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EXHIBIT 10.174
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LOAN AGREEMENT
BY AND BETWEEN
▇▇▇▇▇▇ COMMUNICATIONS OF
BOSTON-46, INC.
AND
CHANNEL 46 OF BOSTON, INC.
FOR
TELEVISION STATION WHRC(TV),
NORWELL, MASSACHUSETTS
* * *
JUNE 10, 1997
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TABLE OF CONTENTS
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ARTICLE I. AMOUNT AND TERMS OF THE LOANS........................................................1
Section 1.1 The Loan......................................................................1
Section 1.2 The Promissory Note...........................................................1
Section 1.3 Interest......................................................................2
Section 1.4 Repayment of the Loan.........................................................2
Section 1.5 Use of Proceeds and Advancement of Funds......................................2
Section 1.6 Deposit.......................................................................3
Section 1.7 Information...................................................................3
Section 1.8 Prepayment....................................................................3
Section 1.9 Payment on Non-Business Days..................................................3
ARTICLE II. CLOSING.............................................................................3
Section 2.1 Closing Date..................................................................3
ARTICLE III. SECURITY...........................................................................4
Section 3.1 Security Interest.............................................................4
Section 3.2 Pledge Agreement..............................................................4
Section 3.3 Leasehold Mortgages...........................................................4
Section 3.4 Mortgages.....................................................................4
ARTICLE IV. CONDITIONS OF LENDING...............................................................5
Section 4.1 Conditions Precedent to Loan..................................................5
Section 4.2 Compliance....................................................................6
ARTICLE V. REPRESENTATIONS AND WARRANTIES.......................................................6
Section 5.1 Representations and Warranties of the Borrower................................6
ARTICLE VI. COVENANTS OF THE BORROWER...........................................................9
Section 6.1 Affirmative Covenants.........................................................9
Section 6.2 Negative Covenants...........................................................10
Section 6.3 Reporting Requirements.......................................................13
ARTICLE VII. EVENTS OF DEFAULT.................................................................14
Section 7.1 Events of Default............................................................14
Section 7.2 Effect of Event of Default...................................................17
ARTICLE VIII. MISCELLANEOUS....................................................................17
Section 8.1 No Waiver; Cumulative Remedies...............................................17
Section 8.2 Amendments...................................................................17
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Section 8.3 Conflicts....................................................................18
Section 8.4 Address for Notices..........................................................18
Section 8.5 Expenses.....................................................................18
Section 8.6 Binding Effect; Assignment...................................................19
Section 8.7 Governing Law................................................................19
Section 8.8 Severability of Provisions...................................................19
Section 8.9 Headings.....................................................................20
Section 8.10 Rights Affected by Extensions................................................20
Section 8.11 Survival of Representations and Warranties...................................20
Section 8.12 FCC Compliance...............................................................20
Section 8.13 Further Assurances...........................................................21
Section 8.14 Indemnification..............................................................21
Section 8.15 Waiver.......................................................................21
Section 8.16 Maximum Interest.............................................................21
Section 8.17 Counterparts.................................................................22
ARTICLE IX. GUARANTY...........................................................................23
Section 9.1 Guaranty.....................................................................23
Section 9.2 Representations and Warranties...............................................24
Section 9.3 Limited Recourse.............................................................24
LIST OF EXHIBITS
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Exhibit 1 -- Promissory Note
Exhibit 2 -- Security Agreement
Exhibit 3 -- Pledge Agreement
Exhibit 4 -- Mortgage
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of this 10th day of June, 1997, is by and
between ▇▇▇▇▇▇ COMMUNICATIONS OF BOSTON-46, INC., a Florida corporation having
its principal offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (the "Lender"), and CHANNEL 46 OF BOSTON, INC., a Florida corporation
having its principal offices at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (the "Borrower").
W I T N E S S E T H:
WHEREAS, the Borrower is purchasing substantially all of the assets and
properties, including all broadcast licenses issued by the Federal
Communications Commission (the "FCC Licenses") and other governmental
authorities, of Television Station WHRC(TV), Norwell, Massachusetts (the
"Station") pursuant to an Asset Purchase Agreement (the "Purchase Agreement"),
dated as of September 27, 1996, between the Borrower and Massachusetts
Redevelopment Limited Liability Company ("Seller");
WHEREAS, the Lender is willing to lend the Borrower sufficient funds to
acquire the Station on which the Lender will provide programming pursuant to a
Time Brokerage Agreement; and
WHEREAS, the Borrower desires to borrow funds from the Lender to
finance the purchase and operation of the Station.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, the Lender and the Borrower agree as follows:
ARTICLE I. AMOUNT AND TERMS OF THE LOANS
Section 1.1 The Loan. The Lender agrees, upon the terms and conditions
hereinafter set forth, to make a loan or loans to the Borrower in an aggregate
principal amount not to exceed at any one time outstanding Sixteen Million
Dollars ($16,000,000.00) plus such additional amounts that are reasonably
requested by the Borrower for the purposes set forth in Section 1.5 and are
approved by the Lender in its sole and absolute discretion (the "Loan").
