SIXTH AMENDMENT AND WAIVER TO AMENDED AND RESTATED CREDIT AGREEMENT
EXHIBIT 10.51
SIXTH AMENDMENT AND WAIVER
TO AMENDED AND RESTATED CREDIT AGREEMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS SIXTH AMENDMENT AND WAIVER TO AMENDED AND RESTATED CREDIT AGREEMENT (“Sixth Amendment”),
dated as of June 8, 2009, is made and entered into by and between MOTORCAR PARTS OF AMERICA, INC.,
a New York corporation (“Borrower”), and UNION BANK, N.A., a national banking association formerly
known as Union Bank of California, N.A. (“Bank”).
A. Borrower and Bank are parties to that certain Amended and Restated Credit Agreement dated as of
October 24, 2007, as amended by (i) that certain First Amendment dated as of January 14, 2008, (ii)
that certain Second Amendment dated as of May 13, 2008, (iii) that certain Third Amendment dated as
of August 19, 2008, (iv) that certain Fourth Amendment dated as of January 30, 2009 and (v) that
certain Fifth Amendment dated as of April 6, 2009 (as so amended, the “Agreement”), pursuant to
which Bank agreed to make various credit facilities available to Borrower in the respective amounts
provided for therein.
B. Pursuant to Section 6.5(a) of the Agreement, Borrower agreed, among other things, to achieve,
on a consolidated basis with its Subsidiaries, EBITDA of not less than Four Million Five Hundred
Thousand Dollars ($4,500,000) for each fiscal quarter ending after December 31, 2008. Borrower
failed to comply with Section 6.5(a) of the Agreement for the fiscal quarter ended March 31, 2009,
which failure constitutes an Event of Default under Section 8.1(c) of the Agreement.
C. Pursuant to Section 6.5(b) of the Agreement, Borrower agreed, among other things, to achieve,
on a consolidated basis with its Subsidiaries, total EBITDA of not less than Nineteen Million Five
Hundred Thousand Dollars ($19,500,000) as of the last day of each fiscal quarter ending after
December 31, 2008, for the four (4) consecutive fiscal quarters ending on such date. Borrower
failed to comply with Section 6.5(b) of the Agreement as of the close of the fiscal quarter ended
March 31, 2009, which failure constitutes an Event of Default under Section 8.1(c) of the
Agreement.
D. Borrower has requested that Bank agree to waive the Events of Default described in Recitals B
and C hereinabove. Bank is willing to so waive such Events of Default, subject, however, to the
terms and conditions of this Sixth Amendment.
E. In addition to the foregoing waivers, Borrower has requested that Bank agree to amend the
Agreement in certain respects. Bank is willing to so amend the Agreement, subject, however, to the
terms and conditions of this Sixth Amendment.
In consideration of the above recitals and of the mutual covenants and conditions contained
herein, Borrower and Bank agree as follows:
1. Defined Terms. Initially capitalized terms used herein which are not otherwise defined
herein shall have the meanings assigned thereto in the Agreement.
2. Waivers.
(a) Subject to the terms and conditions set forth in this Sixth Amendment, Bank hereby waives
the Events of Default that occurred under Section 8.1(c) of the Agreement as a result of Borrower’s
failure to
comply with Section 6.5(a) and Section 6.5(b) of the Agreement, all as more specifically described
in Recitals B and C hereinabove.
(b) The waivers provided for in subsection (a) of this Section 2 are limited precisely as
written and shall not be deemed to excuse Borrower’s further performance of Section 6.5(a) or
Section 6.5(b) of the Agreement, as amended by this Sixth Amendment, or of any other condition,
covenant or term contained in the Agreement, as amended by this Sixth Amendment, or any other Loan
Document. Any failure or delay on the part of Bank in the exercise of any right, power or
privilege under the Agreement, as amended by this Sixth Amendment, or any other Loan Document shall
not operate as a waiver thereof.
