SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended June 30, 1997
Commission File Number 0-20984
HAHN AUTOMOTIVE WAREHOUSE, INC.
NEW YORK 16-0467030
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
no.)
415 West Main Street Rochester, New York 14608
(Address of principal executive offices)(Zip Code)
(716) 235-1595
(Registrant's telephone number, including area code)
1
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
1
Number of shares outstanding of the registrant's common stock,
par value $.01 per share, on August 13, 1997; 4,745,014.
FORM 10-Q/A
(Amendment)
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 - Waiver, Modification and Third Amendment to the
Credit Facility Agreement and Forbearance Agreement, dated
as of July 24, 1997 among the Company and its wholly-owned
subsidiaries and the banks named therein, and incorporated
herein by reference to the 10-Q filing dated August 15,
1997.
10.2 - Letter Agreement, dated August 5, 1997, between
Schottenstein Bernstein Capital Group, LLC, HLCO Trading
Company, Inc. and Garcel, Inc. d/b/a Great American Asset
Management, as joint venturers, and AUTOWORKS, Inc, and
incorporated herein by reference to the 10-Q filing dated
August 15, 1997.
10.3 - Sixth Amendment to Note Agreement dated as of July
24, 1997 between the Company and its Senior Secured Note holder,
Massachusetts Mutual Life Insurance Company, contained herein.
Exhibit 27 - Selected financial information as required for
Edgar electronic filing for the nine months ended June 30,
1996.
(b) Reports on Form 8-K
2
During the quarter ended June 30, 1997, the Company filed
(a) a Current Report on Form 8-K, filed July 25, 1997 reporting
the Company's exit from the AUTOWORKS retail business and the
filing by AUTOWORKS of a petition for reorganization under
Chapter 11 of the United States Bankruptcy Code; and (b) a
further Current Report on Form 8-K, filed August 11, 1997,
containing (i) the Company's Pro Forma Consolidated Balance Sheet
at March 31, 1997 and Pro Forma Consolidated Statement of
Operations for the six months then ended and (ii) Pro Forma
Consolidated Balance Sheet at September 30, 1996 and Pro forma
Consolidated Statement of Operations for the fiscal year then
ended, in each case reflecting the effects of the Company's
classification of the AUTOWORKS business as a discontinued
operation.
EXHIBIT 10.3
HAHN AUTOMOTIVE WAREHOUSE, INC.
SIXTH AMENDMENT TO NOTE AGREEMENT
Re:
Note Agreement dated as of December 15, 1989
Dated as of July 24, 1997
$15,000,000 Senior Secured Notes due June 15, 1999
3
SIXTH AMENDMENT TO NOTE AGREEMENT
SIXTH AMENDMENT TO NOTE AGREEMENT (this "Agreement"), dated
as of July 24, 1997, between HAHN AUTOMOTIVE WAREHOUSE, INC. (the
"Company"), a New York corporation, and MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY ("MassMutual"), a Massachusetts corporation.
RECITALS:
A. Pursuant to that certain Note Agreement, dated as of
December 15, 1989 (as previously amended and as in effect prior
to the effectiveness of this Agreement, the "Existing Note
Agreement," and, as amended and supplemented by this Agreement,
the "Amended Note Agreement"), the Company issued Fifteen Million
Dollars ($15,000,000) in aggregate principal amount of its ten
and twenty-five one-hundredths percent (10.25%) Senior Secured
Notes due June 15, 1999 (the "Notes").
B. Payment of the obligations of the Company in respect of
the Notes is, and the obligations of the Company in respect of
the Notes will continue to be, secured by a security interest in
certain collateral pursuant to (i) that certain Amended and
Restated Security Agreement, dated as of June 26, 1996, by and
between the Company and MassMutual, (ii) that certain Amended and
Restated Security Agreement, dated as of June 26, 1996, by and
between Auto Works, Inc. ("Auto Works") and MassMutual, and (iii)
that certain Security Agreement, dated as of June 26, 1996, by
and between Meisenzahl Auto Parts, Inc. ("Meisenzahl") and
MassMutual. The foregoing security agreements are referred to
herein collectively as the "MassMutual Security Agreements".
C. Pursuant to that certain Credit Facility Agreement (as
previously amended and as in effect prior to the effectiveness of
the Bank Modification Agreement (as defined below), the "Existing
Credit Agreement"), dated as of June 26, 1996, by and among (i)
the Company, Auto Works, Meisenzahl (sometimes referred to herein
collectively as the "Borrower"), (ii) Fleet Bank, a bank and
trust company formed under the laws of New York (in its capacity
as a lender ("Fleet") and in its capacity as agent (the
"Agent")), and (iii) Fleet, The Chase Manhattan Bank,
Manufacturers and Traders Trust Company and The Sumitomo Bank,
Limited (referred to herein collectively as the "Banks"), the
Borrower obtained certain lines of credit from the Banks.
