ProElite Violates Loan Terms, CBS/Showtime May Seek Remedy

October 22, 2008

ProElite made another filing with the SEC recently, basically stating that CBS/Showtime feels ProElite has violated the terms of its loans (which required certain bank balances be kept). The total amount of loans outstanding from CBS/Showtime to ProElite was $6.3 million. What is interesting is the possible remedies that CBS/Showtime can make under the terms of the loan. CBS/Showtime may, within three business days, exercise rights and remedies that include:

(a) exercising any and all rights as beneficial and legal owner of the Company’s assets;
(b) selling or assigning the Company’s assets in whole or in part;
(c) granting a license or franchise to use the Company’s assets in whole or in part;
(d) suing, demanding, collecting or receiving in Showtime’s name and money property or receivable on account of or in exchange for the Company’s assets; or
(e) exercising all voting powers of ownership pertaining to the Company’s assets as if Showtime were the sole and absolute owner thereof.

Basically, there could be some major movement possible in the short term unless there some legal challenge by ProElite investors.

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