Section 1.2 The Promissory Note. The outstanding principal amount of
the Loan shall be evidenced by and subject to the terms of a promissory note,
dated of even date herewith, substantially in the form set forth as Exhibit 1
hereto (as amended, renewed, restated, increased, consolidated or substituted
from time to time, the "Note") payable to the order of the Lender and
representing the obligation of the Borrower to pay the Lender the amount of the
Loan, with interest thereon, as prescribed in Section 1.3. All references to the
"Note" in this Loan Agreement, the Security Agreement, the Pledge Agreement,
each Leasehold Mortgage or Mortgage (each as defined in this Loan Agreement) and
in such other
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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 equal to 9%. 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 thereof. The first payment of interest by
the Borrower to the Lender shall be due thirty (30) days after the acquisition
of the Station by the Borrower, at which time all accrued interest shall become
due and payable. Thereafter, accrued interest shall be paid monthly on or before
the first day of each month until all principal and interest hereunder is paid
in full and at the repayment or maturity of the Loan. If any installment of
principal or interest is not paid when due, that installment shall bear interest
at a rate per annum equal to the lower of the highest rate permitted by law or
eighteen percent (18%) from the date due thereof until paid in full.
Section 1.4 Repayment of the Loan. In the event that the Purchase
Agreement is terminated prior to the acquisition of the Station by the Borrower,
the Borrower shall immediately repay to the Lender the outstanding principal
amount of the Loan, if any. The outstanding principal amount of the Loan plus
all accrued and unpaid interest thereon shall be due and payable on the first
day of the 84th month following the acquisition of the Station by the Borrower
(the "Maturity Date"). In the event of a termination of the Time Brokerage
Agreement dated as of October 7, 1996, between the Lender and Seller, as amended
by amendments dated as of April 17, 1997 and June 10, 1997 and as assumed by the
Borrower pursuant to Assumption of Time Brokerage Agreement, dated as of June
10, 1997, by and between Seller and the Borrower (the "Time Brokerage
Agreement"), the Borrower shall, in addition to payments of interest required
under Section 1.3 hereof, repay the outstanding principal balance of the Loan in
consecutive, equal monthly installments commencing on the first day of the month
following such termination (the "Amortization Commencement Date") and ending on
the Maturity Date, with each such monthly principal installment payment equal to
(x) the principal amount of the Loan outstanding hereunder as of the first day
of the month following such termination divided by (y) the total number of
consecutive months included in the period commencing on the Amortization
Commencement Date, through and including the Maturity Date.
Section 1.5 Use of Proceeds and Advancement of Funds. The proceeds of
the Loan are to be used by the Borrower exclusively for (i) financing the
purchase of the Station under the Purchase Agreement following receipt of
approval by the Federal Communications Commission (the "FCC") of the assignment
of the FCC Licenses of the Station to the Borrower, (ii) financing the purchase
of certain equipment from the Lender in the amount of
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$395,686.47 pursuant to the ▇▇▇▇ of Sale of even date herewith (the "▇▇▇▇ of
Sale") and (iii) working capital and operating expenses relating to the Station.
The parties hereto acknowledge that on the date hereof, the Lender made Loans to
the Borrower in the amount of $15,395,686.47, $15,000,000 of which were used to
acquire the Station from Seller under the Purchase Agreement and $395,686.47 of
which were used to acquire the equipment from the Lender pursuant to the ▇▇▇▇ of
Sale.
Section 1.6 Deposit. The parties hereto acknowledge that the Lender
has already advanced to the Borrower $250,000 to be used as a deposit (the
"Deposit") towards the purchase of the Station. The parties hereto agree that
the Deposit, together with any interest earned thereon while held in escrow,
shall be returned to the Lender immediately upon receipt thereof by the
Borrower. The Borrower shall instruct and cause the escrow agent holding the
Deposit to pay such Deposit to the Lender immediately upon the Borrower becoming
entitled to receive such deposit under the Purchase Agreement and the Escrow
Agreement governing such Deposit.
Section 1.7 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 1.8 Prepayment. The Borrower may prepay the Loan in whole at
any time, or from time to time in part, with accrued interest to the date of
prepayment on the amount prepaid, without penalty, provided that each payment,
other than that for the full amount of the outstanding balance, shall be in the
amount of Ten Thousand Dollars ($10,000.00) or an integral multiple thereof,
provided, however, that if any such prepayment is made within three years of the
Borrower's acquisition of the Station, the Borrower shall reimburse the Lender
for any prepayment penalty imposed on the Lender or its affiliates under their
debt agreements or instruments as a result of the Borrower's prepayment. Each
prepayment on the Loan shall be applied to installments of principal payable on
the Loan in the inverse order of maturity.
Section 1.9 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 II. CLOSING
Section 2.1 Closing Date. Subject to the satisfaction of the terms and
conditions hereof, the closing of this transaction shall occur on a date agreed
upon by the parties hereto (the "Closing Date").
