1
EXHIBIT 10.3
BUSINESS LOAN AGREEMENT.
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
$1,900,000.00 04-24-1996 04-15-2001 20002816 FOON
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
Borrower: DOVE AUDIO,INC. (TIN: 954015834) Lender: ASAHI BANK OF CALIFORNIA
8955 BEVERLY BOULEVARD 635 WEST 7TH STREET
WEST HOLLYWOOD, CA 90048 LOS ANGELES, CA 90017
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THIS BUSINESS LOAN AGREEMENT BETWEEN DOVE AUDIO,INC. ("BORROWER") AND ASAHI
BANK OF CALIFORNIA ("LENDER") IS MADE AND EXECUTED ON THE FOLLOWING TERMS AND
CONDITIONS. BORROWER HAS RECEIVED PRIOR COMMERCIAL LOANS FROM LENDER OR HAS
APPLIED TO LENDER FOR A COMMERCIAL LOAN OR LOANS AND OTHER FINANCIAL
ACCOMMODATIONS, INCLUDING THOSE WHICH MAY BE DESCRIBED ON ANY EXHIBIT OR
SCHEDULE ATTACHED TO THIS AGREEMENT. ALL SUCH LOANS AND FINANCIAL
ACCOMMODATIONS, TOGETHER WITH ALL FUTURE LOANS AND financial ACCOMMODATIONS
FROM LENDER TO BORROWER, ARE REFERRED TO IN THIS AGREEMENT INDIVIDUALLY AS THE
"LOAN" AND COLLECTIVELY AS THE "LOANS." BORROWER UNDERSTANDS AND AGREES THAT:
(A) In GRANTING, RENEWING, OR EXTENDING ANY LOAN, LENDER IS RELYING UPON
BORROWER'S REPRESENTATIONS, WARRANTIES, AND AGREEMENTS, AS SET FORTH in THIS
AGREEMENT; (B) THE GRANTING, RENEWING, OR EXTENDING OF ANY LOAN BY LENDER AT
ALL TIMES SHALL BE SUBJECT TO LENDER'S SOLE JUDGMENT AND DISCRETION; AND (C)
ALL SUCH LOANS SHALL BE AND SHALL REMAIN SUBJECT TO THE FOLLOWING TERMS AND
CONDITIONS OF THIS AGREEMENT.
TERM. This Agreement shall be effective as of APRIL 24, 1996, and shall
continue thereafter until all Indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used
in this Agreement. Terms not otherwise defined in this Agreement shall have
the meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
AGREEMENT. The word "Agreement" means this Business Loan Agreement, as
this Business Loan Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached to this
Business Loan Agreement from time to time.
BORROWER. The word "Borrower" means DOVE AUDIO,INC. The word
"Borrower" also includes, as applicable, all subsidiaries and
affiliates of Borrower as provided below in the paragraph titled
"Subsidiaries and Affiliates."
CERCLA. The word "CERCLA" means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
COLLATERAL. The word "Collateral" means and includes without
limitation all property and assets granted as collateral security for
a Loan, whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted
in the form of a security interest, mortgage, deed of trust,
assignment, pledge, chattel mortgage, chattel trust, factor's lien,
equipment trust, conditional sale, trust receipt, lien, charge, lien
or title retention contract, lease or consignment intended as a
security device, or any other security or lien interest whatsoever,
whether created by law, contract, or otherwise.
ERISA. The word "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
EVENT OF DEFAULT. The words "Event of Default" mean and include
without limitation any of the Events of Default set forth below in the
section titled "EVENTS OF DEFAULT."
GRANTOR. The word "Grantor" means and includes without limitation
each and all of the persons or entities granting a Security Interest
in any Collateral for the Indebtedness, including without limitation
all Borrowers granting such a Security Interest.
GUARANTOR. The word "Guarantor" means and includes without limitation
each and all of the guarantors, sureties, and accommodation parties in
connection with any Indebtedness.
INDEBTEDNESS. The word "Indebtedness" means and includes without
limitation all Loans, together with all other obligations, debts and
liabilities of Borrower to Lender, or any one or more of them, as well
as all claims by Lender against Borrower, or any one or more of them;
whether now or hereafter existing, voluntary or involuntary, due or
not due, absolute or contingent, liquidated or unliquidated; whether
Borrower may be liable individually or jointly with others; whether
Borrower may be obligated as a guarantor, surety, or otherwise;
whether recovery upon such Indebtedness may be or hereafter may become
barred by any statute of limitations; and whether such Indebtedness
may be or hereafter may become otherwise unenforceable.
LENDER. The word "Lender" means ASAHI BANK OF CALIFORNIA, its
successors and assigns.
LOAN. The word "Loan" or "Loans" means and includes without
limitation any and all commercial loans and financial accommodations
from Lender to Borrower, whether now or hereafter existing, and
however evidenced, including without limitation those loans and
financial accommodations described herein or described on any exhibit
or schedule attached to this Agreement from time to time.
NOTE. The word "Note" means and includes without limitation
Borrower's promissory note or notes, if any, evidencing Borrower's
Loan obligations in favor of Lender, as well as any substitute,
replacement or refinancing note or notes therefor.
PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and
security interests securing Indebtedness owed by Borrower to Lender;
(b) liens for taxes, assessments, or similar charges either not yet
due or being contested in good faith; (c) liens of materialmen,
mechanics, warehousemen, or carriers, or other like liens arising in
the ordinary course of business and securing obligations which are not
yet delinquent; (d) purchase money liens or purchase money security
interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure indebtedness outstanding on the
date of this Agreement or permitted to be incurred under the paragraph
of this Agreement titled "Indebtedness and Liens"; (e) liens and
security interests which, as of the date of this Agreement, have been
disclosed to and approved by the Lender in writing; and (f) those
liens and security interests which in the aggregate constitute an
immaterial and insignificant monetary amount with respect to the net
value of Borrower's assets.
RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
SECURITY AGREEMENT. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract,
or otherwise, evidencing, governing, representing, or creating a
Security Interest.
SECURITY INTEREST. The words "Security interest" mean and include
without limitation any type of collateral security, whether in the
form of a lien, charge, mortgage, deed of trust, assignment, pledge,
chattel mortgage, chattel trust, factor's lien, equipment trust,
conditional sale, trust receipt, lien or title retention contract,
lease or consignment intended as a security device, or any other
security or lien interest whatsoever, whether created by law,
contract, or otherwise.
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SARA. The word "SARA" means the Superfund Amendments and
Reauthorization Act of 1986 as now or hereafter amended.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the
initial Loan Advance and each subsequent Loan Advance under this
Agreement shall be subject to the fulfillment to Lender's satisfaction
of all of the conditions set forth in this Agreement and in the
Related Documents.
LOAN DOCUMENTS. Borrower shall provide to Lender in form satisfactory
to Lender the following documents for the Loan: (a) the Note, (b)
Security Agreements granting to Lender security interests in the
Collateral, (c) Financing Statements perfecting Lender's Security
Interests; (d) evidence of insurance as required below; and (e) any
other documents required under this Agreement or by Lender or its
counsel.
BORROWER'S AUTHORIZATION. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and
the Related Documents, and such other authorizations and other
documents and instruments as Lender or its counsel, in their sole
discretion, may require.
PAYMENT OF FEES AND EXPENSES. Borrower shall have paid to Lender all
fees, charges, and other expenses which are then due and payable as
specified in this Agreement or any Related Document.
REPRESENTATIONS AND WARRANTIES. The representations and warranties
set forth in this Agreement, in the Related Documents, and in any
document or certificate delivered to Lender under this Agreement are
true and correct.
NO EVENT OF DEFAULT. There shall not exist at the time of any advance
a condition which would constitute an Event of Default under this
Agreement.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:
ORGANIZATION. Borrower is a corporation which is duly organized,
validly existing, and in good standing under the laws of the State of
California and is validly existing and in good standing in all states
in which Borrower is doing business. Borrower has the full power and
authority to own its properties and to transact the businesses in
which it is presently engaged or presently proposes to engage.
Borrower also is duly qualified as a foreign corporation and is in
good standing in all states in which the failure to so quality would
have a material adverse effect on its businesses or financial
condition.
AUTHORIZATION. The execution, delivery, and performance of this
Agreement and all Related Documents by Borrower, to the extent to be
executed, delivered or performed by Borrower, have been duly
authorized by all necessary action by Borrower; do not require the
consent or approval of any other person, regulatory authority or
governmental body; and do not conflict with, result in a violation of,
or constitute a default under (a) any provision of its articles of
incorporation or organization, or bylaws, or any agreement or other
instrument binding upon Borrower or (b) any law, governmental
regulation, court decree, or order applicable to Borrower.
FINANCIAL INFORMATION. Each financial statement of Borrower supplied
to Lender truly and completely disclosed Borrower's financial
condition as of the date of the statement, and there has been no
material adverse change in Borrower's financial condition subsequent
to the date of the most recent financial statement supplied to Lender.
Borrower has no material contingent obligations except as disclosed in
such financial statements.
LEGAL EFFECT. This Agreement constitutes, and any instrument or
agreement required hereunder to be given by Borrower when delivered
will constitute, legal, valid and binding obligations of Borrower
enforceable against Borrower in accordance with their respective
terms.
PROPERTIES. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender
and as accepted by Lender, and except for property tax liens for taxes
not presently due and payable, Borrower owns and has good title to all
of Borrower's properties free and clear of all Security Interests, and
has not executed any security documents or financing statements
relating to such properties. All of Borrower's properties are titled
in Borrower's legal name, and Borrower has not used, or filed a
financing statement under, any other name for at least the last five
(5) years.
HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous
substance," "disposal," "release," and "threatened release," as used
in this Agreement, shall have the same meanings as set forth in the
"CERCLA," "SARA," the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq., the Resource Conservation and Recovery
Act, 49 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of
Division 20 of the California Health and Safety Code, Section 25100,
et seq., or other applicable state or Federal laws, rules, or
regulations adopted pursuant to any of the foregoing. Except as
disclosed to and acknowledged by Lender in writing, Borrower
represents and warrants that: (a) During the period of Borrower's
ownership of the properties, there has been no use, generation,
manufacture, storage, treatment, disposal, release or threatened
release of any hazardous waste or substance by any person on, under,
about or from any of the properties. (b) Borrower has no knowledge of,
or reason to believe that there has been (i) any use, generation,
manufacture, storage, treatment, disposal, release, or threatened
release of any hazardous waste or substance on, under, about or from
the properties by any prior owners or occupants of any of the
properties, or (ii) any actual or threatened litigation or claims of
any kind by any person relating to such matters. (c) Neither Borrower
nor any tenant, contractor, agent or other authorized user of any of
the properties shall use, generate, manufacture, store, treat, dispose
of, or release any hazardous waste or substance on, under, about or
from any of the properties; and any such activity shall be conducted
in compliance with all applicable federal, state, and local laws,
regulations, and ordinances, including without limitation those laws,
regulations and ordinances described above. Borrower authorizes
Lender and its agents to enter upon the properties to make such
inspections and tests as Lender may deem appropriate to determine
compliance of the properties with this section of the Agreement. Any
inspections or tests made by Lender shall be at Borrower's expense and
for Lender's purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Borrower or to
any other person. The representations and warranties contained herein
are based on Borrower's due diligence in investigating the properties
for hazardous waste and hazardous substances. Borrower hereby (a)
releases and waives any future claims against Lender for indemnity or
contribution in the event Borrower becomes liable for cleanup or other
costs under any such laws, and (b) agrees to indemnify and hold
harmless Lender against any and all claims, losses, liabilities,
damages, penalties, and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this section
of the Agreement or as a consequence of any use, generation,
manufacture, storage, disposal, release or threatened release
occurring prior to Borrower's ownership or interest in the properties,
whether or not the same was or should have been known to Borrower.
The provisions of this section of the Agreement, including the
obligation to indemnity, shall survive the payment of the Indebtedness
and the termination or expiration of this Agreement and shall not be
affected by Lender's acquisition of any interest in any of the
properties, whether by foreclosure or otherwise.
LITIGATION AND CLAIMS. No litigation, claim, investigation,
administrative proceeding or similar action (including those for
unpaid taxes) against Borrower is pending or threatened, and no other
event has occurred which may materially adversely affect Borrower's
financial condition or properties, other than litigation, claims, or
other events, if any, that have been disclosed to and acknowledged by
Lender in writing.
TAXES. To the best of Borrower's knowledge, all tax returns and
reports of Borrower that are or were required to be filed, have been
filed, and all taxes, assessments and other governmental charges have
been paid in full, except those presently being or to be contested by
Borrower in good faith in the ordinary course of business and for
which adequate reserves have been provided.
LIEN PRIORITY. Unless otherwise previously disclosed to Lender in
writing, Borrower has not entered into or granted any Security
Agreements, or permitted the filing or attachment of any Security
Interests on or affecting any of the Collateral directly or indirectly
securing repayment of
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Borrower's Loan and Note, that would be prior or that may in any way
be superior to Lender's Security Interests and rights in and to such
Collateral.
