Exhibit 10.2
LINE OF CREDIT AGREEMENT
This LINE OF CREDIT AGREEMENT (this “Agreement”) is dated and effective as of
the 17th day of August, 2009 (the “Effective Date’’) by and between HERE MEDIA
INC., a corporation organized under the laws of the State of Delaware and with
its principal place of business in Los Angeles, California (the “Borrower’’),
and PAUL A. COLICHMAN, an individual residing in Los Angeles, California
(hereinafter referred to as the “Lender’’). The Lender and the Borrower are
sometimes collectively referred to herein as the “parties” and individually as a
“party.”
ARTICLE I
PREAMBLE
WHEREAS, in order to provide additional working capital to Borrower, the Lender
has agreed to make available to the Borrower a line of credit in an amount of up
to Two Million Dollars ($2,000,000.00) (the “Credit Line’’), subject to the
terms and conditions set forth herein; and
WHEREAS, the parties desire to set forth certain terms and conditions relating
to the Credit Line;
NOW, THEREFORE, in consideration of the mutual covenants, promises,
representations and warranties set forth herein, the parties agree as follows:
ARTICLE II
DEFINITIONS
All capitalized terms used in this Agreement shall have the following meanings
(such meanings to be equally applicable to both the singular and the plural
forms of the terms defined):
“ADVANCES” shall have the meaning set forth in Section 3.01.
“AGREEMENT” shall mean this Line of Credit Agreement, as the same may be amended
or otherwise modified from time to time.
“BUSINESS DAY” shall mean a day other than a Saturday, Sunday or other day on
which commercial banks are authorized or required to close under the laws of the
United States of America.
“DEFAULT” shall mean any of the events specified in Section 6.01, without giving
effect to any requirement for the giving of notice, for the lapse of time, or
both, or for the happening of any other condition, event or act.
“EVENT OF DEFAULT” shall mean any of the events specified in Section 6.01,
provided that any requirement for the giving of notice, the lapse of time, or
both, or for the happening of any further condition, event or act has occurred
or has been satisfied.

 

 

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“GOVERNMENTAL AUTHORITY” shall mean any government (whether the located within
or outside the United States) or any department, agency, division or
instrumentality thereof.
“LAW” shall mean any statute, rule, regulation, order, judgment, award or decree
of any Governmental Authority.
“MATURITY DATE” shall mean two (2) years from the Effective Date.
“PERSON” shall mean and include an individual, a partnership, a corporation, a
trust, an unincorporated association, a joint venture or any other entity or a
government or any agency or political subdivision thereof.
“OUTSTANDING PRINCIPAL BALANCE” shall mean the aggregate amount of all Advances
made by the Lender to the Borrower hereunder, less all repayments thereof.
ARTICLE III
THE LINE OF CREDIT
SECTION 3.01. ADVANCES.
(a) The Lender may make advances to the Borrower (each an “Advance”) from time
to time during the term hereof and ending on the Maturity Date; in such amounts
as may be requested by the Borrower in accordance with the provisions hereof;
provided, however, that the Outstanding Principal Amount at any time shall not
exceed the Credit Line. Borrower shall account for the Advances made and the
outstanding principal amount in a form or manner similar to the form of
Exhibit A.
All requests for Advances shall be made by the Borrower to the Lender in writing
(in such form as is reasonably satisfactory to the Lender) or by telephone
request (which shall be promptly confirmed in writing) which specifies the
amount of the Advance to be made and the date the proceeds of the Advance are
requested to be made available to the Borrower (an “Advance Request”).
Notwithstanding the foregoing, any Advances are at the sole discretion of the
Lender. Lender may review Borrower’s financial statements in determining whether
or not additional Advances may be made.
(b) An Advance Request received by the Lender on a day that is not a Business
Day or that is received by Lender after 12:00 noon, Los Angeles, California
time, on a Business Day shall be treated as having been received by the Lender
on the first following Business Day. Subject to Lender’s discretion and
approval, Lender shall fund all such Advance Requests within one (1) business
day of receipt of the Advance Request. The Lender shall not incur liability to
the Borrower for treating any such request as an Advance Request if the Lender
believes in good faith that the Person making the request is an authorized
officer of the Borrowing.
(c) Advances under the Line of Credit shall be made by direct wire transfer of
funds from the Lender to an account designated by Borrower in writing to Lender,
or by delivery of a check made payable to Lender and delivered to Borrower or
Borrower’s agent.
LINE OF CREDIT AGREEMENT

 

