Exhibit 10.1
FOURTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT
This Fourth Amendment and Waiver to Credit Agreement (herein, the
"Amendment") is entered into as of February 29, 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) waive certain
existing defaults, (ii) make $1,000,000 available to the Borrower for
Revolving Loans and Letters of Credit (but such Letters of Credit shall not
support or collateralize performance bonds) and terminate the remaining
Revolving Credit Commitments such that the Revolving Commitments aggregate
$3,375,000 after giving effect to this Amendment, and (iii) 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. WAIVER.
The Borrower has disclosed to the Lenders that it was in default of
Sections 8.21(a) (Total Leverage Ratio), 8.21(b) (Net Worth) and 8.21(c)
(Fixed Charge Coverage Ratio) of the Credit Agreement as of June 2, 2007,
August 31, 2007 and November 30, 2007 (collectively, the "Existing
Defaults"). The Borrower hereby requests that the Lenders waive the
Existing Defaults, and, subject to the satisfaction of the conditions
precedent set forth in Section 3 below, the Lenders hereby waive the
Existing Defaults. The waivers set forth herein shall not extend to any
matters or time periods other than as set forth above.
SECTION 2. AMENDMENTS.
Subject to the satisfaction of the conditions precedent set forth in
Section 3 below, the Credit Agreement shall be and hereby is amended as
follows:
2.1. 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
SCHEDULED PRINCIPAL
PAYMENT DATE PAYMENT ON TERM LOANS
03/31/08 $750,000
06/30/08 $750,000
09/30/08 $750,000
12/31/08 $750,000
03/31/09 $1,250,000
, 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 June 30, 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:
(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; provided
however, that the mandatory prepayments made by virtue of the
first three payments received on account of the MIR3, Inc. note
shall be applied to the principal installment due March 31, 2008.
For further clarity, all subsequent payments on the MIR3, Inc.
note shall be applied to the remaining amortization payments on
the Term Loan in inverse order of maturity.
2.3. Section 2.1 of the Credit Agreement shall be amended by adding new
subsections (d), (e) and (f) to read as follows:
(d) Exit Fee. The Borrower shall pay to the Administrative Agent for
the ratable account of the Lenders in accordance with their
respective Percentages an exit fee of $500,000 which shall be
fully earned on the Fourth Amendment Effective Date and shall be
due and payable on the Revolving Credit Termination Date;
provided, however, (i) if the Obligations are paid in full on or
before December 31, 2008, such fee 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 such fee shall be reduced to $300,000.
(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 Revolving Credit Termination Date; 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 to by 40%.
(f) Audit Fees. The Borrower shall pay to the Administrative Agent
for its own use and benefit charges for audits of the Collateral
performed by the Administrative Agent or its agents or
representatives in such amounts as the Administrative Agent may
from time to time request (the Administrative Agent acknowledging
and agreeing that such charges shall be computed in the same
manner as it at the time customarily uses for the assessment of
charges for similar collateral audits); provided, however, that
in the absence of any Default and Event of Default, the Borrower
shall not be required to pay the Administrative Agent for more
than two (2) such audits per calendar year.
2.4. 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:
<table>
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:
<s> <c> <c> <c> <c> <c> <c>
I Greater than 0.750% 1.750% 2.00% 3.00% 0.250%
or equal to
2.25 to 1.0
II Less than 0.625% 1.625% 2.00% 3.00% 0.225%
2.25 to 1.0,
but greater
than or equal
to 1.75 to 1.0
III Less than 1.75 0.500% 1.500% 2.00% 3.00% 0.200%
to 1.0, but
greater than
or equal to
1.25 to 1.0
IV Less than 0.500% 1.375% 2.00% 3.00% 0.175%
1.25 to 1.0,
but greater
than or equal
to 1.00 to 1.0
V Less than 1.00 0.500% 1.250% 2.00% 3.00% 0.150%
to 1.0
</table>
2.5. The definition of Revolving Credit Commitment shall be amended by
restating the last sentence thereof to read as follows:
The Borrower and the Lenders acknowledge and agree that the Revolving
Credit Commitments of the Lenders aggregate $3,375,000 on the Fourth
Amendment Effective Date.
