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ARTICLE V REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement and make the
Loan, Borrower represents and warrants as follows:
Section 5.1 Existence and Standing. Borrower is a corporation duly
incorporated, 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 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, and all other documents that have been or will be
executed and delivered by the Borrower pursuant to this Agreement (the "Loan
Documents").
Section 5.2 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, 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.
Section 5.3 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 for the valid
execution, delivery and performance by the Borrower of this Agreement, the Note,
any Mortgage or Leasehold Mortgage, the Security Agreement, or any other
document required to be executed and delivered by the Borrower pursuant to this
Agreement.
Section 5.4 Binding Obligations. This Agreement, the Note, any
Leasehold Mortgage or Mortgage, the Security Agreement, the Pledge Agreement,
and all other documents required to be executed and delivered by the Borrower or
the Shareholder pursuant to this Agreement have been executed and delivered by a
duly authorized officer of the Borrower and constitute legal, valid and binding
obligations of the Borrower (or, in the
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case of this Agreement or the Pledge Agreement, of the Shareholder) enforceable
in accordance with their respective terms.
Section 5.5 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.
Section 5.6 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.
Section 5.7 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 their business and
operations or such licenses and permits have been applied for and are now being
diligently pursued.
Section 5.8 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).
Section 5.9 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.
Section 5.10 Absence of Undisclosed Liabilities. Except for (i)
obligations arising under the Loan Documents, (ii) liabilities and obligations
incurred pursuant to the terms of the Option Agreement, and (iii) liabilities
incurred in the ordinary course of business (other than for borrowed money),
Borrower has on the date hereof no material liabilities or
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obligations relating to the Station or otherwise of any nature, whether accrued,
absolute, contingent or otherwise.
Section 5.11 Solvency. Borrower has received, or has the right to
receive, consideration which is the reasonable equivalent value of the
obligations and liabilities that Borrower has incurred to Lender. Borrower is
not insolvent as defined in Section 101 of Title 11 of the United States Code or
any applicable state insolvency statute, nor, after giving effect to the
consummation of the transactions contemplated herein, will Borrower be rendered
insolvent by the execution and delivery of this Agreement, the Note or the other
Loan Documents to Lender. Borrower is not engaged, and Borrower is not about to
engage, in any business or transaction for which the assets retained by it shall
be an unreasonably small capital, taking into consideration the obligations to
Lender incurred hereunder and under the Loan Documents. Borrower does not intend
to, and Borrower does not believe that it will, incur debts beyond its ability
to pay them as they mature.
Section 5.12 Material Misstatement. No statement made herein or
information, exhibit or report furnished by Borrower to 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 BORROWER
Section 6.1 Affirmative Covenants. So long as the Note shall remain
unpaid, Borrower hereby covenants and agrees that it will, unless 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 Station
or 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) Maintenance of Properties. Maintain and preserve all of
the Borrower's properties necessary or useful in the proper conduct of its
business in good working order and condition, ordinary wear and tear excepted.
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(c) Compliance with Laws. Comply in all material respects
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority.
(d) Maintenance of Insurance. Maintain with responsible and
reputable insurance companies policies on all of the Borrower's 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 Lender copies of all such policies and any riders or
amendments thereto. The policies of insurance required hereunder shall name
Lender as an additional loss payee or additional insured, as applicable, and
shall provide that Lender shall receive at least thirty (30) days' written
notice prior to the cancellation, termination or alteration of any such policy.
(e) Operations in Ordinary Course. Continue to operate the
Borrower's business in the ordinary course.
(f) Perfection of Liens. Do all things requested by Lender to
preserve and perfect as first liens and security interests the liens and
security interests of Lender arising pursuant to the Security Agreement, any
Mortgage or any other agreement required hereunder.
(g) FCC Approval. If counsel to Lender reasonably determines
that the consent of the FCC is required in connection with the execution,
delivery and performance of this Agreement, the Security Agreement, any Mortgage
or any other document delivered to Lender in connection herewith or therewith or
as a result of any action which may be taken pursuant hereto or thereto, then
Borrower, at its sole cost and expense, agree to use their best efforts to
secure such consent and to cooperate with Lender in any action commenced by
Lender to secure such consent.
(h) Agreements. Comply with the Borrower's obligations
under the Option Agreement, Time Brokerage Agreement, Construction Agreement
and Lease Agreement.
(i) Information and Inspection. Insure that the Borrower shall
furnish to Lender from time to time, upon request, full information pertaining
to any covenant, provision or condition hereof, or to any matter connected with
its books, records, operations, financial condition, properties, activities or
business. At all reasonable times, Borrower shall permit any authorized
representatives designated by Lender to visit and inspect any of the properties
of the Borrower and its books and records, and to take extracts therefrom and
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make copies thereof, and to discuss the Borrower's affairs, finances and
accounts with the management and independent accountants of the Borrower.
