FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit
10.1
FIFTH
AMENDMENT TO
This
FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”),
dated
August 2, 2006, by and among LASALLE BUSINESS CREDIT, LLC, a Delaware limited
liability company (“LaSalle”),
with
its principal office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
the
financial institutions that, from time to time, become a party to the Loan
Agreement (hereinafter defined) (such financial institutions, collectively,
the
“Lenders”
and
each individually, a “Lender”),
LaSalle as agent for the Lenders (in such capacity, the “Agent”),
and
IMPCO TECHNOLOGIES, INC., a Delaware corporation, with its principal office
at
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000 (the “Borrower”).
WHEREAS,
the Borrower and LaSalle as a Lender and the Agent, are parties to a Loan and
Security Agreement dated as of July 18, 2003 (as amended, restated,
supplemented, or otherwise modified from time to time, the “Loan
Agreement”),
pursuant to which the Lenders have agreed, upon satisfaction of certain
conditions, to make Revolving Advances and other financial accommodations to
the
Borrower in the aggregate principal amount not to exceed
$9,000,000;
WHEREAS,
the Borrower desires to reorganize the corporate structure of the Borrower
into
a holding company structure, pursuant to which (i) the Borrower will form a
wholly-owned subsidiary to be known as “FUEL SYSTEMS SOLUTIONS, INC.,” a
Delaware corporation (“Fuel
Systems”),
to be
the sole parent of the Borrower immediately following such reorganization,
(ii)
the Borrower will be merged with and into IMPCO Merger Sub, Inc., a Delaware
corporation to be formed by Fuel Systems for the sole purpose of effecting
such
reorganization (“Merger
Sub”),
with
the Borrower remaining as the surviving entity to be governed by the Certificate
of Incorporation and Bylaws of Merger Sub, substantially as in effect
immediately prior to such reorganization, pursuant to an agreement and plan
of
reorganization, and (iii) the stockholders of the Borrower will exchange all
of
their shares of the Borrower for shares of Fuel Systems on a one-for-two
exchange basis upon the effective time of such reorganization (the transactions
contemplated by this clause, collectively, the “Reorganization”);
WHEREAS,
as part of the formation of Fuel Systems and prior to the Reorganization,
the
Borrower shall contribute all of its interest and rights in and to the issued
and outstanding common stock of BRC, S.r.l., an Italian limited liability
company and a wholly-owned subsidiary of the Borrower (“BRC”),
to
and for the benefit of Fuel Systems (the “Contribution”),
such
that BRC will become a wholly-owned subsidiary of Fuel Systems;
WHEREAS,
the Reorganization will not be effective until such time and date as a
Certificate of Merger is filed with the Delaware Secretary of State (the
“Effective
Time”);
WHEREAS,
the Borrower has advised the Lenders and the Agent that it is not in compliance
with the Loan Agreement (hereinafter “Financial
Covenant Non-Compliance”):
due
to a failure to achieve the U.S. Minimum Pre-Tax Income as otherwise required
in
Paragraph
14(x)(v)
for the
fiscal quarter ending June 30, 2006; and
WHEREAS,
the Borrower has requested that the Lenders and the Agent agree to permitting
the Borrower to effect the Reorganization and the Contribution, to waive
the
Financial Covenant Non-Compliance and for certain other agreements and consents
in connection therewith, all as particularly set forth on the terms and
conditions below.
All
capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Loan Agreement unless the
context requires otherwise.
NOW
THEREFORE, the parties hereto agree as follows:
1. Section
13(s)
of the
Loan Agreement is hereby amended to permit the Reorganization and the
Contribution, whereby, among the other transactions contemplated above, Fuel
Systems shall become the owner of 100% of the issued and outstanding stock
of
each of the Borrower and BRC, and Schedule 13(s) to the Loan Agreement is
hereby amended, effective upon the Effective Time, to reflect that Fuel Systems
will be the Parent of the Borrower following the Effective Time of the
Reorganization.
2. Section
14(i) of the Loan Agreement is hereby amended to permit the Reorganization
and the Contribution, whereby, among the other transactions contemplated
above,
Fuel Systems shall become the owner of 100% of the issued and outstanding
stock
of each of the Borrower and BRC.
3. Section
14(l) of the Loan Agreement is hereby amended to permit the organizational
documents of the Borrower to be the same as the organizational documents
of
Merger Sub immediately prior to the Reorganization, except that Article First
of
the Certificate of Incorporation of Merger Sub shall be amended to read “Article
First: The name of the corporation is IMPCO Technologies, Inc.”
4. Section
14(m) of the Loan Agreement, which otherwise prohibits any transactions with
its Affiliates except in the ordinary course of business, is hereby amended
to
permit the Reorganization, including the transfer of the Borrower’s issued and
outstanding stock to Fuel Systems, the merger of the Borrower with and into
Merger Sub and the execution of an agreement and plan of reorganization in
furtherance thereof, and the Contribution.