2.6. 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 June 30, 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.
2.7. Section 5.1 of the Credit Agreement shall be amended by adding the
following new definitions in appropriate alphabetical sequence:
"Existing Letters of Credit" means those Letters of Credit identified
on Schedule 5.1 attached hereto and made a part hereof.
"Fourth Amendment Effective Date" means the date upon which all of the
conditions precedent to the effectiveness of the Fourth Amendment and
Waiver to this Agreement have been satisfied or waived to the
satisfaction of the Administrative Agent.
2.8. Section 6.4 of the Credit Agreement (Use of Proceeds; Margin Stock)
shall be amended by adding a proviso at the end hereof to read as follows:
"; provided, however, that the Revolving Credit may not be used to
support or collateralize any performance bonds."
2.9. Section 8.5 of the Credit Agreement shall be amended by (i) replacing
clause (k) to read as set forth below, (ii) replacing the period at the end
of clause (n) with "; and", and (iii) adding a new clause (o) to read as set
forth below:
(k) No later than Monday of each week (beginning August 20, 2007),
the Borrower shall provide to the Administrative Agent and the
Lenders a cash balance report (reflecting actual cash receipts
and cash disbursements of the Borrower and its Subsidiaries from
the prior week, projected cash receipts and cash disbursements of
the Borrower and its Subsidiaries for such week and a 13-week
cash balance forecast showing projected cash receipts and cash
disbursements of the Borrower and its Subsidiaries over the
following 13-week period, together with a reconciliation of
actual cash receipts and cash disbursements of the Borrower and
its Subsidiaries from the prior week against the cash balance
forecast previously furnished to the Administrative Agent and the
Lenders and showing any deviations on a cumulative basis),
prepared by the Borrower and in form and substance, and with such
detail, as the Administrative Agent may request;
(o) No later than 20 calendar days after the last day of each fiscal
month, the Borrower shall provide to the Administrative Agent and
the Lenders (i) a report of revenues for such fiscal month broken
out by division and otherwise in form and substance satisfactory
to the Administrative Agent, (ii) an accounts receivable aging
list for the ten (10) largest Receivables at such time and (iii)
a copy of the consolidating balance sheet of the Borrower and its
Subsidiaries as of the last day of such fiscal month and the
consolidating statement of income of the Borrower and its
Subsidiaries for such fiscal month and for the year-to-date
period then ended showing results of operations for each business
unit, each in reasonable detail and each accompanied by
comparative figures for the corresponding date and period in the
previous fiscal year, prepared by the Borrower in accordance with
GAAP (subject to the absence of footnote disclosures and year-end
audit adjustments) and certified to by its chief financial
officer or another officer of the Borrower acceptable to the
Administrative Agent, and showing variance of such actual results
of operations from the most recent forecast delivered to the
Administrative Agent."
2.10. 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:
3 Months ending 5/31/2008 ($604,000)
6 Months ending 8/30/2008 $801,000
9 Months ending 11/29/2008 $2,918,000
12 Months ending 2/28/2009 $6,020,000
12 Months ending 5/30/2009 $10,026,000
(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 two
(2) months to be less than:
SALES OF WIRELESS DIVISION SHALL
FISCAL MONTH ENDING NOT BE LESS THAN:
4/26/2008 $9,616,000
5/31/2008 $10,646,000
6/28/2008 $11,418,000
7/26/2008 $12,030,000
8/30/2008 $13,144,000
9/27/2008 $13,159,000
10/25/2008 $12,949,000
11/29/2008 $13,217,000
12/27/2008 $12,525,000
1/24/2009 $12,507,000
2/28/2009 $13,597,000
3/28/2009 $13,086,000
4/25/2009 $12,930,000
5/30/2009 $14,061,000
2.11. Section 9 of the Credit Agreement shall be amended by deleting the
period at the end of clause (k) and replacing it with "; or" and adding a
new clause (l) to read as follows:
(l) Echostar extends the final authorization/clearance for shipment
of new generation hardware (e.g., DPP Triple) by the Borrower
beyond June 30, 2008.
