Document/Exhibit Description Pages Size
1: 10-Q Paxson Communications, Inc. Form 10-Q 21 142K
13: EX-10.100 Asset Purchase Agreement 40 175K
14: EX-10.101 Asset Purchase Agreement 41 177K
15: EX-10.102 Asset Purchase Agreement 45 190K
16: EX-10.103 Construction Agreement 9 37K
17: EX-10.104 Loan Agreement 29 120K
18: EX-10.105 Asset Purchase Agreement 44 184K
19: EX-10.106 Asset Purchase Agreement 42 176K
20: EX-10.107 Agreement and Plan of Merger 34 110K
21: EX-10.107.01 First Amendment to Agreement and Plan of Merger 3 17K
22: EX-10.108 Asset Purchase Agreement 41 174K
23: EX-10.109 Option Agreement 9 35K
24: EX-10.110 Subordinated Note 13 50K
25: EX-10.111 Asset Purchase Agreement 40 142K
26: EX-10.112 Asset Purchase Agreement 40 169K
27: EX-10.113 Time Brokerage Agreement 28 96K
28: EX-10.114 Purchase Agreement 17 63K
29: EX-10.115 Asset Purchase Agreement 32 138K
30: EX-10.116 Asset Purchase Agreement 32 148K
31: EX-10.117 Asset Purchase Agreement 32 144K
32: EX-10.118 Asset Purchase Agreement 33 147K
33: EX-10.119 Time Brokerage Agreement 16 70K
34: EX-10.120 Loan Agreement 28 109K
35: EX-10.121 Second Amendment to Asset Purchase Agreement 6 22K
36: EX-10.122 Asset Purchase Agreement 41 180K
37: EX-10.123 Asset Purchase Agreement 94 303K
38: EX-10.124 Loan Agreement 52 170K
39: EX-10.125 Time Brokerage Agreement 28 98K
40: EX-10.126 Option Agreement 18 64K
2: EX-10.89 Amended as Restated Promissory Note 6 25K
3: EX-10.90 First Anemdment to Loan Agreement 2 15K
4: EX-10.91 Asset Purchase Agreement 15 73K
5: EX-10.92 Asset Purchase Agreement 41 174K
6: EX-10.93 The Brokerage Agreement 29 97K
7: EX-10.94 Asset Purchase Agreement 38 173K
8: EX-10.95 First Amendment 2 15K
9: EX-10.96 Promissory Note 4 21K
10: EX-10.97 Stock Purchase Agreement 42 199K
11: EX-10.98 Asset Purchase Agreement 42 178K
12: EX-10.99 Asset Purchase Agreement 42 177K
41: EX-27 Financial Data Schedule (For SEC Use Only) 1 12K
EXHIBIT 10.104
===============================================================================
LOAN AGREEMENT
BY AND AMONG
PAXSON COMMUNICATIONS OF
PROVIDENCE-69, INC.,
OFFSHORE BROADCASTING CORPORATION
AND
OCEAN STATE TELEVISION, L.L.C.
* * *
APRIL 16, 1996
===============================================================================
TABLE OF CONTENTS
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PAGE
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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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.4 Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.5 Mandatory Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.6 Forgiveness of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.7 Use of Proceeds and Advancement of Funds . . . . . . . . . . . . . . . . . . . . . 4
Section 1.8 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.9 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.10 Payment on Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II. CLOSING; ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.1 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.2 Assignment and Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III. SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.1 Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.2 Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.3 Leasehold Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.4 Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.5 Assignment and Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.1 Conditions Precedent to Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.2 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE V. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.1 Representations and Warranties of Borrower and the Company . . . . . . . . . . . . 9
ARTICLE VI. COVENANTS OF THE BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.2 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 6.3 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VII. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.2 Effect of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.1 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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Section 8.3 Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.4 Address for Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.6 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.8 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.9 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.10 Rights Affected by Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.11 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . 24
Section 8.12 FCC Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.14 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.15 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.16 Maximum Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
LIST OF EXHIBITS AND SCHEDULE
-----------------------------
Exhibit 1 -- Form of Promissory Note
Exhibit 2 -- Form of Security Agreement
Exhibit 3 -- Form of Pledge Agreement
Exhibit 4 -- Form of Assignment and Assumption
Agreement
ii
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of this 16th day of April, 1996, is by