BINDING EFFECT. This Agreement, the Note, all Security Agreements
directly or indirectly securing repayment of Borrower's Loan and Note
and all of the Related Documents are binding upon Borrower as well as
upon Borrower's successors, representatives and assigns, and are
legally enforceable in accordance with their respective terms.
COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely
for business or commercial related purposes.
EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which
Borrower may have any liability complies in all material respects with
all applicable requirements of law and regulations, and (i) no
Reportable Event nor Prohibited Transaction (as defined in ERISA) has
occurred with respect to any such plan, (ii) Borrower has not
withdrawn from any such plan or initiated steps to do so, and (iii) no
steps have been taken to terminate any such plan.
LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of
business, or Borrower's Chief executive office, if Borrower has more
than one place of business, is located at 8955 Beverly Boulevard, West
Hollywood, CA 90048. Unless Borrower has designated otherwise in
writing this location is also the office or offices where Borrower
keeps its records concerning the Collateral.
INFORMATION. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender
will be, true and accurate in every material respect on the date as of
which such information is dated or certified; and none of such
information is or will be incomplete by omitting to state any material
fact necessary to make such information not misleading.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and
agrees that Lender, without independent investigation, is relying upon
the above representations and warranties in making the above
referenced Loan to Borrower. Borrower further agrees that the
foregoing representations and warranties shall be continuing in nature
and shall remain in full force and effect until such time as
Borrower's Indebtedness shall be paid in full, or until this Agreement
shall BE terminated in the manner provided above, whichever is the
last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
LITIGATION. Promptly inform Lender in writing of (a) all material
adverse changes in Borrower's financial condition, and (b) all
existing and all threatened litigation, claims, investigations,
administrative proceedings or similar actions affecting Borrower or
any Guarantor which could materially affect the financial condition of
Borrower or the financial condition of any Guarantor.
FINANCIAL RECORDS. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent
basis, and permit Lender to examine and audit Borrower's books and
records at all reasonable times.
FINANCIAL STATEMENTS. Furnish Lender with, as soon as available, but
in no event later than one hundred twenty (120) days after the end of
each fiscal year, Borrower's balance sheet and income statement for
the year ended, prepared by Borrower. All financial reports required
to be provided under this Agreement shall be prepared in accordance
with generally accepted accounting principles, applied on a consistent
basis, and certified by Borrower as being true and correct.
ADDITIONAL INFORMATION. Furnish such additional information and
statements, lists of assets and liabilities, agings of receivables and
payables, inventory schedules, budgets, forecasts, tax returns, and
other reports with respect to Borrower's financial condition and
business operations as Lender may request from time to time.
INSURANCE. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect
to Borrower's properties and operations, in form, amounts, coverages
and with insurance companies reasonably acceptable to Lender.
Borrower, upon request of Lender, will deliver to Lender from time to
time the policies or certificates of insurance in form satisfactory to
Lender, including stipulations that coverages will not be cancelled or
diminished without at least ten (10) days' prior written notice to
Lender. Each insurance policy also shall include an endorsement
providing that coverage in favor of Lender will not be impaired in any
way by any act, omission or default of Borrower or any other person.
In connection with all policies covering assets in which Lender holds
or is offered a security interest for the Loans, Borrower will provide
Lender with such loss payable or other endorsements as Lender may
require.
INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports
on each existing insurance policy showing such information as Lender
may reasonably request, including without limitation the following:
(a) the name of the insurer; (b) the risks insured; (c) the amount of
the policy; (d) the properties insured; (e) the then current property
values on the basis of which insurance has been obtained, and the
manner of determining those values; and (f) the expiration date of the
policy. In addition, upon request of Lender (however not more often
than annually), Borrower will have an independent appraiser
satisfactory to Lender determine, as applicable, the actual cash value
or replacement cost of any Collateral. The cost of such appraisal
shall be paid by Borrower.
OTHER AGREEMENTS. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and
any other party and notify Lender immediately in writing of any
default in connection with any other such agreements.
LOAN FEES AND CHARGES. In addition to all other agreed upon fees and
charges, pay the following: $19,000.00.
LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender in
writing.
TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens, of every
kind and nature, imposed upon Borrower or its properties, income, or
profits, prior to the date on which penalties would attach, and all
lawful claims that, if unpaid, might become a lien or charge upon any
of Borrower's properties, income, or profits. Provided however,
Borrower will not be required to pay and discharge any such
assessment, tax, charge, levy, lien or claim so long as (a) the
legality of the same shall be contested in good faith by appropriate
proceedings, and (b) Borrower shall have established on its books
adequate reserves with respect to such contested assessment, tax,
charge, levy, lien, or claim in accordance with generally accepted
accounting practices. Borrower, upon demand of Lender, will furnish
to Lender evidence of payment of the assessments, taxes, charges,
levies, liens and claims and will authorize the appropriate
governmental official to deliver to Lender at any time a written
statement of any assessments, taxes, charges, levies, liens and claims
against Borrower's properties, income, or profits.
PERFORMANCE. Perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in the Related Documents in
a timely manner, and promptly notify Lender if Borrower learns of the
occurrence of any event which constitutes an Event of Default under
this Agreement or under any of the Related Documents.
OPERATIONS. Maintain executive and management personnel with
substantially the same qualifications and experience AS the present
executive and management personnel; provide written notice to Lender
of any change in executive and management personnel; conduct its
business affairs in a reasonable and prudent manner and in compliance
with all applicable federal, state and municipal laws, ordinances,
rules and regulations respecting its properties, charters, businesses
and operations, including without limitation, compliance with the
Americans With Disabilities Act and with all minimum funding standards
and other requirements of ERISA and other laws applicable to
Borrower's employee benefit plans.
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INSPECTION. Permit employees or agents of Lender at any reasonable
time to inspect any and all Collateral for the Loan or Loans and
Borrower's other properties and to examine or audit Borrower's books,
accounts, and records and to make copies and memoranda of Borrower's
books, accounts, and records. If Borrower now or at any time
hereafter maintains any records (including without limitation computer
generated records and computer software programs for the generation of
such records) in the possession of a third party, Borrower, upon
request of Lender, shall notify such party to permit Lender free
access to such records at all reasonable times and to provide Lender
with copies of any records it may request, all at Borrower's expense.
COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide
Lender at least annually and at the time of each disbursement of Loan
proceeds with a certificate executed by Borrower's chief financial
officer, or other officer or person acceptable to Lender, certifying
that the representations and warranties set forth in this Agreement
are true and correct as of the date of the certificate and further
certifying that, as of the date of the certificate, no Event of
Default exists under this Agreement.
ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all
respects with all environmental protection federal, state and local
laws, statutes, regulations and ordinances; not cause or permit to
exist, as a result of an intentional or unintentional action or
omission on its part or on the part of any third party, on property
owned and/or occupied by Borrower, any environmental activity where
damage may result to the environment, unless such environmental
activity is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within
thirty (30) days after receipt thereof a copy of any notice, summons,
lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrower's part in connection with
any environmental activity whether or not there is damage to the
environment and/or other natural resources.
ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
financing statements, instruments, documents and other agreements as
Lender or its attorneys may reasonably request to evidence and secure
the Loans and to perfect all Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent
of Lender:
INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the
normal course of business and indebtedness to Lender contemplated by
this Agreement, create, incur or assume indebtedness for borrowed
money, including capital leases, (b) except as allowed as a Permitted
Lien, sell, transfer, mortgage, assign, pledge, lease, grant a
security interest in, or encumber any of Borrower's assets, or (c)
sell with recourse any OF Borrower's accounts, except to Lender.
CONTINUITY OF OPERATIONS. (a) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (b) cease operations, liquidate, merge, transfer, acquire or
consolidate with any other entity, change ownership, change its name,
dissolve or transfer or sell Collateral out of the ordinary course of
business, (c) pay any dividends on Borrower's stock (other than
dividends payable in its stock), provided, however that
notwithstanding the foregoing, but only so long as no Event of Default
has occurred and is continuing or would result from the payment of
dividends, if Borrower is a "Subchapter S Corporation" (as defined in
the Internal Revenue Code of 1986, as amended), Borrower may pay cash
dividends on its stock to its shareholders from time to time in
amounts necessary to enable the shareholders to pay income taxes and
make estimated income tax payments to satisfy their liabilities under
federal and state law which arise solely from their status as
Shareholders of a Subchapter S Corporation because of their ownership
of shares of stock of Borrower, or (d) purchase or retire any of
Borrower's outstanding shares or alter or amend Borrower's capital
structure.
LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance
money or assets, (b) purchase, create or acquire any interest in any
other enterprise or entity, or (c) incur any obligation as surety or
guarantor other than in the ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under the terms of this Agreement
or any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Borrower or any Guarantor becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; or (d) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or
any other loan with Lender.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when
due on the Loans.
OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or
to perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or
failure of Borrower to comply with or to perform any other term,
obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower's
property or Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Agreement or any of
the Related Documents.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under
this Agreement or the Related Documents is false or misleading in any
material respect at the time made or furnished, or becomes false or
misleading at any time thereafter.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any Security Agreement to create a valid and perfected Security
Interest) at any time and for any reason.
INSOLVENCY. The dissolution or termination of Borrower's existence as
a going business, the insolvency of Borrower, the appointment of a
receiver for any part of Borrower's property, any assignment for the
benefit OF creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws
by or against Borrower.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any
creditor of any Grantor against any collateral securing the
Indebtedness, or by any governmental agency. This includes A
garnishment, attachment, or levy on or of any of Borrower's deposit
accounts with Lender. However, this Event of Default shall not apply
if there is a good faith dispute by Borrower or Grantor, as the case
may be, as to the validity or reasonableness of the claim which is the
basis of the creditor or forfeiture proceeding. and if Borrower or
Grantor gives lender written notice of the creditor or forfeiture
proceeding and furnishes reserves or a surety bond for the creditor or
forfeiture proceeding satisfactory to Lender.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any Guaranty of the Indebtedness. Lender, at its
option, may, but shall not be required to, permit the Guarantor's
estate to assume unconditionally the obligations arising under the
guaranty in a manner satisfactory
5
BUSINESS LOAN AGREEMENT
(CONTINUED)
04-24-1996 Page 5
Loan No 20002816
================================================================================
to Lender, and, in doing so, cure the Event of Default.
CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
ADVERSE CHANGE. A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment OR
performance of the Indebtedness is impaired.
RIGHT TO CURE. If any default, other than a Default on Indebtedness,
is curable and if Borrower or Grantor, as the case may be, has not
been given a notice of a similar default within the preceding twelve
(12) months, it may be cured (and no Event of Default will have
occurred) if Borrower or Grantor, as the case may be, after receiving
written notice from Lender demanding cure of such default: (a) cures
the default within fifteen (15) days; or (b) if the cure requires more
than fifteen (15) days, immediately initiates steps which Lender deems
in Lender's sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except
where otherwise provided in this Agreement or the Related Documents, all
commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate and, at Lender's
option, all Indebtedness immediately will become due and payable, all without
notice OF any kind to Borrower, except that in the case of an Event of Default
of the type described in the "Insolvency" subsection above, such acceleration
shall be automatic and not optional. In addition, Lender shall have all the
rights and remedies provided in the Related Documents or available at law, in
equity, or otherwise. Except as may be prohibited by applicable law, all of
Lender's rights and remedies shall be cumulative and may be exercised
singularly or concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures or to
take action to perform an obligation of Borrower or of any Grantor shall not
affect Lender's right to declare a default and to exercise its rights and
remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in writing
and signed by the party or parties sought to be charged or bound by
the alteration or amendment.
APPLICABLE LAW. This Agreement has been delivered to Lender and
accepted by Lender in the State of California. If there is a lawsuit,
Borrower agrees upon Lender's request to submit to the jurisdiction of
the courts of Los Angeles County, the State of California. Lender and
Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower
against the other. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to
Lender's sale or transfer, whether now or later, of one or more
participation interests in the Loans to one or more purchasers,
whether related or unrelated to Lender. Lender may provide, without
any limitation whatsoever, to any one or more purchasers, or potential
purchasers, any information or knowledge Lender may have about
Borrower or about any other matter relating to the Loan, and Borrower
hereby waives any rights to privacy it may have with respect to such
matters. Borrower additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase of
such participation interests. Borrower also agrees that the
purchasers of any such participation interests will be considered as
the absolute owners of such interests in the Loans and will have all
the rights granted under the participation agreement or agreements
governing the sale of such participation interests. Borrower further
waives all rights of offset or counterclaim that it may have now or
later against Lender or against any purchaser of such a participation
interest and unconditionally agrees that either Lender or such
purchaser may enforce Borrower's obligation under the Loans
irrespective of the failure or insolvency of any holder of any
interest in the Loans. Borrower further agrees that the purchaser of
any such participation interests may enforce its interests
irrespective of any personal claims or defenses that Borrower may have
against Lender.
COSTS AND EXPENSES. Borrower agrees to pay upon demand all of
Lender's expenses, including without limitation attorneys' fees,
incurred in connection with the preparation, execution, enforcement,
modification and collection of this Agreement or in connection with
the Loans made pursuant to this Agreement. Lender may pay someone
else to help collect the Loans and to enforce this Agreement, and
Borrower will pay that amount. This includes, subject to any limits
under applicable law, Lender's attorneys' fees and Lender's legal
expenses, whether or not there is a lawsuit, including attorneys' fees
for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Borrower also will pay any court
costs, in addition to all other sums provided by law.
