SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
(Amendment No. 55)
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
a professional corporation
1615 L Street, N.W., Suite 400
Washington, D.C. 20036-5612
(202) 452-8600
January 14, 1999
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ].
(Continued on following pages)
(Page 1 of 23 Pages)
<PAGE>
CUSIP No. 669 752107 Page 2 of 23 Pages
13D
1. Names of Reporting Persons
Identification No. of Above Persons (Entities only)
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 13,430,427 shares
OWNED BY
EACH 8. Shared Voting Power
REPORTING 0 shares
PERSON
WITH 9. Sole Dispositive Power
13,430,427 shares
10. Shared Dispositive Power
0 shares
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,430,427 shares
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
13. Percent of Class Represented by Amount in Row (11)
70.3%
14. Type of Reporting Person
CO
<PAGE>
CUSIP No. 669 752107 Page 3 of 23 Pages
13D
1. Names of Reporting Persons
Identification No. of Above Persons (Entities only)
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 1,000,000 shares
OWNED BY
EACH 8. Shared Voting Power
REPORTING 13,430,427 shares
PERSON
WITH 9. Sole Dispositive Power
1,000,000 shares
10. Shared Dispositive Power
13,430,427 shares
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,430,427 shares
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
13. Percent of Class Represented by Amount in Row (11)
70.3%
14. Type of Reporting Person
CO
<PAGE>
CUSIP No. 669 752107 Page 4 of 23 Pages
13D
1. Names of Reporting Persons
Identification No. of Above Persons (Entities only)
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 shares
OWNED BY
EACH 8. Shared Voting Power
REPORTING 14,430,427 shares
PERSON
WITH 9. Sole Dispositive Power
0 shares
10. Shared Dispositive Power
14,430,427 shares
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,430,427 shares
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
13. Percent of Class Represented by Amount in Row (11)
70.3%
14. Type of Reporting Person
CO
<PAGE>
This Amendment No. 55 amends and supplements the statement on Schedule
13D (the "Schedule 13D") filed by Concept Communications, Inc., a Delaware
corporation ("Concept"), Crown Communications Corporation, a Delaware
corporation ("Communications"), and Crown Capital Corporation, a Delaware
corporation ("Capital"), relating to the Common Stock, par value $.04 per share
(the "Common Stock"), of The Nostalgia Network, Inc., a Delaware corporation
(the "Issuer"). Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 is hereby amended and supplemented by adding the following
thereto:
The funds for the $1,000,000 Communications loaned to the Issuer on
January 14, 1999, and the funds for the $2,000,000 Communications loaned to the
Issuer on January 29, 1999 (as further discussed in Item 4 below) were obtained
by Communications from Atlantic Video.
The Reporting Persons understand from Atlantic Video that all or
substantially all of the amounts loaned by Atlantic Video to Communications have
been obtained by Atlantic Video as proceeds from a loan from One-Up, which
received these funds as proceeds of a loan from UCI.
Item 4. Purpose of Transaction.
Item 4 is hereby amended and supplemented by appending to the material
under the caption "Certain Loans to the Issuer" the following:
On January 14, 1999, pursuant to the Communications March 1998 Seidman
Letter and subject to the terms and conditions of the April 1, 1998 Promissory
Note, Communications loaned to the Issuer $1,0000,000.
On January 29, 1999, Communications loaned to the Issuer $2,000,000,
and the Issuer delivered to Communications a promissory note in like amount (the
"January 29, 1999 Promissory Note"). The January 29, 1999 Promissory Note is
payable on March 31, 1999, together with interest, at an annual rate equal to
the Prime Rate, as published in the Wall Street Journal on January 29, 1999. The
January 29, 1999 Promissory Note is secured under the terms of the
Communications Security Agreement.
On February 1, 1999, the Issuer executed and delivered to Concept a new
promissory note in the principal amount of $20,403,537.85 (the "1999 Concept
Wrap Note") substituting and replacing the 1998 Concept Wrap Note. The principal
amount of the 1999 Concept Wrap Note equals the total unpaid principal on the
1998 Concept Wrap Note and all accrued and unpaid interest thereon. The 1999
Concept Wrap Note is payable on March 31, 1999, together with interest, at an
annual rate equal to the Prime Rate, as published in the Wall Street Journal on
February 1, 1999. The 1999 Concept Wrap Note is secured under the terms of the
Security Agreement. Pursuant to the terms of the 1999 Concept Wrap Note, the
Issuer must pay to Concept accrued interest of at least $20,000 per month,
payable on the last day of each month commencing on February 28, 1999 until
March 31, 1999.