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ARTICLE III. SECURITY
Section 3.1 Security Interest. As security for the Loan, the Borrower
shall execute and deliver to the Lender, on or before the Closing Date, a
security agreement in the form of Exhibit 2 hereto (the "Security Agreement").
Section 3.2 Pledge Agreement. As further security for the Loan, on or
before the Closing Date, the Borrower shall deliver to the Lender a pledge
agreement in the form of Exhibit 3 hereto, duly executed by The Christian
Network, Inc. (the "Shareholder"), the sole shareholder of the Borrower (the
"Pledge Agreement").
Section 3.3 Leasehold Mortgages. If requested by the Lender, at such
time as the Borrower enters into any lease or assumes the Lessee's interest
under any lease, it shall execute with respect to such lease a leasehold
mortgage substantially in the form of Exhibit 4 hereto (a "Leasehold Mortgage"),
granting the Lender a lien on its leasehold interest under such lease. In
particular, and without limiting the generality of the foregoing, if requested
by the Lender, the Borrower shall execute a Leasehold Mortgage with respect to
each lease, if any, that it assumes or enters into as part of the acquisition of
the Station. If requested by the Lender, the Borrower shall also deliver to the
Lender with respect to any lease to which the Borrower becomes a party one or
more of the following documents, each of which shall be in form and substance
satisfactory to the Lender: (i) evidence of the filing of the lease or a
memorandum of lease, (ii) an estoppel certificate executed by the landlord under
such lease or any sublessee, (iii) an executed landlord's consent and waiver,
(iv) fixture filing UCC-1 financing statements, (v) copies of such lease and any
sublease, (vi) executed tenant subordination agreements, (vii) a title
encumbrance report with respect to the real property subject to such lease, and
(viii) any other document required by applicable law to create or perfect a
mortgage lien with respect to such lease or reasonably required by the Lender.
Section 3.4 Mortgages. At such time as the Borrower acquires any
parcel of real estate, the Borrower shall execute a first mortgage or deed of
trust in favor of the Lender on such parcel, in form and substance acceptable to
the Lender (a "Mortgage"). If requested by the Lender, the Borrower shall also
deliver to the Lender with respect to such property one or more of the following
documents, each of which shall be in form and substance satisfactory to the
Lender: (i) fixture filing UCC-1 financing statements, (ii) copies of any lease
relating to such property, if any, (iii) executed tenant subordination
agreements and estoppel certificates, if applicable, (iv) a survey of such real
property, (v) a mortgagee title insurance policy, with such coverage and with
such endorsements, including, without limitation, usury, first loss, last
dollar, revolving credit, variable rate, doing business, zoning comprehensive,
contiguity (as applicable) and survey, to the extent available in the state
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where the property is located, as the Lender may require, and (vi) any other
document required by applicable law to create or perfect a mortgage lien with
respect to such property or reasonably required by the Lender.
ARTICLE IV. CONDITIONS OF LENDING
Section 4.1 Conditions Precedent to Loan. The obligation of the Lender
to disburse from time to time any portion of the Loan hereunder is subject to
the condition precedent that the Lender shall have received all of the
following, on or before the Closing Date, in form and substance satisfactory to
the Lender:
(1) The Note, duly executed and delivered by the Borrower;
(2) The Security Agreement, together with appropriate UCC-1
forms and, if applicable, landlord lien waivers, duly executed and delivered by
the Borrower;
(3) The Pledge Agreement, duly executed and delivered by the
Shareholder together with stock certificates and blank stock powers;
(4) Certified copies of the resolutions of (i) the Board of
Directors 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, and (ii) the Board of Stewards of the Shareholder
evidencing approval of the execution, delivery and performance of this Loan
Agreement and the Pledge Agreement;
(5) A Certificate of Good Standing for the Borrower and the
Shareholder in Florida and for the Borrower in Massachusetts;
(6) Copies of UCC, judgment and tax lien searches in each
jurisdiction in which collateral covered by the Security Agreement is located,
naming the Borrower as debtor;
(7) a copy of the executed Time Brokerage Agreement together
with documentation that it has been duly assumed by the Borrower and that it
constitutes the legal and valid obligation of the Borrower enforceable in
accordance with its terms;
(8) With respect to each leased real property, the documents
required by Section 3.3, and with respect to each owned real property, the
documents required by Section 3.4;
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(9) Copies of the certificates evidencing the insurance
required to be maintained by the Borrower pursuant to Section 6.1(5);
(10) Evidence, in form and substance acceptable to the Lender,
that the Borrower has received the approval of the FCC to be the licensee of the
Station and that such approval remains in full force and effect and is not
subject to any motions or petitions for reconsideration or other opposition;
(11) A copy of the Purchase Agreement and each other contract,
certificate and other document executed by the Borrower or the Seller of the
Station in connection with the Borrower's acquisition of the Station; and
(12) Such other agreements, certificates, opinions of counsel
and documents that the Lender may reasonably require.
