EXHIBIT 10.1
AMENDMENT AGREEMENT NUMBER SEVEN
TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT AGREEMENT NUMBER SEVEN TO LOAN AND SECURITY AGREEMENT
(this "Seventh Amendment") dated as of May 25, 2006, is entered into by and
between CALAMP CORP., a Delaware corporation formerly known as CALIFORNIA
AMPLIFIER, INC. ("Borrower") and U.S. Bank National Association, a national
banking association ("Bank").
RECITALS
A. Borrower and Bank are parties to that certain Loan and Security
Agreement dated as of May 2, 2002, between Borrower and Bank (the "Original
Loan and Security Agreement"), as amended by that certain Amendment Agreement
Number One to Loan and Security Agreement dated as of April 3, 2003, between
Borrower and Bank, that certain Amendment Agreement Number Two to Loan and
Security Agreement dated as of July 3, 2003, between Borrower and Bank, that
certain Amendment Agreement Number Three to Loan and Security Agreement dated
as of January 5, 2004, between Borrower and Bank, that certain Amendment
Agreement Number Four to Loan and Security Agreement dated as of February 27,
2004, between Borrower and Bank, that certain Amendment Agreement Number Five
to Loan and Security Agreement dated as of November 23, 2004, between Borrower
and Bank, and that certain Amendment Agreement Number Six to Loan and Security
Agreement dated as of October 25, 2005 (the Original Loan and Security
Agreement, as amended by such amendments, the "Existing Loan and Security
Agreement"). The Existing Loan and Security Agreement, as amended and
modified by this Seventh Amendment, is referred to hereinafter as the "Loan
and Security Agreement." Capitalized terms not defined herein shall have the
meanings ascribed to them in the Existing Loan and Security Agreement.
B. As of the date hereof, Borrower has repaid in full all Advances made
by Bank to Borrower under the Existing Loan and Security Agreement. Under the
Existing Loan and Security Agreement, however, Bank has issued, and there are
currently outstanding, two standby letters of credit issued by Bank for the
account of Borrower in the aggregate amount of $2,875,000.00 (collectively,
the "Existing Letters of Credit").
C. Borrower has requested that Bank modify the Existing Loan and
Security Agreement to, among other things, delete certain financial reporting
requirements and financial covenants from the Loan and Security Agreement.
D. Bank is willing to so amend the Existing Loan and Security Agreement
on the terms and conditions herein.
AGREEMENT
1. RECITALS. The Recitals above are incorporated herein by this reference
as if fully set forth herein. Capitalized terms not otherwise defined in the
Recitals or otherwise in this Seventh Amendment shall have the meanings
ascribed to them in the Existing Loan and Security Agreement.
2. EXTENSION OF REVOLVING MATURITY DATE. The definition of "Revolving
Maturity Date" in Section 1.1 of the Existing Loan and Security Agreement is
deleted in its entirety and replaced with the following:
"Revolving Maturity Date" means August 3, 2007.
3. DECREASE OF MAXIMUM REVOLVING AMOUNT. All references in that certain
Revolver Note dated as of May 2, 2002, by Borrower in favor of Bank, as
amended, to the principal amount thereof, are hereby deleted and replaced with
"Two Million Eight Hundred Seventy-Five Thousand and 00/100 Dollars" or
"$2,875,000.00," as appropriate. In addition, the definition of "Maximum
Revolving Amount" in Section 1.1 of the Existing Loan and Security Agreement
is deleted in its entirety and replaced with the following:
"Maximum Revolving Amount" means $2,875,000.00.