3. Amendments To The Agreement.
(a) Section 1 of the Agreement is hereby amended by adding new definitions of
“Reserve” and “Reserve Amount” thereto in the appropriate alphabetical order, which
shall read in full as follows:
“‘Reserve’ shall mean a borrowing reserve established in connection with the Revolving
Credit Commitment, which Reserve shall remain in effect thereunder if and only if Borrower is a
party to any factoring program or similar arrangement with a factor reasonably satisfactory to
Bank, pursuant to which the accounts receivable of Borrower owing by its largest account debtor are
being factored by such factor.”
“‘Reserve Amount’ shall mean the amount of the Reserve, which shall be Seven Million
Five Hundred Thousand Dollars ($7,500,000) from and after the effective date of the Sixth
Amendment.”
(b) Section 1 of the Agreement is hereby further amended by adding a new definition of
“Sixth Amendment” thereto in the appropriate alphabetical order, which shall read in full
as follows:
“‘Sixth Amendment’ shall mean that certain Sixth Amendment to this Agreement, dated as
of June 8, 2009, by and between Borrower and Bank.”
(c) Section 2.1 of the Agreement is hereby amended to read in full as follows:
“2.1 Revolving Credit Commitment. Subject to the terms and conditions of this Agreement, from
the effective date of the Sixth Amendment to this Agreement to but excluding the Revolving Credit
Commitment Termination Date, provided that no Event of Default then has occurred and is continuing,
Bank will make one or more revolving loans (collectively, the ‘Revolving Loans’ and individually, a
‘Revolving Loan’) to Borrower as Borrower may request from time to time; provided, however, that
(a) the aggregate outstanding principal amount of all such Revolving Loans at any one time shall
not exceed the difference of (i) Forty Million Dollars ($40,000,000) less
(ii) the Reserve Amount (the ‘Revolving Credit Commitment’) and (b) the aggregate principal amount
of all Revolving Loans made by Bank to Borrower during the term of this Agreement, the proceeds of
which are used by Borrower for the purpose of consummating a Permitted Acquisition, shall not
exceed Fifteen Million Dollars ($15,000,000). Each Revolving Loan requested and made hereunder
which bears interest at a rate based upon the Base Interest Rate (as such term is defined in the
Revolving Note) shall be in a principal amount of not less than Five Hundred Thousand Dollars
($500,000). Each Revolving Loan requested and made hereunder which bears interest at a rate based
upon the Reference Rate (as such term is defined in the Revolving Note) shall be in a principal
amount of not less than One Hundred Thousand Dollars ($100,000). Within the limits of time and
amount set forth in this Section 2.1, Borrower may borrow, repay and reborrow Revolving Loans under
the Revolving Credit Commitment. All Revolving Loans shall be requested before the Revolving
Credit Commitment Termination Date, on which date all outstanding principal of and accrued but
unpaid interest on all Revolving Loans shall be due and payable. Borrower’s obligation to repay
the outstanding principal amount of all Revolving Loans, together with accrued but unpaid interest
thereon, shall be evidenced by a promissory note issued by Borrower in favor of Bank (the
‘Revolving Note’) on the standard form used by Bank to evidence its commercial loans. Bank shall
enter the amount of each Revolving Loan, and any payments thereof, in its books and records, and
such entries shall be prima facie evidence of the principal amount outstanding
under the Revolving Credit Commitment. The
failure of Bank to make any notation in its books and records shall not discharge Borrower of its
obligation to repay in full with interest all amounts borrowed hereunder. The proceeds of the
Revolving Loans shall be disbursed pursuant to an Authorization to Disburse, on Bank’s standard
form therefor, executed and delivered by Borrower to Bank, and used by Borrower for any of the
purposes set forth in Section 2.3(a) hereinbelow.”