and among PAXSON COMMUNICATIONS OF PROVIDENCE-69, INC., a Florida corporation
having its principal offices at 601 Clearwater Park Road, West Palm Beach,
Florida 33401 (the "Lender"), OFFSHORE BROADCASTING CORPORATION, a Rhode Island
corporation having its principal offices at 449 Barlow's Landing Road,
Pocassett, Massachusetts 02559 (the "Borrower"), and OCEAN STATE TELEVISION,
L.L.C., a Delaware limited liability company having its principal offices at
601 Clearwater Park Road, West Palm Beach, Florida 33401 (the "Company").
W I T N E S S E T H:
WHEREAS, the Borrower owns or leases substantially all of the assets
and properties, including all broadcast licenses issued by the Federal
Communications Commission ("FCC Licenses") and licenses and permits issued by
other governmental authorities, used or useful in the business or operations of
Television Station WOST-TV, Block Island, Rhode Island (the "Station");
WHEREAS, Borrower has secured from the FCC a construction permit to
relocate the Station's transmitter site to Hopkinton, Rhode Island (the
"Construction Permit");
WHEREAS, Lender and Borrower have formed the Company pursuant to the
terms of an Operating Agreement of Ocean State Television, L.L.C., dated as of
the date hereof (the "Operating Agreement");
WHEREAS, Borrower, Lender and the Company have entered into an Asset
Contribution Agreement dated as of the date hereof (the "Contribution
Agreement"), whereby, inter alia, subject to the prior consent of the FCC, (i)
Borrower has agreed to contribute to the Company substantially all of the
assets used or useful in the business or operations of the Station in exchange
for a cash payment in the amount of One Million Dollars ($1,000,000) and a
fifty percent (50%) equity interest in the Company, and (ii) Lender has agreed
to contribute to the Company a cash payment in the amount of One Million
Dollars ($1,000,000) in exchange for a fifty percent (50%) equity interest in
the Company;
WHEREAS, the Contribution Agreement provides that Borrower and Lender
shall enter into this Loan Agreement, pursuant to which Lender agrees to make a
loan to Borrower of up to a total principal amount of Three Million Dollars
($3,000,000) to provide interim funds for construction in accordance with the
Construction Permit and for operating expenses of the Station prior to the
consummation of the transactions contemplated by the Contribution
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Agreement (the "Contribution Closing") and, following the Contribution Closing,
for certain operating and capital expenses related to the relocation of the
Station; and
WHEREAS, upon the Contribution Closing, the Company shall assume the
obligations of the Borrower to repay the outstanding principal balance of the
loans made prior to the Contribution Closing.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, the Lender, Borrower and the Company 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 and
the Company in an aggregate principal amount not to exceed at any one time
outstanding Three Million Dollars ($3,000,000.00) (the "Loan") as provided
below:
(a) Operating Loans. Upon the terms and conditions
hereinafter set forth, the Lender agrees to advance Borrower up to Six Thousand
Dollars ($6,000) for each calendar month prior to the Contribution Closing
(individually, an "Operating Loan" and collectively, the "Operating Loans").
At Borrower's request, Lender made Operating Loans to Borrower in the amount of
Six Thousand Dollars ($6,000) each on or about January 1, February 1, March 1,
and April 1, 1996, in contemplation of the execution and delivery of this
Agreement. Upon the Contribution Closing, Lender shall have no further
obligation to make any Operating Loans.
(b) Relocation Loans. Upon the terms and conditions
hereinafter set forth, the Lender agrees to advance the Company up to an amount
equal to Three Million Dollars less the total outstanding principal balance of
the Operating Loans (the "Relocation Loan" and collectively with the Operating
Loans, the "Loan"); provided, however, that the Lender may elect, in its sole
discretion, to not make any Relocation Loan prior to the later of (x) the
execution and delivery of the Lease Agreement (as defined in the Contribution
Agreement) or (y) the issuance by the Town of Hopkinton, Rhode Island, of a
building permit for the construction of the Station's transmission facilities
at the site specified in the Construction Permit.
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
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order of the Lender and representing (a) prior to the Contribution Closing, the
obligation of the Borrower to pay the Lender the amount of the Operating Loans
and (b) following the Contribution Closing, the obligation of the Company to pay
the Loan, with interest thereon, as prescribed in Section 1.4. 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 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 the interest
rate per annum paid by Lender or its affiliates pursuant to the terms of the
Credit Agreement dated as of December 19, 1995, among Paxson Communications
Corporation, the several lenders party thereto from time to time, and Union
Bank as Agent, as such rate may be adjusted from time to time. Interest shall
be calculated on the basis of a year of three-hundred and sixty (360) days and
the actual number of days elapsed during the period for which such interest is
payable. Interest on the Operating Loans shall begin to accrue on the
outstanding principal amount of such Loans on the date of disbursement of all
or a portion of such Loans. Interest on the Relocation Loan shall not begin to
accrue until one hundred and twenty (120) days after the Station commences
broadcast operations at the site proposed in the Construction Permit (the
"Commencement Date"). In the event the Contribution Closing occurs, the first
payment of interest to the Lender on the Operating Loans and the Relocation
Loan shall be due on the first day of the fourth month after the Commencement
Date, at which time all accrued but unpaid 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 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 Principal. In the event the Contribution Closing
occurs, the outstanding principal balance of the Loan plus any accrued and
unpaid interest thereon shall be due and payable on the first day of the 76th
month following the Commencement Date (the "Term Date"). The Company 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 sixteenth (16th) month
following the Commencement Date (the "Amortization Commencement Date") and
ending on the Term Date.
