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Exhibit 10.1

FIRST AMENDMENT
AND
WAIVER
TO
LOAN AND SECURITY AGREEMENT

        THIS FIRST AMENDMENT AND WAIVER TO LOAN AND SECURITY AGREEMENT (this
"First Amendment") is made and entered into as of October 11, 2002 by and among
Holley Performance Products, Inc., a Delaware corporation ("Parent"), and each
of Parent's Subsidiaries identified on the signature pages hereof (such
Subsidiaries, together with Parent, are referred to hereinafter each
individually as a "Borrower", and individually and collectively, jointly and
severally, as the "Borrowers"), the Lenders (as defined in the Loan Agreement
referred to below) listed on the signatory pages hereof and Foothill Capital
Corporation, a California corporation, in its capacity as arranger and
administrative agent (the "Agent").

WITNESSETH:

        WHEREAS, the Borrowers, the Lenders and Agent are parties to that
certain Loan and Security Agreement (the "Loan Agreement"), dated as of July 30,
2002;

        WHEREAS, on September 11, 2002 and September 25, 2002, (1) KHPP
Holdings, Inc., a Delaware corporation ("KHPP"), issued promissory notes in
favor of KHPP Acquisition Company II, L.P., a Delaware limited partnership
("KHPP Acquisition"), in an aggregate principal amount of $2,000,000 (the
"Original KHPP Acquisition Notes"), and (2) Parent issued promissory notes in
favor of KHPP in an aggregate principal amount of $2,000,000 (the "Original KHPP
Notes," and, collectively with the Original KHPP Acquisition Notes, the
"Original Notes");

        WHEREAS, as a condition to entering into this First Amendment, (1) KHPP
Acquisition and KHPP shall have entered into the KHPP Acquisition Investment
Documents (as defined in Section 2.01(a) hereof), pursuant to which KHPP shall
have received (a) an aggregate amount of $7,500,000 in respect of issuing the
Original KHPP Acquisition Notes and the KHPP Acquisition Note (as defined in
Section 2.01(a) hereof) to KHPP Acquisition (the "KHPP Acquisition Debt
Investment") and (b) an infusion of equity capital from KHPP Acquisition in an
aggregate amount of $7,500,000 (collectively with the KHPP Acquisition Debt
Investment, the "KHPP Acquisition Investment") and (2) KHPP and Parent shall
have entered into the KHPP Investment Documents (as defined in Section 2.01(a)
hereof), pursuant to which Parent shall have received (a) an aggregate amount of
$7,500,000 in respect of issuing the Original KHPP Notes and the KHPP Note (as
defined in Section 2.01(a) hereof) to KHPP (the "KHPP Debt Investment") and
(b) an infusion of equity capital from KHPP in an aggregate amount of $7,500,000
(collectively with the KHPP Debt Investment, the "KHPP Investment");

        WHEREAS, as of October 9, 2002, Borrowers have the Availability set
forth on the certificate attached hereto as Exhibit A; and

        WHEREAS, the Borrowers, the Lenders and Agent wish to amend the Loan
Agreement as herein provided;

        NOW, THEREFORE, in consideration of the agreements and provisions herein
contained, the parties hereto do hereby agree as follows:

        Section 1.    Definitions.    Any capitalized term used but not
otherwise defined herein shall have the meanings ascribed to such terms in the
Loan Agreement.

        Section 2.    Amendments to Loan Agreement.    The Loan Agreement is
hereby amended, effective as of the date this First Amendment becomes effective
in accordance with Section 4 hereof, as follows:

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        2.01    Amendments to Section 1.1.    

        (a)  The following defined terms are hereby added to Section 1.1 of the
Loan Agreement:

        "Investment Documents" means, collectively, the KHPP Investment
Documents and the KHPP Acquisition Investment Documents.

        "KHPP Acquisition Investment Documents" means, collectively, the KHPP
Acquisition Note, the KHPP Acquisition Note Documents, the KHPP Acquisition
Preferred Stock Purchase Agreement and all documents, instruments and agreements
from time to time delivered in accordance therewith or otherwise relating
thereto.

        "KHPP Acquisition Note" means the promissory note issued by KHPP in
favor of KHPP Acquisition in the original principal amount of $7,500,000, in
form and substance satisfactory to Agent, dated as of October 11, 2002.