5. Section
14(v) of the Loan Agreement is hereby amended and restated to read in its
entirety as follows, to be effective upon the Effective Time:
“The
Borrower’s common stock shall at all times be owned by Fuel Systems and the
common stock of Fuel Systems shall at all times be listed on the NASDAQ Global
Market.”
6. No
Change of Control.
Neither
the Reorganization nor the Contribution, individually or in the aggregate,
shall
be deemed a Change of Control, a Default and/or an Event of Default under
the
Loan Agreement or the Other Agreements.
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7. Limited
Waiver and Reset of Covenant.
(a) Effective
as of the Effective Date, the Lenders and the Agent hereby waive the Financial
Covenant Non-Compliance.
(b) The
waiver granted herein is a one-time waiver, given solely for the specific
covenants and specific time periods set forth herein. Nothing contained in
this
Amendment constitutes a waiver by the Lenders or the Agent of any other term
or
provision of the Loan Agreement or the Other Agreements, whether or not the
Lenders or the Agent have any knowledge thereof, nor may anything contained
in
this Amendment be deemed a waiver by the Lenders or the Agent of any
non-compliance with the terms or provisions of the Loan Agreement or the
Other
Agreements that may occur after the date of this Amendment.
(c) Paragraph
14(x)(v)
of the
Loan Agreement is hereby amended and restated in its entirety to read as
follows:
“(v) U.S.
Minimum Pre-Tax Income.
Borrower shall maintain and cause the U.S. Consolidated Group to maintain,
as of
the end of each fiscal period set forth below, Pre-Tax Income of not less
than
the respective amount set forth below opposite each such fiscal
period:
|
Fiscal
Period
|
Minimum
Pre-Tax Income
|
|||
|
Four
consecutive fiscal quarters ending at end of FQ2 2006
|
($2,794,000
|
)
|
||
|
Four
consecutive fiscal quarters ending at end of FQ3 2006
|
($3,497,000
|
)
|
||
|
Four
consecutive fiscal quarters
ending
at end of FQ4 2006
|
($1,437,000
|
)
|
||
The
Minimum Pre-Tax Income Covenant for the fiscal quarters after the end of
the FQ4
2006 fiscal quarter will be set by Agent in this discretion, reasonably
exercised, on written notice by Agent to Borrower, based on Borrower's
2007
Projections which is otherwise required to be delivered to Agent in 2006
pursuant to Section 11(f) of the Loan Agreement. So
long
as no Event of Default has occurred and is continuing and Borrower’s average
Excess Availability is $2,500,000 or greater during a fiscal quarter, neither
the Minimum Pre-Tax Income nor the U.S. Consolidated Group minimum Tangible
Net
Worth (Section 14(x)(i) of the Loan Agreement) covenants will be measured
for
that fiscal quarter.
3
8. Borrowing
Base Certificate.
Subject
to the conditions in the immediately following sentence, Section 11(a) of
the
Loan Agreement is hereby modified to change the frequency of delivery to
Agent
of the Borrowing Base Certificate from Tuesday of each week, calculated as
of
the last day of the immediately preceding Week to no later than the fifteenth
day of each calendar month calculated as of the last day of the immediately
preceding calendar month. The foregoing change in the frequency of delivery
of
the Borrowing Base Certificate shall only be effective so long as no Event
of
Default has occurred and is continuing and, for the then immediately preceding
calendar month, (a) Borrower’s average Excess Availability was $2,500,000 or
greater and (b) Borrower’s Excess Availability was not less than $2,500,000
during five or more consecutive Business Days.
9. Loan
Agreement Remains Effective. The amendments herein relate specifically to
the terms herein, are limited to the specific facts set forth above and are
not
an amendment of, or consent to a violation of, any other term, condition
or
obligation of the Loan Agreement. Except as specifically amended by the terms
herein, the Loan Agreement remains in full force and effect.
10. Amendment
Fee. In consideration for the accommodations granted by the Agent and the
Lenders herein and in addition to all other fees and costs, the Borrower
hereby
agrees to pay to the Agent a nonrefundable fee equal to Five Thousand Dollars
($5,000), which fee will be fully earned, due, and payable as of the date
of
this Amendment (the “Amendment
Fee”).
11. Conditions
to Effectiveness of Amendment and Waiver. The effectiveness of the
amendments, consent, and waiver contained in this Amendment, is subject to
the
fulfillment (to the satisfaction of the Agent and the Lenders) of the following
conditions precedent (the date upon which conditions are satisfied to the
satisfaction of the Agent and the Lenders, the “Effective
Date”):
(a) Each
of
the Borrower and the Agent has executed this Amendment and the same has been
delivered to the Agent;
(b) The
Borrower has executed and delivered to the Agent all agreements, instruments,
and documents reasonably requested by the Agent in connection with this
Amendment.
