EXHIBIT 99 to Form 8-K dated May 21,
2009.
LIMITED FORBEARANCE AND FOURTH AMENDMENT
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TO AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
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THIS LIMITED
FORBEARANCE AND FOURTH AMENDMENT TO AMENDED AND
RESTATED
CREDIT AND SECURITY AGREEMENT (this "Agreement") is made effective
as of May 12,
2009, by and among WELLS FARGO BANK, NATIONAL
ASSOCIATION, acting through its
Wells Fargo Business Credit operating division (the
"Lender"), ALEIER, INC., a
Texas corporation, ("Aleier"), CIRRONET INC., a Georgia
corporation ("Cirronet"
and together with Aleier, sometimes collectively referred to as the
"Guarantors"
and each individually, a "Guarantor") and
RF MONOLITHICS, INC., a Delaware
corporation (the "Borrower" and
together with the Guarantors,
sometimes
hereinafter collectively referred to as the "Obligors").
RECITALS:
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A. The Borrower
and the Lender have entered into that certain
Amended
and Restated Credit and Security Agreement dated as of
August 29, 2007 (as the
same has been amended from time to time, the
"Credit Agreement"; capitalized
terms used herein and not otherwise defined having the
meanings given to such
terms in the Credit Agreement).
B. In
connection with the Credit Agreement,
Aleier has executed a
Guaranty Agreement, dated as of August 29, 2007
(as the same may be amended,
restated or modified from time to time, the "Aleier Guaranty").
C. In
connection with the Credit Agreement,
Cirronet has executed a
Guaranty Agreement, dated as of August 29, 2007
(as the same may be amended,
restated or modified from time to time, the "Cirronet
Guaranty").
D. On the date hereof,
the Borrower is in default of certain obligations
under the Credit Agreement, and, as a result, the Lender is
entitled to exercise
its rights and remedies under the Credit Agreement and the other
Loan Documents.
E. The
Obligors acknowledge existence of the
Enumerated Defaults
(defined below) and request that the Lender forbear
from exercising all of its
rights and remedies under the Loan Documents.
F. The Lender
is willing to forbear from exercising
certain of its
rights and remedies resulting from
the Enumerated Defaults for a period
beginning as of the date hereof through and
including 5:00 p.m. prevailing
Central time on the earlier of (i) a Forbearance Termination
Date and (ii) July
31, 2009 (the "Forbearance Period") upon the terms and
conditions set forth in
this Agreement.
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NOW,
THEREFORE, in consideration of the premises herein
contained and
other good and valuable consideration, the receipt and
sufficiency of which are
hereby acknowledged, the parties, intending
to be legally bound, covenant,
agree, acknowledge, represent and warrant as follows:
AGREEMENTS:
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1.
Incorporation of Recitals. Each of the above Recitals
is expressly
incorporated herein by reference and made a part hereof for all
purposes.
2. Reaffirmation
of Obligations. Each Obligor hereby acknowledges that
the Loan Documents and the
Obligations constitute the valid and
binding
obligations of such Obligor enforceable against such Obligor
in accordance with
their respective tents, and each Obligor hereby reaffirms its
obligations under
the Loan Documents. The Lender's
entry into this Agreement or any of the
documents referenced herein, its negotiations
with any Person with respect to
any Loan Documents, its conduct of
any analysis or investigation of any
Collateral for the Obligations or any Loan
Documents, its acceptance of any
payment from any Obligor or any other Person of any
payments made prior to the
date hereof, or any other action or failure
to act on the part of the Lender
shall not constitute (a) a modification of any Loan Document
or (b) a waiver of
any Default or Event of Default under the Credit Agreement,
including, without
limitation, the Enumerated Defaults, or any waiver of
any term or provision of
any Loan Document.
3.
Enumerated Defaults. As of the date hereof;
the Borrower hereby
acknowledges, confirms and agrees that (i) since
February 28, 2009, a Default
Period exists and (ii) the Borrower
has failed to comply with at least the
following covenants (collectively, the
"Enumerated Defaults"), each of which
presently constitutes an Event of Default and
entitles the Lender to exercise
its rights and remedies under the Credit Agreement and the
other Loan Documents
and other rights and remedies available under applicable law:
a. Section
6.2(a) relating to minimum Net Income during the
Borrower's
fiscal quarter ending February 28, 2009.
b. Section
6.2(b) relating to maximum loss in a fiscal quarter for
the
Borrower's fiscal quarter ending February 28, 2009.
c. Section
6.2(c) relating to minimum Debt Service Coverage Ratio
for
the Borrower's fiscal quarter ending February 28, 2009.
