<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 8, 1997
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 0-21362
------------------
HARVARD INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 21-0715310
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
2502 N. ROCKY POINT DRIVE, SUITE 960
TAMPA, FLORIDA 33607
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(813) 288-5000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
------------------
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 ( )
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS FILED ALL DOCUMENTS AND
REPORTS REQUIRED TO BE FILED BY SECTION 12, 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 SUBSEQUENT TO THE DISTRIBUTION OF SECURITIES UNDER A PLAN
CONFIRMED BY A COURT. YES (X) NO ( )
APPLICABLE ONLY TO CORPORATE ISSUERS:
THE NUMBER OF SHARES OUTSTANDING OF REGISTRANT'S COMMON STOCK, AS OF MAY 1,
1997, WAS 7,026,587.
================================================================================
<PAGE> 2
HARVARD INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION: PAGE
----
Item 1. Financial Statements:
<S> <C>
Consolidated Balance Sheets
March 31, 1997 (Unaudited) and September 30, 1996 (Audited)......................... 2
Consolidated Statements of Operations (Unaudited)
Three and Six Months Ended March 31, 1997 and 1996.................................. 3
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended March 31, 1997 and 1996............................................ 4
Notes to Consolidated Financial Statements - (Unaudited).................................. 5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations.......................................................................14
PART II. OTHER INFORMATION:
Item 5. Other Information................................................................18
Item 6. Exhibits and Reports on Form 8-K.................................................18
SIGNATURES................................................................................19
</TABLE>
1
<PAGE> 3
HARVARD INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND SEPTEMBER 30, 1996
(In thousands of dollars)
<TABLE>
<CAPTION>
March 31, September 30,
1997 1996
ASSETS (Unaudited) (Audited)
---------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents............................................ $ 2,448 $ 1,107
Accounts receivable, net............................................. 100,762 99,581
Inventories.......................................................... 57,896 53,901
Prepaid expenses and other current assets............................ 2,224 1,637
----------- -------------
Total current assets.......................................... 163,330 156,226
Property, plant and equipment, net..................................... 275,623 300,673
Intangible assets, net................................................. 5,209 127,250
Other assets, net...................................................... 34,401 33,556
----------- -------------
$ 478,563 $ 617,705
=========== =============
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities:
Debt in default...................................................... $ 398,147 $ -
Current portion of long term debt.................................... - 1,487
Accounts payable..................................................... 102,614 89,073
Accrued expenses..................................................... 68,959 66,949
Income taxes payable................................................. 3,582 5,875
----------- -------------
Total current liabilities..................................... 573,302 163,384
Long-term debt......................................................... 359,116
Postretirement benefits other than pensions............................ 103,385 100,464
Other ................................................................. 31,375 25,970
----------- -------------
Total liabilities............................................. 708,062 648,934
----------- -------------
14 1/4% Pay-In-Kind Exchangeable Preferred Stock,
($123,464 liquidation value at March 31, 1997 - includes
$8,214 of undeclared dividends payable September 30, 1997)......... 122,943 114,495
----------- -------------
Shareholders' deficiency:
Common Stock, $.01 par value; 30,000,000 shares authorized;
shares issued and outstanding: 7,017,767 at March 31,
1997 and 7,014,357 at September 30, 1996......................... 70 70
Additional paid-in capital........................................... 33,820 42,245
Additional minimum pension liability................................ (1,767) (1,767)
Foreign currency translation adjustment.............................. (1,935) (1,964)
Accumulated deficit.................................................. (382,630) (184,308)
----------- -------------
Total shareholders' deficiency................................ (352,442) (145,724)
----------- -------------
Commitments and contingent liabilities.................................
$ 478,563 $ 617,705
=========== =============
</TABLE>
See accompanying Notes to Consolidated Financial Statements (Unaudited).
-2-
<PAGE> 4
HARVARD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
(In thousands of dollars, except share and per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
---------------------- ----------------------
March 31, March 31, March 31, March 31,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sales................................................ $ 209,226 $ 200,821 $ 396,487 $ 411,357
---------- ---------- ---------- ----------
Costs and expenses:
Cost of sales..................................... 209,972 196,426 400,434 384,776
Selling, general and administrative............... 14,385 11,945 24,590 22,199
Interest expense.................................. 12,144 10,311 24,332 20,361
Amortization of goodwill.......................... 3,828 2,582 7,656 5,164
Other (income) expense, net....................... 1,539 (30) 1,797 94
Impairment of long-lived assets................... 134,987 - 134,987 -
---------- ---------- ---------- ----------
Total costs and expenses...................... 376,855 221,234 593,796 432,594
---------- ---------- ---------- ----------
Loss before income taxes............................. (167,629) (20,413) (197,309) (21,237)
Provision for income taxes........................... 525 549 1,013 1,449
---------- ---------- ---------- ----------
Net loss............................................. $ (168,154) $ (20,962) $ (198,322) $ (22,686)
========== ========== ========== ==========
PIK preferred dividends and accretion................ $ 4,224 $ 3,712 $ 8,448 $ 7,422
========== ========== ========== ==========
Net loss attributable to common shareholders......... $ (172,378) $ (24,674) $ (206,770) $ (30,108)
========== ========== ========== ==========
Primary per common and common equivalent share:
Loss per common and common equivalent share....... $ (24.57) $ (3.53) $ (29.47) $ (4.30)
========== ========== ========== ==========
Weighted average number of common and common
equivalent shares outstanding..................... 7,017,160 6,997,157 7,016,126 6,996,032
========== ========== ========== ==========
</TABLE>
See accompanying Notes to Consolidated Financial Statements (Unaudited).
-3-
<PAGE> 5
HARVARD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
(In thousands of dollars)
<TABLE>
<CAPTION>
Six months ended
-------------------------
March 31, March 31,
1997 1996
----------- -----------
<S> <C> <C>
Cash flows related to operating activities:
Loss from continuing operations..................................... $ (198,322) $ (22,686)
Add back (deduct) items not affecting cash and cash equivalents:
Depreciation and amortization..................................... 34,718 25,901
Impairment of long-lived assets................................... 134,987 -
Loss on disposition of property, plant and equipment
and property held for sale....................................... 1,208 982
Postretirement benefits........................................... 3,499 3,848
Changes in operating assets and liabilities of continuing operations,
net of effects from acquisitions and reorganization items:
Accounts receivable............................................... (1,181) 1,871
Inventories....................................................... (3,995) 1,853
Other current assets.............................................. (587) 167
Accounts payable.................................................. 13,541 (6,870)
Accrued expenses and income taxes payable......................... 2,166 (16,064)
Other noncurrent liabilities...................................... 4,977 474
----------- ----------
Net cash used in continuing operations.............................. (8,989) (10,524)
----------- ----------
Cash flows related to investing activities:
Acquisition of property, plant and equipment........................ (20,313) (20,787)
Cash flows related to discontinued operations....................... 204 2,673
Proceeds from disposition of property, plant and equipment.......... 395 663
Net change in other noncurrent accounts............................. (2,889) (1,070)
----------- ----------
Net cash used in investing activities............................... (22,603) (18,521)
----------- ----------
Cash flows related to financing activities:
Net borrowings under financing/credit agreement..................... 38,274 18,000
Proceeds from sale of stock/exercise of stock options............... 23 29
Repayments of long-term debt........................................ (730) (1,366)
Pension fund payments pursuant to PBGC settlement agreement......... (3,000) (3,000)
Payment of EPA settlements.......................................... (1,634) (810)
----------- ----------
Net cash provided by financing activities........................... 32,933 12,853
----------- ----------
Net increase (decrease) in cash and cash equivalents.................. 1,341 (16,192)
Beginning of period.................................................. 1,107 19,925
----------- ----------
End of period........................................................ $ 2,448 $ 3,733
=========== ==========
</TABLE>
See accompanying Notes to Consolidated Financial Statements (Unaudited).
-4-
<PAGE> 6
HARVARD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997 AND 1996
(UNAUDITED)
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
NOTE 1
The interim consolidated financial statements are unaudited but, in the
opinion of management, reflect all adjustments necessary for a fair
presentation of the results for the periods presented. The results of
operations for any interim period are not necessarily indicative of the results
to be expected for the full year. These interim consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto for the year ended September 30, 1996 included in
the Company's Annual Report on Form 10-K.
NOTE 2
On May 8, 1997, Harvard Industries, Inc. (the "Company") and substantially
all of its subsidiaries (the "Company" and such subsidiaries hereinafter
sometimes designated the "Debtors") filed voluntary petitions for relief under
Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court
for the District of Delaware. Under Chapter 11, certain claims against the
Debtors arising prior to the filing of the petitions for relief under the
federal bankruptcy laws are stayed while the Debtors continue business
operations as debtors-in-possession ("DIP"). Additional claims (liabilities
subject to compromise) may arise subsequent to the filing date resulting from
rejection of executory contracts, including leases, and from the determination
by the Court (or agreed to by parties in interest) of allowed claims for
contingencies and other disputed amounts. Claims secured by liens against the
Debtors' assets ("secured claims") also are stayed as to enforcement.
The Debtors have requested approval from the Bankruptcy Court to pay or
otherwise honor certain prepetition obligations, including employee wages,
salaries and other compensation, employee medical, pension and similar benefits,
reimbursable employee expenses and certain workers' compensation, as well as
continuation of prepetition customer practices with respect to warranty, refunds
and return policies.
The accompanying financial statements do not reflect any effect of the
bankruptcy filing, except for the reclassification of long-term debt as
discussed in Note 9.
NOTE 3
On three separate occasions in fiscal 1994, the Company became aware that
certain products of its ESNA division were not manufactured and/or tested in
accordance with required specifications at its Union, New Jersey and/or
Pocahontas, Arkansas facility. These fastener products were sold to the United
States Government and other customers for application in the construction of
aircraft engines and air frames. In connection therewith, the Company notified
the Department of Defense Office of Inspector General ("DoD/OIG") and, upon
request, was admitted into the Voluntary Disclosure Program of the Department
of Defense (the "ESNA matter").
At March 31, 1997, the remaining accrued costs of discontinued operations
(the "ESNA matter") are primarily related to legal costs, fines and penalties,
severance pay and certain building carrying costs. The ultimate cost of
disposition of the ESNA matter, as well as the required funding of such cost, is
dependent upon future events, the outcomes of which are not determinable at the
present time. Such outcomes could have a material effect on the Company's
financial condition, results of operations and/or liquidity. If it is
ultimately determined that the deviations from specifications and certifications
made in connection therewith constitute violations of various statutory and
regulatory provisions, the Company may, among other things, be subject to
criminal prosecution, treble damages and penalties under the Civil False Claims
Act or the Racketeer Influenced and Corrupt Organization Act ("RICO"), as well
as administrative sanctions, such as debarment from future government
contracting.
5
<PAGE> 7
NOTE 4
During the six months ended March 31, 1997, the Company recorded an
increase of $8,448 in its 14 1/4% Pay-In-Kind Exchangeable Preferred Stock
("PIK Preferred Stock") and a corresponding deduction in additional
paid-in-capital to recognize (i) an accrual of 50% of the required 1997
dividend which is payable in shares of PIK Preferred Stock on September 30,
1997 and (ii) the accretion of the related difference between the fair value of
such stock at August 23, 1992 and redemption value.
NOTE 5
Net loss per common share is computed by dividing net loss after deducting
accrued dividends and accretion related to PIK Preferred Stock by the weighted
average number of common shares outstanding. No consideration was given in
either period to equivalent shares related to stock options since such options
are anti-dilutive.
NOTE 6
The Company is also a party to various claims and routine litigation
arising in the normal course of its business. Based on information currently
available, management of the Company believes, after consultation with legal
counsel, that the result of such claims and litigation, except for the
uncertainties related to the ESNA matter discussed in Note 3, will not have a
material effect on the financial position or results of operations of the
Company.
NOTE 7
Income tax rates result principally from the fact of having an operating
profit in Canada and an operating loss in the U.S. for which benefit was not
recognized.
NOTE 8
The Company intends to sell or otherwise divest of its Doehler-Jarvis,
Harman Automotive and Harvard Interiors operations as well as a non-core
product line of one of its other subsidiaries. The Company recorded a $134,987
charge in the second quarter reflecting the permanent impairment of long-lived
assets at its Doehler-Jarvis and Harman Automotive subsidiaries and one plant
which is scheduled to close later in the year. Any such dispositions will be
subject to the approval of the Bankruptcy Court.
NOTE 9
The Company has reflected all debt as current in recognition of its
inability to meet its continuing obligations. The Company has obtained a
two-year postpetition Loan and Security Agreement ("DIP financing") subject to
the approval of the Bankruptcy Court to enable it to continue normal operations
during the Chapter 11 proceeding. The DIP financing provides up to $175,000 of
financing, subject to collateral availability including the repayment of
prepetition obligations of approximately $103,700. The DIP financing provides
for $65,000 of Term Loans and $110,000 of Revolving Credit Loans which includes
a $25,000 sub-limit letter of credit facility principally for stand by letters
of credit.
The Revolving Credit Loans bear interest at the rate of 1.50% in excess of
the Base Rate (Prime) and the Term Loan 1.75% in excess of the Base Rate. The
Term Loans provide for quarterly payments of $3,250 beginning November 30, 1997
through February 28, 1999 with a final installment of $45,500 due on
May 8, 1999.
The DIP financing provides for the net proceeds from asset sales, if any,
to prepay principal in respect of the Revolving Credit Loans to the extent
such collateral was sold and any excess proceeds, if any, shall be applied
fifty percent in inverse order of the maturities and fifty percent in direct
order of the maturities.
The DIP financing also provides, among other things, monthly covenants
beginning May 31, 1997 with respect to EBITDA and capital expenditures and a
monthly fixed charge ratio beginning October 1, 1997.
As collateral the Debtors have pledged substantially all assets of
the Debtors.
NOTE 10
Both the 12% Notes and the 11 1/8% Notes are guarantied on a senior
unsecured basis, pursuant to guaranties (the Guaranties) by all of the
Company's wholly-owned direct and certain of its wholly-owned indirect domestic
subsidiaries (the "Guarantors"). Both Notes are unconditionally guarantied,
jointly and severally, on a senior unsecured basis, by each of the Guarantors
under such Guarantor's
6
<PAGE> 8
guaranty (a "Guaranty"). Each Guaranty by a Guarantor is limited to an amount
not to exceed the maximum amount that can be guarantied by that Guarantor
without rendering the Guaranty, as it relates to such Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer. As
such, a Guaranty could be effectively subordinated to all other indebtedness
(including guaranties and other contingent liabilities) of the applicable
Guarantor, and, depending on the amount of such indebtedness, a Guarantor's
liability on its Guaranty could be reduced to zero.
The following condensed consolidating information presents:
1. Condensed balance sheets as of March 31, 1997 and September 30, 1996
and condensed statements of operations and cash flows for the six months ended
March 31, 1997 and 1996.
2. The Parent Company and Combined Guarantor Subsidiaries with their
investments in subsidiaries accounted for on the equity method.
3. Elimination entries necessary to consolidate the Parent Company and all
of its subsidiaries.
4. The Parent Company, pursuant to the terms of an interest bearing note
with Guarantor Subsidiaries, has included in their allocation of expenses,
interest expense for the six and three months ended March 31, 1997 and 1996,
respectively.
