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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: April 26, 1995
ACS ENTERPRISES, INC.
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(Exact name of registrant as specified in charter)
Pennsylvania 1-11584 23-1976138
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
2510 Metropolitan Drive, Trevose, Pennsylvania 19053-6789
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (215) 396-9400
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ITEM 5. OTHER EVENTS
On April 26, 1995, ACS Enterprises, Inc. (the "Company") and each of
its subsidiaries entered into a Limited Consent to Credit Agreement (the
"Consent") with the Lenders listed therein (the "Lenders") and Banque Paribas,
as agent for the Lenders (the "Agent"). The Consent referred to and modified
the Credit Agreement by and among the Company, its subsidiaries, the Lenders
and the Agent dated as of November 9, 1993, as amended (the "Credit
Agreement").
The Consent provided for, among other things: (i) the waiver by the
Lenders and the Agent of the requirement contained in the Credit Agreement that
the Company meet certain covenants in order to draw upon an additional $4
million of funds with respect to the $25 million credit facility provided for
in the Credit Agreement, (ii) the waiver by the Company and its subsidiaries of
any claim they may have had against the Agent or the Lenders arising out of any
circumstance that has limited or restricted the availability of credit under
the Credit Agreement, (iii) the termination or expiration of the Agreement and
Plan of Merger by
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and among the Company, CAI Wireless Systems, Inc. and CAI Transactions P, Inc.
dated March 28, 1995 (the "Merger Agreement") to be an immediate Event of
Default under the Credit Agreement, granting the Agent and the Lenders all
rights and remedies arising under the Credit Agreement as a consequence of such
Event of Default, including, without limitation, the right to declare all
obligations under the Credit Agreement immediately due and payable and to
exercise all rights and remedies with respect to any or all of the collateral
provided for under the Credit Agreement, and (iv) the requirement that all
obligations under the Credit Agreement become immediately due and payable upon
the effectiveness of the merger contemplated by the Merger Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits:
2.1 Limited Consent to Credit Agreement, dated as of
April 26, 1995, by and among ACS Enterprises, Inc.,
ACS Home Systems, Inc., Apartment Cable Systems,
Inc., each of the other credit parties listed on the
signature pages thereof, the financial institutions
listed on the signature page thereof and Banque
Paribas, as Agent.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ACS ENTERPRISES, INC.
By: /s/ CHARLES J. MALLON
------------------------------
Charles J. Mallon
Chief Financial Officer
Dated: May 9, 1995
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page Number
- - ------- ---------------------- -----------
<S> <C>
2.1 Limited Consent to Credit
Agreement, dated as of April
26, 1995, by and among ACS
Enterprises, Inc., ACS Home
Systems, Inc., Apartment Cable
Systems, Inc., each of the other
credit parties listed on the
signature pages thereof, the
financial institutions listed
on the signature page thereof
and Banque Paribas, as Agent.
</TABLE>
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EXECUTION
ACS ENTERPRISES, INC.
ACS HOME SYSTEMS, INC.
APARTMENT CABLE SYSTEMS, INC.
LIMITED CONSENT
TO CREDIT AGREEMENT
This LIMITED CONSENT TO CREDIT AGREEMENT (this "CONSENT") is dated as
of April 26, 1995 and entered into by and among ACS ENTERPRISES, INC., a
Pennsylvania corporation ("COMPANY"), ACS HOME SYSTEMS, INC., a Pennsylvania
corporation ("HOME SYSTEMS") and APARTMENT CABLE SYSTEMS, INC., a Pennsylvania
corporation ("APARTMENT CABLE"); each of Company, Home Systems and Apartment
Cable being also referred to herein individually as a "BORROWER" and
collectively as the "BORROWERS"), EACH OF THE OTHER CREDIT PARTIES LISTED ON
THE SIGNATURE PAGES HEREOF, THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE
PAGES HEREOF (each individually referred to herein as a "LENDER" and
collectively as "LENDERS"), and BANQUE PARIBAS ("BANQUE PARIBAS"), as agent for
Lenders (in such capacity, "AGENT"), and is made with reference to that certain
Credit Agreement dated as of November 9, 1993, as amended by that certain First
Amendment to Credit Agreement dated as of August 24, 1994 and that certain
Second Amendment to Credit Agreement (the "SECOND AMENDMENT") dated as of
December 9, 1994 (as amended and currently in effect, the "CREDIT AGREEMENT"),
by and among Borrowers, Lenders and Agent. Capitalized terms used herein
without definition shall have the same meanings herein as set forth in the
Credit Agreement.