2.12. Schedule 1 to the Credit Agreement shall be amended in its entirety
to read as set forth on Schedule 1 attached hereto.
SECTION 3. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:
3.1. The Borrower, the Administrative Agent and the Lenders shall have
executed and delivered this Amendment.
3.2. The Administrative Agent shall have received and approved a quarterly
forecast for the Borrower and its Subsidiaries through August 31, 2009.
3.3. 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.
3.4. Legal matters incident to the execution and delivery of this Amendment
shall be satisfactory to the Administrative Agent and its counsel.
3.5. The Guarantors shall have executed their reaffirmation,
acknowledgment, and consent in the space provided for that purpose below.
3.6. The Borrower shall have paid any invoices for professional services
rendered on behalf of the Administrative Agent, including legal fees.
3.7. $3,778,078 (plus accrued interest thereon) held in an escrow account
by the Administrative Agent from proceeds of the TelAlert sale shall be
applied to the several installments of the Term Loans in inverse order of
maturity, except that to the extent the escrow account includes amounts
collected by Borrower on the MIR3 note, such amounts will be applied to the
Term Loan principal payment due on March 31, 2008.
SECTION 4. 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 5. MISCELLANEOUS.
5.1. 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.
5.2. 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.
5.3. 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.
5.4. 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.
5.5. 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]
<page>
This Fourth Amendment and Waiver to Credit Agreement is entered into as of
the date and year first above written.
"BORROWER"
CALAMP CORP.
By /s/ Richard K. Vitelle
_____________________________
Name: Richard K. Vitelle
Title: Vice President of Finance
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/ Geoffrey R. McConnell
_______________________________
Name: Geoffrey R. McConnell
Title: Managing Director
UNION BANK OF CALIFORNIA, N.A.
By /s/ Daniel J. Isenberg
__________________________
Name: Daniel J. Isenberg
Title: Vice President
BANK OF THE WEST
By /s/ Carrie Lee
__________________________
Name: Carrie Lee
Title: Vice President
<page>
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/ Sheri Davis
__________________________
Name: Sheri Davis
Title: President
CALAMP SOLUTIONS, INC.
By /s/ Sheri Davis
__________________________
Name: Sheri Davis
Title: President
DATARADIO HOLDINGS, INC.
By /s/ Garo Sarkissian
__________________________
Name: Garo Sarkissian
Title: President
DATARADIO CORPORATION
By /s/ Michael Burdiek
__________________________
Name: Michael Burdiek
Title: President
DATARADIO COR LTD.
By /s/ Richard Vitelle
__________________________
Name: Richard Vitelle
Title: Treasurer
<page>
SCHEDULE 1
COMMITMENTS
TERM LOAN BALANCE AS OF
THE FOURTH AMENDMENT REVOLVING CREDIT
NAME OF LENDER EFFECTIVE DATE COMMITMENT
Bank of Montreal, Chicago Branch $20,876,190.48 $2,250,000.00
Union Bank of California, N.A. $5,219,047.62 $562,500.00
Bank of the West $5,219,047.62 $562,500.00
TOTAL $31,314,285.72 $3,375,000.00
============== =============
<page>
SCHEDULE 5.1
EXISTING LETTERS OF CREDIT
L/C # AMOUNT EXPIRY DATE BENEFICIARY
BMCH154978OS $1,375,000 10/31/08 Travelers Indemnity Company
BMCH166063OS $1,000,000 2/29/08 Evercom International
Limited