The Company believes that providing the following condensed consolidating
information is of material interest to investors in the Notes and has not
presented separate financial statements for each of the Guarantors.
7
<PAGE> 9
HARVARD INDUSTRIES, INC.
CONSOLIDATING BALANCE SHEET
MARCH 31, 1997
(In thousands of dollars)
<TABLE>
<CAPTION>
Combined Combined
Parent Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
---------- -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents....................... $ 8 $ 2,440 $ - $ - $ 2,448
Accounts receivable, net........................ 2,987 92,009 5,766 - 100,762
Inventories..................................... 3,242 51,554 3,100 - 57,896
Prepaid expenses and other current assets....... 1,293 933 (2) - 2,224
---------- ------------- -------------- ------------- -------------
Total current assets.......................... 7,530 146,936 8,864 - 163,330
Investment in Subsidiaries........................ 127,475 41,891 - (169,366) -
Property, plant and equipment, net................ 4,305 261,209 10,109 - 275,623
Intangible assets, net............................ - 5,209 - - 5,209
Intercompany receivables.......................... 408,381 171,710 35,546 (615,637) -
Other assets...................................... 27,847 6,518 36 - 34,401
---------- ------------- -------------- ------------- -------------
$ 575,538 $ 633,473 $ 54,555 $ (785,003) $ 478,563
========== ============= ============== ============= =============
LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Debt in default(a).............................. $ 301,981 $ 96,166 $ - $ - $ 398,147
Accounts payable................................ 2,352 97,213 3,049 - 102,614
Accrued expenses................................ 20,375 48,450 134 - 68,959
Income taxes payable............................ (1,661) 1,140 4,103 - 3,582
---------- ------------- -------------- ------------- -------------
Total current liabilities.................. 323,047 242,969 7,286 - 573,302
Postretirement benefits other than pensions....... - 103,385 - - 103,385
Intercompany payables............................. 474,845 136,382 4,410 (615,637) -
Other............................................. 7,145 23,262 968 - 31,375
---------- ------------- -------------- ------------- -------------
Total liabilities.......................... 805,037 505,998 12,664 (615,637) 708,062
---------- ------------- -------------- ------------- -------------
PIK Preferred..................................... 122,943 - - - 122,943
---------- ------------- -------------- ------------- -------------
Shareholders' equity (deficiency):
Common stock and additional
paid-in-capital............................... 33,890 73,054 135 (73,189) 33,890
Additional minimum pension liability............ (1,767) (1,767) - 1,767 (1,767)
Foreign currency translation adjustment......... (1,935) (1,935) (1,935) 3,870 (1,935)
Retained earnings (deficit)..................... (382,630) 58,123 43,691 (101,814) (382,630)
---------- ------------- -------------- ------------- -------------
Total shareholders' equity (deficit).......... (352,442) 127,475 41,891 (169,366) (352,442)
---------- ------------- -------------- ------------- -------------
$ 575,538 $ 633,473 $ 54,555 $ (785,003) $ 478,563
========== ============= ============== ============= =============
</TABLE>
(a) Includes $300,000 senior notes payable which are subject to
the guarantee of the combined guarantor subsidiaries
-8-
<PAGE> 10
HARVARD INDUSTRIES, INC.
CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 1996
(In thousands of dollars)
<TABLE>
<CAPTION>
Combined Combined
Parent Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
---------- ------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................... $ (1,655) $ 4,367 $ (1,605) $ - $ 1,107
Accounts receivable, net....................... 5,925 88,124 5,532 - 99,581
Inventories.................................... 5,056 46,312 2,533 - 53,901
Prepaid expenses and other current assets...... 372 1,265 - - 1,637
---------- ------------- -------------- ------------- -------------
Total current assets......................... 9,698 140,068 6,460 - 156,226
Investment in Subsidiaries....................... 296,822 41,877 - (338,699) -
Property, plant and equipment, net............... 4,747 286,575 9,351 - 300,673
Intangible assets, net........................... - 127,250 - - 127,250
Intercompany receivables......................... 394,988 222,486 16,134 (633,608) -
Other assets..................................... 25,428 8,092 36 - 33,556
---------- ------------- -------------- ------------- -------------
$ 731,683 $ 826,348 $ 31,981 $ (972,307) $ 617,705
========== ============= ============== ============= =============
LIABILITIES AND SHAREHOLDERS'
DEFICIENCY
Current liabilities:
Current portion of long-term debt.............. $ - $ 1,487 $ - $ - $ 1,487
Accounts payable............................... 3,711 81,975 3,387 - 89,073
Accrued expenses .............................. 19,947 47,002 - - 66,949
Income taxes payable .......................... 5 1,169 4,701 - 5,875
---------- ------------- -------------- ------------- -------------
Total current liabilities................. 23,663 131,633 8,088 - 163,384
Long-term debt................................... 300,445 58,671 - - 359,116
Postretirement benefits other than
pensions..................................... - 100,464 - - 100,464
Intercompany payables............................ 435,038 217,523 (18,953) (633,608) -
Other............................................ 3,766 21,235 969 - 25,970
---------- ------------- -------------- ------------- -------------
Total liabilities......................... 762,912 529,526 (9,896) (633,608) 648,934
---------- ------------- -------------- ------------- -------------
PIK Preferred.................................... 114,495 - - - 114,495
---------- ------------- -------------- ------------- -------------
Shareholders' deficiency:
Common stock and additional
paid-in-capital.............................. 42,315 73,054 135 (73,189) 42,315
Additional minimum pension liability........... (1,767) (1,767) - 1,767 (1,767)
Foreign currency translation adjustment........ (1,964) (1,952) (1,952) 3,904 (1,964)
Accumulated deficit............................ (184,308) 227,487 43,694 (271,181) (184,308)
---------- ------------- -------------- ------------- -------------
Total shareholders' deficiency............ (145,724) 296,822 41,877 (338,699) (145,724)
---------- ------------- -------------- ------------- -------------
$ 731,683 $ 826,348 $ 31,981 $ (972,307) $ 617,705
========== ============= ============== ============= =============
</TABLE>
-9-
<PAGE> 11
HARVARD INDUSTRIES, INC.
CONSOLIDATING INCOME STATEMENTS OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1997
(In thousands of dollars)
<TABLE>
<CAPTION>
Combined Combined
Parent Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Elimination Consolidated
----------- ------------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Sales........................................... $ 11,367 $ 371,849 $ 13,271 $ - $ 396,487
----------- ------------- -------------- ------------ -------------
Costs and expenses:
Cost of sales................................. 12,081 376,442 11,911 - 400,434
Selling, general and administrative........... 9,092 15,498 - - 24,590
Interest expense.............................. 18,740 5,458 134 - 24,332
Amortization of goodwill...................... - 7,656 - - 7,656
Impairment of long-lived assets............... - 134,987 - - 134,987
Other (income) expense, net................... 593 1,190 14 - 1,797
Equity in (income) loss of
subsidiaries................................ 179,954 3 - (179,957) -
Allocated expenses............................ (10,771) 9,912 859 - -
----------- ------------- -------------- ------------ -------------
Total costs and expenses.................. 209,689 551,146 12,918 (179,957) 593,796
----------- ------------- -------------- ------------ -------------
Income (loss) before income taxes............... (198,322) (179,297) 353 179,957 (197,309)
Provision for income taxes...................... - 657 356 - 1,013
----------- ------------- -------------- ------------ -------------
Net income (loss)............................ $ (198,322) $ (179,954) $ (3) $ 179,957 $ (198,322)
=========== ============= ============== ============ =============
</TABLE>
-10-
<PAGE> 12
HARVARD INDUSTRIES, INC.
CONSOLIDATING INCOME STATEMENTS OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1996
(In thousand of dollars)
<TABLE>
<CAPTION>
Combined Combined
Parent Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Elimination Consolidated
---------- ------------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Sales.................................................. $ 16,644 $ 380,524 $ 14,189 $ - $ 411,357
---------- ------------- -------------- ------------ -------------
Costs and expenses:
Cost of sales........................................ 15,721 356,856 12,199 - 384,776
Selling, general and administrative.................. 5,323 16,872 4 - 22,199
Interest expense..................................... 18,773 1,568 20 - 20,361
Amortization of goodwill............................. - 5,164 - - 5,164
Other (income) expense, net.......................... (18) 300 (188) - 94
Equity in (income) loss of subsidiaries............. 11,809 (368) - (11,441) -
Allocated expenses................................... (12,278) 11,299 979 - -
---------- ------------- -------------- ------------ -------------
Total costs and expenses......................... 39,330 391,691 13,014 (11,441) 432,594
---------- ------------- -------------- ------------ -------------
Income (loss) before provision for
income taxes ........................................ (22,686) (11,167) 1,175 11,441 (21,237)
Provision for income taxes............................. - 642 807 - 1,449
---------- ------------- -------------- ------------ -------------
Net income (loss)...................................... $ (22,686) $ (11,809) $ 368 $ 11,441 $ (22,686)
========== ============= ============== ============ =============
</TABLE>
-11-
<PAGE> 13
HARVARD INDUSTRIES, INC.
CONSOLIDATING STATEMENT OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1997
(In thousands of dollars)
<TABLE>
<CAPTION>
Combined Combined
Parent Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Elimination Consolidated
----------- ------------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Cash flows related to operating activities:
Net income (loss).................................. $ (198,322) $ (179,954) $ (3) $ 179,957 $ (198,322)
Add back (deduct) items not affecting
cash and cash equivalents:
Equity in (income) loss of subsidiaries.......... 179,954 3 - (179,957) -
Depreciation and amortization.................... 1,500 32,635 583 - 34,718
Impairment of long-lived assets.................. - 134,987 - - 134,987
Loss on Disposition of property, plant and
equipment and property held for sale........... - 1,208 - - 1,208
Postretirement benefits.......................... - 3,499 - - 3,499
Changes in operating assets and liabilities :
Accounts receivable.............................. 2,938 (3,885) (234) - (1,181)
Inventories...................................... 1,814 (5,242) (567) - (3,995)
Other current assets............................. (921) 332 2 - (587)
Accounts payable................................. (1,359) 15,238 (338) - 13,541
Accrued expenses and income taxes payable........ 179 2,451 (464) - 2,166
Other noncurrent liabilities..................... 3,156 1,821 - - 4,977
----------- ------------- -------------- ------------ -------------
Net cash provided by (used in) operations............ (11,061) 3,093 (1,021) - (8,989)
----------- ------------- -------------- ------------ -------------
Cash flows related to investing activities:
Acquisition of property, plant and equipment....... (3) (19,010) (1,300) - (20,313)
Proceeds to date from sale of discontinued operations - - - - -
Cash flows related to net assets of discontinued
operations....................................... 204 - - - 204
Proceeds from disposition of property,
plant and equipment.............................. - 395 - - 395
Net change in other noncurrent accounts............ (836) (2,011) (42) - (2,889)
----------- ------------- -------------- ------------ -------------
Net cash used in investing activities................ (635) (20,626) (1,342) - (22,603)
----------- ------------- -------------- ------------ -------------
Cash flows related to financing activities:
Net borrowings under financing / credit agreement.. 2,266 36,008 - - 38,274
Proceeds from sale of stock / exercise of stock
options.......................................... 23 - - - 23
Repayments of long-term debt....................... (730) - - - (730)
Pension fund payment pursuant to PBGC settlement
agreements....................................... (3,000) - - - (3,000)
Payment of EPA settlements......................... (1,007) (627) - - (1,634)
Net changes in intercompany balances............... 15,807 (19,775) 3,968 - -
----------- ------------- -------------- ------------ -------------
Net cash provided by financing activities............ 13,359 15,606 3,968 - 32,933
----------- ------------- -------------- ------------ -------------
Net increase (decrease) in cash and cash equivalents. 1,663 (1,927) 1,605 - 1,341
Cash and cash equivalents :
Beginning of period................................ (1,655) 4,367 (1,605) - 1,107
----------- ------------- -------------- ------------ -------------
End of period...................................... $ 8 $ 2,440 $ - $ - $ 2,448
=========== ============= ============== ============ =============
</TABLE>
-12-
<PAGE> 14
HARVARD INDUSTRIES, INC.
CONSOLIDATING STATEMENT OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1996
(In thousands of dollars)
<TABLE>
<CAPTION>
Combined Combined
Parent Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Elimination Consolidated
-------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Cash flows related to operating activities:
Net income (loss)............................................... $(22,686) $(11,809) $ 368 $ 11,441 $(22,686)
Add back (deduct) items not affecting
cash and cash equivalents:
Equity in (income) loss of subsidiaries....................... 11,809 (368) - (11,441) -
Depreciation and amortization................................. 1,790 23,608 503 - 25,901
Loss on disposition of property, plant and
equipment and property held for sale......................... - 982 - - 982
Postretirement benefits....................................... - 3,848 - - 3,848
Changes in operating assets and liabilities:
Accounts receivable........................................... 767 713 391 - 1,871
Inventories................................................... 41 2,449 (637) - 1,853
Other current assets.......................................... (388) 569 (14) - 167
Accounts payable.............................................. (316) (7,080) 526 - (6,870)
Accrued expenses and income taxes payable..................... (17,584) (843) 2,352 11 (16,064)
Other noncurrent liabilities.................................. 474 - - 474
-------- -------- ------- -------- --------
Net cash provided by (used in) operations......................... (26,567) 12,543 3,489 11 (10,524)
-------- -------- ------- -------- --------
Cash flows related to investing activities:
Acquisition of property, plant and equipment.................... 22 (18,489) (2,320) - (20,787)
Proceeds to date from sale of discontinued operations........... 2,673 - - - 2,673
Proceeds from disposition of property, plant and equipment...... - 663 - - 663
Net change in other noncurrent accounts......................... (472) 2,581 (3,199) 20 (1,070)
-------- -------- ------- -------- --------
Net cash provided by (used in) investing activities............... 2,223 (15,245) (5,519) 20 (18,521)
-------- -------- ------- -------- --------
Cash flows related to financing activities:
Net borrowings under credit agreement........................... 18,000 - - - 18,000
Proceeds from exercise of stock options......................... 29 - - - 29
Repayments of long-term debt.................................... (16) (1,350) - - (1,366)
Pension fund payment pursuant to PBGC settlement agreement ..... - (3,000) - - (3,000)
Payment of EPA settlement agreements............................ (781) (134) 105 - (810)
Net changes in intercompany balances............................ (9,711) 10,302 (591) - -
-------- -------- ------- -------- --------
Net cash provided by (used in) financing activities.............. 7,521 5,818 (486) - 12,853
-------- -------- ------- -------- --------
Net increase (decrease) in cash and cash equivalents.............. (16,823) 3,116 (2,516) 31 (16,192)
Cash and cash equivalents :
Beginning of period............................................. 18,645 (2,180) 3,491 (31) 19,925
-------- -------- ------- -------- --------
End of period................................................... $ 1,822 $ 936 $ 975 $ - $ 3,733
======== ======== ======= ======== ========
</TABLE>
-13-
<PAGE> 15
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS)
FORWARD - LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements.