        "KHPP Acquisition Note Documents" means all documents, instruments and
agreements from time to time delivered in accordance with or otherwise relating
to the KHPP Acquisition Note.

        "KHPP Acquisition Preferred Stock Purchase Agreement" means that certain
preferred stock purchase agreement between KHPP Acquisition and KHPP dated as of
October 11, 2002, in form and substance satisfactory to Agent.

        "KHPP Investment Documents" means, collectively, the KHPP Note, the KHPP
Note Documents, the KHPP Preferred Stock Purchase Agreement and all documents,
instruments and agreements from time to time delivered in accordance therewith
or otherwise relating thereto.

        "KHPP Note" means the promissory note issued by Parent in favor of KHPP
in the original principal amount of $7,500,000, in form and substance
satisfactory to Agent, dated as of October 11, 2002.

        "KHPP Note Documents" means all documents, instruments and agreements
from time to time delivered in accordance with or otherwise relating to the KHPP
Note.

        "KHPP Preferred Stock Purchase Agreement" means that certain preferred
stock purchase agreement between KHPP and Parent dated as of October 11, 2002,
in form and substance satisfactory to Agent.

        "Side Letter" means the side letter agreement dated as of October 11,
2002, in form and substance satisfactory to Agent, executed and delivered by
Parent, Agent, KHPP Acquisition and KHPP.

        (b)  The definitions of "Base Rate Margin," "Base Rate Subline A
Margin," Base Rate Subline B Margin" and Base Rate Subline C Margin" are hereby
deleted in their entirety and the following new defined terms are inserted in
replacement thereof:

        "Base Rate Margin" means 1.00; provided, however, that if Parent's
EBITDA for fiscal year 2003 equals or exceeds $26,000,000, then, commencing on
and as of the first day of the fiscal quarter of Parent next following the
receipt by Agent of Parent's and its Subsidiaries' audited financial statements
for fiscal year 2003 pursuant to Section 6.3(b), "Base Rate Margin" shall mean
0.75. The determination of EBITDA for purposes of this definition shall be based
upon the fiscal year 2003 audited financial statements delivered to Agent
pursuant to Section 6.3(b). Notwithstanding the foregoing, if Parent fails to
deliver to Agent the financial statements for fiscal year 2003 required pursuant
to Section 6.3(b), then "Base Rate Margin" shall mean 1.00.

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        "Base Rate Subline A Margin" means 2.00; provided, however, that if
Parent's EBITDA for fiscal year 2003 equals or exceeds $26,000,000, then,
commencing on and as of the first day of the fiscal quarter of Parent next
following the receipt by Agent of Parent's and its Subsidiaries' audited
financial statements for fiscal year 2003 pursuant to Section 6.3(b), "Base Rate
Subline A Margin" shall mean 1.75. The determination of EBITDA for purposes of
this definition shall be based upon the fiscal year 2003 audited financial
statements delivered to Agent pursuant to Section 6.3(b). Notwithstanding the
foregoing, if Parent fails to deliver to Agent the financial statements for
fiscal year 2003 required pursuant to Section 6.3(b), then "Base Rate Subline A
Margin" shall mean 2.00.

        "Base Rate Subline B Margin" means 8.75; provided, however, that if
Parent's EBITDA for fiscal year 2003 equals or exceeds $26,000,000, then,
commencing on and as of the first day of the fiscal quarter of Parent next
following the receipt by Agent of Parent's and its Subsidiaries' audited
financial statements for fiscal year 2003 pursuant to Section 6.3(b), "Base Rate
Subline B Margin" shall mean 8.50. The determination of EBITDA for purposes of
this definition shall be based upon the fiscal year 2003 audited financial
statements delivered to Agent pursuant to Section 6.3(b). Notwithstanding the
foregoing, if Parent fails to deliver to Agent the financial statements for
fiscal year 2003 required pursuant to Section 6.3(b), then "Base Rate Subline B
Margin" shall mean 8.75.

        "Base Rate Subline C Margin" means 2.00; provided, however, that if
Parent's EBITDA for fiscal year 2003 equals or exceeds $26,000,000, then,
commencing on and as of the first day of the fiscal quarter of Parent next
following the receipt by Agent of Parent's and its Subsidiaries' audited
financial statements for fiscal year 2003 pursuant to Section 6.3(b), "Base Rate
Subline C Margin" shall mean 1.75. The determination of EBITDA for purposes of
this definition shall be based upon the fiscal year 2003 audited financial
statements delivered to Agent pursuant to Section 6.3(b). Notwithstanding the
foregoing, if Parent fails to deliver to Agent the financial statements for
fiscal year 2003 required pursuant to Section 6.3(b), then "Base Rate Subline C
Margin" shall mean 2.00.

