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 (Date of earliest event reported): December 22, 2009
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Exact Name of Registrant as
Specified in Its Charter: CALAMP CORP.
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DELAWARE 0-12182 95-3647070
_____________________________ ____________ _____________
State or Other Jurisdiction of Commission I.R.S. Employer
Incorporation or Organization File Number Identification No.
Address of Principal Executive Offices: 1401 N. Rice Avenue
Oxnard, CA 93030
_________________________
Registrant's Telephone Number, Including
Area Code: (805) 987-9000
_________________________
Former Name or Former Address,
if Changed Since Last Report: Not applicable
_____________________________
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14.a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 Entry into a Material Definitive Agreement
On December 22, 2009, CalAmp Corp. (the "Company") entered into a Loan
and Security Agreement (the "Loan Agreement") with Square 1 Bank of Durham,
North Carolina. This revolving credit facility has a two-year term and
provides for borrowings up to the lesser of $12 million or 85% of the
Company's eligible accounts receivable. Outstanding borrowings under this
facility bear interest at Square 1 Bank's prime rate plus 2.0%, subject to
minimum interest of 6.0% per annum or $20,000 per month, whichever is
greater. Interest is payable on the last day of each calendar month. The
Company paid a loan fee of $120,000 to Square 1 Bank in connection with this
new credit facility.
The Loan Agreement contains a financial covenant that requires the
Company to maintain minimum levels of earnings before interest, income taxes,
depreciation, amortization and other noncash charges ("EBITDA"). The Loan
Agreement also provides for a number of standard events of default, including
a provision that a material adverse change constitutes an event of default
that permits the lender, at its option, to accelerate the loan. Among other
provisions, the Loan Agreement also requires a lock-box and cash collateral
account whereby cash remittances from the Company's customers are directed to
the cash collateral account and which amounts are applied to reduce the
revolving loan principal balance. Borrowings under the Loan Agreement are
secured by substantially all of the assets of the Company and its domestic
subsidiaries.
The Company had no relationship with Square 1 Bank, material or
otherwise, prior to entering into the Loan Agreement.
On December 22, 2009, the Company also entered into a Subordinated Note
and Warrant Purchase Agreement (the "Note Purchase Agreement") with the nine
investors listed in Exhibit I of the agreement (filed as Exhibit 10.2 of this
Form 8-K) and incorporated herein by reference. The Company raised
$1,925,000 from this issuance of subordinated debt (the "Subordinated
Notes"). The Subordinated Notes bear interest at 12% per annum and have a
maturity date of December 22, 2012. Interest is payable semiannually on the
last day of June and December, and all Subordinated Note principal is payable
at the maturity date. The Company also issued a total of 192,500 common
stock purchase warrants (the "Warrants") to the Subordinated Note holders at
an exercise price of $4.02 per share, which represents a 20% premium to the
average closing price of the Company's common stock for the 20 consecutive
trading days prior to December 22, 2009 The Subordinated Notes and Warrants
were sold in a private placement transaction, have not been registered under
the Securities Act of 1933, as amended, and were not and may not be offered
or sold in the United States absent registration or an applicable exemption
from registration requirements.
Pursuant to the Note Purchase Agreement, the Company and the holders of
the Warrants entered into a Registration Rights Agreement, dated December 22,
2012 (the "Warrant Registration Rights Agreement"). Under the Warrant
Registration Rights Agreement, if the Company proposes to register any shares
of its common stock, it will use reasonable efforts to effect the
registration of the shares of common stock underlying the Warrants.
The Company sold $325,000 in principal amount of Subordinated Notes to
three investors affiliated with the Company.
B. Riley & Co. LLC, the Company's financial advisor, will be paid a
placement fee of $209,000 in connection with the Square 1 Bank Loan Agreement
and the Subordinated Note and Warrant Purchase Agreement. Of the $1,925,000
of Subordinated Notes issued by the Company, a total of $300,000 of the notes
were purchased by B. Riley & Co. LLC or by an employee retirement trust
thereof.
The foregoing description of each of the Loan Agreement and the Note
Purchase Agreement is qualified in its entirety by reference to the
agreements attached as Exhibits 10.1 and 10.2 and incorporated herein by
reference. These agreements have been included to provide investors with
information regarding their terms and are not intended to provide any other
factual information about the Company.
ITEM 1.02 Termination of a Material Definitive Agreement
On December 22, 2009, the Company paid in full the $13,955,000
outstanding principal balance of its credit facility with Bank of Montreal
and two other banks, which had a maturity date of December 31, 2009. The
funds for this payoff were provided by a drawdown of $7,780,000 under the new
revolving credit facility with Square 1 Bank and proceeds of $1,925,000 from
the issuance of subordinated debt as described in Item 1.01 above,
supplemented by proceeds of $4,250,000 from the private placement of common
stock described in Item 3.02 below. As a result of this payoff, the credit
facility with Bank of Montreal and the two other banks was terminated.
The Company had no material relationship with Bank of Montreal and the
two other banks, other than in respect of the credit facility that was
terminated.
ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant
The Company has disclosed in Item 1.01 above the information relating to
the Company's direct financial obligations under the Square 1 Bank Loan and
Security Agreement and the Subordinated Note and Warrant Purchase Agreement,
both dated December 22, 2009.
ITEM 3.02 Unregistered Sales of Equity Securities
On December 22, 2009, the Company sold 1,931,819 shares of common stock
for $4,250,000 in a private placement with 13 investors, none of whom were
officers, directors, or other affiliates of the Company. In addition, as
disclosed in Item 1.01 above, the Company issued Warrants to purchase shares
of the Company's common stock upon exercise of such Warrants. The
information set forth in Item 1.01 above with respect to the Warrants and the
shares of common stock issuable upon exercise thereof is incorporated by
reference in this Item 3.02.
The Company issued these securities in reliance upon an exemption from
registration under Rule 506 of Regulation D or Section 4(2) of the Securities
Act of 1933, as amended. The Company agreed to use commercially reasonable
efforts to file a registration statement with the Securities and Exchange
Commission and have it declared effective for purposes of registering these
privately-issued securities.
ITEM 9.01 Financial Statements and Exhibits
(c) Exhibits
10.1 Loan and Security Agreement dated December 22, 2009 between
Square 1 Bank, CalAmp Corp. and CalAmp's domestic subsidiaries.
10.2 Subordinated Note and Warrant Purchase Agreement dated December
22, 2009 between CalAmp Corp. and nine investors.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
CALAMP CORP.
December 29, 2009 By: /s/ Richard K. Vitelle
_________________ _________________________
Date Richard K. Vitelle,
Vice President-Finance
(Principal Financial Office)