Additional written or oral forward-looking statements may be made by the
Company from time to time, in filings with the Securities and Exchange
Commission or otherwise. Such forward-looking statements are within the
meaning of that term in Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Such statements may include, but
not be limited to, projections of revenues, income or losses, capital
expenditures, plans for future operations, including the possible sale of
underperforming operations, financing needs or plans, plans relating to
products or services of the Company, as well as assumptions relating to the
foregoing.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified. Consequently,
future events and actual results could differ materially from those set forth
in, contemplated by, or underlying the forward-looking statements. Statements
in this Quarterly Report, particularly the Notes to Consolidated Financial
Statements and "Management's Discussion and Analysis of Financial Condition and
Results of Operations," describe factors, among others, that could contribute
to or cause such differences. Other factors that could contribute to or cause
such differences include the effects of the bankruptcy filing upon suppliers,
vendors and customers, unanticipated increases in launch and other operating
costs, a reduction and inconsistent demand for passenger cars and light trucks,
the inability to attain future EBITDA requirements and earlier than anticipated
and/or increased costs of resolving the ESNA matter.
GENERAL
The Company's results of operations have been adversely impacted during
the six months ended March 31, 1997 by the following conditions: declines in
sales, losses related to a manifold program ("Manifold Program") between
Doehler-Jarvis and a major customer which was launched in fiscal 1995;
operational inefficiencies at Doehler-Jarvis' Toledo and Pottstown plants,
including the impact of significant overtime resulting from operating the
Toledo plant on a seven day week basis. Doehler-Jarvis operations incurred
negative gross margins (cost of sales exceeded revenues) of over 8.4% for its
entire operation. In addition, Harman Automotive's operations incurred
negative gross margins of over 18% caused primarily by a decrease in sales of
approximately 38%. See Note 2 above relating to the filing by the Company
under Chapter 11.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1997 Compared to Three Months Ended March 31,1996
Sales. Consolidated sales increased $8,405, or 4.2%. Sales decreased
approximately $9,200 in Harman Automotive, Harvard Interiors and Doehler-Jarvis,
all of which have been designated for sale.
Gross Profit. The consolidated gross profit expressed as a percentage of
sales (the "gross profit margin") decreased from 2.2% to a gross loss of 0.4%.
The decrease in the gross profit margin resulted
14
<PAGE> 16
primarily from operational inefficiencies at the Company's Doehler-Jarvis
subsidiary and the negative margins incurred at Harman Automotive.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $2,440, due to a $4,000 charge primarily
related to the Termination, Consulting and Release Agreement dated February 12,
1997 with Mr. Vincent J. Naimoli, the former Chairman of the Board, President
and Chief Executive Officer of the Company. As a percentage of sales, such
expenses increased from 5.9% to 6.9%.
Interest Expense. Interest expense increased from $10,311 to $12,144, or
17.8%. The increase in interest expense results from increased borrowings in
the current period under the term and revolving loan agreement.
Amortization of Goodwill. The increase of $1,246 in goodwill amortization
is attributable to the change in the life of goodwill amortization related to
the acquisition of Doehler-Jarvis from 15 years to 10 years.
Other (Income) Expense, Net. The increase of $1,569 changed mainly due to
an increase in loss on disposal of machinery and equipment.
Impairment of Long-Lived Assets. As a result of continuing losses and
projected future operations and cash flows, the Company recorded a charge of
$134,987 reflecting the permanent impairment of long-lived assets at its
Doehler-Jarvis and Harman Automotive subsidiaries and one plant. The goodwill
portion of this charge is $114,385.
Provision for Income Taxes. The decrease in the provision for income
taxes results from a decrease in operating profit in Canadian operations.
Net Loss. The net loss increased from $20,962 to $168,154 for the reasons
described above.
Six Months Ended March 31, 1997 Compared to Six Months Ended March 31, 1996
Sales. Consolidated sales decreased $14,870, or 3.6%. Sales for Harman
Automotive, Harvard Interiors and Doehler-Jarvis, all of which have been
designated for sale decreased approximately $18,000 excluding $8,700 due to a
decline in average aluminum prices, the benefit of which was passed on to
customers.
Gross Profit. The consolidated gross profit expressed as a percentage of
sales (the "gross profit margin") decreased from 6.5% to a gross loss of 1.0%.
The decrease in the gross profit margin resulted primarily from operational
inefficiencies at the Company's Doehler-Jarvis subsidiary and the negative
margins incurred at Harman Automotive.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $2,391, due to a $4,000 charge primarily
related to the Termination, Consulting and Release Agreement dated February 12,
1997 with Mr. Vincent J. Naimoli, the former Chairman of the Board, President
and Chief Executive Officer of the Company.
15
<PAGE> 17
Amortization of Goodwill. The increase of $2,492 in goodwill amortization
is attributable to the change in the life of goodwill amortization related to
the acquisition of Doehler-Jarvis from 15 years to 10 years.
Other (Income) Expense, Net. The increase of $1,703 changed mainly due to
an increase in loss on disposal of machinery and equipment.
Impairment of Long-Lived Assets. As a result of continuing losses and
projections of future operations and cash flows, the Company recorded a charge
of $134,987 reflecting the permanent impairment of long-lived assets at its
Doehler-Jarvis and Harman Automotive subsidiaries and one plant. The goodwill
portion of this charge is $114,385.
Provision for Income Taxes. The decrease in the provision for income
taxes results from a decrease in operating profit in Canada.
Net Loss. The net loss increased from $22,686 to $198,322 for the reasons
described above.
LIQUIDITY AND CAPITAL RESOURCES
Material Event. On May 8, 1997, the Debtors filed voluntary petitions
for relief under Chapter 11 of the federal bankruptcy laws in the United States
Bankruptcy Court for the District of Delaware. Under Chapter 11, certain claims
against the Debtors arising prior to the filing laws are stayed. Additional
claims (liabilities subject to compromise) may arise subsequent to the filing
date resulting from rejection of executory contracts, including leases, and from
the determination by the Court (or agreed to by parties in interest) of allowed
claims for contingencies and other disputed amounts. Claims secured by liens
against the Debtors assets ("secured claims") also are stayed as to enforcement.
General. For the six months ended March 31, 1997, the Company had a
negative cash flow from operations of $8,989 compared to $10,524 for the six
months ended March 31, 1996. The 1997 negative cash flow resulted principally
from operating losses incurred at the Doehler-Jarvis and Harman Automotive
subsidiaries, as well as payments for interest on indebtedness. The Company
increased its borrowings under its financing agreement by $38,274 at March 31,
1997 to fund the negative cash flow from operations and related activities.
The Company had a deficiency of earnings over fixed charges and dividends on
preferred stock of $205,757 and $28,659 for the six months ended March 31, 1997
and 1996, respectively.
Financing. At March 31, 1997, $47,108 of indebtedness was outstanding
under the Company's Revolving Line of Credit, $30,000 of indebtedness was
outstanding under the Company's Term Loan and stand-by Letters of Credit
outstanding amounted to $19,300. By reason of the Company's inability to meet
its continuing future obligations, the Company has reflected all of its
indebtedness as current liabilities. The filing under Chapter 11 is an event
of default under the terms of all of its indebtedness. The Company's
strategic plan will be to continue its efforts to sell or otherwise divest of
its Doehler-Jarvis and Harman Automotive subsidiaries and its Harvard Interiors
division as well as a non-core product line of one of its other subsidiaries,
subject to Bankruptcy Court approval. There is no assurance that any of such
businesses will in fact be sold, but, in any event, any proceeds realized
16
<PAGE> 18
from such dispositions are expected to be applied to the reduction of the
Company's borrowings from existing lenders. To date, the Company has not
obtained a firm proposal for the sale of any of the businesses designated to be
sold. The Company has obtained a two-year DIP financing, subject to the
approval of the Bankruptcy Court to enable it to continue normal operations
during the Chapter 11 proceeding. The DIP financing provides up to $175,000
of financing, subject to collateral availability including the repayment of
prepetition obligations of approximately $103,700. The DIP financing provides
for $65,000 of Term Loans and $110,000 of Revolving Credit Loans which includes
a $25,000 sub-limit letter of credit facility principally for stand by letters
of credit.
The Revolving Credit Loans bear interest at the rate of 1.50% in excess of
the Base Rate (Prime) and the Term Loan 1.75% in excess of the Base Rate. The
Term Loans provide for quarterly payments of $3,250 beginning November 30, 1997
through February 28, 1999 with a final installment of $45,500 due on
May 8, 1999.
The DIP financing provides for the net proceeds from asset sales, if any,
to prepay principal in respect of the Revolving Credit Loans to the extent
such collateral was sold and any excess proceeds, if any, shall be applied
fifty percent in inverse order of the maturities and fifty percent in direct
order of the maturities.
The DIP financing also provides, among other things, monthly covenants
beginning May 31, 1997 with respect to EBITDA and capital expenditures and a
monthly fixed charge ratio beginning October 1, 1997.
As collateral the Debtors have pledged substantially all assets of
the Debtors.
Capital Expenditures. Additional capital expenditures of $18,000 for the
balance of the year ended September 30, 1997 and $27,000 for the 1998 fiscal
year by Doehler-Jarvis are currently anticipated. Consolidated capital
expenditures for the balance of fiscal 1997 are anticipated to be $33,000.
Moreover, the Company anticipates incurring expenses of approximately $2,300
through fiscal 1998 as start-up costs under a V-6 engine block program, a major
outsourcing program with General Motors; however, revenues from this program
are not expected to commence until December 1997, with full annual volumes not
expected to be achieved until the year 2003. During the term of the DIP
financing the Company must consult with The CIT Group on any capital spending
in cumulative excess of $10,000.
Other Expenditures. The estimated closing costs of the plant mentioned in
Note 8 will approximate $2,900. All of such expenditures, which are subject to
approval of the Bankruptcy Court, will necessarily serve to compound the
Company's existing cash shortfall and its ability to meet its obligations.
Although any DIP financing, if obtained, will ameliorate these liquidity
concerns, it is also contemplated that any such financing will place
limitations on aggregate capital expenditures. Nevertheless, management
expects that its existing operations will continue without interruption during
the reorganization period.
ESNA. The Company believes that the 1997 estimated costs of the ESNA
matter, exclusive of possible fines, damages and penalties, if any, will not be
material. Such costs relate to carrying costs of the Union, N.J. facility,
severance payments, subcontract costs and costs associated with the Company's
ongoing participation in the Department of Defense Voluntary Disclosure
Program. However, the ultimate cost of disposition of this matter, as well as
the required funding of such costs, depends upon future events, the outcomes of
which are not determinable at the present time, including the Company receiving
favorable consideration from the government as a result of its admission into
the Voluntary Disclosure Program. Such outcomes could have a material effect
on the Company's financial condition, results of operations and/or liquidity.
If it is ultimately determined that the deviation from specifications and
certifications made in connection therewith constitute violations of various
statutory and regulatory provisions, the Company may, among other things, be
subject to criminal prosecution, treble damages and penalties under the Civil
False Claims Act or RICO, as well as administrative sanctions, such as
debarment from future government contracting. The Company is unable to
determine the effect of the bankruptcy filing on the ESNA matter.
Loss of Ford Business. Effective January 1997, the Company was advised by
Ford Motor Company that a program with approximately $8,000 of sales during the
year ended September 30, 1996 (related to mid-size passenger car front wheel
drive aluminum transmission housings) would be resourced to a competitor due to
the inability of the Doehler-Jarvis Toledo plant to maintain delivery dates
compatible with customer demands. This resulted from the over-capacity
situation at this plant.
17
<PAGE> 19
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION.
The Ratio of Earnings to Fixed Charges and Dividends on Preferred Stock,
and the supporting computation thereof, are filed as Exhibit 12.1 to this
Quarterly Report on Form 10-Q and are incorporated herein by reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
10.2(a) Amendment No. 2, dated as of April 21, 1997, to the Financing Agreement,
dated as of October 4, 1996, as amended, among the Registrant and
certain of its subsidiaries, with The CIT Group/Business Credit Inc.,
as a lender and as agent for a lender group.
10.30 Access and Occupancy Agreements, dated March 1997 between General
Motors Corporation and Doehler-Jarvis Greeneville, Inc. and
Doehler-Jarvis, Inc.
10.31 Accommodation Agreement, dated March 1997 between General Motors
Corporation and Harvard Industries, Inc., Doehler-Jarvis, Inc. and
Doehler-Jarvis Greeneville, Inc.
10.32 Post-Petition Loan and Security Agreement with The CIT Group/Business
Credit Inc., as a lender and as agent for a lender group (the "DIP
financing"), (to be filed by amendment).
12.1 Computation of Ratio of Earnings to Fixed Charges and Dividends on
Preferred Stock.
27 Financial Data Schedule (For SEC use only)
(b) Reports on Form 8-K:
None.
18
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto authorized.
HARVARD INDUSTRIES, INC.
-------------------------------
(Registrant)
May 8, 1997 BY /s/ Joseph J. Gagliardi
-------------------------------
Joseph J. Gagliardi
Senior Vice President Finance and
Chief Financial Officer
(Principal Financial Officer)
/s/ William J. Warren
-------------------------------
William J. Warren
Vice President and
May 8, 1997 Chief Accounting Officer
(Principal Accounting Officer)
19
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- --------
<S> <C> <C>
10.2(a) Amendment No. 2, dated as of April 21, 1997, to the Financing Agreement,
dated as of October 4, 1996, as amended, among the Registrant and
certain of its subsidiaries, with The CIT Group/Business Credit Inc.,
as a lender and as agent for a lender group.
10.30 Access and Occupancy Agreements, dated March 1997 between General
Motors Corporation and Doehler-Jarvis Greeneville, Inc. and
Doehler-Jarvis, Inc.
10.31 Accommodation Agreement, dated March 1997 between General Motors
Corporation and Harvard Industries, Inc., Doehler-Jarvis, Inc. and
Doehler-Jarvis Greeneville, Inc.
10.32 Post-Petition Loan and Security Agreement with The CIT Group/Business
Credit Inc., as a lender and as agent for a lender group (the "DIP
financing"), (to be filed by amendment).
12.1 Computation of Ratio of Earnings to Fixed Charges and Dividends on
Preferred Stock.
27 Financial Data Schedule (For SEC use only)
</TABLE>
20
<PAGE> 1
EXHIBIT 10.2(a)
DATED: April 21, 1997
AMENDMENT NO. 2 (the "Amendment"), by and among The CIT
Group/Business Credit, Inc. ("CITBC"), Congress Financial Corporation, General
Electric Capital Corporation, Heller Financial, Inc., Finova Capital
Corporation and Foothill Capital Corporation (each a "Lender" and collectively
the "Lenders"), CITBC as agent for the Lenders (the "Agent") and Harvard
Industries, Inc., a Florida corporation (hereinafter "Harvard"), The
Kingston-Warren Corporation, a New Hampshire corporation, Harman Automotive,
Inc., a Michigan corporation, Hayes-Albion Corporation, a Michigan corporation,
and Doehler-Jarvis, Inc., a Delaware corporation, Doehler-Jarvis Greeneville,
Inc., a Delaware corporation, Doehler-Jarvis Pottstown, Inc., a Delaware
corporation, Doehler-Jarvis Technologies, Inc., a Delaware corporation, and
Doehler-Jarvis Toledo, Inc., a Delaware corporation. Harvard and each of the
entities subsequently identified above are referred to herein individually as a
"Company" and collectively as the Companies.
