EXHIBIT 10.27
TWELFTH AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
AND WAIVER
THIS TWELFTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
AND WAIVER (the "Amendment") is dated as of November 30, 1998, and is by and
among AMERICABLE, INC., a Minnesota corporation ("Americable"), CABLE
DISTRIBUTION SYSTEMS, INC., a Georgia corporation ("Cable") (Americable and
Cable are hereinafter each individually referred to as an "Original Borrower"
and collectively as the "Original Borrowers"), ENSTAR NETWORKING CORPORATION, a
Minnesota corporation ("ENC") (Americable, Cable and ENC are hereinafter each
individually referred to as an "Borrower" and collectively as the "Borrowers")
and U.S. BANK NATIONAL ASSOCIATION, a national banking association and the
successor by merger with First Bank National Association, (the "Bank").
Capitalized terms not otherwise expressly defined herein shall have the meanings
set forth in the Loan Agreement hereinafter described.
RECITALS
WHEREAS, the Original Borrowers and the Bank are parties to an Amended and
Restated Loan and Security Agreement, dated as of June 1, 1993, as amended by a
First Amendment dated as of November 29, 1993, a Waiver, a Second Amendment
dated March 3, 1995, a Third Amendment dated May 31, 1996, a letter amendment
dated June 28, 1996, a letter amendment dated July 31, 1996, a Sixth Amendment
dated as of August 9, 1996, a Seventh Amendment dated as of May 29, 1997, an
Eighth Amendment dated as of September 30, 1997, a Ninth Amendment dated as of
March 5, 1998 and a Tenth Amendment dated as of June 30, 1998 (as so amended,
the "Loan Agreement");
WHEREAS, the Borrowers have requested and the Bank has agreed further to
amend the Loan Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1 - AMENDMENTS TO THE LOAN AGREEMENT
1.1 Amendments to Loan Agreement. As of the effective date of this
Amendment, the Loan Agreement is hereby amended as follows:
(a) Section 1.1 is amended to delete the date "September 30, 1998,"
appearing in the definition of the "Termination Date" and the date
"October 31, 1999" is substituted therefor;
(b) Section 2.1(c) is amended in its entirety to read as follows:
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"(c) The Revolving Loans shall be constituted of Eurodollar
Advances and Reference Rate Advances, as shall be selected by the
Borrower; provided, that no new Eurodollar Advances will be made
after November 30, 1998, no Reference Rate Advance may be converted
into a Eurodollar Advance after that date and no Eurodollar Advance
existing on that date may be continued as a Eurodollar Advance after
the end of its then effective Interest Period."
(c) Section 2.5(a) is amended by adding the following as the last
sentence thereof:
"Notwithstanding anything to the contrary set forth in this
Section 2.5(a), no Eurodollar Advance shall be obtained after
November 30, 1998."
(d) Section 2.13 is amended by adding the following as the last
sentence thereof:
"Notwithstanding anything to the contrary set forth in this
Section 2.13, no Reference Rate Advance may be converted into a
Eurodollar Advance after November 30, 1998 and no existing Eurodollar
Advance may be continued as a Eurodollar Advance after the end of its
then effective Interest Period."
(e) Section 6.2 is amended in its entirety to read as follows:
"6.2 Sale of Assets. Sell, transfer, convey, lease, assign or
otherwise dispose (with or without recourse) of: (a) any of the
1,025,000 shares of CorVel Corporation's common stock (the 'CorVel
Stock') owned by Americable; or (b) any of its other assets
(including, without limitation, any Accounts Receivable, instruments
or chattel paper) except for sales and leases of Inventory in the
ordinary course of business."
(f) Section 6.8 is amended in its entirety to read as follows:
"6.8 Restricted Payments. Purchase or redeem any shares of its
stock, declare or pay any dividends thereon (other than stock
dividends and dividends payable to Americable), make any distribution
to stockholders as such (other than Americable) or set aside any funds
for any such purpose, and not prepay, purchase or redeem any
subordinated Indebtedness of the Borrower or any Subsidiary; provided,
however, that, so long as no Event of Default or Unmatured Event of
Default has occurred and is continuing or would result therefrom,
Americable may make payments to ENStar: (a) with respect to any tax
obligation of Americable or any of its Subsidiaries actually paid by
ENStar (less any refund actually received by ENStar); and (b) of an
additional amount not to exceed in the aggregate, the sum of the
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following amounts received by Americable after February 28, 1997: (i)
cash dividends received by Americable with respect to the CorVel
Stock; and (ii) net cash proceeds received by Americable from the
sale of the CorVel Stock permitted by Section 6.2 except that all such
cash proceeds received by Americable after November 1, 1998 shall be
paid to the Lender for application to the Obligations in such order as
Lender may elect and, if any such net proceeds are applied to the
Advances, then such applied amount shall reduce the Credit Amount.
