SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 28
TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
THE NOSTALGIA NETWORK, INC.
(Name of Issuer)
Common Stock, $.04 par value
(Title of Class of Securities)
669 752107
(CUSIP Number)
Dong Moon Joo, President
Concept Communications, Inc.
650 Massachusetts Avenue, N.W.
Washington, D.C. 20001
(202) 789-2124
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
with a copy to:
Arthur E. Cirulnick
Tucker, Flyer & Lewis
a professional corporation
1615 L Street, N.W., Suite 400
Washington, D.C. 20036-5601
(202) 452-8600
January 4, 1996
(Date of Event which Requires Filing
of this Statement)
Check the following box if a fee is being paid with this Statement:
Exhibit Index is on page 18.
<PAGE>
CUSIP No. 669 752107
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
Concept Communications, Inc.
2. Check the appropriate box if a member of a group*
(a) (X)
(b) ( )
3. SEC USE ONLY
4. Source of Funds*
AF (Crown Communications Corporation)
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d)or 2(e)
( )
6. Citizenship or Place of Organization
Delaware
NUMBER OF SHARES 7. Sole Voting Power
BENEFICIALLY 12,894,023 shares
OWNED BY
EACH 8. Shared Voting Power
REPORTING 0
PERSON
WITH 9. Sole Dispositive Power
12,894,023 shares
10. Shared Dispositive Power
0
11. Aggregate Amount Beneficially Owned by Each Reporting Person
12,894,023 shares
12. Check Box if the Aggregate Amount in Row 11 Excludes Certain
Shares*
( )
13. Percent of Class Represented by Amount in Row (11)
62.5%
14. Type of Reporting Person*
CO<PAGE>
CUSIP No. 669 752107
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
Crown Communications Corporation
2. Check the appropriate box if a member of a group*
(a) (X)
(b) ( )
3. SEC USE ONLY
4. Source of Funds*
OO
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant
to Items 2(d) or 2(e)
( )
6. Citizenship or Place of Organization
Delaware
NUMBER OF SHARES 7. Sole Voting Power
BENEFICIALLY 0
OWNED BY
EACH 8. Shared Voting Power
REPORTING 12,894,023 shares
PERSON
WITH 9. Sole Dispositive Power
0
10. Shared Dispositive Power
12,894,023 shares
11. Aggregate Amount Beneficially Owned by Each Reporting Person
12,894,023 shares
12. Check Box if the Aggregate Amount in Row 11 Excludes Certain
Shares*
( )
13. Percent of Class Represented by Amount in Row 11
62.5%
14 Type of Reporting Person*
CO<PAGE>
CUSIP No. 669 752107
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
Crown Capital Corporation
2. Check the appropriate box if a member of a group*
(a) (X)
(b) ( )
3. SEC USE ONLY
4. Source of Funds*
AF (Crown Communications Corporation)
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant
to Items 2(d) or 2(e)
( )
6. Citizenship or Place of Organization
Delaware
NUMBER OF SHARES 7. Sole Voting Power
BENEFICIALLY 0
OWNED BY
EACH 8. Shared Voting Power
REPORTING 12,894,023 shares
PERSON
WITH 9. Sole Dispositive Power
0
10. Shared Dispositive Power
12,894,023 shares
11. Aggregate Amount Beneficially Owned by Each Reporting Person
12,894,023 shares
12. Check Box if the Aggregate Amount in Row 11 Excludes Certain
Shares*
( )
13. Percent of Class Represented by Amount in Row 11
62.5%
14. Type of Reporting Person*
CO<PAGE>
Item 1. Security and Issuer.
This Amendment No. 28 is the first EDGAR filing
pursuant to Regulation S-T promulgated under the Securities
Exchange Act of 1934, as amended (the "Act"), and amends and
restates in its entirety the statement on Schedule 13D
previously filed on May 10, 1990 by Concept Communications,
Inc. ("Concept"), Crown Communications Corporation
("Communications"), Crown Capital Corporation ("Capital")
and Jonathan S. Park, as amended by Amendments 1 through 27
thereto, inclusive (the "Schedule"), relating to shares of
Common Stock, par value $.04 per share (the "Common Stock"),
of The Nostalgia Network, Inc. (the "Issuer"), a Delaware
corporation, which has its principal executive offices at
650 Massachusetts Avenue, N.W., Washington, D.C. 20001.
Item 2. Identity and Background.
This amendment is filed by Concept, a Delaware
corporation, Communications, a Delaware corporation, and
Capital, a Delaware non-stock corporation. Concept,
Communications and Capital are sometimes collectively
referred to as the "Reporting Persons." With respect to
voting securities of the Issuer, the Reporting Persons
constitute a group (the "Reporting Group"), within the
meaning of Rule 13d-5(b)(1) promulgated under the Act.
Concept has its principal business and executive
offices at 650 Massachusetts Avenue, N.W., Washington, D.C.
20001. Concept has diverse interests in the communications
and telecommunications industries as a holding company with
ownership interests in firms involved principally in video
newsgathering and transmission services, corporate video
communication and program production and post-production.
Dong Moon Joo, Max Hugel and Michael Sebold are the
directors of Concept, and Messrs. Joo (President) and Werner
Seubert (Vice President) are the executive officers of
Concept.
Mr. Joo is President of Concept and President and
Chief Executive Officer of The Washington Times Corporation
and News World Communications, Inc. ("News World"). The
Washington Times Corporation and News World publish numerous
newspapers and periodicals. The principal offices of
Atlantic Video are located at 650 Massachusetts Avenue,
N.W., Suite 200, Washington, D.C. 20001, which is the
business address of Mr. Joo. Mr. Joo is a citizen of South
Korea.
Mr. Hugel is Chairman of the Board of Rockingham
Venture, Inc., which is engaged in the operation of a
racetrack. The principal offices of Rockingham Venture,
Inc. are located at Rockingham Park Boulevard, P.O. Box 45,
Salem, New Hampshire 03079, which is Mr. Hugel's business
address. Mr. Hugel is a citizen of the United States.
Mr. Sebold is General Counsel of Concept. Mr.
Sebold's business address is 650 Massachusetts Avenue, N.W.,
Washington, D.C. 20001. Mr. Sebold is a citizen of the
United States.
Mr. Seubert is Vice President and Controller of
Atlantic Video, Inc. ("Atlantic Video"). Atlantic
Video is engaged in the production and recording of
videotapes, the provision of post-production services and
related activities. Mr. Seubert's business address is 650
Massachusetts Avenue, N.W., Suite 200, Washington, D.C.
20001. Mr. Seubert is a citizen of the Federal Republic of
Germany.
Communications owns ninety percent (90%) of the
capital stock of Concept. Communications has its principal
offices at 650 Massachusetts Avenue, N.W., Washington, D.C.
20001. Communications has diverse interests in the
communications and telecommunications industries through
operation of a satellite up-linking business and its
majority ownership interest in Concept. Mr. Joo, Keith
Cooperrider, Robert Morton, Nora Spurgin and Richard Wojcik
are the directors of Communications, and Messrs. Joo
(President) and Sebold (Vice President) are the executive
officers of Communications.
Messrs. Cooperrider and Morton are both
principally employed by The Washington Times newspaper. The
principal offices of The Washington Times are located at
3600 New York Avenue, N.E., Washington, D.C. 20002, which is
the business address of Messrs. Cooperrider and Morton.
Mr. Cooperrider serves as Controller, and Mr. Morton serves
as Assistant Managing Editor. Messrs. Cooperrider and
Morton are both citizens of the United States.
Ms. Spurgin is President of the Women's Federation
for World Peace, which is a nonprofit organization with the
purpose of uniting women to take action for the moral
education and healing of their families and society. The
principal offices of the Women's Federation for World Peace
are at 4 W. 43rd Street, New York, New York 10036. That
address is also the business address of Ms. Spurgin. Ms.
Spurgin is a citizen of the United States.
Mr. Wojcik is a Vice President of U.S. Property
Development Corporation, which owns and manages various
commercial properties in the Washington, D.C. metropolitan
area. The principal offices of U.S. Property Development
Corporation are located at 150 South Gordon Street,
Alexandria, Virginia 22304, which is the business address of
Mr. Wojcik. Mr. Wojcik is a citizen of the United States.
The sole stockholder of Communications is Capital,
which has its principal offices at 650 Massachusetts Avenue,
N.W., Washington, D.C. 20001. Capital is a holding company
which indirectly owns interests in firms involved in the
communications and telecommunications industries through its
ownership of Communications. Mr. Joo, Neil A. Salonen,
Thomas Ward, Anthony Guerra and Michael McDevitt are the
members of Capital; Messrs. Joo, Cooperrider and Wojcik are
the directors of Capital; and Messrs. Joo (President) and
Sebold (Vice President) are the executive officers of
Capital.
Mr. Salonen is President of International Cultural
Foundation, which is a nonprofit, tax-exempt foundation with
the purpose of promoting academic, scientific, religious and
cultural exchange among the countries of the world. The
principal offices of International Cultural Foundation are
located at 51 Monroe Street, Suite 1201, Rockville, Maryland
20850, which is Mr. Salonen's business address. Mr. Salonen
is a citizen of the United States.
Messrs. Ward and Guerra are both principally
employed by the University of Bridgeport, an institute of
higher learning. The principal offices of the University of
Bridgeport are located at 271 Park Avenue, Bridgeport,
Connecticut 06601, which is the business address of
Messrs. Ward and Guerra. Mr. Ward serves as Special
Assistant to the President for New Initiatives, and
Mr. Guerra serves as the Dean of College Graduate and
Undergraduate Studies. Messrs. Ward and Guerra are both
citizens of the United States.
Mr. McDevitt is Director of Security at Belvedere
Estates, which operates a group of properties in Westchester
County, New York. The principal offices of Belvedere
Estates are located at 723 South Broadway, Tarrytown, New
York 10591, which is the business address of Mr. McDevitt.
Mr. McDevitt is a citizen of the United States.
