EXHIBIT 10.39
As of September 30, 2001
Xxxxx.xxx, Inc.
c/o The Reader's Digest Association, Inc.
Reader's Xxxxxx Xxxx
Xxxxxxxxxxxxx, Xxx Xxxx 00000-0000
Re: Amended, Restated and Consolidated
Subordinated Loan Agreement
Ladies and Gentlemen:
This letter sets forth our agreement (the "Agreement") to amend, restate
and consolidate those certain (i) Loan Agreement, dated as of November 1, 1999,
(ii) Loan Agreement, dated as of August 2, 2000, and (iii) Loan Agreement, dated
as of October 2, 2000 (collectively, the "Prior Loan Agreements"), each by and
among The Reader's Digest Association, Inc. ("RDA"), Xxxxxx.xxx, Inc. ("Domain";
collectively with RDA, the "Lenders") and Xxxxx.xxx, Inc. (the "Borrower"), each
a Delaware corporation.
1. The Loans. Pursuant to the Prior Loan Agreements, RDA is owed
$26,443,125.00 and Domain is owed $9,806,875.00 in outstanding principal (the
"Subordinated Loans"), together with accrued and unpaid interest. Effective as
of the date hereof, the terms of the Subordinated Loans are hereby modified as
follows:
(a) Interest. Each Subordinated Loan bears interest at a rate
equal to the rate applicable to a three month LIBOR rate loan plus 2% per annum
computed on the basis of a 360-day year or, if lower, the maximum rate permitted
by law. Commencing on the date hereof, RDA hereby waives interest accruing on
its Subordinated Loans to the Borrower up to a maximum amount of $5,000,000.00,
and Domain hereby waives interest accruing on its Subordinated Loans to the
Borrower up to a maximum amount of $1,250,000.00. For purposes of determining
this waiver, accruing interest shall continue to be calculated at the rate of
three month LIBOR plus 2% per annum computed on the basis of a 360-day year.
(b) Payments. Each Subordinated Loan shall mature on the
later of (i) August 31, 2002 and (ii) the date of indefeasible payment of all
amounts due under the Loan Agreement between RDA and the Borrower (the
"Senior Loan Agreement") and the Senior Promissory Note in favor of RDA in the
aggregate principal amount of $15,000,000.00 (the "Senior Note"), each dated as
of September 30, 2001.
(c) Prepayments. The Borrower may, if and to the extent that
the Senior Loans (as described below) shall have been paid in full, prepay all
or any portion of the Subordinated Loans in minimum amounts of the lesser of
$100,000 or the outstanding principal amount of the Subordinated Loans, together
with interest thereon accrued and unpaid to the date of prepayment without
premium or penalty.
(d) Accelerated Maturity Upon an Initial Public Offering. At
the option of the Lenders, all Subordinated Loans shall immediately become due
upon the receipt by the Borrower of proceeds of an initial public offering of
its common stock pursuant to the Securities Act of 1933, as amended.
(e) No Reborrowing. The Subordinated Loans may not be
reborrowed.
(f) Replacement Notes. Upon execution and delivery of this
Agreement, each of RDA and Domain is surrendering the promissory notes described
in Exhibit A hereto in its possession which evidence the Subordinated Loans.
Upon receipt, the Borrower shall xxxx such notes "cancelled" and issue new
Subordinated Promissory Notes (the "Subordinated Notes") to each of RDA and
Domain, to evidence its Subordinated Loan to the Borrower. The Subordinated
Notes shall be in the form of Exhibit B attached hereto.
2. Subordination. The Subordinated Loans are subordinate and junior in
right of payment to the amounts advanced to or owed by the Borrower to RDA
pursuant to the Senior Loan Agreement (the "Senior Loans") and the Senior Note.
