AMENDMENT NO. 1, WAIVER AND CONSENT
TO
POST-PETITION LOAN AND SECURITY AGREEMENT
THE CIT GROUP/BUSINESS CREDIT, INC.
AS AGENT AND LENDER
AND
CONGRESS FINANCIAL CORPORATION
GENERAL ELECTRIC CAPITAL CORPORATION
▇▇▇▇▇▇ FINANCIAL, INC.
FINOVA CAPITAL CORPORATION
FOOTHILL CAPITAL CORPORATION
AND
BANKBOSTON, N.A.
AS LENDERS
AND
HARVARD INDUSTRIES, INC.,
THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ CORPORATION,
▇▇▇▇▇▇ AUTOMOTIVE, INC.,
▇▇▇▇▇-ALBION CORPORATION,
▇▇▇▇▇▇▇-▇▇▇▇▇▇, INC.,
▇▇▇▇▇▇▇-▇▇▇▇▇▇ GREENEVILLE, INC.,
▇▇▇▇▇▇▇-▇▇▇▇▇▇ POTTSTOWN, INC.,
▇▇▇▇▇▇▇-▇▇▇▇▇▇ TECHNOLOGIES, INC.,
AND
▇▇▇▇▇▇▇-▇▇▇▇▇▇ TOLEDO, INC.
(AS COMPANIES)
DATED: DECEMBER 29, 1997
AMENDMENT NO. 1, WAIVER AND CONSENT (the "Amendment") dated
December 29, 1997, by and among HARVARD INDUSTRIES, INC., a Florida corporation
and a debtor and debtor in possession under chapter 11 of the Bankruptcy Code
(herein "Harvard"), ▇▇▇▇▇▇▇-▇▇▇▇▇▇, INC., a Delaware corporation and a debtor
and debtor in possession under chapter 11 of the Bankruptcy Code ("DJ Inc."),
THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ CORPORATION, a New Hampshire corporation and a debtor and
debtor in possession under chapter 11 of the Bankruptcy Code ("▇▇▇▇▇▇▇▇
▇▇▇▇▇▇"), ▇▇▇▇▇▇ AUTOMOTIVE, INC., a Michigan corporation and a debtor and
debtor in possession under chapter 11 of the Bankruptcy Code ("▇▇▇▇▇▇
Automotive"), ▇▇▇▇▇-ALBION CORPORATION, a Michigan corporation and a debtor and
debtor in possession under chapter 11 of the Bankruptcy Code ("▇▇▇▇▇-Albion"),
▇▇▇▇▇▇▇-▇▇▇▇▇▇ GREENEVILLE, INC., a Delaware corporation and a debtor and
debtor in possession under chapter 11 of the Bankruptcy Code, ▇▇▇▇▇▇▇-▇▇▇▇▇▇
POTTSTOWN, INC., a Delaware corporation and a debtor and debtor in possession
under chapter 11 of the Bankruptcy Code ("DJ Pottstown"), ▇▇▇▇▇▇▇-▇▇▇▇▇▇
TECHNOLOGIES. INC., a Delaware corporation and a debtor and debtor in
possession under chapter 11 of the Bankruptcy Code ("DJ Technologies"), and
▇▇▇▇▇▇▇-▇▇▇▇▇▇ TOLEDO, INC., a Delaware corporation and a debtor and debtor in
possession under chapter 11 of the Bankruptcy Code ("▇▇ ▇▇▇▇▇▇"), THE CIT
GROUP/BUSINESS CREDIT, INC. ("CITBC") as agent for the Lenders whose names are
set forth on the signature pages hereto (each a "Lender" and collectively the
"Lenders" and CITBC as such agent being the "Agent") and the Lenders. Harvard
and each of the entities subsequently identified above (other than the Agent
and the Lenders) are referred to herein individually as a "Company" and
collectively as the "Companies").