RECITALS
WHEREAS, pursuant to the Second Amendment, Borrowers agreed that no
more than $15,000,000 in Total Utilization of Revolving Loan Commitments would
be available under the Credit Agreement unless and until the Borrowers could
comply with the Specified Covenants, and that such $15,000,000 of availability
would be conditioned on Borrowers' ability to comply with the covenants as
amended by the Second Amendment, including the covenants set forth in
subsection 6.19 of the Credit Agreement (the "LIMITED AVAILABILITY
COVENANTS") and the other conditions set forth in the Credit Agreement;
WHEREAS, Borrowers have been unable to comply with either the
Specified Covenants or the Limited Availability Covenants, but pursuant to
waivers and consents granted by Lenders under the Credit Agreement prior to the
date hereof, have been permitted to borrow, and currently have outstanding,
$17,332,000 in Revolving Loans under the Credit Agreement;
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WHEREAS, Borrowers have stated that they are still unable to comply
with the Specified Covenants or with the Limited Availability Covenants and
therefore will be unable to borrow under the Credit Agreement unless Lenders
waive such covenants;
WHEREAS, the Company has entered into that certain Agreement and Plan
of Merger dated as of March 28, 1995 (the "MERGER AGREEMENT") with CAI Wireless
Systems, Inc., a Connecticut corporation ("CAI") and CAI Transactions P, Inc.,
a Delaware corporation ("CAIP") pursuant to which CAIP proposes to merge with
and into Company with Company as the surviving corporation (the "MERGER");
WHEREAS, Borrowers have agreed to repay all outstanding Obligations
and terminate the Credit Agreement and each of the other Loan Documents in
accordance with their respective terms prior to, or concurrently with, the
consummation of the Merger;
WHEREAS, Borrowers currently have requested that they be permitted to
borrow up to an additional $4,000,000 in Revolving Loans as set forth below
without being required to comply with the Specified Covenants or the Limited
Availability Covenants; and
WHEREAS, given the inability of Borrowers to comply with the Specified
Covenants and the Limited Availability Covenants, Lenders are willing to permit
such borrowings solely in reliance upon the pending Merger and the resulting
repayment of Obligations.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1.
LIMITED CONSENT AND AGREEMENT
The parties hereto agree as follows:
(i) Borrowers may borrow (i) up to an additional
$2,000,000 in Revolving Loans after the Effective Date, (as defined
below) and prior to May 29, 1995 and (ii) up to an additional
$2,000,000 in Revolving Loans (such that the aggregate outstanding
principal amount of Revolving Loans shall not in any event exceed
$21,332,000), on or after the later of (a) May 29, 1995 or (b) the
date on which the Stage I Closing (as defined in that certain
Securities Purchase Agreement dated as of March 28, 1995 and related
to the Merger Agreement, among CAI, BANX Partnership and the other
parties named therein) shall have occurred, without being required to
comply with the Specified Covenants or the Limited Availability
Covenants as long as at the time of each such borrowing (i) no Event
of Default or Potential Event of Default (other than as may result
solely from non-compliance with the Specified Covenants and/or the
Limited Availability Covenants) shall have occurred and be continuing
and Borrowers shall have otherwise satisfied all conditions required
as a condition to borrowing under the Credit Agreement and
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material agreements related thereto shall be shall be in full force
and effect and all parties thereto shall have complied with all terms
thereof required to be complied with by such party as of such date,
without giving effect to any waiver or modification of any such terms;
(ii) Other than as set forth above, Borrowers shall not be
permitted to borrow any additional Revolving Loans under the Credit
Agreement (including any reborrowing of any amounts repaid after the
date hereof);
(iii) the termination or expiration of the Merger Agreement
or any of the material agreements related thereto at any time and for
any reason shall constitute an immediate Event of Default under the
Credit Agreement and Agent and Lenders shall have all rights and
remedies arising under the Credit Agreement and the other Loan
Documents as a consequence of an Event of Default including, without
limitation, the right to declare all Obligations immediately due and
payable and to exercise all rights and remedies with respect to any
or all of the Collateral; and
(iv) in order to induce Lenders to enter into this
Consent, Borrowers hereby agree to release, waive or otherwise abandon
any claim they or any of their respective Affiliates may have or
hereafter may have against Agent, any Lender or any of their
respective officers, directors, employees, agents, advisors or
Affiliates, based on, arising out of, or relating to, any Event of
Default or any other event or circumstance, or waiver or consent
related thereto, in each case through the Effective Date, that has
limited or otherwise restricted the availability of credit under the
Credit Agreement, including, without limitation the requirement that
Borrowers comply with the Specified Covenants and/or the Limited
Availability Covenants as a condition to such availability and the
agreements set forth in this Consent.
SECTION 2.
BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Consent and to amend the
Credit Agreement in the manner provided herein, each of the Credit Parties
represents and warrants to each Lender that the following statements are true,
correct and complete:
A. POWER AND AUTHORITY. Each Credit Party has all requisite
corporate or other power and authority to enter into this Consent and to carry
out the transactions contemplated by, and perform its obligations under, the
Credit Agreement as modified hereby.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Consent has been duly authorized by all necessary corporate or other power
on the part of each Credit Party.