        (c)  The definition of "Loan Documents" in Section 1.1 of the Loan
Agreement is hereby amended by inserting the words ", the Side Letter," directly
after the words "the Intercompany Subordination Agreement" and before the words
"the Letters of Credit" in the fourth line thereof.

        2.02    Amendment of Section 3.2.    Section 3.2 of the Loan Agreement
is hereby amended by deleting Section 3.2(d) in it entirety.

        2.03    Amendment to Section 6.    Section 6 of the Loan Agreement is
hereby amended by inserting the following as new Section 6.18:

        "Section 6.18. Parent promptly will provide the Lenders with true and
complete copies of any and all documents and other information delivered to any
Person pursuant to, or in connection with, the Investment Documents."

        2.04    Amendment to Section 7.1.    Section 7.1 of the Loan Agreement
is hereby amended by inserting the following as new Section 7.1(g) :

        "(g) Indebtedness owed to KHPP pursuant to the KHPP Note Documents, so
long as such Indebtedness is (i) not secured by any of the assets or properties
of any Borrower or the Guarantor and (ii) subject to the terms and provisions of
the Side Letter."

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        2.05    Amendment to Section 7.8.    Section 7.8(a) of the Loan
Agreement is hereby amended by deleting Section 7.8(a) in its entirety and
inserting the following new Section 7.8(a) in replacement thereof:

        "Except (i) as specifically permitted by the Side Letter or (ii) in
connection with a refinancing permitted by Section 7.1(d), prepay, redeem,
defease, purchase, or otherwise acquire any Indebtedness of any Borrower prior
to its scheduled maturity, other than the Obligations in accordance with this
Agreement, and"

        2.06    Amendment to Section 7.14.    Section 7.14 of the Loan Agreement
is hereby amended by inserting the words "the KHPP Investment Documents or"
directly after the words "permitted by" and before the words "Section 7.11" in
the first line thereof

        2.07    Amendment to Section of Loan Agreement with the heading
"Securities Accounts."    The Section of the Loan Agreement with the heading
"Securities Account" is hereby numbered as Section 7.19 of the Loan Agreement.

        2.08    Amendments to Section 7.19.    

        (a)  Section 7.19 of the Loan Agreement is hereby renumbered as
Section 7.20 of the Loan Agreement.

        (b)  Section 7.19(a)(i) of the Loan Agreement is hereby amended by
deleting Section 7.19(a)(i) in its entirety and inserting the following new
Section 7.20(a)(i) in replacement thereof:

(i)Fixed Charge Coverage Ratio. A Fixed Charge Coverage Ratio, measured on a
fiscal quarter-end basis, of not less than the applicable Fixed Charge Coverage
Ratio set forth in the following table for the applicable period set forth
opposite thereto:

Applicable Fixed
Charge Coverage Ratio

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  Applicable Period

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0.31:1   For the 12 month period ending June 30, 2003 0.66:1   For the 12 month
period ending September 30, 2003 0.9:1   For the 12 month period ending December
31, 2003 1:1   For the 12 month period ending each fiscal quarter thereafter

        2.09    Amendments to Section 7.20.    Section 7.20 of the Loan
Agreement is hereby renumbered as Section 7.21 of the Loan Agreement.

        2.10    Amendment to Section 7 of the Loan Agreement.    Section 7 of
the Loan Agreement is hereby amended by inserting the following as new Sections
7.22 and 7.23:

        "Section 7.22.    KHPP Investment Documents.    Directly or indirectly
amend, modify, alter or change any term or condition of any KHPP Investment
Document."

        "Section 7.23.    Phase-II Environmental Report.    After January 1,
2004, Parent shall deliver a phase-II environmental report with respect to each
parcel comprising the Real Property Collateral, within ninety (90) days after
Agent's request, the scope of the report and the results thereof shall be
acceptable to Agent."

        2.11    Amendment to Section 8 of the Loan Agreement.    Section 8 of
the Loan Agreement is hereby amended by inserting the following as new
Section 8.14:

        "Section 8.14.    If a default occurs under any Investment Document."