During the last five years, none of Concept, Com-
munications, Capital, Ms. Spurgin and Messrs. Joo, Hugel,
Sebold, Seubert, Cooperrider, Morton, Wojcik, Salonen, Ward,
Guerra and McDevitt has been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction
and, as a result of such proceeding, was or is subject to a
judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to,
Federal or state securities laws or finding any violation
with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
The aggregate purchase price of all shares of the
Common Stock and the Issuer's Preferred Stock, par value
$2.00 per share (the "Preferred Stock"), acquired by Concept
through the date hereof, (as more specifically detailed in
Item 5 of the Schedule), was $28,475,547.03. Of this amount
$10,720,435.78 was derived from corporate funds of Concept,
$341,812.50 was obtained by Concept from Communications and
was derived from corporate funds of Communications, and
$17,413,298.75 was obtained by Concept from Communications,
which borrowed the necessary funds from Atlantic Video
pursuant to a Promissory Note, as amended (the
"Communications/AVI Promissory Note"), and a Second Restated
Security Agreement (the "Restated Security Agreement"). The
Restated Security Agreement grants to Atlantic Video a
security interest in 430 shares of the Common Stock of
Concept, representing approximately 40% of the issued and
outstanding shares of Concept. The Communications/AVI
Promissory Note and the Restated Security Agreement were
filed as Exhibits 23.0 and 27.0 of the Schedule,
respectively, and are incorporated herein by reference, and
the descriptions of certain provisions thereof contained
herein are qualified in their entirety by reference to such
exhibits. Atlantic Video has informed the Reporting Persons
that the funds loaned by Atlantic Video to Communications
pursuant to that lending arrangement were a portion of the
proceeds of a loan from Atlantic Video's corporate parent,
One-Up Enterprises, Inc. ("One-Up"), which received those
funds as proceeds of a loan from its corporate parent,
Unification Church International, Inc. ("UCI").
On March 29, 1995, Concept loaned $4,000,000 to
the Issuer and received a Promissory Note dated March 29,
1995, which is described in Items 4 and 6 of this Amendment
No. 28 (the "March 1995 Promissory Note"). These funds were
obtained by Concept from Communications, which borrowed the
necessary funds from Atlantic Video pursuant to the
Communications/AVI Promissory Note and the Restated Security
Agreement. The Reporting Persons understand from Atlantic
Video that all or substantially all of the $4,000,000 loaned
by Atlantic Video to Communications was borrowed by Atlantic
Video from a corporation doing business in Uruguay.
In addition to the loan evidenced by the March
1995 Promissory Note, from December 1994 through January
1996 Concept loaned an aggregate of the $7,000,000 to the
Issuer, as described in Items 4 and 6 of this Amendment No.
28. These funds were obtained by Concept from
Communications, which borrowed the necessary funds from
Atlantic Video pursuant to the Communications/AVI Promissory
Note and the Restated Security Agreement. The Reporting
Persons understand from Atlantic Video that all or
substantially all of the $7,000,000 loaned by Atlantic Video
to Communications was received by Atlantic Video as proceeds
of a loan from One-Up, which received those funds as
proceeds of a loan from UCI.
Item 4. Purpose of Transaction.
By virtue of its purchases of shares of the Common
Stock and the Preferred Stock, Concept holds a majority of
the voting power of the voting securities of the Issuer
currently outstanding and is able to cause, and has caused,
the election of a slate of directors acceptable to it. As a
result, Concept may influence the direction of the
management and policies of the Company.
The Reporting Persons intend to continually assess
the market for the purchase and sale of the Issuer's
securities as well as the Issuer's financial position and
operations. In addition, the Reporting Persons in the
future may make additional purchases of all or any portion
of the outstanding shares of the Common Stock and the
Preferred Stock, either in the open market or in private
transactions, depending on their evaluations of the Issuer's
business, prospects, and financial condition, the market for
such securities, other opportunities available to them, the
conditions of the financial and stock markets, general
economic conditions, and other future developments.
Depending on their evaluations of the Issuer's business,
prospects, and financial condition, the market for such
securities, other opportunities available to them, the
conditions of the financial and stock markets, general
economic conditions, and other future developments, the
Reporting Persons may decide to sell all or part of their
investments in the Common Stock and the Preferred Stock.
Certain Loans to the Issuer.
As part of Concept's agreement to make the
$4,000,000 loan evidenced by the March 1995 Promissory Note,
Concept and the Issuer entered into a letter agreement on
March 29, 1995 containing certain provisions regarding a
potential conversion of that loan into equity securities of
the Issuer and certain other matters, which are described in
Item 6 of this Amendment No. 28 (the "March 1995 Letter
Agreement"). Copies of the March 1995 Promissory Note and
the March 1995 Letter Agreement were filed as Exhibits 27.1
and 27.2 of the Schedule, respectively, and are incorporated
herein by reference, and the descriptions of certain
provisions thereof contained herein are qualified in their
entirety by reference to such exhibits.
On January 4, 1996, Concept loaned to the Issuer
$1,000,000 and received a Promissory Note dated January 4,
1996, which is described in Item 6 of this Amendment 28 (the
"January 1996 Promissory Note"). In connection with such
loan, the Issuer and Concept executed a Security Agreement
granting to Concept a security interest in the Issuer's
assets (the "Security Agreement"). Copies of the January
1996 Promissory Note and the Security Agreement are attached
hereto as Exhibits 28.0 and 28.1, respectively, and are
incorporated herein by reference, and the descriptions of
certain provisions thereof contained herein are qualified in
their entirety by reference to such exhibits.
On December 16, 1994, July 24, 1995 and October 2,
1995, Concept loaned to the Issuer $2,500,000, $1,500,000
and $2,000,000, respectively. All of these loans were made
on an unsecured basis. However, a default under any of
these loans or under the March 1995 Promissory Note is a
default under the January 1996 Promissory Note, which is a
collateralized obligation. Copies of the Promissory Notes
evidencing the December 16, 1994, July 24, 1995 and October
2, 1995 loans are attached hereto as Exhibits 28.2, 28.3 and
28.4, respectively, and are incorporated herein by
reference, and the descriptions of certain provisions
thereof contained herein are qualified in their entirety by
reference to such exhibits.
Concept has advised the Issuer of its intention to
convert some or all of the $11,000,000 of outstanding loans
(together with accrued interest thereon) into equity
securities of the Issuer. As reported in Item 6 hereof, no
agreement has been reached between Concept and the Issuer
regarding the terms of such conversion.
Arrangements with GNM.
In connection with a Stock Purchase Agreement
entered into among Concept, Gold 'N M Television, Inc.
("GNM"), Nostalgia Network Partners, L.P. ("NNP") and Marnel
Associates, Ltd. ("Marnel") (GNM, NNP and Marnel being
referred to as the "GNM Group") on April 30, 1990 (the
"Stock Purchase Agreement"), pursuant to which Concept
acquired its initial equity interest in the Issuer, Concept
and the GNM Group entered into a Shareholders Agreement (the
"Shareholders Agreement") and a Vote Pooling Agreement (the
"Vote Pooling Agreement"). The Shareholders Agreement
contained, inter alia, certain restrictions on the ability
of Concept and the GNM Group to convey their securities of
the Issuer to third parties and provided Concept and the GNM
Group with the right to purchase each other's securities of
the Issuer in certain events. The Vote Pooling Agreement
required Concept and the GNM Group to vote their securities
of the Issuer for the election of a Board of Directors
comprised of a certain number of representatives of Concept
and the GNM Group, respectively, based upon the number of
securities of the Issuer owned by such parties. The Stock
Purchase Agreement, the Shareholders Agreement and the Vote
Pooling Agreement were filed as Exhibits 1.4, 1.9 and 1.10
to the Schedule, respectively, and are incorporated herein
by reference, and the descriptions of certain provisions
thereof contained herein are qualified in their entirety by
reference to such exhibits.
These agreements, and the rights and obligations
of the parties thereunder, have been the subject of
extensive litigation between Concept and the GNM Group.
Concept is informed that in the third quarter of
1994 the Issuer received a letter from Michael E. Marcovsky,
who claimed to be the controlling person of GNM, contending
that the provisions of the Vote Pooling Agreement no longer
apply. On or about September 30, 1994, Concept advised the
Issuer of its belief that Concept is no longer bound by the
Vote Pooling Agreement. Accordingly, the Reporting Persons
believe that the GNM Group and Concept no longer are subject
to the provisions of the Vote Pooling Agreement, and that
there is no binding agreement between Concept and the GNM
Group regarding the voting of the securities of the Issuer.
The GNM Group does not currently have any representatives on
the Issuer's Board of Directors.
In August 1993, GNM filed a petition for
reorganization under Chapter 11, of the United States
Bankruptcy Code (the "Bankruptcy Action"), in the United
States Bankruptcy Court for the Central District of
California (the "Bankruptcy Court"). The Bankruptcy Action
has since been converted to a Chapter 7 liquidation. The
trustee appointed in the Action (the "Bankruptcy Trustee")
has sought and obtained an order of the Bankruptcy Court
permitting the Bankruptcy Trustee to assume the Shareholders
Agreement. The Bankruptcy Trustee has demanded that Concept
purchase certain shares of the Issuer owned by GNM pre-
petition, which shares purportedly are subject to a security
interest in favor of Allied Cellular Systems, Inc.
("Allied"). The Bankruptcy Trustee asserted that Concept is
obligated to purchase such shares pursuant to the "Buy/Sell
Provision" of the Shareholders Agreement. Concept has
rejected the Bankruptcy Trustee's demands. The Bankruptcy
Trustee has also attempted to set aside a purchase by
Concept of 1,500,000 shares of the Common Stock (the "M/A
Burgers Shares") which Concept purchased pursuant to its
right of first refusal under the Shareholders Agreement
following an attempted sale of such shares by M/A Burgers,
Inc. ("M/A Burgers") at a public auction on July 22, 1993.
Concept has opposed the Bankruptcy Trustee's attempt to set
aside such purchase and believes it is the beneficial owner
of the M/A Burgers Shares, notwithstanding the fact that the
stock certificates evidencing the M/A Burgers Shares have
not been reissued in Concept's name.
