Exhibit 10.1
FIFTH AMENDMENT TO CREDIT AGREEMENT
This Fifth Amendment to Credit Agreement (herein, the "Amendment") is
entered into as of October 24, 2008, among CalAmp Corp., a Delaware
corporation (the "Borrower"), the lenders party hereto (herein, the
"Lenders"), and Bank of Montreal, as administrative agent for the Lenders
(the "Administrative Agent").
PRELIMINARY STATEMENTS:
A. The Borrower, certain subsidiaries of the Borrower, as guarantors,
the Administrative Agent, and the other Lenders have entered into that
certain Credit Agreement dated as of May 26, 2006 (such Credit Agreement, as
the same has been or may be amended, modified or restated from time to time,
hereinafter referred to as the "Credit Agreement"). All defined terms used
herein shall have the same meaning as in the Credit Agreement unless
otherwise defined herein.
B. The Borrower has requested that the Lenders (i) extend the
Revolving Credit Termination Date and the Term Loan Maturity Date, and
(ii) make certain other amendments to the Credit Agreement, and the Lenders
are willing to so waive and so amend the Credit Agreement, all in the manner
and on the terms and conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS.
Subject to the satisfaction of the conditions precedent set forth in
Section 2 below, the Credit Agreement shall be and hereby is amended as
follows:
1.1. Section 1.8(a) of the Credit Agreement shall be amended and restated
in its entirety to read as follows:
Section 1.8. Maturity of Loans. (a) Scheduled Payments of Term
Loans. The Borrower shall make principal payments on the Term Loans in
installments on the last day of each March, June, September, and December in
each year, with the amount of each such principal installment to equal the
amount set forth in Column B below shown opposite of the relevant due date as
set forth in Column A below:
COLUMN A COLUMN B
PAYMENT DATE SCHEDULED PRINCIPAL
PAYMENT ON TERM LOANS
12/31/08 $750,000
03/31/09 $1,250,000
06/30/09 $1,600,000
09/30/09 $1,600,000
,it being agreed that the final payment of both principal and
interest not previously paid on the Term Loans shall be due and
payable on December 31, 2009 (the "Term Loan Maturity Date"). Each
such principal payment shall be applied to the Lenders holding the
Term Loans pro rata based upon their Term Loan Percentages.
2.2. Section 1.9 (Prepayments) of the Credit Agreement shall be amended
and restated in its entirety to read as follows:
Section 1.9. Prepayments. (a) Optional. The Borrower may prepay in
whole or in part (but, if in part, then: (i) if such Borrowing is of Base
Rate Loans, in an amount not less than $100,000, (ii) if such Borrowing is of
Eurodollar Loans, in an amount not less than $500,000, and (iii) in each
case, in an amount such that the minimum amount required for a Borrowing
pursuant to Section 1.5 hereof remains outstanding) any Borrowing of
Eurodollar Loans at any time upon 3 Business Days prior notice by the
Borrower to the Administrative Agent or, in the case of a Borrowing of Base
Rate Loans, notice delivered by the Borrower to the Administrative Agent no
later than 12:00 Noon (Chicago time) on the date of prepayment (or, in any
case, such shorter period of time then agreed to by the Administrative
Agent), such prepayment to be made by the payment of the principal amount to
be prepaid and, in the case of any Term Loans or Eurodollar Loans, accrued
interest thereon to the date fixed for prepayment plus any amounts due the
Lenders under Section 1.12 hereof.
(b) Mandatory. (i) If after the Closing Date the Borrower or any
Subsidiary shall issue any Indebtedness for Borrowed Money, other than
Indebtedness for Borrowed Money permitted by Section 8.7(a)-(e) and (g)-(m)
hereof, the Borrower shall promptly notify the Administrative Agent of the
estimated Net Cash Proceeds of such issuance to be received by or for the
account of the Borrower or such Subsidiary in respect thereof. Promptly upon
receipt by the Borrower or such Subsidiary of Net Cash Proceeds of such
issuance, the Borrower shall prepay the Term Loans in an aggregate amount
equal to 100% of the amount of such Net Cash Proceeds. The Borrower
acknowledges that its performance hereunder shall not limit the rights and
remedies of the Lenders for any breach of Section 8.7 hereof or any other
terms of the Loan Documents.