W I T N E S S E T H
WHEREAS, each Company has filed a separate petition for
relief under chapter 11 of title 11 of the United States Code (the "Chapter 11
Cases") with the United States Bankruptcy Court for the District of Delaware
(the "Court") and continues to operate its business as a debtor-in-possession;
and
WHEREAS, the Companies, the Lenders and CITBC, as Agent, are
parties to that certain Post-Petition Loan and Security Agreement, dated as of
May 8, 1997 (as amended by this Amendment and as further amended, extended,
supplemented or otherwise modified from time to time, the "DIP Financing
Agreement" and capitalized terms defined in the DIP Financing Agreement and not
otherwise defined herein having the meanings provided therein), providing for,
inter alia, Term Loans and Revolving Credit Loans to the Companies in the
aggregate
principal amounts of $65,000,000 for the Term Loans and up to $110,000,000 for
the Revolving Credit Loans; and
WHEREAS, pursuant to the Final Order dated June 12, 1997 (the
"Final Order") the Court, inter alia, approved the DIP Financing Agreement and
all transactions contemplated by the DIP Financing Agreement; and
WHEREAS, pursuant to the Final Order and the DIP Financing
Agreement, the Post-Petition Obligations (as defined in the Final Order) (i)
are secured by fully perfected and subsisting first priority liens on and
security interests in all assets and properties of the Companies (subject only
to the Carve-Out, Superior Existing Liens and Permitted Purchase Money Liens
(each as defined in the Final Order)) and (ii) constitute in accordance with
section 364(c)(1) of the Bankruptcy Code, claims against each of the Companies
which are administrative expense claims having priority over any and all
administrative expenses of the kind specified in sections 503(b) or 507(b) of
the Bankruptcy Code, subject only to the Carve-Out; and
WHEREAS, the Companies are in discussions with certain
members of the Official Committee of Unsecured Creditors or their affiliates
(in this capacity, the "Junior Lenders") pursuant to which the Junior Lenders
will lend an additional $25,000,000 to the Companies, on a subordinated basis,
to be used by the Companies, inter alia, to repay Revolving Credit Loans; and
WHEREAS, the Companies have requested the Agent and the
Lenders to enter into this Amendment, inter alia, (i) to waive certain Events
of Default which have arisen prior to the date of this Amendment, and (ii) to
amend certain financial covenants contained in the DIP Financing Agreement; and
WHEREAS, it is a condition precedent to the Agent and the
Lenders agreeing to amend the DIP Financing Agreement as requested by the
Companies that the parties hereto enter into the Amendment; and
WHEREAS, as consideration for the Lenders agreeing to amend
the DIP Financing Agreement as so requested by the Companies, the Companies
have agreed to pay an amendment fee of $250,000 (the "Amendment Fee") to the
Agent for the ratable benefit of the Lenders, payable at the time set forth
herein; and
WHEREAS, the Lenders have agreed with the Companies to enter
into this Amendment upon the terms and subject to the conditions contained
herein;
NOW, THEREFORE, the parties hereto agree as follows:
2
SECTION 1. Amendments to the DIP Financing Agreement. Upon
the satisfaction of the conditions in Section 3 of this Amendment relating to
the effectiveness of this Section 1, the DIP Financing Agreement is hereby
amended as follows:
(i) Section 1 is hereby amended by:
(a) Adding the following new definitions in appropriate
alphabetical order:
"Adjusted Net Worth" shall mean, at any time, the excess of
the Total Assets of the Companies at such time over the Total
Liabilities of the Companies at such time, adjusted so as to add back
(i) any amounts shown on the consolidated balance sheet of the
Companies as liabilities subject to compromise, (ii) Harvard's 14 1/4%
Pay-in-Kind Exchangeable Preferred Stock, and (iii) any Indebtedness
incurred subsequent to January 1, 1998 which is subordinated to the
Obligations.
"Tangible Net Worth" shall mean, at any time, the Adjusted
Net Worth of the Companies at such time, excluding, however, from the
determination of the Total Assets at such time, (i) all goodwill,
organizational expenses, research and development expenses,
trademarks, trade names, copyrights, patents, patent applications,
licenses and rights in any thereof, and other similar intangibles,
(ii) treasury stock and capital stock, obligations or other securities
of, or capital contributions to, or investments in, any Subsidiary,
(iii) securities which are not readily marketable, (iv) cash held in a
sinking or other analogous fund established for the purpose of
redemption, retirement, defeasance or prepayment of any stock or
Indebtedness, and (v) any items not included in clauses (i) through
(iv) above which are treated as intangibles in conformity with GAAP.