On July 22, 1993, Concept consummated the exercise
of its right of first refusal with respect to the M/A
Burgers Shares by purchasing such shares of the Common Stock
from M/A Burgers. In connection therewith, Concept and M/A
Burgers agreed on certain related matters, including inter
alia: (a) Concept's agreement to indemnify M/A Burgers,
subject to the satisfaction of certain conditions by M/A
Burgers, against certain damages that may be incurred by M/A
Burgers in connection with Concept's exercise of its right
of first refusal or its other rights pursuant to the
Shareholders Agreement; (b) that Concept's obligation to
indemnify M/A Burgers, as referenced in clause (a), will be
secured by a pledge to M/A Burgers of 1,500,000 shares of
the Common Stock (the "Pledged Shares") and guaranteed by
Atlantic Video (the "Guaranty"); and (c) that the Guaranty
and the Pledged Shares will be released upon Concept's
delivery into escrow of cash and certain promissory notes as
substitute collateral in lieu of the Pledged Shares. All of
the obligations of Concept under such agreement will be
deemed satisfied and released if M/A Burgers joins in the
proposed settlement described below in this Item 4.
Proposed Settlement.
Concept, the Bankruptcy Trustee and Allied believe
that they have reached an agreement in principle relating to
the settlement of the various disputes among them. However,
M/A Burgers, which is sought to be a party to such
settlement, has not agreed to the agreement in principle.
Even after full execution of definitive agreements relating
to the agreement in principle, the terms thereof are subject
to the approval of the Bankruptcy Court.
Under the terms of the proposed settlement,
Concept would pay to the Estate of GNM (the "Estate")
$1,050,000, in full settlement of all claims which the
Estate has against Concept. As part of such settlement, the
Bankruptcy Trustee would transfer to Concept 456,409 shares
of the Common Stock and 1,250 shares of the Preferred Stock.
The Bankruptcy Trustee would also relinquish its claim
against Concept relating to the purchase of M/A Burgers
Shares by Concept, which purchase the Bankruptcy Trustee was
attempting to set aside in the Bankruptcy Action. Concept
and the Estate would release all claims which either of them
has against the other and the Shareholders Agreement and the
Vote Pooling Agreement would terminate.
Also as part of such settlement, the Bankruptcy
Trustee would transfer to Allied the Estate's interest in
1,170,000 shares of the Common Stock and Allied would waive
its claim to a security interest in 1,335,676 shares of the
Common Stock and 1,250 shares of the Preferred Stock owned
by the Estate. Of these 1,170,000 shares of the Common
Stock transferred to Allied, Concept would purchase 170,000
shares at $.90 per share. Concept would have the option to
purchase the remaining 1,000,000 shares at an initial option
price of $.90 per share, which option price would increase
over time to a maximum of $1.10 per share. In the event
that Concept has not exercised its option within 18 months
after the date that such agreement becomes effective, Allied
would have the right, at any time during the following six
months, to require Concept to purchase such 1,000,000 shares
of the Common Stock at a price of $1.20 per share.
Concept's "call" and Allied's "put" are together referred to
as the "Allied Option." During the duration of the Allied
Option, Concept would have an irrevocable proxy to vote the
1,000,000 shares of the Common Stock which are the subject
of the Allied Option. As part of the arrangements described
above, the Bankruptcy Trustee, Concept and Allied would
release all claims which any of them has against the other
and all litigation among those parties would be dismissed
with prejudice.
Item 5. Interest in Securities of the Issuer.
(a)-(b) The following table sets forth informa-
tion with respect to the shares of the Common Stock
beneficially owned by the Reporting Persons as of the close
of business on January 19, 1996, and reflects Concept's
position that actions and omissions by GNM and its
affiliates relieve Concept of any obligation, pursuant to
the "Buy/Sell Provision" of the Shareholders Agreement, to
purchase securities of the Issuer owned beneficially by GNM,
NNP, Marnel and the Marnel Pension Plan:
<TABLE>
<CAPTION>
Name Aggregate Number Percentage Sole Power
of Shares of Class <F1> to Vote or
Beneficially or Direct
Owned Vote
<S> <C> <C> <C>
Concept 12,894,023<F2><F3> 62.5%<F4> 12,894,023<F2><F3>
Communications 12,894,023<F2><F3> 62.5%<F4> 0
Capital 12,894,023<F2><F3> 62.5%<F4> 0
Name Shared Power Sole Power Shared Power
to Vote or to Dispose to Dispose or
Direct Vote or Direct or Direct
Disposition Disposition
<S> <C> <C> <C>
Concept 0 12,894,023<F2><F3> 0
Communications 12,894,023<F2><F3> 0 12,894,023<F2><F3>
Capital 12,894,023<F2><F3> 0 12,894,023<F2><F3>
<FN>
<F1> Computed on the basis of 20,614,376 shares of the Common
Stock outstanding (20,274,371 shares of the Common Stock
reported to be outstanding in the Issuer's Form 10-Q for
the quarter ended September 30, 1995 and taking into
account the increase in the number of shares that would be
outstanding upon the conversion of the Preferred Stock
owned by Concept and the complete exercise of the Tiger
Warrant (as defined in Item 6 of this Amendment 28) by
Concept).
<F2> Includes 11,054,018 shares of the Common Stock and 1,250
shares of the Preferred Stock (each share convertible into
100 shares of the Common Stock) owned by Concept, the
1,500,000 M/A Burgers Shares that Concept believes it has
acquired pursuant to its exercise of the "right of first
refusal" provisions of the Shareholders Agreement and
215,005 shares of the Common Stock that may be acquired by
Concept pursuant to the unexercised portion of the Tiger
Warrant.
<F3> In the event that Concept finalizes the agreement with the
Bankruptcy Trustee and certain other parties described in
Item 4 hereof and such agreement is confirmed by the
Bankruptcy Court, the aggregate number of shares
beneficially owned will be 14,645,632, which will include
13,180,627 shares of the Common Stock and 2,500 shares of
the Preferred Stock (each share convertible into 100 shares
of the Common Stock) owned by Concept, 215,005 shares of
the Common Stock that may be acquired pursuant to the
unexercised portion of the Tiger Warrant and 1,000,000
shares of the Common Stock that may be acquired pursuant to
the Allied Option.
<F4> In the event that Concept finalizes the agreement with the
Bankruptcy Trustee described in Item 4 hereof and such
agreement is confirmed by the Bankruptcy Court, the
percentage of class owned will be 70.6%, computed on the
basis of 20,739,736 shares of the Common Stock outstanding
(20,274,371 shares of the Common Stock reported to be
outstanding in the Issuer's Form 10-Q for the quarter ended
September 30, 1995 and taking into account the number of
shares that would be outstanding upon the conversion of the
Preferred Stock then owned by Concept and the complete
exercise of the Tiger Warrant by Concept.)
</FN>
</TABLE>
None of Ms. Spurgin and Messrs. Joo, Hugel, Sebold,
Seubert, Cooperrider, Morton, Wojcik, Salonen, Ward, Guerra
and McDevitt beneficially owns shares of the Common Stock or
the Preferred Stock.
(c) No transactions in securities of the Issuer
were effected in the sixty days preceding January 19, 1996
by the Reporting Persons.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer.
Arrangements with John G. Heim.
In connection with the employment by the Issuer of
John G. Heim as its President and Chief Executive Officer,
Concept entered into an agreement with Mr. Heim. That
agreement provides that, in the event that at any time while
Mr. Heim is the holder of at least 200,000 shares of the
Common Stock, Concept desires to sell to a party which is
not a direct or indirect affiliate or associate of Concept
at least a majority of the shares of the Common Stock then
held by Concept, Concept either (i) would require such third
party to purchase at the same price and upon the same terms
being offered to Concept all shares of the Common Stock then
owned by Mr. Heim which he desires to sell or (ii) would
agree to purchase from Mr. Heim all shares of the Common
Stock then owned by him which he desires to sell at the same
price and upon the same terms as the shares being sold by
Concept to such third party. A copy of the letter agreement
between Concept and Mr. Heim was filed as Exhibit 26.2 to
the Schedule and is incorporated herein by reference, and
the description of certain provisions thereof contained
herein is qualified in its entirety by reference to such
exhibit.
Arrangements with Tiger Communications Company, L.P.
As of February 22, 1994, Concept and Tiger
Communications Company, L.P. ("Tiger") entered into a
Purchase Agreement (the "Purchase Agreement") pursuant to
which Concept acquired from Tiger (i) an aggregate of
4,322,324 shares of the Common Stock (the "Tiger Shares")
and (ii) a warrant to purchase up to 365,005 shares of the
Common Stock at a price of $2.00 per share on or before May
15, 1997 (the "Tiger Warrant"). The Purchase Agreement
provides that Concept acquired all of Tiger's rights under a
Registration Rights Agreement by and between the Issuer and
Tiger dated on or about February 24, 1992, as the same has
been amended to date (the "Registration Rights Agreement"),
with respect to the Tiger Shares and the shares of the
Common Stock underlying the Tiger Warrant. As of the date
hereof, Concept has purchased 150,000 shares of the Common
Stock underlying the Tiger Warrant and there remains 215,005
shares of the Common Stock that may be acquired by Concept
pursuant to the unexercised portion of the Tiger Warrant.
As part of the Purchase Agreement, under certain
circumstances, Concept might be required to pay to Tiger up
to an additional $700,000. This potential obligation would
be dismissed as part of the proposed settlement described in
Item 4 hereof.
The Registration Rights Agreement generally
provides that, from February 24, 1993 to February 24, 1997,
Tiger, or its designee, may demand that the Issuer effect
the registration under the Securities Act of 1933, as
amended, of no less than 500,000 shares of the Common Stock
held by Tiger. Tiger, or its designee, may make two such
demands. Tiger, or its designee, is also entitled to
request that the Issuer include securities held by Tiger, or
its designee, in certain registrations by the Issuer of its
securities.
