Exhibit 10.1
AMENDMENT NO. 1 TO CREDIT AGREEMENT
THIS AMENDMENT, dated as of July 30, 1999, by and between Prestolite
Electric Incorporated, a Delaware corporation, of Ann Arbor, Michigan (herein
called "Company"), and Comerica Bank, a Michigan banking corporation, of
Detroit, Michigan (herein called "Bank").
W I T N E S S E T H:
WHEREAS, said parties desire to amend that certain Second Amended and
Restated Credit Agreement dated as of December 31, 1998, entered into by and
between Company and Bank (herein called "Agreement"), to extend the maturity
date of the line of credit, to revise the borrowing base, to change the
Applicable Margins, and to make other revisions;
NOW, THEREFORE, IT IS AGREED that the Agreement is amended as follows:
1. The definition of "Applicable Eurodollar Margin" in Section 1 is
amended to read in its entirety as follows:
"Applicable Eurodollar Margin" shall mean, as of any date of
determination thereof, the following Margins:
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The Applicable Eurodollar Margin is:
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If Funded Debt Margin Reduction Non-Margin
Ratio ("x") is: Period Reduction Period
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x more than 5.5 3.25% 3.375%
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5 less than x less than or equal to 5.5 3% 3.125%
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4 less than x less than or equal to 5 2.75% 2.875%
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3.5 less than x less than or equal to 4 2.5% 2.625%
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3 less than x less than or equal to 3.5 2.25% 2.25%
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x less than or equal to 3 2% 2.0%
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2. The definition of "Applicable Prime-based Margin" in Section 1 is
amended to read in its entirety as follows:
"Applicable Prime-based Margin" shall mean as of any date of
determination thereof, the following margins:
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The Applicable Prime-based Margin is:
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If Funded Debt Margin Reduction Non-Margin
Ratio ("x") is: Period Reduction Period
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x more than 5.5 .50% .625%
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5 less than x less than or equal to 5.5 .25% .375%
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4 less than x less than or equal to 5 0 .125%
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3.5 less than x less than or equal to 4 0 0
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3 less than x less than or equal to 3.5 0 0
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x less than or equal to 3 0 0
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3. The definition of "Revolving Credit Maturity Date" in Section 1 is
amended by deleting the July 31, 2000 where it appears therein and replacing it
with the date July 31, 2001.
4. The definition of "Borrowing Base" in Section 1 is amended to read in
its entirety as follows:
"Borrowing Base" shall mean as of any date of determination, (i)
at all times other than during a Margin Reduction Period the sum of
(a) 84% of Eligible Accounts plus (b) the lesser of 35% of Eligible
----
Inventory or $9,000,0000, plus (c) the Overformula Amount, and (ii)
----
during any Margin Reduction Period, the sum of (a) 80% of Eligible
Accounts, plus (b) the lesser of 25% of Eligible Inventory or
----
$9,000,000, plus the Overformula Amount."
----
5. Section 1 is amended by adding a new definition of "Overformula
Amount" to read in its entirety as follows:
"Overformula Amount" shall mean (i) $3,000,000 for the period from
July 30, 1999 to September 30, 1999, (ii) $1,500,000 for the period
from October 1, 1999 to November 30, 1999, and (iii) $0 at all times
thereafter.
6. Section 1 is amended by adding a new definition of "Applicable
Commitment Fee Percentage" to read in its entirety as follows:
"Applicable Commitment Fee Percentage" shall mean as of the date of
determination thereof, the following per annum rate:
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The Applicable Commitment Fee
If Funded Debt Ratio ("x") is: Percentage is:
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x more than 5.5 .625%
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5 less than x less than or equal to 5.5 .50%
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4 les than x less than or equal to 5 .375%
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3.5 less than x less than or equal to 4 .25%
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3 less than x less than or equal to 3.5 .25%
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x less than or equal to 3 .25%
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7. Section 2.2 is amended to read in its entirety as follows:
"2.2 The Revolving Credit Note shall mature on the Revolving Credit
Maturity Date and each Advance from time to time outstanding
thereunder shall bear interest at its Applicable Interest Rate. The
amount and date of each Advance, its Applicable Interest Rate, its
Interest Period, and the amount and date of any repayment shall be
noted on Bank's records, which records will be conclusive evidence
thereof. Effective July 30, 1999, the Applicable Margins shall be
2.875% for Eurodollar-based Advances and .125% for Prime-based
Advances. Adjustments to the Applicable Margin based on the Funded
Debt Ratio shall be implemented as follows:
(a) Such Applicable Margin adjustments shall be given prospective
effect only, effective immediately as to any Prime-based
Advance, and as to any Eurodollar-based Advance, effective
upon the expiration of the applicable Interest Period(s), if
any, in effect on the date of delivery of the annual
financial statements and compliance certificate required
under Sections 10.1(a) and 10.10 hereof, as the case may be,
establishing applicability of the appropriate adjustments,
with no retroactivity or claw-back (provided, however, that
if Company fails to timely deliver such financial statements
and compliance certificate, the Applicable Margins shall be
3.25% or 3.375%, as applicable, for Eurodollar-based Advances
and 0.50% or .625%, as applicable, for Prime-based Advances
for the number of days such financial statements and
certificate were not timely delivered, commencing on the
first Business Day after the latest due date for such
financial statements and certificate and continuing until the
first Business Day after delivery of such financial
statements and certificate;
(b) An adjustment hereunder, after becoming effective, shall
remain in effect only through the end of the applicable
Interest Period(s) in effect on the delivery of subsequent
quarterly financial certificates, as aforesaid, demonstrating
any change in such Funded Debt Ratio or the occurrence of any
event which under the terms hereof causes
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such adjustment no longer to be applicable; and any such
subsequent adjustment or no adjustment, as the case may be,
shall apply (and said pricing shall thereby be adjusted up
or down, as applicable), effective with the commencement of
the Interest Period immediately following such change or
event;
(c) Such Applicable Margin adjustments under this Section 2.2
shall be made irrespective of, and in addition to, any other
interest rate adjustments hereunder."