Section 4.2 Compliance. All of the representations and warranties of
the Borrower and the Shareholder in this Loan Agreement, the Note, the Security
Agreement and the Pledge 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 at such
times. The Borrower shall have performed all obligations and taken all actions
to be performed or taken by it hereunder on or prior to such dates. On the
Closing Date, the Borrower and Shareholder shall deliver to the Lender a
certificate, dated as of such date and signed by an executive officer of the
Borrower and the Shareholder, certifying compliance with the conditions of this
Section 4.2. Each disbursement of all or a portion of the Loan to the Borrower
shall in and of itself, constitute a representation and warranty that the
Borrower and the Shareholder as of the date of such Loan, are in compliance with
this Section and if the Borrower or Shareholder is not in compliance with this
Section, the Lender shall not be required to disburse such Loan to the Borrower.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Borrower. In order
to induce the Lender to enter into this Agreement and make the Loan, the
Borrower represents and warrants as follows:
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(1) Existence and Standing. The Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Florida and is qualified to do business and in good standing under the laws
of any other jurisdiction in which it conducts its business, and has all
requisite power and authority, corporate or otherwise, to conduct its business,
to own its properties and to execute and deliver, and to perform all of its
obligations under this Agreement, the Note, any Mortgage or Leasehold Mortgage,
the Security Agreement and all other documents that have been or will be
executed and delivered by the Borrower pursuant to this Agreement.
(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.
(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 and the consent of the lessor of the
leasehold interest acquired and assumed by the Borrower at the closing of the
acquisition of the Station, is or will be necessary to the valid execution,
delivery and performance by the Borrower of this Agreement, the Note, any
Mortgage or Leasehold Mortgage, the Security Agreement or any other document
required to be executed and delivered by the Borrower pursuant to this
Agreement.
(4) Binding Obligations. This Agreement, the Note, any
Leasehold Mortgage, any Mortgage, the Security Agreement, the Pledge Agreement
and all other documents required to be executed and delivered by the Borrower
(or, in the case of this Agreement and the Pledge Agreement, by the Shareholder)
pursuant to this Agreement have been or, on or prior to the Closing Date, will
be executed and delivered by duly authorized officers of the Borrower (or, in
the case of this Agreement and the Pledge Agreement, of the Shareholder) and
constitute or, on or prior to the Closing Date, will constitute, legal, valid
and binding obligations of the Borrower (or, in the case of this Agreement and
the Pledge Agreement, of the Shareholder) enforceable in accordance with their
respective terms.
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(5) Litigation. There are no actions, suits or proceedings
pending, or, to the knowledge of the Borrower, threatened against or affecting
the Borrower, the Station 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 or the Station.
(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.
(7) Compliance with Laws. The Borrower has complied in all
material respects with all applicable federal, state and local laws. The
Borrower has obtained all material licenses and permits required for the conduct
of its business and operations or such licenses and permits have been applied
for and are now being diligently pursued.
(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).
(9) Title to Properties. The Borrower has, or will have upon
the closing of the acquisition of the Station, 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 to the Borrower's knowledge, 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.
(10) 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.
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ARTICLE VI. COVENANTS OF THE BORROWER
Section 6.1 Affirmative Covenants. So long as the Note shall remain
unpaid and this Agreement shall not have been terminated, the Borrower hereby
covenants and agrees that it will, unless the Lender shall otherwise consent in
writing:
(1) 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.
(2) Preservation of Existence. Preserve and maintain its
respective corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation.
(3) Maintenance of Properties. Subject to the provisions of
the Time Brokerage Agreement, 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.
(4) Compliance with Laws. Comply in all material respects
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority.
(5) 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.
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(6) Operations in Ordinary Course. Continue to operate its
business in the ordinary course.
(7) Perfection of Liens. Do all things requested by the Lender
to preserve and perfect the liens and security interests of the Lender arising
pursuant to the Security Agreement, the Pledge Agreement, any Leasehold
Mortgage, any Mortgage or any other agreement required hereunder as first liens
and security interests.
(8) FCC Approval. If counsel to the Lender reasonably
determines that the consent of the FCC is required as a result of any action
which may be taken pursuant to this Agreement, the Pledge Agreement, the
Security Agreement, any Mortgage or Leasehold Mortgage or any other document
delivered to the Lender in connection herewith or therewith, 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.
(9) Purchase Agreement. Comply in all material respects with
its obligations under the Purchase Agreement and the Time Brokerage Agreement.
Section 6.2 Negative Covenants. So long as the Note shall remain
unpaid and this Agreement shall not have been terminated, the Borrower hereby
covenants that it will not, without the Lender's prior written approval:
(1) Indebtedness. Create or incur, assume or suffer to exist
any indebtedness, obligation or liability, whether matured or unmatured,
liquidated or unliquidated, direct or contingent, joint or several, except for:
(i) indebtedness evidenced by the Note; (ii) indebtedness (other than for
borrowed money) incurred in the ordinary course of business not to exceed Fifty
Thousand Dollars ($50,000.00) in the aggregate at any one time; (iii)
obligations or liabilities arising under the indemnification provisions of the
Purchase Agreement.