Arrangements with Atlantic Video.
The description of borrowing arrangements between
Concept and Communications, and between Communications and
Atlantic Video, contained in Item 3 hereof, is incorporated
herein by reference.
Arrangements with the Issuer.
On March 29, 1995, Concept loaned $4,000,000 to
the Issuer and received the March 1995 Promissory Note in
the principal amount of $4,000,000 as described in Item 3
hereof. In connection with that loan transaction, (i)
Concept and the Issuer entered into the March 1995 Letter
Agreement and (ii) Concept delivered a letter containing
representations regarding a promissory note in the principal
amount of $2,500,000 made by the Issuer to Concept dated
December 16, 1994 (the "Concept Letter Regarding the
$2,500,000 Note"). Copies of the March 1995 Promissory
Note, the March 1995 Letter Agreement and of the Concept
Letter Regarding the $2,500,000 Note were filed as Exhibits
27.1, 27.2, and 27.3 of the Schedule, respectively, and are
incorporated herein by reference, and the descriptions of
certain provisions thereof contained herein are qualified in
their entirety by reference to such exhibits.
The March 1995 Promissory Note evidences the
Issuer's obligation to repay to Concept the $4,000,000
Concept loaned to the Issuer on such date. Such loan
matures on February 1, 1996 unless sooner prepaid and bears
interest at the annual rate of 6.09% (the six-month Treasury
bill rate in effect as of March 27, 1995) through such
maturity date. The March 1995 Promissory Note requires that
it be prepaid prior to the maturity date in the event of an
equity investment in the Issuer of at least the principal
amount of the loan prior to the maturity date. That loan is
in addition to an earlier loan of $2,500,000 made by Concept
to the Issuer on December 16, 1994 (which bears interest at
an annual rate of 6.43%, the six-month Treasury bill rate in
effect at or about the time such earlier loan was agreed to
and made). The March 1995 Letter Agreement provides that if
either of these loans or any subsequent loans from Concept
to the Issuer are outstanding at January 31, 1996, each such
loan will have its interest rate adjusted, effective as of
February 1, 1996, to the six-month Treasury bill rate used
to compute the initial interest rate for such loans, plus
two percentage points.
The March 1995 Letter Agreement provides that
Concept and the Issuer anticipate that the principal and
accrued interest on the loan evidenced by the March 1995
Promissory Note will be converted into equity securities of
the Issuer when Concept and the Issuer reach agreement as to
the price at which such equity securities will be issued to
Concept in such conversion. The March 1995 Letter Agreement
provides that, as part of such conversion, the Issuer will
issue to Concept at least 2,000 shares of the Preferred
Stock and that, in the interim, the Issuer will not issue
any shares of the Preferred Stock to any other person or
entity. Concept and representatives of the Issuer have from
time to time had discussions regarding the terms of such
conversion, but, to date, no agreement has been reached.
In the March 1995 Letter Agreement, the Issuer
grants to Concept a right of first refusal in the event
that, prior to the date of conversion of such loan into
securities of the Issuer, the Issuer desires to sell to any
person or persons acting in concert in any transaction or
series of transactions more than 500,000 shares of the
Common Stock or more than 500 shares of the Preferred Stock.
In the March 1995 Letter Agreement, the Issuer agrees that,
in the event that it sells any of its shares to a third
party at a price less than the price at which the Issuer and
Concept agree to convert Concept's loan, the Issuer will
issue such number of additional shares to Concept as would
cause Concept's conversion price to be adjusted to such
lesser purchase price (the "Anti-Dilution Right").
The March 1995 Letter Agreement also provides that
during the term of the loan evidenced by the March 1995
Promissory Note, the Issuer will not enter into any
agreement committing it to spend in excess of $1,000,000
unless such expenditure is provided for in the Issuer's
long-range business plan or otherwise approved by Concept.
In the March 1995 Letter Agreement, the Issuer agrees to
provide to Concept monthly financial statements and
financial information through the date on which the loan
evidenced by the March 1995 Promissory Note is converted
into equity securities of the Issuer.
As previously noted in Items 3 and 4 hereof and
this Item 6, Concept loaned the Issuer $2,500,000 and
received a Promissory Note made by the Issuer to Concept in
the principal amount of $2,500,000, dated December 16, 1994
(the "December 1994 Promissory Note"). The December 1994
Promissory Note provides that it matures at the earlier of
June 16, 1995 or the completion of an equity investment by
Concept or others in the Issuer in an amount of at least the
amount of the December 1994 Promissory Note. The
December 1994 Promissory Note also provides that if such
investment does not occur within the term of the
December 1994 Promissory Note, the Issuer's obligation to
repay the loan is conditioned upon Concept's exercise of the
unexercised portion of the Tiger Warrant. In the Concept
Letter Regarding the $2,500,000 Note, Concept agreed to
extend the term of the December 1994 Promissory Note until
February 1, 1996 if the requisite equity investment in the
Issuer is not completed during 1995. Such equity investment
was not completed during 1995. The December 1994 Promissory
Note requires the loan to be repaid prior to the maturity
date if an equity investment is made in the Issuer of at
least the principal amount of the loan prior to the maturity
date.
On January 4, 1996, Concept loaned $1,000,000 to
the Issuer and received the January 1996 Promissory Note.
The January 1996 Promissory Note evidences the Issuer's
obligation to repay the $1,000,000 loaned to the Issuer on
such date. Such loan matures on February 1, 1996 unless
sooner prepaid and bears interest at the annual rate of
5.28% (the six-month Treasury bill rate in effect on or
about January 2, 1996) through such maturity date. The
January 1996 Promissory Note requires that it be prepaid
prior to the maturity date in the event of an equity
investment in the Issuer of at least the principal amount of
the loan prior to the maturity date. In the event that this
loan is not repaid by February 1, 1996, the interest rate
will adjust, as of February 1, 1996, to the six month
Treasury bill rate in effect as of February 1, 1996, plus
two percentage points. In connection with that loan
transaction, the Issuer entered into the Security Agreement
granting to Concept a security interest in the Issuer's
assets.
As previously noted in Items 3 and 4 hereof,
Concept loaned the Issuer $1,500,000 on July 24, 1995 and
received a Promissory Note from the Issuer dated July 24,
1995 evidencing the Issuer's obligation to repay to Concept
the $1,500,000 loaned to the Issuer on such date (the
"July 1995 Promissory Note"). Such loan matures on
February 1, 1996 unless sooner prepaid and bears interest at
the annual rate of 6.59% (the six-month Treasury bill rate
in effect on or about July 24, 1995) through such maturity
date. The July 1995 Promissory Note requires that it be
prepaid prior to the maturity date in the event of an equity
investment in the Issuer of at least the principal amount of
the loan prior to the maturity date. In the event this loan
is not repaid by February 1, 1996, the interest rate will
adjust, as of February 1, 1996, to an annual rate of 8.59%.
As previously noted in Items 3 and 4 hereof,
Concept loaned the Issuer $2,000,000 on October 2, 1995 and
received a Promissory Note from the Issuer dated October 2,
1995 evidencing the Issuer's obligation to repay to Concept
the $2,000,000 loaned to the Issuer on such date (the
"October 1995 Promissory Note"). Such loan matures on
February 1, 1996 unless sooner prepaid and bears interest at
the annual rate of 5.58% (the six-month Treasury bill rate
in effect on or about October 2, 1995) through such maturity
date. The October 1995 Promissory Note requires that it be
prepaid prior to the maturity date in the event of an equity
investment in the Issuer of at least the principal amount of
the loan prior to the maturity date. In the event this loan
is not repaid by February 1, 1996, the interest rate will
adjust, as of February 1, 1996, to the six-month Treasury
bill rate in effect as of February 1, 1996, plus two
percentage points.
In connection with the October 2, 1995 loan by
Concept to the Issuer, Concept and the Issuer executed a
letter agreement (the "October 2, 1995 Letter Agreement")
extending the Anti-Dilution Right to all loans outstanding
from Concept to the Issuer as of the date of the conversion
of such loans into equity of the Issuer. A copy of the
October 2, 1995 Letter Agreement is attached hereto as
Exhibit 28.5, and is incorporated herein by reference, and
the description of certain provisions thereof contained
herein is qualified in their entirety by reference to such
exhibits.
Arrangements with GNM
For a description of arrangements with GNM, see
the information under the heading "Arrangements with GNM"
under Item 4 hereof, which information is hereby
incorporated under this Item 6.
Item 7. Items to be Filed as Exhibits
Exhibit Description
28.0 Copy of Promissory Note dated January 4, 1996 made
by The Nostalgia Network, Inc. to Concept
Communications, Inc. in the principal amount of
$1,000,000.
28.1 Security Agreement dated January 4, 1996 by and
between The Nostalgia Network, Inc. and Concept
Communications, Inc.
28.2 Copy of Promissory Note dated December 16, 1994
made by The Nostalgia Network, Inc. to Concept
Communications, Inc. in the principal amount of
$2,500,000.
28.3 Copy of Promissory Note dated July 24, 1995 made
by The Nostalgia Network, Inc. to Concept
Communications, Inc. in the principal amount of
$1,500,000.
28.4 Copy of Promissory Note dated October 2, 1995 made
by The Nostalgia Network, Inc. to Concept
Communications, Inc. in the principal amount of
$2,000,000.
28.5 Letter agreement dated October 2, 1995 by and
between The Nostalgia Network, Inc. and Concept
Communications, Inc.
SIGNATURES
After reasonable inquiry and to the best knowledge and
belief of the undersigned, the undersigned hereby certifies
that the information set forth in this amendment is true,
complete and correct.
Dated: January 25, 1996
CONCEPT COMMUNICATIONS, INC.
By: \s\ DONG MOON JOO
Dong Moon Joo, President
CROWN COMMUNICATIONS CORPORATION
By: \s\ DONG MOON JOO
Dong Moon Joo, President
CROWN CAPITAL CORPORATION
By: \s\ DONG MOON JOO
Dong Moon Joo, President
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
28.0 Copy of Promissory Note dated January 4,
1996 made by The 19
Nostalgia Network, Inc. to Concept
Communications, Inc. in the principal amount of
$1,000,000.