(j) Preservation of Existence. Preserve and maintain
its respective corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation.
Section 6.2 Negative Covenants. So long as the Note shall remain
unpaid and the Agreement shall not have been terminated, Borrower hereby
covenants that it will not, without 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 (other than for borrowed money) incurred in the ordinary course
of business not to exceed Twenty-Five Thousand Dollars ($25,000) in the
aggregate at any one time; (ii) obligations or liabilities arising under the
indemnification provisions of the Option 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:
(i) any security interest or lien created pursuant to
or in connection with this Agreement or securing the Loan, the Security
Agreement, 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;
(iv) deposits or pledges to secure payment of workers'
compensation, unemployment insurance or other social security benefits or
obligations; or
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(v) any judgment lien, singly or aggregated with
other judgment liens, in an amount less than Fifty Thousand Dollars ($50,000),
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. Except pursuant to the terms of
the Option Agreement, 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 sales in the ordinary course of business 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 Ownership Interests. Issue or
permit the transfer of any shares of Capital Stock of 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 Lender with respect to such assets.
(h) Transactions with Affiliates. Enter into any
transaction or agreement, other than the Transaction Documents, with any
affiliate of the Borrower.
(i) Contracts. Enter into any contract or commitment
relating to its assets except for contracts involving aggregate payments of less
than Twenty Thousand Dollars ($20,000) 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).
(j) Adverse Change. Suffer any material adverse change in the
business, assets, properties, prospects or condition (financial or otherwise) of
the Borrower or the
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Station, or any damage, destruction or loss affecting any assets used or useful
in the conduct of the business of the Borrower.
(k) Cancellation of Debts. Cancel any debts owed to or
claims held by the Borrower.
(l) 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 Lender except and as required by
generally accepted accounting principles as required to present accurate
financial information on the Borrower.
(m) Rights. Transfer or grant any right under, or enter into
any settlement regarding the breach or infringement of, any license, patent,
copyright, trademark, service ▇▇▇▇, trade name, franchise, or similar right, or
modify any existing right relating to the Station.
(n) Agreements. Terminate, amend or commit any material
breach or default under the Option Agreement.
(o) 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.
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 Lender shall otherwise consent in writing, furnish to 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
Borrower setting forth details of such Event of Default and the action which the
Borrower proposes to take with respect thereto.
(b) Financial Statements. 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
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of cash flow of Borrowers for such fiscal year, in each case prepared by an
independent public accountant of recognized standing acceptable to Lender,
except that 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) or more and of any other
matter of the type described in Section 5.6.
(d) Other Information. Such other information respecting the
business, properties, operations or the condition, financial or otherwise, of
the Borrower or the Station as Lender may from time to time reasonably request.
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) Borrower shall fail to pay any installment of principal or
interest on the Note, or any other obligation to Lender 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 Lender in any material
portion of the collateral covered by the Security Agreement, or any Mortgage
shall at any time not constitute a legal, valid and enforceable security
interest or lien; or
(c) Any representation or warranty made by Borrower herein, in
the Security Agreement or any Mortgage, 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 Mortgage, the Security Agreement
shall prove to have been incorrect in any material respect when made; or
(d) Borrower shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement, the Note, the Security
Agreement, any Mortgage, and any such failure remains unremedied for thirty (30)
days after written notice thereof shall have been given to Borrower by Lender;
or
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(e) The Borrower shall fail to pay any indebtedness for
borrowed money owing by the Borrower 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
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 Borrower 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) Either (i) the Borrower shall fail to pay its debts as
they mature in the ordinary course of business; or (ii) the Borrower 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) 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
(g) 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
(h) There shall be a cancellation, denial or revocation of any
material FCC License for the Station (including the Construction Permit), the
Borrower shall be finally denied renewal of any such FCC License, or any such
FCC License shall be renewed on terms that materially adversely affect the
economic or commercial value or usefulness thereof; or
(i) Any money judgment, writ or warrant of attachment, or
similar process involving (i) in any individual case an amount in excess of
Fifty Thousand Dollars ($50,000), or (ii) in the aggregate at any time an amount
in excess of Fifty Thousand Dollars ($50,000),
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and in either case not adequately covered by insurance as to which the insurance
Borrower has acknowledged coverage, shall be entered or filed against the
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
(j) Any material adverse effect upon or change in (a) the
properties, assets, business, operations, financial condition, prospects or
liabilities of the Borrower or on the ability of the Borrower to conduct its
business, (b) the ability of the Borrower, or any other party to a Loan Document
(other than Lender) to perform its obligations hereunder, or under any other
Loan Document to which it is a party, (c) the validity or enforceability of this
Agreement, the Note, any other Loan Document, (d) the rights or remedies of
Lender under this Agreement, the Note, any other Loan Document, or at law or in
equity or (e) the value of any material collateral granted to Lender pursuant to
any Loan Document shall occur.