        Section 3.    Representations and Warranties.    In order to induce
Agent and the Lenders to enter into this First Amendment, each of the Borrowers
hereby represents and warrants that:

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        3.01    No Default.    At and as of the date of this First Amendment and
at and as of the Effective Date and both prior to and after giving effect to
this First Amendment, no Default or Event of Default exists.

        3.02    Representations and Warranties True and Correct.    At and as of
the date of this First Amendment and at and as of the Effective Date and both
prior to and after giving effect to this First Amendment, each of the
representations and warranties contained in the Loan Agreement and the other
Loan Documents is true and correct in all material respects.

        3.03    Corporate Power, Etc.    Such Borrower (i) has all requisite
corporate power and authority to execute and deliver this First Amendment and
the Side Letter and to consummate the transactions contemplated hereby and
thereby and (ii) has taken all action, corporate or otherwise, necessary to
authorize the execution and delivery of this First Amendment and the Side Letter
and the consummation of the transactions contemplated hereby and thereby.

        3.04    No Conflict.    Neither the execution and delivery of this First
Amendment and the Side Letter, nor consummation of the transactions contemplated
hereby or thereby will (i) conflict with or result in any breach or violation of
any provision of the certificate of incorporation or by-laws of such Borrower,
(ii) result in any breach or violation of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in the creation of a Lien upon any of the properties or assets of such
Borrower under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease agreement or other instrument
or obligation to which such Borrower is a party or to which any of its
properties or assets are subject, (iii) require any consent, approval,
authorization or permit of, or filing with or notification to, any third party
or any Governmental Authority, or (iv) violate any order, writ, injunction,
decree, judgment, ruling, law, statute, rule or regulation of any Governmental
Authority.

        3.05    Binding Effect.    This First Amendment and the Side Letter have
been duly executed and delivered by such Borrower and constitute the legal,
valid and binding obligations of such Borrower, enforceable against such
Borrower in accordance with their respective terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
relating to or affecting the enforcement of creditors' rights generally, and
(ii) the application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

        3.06    Investment Documents.    Parent has delivered to the Lenders
true and complete copies of the Investment Documents. All of the representations
and warranties of KHPP, KHPP Acquisition, Parent and any Borrower in the
Investment Documents are true and correct in all respects.

        Section 4.    Conditions.    This First Amendment and the effectiveness
of the amendments set forth in Section 2 hereof shall be effective as of
October 11, 2002 (the "Effective Date") upon the fulfillment by the Borrowers,
in a manner satisfactory to Agent and the Lenders, of all of the following
conditions precedent set forth in this Section 4:

        4.01    Execution and Delivery of the First Amendment.    Each of the
parties hereto shall have executed an original counterpart of this First
Amendment and shall have delivered (including by way of facsimile transmission)
the same to Agent.

        4.02    Execution and Delivery of the Side Letter.    Agent, KHPP
Acquisition, KHPP and Parent shall have executed an original counterpart of the
Side Letter and shall have delivered (including by way of facsimile
transmission) the same to Agent.

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        4.03    KHPP Acquisition Investment.    The KHPP Acquisition Investment
shall have occurred on terms and conditions satisfactory to Agent, and Agent
shall have been furnished with evidence, satisfactory to Agent and its counsel,
of the KHPP Acquisition Investment having occurred.

        4.04    KHPP Investment.    The KHPP Investment shall have occurred on
terms and conditions satisfactory to Agent, and Agent shall have been furnished
with evidence, satisfactory to Agent and its counsel, of the KHPP Investment
having occurred.

        4.05    Investment Documents.    The Investment Documents shall have
been executed by all of the parties thereto, and Parent shall have delivered to
Agent true and complete copies of the Investment Documents. Agent and its
counsel shall have reviewed, and be satisfied in all respects with, the
Investment Documents.

        4.06    Cancellation of Original Notes. The Original Notes shall have
been cancelled and Agent shall have received satisfactory evidence that the
Original Notes shall have been cancelled and are of no further effect.