4. Forbearance. The
Lender hereby agrees to forbear from the exercise of
any of its rights and remedies under Section 7.2 of the Credit
Agreement and the
other Loan Documents as a result
of the Enumerated Defaults dining
the
Forbearance Period; provided, however, that such forbearance shall
be subject to
all terms and conditions set forth in this
Agreement and nothing contained
herein shall alter, affect or impair in any way the Lender's
ability to exercise
discretion as provided in the Credit Agreement or to
exercise any other rights
and remedies available to it
irrespective of whether a Default or Event of
Default exists.
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5. Forbearance Limited
to Enumerated Defaults. The Lender's forbearance
shall be limited solely to the Enumerated Defaults
existing on the date hereof
and to the inapplicability of the covenants found in Sections
6.2(a) and 6.2(c)
of the Credit Agreement during the Forbearance Period, and
the Lender shall not
be deemed to have waived any rights or remedies it may have
with respect to any
other existing or future breach,
Default or Event of Default arising or
occurring thereunder during the Forbearance Period or with respect
to any breach
of this Agreement.
6. Notice
Requirements Satisfied. Each Obligor acknowledges
that all
notice requirements embodied in the Loan Documents and
imposed upon the Lender
in connection with the Enumerated Defaults,
and the exercise of its remedies
therefor (together with all applicable cure
and/or grace periods) have been
satisfied (or shall be deemed to have been satisfied by this
Agreement) without
exception, and that upon the expiration of the
Forbearance Period, the Lender
shall, with respect to the Enumerated Defaults, have the full right
and power to
exercise all remedies granted to it thereunder
without further notice to the
Obligors or any of them and subject to no other conditions
precedent.
7. Agreement in
the Nature of Forbearance Only. Each
Obligor hereby
acknowledges that the Lender's obligations
under this Agreement are in the
nature of a conditional forbearance
only, and that the Lender has made no
agreement or commitment to modify or extend the
Loan Documents or to forbear
beyond the Forbearance Period, and that, upon the termination of
the Forbearance
Period, the Lender shall have the immediate and unconditional
right to exercise
all of its rights and remedies under the Loan Documents.
8. Termination of the
Forbearance Period. The Forbearance Period shall
end on the first to occur of the following (each
a "Forbearance Termination
Date"):
a.
Breach. A breach by any
Obligor of any of the
covenants,
representations and/or warranties set forth in this Agreement.
b. New Event
of Default. The occurrence of any
Default or Event of
Default under any one or more of the Loan Documents
other than the
Enumerated Defaults. For avoidance of doubt, a Default
or Event of
Default arising or occurring after
the date hereof is not an
Enumerated Default even though a prior
breach thereof may have
resulted in an Enumerated Default.
c. Creditor
Enforcement Action. Any creditor or
creditors of any
Obligor take or threaten any enforcement action (i.e., action
under
applicable law to
foreclose, execute or levy on, collect on, take
possession of or control of, or sell or
otherwise realize upon
(whether judicially or non-judicially) or
to lease, license or
otherwise dispose of (whether publicly or privately)
any assets of
an Obligor or otherwise to exercise or enforce remedial
rights with
respect to assets, to sue one or more of the
Obligors, to seek or
obtain a judgment against one or more of the Obligors, or to seek
or
commence, or join in the filing of a petition or
complaint seeking
insolvency, bankruptcy, receivership,
conservatorship or similar
proceedings) that, in the Lender's sole and
exclusive judgment,
would materially - interfere with the operation of the
business of
the Obligors or the Lender's ability to collect the
obligations of
the Obligors.
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d. Representations
and Warranties. The breach by the Obligors, or any
or some of them, of any representation or
warranty found in this
Agreement or any other Loan Document.
The Obligors agree that a breach of
Sections 8a., b., c., or d. of this
Agreement, or a breach of some or all of them, is
a Default and an Event of
Default. Upon termination of the Forbearance Period,
the Lender's agreement to
forbear shall terminate automatically
without further act or action by the
Lender, and the Lender shall be entitled to
exercise any and all rights and
remedies available under the Loan Documents
and this Agreement, at law, in
equity, or otherwise without any further lapse of time, expiration
of applicable
grace periods, or requirements of
notice, demand, presentment, notice of
dishonor, notice of acceleration, notice of
intent to accelerate, notice of
intent to foreclose, notice of sale, notice of protest
or other formalities of
any kind, all of which are hereby expressly waived by each
Obligor.
