Document:

Convenience TV Inc.: Exhibit 10.1  - Filed by newsfilecorp.com

OPTION AGREEMENT

THIS Option Agreement (this “Agreement”) dated
_____________________ , is made by and between Convenience TV Inc. (the
“Company”), and  _______________________, the undersigned optionee (the
“Optionee”), of _____________________________ , ______________,
____________________________.

The purpose of this AGREEMENT is to set forth the terms whereby
the Optionee will hold an option to acquire _______________ shares of its common
stock (the “Shares”) from the Company.

The following numbered paragraphs reflect the entire
understanding of the arrangement between Optionee and Company.

	1. 	
      Terms and Conditions of
Option

In consideration for certain consulting services rendered to
the Company by Optionee, the Company hereby grants to the Optionee the option
(the “Option”) to purchase, subject to the terms and conditions of this
Agreement, the Shares, at an exercise price of $__________ per Share (the
“Option Price”).

The term (the “Option Term”) of the Option shall commence on
the date of this Agreement and shall expire on the __________ anniversary of the
date of this Agreement (the “Expiration Date”). The Option shall vest
immediately.

	2. 	
      Terms of Settlement

On or before the Expiration Date, the Option may be exercised,
from time to time, in whole or in part (but for the purchase of whole shares
only), by delivery of a written notice (the “Notice”) from the Optionee to the
Company, which Notice shall:

	 	(a) 	
      state that the Optionee elects to exercise the
    Option;

	 	 	 
	 	(b) 	
      state the number of shares with respect to which the
      Option is being exercised (the “Optioned Shares”);

	 	 	 
	 	(c) 	
      state the date upon which the Optionee desires to
      consummate the purchase of the Optioned Shares (which date must be prior
      to the termination of such Option and no later than 30 days from the
      delivery of such Notice); and

Payment of the Option Price for the Optioned Shares shall be
made by delivery of cash, money order or a certified check to the order of the
Company in an amount equal to the Option Price.

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Notice must be delivered by mail to: 

Convenience TV Inc. 
248 Main Street 
Venice, CA
90291

Attention: Chief Financial Officer and Treasurer.

or to such other address or facsimile transmission number as
the Company may designate as its executive office by public notice or by written
notice to the Optionee. 

Restricted Status of the Shares; Subsequent
Dispositions

The Optionee hereby confirms its understanding that the Shares
to be delivered to the Optionee will be “restricted securities” as that term is
defined in Rule 144 under the under the Securities Act of 1933, as amended (the
“Securities Act”), and agrees that such Shares shall bear a restrictive legend
indicating that they have not been registered under the Securities Act. The
Optionee hereby agrees that it shall not make any subsequent offer, sale,
transfer, or pledge of Shares unless such disposition is pursuant to
registration under the Securities Act and any applicable securities laws of any
state or pursuant to an exemption therefrom.

	3. 	
      Representations and Warranties of
  Company

Company represents and warrants
that:

	 	(a) 	
      immediately prior to and at the exercise of the Option,
      the Company shall be the legal and beneficial owner of the Shares and the
      Company shall transfer to the Optionee the Shares free and clear of all
      liens, restrictions, covenants or adverse claims of any kind or
      character;

	 	 	 
	 	(b) 	
      the Company has the legal power and authority to execute
      and deliver this Agreement and all other documents required to be executed
      and delivered by the Company hereunder and to consummate the transactions
      contemplated hereby;

	 	 	 
	 	(c) 	
      there are no investigations, actions, suits or
      proceedings, administrative or otherwise, threatened or pending to the
      knowledge of the Company that affect each Company’s rights to their
      respective Shares or the sale of their respective Shares;

	 	 	 
	 	(d) 	
      the warranties and representations of the Company and the
      provisions hereof shall survive the date hereof, and the consummation of
      the transactions contemplated herein;

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	 	(e) 	
      the Company shall indemnify, defend and hold harmless
      Optionee from and against all liabilities incurred by Optionee, directly
      or indirectly, including without limitation, all reasonable attorney’s
      fees and court costs, arising out of or in connection with the purchase of
      the Company’s Shares set forth in this Agreement, except where fraud,
      intent to defraud or default of payment evolves on the part of Optionee;
      and

	 	 	 
	 	(f) 	
      such Company is not insolvent, is not in receivership,
      nor is any application for receivership pending; no proceedings are
      pending by or against it in bankruptcy or reorganization in any State or
      Federal court, nor has it committed any act of
  bankruptcy.