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Section 1.5 Mandatory Prepayment. Notwithstanding anything in
this Agreement to the contrary, the entire outstanding principal balance of the
Operating Loans and all interest accrued thereon and all other amounts owed by
Borrower to Lender hereunder shall be due and payable within ninety (90) days
following a termination of the Contribution Agreement for any reason other than
a material breach thereof by Lender.
Section 1.6 Forgiveness of Loans. In the event that Borrower
terminates the Contribution Agreement due to Lender's material breach thereof
in accordance with Section 9.1(d) of the Contribution Agreement, the total
outstanding principal balance and all accrued interest owed by Borrower to
Lender hereunder as of the date of such termination shall be forgiven, and
Lender's commitment to make any additional Loans shall terminate.
Section 1.7 Use of Proceeds and Advancement of Funds.
(a) The proceeds of the Operating Loans are to be used by
the Borrower exclusively for reasonable and necessary operating expenses
incurred by Borrower in connection with the business and operations of the
Station.
(b) The proceeds of the Relocation Loan are to be used by
Borrower or the Company for reasonable and necessary operating and capital
expenses incurred in connection with the business and operations of the Station
and the relocation of the Station as contemplated by the Construction Permit.
(c) For each Loan to be made hereunder, Borrower or the
Company, as the case may be, shall deliver to Lender a borrowing notice no less
than three business days prior to the date of such Loan.
Section 1.8 Information. The Borrower and Company each agree to
furnish to the Lender such information as the Lender may reasonably request in
connection with the Loan or the Station, including, without limitation, copies
of invoices or other evidence of the expenses incurred by Borrower and the
Company in connection with the operation or construction of the Station.
Section 1.9 Prepayment. The Borrower or the Company 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.
Each prepayment on the Note shall be applied to installments of principal
payable on the Note in the inverse order of maturity.
Section 1.10 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
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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; ASSIGNMENT
Section 2.1 Closing Date. Closing of the loan transactions
contemplated by this Agreement shall occur contemporaneously with the parties'
execution and delivery of this Agreement (the "Closing Date").
Section 2.2 Assignment and Assumption. Upon the Contribution
Closing, Borrower's rights and interests under this Agreement and the other
Loan Documents (as defined below) shall be assigned by Borrower to the Company,
and the Company shall assume Borrower's obligations under this Agreement and
the other Loan Documents, pursuant to an Assignment and Assumption Agreement in
the form of Exhibit 4 hereto.
ARTICLE III. SECURITY
Section 3.1 Security Interest. As security for the Operating
Loans, 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"). In the event the Operating Loans are forgiven pursuant
to Section 1.6 hereof, the Security Agreement shall terminate, and Borrower
shall have no further obligation thereunder. In connection with the assignment
and assumption transactions contemplated by Section 2.2, the Company agrees,
upon the Contribution Closing, to execute and deliver to the Lender an Amended
and Restated Security Agreement substantially in the form of 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 Raymond A.
Yorke (the "Shareholder"), the sole shareholder of the Borrower (the "Pledge
Agreement"). In the event the Operating Loans are forgiven pursuant to Section
1.6 hereof, the Pledge Agreement shall terminate, Shareholder shall have no
further obligation thereunder, and Borrower shall immediately return to
Shareholder the collateral pledged pursuant thereto. In connection with the
assignment and assumption transactions contemplated by Section 2.2, Borrower
agrees, upon the Contribution Closing, to execute and deliver to the Lender an
Amended and Restated Pledge Agreement substantially in the form of the Pledge
Agreement, pursuant to which Borrower shall pledge to Lender all of its rights
and interests in Borrower's Percentage Interest in the Company (as defined in
the Operating Agreement) as collateral security for the Company's obligations
hereunder, and the Pledge Agreement shall terminate.
- 6 -
Section 3.3 Leasehold Mortgages. At such time as the Borrower
enters into or assumes the lessee's interest under any lease, it shall execute
with respect to such lease a leasehold mortgage in a form reasonably acceptable
to Borrower and Lender (a "Leasehold Mortgage"), granting the Lender a lien on
its leasehold interest under such lease. Notwithstanding the requirement in
the preceding sentence, Borrower shall not be required to execute a Leasehold
Mortgage with respect to the existing Lease dated October 14, 1988, between
Borrower, as assignee of Offshore Broadcasting, a general partnership, and
Block Island Power Company unless specifically requested to do so by the
Lender. If requested by 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 or the
Company acquires any parcel of real estate, the Borrower or the Company shall
execute a first mortgage or deed of trust in favor of the Lender on such
parcel, in form and substance acceptable to Lender (a "Mortgage"). If
requested by Lender, the Borrower or the Company 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
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.
Section 3.5 Assignment and Assumption. In connection with the
assignment and assumption transactions contemplated by Section 2.2, the Company
agrees to execute and deliver to Lender an Amended and Restated Promissory
Note, substantially in the form of the Note, any Leasehold Mortgage or Mortgage
contemplated by Section 3.3 and Section 3.4, respectively, and any other
agreements, financing statements, certificates or documents requested by Lender
in connection with the assignment and assumption transactions contemplated by
Section 2.2.