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D. Pursuant to that certain Waiver, Modification and Third
Amendment to the Credit Facility Agreement and Forbearance
Agreement (the "Bank Modification Agreement"), dated as of July
24, 1997, by and among the Borrower, the Agent and the Banks, the
Borrower, the Agent and the Banks have agreed to certain
modifications to the Existing Credit Agreement. The Existing
Credit Agreement, as modified by the Bank Modification Agreement,
is referred to herein as the "Amended Credit Agreement".
E. Payment of the obligations of the Borrower in respect
of the Existing Credit Agreement is, and the obligations of the
Borrower in respect of the Amended Credit Facility will continue
to be, secured by a security interest in certain collateral
pursuant to (i) that certain Amended and Restated Security
Agreement, dated as of June 26, 1996, by and between the Company
and the Agent, for the benefit of the Banks, and that certain
Addendum to Amended and Restated Security Agreement, dated as of
June 26, 1996, by and between the Company and the Agent, for the
benefit of the Banks, (ii) that certain Amended and Restated
Security Agreement, dated as of June 26, 1996, by and between
Auto Works and the Agent, for the benefit of the Banks, and that
certain Addendum to Amended and Restated Security Agreement,
dated as of June 26, 1996, by and between Auto Works and the
Agent, for the benefit of the Banks, and (iii) that certain
Security Agreement, dated as of June 26, 1996, by and between
Meisenzahl and the Agent, for the benefit of the Banks, and that
certain Addendum to Amended and Restated Security Agreement,
dated as of June 26, 1996, by and between Meisenzahl and the
Agent, for the benefit of the Banks.
F. Pursuant to that certain Amended and Restated
Intercreditor Agreement (as in effect prior to the Intercreditor
Amendment (as defined below), the "Existing Intercreditor
Agreement"), dated as of June 26, 1996, by and between MassMutual
and the Agent, MassMutual and the Agent, on behalf of itself and
the Banks, made certain agreements concerning certain collateral
and other matters.
G. Pursuant to that certain First Amendment to Amended and
Restated Intercreditor Agreement (the "Intercreditor Amendment"),
dated as of the date hereof, by and between MassMutual and the
Agent, MassMutual and the Agent, on behalf of itself and the
Banks, have agreed to certain modifications to the Existing
Intercreditor Agreement. The Existing Intercreditor Agreement,
as amended by the Intercreditor Amendment is referred to herein
as the "Amended Intercreditor Agreement".
5
H. On or about July 24, 1997, Auto Works commenced a case
under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C.
101 et seq. The commencement of such case constituted an "Event
of Default" under the provisions of each of Section 6.1(c),
Section 6.1(e), Section 6.1(k), and Section 6.1(m) of the
Existing Note Agreement. Such Events of Default are collectively
referred to herein as the "Designated Defaults".
I. As a result of the occurrence of the Designated
Defaults, the Company acknowledges that the indebtedness
evidenced by the Notes has been automatically accelerated and is
currently due and payable in its full amount.
J. The Company has requested that MassMutual forbear from
exercising its rights and remedies in respect of the Designated
Defaults and that MassMutual amend or waive certain terms of the
Existing Note Agreement, as more particularly set forth in this
Agreement.
K. Subject to the terms and conditions set forth herein,
MassMutual has agreed to the Company's request.
L. The Company and MassMutual are desirous of entering
into this Agreement on the terms and conditions hereinafter set
forth.
AGREEMENT:
NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINED TERMS.
As used herein, the following terms shall have the meanings
set forth below or in the document or the Section of this
Agreement referenced below. The terms used herein and not
defined herein shall have the respective meanings ascribed to
such terms in the Amended Note Agreement.
"Agent" -- Recital C.
"Agreement, this" -- introductory sentence hereof.
"Amended Credit Agreement" -- Recital D hereof.
"Amended Intercreditor Agreement" -- Recital G hereof.
"Amended Note Agreement" -- Recital A hereof.
6
"Amended Note Documents" -- means, collectively, the Amended
Note Agreement, the Notes, the MassMutual Security Documents, and
the Amended Intercreditor Agreement, as each may be amended from
time to time.
"Amendment Effective Date" -- introductory language to
Section 5.
"Auto Works" -- Recital B hereof.
"Bank Modification Agreement" -- Recital D hereof.
