SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 56)
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
March 5, 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 that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ].
(Continued on following pages)
(Page 1 of 32 Pages)
<PAGE>
CUSIP No. 669 752107 Page 2 of 32 Pages
13D
1. Names of Reporting Persons
I.R.S. Identification Nos. 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
Item 2(d) or 2(e)
[ ]
6. Citizenship or Place of Organization
Delaware
NUMBER OF 7. Sole Voting Power
SHARES 13,430,427 shares
BENEFICIALLY
OWNED BY 8. Shared Voting Power
EACH 0 shares
REPORTING
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 32 Pages
13D
1. Names of Reporting Persons
I.R.S. Identification Nos. 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
Item 2(d) or 2(e)
[ ]
6. Citizenship or Place of Organization
Delaware
NUMBER OF 7. Sole Voting Power
SHARES 1,000,000 shares
BENEFICIALLY
OWNED BY 8. Shared Voting Power
EACH 13,430,427 shares
REPORTING
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 32 Pages
13D
1. Names of Reporting Persons
I.R.S. Identification Nos. 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
Item 2(d) or 2(e)
[ ]
6. Citizenship or Place of Organization
Delaware
NUMBER OF 7. Sole Voting Power
SHARES 0 shares
BENEFICIALLY
OWNED BY 8. Shared Voting Power
EACH 14,430,427 shares
REPORTING
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. 56 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 $1,500,000 Communications loaned to the Issuer on
March 5, 1999, and the funds for the $3,500,000 Communications loaned to the
Issuer on March 22, 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 March 5, 1999, Communications loaned to the Issuer $1,500,000, and
the Issuer delivered to Communications a promissory note in like amount (the
"March 5, 1999 Promissory Note"). The March 5, 1999 Promissory Note was 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 March 5, 1999. The March 5,
1999 Promissory Note is secured under the terms of the Communications Security
Agreement.
On March 20, 1999, Concept delivered to BDO Seidman, L.L.P., the
Issuer's certified public accountants, a letter representing Concept's intention
to modify the maturity date of the existing loan, evidenced by the 1999 Concept
Wrap Note which was due on March 31, 1999, to provide for a maturity date of
such loan of January 1, 2000 (the "Concept March 20, 1999 Seidman Letter"). As
part of the March 27, 1999 Concept Wrap Note (as defined below), such maturity
date was modified in accordance with the Concept March 20, 1999 Seidman Letter.
On March 20, 1999, Communications delivered to BDO Seidman, L.L.P. a
letter representing Communication's ability and intention to provide financial
support to the Issuer throughout the remainder of 1999 (the "Communications
March 20, 1999 Seidman Letter"). Pursuant to the Communications March 20, 1999
Seidman Letter, Communications' continued willingness to provide such financial
support is conditioned, among other things, upon the advance approval by the
Issuer's executive committee of any original and acquired programming expenses.
Communications' financial commitment to the Issuer for 1999 will not exceed
$15,000,000, which includes $8,000,000 previously loaned to the Issuer as
evidenced by the $1,000,000 advanced on January 14, 1999 (notwithstanding the
typographical error in the Communications March 20, 1999 Seidman Letter
incorrectly referencing an advance on January 8, 1999), the January 29, 1999
Promissory Note, the March 5, 1999 Promissory Note and $3,500,000 advanced on
March 22, 1999 (this $3,500,000 amount was loaned on March 22, 1999 as evidenced
by the March 22, 1999 Promissory Note, as defined below).
The remainder of the financial support may be in the form of debt or
equity financing. To the extent that it is in the form of debt, it will not be
callable prior to January 1, 2000. Communications' commitment to fund the Issuer
will be reduced or cease if the Issuer enters into a strategic partnership or if
Communications and Concept, together, are no longer the majority owners of the
Issuer as a result of the issuance of additional securities of the Issuer.
Pursuant to the Communications March 20, 1999 Seidman Letter, Communications
also represented its intent to modify the maturity date of the existing loans,
evidenced by the 1999 Communications Wrap Note, the January 29, 1999 Promissory
Note and the March 5, 1999 Promissory Note, which were due on March 31, 1999 to
provide for a maturity date on all such loans of January 1, 2000. As part of the
March 27, 1999 Communications Wrap Note (as defined below), such maturity date
was modified in accordance with the Communications March 20, 1999 Seidman
Letter.
