Exhibit 10.01


 


PROMISSORY NOTE


 


	
  Principal

  $5,000,000.00

  	
   

  	
  Loan Date

  12-15-2009

  	
   

  	
  Maturity

  12-15-2010

  	
   

  	
  Loan No.

  15525121115

  	
   

  	
  Call / Coll

  1C1 / 599

  	
   

  	
  Account



  	
   

  	
  Officer

  BORES

  	
   

  	
  Initials



  



 


References in the boxes above are for Lender’s use only and do not limit
the applicability of this document to any particular loan or item.

Any item above containing “***” has been omitted due to text length
limitations.


 


	
  Borrower:

  	
  New Frontier Media Inc

  	
  Lender:

  	
  GREAT WESTERN BANK

  
	
   

  	
  7007 Winchester Circle, Suite 200

  	
   

  	
  Lakewood

  
	
   

  	
  Boulder, CO 80301

  	
   

  	
  215 Union Blvd.

  
	
   

  	
   

  	
   

  	
  Suite 150

  
	
   

  	
   

  	
   

  	
  Lakewood, CO 80228

  



 


	
  Principal Amount: $5,000,000.00

  	
  Date of Note: December 15, 2009

  



 


PROMISE TO PAY.  New Frontier Media Inc (“Borrower”)
promises to pay to GREAT WESTERN BANK (“Lender”), or order, in lawful money of
the United States of America, the principal amount of Five Million & 00/100
Dollars ($5,000,000.00) or so much as may be outstanding, together with
interest on the unpaid outstanding principal balance of each advance.  Interest shall be calculated from the date of
each advance until repayment of each advance.


 


PAYMENT.  Borrower will pay this
loan in full immediately upon Lender’s demand. 
If no demand is made, Borrower will pay this loan in one payment of all
outstanding principal plus all accrued unpaid interest on December 15, 2010.  In addition, Borrower will pay regular
monthly payments of all accrued unpaid interest due as of each payment date,
beginning January 15, 2010, with all subsequent interest payments to be due on
the same day of each month after that.  Unless
otherwise agreed or required by applicable law, payments will be applied first
to any accrued unpaid interest; then to principal; then to any unpaid
collection costs; and then to any late charges. 
Borrower will pay Lender at Lender’s address shown above or at such
other place as Lender may designate in writing.


 


VARIABLE INTEREST RATE.  The interest rate on this Note is subject to
change from time to time based on changes in an independent index which is the
The High Prime Rate as quoted in the Money Rates Section of the Wall Street
Journal (the “Index”).  The Index is not
necessarily the lowest rate charged by Lender on its loans.  If the Index becomes unavailable during the
term of this loan, Lender may designate a substitute index after notifying
Borrower.  Lender will tell Borrower the
current Index rate upon Borrower’s request. 
The interest rate change will not occur more often than each day.  Borrower understands that Lender may make
loans based on other rates as well.  The Index currently is 3.250% per annum.  Interest on the unpaid principal balance of
this Note will be calculated as described in the “INTEREST CALCULATION METHOD”
paragraph using a rate of 0.125 percentage points under the Index, adjusted if
necessary for any minimum and maximum rate limitations described below,
resulting in an initial rate of 5.750% per annum based on a year of 360 days.  NOTICE: Under no circumstances will the
interest rate on this Note be less than 5.750% per annum or more than the maximum
rate allowed by applicable law.


 


INTEREST CALCULATION METHOD.  Interest on this Note is computed on a
365/360 basis; that is, by applying the ratio of the 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.  All interest payable under this Note is
computed using this method.


 


PREPAYMENT; MINIMUM INTEREST CHARGE.  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.  In any event, even upon full prepayment of
this Note, Borrower understands that Lender is entitled to a minimum
interest charge of $75.00.  Other
than Borrower’s obligation to pay any minimum interest charge, Borrower may pay
without penalty 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 of accrued unpaid interest. 
Rather, early payments will reduce the principal balance due.  Borrower agrees not to send Lender payments
marked “paid in full”, “without recourse”, or similar language.  If Borrower sends such a payment, Lender may
accept it without losing any of Lender’s rights under this Note, and Borrower
will remain obligated to pay any further amount owed to Lender.  All written communications concerning
disputed amounts, including any check or other payment instrument that
indicates that the payment constitutes “payment in full” of the amount owed or
that is tendered with other conditions or limitations or as full satisfaction
of a disputed amount must be mailed or delivered to: GREAT WESTERN BANK,
Lakewood, 215 Union Blvd., Suite 150, Lakewood, CO 80228.


 


LATE CHARGE.  If a payment is 10 days or more late,
Borrower will be charged 2.000% of the regularly
scheduled payment or $25.00, whichever is greater.


 


INTEREST AFTER DEFAULT.  Upon default, including failure to pay upon
final maturity, the interest rate on this Note shall be increased to 20.000% per
annum based on a year of 360 days.  However,
in no event will the interest rate exceed the maximum interest rate limitations
under applicable law.


 


DEFAULT.  Each of the following shall constitute an
event of default (“Event of Default”) under this Note:


 


Payment Default.  Borrower fails to make any payment when due
under this Note.


 


Other Defaults.  Borrower fails to comply with or to perform
any other term, obligation, covenant or condition contained in this Note or in
any of the related documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Borrower.