"Banks" -- Recital C hereof.
"Borrower" -- Recital C hereof.
"Company" -- introductory sentence hereof.
"Designated Defaults" -- Recital H hereof.
"Existing Credit Agreement" -- Recital C hereof.
"Existing Intercreditor Agreement" -- Recital F hereof.
"Existing Note Agreement" -- Recital A hereof.
"Fleet" -- Recital C hereof.
"Forbearance Default" -- Section 3.
"Intercreditor Amendment" -- Recital G hereof.
"MassMutual" -- introductory sentence hereof.
"MassMutual Security Documents" -- Recital B hereof.
"Meisenzahl" -- Recital B hereof.
"Notes" -- Recital A hereof.
SECTION 2. AMENDMENTS TO EXISTING NOTE AGREEMENT AND
NOTES; WAIVER.
7
2.1 Amendments to Existing Note Agreement and Notes. The
Company and, subject to the satisfaction of the conditions set
forth in Section 5 hereof, MassMutual hereby consent and agree to
the amendments to the Existing Note Agreement as set forth in
Exhibit A to this Agreement. Each such amendment shall become
effective on the Amendment Effective Date and is incorporated
herein by reference as if set forth verbatim in this Agreement.
The Company hereby expressly assumes, and agrees to perform each
and every one of, its obligations under the Amended Note
Agreement and the Notes. All of the amounts due and owing under,
and evidenced by, the Notes as of the Amendment Effective Date
shall continue to be outstanding under, and after the Amendment
Effective Date will be evidenced by, the Notes and shall be
governed by the terms of the Notes and the Amended Note
Agreement.
2.2 Waivers with respect to Existing Note Agreement.
MassMutual hereby waives compliance by the Company, until the
earlier of (i) November 30, 1997 and (ii) the occurrence of a
Forbearance Default (as defined herein), with the following
sections of the Existing Note Agreement:
(a) Section 5.1 (but solely as it relates to the
Company's obligation to cause Auto Works to maintain its
corporate existence);
(b) Section 5.3 (but solely as it relates to the
Company's obligation to cause Auto Works promptly to pay and
discharge the obligations specified therein);
(c) Section 5.5 (but solely as it relates to the
Company's obligation to prevent a substantial change in the
general nature of the business of Auto Works);
(d) Sections 5.6 and 5.7 (but solely to the extent
that such non-compliance with Sections 5.6 or 5.7 is caused
by the bankruptcy of Auto Works); and
(e) Section 5.12 (but solely as it relates to the
obligation of the Company to prevent a sale of the assets of
Auto Works; provided, however, that any such sale must
receive the prior approval of the United States Bankruptcy
Court for the Western District of New York, and shall be on
prior written and timely notice to MassMutual).
SECTION 3. FORBEARANCE.
8
Effective upon the satisfaction of the conditions set forth
in Section 5 hereof, MassMutual hereby agrees, until the earlier
of (i) November 30, 1997 and (ii) the occurrence of a Forbearance
Default, to forbear from exercising any rights or remedies in
respect of the Designated Defaults. Such forbearance shall not
in any way affect the ability of MassMutual to collect, receive
or apply the proceeds of Collateral to the obligations evidenced
by the Notes as set forth in the Amended Note Agreement or the
MassMutual Security Agreements.
Upon the occurrence of a Forbearance Default, MassMutual
shall immediately be entitled to exercise each and every right or
remedy available to it under the Amended Note Documents or
applicable law in respect of such Forbearance Default and in
respect of the Designated Defaults.
Any one or more of the following shall constitute a
"Forbearance Default", as the term is used herein:
(a) the occurrence of any Event of Default other than
the Designated Defaults;
(b) the failure of the Company to comply with any of
the terms or provisions hereof;
(c) any of the Company's representations or warranties
contained herein shall be false, misleading or incorrect in
any respect;
(d) without the written consent of MassMutual, the
Company shall agree to any modification to the Amended
Credit Agreement (or the terms of the indebtedness evidenced
thereby) which includes any provision that would be in any
way adverse to the Company, any of its subsidiaries, or
MassMutual; or
(e) the Banks shall decline for any reason to advance
funds in respect of any loan request by the Borrower under
the provisions of the Amended Credit Agreement other than
because the Borrower has fully drawn the availability under
the Amended Credit Agreement.
SECTION 4. WARRANTIES AND REPRESENTATIONS.
To induce MassMutual to enter into this Agreement, the
Company warrants and represents to MassMutual that, as of the
Amendment Effective Date:
9
4.1 Organization, Existence and Authority. The Company is
a corporation duly incorporated, validly existing and is in good
standing under the laws of the State of New York. The Company
has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its obligations under the
Amended Note Documents.