(2) 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 acquired, excluding, however, from the operation
of this covenant with respect to property or assets other than the Stock (as
defined in the Pledge Agreement):
(i) any security interest or lien created pursuant to
or in connection with this Agreement or securing the Loan, the Security
Agreement, the Pledge Agreement, any Leasehold Mortgage or any Mortgage;
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(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
(v) any judgment lien, singly or aggregated with other
judgment liens, in an amount less than $100,000, unless the judgment it secures
shall not, within thirty (30) days after the entry thereof, have been
discharged, vacated, reversed, or execution thereof stayed pending appeal, or
shall not have been discharged, vacated or reversed within thirty (30) days
after the expiration of any such stay.
(3) Disposition of Assets. Sell, transfer, lease or otherwise
dispose of any of its assets or properties other than sales of assets in the
ordinary course of business (which shall expressly not include any transfer or
assignment of any FCC License).
(4) 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.
(5) Transfer or Issuance of Shares. Issue or permit the
transfer of any shares of the capital stock of the Borrower, or any options,
warrants, convertible securities or other rights to purchase the Borrower's
stock. The preceding sentence shall not apply to issuances or transfers to the
Lender.
(6) 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.
(7) 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
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in which no financing statement on Form UCC-1 has been filed by the Lender with
respect to such assets.
(8) 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.
(9) Transactions with Affiliates. Enter into any transaction
or agreement with any affiliate of the Borrower, except for an affiliation
agreement or similar programming agreement with Shareholder so long as such
affiliation agreement can be terminated by the Borrower at its option upon 30
days or less prior notice to Shareholder.
(10) 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), except for an affiliation agreement or similar
programming agreement with Shareholder so long as such affiliation agreement can
be terminated by the Borrower at its option upon 30 days or less prior notice to
Shareholder.
(11) Adverse Change. Suffer any material adverse change in the
business, assets, properties 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, provided,
however, that this subsection (11) shall not apply to any changes occasioned by
or resulting from actions taken by the Lender under the Time Brokerage
Agreement, litigation involving the use of the "Bridgewater Site" (as defined in
the Purchase Agreement) as the transmitter location for the Station, or actions
by the FCC relating to the Advanced Television Proceeding.
(12) 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.
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(13) Cancellation of Debts. Cancel any debts owed to or claims
held by the Borrower.
(14) Write-Down. Suffer any significant write-down of the
value of any assets or any significant write-off as uncollectible of any
accounts receivable without the prior written consent of the Lender except and
as required by generally accepted accounting principles as required to present
accurate financial information on the Borrower.
(15) 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 Borrower.
(16) Television Affiliation Agreement. In the event the
Borrower acquires the Station, terminate, amend or waive any provision of any
Television Affiliation Agreement (as defined in Section 7.1(4) below), provided
that an affiliation agreement or similar programming agreement with Shareholder
shall be excluded from this covenant so long as at all times such agreement can
be terminated by the Borrower at its option upon 30 days or less prior notice to
Shareholder.
(17) Purchase Agreement; Time Brokerage Agreement. Terminate,
amend, commit any material breach or default under or waive any material term of
the Purchase Agreement or commit any material breach or default under the Time
Brokerage Agreement.
(18) Subsidiaries. Create or acquire any subsidiary of the
Borrower, unless the Lender shall have approved such action in advance and the
Borrower shall have taken all actions required by the Lender to grant the Lender
a first priority security interest in all of the issued and outstanding stock of
such subsidiary. The Borrower acknowledges and agrees that until such time as
such security interest is granted and perfected, the Lender shall have an
equitable lien in the stock of any subsidiary created or acquired by the
Borrower.
Section 6.3 Reporting Requirements. So long as the Note shall remain
unpaid and the Agreement shall not have been terminated, the Borrower shall,
unless the Lender shall otherwise consent in writing, furnish to the Lender:
(1) Default Certificate. As soon as possible and in any event
within five (5) business days after the occurrence of any Event of Default (as
defined in Section 7.1) of which the Borrower has knowledge, the statement of
the President of the Borrower setting
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forth details of such Event of Default and the action which the Borrower
proposes to take with respect thereto.
(2) 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 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.
(3) Notice of Litigation. Except with respect to existing
litigation involving the use of the "Bridgewater Site," 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(5).
(4) Budget. An annual budget within thirty (30) days of the
beginning of each fiscal year of the Borrower. Such budget shall be satisfactory
in form and substance to the Lender.