28.1 Security Agreement dated January 4,
1996 by and between The 24
Nostalgia Network, Inc. and Concept
Communications, Inc.
28.2 Copy of Promissory Note dated December 16,
1994 made by The 32
Nostalgia Network, Inc. to Concept
Communications, Inc. in the principal amount
of $2,500,000.
28.3 Copy of Promissory Note dated July
24, 1995 made by The 33
Nostalgia Network, Inc. to Concept
Communications, Inc. in the principal amount
of $1,500,000.
28.4 Copy of Promissory Note dated
October 2, 1995 made by The 38
Nostalgia Network, Inc. to Concept
Communications, Inc. in the principal amount of
$2,000,000.
28.5 Letter agreement dated October 2,
1995 by and between The 43
Nostalgia Network, Inc. and Concept
Communications, Inc.
PROMISSORY NOTE
$1,000,000 Washington, D.C.
Maturity Date: February 1, 1996 January 4, 1996
FOR VALUE RECEIVED, the undersigned, THE NOSTALGIA NETWORK,
INC., a Delaware Corporation ("Maker"), hereby promises to pay to
the order of CONCEPT COMMUNICATIONS, INC., a Delaware
corporation, or any subsequent holder or holders ("Holder") of
this Promissory Note (this "Note"), at 650 Massachusetts Avenue,
N.W., Washington, D.C., 20001, or at such other place as Holder
may from time to time designate in writing, the principal sum of
One Million Dollars ($1,000,000), together with all accrued
interest on such outstanding balance, in accordance with the
terms and provisions of this Note.
1. Principal and Interest. Interest shall accrue on the
outstanding principal balance of this Note from January 4, 1996,
at the rate of five and twenty-eight hundredths percent (5.28%)
per annum, and the principal balance together with all interest
accrued thereon, shall be payable on February 1, 1996 (the "Ma-
turity Date"). In the event that the principal balance and all
accrued interest is not paid on or before the Maturity Date,
interest shall accrue thereafter on all unpaid amounts at the
rate equal to that accruing on six month United States Treasury
bills as of such date plus two percentage points.
2. Payments. All payments by Maker hereunder shall be
applied (i) first to the interest due and unpaid under this Note,
and (ii) thereafter, to any principal owing under this Note.
3. Prepayment. Maker shall have the right to prepay, in
part or in full, without penalty, this Note (together with all
accrued interest to the date of prepayment on the amount of prin-
cipal thus prepaid) at any time or times. The purpose of this
loan is to provide a bridge until Maker is able to negotiate an
equity investment not less than the principal amount hereof. If
this investment occurs prior to the Maturity Date, Maker shall be
required to prepay all amounts owed hereunder.
4. Security. This note is secured by a security interest
in collateral described in a certain security agreement between
Payee and Maker, the effective date of which is January 4, 1996
(the "Security Agreement"). The rights and obligations of the
parties with respect to the above-mentioned collateral are stated
in the Security Agreement.
5. Waiver Regarding Notice. Maker waives presentment,
demand and presentation for payment, protest and notice of
protest, and, except as otherwise specifically provided herein,
any other notices of whatever kind or nature, bringing of suit
and diligence in taking any action to collect any sums owing
hereunder. From time to time, without in any way affecting the
obligation of Maker to pay the outstanding principal balance of
this Note and any interest accrued thereon and fully to observe
and perform the covenants and obligations of Maker under this
Note, without giving notice to, or obtaining the consent of,
Maker, and without any liability whatsoever on the part of
Holder, Holder may, at its option, extend the time for payment of
interest hereon and/or principal of this Note, reduce the
payments hereunder, release anyone liable on this Note or accept
a renewal of this Note, join in any extension or subordination,
or exercise any right or election hereunder. No one or more of
such actions shall constitute a novation or operate to release
any party liable for or under this Note, either as Maker or
otherwise.
6. Events of Default. Each of the following shall
constitute an "Event of Default" hereunder:
a. Maker's failure to make any required payment of
principal and/or interest under this Note, or any other amount
due and payable under this Note on or before the date on which
such payment is due under this Note;
b. Maker's failure to make any required payment when
due of any other amounts owed by Maker to Holder; and
c. Maker's insolvency, general assignment for the
benefit of creditors, or the commencement by or against Maker of
any case, proceeding, or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or composition
of Maker's debts under any law relating to bankruptcy,
insolvency, or reorganization, or relief of debtors, or seeking
appointment of a receiver, trustee, custodian, or other similar
official for Maker or for all or any substantial part of Maker's
assets.
7. Acceleration. Upon the occurrence of an Event of
Default, Holder shall have the right to cause the entire unpaid
principal balance, together with all accrued interest thereon,
reasonable attorneys' and paralegals' fees and all fees, charges,
costs and expenses, if any, owed by Maker to Holder, to become
immediately due and payable in full by giving written notice to
Maker.
8. Remedies. Upon the occurrence of an Event of Default,
Holder may avail itself of any legal or equitable rights which
Holder may have at law or in equity or under this Note,
including, but not limited to, the right to accelerate the
indebtedness due under this Note as described in the preceding
sentence. The remedies of Holder as provided herein shall be
distinct and cumulative, and may be pursued singly, successively
or together, at the sole discretion of Holder, and may be
exercised as often as occasion therefor shall arise. Failure to
exercise any of the foregoing options upon the occurrence of an
Event of Default shall not constitute a waiver of the right to
exercise the same or any other option at any subsequent time in
respect to the same or any other Event of Default, and no single
or partial exercise of any right or remedy shall preclude other
or further exercise of the same or any other right or remedy.
Holder shall have no duty to exercise any or all of the rights
and remedies herein provided or contemplated. The acceptance by
Holder of any payment hereunder that is less than payment in
full of all amounts due and payable at the time of such payment
shall not constitute a waiver of the right to exercise any of the
foregoing rights or remedies at that time, or nullify any prior
exercise of any such rights or remedies without the express
written consent of Holder.
9. Expenses of Collection. If this Note is referred to an
attorney for collection, whether or not suit has been filed or
any other action instituted or taken to enforce or collect under
this Note, Maker shall pay all of Holder's costs, fees (including
reasonable attorneys' and paralegals' fees) and expenses in
connection with such referral.
10. Governing Law. The provisions of this Note shall be
governed and construed according to the law of the District of
Columbia, without giving effect to its conflicts of laws
provisions.
11. No Waiver. Neither any course of dealing by Holder nor
any failure or delay on its part to exercise any right, power or
privilege hereunder shall operate as a waiver of any right or
remedy of Holder hereunder unless said waiver is in writing and
signed by Holder, and then only to the extent specifically set
forth in said writing. A waiver as to one event shall not be
construed as a continuing waiver by Holder or as a bar to or
waiver of any right or remedy by Holder as to any subsequent
event.
12. Notices.
a. All notices hereunder shall be in writing and shall
either be hand delivered, with receipt therefor, or sent by
Federal Express or similar courier, with receipt therefor, or by
certified or registered mail, postage prepaid, return receipt
requested, as follows:
If to Maker: The Nostalgia Network, Inc.
650 Massachusetts Avenue, N.W.
Washington, D.C. 20001
Attn: President
If to Holder: Concept Communications, Inc.
650 Massachusetts Avenue, N.W., Second Floor
Washington, D.C. 20001
Notices shall be effective when received; provided, however, that
if any notice sent by courier or by certified or registered mail
is returned as undeliverable, such notice shall be deemed
effective when mailed or given to such courier.
b. Either of the foregoing persons may change the
address to which notices are to be delivered to it hereunder by
giving written notice to the others as provided in this Paragraph
11.
13. Severability. In the event that any one or more of the
provisions of this Note shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such inva-
lidity, illegality or unenforceability shall not affect any other
provision of this Note, and this Note shall be construed as if
such invalid, illegal or unenforceable provision had never been
contained herein.
14. Limitations of Applicable Law. In the event the oper-
ation of any provision of this Note results in an effective rate
of interest transcending the limit of the usury or any other law
applicable to the loan evidenced hereby, all sums in excess of
those lawfully collectible as interest for the period in question
shall, without further agreement or notice by any party to this
Note, be applied to the unpaid principal balance of this Note
immediately upon receipt of such monies by Holder, with the same
force and effect as though Maker had specifically designated such
extra sums to be so applied to the unpaid principal balance and
Holder had agreed to accept such extra payment(s) as a
prepayment.
15. Captions. The captions herein are for convenience of
reference only and in no way define or limit the scope or content
of this Note or in any way affect its provisions.
16. Debtor-Creditor Relationship. Holder shall in no event
be construed for any purpose to be a partner, joint venturer or
associate of Maker, it being the sole intention of the parties to
establish a relationship of debtor and creditor.
17. Time of the Essence. It is expressly agreed that time
is of the essence in the performance of the obligations set forth
in this Note.
<PAGE>
IN WITNESS WHEREOF, Maker has executed this Promissory Note
on this fourth day of January 1996, pursuant to due authority.
MAKER:
ATTEST: THE NOSTALGIA NETWORK, INC.,
a Delaware corporation
\s\DANIEL C. HOLDGREIWE By:\s\ JACK HEIM
Daniel C. Holdgreiwe Jack Heim
Secretary President
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is made and
entered into this fourth day of January, 1996, by and between
CONCEPT COMMUNICATIONS, INC., 650 Massachusetts Ave., N.W.,
Washington, D.C., 20001, a Delaware Corporation ("Secured
Party"), and THE NOSTALGIA NETWORK, INC., 650 Massachusetts Ave.,
N.W., Washington, D.C., 20001, a Delaware Corporation ("Debtor")
WHEREAS, Secured Party, on date even herewith has loaned to
Debtor One*Million*And No/100 Dollars ($1,000,000.00), and Debtor
did, effectively on this date, execute a Promissory Note (the
"Note") on which Secured Party is payee in the principal amount
of One*Million*and No/100 Dollars ($1,000,000.00), plus interest
thereon; and
WHEREAS, as an inducement to Secured Party to accept the
Note Debtor has agreed to execute and deliver this Agreement to
Secured Party; and
WHEREAS, the parties hereby wish to secure in the manner set
forth in this Agreement the payment, performance and discharge of
all obligations of Debtor under the Note or otherwise.