- 7 -
ARTICLE IV. CONDITIONS OF LENDING
Section 4.1 Conditions Precedent to Loan. The obligation of the
Lender to disburse from time to time any portion of the Loan hereunder is
subject to the condition precedent that the Lender shall have received all of
the following, on or before the Closing Date, in form and substance
satisfactory to the Lender:
(a) The Note, duly executed and delivered by the
Borrower;
(b) The Security Agreement, together with appropriate
UCC-1 forms and, if applicable, landlord lien waivers, duly executed and
delivered by the Borrower;
(c) The Pledge Agreement, duly executed and delivered by the
Shareholder together with stock certificates and blank stock powers;
(d) Certified copies of the resolutions of the Board of
Directors of Borrower evidencing approval of the execution, delivery and
performance of this Agreement, the Note and the Security Agreement and other
matters contemplated hereby;
(e) A Certificate of Good Standing for the Borrower from the
State of Rhode Island issued no more than 10 days prior to the Closing Date or
at such other time specified by Lender;
(f) A copy of the Construction Permit;
(g) Copies of UCC, judgment and tax lien searches in each
jurisdiction in which collateral covered by the Security Agreement is located,
naming the Borrower as debtor;
(h) With respect to leased real property, the documents
required by Section 3.3, and with respect to owned real property, if any, the
documents required by Section 3.4;
(i) Copies of the certificates evidencing the insurance
required to be maintained by the Borrower pursuant to Section 6.1(e);
(j) The Contribution Agreement, duly executed by Borrower and
the Company;
- 8 -
(k) The Construction Agreement (as defined in the
Contribution Agreement), duly executed by Borrower and the Company;
(l) The Operating Agreement, duly executed by the Borrower;
and
(m) Such other agreements, certificates, opinions of counsel
and documents that the Lender may reasonably require.
Section 4.2 Compliance. Prior to the Contribution Closing, all
of the representations and warranties of the Borrower and Shareholder in this
Loan Agreement, and, following the Contribution Closing, all representations
and warranties of the Company, 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. Prior to the Contribution Closing, the Borrower, and, following the
Contribution Closing, the Company, shall be in compliance with all of the
applicable terms and provisions of this Agreement and no Event of Default or any
event which with the lapse of any applicable grace period or the giving of
notice or both would constitute an Event of Default shall have occurred and be
continuing. The Borrower or the Company, as the case may be, shall have
performed all obligations and taken all actions to be performed or taken by it
hereunder on or prior to such date. On the Closing Date, the Borrower and
Shareholder shall deliver to the Lender a certificate, dated as of such date and
signed by an executive officer of the Borrower and 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 or the Company shall in and of itself,
constitute a representation and warranty that the Borrower, Shareholder and the
Company as of the date of such Loan, is in compliance with this Section and if
the Borrower, Shareholder or the Company is not in compliance with this Section,
the Lender shall not be required to disburse such Loan.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of Borrower and the
Company. In order to induce the Lender to enter into this Agreement and make
the Loan, Borrower and the Company represent and warrant as follows:
(a) Existence and Standing. Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Rhode Island, and the Company is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Delaware.
The Borrower and the Company each are 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
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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 or the Company pursuant
to this Agreement.
(b) Authorizations, Compliance with Laws. The execution,
delivery and performance by the Borrower and the Company 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 or the Company
pursuant to this Agreement have been duly authorized by all necessary corporate
or limited liability company 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 the Company or (B) any provision of the charter or by-laws of the
Borrower or the Operating Agreement of the Company; or (ii) result in a breach
of or constitute a default under any agreement or instrument to which the
Borrower or the Company 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 or the Company's properties or assets other than as
contemplated by this Agreement.
(c) No Consent. Except for the prior consent of the FCC
as to any transfer of control or exercise of creditor's rights deemed to
operate as a transfer of control, no authorization, consent, approval, license,
exemption of or filing or registration with any court or governmental
department or agency is or will be necessary for the valid execution, delivery
and performance by the Borrower or the Company 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 or the Company pursuant
to this Agreement.
(d) 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,
the Shareholder or the Company pursuant to this Agreement have been executed
and delivered by a duly authorized officer or representative of the Borrower or
the Company, respectively, and constitute legal, valid and binding obligations
of the Borrower and the Company (or, in the case of this Agreement or the
Pledge Agreement, of the Shareholder) enforceable in accordance with their
respective terms.
(e) Litigation. Except as described on Schedule 3.16 of
the Contribution Agreement, 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
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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. There are no actions, suits or proceedings
pending, or, to the knowledge of the Company, threatened against or affecting
the Company 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
Company.
(f) No Default. Neither the Borrower nor the Company is in
default in the performance, observance or fulfillment of any of the obligations
or conditions contained in any material agreement or instrument to which it is
a party, nor with respect to any order, judgment, writ, injunction or decree of
any court, governmental authority or arbitration board.