8. Section 2.6 is amended to read in its entirety as follows:
"2.6 Company shall pay to Bank a non-refundable revolving credit
commitment fee on the daily average amount by which $23,000,000 exceeds
the aggregate amount of Advances outstanding from time to time. The
revolving credit commitment fee shall be equal to the amount of such
excess times the Applicable Commitment Fee percentage computed on a
daily basis. The revolving credit commitment fee shall be payable
quarterly in arrears on the first day of each January, April, July and
October, and at the Revolving Credit Maturity Date, and shall be
computed on the basis of a year of 360 days and assessed for the actual
number of day elapsed. Commencing July 30, 1999, the revolving credit
commitment fee shall be .375% per annum. Adjustments thereto shall be
given prospective effect, effective on delivery of the annual financial
statements and certificate required under Sections 10.10 and 10.1(a)
establishing applicability of the appropriate adjustments, with no
retroactivity or claw-back; provided, that if Company fails to timely
deliver such financial certificate, the revolving credit commitment fee
shall be .625% per annum for the number of days such financial
statements and certificate was not timely delivered, commencing on the
first day of such next fiscal quarter. For purposes of calculating the
revolving credit commitment fee, the face amount of outstanding letters
of credit shall be considered to be outstanding Advances.
9. Section 3.1(a) is amended by inserting the words "and the Overformula
Amount is $0" after the word "continuing" in the second line thereof.
10. A new Section 8.3 is added to the Agreement, to read in its entirety
as follows:
"8.3 Commencing with the execution and delivery of Amendment No. 1 to
this Credit Agreement, the Company will pay to the Bank, on the date of
any amendment to this Agreement which extends the Revolving Credit
Maturity Date, its non-refundable loan extension fee in the amount of
one-eighth percent (_%) of the amount of the maximum amount of the
Revolving Credit as described in Section 2.1 hereof."
This Amendment shall be effective as of the date hereof and upon payment by
Company to Bank of its non-refundable loan amendment fee in the amount of $7,500
and non-refundable loan extension fee in the amount of $28,750. Except as
modified hereby, all of the terms and conditions of the Agreement and the
Revolving Credit Note shall remain in full force and effect.
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Company hereby represents and warrants that, after giving effect to the
amendments contained herein, (a) the execution, delivery and performance of this
Amendment and any other documents and instruments required under this Amendment
or the Agreement are within Company's corporate powers, have been duly
authorized, are not in contravention of law or the terms of Company's
certificate of incorporation or bylaws and do not require the consent or
approval of any governmental body, agency or authority, and this Amendment, and
any other documents and instruments required under this Amendment or the
Agreement, are valid and binding in accordance with their terms; (b) the
continuing representations and warranties of Company set forth in Section 9.1
through 9.5 and 9.8 through 9.16 of the Agreement are true and correct on and as
of the date hereof, and the continuing representations and warranties of Company
set forth in Section 9.6 of the Agreement are true and correct as of the date
hereof with respect to the most recent financial statements furnished to Bank by
Company in accordance the Agreement; and (c) no Default or Event of Default has
occurred and is continuing as of the date hereof.
WITNESS the execution hereof as of the date and year first above written.
COMERICA BANK PRESTOLITE ELECTRIC INCORPORATED
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxxxxx
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Its: Vice President Its: Controller
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CONSENT OF GUARANTOR
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The undersigned guarantor hereby consents to the foregoing Amendment as of
the date thereof and reaffirms and ratifies all of its obligations to the Bank
under the guaranty of the obligations of Company previously executed and
delivered by it.
PRESTOLITE ELECTRIC HOLDING, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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Its: Treasurer
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