EXHIBIT 10.1
AMENDMENT NO. 1
This AMENDMENT NO. 1 ("Amendment") is made as of March 8, 2000
among KHPP HOLDINGS, INC., a Delaware corporation ("Holdings"), XXXXXX
PERFORMANCE PRODUCTS, INC., a Delaware corporation (the "Borrower"), CREDIT
AGRICOLE INDOSUEZ, as Administrative Agent for the Banks (in such capacity
"Agent"), COMERICA BANK, as co-Agent (the "co-Agent"), and the Banks listed on
the signature pages hereof ("Banks"). This agreement is made with reference to
that certain Amended and Restated Credit Agreement dated as of May 15, 1998, and
amended and restated as of September 20, 1999, by and among Holdings, the
Borrower, Agent, co-Agent and the Banks (the "Credit Agreement"). All
capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Credit Agreement.
WHEREAS, Holdings, the Borrower, Agent, co-Agent and the
Banks entered into the Credit Agreement;
WHEREAS, the Borrower desires to increase the Total Revolving
Loan Commitment by $10,000,000 and to amend certain provisions of the Credit
Agreement and the Guarantors desire to acknowledge such amendments;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. AMENDMENTS
1.1 Section 1.01 (Commitments) and Section 1.12 (Total
Revolving Loan Commitments; Limitations on Outstanding Loan Amounts) of the
Credit Agreement are hereby amended by replacing the number "$25,000,000" with
"$35,000,000".
1.2 Section 7.12 of the Credit Agreement (Leverage Ratio) is
hereby amended by replacing the ratios set forth for the Test Periods ending
March 31, 2000 and June 30, 2000 with the following:
March 31, 2000................................. 6.55 to 1.00
June 30, 2000.................................. 6.45 to 1.00
1.3 The following definitions contained in Section 9 of the
Credit Agreement are hereby replaced in their entirety with the following:
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"'BORROWING BASE' means an amount equal to the sum of (i) 75% of the
Eligible Accounts Receivable and (ii) 55% of the Eligible Inventory."
"'CONSOLIDATED NET INCOME' for any Person means, for any
period, the net income (or loss) of such Person and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined on a consolidated basis for such Person and its consolidated
Subsidiaries in conformity with GAAP; PROVIDED that there shall be excluded (i)
the income (or loss) of any other Person (other than consolidated Subsidiaries
of such Person) in which any third Person (other than such Person or any of its
consolidated Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to such Person or any
of its Subsidiaries by such other Person during such period, (ii) the income (or
loss) of any other Person accrued prior to the date it becomes a consolidated
Subsidiary of such Person or is merged into or consolidated with such Person or
any of its consolidated Subsidiaries or such other Person's assets are acquired
by such Person or any of its consolidated Subsidiaries, and (iii) the income of
any consolidated Subsidiary of such Person to the extent that the declaration or
payment of dividends or similar distributions by that consolidated Subsidiary of
that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that consolidated Subsidiary; PROVIDED
FURTHER that notwithstanding clause (ii) above, the results of operations (plus
identified acquisition-related savings) relating to acquisitions consummated by
the Borrower in calendar year 1999 shall be included from January 1, 1999, and
such results of operations shall be deemed included for all reportable periods
under the Credit Agreement during 1999 and thereafter."
