Hal,
What are your thoughts about the millions that Bramson loaned himself from the AXC coffers? These notes are basically secured with AXC stock, the 400k cross we saw last fall was approved as collateral. I am no wizard with these cryptic filings and transactions, but on the surface they look bad. Thoughts?
>>> In November 2000, SIC assumed Mr. Bramson's obligation under another note
payable to the Company, which was secured by a pledge of 400,000 shares of the
Company's Class A Stock held by Mr. Bramson. In connection with its assumption
of the debt represented by this note, SIC issued a new note to the Company, and
Mr. Bramson transferred the pledged shares to SIC, with the Company's consent.
The note issued by SIC bears interest at the rate of 6.34%, matures in October
2007, and is secured by a pledge of the 400,000 shares transferred to SIC. The
largest aggregate amount outstanding under the note during 2000 was
$1,015,000.50, which was the amount outstanding on March 31, 200l. Mr. Bramson
paid $73,234 of interest, in cash, on this note in 2000.
The Company also holds a secured promissory note issued by SH Securities
Co., LLC ("SHSC"), a limited liability company controlled by Mr. Bramson. This
note bears interest at the rate of 5.74%, matures in October 2008, and is
secured by a pledge of 400,000 shares of Class A Stock held by SHSC, which are
the sole significant assets of SHSC. In recognition of Mr. Bramson's
contributions to the Company, the Board of Directors agreed to reduce the
principal amount of this note by $176,000 each year, and to forgive the accrued
interest payable on each interest payment date, commencing in 1998 and ending on
the maturity date of the note in 2008. On behalf of the Company, the Board
subsequently requested Mr. Bramson and SHSC to consent to eliminating the annual
principal reductions, effective with the principal reduction scheduled for
October 2000. The interest forgiveness will continue on each interest payment
date until the final maturity of the note. In consideration of Mr. Bramson's and
SHSC's agreement to terminate the scheduled principal reductions, the Company
agreed to convert the note to a non-recourse obligation of SHSC. In October
2000, $106,075.20 of interest on the note was forgiven. The largest amount
outstanding under this note during 2000 was $1,848,000.
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