W I T N E S S E T H
WHEREAS, the Companies, the Lenders and the Agent are party to
a Financing Agreement, dated October 4, 1996, as amended by Amendment No. 1
thereto dated December 20, 1996 (as such Financing Agreement may be further
amended from time to time, the "Financing Agreement" and capitalized terms
defined in the Financing Agreement and not otherwise defined herein having the
meanings provided therein); and
WHEREAS, the Companies have requested that the Lenders (i)
increase the Revolving Line of Credit by $10,000,000 to $100,000,000 until May
15, 1997 and (ii) reduce the Availability Reserve from $10,000,000 to
$5,000,000 until May 15, 1997; and
WHEREAS, the Companies have also requested that the Lenders
increase the Inventory Advance Percentage as provided herein until May 15,
1997; and
WHEREAS, as consideration for the Lenders agreeing to amend
the Financing Agreement as so requested by the Companies, the Companies have
agreed to pay an amendment fee of $500,000 (the "Amendment Fee") to the Agent
for the benefit of the Lenders, payable at the times and in the amounts set
forth herein; and
<PAGE> 2
WHEREAS, it is a condition precedent to the Lenders agreeing
to amend the Financing Agreement as requested by the Companies that the parties
hereto enter into this Amendment; and
WHEREAS, the Lenders have agreed with the Companies to amend
the Financing Agreement upon the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Amendments to the Financing Agreement. Upon the
satisfaction of the conditions in Section 3 of this Amendment relating to the
effectiveness of this Section 1, the Financing Agreement is hereby amended as
follows:
(a) Section 1 is hereby amended by:
(i) amending the definition of "AVAILABILITY RESERVE" by
deleting the reference to "$10,000,000" in the second line thereof and
replacing it with "$5,000,000 until May 15, 1997 and $10,000,000
thereafter...".
(ii) deleting the definition of "INVENTORY ADVANCE
PERCENTAGE" in its entirety and substituting in its place the following new
definition:
INVENTORY ADVANCE PERCENTAGE means (a) in the case of raw
material and finished goods Inventory, sixty percent (60%) until May 15, 1997
and fifty percent (50%) thereafter and (b) in the case of work-in-process
Inventory, thirty percent until May 15, 1997 and twenty-five percent (25%)
thereafter.
(iii) amending the definition of "LINE OF CREDIT" by deleting
the reference to "$120,000,000" in the last line thereof and replacing it with
"$130,000,000 until May 15, 1997 and $120,000,000 thereafter...".
(iv) deleting the definition of "REVOLVING LINE OF CREDIT" in
its entirety and substituting in its place the following new definition:
REVOLVING LINE OF CREDIT means the commitment of the Lenders
to make Revolving Loans pursuant to Section 3 hereof in an aggregate amount of
up to (a) $100,000,000 until May 15, 1997, and (b) $90,000,000 thereafter.
2
<PAGE> 3
(b) Section 3 is hereby amended by:
(i) deleting the words "...(a) in amounts up to $90,000,000
in the aggregate and...," in the eighth and ninth lines of Paragraph 1 thereof
and replacing them with the following:
"...(a) in amounts up to (i) $100,000,000 in the aggregate
until May 15, 1997 and (ii) $90,000,000 in the aggregate thereafter, and...".
SECTION 2. 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, subject to
applicable bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law), (b) except
as disclosed in writing to the Agent and the Lenders, no event has occurred and
is continuing on the date hereof that constitutes a Default or would constitute
a Default after giving effect to this Amendment, (c) the representations and
warranties of such Company contained in Section 7 of the 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 and (d) EBITDA for the two Fiscal Quarters
ending March 31, 1997 exceeded $2,000,000.
SECTION 3. Conditions to Effectiveness. The amendments in
Section 1 of this Amendment shall become effective and each Lender's commitment
to make Revolving Loans to the Companies under the Revolving Line of Credit and
to participate in the Letter of Credit Guaranty within the Revolving Line of
Credit shall increase ratably on the date (the "Effective Date") when
counterparts hereof shall have been executed by all of the Lenders, the Agent
and the Companies, and the Agent shall have received:
(a) Revolving Loan Promissory Notes substantially in the form
of Exhibit A hereto executed by each of the Companies in favor of the Lenders,
in an amount for each Lender equal to such Lender's Ratable Portion of the
Revolving Line of Credit.
(b) The Amendment Fee, for the benefit of the Lenders; and
3
<PAGE> 4
(c) 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.
(d) Counsel for the Companies shall have delivered to the
Agent opinions satisfactory to the Agent containing such matters as the Agent
may reasonably request.
SECTION 4. Amendment Fee. (a) To induce the Agent and the
Lenders to enter into this Amendment and to continue to extend to the Companies
the Revolving Loans as such Revolving Loans may be increased hereby, the
Companies shall jointly and severally pay to the Agent for the Lenders an
Amendment Fee of $500,000.
(b) In the event the Agent (on behalf of itself or the other
Lenders) issues a commitment to provide the Companies with financing under
Section 364 of the United States Bankruptcy Code upon one or more of the
Companies seeking relief under chapter 11 of the United States Bankruptcy Code
(a "DIP Financing Commitment"), $375,000 of such Amendment Fee shall be
credited toward any fee which may be charged by the Agent in connection with
the issuance of such commitment. If the Agent declines to issue a DIP
Financing Commitment, $375,000 of such Amendment Fee shall be credited to the
Revolving Loan Account.
SECTION 5. Effect on the Financing Agreement. Except as
amended hereby, the Financing Agreement and the other Documents shall remain in
full force and effect.
SECTION 6. Confirmation of Guaranty. Each Company, by its
execution of this Amendment, hereby expressly confirms and agrees the
amendments set forth in this Amendment are in its best interests and that its
guaranty of the Obligations in Section 12 of the Financing Agreement remains in
full force and effect and applies to the Obligations as they may be increased
from time to time by virtue of the increase in the Revolving Line of Credit and
the reduction in the Availability Reserve effected hereby.
SECTION 7. 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.
4
<PAGE> 5
SECTION 8. Governing Law. The validity, interpretation and
enforcement of this Amendment shall be governed by the law of the State of New
York.
SECTION 9. 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 10. References. References herein and in the
Documents to the "Financing Agreement", "this Agreement", "hereunder",
"hereof", or words of like import referring the Financing Agreement, shall mean
and be a reference to the Financing Agreement as amended hereby.
5
<PAGE> 6
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 the Company a
fully executed original for their files.
Very truly yours,
THE CIT GROUP/BUSINESS
CREDIT, INC., AS AGENT AND LENDER
By:
---------------------------------
Vice President
CONGRESS FINANCIAL CORPORATION,
AS LENDER
By:
---------------------------------
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
AS LENDER
By:
---------------------------------
Title:
HELLER FINANCIAL, INC., AS LENDER
By:
---------------------------------
Title:
6
<PAGE> 7
FINOVA CAPITAL CORPORATION, AS LENDER
By:
---------------------------------
Title:
FOOTHILL CAPITAL CORPORATION, AS LENDER
By:
---------------------------------
Title:
Read and Agreed to:
HARVARD INDUSTRIES, INC.
THE KINGSTON-WARREN CORPORATION
HARMAN AUTOMOTIVE, INC.
HAYES-ALBION CORPORATION
DOEHLER-JARVIS, INC.
DOEHLER-JARVIS GREENEVILLE, INC.
DOEHLER-JARVIS POTTSTOWN, INC.
DOEHLER-JARVIS TECHNOLOGIES, INC.
DOEHLER-JARVIS TOLEDO, INC.
By:
--------------------------------
Title:
7
<PAGE> 8
EXHIBIT A
FORM OF REVOLVING LOAN PROMISSORY NOTE
HARVARD INDUSTRIES, INC.
THE KINGSTON-WARREN CORPORATION,
HARMAN AUTOMOTIVE, INC.,
HAYES-ALBION CORPORATION,
DOEHLER-JARVIS, INC.,
DOEHLER-JARVIS GREENEVILLE, INC.,
DOEHLER-JARVIS POTTSTOWN, INC.,
DOEHLER-JARVIS TECHNOLOGIES, INC.,
DOEHLER-JARVIS TOLEDO, INC.
AMENDED AND RESTATED REVOLVING LOAN PROMISSORY NOTE
April 21, 1997
No. R-
$____________
FOR VALUE RECEIVED, the undersigned, HARVARD INDUSTRIES, INC.,
a Florida corporation, THE KINGSTON-WARREN CORPORATION, a New Hampshire
corporation, HARMAN AUTOMOTIVE, a Michigan corporation, HAYES-ALBION
CORPORATION, a Michigan corporation, DOEHLER-JARVIS, INC., a Delaware
corporation, DOEHLER-JARVIS GREENEVILLE, INC., a Delaware corporation,
DOEHLER-JARVIS POTTSTOWN, INC., a Delaware corporation, DOEHLER-JARVIS
TECHNOLOGIES, INC., a Delaware corporation, and DOEHLER-JARVIS TOLEDO, INC., a
Delaware corporation (the "Companies"), promise to pay to the order of [NAME OF
LENDER] as Lender (the "Lender") under a certain Financing Agreement dated
October 4, 1996 as amended by Amendment No. 1 thereto dated December 20, 1996
and Amendment No. 2 thereto dated April 21, 1997 between THE CIT GROUP/BUSINESS
CREDIT, INC., as Agent and Lender, other lenders party thereto and the
Companies (herein the "Financing Agreement") at the Agent's office located at
1211 Avenue of the Americas, New York, New York, in lawful money of the United
States of America and in immediately available funds, the principal amount of
[AMOUNT IN WORDS], or, if less, such other principal amount advanced to such
Company pursuant to Section 3, Paragraph 1 of the Financing Agreement and then
outstanding. The balance of such Revolving Loan to each such
<PAGE> 9
Company will fluctuate as a result of the daily application of the proceeds of
collections of the Accounts and the making of additional Revolving Loans to
each such Company as described in Section 3. The Revolving Loans may be
borrowed, repaid and reborrowed by the Companies in accordance with the terms
and provisions of the Financing Agreement. A final payment in an amount equal
to the outstanding aggregate balance of principal and interest remaining unpaid
in respect of the Revolving Loans made to such Company, if any, under this
Revolving Loan Promissory Note as shown on the books and records of the Agent
shall be due and payable upon any termination of the Financing Agreement.
All capitalized terms used herein shall have the meaning
provided therefor in the Financing Agreement, unless otherwise defined herein.
Each Company further promises to pay interest at such office,
in like money, on the unpaid principal amount owing hereunder in respect of
Revolving Loans made to such Company from time to time on the dates and at the
rates specified in Section 8, Paragraph 1 of the Financing Agreement.
If any payment on this Revolving Loan Promissory Note becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day, and with respect to payments
of principal, interest thereon shall be payable at the then applicable rate
during such extension.
This Revolving Loan Promissory Note is one of the Revolving
Loan Promissory Notes referred to in the Financing Agreement, and is subject
to, and entitled to, all provisions and benefits thereof and is subject to
optional and mandatory prepayment, in whole or in part, as provided therein.
The date and amount of the advance(s) made hereunder will be
recorded on the separate ledgers maintained by the Agent, provided that any
failure to record any such information on such ledgers shall not in any manner
affect the obligation of each Company to make payments of principal and
interest in accordance with the terms of this Revolving Loan Promissory Note.
The aggregate unpaid principal amount of all advances made pursuant hereto may
be set forth in the balance column on said schedule or such ledgers maintained
by the Agent. All such advances, whether or not so recorded, shall be due as
part of this Revolving Loan Promissory Note.
<PAGE> 10
Each Company confirms that any amount received by or paid to
the Agent in connection with the Financing Agreement and/or any balances
standing to its credit on any of its accounts on the Agent's books under the
Financing Agreement may in accordance with the terms of the Financing Agreement
be applied in reduction of this Revolving Loan Promissory Note, but no balance
or amounts shall be deemed to effect payment in whole or in part of this
Revolving Loan Promissory Note unless the Agent shall have actually charged
such account or accounts for the purposes of such reduction or payment of this
Revolving Loan Promissory Note.
Upon the occurrence of any one or more of the Events of
Default specified in the Financing Agreement or upon termination of the
Financing Agreement, all amounts then remaining unpaid on this Revolving Loan
Promissory Note may become, or be declared to be, immediately due and payable
as provided in the Financing Agreement.
Each Company and any and all guarantors, sureties and
endorsers jointly and severally waive grace, demand, presentment for payment,
notice of dishonor or default, notice of intent to accelerate, notice of
acceleration, protest and diligence in collecting.
This Note amends and restates and is a substitute for, but is
not in payment or satisfaction of, the Revolving Loan Promissory Note dated
_______, 1996 from the Companies to the Lender.
<PAGE> 11
This Revolving Loan Promissory Note shall be governed by, and
construed in accordance with, the laws of the state of New York and the
applicable federal laws of the United States.
HARVARD INDUSTRIES, INC.
THE KINGSTON-WARREN CORPORATION
HARMAN AUTOMOTIVE, INC.
HAYES-ALBION CORPORATION
DOEHLER-JARVIS, INC.
DOEHLER-JARVIS GREENEVILLE, INC.
DOEHLER-JARVIS POTTSTOWN, INC.
DOEHLER-JARVIS TECHNOLOGIES, INC.
DOEHLER-JARVIS TOLEDO, INC.
By:
--------------------------------------
Title:
Attest:
- ------------------------------
Title:
<PAGE> 12
AMENDMENT NO. 2
TO
FINANCING AGREEMENT
THE CIT GROUP/BUSINESS CREDIT, INC.
AS AGENT AND LENDER
AND
CONGRESS FINANCIAL CORPORATION
GENERAL ELECTRIC CAPITAL CORPORATION
HELLER FINANCIAL, INC.
FINOVA CAPITAL CORPORATION
AND
FOOTHILL CAPITAL CORPORATION
AS LENDERS
AND
HARVARD INDUSTRIES, INC.,
THE KINGSTON-WARREN CORPORATION,
HARMAN AUTOMOTIVE, INC.,
HAYES-ALBION CORPORATION,
DOEHLER-JARVIS, INC.,
DOEHLER-JARVIS GREENEVILLE, INC.,
DOEHLER-JARVIS POTTSTOWN, INC.,
DOEHLER-JARVIS TECHNOLOGIES, INC.,
AND
DOEHLER-JARVIS TOLEDO, INC.
(AS BORROWERS)
DATED: APRIL 21, 1997
<PAGE> 13
DATED: April 21, 1997
AMENDMENT NO. 2 (the "Amendment"), by and among The CIT
Group/Business Credit, Inc. ("CITBC"), Congress Financial Corporation, General
Electric Capital Corporation, Heller Financial, Inc., Finova Capital Corporation
and Foothill Capital Corporation (each a "Lender" and collectively the
"Lenders"), CITBC as agent for the Lenders (the "Agent") and Harvard Industries,
Inc., a Florida corporation (hereinafter "Harvard"), The Kingston-Warren
Corporation, a New Hampshire corporation, Harman Automotive, Inc., a Michigan
corporation, Hayes-Albion Corporation, a Michigan corporation, and
Doehler-Jarvis, Inc., a Delaware corporation, Doehler-Jarvis Greeneville, Inc.,
a Delaware corporation, Doehler-Jarvis Pottstown, Inc., a Delaware corporation,
Doehler-Jarvis Technologies, Inc., a Delaware corporation, and Doehler-Jarvis
Toledo, Inc., a Delaware corporation. Harvard and each of the entities
subsequently identified above are referred to herein individually as a "Company"
and collectively as the Companies.