4.2 Authorization, Execution and Enforceability. The
execution and delivery by the Company of this Agreement and the
performance by the Company of its obligations under the Amended
Note Documents have been duly authorized by all necessary action
on the part of the Company. This Agreement has been duly
executed and delivered by the Company. Each of the Amended Note
Documents constitutes a valid and binding obligation of the
Company, enforceable in accordance with its respective terms,
except that the enforceability thereof may be:
(a) limited by bankruptcy, insolvency or other similar
laws affecting the enforceability of creditors' rights
generally; and
(b) subject to the availability of equitable remedies.
4.3 No Conflicts or Defaults. Neither the execution and
delivery by the Company of this Agreement and the other Amended
Note Documents, nor the performance by the Company of its
obligations under any of the Amended Note Documents, conflicts
with, results in any breach in any of the provisions of,
constitutes a default under, violates or results in the creation
of any Lien (other than pursuant to the Amended Note Documents)
upon any Property of the Company under the provisions of:
(a) any charter document, partnership agreement or
bylaws of the Company;
(b) assuming the contemporaneous execution and
delivery of the Bank Modification Agreement, any agreement,
instrument or conveyance to which the Company or any
Properties of the Company may be bound or affected; or
10
(c) any statute, rule or regulation or any order, judgment
or award of any court, tribunal or arbitrator by which the
Company or any Properties of the Company may be bound or
affected.
4.4 Governmental Consent. Neither the execution and
delivery by the Company of this Agreement and the other Amended
Note Documents nor the performance by the Company of its
obligations under each of the Amended Note Documents, is such as
to require a consent, approval or authorization of, or filing,
registration or qualification with, any Governmental Authority on
the part of the Company as a condition thereto.
4.5 No Defaults or Events of Default. After giving effect
to the transactions contemplated by this Agreement, including the
contemporaneous execution and delivery of the Bank Modification
Agreement, no Default or Event of Default (other than Designated
Defaults in respect of which (i) MassMutual has agreed to forbear
hereunder and (ii) the Banks have agreed to forbear under the
Bank Modification Agreement) will exist under any of the Amended
Note Documents or the Amended Credit Agreement.
4.6 Disclosure. The financial statements and certificates
delivered to MassMutual by the Company or the Company's
accountants, as the case may be, pursuant to Section 5.19 of the
Existing Note Agreement do not, nor does this Agreement or any
written statement furnished by the Company in connection
herewith, contain any untrue statement of a material fact or omit
a material fact necessary to make the statements contained
therein or herein not misleading. There is no fact existing as
of the date hereof which the Company has not disclosed to
MassMutual in writing which has had or, so far as the Company can
now reasonably foresee, could reasonably be expected to have, a
material adverse effect on the condition, financial or otherwise,
of the Company or its Subsidiaries, or the operations of any of
them, or upon the Company's ability to perform its obligations
under this Agreement, the Amended Note Agreement and the Notes.
4.7 Certain Representations and Warranties. All of the
representations and warranties contained in the Bank Modification
Agreement, as in effect on the Amendment Effective Date, are true
and correct in all respects.
4.8 No Undisclosed Consideration. Except as expressly set
forth in the documents described in Section 5.1 or Section 5.2
hereof, neither the Company nor any Subsidiary has paid or will
pay, directly or indirectly, any fee, charge or other
consideration to any Lender (as defined in the Amended
Intercreditor Agreement) as a condition to, or otherwise in
connection with, this Agreement or the Bank Modification
11
Agreement.
SECTION 5. CONDITIONS PRECEDENT.
The amendments set forth in Section 2 hereof and the
agreement to forbear set forth in Section 3 hereof shall not
become effective unless all of the following conditions precedent
shall have been satisfied on or before August 8, 1997 (the date
of such satisfaction being herein referred to as the "Amendment
Effective Date"):
5.1 Execution and Delivery of this Agreement. The Company
shall have executed and delivered to MassMutual a counterpart of
this Agreement.
5.2 Execution and Delivery of Other Documents. The
following documents, each in form and substance satisfactory to
MassMutual and its special counsel, shall have been duly executed
and delivered by the parties thereto, and shall be in full force
and effect:
(a) the Bank Modification Agreement; and
(b) the Intercreditor Amendment.
5.3 Security Interest Perfection. The Company shall have
caused such UCC-1 Financing Statements and other documents to be
executed and filed in the appropriate offices in Wayne County,
North Carolina and Cumberland County, North Carolina as are
required to perfect or protect all of the security interests
granted pursuant to the MassMutual Security Agreements.