On March 22, 1999, Communications loaned to the Issuer $3,500,000, and
the Issuer delivered to Communications a promissory note in like amount (the
"March 22, 1999 Promissory Note"). The March 22, 1999 Promissory Note is payable
on January 1, 2000, together with interest, at an annual rate equal to the Prime
Rate, as published in the Wall Street Journal on March 22, 1999. The March 22,
1999 Promissory Note is secured under the terms of the Communications Security
Agreement.
On March 27, 1999, pursuant to the Concept March 20, 1999 Seidman
Letter, the Issuer executed and delivered to Concept a new promissory note in
the principal amount of $20,598,035.71 (the "March 27, 1999 Concept Wrap Note")
substituting and replacing the 1999 Concept Wrap Note. The principal amount of
the March 27, 1999 Concept Wrap Note equals the total unpaid principal on the
1999 Concept Wrap Note and all accrued and unpaid interest thereon. The March
27, 1999 Concept Wrap Note is payable on January 1, 2000, together with
interest, at an annual rate equal to the Prime Rate, as published in the Wall
Street Journal on March 27, 1999. The March 27, 1999 Concept Wrap Note is
secured under the terms of the Security Agreement. Pursuant to the terms of the
March 27, 1999 Concept Wrap Note, the Issuer must pay to Concept accrued
interest of at least $5,000 per month, payable on the last day of each month
commencing on March 31, 1999 until December 31, 1999.
On March 27, 1999, pursuant to the Communications March 20, 1999
Seidman Letter, the Issuer executed and delivered to Communications a new
promissory note in the principal amount of $50,571,503.02 (the "March 27, 1999
Communications Wrap Note") substituting and replacing: (i) the 1999
Communications Wrap Note; (ii) the January 29, 1999 Promissory Note
(notwithstanding the typographical error in the March 27, 1999 Communications
Wrap Note incorrectly referencing a January 1, 1999 note); and (iii) the March
5, 1999 Promissory Note. The principal amount of the March 27, 1999
Communications Wrap Note equals the total unpaid principal on the 1999
Communications Wrap Note, the January 29, 1999 Promissory Note and the March 5,
1999 Promissory Note, and all accrued and unpaid interest thereon. The March 27,
1999 Communications Wrap Note is payable on January 1, 2000, together with
interest, at an annual rate equal to the Prime Rate, as published in the Wall
Street Journal on March 27, 1999. The March 27, 1999 Communications Wrap Note is
secured under the terms of the Communications Security Agreement. Pursuant to
the terms of the March 27, 1999 Communications Wrap Note, the Issuer must pay to
Communications accrued interest of at least $55,000 per month, payable on the
last day of each month commencing on March 31, 1999 until December 31, 1999.
The foregoing descriptions of the March 5, 1999 Promissory Note, the
Concept March 20, 1999 Seidman Letter, the Communications March 20, 1999 Seidman
Letter, the March 22, 1999 Promissory Note, the March 27, 1999 Concept Wrap Note
and the March 27, 1999 Communications Wrap Note are qualified in their entirety
by the text of the March 5, 1999 Promissory Note, the Concept March 20, 1999
Seidman Letter, the Communications March 20, 1999 Seidman Letter, the March 22,
1999 Promissory Note, the March 27, 1999 Concept Wrap Note and the March 27,
1999 Communications Wrap Note which are attached hereto as Exhibit 56.1, 56.2,
56.3, 56.4, 56.5 and 56.6 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. 56.
Item 7. Items to be Filed as Exhibits
Exhibit Description
56.1 Promissory Note dated March 5, 1999 made by The Nostalgia Network,
Inc. to Crown Communications Corporation in the principal amount of
$1,500,000.
56.2 Letter dated March 20, 1999 from Concept Communications, Inc. to BDO
Seidman, L.L.P.
56.3 Letter dated March 20, 1999 from Crown Communications Corporation to
BDO Seidman, L.L.P.
56.4 Promissory Note dated March 22, 1999 made by The Nostalgia Network,
Inc. to Crown Communications Corporation in the principal amount of
$3,500,000.
56.5 Promissory Note dated March 27, 1999 made by The Nostalgia Network,
Inc. to Concept Communications, Inc. in the principal amount of
$20,598,035.71.