NOTICES. All notices required to be given under this Agreement shall
be given in writing, may be sent by telefacsimilie, and shall be
effective when actually delivered or when deposited with a nationally
recognized overnight courier or deposited in the United States mail,
first class, postage prepaid, addressed to the party to whom the
notice is to be given at the address shown above. Any party may
change its address for notices under this Agreement by giving formal
written notice to the other parties, specifying that the purpose of
the notice is to change the party's address. To the extent permitted
by applicable law, if there is more than one Borrower, notice to any
Borrower will constitute notice to all Borrowers. For notice
purposes, Borrower agrees to keep Lender informed at all times of
Borrower's current addresses).
SEVERABILITY. If a court of competent jurisdiction finds any
provision of this Agreement to be invalid or unenforceable as to any
person or circumstance, such finding shall not render that provision
invalid or unenforceable as to any other persons or circumstances. If
feasible, any such offending provision shall be deemed to be modified
to be within the limits of enforceability or validity; however, if the
offending provision cannot be so modified, it shall be stricken and
all other provisions of this Agreement in all other respects shall
remain valid and enforceable.
SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of
any provisions of this Agreement makes it appropriate, including
without limitation any representation, warranty or covenant, the word
"Borrower" as used herein shall include all subsidiaries and
affiliates of Borrower. Notwithstanding the foregoing however, under
no circumstances shall this Agreement be construed to require Lender
to make any Loan or other financial accommodation to any subsidiary or
affiliate of Borrower.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or
on behalf of Borrower shall bind its successors and assigns and shall
inure to the benefit of Lender, its successors and assigns. Borrower
shall not, however, have the right to assign its rights under this
Agreement or any interest therein, without the prior written consent
of Lender.
SURVIVAL. All warranties, representations, and covenants made by
Borrower in this Agreement or in any certificate or other instrument
delivered by Borrower to Lender under this Agreement shall be
considered to have been relied upon by Lender and will survive the
making of the Loan and delivery to Lender of the Related Documents,
regardless of any investigation made by Lender or on Lender's behalf.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of
this Agreement.
WAIVER. Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any
right shall operate as a waiver of such right or any other right. a
waiver by Lender of a provision of this Agreement shall not prejudice
or constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this
Agreement. No prior waiver BY Lender, nor any course of dealing
between Lender and Borrower, or
6
BUSINESS LOAN AGREEMENT
(CONTINUED)
04-24-1996 Page 6
Loan No 20002816
================================================================================
between Lender and any Grantor, shall constitute a waiver of any of
Lender's rights or of any obligations of Borrower or of any Grantor as
to any future transactions. Whenever the consent of Lender is
required under this Agreement, the granting of such consent by Lender
in any instance shall not constitute continuing consent in subsequent
Instances where such consent is required, and in all cases such
consent may be granted or withheld in the sole discretion of Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
APRIL 24,1996.
BORROWER:
DOVE AUDIO, INC.
By: MICHAEL VINER
--------------------------------------------------
MICHAEL VINER, CHAIRMAN OF THE BOARD AND PRESIDENT
LENDER:
ASAHI BANK OF CALIFORNIA
By
---------------------------------------------------
AUTHORIZED OFFICER
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.20b (c) 1996 CFI ProServices,
Inc. All rights reserved. [CA-C40 E3.20 F3.20 P3.20 20002816.LN]
7
PROMISSORY NOTE
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
$1,900,000.00 04-24-1996 04-15-2001 20002816 FOON
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
Borrower: DOVE AUDIO,INC. (TIN: 954015834) Lender: ASAHI BANK OF CALIFORNIA
8955 BEVERLY BOULEVARD 635 WEST 7TH STREET
WEST HOLLYWOOD, CA 90048 LOS ANGELES, CA 90017
====================================================================================================================
PRINCIPAL AMOUNT: $1,900,000.00 INTEREST RATE: 8.000% DATE OF NOTE: APRIL 24, 1996
PROMISE TO PAY. DOVE AUDIO,INC. ("BORROWER") PROMISES LO PAY LO ASAHI BANK OF
CALIFORNIA ("LENDER"), OR ORDER, IN LAWFUL MONEY OF THE UNITED STATES OF
AMERICA, THE PRINCIPAL AMOUNT OF ONE MILLION NINE HUNDRED THOUSAND & 00/100
DOLLARS ($1,900,000.00), TOGETHER WITH INTEREST AT THE RATE OF 8.000% PER ANNUM
ON THE UNPAID PRINCIPAL BALANCE FROM APRIL 25, 1996, UNTIL PAID IN FULL.
PAYMENT. BORROWER WILL PAY THIS LOAN ON DEMAND, OR IF NO DEMAND IS MADE, IN 59
REGULAR PAYMENTS OF $15,995.20 EACH AND ONE IRREGULAR LAST PAYMENT ESTIMATED AT
$1,677,930.23. BORROWER'S FIRST PAYMENT IS DUE MAY 15, 1996, AND ALL SUBSEQUENT
PAYMENTS ARE DUE ON THE SAME DAY OF EACH MONTH AFTER THAT. BORROWER'S FINAL
PAYMENT DUE APRIL 15, 2001, WILL BE FOR ALL PRINCIPAL AND ALL ACCRUED INTEREST
NOT YET PAID. PAYMENTS INCLUDE PRINCIPAL AND INTEREST. Interest on this Note
is computed on a 365/360 simple interest basis; that is, by applying the ratio
of the annual interest rate over a year of 360 days, multiplied by the
outstanding principal balance, multiplied by the actual number of days the
principal balance is outstanding. Borrower will pay Lender at Lender's address
shown above or at such other place as Lender may designate in writing. Unless
otherwise agreed or required by applicable law, payments will be applied first
to accrued unpaid interest, then to principal, and any remaining amount to any
unpaid collection costs and late charges.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject to
refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law. Except for the foregoing, Borrower may pay all
or a portion of the amount owed earlier than it is due. Early payments will
not, unless agreed to by Lender in writing, relieve Borrower of Borrower's
obligation to continue to make payments under the payment schedule. Rather,
they will reduce the principal balance due and may result in Borrower making
fewer payments.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
2.000% OF THE UNPAID PORTION OF THE REGULARLY SCHEDULED PAYMENT.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform
when due any other term, obligation, covenant, or condition contained in this
Note or any agreement related to this Note, or in any other agreement or loan
Borrower has with Lender. (c) Borrower defaults under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect
any of Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, A receiver is
appointed for any part OF Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor
tries to take any of Borrower's property on or in which Lender has a lien or
security interest. This includes a garnishment of any of Borrower's accounts
with Lender. (g) Any of the events described in this default section occurs
with respect to any guarantor of this Note. (h) A material adverse change
occurs in Borrower's financial condition, or Lender believes the prospect of
payment or performance of the Indebtedness is impaired.
If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from Lender
demanding cure of such default: (a) cures the default within fifteen (15) days;
or (b) if the cure requires more than fifteen (15) days, immediately initiates
steps which Lender deems in Lender's sole discretion to be sufficient to cure
the default and thereafter continues and completes all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, or if this Note
is not paid at final maturity, Lender, at its option, may add any unpaid
accrued interest to principal and such sum will bear interest therefrom until
paid, at the rate provided in this Note. Lender may hire or pay someone else
to help collect this Note if Borrower does not pay. Borrower also will pay
Lender that amount. This includes, subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses whether or not there is a
lawsuit, including attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services.
Borrower also will pay any court costs, in addition to all other sums provided
by law. THIS NOTE HAS BEEN DELIVERED TO LENDER AND ACCEPTED BY LENDER IN THE
STATE OF CALIFORNIA. IF THERE IS A LAWSUIT, BORROWER AGREES UPON LENDER'S
REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS OF LOS ANGELES COUNTY, THE
STATE OF CALIFORNIA. LENDER AND BORROWER HEREBY WAIVE THE RIGHT TO ANY JURY
TRIAL IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR
BORROWER AGAINST THE OTHER. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
COLLATERAL. Borrower acknowledges this Note is secured by 1st Deed of Trust on
the property located at 8955 Beverly Boulevard, West Hollywood, California
90048. That agreement contains the following due on sale provision: Lender
may, at its option, declare immediately due and payable all sums secured by
this Deed of Trust upon the sale or transfer, without the Lender's prior
written consent, of all or any part of the Real Property, or any interest in
the Real Property. A "sale or transfer" means the conveyance of Real Property
or any right, title or interest therein; whether legal, beneficial or
equitable; whether voluntary or involuntary; whether by outright sale, deed,
installment sale contract, land contract, contract for deed, leasehold interest
with a term greater than three (3) years, lease-option contract, or by sale,
assignment, or transfer of any beneficial interest in or to any land trust
holding title to the Real Property, or by any other method of conveyance of
Real Property interest. If any Trustor is a corporation, partnership or
limited liability company, transfer also includes any change in ownership of
more than twenty-five percent (25%) of the voting stock, partnership interests
or limited liability company interests, as the case may be, of Trustor.
However, this option shall not be exercised by Lender if such exercise is
prohibited by applicable law.
8
PROMISSORY NOTE
(CONTINUED)
04-24-1996 Page 2
Loan No 20002816
================================================================================
GENERAL PROVISIONS. This Note is payable on demand. The inclusion of
specific default provisions or rights of Lender shall not preclude
lender's right to declare payment of this Note on its demand. Lender
may delay or forgo enforcing any of its rights or remedies under this
Note without losing them. Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law, waive
any applicable statute of limitations, presentment, demand for
payment, protest and notice of dishonor. Upon any change in the terms
of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation
maker or endorser, shall be released from liability. All such parties
agree that Lender may renew or extend (repeatedly and for any length
of time) this loan, or release any party or guarantor or collateral;
or impair, fail to realize upon or perfect Lender's security interest
in the collateral; and take any other action deemed necessary by
Lender without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is
made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE AND
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
DOVE AUDIO,INC.
BY: MICHAEL VINER
---------------------------------------------------
MICHAEL VINER, CHAIRMAN OF THE BOARD AND PRESIDENT
================================================================================
Fixed Rate. Balloon. LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.20b
(C) 1996 CFI ProServices, Inc. All rights reserved. [CA-020 E3.20 P3.20
2000281 S.LN]
9
RECORDATION REQUESTED BY:
ASAHI BANK OF CALIFORNIA
635 WEST 7TH STREET
LOS ANGELES, CA 90017
WHEN RECORDED MAIL TO:
ASAHI BANK OF CALIFORNIA
635 WEST 7TH STREET
LOS ANGELES, CA 90017
SEND TAX NOTICES TO:
ASAHI BANK OF CALIFORNIA
635 WEST 7TH STREET
LOS ANGELES, CA 90017
FOR RECORDER'S USE ONLY
DEED OF TRUST
THIS DEED OF TRUST IS DATED APRIL 24, 1996, AMONG DOVE AUDIO,INC., WHOSE
ADDRESS IS 8955 BEVERLY BOULEVARD, WEST HOLLYWOOD, CA 90048 (REFERRED TO BELOW
AS "TRUSTOR"); ASAHI BANK OF CALIFORNIA, WHOSE ADDRESS IS 635 WEST 7TH STREET,
LOS ANGELES, CA 90017 (REFERRED TO BELOW SOMETIMES AS "LENDER" AND SOMETIMES AS
"BENEFICIARY"); AND NORTH AMERICAN TITLE COMPANY, WHOSE ADDRESS IS 520 NORTH
BRAND BOULEVARD, GLENDALE, CA 91203 (REFERRED TO BELOW AS "TRUSTEE").
CONVEYANCE AND GRANT. FOR VALUABLE CONSIDERATION, TRUSTOR IRREVOCABLY GRANTS,
TRANSFERS AND ASSIGNS TO TRUSTEE in trust, WITH POWER OF SALE, FOR THE BENEFIT
OF LENDER AS BENEFICIARY, all of Trustor's right, title, and interest in and to
the following described real property, together with all existing or
subsequently erected or affixed buildings, improvements and fixtures; all
easements, rights of way, and appurtenances; all water, water rights and ditch
rights (including stock in utilities with ditch or irrigation rights); and all
other rights, royalties, and profits relating to the real property, including
without limitation all minerals, oil, gas, geothermal and similar matters,
LOCATED in LOS ANGELES COUNTY, STATE OF CALIFORNIA (THE "REAL PROPERTY"):
PLEASE SEE EXHIBIT "A" ATTACHED HERETO AND BY THIS REFERENCE MADE A
PART HEREOF.
THE REAL PROPERTY OR ITS ADDRESS IS COMMONLY KNOWN AS 8955 BEVERLY BOULEVARD,
WEST HOLLYWOOD, CA 90048.
Trustor presently assigns to Lender (also known as Beneficiary in this Deed of
Trust) all of Trustor's right, title, and interest in and to all present and
future leases of the Property and all Rents from the Property. This is an
absolute assignment in the Rents given as additional Security pursuant to
California Civil Code Section 2938. In addition, Trustor grants Lender a
Uniform Commercial Code security interest in the Rents and the Personal
Property defined below.