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SECTION 3.02. USE OF PROCEEDS. The Investment shall be applied by the Borrower
for working capital purposes.
SECTION 3.03. SECURITY INTEREST. Borrower hereby grants Lender a security
interest in the following collateral:
(a) List of domain names owned or under the control of Borrower as listed in
Exhibit B.
(b) List of trademarks and tradenames as identified in Exhibit C.
(c) Any reserves not to exceed one million dollars ($1,000,000) held by
Borrower’s credit card processor, Wells Fargo.
ARTICLE IV
INTEREST
SECTION 4.01. INTEREST RATE. The Borrower shall pay interest on the Outstanding
Principal Balance at the Prime Rate (as hereinafter defined), as adjusted every
30 days, plus 1.00%, from the date of issuance thereof to and including the date
of repayment. The “Prime Rate” means the US Prime Rate as set out in the Wall
Street Journal Money Rates column on the date the rate is to be determined.
SECTION 4.02. COMPUTATION. Interest on the Advances shall be computed on the
basis of a year deemed to consist of 365 days and paid for the actual number of
days elapsed.
ARTICLE V
COVENANTS
SECTION 5.01. AFFIRMATIVE COVENANTS. During the term of this Agreement, the
Borrower covenants and agrees:
(a) CORPORATE EXISTENCE AND AUTHORIZATIONS. The Borrower shall maintain in good
standing its corporate existence and its right to transact business in those
jurisdictions in which it is now or hereafter doing a material amount of
business, and the Borrower shall maintain all material licenses, permits and
registrations necessary for the conduct of its operations.
(b) COMPLIANCE WITH LAWS. The Borrower shall comply with all material Laws
applicable to its business operations.
ARTICLE VI
DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. Anyone or more of the following shall
constitute an Event of Default under this Agreement, unless waived by the
Lender:
(a) FAILURE TO PAY. Failure to pay any amounts owed under this Agreement which
continues beyond any applicable grace period.
(b) BREACH OF COVENANTS. The material breach of any covenant in this Agreement
unless expressly waived, in writing, by the Lender, which breach is not cured
within 30 Business Days.
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SECTION 6.02. RIGHTS AND REMEDIES IN THE EVENT OF DEFAULT. Upon any Event of
Default, and at any time thereafter, the Lender may declare in writing to the
Borrower all or any part of the Outstanding Principal Balance immediately due
and payable.
SECTION 6.03. REMEDIES NOT EXCLUSIVE. The Lender shall be entitled to enforce
payment and performance of all obligations of the Borrower hereunder and to
exercise all rights and powers hereunder or under any Law and the pursuit of any
remedy available to the Lender against the Borrower shall not prejudice or in
any manner affect the Lender’s right to realize upon or enforce any other remedy
or security now or hereafter available to it in such order and in such manner as
the Lender may determine in its sole discretion. No such right or remedy shall
be exclusive, but each shall be cumulative and shall be in addition to every
other remedy provided herein or in any other agreement or by Law and each such
remedy may be exercised concurrently or independently.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. NOTICES. All notices or other communications to be given hereunder
shall be given in writing and delivered by (a) certified mail, return receipt
requested, (b) personal delivery, (c) facsimile or (d) express carrier addressed
as follows:

     
If to the Lender:
  Mr. Paul Colichman
 
  10990 Wilshire Blvd., Penthouse Suite
 
  Los Angeles, California 90024
 
  Email: pac@regententertainment.com
 
  Telephone: (310) 806-4288
 
  Facsimile: (310) 806-4268
 
   
If to the Borrower:
  Here Media Inc.
 
