FIFTH AMENDMENT TO CREDIT AGREEMENT
EXHIBIT 99.1
FIFTH AMENDMENT
TO CREDIT AGREEMENT
TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (“Fifth Amendment”), dated as of November 10, 2006,
is made and entered into by and between MOTORCAR PARTS OF AMERICA, INC., a New York corporation
(“Borrower”), and UNION BANK OF CALIFORNIA, N.A., a national banking association (“Bank”).
RECITALS:
A. Borrower and Bank are parties to that certain Credit Agreement dated as of May 28, 2004,
as amended by that certain First Amendment dated as of November 8, 2005, that certain Second
Amendment dated as of April 5, 2006, that certain Third Amendment dated as of April 10, 2006 and
that certain Fourth Amendment dated as of August 8, 2006 (as so amended, the “Agreement”), pursuant
to which Bank agreed to make (i) a Revolving Credit Commitment available to Borrower in the
aggregate outstanding principal amount not to exceed Thirty-Five Million Dollars ($35,000,000), and
(ii) a Letter of Credit Sublimit of the Revolving Credit Commitment available to Borrower in the
amount of Seven Million Dollars ($7,000,000), all as more specifically provided for in the
Agreement.
B. Borrower and Bank desire to amend the Agreement in certain respects, subject, however, to
the terms and conditions of this Fifth Amendment.
AGREEMENT:
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
shall have the meanings assigned thereto in the Agreement.
2. Amendments to the Agreement.
(a) Section 6.6 of the Agreement is hereby amended to read in full as follows:
“6.6 EBITDA.
“(a) Borrower and its Subsidiaries shall achieve EBITDA of not less than Three Million
Dollars ($3,000,000) for each fiscal quarter of each fiscal year; and
“(b) Borrower and its Subsidiaries shall achieve EBITDA, as of the last day of each fiscal
quarter for the four (4) consecutive fiscal quarters ended on such date, of not less than Thirteen
Million Dollars ($13,000,000).
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“For the purpose of determining Borrower’s compliance with subsections (a) and (b) of this
Section 6.6 for any fiscal quarter or as of the last day of any fiscal quarter for the four (4)
consecutive fiscal quarters ended on such date, as the case may be, the actual EBITDA of Borrower
and its Subsidiaries achieved for the fiscal quarter ended September 30, 2006 shall be increased by
Eight Million Sixty-Two Thousand Dollars ($8,062,000), which amount represents the adjustment made
to Borrower’s long-term core deposit for the fiscal quarter ended on such date (as shown on
Borrower’s Financial Statement for such fiscal quarter).”
(b) Section 6.8 of the Agreement is hereby amended to read in full as follows:
“6.8 Current Ratio. Borrower and its Subsidiaries shall maintain a ratio of Current Assets
to Current Liabilities of not less than 1.20 to 1.00 as of the close of each fiscal quarter,
commencing with the fiscal quarter ended September 30, 2006.”
3. Effectiveness of this Fifth Amendment. This Fifth 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 Fifth Amendment, duly executed by Borrower;
(b) An amendment fee in the sum of Seventeen Thousand Five Hundred Dollars ($17,500) in
connection with the amendments to the Agreement provided for herein, which amendment fee shall be
nonrefundable;
(c) A legal documentation fee in the sum of Six Hundred Dollars ($600), which legal
documentation fee shall be nonrefundable; and
(d) Such other documents, instruments or agreements as Bank may reasonably deem necessary in
order to effect fully the purposes of this Fifth Amendment.
4. 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 Fifth 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 Fifth Amendment.
5. 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;
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(b) The execution, delivery and performance of this Fifth 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 Fifth 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 Fifth 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.
6. Governing Law. This Fifth 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.
7. Counterparts. This Fifth 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
instrument.
WITNESS the due execution hereof as of the date first above written.
| “Borrower” MOTORCAR PARTS OF AMERICA, INC. |
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| By: | /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx |
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Chairman, President and
Chief Executive Officer |
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| “Bank” UNION BANK OF CALIFORNIA, N.A. |
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| By: | /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx |
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Vice President |
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