EXHIBIT 10.3
LOAN AGREEMENT
THIS
LOAN AGREEMENT (the "Agreement") is made as of the 12th day of
April, 2004, by and between MME, Inc., a
New Jersey corporation (the "Lender"),
and PARADISE MUSIC & ENTERTAINMENT, INC., a Delaware corporation having an
office at PMB 300 1630 A 30th Street,
Boulder, Colorado 80301 (the "Borrower").
WHEREAS, Borrower has
requested Lender to make a loan to Borrower in the
principal amount of $80,000.00;
WHEREAS, Lender has agreed to make such loan to Borrower,
subject to the
terms and conditions contained herein;
and
NOW,
THEREFORE, for good and valuable consideration, and intending to be
legally bound, the parties agree as
follows:
1.
GENERAL
1.1
AGREEMENT TO LEND.
Lender loaned to
Borrower and Borrower
borrowed from Lender the principal amount
of $80,000.00 (the "Loan"), receipt of
which is hereby acknowledged.
1.2
PURPOSE OF LOAN AND USE OF FUNDS. The purpose of the Loan
is to provide Borrower with additional
working capital.
1.3 THE
CLOSING DATE.
The closing date of the Loan shall be
deemed to be April 12, 2004 (the "Closing
Date").
1.4 TERM.
The term of the Loan
shall be to April 12, 2007 (the
"Term").
1.5 THE
NOTE. The Loan shall be evidenced by that certain
promissory note dated as of the Closing Date given by Borrower in favor of
Lender in the principal amount of
$80,000.00 (the "Note"), substantially in the
form of EXHIBIT "A" annexed hereto and made a part hereof.
The Note shall
bear
interest at the rate of ten (10%) percent
per annum and such
interest shall be
paid quarterly in arrears.
1.6 THE
SECURITY AGREEMENT.
The payment of the Note is secured
by all of the assets of Borrower
pursuant to that
certain Security Agreement
dated as of the Closing Date between
Borrower, as debtor, and Lender, as secured
party (the "Security Agreement"), substantially in the form of EXHIBIT "B"
annexed hereto and made a part hereof.
2.
DELIVERY OF DOCUMENTS. Upon execution of this Agreement,
Borrower
shall deliver to Lender, in form and substance satisfactory to Lender and
(unless otherwise indicated) each dated as of the Closing Date,
the following
(the "Loan Documents"):
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2.1 The
Note.
2.2 The
Security Agreement.
2.3
Corporate Resolutions of Borrower.
2.5
Warrant for 1,000,000 shares of Common Stock of Borrower at
an exercise price of $0.002 per share.
2.5 Such
additional
instruments,
information and materials as
Lender may reasonably request.
3.
REPRESENTATION AND
WARRANTIES.
Borrower
makes the following
representations and warranties to Lender,
all of which are material and are made
to induce Lender to make the Loan,
are true as of the
date hereof
and shall
continue to be true until the Loan is
repaid in full.
3.1
ORGANIZATION OF BORROWER; AUTHORITY; POWER, ETC. Borrower
is a corporation duly formed and validly
existing under the laws of the State of
Delaware, and has full power, legal capacity and authority to execute
each of
the Loan Documents and to perform and
observe all of its obligations thereunder.
3.2
VIOLATION OF OTHER
AGREEMENTS. The
execution and delivery
of the Loan Documents and the performance and observance of the
covenants to be
performed and observed thereunder do not violate or
constitute a default in any
agreement to which Borrower is a party.
3.3
VALIDITY OF LOAN DOCUMENTS. Upon due execution and delivery
thereof, the Loan Documents shall constitute the legal, valid and binding
obligations of Borrower, enforceable against Borrower in accordance
with their
respective terms, subject only to bankruptcy and
insolvency laws applicable to
creditors generally and to equity principles which may preclude specific
performance and other equitable
remedies.
3.4
CHARACTER OF REPRESENTATIONS; SURVIVAL. The representations
and warranties contained in this Agreement or in any certificate or statement
furnished to Lender by Borrower
shall survive the
execution of this
Agreement
and shall not contain any untrue statement
of a material fact or omit to state a
material fact necessary in order to make the
statements
contained herein or
therein not misleading.
3.5 LIENS
AND ENCUMBRANCES. As
of the date hereof there are no
liens, claims, security interests or other
charges or encumbrances (other than
those in favor of Lender) on any assets to which Lender has an interest
hereunder and Borrower covenants and agrees to keep such assets
free from all
liens and encumbrances.
3.6
AUTHORIZED
SHARES. As
of the date hereof there are
75,000,000 shares of Borrower's Common Stock authorized for issuance and
75,000,000 shares of Borrower's
2
<PAGE>
Common Stock are outstanding [after giving effect to all
options, warrants
and
other securities that are convertible into
shares of Borrower's Common Stock].
4.
COVENANTS OF BORROWER. Borrower covenants and agrees as
follows:
4.1
PERFORMANCE OF
COVENANTS IN LOAN
DOCUMENTS. To fully
and
faithfully perform and observe the
covenants and obligations to be performed and
observed in each of the Loan Documents, and not suffer or permit a default
thereunder.
4.2 BOOKS
AND RECORDS. To use its best efforts to keep adequate
records of the operations of the Borrower
in accordance with generally accepted
accounting principles and permit Lender, during regular business hours, to
examine, make copies, and take away copies of such books and
records. Upon
execution of this Agreement, Borrower shall deliver to Lender a detailed
schedule of all current and contingent liabilities of Borrower known as
of the
date hereof, indicating the claimant(s),
including their
address and telephone
numbers, the amount alleged to be due and
Borrower's
position with respect
to
each of such liabilities.
4.4
INDEMNIFICATION.
Borrower agrees
to indemnify and hold
Lender harmless against any and all claims
and liability,
including
reasonable
legal costs and expenses happening in or arising out of or
in any way relating
to the Loan, and the use of the Loan proceeds, except if such claims and
liability arise from the gross negligence or willful misconduct of Lender.
Lender shall be entitled to appear in any
action or proceeding
to defend itself
against any such claims, and, if Borrower is not named and
served as a party to
such action or proceeding, Lender agrees to promptly notify Borrower of the
pendency of such action or proceeding and cooperate with Borrower to permit
Borrower to intervene therein. All costs incurred by Lender in
connection with
any such a