(5) 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 VII. EVENTS OF DEFAULT
Section 7.1 Events of Default. Under this Agreement, an Event of
Default shall be any of the following:
(1) 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, in the
case of any installment of interest, such default shall remain unremedied for a
period of five (5) days; or
(2) The security interest or lien of the Lender in any
material portion of the collateral covered by the Security Agreement, the Pledge
Agreement or any Leasehold
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Mortgage or Mortgage shall at any time not constitute a legal, valid and
enforceable security interest or lien; or
(3) Any representation or warranty made by the Borrower (or
any of its officers) herein, in the Security Agreement, any Leasehold Mortgage
or Mortgage or by the Shareholder (or any of its officers) herein or in the
Pledge Agreement or in any certificate, agreement, instrument or statement
contemplated by or made or delivered pursuant to or in connection with this
Agreement, the Note, any Leasehold Mortgage or Mortgage, the Security Agreement
or the Pledge Agreement, shall prove to have been incorrect in any material
respect when made; or
(4) The Borrower shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement, the Note, the Security
Agreement, any Leasehold Mortgage or Mortgage, the Time Brokerage Agreement or
any television affiliation agreement relating to the Station (the "Television
Affiliation Agreement"), or the Shareholder shall fail to perform or observe any
term, covenant or agreement contained in the Pledge Agreement or herein, 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
(5) The Borrower or the Shareholder shall fail to pay any
indebtedness for borrowed money owing by the Borrower or the Shareholder or any
interest or premium thereon, when due, whether such indebtedness shall become
due by scheduled maturity, by required prepayment, by acceleration, by demand or
otherwise, or the Borrower or the Shareholder shall fail to perform any term,
covenant or agreement under any agreement or instrument evidencing or securing
or relating to any such indebtedness owing by the Borrower or the Shareholder if
the effect of such failure is to accelerate, or to permit the holder of such
indebtedness to accelerate the maturity of such indebtedness and such
acceleration could impair in any material respects the ability of the Borrower
or the Shareholder to timely perform their obligations hereunder or under any
other agreement contemplated hereby or could materially adversely affect any
right of the Lender hereunder or under any other agreement contemplated hereby;
or
(6) The Borrower shall expend the proceeds of the Loan for any
purpose other than the purchase of the Station and working capital and operating
expenses relating to the Station without the prior written consent of the
Lender, which may be withheld in the Lender's sole and absolute discretion; or
(7) Either (i) the Borrower or the Shareholder shall fail to
pay its debts as they mature in the ordinary course of business; or (ii) the
Borrower or the Shareholder shall file a petition commencing a voluntary case
concerning it under any Chapter of Title 11 of
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the United States Code entitled "Bankruptcy"; or (iii) the Borrower or the
Shareholder shall apply for or consent to the appointment of any receiver,
trustee, custodian or similar officer for it or for all or any substantial part
of its property; or (iv) such receiver, trustee, custodian or similar officer
shall be appointed without the application or consent of the Borrower or the
Shareholder and such appointment shall continue undischarged for a period of
sixty (60) days; or (v) an involuntary case is commenced against the Borrower or
the Shareholder under any Chapter of the aforementioned Title 11 and an order
for relief under such Title 11 is entered or the petition commencing the case is
controverted but is not dismissed within sixty (60) days after the commencement
of the case; or (vi) the Borrower or the Shareholder shall institute (by
petition, application, answer, consent or otherwise) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution, liquidation or
similar proceeding relating to it under the laws of any jurisdiction; or (vii)
any such proceeding shall be instituted against the Borrower or the Shareholder
and shall remain undismissed for a period of sixty (60) days; or (viii) the
Borrower or the Shareholder shall take any action for the purpose of
effectuating the foregoing; or
(8) 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
(9) There shall be a cancellation, denial or revocation of any
material FCC License for the Station, except for denial or cancellation of any
FCC License to use the Bridgewater Site prior to the time that final local
zoning is received authorizing the construction and operation of the Station
from that site, the Borrower shall be finally denied renewal of any such
License, or any such FCC License shall be renewed on terms that materially
adversely affect the economic or commercial value or usefulness thereof,
provided that such denial, cancellation or non-renewal is not attributable in
any way to Lender's conduct under the Time Brokerage Agreement or the terms
thereof; or
(10) Any money judgment, writ or warrant of attachment, or
similar process involving (i) in any individual case an amount in excess of One
Hundred Thousand Dollars ($100,000.00), or (ii) in the aggregate at any time an
amount in excess of One Hundred Thousand Dollars ($100,000.00), and in either
case not adequately covered by insurance as to which the insurance company has
acknowledged coverage, shall be entered or filed against 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
(11) The Shareholder shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to Article
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IX hereof or any obligation of the Shareholder under Article IX hereof shall,
for any reason other than the full satisfaction thereof, not be or shall cease
to be in full force and effect or is, or is declared to be, null and void, or
the Shareholder shall, or shall purport to, terminate, revoke, repudiate,
declare voidable or void, deny, disaffirm or otherwise contest Article IX hereof
or any term or provision thereof or any of its obligations or liabilities under
Article IX hereof.
Section 7.2 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, 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(7), 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 and, without
limiting the generality of the foregoing, the rights and remedies provided for
in the Security Agreement, Pledge Agreements, and any Mortgage or Leasehold
Mortgage, which provisions are hereby incorporated by reference.
Section 7.3 Effect of Time Brokerage Agreement. Notwithstanding any
other provision of this Agreement or any other Loan Document, an Event of
Default shall not be deemed to occur and neither Borrower nor Shareholder shall
be deemed to be in default hereunder or thereunder to the extent that any action
or failure to act, including the payment of any obligations or liabilities of
Borrower or the Station, on the part of Borrower or Shareholder is attributable
in substantial part to a breach or default by Lender under the Time Brokerage
Agreement.