"'ELIGIBLE ACCOUNTS RECEIVABLE' means, as at any applicable
date of determination, the aggregate face amount of the Accounts of the Credit
Parties included in clause (i) of the definition of Account hereunder (excluding
any Accounts set forth in clauses (ii) through (vi) of such definition), without
duplication, in each case less (without duplication) the aggregate amount of all
reserves, limits and deductions with respect to such Accounts set forth below
and less the aggregate amount of all returns, discounts, claims, rebates,
offsets, credits, charges (including warehouseman's charges) and allowances of
any nature with respect to such Accounts (whether or not reflected on the
balance sheet and whether issued,
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owing, granted or outstanding). Unless otherwise approved in writing by the
Administrative Agent in its sole discretion, no individual Account shall be
deemed to be an Eligible Account Receivable if:
(a) the Credit Party does not have legal and valid title to
the Account; or
(b) the Account is not the valid, binding and legally
enforceable obligation of the account debtor subject, as to
enforceability, only to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws at the time in effect
affecting the enforceability of creditors' rights generally and (ii)
judicial discretion in connection with the remedy of specific
performance and other equitable remedies; or
(c) the Account arises out of a sale made by a Credit Party to
an Affiliate of such Credit Party; or
(d) the Account is unpaid more than 60 days after the original
payment due date; or
(e) (i) the account debtor for such Account is also a creditor
of a Credit Party, to the extent of the amount owed by such Credit
Party to the account debtor, (ii) the Account is subject to any claim
on the part of the account debtor disputing liability under such
Account in whole or in part, to the extent of the amount of such
dispute or (iii) the Account otherwise is or is reasonably likely to
become subject to any right of setoff or any counterclaim, claim or
defense by the account debtor, to the extent of the amount of such
setoff or counterclaim, claim or defense; or
(f) the account debtor for such Account has commenced a
voluntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or made an assignment for the benefit of creditors
or if a decree or order for relief has been entered by a court having
jurisdiction in the premises in respect of the account debtor in an
involuntary case under the federal bankruptcy laws, as now constituted
or hereafter amended, or if any other petition or other application for
relief under the federal bankruptcy laws has been filed by or against
the account debtor, or if the account debtor has failed, suspended
business, ceased to be solvent, or consented to or suffered a receiver,
trustee, liquidator or custodian
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to be appointed for it or for all or a significant portion of its
assets or affairs; or
(g) the Administrative Agent does not have a valid and
perfected first priority security interest in such Account (subject
only to a tax lien being contested in good faith and by appropriate
proceedings and permitted by Section 7.03(a)); or
(h) the sale to the account debtor for such Account is on a
consignment, sale on approval, guaranteed sale or sale-and-return basis
or pursuant to any written agreement requiring repurchase or return; or
(i) such Account is from an account debtor (or any Affiliate
thereof) and fifty percent (50%) or more, in face amount, of other
Accounts from either such account debtor or any Affiliate thereof do
not meet the requirements for eligible status set forth in subparagraph
(d); or
(j) the account debtor for such Account is a foreign
government or any agency, department or institution thereof; or
(k) such Account is an Account a security interest in which
would be subject to the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. ss. 3727 ET Seq.), unless the Credit Party has
assigned the Account to the Administrative Agent in compliance with the
provisions of such Act; or
(l) the account debtor for such Account is outside the
continental United States or incorporated in or conducting
substantially all of its business in any jurisdiction located outside
the continental United States, unless the sale is (i) on letter of
credit or sight draft, guaranty or acceptance terms, in each case
acceptable to the Administrative Agent, (ii) such Account is otherwise
approved by and reasonably acceptable to the Administrative Agent; or
(m) the Administrative Agent determines in good faith in
accordance with its internal credit policies that (i) collection of the
account is insecure or (ii) such Account may not be paid by reason of
the account debtor's financial inability to pay; provided, however,
that any Account referred to in this clause (m) shall not become
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ineligible until the Administrative Agent shall have given the Credit
Party three Business Days' advance notice of such determination; or
(n) the goods giving rise to such Account have not been
shipped or the services giving rise to such Account have not been
performed by a Credit Party or the Account otherwise does not represent
a final sale; or
(o) such Account does not comply in all material respects with
all applicable legal requirements, including, where applicable, the
Federal Consumer Credit Protection Act, the Federal Truth in Lending
Act and Regulation Z of the Board of Governors of the Federal Reserve
System, in each case as amended.
In addition to the foregoing, Eligible Accounts Receivable
includes such Accounts as the Borrower requests and that the
Administrative Agent approves in advance, in writing and in its sole
discretion (or if the aggregate face amount to be approved exceeds
$1,500,000 at any one time, the approval of the Required Banks has been
obtained in writing)."
"'REVOLVING LOAN COMMITMENT' means, with respect to each Bank,
the amount set forth opposite such Bank's name on Schedule I hereto directly
below the column entitled "Revolving Loan Commitment," as such amount may be
reduced from time to time pursuant to Sections 2.01, 2.02 and/or 8."
SECTION 2. RATIFICATION OF AGREEMENT
2.1 To induce the Banks to enter into this Amendment, the
Borrower and Holdings jointly and severally represent and warrant that after
giving effect to this Amendment no violation of the terms of the Credit
Agreement exist and all representations and warranties contained in the Credit
Agreement are true, correct and complete in all material respects on and as of
the date hereof except to the extent such representations and warranties
specifically relate to an earlier date in which case they were true, correct and
complete in all material respects on and as of such earlier date.