4. MODIFICATION OF LETTERS OF CREDIT PROVISION. Subsections (a) and (b) of
Section 2.3 of the Existing Loan and Security Agreement are deleted in their
entirety and replaced with the following:
(a) Bank shall permit Letter of Credit No. SLCPPDX01728 in the amount of
$1,875,000.00 issued by Bank for the benefit of Travelers Indemnity Company
and Letter of Credit No. SLCPPDX01383 in the amount of $1,000,000.00 issued by
Bank for the benefit of Evercom International Limited (collectively, the
"Existing Letters of Credit") to remain outstanding through the Revolving
Maturity Date, subject to the terms and conditions of this Agreement and all
other documents and instruments issued in connection herewith, including,
without limitation, the terms and conditions that provide to Bank the right
not to renew one or both of the Existing Letters of Credit.
(b) Bank shall have no obligation to issue for the account of Borrower
any Letters of Credit other than the Existing Letters of Credit.
5. EXPIRATION OF LETTERS OF CREDIT. Subject to all the terms and conditions
of this Seventh Amendment, the Existing Loan and Security Agreement that are
not inconsistent with this Seventh Amendment, and all other documents and
instruments issued in connection herewith, including, without limitation, the
terms and conditions that provide to Bank the right not to renew the Existing
Letters of Credit, the Existing Letters of Credit may remain outstanding
through and including August 3, 2007 for so long as (a) is necessary to
support the underlying obligations of Borrower to the beneficiaries of such
Existing Letters of Credit and (b) there continues to exist, from and after
July 3, 2006, either (i) a Safekeeping Account (as defined below) subject to
the provisions of a Pledge Agreement (as defined below) and a Control
Agreement (as defined below) that are in full force and effect, or (ii) a
Pledged Account (as defined below) subject to the provisions of a Pledge
Agreement that is in full force and effect. Borrower shall continue to be
subject to the provisions of the Loan and Security Agreement, including,
without limitation, Section 2.3 of the Loan and Security Agreement (as
modified herein), with respect to the Existing Letters of Credit (and draws
made thereon), until the Existing Letters of Credit are no longer outstanding
and Bank has been reimbursed for any and all draws made on Letters of Credit
and other amounts that Borrower is obligated to pay to Bank under the Loan and
Security Agreement.
6. LETTER OF CREDIT FACILITY. Notwithstanding any provision to the contrary
in the Existing Loan Agreement, or any Loan Document, as of the effectiveness
of this Seventh Amendment:
6.1 The only credit facility available to Borrower under the Existing
Loan and Security Agreement or any Loan Document shall be the letter of credit
facility described in Section 2.3 of the Loan and Security Agreement (as
modified by this Seventh Amendment). The credit facilities described in
Sections 2.1 and 2.2 of the Existing Loan and Security Agreement are
terminated.
6.2 Borrower shall have no right under the Loan and Security Agreement
or any other Loan Document (a) to receive Advances or any other loans, or (b)
have issued for its account any Letters of Credit other than the Existing
Letters of Credit.
6.3 All references in any Loan Document to a "maturity date" or final
date on which extensions of credit owed by Borrower to Bank are due and
payable are hereby deleted and replaced with "August 3, 2007." All references
in any Loan Document to a date beyond which the Existing Letters of Credit
shall not be extended are hereby deleted and replaced with "August 3, 2007."
7. SAFEKEEPING ACCOUNT OR PLEDGED ACCOUNT. As security for Borrower's
obligations to Bank under the Loan and Security Agreement and the other Loan
Documents, on or before July 3, 2006, Borrower shall either (a) deposit into a
deposit account at Bank opened through the U.S. Bank Money Center the amount
of $2,875,000.00 (such funds and account collectively, a "Safekeeping
Account"), which account and the amounts deposited therein shall be pledged to
Bank pursuant to a Pledge Agreement of even date herewith (a "Pledge
Agreement") and a Control Agreement of even date herewith (a "Control
Agreement") by and between Borrower and Bank in form and substance
satisfactory to Bank in its sole discretion, or (b) deposit into a deposit
account at Bank the amount of $2,875,000.00 (such funds and account
collectively, a "Pledged Account"), which account and the amounts deposited
therein shall be pledged to Bank pursuant to a Pledge Agreement by Borrower in
favor of Bank in form and substance satisfactory to Bank in its sole
discretion. During such time as any Existing Letter of Credit is issued and
outstanding, either (i) a Safekeeping Account, a Pledge Agreement and a
Control Agreement shall be valid, in full force and effect and not terminated
or expired, or (ii) a Pledged Account and a Pledge Agreement shall be valid,
in full force and effect and not terminated or expired.