W I T N E S S E T H
WHEREAS, the Companies, the Lenders and the Agent are party to
a Financing Agreement, dated October 4, 1996, as amended by Amendment No. 1
thereto dated December 20, 1996 (as such Financing Agreement may be further
amended from time to time, the "Financing Agreement" and capitalized terms
defined in the Financing Agreement and not otherwise defined herein having the
meanings provided therein); and
WHEREAS, the Companies have requested that the Lenders (i)
increase the Revolving Line of Credit by $10,000,000 to $100,000,000 until May
15, 1997 and (ii) reduce the Availability Reserve from $10,000,000 to $5,000,000
until May 15, 1997; and
WHEREAS, the Companies have also requested that the Lenders
increase the Inventory Advance Percentage as provided herein until May 15, 1997;
and
WHEREAS, as consideration for the Lenders agreeing to amend
the Financing Agreement as so requested by the Companies, the Companies have
agreed to pay an amendment fee of $500,000 (the "Amendment Fee") to the Agent
for the benefit of the Lenders, payable at the times and in the amounts set
forth herein; and
<PAGE> 14
WHEREAS, it is a condition precedent to the Lenders agreeing
to amend the Financing Agreement as requested by the Companies that the parties
hereto enter into this Amendment; and
WHEREAS, the Lenders have agreed with the Companies to amend
the Financing Agreement upon the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Amendments to the Financing Agreement. Upon the
satisfaction of the conditions in Section 3 of this Amendment relating to the
effectiveness of this Section 1, the Financing Agreement is hereby amended as
follows:
(a) Section 1 is hereby amended by:
(i) amending the definition of "AVAILABILITY RESERVE" by
deleting the reference to "$10,000,000" in the second line thereof and replacing
it with "$5,000,000 until May 15, 1997 and $10,000,000 thereafter...".
(ii) deleting the definition of "INVENTORY ADVANCE PERCENTAGE"
in its entirety and substituting in its place the following new definition:
INVENTORY ADVANCE PERCENTAGE means (a) in the case of raw
material and finished goods Inventory, sixty percent (60%) until May 15, 1997
and fifty percent (50%) thereafter and (b) in the case of work-in-process
Inventory, thirty percent until May 15, 1997 and twenty-five percent (25%)
thereafter.
(iii) amending the definition of "LINE OF CREDIT" by deleting
the reference to "$120,000,000" in the last line thereof and replacing it with
"$130,000,000 until May 15, 1997 and $120,000,000 thereafter...".
(iv) deleting the definition of "REVOLVING LINE OF CREDIT" in
its entirety and substituting in its place the following new definition:
REVOLVING LINE OF CREDIT means the commitment of the Lenders
to make Revolving Loans pursuant to Section 3 hereof in an aggregate amount of
up to (a) $100,000,000 until May 15, 1997, and (b) $90,000,000 thereafter.
2
<PAGE> 15
(b) Section 3 is hereby amended by:
(i) deleting the words "...(a) in amounts up to $90,000,000 in
the aggregate and...," in the eighth and ninth lines of Paragraph 1 thereof and
replacing them with the following:
"...(a) in amounts up to (i) $100,000,000 in the aggregate
until May 15, 1997 and (ii) $90,000,000 in the aggregate thereafter, and...".
SECTION 2. 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, subject to
applicable bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law), (b) except
as disclosed in writing to the Agent and the Lenders, no event has occurred and
is continuing on the date hereof that constitutes a Default or would constitute
a Default after giving effect to this Amendment, (c) the representations and
warranties of such Company contained in Section 7 of the 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 and (d) EBITDA for the two Fiscal Quarters ending
March 31, 1997 exceeded $2,000,000.
SECTION 3. Conditions to Effectiveness. The amendments in
Section 1 of this Amendment shall become effective and each Lender's commitment
to make Revolving Loans to the Companies under the Revolving Line of Credit and
to participate in the Letter of Credit Guaranty within the Revolving Line of
Credit shall increase ratably on the date (the "Effective Date") when
counterparts hereof shall have been executed by all of the Lenders, the Agent
and the Companies, and the Agent shall have received:
(a) Revolving Loan Promissory Notes substantially in the form
of Exhibit A hereto executed by each of the Companies in favor of the Lenders,
in an amount for each Lender equal to such Lender's Ratable Portion of the
Revolving Line of Credit.
(b) The Amendment Fee, for the benefit of the Lenders; and
3
<PAGE> 16
(c) 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.
(d) Counsel for the Companies shall have delivered to the
Agent opinions satisfactory to the Agent containing such matters as the Agent
may reasonably request.
SECTION 4. Amendment Fee. (a) To induce the Agent and the
Lenders to enter into this Amendment and to continue to extend to the Companies
the Revolving Loans as such Revolving Loans may be increased hereby, the
Companies shall jointly and severally pay to the Agent for the Lenders an
Amendment Fee of $500,000.
(b) In the event the Agent (on behalf of itself or the other
Lenders) issues a commitment to provide the Companies with financing under
Section 364 of the United States Bankruptcy Code upon one or more of the
Companies seeking relief under chapter 11 of the United States Bankruptcy Code
(a "DIP Financing Commitment"), $375,000 of such Amendment Fee shall be credited
toward any fee which may be charged by the Agent in connection with the issuance
of such commitment. If the Agent declines to issue a DIP Financing Commitment,
$375,000 of such Amendment Fee shall be credited to the Revolving Loan Account.
SECTION 5. Effect on the Financing Agreement. Except as
amended hereby, the Financing Agreement and the other Documents shall remain in
full force and effect.
SECTION 6. Confirmation of Guaranty. Each Company, by its
execution of this Amendment, hereby expressly confirms and agrees the amendments
set forth in this Amendment are in its best interests and that its guaranty of
the Obligations in Section 12 of the Financing Agreement remains in full force
and effect and applies to the Obligations as they may be increased from time to
time by virtue of the increase in the Revolving Line of Credit and the reduction
in the Availability Reserve effected hereby.
SECTION 7. 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.
4
<PAGE> 17
SECTION 8. Governing Law. The validity, interpretation and
enforcement of this Amendment shall be governed by the law of the State of New
York.
SECTION 9. 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 10. References. References herein and in the Documents
to the "Financing Agreement", "this Agreement", "hereunder", "hereof", or words
of like import referring the Financing Agreement, shall mean and be a reference
to the Financing Agreement as amended hereby.
5
<PAGE> 18
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 the Company a fully
executed original for their files.
Very truly yours,
THE CIT GROUP/BUSINESS
CREDIT, INC., AS AGENT AND
LENDER
By:
Vice President
CONGRESS FINANCIAL
CORPORATION, AS LENDER
By:
Title:
GENERAL ELECTRIC
CAPITAL CORPORATION, AS
LENDER
By:
Title:
HELLER FINANCIAL, INC., AS
LENDER
By:
Title:
<PAGE> 19
FINOVA CAPITAL
CORPORATION, AS LENDER
By:
Title:
FOOTHILL CAPITAL
CORPORATION, AS LENDER
By:
Title:
Read and Agreed to:
HARVARD INDUSTRIES, INC.
THE KINGSTON-WARREN CORPORATION
HARMAN AUTOMOTIVE, INC.
HAYES-ALBION CORPORATION
DOEHLER-JARVIS, INC.
DOEHLER-JARVIS GREENEVILLE, INC.
DOEHLER-JARVIS POTTSTOWN, INC.
DOEHLER-JARVIS TECHNOLOGIES, INC.
DOEHLER-JARVIS TOLEDO, INC.
By:
Title:
<PAGE> 20
EXHIBIT A
FORM OF REVOLVING LOAN PROMISSORY NOTE
HARVARD INDUSTRIES, INC.
THE KINGSTON-WARREN CORPORATION,
HARMAN AUTOMOTIVE, INC.,
HAYES-ALBION CORPORATION,
DOEHLER-JARVIS, INC.,
DOEHLER-JARVIS GREENEVILLE, INC.,
DOEHLER-JARVIS POTTSTOWN, INC.,
DOEHLER-JARVIS TECHNOLOGIES, INC.,
DOEHLER-JARVIS TOLEDO, INC.
AMENDED AND RESTATED REVOLVING LOAN PROMISSORY NOTE
April 21, 1997
No. R-
$------------
FOR VALUE RECEIVED, the undersigned, HARVARD INDUSTRIES, INC.,
a Florida corporation, THE KINGSTON-WARREN CORPORATION, a New Hampshire
corporation, HARMAN AUTOMOTIVE, a Michigan corporation, HAYES-ALBION
CORPORATION, a Michigan corporation, DOEHLER-JARVIS, INC., a Delaware
corporation, DOEHLER-JARVIS GREENEVILLE, INC., a Delaware corporation,
DOEHLER-JARVIS POTTSTOWN, INC., a Delaware corporation, DOEHLER-JARVIS
TECHNOLOGIES, INC., a Delaware corporation, and DOEHLER-JARVIS TOLEDO, INC., a
Delaware corporation (the "Companies"), promise to pay to the order of [NAME OF
LENDER] as Lender (the "Lender") under a certain Financing Agreement dated
October 4, 1996 as amended by Amendment No. 1 thereto dated December 20, 1996
and Amendment No. 2 thereto dated April 21, 1997 between THE CIT GROUP/BUSINESS
CREDIT, INC., as Agent and Lender, other lenders party thereto and the
Companies (herein the "Financing Agreement") at the Agent's office located at
1211 Avenue of the Americas, New York, New York, in lawful money of the United
States of America and in immediately available funds, the principal amount of
[AMOUNT IN WORDS], or, if less, such other principal amount advanced to such
Company pursuant to Section 3, Paragraph 1 of the Financing Agreement and then
outstanding. The balance of such Revolving Loan to each such
<PAGE> 21
Company will fluctuate as a result of the daily application of the proceeds of
collections of the Accounts and the making of additional Revolving Loans to each
such Company as described in Section 3. The Revolving Loans may be borrowed,
repaid and reborrowed by the Companies in accordance with the terms and
provisions of the Financing Agreement. A final payment in an amount equal to the
outstanding aggregate balance of principal and interest remaining unpaid in
respect of the Revolving Loans made to such Company, if any, under this
Revolving Loan Promissory Note as shown on the books and records of the Agent
shall be due and payable upon any termination of the Financing Agreement.
All capitalized terms used herein shall have the meaning
provided therefor in the Financing Agreement, unless otherwise defined herein.
Each Company further promises to pay interest at such office,
in like money, on the unpaid principal amount owing hereunder in respect of
Revolving Loans made to such Company from time to time on the dates and at the
rates specified in Section 8, Paragraph 1 of the Financing Agreement.
If any payment on this Revolving Loan Promissory Note becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day, and with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension.
This Revolving Loan Promissory Note is one of the Revolving
Loan Promissory Notes referred to in the Financing Agreement, and is subject to,
and entitled to, all provisions and benefits thereof and is subject to optional
and mandatory prepayment, in whole or in part, as provided therein.
The date and amount of the advance(s) made hereunder will be
recorded on the separate ledgers maintained by the Agent, provided that any
failure to record any such information on such ledgers shall not in any manner
affect the obligation of each Company to make payments of principal and interest
in accordance with the terms of this Revolving Loan Promissory Note. The
aggregate unpaid principal amount of all advances made pursuant hereto may be
set forth in the balance column on said schedule or such ledgers maintained by
the Agent. All such advances, whether or not so recorded, shall be due as part
of this Revolving Loan Promissory Note.
<PAGE> 22
Each Company confirms that any amount received by or paid to
the Agent in connection with the Financing Agreement and/or any balances
standing to its credit on any of its accounts on the Agent's books under the
Financing Agreement may in accordance with the terms of the Financing Agreement
be applied in reduction of this Revolving Loan Promissory Note, but no balance
or amounts shall be deemed to effect payment in whole or in part of this
Revolving Loan Promissory Note unless the Agent shall have actually charged such
account or accounts for the purposes of such reduction or payment of this
Revolving Loan Promissory Note.
Upon the occurrence of any one or more of the Events of
Default specified in the Financing Agreement or upon termination of the
Financing Agreement, all amounts then remaining unpaid on this Revolving Loan
Promissory Note may become, or be declared to be, immediately due and payable as
provided in the Financing Agreement.
Each Company and any and all guarantors, sureties and
endorsers jointly and severally waive grace, demand, presentment for payment,
notice of dishonor or default, notice of intent to accelerate, notice of
acceleration, protest and diligence in collecting.
This Note amends and restates and is a substitute for, but is
not in payment or satisfaction of, the Revolving Loan Promissory Note dated
_______, 1996 from the Companies to the Lender.
<PAGE> 23
This Revolving Loan Promissory Note shall be governed by, and
construed in accordance with, the laws of the state of New York and the
applicable federal laws of the United States.
HARVARD INDUSTRIES, INC.
THE KINGSTON-WARREN CORPORATION
HARMAN AUTOMOTIVE, INC.
HAYES-ALBION CORPORATION
DOEHLER-JARVIS, INC.
DOEHLER-JARVIS GREENEVILLE, INC.
DOEHLER-JARVIS POTTSTOWN, INC.
DOEHLER-JARVIS TECHNOLOGIES, INC.
DOEHLER-JARVIS TOLEDO, INC.
By:
Title:
Attest:
Title:
<PAGE> 1
ACCESS AND OCCUPANCY AGREEMENT
General Motors Corporation ("GM"), Doehler-Jarvis Greenville, Inc.
("Greenville") and Doehler-Jarvis, Inc. ("Doehler-Jarvis"), both direct and
indirect, respectively, wholly-owned subsidiaries of Harvard Industries, Inc.
("Harvard"), enter into this Access and Occupancy Agreement (this "Agreement")
on March __, 1997.
RECITALS
A. Doehler-Jarvis and Greenville are major suppliers of component
parts to GM pursuant to various purchase orders and/or supply contracts issued
by GM (collectively, the "Purchase Orders").
B. Doehler-Jarvis entered into a supply arrangement with GM to supply
the requirements of GM's Delphi Automotive Systems Division ("Delphi") for the
V-8 Lower Intake Manifold (the "V-8 Manifold").
C. Prior to a price increase granted by GM pursuant to the terms of a
Term Sheet dated July 25, 1996 (the "Term Sheet") Doehler-Jarvis and Greenville
assert that they were incurring significant operating losses in connection with
the production of V-8 Manifolds by Doehler-Jarvis and/or Greenville, as
applicable. Doehler-Jarvis and Greenville also advised GM that the financial
stability of Doehler-Jarvis and Greenville could be threatened if
Doehler-Jarvis and/or Greenville, as applicable, continued to produce and
deliver the V-8 Manifold at the existing contract price and requested that GM
grant a price increase and other financial accomodations to Doehler-Jarvis and
Greenville as a condition to continuing to deliver V-8 Manifolds to GM.