2.2 Except as expressly set forth in this Amendment, the
terms, provisions and conditions of the Credit Agreement and the Credit
Documents are unchanged, and said agreements, as amended, shall remain in full
force and effect and are hereby confirmed and ratified.
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SECTION 3. CONDITIONS PRECEDENT
The effectiveness of this Amendment and the obligations of the
Banks to make any Loans to the Borrower with respect to the additional Revolving
Loan Commitment is subject to the substantially contemporaneous satisfaction of
the following conditions:
(a) There shall have been delivered to the Agent for the
account of each of the Banks the Revolving Notes reflecting the
additional Revolving Loan Commitment of such Bank by the Borrower;
(b) The Agent shall have received (i) evidence satisfactory to
it that the Board of Directors of the Borrower shall have approved this
Amendment and the transactions contemplated hereby and (ii) an opinion
of the Borrower's counsel addressed to each of the Banks, which shall
be delivered on and dated as of the date of execution of the Revolving
Notes and shall be in form and substance satisfactory to the Agent; and
(c) All costs, fees and expenses of the Banks in connection
with the negotiation, preparation, execution and delivery of this
Amendment and any other amendments, waiver or consents relating to the
Credit Agreement (including, without limitation, the fees and
disbursements of Xxxxxx Xxxxxx & Xxxxxxx) shall have been paid in full.
SECTION 4. COUNTERPARTS; EFFECTIVENESS
This Amendment may be executed in any number of counterparts,
and all such counterparts taken together shall be deemed to constitute one and
the same instrument. Signature pages may be detached from counterpart documents
and reassembled to form duplicate executed originals. This Amendment shall
become effective as of the date hereof upon the execution of the counterparts
hereof by Holdings, the Borrower and the Banks.
SECTION 5. GOVERNING LAW
THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
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SECTION 6. ACKNOWLEDGMENT AND CONSENT BY THE GUARANTORS
Each of the Guarantors hereby acknowledges that it has read
this Amendment and consents to the terms hereof and further confirms and agrees
that, notwithstanding the effectiveness of this Amendment, its obligations under
its Guarantee shall not be impaired or affected and such Guarantee is, and shall
continue to be, in full force and effect and is hereby confirmed and ratified in
all respects.
Witness the execution hereof by the respective duly authorized
officers of the undersigned as of the date first above written.
KHPP HOLDINGS, INC.
By: /s/
-----------------------------------------
Name:
Title:
XXXXXX PERFORMANCE PRODUCTS, INC.
By: /s/
-----------------------------------------
Name:
Title:
XXXXXX AUTOMOTIVE INDUSTRIES, INC.
By: /s/
-----------------------------------------
Name:
Title:
LUNATI CAMS, INC.
By: /s/
-----------------------------------------
Name:
Title:
LMT MOTOR SPORTS CORPORATION
By: /s/
-----------------------------------------
Name:
Title:
LUNATI & XXXXXX PISTONS, INCORPORATED
By: /s/
-----------------------------------------
Name:
Title:
XXXXXX PERFORMANCE SYSTEMS, INC.
By: /s/
-----------------------------------------
Name:
Title:
HOOKER INDUSTRIES, INC.
By: /s/
-----------------------------------------
Name:
Title:
CREDIT AGRICOLE INDOSUEZ,
as Administrative Agent and a Bank
By: /s/
-----------------------------------------
Name:
Title:
By: /s/
-----------------------------------------
Name:
Title:
COMERICA BANK,
as co-Agent and as a Bank
By: /s/
-----------------------------------------
Name:
Title:
BANK AUSTRIA CREDITANSTALT CORPORATE
FINANCE, INC., as a Bank
By: /s/
-----------------------------------------
Name:
Title:
By: /s/
-----------------------------------------
Name:
Title:
CIBC INC., as a Bank
By: /s/
-----------------------------------------
Name:
Title:
SCHEDULE 1
Loan Commitments
REVOLVING LOAN
BANK COMMITMENT
Credit Agricole Indosuez $ 14,800,000
Comerica Bank 8,000,000
Bank Austria 7,000,000
Creditanstalt Corporate Finance, Inc.
CIBC Inc. 5,200,000
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$35,000,000
