EXHIBIT 1
SECOND MODIFICATION OF LOAN AGREEMENT
THIS MODIFICATION is made as of this 24th day of September, 1996, by
and between BULL RUN CORPORATION, a Georgia corporation ("Borrower"), and
NATIONSBANK, N.A. (SOUTH), a Georgia banking corporation, successor by merger to
Bank South ("Lender").
Statement of Facts
Lender and Borrower are parties to that certain Loan Agreement, dated
as of March 29, 1995, as amended by the First Modification of Loan Agreement,
dated as of January 3, 1996, (the "Loan Agreement"), pursuant to which Lender
has agreed to make one or more loans from time to time to the Borrower in
accordance with the terms and conditions thereof. Lender and Borrower desire to
modify the Loan Agreement in order to provide for a new $5,000,000 term loan, to
increase the revolving credit loan to $2,000,000, and in certain other respects
in accordance with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, the covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Borrower and Lender do
hereby agree that all capitalized terms used herein shall have the meanings
ascribed thereto in the Loan Agreement as amended hereby (except as otherwise
expressly defined or limited herein) and do hereby further agree as follows:
Statement of Terms
1. Amendments of Loan Agreement. Subject to the fulfillment of the
conditions precedent to the effectiveness of this Modification which are set
forth below, the Loan Agreement shall be amended as follows:
(a) Section 1.01 of the Loan Agreement is hereby amended by
adding to Section 1.01 the following new definitions:
"Capital Expenditures" shall mean the cost,
determined in accordance with GAAP, of any fixed asset or
improvement, or replacement, substitution, or addition
thereto, which have a useful life of more than one year,
including, without limitation, those arising in connection
with Capital Leases.
"Capital Lease" shall mean any lease of Property by a
Person that, in accordance with GAAP, should be reflected as a
liability on the balance sheet of such Person.
"Debt Service" shall mean, for any period of
determination, the sum of the following (determined without
duplication) for the Borrower and its Subsidiaries, determined
on a consolidated basis in accordance with GAAP: (a) interest
expense for such period; (b) dividends paid during such period
(other than any dividend or distribution payable in capital
stock of the same class); (c) the aggregate amount of all
regularly scheduled payments of principal to be made during
the four consecutive fiscal quarters immediately following the
determination of the Debt Service Ratio pursuant to Section
7.05(d) hereof, and (d) payments for state and federal income
taxes during such period, provided, however, that Debt Service
shall not include payment by the Borrower in March, 1996 of
its tax liability for 1995 in an amount of approximately
$450,000.
"Debt Service Ratio" shall mean for any period of
determination the ratio of (a) EBITDA for such period to (b)
Debt Service for such period.
"EBITDA" shall mean, with respect to any period of
determination, the Borrower's net income for such period, as
determined on a consolidated basis together with its
Subsidiaries in accordance with GAAP and reported on the
financial statements for such period delivered pursuant to
Section 7.01 hereof, plus any and all of the following
deducted in determining such net income: (a) interest expense;
(b) state and federal income taxes accrued or otherwise
provided for; (c) depreciation; and (d) amortization.
"Marketable Securities" shall mean any security
traded on the American Stock Exchange, the New York Stock
Exchange or NASDAQ.
"Property" shall mean any interest in any kind of
property or asset, whether real, personal or mixed, or
tangible or intangible.
"Third Term Loan" shall mean any and all advances
made by Lender to Borrower under the Third Term Loan Facility.
"Third Term Loan Facility" shall mean the term loan
facility provided by Lender to Borrower under Section 3.02A
hereof.
"Third Term Loan Facility Expiration Date" shall mean
September 30, 1996 (as such date may be extended, accelerated
or amended from time to time pursuant to this Agreement).
"Third Term Loan Maximum Availability" shall mean
$5,000,000.
"Third Term Loan Note" shall mean the Third Term Loan
Note, dated as of the date of the Second Modification of Loan
Agreement, executed by the Borrower and payable to the order
of the Lender as evidence of the Third Term Loan and any
extension, renewal, modification or replacement thereof or
therefor.