(g) Compliance with Laws. The Borrower and the Company have
complied in all material respects with all applicable federal, state and local
laws. The Borrower and the Company have 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.
(h) Taxes. The Borrower and the Company have filed all tax
returns and reports (federal, state and local) required to be filed by them,
and has paid all taxes shown thereon, including interest and penalties, and all
assessments received by them (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 or
the Company in conformity with generally accepted accounting principles).
(i) Title to Properties. The Borrower and the Company have
good and marketable title to all of their property and assets and valid and
enforceable leasehold interests in the property which they hold under lease,
all such property, assets and leasehold interests being free and clear of any
and all mortgages, deeds of trust, assignments, liens, security interests,
charges or encumbrances of any nature whatsoever, except for those created
hereby, and no mortgages, deeds of trust, financing statements or other
evidences of security interests covering all or any of the aforesaid property
are on file among the records of any public office, except those evidencing a
security interest in favor of the Lender.
(j) Material Misstatement. No statement made herein or
information, exhibit or report furnished by the Borrower or the Company to the
Lender in connection with
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this Agreement or its negotiation, contains any material misstatement of fact or
omits to state a material fact or any fact necessary to make the foregoing not
misleading.
ARTICLE VI. COVENANTS OF THE BORROWER
Section 6.1 Affirmative Covenants. So long as the Note shall
remain unpaid, the Borrower hereby covenants and agrees that it will, unless
the Lender shall otherwise consent in writing:
(a) Payment of Obligations. Pay punctually and discharge
when due: (i) all indebtedness heretofore or hereafter incurred; (ii) all
taxes, assessments and governmental charges or levies imposed upon it or its
income or profits, or upon any properties belonging to it; (iii) claims or
demands of materialmen, mechanics, carriers, warehousemen, landlords and other
like persons which, if unpaid might become a lien or charge upon the property
of the Borrower; provided that this covenant shall not require the payment of
any of the matters set forth in (i), (ii) and (iii) above if the same shall be
contested in good faith and by proper proceedings diligently pursued and as to
which adequate reserves have been set aside on the books of the Borrower in
accordance with generally accepted accounting principles.
(b) Preservation of Existence. Preserve and maintain its
respective corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation.
(c) Maintenance of Properties. Maintain and preserve all
of its properties necessary or useful in the proper conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(d) Compliance with Laws. Comply in all material
respects with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority.
(e) Maintenance of Insurance. Maintain with responsible
and reputable insurance companies policies on all of its properties and
covering such risks, including public liability and workers' compensation, in
such amounts as are usually carried by companies engaged in similar businesses
and owning similar properties as the Borrower, and promptly upon execution
thereof provide to the Lender copies of all such policies and any riders or
amendments thereto. The policies of insurance required hereunder shall name the
Lender as an additional loss payee or additional insured, as applicable, and
shall provide that the Lender shall receive at least thirty (30) days' written
notice prior to the cancellation, termination or alteration of any such policy.
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(f) Operations in Ordinary Course. Continue to operate
its business in the ordinary course.
(g) Perfection of Liens. Do all things requested by the
Lender to preserve and perfect the liens and security interests of the Lender
arising pursuant to the Security Agreement, the Pledge Agreement, any Leasehold
Mortgage, any Mortgage or any other agreement required hereunder as first liens
and security interests.
(h) FCC Approval. If counsel to the Lender reasonably
determines that the consent of the FCC is required in connection with the
execution, delivery and performance of this Agreement, the Pledge Agreement,
the Security Agreement, any Mortgage or Leasehold Mortgage or any other
document delivered to the Lender in connection herewith or therewith or as a
result of any action which may be taken pursuant hereto or thereto, then
Shareholder, Borrower and the Company, as the case may be, shall use their
respective best efforts, at their sole cost and expense, to secure such consent
and to cooperate with the Lender in any action commenced by the Lender to
secure such consent.
(i) Agreements. Comply with its obligations under the
Contribution Agreement, Construction Agreement and Operating Agreement.
Section 6.2 Negative Covenants. So long as the Note shall remain
unpaid and the Agreement shall not have been terminated, the Borrower hereby
covenants that it will not, without the Lender's prior written approval:
(a) Indebtedness. Create or incur, assume or, except for
the obligations set forth on Schedule 6.2 hereof, 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 Contribution
Agreement.