On February 1, 1999, the Issuer executed and delivered to
Communications a new promissory note in the principal amount of $46,597,020.20
(the "1999 Communications Wrap Note") substituting and replacing: (i) the 1998
Communications Wrap Note; and (ii) the April 1, 1998 Promissory Note. The
principal amount of the 1999 Communications Wrap Note equals the total unpaid
principal on the 1998 Communications Wrap Note and the April 1, 1998 Promissory
Note, and all accrued and unpaid interest thereon. The 1999 Communications Wrap
Note is payable on March 31, 1999, together with interest, at an annual rate
equal to the Prime Rate, as published in the Wall Street Journal on February 1,
1999. The 1999 Communications Wrap Note is secured under the terms of the
Communications Security Agreement. Pursuant to the terms of the 1999
Communications Wrap Note, the Issuer must pay to Communications accrued interest
of at least $40,000 per month, payable on the last day of each month commencing
on February 28, 1999 until March 31, 1999.
The foregoing descriptions of the January 29, 1999 Promissory Note, the
1999 Concept Wrap Note and the 1999 Communications Wrap Note are qualified in
their entirety by the text of the January 29, 1999 Promissory Note, the 1999
Concept Wrap Note and the 1999 Communications Wrap Note which are attached
hereto as Exhibit 55.1, 55.2 and 55.3, respectively, and are incorporated herein
by reference.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
Item 6 is hereby amended and supplemented by incorporating herein the
information set forth under Item 4 in this Amendment No. 55.
Item 7. Items to be Filed as Exhibits
Exhibit Description
55.1 Promissory Note dated January 29, 1999 made by The Nostalgia Network, Inc.
to Crown Communications Corporation in the principal amount of $2,000,000.
55.2 Promissory Note dated February 1, 1999 made by The Nostalgia Network, Inc.
to Concept Communications, Inc. in the principal amount of $20,403,537.85.
55.3 Promissory Note dated February 1, 1999 made by The Nostalgia Network, Inc.
to Crown Communications Corporation in the principal amount of
$46,597,020.20.
<PAGE>
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: February 12, 1999
CONCEPT COMMUNICATIONS, INC.
/s/ Nicholas Chiaia
By: Nicholas Chiaia, Secretary
CROWN COMMUNICATIONS CORPORATION
/s/ Nicholas Chiaia
By: Nicholas Chiaia, Secretary
CROWN CAPITAL CORPORATION
/s/ Nicholas Chiaia
By: Nicholas Chiaia, Secretary
<PAGE>
Exhibit Index
Exhibit Description Page
55.1 Promissory Note dated January 29, 1999 made by The Nostalgia Network, 9
Inc. to Crown Communications Corporation in the principal amount of
$2,000,000.
55.2 Promissory Note dated February 1, 1999 made by The Nostalgia Network, 14
Inc. to Concept Communications, Inc. in the principal amount of
$20,403,537.85.
55.3 Promissory Note dated February 1, 1999 made by The Nostalgia Network, 19
Inc. to Crown Communications Corporation in the principal amount of
$46,597,020.20.
PROMISSORY NOTE
$2,000,000.00 Washington, D.C.
Maturity Date: March 31, 1999 January 29, 1999
FOR VALUE RECEIVED, the undersigned, THE NOSTALGIA NETWORK, INC. a
Delaware corporation ("Maker"), hereby promises to pay to the order of CROWN
COMMUNICATIONS CORPORATION, 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
($2,000,000.00), together with all accrued interest on such outstanding balance,
in accordance with the terms and provisions of this Note.
1. Interest; Payments. Interest shall accrue on the unpaid principal balance of
this Note (as well as on all accrued and unpaid interest) from and after the
date of this Note at a per annum rate equal to the Prime Rate as published in
the Wall Street Journal on January 29, 1999, compounded monthly. The principal
balance, together with all unpaid interest accrued thereon, shall be due and
payable on March 31, 1999 (the "Maturity Date").
