EXHIBIT 10.13
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 3/98)
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 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 (ii) $1,500,000;
provided, however, that the Bank, in its sole discretion, may: (x) limit
the amount of ENC's Eligible Accounts Receivable and Eligible Inventory
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 Base.
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. [INTENTIONALLY DELETED.]
5.2 Leverage Ratio. [INTENTIONALLY DELETED.]
5.3 Interest Coverage Ratio. [INTENTIONALLY DELETED.]
5.4 Capital Expenditures. Make Capital Expenditures in an amount
exceeding $600,000 determined on a consolidated basis for the Borrowers
only (excluding Transition) during Americable's fiscal year ending
December 31, 1998.
5.5 Year-to-date Loss. Sustain, at any fiscal month-end, a fiscal
year-to-date loss before taxes computed on a consolidated basis for
Americable and its consolidated Subsidiaries 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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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);
provide, however, that:
(a) the permitted maximum fiscal year-to-date loss for any fiscal
month shall be reduced (i.e., made a less negative number) by the
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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: March 5, 1998
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/ XXXXX X. XXXXX
---------------------------
Xxxxx X. Xxxxx, President
and Chief Executive Officer
CABLE DISTRIBUTION SYSTEMS, INC.,
a Georgia corporation
By: /s/ XXXXX X. XXXXX
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Xxxxx X. Xxxxx, Secretary
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 ASSOCIATION,
a national banking association
and the successor by merger with
First Bank National Association
By:
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Title:
ASSUMPTION AGREEMENT AND NINTH AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT AND WAIVER
THIS ASSUMPTION AGREEMENT AND NINTH AMENDMENT TO AMENDED AND RESTATED LOAN
AND SECURITY AGREEMENT AND WAIVER (the "Amendment") is dated as of March 5,
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 a "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 and an
Eighth Amendment dated as of September 30, 1997 (as so amended, the "Loan
Agreement");
WHEREAS, Americable has transferred certain of its assets to ENC and such
transfer requires the Bank's consent; and
WHEREAS, as a condition to consenting to such transfer, the Bank has
required that ENC assume the Obligations on a joint and several basis with the
Original Borrowers by executing and delivering this Amendment.
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 - ASSUMPTION AGREEMENT
1.1 Assumption of Loan Agreement. ENC hereby expressly assumes and agrees
to perform, observe and confirm, on a joint and several basis with the Original
Borrowers, all and singular, the covenants, agreements, terms, conditions,
obligations, appointments, duties and liabilities of the Original Borrowers, or
any of them, under the Original Agreement, and each other Loan Document to which
any Original Borrower is a party and any other document or instrument executed
and delivered or furnished by any Original Borrower in connection therewith. By
virtue of the foregoing, ENC hereby accepts and assumes, on a joint and several
basis with each of the Original Borrowers, any and all liability of any Original
Borrower relating to any representation or warranty made by any Original
Borrower in the Loan Agreement and confirms and restates all such
representations and warranties made by each Original Borrower with respect to
itself as being true and correct except for the representations and warranties
that relate solely to an earlier date.
1.2 Collateral Accounts. Without limiting the generality of the foregoing,
the Original Borrowers and ENC agree that the Collateral Account for all of the
Borrowers is Account No. 170225066456 and that the Disbursement Account for all
of the Borrowers is Account No. 180121002836.
1.3 Binding Effect. Effective immediately upon the Effective Date of this
Amendment, ENC shall be bound by, and shall enjoy the benefits of, the Original
Agreement and each other Document to which any Original Borrower is a party as
if ENC had been an original signatory thereto.
ARTICLE II - AMENDMENTS TO THE LOAN AGREEMENT
2.1 Amendments to Loan Agreement. The Loan Agreement is hereby amended
as follows:
(a) the definition of "Borrower" and "Borrowers" set forth in the
preamble to the Loan Agreement is hereby amended in its entirety to read as
follows:
"Americable, Cable and ENC are hereinafter each individually
referred to as a 'Borrower' and collectively as the 'Borrowers'."
(b) Section 1.1 of the Loan Agreement is further amended to add the
following new definition of "ENC":
"ENC': Enstar Networking Corporation, a Minnesota corporation."
(c) Section 7.1(o) is amended in its entirety to read as follows:
"(o) Ownership. (i) So long as the Americable Spin-off has not
occurred, NSU shall cease to own at least 90% of the shares of all
voting stock of Americable; or (ii) Americable shall cease to own at
least 90% of the shares of all voting stock of either of Cable or
ENC."
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(d) Section 12.11 is amended in its entirety to read as follows:
"12.11 Joint and Several Obligations. Each Borrower, and all of
them, shall be jointly and severally obligated hereunder and under
the other Loan Documents; provided, however, that if Cable's or
ENC's liability for Obligations would otherwise be held or
determined to be void, invalid or unenforceable in any action or
proceeding involving any state corporate law, or any state or
federal bankruptcy, insolvency, reorganization or other law
affecting the rights of creditors generally on account of the
amount of such liability, then, notwithstanding any other
provision of this Agreement to the contrary, the amount of such
Borrower's liability shall, without any further action by such
Borrower, the Lender or any other person, be automatically limited
and reduced to the highest amount which is valid and enforceable
as determined in such action or proceeding."
(e) Supplement A (Amended 9/97) attached to the Loan Agreement is
hereby deleted and Supplement A (Amended 3/98) attached to this Amendment
is substituted therefor. All references in the Loan Agreement to
"Supplement A" shall be references to Supplement A (Amended 3/98).
2.2 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 III - 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 any 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 such 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 such 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
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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 of creditors
generally and to general equitable principles which may limit the right to
obtain equitable remedies.
ARTICLE IV - 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:
4.1 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.
4.2 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.
4.3 The Bank shall have received the following documents appropriately
completed and duly executed by the Borrowers and the other Obligors where
appropriate:
(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) UCC Financing Statements duly executed by ENC in form and
substance satisfactory to the Bank;
(c) UCC Searches on ENC showing no other Person holds any Lien on
any of ENC's assets other than Liens permitted by the Bank;
(d) A favorable opinion of counsel to the Borrowers in form and
substance satisfactory to the Bank;
(e) An Acknowledgment and Consent duly executed by ENStar in form
and substance satisfactory to the Bank; and
(f) Such other approvals, opinions or documents, as the Bank may
reasonably request.
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ARTICLE V - GENERAL
5.1 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.
5.2 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 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.
5.3 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.
5.4 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.
5.5 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.
5.6 Recitals. The recitals hereto are incorporated herein by reference and
constitute an integral part of this Amendment.
5.7 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 release
and forever discharge 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 Borrowers ever had or now
have against the Bank or its successors, assigns, directors, officers, agents,
employees or participants by virtue of their relationship to the Borrowers in
connection with the Loan Documents and the transactions related thereto.
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