(b) Liens. Create, assume or suffer to exist, directly
or indirectly, any security interest, mortgage, deed of trust, pledge, lien,
charge or other encumbrance, of any nature whatsoever upon any of its
properties or assets, now owned or hereafter as acquired, excluding, however,
from the operation of this covenant with respect to property or assets other
than the Stock (as defined in the Pledge Agreement):
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(i) any security interest or lien created
pursuant to or in connection with this Agreement or securing the Loan, the
Security Agreement, the Pledge Agreement, any Leasehold Mortgage or any
Mortgage;
(ii) liens for taxes or assessments either not
delinquent or the validity of which are being contested in good faith by
appropriate legal or administrative proceedings and as to which adequate
reserves shall have been set aside on its books, in conformity with generally
accepted accounting principles;
(iii) materialmen's, mechanics', carriers',
workmen's, repairmen's, warehousemen's or other like liens arising in the
ordinary course of business and either not yet due and payable or being
contested in good faith by appropriate legal proceedings and as to which
adequate reserves shall have been set aside on its books, in conformity with
generally accepted accounting principles;
(iv) deposits or pledges to secure payment of
workers' compensation, unemployment insurance or other social security benefits
or obligations; or
(v) any judgment lien, singly or aggregated with
other judgment liens, in an amount less than $100,000, unless the judgment it
secures shall not, within thirty (30) days after the entry thereof, have been
discharged, vacated, reversed, or execution thereof stayed pending appeal, or
shall not have been discharged, vacated or reversed within thirty (30) days
after the expiration of any such stay.
(c) Disposition of Assets. Except pursuant to the terms
of the Contribution 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 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.
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(f) Change of Business. Change, in any material respect,
the nature or character of its business as intended, or engage in any activity
not reasonably related to such business.
(g) Remove Assets. Remove any of the assets procured
with the proceeds of the borrowings provided for herein, or any replacements
for such assets, to a jurisdiction in which no financing statement on Form
UCC-1 has been filed by the Lender with respect to such assets.
(h) Distributions or Dividends. Declare or make,
directly or indirectly, any payment or distribution, or incur any liability for
the purchase, acquisition, redemption or retirement of any capital stock of the
Borrower or as a dividend, return of capital or other payment or distribution
of any kind to a shareholder of the Borrower or any affiliate of the Borrower
(other than any stock dividend or stock split or similar distribution payable
only in capital stock of the Borrower) in respect of the Borrower's capital
stock.
(i) Transactions with Affiliates. Enter into any
transaction or agreement with any affiliate of the Borrower.
(j) Contracts. Enter into any contract or commitment
relating to its stock or assets except for contracts involving aggregate
payments of less than Five Thousand Dollars ($5,000.00) and contracts which can
be terminated without penalty on thirty (30) days' notice or less, or amend or
terminate any material contract (or waive any substantial right thereunder), or
incur any obligation (including obligations relating to the borrowing of money
or guarantee of indebtedness).
(k) Adverse Change. Suffer any material adverse change
in the business, assets, properties, prospects or condition (financial or
otherwise) of the Borrower or the Station, or any damage, destruction or loss
affecting any assets used or useful in the conduct of the business of the
Borrower.
(l) Employee Compensation. Suffer any material increase
in excess of the reasonable range in the broadcast industry in the same or
similar markets in compensation payable or to become payable to any employees,
or any bonus payment made or promised to any employee, or any material change
in personnel policies, insurance benefits or other compensation arrangements
affecting any employees, provided that nothing in this clause shall be
construed to limit or restrict the commission compensation of employees who may
be selling brokered time for the Borrower.
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(m) Cancellation of Debts. Cancel any debts owed to or
claims held by the Borrower.
(n) Write-Down. Suffer any significant write-down of the
value of any assets or any significant write-off as uncollectible of any
accounts receivable without the prior written consent of the Lender except and
as required by generally accepted accounting principles as required to present
accurate financial information on the Borrower.
(o) Rights. Transfer or grant any right under, or enter
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, service mark, trade name, franchise, or similar
right, or modify any existing right relating to the Borrower.
(p) Agreements. Terminate, amend, commit any material
breach or default under the Contribution Agreement, Operating Agreement or
Construction Agreement.
(q) Subsidiaries. Create or acquire any subsidiary of
Borrower, other than the Company, unless Lender shall have approved such action
in advance and Borrower shall have taken all actions required by Lender to
grant Lender a first priority security interest in all of the issued and
outstanding stock or other equity interests of such subsidiary. Borrower
acknowledges and agrees that until such time as such security interest is
granted and perfected, Lender shall have an equitable lien in the stock of any
subsidiary created or acquired by Borrower.
(r) Programming. Make any changes in the Station's
programming except for changes in the Station's non-entertainment or public
affairs programming so long as such changes do not increase by more than ten
percent the aggregate amount of non-entertainment and public affairs
programming broadcast each week by the Station between the hours of 6:00 a.m.
and midnight.
Section 6.3 Reporting Requirements. So long as the Note shall
remain unpaid and the Agreement shall not have been terminated, the Borrower
shall, unless the Lender shall otherwise consent in writing, furnish to the
Lender:
(a) Default Certificate. No later than five (5) business
days after the occurrence of each event described in Section 7.1 of which the
Borrower has knowledge, whether or not such event is remedied within any
applicable cure period specified in Section 7.2, the statement of the President
of the Borrower setting forth details of such event and the action which the
Borrower proposes to take with respect thereto.
- 16 -
(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
unaudited 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.