2. Payments. All payments by Maker hereunder shall be applied (i) first to any
collection costs pursuant to Paragraph 8 hereof, (ii) second to the interest due
and unpaid under this Note, and (iii) 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 principal thus prepaid) at any time or times.
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, which
failure continues for a period of ten (10) days after written notice of such
failure is sent by Holder to Maker;
(b) The occurrence of an event of default under that certain Security Agreement
by and between Maker and Holder dated as of March 21, 1997, as amended (the
"Security Agreement");
(c) The occurrence of an event of default under any outstanding promissory notes
by Maker payable to Concept Communications, Incorporated, a Delaware corporation
("Concept");
(d) The occurrence of an event of default under that certain Security Agreement
by and between Maker and Concept, dated as of January 4, 1996;
(e) Maker's failure to perform any other obligation (other than one that can be
satisfied with the payment of money) required under this Note, and the
continuation of such failure for a period of ten (10) days after Holder gives
Maker written notice of such failure to perform; and
(f) 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 arbitration has been initiated 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 in-house and outside 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. Security. Payment of the indebtedness evidenced by this Note is secured by
certain assets of Maker pledged to Holder pursuant to the Security Agreement.
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: Crown Communications Corporation
650 Massachusetts Avenue, N.W.
Washington, D.C. 20001
Attn: General Counsel
with a copy to: Tucker, Flyer & Lewis
1615 L Street, N.W., Suite 400
Washington, D.C. 20036
Attn: Arthur E. Cirulnick, Esquire
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) Any 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 Paragraph 13(a).
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 invalidity, 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 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.
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.
18. Binding Arbitration. Arbitration shall be the exclusive procedure for
resolving any dispute between the parties and shall be conducted in accordance
with the rules of the American Arbitration Association ("AAA"), including the
procedures for selecting an arbitrator and for engaging in discovery. However,
provisional equitable relief may be brought in a court with appropriate
jurisdiction. Any dispute to be arbitrated as provided hereunder shall be
referred to a sole arbitrator selected by the President of AAA with experience
and expertise in the subject matter of this Agreement. Should any party
hereunder not agree to accept as sole arbitrator the person selected by the
President of AAA, then the case shall be referred to a panel of three (3)
arbitrators whereby each party shall appoint one arbitrator and the two so
appointed shall mutually agree upon the third arbitrator. The decision of the
arbitrator(s) shall be final and may be enforceable in any court of competent
jurisdiction. The arbitrator shall be authorized to determine the party
responsible for payment of attorneys' fees and costs; and he/she shall have the
authority only to enforce the legal and contractual rights of the parties
arising hereunder and shall not add to, modify, disregard, or refuse to enforce
any contractual rights.
IN WITNESS WHEREOF, Maker has executed this Promissory Note under seal on
this 29th day of January, 1999.
MAKER:
ATTEST: THE NOSTALGIA NETWORK, INC.,
a Delaware corporation
/s/ Willard R. Nichols By: /s/ Willard R. Nichols
Secretary Name: Willard R. Nichols
Title: VP, GC and Secretary
[CORPORATE SEAL]
PROMISSORY NOTE
$20,403,537.85 Washington, D.C.
Maturity Date: March 31, 1999 February 1, 1999
FOR VALUE RECEIVED, the undersigned, THE NOSTALGIA NETWORK, INC. a
Delaware corporation ("Maker"), hereby promises to pay to the order of CONCEPT
COMMUNICATIONS INCORPORATED, a Delaware corporation, or any subsequent holder or
holders ("Holder") of this Promissory Note (this "Note"), at 650 Massachusetts
Avenue, NW, Washington, D.C. 20001, or at such other place as Holder may from
time to time designate in writing, the principal sum of twenty million four
hundred three thousand five hundred thirty seven and 85/100 dollars
($20,403,537.85), together with all accrued interest on such outstanding
balance, in accordance with the terms and provisions of this Note.
1. Substitution and Replacement. Maker gives this Note in substitution
and replacement of that certain promissory note dated April 1, 1998 in the
principal amount of $19,217,867.39 (the "Old Note"). Upon execution of this Note
to Holder, the Old Note shall be deemed to be cancelled and of no further force
and effect.
