SECURED PROMISSORY NOTE
$122,997.18 Los Angeles, California
October 17,1996
FOR VALUE RECEIVED, the undersigned, TRADEWINDS TELEVISION, LLC, a
California limited liability company (the "Borrower") hereby promises to pay to
AFFINITY ENTERTAINMENT, INC., a Delaware corporation (the "Lender"), or order,
on the Maturity Date (as such term is defined herein) the principal sum of One
Hundred Twenty-Two Thousand Nine Hundred Ninety-Seven Dollars and Eighteen Cents
($122,997.18) or so much thereof as may be borrowed hereunder, with interest
thereon in accordance with the terms set forth herein.
The Maturity Date, unless mutually extended by Borrower and Lender,
shall be the date upon which Lender makes written demand for payment to Borrower
which may be made after the date which is 90 days following receipt of written
notice (60 days following receipt of written notice on or after December 1,
1996) by Borrower from Lender ("Demand Notice") that Lender has determined that
the conditions to the Transaction contemplated by that certain letter agreement
dated September 13,1996 among Borrower, Lender and Rick Pack could not be
satisfied, and the Transaction will not be consummuated; provided, however, that
notwithstanding the foregoing, this Note shall become immediately due and
payable without any notice if either of the following conditions are not met at
any time prior to the Maturity Date: (i) all payments due from Borrower to third
parties with respect to the production, distribution, marketing and other
exploitation of the television series "Bounty Hunters" (the "Series") are not
made promptly when due or otherwise Borrower defaults in any monetary or
contractual obligation relating to the Series, or (ii) Borrower shall not have
(a) provided Lender with a two (2) week cash budget of expenditures, acceptable
to Lender, due with respect to the Series by the close of business on the date
of the "Demand Notice" and on each Friday thereafter, and (b) deposited in an
escrow account, approved by Lender, sufficient cash to meet the monetary
obligations set forth in the budget, initially for the next two (2) week period
and thereafter for the next one (1) week period. Advances may be made under this
Note prior to the Maturity Date on the condition that at the time of any such
borrowing, such borrowing has been approved by Lender in its sole discretion
regarding the use of such advances, and no Event of Default exists under the
Security Agreement referred to herein, and provided further that the aggregate
principal amount of all sums borrowed hereunder shall not exceed the sum of One
Hundred Twenty-Two Thousand Nine Hundred Ninety-Seven Dollars and Eighteen Cents
($l22,997.18). Each borrowing hereunder shall be recorded by the Lender and,
prior to any transfer of this Note, shall be endorsed on the schedule annexed to
this Note. The aggregate unpaid amount of principal set forth on the schedule
annexed to this Note shall be presumptive evidence of the principal amount owing
and unpaid on this Note. However, the failure to record any such amount on such
schedule shall not limit or otherwise affect the obligations of Borrower
hereunder to repay the principal amount of all advances hereunder together with
interest accruing thereon. Amounts repaid hereunder may not be reborrowed.
The undersigned promises to pay, on the Maturity Date, interest on the
unpaid principal balance hereof from time to time outstanding from the date of
the first disbursement hereunder until paid, at a rate per annum of eight
percent (8%).
This Note is entitled to the benefits and subject to all of the terms
and conditions of the Interim Financing and Security Agreement dated September
13,1996 among Lender, Borrower and Rick Pack, as amended from time to time
("Security Agreement").
The undersigned agrees to pay all expenses of Lender incurred in
collection of this Note, including reasonable attorneys' fees in connection
therewith, irrespective of whether suit is brought hereon.
AU principal and interest hereunder shall be payable in lawful money of
the United States of America and shall be paid at such place as the holder
hereof may from time to time designate.
Upon the occurrence of any default in the payment of principal or
interest hereunder or upon any Event of Default under the Security Agreement or
any material breach of any other term or condition set forth in the Security
Agreement, the principal hereof with interest accrued thereon shall become, or
may be declared to be, at the option of the Lender, forthwith due and payable.