9.
Covenants. Each Obligor covenants,
agrees and acknowledges as
follows, intending to be legally bound:
a.
Forbearance Fee. The Borrower agrees to pay
to the Lender on the
date hereof a fully-earned fee of $10,000 for this Agreement and
the
Lender's agreements and forbearance contained herein
(after giving
effect to rebates, if any, the "Forbearance Fee").
b. Amendment of
Article I Definitions. The Obligors request and
agree
to the following permanent changes to
Section 1.1 of the Credit
Agreement:
(i) The following definitions are added to Section 1.1 of the
Credit Agreement in appropriate alphabetical order:
"Authenticated" means (a) to have signed;
or (b) to
have executed or to have otherwise adopted a symbol, or
have
encrypted or similarly processed a Record in whole
or in part, with
the present intent of
the
authenticating Person to identify the Person and adopt
or accept a Record.
"Daily Three Month LIBOR" means, for any day, the rate
of interest equal to LIBOR then in effect for delivery
for a three (3) month
period. When interest is
determined in relation to Daily Three Month LIBOR, each
change in the interest rate shall become effective each
Business Day that Lender determines that Daily
Three
Month
LIBOR has changed.
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"Record" means information that is
inscribed on a
tangible medium or that is stored in an electronic
or
other medium and is retrievable in perceivable form.
(ii) Clause (b)(ii)(B) of the definition of "Borrowing
Base"
is amended by deleting the dollar amount of
"$3,000,000" therefrom
and inserting in lieu thereof the following:
"$1,850,000 through
June 19, 2009, $1,700,000 from June 20, 2009 through July 19,
2009,
and $1,600,000 beginning July 20, 2009 and for each reporting
period
thereafter";
(iii)
The definition of "Interest Period" is deleted in
its
entirety;
(iv) The definition of "LIBOR" is amended and restated in its
entirety to read as follows:
"LIBOR" means the rate per annum (rounded upward, if necessary,
to the nearest whole I/16th of one percent) determined pursuant
to the following formula:
LIBOR
=
Base LIBOR
_______________________________
100% - LIBOR Reserve Percentage
(i) "Base LIBOR" means the rate per annum for
United
States dollar deposits quoted by Lender for the purpose
of calculating the effective LIBOR Advance
Rate for
loans that reference Daily Three Month
LIBOR as the
Inter-Bank Market Offered Rate in effect from time
to
time for three (3) month delivery of funds in
amounts
approximately equal to the principal amount
of such
loans. Borrower understands and agrees that Lender may
base
its quotation of the Inter-Bank Market
Offered
Rate upon such offers or other market indicators of the
Inter-Bank Market as Lender in its
discretion deems
appropriate,
including but not limited to the rate
offered for U.S. dollar
deposits on the London
Inter-Bank Market.
(ii) "LIBOR Reserve Percentage" means
the reserve
percentage prescribed by the Board of Governors of the
Federal Reserve System (or
any successor) for
"Eurocurrency Liabilities" (as defined in Regulation D
of the Federal Reserve Board, as amended), adjusted by
the Lender for expected changes
in such reserve
percentage during the applicable term of the Revolving
Note.
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(v) The definition of "LIBOR Advance Rate"
is amended and
restated in its entirety to read as follows:
"LIBOR Advance Rate" means an interest rate
equal to Daily
Three Month LIBOR plus 7.50%, which interest rate shall change
whenever Daily Three Month LIBOR changes.
(vi) The definition of "Maximum Line Amount" is
amended by
deleting therefrom the dollar amount of "$11,000,000" and
inserting
in lieu thereof a dollar amount of "$6,000,000".
c. Procedures for Line of Credit
Advances. The Obligors agree that
Section 2.2 of the Credit Agreement is amended and
restated in
its entirety to read as follows:
Section 2.2
Procedures for Line of Credit Advances.
(a) Advances Credited to Operating Account. All Advances
("Fixed
Rate Advances") shall be credited to Borrower's demand
deposit
account maintained with Lender (the "Operating Account"),
unless
the parties agree in an Authenticated
Record to disburse to
another account.
(b) Advances upon Borrower's Request. Borrower may
request one
or more Advances on any Business Day. No request for an
Advance
will be deemed received until Lender acknowledges
receipt, and
Borrower, if requested by Lender, confirms
the request in an
Authenticated Record. Borrower shall repay all Advances, even
if
the Person requesting the Advance on behalf of Borrower
lacked
authorization.