2. Interest; Payments. Interest shall accrue on the unpaid principal
balance of this Note (as well as on all accrued and unpaid interest) from and
after the date of this Note at a per annum rate equal to the Prime Rate as
published in the Wall Street Journal on February 1, 1999, compounded monthly,
and interest of at least Twenty Thousand Dollars ($20,000) per month shall be
paid monthly on the last day of each month commencing February 28, 1999 until
March 31, 1999. The principal balance, together with all remaining unpaid
interest accrued thereon, shall be due and payable on March 31, 1999 (the
"Maturity Date").
3. Payments. All payments by Maker hereunder shall be applied (i) first
to any collection costs pursuant to Paragraph 9 hereof, (ii) second to the
interest due and unpaid under this Note, and (iii) thereafter, to any principal
owing under this Note.
4. 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 principal thus prepaid) at any time or times.
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, which failure continues for a period of ten (10) days after written notice
of such failure is sent by Holder to Maker;
(b) The occurrence of an event of default under that certain
Security Agreement by and between Maker and Holder dated as of January 4, 1996,
as amended (the "Security Agreement");
(c) The occurrence of an event of default under that certain
promissory note dated as of the date hereof by Maker payable to Crown
Communications Corporation, a Delaware corporation ("Communications") in the
principal amount of $46,575,411.46;
(d) The occurrence of an event of default under that certain
Security Agreement by and between Maker and Communications dated as of March 21,
1997;
(e) Maker's failure to perform any other obligation (other
than one that can be satisfied with the payment of money) required under this
Note, and the continuation of such failure for a period of ten (10) days after
Holder gives Maker written notice of such failure to perform; and
(f) 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 arbitration has been initiated 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. Security. Payment of the indebtedness evidenced by this Note is secured by
certain assets of Maker pledged to Holder pursuant to the Security
Agreement.
12. 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.
13. 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.
Washington, D.C. 20001
Attn: General Counsel
with a copy to: Tucker, Flyer & Lewis
1615 L Street, N.W., Suite 400
Washington, D.C. 20036
Attn: Arthur E. Cirulnick, Esquire
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) Any 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 Paragraph 13(a).
14. 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 invalidity, 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.
15. 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.
16. 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.
17. 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.
18. 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.
19. Binding Arbitration. Arbitration shall be the exclusive procedure
for resolving any dispute between the parties and shall be conducted in
accordance with the rules of the American Arbitration Association ("AAA"),
including the procedures for selecting an arbitrator and for engaging in
discovery. However, provisional equitable relief may be brought in a court with
appropriate jurisdiction. Any dispute to be arbitrated as provided hereunder
shall be referred to a sole arbitrator selected by the President of AAA with
experience and expertise in the subject matter of this Agreement. Should any
party hereunder not agree to accept as sole arbitrator the person selected by
the President of AAA, then the case shall be referred to a panel of three (3)
arbitrators whereby each party shall appoint one arbitrator and the two so
appointed shall mutually agree upon the third arbitrator. The decision of the
arbitrator(s) shall be final and may be enforceable in any court of competent
jurisdiction. The arbitrator shall be authorized to determine the party
responsible for payment of attorneys' fees and costs; and he/she shall have the
authority only to enforce the legal and contractual rights of the parties
arising hereunder and shall not add to, modify, disregard, or refuse to enforce
any contractual rights.
IN WITNESS WHEREOF, Maker has executed this Promissory Note under seal on
this 1st day of February 1999.
MAKER:
ATTEST: THE NOSTALGIA NETWORK, INC.,
a Delaware corporation
/s/ Willard R. Nichols By: /s/ Willard R. Nichols
Secretary Name: Willard R. Nichols
Title: VP, GC and Secretary
[CORPORATE SEAL]
PROMISSORY NOTE
$46,597,020.20 Washington, D.C.
Maturity Date: March 31, 1999 February 1, 1999
FOR VALUE RECEIVED, the undersigned, THE NOSTALGIA NETWORK, INC. a
Delaware corporation ("Maker"), hereby promises to pay to the order of CROWN
COMMUNICATIONS CORPORATION, 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 forty six million five
hundred ninety seven thousand twenty and 20/100 dollars ($46,597,020.20),
together with all accrued interest on such outstanding balance, in accordance
with the terms and provisions of this Note.