Any Excess Cash Flow which is not paid to the Borrower in the next
succeeding fiscal year may not be included in the determination of
Excess Cash Flow for such fiscal year."
(g) Supplement A (Amended 3/98) attached to the Loan Agreement is
hereby deleted and Supplement A (Amended 11/98) attached to this
Amendment is substituted therefor. All references in the Loan Agreement to
"Supplement A" shall be references to Supplement A (Amended 11/98).
(h) The Borrowing Base Certificate attached to the Loan Agreement as
Exhibit A (Amended 8/9/96) is hereby amended to conform to Exhibit A
(Amended 11/98) attached to this Amendment.
1.2 Construction. All references in the Loan Agreement to "this
Agreement," "herein" and similar references shall be deemed to refer to the Loan
Agreement as amended by this Amendment.
ARTICLE II - REPRESENTATIONS AND WARRANTIES
To induce the Bank to enter into this Amendment and to make and
maintain the Loans under the Loan Agreement as amended hereby, the Borrowers
hereby warrant and represent to the Bank that: (a) The execution, delivery
and performance by the Borrowers of this Amendment and any other documents to
which the Borrower is a party have been duly authorized by all necessary
corporate or partnership action, do not require any approval or consent of,
or any registration, qualification or filing with, any government agency or
authority or any approval or consent of any other person (including, without
limitation, any stockholder or partner), do not and will not conflict with,
result in any violation of or constitute any default under, any provision of
the Borrower's articles of incorporation or bylaws, any agreement binding on
or applicable to such Borrower or any of its property, or any law or
governmental regulation or court decree or order, binding upon or applicable,
to such Borrower or of any of its property and will not result in the creation
or imposition of any security interest or other lien or encumbrance in or on
any of its property pursuant to the provisions of any agreement applicable to
the Borrower or any of its property; (b) The Loan Agreement as amended by this
Amendment is the legal, valid and binding obligations of each Borrower and is
enforceable in accordance with its terms, subject only to bankruptcy,
insolvency, reorganization, moratorium or similar laws, rulings or decisions
at the time in effect affecting the enforceability of rights or creditors
generally and to general equitable principles which may limit the right to
obtain equitable remedies.
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ARTICLE III - CONDITIONS AND EFFECTIVENESS
This Amendment shall become effective on the date first set forth above,
provided, however, that the effectiveness of this Amendment is subject to the
satisfaction of each of the following conditions:
3.1 Before and after giving effect to this Amendment, the
representations and warranties in ARTICLE IV of the Loan Agreement shall
be true and correct as though made on the date hereof except for changes
that are permitted by the terms of the Loan Agreement. The execution by
the Borrowers of this Amendment shall be deemed a representation that the
Borrowers have complied with the foregoing condition.
3.2 Before and after giving effect to this Amendment, no Event of
Default or no Default, shall have occurred and be continuing under the
Loan Agreement except for those expressly waived by the terms hereof. The
execution by the Borrowers of this Amendment shall be deemed a
representation that the Borrowers have complied with the foregoing
condition.
3.3 The Bank shall have received the following documents
appropriately completed and duly executed by the Borrowers and the other
Obligors where appropriate and shall have received the other items
described herein:
(a) This Amendment appropriately completed and duly executed by
the Borrowers, together with a resolution of each of the Borrowers
authorizing the execution and delivery of this Amendment in form and
substance satisfactory to the Bank;
(b) An Acknowledgement and Consent duly executed by ENStar in
form and substance satisfactory to the Bank;
(c) A $15,000 extension fee in immediately available funds;
and
(d) Such other approvals, opinions or documents, as the Bank
may reasonably request.