(a) Events of Default under the Senior Loan Agreement. Upon the
occurrence of any Event of Default provided under the Senior Loan Agreement
(the "Senior Loan Default") then, unless and until such Senior Loan Default
shall have been cured or waived or shall have ceased to exist, no direct or
indirect payment (in cash, property or set-off or otherwise, except that payment
may be made by delivery of subordinated notes of the same type) shall be made on
account of the principal of, or prepayment premium, if any, or any other amount
in respect of, or interest on, any Subordinated Loan, or in respect of any
redemption, retirement, purchase or other acquisition of any Subordinated Loan,
during any period:
(i) commencing on the date such Senior Loan Default shall
first occur and ending on the date on which such Senior Loan Default shall have
been cured or waived or shall have ceased to exist; or
(ii) in which any judicial proceeding or any other
proceeding or action (whether judicial or otherwise) seeking to foreclose or
otherwise realize on any collateral shall be pending in respect of such Senior
Loan Default, or in which the maturity of the Senior Loans shall have been
accelerated in respect of such Senior Loan Default and such acceleration shall
not have been annulled.
(b) Notice by the Borrower. The Borrower shall give written
notice to each holder of Subordinated Loans of (i) any Senior Loan Default and
(ii) events described in Section 2(a)(i) and (ii) immediately upon the
occurrence or receipt thereof, as the case may be.
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(e) Insolvency, etc. In the event of:
(i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Borrower, its creditors or its property;
(ii) any proceeding for the liquidation, dissolution or other
winding-up of the Borrower, voluntary or involuntary, whether or not involving
insolvency or bankruptcy proceedings;
(iii) any assignment by the Borrower for the benefit of creditors;
or
(iv) any other marshalling of the assets of the Borrower,
first, all Senior Loans shall be paid in full in cash before any payment or
distribution, whether in cash, securities or other property, shall be made to
any holder of any Subordinated Loan on account of any Subordinated Loans. Any
payment or distribution, whether made in cash, securities, or other property and
whether made directly or indirectly, that would otherwise (but for this
subsection (c)) be payable or deliverable in respect of the Subordinated Loans
shall first be paid or delivered directly to the holder of the Senior Loans
until all Senior Loans shall have been paid in full in cash and second be paid
or delivered directly to the holders of the Subordinated Loans in accordance
with the priorities then existing among such holders until all Subordinated
Loans shall have been paid in full in cash.
(d) Limited Suspension of Remedies of Holders of Subordinated Loans. No
holder of Subordinated Loans may:
(i) declare or join in the declaration of any Subordinated Loan
to be due and payable or otherwise accelerate the maturity of the principal of
the Subordinated Notes, accrued interest thereon or prepayment premium or other
amounts due thereunder, or
(ii) commence any administrative, legal or equitable action
against the Borrower at any time during any period during which payment on the
Subordinated Loans shall be prohibited pursuant to the terms of Section 2(a)
hereof.
(e) Proof of Claim. Each holder of the Subordinated Loans irrevocably
authorizes and empowers the holder of the Senior Loans in any proceeding under
any federal or state bankruptcy or insolvency law, or any other reorganization,
dissolution or liquidation proceedings or the Borrower to file a proof of claim
on behalf of such holder of the Subordinated Loans with respect to the
Subordinated Loans and the other amounts owing hereunder and the Subordinated
Notes if (and only if) such holder of the Subordinated Loans fails to file proof
of its claims prior to ten (10) days before the expiration of the time period
during which such proof of claim must be filed. Neither this Section 2(e) nor
any other provision hereof, shall be construed to give the holder of the Senior
Loans any right to vote any Subordinated Loans or any related claim, whether in
connection with any resolution, arrangement, plan of reorganization, compromise,
settlement, election, or otherwise.
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(f) Acceleration of Subordinated Loans. In the event that any
Subordinated Loans shall be declared due and payable as the result of the
occurrence of any one or more Events of Default as provided in Section 4 hereof,
under circumstances when the terms of Section 2(a) do not prohibit payment on
the Subordinated Loans, no payment shall be made in respect of any Subordinated
Loan unless and until all Senior Loans shall have been paid in full in cash or
such declaration and its consequences shall have been rescinded and all such
Events of Default shall have been remedied or waived or shall have ceased to
exist.
