Exhibit 10.1
CREDIT AGREEMENT
by and between
INFOSONICS CORPORATION, a Maryland corporation
and
WELLS FARGO HSBC TRADE BANK, N.A.
Dated as of
October 6, 2005
Exhibit A - Addendum to Credit Agreement
Exhibit B - Revolving Credit Facility Supplement
Exhibit C - Collateral/Credit Support Document
Exhibit D - Borrowing Base Certificate
WELLS FARGO HSBC TRADE BANK
CREDIT AGREEMENT
INFOSONICS CORPORATION, a Maryland corporation ("Borrower"), organized under the
laws of the State of Maryland whose chief executive office is located at the
address specified after its signature to this Agreement ("Borrower's Address")
and WELLS FARGO HSBC TRADE BANK, N.A. ("Trade Bank"), whose address is specified
after its signature to this Agreement, have entered into this CREDIT AGREEMENT
as of October 6, 2005. ("Effective Date"). All references to this "Agreement"
include those covenants included in the Addendum to Agreement ("Addendum")
attached as Exhibit A hereto.
I.
CREDIT FACILITY
1.1
THE FACILITY. SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, TRADE BANK WILL MAKE AVAILABLE TO BORROWER A REVOLVING CREDIT
FACILITY ("FACILITY") FOR WHICH A FACILITY SUPPLEMENT ("SUPPLEMENT") IS ATTACHED
AS EXHIBIT B HERETO. ADDITIONAL TERMS FOR THE FACILITY. THE FACILITY WILL BE
AVAILABLE FROM THE CLOSING DATE UP TO AND UNTIL OCTOBER 1, 2006 ("FACILITY
TERMINATION DATE"). COLLATERAL AND CREDIT SUPPORT REQUIRED FOR THE FACILITY IS
SET FORTH IN EXHIBIT C HERETO. DEFINITIONS FOR THOSE CAPITALIZED TERMS NOT
OTHERWISE DEFINED ARE CONTAINED IN ARTICLE 8 BELOW.
1.2
CREDIT EXTENSION LIMIT. THE AGGREGATE OUTSTANDING AMOUNT OF ALL
CREDIT EXTENSIONS MAY AT NO TIME EXCEED THE LESSER OF (A)
TWENTY MILLION
DOLLARS ($20,000,000) OR (B) THE BORROWING BASE IN EFFECT FROM TIME TO TIME
("OVERALL CREDIT LIMIT"). THE AGGREGATE OUTSTANDING AMOUNT OF ALL CREDIT
EXTENSIONS OUTSTANDING AT ANY TIME UNDER REVOLVING CREDIT FACILITY MAY NOT
EXCEED THAT AMOUNT SPECIFIED AS THE "CREDIT LIMIT" IN THE SUPPLEMENT FOR THE
FACILITY.
AN AMOUNT EQUAL TO 100% OF EACH UNFUNDED CREDIT EXTENSION SHALL BE
USED IN CALCULATING THE OUTSTANDING AMOUNT OF CREDIT EXTENSIONS UNDER THIS
AGREEMENT.
1.3
OVERADVANCE. ALL CREDIT EXTENSIONS MADE HEREUNDER SHALL BE ADDED
TO AND DEEMED PART OF THE OBLIGATIONS WHEN MADE. IF, AT ANY TIME AND FOR ANY
REASON, THE AGGREGATE OUTSTANDING AMOUNT OF ALL CREDIT EXTENSIONS MADE PURSUANT
TO THIS AGREEMENT EXCEEDS THE DOLLAR LIMITATION IN SECTION 1.2 OR THE BORROWING
BASE, THEN BORROWER SHALL IMMEDIATELY PAY TO TRADE BANK ON DEMAND, IN CASH, THE
AMOUNT OF SUCH EXCESS.
1.4
REPAYMENT; INTEREST AND FEES. EACH FUNDED CREDIT EXTENSION SHALL
BE REPAID BY BORROWER, AND SHALL BEAR INTEREST FROM THE DATE OF DISBURSEMENT AT
THOSE PER ANNUM RATES AND SUCH INTEREST SHALL BE PAID, AT THE TIMES SPECIFIED IN
THE SUPPLEMENT, NOTE OR FACILITY DOCUMENT. BORROWER AGREES TO PAY TO TRADE BANK
WITH RESPECT TO (A) THE REVOLVING CREDIT FACILITY, INTEREST AT A PER ANNUM RATE
EQUAL TO (I) AT A FLUCTUATING RATE PER ANNUM EQUAL TO THE PRIME RATE IN EFFECT
FROM TIME TO TIME, OR (II) WELLS FARGO'S LIBOR RATE PLUS 1.5% AS SPECIFIED IN
THE NOTE, AND (B)