5.4 No Default; Representations And Warranties True. The
warranties and representations set forth in Section 4 hereof
shall be true and correct on the Amendment Effective Date and no
Default or Event of Default shall exist which would not be waived
by this Agreement or the Bank Modification Agreement.
5.5 Authorization of Transactions. The Company shall have
duly authorized the execution and delivery of this Agreement and
each of the documents executed and delivered in connection
herewith and the performance of all of its obligations
contemplated by this Agreement.
12
5.6 Payment of Certain Expenses. The Company shall have
paid all reasonable costs and expenses of MassMutual relating to
this Agreement and the other Amended Note Documents, including
without limitation (i) the fees and expenses of Hebb & Gitlin,
MassMutual's special counsel and (ii) the out-of-pocket expenses
of MassMutual, in accordance with Section 7.5 hereof.
5.7 Proceedings Satisfactory. All documents executed and
delivered, and actions and proceedings taken, in connection with
this Agreement shall be satisfactory to MassMutual and its
special counsel. MassMutual and its special counsel shall have
received copies of such documents and papers as they may
reasonably request in connection therewith, in form and substance
satisfactory to them.
SECTION 6. NO PREJUDICE OR WAIVER; REAFFIRMATION.
6.1 No Prejudice or Waiver. Except as provided herein, the
terms of this Agreement shall not operate as a waiver by
MassMutual of, or otherwise prejudice MassMutual's rights,
remedies or powers under, the Amended Note Documents or under
applicable law. Except as expressly provided herein:
(a) no terms and provisions of any agreement are
modified or changed by this Agreement; and
(b) the terms and provisions of the Existing Note
Agreement and the Notes shall continue in full force and
effect.
6.2 Reaffirmation. The Company hereby acknowledges and
reaffirms all of its obligations and duties under the Amended
Note Documents.
6.3 Acknowledgement of Outstanding Obligations. The
Company hereby affirms and acknowledges that (i) the Designated
Defaults have occurred, (ii) as of the date hereof, the aggregate
principal amount outstanding under the Notes is $4,250,000,
together with accrued interest thereon and cost expenses
(collectively, the Outstanding Amount") and (iii) the Outstanding
Amount is now due and owing and that the Company is obligated to
pay to MassMutual, all without defense, setoff or counterclaim of
any kind or nature whatsoever, the Outstanding Amount.
SECTION 7. MISCELLANEOUS.
7.1 Governing Law. This Agreement shall be governed by and
construed in accordance with New York law.
13
7.2 Duplicate Originals. Two or more duplicate originals
of this Agreement may be signed by the parties, each of which
shall be an original but all of which together shall constitute
one and the same instrument. This Agreement may be executed in
one or more counterparts and shall be effective when at least one
counterpart shall have been executed by each party hereto, and
each set of counterparts which, collectively, show execution by
each party hereto shall constitute one duplicate original.
7.3 Waivers and Amendments. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated
orally, or by any action or inaction, but only by an instrument
in writing signed in accordance with the amendment provisions set
forth in the Existing Note Agreement.
7.4 Section Headings. The titles of the sections hereof
appear as a matter of convenience only, do not constitute a part
of this Agreement and shall not affect the construction hereof.
7.5 Costs and Expenses. The Company affirms and
acknowledges that Section 9.4 of the Existing Agreement and the
Amended Agreement applies to this Agreement and the transactions
contemplated hereby. Without limiting such Section 9.4, the
Company agrees ,on or before the Amendment Effective Date, to pay
all costs and expenses of MassMutual relating to this Agreement
and the other Amended Note Documents, including, but not limited
to, (i) the statement for reasonable fees and disbursements of
MassMutual's special counsel and (ii) the statement for
reasonable out-of-pocket expenses of MassMutual, in each case,
presented to the Company on or before the Amendment Effective
Date. The Company will also pay upon receipt of any statement
thereof, each additional statement for (i) reasonable fees and
disbursements of MassMutual's special counsel or (ii) reasonable
out-of-pocket expenses of MassMutual, rendered after the
Amendment Effective Date in connection with the Amended Note
Documents.
7.6 Survival. All warranties, representations,
certifications and covenants made by or on behalf of the Company
or any Subsidiary in the Amended Note Documents or in any
certificate or other instrument delivered pursuant to the Amended
Note Documents shall be considered to have been relied upon by
MassMutual and shall survive the execution of the Amended Note
Documents, regardless of any investigation made by or on behalf
of MassMutual. All statements in any such certificate or other
instrument shall constitute warranties and representations of the
Company hereunder.