 


False Statements.  Any warranty, representation or statement
made or furnished to Lender by Borrower or on Borrower’s behalf under this Note
or the related documents is false or misleading in any material respect, either
now or at the time made or furnished or becomes false or misleading at any time
thereafter.


 


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 or by any governmental agency against
any collateral securing the loan.  This
includes a garnishment of any of Borrower’s accounts, including deposit
accounts, with Lender.  However, this
Event of Default shall not apply if there is a good faith dispute by Borrower
as to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice
of the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.


 


Events Affecting Guarantor.  Any of the preceding events occurs with
respect to any guarantor, endorser, surety, or accommodation party of any of
the indebtedness or any guarantor, endorser, surety, or accommodation party
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any guaranty of the indebtedness evidenced by this Note.


 


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 this Note is impaired.


 


Insecurity. 
Lender in good faith believes itself insecure.


 


Cure Provisions.  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 if Borrower, after Lender sends written notice to Borrower demanding
cure of such default:  (1) cures the
default within fifteen (15) days; or (2) 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 under this Note and all accrued unpaid interest
immediately due, and then Borrower will pay that amount.


 


ATTORNEYS’ FEES; EXPENSES.  Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. 
Borrower will pay Lender the reasonable costs of such collection.  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 


 

















 


without limitation attorneys’ fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), and appeals. 
If not prohibited by applicable law, Borrower also will pay any court
costs, in addition to all other sums provided by law.


 


GOVERNING LAW.  This Note will be governed
by federal law applicable to Lender and, to the extent not preempted by federal
law, the laws of the State of Colorado without regard to its conflicts of law
provisions.  This Note has been accepted
by Lender in the State of Colorado.


 


CHOICE OF VENUE.  If there is a lawsuit, Borrower agrees upon
Lender’s request to submit to the jurisdiction of the courts of Jefferson
County, State of Colorado.


 


RIGHT OF SETOFF.  To the extent permitted by applicable law,
Lender reserves a right of setoff in all Borrower’s accounts with Lender
(whether checking, savings, or some other account).  This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.  However, this does not include any IRA or
Keogh accounts, or any trust accounts for which setoff would be prohibited by
law.  Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts.


 


COLLATERAL.  Borrower acknowledges this Note is secured by
COMMERCIAL SECURITY AGREEMENT FROM NEW FRONTIER MEDIA INC TO GREAT WESTERN BANK
DATED 12/15/2009.


 


LINE OF CREDIT.  This Note evidences a revolving line of
credit.  Advances under this Note may be
requested orally by Borrower or as provided in this paragraph.  All oral requests shall be confirmed in
writing on the day of the request.  All
communications, instructions, or directions by telephone or otherwise to Lender
are to be directed to Lender’s office shown above.  The following person or persons are
authorized to request advances and authorize payments under the line of credit
until Lender receives from Borrower, at Lender’s address shown above, written
notice of revocation of such authority: Michael Weiner, CEO of New
Frontier Media Inc; and Grant Williams, CFO of New Frontier Media Inc.  Borrower agrees to be liable for all sums
either:  (A) advanced in accordance with
the instructions of an authorized person or (B) credited to any of Borrower’s
accounts with Lender.  The unpaid
principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender’s internal records, including daily
computer print-outs.  Lender will have no
obligation to advance funds under this Note if:  (A) Borrower or any guarantor is in default
under the terms of this Note or any agreement that Borrower or any guarantor
has with Lender, including any agreement made in connection with the signing of
this Note; (B) Borrower or any guarantor ceases doing business or is insolvent;
(C) any guarantor seeks, claims or otherwise attempts to limit, modify or
revoke such guarantor’s guarantee of this Note or any other loan with Lender; (D)
Borrower has applied funds provided pursuant to this Note for purposes other than
those authorized by Lender; or (E) Lender in good faith believes itself
insecure.


 


SUCCESSOR INTERESTS.  The terms of this Note shall be binding upon
Borrower, and upon Borrower’s heirs, personal representatives, successors and
assigns, and shall inure to the benefit of Lender and its successors and
assigns.


 


NOTIFY US OF INACCURATE INFORMATION WE REPORT
TO CONSUMER REPORTING AGENCIES.  Please notify us if we report any inaccurate
information about your account(s) to a consumer reporting agency.  Your written notice describing the specific
inaccuracy(ies) should be sent to us at the following address: GREAT WESTERN
BANK 35 1st Ave NE Watertown, SD 57201.


 


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.  If any part of
this Note cannot be enforced, this fact will not affect the rest of the Note.  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
presentment, demand for payment, 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.  The obligations under this Note are joint and
several.


 


PRIOR TO SIGNING THIS NOTE, BORROWER READ AND
UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST
RATE PROVISIONS.  BORROWER AGREES TO THE
TERMS OF THE NOTE.


 


BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED
COPY OF THIS PROMISSORY NOTE.


 


	
  BORROWER:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  NEW FRONTIER MEDIA INC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael Weiner

  	
   

  	
  By:

  	
  /s/ Grant Williams

  
	
   

  	
  Michael Weiner, CEO of New Frontier Media
  Inc

  	
   

  	
  Grant Williams, CFO of New Frontier Media
  Inc

  
					



 


 


Laser PRO Lending, Ver.
5.46.00.003 Copr. Harland Financial Solutions, Inc. 1997, 2009.  All Rights Reserved.


 


2