"Third Term Loan Obligations" shall mean,
collectively, any and all Obligations of Borrower to pay
Lender the principal of, interest or fees on, collection costs
for, or any other sums owing in respect of the Third Term Loan
or the Third Term Loan Note.
(b) Section 1.01 of the Loan Agreement is hereby further
amended by deleting from Section 1.01 the terms "Collateral,"
"Revolving Credit Facility Expiration Date," "Revolving Credit Maximum
Availability," "Term Loan Facilities," "Term Loan Notes," "Term Loans,"
and "Warrant" by substituting in lieu thereof the following new
definitions of such terms:
"Collateral" shall mean (i) the Pledged Shares, (ii)
the Warrants, (iii) any and all other property which may be
hereafter pledged or collaterally assigned to Lender or in
which Lender may be otherwise granted a Lien to secure the
Obligations pursuant to any and all of the Credit Documents
and (iv) any and all cash and non-cash proceeds of the
foregoing.
"Revolving Credit Facility Expiration Date" shall
mean April 1, 1998, (as such date may be extended, accelerated
or amended from time to time pursuant to this Agreement).
"Revolving Credit Maximum Availability" shall mean
$2,000,000 (as such amount may be adjusted from time to time
pursuant to this Agreement).
"Term Loan Facilities" shall mean, collectively, the
First Term Loan Facility, the Second Term Loan Facility, and
the Third Term Loan Facility.
"Term Loan Notes" shall mean, collectively, the
First Term Loan Note, the Second Term Loan Note, and the
Third Term Loan Note.
"Term Loans" shall mean, collectively, the First Term
Loan, the Second Term Loan, and the Third Term Loan.
"Warrants" shall mean (a) the warrant to purchase
487,500 shares of the common stock of Xxxx issued on January
3, 1996, by Xxxx in favor of Borrower in connection with the
Subordinated Note, and any extension, modification, supplement
or replacement thereof or therefor, and (b) the warrant to
purchase 250,000 shares of common stock of Xxxx issued or to
be issued by Xxxx in favor of the Borrower in connection with
the issuance of series B preferred stock of Xxxx, and any
extension, modification, supplement or replacement thereof or
therefor.
(c) The Loan Agreement is hereby further amended by adding the
following Section 3.02A after the existing Section 3.02 and before the
existing Section 3.03:
Section 3.02A. Third Term Loan Facility.
(a) Subject to the terms and conditions of this
Agreement, the Lender agrees to advance to the Borrower, from
time to time on or prior to the Third Term Loan Facility
Expiration Date and upon the Borrower's request therefor, a
Third Term Loan in the principal amount of up to the Third
Term Loan Maximum Availability.
(b) The proceeds of the Third Term Loan shall be used
to purchase (i) 500 shares of series B preferred stock of Xxxx
and (ii) warrants to purchase 250,000 shares of class A common
stock of Xxxx.
(d) The Loan Agreement is hereby further amended by deleting
the existing Section 3.03(d) in its entirety and by substituting in
lieu thereof, the following new Section 3.03(d):
(d) The Lender, upon determining the Adjusted LIBOR
for any Interest Period applicable to any Term Loan, shall
promptly notify by telephone (confirmed in writing) or in
writing the Borrower thereof and any such determination by the
Lender shall, in the absence of manifest error, be final,
conclusive and binding for all purposes.
(e) The Loan Agreement is hereby further amended by adding to
Section 3.04 the following subsection (d) after subsection (c) thereof:
(d) The Borrower's obligation to pay to the Lender
the principal of and interest on the Third Term Loan shall be
evidenced by the records of the Lender (subject to Section
4.05 hereof) and by the Third Term Loan Note. The principal
balance of the Third Term Loan shall be payable in forty-seven
(47) consecutive monthly installments of $50,000 each, with
the first such installment due on February 1, 1999 and each of
the remaining installments being due on the same day of each
succeeding month thereafter, together with a forty-eighth
(48th) and final installment of principal on the Third Term
Loan which shall be due on January 1, 2003 in an amount equal
to the entire remaining unpaid principal balance of the Third
Term Loan.