        4.07    Delivery of Other Documents.    Agent shall have received all of
the following, each duly executed and dated the date hereof, in form and
substance reasonably satisfactory to Agent:

        (a)    Resolutions of the Borrowers.    Copies, duly certified by the
secretary or assistant secretary of each Borrower of (i) resolutions of the
Board of Directors of such Borrower authorizing or ratifying the execution and
delivery of this First Amendment, the Side Letter and the performance of the
transactions contemplated herein and therein, (ii) all documents evidencing
other necessary corporate action, and (iii) all approvals or consents, if any,
with respect to this First Amendment.

        (b)    Incumbency Certificates.    Certificates of the secretary or
assistant secretary of each Borrower certifying the names of the officers of
such Borrower authorized to sign this First Amendment, the Side Letter and all
other documents or certificates to be delivered hereunder or in connection
herewith, together with the true signatures of such officers.

        (c)    Other.    All other such instruments, documents and agreements as
Agent may reasonably request.

        4.08    Closing Fee.    The Borrower shall have paid to Agent, for the
benefit of the Lenders (apportioned in accordance with each Lender's Pro Rata
Share), a closing fee in the amount of $200,000.

        4.09    Compliance with Terms.    Each Borrower shall have complied in
all respects with the terms of this First Amendment, the Side Letter and of any
other agreement, document, instrument or other writing to be delivered by the
Borrower in connection herewith and therewith.

        Section 5.    Waiver.    Subject to the satisfaction of the conditions
precedent set forth in Section 4 hereof, the Agent and the Lenders hereby waives
compliance with the provisions of the Loan Documents that prohibit Borrowers
from entering into the Original Notes.

        Section 6.    General Confirmations and Amendments.    

        6.01    Continuing Effect.    Except as specifically provided herein,
the Loan Agreement and the other Loan Documents shall remain in full force and
effect in accordance with their respective terms and are hereby ratified and
confirmed in all respects.

        6.02    No Waiver.    This First Amendment is limited as specified and
the execution, delivery and effectiveness of this First Amendment shall not
operate as a modification, acceptance or waiver of any provision of the Loan
Agreement or any other Loan Document.

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        6.03    References.    

        (a)  From and after the Effective Date, (i) the Loan Agreement, the
other Loan Documents and all agreements, instruments and documents executed and
delivered in connection with any of the foregoing shall each be deemed amended
hereby to the extent necessary, if any, to give effect to the provisions of this
First Amendment and (ii) all of the terms and provisions of this First Amendment
are hereby incorporated by reference into the Loan Agreement, as if such terms
and provisions were set forth in full therein.

        (b)  From and after the Effective Date, (i) all references in the Loan
Agreement to "this Agreement", "hereto", "hereof", "hereunder" or words of like
import referring to the Loan Agreement shall mean the Loan Agreement as amended
hereby and (ii) all references in the Loan Agreement, the other Loan Documents
or any other agreement, instrument or document executed and delivered in
connection therewith to "Loan Agreement", "thereto", "thereof", "thereunder" or
words of like import referring to the Loan Agreement shall mean the Loan
Agreement as amended hereby.

        Section 7.    Miscellaneous.    

        7.01    Governing Law.    THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

        7.02    Severability.    The provisions of this First Amendment are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction and shall not in any manner affect such clause or provision in
any other jurisdiction, or any other clause or provision in this First Amendment
in any jurisdiction.

        7.03    Counterparts.    This First Amendment may be executed in any
number of counterparts, each of which counterparts when executed and delivered
shall be an original, but all of which shall together constitute one and the
same instrument.

        7.04    Headings.    Section headings in this First Amendment are
included herein for convenience of reference only and shall not constitute a
part of this First Amendment for any other purpose.

        7.05    Binding Effect; Assignment.    This First Amendment shall be
binding upon and inure to the benefit of the Borrowers, Agent and the Lenders
and their respective successors and assigns; provided, however, that the rights
and obligations of the Borrowers under this First Amendment shall not be
assigned or delegated without the prior written consent of Agent and the
Lenders.

        7.06    Expenses.    The Borrowers agree to pay Agent upon demand for
all reasonable expenses, including reasonable fees of attorneys and legal
assistants for Agent, Highbridge and HCM/Z Special Opportunites, LLC (who may be
employees of Agent, Highbridge or HCM Special Opportunities, LLC, as
applicable), incurred by Agent and Highbridge in connection with the
preparation, negotiation and execution of this First Amendment, the Side Letter
and any document required to be furnished herewith or therewith.

        [Signature pages follow]

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Exhibit 10.1