(ii) If the Borrower or any Subsidiary shall at any time or from
time to time make or agree to make a Disposition of, or shall suffer an Event
of Loss with respect to, any Property (including, without limitation, any
intellectual property) or shall receive any Extraordinary Income, then the
Borrower shall promptly notify the Administrative Agent of such proposed
Disposition or Event of Loss or Extraordinary Income (including the amount of
the estimated Net Cash Proceeds to be received by the Borrower or such
Subsidiary in respect thereof) and, promptly upon receipt (but in no event
later than 5 Business Days after receipt) by the Borrower or such Subsidiary
of the Net Cash Proceeds of such Disposition or Event of Loss or
Extraordinary Income, the Borrower shall prepay the Obligations in an
aggregate amount equal to 50% of the amount of all such Net Cash Proceeds;
provided that (x) so long as no Default or Event of Default then exists, this
subsection shall not require any such prepayment with respect to Net Cash
Proceeds received on account of an Event of Loss so long as such Net Cash
Proceeds are applied to replace or restore the relevant Property in
accordance with the relevant Collateral Documents, (y) this subsection shall
not require any such prepayment with respect to Net Cash Proceeds received on
account of Dispositions during any fiscal year of the Borrower not exceeding
$50,000 in the aggregate so long as no Default or Event of Default then
exists, and (z) in the case of any Disposition not covered by clause (y)
above, so long as no Default or Event of Default then exists, if the Borrower
states in its notice of such event that the Borrower or the relevant
Subsidiary intends to reinvest, within 90 days of the applicable Disposition,
the Net Cash Proceeds thereof in assets similar to the assets which were
subject to such Disposition, then the Borrower shall not be required to make
a mandatory prepayment under this subsection in respect of such Net Cash
Proceeds to the extent such Net Cash Proceeds are actually reinvested in such
similar assets with such 90-day period. Promptly after the end of such
90-day period, the Borrower shall notify the Administrative Agent whether the
Borrower or such Subsidiary has reinvested such Net Cash Proceeds in such
similar assets, and, to the extent such Net Cash Proceeds have not been so
reinvested, the Borrower shall promptly prepay the Obligations in the amount
of such Net Cash Proceeds not so reinvested. The amount of each such
prepayment shall be applied to the outstanding Term Loans until paid in full
and then to the Revolving Credit. If the Administrative Agent or the
Required Lenders so request, all proceeds of such Disposition or Event of
Loss shall be deposited with the Administrative Agent (or its agent) and held
by it in the Collateral Account. So long as no Default or Event of Default
exists, the Administrative Agent is authorized to disburse amounts
representing such proceeds from the Collateral Account to or at the
Borrower's direction for application to or reimbursement for the costs of
replacing, rebuilding or restoring such Property.
(iii) The Borrower shall, on each date the Revolving Credit
Commitments are reduced pursuant to Section 1.13 hereof, prepay the Revolving
Loans and, if necessary, prefund the L/C Obligations by the amount, if any,
necessary to reduce the sum of the aggregate principal amount of Revolving
Loans and L/C Obligations then outstanding to the amount to which the
Revolving Credit Commitments have been so reduced.
(iv) Unless the Borrower otherwise directs, prepayments of Loans
under this Section 1.9(b) shall be applied first to Borrowings of Base Rate
Loans until payment in full thereof with any balance applied to Borrowings of
Eurodollar Loans in the order in which their Interest Periods expire. Each
prepayment of Loans under this Section 1.9(b) shall be made by the payment of
the principal amount to be prepaid and, in the case of any Term Loans or
Eurodollar Loans accrued interest thereon to the date of prepayment together
with any amounts due the Lenders under Section 1.12 hereof. Each prefunding
of L/C Obligations shall be made in accordance with Section 9.4 hereof.
(c) Any amount of Revolving Loans paid or prepaid before the
Revolving Credit Termination Date may, subject to the terms and conditions of
this Agreement, be borrowed, repaid and borrowed again. No amount of the
Term Loans paid or prepaid may be reborrowed, and, in the case of any partial
prepayment, such prepayment shall be applied to the remaining amortization
payments on the Term Loans in inverse order of maturity.