D. GM asserts that Doehler-Jarvis and/or Greenville's failure or
refusal to satisfy GM's requirements for the V-8 Manifold would irreparably
injure GM.
E. On July 25, 1996, the parties executed the Term Sheet outlining
the terms of an agreement pursuant to which Doehler-Jarvis would be granted a
price increase on the V-8 Manifold and GM would provide certain additional
financial accomodations in consideration for the agreements and commitments of
Harvard, Doehler-Jarvis and Greenville set forth therein.
F. The parties are entereing into this Agreement and the Exhibits
hereto to memorialize the agreements of the parties set forth in the Term
Sheet.
THEREFORE, in consideration of the above recitals (which are part of
this Agreement) and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Doehler-Jarvis, Greenville, and GM agree
as follows:
<PAGE> 2
TERMS AND CONDITIONS
1. Certain Defined Terms. In addition to those terms defined elsewhere
in this Agreement, the following terms shall have the indicated meanings,
unless the context otherwise requires:
"Code" means the Uniform Commercial Code as in effect in the State
of Michigan as of the date of this Agreement.
"Components Parts" shall mean all component parts called for by any
purchase order issued by GM to Doehler-Jarvis or Greenville whether as of
the date of this Agreement or in the future which Component Paris are in
whole or in part manufactured or assembled at the Greenville Plant as
defined herein.
"Contract Rights" means all rights of Doehler-Jarvis or Greenville
(including, without limitation, all rights to payment) under each Contract
(defined below).
"Contracts" means, collectively, all licensing agreements and any
and all other contracts, supply agreements or other agreements in or
under which Doehler-Jarvis or Greenville may now or hereafter have any
right, title or interest and which pertain to the lease, sale or other
disposition by Doehler-Jarvis and/or Greenville of Equipment, Inventory,
fixtures, real property or any interest in real property, or the right to
use or acquire personal property, as any of the same may from time to time
be amended, supplemented or otherwise modified.
"Default" shall mean any of the following events:
(a) An executive officer of Doehler-Jarvis or Greenville
acknowledges in writing that Doehler-Jarvis or Greenville is
unable or unwilling to timely satisfy GM's delivery
requirements of the Component Parts in accordance with the
terms and conditions of the purchase orders relating to the
Component Parts and any other agreements between GM and
Doehler-Jarvis or Greenville. For this purpose "executive
officer" means any of the Chairman, President, Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer,
Chief Accounting Officer, Vice Presidents, Treasurer,
Controller or Secretary of Doehler-Jarvis or Greenville.
(b) A voluntary or involuntary petition under Chapter 7 of the
Bankruptcy Code is filed against Doehler-Jarvis or Greenville
and such portion is not (i) dismissed within thirty (30) days,
or (ii) converted to a proceeding under Chapter 11 of the
Bankruptcy Code within thirty (30) days.
(c) Doehler-Jarvis or Greenville makes an assignment for the
benefit of creditors or a similar transfer of or action
involving any Operating Assets or Real Estate for purposes of
liquidating a material portion of the
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Operating Assets or Real Estate, or a Trustee, custodian or
receiver is appointed over all or substantially all of
Doehler-Jarvis's or Greenville's property.
(d) Doehler-Jarvis or Greenville ceases to satisfy GM's reasonable
requirements pursuant to releases issued by GM to
Doehler-Jarvis or Greenville so as to result in the imminent
interruption of GM's assembly operations.
(e) Doehler-Jarvis or Greenville fails or refuses for any reason
to ship or produce the Component Parts pursuant to releases
issued by GM to Doehler-Jarvis or Greenville in the ordinary
course of business, the consequence of which is that
production at any GM plant is negatively impacted to a
material extent.
(f) Any Lender (or a successor secured lender holding a security
interest in a material portion of Doehler-Jarvis's or
Greenville's assets) commences a foreclosure action of its
liens, security interests and/or mortgages in or against all
or any of the Real Estate or Operating Assets.
Notwithstanding the provisions of this Section 1 or any other provision of
this Agreement, any delay or failure of Doehler-Jarvis or Greenville to
perform their respective obligations to GM shall not constitute a Default
hereunder if and to the extent that such delay or failure is caused,
without the fault or negligence of either Doehler-Jarvis or Greenville, by
acts of God, actions by any governmental authority (whether valid or
invalid), fires, floods, windstorms, explosions, riots, natural disasters,
wars, labor problems (including lockouts, strikes and slowdowns and
including labor problems of GM) inability to obtain power, materials,
labor, equipment or transportation not resulting from Harvard's,
Doehler-Jarvis's or Greenville's inability or unwillingness to pay for
such items (including Payment on COD or CIA terms), and court injunctions
or orders so long as Harvard, Doehler-Jarvis or Greenville did not seek or
participate directly or indirectly in the seeking of such court injunction
or order, provided that written notice of such delay (including the
anticipated duration of the delay) shall be given by the affected party to
GM within ten (10) days.
"Documents" means all "documents" as that term is defined in Section
9-105(f) of the Code.
"Equipment" means any "equipment", as such term is defined in
Section 9-109(2) of the Code, now or hereafter owned by Doehler-Jarvis or
Greenville, wherever located, and shall also mean and include all
machinery, equipment, vehicles, furnishings and fixtures (as such term is
defined in Section 9-313(a) of the Code) now owned or hereafter acquired
by Doehler-Jarvis or Greenville, including without limitation, all items
of machinery and equipment of any kind, nature and description, whether
affixed to real property or not, as well as all additions to,
substitutions for, replacements of or accessions
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to any of the foregoing items and all attachments, components, parts
(including spare parts) and accessories whether installed thereon or
affixed thereto.
"General Intangibles" means all "general intangibles", as such term
is defined in Section 9-106 of the Code, now or hereafter owned by
Doehler-Jarvis or Greenville, including, without limitation, customer
lists, rights in intellectual property, goodwill, trade names, service
marks, trade secrets, patents, trademarks, copyrights, applications
therefore, permits, licenses, now owned or hereafter acquired by
Doehler-Jarvis or Greenville, but excluding items described in the
definition of Accounts.
"GM Agreements" means, collectively, this Agreement, the Purchase
Orders and the Accommodation Agreement.
"Instruments" means all "instruments", as such term is defined in
Section 9-105(i) of the Code.
"Intellectual Property" means all now existing or hereafter acquired
patents, trademarks, copyrights, inventions, licenses, discoveries,
processes, know-how, techniques, trade secrets, designs, specifications
and the like (regardless of whether such items are now patented or
registered, or registerable, or patentable in the future), and all
technical, engineering, or other information and knowledge, production
data and drawings, including without limitation, all items, rights and
property defined as Intellectual Property under 11 U.S.C. Section 101, as
amended from time to time.
"Inventory" means any "inventory", as such term is defined in Section
9-109(4) of the Code, wherever located, now owned or hereafter acquired by
Doehler-Jarvis or Greenville or in which Doehler-Jarvis or Greenville now
has or hereafter may acquire any right, title or interest, wherever
located, including, without limitation, all goods and other personal
property now or hereafter owned by Doehler-Jarvis or Greenville which are
leased or are held for sale or lease or are furnished or are to be
furnished under a contract of service or which constitute raw materials,
work in process or materials used or consumed or to be used or consumed in
Doehler-Jarvis's or Greenville's business, or in the processing, packaging
or shipping of the same, and all finished goods.
"Lenders" means the several financial institutions party to the
Financing Agreement dated as of October 4, 1996 among Harvard,
Doehler-Jarvis, Greenville, the Borrowers named therein, The CIT
Group/Business Credit, Inc., as Agent and Lender, and such Lenders.
"Obligations" means Doehler-Jarvis's and Greenville's obligations
under this Agreement and the other GM Agreements, including, without
limitation, the obligation to provide GM (or its designee) the Right to
Occupy as defined herein.
"Operating Assets" means all assets located at the Greenville Plant
(as defined below) and used in the production of Component Parts, including
Equipment, Contract
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Rights and General Intangibles (other than deposit accounts, insurance
refunds, tax refunds, tax refund claims and cash and cash
equivalents), but specifically excluding Inventory, Documents,
Instruments, accounts (as defined in the Code) and chattel paper (as
defined in the Code) (and cash or cash equivalent Proceeds of such
excluded items and of General Intangibles).
"Proceeds" shall have the meaning provided it under the Code.
"Real Estate" means, collectively, the ownership and/or leasehold
interests and related rights and interests in the premises described on
Schedule I attached hereto which is owned by Greenville (the "Greenville
Plant").
"Requirement of Law" means the charter and bylaws or other
organizational or governing documents of any entity, and any material law,
treaty, rule or regulation or determination of arbitration or a court or
other governmental authority, in each case applicable to or binding upon
any applicable person or entity or any of its property or to which such
entity or person or any of its property is subject.
2. Right of Access and Occupancy.
(a) Effective immediately, Doehler-Jarvis and Greenville, jointly
and severally, hereby grant GM or its designee a fully-paid right to use
the Operating Assets and a right to use and occupy the Real Estate
(collectively, the "Right to Occupy") to manufacture Component Parts for
GM. Such Right to Occupy shall be effective immediately and shall expire
365 days after GM provides a Default Notice (as defined below) to
Doehler-Jarvis and Greenville (the "Occupancy Period"). Though
Doehler-Jarvis and Greenville acknowledge that, pursuant to the Right to
Occupy granted immediately above, GM has the immediate right to occupy and
use the Operating Assets and the Real Estate to manufacture Component
Parts, GM agrees that it will defer from exercising such rights until a
Default occurs and GM provides Doehler-Jarvis and Greenville written
notice thereof (the "Default Notice").
(b) GM's Obligations. If GM invokes its Right to Occupy (for
itself or its designee) by providing a Default Notice, GM shall:
(i) indemnify and hold Doehler-Jarvis, Greenville and their
officers and directors and Lenders harmless from any
and all costs, damages, liabilities or injury caused by
GM's or its designee's use of the Operating Assets and
the Real Estate during that portion of the Occupancy
Period during which GM is using and occupying the
Operating Assets and the Real Estate (the "Operating
Period");
(ii) insure (by continuing in force then existing
Doehler-Jarvis or Greenville insurance if it is more
economical to do so) and maintain the Operating Assets
and the Real Estate in the same
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condition as existed on the first day of the
Operating Period, ordinary wear and tear excepted;
(iii) pay all actual costs and expenses incurred in
connection with the manufacturing of Component Parts
during the Operating Period, including, without
limitation, utilities and other overhead expenses,
prorated property taxes and assessments attributable to
the Operating Assets and Real Estate, any payments due
on account of any of the Operating Assets which are
leased from third parties (without acceleration), and
regularly scheduled monthly principal and interest
payments with respect to term loans to Doehler-Jarvis
or Greenville for equipment comprising a portion of the
Operating Assets, without acceleration and without
regard to any balloon payments.
(iv) subject to GM's or its designee's right to use and
occupancy of the Operating Assets and the Real Estate
during the Operating Period, afford Doehler-Jarvis's
and Greenville's representatives (and representatives
of Lenders, secured creditors or mortgagees of the
Operating Assets and/or Real Estate) reasonable access
to inspect the Operating Assets and the Real Estate;
(v) subject to Doehler-Jarvis's and Greenville's other
customers agreeing to (a) make payment to GM or its
designee on account of their allocable share of
overhead and related expenses and all direct expenses
related to such other customer's production, and (b)
Doehler-Jarvis, Greenville or Lenders making the
necessary tangible personal property available for use
during the Operating Period, GM agrees, for itself and
its designee, to produce component parts for such other
customers during the Operating Period or to provide the
other customers access provided such customers do not
interfere with the production of Component Parts;
(vi) comply with the following:
(a) During the Operating Period, Doehler-Jarvis and/or
Greenville, as applicable, shall continue to
employ their respective employees who work at the
Greenville Plant whose employment, in the
discretion of GM, is necessary to maintain
continued production of the Component Parts (the
"Greenville Employees") for the benefit of GM or
GM's designee, and GM or its designee shall
reimburse Doehler-Jarvis and Greenville for all
costs and expenses relating to Doehler-Jarvis's
and Greenville's employment of the Greenville
Employees, which are incurred during the
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Operating Period. Without limiting the generality
of the foregoing, GM or its designee shall
reimburse Doehler-Jarvis and Greenville all
amounts incurred by Doehler-Jarvis and Greenville
to meet their regular payroll obligations,
including without limitation, salaries, wages,
payroll taxes, workers' compensation, unemployment
insurance, disability insurance, welfare, pension
and other payments and contributions required to
be made by Doehler-Jarvis or Greenville with
respect to the Greenville Employees, which are
incurred during the Operating Period, but in no
event will GM be liable for any costs or expenses
relating to service prior to the time GM exercises
its Right to Occupy including, without limitation,
the costs of unfunded pension liability.
Notwithstanding the foregoing, Doehler-Jarvis and
Greenville may, at their sole cost and expense,
continue to employ employees not involved in the
production of Component Parts (the "Other
Employees") but under no circumstances will GM be
responsible for reimbursing Doehler-Jarvis or
Greenville for costs and expenses relating to
Doehler-Jarvis's or Greenville's employment of the
Other Employees, or the Greenville Employees to
the extent the Greenville Employees are performing
services unrelated to the production of the
Component Parts.
(b) During the Operating Period, Doehler-Jarvis or
Greenville shall not increase compensation or
benefits of the Greenville Employees except as
may be required by applicable law or pursuant to
contracts in existence prior to the commencement
of the Operating Period.
(c) Doehler-Jarvis and Greenville, jointly and
severally, shall indemnify, defend and hold GM,
its designee and their respective employees and
agents harmless from any and all costs, expenses
(including reasonable attorneys' fees), losses,
damages, liabilities or injury arising from claims
or liabilities arising or accruing prior to the
first day of the Operating Period, regardless of
when such claims are asserted.
(c) Right to Terminate. GM shall have the right to terminate the
Operating Period upon ten (10) days written notice to Doehler-Jarvis.
Upon expiration of the referenced notice period, the Operating Period
shall terminate and, except for the obligations referenced in subparagraph
2(b)(i) and payment of any amounts payable under subparagraphs 2(b)(i)
through 2(b)(vi) above not paid as of the termination of the
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Operating Period, GM shall have no further obligations or liabilities to
Doehler-Jarvis, Greenville, Harvard or Lenders.
(d) SPECIFIC PERFORMANCE. IN CONNECTION WITH ANY ACTION OR
PROCEEDING TO ENFORCE GM'S RIGHT TO OCCUPY, DOEHLER-JARVIS AND GREENVILLE
ACKNOWLEDGE THAT GM WILL NOT HAVE AN ADEQUATE REMEDY AT LAW, THAT THE
OPERATING ASSETS AND REAL ESTATE ARE UNIQUE AND GM SHALL BE ENTITLED TO
SPECIFIC PERFORMANCE OF GREENVILLE'S AND DOEHLER-JARVIS'S OBLIGATIONS TO
GM UNDER THIS AGREEMENT.