DEFINITIONS. The following words shall have the following meanings when used
in this Deed of Trust. Terms not otherwise defined in this Deed of Trust shall
have the meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
BENEFICIARY. The word "Beneficiary" means ASAHI BANK OF CALIFORNIA,
its successors and assigns. ASAHI BANK OF CALIFORNIA also is referred
to as "Lender" in this Deed of Trust.
DEED OF TRUST. The words "Deed of Trust" mean this Deed of Trust
among Trustor, Lender, and Trustee, and includes without limitation
all assignment and security interest provisions relating to the
Personal Property and Rents.
GUARANTOR. The word "Guarantor" means and includes without limitation
any and all guarantors, sureties, and accommodation parties in
connection with the Indebtedness.
IMPROVEMENTS. The word "Improvements" means and includes without
limitation all existing and future improvements, fixtures, buildings,
structures, mobile homes affixed on the Real Property, facilities,
additions, replacements and other construction on the Real Property.
10
DEED OF TRUST
(CONTINUED)
04-24-1996 Page 2
Loan No 20002816
INDEBTEDNESS. The word "Indebtedness" means all principal and
interest payable under the Note and any amounts expended or advanced
by Lender to discharge obligations of Trustor or expenses incurred by
Trustee or Lender to enforce obligations of Trustor under this Deed of
Trust, together with interest on such amounts as provided in this Deed
of Trust.
LENDER. The word "Lender" means ASAHI BANK OF CALIFORNIA, its
successors and assigns.
NOTE. THE WORD "NOTE" MEANS THE NOTE DATED APRIL 24, 1996, in THE
PRINCIPAL AMOUNT OF $1,900,000.00 from Trustor to Lender, together
with all renewals, extensions, modifications, refinancings, and
substitutions for the Note.
PERSONAL PROPERTY. The words "Personal Property" mean all equipment,
fixtures, and other articles of personal property now or hereafter
owned by Trustor, and now or hereafter attached or affixed to the Real
Property; together with all accessions, parts, and additions to, all
replacements of, and all substitutions for, any of such property; and
together with all proceeds (including without limitation all insurance
proceeds and refunds of premiums) from any sale or other disposition
of the Property.
PROPERTY. The word "Property" means collectively the Real Property
and the Personal Property.
REAL PROPERTY. The words "Real Property" mean the property, interests
and rights described above in the "Conveyance and Grant" section.
RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
RENTS. The word "Rents" means all present and future rents, revenues,
income, issues, royalties, profits, and other benefits derived from
the Property.
TRUSTEE. The word "Trustee" means North American Title Company and
any substitute or successor trustees.
TRUSTOR. The word "Trustor" means any and all persons and entities
executing this Deed of Trust, including without limitation all
Trustors named above.
THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST
IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (1) PAYMENT OF THE
INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF TRUSTOR UNDER
THE NOTE, THE RELATED DOCUMENTS, AND THIS DEED OF TRUST. THIS DEED OF TRUST IS
GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Deed of Trust,
Trustor shall pay to Lender all amounts secured by this Deed of Trust as they
become due, and shall strictly and in a timely manner perform all of Trustor's
obligations under the Note, this Deed of Trust, and the Related Documents.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Trustor agrees that Trustor's
possession and use of the Property shall be governed by the following
provisions:
POSSESSION AND USE. Until the occurrence of an Event of Default, or
until Lender exercises its right to collect Rents as provided for in
the Assignment of Rents form executed by Grantor in connection with
the Property, Trustor may (a) remain in possession and control of the
Property, (b) use, operate or manage the Property, and (c) collect any
Rents, from the Property.
DUTY TO MAINTAIN. Trustor shall maintain the Property in tenantable
condition and promptly perform all repairs, replacements, and
maintenance necessary to preserve its value.
HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous
substance," "disposal," "release," and "threatened release," as used
in this Deed of Trust, shall have the same meanings as set forth in
the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"),
the Superfund Amendments and Reauthorization Act of 1986, Pub. L.
No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq., the Resource Conservation and Recovery
Act, 49 U.S.C. Section 6901, et seq., Chapter 6.5 through 7.7 of
Division 20 of the California Health and Safety Code, Section 25100,
et seq., or other applicable state or Federal laws, rules, or
regulations adopted pursuant to any of the foregoing. The terms
"hazardous waste" and "hazardous substance" shall also include,
without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos. Trustor represents and warrants to
Lender that: (a) During the period of Trustor's ownership of the
Property, there has been no use, generation, manufacture, storage,
treatment, disposal, release or threatened release of any hazardous
waste or substance by any person on, under, about or from the
Property; (b) Trustor has no knowledge of, or reason to believe that
there has been, except as previously disclosed to
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and acknowledged by Lender in writing, (i) any use, generation,
manufacture, storage, treatment, disposal, release, or threatened
release of any hazardous waste or substance on, under, about or from the
Property by any prior owners or occupants of the Property or (ii) any
actual or threatened litigation or claims of any kind by any person
relating to such matters; and (c) Except as previously disclosed to and
acknowledged by Lender in writing, (i) neither Trustor nor any tenant,
contractor, agent or other authorized user of the Property shall use,
generate, manufacture, store, treat, dispose of, or release any
hazardous waste or substance on, under, about or from the Property and
(ii) any such activity shall be conducted in compliance with all
applicable federal, state, and local laws, regulations and ordinances,
including without limitation those laws, regulations, and ordinances
described above. Trustor authorizes Lender and its agents to enter upon
the Property to make such inspections and tests, at Trustor's expense,
as Lender may deem appropriate to determine compliance of the Property
with this section of the Deed of Trust. Any inspections or tests made
by Lender shall be for Lender's purposes only and shall not be construed
to create any responsibility or liability on the part of the Lender to
Trustor or to any other person. The representations and warranties
contained herein are based on the Trustor's due diligence in
investigating the Property for hazardous waste and hazardous substances.
Trustor hereby (a) releases and waives any future claims against Lender
for indemnity or contribution in the event Trustor becomes liable for
cleanup or other costs under any such laws, and (b) agrees to indemnify
and hold harmless Lender against any and all claims, losses,
liabilities, damages, penalties, and expenses which Lender may directly
or indirectly sustain or suffer resulting from a breach of this section
of the Deed of Trust or as a consequence of any use, generation,
manufacture, storage, disposal, release or threatened release occurring
prior to Trustor's ownership or interest in the Property, whether or not
the same was or should have been known to Trustor. The provisions of
this section of the Deed of Trust, including the obligation to
indemnify, shall survive the payment of the indebtedness and the
satisfaction and reconveyance of the lien of this Deed of Trust and
shall not be affected by Lender's acquisition of any interest in the
Property, whether by foreclosure or otherwise.
NUISANCE, WASTE. Trustor shall not cause, conduct or permit any
nuisance nor commit, permit, or suffer any stripping of or waste on or
to the Property or any portion of the Property. Without limiting the
generality of the foregoing, Trustor will not remove, or grant to any
other party the right to remove, any timber, minerals (including oil and
gas), soil, gravel or rock products without the prior written consent of
Lender.
REMOVAL OF IMPROVEMENTS. Trustor shall not demolish or remove any
improvements from the Real Property without the prior written consent of
Lender. As a condition to the removal of any improvements, Lender may
require Trustor to make arrangements satisfactory to Lender to replace
such improvements with improvements of at least equal value.
LENDER'S RIGHT TO ENTER. Lender and its agents and representatives may
enter upon the Real Property at all reasonable times to attend to
Lender's interests and to inspect the Property for purposes of Trustor's
compliance with the terms and conditions of this Deed of Trust.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Trustor shall promptly
comply with all laws, ordinances, and regulations, now or hereafter in
effect, of all governmental authorities applicable to the use or
occupancy of the Property, including without limitation, the Americans
With Disabilities Act. Trustor may contest in good faith any such law,
ordinance, or regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Trustor has notified Lender in
writing prior to doing so and so long as, in Lender's sole opinion,
Lender's interests in the Property are not jeopardized. Lender may
require Trustor to post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect the Lender's interest.
DUTY TO PROTECT. Trustor agrees neither to abandon nor leave unattended
the Property. Trustor shall do all other acts, in addition to those
acts set forth above in this section, which from the character and use
of the Property are reasonably necessary to protect and preserve the
Property.
DUE ON SALE - CONSENT BY LENDER. Lender may, at its option, declare immediately
due and payable all sums secured by this Deed of Trust upon the sale or
transfer, without the Lender's prior written consent, of all or any part of the
Real Property, or any interest in the Real Property. A "sale or transfer" means
the conveyance of Real Property or any right, title or interest therein; whether
legal, beneficial or equitable; whether voluntary or involuntary; whether by
outright sale, deed, installment sale contract, land contract, contract for
deed, leasehold interest with a term greater than three (3) years, lease-option
contract, or by sale, assignment, or transfer of any beneficial interest in or
to any land trust holding title to the Real Property, or by any other method of
conveyance of Real Property interest. If any Trustor is a corporation,
partnership or limited liability company, transfer also includes any change in
ownership of more than twenty-five percent (25%) of the voting stock,
partnership interests or limited liability company interests, as the case may
be, of Trustor. However, this option shall not be exercised by Lender if such
exercise is prohibited by applicable law.
TAXES AND LIENS. The following provisions relating to the taxes and liens on
the Property are a part of this Deed of Trust.
PAYMENT. Trustor shall pay when due (and in all events at least ten
(10) days prior to delinquency) all taxes, special taxes, assessments,
charges (including water and sewer), fines and impositions levied
against or on account of the Property, and shall pay when due all claims
for work done on or for services rendered or material furnished to the
Property. Trustor shall maintain the Property free of all liens having
priority over or equal to the interest of Lender under this Deed of
Trust, except for the lien of taxes and assessments not due and except
as otherwise provided in this Deed of Trust.
RIGHT TO CONTEST. Trustor may withhold payment of any tax, assessment,
or claim in connection with a good faith dispute over the obligation to
pay, so long as Lender's interest in the Property is not jeopardized.
If a lien
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arises or is filed as a result of nonpayment, Trustor shall within
fifteen (15) days after the lien arises or, if a lien is filed, within
fifteen (15) days after Trustor has notice of the filing, secure the
discharge of the lien, or if requested by Lender, deposit with Lender
cash or a sufficient corporate surety bond or other security
satisfactory to Lender in an amount sufficient to discharge the lien
plus any costs and attorneys' fees or other charges that could accrue as
a result of a foreclosure or sale under the lien. In any contest,
Trustor shall defend itself and Lender and shall satisfy any adverse
judgment before enforcement against the Property. Trustor shall name
Lender as an additional obligee under any surety bond furnished in the
contest proceedings.
EVIDENCE OF PAYMENT. Trustor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at
any time a written statement of the taxes and assessments against the
Property.
NOTICE OF CONSTRUCTION. Trustor shall notify Lender at least fifteen
(15) days before any work is commenced, any services are furnished, or
any materials are supplied to the Property, if any mechanic's lien,
materialmen's lien, or other lien could be asserted on account of the
work, services, or materials. Trustor will upon request of Lender
furnish to Lender advance assurances satisfactory to Lender that Trustor
can and will pay the cost of such improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the
Property are a part of this Deed of Trust.
MAINTENANCE OF INSURANCE. Trustor shall procure and maintain policies
of fire insurance with standard extended coverage endorsements on a
replacement basis for the full insurable value covering all improvements
on the Real Property in an amount sufficient to avoid application of any
coinsurance clause, and with a standard mortgagee clause in favor of
Lender. Grantor shall also procure and maintain comprehensive general
liability insurance in such coverage amounts as Lender may request with
trustee and Lender being named as additional insureds in such liability
insurance policies. Additionally, Grantor shall maintain such other
insurance, including but not limited to hazard, business interruption,
and boiler insurance, as Lender may reasonably require. Notwithstanding
the foregoing, in no event shall Trustor be required to provide hazard
insurance in excess of the replacement value of the improvements on the
Real Property. Policies shall be written in form, amounts, coverages
and basis reasonably acceptable to Lender and issued by a company or
companies reasonably acceptable to Lender. Trustor, upon request of
Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without
at least ten (10) days' prior written notice to Lender. Each insurance
policy also shall include an endorsement providing that coverage in
favor of Lender will not be impaired in any way by any act, omission or
default of Grantor or any other person. Should the Real Property at any
time become located in an area designated by the Director of the Federal
Emergency Management Agency as a special flood hazard area, Trustor
agrees to obtain and maintain Federal Flood insurance to the extent such
insurance is required by Lender and is or becomes available, for the
term of the loan and for the full unpaid balance of the loan, or the
maximum limit of coverage that is available, whichever is less.
APPLICATION OF PROCEEDS. Trustor shall promptly notify Lender of any
loss or damage to the Property. Lender may make proof of loss if
Trustor fails to do so within fifteen (15) days of the casualty. If in
Lender's sole judgment Lender's security interest in the Property has
been impaired, Lender may, at its election, receive and retain the
proceeds of any insurance and apply the proceeds to the reduction of the
indebtedness, payment of any lien affecting the Property, or the
restoration and repair of the Property. If the proceeds are to be
applied to restoration and repair, Trustor shall repair or replace the
damaged or destroyed improvements in a manner satisfactory to Lender.