1. Substitution and Replacement. This Note is given by Maker in
substitution and replacement of those certain promissory notes dated April 1,
1998 in the principal amounts of $28,560,005.61 and $15,250,000 (the "Old
Notes"), respectively. Upon execution of this Note to Holder, the Old Notes
shall be deemed to be cancelled and of no further force and effect.
2. Interest; Payments. Interest shall accrue on the unpaid principal
balance of this Note (as well as on all accrued and unpaid interest) from and
after the date of this Note at a per annum rate equal to the Prime Rate as
published in the Wall Street Journal on February 1, 1999, compounded monthly,
and interest of at least Forty Thousand Dollars ($40,000) per month shall be
paid monthly on the last day of each month commencing February 28, 1999 until
March 31, 1999. The principal balance, together with all remaining unpaid
interest accrued thereon, shall be due and payable on March 31, 1999 (the
"Maturity Date").
3. Payments. All payments by Maker hereunder shall be applied (i) first
to any collection costs pursuant to Paragraph 9 hereof, (ii) second to the
interest due and unpaid under this Note, and (iii) thereafter, to any principal
owing under this Note.
4. 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 principal thus prepaid) at any time or times.
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, which failure continues for a period of ten (10) days after written notice
of such failure is sent by Holder to Maker;
(b) The occurrence of an event of default under that certain
Security Agreement by and between Maker and Holder dated as of March 21, 1997,
as amended (the "Security Agreement");
(c) The occurrence of an event of default under that certain
promissory note dated as of the date hereof by Maker payable to Concept
Communications, Incorporated, a Delaware corporation ("Concept") in the
principal amount of $20,403,537.85;
(d) The occurrence of an event of default under that certain
Security Agreement by and between Maker and Concept, dated as of January 4,
1996;
(e) Maker's failure to perform any other obligation (other
than one that can be satisfied with the payment of money) required under this
Note, and the continuation of such failure for a period of ten (10) days after
Holder gives Maker written notice of such failure to perform; and
(f) 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 arbitration has been initiated 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. Security. Payment of the indebtedness evidenced by this Note is secured by
certain assets of Maker pledged to Holder pursuant to the Security
Agreement.
12. 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.
13. 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: Crown Communications Corporation
650 Massachusetts Avenue, N.W.
Washington, D.C. 20001
Attn: General Counsel
with a copy to: Tucker, Flyer & Lewis
1615 L Street, N.W., Suite 400
Washington, D.C. 20036
Attn: Arthur E. Cirulnick, Esquire
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) Any 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 Paragraph 13(a).
14. 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 invalidity, 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.
15. 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.
16. 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.
17. 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.
18. 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.
19. Binding Arbitration. Arbitration shall be the exclusive procedure
for resolving any dispute between the parties and shall be conducted in
accordance with the rules of the American Arbitration Association ("AAA"),
including the procedures for selecting an arbitrator and for engaging in
discovery. However, provisional equitable relief may be brought in a court with
appropriate jurisdiction. Any dispute to be arbitrated as provided hereunder
shall be referred to a sole arbitrator selected by the President of AAA with
experience and expertise in the subject matter of this Agreement. Should any
party hereunder not agree to accept as sole arbitrator the person selected by
the President of AAA, then the case shall be referred to a panel of three (3)
arbitrators whereby each party shall appoint one arbitrator and the two so
appointed shall mutually agree upon the third arbitrator. The decision of the
arbitrator(s) shall be final and may be enforceable in any court of competent
jurisdiction. The arbitrator shall be authorized to determine the party
responsible for payment of attorneys' fees and costs; and he/she shall have the
authority only to enforce the legal and contractual rights of the parties
arising hereunder and shall not add to, modify, disregard, or refuse to enforce
any contractual rights.
IN WITNESS WHEREOF, Maker has executed this Promissory Note under seal on
this 1st day of February, 1999.
MAKER:
ATTEST: THE NOSTALGIA NETWORK, INC.,
a Delaware corporation
/s/ Willard R. Nichols By: /s/ Willard R. Nichols
Secretary Name: Willard R. Nichols
Title: VP, GC and Secretary
[CORPORATE SEAL]