(e) Appointment of Receiver. In addition to any rights and
remedies GM may have under the terms of this or any other agreement
between GM and Doehler-Jarvis, Greenville and/or Harvard, GM shall have
the right to the appointment of a receiver to effectuate its Right to
Occupy. In connection with any hearing on the appointment of a receiver,
Doehler-Jarvis and Greenville agree that at least seventy-two (72) hours
actual notice of any request for a hearing on such appointment shall be
adequate notice and that the only issue to be litigated in any such
hearing will be whether or not a Default has occurred.
(f) IRREPARABLE HARM; LIMITATION OF NOTICE. DOEHLER-JARVIS AND
GREENVILLE ACKNOWLEDGE THAT GM WILL SUFFER IRREPARABLE HARM IF
DOEHLER-JARVIS AND GREENVILLE FAIL TO COOPERATE WITH GM IN ALLOWING GM TO
EXERCISE ITS RIGHTS UNDER THIS AGREEMENT. ACCORDINGLY, PROVIDED THAT
DOEHLER-JARVIS AND GREENVILLE RECEIVE AT LEAST FORTY-EIGHT (48) HOURS
ACTUAL NOTICE OF ANY REQUEST FOR HEARINGS IN CONNECTION WITH PROCEEDINGS
INSTITUTED BY GM, DOEHLER-JARVIS AND GREENVILLE. WAIVE TO THE FULLEST
EXTENT POSSIBLE UNDER APPLICABLE LAW, THE RIGHT TO NOTICE IN EXCESS OF 48
HOURS IN CONNECTION WITH ANY JUDICIAL PROCEEDINGS INSTITUTED BY GM IN
CONNECTION WITH THE ENFORCEMENT OF ITS RIGHTS UNDER THIS AGREEMENT.
4. Obligation to Purchase Inventory. If GM invokes the Right to
Occupy, GM shall purchase all raw materials, work in process and finished goods
inventory (other than such items that are owned by GM and provided to
Doehler-Jarvis or Greenville on consignment or bailment) related to goods
produced by Doehler-Jarvis or Greenville for GM at the Greenville Plant which
are usable by GM and in a merchantable condition (the "GM Greenville
Inventory"). For purposes of this Agreement, the term "usable" means usable in
the production of Component Parts at the Greenville Plant in the quantities
called for by GM in effect as or the date GM exercises the Right of Access. GM
will purchase the GM Greenville Inventory (free and clear of all liens and
security interests) for the following amounts:
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(a) For raw materials, ninety percent (90%) of Doehler-Jarvis's or
Greenville's actual invoice cost;
(b) For work in process, the pro-rated current Purchase Order
price for the Component Part in question based on a percentage of
completion, and
(c) For finished goods, the price called for by the underlying
Purchase Order, as amended from time to time to reflect any price changes
agreed to by Doehler-Jarvis and/or Greenville and GM.
Within three (3) business days of the date GM invokes the Right to Occupy, GM
and Lenders, or their respective designees, will undertake a physical
inventory of the GM Greenville Inventory, which physical inventory shall be
completed within twenty (20) business days from the date GM exercises the Right
to Occupy. GM shall make payment to Lenders for Greenville's account, for the
GM Greenville Inventory within five (5) business days after completion of the
physical inventory. The forgoing payment shall be free and clear of any rights
of setoff or recoupment. Doehler-Jarvis and Greenville acknowledge that the
foregoing prices to be paid for the GM Greenville Inventory by GM constitute
commercially reasonable prices, and that any sale by Lenders pursuant to the
foregoing shall be deemed to be commercially reasonable in all respects,
including method, time, place and terms.
5. Bankruptcy Court Approvals. Doehler-Jarvis and Greenville hereby
agree that in the event Doehler-Jarvis and/or Greenville seek protection under
or become subject to Chapter 11 of the Bankruptcy Code, the terms of a
financing order submitted to the Bankruptcy Court for approval will contain a
provision confirming GM's rights under the Accommodation Agreement and this
Agreement and Doehler-Jarvis and Greenville will exercise their best efforts in
good faith to obtain the Bankruptcy Court's approval of such provision.
6. Rights of GM: Limitations on GM's Obligations. Unless GM exercises
its Right to Occupy, in which case GM shall have the obligations outlined in
Section 2(b) above, GM shall not have any obligation or liability by reason of
or arising out of this Agreement, nor shall GM be required or obligated in any
manner to perform or fulfill any of the obligations of Doehler-Jarvis or
Greenville.
7. Remedies. Subject to the terms of any agreement between GM and
Lenders, upon Default, GM shall have all rights and remedies provided in this
Agreement and in any other agreements with Doehler-Jarvis, Greenville or
Harvard. Further, all of GM's rights and remedies under this Agreement are
cumulative and not exclusive of any rights and remedies under any other
agreement or under applicable law.
8. Injunctive Relief. Given that GM will incur significant damages if
Doehler-Jarvis or Greenville fail to timely satisfy its obligations to GM and
GM's operations are materially and negatively impacted, and because GM does not
have an adequate remedy at law and would be irreparably harmed by such events,
Doehler-Jarvis and Greenville agree that GM shall be entitled
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to injunctive relief (both prohibitive and mandatory) in connection with any
actual or threatened violations of any terms or conditions of this Agreement.
GM agrees to provide Lenders notice of any proceeding seeking injunctive relief
simultaneous with providing such notice to Doehler-Jarvis or Greenville.
9. Representations and Warranties. Doehler-Jarvis and Greenville,
jointly and severally, hereby represent and warrant to GM that:
(a) Accuracy of Information. All information, certificates or
statements given to GM pursuant to this Agreement shall be true and
complete in all material respects, when given.
(b) Authority. Doehler-Jarvis and Greenville have the authority
to provide to GM all of the rights and interests provided to GM hereunder.
The individuals signing this Agreement on behalf of Doehler-Jarvis and
Greenville are authorized representatives of each of such respective
companies, and have the power and authority to bind Doehler-Jarvis and
Greenville, as applicable, to the terms and conditions of this
Agreement.
(c) Description of Real Estate. The legal description of the Real
Estate attached as Schedule I is a complete and accurate description of
the Real Estate and includes all property on which all buildings and other
facilities of the Greenville Plant necessary for the production of
Component Parts are located.
10. Covenants. Doehler-Jarvis and Greenville covenant and agree with GM
that from and after the date of this Agreement until the Obligations we paid in
full:
(a) Further Documentation. At any time and from time to time,
upon the written request of GM, and at the sole expense of Doehler-Jarvis
and Greenville, Doehler-Jarvis and Greenville will promptly and duly
execute and deliver any and all such further instruments and documents and
take such further action as GM may reasonably request, subject to existing
obligations of Harvard, Doehler-Jarvis or Greenville to parties other than
GM, for the purpose of obtaining the full benefits of this Agreement and
of the rights and powers herein granted.
(b) Payment of Obligations. Subject to Section 3(b) above, if GM
invokes the Right to Occupy, Doehler-Jarvis and Greenville will pay
promptly when due, all taxes, assessments and governmental charges or
levies imposed upon the Operating Assets, the Real Estate or in respect of
its income or profits therefrom, as well as all claims of any kind
(including, without limitation, claims for labor, materials and supplies)
against or with respect to the Operating Assets and the Real Estate.
(c) Sales or Dispositions of Operating Assets: Certain Uses
Prohibited. Doehler-Jarvis and Greenville will not sell or otherwise
dispose of any Operating Assets or the Real Estate except in the ordinary
course of business. Further, Doehler-Jarvis and
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Greenville will not use any of the Operating Assets or Real Estate in any
way which would materially adversely affect GM's rights and remedies under
this Agreement.
(d) Limitations on Modifications of Agreements, etc.
Doehler-Jarvis and Greenville will not, other than in the ordinary course
of business, (i) amend, modify, terminate or waive any provision of any
Contract which might materially adversely affect GM's Right to Occupy, or
(ii) fail to exercise promptly and diligently each and every right which
it may have under each Contract in an manner which could materially and
adversely affect GM's rights and remedies under this Agreement.
(e) Maintenance or Insurance. Subject to Section 2(b),
Doehler-Jarvis and Greenville shall, at their expense, keep and maintain
the Operating Assets and the Real Estate insured against all risk of loss
or damage from fire, theft, malicious mischief, explosion, sprinklers, and
all other hazards and risks of physical damage included within the meaning
of the term "extended coverage" in such amounts as are ordinarily insured
against by other owners of similar businesses.
(f) Right of Inspection: Cooperation. In addition to any rights
GM may have under the Purchase Orders, GM and its representatives shall,
upon reasonable request and reasonable times, have the right to enter into
and upon any premises where any of the Operating Assets and the Real
Estate are located for the purpose of inspecting the same, observing its
use or otherwise protecting GM's interests therein. GM will take
reasonable steps to maintain the confidentiality of information obtained
by GM, except as required by law.
11. Secured Party and Lessor Acknowledgments.
(a) Simultaneously with the execution of this Agreement,
Doehler-Jarvis will deliver to GM acknowledgements from the Lenders, in
the form of Exhibit 11-A. Consent of the Lenders is a precondition to the
effectiveness of this Agreement and the Accommodation Agreement.
(b) Within 30 days of the execution of this Agreement,
Doehler-Jarvis will exercise its best efforts deliver to GM
acknowledgements from lessors of certain equipment located in the
Greenville plant, in the form of Exhibit 11-B.
(c) If subsequent to the execution of this Agreement, Doehler-Jarvis
or Greenville intends to grant additional or further security interests,
liens or mortgages in the Operating Assets to any party other than
Lenders, five business days prior of granting such liens, security
interests or mortgages Doehler-Jarvis or Greenville shall deliver to GM an
acknowledgment from such secured creditors and/or mortgagees in a form
substantially similar to Exhibit 11-A.
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12. Limitation on Setoffs. For the benefit of Lenders only and subject
to Lenders' compliance with the terms of Exhibit 11-A and Lenders otherwise not
materially interfering with GM's Right to Occupy, GM agrees:
(a) If GM invokes the Right to Occupy, GM will pay to Lenders, for
Greenville's account, all outstanding bona fide accounts payable due
Greenville net of (i) ordinary course of business setoffs (short
shipments, defective product, mathematical errors, etc.) and (ii) any
damages incurred or to be incurred by GM as a result of Greenville's
breaches of its obligations to GM, provided, however, that the aggregate
setoffs under (i) and (ii) shall be limited to 15% of outstanding bona
fide accounts payable due to Greenville.
(b) 25% of the net amount due by GM under subparagraph (a) above will be
paid at or prior to the time GM invokes the Right to Occupy.
(c) The balance of the amount owing by GM under subparagraph (a) above
will be paid within 30 days of GM's invocation of the Right to Occupy.
(d) For purposes of this paragraph 12, the term bona fide means arising
in the ordinary course of business from goods or services actually
received by GM as called for by the Purchase Orders.
13. Term. The rights granted GM under this Agreement shall continue as
long as the Purchase Orders between Doehler-Jarvis and/or Greenville and GM
with respect to Component Parts are in effect (exclusive of the termination of
such Purchase Orders by Doehler-Jarvis and/or Greenville). Nevertheless, the
Access and Occupancy Period shall be limited as provided in Section 2(a).
Notwithstanding the forgoing, the termination of this Agreement shall not
affect the parties' rights, duties and obligations under the Accommodation
Agreement.
14. Confidential Information and Data. To the extent the Operating
Assets include or GM (or its designee) otherwise comes into possession of or
becomes aware of, Doehler-Jarvis's or Greenville's trade secrets or proprietary
information during the Operating Period, GM (and its designee) shall (a) keep
such information, data and trade secrets confidential, and (b) only use such
information, data and trade secrets during the Operating Period in connection
with producing Component Parts. The provisions of this paragraph shall survive
termination of this Agreement.
15. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
16. Section Headings, etc. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into
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consideration the interpretation hereof. All references to Sections, Schedules
and Exhibits are to Sections, Schedules and Exhibits in or to this Agreement
unless otherwise specified.
17. No waiver: Cumulative Remedies. GM shall not by any act, delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
under this Agreement or any breach of the terms and conditions of this
Agreement. A waiver by GM of any right or remedy under this Agreement on any
one occasion shall not be construed as a bar to any right or remedy which GM
would otherwise have had on any future occasion. No failure to exercise nor
any delay in exercising on the part of GM any right, power or privilege under
this Agreement, shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Agreement preclude
any other or future exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies under this Agreement are cumulative and
may be exercised singly or concurrently, and are not exclusive of any rights
and remedies provided by any other agreements or applicable law.
18. Waivers and Amendments. Successors and Assigns. Governing Law.
None of the terms or provisions of this Agreement may be waived, altered,
modified or amended except by a written instrument, duly executed by
Doehler-Jarvis, Greenville and GM. This Agreement and all obligations of
Doehler-Jarvis and Greenville hereunder shall be binding upon the successors
and assigns of Doehler-Jarvis and Greenville, and shall, together with the
rights and remedies of GM hereunder, inure to the benefit of GM and its
successors and assigns. Doehler-Jarvis and Greenville may not assign or
transfer any of their respective rights or obligations hereunder without the
prior written consent of GM. This Agreement shall be governed by, and be
construed and interpreted in accordance with, the laws of the State of
Michigan, without regard to principles regarding conflict of laws.
19. Notices All notices, requests and other communications that are
required or may be given under this Agreement shall be in writing, and shall be
deemed to have been given on the date of delivery, if delivered by hand,
telecopy or courier, or three (3) days after mailing, if mailed by certified or
registered mail, postage prepaid, return receipt requested, addressed as set
forth below (which addresses may be changed, from time to time, by notice given
in the manner provided in this Section):
If to Doehler-Jarvis Harvard Industries, Inc.
or Greenville; 2502 N. Rocky Point Drive
Suite 960
Tampa, FL 33607
Attn: Richard T. Dawson, Esq.
and a copy to: Holland & Knight LLP
400 North Ashley Drive, Suite 2800
Tampa, Florida 33602
Attn: Michael L. Jamieson, Esq.
-13 -
<PAGE> 14
If to GM: General Motors Corporation
Worldwide Purchasing
Delphi Automotive Systems
Energy & Engine Management Systems
4800 S. Saginaw St.
P.0. Box 1360
Flint, MI 48501-1360
Attn: Kenneth E. Szymczak, Director
with a copy to: Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, Michigan 48226
Attn: Robert B. Weiss, Esq.
20. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
21. Entire Agreement: Conflicts. This Agreement together with any
other agreements and schedules executed in connection with this Agreement
constitutes the entire understanding of the parties in connection with the
subject matter hereof This Agreement may not be modified, altered or amended
except by an agreement in waiting signed by GM, Doehler-Jarvis and Greenville.
To the extent any terms or conditions of this Agreement are inconsistent or
conflict with the terms of any other agreements between the parties, the terms
of this Agreement shall govern and control,
22. Preservation of Rights under Purchase Orders. The purpose of this
Agreement is to expand upon the rights and interests of GM under the Purchase
Orders and by entering into this Agreement GM is not waiving or limiting any
lights GM has under the Purchase Orders. This Agreement shall be deemed to be
incorporated by reference into, and shall be part of, all existing and future
Purchase Orders without any specific reference to this Agreement in any such
Purchase Orders.