Lender shall, upon satisfactory proof of such expenditure, pay or
reimburse Trustor from the proceeds for the reasonable cost of repair or
restoration if Trustor is not in default under this Deed of Trust. Any
proceeds which have not been disbursed within 180 days after their
receipt and which Lender has not committed to the repair or restoration
of the Property shall be used first to pay any amount owing to Lender
under this Deed of Trust, then to pay accrued interest, and the
remainder, if any, shall be applied to the principal balance of the
indebtedness. If Lender holds any proceeds after payment in full of the
indebtedness, such proceeds shall be paid to Trustor as Trustor's
interests may appear.
UNEXPIRED INSURANCE AT SALE. Any unexpired insurance shall inure to the
benefit of, and pass to, the purchaser of the Property covered by this
Deed of Trust at any trustee's sale or other sale held under the
provisions of this Deed of Trust, or at any foreclosure sale of such
Property.
TRUSTOR'S REPORT ON INSURANCE. Upon request of Lender, however, not
more than once a year, Trustor shall furnish to Lender a report on each
existing policy of insurance showing: (a) the name of the insurer; (b)
the risks insured; (c) the amount of the policy; (d) the property
insured, the then current replacement value of such property, and the
manner of determining that value; and (e) the expiration date of the
policy. Trustor shall, upon request of Lender, have an independent
appraiser satisfactory to Lender determine the cash value replacement
cost of the Property.
EXPENDITURES BY LENDER. If Trustor fails to comply with any provision of this
Deed of Trust, or if any action or proceeding is commenced that would materially
affect Lender's interests in the Property, Lender on Trustor's behalf may, but
shall not be required to, take any action that Lender deems appropriate. Any
amount that Lender expends in so doing will bear interest at the rate charged
under the Note from the date incurred or paid by Lender to the date of
repayment by Trustor. All such expenses, at Lender's option, will (a) be
payable on demand, (b) be added to the balance of the Note and be apportioned
among and be payable with any installment payments to become due during either
(i) the term of any applicable insurance policy or (ii) the remaining term of
the Note, or (c) be treated as a balloon payment which will be due and payable
at the Note's maturity. This Deed of Trust also will secure payment of these
amounts. The rights provided for in this paragraph shall be in addition to any
other rights or any remedies to which Lender may he entitled on account of the
default. Any such action by Lender shall not be construed as curing the
default so as to bar Lender from any remedy that it otherwise would have
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had.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of
the Property are a part of this Deed of Trust.
TITLE. Trustor warrants that: (a) Trustor holds good and marketable
title of record to the Property in fee simple, free and clear of all
liens and encumbrances other than those set forth in the Real Property
description or in any title insurance policy, title report, or final
title opinion issued in favor of, and accepted by, Lender in connection
with this Deed of Trust, and (b) Trustor has the full right, power, and
authority to execute and deliver this Deed of Trust to Lender.
DEFENSE OF TITLE. Subject to the exception in the paragraph above,
Trustor warrants and will forever defend the title to the Property
against the lawful claims of all persons. In the event any action or
proceeding is commenced that questions Trustor's title or the interest
of Trustee or Lender under this Deed of Trust, Trustor shall defend the
action at Trustor's expense. Trustor may be the nominal party in such
proceeding, but Lender shall be entitled to participate in the
proceeding and to be represented in the proceeding by counsel of
Lender's own choice, and Trustor will deliver, or cause to be delivered,
to Lender such instruments as Lender may request from time to time to
permit such participation.
COMPLIANCE WITH LAWS. Trustor warrants that the Property and Trustor's
use of the Property complies with all existing applicable laws,
ordinances, and regulations of governmental authorities.
CONDEMNATION. The following provisions relating to condemnation proceedings are
a part of this Deed of Trust.
APPLICATION OF NET PROCEEDS. If all or any part of the Property is
condemned by eminent domain proceedings or by any proceeding or purchase
in lieu of condemnation, Lender may at its election require that all or
any portion of the net proceeds of the award be applied to the
indebtedness or the repair or restoration of the Property. The net
proceeds of the award shall mean the award after payment of all
reasonable costs, expenses, and attorneys' fees incurred by Trustee or
Lender in connection with the condemnation.
PROCEEDINGS. If any proceeding in condemnation is filed, Trustor shall
promptly notify Lender in writing, and Trustor shall promptly take such
steps as may be necessary to defend the action and obtain the award.
Trustor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the
proceeding by counsel of its own choice, and Trustor will deliver or
cause to be delivered to Lender such instruments as may be requested by
it from time to time to permit such participation.
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The
following provisions relating to governmental taxes, fees and charges are a
part of this Deed of Trust:
CURRENT TAXES, FEES AND CHARGES. Upon request by Lender, Trustor shall
execute such documents in addition to this Deed of Trust and take
whatever other action is requested by Lender to perfect and continue
Lender's lien on the Real Property. Trustor shall reimburse Lender for
all taxes, as described below, together with all expenses incurred in
recording, perfecting or continuing this Deed of Trust, including
without limitation all taxes, fees, documentary stamps, and other
charges for recording or registering this Deed of Trust.
TAXES. The following shall constitute taxes to which this section
applies: (a) a specific tax upon this type of Deed of Trust or upon all
or any part of the indebtedness secured by this Deed of Trust; (b) a
specific tax on Trustor which Trustor is authorized or required to
deduct from payments on the indebtedness secured by this type of Deed of
Trust; (c) a tax on this type of Deed of Trust chargeable against the
Lender or the holder of the Note; and (d) a specific tax on all or any
portion of the indebtedness or on payments of principal and interest
made by Trustor.
SUBSEQUENT TAXES. If any tax to which this section applies is enacted
subsequent to the date of this Deed of Trust, this event shall have the
same effect as an Event of Default (as defined below), and Lender may
exercise any or all of its available remedies for an Event of Default as
provided below unless Trustor either (a) pays the tax before it becomes
delinquent, or (b) contests the tax as provided above in the Taxes and
Liens section and deposits with Lender cash or a sufficient corporate
surety bond or other security satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to
this Deed of Trust as a security agreement are a part of this Deed of Trust.
SECURITY AGREEMENT. This instrument shall constitute a security
agreement to the extent any of the Property constitutes fixtures or
other personal property, and Lender shall have all of the rights of a
secured party under the Uniform Commercial Code as amended from time to
time.
SECURITY INTEREST. Upon request by Lender, Trustor shall execute
financing statements and take whatever other action is requested by
Lender to perfect and continue Lender's security interest in the Rents
and Personal Property. Trustor shall reimburse Lender for all expenses
incurred in perfecting or continuing this security interest. Upon
default, Trustor shall assemble the Personal Property in a manner and at
a place reasonably convenient to Trustor and Lender and make it
available to Lender within three (3) days after receipt of written
demand from Lender.
ADDRESSES. The mailing addresses of Trustor (debtor) and Lender
(secured party), from which information concerning the security interest
granted by this Deed of Trust may be obtained (each as required by the
Uniform Commercial Code), are as stated on the first page of this Deed
of Trust.
FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to
further assurances and attorney-in-fact are a part of this Deed of Trust.
FURTHER ASSURANCES. At any time, and from time to time, upon request of
Lender, Trustor will make, execute and deliver, or will cause to be
made, executed or delivered, to Lender or to Lender's designee, and when
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requested by Lender, cause to be filed, recorded, refiled, or
rerecorded, as the case may be, at such times and in such offices and
places as Lender may deem appropriate, any and all such mortgages, deeds
of trust, security deeds, security agreements, financing statements,
continuation statements, instruments of further assurance, certificates,
and other documents as may, in the sole opinion of Lender, be necessary
or desirable in order to effectuate, complete, perfect, continue, or
preserve (a) the obligations of Trustor under the Note, this Deed of
Trust, and the Related Documents, and (b) the liens and security
interests created by this Deed of Trust as first and prior liens on the
Property, whether now owned or hereafter acquired by Trustor. Unless
prohibited by law or agreed to the contrary by Lender in writing,
Trustor shall reimburse Lender for all costs and expenses incurred in
connection with the matters referred to in this paragraph.
ATTORNEY-IN-FACT. If Trustor fails to do any of the things referred to
in the preceding paragraph, Lender may do so for and in the name of
Trustor and at Trustor's expense. For such purposes, Trustor hereby
irrevocably appoints Lender as Trustor's attorney-in-fact for the
purpose of making, executing, delivering, filing, recording, and doing
all other things as may be necessary or desirable, in Lender's sole
opinion, to accomplish the matters referred to in the preceding
paragraph.
FULL PERFORMANCE. If Trustor pays all the Indebtedness when due, and otherwise
performs all the obligations imposed upon Trustor under this Deed of Trust,
Lender shall execute and deliver to Trustee a request for full reconveyance and
shall execute and deliver to Trustor suitable statements of termination of any
financing statement on file evidencing Lender's security interest in the Rents
and the Personal Property. Lender may charge Trustor a reasonable reconveyance
fee at the time of reconveyance.
DEFAULT. Each of the following, at the option of Lender, shall constitute an
event of default ("Event of Default") under this Deed of Trust:
DEFAULT OF INDEBTEDNESS. Failure of Trustor to make any payment when
due on the Indebtedness.
DEFAULT ON OTHER PAYMENTS. Failure of Trustor within the time required
by this Deed of Trust to make any payment for taxes or insurance, or any
other payment necessary to prevent filing of or to effect discharge of
any lien.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower's
property or Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Deed of Trust or any of
the Related Documents.
COMPLIANCE DEFAULT. Failure to comply with any other term, obligation,
covenant or condition contained in this Deed of Trust, the Note or in
any of the Related Documents. If such a failure is curable and if
Trustor has not been given a notice of a breach of the same provision of
this Deed of Trust within the preceding twelve (12) months, it may be
cured (and no Event of Default will have occurred) if Trustor, after
Lender sends written notice demanding cure of such failure: (a) cures
the failure within fifteen (15) days; or (b) if the cure requires more
than fifteen (15) days, immediately initiates steps sufficient to cure
the failure and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably
practical.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Trustor under this Deed of Trust,
the Note or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished.
INSOLVENCY. The dissolution or termination of Trustor's existence as a
going business, the insolvency of Trustor, the appointment of a receiver
for any part of Trustor's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against
Trustor.
FORECLOSURE, FORFEITURE, ETC. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or
any other method, by any creditor of Trustor or by any governmental
agency against any of the Property. However, this subsection shall not
apply in the event of a good faith dispute by Trustor as to the validity
or reasonableness of the claim which is the basis of the foreclosure or
forfeiture proceeding, provided that Trustor gives Lender written notice
of such claim and furnishes reserves or a surety bond for the claim
satisfactory to Lender.
BREACH OF OTHER AGREEMENT. Any breach by Trustor under the terms of any
other agreement between Trustor and Lender that is not remedied within
any grace period provided therein, including without limitation any
agreement concerning any indebtedness or other obligation of Trustor to
Lender, whether existing now or later.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occur with
respect to any Guarantor of any of the Indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness. Lender, at its
option, may, but shall not be required to, permit the Guarantor's estate
to assume unconditionally the obligations arising under the guaranty in
a manner satisfactory to Lender, and, in doing so, cure the Event of
Default.
ADVERSE CHANGE. A material adverse change occurs in Trustor's financial
condition, or Lender believes the prospect of payment or performance of
the Indebtedness is impaired.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and
at any time thereafter, Trustee or Lender, at its option, may exercise any one
or more of the following rights and remedies, in addition to any other rights
or remedies provided by law:
FORECLOSURE BY SALE. Upon an Event of Default under this Deed of Trust,
Beneficiary may declare the entire Indebtedness secured by this Deed of
Trust immediately due and payable by delivery to Trustee of written
declaration of default and demand for sale and of written notice of
default and of election to cause to be sold the Property, which notice
Trustee shall cause to be filed for record. Beneficiary also shall
deposit with
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Trustee this Deed of Trust, the Note, other documents requested by
Trustee, and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following
the recordation of the notice of default, and notice of sale having been
given as then required by law, Trustee, without demand on Trustor, shall
sell the Property at the time and place fixed by it in the notice of
sale, either as a whole or in separate parcels, and in such order as it
may determine, at public auction to the highest bidder for cash in
lawful money of the United States, payable at time of sale. Trustee may
postpone sale of all or any portion of the Property by public
announcement at such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement in accordance with applicable law.
Trustee shall deliver to such purchaser its deed conveying the Property
so sold, but without any covenant or warranty, express or implied. The
recitals in such deed of any matters or facts shall be conclusive proof
of the truthfulness thereof. Any person, including Trustor, Trustee or
Beneficiary may purchase at such sale. After deducting all costs, fees
and expenses of Trustee and of this Trust, including cost of evidence of
title in connection with sale, Trustee shall apply the proceeds of sale
to payment of: all sums expended under the terms hereof, not then
repaid, with accrued interest at the amount allowed by law in effect at
the date hereof; all other sums then secured hereby; and the remainder,
if any, to the person or persons legally entitled thereto.