14
7.7 Waiver and Release. For and in consideration of the
agreements contained in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of all of
which are hereby acknowledged, the Company, on its own behalf,
and to the extent that it is lawfully able to do so, on behalf of
its predecessors, successors, assigns, Subsidiaries, affiliates
and agents and all of their respective past, present and future
officers, directors, shareholders, employees, contractors and
attorneys, and the predecessors, heirs, successors, and assigns
of each of them (collectively referred to in this Section 7.7 as
the "Releasors") do hereby jointly and severally fully RELEASE,
REMISE, ACQUIT, IRREVOCABLY WAIVE and FOREVER DISCHARGE
MassMutual, together with its predecessors, successors, assigns,
subsidiaries, affiliates and agents and all of their respective
past, present and future officers, directors, shareholders,
employees, contractors and attorneys, and the predecessors,
heirs, successors and assigns of each of them (MassMutual and all
of the foregoing being collectively referred to in this Section
7.7 as the "Released Parties"), from and with respect to any and
all Claims (as defined below).
As used in this Section 7.7, the term "Claims" shall mean
and include any and all, and all manner of, action and actions,
cause and causes of action, suits, disputes, controversies,
claims, debts, sums of money, offset rights, defenses to payment,
agreements, promises, notes, bonds, bills, covenants, losses,
damages, judgments, executions and demands of whatever nature,
known or unknown, whether in contract, in tort or otherwise, at
law or in equity, for money damages or dues, recovery of
property, or specific performance, or any other redress or
recompense which have accrued or may ever accrue, may have been
had, may be now possessed, or may or shall be possessed in the
future by or on behalf of any one or more of the Releasors
against any one or more of the Released Parties for, upon, by
reason of, on account of, or arising from or out of, or by virtue
of, any transaction, event or occurrence, duty or obligation,
indemnification, agreement, promise, warranty, covenant or
representation, breach of fiduciary duty, breach of any duty of
fair dealing, breach of confidence, breach of funding commitment,
undue influence, duress, economic coercion, conflict of interest,
negligence, bad faith, malpractice, violations of federal or
state securities laws or the Racketeer Influenced and Corrupt
Organizations Act, intentional or negligent infliction of mental
distress, tortious interference with contractual relations,
tortious interference with corporate governance or prospective
business advantage, breach of contract, deceptive trade
practices, libel, slander, usury, conspiracy, wrongful
acceleration of any indebtedness, wrongful foreclosure or attempt
to foreclose on any collateral relating to any
15
indebtedness, action or inaction, relationship or activity,
service rendered, matter, cause or thing, whatsoever, express or
implied, transpiring, entered into, created or existing from the
beginning of time to the date of the execution of this Agreement
in respect of the Notes or the Existing Note Agreement, and shall
include, but not be limited to, any and all Claims in connection
with, as a result of, by reason of, or in any way related to or
arising from the existence of any relationships or communications
by and between the Releasors and the Released Parties with
respect to the Notes, the agreements pursuant to which the Notes
were issued, and all agreements, documents and instruments
related thereto, including, without limitation, the Amended Note
Documents, as presently constituted and as the same may from time
to time be amended.
The Company, for itself and the other Releasors,
acknowledges that the Releasors may hereafter discover facts,
which exist or existed on or before the date hereof, different
from or in addition to those they now know or believe to be true
with respect to the Claims herein released. Notwithstanding the
foregoing, the Company, for itself and the other Releasors,
agrees that this Section 7.7 shall survive the termination hereof
and shall remain effective in all respects and waive the right to
make any new, different or additional claim on account of such
different or additional facts. The Company, for itself and the
other Releasors, acknowledges that no representation or warranty
of any kind or character has been made to the Releasors by any
one or more of the Released Parties or any agent, representative
or attorney of the Released Parties to induce the execution of
this Agreement containing this Section 7.7.
The Company, for itself and the other Releasors, hereby
represents and warrants unto the Released Parties that:
(a) the Company has the full right, power, and
authority to execute and deliver this Agreement containing
this Section 7.7 without the necessity of obtaining the
consent of any other party;
(b) the Company has received independent legal advice
from attorneys of their choice with respect to the
advisability of granting the release provided herein, and
with respect to the advisability of executing this Agreement
containing this Section 7.7;
(c) the Company has not relied upon any statements,
representations or promises of any of the Released Parties
in executing this Agreement containing this Section 7.7, or
in granting the release provided herein;
16
(d) the Releasors have not entered into any other
agreements or understandings relating to the Claims;
(e) the terms of this Section 7.7 are contractual, not
a mere recital, and are the result of negotiation among all
the parties; and
(f) this Section 7.7 has been carefully read by, and
the contents hereof are known and understood by, and it is
signed freely by the Company.