ARTICLE IV - GENERAL
4.1 Expenses. The Borrowers jointly and severally agree to reimburse
the Bank upon demand for all reasonable expenses, including reasonable fees of
attorneys (who may be employees of the Bank) and legal expenses incurred by the
Bank in the preparation, negotiation and execution of this Amendment and any
other document required to be furnished herewith, and in enforcing the
obligations of the Borrowers hereunder, and to jointly and severally pay and
save the Bank harmless from all liability for, any stamp or other taxes which
may be payable with respect to the execution or delivery of this Amendment,
which obligations of the Borrowers shall survive any termination of the Loan
Agreement.
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4.2 Counterparts. This Amendment may be executed in as many
counterparts as may be deemed necessary or convenient, and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed an original but all such counterparts shall
constitute but one and the same instrument.
4.3 Severability. Any provision of this Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or
affecting the validity or enforceability of such provisions in any other
jurisdiction.
4.4 Law. This Amendment shall be a contract made under the laws of
the State of Minnesota, which laws shall govern all the rights and duties
hereunder.
4.5 Successors: Enforceability. This Amendment shall be binding
upon the Borrowers and the Bank and their respective successors and
assigns, and shall inure to the benefit of the Borrowers and the Bank and
the successors and assigns of the Bank. Except as hereby amended, the
Loan Agreement shall remain in full force and effect and is hereby
ratified and confirmed in all respects.
4.6 Recitals. The recitals hereto are incorporated herein by
reference and constitute and integral part of this Amendment.
4.7 Acknowledgement and Release. In order to induce the Bank
to enter into this Amendment, the Borrowers: (a) represent and warrant
to the Bank that no events have taken place and no circumstances exist
at the date hereof which would give the Borrowers the right to assert a
defense, offset or counterclaim to any claim by the Bank for payment of
the Obligations; and (b) hereby releases and forever discharges the Bank
and its successors, assigns, directors, officers, agents, employees and
participants from any and all actions, causes of action, suits,
proceedings, debts, sums of money, covenants, contracts, controversies,
claims and demands, at law or in equity, which the Borrower ever had or
now has against the Bank or its successors, assigns, directors, officers,
agents, employees or participants by virtue of their relationship to the
Borrower in connection with the Loan Documents and the transactions
related thereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized as of the
date first written above.
AMERICABLE, INC., a Minnesota Corporation
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Vice President, Finance
CABLE DISTRIBUTION SYSTEMS, INC.,
a Georgia Corporation
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Vice President, Finance
> ENSTAR NETWORKING CORPORATION,
a Minnesota Corporation
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Vice President, Finance
U.S. BANK NATIONAL ASSOCATION,
f/k/a First Bank National Association
By: /s/ Xxx Xxxxxxxx
----------------------
Xxx Xxxxxxxx
Assistant Vice President
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SUPPLEMENT A
to
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Dated as of JUNE 1, 1993 Among
U.S. BANK NATIONAL ASSOCIATION, as the successor
by merger with First Bank National Association (the "Bank") and
AMERICABLE, INC., CABLE DISTRIBUTION SYSTEMS, INC.
and ENSTAR NETWORKING CORPORATION
(collectively, the "Borrowers")
(AMENDED 11/98)
1. Loan Agreement Reference. This Supplement A, as it may be amended or
modified from time to time, is a part of the Amended and Restated Loan and
Security Agreement, dated as of June 1, 1993, among the Borrowers and the Bank
(together with all amendments, modifications and supplements thereto, the "Loan
Agreement"). Terms used herein which are defined in the Loan Agreement shall
have the meanings given such terms in the Loan Agreement unless the context
other requires.
2. Credit Amount; Borrowing Base.
2.1 Credit Amount. The maximum amount of Revolving Loans which the
Bank will make available to the Borrowers shall not exceed THREE MILLION AND
NO/100 DOLLARS ($3,000,000) (such amount is herein called the "Credit
Amount") (unless such amount is increased by the Bank in its sole and
absolute discretion).
2.2 Borrowing Base.
The term "Borrowing Base," as used herein, shall mean:
(a) an amount of up to 80% of the net amount (as determined by
the Bank after deduction of such reserves and allowances as the Bank
deems proper and necessary) of the Borrowers' Eligible Accounts
Receivable; provided, that the 80% borrowing base percentage shall be
reduced to 75% on May 1, 1999;
provided further, however, that the Bank, in its sole discretion, may: (x)
limit the amount of ENC's Eligible Accounts Receivable included in the
consolidated Borrowing Base for all Borrowers to an amount which does not
exceed the sum of the outstanding principal balance of Advances obtained by
ENC directly from the Bank or obtained by any other Borrower and disbursed
to, or for the benefit of ENC; and/or (y) require that the Borrowing Base
be separately calculated for each of Americable and ENC and that the
Advances made to such Borrower be limited to such Borrower's Borrowing
Base.
