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Subsequent Events
3 Months Ended
Mar. 31, 2014
Subsequent Events

5. Subsequent Events

Previously, on April 12, 2013, the Company issued a letter of credit in the amount of $.2 million and with an original expiration date of April 15, 2014, to guarantee payments on an office lease obtained by Three Lions and subject to the Company providing to Three Lions a 30-day notice of intent to terminate the letter of credit. The Company allowed the letter of credit to continue beyond the original expiration by it not providing the required 30-day notice of intent to terminate the letter of credit to Three Lions. However, the Company can terminate the letter of credit at any time after the original expiration date of April 15, 2014, provided the Company provides the required 30-day notice of intent to terminate the letter of credit to Three Lions.

On May 13, 2013, the Company announced in a current report on Form 8-K, (the “SunTrust 8-K”), that on May 7, 2014, the Company had entered into an amendment of the LLC Agreement with the other members of Three Lions (the “First Amendment”), which amended the transfer restrictions in the LLC Agreement to permit each member to pledge 100% of its interest in Three Lions as security in order to enable Three Lions to obtain additional line of credit financing from SunTrust Bank (“SunTrust”). The First Amendment also amended the provision of the LLC Agreement pursuant to which OA3, an affiliate of the Company’s controlling shareholder, is obligated to make available to Three Lions, upon the request of its chief executive officer, a revolving loan facility in a principal amount not to exceed $6,000,000 on the terms set forth in the LLC Agreement (the “OA3 Loan Facility”). Under the First Amendment, Three Lions is only permitted to draw on the OA3 Loan Facility for the sole purpose of providing funding necessary for Three Lions to cure any defaults under the SunTrust credit facility, and the OA3 Loan Facility is made subordinate and junior in right of payment of the obligations under the SunTrust facility.

The Company also announced in the SunTrust 8-K that on May 7, 2014, the Company entered into a pledge agreement with SunTrust (the “Pledge Agreement”), wherein the Company pledged all of its equity interests in Three Lions and the proceeds therefrom (the “Pledged Securities”) to SunTrust as security for Three Lions’ obligations under the SunTrust facility, in order to satisfy a condition precedent to SunTrust’s agreement to provide such financing. Unless and until an event of default shall have occurred and be continuing under the SunTrust facility, the Company shall retain all voting rights, and rights to receive any cash dividends or distributions paid while no event of default is continuing, with respect to the Pledged Securities so long as such rights are exercised in a manner not inconsistent with the terms of the Pledge Agreement and the SunTrust facility. The Company’s pledge of the Pledged Securities under the Pledge Agreement shall terminate only upon the payment in full and termination of Three Lions’ obligations under the SunTrust facility. The Pledge Agreement expressly provides that SunTrust shall not have any claim, remedy or right to proceed against the Company for any deficiency in payment or performance of the obligations under the SunTrust facility, from any source other than the Pledged Securities pledged by the Pledge Agreement.