  10990 Wilshire Blvd., Penthouse Suite
 
  Los Angeles, California 90024
 
  Attention: Tony Shyngle
 
  Email: Tony.shyngle@regentmedia.com
 
  Telephone: (310) 806-4288
 
  Facsimile: (310) 806-4268

or to such other address furnished by any party to the other in writing at any
time and from time to time for such notice purposes. Any notice served by either
party on the other shall be deemed effective upon receipt of return receipt if
sent by certified mail, return receipt requested, when received, if delivered
personally, upon machine confirmation if sent by facsimile, or upon confirmation
of delivery by an express carrier.
SECTION 7.02. AMENDMENTS AND WAIVERS. No amendment, modification or waiver of
any provision of this Agreement or the Note shall be effective unless the same
shall be in writing and signed by the Borrower and the Lender; provided,
however, that any such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.
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SECTION 7.03. SUCCESSORS AND ASSIGNS. Neither the Borrower nor the Lender may
assign, delegate or transfer any of its rights or obligations under this
Agreement or the Note without the prior written consent of the other.
SECTION 7.04. SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable, or which is prohibited under Law for any reason, the
invalidity shall not affect the validity of the remaining provisions of this
Agreement, and the parties shall substitute for the invalid provision a valid
provision which most closely approximates the intent and economic effect of the
invalid provision.
SECTION 7.05. COUNTERPARTS. This Agreement may be executed by the parties hereto
on any number of separate counterparts, and all such counterparts taken together
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Agreement to produce or account for more than one
counterpart signed by the party to be charged.
SECTION 7.06. GOVERNING LAW; ARBITRATION; NO THIRD-PARTY RIGHTS.
(a) This Agreement and the rights and obligations of the parties hereunder shall
be governed by and construed and interpreted in accordance with the laws of the
United States and State of California applicable to contracts made and to be
performed wholly within such State, without regard to any choice or conflict of
laws rules.
(b) The parties to this Agreement shall act in good faith to resolve any dispute
or other controversy arising under this Agreement. Absent agreement resolving a
dispute within twenty (20) days after written notice of the dispute has been
delivered from one party to the other, any party shall have the right to seek to
settle the matter by arbitration to the exclusion of any other form of dispute
resolution. Any arbitration shall be conducted according to the applicable rules
of the American Arbitration Association and shall take place in Los Angeles,
California. Such arbitration shall be heard by a single arbitrator, who shall be
jointly designated by the Lender and the Borrower if the parties are unable to
agree within ten (10) days after the dispute is submitted to arbitration, by the
American Arbitration Association. The decision of the arbitrator shall be final
and binding upon the parties hereto. The each party in any arbitration
proceeding shall pay its own costs in connection therewith, including attorneys’
fees.
(c) This Agreement is solely for the benefit of the parties hereto and their
respective successors and assigns, and no other Person shall have any right,
benefit, priority or interest under, or because of the existence of, this
Agreement.
SECTION 7.07. HEADINGS. The section headings are for convenience only and shall
not affect the interpretation or construction of this Agreement or the Note. The
Exhibits referred to throughout this Agreement are attached to this Agreement
and are incorporated into this Agreement. Unless the context clearly indicates,
words used in the singular include the plural, words in the plural include the
singular and the word “including” means “including, but not limited to.”
SECTION 7.08. THE LENDER’S SOLE DISCRETION. Any provision in any of this
Agreement or the Note which requires the Lender’s approval or consent shall be
interpreted to mean at the Lender’s sole discretion unless otherwise specified.
SECTION 7.09. CONFLICT OF TERMS. In the event of any material conflict between
the terms of this Agreement and the Note, the terms of this Agreement shall
control.
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SECTION 7.10. OTHER JURISDICTIONS. The Borrower agrees that the Lender shall
have the right to proceed against the Borrower or its property in a court in any
location to enable the Lender to enforce a judgment or other court order entered
in favor of the Lender. The Borrower waives any objection that it may have to
the location of the court in which the Lender have commenced a proceeding
described in this Section.
SECTION 7.11. WAIVER. The failure of either party at any time to require
performance by the other party of any provision of this Agreement shall not
affect in any way the full right to require the performance at any subsequent
time. The waiver by either party of a breach of any provision of this Agreement
shall not be taken or held to be a waiver of the provision itself. Any course of
performance shall not be deemed to amend or limit any provision of this
Agreement.
SECTION 7.12. SECTION REFERENCES. References to “Sections,” “subsections” and
“Exhibits” shall be to Sections, subsections, Exhibits and Schedules,
respectively, of this Agreement unless otherwise specifically provided.
SECTION 7.13. RELATIONSHIP OF PARTIES. Nothing contained in this Agreement shall
be deemed or construed by the parties, or by any third party, to create the
relationship of partnership or joint venture between the parties hereto, it
being understood and agreed that no provision contained herein shall be deemed
to create any relationship between the parties hereto other than the
relationship of Borrower and Lender.
SECTION 7.14. ENTIRE AGREEMENT. This Agreement and the Note set forth all of the
promises, agreements, conditions and understandings between the parties
respecting the subject matter hereof and supersedes all negotiations,
conversations, discussions, correspondence, memorandums and agreements between
the parties concerning the subject matter.
SECTION 7.15. TIME OF THE ESSENCE. Time is of the essence with respect to this
Agreement. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered by their proper and duly authorized officers as of the day and
year first above written.
LENDER:
Signed by Paul A. Colichman
BORROWER:
HERE MEDIA INC., a Delaware corporation
Signed by Tony Shyngle, CFO
LINE OF CREDIT AGREEMENT

 

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EXHIBIT “A” (List of Advances & Principal Reductions)
Date of Advance Amount of Advance Amount of Principal Repayment
LINE OF CREDIT AGREEMENT

 

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          EXHIBIT “B”         (URL’s)        
 
       
gay.com
      kleptomaniac.com
 
       
gay.net
      kleptomaniac.net
 
       
gayemail.com
      Igbt.com
 
       
gaynet.com
      Igbt.us
 
       
gay-net.com
      menofgay.com
 
       
gay-net.net
      menofgaycom.com
 
       
gaynet.org
      mrgaycom.com
 
       
gaysportsblog.com
      onlinepartners.com
 
       
gaytvblog.com
      outandabout.com
 
       
gayvote.net
      pride.com
 
       
gaywire.net
      queer.org

LINE OF CREDIT AGREEMENT

 

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                  Mark   Status   Country   Application Number
 
               
Gay.com & design
  Registered   USA   75871682  
 
               
Gay.net & design
  Registered   USA   75332677  
 
               
Out & About
  Registered   USA   74317960  
 
               
Out & About
  Registered   USA   78690466  
 
               
Gay.com logo (black on white)
  Filed   USA   77565110  
 
               
Gay.com logo (white on black)
  Filed   USA   77565137  
 
               
Gay.com & Design
  Registered   European Union (O.H.M.I.)   001558410  
 
               
Gay.com & Design
  Filed   Brazil   823067858  
 
               
Gay.com & Design
  Registered   Argentina   2405881  

LINE OF CREDIT AGREEMENT

 

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