Section 7.2 Effect of Event of Default. Should any Event of Default
occur, Lender may at its option by written notice to 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
Borrower to 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 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 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
Borrower required from Lender. 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 and, without limiting the generality of the
foregoing, the rights and remedies provided for in the Security Agreement, and
any Mortgage or Leasehold Mortgage, which provisions are hereby incorporated by
reference.
ARTICLE VIII MISCELLANEOUS
Section 8.1 No Waiver; Cumulative Remedies. No failure or delay on the
part of 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.
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Section 8.2 Amendments. No amendment, modification, termination or
waiver of any provision of this Agreement, the Note, the Security Agreement, or
any Mortgage, nor consent to any departure by Borrower therefrom, shall in any
event be effective unless in writing, signed by Lender and then only in the
specific instance and for the specific purpose for which given. No notice to or
demand on 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 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:
If to Borrower: Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Broadcasting Company of Albuquerque
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Lender: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ Communications of Albuquerque-14, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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 8.5 Expenses. Borrower agrees to pay on demand all costs and
expenses incurred by Lender directly in the enforcement of this Agreement, the
Note, the Security Agreement, any Mortgage, 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, Borrower shall pay any and all taxes and fees payable or
determined to be payable in 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,
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preparation and execution of the Loan Documents and all the costs of furnishing
all opinions by counsel for Borrower, and of Borrower 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 8.6 Binding Effect; Assignment. This Agreement shall become
effective when executed and thereafter shall be binding upon and inure to the
benefit of Borrower, Lender and their respective successors and assigns, except
that Borrower shall not have the right to assign any rights or obligations
hereunder without the prior written consent of Lender. 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 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. For purposes of this section, the term affiliate shall mean, as
applied to any entity or individual, any other entity or individual directly or
indirectly controlling, controlled by, or under common control with, that entity
or individual. For 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 otherwise by contract.
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 recordation shall
be determined by the State thereof.
Section 8.8 Severability of Provisions. Any provision of this
Agreement, the Note, the Security Agreement, or any 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.
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Section 8.9 Headings. Article and Section headings in this Agreement
are included 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 Lender and
its assigns shall not be impaired by any indulgence, release, renewal, extension
or modification which 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 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 Borrower to Lender hereunder
have been paid in full.
Section 8.12 FCC Compliance. Notwithstanding anything herein or in any
of the other Loan Documents to the contrary, but without limiting or waiving
Borrower's obligations hereunder or under any of the other Loan Documents,
Lender's remedies hereunder and under the other Loan Documents are subject to
compliance with the Communications Act of 1934, as amended, and all applicable
rules, regulations and policies of the FCC, and Lender will not take any action
pursuant to this Agreement or any of the other Loan Documents that would
constitute or result in any assignment of any FCC authorization held by the
Borrower or any change of control of the Station if such assignment or change of
control would require under then existing law (including the written rules and
regulations promulgated by the FCC), the prior approval of the FCC, without
first obtaining such approval of the FCC. This Agreement, the other Loan
Documents and the transactions contemplated hereby and thereby do not and will
not constitute, create, or have the effect of constituting or creating, directly
or indirectly, actual or practical ownership of Borrower by Lender or control,
affirmative or negative, direct or indirect, of Borrower by Lender, over the
programming, management or any other aspect of the operation of Borrower, which
ownership and control remain exclusively and at all times in Borrower until such
time as Lender has complied with such law, rules, regulations and policies.
Section 8.13 Further Assurances. From time to time, Borrower shall
execute and deliver to Lender such additional documents as 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
Lender hereunder or thereunder.
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Section 8.14 Indemnification. Borrower hereby indemnifies and holds
harmless 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 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 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 DOCUMENTS, OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION AND THE
LENDER/BORROWERS 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 Borrowers 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 Borrowers 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;
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(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 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 Maturity Date of the Loan Documents shall be allowed to the fullest
extent permitted by applicable law.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
24
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement
to be executed by their respective duly authorized officers as of the date first
above written.
▇▇▇▇▇▇ COMMUNICATIONS
OF ALBUQUERQUE-14, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
▇▇▇▇▇▇▇ BROADCASTING
COMPANY OF ALBUQUERQUE
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary/Treasurer
and Director