(f) The Loan Agreement is hereby further amended by deleting
Section 4.04(b) and Section 4.04(c) in their entireties and by
substituting in lieu thereof the following new Section 4.04(b) and
Section 4.04(c):
(b) The Obligations shall be secured by (i) the
Borrower's first-priority and perfected pledge to the Lender
of one hundred percent of the outstanding capital stock of
Guarantor pursuant to the Borrower Stock Pledge Agreement,
(ii) the Guarantor's first priority and perfected pledge to
the Lender of 169,431 shares of the common stock of Xxxx
pursuant to the First Guarantor Pledge Agreement, and (iii)
the Partnership's first priority and perfected pledge to the
Lender of 1,284,000 shares of the common stock of the Borrower
pursuant to the Partnership Pledge Agreement.
(c) The Second Term Loan Obligations and the Third
Term Loan Obligations shall be secured by the Guarantor's
first-priority and perfected pledge to the Lender of 906,294
shares of the common stock of Xxxx in exchange for the
Subordinated Note pursuant to the Second Guarantor Pledge
Agreement and shall be further secured by the Borrower's
first-priority and perfected pledge to the Lender of 500
shares of series B preferred stock of Xxxx, 1000 shares of
series A preferred stock of Xxxx and all of the Warrants
pursuant to the Second Borrower Pledge Agreement.
(g) The Loan Agreement is hereby further amended by deleting
Section 7.05(c) in its entirety and by substituting in lieu thereof the
following new Section 7.05(c):
(c) Borrower's Leverage Ratio shall not be more than
1.8 to 1.0 as of the end of any fiscal quarter or year ending
on or after September 30, 1996.
(h) The Loan Agreement is hereby further amended by deleting
Section 7.05(d) in its entirety, and by substituting in lieu thereof,
the following new Section 7.05(d):
(d) As of the last day of each fiscal quarter,
Borrower's Debt Service Ratio for the four quarter period then
ended shall not be less than 1.1 to 1.0 at any time on or
after December 31, 1996.
(i) The Loan Agreement is hereby further amended by adding the
following new Section 9.01(xiv) after the existing Section 9.01(xiii):
(xiv) the aggregate value of all of Purchaser's
unpledged and non-affiliated Marketable Securities shall be
less than $60,000,000 at any time on or after September 30,
1996.
2. No Other Amendments. Except for the amendments expressly set forth
and referred to in Section 1 above, the Loan Agreement shall remain unchanged
and in full force and effect. Nothing in this Modification or any of the other
Supplemental Credit Documents (as defined below) is intended, or shall be
construed, to constitute a novation or an accord and satisfaction of any of the
Obligations or to modify, affect or impair the perfection or continuity of
Lender's security interests in, security titles to or other Liens on any
Collateral for the Obligations.
3. Representations and Warranties. To induce Lender to enter into this
Modification, the Borrower does hereby warrant, represent and covenant to Lender
that: (a) each representation or warranty of the Borrower set forth in the Loan
Agreement is hereby restated and reaffirmed as true and correct on and as of the
date hereof as if such representation or warranty were made on and as of the
date hereof (except to the extent that any such representation or warranty
expressly relates to a prior specific date or period), and no Default or Event
of Default has occurred and is continuing as of this date under the Loan
Agreement as amended by this Modification; and (b) each of the Borrower, the
Guarantor and the Partnership has the power and is duly authorized to enter
into, deliver and perform the Supplemental Credit Documents to which it is a
party, and each of the Supplemental Credit Documents is the legal, valid and
binding obligation of each Credit Party enforceable against such Credit Party in
accordance with its terms.
4. Facility Fee. In consideration of Lender entering into this
Modification, Borrower shall pay to Lender on or before the date of this
Modification, a non-refundable facility fee of $37,500. Borrower acknowledges
that such facility fee shall be fully earned by the Lender
upon the Lender's receipt of such fee and shall be non-refundable.