	4. 	
      Optionee’s Representations

The Optionee hereby represents, warrants and covenants to the
Company the following:

     4.01 Transfer
Restrictions. Purchasers (and/or assigns) agree that the shares underlying
the Option being acquired pursuant to this Agreement may be sold, pledged,
assigned, hypothecated or otherwise transferred, with or without consideration
(“Transfer”) only pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the “Act”), or pursuant to an exemption from
registration under the Act.

     4.02 Investment Intent.
The Optionee is acquiring the Option for its own account for investment, and not
with a view toward distribution thereof.

     4.03 No Advertisement. The
Optionee acknowledges that the Options have been offered to them in direct
communication between them and the Company, and not through any advertisement of
any kind. 

     4.04 Knowledge and
Experience. The Optionee acknowledges that they have been encouraged to seek
their own legal and financial counsel to assist them in evaluating this
purchase. The Optionee acknowledges that the Company has given them and all of
their counselors’ access to all information relating to the Company’s business
that they or any one of them have requested. The Optionee acknowledges that it
has sufficient business and financial experience, and knowledge concerning the
affairs and conditions of the Company so that they can make a reasoned decision
as to this purchase of the Option and are capable of evaluating the merits and
risks of this purchase. 

     4.05 Accredited Investor. The
Optionee is either:

	 	(a) 	
      an “Accredited Investor” as defined in Regulation D of
      the Act; or

	 	 	 
	 	(b) 	
      a close personal friend of a director or executive
      officer of the Company and has known the director or executive officer for
      a sufficient period of time to be in a position to assess the capabilities
      and trustworthiness of the said person; or a close business associate of
      the Company and has had sufficient prior business dealings with the
      director or executive officer to be in a position to assess
  the capabilities and trustworthiness of
the said person; and either alone or with the Optionee’s professional advisers
who are unaffiliated with, have no equity interest in and are not compensated by
the Company or any affiliate or selling agent of Sellers, directly or
indirectly, has sufficient knowledge and experience in financial and business
matters that the Otionee is capable of evaluating the merits and risks of an
investment in the Option offered by the Company and of making an informed
investment decision with respect thereto and has the capacity to protect the
Optionee’s own interests in connection with the Optionee’s proposed investment
in the Option.  

Page | 4

	5. 	
      Entire Agreement

This Agreement sets forth the entire understanding and
agreement between the parties with reference to the subject matter hereof, and
there are no other agreements, inducements, understandings, restrictions,
warranties or other representations verbal or otherwise between the parties
other than those set forth herein. 

	6. 	
      Legal Agreement

By the signatures of their appointed representatives appearing
below, the Optionee and Company will have duly executed and delivered this
agreement, constituting a legal, valid and binding agreement enforceable under
the laws of the State of California in accordance with its terms.

	7. 	
      Further Acts

Each party to this Agreement agrees to perform any further acts
and execute and deliver any documents that may be reasonably necessary to carry
out the provisions of this Agreement.

	8. 	
      Survival

This Agreement shall be binding on, and shall inure to the
benefit of, the parties and their respective heirs, legal representatives,
successors and assigns.

	9. 	
      Notice

All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing, and shall be
deemed to have been duly given (1) on the date of delivery, if delivered
personally, or sent by facsimile by 3:00 p.m. local time at the place of
delivery on such date, followed by an original delivered by first class mail,
registered or certified, return receipt requested, postage prepaid, to the party
to whom notice is to be given, (2) within 72 hours after mailing, if mailed to
the party to whom notice is to be given, by first class mail, registered or
certified mail, return receipt requested, postage prepaid, or (3) on the
following day if sent by a nationally recognized overnight delivery services, in
each case, properly addressed to the party at his address set forth on the signature page of this Agreement or any other address that any
party may designate by written notice to the others.

Page | 5

	10. 	
      Assignment and Termination

No party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of the
other party.

	11. 	
      Counterparts

This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

CONVENIENCE TV INC.