(c) The
Borrower has paid the Amendment Fee to the Agent.
12. Acknowledgments
and Confirmations.
The
Borrower, the Lenders, and the Agent hereby acknowledge and confirm that
as of
the date hereof: (i) all references in the Loan Agreement to “this Agreement”
will be deemed to refer to the Loan Agreement, as amended by this Amendment;
and
(ii) all references in each of the Other Agreements to the “Loan Agreement” will
be deemed to refer to the Loan Agreement, as amended by this
Amendment.
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13. Representations
and Warranties. The Borrower hereby represents and warrants to the Lenders
and the Agent, that:
(a) Each
of
the representations and warranties set forth in Paragraph
13
of the
Loan Agreement is true in all material respects as of the date hereof, except
for changes in the ordinary course of business, that, either singly or in
the
aggregate, are not materially adverse to the business or financial condition
of
the Borrower or to the Collateral.
(b) As
of the
date hereof, after giving effect to the terms of this Amendment, there exists
no
Default or Event of Default.
(c) The
Borrower has the power to execute, deliver, and perform this Amendment and
all
agreements, instruments, and documents executed in connection herewith (this
Amendment and such other agreements, instruments, are documents are sometimes
hereinafter referred to collectively as the “Amendment
Documents”).
The
Borrower has taken all necessary action to authorize the execution, delivery,
and performance of this Amendment and the other Amendment Documents. No consent
or approval of any entity or Person (including without limitation, any
shareholder of the Borrower), no consent or approval of any landlord or
mortgagee, no waiver of any Lien or right of distraint or other similar right,
and no consent, license, approval, authorization, or declaration of any
governmental authority, bureau, or agency is required in connection with
the
execution, delivery, or performance by the Borrower, or the validity or
enforcement, of this Amendment or the other Amendment Documents.
(d) The
execution and delivery by the Borrower of this Amendment and the other Amendment
Documents and performance by it hereunder and thereunder, will not violate
any
provision of law and will not conflict with or result in a breach of any
order,
writ, injunction, ordinance, resolution, decree, or other similar document
or
instrument of any court or governmental authority, bureau, or agency, domestic
or foreign, or the certificate of incorporation or by-laws of the Borrower,
or
create (with or without the giving of notice or lapse of time, or both) a
default under or breach of any agreement, bond, note, or indenture to which
the
Borrower is a party, or by which it is bound or any of its properties or
assets
is affected (including without limitation, the Subordinated Debt Documents),
or
result in the imposition of any Lien of any nature whatsoever upon any of
the
properties or assets owned by or used in connection with the business of
the
Borrower, other than the Liens contemplated by this Amendment.
(e) This
Amendment and the other Amendment Documents have been duly executed and
delivered by the Borrower and constitute the valid and legally binding
obligation of the Borrower, enforceable in accordance with their respective
terms.
14. Effectiveness
of Amendment and Waiver.
The
amendments, consent, and waiver contained in this Amendment shall be effective
as of the date hereof, subject to the fulfillment (to the satisfaction of
the
Agent and the Lenders) of all legal matters incident to this Amendment
reasonably satisfactory to the Lenders, the Agent, and their
counsel.
5
15. Covenants
of the Borrower. Following the Effective Time of the Reorganization, the
Borrower agrees and covenants as follows (to the satisfaction of the Agent
and
the Lenders):
(a) The
Borrower will execute and deliver to the Agent all agreements, instruments,
and
documents reasonably requested by the Agent in connection with this
Amendment.
(b) The
Borrower will deliver to the Agent evidence that Fuel Systems is the owner
of
100% of the capital stock of the Borrower and that Fuel Systems’ stock is listed
on NASDAQ.
16. Further
Assurances.
The
Borrower agrees that it will, from time to time, execute and/or deliver all
agreements, instruments, and documents and do and perform all actions and
things
(all at the Borrower’s sole expense) as the Agent may reasonably request to
carry out the intent and terms of this Amendment.
17. Miscellaneous.
(a) The
Borrower’s breach of any of its covenants contained in this Amendment will
constitute an Event of Default.
(b) Nothing
contained in this Amendment imposes an obligation on the Lenders or the Agent
to
further amend the Loan Agreement or waive compliance with any other
provision.
(c) Except
as
set forth in this Amendment, none of the Lenders nor the Agent waive any
breach
of, or Default or Event of Default under, the Loan Agreement, nor any right
or
remedy the Lenders or the Agent may have under the Loan Agreements, the Other
Agreements, or applicable law, all of which rights and remedies are expressly
reserved.