(c) Notice of Litigation. Promptly give written notice
of (i) all actions, suits and proceedings before any court or governmental
agency, domestic or foreign, which may be commenced or threatened against the
Borrower in which the claim involved is Five Thousand Dollars ($5,000.00) or
more and of any other matter of the type described in Section 5.1(e), and (ii)
any adverse development in the litigation described in Schedule 3.16 to the
Contribution Agreement.
(d) Budget. An annual budget within thirty (30) days of
the beginning of each fiscal year of the Borrower. Such budget shall be
satisfactory in form and substance to the Lender.
(e) Other Information. Such other information respecting
the business, properties, operations or the condition, financial or otherwise,
of the Borrower as the Lender may from time to time reasonably request.
ARTICLE VII. EVENTS OF DEFAULT
Section 7.1 Events of Default. Under this Agreement, any of the
following events, unless remedied within any applicable cure period specified
in Section 7.2, shall constitute an Event of Default:
(a) The Borrower or the Company 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 forty-five (45) days to enable the Company to
seek refinancing of the Loan in accordance with Section 5.6 of the Operating
Agreement; or
(b) The security interest or lien of the Lender in any
material portion of the collateral covered by the Security Agreement, Pledge
Agreement or any Leasehold Mortgage or Mortgage shall at any time not
constitute a legal, valid and enforceable security interest or lien; or
- 17 -
(c) Any representation or warranty made by the Borrower
or the Company herein, in the Security Agreement or any Leasehold Mortgage or
Mortgage, or by the Shareholder 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
(d) The Borrower or the Company 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, or the
Shareholder shall fail to perform or observe any term, covenant or agreement
contained in the Pledge Agreement, and any such failure remains unremedied for
thirty (30) days after written notice thereof shall have been given to the
Borrower, Shareholder and the Company by the Lender; or
(e) The Borrower or the Company shall fail to pay any
indebtedness for borrowed money owing by the Borrower or the Company 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 Company 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 Company, and
any such failure to pay or perform remains unremedied for a period of ten (10)
days; provided, however, that an event described in Section 7.1(g) shall
constitute an Event of Default without regard to the cure period provided for
herein if the effect of such failure to pay or perform is to accelerate, or to
permit the holder of such indebtedness to accelerate, the maturity of such
indebtedness; or
(f) The Borrower or the Company shall expend the proceeds
of the Loan for any purpose other than 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 discretion, and the full amount of any
such improper expenditure of Loan proceeds is not repaid to the Lender within
ten (10) days after notice thereof shall have been given to the Borrower or the
Company by the Lender; or
(g) Either (i) any of the Borrower, Shareholder or the
Company shall fail to pay its debts, other than the debts of the Borrower set
forth on Schedule 6.2, as they mature in the ordinary course of business; or
(ii) any of Borrower, Shareholder or the Company 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) any of the Borrower,
Shareholder or the Company shall apply for or consent to the appointment of any
receiver,
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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,
Shareholder or the Company and such appointment shall continue undischarged for
a period of thirty (30) days; or (v) an involuntary case is commenced against
the Borrower, Shareholder or the Company 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, Shareholder or the
Company 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, Shareholder or the Company and shall remain undismissed for a period
of thirty (30) days; or (viii) the Borrower, Shareholder or the Company shall
take any action for the purpose of effectuating the foregoing; or
(h) Any court, government, or government agency shall
condemn, seize or otherwise appropriate or take custody or control of all or a
substantial portion of the property or assets of the Borrower or the Company and
any such action shall not have been reversed or vacated within ten (10) days
from the date thereof; or
(i) There shall be a cancellation, denial or revocation
of any material FCC License for the Station, the Borrower or the Company 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; or
(j) Any money judgment, writ or warrant of attachment, or
similar process involving (i) in any individual case an amount in excess of One
Hundred Thousand Dollars ($100,000.00), or (ii) in the aggregate at any time an
amount in excess of One Hundred Thousand Dollars ($100,000.00), and in either
case not adequately covered by insurance as to which the insurance company has
acknowledged coverage, shall be entered or filed against Borrower or the
Company or its assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 30 days or in any event later than five days prior to
the date of any proposed sale thereunder; or
(k) There shall be a development in the litigation
described in Schedule 3.16 of the Contribution Agreement that could reasonably
be expected to have a material adverse effect on the business, assets,
properties, financial condition or business prospects of the Station; provided,
however, that a monetary judgment in such litigation shall not constitute an
Event of Default if such judgment is paid by Offshore on or before such payment
is due.
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Section 7.2 Effect of Event of Default. Should any event set
forth in Section 7.1 occur and remain unremedied following the end of any cure
period specified in Section 7.1, the Lender may at its option by written notice
to the Borrower and the Company 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 or the Company 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 and the Company, 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 the occurrence of an event
under Section 7.1(g), said occurrence shall constitute an Event of Default and
all the obligations of the Borrower and the Company 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 or the Company required from the Lender. Upon an Event
of Default, 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.
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.
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 or the Company 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 or the Company 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
- 20 -
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: Mr. Raymond A. Yorke
Offshore Broadcasting Corp.