1.3. Section 2.1 of the Credit Agreement shall be amended by amending
subsection (e) to read as follows:
(e) Default Interest Prior to Fourth Amendment Effective Date. The
amount of interest accrued by virtue of the imposition of the default rate of
interest pursuant to Section 1.10 hereof through the Fourth Amendment
Effective Date was $204,086 (the "Default Interest Amount"). The Borrower
acknowledges and agrees that the Default Interest Amount is justly and truly
owing by the Borrower without defense, offset or counterclaim and is due and
payable on the June 30, 2009; provided, however (i) if the Obligations are
paid in full on or before December 31, 2008, the Default Interest Amount
shall be forgiven, and (ii) if the Borrower receives at least $5,000,000 of
new cash equity or cash proceeds of Subordinated Debt on or before December
31, 2008, then the Default Interest Amount shall be reduced by 40%.
1.4. Section 2.1 of the Credit Agreement shall be amended by adding a new
subsection (g) to read as follows:
(g) Fifth Amendment Fee. The Borrower shall pay to the
Administrative Agent for the ratable account of the Lenders in accordance
with their respective Percentages a Fifth Amendment fee of $150,000 which
shall be fully earned on the Fifth Amendment Effective Date and shall be due
and payable on the Revolving Credit Termination Date; provided, however, if
the Obligations are paid in full on or before June 30, 2009, such fee shall
be forgiven.
1.5. The definition of "Applicable Margin" appearing in Section 5.1 of
the Credit Agreement shall be amended by replacing the table therein with the
following:
APPLICABLE APPLICABLE APPLICABLE APPLICABLE
MARGIN FOR MARGIN FOR MARGIN FOR MARGIN FOR
BASE RATE EURODOLLAR BASE RATE EURODOLLAR
LOANS UNDER LOANS UNDER LOANS UNDER LOANS UNDER
TERM CREDIT AND TERM CREDIT REVOLVING REVOLVING
TOTAL REIMBURSEMENT AND LETTER OF CREDIT AND CREDIT AND
LEVERAGE OBLIGATIONS CREDIT FEE REIMBURSEMENT LETTER
RATIO FOR EXISTING FOR EXISTING OBLIGATIONS OF CREDIT APPLICABLE
FOR SUCH LETTERS OF LETTERS OF FOR NEW FEE FOR NEW MARGIN FOR
PRICING CREDIT CREDIT LETTERS LETTERS COMMITMENT
LEVEL DATE SHALL BE: SHALL BE: OF CREDIT OF CREDIT FEE SHALL BE:
I Greater than 2.750% 3.750% 4.00% 5.00% 0.250%
or equal to
2.25 to 1.0
II Less than 2.625% 3.625% 4.00% 5.00% 0.225%
2.25 to 1.0,
but greater
than or equal
to 1.75 to 1.0
III Less than 1.75 2.500% 3.500% 4.00% 5.00% 0.200%
to 1.0, but
greater than
or equal to
1.25 to 1.0
IV Less than 2.500% 3.375% 4.00% 5.00% 0.175%
1.25 to 1.0,
but greater
than or equal
to 1.00 to 1.0
V Less than 1.00 2.500% 3.250% 4.00% 5.00% 0.150%
to 1.0
1.6. The definition of Revolving Credit Termination Date appearing in
Section 5.1 shall be amended and restated in its entirety to read as follows:
"Revolving Credit Termination Date" means December 31, 2009,
or such earlier date on which the Revolving Credit Commitments are
terminated in whole pursuant to Section 1.13, 9.2 or 9.3 hereof.
1.7. Section 5.1 of the Credit Agreement shall be amended by adding the
following new definitions in appropriate alphabetical sequence:
"Event of Loss" means, with respect to any Property, any of the following:
(a)any loss, destruction or damage of such Property or (b)any condemnation,
seizure, or taking, by exercise of the power of eminent domain or otherwise,
of such Property, or confiscation of such Property or the requisition of the
use of such Property.
"Extraordinary Income" means any income from (a) settlement of any
litigation (including, without limitation, the Xxxxxx litigation), (b) any
tax refunds, or (c) any extraordinary income (in accordance with GAAP).
"Fifth Amendment Effective Date" means the date upon which all of the
conditions precedent to the effectiveness of the Fifth Amendment to this
Agreement have been satisfied or waived to the satisfaction of the
Administrative Agent.
1.8. Section 8.21 (Financial Covenants) shall be amended and restated in
its entirety to read as follows:
Section 8.21. Financial Covenants. (a) Total Leverage Ratio. Reserved.