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2.3 Bank's Rights. The Borrowers agree that nothing contained in this
Supplement A (a) shall be construed as the Bank's agreement to resort or
look to a particular type or item of Collateral as security for any specific
Loan or advance or in any way limit the Bank's right to resort to any or all
of the Collateral as security for any of the obligations, (b) shall be
deemed to limit or reduce any lien on or any security interest in or upon
any portion of the Collateral or other security for the Obligations or (c)
shall supersede Section 2.10 of the Loan Agreement.
3. Interest.
3.1 Revolving Loans. The unpaid balance of the Revolving Loans shall
bear interest to maturity as follows:
(a) Eurodollar Advances. The unpaid principal amount of each
Eurodollar Advance shall bear interest prior to maturity at a rate per
annum equal to the Eurodollar Rate (Reserve Adjusted) in effect for
each Interest Period for such Eurodollar Advance plus 2.50% per annum.
(b) Reference Rate Advances. The unpaid principal amount of
Revolving Loans accruing interest as Reference Rate Advances shall bear
interest prior to maturity as follows: (i) on that portion of the
aggregate outstanding principal of the Revolving Loans which is equal
to or less than $2,500,000, at a rate per annum equal to the Reference
Rate; and (ii) on that portion of the aggregate outstanding principal
of the Revolving Loans which exceeds $2,500,000, at a rate per annum
equal to the sum of the Reference Rate plus one-half of one percent
(0.50) per annum.
3.2 Default Rate. If any amount of the Loans is not paid when due,
whether by acceleration or otherwise, the entire unpaid principal balance
of the Loans (other than overdraft Loans and Over Advances) shall bear
interest until paid at a rate per annum equal to the greater of (i) the
Reference Rate from time to time in effect plus four percent (4%) or (ii)
two percent (2%) above the rate in effect at the time such amount became
due for such past due amount.
3.3 Overdraft Loans; Over Advances. Overdraft Loans and over Advances
shall bear interest at the rate(s) determined pursuant to Section 2.8 or
Section 2.9 of the Original Agreement, as applicable.
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4. Eligible Account Receivable Data.
(a) The Account Receivable must not be unpaid on the date that is
90 days after the date of the invoice evidencing such Account Receivable.
(b) If invoices representing 10% or more of the unpaid net amount of
all Accounts Receivable from any one Account Debtor are unpaid more than 90
days after the dates of the invoices evidencing such Accounts Receivable,
then all Accounts Receivable relating to such Account Debtor shall cease to
be Eligible Accounts Receivable.
5. Additional Covenants. From the date of the Loan Agreement and thereafter
until all of the Borrowers' Obligations under the Loan Agreement are paid in
full, the Borrowers agree that, unless the Bank shall otherwise consent in
writing, it will not, and will not permit any Subsidiary to, do any of the
following:
5.1 Tangible Capital Base.
5.2 Leverage Ratio.
5.3 Interest Coverage Ratio.
5.4 Capital Expenditures. Make Capital Expenditures in an amount
exceeding: (a) $1,000,000 during Americable's fiscal year ended December 31,
1998, or (b) $750,000 during Americable's fiscal year ending December 31,
1999; determined on a consolidated basis for the Borrowers only (excluding
Transition).
5.5 Fiscal Month Loss. Sustain, at any fiscal month-end, commencing
as of October 31, 1998, a loss before taxes computed on a consolidated basis
for Americable and its consolidated Subsidiaries in accordance with GAAP
greater than $100,000 for the relevant fiscal month; provided, however, that
if the consolidated loss before taxes for any fiscal month exceeds $100,000,
then Borrowers, by no later than 10 days after submitting its financial
statements for such fiscal month to Bank, shall obtain a capital
contribution from ENStar in amount equal to double the amount by which the
consolidated loss before taxes exceeds $100,000.
Borrowers' Initials
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Bank's Initials
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Date: November 30, 1998