ARTICLE VIII. 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.
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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, the
Pledge Agreement or any Mortgage or Leasehold Mortgage, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless in
writing, signed by the Lender and then only in the specific instance and for the
specific purpose for which given. No notice to or demand on the Borrower in any
case shall entitle it to any other or further notice or demand in similar or
other circumstances.
Section 8.3 Conflicts. In the event of any conflict or inconsistency
between any provision of this Agreement and a provision of the Note, the
Security Agreement, the Pledge Agreement or any Mortgage or 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:
If to the Borrower: ▇▇▇▇▇ ▇. ▇▇▇▇
Channel 46 of Boston, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Lender: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ Communications of Boston-46, 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. The Borrower agrees to pay on demand all costs
and expenses incurred by the Lender directly in the enforcement of this
Agreement, the Note, the Security Agreement, any Mortgage or Leasehold Mortgage,
the Pledge Agreement and other instruments and documents to be delivered
hereunder, including, without limitation, the reasonable fees and expenses of
any attorney to whom the Note is referred for collection (whether or not
litigation is commenced) or for representation out of court, in trial, on appeal
or in proceedings under any bankruptcy or insolvency law or otherwise. In
addition, the Borrower shall pay any and all taxes and fees payable in
connection with the execution,
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delivery or recordation of any instruments and documents to be delivered
hereunder. In addition, the Borrower agrees to pay (i) all the actual and
reasonable costs and expenses of the Lender in connection with the negotiation,
preparation and execution of this Loan Agreement, the Note, the Security
Agreement, the Pledge Agreement, any Mortgage or Leasehold Mortgage and all
other documents and instruments to be delivered hereunder (collectively, the
"Loan Documents") and all the costs of furnishing all opinions by counsel for
the Borrower, and of the Borrower's performance of and compliance with all
agreements and conditions contained herein and in the other Loan Documents on
its part to be performed or complied with including, without limitation,
confirming compliance with environmental and insurance requirements; (ii) the
reasonable fees, expenses and disbursements of counsel to the Lender (including
allocated costs of internal counsel) in connection with the negotiation,
preparation, and execution 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 the 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, without the Borrower's consent, all or any
portion of the 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 the 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 the Lender or its
affiliates as security for indebtedness of the 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.
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Section 8.8 Severability of Provisions. Any provision of this
Agreement, the Note, the Pledge Agreement, the Security Agreement, or any
Mortgage or Leasehold Mortgage that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating 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 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 the Lender
and its assigns shall not be impaired by any indulgence, release, renewal,
extension or modification which the Lender may grant with respect to the
indebtedness or any part thereof, or with respect to the collateral or with
respect to any endorser, guarantor, or surety without notice or consent of the
Borrower or any endorser, guarantee, or surety.
Section 8.11 Survival of Representations and Warranties. All
representations and warranties made in this Agreement and in any documents or
certificates delivered pursuant hereto or thereto shall survive the execution
and delivery of this Agreement and the Note and the making of the Loan hereunder
and continue in full force and effect, as of the respective dates as of which
they were made, until all of the obligations of the Borrower to the Lender
hereunder have been paid in full.
Section 8.12 FCC Compliance. Notwithstanding anything herein or in any
of the other Loan Documents to the contrary, but without limiting or waiving the
Borrower's obligations hereunder or under any of the other Loan Documents, the
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 neither the Lender nor the
Borrower will 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 the Borrower by the Lender or control, affirmative or negative, direct or
indirect, of the Borrower by the Lender, over the programming, management or any
other aspect of the operation of the Borrower, which ownership and control
remain
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exclusively and at all times in the Borrower until such time as the Lender has
complied with such law, rules, regulations and policies.
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 resulted solely from
the gross negligence or willful misconduct of such Indemnified Person.
Section 8.15 Waiver. EACH OF THE LENDER, THE BORROWER AND SHAREHOLDER
HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE LOAN
DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
LOAN TRANSACTION AND THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
REPLACEMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE LOAN
DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOAN.
Section 8.16 Maximum Interest. The Lender and the 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 the 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
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contracting for, or the payment by the Borrower of, interest at a rate greater
than the Maximum Rate. The Lender and the Borrower further agree that:
(1) 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 the 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;
(2) 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;
(3) if the maturity of any Loan Document is accelerated for
any reason, or in the event of any prepayment by the 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;
(4) 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
(5) 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.
Section 8.17 Counterparts. This Agreement may be signed in any number
of counterparts with the same effect as if the signature on all counterparts
were upon the same instrument.