(c) Protective Advances; Advances to
Pay Indebtedness Due.
Lender may initiate a LIBOR Rate Advance on the Line of
Credit
in its sole discretion for any reason at
any time, without
Borrower's compliance with any of
the conditions of this
Agreement, and (i) disburse the
proceeds directly to third
Persons in order to protect Lender's interest in
Collateral or
to perform any of Borrower's obligations under this
Agreement,
or (ii) apply the proceeds to the amount of
any Indebtedness
then due and payable to Lender.
d. LIBOR Advances.
The Obligors agree that Section 2.3 of
the
Credit Agreement is amended and restated in its entirety to
read
as follows:
Section 2.3 LIBOR Advances.
(a) Each LIBOR Advance shall be funded at the LIBOR Advance
Rate
in effect on the Business Day that the Advance is to be made.
If
Borrower requests an Advance for delivery of funds on a
specific
Business Day, the request shall be made no later than 11:59
a.m.
Central Time on the Business Day on which
Borrower wants the
LIBOR Advance to be funded, specifying the
principal Advance
amount being requested. Rate Hedges may not be used with
respect
to
any Advance that utilizes the LIBOR Advance Rate.
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(b) Taxes and Regulatory Costs. The
Borrower shall pay the
Lender with respect to any Advance, upon demand and in
addition
to any other amounts due or to become due hereunder, any and
all
(i) withholdings, interest equalization taxes,
stamp taxes or
other taxes (except income and franchise taxes) imposed
by any
domestic or foreign governmental authority and
related in any
manner to LIBOR, and future, supplemental,
emergency or other
changes in the LIBOR Reserve
Percentage, assessment rates
imposed
by the Federal Deposit Insurance Corporation, or similar
requirements or costs imposed by
any domestic or foreign
governmental authority or resulting
from compliance by the
Lender with any request or directive (whether or not having
the
force of law) from any central bank
or other governmental
authority and related in any manner to LIBOR to the extent
they
are not included in the calculation of LIBOR.
In determining
which of the foregoing are attributable to
any LIBOR option
available to the Borrower hereunder, any reasonable
allocation
made by the Lender among its operations shall be conclusive
and
binding upon the Borrower.
e. Pricing. Floating Rate
Advances are no longer available under
Section 2.2 of the Credit Agreement. Existing Advances
and any
future Advances shall be LIBOR
Advances.
f. Interest. The Obligors
agree that Section 2.8(a) of the Credit
Agreement is amended and restated in its
entirety to read as
follows:
(a) Interest. Except
as provided in Section 2.3,
Section 2.8(c) and Section 2.8(f), the principal amount
of each Advance shall bear
interest at the LIBOR
Advance Rate.
g. Prepayment Fees. The
Obligors wee that-Section 2.9(f) of the
Credit Agreement is deleted in its entirety, and the
following
inserted in lieu thereof: "[omitted intentionally]".
h. Strict Compliance.
The Obligors will strictly comply
with
Section 2.11(a) of the Credit Agreement and
no proceeds of
Collateral shall be retained by any Obligor or deposited to
any
accounts other than the Collateral
Account and all account
debtors of the Borrower shall be notified in
writing that all
payments owed to the Borrower shall be sent to
the Lender via
desk-top deposit or to a Lender-controlled
lockbox if then
existing (in the case of checks) or by wire
transfer to the
Collateral Account (in all other instances). This provision
does
not prohibit the Borrower from
maintaining, subject to the
restrictions set forth in Section 11 of the Third
Amendment to
the Credit Agreement, the
Viewpoint Bank deposit account
referred-to therein or depositing a portion of Advances (not
to
exceed the amounts described in said Section 11) therein.
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i. No Waiver. The Obligors
agree that by making Revolving Advances
the Lender is not waiving any, and
retains (subject to the
provisions of this Agreement) all, of its rights under the
Loan
Documents and applicable law.
j. Cash Forecast; Etc.
The Obligors shall provide to the Lender
projections
of cash receipts and disbursements for the Borrower,
including a line item
cash forecast for
weekly cash
requirements, projected sales, projected
inventory positions,
projected loan balances and Availability, on a
rolling 4-week
basis ("Cash Forecast") and, not later than the first
Business
Day of each week, shall provide to
the Lender a compliance
certificate in the same spreadsheet form as the
rolling Cash
Forecast, certified as true and
accurate, that shows the
comparison of all cash forecast categories with actual levels
of
expenditures and revenues generated for the preceding week,
and
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