JUDICIAL FORECLOSURE. With respect to all or any part of the Personal
Property, Lender shall have the right in lieu of foreclosure by power of
sales to foreclose by judicial foreclosure in accordance with and to the
full extent provided by California law.
UCC REMEDIES. With respect to all or any part of the Personal Property,
Lender shall have all the rights and remedies of a secured party under
the Uniform Commercial Code, including without limitation the right to
recover any deficiency in the manner and to the full extent provided by
California law.
COLLECT RENTS. Lender shall have the right, without notice to Trustor,
to take possession of and manage the Property and collect the Rents,
including amounts past due and unpaid, and apply the net proceeds, over
and above Lender's costs, against the Indebtedness. In furtherance of
this right, Lender may require any tenant or other user of the Property
to make payments of rent or use fees directly to Lender. If the Rents
are collected by Lender, then Trustor irrevocably designates Lender as
Trustor's attorney-in-fact to endorse instruments received in payment
thereof in the name of Trustor and to negotiate the same and collect the
proceeds. Payments by tenants or other users to Lender in response to
Lender's demand shall satisfy the obligations for which the payments are
made, whether or not any proper grounds for the demand existed. Lender
may exercise its rights under this subparagraph either in person, by
agent, or through a receiver.
APPOINT RECEIVER. Lender shall have the right to have a receiver
appointed to take possession of all or any part of the Property, with
the power to protect and preserve the Property, to operate the Property,
to operate the Property preceding foreclosure or sale, and to collect
the Rents from the Property and apply the proceeds, over and above the
cost of the receivership, against the Indebtedness. The receiver may
serve without bond if permitted by law. Lender's right to the
appointment of a receiver shall exist whether or not the apparent value
of the Property exceeds the Indebtedness by a substantial amount.
Employment by Lender shall not disqualify a person from serving as a
receiver.
TENANCY AT SUFFERANCE. If Trustor remains in possession of the Property
after the Property is sold as provided above or Lender otherwise becomes
entitled to possession of the Property upon default of Trustor, Trustor
shall become a tenant at sufferance of Lender or the purchaser of the
Property and shall, at Lender's option, either (a) pay a reasonable
rental for the use of the Property, or (b) vacate the Property
immediately upon the demand of Lender.
OTHER REMEDIES. Trustee or Lender shall have any other right or remedy
provided in this Deed of Trust or the Note or by law.
NOTICE OF SALE. Lender shall give Trustor reasonable notice of the time
and place of any public sale of the Personal Property or of the time
after which any private sale or other intended disposition of the
Personal Property is to be made. Reasonable notice shall mean notice
given at least five (5) days before the time of the sale or disposition.
Any sale of Personal Property may be made in conjunction with any sale
of the Real Property.
SALE OF THE PROPERTY. To the extent permitted by applicable law,
Trustor hereby waives any and all rights to have the Property
marshalled. In exercising its rights and remedies, the Trustee or
Lender shall be free to sell all or any part of the Property together or
separately, in one sale or by separate sales. Lender shall be entitled
to bid at any public sale on all or any portion of the Property.
WAIVER; ELECTION OF REMEDIES. A waiver by any party of a breach of a
provision of this Deed of Trust shall not constitute a waiver of or
prejudice the party's rights otherwise to demand strict compliance with
that provision or any other provision. Election by Lender to pursue any
remedy provided in this Deed of Trust, the Note, in any Related
Document, or provided by law shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to
perform an obligation of Trustor under this Deed of Trust after failure
of Trustor to perform shall not affect Lender's right to declare a
default and to exercise any of its remedies.
ATTORNEY'S FEES; EXPENSES. If Lender institutes any suit or action to
enforce any of the terms of this Deed of Trust, Lender shall be entitled
to recover such sum as the court may adjudge reasonable as attorneys'
fees at trial and on any appeal. Whether or not any court action is
involved, all reasonable expenses incurred by Lender which in Lender's
opinion are necessary at any time for the protection of its interest or
the enforcement of its rights shall become a part of the Indebtedness
payable on demand and shall bear interest at the Note rate from the date
of expenditure until repaid. Expenses covered by this paragraph
include, without limitation, however subject to any limits under
applicable law, Lender's attorneys' fees whether or not there is a
lawsuit, including attorneys' fees for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay
16
04-24-1996 DEED OF TRUST Page 8
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================================================================================
or injunction), appeals and any anticipated post-judgment collection
services, the cost of searching records, obtaining title reports
(including foreclosure reports), surveyors' reports, appraisal fees,
title insurance, and fees for the Trustee, to the extent permitted by
applicable law. Trustor also will pay any court costs, in addition to
all other sums provided by law.
RIGHTS OF TRUSTEE. Trustee shall have all of the rights and duties of
Lender as set forth in this section.
POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions relating to the
powers and obligations of Trustee are part of this Deed of Trust.
POWERS OF TRUSTEE. In addition to all powers of Trustee arising as a
matter of law, Trustee shall have the power to take the following
actions with respect to the Property upon the written request of Lender
and Trustor: (a) join in preparing and filing a map or plat of the Real
Property, including the dedication of streets or other rights to the
public; (b) join in granting any easement or creating any restriction on
the Real Property; and (c) join in any subordination or other agrement
affecting this Deed of Trust or the interest of Lender under this Deed
of Trust.
OBLIGATIONS TO NOTIFY. Trustee shall not be obligated to notify any
other party of a pending sale under any other trust deed or lien, or of
any action or proceeding in which Trustor, Lender, or Trustee shall be a
party, unless the action or proceeding is brought by Trustee.
TRUSTEE. Trustee shall meet all qualifications required for Trustee
under applicable law. In addition to the rights and remedies set forth
above, with respect to all or any part of the Property, the Trustee
shall have the right to foreclose by notice and sale, and Lender shall
have the right to foreclose by judicial foreclosure, in either case in
accordance with and to the full extent provided by applicable law.
SUCCESSOR TRUSTEE. Lender, at Lender's option, may from time to time
appoint a successor Trustee to any Trustee appointed hereunder by an
instrument executed and acknowledged by Lender and recorded in the
office of the recorder of Los Angeles County, California. The
instrument shall contain, in addition to all other matters required by
state law, the names of the original Lender, Trustee, and Trustor, the
book and page where this Deed of Trust is recorded, and the name and
address of the successor Trustee, and the instrument shall be executed
and acknowledged by Lender or its successors in interest. The successor
Trustee, without conveyance of the Property, shall succeed to all the
title, power, and duties conferred upon the Trustee in this Deed of
Trust and by applicable law. The procedure for substitution of trustee
shall govern to the exclusion of all other provisions for substitution.
NOTICES TO TRUSTOR AND OTHER PARTIES. Any notice under this Deed of Trust shall
be in writing, may be sent by telefacsimile, and shall be effective when
actually delivered, or when deposited with a nationally recognized overnight
courier, or, if mailed, shall be deemed effective when deposited in the United
States mail first class, registered mail, postage prepaid, directed to the
addresses shown near the beginning of this Deed of Trust. Any party may change
its address for notices under this Deed of Trust by giving formal written notice
to the other parties, specifying that the purpose of the notice is to change the
party's address. All copies of notices of foreclosure from the holder of any
lien which has priority over this Deed of Trust shall be sent to Lender's
address, as shown near the beginning of this Deed of Trust. For notice
purposes, Trustor agrees to keep Lender and Trustee informed at all times of
Trustor's current address. Each Trustor requests that copies of any notices of
default and sale be directed to Trustor's address shown near the beginning of
this Deed of Trust.
STATEMENT OF OBLIGATION. Lender may collect a fee, in an amount not to exceed
the statutory maximum, for furnishing the statement of obligation as provided
by Section 2943 of the Civil Code of California.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Deed of Trust:
AMENDMENTS. This Deed of Trust, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Deed of Trust. No alteration of or
amendment to this Deed of Trust shall be effective unless given in
writing and signed by the party or parties sought to be charged or bound
by the alteration or amendment.
ANNUAL REPORTS. If the Property is used for purposes other than
Trustor's residence, Trustor shall furnish to Lender, upon request, a
certified statement of net operating income received from the Property
during Trustor's previous fiscal year in such form and detail as Lender
shall require. "Net operating income" shall mean all cash receipts from
the Property less all cash expenditures made in connection with the
operation of the Property.
ACCEPTANCE BY TRUSTEE. Trustee accepts this Trust when this Deed of
Trust, duly executed and acknowledged, is made a public record as
provided by law.
APPLICABLE LAW. THIS DEED OF TRUST HAS BEEN DELIVERED TO LENDER AND
ACCEPTED BY LENDER IN THE STATE OF CALIFORNIA. THIS DEED OF TRUST SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.
CAPTION HEADINGS. Caption headings in this Deed of Trust are for
convenience purposes only and are not to be used to interpret or define
the provisions of this Deed of Trust.
MERGER. There shall be no merger of the interest or estate created by
this Deed of Trust with any other interest or estate in the Property at
any time held by or for the benefit of Lender in any capacity, without
the written consent of Lender.
SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Deed of Trust to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
17
04-24-1996 DEED OF TRUST Page 9
Loan No 20002816 (Continued)
===============================================================================
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemed to be modified to be within
the limits of enforceability or validity; however, if the offending
provision cannot be so modified, it shall be stricken and all other
provisions of this Deed of Trust in all other respects shall remain
valid and enforceable.
SUCCESSORS AND ASSIGNS. Subject to the limitations stated in this Deed
of Trust on transfer of Trustor's interest, this Deed of Trust shall be
binding upon and inure to the benefit of the parties, their successors
and assigns. If ownership of the Property becomes vested in a person
other than Trustor, Lender, without notice to Trustor, may deal with
Trustor's successors with reference to this Deed or Trust and the
Indebtedness by way of forbearance or extension without releasing
Trustor from the obligations of this Deed of Trust or liability under
the Indebtedness.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of
this Deed of Trust.
WAIVERS AND CONSENTS. Lender shall not be deemed to have waived any
rights under this Deed of Trust (or under the Related Documents) unless
such waiver is in writing and signed by Lender. No delay or omission on
the part of Lender in exercising any right shall operate as a waiver of
such right or any other right. A waiver by any party of a provision of
this Deed or Trust shall not constitute a waiver of or prejudice the
party's right otherwise to demand strict compliance with that provision
or any other provision. No prior waiver by Lender, nor any course of
dealing between Lender and Trustor, shall constitute a waiver of any of
Lender's rights or any of Trustor's obligations as to any future
transactions. Whenever consent by Lender is required in this Deed of
Trust, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent
is required.
EACH TRUSTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF TRUST,
AND EACH TRUSTOR AGREES TO ITS TERMS.
TRUSTOR:
DOVE AUDIO, INC.
By: /s/ MICHAEL VINER
--------------------------------------------------
Michael Viner, Chairman of the Board and President
- - -------------------------------------------------------------------------------
CERTIFICATE OF ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On APRIL 24, 1996, before me, A. WATANABE, personally appeared Michael Viner,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
A. WATANABE
COMM. #989696
Notary Public - California
LOS ANGELES COUNTY
My Comm. Expires MAR 28, 1997
WITNESS my hand and official seal.
Signature /s/ A. WATANABE (Seal)
------------------------------
18
EXHIBIT "A"
PARCEL 1:
LOT 332 OF TRACT NO. 5125, IN THE CITY OF WEST HOLLYWOOD, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 62 PAGES 39 AND 40 OF
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THE SOUTHERLY 55 FEET THEREOF.
PARCEL 2:
LOT 331 AND THE SOUTHERLY 55 FEET OF LOT 332 OF TRACT NO. 5125, IN THE CITY OF
WEST HOLLYWOOD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED
IN BOOK 62 PAGES 39 AND 40 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.
PARCEL 3:
LOTS 284, 285, 286, 329 AND 330 OF TRACT 5125, IN THE CITY OF WEST HOLLYWOOD,
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 62
PAGES 39 AND 40 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 4:
LOT 282 OF TRACT NO. 5125, IN THE CITY OF WEST HOLLYWOOD, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 62 PAGE 39 OF MAPS,
IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 5:
LOT 283 OF TRACT NO. 5125, IN THE CITY OF WEST HOLLYWOOD, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 62 PAGES 39 AND 40 OF
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
19
RECORDATION REQUESTED BY:
ASAHI BANK OF CALIFORNIA
635 WEST 7TH STREET
LOS ANGELES, CA 90017
WHEN RECORDED MAIL TO:
ASAHI BANK OF CALIFORNIA
635 WEST 7TH STREET
LOS ANGELES, CA 90017
SEND TAX NOTICES TO:
ASAHI BANK OF CALIFORNIA
635 WEST 7TH STREET
LOS ANGELES, CA 90017
FOR RECORDER'S USE ONLY
ASSIGNMENT OF RENTS
THIS ASSIGNMENT OF RENTS IS DATED APRIL 24,1996, BETWEEN DOVE AUDIO, INC., WHOSE
ADDRESS IS 8955 BEVERLY BOULEVARD, WEST HOLLYWOOD, CA 90048 (REFERRED TO BELOW
AS "GRANTOR"); AND ASAHI BANK OF CALIFORNIA, WHOSE ADDRESS IS 635 WEST 7TH
STREET, LOS ANGELES, CA 90017 (REFERRED TO BELOW AS "LENDER").