Borrower hereby waives diligence, presentment, demand, notice, protest
and all other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note and assents to extensions of time of
payment, or forbearance or other indulgence without notice. The right to plead
any and all statutes of limitation as a defense to any demand hereunder is
hereby waived to the full extent permitted by law.
Borrower shall have no right to prepay all or any portion of this Note
until the receipt by Borrower of the Demand Notice.
This Note shall be governed by and be construed in accordance with the
laws of the State of California.
IN WITNESS WHEREOF, this Note has been executed and delivered at Los
Angeles, California, on the date set forth above.
TRADEWINDS TELEVISION, LLC
By: /s/ Royeric Pack
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Its: President/CEO
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SCHEDULE OF ADVANCES OF PRINCIPAL
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Unpaid
Amount of Interest Rate Principal Notation
Date Advance (8%) Balance Made by
====================================================================================================================================
10/17/96 $ 4,112.04 TW Payables
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10/17/96 34,027.29 TW contractors
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10/17/96 84,857.85 BHP Productions
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TOTAL $122,997.18
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TRADEWINDS TELEVISION & BPH PRODUCTIONS
Tradewinds' payables 4,112.04
Tradewinds'contractors 34,027.29
BHP Productions 84,857.85
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Grand total 122,997.18
============
Tradwinds' Payables
Adam Weston Graphics
Airtouch Cellular
All Post
Already There Messenger
Ameritech
Arrowhead Mt Spring Water
AT&T
Camerry Consultants
Catalogue Stationers
Century Parking
Coast Communications
Compuserve
DARB Insurance
Designatory
Diners Club
Entertainment Comm Network
Federal Express
For Media Company
Furst Group
General Parking
Gerallie Legaspi
Guardian Insurance 4,112.04
Ken Larreiras
Len Materna
Monarch Business Forms
Monarch Communications
NAPTE
Neopost Leasing
Newell Color Lab
Nielsen
Omni-Ch
Omni-Ny
Pacific Bell
Pacific Communications
Pryor & Associates
Rick Pack
Shari Jennings
Sharp Electronics
Silver Star Information Systems
Topanga Warner
Video Central
WABU
WCIU-TV
WPXI
WUPA
Western Office Interiors
Woodland Printing
Xerox
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4,112.04
Tradewinds' Contractors
Chris Rovtar 12,500.00
expenses 1,066.09
Bett Alofsin 3,500.00
expenses
Diana Foster 2,000.00
expenses 211.52
Jon Feffo
expenses
bonus
Jan Mansfield 1,500.00
expenses 449.68
Stan Singer 2,000.00
Mark Rafalowski 6,000.00
Parker Publications(Lamerias) 4,800.00
Rick Pack
--------------
34,027.29
BHP Productions
AGK Studios
Al Almond 300.00
Band Pro 4,871.25
B Berry
Courtesy Printing
Crystal Patent
Don Morea 3,379.29
Ed Springer 835.00
Flower Power 2,800.00
Forever Blue 29,732.65
Fresno Shoot
Frontine Productions 3,728.84
Gabriel Miller
Gary Cates
Harris Tulchin
Jerry Peterson
John Young
Kuhn & Miller 8,397.58
K-Zaw Productions 275.00
Lewinter Rosman
Logo Edition
Mark Jeanette
Michael Hawks 400.00
Nicholas Blair 210.00
Nick Richards Ent
NK & Associates 2,553.50
Outlaw Hunter 1,661.00
Peter Jordan 600.00
Rick Dunbar 900.00
Rick Gurley 300.00
Robert Clark
SW Garda 600.00
Scott Bernstein 300.00
Sharpshooters 10,403.24
Sherwood Animation 745.00
Steve Sanzeri
Tom Drew
Vansa Insurance 11,700.00
Video Central
Visionary Music 165.50
William Gallie
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84,857.85
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