(d) Section 6.5 of the Agreement is hereby amended to read in full as follows:
(a) Borrower and its Subsidiaries shall achieve EBITDA of not less than (i) Two Million Nine
Hundred Thousand Dollars ($2,900,000) for the fiscal quarter ending June 30, 2009 and (ii) Four
Million Dollars ($4,000,000) for each fiscal quarter ending thereafter; and
(b) Borrower and its Subsidiaries shall achieve total EBITDA of not less than (i) Twelve
Million Five Hundred Thousand Dollars ($12,500,000) as of the last day of the fiscal quarter ending
June 30, 2009, (ii) Eleven Million Two Hundred Fifty Thousand Dollars ($11,250,000) as of the last
day of the fiscal quarter ending September 30, 2009, (iii) Twelve Million Five Hundred Thousand
Dollars ($12,500,000) as of the last day of the fiscal quarter ending December 31, 2009 and (iv)
Seventeen Million Dollars ($17,000,000) as of the last day of each fiscal quarter ending
thereafter, in each case for the four (4) consecutive fiscal quarters ending on such date.”
(e) Section 6.7 of the Agreement is hereby amended to read in full as follows:
“6.7 Leverage Ratio. Borrower and its Subsidiaries shall maintain a Leverage Ratio of not
greater than (a) 2.25 to 1.00 as of the last day of the fiscal quarter ending June 30, 2009, (b)
2.50 to 1.00 as of the last day of the fiscal quarter ending September 30, 2009 and (c) 2.00 to
1.00 as of the last day of each fiscal quarter ending thereafter.”
4. Effectiveness Of This Sixth Amendment. This Sixth Amendment shall become effective as
of the date hereof when, and only when, Bank shall have received all of the following, in form and
substance satisfactory to Bank:
(a) A counterpart of this Sixth Amendment, duly executed by Borrower:
(b) A waiver fee in connection with the waivers granted by Bank to Borrower pursuant to this
Sixth Amendment in the sum of Twenty-Five Thousand Dollars ($25,000), which waiver fee shall be
non-refundable;
(c) A legal documentation fee in the sum of Eight Hundred Dollars ($800), which legal
documentation fee shall be non-refundable; and
(d) Such other documents, instruments or agreements as Bank may reasonably deem necessary in
order to effect fully the purposes of this Sixth Amendment.
5. Ratification.
(a) Except as specifically amended hereinabove, the Agreement shall remain in full force and
effect and is hereby ratified and confirmed; and
(b) Upon the effectiveness of this Sixth Amendment, each reference in the Agreement to “this
Agreement”, “hereunder”, “herein”, “hereof”, or words of like import referring to the Agreement
shall mean and be a reference to the Agreement, as amended by this Sixth Amendment.
6. Representations and Warranties. Borrower represents and warrants as follows:
(a) Each of the representations and warranties contained in Section 5 of the Agreement, as
amended hereby, is hereby reaffirmed as of the date hereof, each as if set forth herein;
(b) The execution, delivery and performance of this Sixth Amendment are within Borrower’s
corporate powers, have been duly authorized by all necessary corporate action, have received all
necessary approvals, if any, and do not contravene any law or any contractual restriction binding
on Borrower;
(c) This Sixth Amendment is the legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms; and
(d) No event has occurred and is continuing or would result from this Sixth Amendment which
constitutes an Event of Default under the Agreement, or would constitute an Event of Default but
for the requirement that notice be given or time elapse, or both.
7. Governing Law. This Sixth Amendment shall be deemed a contract under and subject to,
and shall be construed for all purposes and in accordance with, the laws of the State of
California.
8. Counterparts. This Sixth Amendment may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute one and the same
agreement.
WITNESS the due execution hereof as of the date first above written.
“Borrower”
MOTORCAR PARTS OF AMERICA, INC.
By:
|
/s/ Xxxxxx X. Xxxxx
Chairman, President and Chief Executive Officer |
“Bank”
UNION BANK, N.A.
By:
|
/s/ Xxxx X. Xxxxx
Senior Vice President |