ASSIGNMENT. FOR VALUABLE CONSIDERATION, GRANTOR ASSIGNS AND CONVEYS TO LENDER
ALL OF GRANTOR'S RIGHT, TITLE, AND INTEREST IN AND TO THE RENTS FROM THE
FOLLOWING DESCRIBED PROPERTY LOCATED IN LOS ANGELES COUNTY, STATE OF
CALIFORNIA:
PLEASE SEE EXHIBIT "A" ATTACHED HERETO AND BY THIS REFERENCE MADE A
PART HEREOF.
THE REAL PROPERTY OR ITS ADDRESS IS COMMONLY KNOWN AS 8955 BEVERLY BOULEVARD,
WEST HOLLYWOOD, CA 90048. THIS IS AN ABSOLUTE ASSIGNMENT IN THE RENTS GIVEN AS
ADDITIONAL SECURITY PURSUANT TO CALIFORNIA CIVIL CODE SECTION 2938.
DEFINITIONS. The following words shall have the following meanings when used
in this Assignment. Terms not otherwise defined in this Assignment shall have
the meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
ASSIGNMENT. The word "Assignment" means this Assignment of Rents
between Grantor and Lender, and includes without limitation all
assignments and security interest provisions relating to the Rents.
EVENT OF DEFAULT. The words "Event of Default" mean and include
without limitation any of the Events of Default set forth below in the
section titled "Events of Default."
GRANTOR. The word "Grantor" means DOVE AUDIO INC..
INDEBTEDNESS. The word "Indebtedness" means all principal and
interest payable under the Note and any amounts expended or advanced
by Lender to discharge obligations of Grantor or expenses incurred by
Lender to enforce obligations of Grantor under this Assignment,
together with interest on such amounts as provided in this Assignment.
LENDER. The word "Lender" means ASAHI BANK OF CALIFORNIA, its
successors and assigns.
NOTE. The word "Note" means the promissory note or credit agreement
dated April 24, 1996, in the original principal amount of
$1,900,000.00 from Grantor to Lender, together with all renewals of,
extensions of, modifications of, refinancings of, consolidations of,
and substitutions for the promissory note or agreement.
PROPERTY. The word "Property" means the real property, and all
improvements thereon, described above in the "Assignment" section.
REAL PROPERTY. The words "Real Property" mean the property, interests
and rights described above in the "Property Definition" section.
RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
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04-24-1996 ASSIGNMENT OF RENTS Page 2
Loan No 20002816 (Continued)
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mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
THIS ASSIGNMENT IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2)
PERFORMANCE OF ANY AND ALL OBLIGATIONS OF GRANTOR UNDER THE NOTE, THIS
ASSIGNMENT, AND THE RELATED DOCUMENTS. THIS DOCUMENT IS GIVEN AND ACCEPTED ON
THE FOLLOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Assignment,
Grantor shall pay to Lender all amounts secured by this Assignment as they
become due, and shall strictly perform all of Grantor's obligations under this
Assignment. Unless and until Lender exercises its right to collect the Rents
as provided below and so long as there is no default under this Assignment,
Grantor may remain in possession and control of and operate and manage the
Property and collect the Rents, provided that the granting of the right to
collect the Rents shall not constitute Lender's consent to the use of cash
collateral in a bankruptcy proceeding.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE RENTS. With
respect to the Rents, Grantor represents and warrants to Lender that:
OWNERSHIP. Grantor is entitled to receive the Rents free and clear of
all rights, loans, liens, encumbrances, and claims except as disclosed
to and accepted by Lender in writing.
NO PRIOR ASSIGNMENT. Grantor has not previously assigned or conveyed
the Rents to any other person by any instrument now in force.
NO FURTHER TRANSFER. Grantor will not sell, assign, encumber, or
otherwise dispose of any Grantor's rights in the Rents except as
provided in this Agreement.
LENDER'S RIGHTS TO COLLECT RENTS. Lender shall have the right at any time, and
even though no default shall have occurred under this Assignment, to collect
and receive the Rents. For this purpose, Lender is hereby given and granted
the following rights, powers and authority:
NOTICE TO TENANTS. Lender may send notices to any and all tenants of
the Property advising them of this Assignment and directing all Rents to
be paid directly to Lender or Lender's agent.
ENTER THE PROPERTY. Lender may enter upon and take possession of the
Property; demand, collect and receive from the tenants or from any
person liable therefor, all of the Rents; institute and carry on all
legal proceedings necessary for the protection of the Property,
including such proceedings as may be necessary to recover possession of
the Property; collect the Rents and remove any tenant or tenants or
other persons from the Property.
MAINTAIN THE PROPERTY. Lender may enter upon the Property to maintain
the Property and keep the same in repair; to pay the costs thereof and
all of services of all employees, including their equipment, and of all
continuing costs and expenses of maintaining the Property in proper
repair and condition, and also to pay all taxes, assessments and water
utilities, and the premiums on fire and other insurance effected by
Lender on the Property.
COMPLIANCE WITH LAWS. Lender may do any and all things to execute and
comply with the laws of the State of California and also all other laws,
rules, orders, ordinances and requirements of all other governmental
agencies affecting the Property.
LEASE THE PROPERTY. Lender may rent or lease the whole or any part of
the Property for such term or terms and on such conditions as Lender may
deem appropriate.
EMPLOY AGENTS. Lender may engage such agent or agents as Lender may
deem appropriate, either in Lender's name or in Grantor's name, to rent
and manage the Property, including the collection and application of
Rents.
OTHER ACTS. Lender may do all such other things and acts with respect
to the Property as Lender may deem appropriate and may act exclusively
and solely in the place and stead of Grantor and to have all of the
powers of Grantor for the purposes stated above.
NO REQUIREMENT TO ACT. Lender shall not be required to do any of the
foregoing acts or things, and the fact that Lender shall have performed
one or more of the foregoing acts or things shall not require Lender to
do any other specific act or thing.
APPLICATION OF RENTS. All costs and expenses incurred by Lender in connection
with the Property shall be for Grantor's account and Lender may pay such costs
and expenses from the Rents. Lender, in its sole discretion, shall determine
the application of any and all Rents received by it; however, any such Rents
received by Lender which are not applied to such costs and expenses shall be
applied to the Indebtedness. All expenditures made by Lender under this
Assignment and not reimbursed from the Rents shall become a part of the
Indebtedness secured by this Assignment, and shall be payable on demand, with
respect at the Note rate from date of expenditure until paid.
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04-24-1996 ASSIGNMENT OF RENTS Page 3
Loan No 20002816 (Continued)
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FULL PERFORMANCE. If Grantor pays all of the indebtedness when due and
otherwise performs all the obligations imposed upon Grantor under this
Assignment, the Note, and the Related Documents, Lender shall execute and
deliver to Grantor a suitable satisfaction of this Assignment and suitable
statements of termination of any financing statement on file evidencing
Lender's security interest in the Rents and the Property. Any termination fee
required by law shall be paid by Grantor, if permitted by applicable law.
EXPENDITURES BY LENDER. If Grantor fails to comply with any provision of this
Assignment, or if any action or proceeding is commenced that would materially
affect Lender's interests in the Property, Lender on Grantor's behalf may, but
shall not be required to, take any action that Lender deems appropriate. Any
amount that Lender expends in so doing will bear interest at the rate charged
under the Note from the date incurred or paid by Lender to the date of
repayment by Grantor. All such expenses, at Lender's option, will (a) be
payable on demand, (b) be added to the balance of the Note and be apportioned
among and be payable with any installment payments to become due during either
(i) the term of any applicable insurance policy or (ii) the remaining term of
the Note, or (c) be treated as a balloon payment which will be due and payable
at the Note's maturity. This Assignment also will secure payment of these
amounts. The rights provided for in this paragraph shall be in addition to any
other rights or any remedies to which Lender may be entitled on account of the
default. Any such action by Lender shall not be construed as curing the
default so as to bar Lender from any remedy that it otherwise would have had.
DEFAULT. Each of the following, at the option of Lender, shall constitute an
event of default ("Event of Default") under this Assignment:
DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when
due on the Indebtedness.
COMPLIANCE DEFAULT. Failure to comply with any other term, obligation,
covenant or condition contained in this Assignment, the Note or in any
of the Related Documents. If such a failure is curable and if Grantor
has not been given a notice of a breach of the same provision of this
Assignment within the preceding twelve (12) months, it may be cured (and
no Event of Default will have occurred) if Grantor, after Lender sends
written notice demanding cure of such failure: (a) cures the failure
within fifteen (15) days; or (b) if the cure requires more than fifteen
(15) days, immediately initiates steps sufficient to cure the failure
and thereafter continues and completes all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably
practical.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower's
property or Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Assignment or any of the
Related Documents.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Grantor under this Assignment,
the Note or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished.
OTHER DEFAULTS. Failure of Grantor to comply with any term, obligation,
covenant, or condition contained in any other agreement between Grantor
and Lender.
INSOLVENCY. The dissolution or termination of Grantor's existence as a
going business, the insolvency of Grantor, the appointment of a receiver
for any part of Grantor's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against
Grantor.
FORECLOSURE, FORFEITURE, ETC. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or
any other method, by any creditor of Grantor or by any governmental
agency against any of the Property. However, this subsection shall not
apply in the event of a good faith dispute by Grantor as to the validity
or reasonableness of the claim which is the basis of the foreclosure or
forfeiture proceeding,provided that Grantor gives Lender written notice
of such claim and furnishes reserves or a surety bond for the claim
satisfactory to Lender.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any Guarantor of any of the indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness. Lender, at its
option, may, but shall not be required to, permit the Guarantor's estate
to assume unconditionally the obligations arising under the guaranty in
a manner satisfactory to Lender, and, in doing so, cure the Event of
Default.
ADVERSE CHANGE. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of
the Indebtedness is impaired.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default
and at any time thereafter, Lender may exercise any one or more of the
following rights and remedies, in addition to any other rights or remedies
provided by law:
ACCELERATE INDEBTEDNESS. Lender shall have the right at its option
without notice to Grantor to declare the entire indebtedness immediately
due and payable, including any prepayment penalty which Grantor would be
required to pay.
COLLECT RENTS. Lender shall have the right, without notice to Grantor,
to take possession of the Property and collect the Rents, including
amounts past due and unpaid, and apply the net proceeds, over and above
Lender's costs, against the Indebtedness. In furtherance of this right,
Lender shall have all the rights provided for in the Lender's Right to
Collect Section, above. If the Rents are collected by Lender, then
Grantor irrevocably designates Lender as Grantor's attorney-in-fact to
endorse instruments received in payment thereof in the name of Grantor
and to negotiate the same and collect the proceeds. Payments by tenants
or other users to Lender in response to Lender's demand shall satisfy
the obligations for which the payments are
22
04-24-1996 ASSIGNMENT OF RENTS Page 4
Loan No 20002816 (Continued)
================================================================================
made, whether or not any proper grounds for the demand existed. Lender
may exercise its rights under this subparagraph either in person, by
agent, or through a receiver.
APPOINTMENT RECEIVER. Lender shall have the right to have a receiver
appointed to take possession of all or any part of the Property, with
the power to protect and preserve the Property, to operate the Property
preceding foreclosure or sale, and to collect the Rents from the
Property and apply the proceeds, over and above the cost of the
receivership, against the indebtedness. The receiver may serve without
bond if permitted by law. Lender's right to the appointment of a
receiver shall exist whether or not the apparent value of the Property
exceeds the indebtedness by a substantial amount. Employment by Lender
shall not disqualify a person from serving as a receiver.
OTHER REMEDIES. Lender shall have all other rights and remedies
provided in this Assignment or the Note or by law.
WAIVER; ELECTION OF REMEDIES. A waiver by any party of a breach of a
provision of this Assignment shall not constitute a waiver of or
prejudice the party's rights otherwise to demand strict compliance with
that provision or any other provision. Election by Lender to pursue any
remedy shall not exclude pursuit of any other remedy, and an election to
make expenditures or take action to perform an obligation of Grantor
under this Assignment after failure of Grantor to perform shall not
affect Lender's right to declare a default and exercise its remedies
under this Assignment.
ATTORNEYS' FEES; EXPENSES. If Lender institutes any suit or action to
enforce any of the terms of this Assignment, Lender shall be entitled to
recover such sum as the court may adjudge reasonable as attorneys' fees
at trial and on any appeal. Whether or not any court action is
involved, all reasonable expenses incurred by Lender that in Lender's
opinion are necessary at any time for the protection of its interest or
the enforcement of its rights shall become a part of the indebtedness
payable on demand and shall bear interest from the date of expenditure
until repaid at the rate provided for in the Note. Expenses covered by
this paragraph include, without limitation, however subject to any
limits under applicable law, Lender's attorneys' fees and Lender's legal
expenses whether or not there is a lawsuit, including attorneys' fees
for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals and any anticipated post-judgment
collection services, the cost of searching records, obtaining title
reports (including foreclosure reports), surveyors' reports, and
appraisal fees, and title insurance, to the extent permitted by
applicable law. Grantor also will pay any court costs, in addition to
all other sums provided by law.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Assignment:
AMENDMENTS. This Assignment, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Assignment. No alteration of or amendment
to this Assignment shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment.