NOW, THEREFORE, in consideration of the mutual promises of
the parties hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Security Interests.
A. In order to secure the due and punctual payment of
the Note (and all sums which may be owed thereunder) in
accordance with the terms thereof, as the Note may be amended
from time to time, Debtor hereby grants to Secured Party a
continuing security interest in the following (hereinafter
collectively called the "Collateral"):
(i) all personal property and fixtures in which
Debtor has an interest, now or hereafter existing or acquired,
and wherever located, tangible or intangible, including but not
limited to all present and hereafter existing or acquired
accounts, contract rights, general intangibles, equipment, goods,
inventory (raw materials, components, work-in process, finished
merchandise and packing and shipping materials), personal
property made available to Debtor by Secured Party ( or its agent
or bailee) pursuant to a trust receipt or other security
agreement the effect of which is to continue Secured Party's
security interest therein, money, instruments, documents, chattel
paper, securities, deposits, credits, claims and demands against
Secured Party;
(ii) all proceeds thereof; and
(iii) all increases, substitutions,
replacements, additions and accessions thereto.
B. The security interests granted pursuant to this
Section 1 (the "Security Interests") are granted as security only
and shall not subject Secured Party to, or transfer or in any way
affect any obligation or liability of Debtor with respect to any
of the Collateral or any transaction which gave rise thereto.
2. Possession
Debtor shall have the right to sell, mortgage or otherwise
dispose of Collateral in the usual course of business without the
prior written consent of Secured Party, so longs as such items
are replaced with comparable items of equal or greater value.
Secured Party shall have a security interest in all such
replacements items. Any action with respect to the Collateral
that is not in the ordinary course of business shall not be taken
unless Debtor shall have obtained the prior written consent of
Secured Party to such action.
3. Location
Except as otherwise provided in Section 2 hereof, Debtor
hereby agrees to keep the Collateral at its principal office and
not to remove the same (except in the usual course of business
for temporary periods) without the prior written consent of
Secured Party.
4. Filing
Debtor will, at its expense, execute, deliver, file and
record (in such manner and form as Secured Party may require), or
permit Secured Party to file and record, any financing
statements, continuation statements, specific assignment or other
instruments that may be necessary or desirable in order to
create, preserve, perfect or validate any security interest or to
enable Secured Party to exercise and enforce its rights
hereunder.
5. Repairs
Debtor hereby agrees to keep the Collateral, at Debtor's own
expense and cost, in such repair and condition as exists on the
date hereof and available for inspection by Secured Party at all
reasonable times.
6. Liens
Debtor hereby agrees to keep the Collateral free and clear
of all liens, charges, encumbrances, taxes and assessments,
except as may have been or may be created by Secured Party.
7. Title
Debtor hereby agrees to defend the title to the Collateral
against all persons and against all claims and demands
whatsoever; provided, however, that Debtor shall not be required
to defend the title to the Collateral against any claim or demand
arising out of any act or failure to act by Secured Party.
8. Payment
Debtor hereby agrees to pay and perform all of the
obligations secured by this Agreement according to the terms
hereof.
9. Applicable Law
The Uniform Commercial Code as in effect in the District of
Columbia shall govern the rights, duties and remedies of the
parties hereto and any provisions herein declared invalid under
any law shall not invalidate any other provision of this
Agreement.
10. Events of Default
Debtor shall be in default under this Agreement upon the
occurrence of:
(i) the failure by Debtor to timely pay the
principal or any installment of principal or interest on the Note
or any other sum due thereunder or otherwise;
(ii) the failure by Debtor to comply with or
perform any provision of this Agreement;
(iii) the breach by Debtor of any covenant,
agreement or condition contained in any other security or other
agreement of any kind securing the payment of the indebtedness
(or any part thereof) under the Note or otherwise;
(iv) the execution by Debtor of an assignment for
the benefit of creditors;
(v) the subjection of the Collateral to levy of
execution or other judicial process;
(vi) the appointment of a receiver of Debtor or
of the Collateral, or of any substantial part thereof;
(vii) the commencement of any bankruptcy or
insolvency proceeding against Debtor; or
(viii) the commencement of any bankruptcy or
insolvency proceeding by Debtor.
11. Remedies Upon Event of Default
Upon any default by Debtor, at the option of Secured Party,
the obligations secured by this Agreement shall immediately
become due any payable in full and Secured Party shall have all
the rights, remedies and privileges with respect to repossession,
retention and sale of the Collateral and disposition of the
proceeds as are accorded by the applicable sections of the
Uniform Commercial Code as in effect in the District of Columbia.
12. General Authority
Debtor hereby irrevocably appoints Secured Party as Debtor's
true and lawful attorney, with full power of substitution, in the
name of Debtor, Secured Party or otherwise, for the sole use and
benefit of Secured Party, but at Debtor's expense, to the extent
permitted by law, to exercise, at any time and from time to time
while any default has occurred and is continuing, all or any of
the following powers with respect to all or any of the
Collateral:
(i) To receive, take, endorse, assign and deliver
any and all checks, notes, drafts, documents and other negotiable
and non-negotiable instruments and chattel paper taken or
received by Secured Party in connection therewith;
(ii) To settle, compromise, compound, prosecute
or defend any action or proceeding with respect thereto;
(iii) To sell, transfer, assign or otherwise deal
in or with same or the proceeds or avails thereof as fully and
effectually as if Secured Party were the absolute owner thereof;
(iv) To extend the time of payment of any or all
thereof and to make any allowance and other adjustments with
reference thereto; and
(v) To discharge any taxes, liens, security
interests or other encumbrances at any time placed thereon;
provided that Secured Party shall give Debtor not less than five
(5) days' prior written notice of the time and place of any sale
or other intended disposition of any of the Collateral, except
any Collateral which is perishable or threatens to decline
speedily in value or is of a type customarily sold on a
recognized market. Secured Party and Debtor agree that such
notice constitutes "reasonable notification" within the meaning
of Section 9-504(3) of the Uniform Commercial Code.
13. Application of Proceeds
The proceeds of any sale of, or other realization upon, all
or any part of the Collateral shall be applied in the following
order or priorities:
First, to pay the expenses of retaking, holding,
preparing for sale or lease, selling, leasing and the like and
reasonable attorneys' fees and legal expenses incurred by Secured
Party;
Second, to the payment of the Note and any other
obligations secured hereby;
Third, to pay the indebtedness secured by any
subordinate security interest in the item of Collateral sold if
written notification of demand therefor is received before
distribution of the proceeds is completed; and
Finally, to pay to Debtor, or its assigns, or as a
court of competent jurisdiction may direct, any surplus then
remaining from such proceeds.
14. Expenses; Secured Party's Lien
Debtor will forthwith upon demand pay to Secured Party:
(i) the amount of any taxes which Secured Party
may have been required to pay by reason of the exercise of its
rights pursuant to Section 12 hereof (including any applicable
transfer taxes) or to free any of the Collateral from any lien
thereon, and
(ii) the amount of any and all reasonable out-of-
pocket expenses, including the fees and disbursements of its
counsel and of any agents not regularly in its employ, which
Secured Party may incur in connection with (a) the collection,
sale or other disposition of any of the Collateral, (b) the
exercise by Secured Party of any of the powers conferred upon it
hereunder or (c) any default on Debtor's part hereunder.
15. Termination of Security Interests; Release of
Collateral
Upon the repayment in full of the Note and all other
obligations secured hereby, the Security Interest shall terminate
and all rights to the Collateral shall revert to Debtor. Upon
any such termination of the Security Interest or release of
Collateral, Secured Party will, at Debtor's expense, execute and
deliver to Debtor such documents as Debtor shall reasonably
request to evidence the termination of the Security Interest or
the release of such Collateral, as the case may be.
16. Notices
All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been
duly given, if delivered or sent by registered or certified mail,
return receipt requested, first-class postage prepaid as follows:
(i) if to Secured Party, to Concept
Communications, Inc., 650 Massachusetts Ave., N.W., Washington,
D.C., 20001, Attention: President, with a copy to Arthur
Cirulnik, Tucker, Flyer & Lewis, 1615 L Street N.W., Washington,
D.C. 20036.
(ii) if to Debtor, to The Nostalgia Network,
Inc., 650 Massachusetts Ave., N.W., Washington, D.C., 20001,
Attention: President, with a copy to Bruce Casino, Esq., Fried,
Frank, Harris, Shriver & Jacobsen, 1001 Pennsylvania Ave., N.W.,
Suite 800, Washington, D.C. 20004, or to such other address as
any such party may designate in accordance with this Section 16.
17. Waivers; Non-Exclusive Remedies
No failure on the part of Secured Party to exercise, and no
delay in exercising, and no course of dealing with respect to,
any rights, power or remedy under this Agreement shall operate as
a waiver thereof; nor shall any single or partial exercise by
Secured Party of any right, power or remedy under this Agreement
preclude any other right, power or remedy. The remedies in this
Agreement are cumulative and are not exclusive of any other
remedies provided by law.
18. Changes in Writing
Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by a
statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought.
19. District of Columbia Law; Meaning of Terms
This Agreement shall be governed and construed according to
the laws of the District of Columbia and shall be binding upon
Debtor, and shall inure to the benefit of Secured Party and its
successors and assigns.
20. Severability
If any provision hereof is invalid or unenforceable in any
jurisdiction, the other provisions hereof shall remain in full
force and effect in such jurisdiction and shall be liberally
construed in favor of Secured Party in order to carry out the
intentions of the parties hereto as nearly as may be possible;
and the invalidity or unenforceability of any provision hereof in
any jurisdiction shall not affect the validity or enforceability
of such provision in any other jurisdiction.
