EIGHTH AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT AND WAIVER
THIS EIGHTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT AND WAIVER (the "Amendment") is dated as of September 30, 1997,
and is by and among AMERICABLE, INC., a Minnesota corporation ("Americable"),
and CABLE DISTRIBUTION SYSTEMS, INC., a Georgia corporation ("Cable")
(Americable and Cable are hereinafter each individually referred to as a
"Borrower" and collectively as the "Borrowers") and FIRST BANK NATIONAL
ASSOCIATION, a national banking association (the "Bank"). Capitalized terms
not otherwise expressly defined herein shall have the meanings set forth in
the Loan Agreement.
RECITALS
WHEREAS, the 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 and a Seventh Amendment dated as of May 29, 1997
(as so amended, the "Loan Agreement");
WHEREAS, the Borrowers and the Bank desire to further amend the terms of
the Loan Agreement;
WHEREAS, the Bank desires to waive the Borrowers' compliance with certain
provisions of 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 I - AMENDMENTS TO THE LOAN AGREEMENT
1.1 Amendments to Loan Agreement. The Loan Agreement is hereby amended
as follows:
(a) Section 1.1 of the Loan Agreement is amended to delete the
definitions of "Additional Availability" and "Approved Acquisition".
SUPPLEMENT A
to
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Dated as of JUNE 1, 1993 Among
FIRST BANK NATIONAL ASSOCIATION (the "Bank") and
AMERICABLE, INC.
and CABLE DISTRIBUTION SYSTEMS, INC.
(collectively, the "Borrowers")
(AMENDED 9/97)
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 otherwise requires.
2. Credit Amount; Borrowing Base.
2.1 Credit Amount. The maximum amount of Revolving Loans which
the Bank will make available tot he Borrowers shall not exceed FOUR
MILLION AND NO/100 DOLLARS ($4,000,000) (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 85% 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; plus
(b) an amount of up to the lesser of (i) 40% of the net value
(the lower of the cost or market value of such Inventory as determined
by the Bank on a first in first out basis and after deduction of such
reserves and allowances as the Bank deems proper and necessary) of the
Borrowers' Eligible Inventory or (iii) $1,500,000.
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 Advanceplus 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 acceleeration 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 Credit Agreement, as applicable.
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. During each of the periods set forth
below, permit the Tangible Capital Base to be less than the amount set
forth below opposite such period at any time:
Period Tangible Capital Base
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June 1, 1996 through and
including December 30, 1996 $3,300,000
December 31, 1996 through and
including June 30, 1997 $3,500,000
5.2 Leverage Ratio. During each of the periods set forth below,
permit the ratio of (a) the total of (i) Americable's unconsolidated
Indebtedness, minus (ii) Americable's unconsolidated Subordinated Debt,
minus (iii) the aggregate unpaid accrued interest on all Subordinated
Debt of Americable owing to NSU, to (b) Tangible Capital Base to be
greater than: (x) 2.5:1 during the period on and after June 30, 1996 to
and including December 30, 1996; or (y) 2.2:1 at any time thereafter
through June 30, 1997.
5.3 Interest Coverage Ratio. Permit the ratio, as of any
Measurement Date for the period commencing on the first day of
Americable's fiscal year through and including such Measurement Date,
of (a) Americable's unconsolidated EBITDA to (b) the total of (i)
Americable's unconsolidated interest expense (including, without
limitation, imputed interest expense on Capitalized Leases) minus (ii)
the aggregate unpaid accrued interest on all Subordinated Debt of
Americable owing to NSU, to be less than: (r) 2:1 for any Measurement
Date occurring prior to January 1, 1997.
5.4 Capital Expenditures. Make Capital Expenditures in an
amount exceeding the following amounts determined on a consolidated basis
for the Borrowers only (excluding Transition): (a) $600,000 during
Americable's fiscal year ending December 31, 1996; (b) $1,250,000 during
Americable's fiscal year ending December 31, 1997; and (c) $600,000 during
any fiscal year thereafter.
5.5 Year-to-date Loss. Sustain, at any fiscal month-end, a fiscal
year-to-date loss before taxes computed in accordance with GAAP greater
than (i.e., a greater negative number than) the amount set forth below
opposite the relevant fiscal month:
Month Loss
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July 31, 1997 ($2,179,000)
August 31, 1997 ($2,387,000)
September 30, 1997 ($2,523,000)
October 31, 1997 ($2,987,000)
November 30, 1997 ($3,161,000)
December 31, 1997 ($3,351,000)
January 31, 1998 ($242,000)
February 28, 1998 ($307,000)
March 31, 1998 ($269,000)
April 30, 1998 ($251,000)
May 31, 1998 ($218,000)
June 30, 1998 ($105,000);
provided, however, that:
(a) the permitted maximum fiscal year-to-date loss for the
months ending October 31, 1997, November 30,1 997, and December 31,
1997, shall be reduced (i.e., made a less negative number) by the
amount of any insurance recoveries in excess of $650,000 (the amount
presently recovered) on Americable's fraud claim of approximately
$950,000; and
(b) if the fiscal year-to-date loss as of any fiscal month-end
exceeds the maximum permitted fiscal year-to-date loss, 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 the amount of such excess.
Borrowers' Initials
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Bank's Initials
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Date: , 19
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