(g) Turnover of Payments. If:
(i) any payment or distribution shall be collected or
received by any holders of Subordinated Loans in contravention of any of the
terms of this Section 2 and prior to the payment in full in cash of the Senior
Loans at the time outstanding; and
(ii) the Borrower shall have notified such holders of
Subordinated Loans of the facts by reason of which such collection or receipt so
contravenes this Section 2;
then such holders of Subordinated Loans will deliver such payment or
distribution, to the extent necessary to pay all such Senior Loans in full in
cash, to the holder of such Senior Loans and, until so delivered, the same
shall be held in trust by such holders of Subordinated Loans as the property of
the holder of such Senior Loans. If after any amount is delivered to the
holder of Senior Loans pursuant to the Section 2(g), whether or not such
amounts have been applied to the payment of Senior Loans, and the outstanding
Senior Loans shall thereafter be paid in full in cash by the Borrower or
otherwise other than pursuant to this Section 2(g), the holder of Senior Loans
shall return to such holders of Subordinated Loans an amount equal to the
amount delivered to the holder of Senior Loans pursuant to this Section 2(g).
(h) Obligations Not Impaired.
(i) No Impairment of Senior Loans. No right of any
present or future holder of any Senior Loans to enforce the subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Borrower or by any act or failure to
act, in good faith, by any such holder, or by any non-compliance by the Borrower
with the terms, provisions and covenants of this Agreement, regardless of any
knowledge thereof any such holder may have or be otherwise charged with. Without
in any way limiting the generality of the foregoing, the holder of Senior Loans
may, at any time and from time to time, without the consent of or notice to any
holder of any Subordinated Loans and without impairing or releasing the
subordination provided in this Section 2 or the obligations hereunder of the
holders of Subordinated Loans to the holder of Senior Loans, do any one or more
of the following:
(1) amend or supplement in any manner any
document or instrument evidencing Senior Loans; provided, however, that in no
event shall the principal amount of Senior Loans entitled to the benefits of
this Section 2 be increased as a result of any such amendment or supplement;
(2) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Loans;
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(3) release any person liable in any manner
for the collection of Senior Loans; and
(4) exercise or refrain from exercising any
rights against the Borrower and another person.
(ii) No Impairment of Subordinated Loans. Nothing
contained in this Section 2(h)(ii) shall impair, as between the Borrower and any
holder of Subordinated Loans, the obligation of the Borrower to pay to such
holder the principal thereof and prepayment premium, if any, and interest
thereon as and when the same shall become due and payable in accordance with the
terms of this Agreement, or prevent any holder of any Subordinated Loans from
exercising all rights, powers and remedies otherwise permitted by applicable law
or under this Agreement, subject to the rights of the holder of the Senior
Loans, to receive cash, securities or other property otherwise payable or
deliverable to the holders of Subordinated Loans.
(i) Payment of Debt; Subrogation. Upon the payment in full
of all Senior Loans in cash, the holders of Subordinated Loans shall be
subrogated to all rights of any holder of Senior Loans to receive any further
payments or distributions applicable to the Senior Loans until the Subordinated
Loans shall have been paid in full, and such payments or distributions received
by the holders of Subordinated Loans by reason of such subrogation, of cash,
securities or other property which otherwise would be paid or distributed to the
holder of Senior Loans, shall as between the Borrower and its creditors other
than the holder of Senior Loans, on the one hand, and the holders of
Subordinated Loans, on the other hand, be deemed to be payment by the Borrower
on account of Senior Loans and not on account of Subordinated Loans.
(j) Reliance of Holders of Senior Loans; Amendments.