21. Headings
The headings in this Agreement are for the purpose of
convenience and reference only and shall not limit or otherwise
affect the meaning hereof.
22. Binding Effect
The terms, warranties, agreements and covenants herein
contained shall bind and inure to the benefit of the respective
parties hereto, and their successors and assigns.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
SECURED PARTY:
Concept Communications, Inc., a
Delaware Corporation
By:\s\DONG MOON JOO
Dong Moon Joo, President
DEBTOR:
The Nostalgia Network, Inc., a
Delaware Corporation,
By:\S\JACK HEIM
Jack Heim, President
NOTE
$2,500,000 Alexandria, Virginia
December 16, 1994
Six (6) months after this date, FOR VALUE RECEIVED, The
Nostalgia Network, Inc. ("Nostalgia"), a Delaware corporation
having its principal place of business at 650 Massachusetts
Avenue, N.W. Washington, D.C., promises to pay to Concept
Communications, Inc. ("Concept"), 650 Massachusetts Avenue, N.W.
Washington, D.C. the sum of Two Million Five Hundred Thousand
dollars ($2,500,000), with interest from this date at the rate of
Six and Forty-Three One Hundredths Percent (6.43%) per annum,
subject to the terms and conditions set forth below.
ACCELERATION: The purpose of this loan is to provide a
bridge until Nostalgia is able to negotiate an equity investment
not less than the amount of this note by Concept or others (the
Proposed Investments"). Accordingly, if the Proposed Investment
takes place before the due date of this Note, this Note will be
immediately due and payable upon completion of the Proposed
Investment.
APPLICATION TO WARRANTS: Concept currently holds 215,005
Nostalgia warrants with an exercise price of $2.00 per share. In
the event that the Proposed Investment does not occur within the
term of this Note, Nostalgia's obligation to repay shall be
conditioned on Concept's exercise of said warrants.
The Nostalgia Network, Inc. has caused this Note to be
executed on its behalf by its undersigned duly authorized
officers.
THE NOSTALGIA NETWORK, INC.
s/ John G. Heim
By John G. Heim, President
s/ Daniel C. Holdgreiwe
By Daniel C. Holdgreiwe,
Secretary
PROMISSORY NOTE
$1,500,000 Washington, D.C.
Maturity Date: February 1, 1996 July 24, 1995
FOR VALUE RECEIVED, the undersigned, THE NOSTALGIA NETWORK,
INC., a Delaware Corporation ("Maker"), hereby promises to pay to
the order of CONCEPT COMMUNICATIONS, INC., a Delaware
corporation, or any subsequent holder or holders ("Holder") of
this Promissory Note (this "Note"), at 650 Massachusetts Avenue,
N.W., Washington, D.C., 20001, or at such other place as Holder
may from time to time designate in writing, the principal sum of
One Million Five Hundred Thousand Dollars ($1,500,000), together
with all accrued interest on such outstanding balance, in
accordance with the terms and provisions of this Note.
1. Principal and Interest. Interest shall accrue on
the outstanding principal balance of this Note from March 29,
1995, at the rate of six and nine hundredths percent (6.59%) per
annum, and the principal balance together with all interest
accrued thereon, shall be payable on February 1, 1996 (the "Ma-
turity Date"). In the event that the principal balance and all
accrued interest is not paid on or before February 1, 1996,
interest shall accrue thereafter on all unpaid amounts at the
rate of eight and nine hundredths percent (8.59%) per annum.
2. Payments. All payments by Maker hereunder shall
be applied (i) first to the interest due and unpaid under this
Note, and (ii) thereafter, to any principal owing under this
Note.
3. Prepayment. Maker shall have the right to prepay,
in part or in full, without penalty, this Note (together with all
accrued interest to the date of prepayment on the amount of prin-
cipal thus prepaid) at any time or times. The purpose of this
loan is to provide a bridge until Maker is able to negotiate an
equity investment not less than the principal amount hereof. If
this investment occurs prior to the Maturity Date, Maker shall be
required to prepay all amounts owed hereunder.
4. Waiver Regarding Notice. Maker waives
presentment, demand and presentation for payment, protest and
notice of protest, and, except as otherwise specifically provided
herein, any other notices of whatever kind or nature, bringing of
suit and diligence in taking any action to collect any sums owing
hereunder. From time to time, without in any way affecting the
obligation of Maker to pay the outstanding principal balance of
this Note and any interest accrued thereon and fully to observe
and perform the covenants and obligations of Maker under this
Note, without giving notice to, or obtaining the consent of,
Maker, and without any liability whatsoever on the part of
Holder, Holder may, at its option, extend the time for payment of
interest hereon and/or principal of this Note, reduce the
payments hereunder, release anyone liable on this Note or accept
a renewal of this Note, join in any extension or subordination,
or exercise any right or election hereunder. No one or more of
such actions shall constitute a novation or operate to release
any party liable for or under this Note, either as Maker or
otherwise.
5. Events of Default. Each of the following shall
constitute an "Event of Default" hereunder:
a. Maker's failure to make any required payment
of principal and/or interest under this Note, or any other amount
due and payable under this Note on or before the date on which
such payment is due under this Note; and
b. Maker's failure to make any required payment
when due of any other amounts owed by Maker to Holder; and
c. Maker's insolvency, general assignment for
the benefit of creditors, or the commencement by or against Maker
of any case, proceeding, or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or composition
of Maker's debts under any law relating to bankruptcy,
insolvency, or reorganization, or relief of debtors, or seeking
appointment of a receiver, trustee, custodian, or other similar
official for Maker or for all or any substantial part of Maker's
assets.
6. Acceleration. Upon the occurrence of an Event of
Default, Holder shall have the right to cause the entire unpaid
principal balance, together with all accrued interest thereon,
reasonable attorneys' and paralegals' fees and all fees, charges,
costs and expenses, if any, owed by Maker to Holder, to become
immediately due and payable in full by giving written notice to
Maker.
7. Remedies. Upon the occurrence of an Event of
Default, Holder may avail itself of any legal or equitable rights
which Holder may have at law or in equity or under this Note,
including, but not limited to, the right to accelerate the
indebtedness due under this Note as described in the preceding
sentence. The remedies of Holder as provided herein shall be
distinct and cumulative, and may be pursued singly, successively
or together, at the sole discretion of Holder, and may be
exercised as often as occasion therefor shall arise. Failure to
exercise any of the foregoing options upon the occurrence of an
Event of Default shall not constitute a waiver of the right to
exercise the same or any other option at any subsequent time in
respect to the same or any other Event of Default, and no single
or partial exercise of any right or remedy shall preclude other
or further exercise of the same or any other right or remedy.
Holder shall have no duty to exercise any or all of the rights
and remedies herein provided or contemplated. The acceptance by
Holder of any payment hereunder that is less than payment in full
of all amounts due and payable at the time of such payment shall
not constitute a waiver of the right to exercise any of the
foregoing rights or remedies at that time, or nullify any prior
exercise of any such rights or remedies without the express
written consent of Holder.
8. Expenses of Collection. If this Note is referred
to an attorney for collection, whether or not suit has been filed
or any other action instituted or taken to enforce or collect
under this Note, Maker shall pay all of Holder's costs, fees
(including reasonable attorneys' and paralegals' fees) and
expenses in connection with such referral.
9. Governing Law. The provisions of this Note shall
be governed and construed according to the law of the District of
Columbia, without giving effect to its conflicts of laws
provisions.
10. No Waiver. Neither any course of dealing by
Holder nor any failure or delay on its part to exercise any
right, power or privilege hereunder shall operate as a waiver of
any right or remedy of Holder hereunder unless said waiver is in
writing and signed by Holder, and then only to the extent
specifically set forth in said writing. A waiver as to one event
shall not be construed as a continuing waiver by Holder or as a
bar to or waiver of any right or remedy by Holder as to any
subsequent event.
11. Notices.
a. All notices hereunder shall be in writing and
shall either be hand delivered, with receipt therefor, or sent by
Federal Express or similar courier, with receipt therefor, or by
certified or registered mail, postage prepaid, return receipt
requested, as follows:
If to Maker: The Nostalgia Network, Inc.
650 Massachusetts Avenue, N.W.
Washington, D.C. 20001
Attn: President
If to Holder: Concept Communications, Inc.
650 Massachusetts Avenue, N.W., Second Floor
Washington, D.C. 20001
Notices shall be effective when received; provided, however, that
if any notice sent by courier or by certified or registered mail
is returned as undeliverable, such notice shall be deemed
effective when mailed or given to such courier.
b. Either of the foregoing persons may change
the address to which notices are to be delivered to it hereunder
by giving written notice to the others as provided in this
Paragraph 11.
12. Severability. In the event that any one or more
of the provisions of this Note shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such inva-
lidity, illegality or unenforceability shall not affect any other
provision of this Note, and this Note shall be construed as if
such invalid, illegal or unenforceable provision had never been
contained herein.
13. Limitations of Applicable Law. In the event the
operation of any provision of this Note results in an effective
rate of interest transcending the limit of the usury or any other
law applicable to the loan evidenced hereby, all sums in excess
of those lawfully collectible as interest for the period in
question shall, without further agreement or notice by any party
to this Note, be applied to the unpaid principal balance of this
Note immediately upon receipt of such monies by Holder, with the
same force and effect as though Maker had specifically designated
such extra sums to be so applied to the unpaid principal balance
and Holder had agreed to accept such extra payment(s) as a
prepayment.
14. Captions. The captions herein are for convenience
of reference only and in no way define or limit the scope or
content of this Note or in any way affect its provisions.
15. Debtor-Creditor Relationship. Holder shall in no
event be construed for any purpose to be a partner, joint
venturer or associate of Maker, it being the sole intention of
the parties to establish a relationship of debtor and creditor.
16. Time of the Essence. It is expressly agreed that
time is of the essence in the performance of the obligations set
forth in this Note.
<PAGE>
IN WITNESS WHEREOF, Maker has executed this Promissory Note
on this 24th day of July, 1995, pursuant to due authority.