The Company, for itself and the other Releasors, covenants
and agrees no Releasor shall bring any claim, action, suit or
proceeding regarding or related in any manner to the matters
released hereby, and the Company, for itself and the other
Releasors, further covenants and agrees that this Section 7.7 is
a bar to any such claim, action, suit or proceeding.
All prior discussions and negotiations regarding the Claims
have been and are merged and integrated into, and are superseded
by, this Section 7.7. The Releasors understand, agree and
expressly assume the risk of any fact not recited, contained or
embodied in this Section 7.7 which may hereafter turn out to be
other than, different from, or contrary to, the facts now known
to the Releasors or believed by the Releasors to be true, and
further agree that this Section 7.7 shall not be subject to
termination, modification, or rescission, by reason of any such
difference in facts.
17
7.8 Indemnification. The Company agrees to indemnify
MassMutual and its directors, officers, employees, agents and
attorneys from, and hold each of them harmless against, any and
all losses, liabilities, claims, damages or expenses incurred by
any of them arising out of or by reason of any investigation or
litigation or other proceedings (including any threatened
investigation, litigation or other proceedings) relating to, or
in connection with, the Amended Note Documents including, without
limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or
other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be
indemnified). Without limiting the generality of the foregoing,
the Company agrees to pay currently the expenses reasonably and
necessarily incurred by MassMutual relating to any such
investigation, litigation or other proceedings (including,
without limitation, the fees and expenses of legal counsel) in
advance of the final disposition thereof, unless a court of
competent jurisdiction finally determines that the Company is not
obligated to provide such current payment in respect of such
investigation, litigation or proceeding. MassMutual agrees to
reimburse the Company for all amounts paid by the Company on
behalf of MassMutual in connection with any claim for indemnity
hereunder in the event, and only to the extent that, a judgment
shall have been entered by a court of competent jurisdiction in a
final adjudication from which there is no further appeal that
MassMutual is not entitled to be indemnified by the Company for
such amounts under this Agreement, applicable law or any other
right of indemnity by the Company that may be available to
MassMutual.
7.9 Consultants. The Company acknowledges and agrees that
MassMutual, and its representatives, agents, attorneys and
financial advisors, shall be permitted (i) to receive all
materials provided to the Banks by their consultants, including,
without limitation (A) Gordon Brothers and (B) Claymore Partners
and (ii) to consult directly with such consultants.
[REMAINDER OF PAGE IS INTENTIONALLY BLANK. NEXT PAGE IS SIGNATU
RE PAGE.]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on their behalf by a duly authorized
officer or agent thereof, as the case may be, as of the date
first above written.
18
HAHN AUTOMOTIVE WAREHOUSE, INC.
By_________________________________
Name:
Title:
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By_________________________________
Name:
Title:
EXHIBIT A
AMENDMENTS TO EXISTING NOTE AGREEMENT
1. Amendments to Section 2.2 of the Existing Note
Agreement. Section 2.2 of the Existing Note Agreement is hereby
amended by deleting the period at the end of the last sentence of
the first paragraph thereof, and replacing it with the following:
"provided, however, in the event that, on or before the
Forbearance Termination Date, the Company shall prepay the
outstanding Notes in whole, by payment of the full principal
amount of the Notes and all accrued interest thereon to the date
of such prepayment, the Company shall not be required to
accompany such prepayment with any Make-Whole Premium."
2. Amendments to Section 5 of the Existing Note Agreement.
(a) Subsection (4) of Section 5.8 of the Existing Note
Agreement is deleted in its entirety and replaced with the
following:
"(4) Current Debt or Funded Debt of a
Restricted Subsidiary to the Company or a Wholly-Owned
Restricted Subsidiary (other than Auto Works)."
(b) The term "Affiliate" when used in Section 5.15 of
the Existing Note Agreement shall be deemed to include, for
all purposes of such Section, Auto Works.
19
(c) Section 5.16 of the Existing Note Agreement is
hereby amended by deleting the existing sub-section (a)
thereof and replacing it with the following:
"(a) investments, loans and advances by the
Company and its Restricted Subsidiaries in and to
Restricted Subsidiaries (other than Auto Works),
including any investment in a corporation which, after
giving effect to such investment, will become a
Restricted Subsidiary;"
(d) Section 5.19 of the Existing Note Agreement is
hereby amended by (i) deleting the word "and" at the end of
sub-section (g) thereof, (ii) deleting the period at the end
of sub-section (h) thereof and replacing it with "; and" and
(iii) adding a new sub-section "(i)" to such Section which
new sub-section shall read in its entirety as follows:
"(i) Additional Information. Simultaneously
with the delivery thereof to any of the Fleet Agented
Banks, copies of any and all certificates, statements,
reports, projections, calculations, verifications,
documents, or other information required to be
delivered to the Fleet Agented Banks under Section 7 of
the Bank Modification Agreement."