(i) Reliance of Holders of Senior Loans. Each holder
of Subordinated Loans by its acceptance thereof shall be deemed to acknowledge
and agree that the foregoing subordination provisions are, and are intended to
be, an inducement to and a consideration of the holder of the Senior Loans,
whether such Senior Loans were created or acquired before or after the creation
of Subordinated Loans, to acquire and hold, or to continue to hold, such Senior
Loans, and such holder of the Senior Loans shall be deemed conclusively to have
relied on such subordination provisions in acquiring and holding, or in
continuing to hold, such Senior Loans.
(ii) Amendments. Notwithstanding the provisions of
Section 2(a) hereof, no amendment, waiver or other modification of this Section
2 shall be effective unless such amendment, waiver or other modification shall
have been approved in writing by the holder of Senior Loans outstanding at the
time of such amendment, waiver or other modification.
(k) Notices. Whenever any notice to holder of the Senior
Note shall be required pursuant to the provisions of this Section 2, the holder
of Senior Loans shall be deemed to have given such notice if such notice shall
have been delivered to RDA.
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3. Representations, Warranties and Covenants. The Borrower
represents, warrants and covenants as follows:
(a) The execution, delivery and performance by the Borrower
of this Agreement and the Subordinated Notes do not contravene any law or any
contractual restriction binding on or affecting the Borrower and will not result
in or require the creation of any lien, security interest or other charge or
encumbrance upon or with respect to any of the Borrower's properties.
(b) Except as already obtained, no consent, approval,
authorization or other order of any person and no consent, authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required to be made for the execution, delivery
or performance of this Agreement and the Subordinated Notes by the Borrower.
(c) Each of this Agreement and the Subordinated Notes has
been duly authorized, executed and delivered by the Borrower and each
constitutes a legal, valid and binding obligation of the Borrower enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, or other similar laws affecting the rights of creditors
generally or by the application of general equity principles.
(d) There are no conditions precedent to the effectiveness
of this Agreement and the Subordinated Notes that have not been satisfied or
waived.
(e) The address of the Borrower set forth in Section 5(a) is
the address of the Borrower's principal office and the Borrower will notify
each of the Lenders in writing within sixty (60) days following any change of
such address.
4. Events of Default. If one or more of the following events (an
"Event of Default") shall occur:
(a) Default in the punctual payment in full when due of any
principal amount of, or interest on, the Subordinated Loans; or
(b) Any representation or warranty made by the Borrower
under or in connection with this Agreement or the Subordinated Notes shall
prove to have been incorrect when made; or
(c) The Borrower shall be insolvent or generally cease
paying, or be unable to pay, its debts as they become due or shall make any
admission in writing to the foregoing effect; or the occurrence of any default
or event of default (after giving effect to any applicable grace or cure
periods) under any instrument or agreement evidencing debt; or a substantial
part of the operations of the Borrower shall be suspended; or the Borrower shall
make an assignment for the benefit or creditors; or the Borrower shall commence,
as debtor, a case under the Federal Bankruptcy Code as now or hereinafter in
effect; or shall commence any proceeding with respect to itself or a substantial
portion of its property under any other insolvency, bankruptcy arrangement,
reorganization, liquidation, dissolution or similar law; or a court of competent
jurisdiction shall enter an order or relief against the Borrower as debtor in a
case under the
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Federal Bankruptcy Code; or a case under the Federal Bankruptcy Code shall be
commenced against the Borrower or any proceeding under any other insolvency,
bankruptcy, reorganization, arrangement, liquidation, dissolution or similar law
of the United States shall be commenced against the Borrower or the Borrower
shall consent to or admit the material allegations against it in any such case
or proceeding; or a trustee, receiver or similar officer shall be appointed for
all or a substantial part of the property of the Borrower and the Borrower shall
consent thereto;
then, upon the happening of any of the foregoing Events of Default and at any
time thereafter so long as such Events of Defaults shall be continuing, subject
to Section 2 hereof, each of the Lenders may by declaration delivered to the
Borrower, demand the immediate payments of the Subordinated Notes, the
Subordinated Loans and all fees and other amounts payable by the Borrower
hereunder, whereupon the same shall become immediately due and payable;
provided, that upon the happening of any event specified in clause (c) above and
all obligations under the Subordinated Notes, the Subordinated Loans or
otherwise shall be immediately due and payable, all without declaration or
notice to the Borrower. The Borrower hereby waives, to the fullest extent
permitted by law, (A) all presentations, demands for performance, notices of
non-performance, protests, notices or protests, notices of intent to accelerate,
notice of dishonor in connection with the Subordinated Notes or any of the
Subordinated Loans, (B) any requirement of diligence or promptness on the part
of each of the Lenders, (C) any and all notices of every kind or description
that may be required by statute or law and any defense of any kind that it may
not or hereafter have, and (D) any defense of any kind (except payment) that it
may now or hereafter have with respect to its liability under this Agreement or
the Subordinated Notes.