FAILURE OF BORROWER TO PROVIDE TO BANK, ON OR BEFORE JULY 3, 2006, EITHER A
SAFEKEEPING ACCOUNT, A PLEDGE AGREEMENT AND A CONTROL AGREEMENT OR A PLEDGED
ACCOUNT AND A PLEDGE AGREEMENT, SHALL CONSTITUTE AN EVENT OF DEFAULT UNDER THE
LOAN AND SECURITY AGREEMENT AND THE LOAN DOCUMENTS.
8. DELETION OF FINANCIAL REPORTING REQUIREMENTS. Sections 6.2 and 6.3 of
the Existing Loan and Security Agreement (which require Borrower to provide
certain financial reports to Bank), are hereby deleted in their entirety.
9. DELETION OF FINANCIAL COVENANTS. Sections 7.1, 7.2, 7.6, 7.8, 7.10,
7.11, 7.12, 7.13, 7.16 and 7.20 of the Existing Loan and Security Agreement
(which contain financial covenants to be satisfied by Borrower), are hereby
deleted in their entirety.
10. REPRESENTATIONS, WARRANTIES AND COVENANTS. Before and after giving
effect to this Seventh Amendment, the representations and warranties in
Section 5 or elsewhere in the Existing Loan and Security Agreement shall be
true and correct as though such representations and warranties were made on
the date hereof. The execution by the Borrower of this Seventh Amendment
shall be deemed a representation that the Borrower has complied with the
foregoing condition. In addition, Borrower reaffirms all covenants contained
in Sections 6 and 7 or elsewhere in the Existing Loan and Security Agreement
(except as such covenants have been amended by this Seventh Amendment) as
though such covenants were made on the date hereof. All of the terms of the
Existing Loan and Security Agreement, except as expressly amended by this
Seventh Amendment, shall remain unchanged and in full force and effect, and
the remaking of the representations and warranties, and reaffirmation of the
covenants, does not in any way limit the continued applicability of all the
provisions of the Existing Loan and Security Agreement, as amended by this
Seventh Amendment.
11. CONDITIONS TO EFFECTIVENESS. This Seventh Amendment shall become
effective upon the execution of this Seventh Amendment by Borrower and Bank
and the delivery to Bank of such fully-executed Seventh Amendment on or before
July 3, 2006.
12. MISCELLANEOUS.
12.1 Continuing Validity. Except as expressly modified above, the
terms of the Existing Loan and Security Agreement and the other Loan Documents
shall remain unchanged and in full force and effect. Consent by Bank to this
Seventh Amendment does not waive Bank's right to require strict performance of
any and all of the documents executed in connection with any credit extended
pursuant to the Loan and Security Agreement or the other Loan Documents nor
does Bank's consent obligate Bank to make any future modifications. Nothing
in this Seventh Amendment shall constitute a satisfaction of the Loan and
Security Agreement or any of the Loan Documents.
12.2 Understanding of Borrower.
PRIOR TO SIGNING THIS SEVENTH AMENDMENT, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS SEVENTH AMENDMENT AND ANY AND ALL RELATED DOCUMENTS.
IN WITNESS WHEREOF, each of Borrower and Bank agree to the terms and
conditions of this Seventh Amendment as set forth above.
Borrower:
CALAMP CORP., a Delaware corporation
formerly known as CALIFORNIA AMPLIFIER, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxx, VP Finance and CFO
Bank:
U.S. BANK NATIONAL ASSOCIATION, a
national banking association
By: /s/ Xxxxx X. Xxxxxxx
---------------------
Xxxxx X. Xxxxxxx, Vice President