449 Barlow's Landing Road
Pocassett, Massachusetts 02559
With a copy (which shall not Mary A. McReynolds, Esq.
constitute notice) to: Mary A. McReynolds, P.C.
888 Sixteenth Street, N.W.
Suite 400
Washington, D.C. 20006
If to the Lender: Mr. Lowell W. Paxson
Paxson Communications of Providence-69, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
With a copy (which shall not John R. Feore, Jr., Esq.
constitute notice) to: Dow, Lohnes & Albertson,
A Professional Limited Liability Company
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
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 or the Company, as the case
may be, 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
- 21 -
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, Lender and
the Company each agrees to pay its own respective expenses incurred 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").
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;
provided, however, that Borrower shall be permitted to assign its rights and
interests under this Agreement and the other Loan Documents to the Company upon
the Contribution Closing so long as (a) the Company assumes all of the
Borrower's obligations under this Agreement and the other Loan Documents
pursuant to the Assignment and Assumption Agreement attached hereto as Exhibit
4, (b) there shall exist no Event of Default on the date of such assignment and
assumption, and (c) Borrower shall have complied with all of its obligations
hereunder, including its obligations with respect to such assignment and
assumption set forth in Article III. 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, the Pledge 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.
- 22 -
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 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, the Company 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 and the
Company 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 or the Company'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
the Lender will not take any action pursuant to this Agreement or any of the
other Loan Documents that would constitute or result, whether de jure or de
facto, in any assignment of any FCC authorization held by the Borrower or the
Company 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 or the Company by
the Lender or control, affirmative or negative, direct or indirect, of the
Borrower or the Company by the Lender, over the programming, management or any
other aspect of the operation of the Borrower or
- 23 -
the Company, which ownership and control remain exclusively and at all times in
the Borrower and the Company 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
and the Company 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 and the Company 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 neither the Borrower nor the Company shall 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. The Shareholder
hereby indemnifies the Lender from and against any and all losses, damages,
costs, expenses or disbursements of any kind or nature whatsoever which may be
incurred by the Lender as a result of Shareholder's failure to comply with its
obligations set forth in 6.1(h) hereof; provided, however, that Shareholder
shall not be liable to the Lender if there is a judicial determination that
such losses, damages, costs, expenses or disbursements resulted solely from the
gross negligence or willful misconduct of the Lender.
Section 8.15 Waiver. EACH OF LENDER, BORROWER AND THE COMPANY
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.
- 24 -
Section 8.16 Maximum Interest. Lender, Borrower and the Company
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
or the Company 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 or the
Company of, interest at a rate greater than the Maximum Rate. Lender, Borrower
and the Company further agree that:
(i) if any excess of interest in such respect is
herein or in any such other instrument provided for, or shall be adjudicated to
be so provided for herein or in any such instrument, the provisions of this
subsection 8.16 shall govern, and neither Borrower, the Company nor their
successors or assigns shall be obligated to pay the amount of such interest to
the extent it is in excess of the Maximum Rate;
(ii) if at any time the amount of interest under
any of the Loan Documents for a calendar year exceeds the Maximum Rate had the
Maximum Rate at all times been in effect, the interest chargeable under any
such Loan Document shall be limited to the amount of interest that could have
been charged if the Maximum Rate had at all times been in effect, but any
subsequent reductions in the interest due shall not reduce the rate of interest
chargeable under any such Loan Document below the Maximum Rate until the total
amount of interest accrued under any such Loan Document equals the amount of
interest that would have accrued if the interest provided for in any such Loan
Document had at all times been in effect and collectible;
(iii) if the maturity of any Loan Document is
accelerated for any reason, or in the event of any prepayment by Borrower or
the Company, 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
- 25 -
federal or state law, whichever shall permit the higher lawful interest, as
construed by courts having jurisdiction thereof; and
(v) the spreading, prorating and amortizing of
interest over the term of the Loan Documents shall be allowed to the fullest
extent permitted by applicable law.
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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.
PAXSON COMMUNICATIONS OF PROVIDENCE-69, INC.
By: /s/ Lowell W. Paxson
------------------------------------------
Name: Lowell W. Paxson
Title: Chairman
OFFSHORE BROADCASTING
CORPORATION
By: /s/ Raymond A. Yorke
------------------------------------------
Raymond A. Yorke
President
OCEAN STATE TELEVISION, L.L.C.
By: /s/ Raymond A. Yorke
------------------------------------------
Raymond A. Yorke
Representative
By: /s/ Lowell W. Paxson
------------------------------------------
Lowell W. Paxson
Representative
RAYMOND A. YORKE HEREBY JOINS IN THE EXECUTION
OF THE FOREGOING AGREEMENT TO AGREE TO THE
PROVISIONS OF SECTIONS 3.2, 4.2, 6.1(H) AND
8.14 ONLY, AS OF THE DATE FIRST ABOVE WRITTEN.
/s/ Raymond A. Yorke
---------------------------------------------
Raymond A. Yorke
Dates Referenced Herein and Documents Incorporated by Reference
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