(5) Miscellaneous.
(a) Notices. All notices and other communications required
or permitted by this Agreement shall be in writing and shall be sent:
If to RDA:
The Reader's Digest Association, Inc.
Reader's Xxxxxx Xxxx
Xxxxxxxxxxxxx, Xxx Xxxx 00000-0000
Attn: Vice President,
Corporate Financial Planning
Facsimile: (000) 000-0000
with a copy to:
The Reader's Digest Association, Inc.
Reader's Xxxxxx Xxxx
Xxxxxxxxxxxxx, Xxx Xxxx 00000-0000
Attn: General Counsel
Facsimile: (000) 000-0000
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If to Domain:
Xxxxxx.xxx, Inc.
c/o StarTek, Inc.
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Chairman
Facsimile: (000) 000-0000
with a copy to:
StarTek, Inc.
0000 X Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: President and Chief Executive Officer
Facsimile: (000) 000-0000
If to the Borrower:
Xxxxx.xxx, Inc.
0000 XX Xxxxxxxxxxxxx Xxx
Xxxxxxxx, Xxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
with a copy to:
The Reader's Digest Association, Inc.
Reader's Xxxxxx Xxxx
Xxxxxxxxxxxxx, Xxx Xxxx 00000-0000
Attn: General Counsel
Facsimile: (000) 000-0000
or, in each case, to such other address as any party may from time to time
specify in writing to the other party hereto. All notices and other
communications required or permitted by this Agreement shall be deemed to have
been duly given if sent to the intended recipient at the proper address
determined pursuant to this Section by courier, facsimile transmission or by
hand and will be deemed given, unless earlier received (i) if sent by courier,
when recorded on the records of the courier as received by the intended party,
(ii) if sent by facsimile, upon transmission if transmitted on a business day of
the intended recipient during business hours and in all other cases, on the next
business day, and (iii) if delivered by hand, on the date of receipt.
(b) Amendments and Modifications. This Agreement and the
Subordinated Notes may not be modified or amended except by an instrument in
writing signed by the Borrower and each of the Lenders.
(c) Waivers. No failure on the part of each of the Lenders
to exercise and no delay in exercising any right, power or remedy hereunder or
under any Note shall operate as a
8
waiver thereof or as any default, nor shall any single or partial exercise by
each of the Lenders of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any right, power or remedy. This
Agreement and the obligations of the Borrower hereunder are in addition to and
not in substitution of any other obligations held by each of the Lenders and
shall not affect the rights, remedies or powers of the Lenders in respect of any
obligations or interest of the Lenders. The remedies herein provided are
cumulative and are not exclusive of any remedy provided at law.
(d) Benefits. This Agreement shall inure to the benefit of
and shall be binding upon the respective successors and assigns to the parties
hereto.
(e) Governing Law. This Agreement and the Subordinated Notes
shall be governed and construed in accordance with the laws of the State of New
York without reference to any conflicts of law principles which would have the
substantive law of any other jurisdiction apply to the subject matter hereof.