	Per: 		 
	 	Authorized Signatory 	 

	 	) 	  
	 	) 	  
	 	) 	  
	 	) 	  
	 	) 	  
	 	) 	 
    
	 	) 	Per: ___________________________
	 	) 	  
	 	) 	  
	 	) 	  
	 	) 	  
	 	) 	  
	 	)ex10-1_17207.htm

EXHIBIT 10.1

 

 

THIRD 2011 AMENDMENT TO LOAN AGREEMENT

THIS THIRD 2011 AMENDMENT TO LOAN AGREEMENT, dated as of August 31, 2011 (the "2011 Amendment #3"), is made and entered into between and among WARREN F. KRUGER, an individual, and ROBERT B. ROSENE, JR., an individual (collectively, the "Borrowers"), GLOG INVESTMENTS, L.L.C., an Oklahoma limited liability company ("GLOG"), GREYSTONE MANUFACTURING, L.L.C., an Oklahoma limited liability company
("Greystone" and collectively with the Borrowers, the "Loan Parties"), and THE F&M BANK & TRUST COMPANY, a state banking corporation (the "Bank").

WITNESSETH:

 

WHEREAS, GLOG, Greystone and the Bank entered into that certain Loan Agreement dated as of March 4, 2005, as previously amended from time to time, including that certain February 2009 Amendment to Loan Agreement dated as of February 16, 2009 and that certain 2011 Amendment to Loan Agreement and Second 2011 Amendment to Loan Agreement, each dated as of March 15, 2011 (collectively, the "Existing Loan Agreement"), pursuant to which the Bank (i) made a certain $3,684,523.86 term loan to GLOG (the "GLOG Loan") and (ii) made a $6,097,776.21 term loan to Greystone (the "Greystone Loan"); and

 

WHEREAS, GLOG has distributed its assets to the Borrowers and the Borrowers have agreed to become jointly and severally liable for the unpaid balance of the note evidencing the GLOG Loan in the face principal amount of $3,663,902.57; and

 

WHEREAS, subject to the terms, provisions and conditions hereinafter set forth, the Bank is willing to release GLOG from liability under the GLOG Loan and to modify, amend, and rearrange the unpaid balance of the note evidencing the GLOG Loan such that the Borrowers shall be jointly and severally liable on such note in the principal amount of $3,663,902.57 until the existing final maturity date of March 15, 2014;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, receipt of which is acknowledged by the parties hereto, the parties agree to amend the Existing Loan Agreement as follows:

 

1.           Definition.  Any capitalized term used herein (including in the recitals hereto) but not otherwise defined shall have the meaning given to such term in the Existing Loan Agreement.

 

2.           GLOG Loan.  The existing GLOG Loan issued by the Bank to GLOG, as borrower, is hereby modified, rearranged, and amended such that the GLOG Loan in the principal amount of $3,663,902.57 until the existing maturity date of March 15, 2014 shall be in favor of the Borrowers who shall be jointly and severally liable under the GLOG Loan, and GLOG shall be released from liability thereunder.  All of the Indebtedness created pursuant thereto shall be evidenced by that certain replacement Promissory Note (Term Note # 60066) dated as of even date herewith from the
Borrowers payable to the order of the Bank in the face principal amount of $3,663,902.57 (the "Restated Note").  The GLOG Loan shall be payable in accordance with the terms and provisions of the Restated Note.  All references in the Existing Loan Agreement to the GLOG Note previously issued by GLOG to the order of the Bank shall hereafter refer to the Restated Note issued by Borrowers to the order of the Bank.

  

  

  

3.           Interest Rate.  All amounts outstanding on the Restated Note shall bear interest at a per annum rate equal to the Base Rate (as defined in the Restated Note), but in no event shall be less than the then applicable Index Floor Rate or more than the maximum rate allowed by law.

 

4.           Pledge Agreement.  Effective as of even date with this 2011 Amendment #3, GLOG is distributing its 50,000 shares of $100 stated value Greystone Series 2003 Preferred Stock (the "Stock") to the Borrowers.  The Stock is currently pledged to the Bank as security for the GLOG Note pursuant to a certain Pledge and Security Agreement from GLOG dated as of March 4, 2005 (the "Existing Pledge Agreement").  The Borrowers shall execute an Amended and Restated Pledge Agreement in form, scope and substance acceptable to the Bank (the "Restated Pledge") in
replacement of the Existing Pledge Agreement, pledging their interest in the Stock to the Bank.

