CONSOLIDATION AND RESTATEMENT OF LOAN AGREEMENTS
AGREEMENT made this 12 day of May, 1997, by and between AUDIO BOOK
CLUB, INC., having an office at 0000 Xxxxxxxxx Xxxxxxxxx, X.X., Xxxxx 000, Xxxx
Xxxxx, Xxxxxxx 00000 (hereinafter "Borrower") and XXXXXX XXXXXXX, residing at 00
Xxxxx Xxxx, Xxxxxxx Xxxxx, Xxx Xxxxxx 00000 (hereinafter "Xxxxxx").
W I T N E S S E T H :
WHEREAS, Borrower is indebted to Xxxxxx in the amount of $50,000
pursuant to the terms of a Loan Agreement dated and entered into on the first
day of June, 1994;
WHEREAS, Borrower is indebted to Xxxxxx pursuant to the terms of a Loan
Agreement in the amount of $350,000 dated and entered into on the 6th day of
February, 1997, which amount of $350,000, and the amount of $50,000 due under
the Loan Agreement dated June 1, 1994 are hereinafter collectively referred to
as the "Indebtedness";
WHEREAS, the parties wish to modify the terms of the Loan Agreements
and consolidate the Indebtedness as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and provisions
herein contained, it is agreed as follows:
1. Acknowledgement of Indebtedness. Borrower acknowledges and agrees to
pay the Indebtedness in accordance with the terms hereinafter set forth.
2. Terms of Payment. The Indebtedness shall be paid by Borrower to
Xxxxxx as follows:
(a) No interest shall be paid or accrued until August 1, 1997;
and
(b) Interest shall be accrued on the principal balance from
time to time outstanding calculated from August 1, 1997 at a rate which is equal
to the greater of 10% per annum or the prime rate of interest charged by
Citibank, N.A. of New York, adjusted monthly, which Indebtedness, together with
accrued interest thereon, shall be due and payable on the earlier of:
(i) 15 months on the consummation of an initial
public offering of the stock of the Borrower; or
(ii) December 31, 1998
(c) Notwithstanding the provisions of subparagraph (b) above,
in no event shall the rate (commencing August 1, 1997) ever be lower than the
minimum interest rate (and compounding frequency) that would be required to
bring the Indebtedness into compliance with the provisions of Internal Revenue
Code Section 7872 or any successor provision.
3. Prepayment. The Indebtedness may be prepaid by Borrower at any time,
and from time to time, in whole or in part, without penalty.
4. Events of Default. The following events shall be deemed defaults
pursuant to the terms of this Loan Agreement:
(a) A binding decree or order of a court shall have been
entered adjudging Borrower bankrupt or insolvent, or approving as
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properly filed a petition seeking reorganization, readjustment, arrangements,
composition or similar relief for Borrower under the Bankruptcy Laws of any
jurisdiction, or any other similar applicable law, and such decree or order
shall have continued undischarged or unstayed for a period of thirty (30) days;
and
(b) Borrower shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking
reorganization, readjustment, arrangement, composition or similar relief under
the Bankruptcy Laws, or any other similar applicable law, or shall consent to
the appointment of a receiver or liquidator or trustee or assignee in bankruptcy
or insolvency of a substantial part of its property, or shall make an assignment
for the benefit of creditors, or shall admit in writing its inability to pay its
debts generally, as they become due; or.
5. Remedies. In the event of a default hereunder as hereinabove
defined, Xxxxxx shall have the right to declare the entire unpaid balance of the
Indebtedness immediately due and payable; the right to seek all remedies
available to him under law for the collection of the Indebtedness and shall be
entitled to recover all of the reasonable costs of collection, including
attorney's fees.
6. Non-Waiver. No course of dealing on the part of Xxxxxx, his agents
or employees, nor any failure or delay on the part of Xxxxxx with respect to the
exercise of any right, power or
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privilege given or granted hereunder shall operate as a waiver thereof as to any
future default, nor shall any single or partial exercise by Xxxxxx of any right,
power or privilege granted or contained herein preclude Xxxxxx from later or
future exercise of any right, power or privilege as to any future defaults. The
rights and remedies of Xxxxxx are cumulative to and not exclusive of any
remedies under the law.
7. Binding Effect. In the event that any part or parts of this
Agreement are found to be void, the remaining provisions shall nevertheless be
binding with the same effect as though the void part or parts were deleted.
8. Modifications. This Agreement may not be changed orally, but only by
a writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought; this Agreement contains the entire
understanding of the parties hereto and all prior agreements or understandings,
whether written or oral, are merged herein.
9. Controlling Law. This Agreement has been executed by Borrower in the
State of Florida and shall be construed and interpreted under the laws of that
State.
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IN WITNESS WHEREOF the parties hereto have signed this Agreement the
day and year first above written.
AUDIO BOOK CLUB, INC.
by: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx - Chairman
/s/ Xxxxxx Xxxxxxx
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XXXXXX XXXXXXX
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