Each of the Lenders and the Borrower irrevocably and unconditionally (i) agree
that any suit, action or proceeding against such party arising out of this
Agreement may be brought in New York State or Federal court sitting in New York,
New York or Westchester County, New York, (ii) waive, to the fullest extent such
party may effectively do so, any objection which such party may have to laying
of venue of any such suit, action or proceeding and (iii) submit to the
non-exclusive jurisdiction of such courts in any suit, action or proceeding and
agree that any process or notice of motion or other application to any court may
be served on such party within or outside such court's territorial jurisdiction
by registered or certified mail or by personal service at such party's address
set forth above.
(f) Counterparts. This Agreement may be simultaneously
executed in several counterparts each of which shall be an original and all of
which shall constitute but one and the same instrument. A facsimile signature of
a counterpart executed copy of this Agreement shall be treated as an original.
(g) Expenses. The Borrower shall pay all expenses, including
reasonable attorneys' fees and costs, in connection with the enforcement of this
Agreement, the Subordinated Notes and any other instruments and documents
delivered in connection herewith or therewith.
(h) Waiver of Jury Trial. Each of the Borrower and Lenders
hereby irrevocably and unconditionally waives all rights to trial by jury in any
legal action, proceeding or counterclaim arising out of or relating to this
Agreement or the Note and for any counterclaim therein.
[signature page follows]
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Please confirm your agreement to the terms and conditions of
this Agreement by causing a duly authorized officer of the Borrower to execute a
counterpart hereof.
Very truly yours,
THE READER'S DIGEST ASSOCIATION, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
XXXXXX.XXX, INC.
By: /s/ A. XXXXX XXXXXXXXXX XX.
---------------------------------
Name: A. XXXXX XXXXXXXXXX XX.
Title: CHAIRMAN
AGREED TO AS OF THE 30th DAY OF
SEPTEMBER, 2001
XXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxx
--------------------------
Name: Xxxxx Xxxxx
Title: President
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EXHIBIT A
LIST OF CANCELLED NOTES
1. Promissory Note, dated November 1, 1999, by the Borrower in favor of RDA
in the amount of $18,433,125.00.
2. Promissory Note, dated as of September 8, 2000 by the Borrower in favor
of RDA in the amount of $4,005,000.00.
3. Promissory Note, dated as of October 2, 2000 by the Borrower in favor
of RDA in the amount of $4,005,000.00.
4. Promissory Note, dated November 1, 1999, by the Borrower in favor of
Domain in the amount of $7,816,875.00.
5. Promissory Note, dated as of September 8, 2000 by the Borrower in favor
of Domain the amount of $995,000.00.
6. Promissory Note, dated as of October 2, 2000 by the Borrower in favor of
Domain in the amount of $995,000.00.
EXHIBIT B
REISSUED NOTES
See attached.
AMENDED, RESTATED AND CONSOLIDATED
SUBORDINATED PROMISSORY NOTE
$26,443,125.00 September 30, 2001
FOR VALUE RECEIVED, this Note amends, restates and consolidates
those certain Promissory Notes listed on Exhibit A hereto. The undersigned,
Xxxxx.xxx, Inc, a Delaware corporation (the "Borrower"), hereby promises to pay
to the order of The Reader's Digest Association, Inc., its successors and
assigns (the "Lender") on the earlier of August 31, 2002 or the date specified
in the Loan Agreement hereinafter described, the principal sum of TWENTY SIX
MILLION FOUR HUNDRED FORTY THREE THOUSAND ONE HUNDRED TWENTY FIVE DOLLARS
($26,443,125.00) in lawful money of the United States of America and in
immediately available funds, and to pay interest on the unpaid principal amount
of such Loan, in like money and funds, from the date of each Loan and until such
Loan shall be paid in full, at the rate per annum and in the manner provided in
the Loan Agreement.