(e) A new Section 5.20 is hereby added to the Existing
Note Agreement which new section shall read in its entirety
as follows:
"5.20 Subordination. The Company shall not
make, nor shall it permit either of Meisenzahl or Auto Works to
make, any payments of principal on the Promissory Note dated
February 1, 1996 in the amount of $1,650,000 between the Company
and Michael Futerman or the Promissory Note dated January 24,
1996 in the amount of $500,000 between the Company and Eli
Futerman (together, the "Subordinated Notes"), although the
Company may make regular interest payments in respect of the
Subordinated Notes until a Forbearance Default occurs, after
which time the Company shall not make any further payments
whatsoever in respect of the Subordinated Notes.
(f) A new Section 5.21 is hereby added to the Existing
Note Agreement which new section shall read in its entirety
as follows:
20
"5.21 Modifications to Fleet Agented
Credit Agreement. Without the written consent of the
holder of the Notes, the Company shall not agree to any
modification to the Fleet Agented Credit Agreement (or
the terms of the indebtedness evidenced thereby) which
includes any provision that would be in any way adverse
to the Company, any of its subsidiaries, or the holder
of the Notes."
3. Amendment to Section 6.1 of the Existing Note
Agreement. Section 6.1(f) of the Existing Note Agreement is
hereby amended to read in its entirety as follows:
"(f) Default shall occur in the observance or
performance of any covenant or agreement contained in
5.6 through 5.13, 5.17, 5.18, 5.20 or 5.21
hereof; or"
4. Amendments to Section 8.1 of the Existing Note
Agreement. Section 8.1 of the Existing Note Agreement is hereby
amended to modify in their entirety or add, each in their proper
alphabetical order, the following definitions:
"Auto Works" shall mean Auto Works, Inc., a
Michigan corporation.
"Bank Modification Agreement" shall mean that
certain Waiver, Modification and Third Amendment to the
Credit Facility Agreement and Forbearance Agreement, dated
as of July 24, 1997, by and among (i) the Company, Auto
Works, Inc., Meisenzahl Auto Parts, Inc. and (ii) the Banks,
as the same may be amended from time to time.
"Fleet Agented Credit Agreement" shall mean that
certain Credit Facility Agreement, dated as of June 26,
1996, by and among the Company, Auto Works, Meisenzahl, and
the Fleet Agented Banks.
"Fleet Agented Banks" shall mean, collectively,
Fleet Bank, The Chase Manhattan Bank, Manufacturers and
Traders Trust Company, and The Sumitomo Bank, Limited, and
their respective successors and assigns.
"Forbearance Termination Date" shall mean the
first to occur of the following:
(A) November 30, 1997;
21
(B) the occurrence of any Event of
Default other than the Designated Defaults (as defined
in the Note Agreement Amendment);
(C) the failure of the Company to
comply with any of the terms or provisions of the Note
Agreement Amendment;
(D) any of the Company's
representations or warranties contained in the Note
Agreement Amendment shall be false, misleading or
incorrect in any respect; or
(E) without the written consent of the
holder of the Notes, the Company shall agree to any
modification to the Fleet Agented Credit Agreement (or
the terms of the indebtedness evidenced thereby) which
includes any provision that would be in any way adverse
to the Company, any of its subsidiaries, or the holder
of the Notes; or
(F) the Fleet Agented Banks shall
decline for any reason to advance funds in respect of
any loan request by the Borrower (as defined in the
Fleet Agented Credit Agreement) under the provisions of
the Fleet Agented Credit Agreement other than because
the Borrower has fully drawn the availability
thereunder.
"Meisenzahl" shall mean Meisenzahl Auto Parts,
Inc., a New York corporation.
"Note Agreement Amendment" shall mean that certain
Sixth Amendment to Note Agreement, dated as of July 24,
1997, by and between the Company and the Purchaser.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
HAHN AUTOMOTIVE WAREHOUSE, INC.
(Registrant)
By: s//Mike Futerman
Mike Futerman
Chief Executive Officer
22
By: s//Eli N. Futerman
Eli N. Futerman
President
By: s//Albert J. Van Erp
Albert J. Van Erp
Vice President - Finance
Dated: August 20, 1997
23