"Total Assets" shall mean, at any time, the total assets of
the Companies at such time determined on a consolidated basis in
accordance with GAAP.
"Total Liabilities" shall mean, at any time, all obligations
which in conformity with GAAP would be included in determining total
liabilities as shown on the liabilities side of the consolidated
balance sheet of the Companies at such time, and in any event
includes, without limitation, all
3
Indebtedness of the Companies at such time whether or not the same
would be so shown.
(ii) Section 8 is hereby amended by deleting Sections 8.8,
8.9 and 8.10 and replacing them in their entirety with the following:
8.8A EBITDA. The Companies shall maintain cumulative EBITDA
(deficiencies shown in parentheses) of not less than:
(a) $(7,500,000) for the three months ended December 31, 1997;
(b) $(10,000,000) for the four months ended January 31, 1997;
(c) $(10,000,000) for the five months ended February 28, 1998;
(d) $(7,500,000) for the six months ended March 31, 1998;
(e) $(5,000,000) for the seven months ended April 30, 1998;
(f) $(2,500,000) for the eight months ended May 31, 1998;
(g) $0 for the nine months ended June 30, 1998;
(h) $(1,000,000) for the ten months ended July 31, 1998;
(i) $1,000,000 for the eleven months ended August 31, 1998; and
(j) $4,000,000 for the year ended September 30, 1998.
8.8B Tangible Net Worth. The Companies shall maintain during
each month set forth below a consolidated Tangible Net Worth
(deficiencies shown in parentheses) of not less than the minimum
amount set forth below for such month:
(a) $(48,822,000) for the month ended December 31, 1997;
(b) $(56,289,000) for the month ended January 31, 1997;
(c) $(33,417,000) for the month ended February 28, 1998;
(d) $(34,769,000) for the month ended March 31, 1998;
(e) $(34,592,000) for the month ended April 30, 1998;
(f) $(37,751,000) for the month ended May 31, 1998;
(g) $(38,861,000) for the month ended June 30, 1998;
(h) $(45,898,000) for the month ended July 31, 1998;
(i) $(47,179,000) for the month ended August 31, 1998; and
(j) $(45,405,000) for the month ended September 30, 1998.
8.9 Capital Expenditures. The Companies shall not make
payments in respect of Capital Expenditures excluding payments on
Capital Lease Obligations in existence on the Petition Date in excess
of $30,000,000 in the aggregate for all Companies during the fiscal
year ending September 30, 1998,
4
without the prior written consent of the Agent (acting on the
instructions of the Required Lenders).
8.10 Fixed Charge Coverage Ratio. From and after October 1,
1998, the Companies shall maintain a ratio of (a) EBITDA to (b) Fixed
Charges of at least 1:1 for the period from the beginning of the
Fiscal Year to the end of the most recently completed calendar month
in such Fiscal Year for which financial statements are available.
SECTION 2. Waiver. The Agent and the Lenders hereby waive
with effect from the Effective Date (as defined below) all Defaults and Events
of Default which have occurred prior to the date hereof which result solely
from the Companies' failure to comply with Section 8.8 of the DIP Financing
Agreement.
SECTION 3. Representations and Warranties. Each of the
Companies hereby represents and warrants as to itself and its Subsidiaries that
(a) the execution, delivery and performance of this Amendment have been duly
authorized by all necessary corporate action on the part of such Company and
this Amendment constitutes a legal, valid and binding obligation of such
Company, enforceable against it in accordance with its terms, (b) except as
disclosed in writing to the Agent and the Lenders or as waived hereby, no event
has occurred and is continuing on the date hereof that constitutes a Default or
Event of Default or would constitute a Default or Event of Default after giving
effect to this Amendment, and (c) the representations and warranties of such
Company contained in Section 6 of the DIP Financing Agreement are true and
correct both before and after giving effect to this Amendment, except to the
extent such representations and warranties are stated to be true only as of a
particular date, in which case such representations and warranties were correct
on and as of such date.