This Note is the Note referred to in the Amended, Restated and
Consolidated Subordinated Loan Agreement, dated as of the date hereof, by and
among the Borrower, the Lender and Xxxxxx.xxx, Inc. (the "Loan Agreement"). This
Note evidences the Loans made by the Lender to the Borrower under the Loan
Agreement. This Note is subordinate and junior in right of payment to the
advances made to and amounts due by the Borrower to the Lender pursuant to that
certain Loan Agreement between the Borrower and the Lender and the Senior
Promissory Note in favor of the Lender, each dated as of September 30, 2001.
Upon the occurrence of any Event of Default under the Loan
Agreement, the principal hereof and accrued interest hereon shall become, or may
be declared to be, forthwith due and payable in the manner, upon the conditions
and with the effect provided in the Loan Agreement. The Borrower may at its
option prepay all or part of the principal of this Note before maturity upon the
terms provided in the Loan Agreement.
This Note shall be governed by, and shall be construed in
accordance with, the laws of the State of New York.
XXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
Title: President
EXHIBIT A
LIST OF CERTAIN PROMISSORY NOTES
1. Promissory Note, dated November 1, 1999, by the Borrower in favor of RDA in
the amount of $18,433,125.00.
2. Promissory Note, dated as of September 8, 2000 by the Borrower in favor of
RDA in the amount of $4,005,000.00.
3. Promissory Note, dated as of October 2, 2000 by the Borrower in favor of RDA
in the amount of $4,005,000.00.
AMENDED, RESTATED AND CONSOLIDATED
SUBORDINATED PROMISSORY NOTE
$9,806,875.00 September 30, 2001
FOR VALUE RECEIVED, this Note amends, restates and consolidates those
certain Promissory Notes listed on Exhibit A hereto. The undersigned, Xxxxx.xxx,
Inc., a Delaware corporation (the "Borrower"), hereby promises to pay to the
order of Xxxxxx.xxx, Inc., its successors and assigns (the "Lender"), on the
earlier of August 31, 2002 or the date specified in the Loan Agreement
hereinafter described the principal sum of NINE MILLION EIGHT HUNDRED SIX
THOUSAND EIGHT HUNDRED SEVENTY FIVE DOLLARS ($9,806,875.00) in lawful money of
the United States of America and in immediately available funds, and to pay
interest on the unpaid principal amount of such Loan, in like money and funds,
from the date of each Loan and until such Loan shall be paid in full, at the
rate per annum and in the manner provided in the Loan Agreement.
This Note is the Note referred to in the Amended, Restated and
Consolidated Subordinated Loan Agreement, dated as of the date hereof (the "Loan
Agreement"), by and among the Borrower, the Lender and The Reader's Digest
Association, Inc. ("RDA"). This Note evidences the Loans made by the Lender to
the Borrower under the Loan Agreement. This Note is subordinate and junior in
right of payment to the advances made to and amounts due by the Borrowers to RDA
pursuant to that certain Loan Agreement between the Borrower and RDA and the
Senior Promissory Note in favor of RDA, each dated as of September 30, 2001.
Upon the occurrence of any Event of Default under the Loan Agreement,
the principal hereof and accrued interest hereon shall become, or may be
declared to be, forthwith due and payable in the manner, upon the conditions and
with the effect provided in the Loan Agreement. The Borrower may at its option
prepay all or part of the principal of this Note before maturity upon the terms
provided in the Loan Agreement.
This Note shall be governed by, and shall be construed in accordance
with, the laws of the State of New York.
XXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
Title: President
EXHIBIT A
LIST OF CERTAIN PROMISSORY NOTES
1. Promissory Note, dated November 1, 1999, by the Borrower in favor of Domain
in the amount of $7,816,875.00.
2. Promissory Note, dated as of September 8, 2000 by the Borrower in favor of
Domain the amount $995,000.00.
3. Promissory Note, dated as of October 2, 2000 by the Borrower in favor of
Domain in the amount of $995,000.00.