 

5.           Guaranty.  Effective upon issuance of the Restated Note, Borrowers and Guarantors shall be the same.  Therefore, the 5.00 MM Guaranty shall become null and void and Guarantors shall be primarily liable on the Restated Note.

 

6.           Ratification. The remaining terms, provisions and conditions set forth in the Existing Loan Agreement shall remain in full force and effect for all purposes and are incorporated herein by reference. Each of the Loan Parties and GLOG restates, confirms, adopts and ratifies the warranties, covenants and representations set forth therein and further represents to the Bank that, as of the date hereof, no Default or Event of Default exists under the Existing Loan Agreement, as amended by this 2011 Amendment #3 (collectively, the "Loan Agreement").

 

7.           Conditions Precedent.  The Bank's obligations hereunder are expressly conditioned on the Borrowers executing and delivering, or causing to be executed and delivered to the Bank the following:

 

	
  

	
(a)

	
this 2011 Amendment #3 and the Restated Note; and

 

	
  

	
(b)

	
the Restated Pledge and originals of the Stock certificates.

 

8.           Collateral and Cross Collateralization and Cross Default.  All of the Indebtedness of each of the Loan Parties to the Bank, including as evidenced by the Restated Note shall be secured in all respects by the collateral described in the Restated Pledge as well as the Collateral described or defined in the Security Agreement described and defined in the Loan Agreement or any other Loan Document, including such amendments thereto or restatements thereof as may be deemed necessary or appropriate by the Bank.  Each of the Loan Parties acknowledge and stipulate
that the collateral described in the Restated Pledge as well as the Collateral described and defined in the Loan Agreement and the Security Agreement and all items and types of collateral, whether real property, personal property or otherwise, granted from time to time, including, without limitation, now in existence, by any of Greystone Real Estate, L.L.C., GLOG, and/or Greystone, as collateral or security for any and all debts, liabilities and obligations of any thereof, whether evidenced by promissory notes or otherwise, shall be and hereby are cross collateralized with each other to the fullest and maximum extent permitted by

  

2

  

applicable law and each thereof is cross-defaulted with each of the other notes, security agreements, pledge agreements, mortgages, guaranties and loan agreements thereof for all purposes and in all respects.  Notwithstanding the foregoing provisions, if and to the extent the Maximum Funded Debt to EBITDA ratio of Section 6.11 of the Loan Agreement is reduced to 4.0 to 1.0 for two (2) consecutive fiscal year ends, the Bank agrees to release the subordinated and junior mortgage liens against the respective properties leased by Greystone Real Estate, L.L.C., as landlord, to Greystone, as tenant.  Notwithstanding the provisions to the contrary contained in Section 9 of the 2011 Amendment to Loan Agreement dated as of March 15,
2011, the Indebtedness of the Loan Parties is not cross-defaulted with any indebtedness of Native American Plastics, LLC, an Oklahoma limited liability company ("NAP") to the Bank, and no collateral from NAP shall be pledged against the Indebtedness of the Loan Parties hereunder.

 

9.           Financial Covenants.  The following financial covenants shall replace Section 6.11 and Section 6.12 of the Existing Loan Agreement:

6.11           Maximum Funded Debt to EBITDA.  The maximum aggregate Funded Debt to EBITDA (net of (minus) pledged certificates of deposit by the Guarantors to the Bank and inclusive of the net income of Yorktown Management, L.L.C.'s ("Yorktown")) of Greystone and its Financial Covenant Affiliates shall be as follows; calculated annually based upon the fiscal year end audited financial statements of Greystone:

 

	Maximum Ratio	 	Effective as of:
	 	 	 
	9.0 to 1.0	 	May 31, 2011
	6.0 to 1.0	 	May 31, 2012
	4.0 to 1.0	 	May 31, 2013 and thereafter

 

                                                                                                                                                                 

6.12           Debt Service Coverage Ratio (DSCR).  The minimum Debt Service Coverage Ratio (Greystone's and its Financial Covenant Affiliates' aggregate Net Operating Income (inclusive of the net operating income of Yorktown and, insofar and only insofar as Greystone is concerned, inclusive of its interest, depreciation and amortization) to principal and interest on the aggregate Funded Debt of Greystone and its Financial Covenant Affiliates' ratio) shall be as follows; calculated annually based upon the fiscal year end audited financial statements of Greystone:

 

	Minimum Ratio	 	Effective as of
	 	 	 
	1.00 to 1.0	 	May 31, 2011
	1.25 to 1.0	 	May 31, 2012
	1.40 to 1.0 	 	May 31, 2013 and thereafter

 

                                          

                                                                                                                                                          

  

3

  

10.          CONSENT TO JURISDICTION AND VENUE.  GLOG AND EACH OF THE LOAN PARTIES HEREBY CONSENT TO THE JURISDICTION OF ANY OF THE LOCAL, STATE, AND FEDERAL COURTS LOCATED WITHIN TULSA COUNTY, OKLAHOMA, AND WAIVE ANY OBJECTION WHICH THEY MAY HAVE BASED ON IMPROPER VENUE OR
FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND WAIVE PERSONAL SERVICE OR ANY AND ALL PROCESS UPON THEM, AND CONSENT THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MAIL OR MESSENGER DIRECTED TO THEM AT THE ADDRESS SET FORTH IN THE EXISTING LOAN AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT OR THREE (3) BUSINESS DAYS AFTER MAILED OR DELIVERED BY MESSENGER.

11.          Fees and Expenses.  The Loan Parties agree to pay to the Bank on demand all costs, fees and expenses (including, without limitation, reasonable attorneys fees and legal expenses) incurred or accrued by the Bank in connection with the preparation, execution, closing, delivery, and administration of this 2011 Amendment #3 (including the Existing Loan Agreement) and the other Loan Documents, or any amendment, waiver, consent or modification thereto or thereof, or any enforcement thereof.  In any action to enforce or construe the provisions of the Loan Agreement or any of
the Loan Documents, the prevailing party shall be entitled to recover its reasonable attorneys' fees and all costs and expenses related thereto.

 

12.          WAIVER OF JURY TRIAL.  GLOG AND EACH OF THE LOAN PARTIES FULLY, VOLUNTARILY AND EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS 2011 AMENDMENT #3, THE CONSOLIDATED TERM NOTE, RESTATED GLOG NOTE, THE LOAN AGREEMENT OR UNDER ANY AMENDMENT, ANY SECURITY INSTRUMENT, OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED (OR WHICH MAY IN THE FUTURE BE DELIVERED) IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION
WITH THE LOAN AGREEMENT.  GLOG AND EACH OF THE LOAN PARTIES AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

13.          Counterparts.  This 2011 Amendment #3 may be executed in multiple counterparts, each of which, when so executed, shall constitute an original copy.

 

[Signature Pages Follow]

 

 

 

  

4

  

IN WITNESS WHEREOF, GLOG and each of the Loan Parties has caused this 2011 Amendment #3 to be delivered to Bank in Tulsa, Oklahoma, individually or by its undersigned duly authorized manager, as applicable, effective for all purposes as of the day and year first above written.

 

GREYSTONE MANUFACTURING, L.L.C., an Oklahoma limited liability company

 

By /s/ Warren F. Kruger                                    

      Warren F. Kruger, manager

	
  

	
"Greystone"

 

GLOG INVESTMENT, L.L.C.

 

an Oklahoma limited liability company

 

	
  

	
By /s/ Robert B. Rosene, Jr.                            

	
  

	
     Robert B. Rosene, Jr., Manager

"GLOG"

	
  

	
 /s/ Warren F. Kruger                                        

	
  

	
 Warren F. Kruger, individually

	
  

	
 /s/ Robert B. Rosene, Jr.                                  

	
  

	
 Robert B. Rosene, Jr., individually

	
  

	
"Borrowers"

The undersigned hereby approves and accepts the cross pledge and cross default provisions of paragraph 8 above.

 

GREYSTONE REAL ESTATE, L.L.C.,

 

an Oklahoma limited liability company

 

	
  

	
By  /s/ Warren F. Kruger                                  

	
  

	
       Warren F. Kruger, manager

 

 

THE F&M BANK & TRUST COMPANY, a state banking corporation

 

	
  

	
By  /s/ Craig Huston                                         

	
  

	
       Craig Huston, Senior Executive President

 

	
  

	
"Bank"

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