SECTION 4. Conditions to Effectiveness. The amendments,
waiver and consent in Sections 1, 2 and 6 of this Amendment shall become
effective on the date (the "Effective Date") when counterparts hereof shall
have been executed by the Required Lenders, the Agent and the Companies, and
the Agent shall have received the following:
(i) A certificate of the secretary or an assistant secretary
of each of the Companies, dated the Effective Date, in form and substance
satisfactory to the Agent, certifying the names and true signatures of each
officer of such Company who have been authorized to execute and deliver any
document required to be executed and delivered hereunder by or on behalf of
such Company; and
5
(ii) The Amendment Fee, for the ratable benefit of the
Lenders.
SECTION 5. Amendment Fee. To induce the Agent and the Lenders
to enter into this Amendment and to continue to extend to the Companies the
Revolving Loans, the Companies shall jointly and severally pay to the Agent for
the ratable benefit of the Lenders an Amendment Fee of $250,000.
SECTION 6. Consent. The Lenders hereby consent, to the extent
required under the DIP Financing Agreement, to the sale of certain properties
located in St. Louis, Missouri to DMD Group, Inc. for $2,700,000 (the "Sale"),
subject to (i) the entry of an order of the Bankruptcy Court approving the
Sale, and (ii) the Asset Sale Proceeds being applied to prepay the Revolving
Credit Loans and the Term Loans as required by Sections 2.4 and 8.7 of the DIP
Financing Agreement.
SECTION 7. Effect on the DIP Financing Agreement. Except as
amended or waived hereby, the DIP Financing Agreement and the other
Post-Petition Loan Documents shall remain in full force and effect. Nothing in
this Amendment shall be deemed to (i) constitute, except as expressly provided
herein, a waiver of compliance by any of the Companies of any term, provision
or condition of the DIP Financing Agreement or any other instrument or
agreement referred to therein or under the Post-Petition Loan Documents or (ii)
prejudice any right or remedy that the Agent or any Lender may now have or may
have in the future under or in connection with the DIP Financing Agreement or
any other Post-Petition Loan Document.
SECTION 8. Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together constitute one and the same
agreement.
SECTION 9. Governing Law. The validity, interpretation and
enforcement of this Amendment shall be governed by the law of the State of New
York.
SECTION 10. Headings. Section headings in this Amendment are
included herein for the convenience of reference only and shall not constitute
part of this Amendment for any other purpose.
SECTION 11. References. References herein and in the
Post-Petition Loan Documents and the Final Order to the "DIP Financing
Agreement", the "Post-Petition Loan and Security Agreement", the "Postpetition
Loan Agreement", "this Agreement", "hereunder", "hereof", or words of like
import referring to the DIP
6
Financing Agreement, shall mean and be a reference to the DIP Financing
Agreement as amended hereby.
7
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their proper and duly authorized
officers as of the date set forth above. This Amendment shall take effect as of
the date set forth above after being accepted below by an officer of the Agent
and the Lenders after which, the Agent shall forward to Harvard a fully
executed original for its files.
HARVARD INDUSTRIES, INC.
THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ CORPORATION
▇▇▇▇▇▇ AUTOMOTIVE, INC.
▇▇▇▇▇-ALBION CORPORATION
▇▇▇▇▇▇▇-▇▇▇▇▇▇, INC.
▇▇▇▇▇▇▇-▇▇▇▇▇▇ GREENEVILLE, INC.
▇▇▇▇▇▇▇-▇▇▇▇▇▇ POTTSTOWN, INC.
▇▇▇▇▇▇▇-▇▇▇▇▇▇ TECHNOLOGIES, INC.
▇▇▇▇▇▇▇-▇▇▇▇▇▇ TOLEDO, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Title: Senior Vice President and
Chief Financial Officer
THE CIT GROUP/BUSINESS CREDIT, INC.,
AS AGENT AND LENDER
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
CONGRESS FINANCIAL CORPORATION, AS
LENDER
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Title: Senior Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION, AS LENDER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Title: Duly Authorized Signatory
▇▇▇▇▇▇ FINANCIAL, INC., AS LENDER
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
FINOVA CAPITAL CORPORATION, AS
LENDER
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Title: Assistant Vice President
FOOTHILL CAPITAL CORPORATION, AS
LENDER
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
BANKBOSTON, N.A. AS LENDER
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: Vice President
9