56.6 Promissory Note dated March 27, 1999 made by The Nostalgia Network,
Inc. to Crown Communications Corporation in the principal amount of
$50,571,503.02.
<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: April 22, 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
56.1 Promissory Note dated March 5, 1999 made by The Nostalgia 11
Network, Inc. to Crown Communications Corporation in the
principal amount of $1,500,000.
56.2 Letter dated March 20, 1999 from Concept Communications, Inc. 16
to BDO Seidman, L.L.P.
56.3 Letter dated March 20, 1999 from Crown Communications 17
Corporation to BDO Seidman, L.L.P.
56.4 Promissory Note dated March 22, 1999 made by The Nostalgia 19
Network, Inc. to Crown Communications Corporation in the
principal amount of $3,500,000.
56.5 Promissory Note dated March 27, 1999 made by The Nostalgia 23
Network, Inc. to Concept Communications, Inc. in the principal
amount of $20,598,035.71.
56.6 Promissory Note dated March 27, 1999 made by The Nostalgia 28
Network, Inc. to Crown Communications Corporation in the
principal amount of $50,571,503.02.
PROMISSORY NOTE
$1,500,000.00 Washington, D.C.
Maturity Date: March 31, 1999 March 5, 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 one million five hundred
thousand dollars ($1,500,000.00), 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 March 5, 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 any
outstanding promissory notes by Maker payable to Holder;
(e) The occurrence of an event of default under that certain
Security Agreement by and between Maker and Concept dated as of January 4, 1996;
(f) 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
(g) 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 paralegal' 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 paralegal' 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 law 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 3rd day of March 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: Vice President, General
Counsel and Secretary
[CORPORATE SEAL]
[CONCEPT'S LETTERHEAD]
March 20, 1999
Mr. Scott Richardson, Partner
BDO Seidman, L.L.P.
1129 20th Street NW, Suite 500
Washington, DC 20036
Gentlemen:
Concept Communications, Inc. ("Concept") hereby represents that the maturity
date on $20,598,035.71 in principal, plus accrued interest on loans to the
Nostalgia Network, Inc. ("Nostalgia") from Concept, which is due as of March 27,
1999 and callable on March 31, 1999, is extended until January 1, 2000.
Moreover, Concept shall receive minimum monthly payments of $5,000 from
Nostalgia. Said payments shall be applied toward accrued interest arising from
the terms of the Note from Nostalgia to Concept.
Very truly yours,
/s/ Dong Moon Joo
Dong Moon Joo
President
Cc: F. Christofferson
H. Goto
[COMMUNICATIONS' LETTERHEAD]
March 20, 1999
Mr. Scott Richardson, Partner
BDO Seidman, L.L.P.
1129 20th Street NW, Suite 500
Washington, DC 20036
Dear Mr. Richardson:
Crown Communications Corporation ("Crown") hereby represents that it has the
ability and intends to provide financial support to the Nostalgia Network, Inc.
("Nostalgia") throughout the remainder of 1999. This financial support is
intended to satisfy Nostalgia's operating expense needs to the extent not
satisfied by cash flows from operations.
It is our understanding that you are relying upon the representations contained
in this letter in forming your opinion on Nostalgia's financial statements
regarding Nostalgia's ability to continue as a going concern. The financial
commitments discussed herein are intended solely for the purpose of satisfying
the "going concern" issue. Moreover, these commitments are not to be construed
as an approved operating budget; nor shall they be relied upon by Nostalgia or
third parties as a basis for extending credit. In addition, our continued
willingness to provide such financial support is conditioned upon the advance
approval by Nostalgia's Executive Committee of any original and acquired
programming expenses.
Solely for the purpose of determining Nostalgia's ability to continue as a going
concern, in connection with your audit of Nostalgia's 1998 financial statements,
the financial support to be provided by Crown to Nostalgia during 1999 shall be
$15,000,000, which is to be given as follows:
$1,000,000 loaned to Nostalgia on January 8, 1999
$2,000,000 loaned to Nostalgia on January 29, 1999
$1,500,000 loaned to Nostalgia on March 5, 1999
$3,500,000 to be loaned to Nostalgia on March 22, 1999
Remainder to be advanced on an as-needed basis throughout 1999.
<PAGE>
Mr. Scott Richardson, Partner
BDO Seidman, L.L.P.