APPLICABLE LAW. THIS ASSIGNMENT HAS BEEN DELIVERED TO LENDER AND
ACCEPTED BY LENDER IN THE STATE OF CALIFORNIA. THIS ASSIGNMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.
NO MODIFICATION. Grantor shall not enter into any agreement with the
holder of any mortgage, deed of trust, or other security agreement which
has priority over this Assignment by which that agreement is modified,
amended, extended, or renewed without the prior written consent of
Lender. Grantor shall neither request nor accept any future advances
under any such security agreement without the prior written consent of
Lender.
SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Assignment to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemed to be modified to be within
the limits of enforceability or validity; however, if the offending
provision cannot be so modified, it shall be stricken and all other
provisions of this Assignment in all other respects shall remain valid
and enforceable.
SUCCESSORS AND ASSIGNS. Subject to the limitations stated in this
Assignment on transfer of Grantor's interest, this Assignment shall be
binding upon and inure to the benefit of the parties, their successors
and assigns. If ownership of the Property becomes vested in a person
other than Grantor, Lender, without notice to Grantor, may deal with
Grantor's successors with reference to this Assignment and the
indebtedness by way of forbearance or extension without releasing
Grantor from the obligations of this Assignment or liability under the
indebtedness.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of
this Assignment.
WAIVER OF HOMESTEAD EXEMPTION. Grantor hereby releases and waives all
rights and benefits of the homestead exemption laws of the State of
California as to all indebtedness secured by this Assignment.
WAIVERS AND CONSENTS. Lender shall not be deemed to have waived any
rights under this Assignment (or under the Related Documents) unless
such waiver is in writing and signed by Lender. No delay or omission on
the part of Lender in exercising any right shall operate as a waiver of
such right or any other right. A waiver by any party of a provision of
this Assignment shall not constitute a waiver of or prejudice the
party's right otherwise to demand strict compliance with that provision
or any other provision. No prior waiver by Lender, nor any course of
dealing between Lender and Grantor, shall constitute a waiver of any of
Lender's rights or any of Grantor's obligations as to any future
transactions. Whenever consent by Lender is required in this
Assignment, the granting of such consent by Lender in any instance shall
not constitute continuing consent to subsequent instances where such
consent is required.
23
EXHIBIT "A"
PARCEL 1:
LOT 332 OF TRACT NO. 5125, IN THE CITY OF WEST HOLLYWOOD, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 62 PAGES 39 AND 40 OF
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THE SOUTHERLY 55 FEET THEREOF.
PARCEL 2:
LOT 331 AND THE SOUTHERLY 55 FEET OF LOT 332 OF TRACT NO. 5125, IN THE CITY OF
WEST HOLLYWOOD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED
IN BOOK 62 PAGES 39 AND 40 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.
PARCEL 3:
LOTS 284, 285, 286, 329 AND 330 OF TRACT 5125, IN THE CITY OF WEST HOLLYWOOD,
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 62
PAGES 39 AND 40 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 4:
LOT 282 OF TRACT NO. 5125, IN THE CITY OF WEST HOLLYWOOD, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 62 PAGE 39 OF MAPS,
IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 5:
LOT 283 OF TRACT NO. 5125, IN THE CITY OF WEST HOLLYWOOD, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 62 PAGES 39 AND 40 OF
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
24
04-24-1996 ASSIGNMENT OF RENTS Page 5
Loan No. 20002816 Continued
===============================================================================
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS ASSIGNMENT OF
RENTS, AND GRANTOR AGREES TO ITS TERMS.
GRANTOR:
DOVE AUDIO, INC.
By: /s/ MICHAEL VINER
---------------------------------------------------------
Michael Viner, Chairman of the Board and President
- - --------------------------------------------------------------------------------
CERTIFICATE OF ACKNOWLEDGMENT
STATE OF CALIFORNIA ---------------- )
) ss
COUNTY OF LOS ANGELES --------------- )
On APRIL 24, 1996 before me, A. WATANABE, personally appeared MICHAEL VINER,
-------------- -----------
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
[NOTARY SEAL
A. WATANABE
COMM. #989696
Notary Public-California
LOS ANGELES COUNTY
My Comm. Expires MAR 28, 1997]
WITNESS my hand and official seal.
Signature /s/ A. WATANABE
-----------------------
===============================================================================
25
AGREEMENT TO PROVIDE INSURANCE
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
- - --------- --------- -------- -------- ---- ---------- ------- ------- --------
$1,900,000.00 04-24-1996 04-15-2001 20002816 Foon /s/
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- - --------------------------------------------------------------------------------
BORROWER: DOVE AUDIO, INC. (TIN: 954015834) LENDER: ASAHI BANK OF CALIFORNIA
8955 BEVERLY BOULEVARD 635 WEST 7TH STREET
WEST HOLLYWOOD, CA 90048 LOS ANGELES, CA 90017
================================================================================
INSURANCE REQUIREMENTS. DOVE AUDIO, INC. ("Grantor) understands that insurance
coverage is required in connection with the extending of a loan or the
providing of other financial accommodations to Grantor by Lender. These
requirements are set forth in the security documents. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"):
COLLATERAL: REAL ESTATE AT 8955 BEVERLY BOULEVARD, WEST HOLLYWOOD, CA 90048.
TYPE. Fire and extended coverage.
AMOUNT. $1,900,000.00; however in no event greater than the
value of the replacement cost of the improvements.
BASIS. Replacement value.
ENDORSEMENTS. Standard mortgagee's clause with stipulation that
coverage will not be cancelled or diminished without a minimum
of ten (10) days' prior written notice to Lender, and without
disclaimer of the insurer's liability for failure to give such
notice.
INSURANCE COMPANY. Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Lender. Grantor
understands that credit may not be denied solely because insurance was not
purchased through Lender.
FLOOD INSURANCE. Flood Insurance for property given as security for this loan
is described as follows:
REAL ESTATE AT 8955 BEVERLY BOULEVARD, WEST HOLLYWOOD, CA 90048. Should
the Collateral at any time be deemed to be located in an area designated
by the Director of the Federal Emergency Management Agency as a special
flood hazard area and should Federal Flood Insurance covering the
Collateral ever become available, Grantor agrees to obtain and maintain
Federal Flood Insurance, to the extent such insurance is required by
Lender, for the term of the loan and for the full unpaid principal
balance of the loan, or the maximum limit of coverage that is available,
whichever is less.
FAILURE TO PROVIDE INSURANCE. Grantor agrees to purchase and maintain any
required flood insurance within 45 days following notice given by Lender.
Additionally, Grantor agrees to deliver to Lender, forty five (45) days from
the date of this Agreement, evidence of all other required insurance as
provided above, with an effective date of April 24, 1996, or earlier. Grantor
acknowledges and agrees that if Grantor fails to provide any required insurance
or fails to continue such insurance in force, Lender may do so at Grantor's
expense as provided in the applicable security document. The cost of any such
insurance, at the option of Lender, shall be payable on demand or shall be
added to the indebtedness as provided in the security document. GRANTOR
ACKNOWLEDGES THAT IF LENDER SO PURCHASES ANY SUCH INSURANCE, THE INSURANCE WILL
PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE TO THE COLLATERAL, UP TO THE
BALANCE OF THE LOAN; HOWEVER, GRANTOR'S EQUITY IN THE COLLATERAL MAY NOT BE
INSURED. IN ADDITION, THE INSURANCE MAY NOT PROVIDE ANY PUBLIC LIABILITY OR
PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE REQUIREMENTS OF ANY
FINANCIAL RESPONSIBILITY LAWS.
AUTHORIZATION. For purposes of insurance coverage on the Collateral, Grantor
authorizes Lender to provide to any person (including any insurance agent or
company) all information Lender deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE
INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED APRIL 24, 1996.
GRANTOR:
DOVE AUDIO, INC.
By: /s/ MICHAEL VINER
--------------------------------------------------
Michael Viner, Chairman of the Board and President
- - --------------------------------------------------------------------------------
FOR LENDER USE ONLY
INSURANCE VERIFICATION
DATE: PHONE:
------------------------------------- ----------------------
AGENT'S NAME:
--------------------------------------
INSURANCE COMPANY:
--------------------------------------
POLICY NUMBER:
--------------------------------------
EFFECTIVE DATES:
--------------------------------------
COMMENTS:
--------------------------------------
- - --------------------------------------------------------------------------------
================================================================================
26
DISBURSEMENT REQUEST AND AUTHORIZATION
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
- - --------- --------- -------- -------- ---- ---------- ------- ------- --------
$1,900,000.00 04-24-1996 04-15-2001 20002816 Foon /s/
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- - --------------------------------------------------------------------------------
BORROWER: DOVE AUDIO, INC. (TIN: 954015834) LENDER: ASAHI BANK OF CALIFORNIA
8955 BEVERLY BOULEVARD 635 WEST 7TH STREET
WEST HOLLYWOOD, CA 90048 LOS ANGELES, CA 90017
================================================================================
LOAN TYPE. This is a Fixed Rate (8.000%), Balloon Loan to a Corporation for
$1,900,000.00 due on April 15, 2001.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:
[ ] Personal, Family, or Household Purposes or Personal Investment.
[X] Business (including Real Estate Investment).
SPECIFIC PURPOSE. The specific purpose of this loan is: Provide funds to
refinance purchase of building to be used as company's now headquarters.
FLOOD INSURANCE. As reflected on Flood Map No. 0005-A dated 06-18-1987, for
the community of 060720, the property that will secure the loan is not located
in an area that has been identified by the Director of the Federal Emergency
Management Agency as an area having special flood hazards. Therefore, although
flood insurance may be available for the property, no special flood hazard
insurance is required by law for this loan.
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $1,900,000.00 as follows:
AMOUNT PAID TO OTHERS ON BORROWER'S BEHALF: $1,900,000.00
$1,900,000.00 to North American Title Company
-------------
NOTE PRINCIPAL: $1,900,000.00
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:
PREPAID FINANCE CHARGES PAID IN CASH: $19,199.50
$19,000.00 Loan Fees
$199.50 Flood Certificate
OTHER CHARGES PAID IN CASH: $7,637.50
$75.00 Sub Escrow fee
$3,562.50 Title Insurance
$4,000.00 Appraisal
----------
TOTAL CHARGES PAID IN CASH: $26,837.00
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION
AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED APRIL 24, 1996.
BORROWER:
DOVE AUDIO, INC.
By: /s/ MICHAEL VINER
--------------------------------------------------
Michael Viner, Chairman of the Board and President
================================================================================
27
NOTICE OF FINAL AGREEMENT
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
- - --------- --------- -------- -------- ---- ---------- ------- ------- --------
$1,900,000.00 04-24-1996 04-15-2001 20002816 Foon /s/
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- - --------------------------------------------------------------------------------
BORROWER: DOVE AUDIO, INC. (TIN: 954015834) LENDER: ASAHI BANK OF CALIFORNIA
8955 BEVERLY BOULEVARD 635 WEST 7TH STREET
WEST HOLLYWOOD, CA 90048 LOS ANGELES, CA 90017
================================================================================
BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THE WRITTEN
LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THE WRITTEN LOAN
AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.
- - --------------------------------------------------------------------------------
As used in this Notice, the following terms have the following meanings:
LOAN. The term "Loan" means the following described loan: a
Fixed Rate (8.000%) Nondisclosable Balloon Loan to a Corporation
for $1,900,000.00 due on April 15, 2001.
PARTIES. The term "Parties" means ASAHI BANK OF CALIFORNIA and
any and all entities or individuals who are obligated to repay
the loan or have pledged property as security for the Loan,
including without limitation the following:
BORROWER: DOVE AUDIO, INC.
LOAN AGREEMENT. The term "Loan Agreement" mans one or more
promises, promissory notes, agreements, undertakings, security
agreements, deeds of trust or other documents, or commitments,
or any combination of those actions or documents, relating to
the Loan, including without limitation the following:
NECESSARY FORMS
Corporate Resolution to Borrow Loan Agreement/Negative Pledge
Promissory Note/Change in Terms Agr. Deed of Trust
Assignment of Rents Agreement to Provide Insurance
Disbursement Request and Authorization Notice of Final Agreement
OPTIONAL FORMS
- - --------------------------------------------------------------------------------
Each Party who signs below, other than ASAHI BANK OF CALIFORNIA, acknowledges,
represents, and warrants to ASAHI BANK OF CALIFORNIA that it has received, read
and understood this Notice of Final Agreement. This Notice is dated April 24,
1996.
BORROWER:
DOVE AUDIO, INC.
By: /s/ MICHAEL VINER
----------------------------------------------------
Michael Viner, Chairman of the Board and President
LENDER:
ASAHI BANK OF CALIFORNIA
By: /s/ [UNKNOWN]
------------------------------------------------------
Authorized Officer
================================================================================