(b) Tangible Net Worth. Reserved
(c) Fixed Charge Coverage Ratio. Reserved.
(d) Minimum EBITDA. The Borrower shall not, as of the last day of each
period set forth below, permit EBITDA for such period to be less
than:
EBITDA SHALL
PERIOD NOT BE LESS THAN:
9 Months ending 11/29/2008 $1,410,000
12 Months ending 2/28/2009 $3,895,000
12 Months ending 5/30/2009 $6,998,000
12 Months ending 8/29/2009 $8,548,000
12 Months ending 11/28/2009 $11,021,000
(e) Minimum Sales of Wireless DataCom Division. As of the last day of
each fiscal month set forth below, the Borrower shall not permit
sales of the Wireless DataCom Division for the past three (3)
months to be less than:
SALES OF WIRELESS DIVISION SHALL
FISCAL MONTH ENDING NOT BE LESS THAN:
10/25/2008 $17,646,000
11/29/2008 $17,890,000
12/27/2008 $18,612,000
1/24/2009 $19,902,000
2/28/2009 $20,574,000
3/28/2009 $21,167,000
4/25/2009 $20,640,000
5/30/2009 $20,192,000
6/27/2009 $20,002,000
7/25/2009 $20,140,000
8/29/2009 $20,901,000
9/26/2009 $21,035,000
10/24/2009 $21,186,000
11/28/2009 $21,390,000
12/26/2009 $21,538,000
SECTION 2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of all
of the following conditions precedent:
2.1. The Borrower, the Administrative Agent and each of the Lenders shall
have executed and delivered this Amendment.
2.2. The Administrative Agent shall have received and approved a
quarterly forecast for the Borrower and its Subsidiaries through February 28,
2011.
2.3. The Administrative Agent shall have received copies (executed or
certified, as may be appropriate) of all legal documents or proceedings taken
in connection with the execution and delivery of this Amendment to the extent
the Administrative Agent or its counsel may reasonably request.
2.4. Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Administrative Agent and its counsel.
2.5. The Guarantors shall have executed their reaffirmation,
acknowledgment, and consent in the space provided for that purpose below.
2.6. The Borrower shall have paid any invoices for professional services
rendered on behalf of the Administrative Agent, including legal fees.
SECTION 3. REPRESENTATIONS.
In order to induce the Lenders to execute and deliver this Amendment, the
Borrower hereby represents to the Lenders that as of the date hereof after
giving effect to this Amendment the representations and warranties set forth
in Section 6 of the Credit Agreement are and shall be and remain true and
correct in all material respects, except to the extent the same expressly
relate to an earlier date (except that the representations contained in
Section 6.5 shall be deemed to refer to the most recent financial statements
of the Borrower delivered to the Administrative Agent) and the Borrower is in
compliance with the terms and conditions of the Credit Agreement and no
Default or Event of Default has occurred and is continuing under the Credit
Agreement or shall result after giving effect to this Amendment.
SECTION 4. MISCELLANEOUS.
4.1. The Borrower and the Guarantors heretofore executed and delivered to
the Administrative Agent certain Collateral Documents and the Borrower
hereby, and the Guarantors by signing below, acknowledge and agree, that,
notwithstanding the execution and delivery of this Amendment, the Collateral
Documents remain in full force and effect and the rights and remedies of the
Agent and the Lenders, the obligations of the Borrower and the Guarantors
thereunder and the liens and security interests created and provided for
thereunder remain in full force and effect and shall not be affected,
impaired or discharged hereby. Nothing herein contained shall in any manner
affect or impair the priority of the liens and security interests created and
provided for by the Collateral Documents as to the indebtedness which would
be secured thereby prior to giving effect to this Amendment.
4.2. Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit
Agreement, the Notes, or any other instrument or document executed in
connection therewith, or in any certificate, letter or communication issued
or made pursuant to or with respect to the Credit Agreement, any reference in
any of such items to the Credit Agreement being sufficient to refer to the
Credit Agreement as amended hereby.
4.3. The Borrower agrees to pay on demand all reasonable costs and
expenses of or incurred by the Administrative Agent in connection with the
negotiation, preparation, execution and delivery of this Amendment, including
the reasonable fees and expenses of counsel for the Administrative Agent.