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ARTICLE IX. GUARANTY
Section 9.1 Guaranty. In consideration for the Lender's execution and
delivery of this Loan Agreement and the Lender's agreement to make the Loan, the
Shareholder agrees as follows:
(1) The Shareholder hereby guarantees the full, complete and
timely payment and performance by the Borrower of each and every obligation of
the Borrower under this Loan Agreement, the Note, the Security Agreement, each
Mortgage and Leasehold Mortgage and each other agreement or instrument executed
and delivered by the Borrower in connection with this Loan Agreement
(individually, a "Borrower Loan Document" and collectively, the "Borrower Loan
Documents"). If any default shall be made by the Borrower in the payment or
performance of any of such obligations, then Shareholder will itself pay or
perform or cause to be paid or performed such obligation upon receipt of notice
from the Lender specifying in summary form the default. The Lender may proceed
to enforce its rights against Shareholder from time to time prior to,
contemporaneously with, or after any enforcement against the Borrower, or
without any enforcement against the Borrower. The obligations of Shareholder
under this Guaranty shall be absolute and unconditional and shall remain in full
force and effect without regard to and shall not be released, discharged, or in
any way affected by (and Shareholder expressly waives any and all defenses
arising out of, or based on): (i) any amendment or modification of or supplement
to any Borrower Loan Document; (ii) any exercise or non-exercise of, or delay in
exercising any, right, remedy, power, or privilege under or in respect of any
Borrower Loan Document; (iii) any bankruptcy, insolvency, arrangement,
composition, assignment for the benefit of creditors, or similar proceeding
commenced by or against the Borrower or Shareholder; (iv) the dissolution
(voluntarily or involuntarily) of the Lender; (v) the genuineness, validity, or
enforceability of any Borrower Loan Document; or (vi) any other circumstance
which might otherwise constitute a legal or equitable discharge of a guarantor
or surety. If payment of any sum by the Borrower pursuant to any Borrower Loan
Document is recovered as a preference or fraudulent transfer under any
applicable bankruptcy or insolvency law, the liability of Shareholder under such
Borrower Loan Document shall continue and remain in full force and effect
notwithstanding such recovery.
(2) Shareholder waives presentment, protest, demand, or action
or delinquency in respect of any of the obligations of the Borrower under the
Borrower Loan Documents. Shareholder waives all set-offs and counterclaims and
all notices of nonperformance, notices of protest, notices of dishonor, and
notices of acceptance of this guaranty.
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(3) This guaranty shall be deemed a continuing guaranty, and
the above consents and waivers of Shareholder shall remain in full force and
effect until the satisfaction in full of all obligations of the Borrower under
the Borrower Loan Documents.
(4) Shareholder agrees that any and all claims in its favor
against the Borrower, any endorser or any other guarantor of all or any part of
the obligations of the Borrower under the Borrower Loan Documents, or against
any of their respective properties, arising by reason of any payment by
Shareholder to the Lender pursuant to the provisions hereof or otherwise, shall
be subordinate and subject in right of payment to the prior payment, in full in
cash, of all obligations of the Borrower under the Borrower Loan Documents.
Shareholder agrees that any right of subrogation arising as a result of its
performance hereunder shall not exist unless and until all obligations of the
Borrower under the Borrower Loan Documents are paid in full in cash.
Section 9.2 Representations and Warranties. Shareholder hereby
represents and warrants to the Lender as follows:
(1) This Loan Agreement has been duly and validly executed and
delivered by Shareholder and constitutes its legal, valid, and binding agreement
with respect to the provisions contained in Article IX, enforceable in
accordance with its terms, except as the enforceability of this Loan Agreement
may be affected by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally, and by judicial discretion in the enforcement of equitable
remedies.
(2) The execution, delivery, and performance by Shareholder of
this Loan Agreement: (i) do not require the consent of any third party; (ii)
will not conflict with any provision of the Articles of Incorporation or Bylaws
of Shareholder; (iii) will not conflict with, result in a breach of, or
constitute a default under, any law, judgment, order, ordinance, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality; and (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or accelerate
or permit the acceleration of any performance required by the terms of, any
agreement, instrument, license, or permit to which Shareholder is a party or by
which Shareholder may be bound.
Section 9.3 Limited Recourse. Notwithstanding anything to the contrary
contained in this Article IX, in any action or proceeding commenced with
reference to any Loan Document, no judgment obtained against Shareholder shall
be enforced against any of its separate assets, other than Shareholder's
interest in all of the issued and outstanding capital stock of the Borrower
(whether outstanding on the date hereof or hereafter), and Shareholder's
liability under any Loan Document shall be limited to such interest. In any
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legal action or suit in equity which the Lender may undertake against
Shareholder to enforce its rights and remedies under any Loan Document, any
judgment obtained by the Lender may be satisfied by recourse only to
Shareholder's interest in all of the issued and outstanding capital stock of the
Borrower (whether outstanding on the date hereof or hereafter) and not by
recourse to any other assets of Shareholder.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized officers, as of the
date first above written.
▇▇▇▇▇▇ COMMUNICATIONS OF
BOSTON-46, INC.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
CHANNEL 46 OF BOSTON, INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
Chairman
THE CHRISTIAN NETWORK, INC. HEREBY
JOINS IN THE EXECUTION OF THE FOREGOING
AGREEMENT TO AGREE TO THE PROVISIONS OF
SECTION 8.15 AND ARTICLE IX ONLY, AS OF
THE DATE FIRST ABOVE WRITTEN.
THE CHRISTIAN NETWORK, INC.
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
Chairman