(d) Except
as
specifically amended in this Amendment, the Loan Agreement and the Other
Agreements remain in full force and effect in accordance with their respective
terms.
(e) No
modification or waiver of or with respect to any provision of this Amendment
and
all other agreements, instruments, and documents delivered pursuant hereto
or
referred to herein, nor consent to any departure by any party hereto or thereto
from any of the terms or conditions hereof or thereof, will in any event
be
effective, unless it is in writing and signed by each party hereto, and then
such waiver or consent will be effective only in the specific instance and
for
the purpose for which given.
(f) This
Amendment, together with all of the other agreements, instruments, and documents
referred to herein, embodies the entire agreement and understanding among
the
parties hereto with respect to the subject matter hereof and thereof and
supersedes all prior agreements and understandings relating to the subject
matter hereof.
(g) Without
in any way limiting Paragraph
14(r)
of the
Loan Agreement, the Borrower shall pay all of the Lenders’ and the Agent’s fees,
costs, and expenses incurred in connection with this Amendment and the
transactions contemplated hereby, including without limitation, the Lenders’ and
the Agent’s legal fees and expenses incurred in connection with the preparation,
negotiation, consummation, and, if required, the enforcement, of this Amendment
and the other Amendment Documents.
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(h) This
Amendment may be signed in any number of counterparts with the same effect
as if
the signatures thereto and hereto were upon the same instrument.
(i) EACH
OF
THE PARTIES TO THIS AMENDMENT HEREBY WAIVE ALL RIGHTS TO TRIAL BY JURY IN
ANY
ACTION OR PROCEEDING THAT PERTAINS DIRECTLY OR INDIRECTLY TO THIS AMENDMENT,
ANY
OF THE OTHER AGREEMENTS, THE LIABILITIES, THE COLLATERAL, ANY ALLEGED TORTIOUS
CONDUCT OF THE BORROWER, THE AGENT, OR THE LENDERS OR THAT, IN ANY WAY, DIRECTLY
OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP AMONG THE BORROWER,
THE AGENT, AND/OR THE LENDERS. IN NO EVENT WILL THE AGENT OR ANY LENDER BE
LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.
(j) This
Amendment is governed by and must be construed in accordance with the applicable
law pertaining in the State of New York, other than those conflict of law
provisions that would defer to the substantive laws of another
jurisdiction.
(k) The
parties to this Amendment prefer that any dispute between or among them be
resolved in litigation subject to a jury trial waiver as set forth above.
If a
pre-dispute jury trial waiver of the type provided for above is unenforceable
in
litigation to resolve any dispute, claim, cause of action or controversy
under
this Amendment, the Loan Agreement or any of the Other Agreements (each,
a
“Claim”)
in the
venue where the Claim is being brought pursuant to the terms of this Amendment,
then, upon the written request of any party, such Claim, including any and
all
questions of law or fact relating thereto, shall be determined exclusively
by a
judicial reference proceeding. Except as otherwise provided in this Section
17
above, venue for any such reference proceeding shall be in the state or federal
court in the County or District where venue is appropriate under applicable
law
(the “Court”).
The
parties shall select a single neutral referee, who shall be a retired state
or
federal judge. If the parties cannot agree upon a referee within 15 days,
the
Court shall appoint the referee. The referee shall report a statement of
decision to the Court. Notwithstanding the foregoing, nothing in this paragraph
shall limit the right of Agent or Lenders to exercise self-help remedies,
foreclose against collateral or obtain provisional remedies (including without
limitation, requests for temporary restraining orders, preliminary injunctions,
writs of possession, writs of attachment, appointment of a receiver, or any
orders that a court may issue to preserve the status quo, to prevent irreparable
injury or to allow a party to enforce its liens and security interests).
The
parties shall bear the fees and expenses of the referee equally unless the
referee orders otherwise. The referee also shall determine all issues relating
to the applicability, interpretation, and enforceability of this Section
17(k).
The parties acknowledge that any Claim determined by reference pursuant to
this
Section 17(k) shall not be adjudicated by a jury.
[Remainder
of Page Intentionally Left Blank]
7
IN
WITNESS WHEREOF,
the
parties hereto have duly executed this Amendment as of the date first above
set
forth.
|
LASALLE
BUSINESS CREDIT, LLC,
as
a
Lender and as Agent
|
||
| |
|
|
| By: | /s/ Xxxxxx Xxxxxx | |
| Name: |
Xxxxxx Xxxxxx |
|
| Title: | Vice President | |
|
IMPCO
TECHNOLOGIES, INC.,
as Borrower
|
||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxxxx | |
| Name: |
Xxxxxx X. Xxxxxxxx |
|
| Title: | Chief Financial Officer | |
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