SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 8, 2000
MDI ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-24919 73-1515699
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
201 Ann Street
Hartford, Connecticut 06103
(Address of principal executive
offices including zip code)
(860) 527-5359
(Registrant's telephone number,
including area code)
N.A.
(Former name or former address, if changed since last report)
Item 5. Other Events.
On September 8, 2000, MDI Entertainment, Inc. entered into a Loan
Agreement with Robert R. Sparacino, Steven M.Saferin, President and Chief
Executive Officer of MDI, and Media Drop-In Productions, Inc., a wholly owned
subsidiary of MDI. Media Drop-In received loans in the aggregate principal
amount of $520,000. The loans will be used to refinance existing indebtedness
and for working capital purposes.
Sparacino and Saferin each received a note, due on January 31, 2001, in
the principal amount of $260,000. The notes are secured by a security interest
in all of Media Drop-In's assets. The Sparacino note bears interest at a fixed
rate of 15% per annum and the Saferin note bears interest at a fixed rate of 10%
per annum, subject to a late charge equal to 5% of any installment of interest
or principal which is not paid by Media Drop-In within 10 days of the due date.
In the event of a default on the loans, including the failure to pay interest
when due after a 10-day opportunity to cure, the outstanding principal balance
of the loans will bear interest at the rate of 30% per annum (the "Default
Rate"). If Media Drop-In fails to pay the principal and interest on the maturity
date of the Sparacino note, the Default Rate will be applied to the principal
balance of such note retroactive to September 8, 2000. Pursuant to a Guaranty
secured by a security interest in substantially all of MDI's assets, MDI
Entertainment, Inc. has guaranteed all of the obligations of Media Drop-In to
Sparacino and Saferin. In connection with the Sparacino loan, Sparacino and his
designees received 5-year warrants to purchase an aggregate of 13,205 shares of
MDI common stock at an exercise price of $3.938 per share.
In connection with the Loan Agreement, MDI has agreed that it will not,
among other things, (i) merge or consolidate with, or sell, assign, lease or
otherwise dispose of all or substantially all of its assets or acquire all or
substantially all of the assets or business of any entity without the lenders'
prior written consent; (ii) sell, lease, assign, transfer or otherwise dispose
of any of its assets owned at or after September 8, 2000, subject to certain
exceptions; (iii) enter into any transactions with any affiliate, subject to
certain exceptions including additional loans made by Saferin in accordance with
the Loan Agreement; (iv) incur indebtedness, subject to certain exceptions
(including the ability to borrow up to an additional $480,000 on the same terms
as the Sparacino loan); and (v) cause or suffer to permit any liens to be placed
on any of its assets which secure the loans, subject to certain exceptions
(including liens securing indebtedness up to $480,000).
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
99.1 Loan Agreement dated, September 8, 2000, between Robert R.
Sparacino, Steven M. Saferin, Media Drop-In Productions, Inc.
and MDI Entertainment, Inc.
99.2 Promissory Note dated, September 8, 2000, in favor of Robert R.
Sparacino.
99.3 Promissory Note, dated September 8, 2000, in favor of Steven M.
Saferin.
99.4 Form of Media Drop-In Productions, Inc. Security Agreement,
dated September 8, 2000.
99.5 Form of MDI Entertainment, Inc. Guaranty, dated September 8,
2000.
99.6 Form of MDI Entertainment, Inc. Security Agreement, dated
September 8, 2000.
99.7 Form of Warrant, dated September 8, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MDI ENTERTAINMENT, INC.
(Registrant)
Dated September 12, 2000 By: /s/ Steven M. Saferin
------------------ --------------------------
Steven M. Saferin
President and Chief Executive Officer
EXHIBIT INDEX
Exhibit No. Description
99.1 Loan Agreement dated, September 8, 2000, between Robert R.
Sparacino, Steven M. Saferin, Media Drop-In Productions, Inc.
and MDI Entertainment, Inc.
99.2 Promissory Note dated, September 8, 2000, in favor of Robert R.
Sparacino.
99.3 Promissory Note, dated September 8, 2000, in favor of Steven M.
Saferin.
99.4 Form of Media Drop-In Productions, Inc. Security Agreement,
dated September 8, 2000.
99.5 Form of MDI Entertainment, Inc. Guaranty, dated September 8,
2000.
99.6 Form of MDI Entertainment, Inc. Security Agreement, dated
September 8, 2000.
99.7 Form of Warrant, dated September 8, 2000.