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C. NO CONFLICT. The execution, delivery and performance of this
Consent by each of the Credit Parties does not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to any
Credit Party or any of their respective Subsidiaries, the Certificate of
Incorporation and Bylaws of any Credit Party or any of their respective
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on any Credit Party or any of their respective Subsidiaries,
(ii) conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any Contractual Obligation of any Credit
Party or any of their respective Subsidiaries, (iii) result in or require the
creation or imposition of any Lien upon any of the properties or assets of any
Credit Party or any of their respective Subsidiaries (other than any Liens
created under any of the Loan Documents in favor of Agent on behalf of
Lenders), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of any Credit Party or
any of their respective Subsidiaries, except for such approvals or consents
which will be obtained on or before the Effective Date and disclosed in writing
to Lenders.
D. GOVERNMENTAL CONSENTS. The execution and delivery and
performance by each Credit Party of this Consent does not and will not require
any registration with, consent or approval of, or notice to, or other action
to, with or by, any federal, state or other governmental authority or
regulatory body.
E. BINDING OBLIGATION. This Consent has been duly executed and
delivered by each Credit Party and this Consent and the Credit Agreement as
modified hereby are the legally valid and binding obligations of each Credit
Party which is a party thereto, enforceable against each such Credit Party in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 4 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Effective Date to the same extent as though made on
and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Consent that would constitute an Event of Default or a Potential Event of
Default.
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SECTION 3.
ACKNOWLEDGEMENT AND CONSENT
Each of License Co., ACS Ohio, Inc., ACS California, Inc., ACS License
Ohio, Inc., ACS License California, Inc., ACS License Pennsylvania, Inc.,
Valley Wireless Cable, Inc., Metrocable, Inc., Metropolitan Satellite Corp.
and Sonnenberg hereby consents to this Consent and agrees that each Loan
Document to which it is a party shall continue in full force and effect and
shall be valid and enforceable and shall not be impaired or affected by the
execution of this Consent and is hereby ratified and confirmed.
SECTION 4.
MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
(i) This Consent shall be limited expressly as written
and except as specifically modified by this Consent, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(ii) The execution, delivery and performance of this
Consent shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power
or remedy of Agent or any Lender under, the Credit Agreement or any of
the other Loan Documents.
B. FEES AND EXPENSES. Borrowers acknowledge that all costs, fees
and expenses as described in subsection 9.2 of the Credit Agreement incurred by
Agent and its counsel with respect to this Consent and the documents and
transactions contemplated hereby shall be for the account of Borrowers.
C. HEADINGS. Section and subsection headings in this Consent are
included herein for convenience of reference only and shall not constitute a
part of this Consent for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS CONSENT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Consent may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same document; signature pages may be detached from
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multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document. This Consent
shall become effective upon the execution of a counterpart hereof by Requisite
Lenders, Borrowers, and each of the other Credit Parties and receipt by
Borrowers and Agent of written or telephonic notification of such execution and
authorization of delivery thereof (the date of such effectiveness being the
"EFFECTIVE DATE".
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWERS:
ACS ENTERPRISES, INC.,
a Pennsylvania corporation
By: /s/ ALAN SONNENBERG
-------------------------------
Name: Alan Sonnenberg
Title: Chairman/CEO
ACS HOME SYSTEMS, INC.,
a Pennsylvania corporation
By: /s/ ALAN SONNENBERG
-------------------------------
Name: Alan Sonnenberg
Title: Chairman/CEO
APARTMENT CABLE SYSTEMS, INC.,
a Pennsylvania corporation
By: /s/ ALAN SONNENBERG
-------------------------------
Name: Alan Sonnenberg
Title: Chairman/CEO
S-1
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OTHER CREDIT PARTIES:
ACS LICENSE, INC.,
a Pennsylvania corporation
By: /s/ ALAN SONNENBERG
-------------------------------
Name: Alan Sonnenberg
Title: Chairman/CEO
ACS OHIO, INC.
By: /s/ ALAN SONNENBERG
-------------------------------
Name: Alan Sonnenberg
Title: Chairman/CEO
ACS CALIFORNIA, INC.
By: /s/ ALAN SONNENBERG
-------------------------------
Name: Alan Sonnenberg
Title: Chairman/CEO
ACS LICENSE OHIO, INC.
By: /s/ ALAN SONNENBERG
-------------------------------
Name: Alan Sonnenberg
Title: Chairman/CEO
ACS LICENSE CALIFORNIA, INC.
By: /s/ ALAN SONNENBERG
-------------------------------
Name: Alan Sonnenberg
Title: Chairman/CEO
S-2
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ACS LICENSE PENNSYLVANIA, INC.
By: /s/ ALAN SONNENBERG
-------------------------------
Name: Alan Sonnenberg
Title: Chairman/CEO
VALLEY WIRELESS CABLE, INC.
By: /s/ ALAN SONNENBERG
-------------------------------
Name: Alan Sonnenberg
Title: Chairman/CEO
METROCABLE, INC.
By: /s/ ALAN SONNENBERG
-------------------------------
Name: Alan Sonnenberg
Title: Chairman/CEO
METROPOLITAN SATELLITE CORP.
By: /s/ ALAN SONNENBERG
-------------------------------
Name: Alan Sonnenberg
Title: Chairman/CEO
ALAN SONNENBERG,
as individual
/s/ ALAN SONNENBERG
---------------------------------
Alan Sonnenberg
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