March 20, 1999
Page Two
Crown's financial support may be in the form of debt or equity financing. Should
such financing be in the form of debt, the principal amount of such debt will
not be callable prior to January 1, 2000. Additionally, we hereby represent and
confirm that the maturity date for all previous debt owed by Nostalgia to Crown,
in the aggregate principal amount of $50,571,503.02 and due March 27, 1999,
shall be extended to January 1, 2000, subject to acceleration if an Event of
Default occurs under the promissory note evidencing such indebtedness.
Crown's continued willingness to provide such financial support shall cease if,
prior to December 31, 1999, as a result of issuance of Nostalgia securities,
Crown and Concept Communications, Inc. together shall no longer possess a
majority of the equity or voting power of Nostalgia. In the event that Nostalgia
enters into a strategic partnership, Crown's commitment may be reduced up to the
amount of the partner's investment, be it as debt or equity financing, into
Nostalgia. As a condition of continued funding, any changes in the current
programming expenditures shall be subject to Crown's approval.
Crown shall receive minimum monthly interest payments of $55,000 from Nostalgia.
Said payments shall be applied toward accrued interest arising from the terms of
the promissory notes from Nostalgia to Crown.
Very truly yours,
/s/ Dong Moon Joo
Dong Moon Joo
President
Cc: F. Christofferson
H. Goto
PROMISSORY NOTE
$3,500,000.00 Washington, D.C.
Maturity Date: January1, 2000 March 22, 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 three million five
hundred thousand dollars ($3,500,000.00), 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 March 22, 1999, compounded monthly. The
principal balance, together with all unpaid interest accrued thereon, shall be
due and payable on January 1, 2000 (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 any
outstanding promissory notes by Maker payable to Holder;
(e) The occurrence of an event of default under that certain
Security Agreement by and between Maker and Concept dated as of January 4, 1996;
(f) 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
(g) 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 paralegal' 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 any other action has been 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 paralegal' 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 law 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.
IN WITNESS WHEREOF, Maker has executed this Promissory Note under seal on
this 22nd day of March 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: Vice President,
General Counsel
and Secretary
[CORPORATE SEAL]
PROMISSORY NOTE
$20,598,035.71 Washington, D.C.
Maturity Date: January 1, 2000 March 27, 1999
FOR VALUE RECEIVED, the undersigned, THE NOSTALGIA NETWORK, INC. a
Delaware corporation ("Maker"), hereby promises to pay to the order of CONCEPT
COMMUNICATIONS INCCORPORATED, 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 twenty
million five hundred ninety eight thousand thirty five and 71/100 dollars
($20,598,035.71), 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 that certain promissory note dated February 1,
1999 in the principal amount of $20,403,537.85. 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 March 27, 1999, compounded monthly, and
interest of at least Five Thousand Dollars ($5,000) per month shall be paid
monthly on the last day of each month commencing March 31, 1999, until December
31, 1999. The principal balance, together with all remaining unpaid interest
accrued thereon, shall be due and payable on January 1, 2000 (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 ("Crown") in the principal
amount of $50,571,503.02;
(d) The occurrence of an event of default under that certain
Security Agreement by and between Maker and Crown, 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 any action has been 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.
IN WITNESS WHEREOF, Maker has executed this Promissory Note under seal on
this 27th day of March, 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: Vice President,
General Counsel
and Secretary
[CORPORATE SEAL]
PROMISSORY NOTE
$50,571,503.02 Washington, D.C.
Maturity Date: January 1, 2000 March 27, 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 fifty million five
hundred seventy one thousand five hundred three and 02/100 dollars
($50,571,503.02), 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 February 1,
1999 in the principal amount of $46,597,020.20; dated January 1, 1999 in the
principal amount of $2,000,000; and dated March 5, 1999 in the principal amount
of $1,500,000 (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 March 27, 1999, compounded monthly, and
interest of at least Fifty Five Thousand Dollars ($55,000) per month shall be
paid monthly on the last day of each month commencing March 31, 1999, until
December 31, 1999. The principal balance, together with all remaining unpaid
interest accrued thereon, shall be due and payable on January 1, 2000 (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 $20,598,035.71;
(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 any action has been 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.
IN WITNESS WHEREOF, Maker has executed this Promissory Note under seal on
this 27th day of March, 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: Vice President,
General Counsel
and Secretary
[CORPORATE SEAL]