5. Reimbursement of Costs and Expenses. The Borrower hereby agrees to
reimburse Lender on demand for all costs (including reasonable attorneys' fees)
incurred by Lender in negotiating, documenting and consummating this
Modification, the other documents referred to herein, and the transactions
contemplated hereby and thereby.
6. Conditions Precedent to Effectiveness of this Modification. The
effectiveness of this Modification and the amendments provided in Section 1
above are subject to the truth and accuracy in all material respects of the
representations and warranties of the Borrower contained in Section 3 above and
to the fulfillment of the following additional conditions precedent (all
documents described below shall be in form and substance satisfactory to Lender,
and the documents described in paragraph (a) below are herein collectively
called the Supplemental Credit Documents.):
(a) Lender shall have received one or more duly executed
counterparts of this Modification, the Revolving Credit Note, the Third
Term Loan Note, the First Modification of Second Borrower Pledge
Agreement, and the Second Modification of Amended and Restated Second
Guarantor Pledge Agreement;
(b) Lender shall have received the originals of all
certificates or other instruments, evidencing the shares and warrants
covered by the First Modification of Second Borrower Pledge Agreement
and a UCC-1 financing statement covering such collateral, both duly
executed and delivered by Borrower;
(c) Lender shall have received a duly executed Guarantor
Reaffirmation and Consent from the Guarantor, a duly executed
Partnership Reaffirmation and Consent from the Partnership, and a duly
executed Purchaser Consent to Second Modification of Loan Agreement
from the Purchaser;
(d) Lender shall have received closing certificates duly
executed and completed by the Borrower, the Guarantor and the
Partnership and a duly executed and completed Federal Reserve Form U-1
relating to each of the Revolving Credit Loan, the Second Term Loan,
and the Third Term Loan;
(e) Lender shall have received an opinion of the Borrower's,
the Guarantor's, the Partnership's and the Purchaser's counsel
addressing such legal matters as may be requested by the Lender;
(f) Lender shall have received a certificate of existence for
Borrower from the Secretary of State of Georgia and a good standing
certificate for Guarantor from the Secretary of State of Delaware;
(g) Lender shall have received payment of the facility fee by
Borrower pursuant to Section 4 hereof plus all interest accrued through
the effective date of this Modification on the First Term Loan and the
Second Term Loan;
7. Conditions Precedent to Funding of the Third Term Loan. The
following condition, together with the conditions set forth in Section 6 hereof,
are conditions precedent to the funding of the Third Term Loan:
(a) All conditions precedent to the issuance of the series A
preferred stock of Xxxx, the series B preferred stock of Xxxx, and the
Warrants shall have been fulfilled (other than the disbursement of the
Third Term Loan proceeds as contemplated hereby), and the series A
preferred stock of Xxxx, the series B preferred stock of Xxxx,
and the Warrants shall be issued on terms and conditions acceptable to
Lender in all respects;
8. Post-Closing Matters. Borrower acknowledges that a written report of
examinations of the Uniform Commercial Code financing statement, tax lien and
judgment lien records of Xxxxxx County has been requested and will be returned
to Lender. Borrower agrees that if such written report shows Liens of record
upon the Borrower other than those of Lender or any other item of record
unsatisfactory to Lender, Borrower shall, upon Lender's request, cause same to
be removed from the record within thirty (30) days of such request.
9. Counterparts. This Modification may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which
when taken together shall constitute one and the same instrument.
10. Governing Law. This Modification shall be governed by, and
construed in accordance with, the internal laws of the State of Georgia
applicable to contracts made and performed in such state.
IN WITNESS WHEREOF, the parties hereto have caused this Modification to
be duly executed and delivered as of the day and year specified at the beginning
hereof.
BORROWER:
BULL RUN CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Xxxxxx X. Xxxxxxx, Xx., President
LENDER:
NATIONSBANK, N.A. (SOUTH)
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, Senior Vice President