MAKER:
ATTEST: THE NOSTALGIA NETWORK, INC.,
a Delaware corporation
s/ Robert J. Wussler By: s/ William Lash, III
Robert Wussler William Lash
Nostalgia 144 Committee Nostalgia 144 Committee
PROMISSORY NOTE
$2,000,000 Washington, D.C.
Maturity Date: February 1, 1996 October 2, 1995
FOR VALUE RECEIVED, the undersigned, THE NOSTALGIA NETWORK,
INC., a Delaware Corporation ("Maker"), hereby promises to pay to
the order of CONCEPT COMMUNICATIONS, INC., a Delaware
corporation, or any subsequent holder or holders ("Holder") of
this Promissory Note (this "Note"), at 650 Massachusetts Avenue,
N.W., Washington, D.C., 20001, or at such other place as Holder
may from time to time designate in writing, the principal sum of
Two Million Dollars ($2,000,000), together with all accrued
interest on such outstanding balance, in accordance with the
terms and provisions of this Note.
1. Principal and Interest. Interest shall accrue on
the outstanding principal balance of this Note from March 29,
1995, at the rate of six and nine hundredths percent (5.58%) per
annum, and the principal balance together with all interest
accrued thereon, shall be payable on February 1, 1996 (the "Ma-
turity Date"). In the event that the principal balance and all
accrued interest is not paid on or before the Maturity Date,
interest shall accrue thereafter on all unpaid amount at the rate
equal to that accruing on six month United States Treasury bills
as of such date plus two percentage points.
2. Payments. All payments by Maker hereunder shall
be applied (i) first to the interest due and unpaid under this
Note, and (ii) thereafter, to any principal owing under this
Note.
3. Prepayment. Maker shall have the right to prepay,
in part or in full, without penalty, this Note (together with all
accrued interest to the date of prepayment on the amount of prin-
cipal thus prepaid) at any time or times. The purpose of this
loan is to provide a bridge until Maker is able to negotiate an
equity investment not less than the principal amount hereof. If
this investment occurs prior to the Maturity Date, Maker shall be
required to prepay all amounts owed hereunder.
4. Waiver Regarding Notice. Maker waives
presentment, demand and presentation for payment, protest and
notice of protest, and, except as otherwise specifically provided
herein, any other notices of whatever kind or nature, bringing of
suit and diligence in taking any action to collect any sums owing
hereunder. From time to time, without in any way affecting the
obligation of Maker to pay the outstanding principal balance of
this Note and any interest accrued thereon and fully to observe
and perform the covenants and obligations of Maker under this
Note, without giving notice to, or obtaining the consent of,
Maker, and without any liability whatsoever on the part of
Holder, Holder may, at its option, extend the time for payment of
interest hereon and/or principal of this Note, reduce the
payments hereunder, release anyone liable on this Note or accept
a renewal of this Note, join in any extension or subordination,
or exercise any right or election hereunder. No one or more of
such actions shall constitute a novation or operate to release
any party liable for or under this Note, either as Maker or
otherwise.
5. Events of Default. Each of the following shall
constitute an "Event of Default" hereunder:
a. Maker's failure to make any required payment
of principal and/or interest under this Note, or any other amount
due and payable under this Note on or before the date on which
such payment is due under this Note; and
b. Maker's failure to make any required payment
when due of any other amounts owed by Maker to Holder; and
c. Maker's insolvency, general assignment for
the benefit of creditors, or the commencement by or against Maker
of any case, proceeding, or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or composition
of Maker's debts under any law relating to bankruptcy,
insolvency, or reorganization, or relief of debtors, or seeking
appointment of a receiver, trustee, custodian, or other similar
official for Maker or for all or any substantial part of Maker's
assets.
6. Acceleration. Upon the occurrence of an Event of
Default, Holder shall have the right to cause the entire unpaid
principal balance, together with all accrued interest thereon,
reasonable attorneys' and paralegals' fees and all fees, charges,
costs and expenses, if any, owed by Maker to Holder, to become
immediately due and payable in full by giving written notice to
Maker.
7. Remedies. Upon the occurrence of an Event of
Default, Holder may avail itself of any legal or equitable rights
which Holder may have at law or in equity or under this Note,
including, but not limited to, the right to accelerate the
indebtedness due under this Note as described in the preceding
sentence. The remedies of Holder as provided herein shall be
distinct and cumulative, and may be pursued singly, successively
or together, at the sole discretion of Holder, and may be
exercised as often as occasion therefor shall arise. Failure to
exercise any of the foregoing options upon the occurrence of an
Event of Default shall not constitute a waiver of the right to
exercise the same or any other option at any subsequent time in
respect to the same or any other Event of Default, and no single
or partial exercise of any right or remedy shall preclude other
or further exercise of the same or any other right or remedy.
Holder shall have no duty to exercise any or all of the rights
and remedies herein provided or contemplated. The acceptance by
Holder of any payment hereunder that is less than payment in full
of all amounts due and payable at the time of such payment shall
not constitute a waiver of the right to exercise any of the
foregoing rights or remedies at that time, or nullify any prior
exercise of any such rights or remedies without the express
written consent of Holder.
8. Expenses of Collection. If this Note is referred
to an attorney for collection, whether or not suit has been filed
or any other action instituted or taken to enforce or collect
under this Note, Maker shall pay all of Holder's costs, fees
(including reasonable attorneys' and paralegals' fees) and
expenses in connection with such referral.
9. Governing Law. The provisions of this Note shall
be governed and construed according to the law of the District of
Columbia, without giving effect to its conflicts of laws
provisions.
10. No Waiver. Neither any course of dealing by
Holder nor any failure or delay on its part to exercise any
right, power or privilege hereunder shall operate as a waiver of
any right or remedy of Holder hereunder unless said waiver is in
writing and signed by Holder, and then only to the extent
specifically set forth in said writing. A waiver as to one event
shall not be construed as a continuing waiver by Holder or as a
bar to or waiver of any right or remedy by Holder as to any
subsequent event.
11. Notices.
a. All notices hereunder shall be in writing and
shall either be hand delivered, with receipt therefor, or sent by
Federal Express or similar courier, with receipt therefor, or by
certified or registered mail, postage prepaid, return receipt
requested, as follows:
If to Maker: The Nostalgia Network, Inc.
650 Massachusetts Avenue, N.W.
Washington, D.C. 20001
Attn: President
If to Holder: Concept Communications, Inc.
650 Massachusetts Avenue, N.W., Second Floor
Washington, D.C. 20001
Notices shall be effective when received; provided, however, that
if any notice sent by courier or by certified or registered mail
is returned as undeliverable, such notice shall be deemed
effective when mailed or given to such courier.
b. Either of the foregoing persons may change
the address to which notices are to be delivered to it hereunder
by giving written notice to the others as provided in this
Paragraph 11.
12. Severability. In the event that any one or more
of the provisions of this Note shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such inva-
lidity, illegality or unenforceability shall not affect any other
provision of this Note, and this Note shall be construed as if
such invalid, illegal or unenforceable provision had never been
contained herein.
13. Limitations of Applicable Law. In the event the
operation of any provision of this Note results in an effective
rate of interest transcending the limit of the usury or any other
law applicable to the loan evidenced hereby, all sums in excess
of those lawfully collectible as interest for the period in
question shall, without further agreement or notice by any party
to this Note, be applied to the unpaid principal balance of this
Note immediately upon receipt of such monies by Holder, with the
same force and effect as though Maker had specifically designated
such extra sums to be so applied to the unpaid principal balance
and Holder had agreed to accept such extra payment(s) as a
prepayment.
14. Captions. The captions herein are for convenience
of reference only and in no way define or limit the scope or
content of this Note or in any way affect its provisions.
15. Debtor-Creditor Relationship. Holder shall in no
event be construed for any purpose to be a partner, joint
venturer or associate of Maker, it being the sole intention of
the parties to establish a relationship of debtor and creditor.
16. Time of the Essence. It is expressly agreed that
time is of the essence in the performance of the obligations set
forth in this Note.
<PAGE>
IN WITNESS WHEREOF, Maker has executed this Promissory Note
on this second day of October, 1995, pursuant to due authority.
MAKER:
ATTEST: THE NOSTALGIA NETWORK, INC.,
a Delaware corporation
s/ Daniel C. Holdgreiwe By: s/ Martin A. Gallogly
Daniel C. Holdgreiwe Marty Gallogly
Secretary Vice-President
Concept Communications, Inc.
October 2, 1995
The Nostalgia Network, Inc.
c/o 144 Committee
650 Massachusetts Avenue, N.W.
Washington, D.C. 20001
Attention: Professor William Lash
Gentlemen:
In a letter agreement between Concept Communications, Inc.
("Concept") and The Nostalgia Network, Inc. ("Nostalgia") dated
March 29, 1995, executed contemporaneously with a promissory note
in the amount of $1,500,000 by Nostalgia in favor of Concept, the
parties agreed in the second sentence of section 4 substantially
as follows:
. . .
". . .[I]n the event of any future sales of shares by Nostalgia
to a third party at a price less than the price to be agreed to
by Concept and Nostalgia with respect to the conversion of all
currently outstanding bridge loans, as well as the currently
contemplated bridge loan, Nostalgia would issue such number of
additional shares to Concept as to cause Concept's subscription
price to be adjusted to such lesser purchase price."
. . .
As a further inducement for Concept to make an additional
bridge loan or loans to Nostalgia, Nostalgia hereby agrees that
Concept's right to receive additional Nostalgia shares as set
forth in the above-mentioned letter agreement shall be calculated
and adjusted on the basis of all outstanding loans from Concept
to Nostalgia as of the date of the conversion of such loans into
equity.
Please indicate your acceptance to the terms hereof by
executing this agreement where indicated below.
Yours truly,
CONCEPT COMMUNICATIONS, INC.
By: s/ Werner Seubert
Werner Seubert
Vice-President
ACCEPTED AND AGREED TO:
THE NOSTALGIA NETWORK, INC.
By: s/ Martin A. Gallogly
Martin A. Gallogly
Vice-President