4.4. This Amendment may be executed in any number of counterparts, and by
the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the
parties hereto may execute this Amendment by signing any such counterpart and
each of such counterparts shall for all purposes be deemed to be an original.
This Amendment shall be governed by the internal laws of the State of
New York.
4.5. FOR VALUE RECEIVED, INCLUDING WITHOUT LIMITATION, THE AGREEMENTS OF
THE LENDERS IN THIS AGREEMENT, THE BORROWER HEREBY RELEASES THE
ADMINISTRATIVE AGENT AND EACH LENDER, ITS CURRENT AND FORMER SHAREHOLDERS,
DIRECTORS, OFFICERS, AGENTS, EMPLOYEES, ATTORNEYS, CONSULTANTS, AND
PROFESSIONAL ADVISORS (COLLECTIVELY, THE "RELEASED PARTIES") OF AND FROM ANY
AND ALL DEMANDS, ACTIONS, CAUSES OF ACTION, SUITS, CONTROVERSIES, ACTS AND
OMISSIONS, LIABILITIES, AND OTHER CLAIMS OF EVERY KIND OR NATURE WHATSOEVER,
BOTH IN LAW AND IN EQUITY, KNOWN OR UNKNOWN, WHICH THE BORROWER HAS OR EVER
HAD AGAINST THE RELEASED PARTIES, INCLUDING, WITHOUT LIMITATION, THOSE
ARISING OUT OF THE EXISTING FINANCING ARRANGEMENTS BETWEEN THE BORROWER AND
THE LENDERS, AND THE BORROWER FURTHER ACKNOWLEDGES THAT, AS OF THE DATE
HEREOF, IT DOES NOT HAVE ANY COUNTERCLAIM, SET-OFF, OR DEFENSE AGAINST THE
RELEASED PARTIES, EACH OF WHICH THE BORROWER HEREBY EXPRESSLY WAIVES.
[SIGNATURE PAGE TO FOLLOW]
This Fifth Amendment to Credit Agreement is entered into as of the date and
year first above written.
"BORROWER"
CALAMP CORP.
By /s/ Xxxxxxx X. Gold
_____________________________
Name: Xxxxxxx X. Gold
Title: President and Chief Executive Officer
Accepted and agreed to by the Lenders.
"LENDERS"
BANK OF MONTREAL, acting through its Chicago Branch, in its individual
capacity as a Lender, as L/C Issuer, and as Administrative Agent
By /s/ Xxxxx Xxxxxx
_______________________________
Name: Xxxxx Xxxxxx
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By /s/ Xxxxxx X. Xxxxxxxx
__________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
BANK OF THE WEST
By /s/ Xxxxxx Xxx
__________________________
Name: Xxxxxx Xxx
Title: Vice President
REAFFIRMATION, ACKNOWLEDGEMENT AND CONSENT OF GUARANTORS
Each of the undersigned, the Guarantors, heretofore executed and
delivered to the Administrative Agent, on behalf of the Lenders, the Credit
Agreement or an Additional Guarantor Supplement. Each of the undersigned
hereby consents to the Fourth Amendment and Waiver to Credit Agreement (the
"Amendment") set forth above and confirms that its Guaranty, and all
obligations of the undersigned thereunder, remains in full force and effect.
Each of the undersigned further agrees that the consent of the undersigned to
any further amendments to the Credit Agreement shall not be required as a
result of this consent having been obtained. Each of the undersigned
acknowledges that the Lenders are relying on the assurances provided herein
in entering into the Amendment.
"GUARANTORS"
CALAMP SOLUTIONS HOLDINGS, INC.
By /s/ Xxxxx Xxxxx
__________________________
Name: Xxxxx Xxxxx
Title: President
CALAMP SOLUTIONS, INC.
By /s/ Xxxxx Xxxxx
__________________________
Name: Xxxxx Xxxxx
Title: President
DATARADIO HOLDINGS, INC.
By /s/ Xxxx Xxxxxxxxxx
__________________________
Name: Xxxx Xxxxxxxxxx
Title: President
DATARADIO CORPORATION
By /s/ Xxxxxxx Xxxxxxx
__________________________
Name: Xxxxxxx Xxxxxxx
Title: President
DATARADIO COR LTD.
By /s/ Xxxx Xxxxxxxxxx
__________________________
Name: Xxxx Xxxxxxxxxx
Title: President
