EXHIBIT 10.1
THIRD AMENDMENT AND CONSENT TO CREDIT AGREEMENT
This Third Amendment and Consent to Credit Agreement (herein, the
"Amendment") is entered into as of December 1, 2007, 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, the Lenders and the Administrative Agent have
previously entered into that certain Second Amendment and Consent to Credit
Agreement dated as of August 9, 2007 (the "Second Amendment"), which
described certain defaults.
C. The Borrower has requested that the Lenders (i) permit the Borrower
to issue a $5,000,000 non-interest bearing subordinated note, (ii) consent to
the Borrower's forgiving $1,000,000 of accounts receivable, and (iii) make
certain amendments to the Credit Agreement, and the Lenders are willing to so
consent 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. RESERVATION OF RIGHTS.
By execution of this Amendment, the Lenders have not waived the Existing
Defaults (as defined in the Second Amendment), or any other default which may
exist under the Loan Documents, and the Lenders expressly continue to reserve
all of their rights and remedies with respect to the Existing Defaults and
such other defaults.
SECTION 2. CONSENT.
The Borrower has notified the Lenders that the Borrower intends to enter
into a Settlement Agreement (the "Settlement Agreement") with EchoStar
Technologies Corporation, a Texas corporation ("EchoStar"), pursuant to
which, among other things, the Borrower will agree to issue an unsecured,
subordinated non-interest bearing note in the amount of $5,000,000 to
EchoStar (the "EchoStar Note") and the Borrower will, subject to the
performance of certain conditions by EchoStar, forgive accounts receivable
owing from EchoStar in an amount equal to $1,000,000. The Borrower has
requested that the Lenders consent to the issuance by the Borrower of the
EchoStar Note with no requirement for prepayment of any Net Cash Proceeds, if
any, from such issuance, notwithstanding Sections 8.7 and 1.9 of the Credit
Agreement, and to the forgiveness of $1,000,000 of accounts receivable,
notwithstanding Section 8.10 of the Credit Agreement and Section 5(c) of the
Security Agreement. To induce the Lenders to consent to the foregoing, by
signing below, the Borrower hereby represents, warrants and agrees that (a)
the EchoStar Note shall provide for a repayment schedule of $5.00 principal
amount per unit of Product (as defined in the Settlement Agreement) after
receipt from EchoStar of the payment for such Product with an acceleration of
the unpaid principal amount only if the Borrower becomes insolvent or files
for bankruptcy or upon a change of control of the Borrower in each case as
further provided in the EchoStar Note, (b) the execution of the Settlement
Agreement shall have occurred, if at all, on or before December 31, 2007 and
(c) the Borrower shall receive a cash payment of $1,277,458 from EchoStar for
payment of outstanding accounts receivable immediately following execution of
the Settlement Agreement. By signing below, the Lenders hereby consent to,
and only consent to, (i) the issuance of the EchoStar Note and (ii) to the
forgiveness of $1,000,000 of receivables owed from EchoStar as described
above, provided that the Borrower and its Subsidiaries satisfy the conditions
precedent set forth in Section 4 below. For further clarity, the Lenders are
only consenting as specifically set forth herein and not to any other
provisions of the Settlement Agreement.
SECTION 3. AMENDMENTS.
Subject to the satisfaction of the conditions precedent set forth in
Section 4 below, the Credit Agreement shall be and hereby is amended as
follows:
3.1. Section 5.1 of the Credit Agreement shall be amended by adding a
new definition in appropriate alphabetical sequence for the term "EchoStar
Note" to read as follows:
""EchoStar Note" means that certain unsecured, subordinated, non-
interest bearing promissory note of the Borrower payable to EchoStar
Technologies Corporation in the original principal amount of $5,000,000."
3.2. Section 8.7 of the Credit Agreement shall be amended by (i)
deleting the word "and" at the end of clause (m), (ii) deleting the period at
the end of clause (n) and inserting "; and" in lieu thereof and (iii)
inserting a new clause (o) to read as follows:
"(o) the indebtedness evidenced by the EchoStar Note, as reduced by
principal reductions thereon from time to time."
SECTION 4. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:
4.1. The Borrower, the Administrative Agent and the Lenders shall have
executed and delivered this Amendment.
4.2. The Administrative Agent shall have received and approved the
definitive Settlement Agreement, including the form of the EchoStar Note.
4.3. 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.
4.4. Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Administrative Agent and its counsel.
4.5. The Guarantors shall have executed their reaffirmation,
acknowledgment, and consent in the space provided for that purpose below.
4.6. The Borrower shall have paid any invoices for professional
services rendered on behalf of the Administrative Agent, including legal
fees.
SECTION 5. 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 (other than Section 6.22 thereof)
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 (other than the Existing Defaults) and no Default or Event
of Default (other than the Existing Defaults) has occurred and is continuing
under the Credit Agreement or shall result after giving effect to this
Amendment.
SECTION 6. MISCELLANEOUS.
6.1. 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.
6.2. 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.
6.3. 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.
6.4. 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.
[SIGNATURE PAGE TO FOLLOW]
This Third Amendment and Consent to Credit Agreement is entered into as
of the date and year first above written.
"BORROWER"
CALAMP CORP.
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President of Finance
Accepted and agreed to by the Required 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/ Xxxxxxxx X. XxXxxxxxx
--------------------------
Name Xxxxxxxx X. XxXxxxxxx
Title Managing Director
UNION BANK OF CALIFORNIA, N.A.
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Name Xxxxxx X. Xxxxxxxx
Title Vice President
BANK OF THE WEST
By
Name
Title
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 Third Amendment and Consent 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/ Xxxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Treasurer
DATARADIO CORPORATION
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Treasurer
DATARADIO COR LTD.
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Treasurer