23. CONSULTATION WITH COUNSEL. THE PARTIES HERETO ACKNOWLEDGE THAT THEY
HAVE BEEN GIVEN THE OPPORTUNITY TO CONSULT WITH COUNSEL BEFORE EXECUTING THIS
AGREEMENT AND ARE EXECUTING SUCH AGREEMENT WITHOUT DURESS OR COERCION AND
WITHOUT RELIANCE ON ANY REPRESENTATIONS, WARRANTIES OR COMMITMENTS OTHER THAN
THOSE REPRESENTATIONS, WARRANTIES AND COMMITMENTS SET FORTH IN THIS AGREEMENT.
-14-
<PAGE> 15
24. WAIVER OF JURY TRIAL. THE PARTIES HERETO ACKNOWLEDGE THAT THE
RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT THIS RIGHT MAY BE
WAIVED. THE PARTIES EACH HEREBY KNOWINGLY, VOLUNTARILY AND WITHOUT COERCION,
WAIVE ALL RIGHTS TO A TRIAL BY JURY OF ALL DISPUTES ARISING OUT OF OR IN
RELATION TO THIS AGREEMENT OR ANY OTHER AGREEMENTS BETWEEN THE PARTIES. NO
PARTY SHALL BE DEEMED TO HAVE RELINQUISHED THE BENEFIT OF THIS WAIVER OF JURY
TRIAL UNLESS SUCH RELINQUISHMENT IS IN A WRITTEN INSTRUMENT SIGNED BY THE PARTY
TO WHICH SUCH RELINQUISHMENT WILL BE CHARGED.
DOEHLER-JARVIS, INC.
By: /s/ Roger L. Burtraw
--------------------
Its: President
---------
STATE OF Michigan )
) SS
COUNTY OF Oakland )
The foregoing instrument was acknowledged before me this 12 day of
March, 1997 by Roger L. Burtraw, the President, of Doehler-Jarvis, Inc., a
Delaware corporation, on behalf of the corporation.
/s/ Karen L. Niemisto
---------------------
Karen L. Niemist, Notary Public
Oakland County, Michigan
My commission expires: 5/20/97
[signatures continued on next page]
-15-
<PAGE> 16
[signatures continued from previous page]
DOEHLER-JARVIS GREENVILLE, INC.
By: /s/ Roger L. Burtraw
---------------------
Its: President
---------
STATE OF Michigan )
) SS
COUNTY OF Oakland )
The foregoing instrument was acknowledged before me this 12 day of
March, 1997 by Roger L. Burtraw, the President, of Doehler-Jarvis Greenville,
Inc., a Delaware corporation, on behalf of the corporation.
/s/ Karen L. Niemisto
---------------------
Karen L. Niemisto, Notary Public
Oakland County, Michigan
My commission expires: 5/20/97
[signatures continued on next page]
-16-
<PAGE> 17
[signatures continued from previous page]
GENERAL MOTORS CORPORATION
By: /s/
-----------------------
Its: ---------------
STATE OF )
) SS
COUNTY OF )
The foregoing instrument was acknowledged before me this ___ day of _____,
1997 by _________________, the ________________________ of General Motors
Corporation, a Delaware corporation, on behalf of the corporation.
---------------------------
Notary Public
--------------,
County
--------------
My commission expires:
--------
SCHEDULES
I - Real Estate
EXHIBITS
11-A - Lender's Acknowledgement and Consent
11-B - Equipment Lessors' Acknowledgment and Consent
-17-
<PAGE> 18
SCHEDULE I
REAL ESTATE
-18-
<PAGE> 19
Greene County, Tennessee
SCHEDULE I
BEGINNING at a spike at the intersection of the Rufe Taylor Road and the Old
Stage Coach Road: thence with the center of the Old Stage Coach Road the
following four (4) calls: N 86 degrees 07' 15" E, 284.86 feet: N 88 degrees
54' 31" E, 136.96 feet: S 89 degrees 53' 58" E, 287.65 feet: end N 88 degrees
18' 18" E, 358.32 feet to a point in the center of the Old Stage Road: thence
leaving the Old Stage Coach Road and with the Ottingers line and the fence line
S 04 degrees 36' 20" W, 375.74 feet to a fence post: thence continuing with the
fence line and the Ottinger line S 05 degrees 21' 03" W. 456.74 feet to a point
in the fence line: thence continuing with the Ottinger's line and thence line
S 68 degrees 21' 02" N, 165.00 feet to an iron pin: thence containing with the
Ottinger line S 23 degrees 38' 58" E, 74.58 feet to an iron pin in the center
of the Old School House Lane and in the line of the several property: thence
with the center of the School House Lane and the Several line the following two
(2) calls: S 61 degrees 42' 45" W, 121.26 feet and S 63 degrees 20' 40" W,
146.69 feet: thence continuing with the center of the School House Lane and
with the Faith Temple Church line and the Newton line S 63 degrees 00' 33" W,
398.32 feet to an iron pin corner to Newton and Johnson: thence with the
Johnson line and the center of an old dirt lane N 34 degrees 17' 14" W, 53.10
feet to a spike in the Rufe Taylor Road: thence with the Rufe Taylor Road:
thence with the Rufe Taylor Road the following three (3) calls: N 03 degrees
03' 14" N, 146.51 feet: N 00 degrees 55' 58" W, 332.62 feet; and N 01 degrees
31' 20" W, 377.25 feet to the BEGINNING.
BEING the same property conveyed to Doehler-Jarvis Limited Partnership by
Special Warranty Deed dated July 20, 1990, filed for record in the office of
the Register of Deeds for Greene County, Tennessee, on July 26, 1990, at 2:30
P.M. in Deed Book 422, Page 33.
<PAGE> 20
EXHIBIT 11-A
LENDERS'
ACKNOWLEDGEMENT AND CONSENT
While not a party to the foregoing Access and Occupancy Agreement or
the other GM Agreements (as defined in the Access and Occupancy Agreement)
between General Motors Corporation ("GM"), Doehler-Jarvis Greenville, Inc.
("Greenville"), and Doehler-Jarvis, Inc. ("Doehler-Jarvis"), dated as of March
12, 1997, Congress Financial Corporation General Electric Capital Corporation
Heller Financial, Inc., Fidora Capital Corporation and Foothill Capital
Corporation ("Lenders") are parties to various loan and/or security agreements
with Harvard Industries, Inc. and/or Doehler-Jarvis and/or Greenville. In such
capacity, Lenders acknowledge, consent to, and agree that their security
interests in Doehler-Jarvis's and Greenville's assets shall be subject to, the
terms and conditions of the GM Agreements. The fact that Lenders are executing
this Acknowledgment and Consent shall not in any way make Lenders guarantors or
sureties for Doehler-Jarvis's and Greenville's performance under the GM
Agreements. However, for good and valuable consideration, the receipt and
sufficiency of which is herby acknowledged, the Lenders agree that in the event
Doehler-Jarvis and/or Greenville file for relief under, or become subject to,
Chapter 11 of the Bankruptcy Code and the Lenders parties to a proposed
post-petition financing order, the Lenders will exercise their reasonable
commercial efforts in good faith to include in the provisions of such order a
provision expressly confirming GM's rights under the Accommodation Agreement
and the Access and Occupancy Agreement.
Lenders' Acknowledgement and Consent as set forth herein is provided in
reliance upon, and the express understanding that, (i) neither the Access and
Occupancy Agreement nor the Accommodation Agreement will be amended without the
Lenders' prior written consent and (ii) the Lenders are third party
beneficiaries of the provisions of paragraph 4 of the Access and Occupancy
Agreement.
By:
---------------------------------
THE CIT GROUP/BUSINESS CREDIT, INC.
for itself and as agent for the Lenders
By: /s/ Frank Grimaldi
---------------------------------
Name: Frank Grimaldi
---------------------------
Title: Vice President
-----------------------
Date: April 16, 1997
--------
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<PAGE> 21
EXHIBIT 11-B
EQUIPMENT LESSORS'
ACKNOWLEDGEMENT AND CONSENT
While not a party to the foregoing Access and Occupancy Agreement between
General Motors Corporation, Doehler-Jarvis, Inc. ("Doehler-Jarvis") and
Doehler-Jarvis Greenville, Inc. ("Greenville"), the undersigned leases certain
equipment located at the Greenville Plant to Doehler-Jarvis or Greenville and,
in such capacity, the undersigned acknowledges, consents to and agrees that
General Motors Corporation can occupy and use these Operating Assets which are
the subject matter of those certain lease agreements executed by and between
Doehler-Jarvis, Inc. and Caterpillar Financial Services Corporation ("Leases")
pursuant to the terms and conditions of said Leases.
/s/
------------------------------------------
Caterpillar Financial Services Corporation
Date: April 11, 1997
<PAGE> 1
ACCOMMODATION AGREEMENT
General Motors Corporation ("GM") and Harvard Industries, Inc.,
Doehler-Jarvis, Inc. and Doehler-Jarvis Greenville, Inc. (collectively, "The
Harvard Group") enter into this Accommodation Agreement (this "Agreement") this
____ day of March, 1997:
RECITALS
A. Doehler-Jarvis, Inc. ("Doehler-Jarvis") and Doehler-Jarvis
Greenville, Inc. ("Greenville") are, respectively, direct and indirect wholly
owned subsidiaries of Harvard Industries, Inc. ("Harvard").
B. The Harvard Group (including Doehler-Jarvis and Greenville) are
major suppliers of component parts (the "Component Parts") to GM pursuant to
various purchase order and/or supply contracts ussed by GM (collectively, the
"Purchase Orders").
C. Doehler-Jarvis entered into a supply arrangment with GM to supply
the requirements of GM's Delphi Automotive Systems Division ("Delphi") for the
V-8 Lower Intake Manifold (the "V-8 Manifold").
D. Prior to the price increase referenced in paragraph 1 below, The
Harvard Group asserts that it was incurring significant operating losses in
connection with the production of V-8 Manifolds by Doehler-Jarvis and/or
Greenville, as applicable. The Harvard Group also advised GM that the
financial stability of the Harvard Group could be threatened if Doehler-Jarvis
and/or Greenville, as applicable, continued to produce and deliver the V-8
Manifold at the existing contract price and requested that GM grant a price
increase and other financial accommodations to the Harvard Group as a condition
to continuing to deliver V-8 Manifolds to GM.
E. GM asserts that the Harvard Group's failure or refusal to satisfy
GM's requirements for the V-8 Manifold would irreparably injure GM.
F. On July 25, 1996, the parties executed a term sheet (the "Term
Sheet") outlining the terms of an agreement pursuant to which the Harvard Group
would be granted a price increase on the V-8 Manifold and GM would provide
certain additional financial accommodations in consideration for the agreements
and commitments of the Harvard Group set forth therein.
G. The parties are entering into this Agreement and the Schedules
hereto to memorialize the agreements of the parties set forth in the Term
Sheet.
THEREFORE, in consideration of the above recitals (which are part of
this Agreement) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, GM and the Harvard Group agree as
follows:
<PAGE> 2
TERMS AND CONDITIONS
1. V-8 Manifold Price Incease. GM has granted Doehler-Jarvis
and/or Greenville, as applicable, a price increase of $7.41 per V-8 Manifold
for an effective adjusted price of $45.83 per V-8 Manifold, plus any additional
adjustments pursuant to GM's aluminim metal market adjustment policy. The
above-referenced price increase was effective for all V-8 Manifolds shipped and
delivered on or after Maly 1, 1996.
2. Continued Delivery. As consideration for GM agreeing to the
price increase referred to above,
(a) Doehler-Jarvis and/or Greenville, as applicable, shall
deliver to GM conforming V-8 Manifolds pursuant to GM releases and GM
requirements of 24,000 V-8 Manifolds per week (the "Required Amount")
as of October 1, 1996. Doehler-Jarvis and/or Greenville, as
applicable, plans to produce the Required Amount on a 5-day, 3-shift
basis but inititially Doehler-Jarvis and/or Greenville, as applicable,
will work on a 6 or 7-day per week basis, if necessary, to produce the
Required Amount. No later than March 15, 1997, Doehler-Jarvis and/or
Greenville, as applicable, will produce the Required Amount on a 5-day,
3-shift basis, and if required by GM, Doehler-Jarvis and/or Greenville,
as applicable, will work a minimum of two Satureday per four week
period to provide at least 8,800 V-8 Manifolds over and above the
Required Amount during each such four week period; and
(b) The Harvard Group shall continue production and delivery
of all Component Parts called for by the Purchase Orders pursuant to
GM releases (excluding the Bell Housing which has been resourced).
3. No Further Modification. With the exception of engineering,
specification or standard changes which may be required by GM in the future,
the Harvard Group will not seek any modification to the terms and conditions of
contracts and agreements between the Harvard Group and GM, including the
Purchase Orders, this Agreement and the Access and Occupancy Agreement,
including price increases, for so long as Component Parts are being installed
in vehicles. Without limiting the generality of the foregoing, with the
exception of engineering, specification or standard changes which may be
required by GM in the future, the Harvard Group will not seek any further price
increase from GM regarding the V-8 Manifold for so long as such V-8 Manifold is
being installed in vehicles.
4. Sharing Cost Savings. Doehler-Jarvis and/or Greenville, as
applicable, will share reductions in costs resulting from reduction in scrap
rate and/or implementation of a sand reclamation process on a 50-50 basis with
GM as follows:
(a) For the period from July 1 through June 30 (the
"Measurement Period") commending July 1, 1996 through the life of the V-8
Manifold Program, Doehler-Jarvis and/or Greenville, as applicable, shall retain
50% of the Cost Savings (as defined below)
2
<PAGE> 3
achieved in such Measurement Period and 50% of such Cost Savings shall
be passed on to GM by means of a price reduction on the V-8 Manifold.
(b) For the purposes of this Agreement, "Cost Savings"
resulting from reduction in scrap rate shall mean the difference
between (i) the actual variable manufacturing cost to produce V-8
Manifolds multiplied by the actual scrap rate for the most recently
ended Measurement Period and (ii) the actual variable manufacturing
cost to produce V-8 Manifolds multiplied by the actual scrap rate for
the immediately preceding Measurement Period. For purposes of this
calculation, the beginning actual variable manufacturing cost
multiplied by the actual scrap rate as of June 30, 1996 shall be
$6,9018. The initial variable manufacturing cost and the method for
determining the future values will be computed consistent with the
previously agreed upon method developed between the Company and BBK
Ltd. (GM's representative).
(c) At the end of each Measurement Period, sand and related
disposal Cost Savings resulting from implementation of a sand
reclamation system will be determined by the parties and such Cost
Savings will also be shared by Doehler-Jarvis and/or Greenville, as
applicable, and GM on a 50/50 basis.
5. Payment Terms. For the period commencing August 1, 1996 and ending
at the close of business on December 31, 1996, with respect to V-8 Manifolds
only, all invoices (a) received by GM from the 15th of the month will be paid
by the 10th of the following month, and (b) received by GM from the 16th to the
last day of the month will be paid by the 25th of the following month. Payment
terms with respect to all other Component Parts shall be those set forth in the
underlying Purchase Orders.
6. Molds and Cores. Harvard will make arrangements to obtain, at the
Harvard Group's cost, for installation no later than March 15, 1997, three
additional sets of the molds described on Schedule 6 ("Molds") at an aggregate
cost of approximately $275,000 and one set of core boxes described on Schedule
6 ("Cores") at a cost of approximately $325,000, which Molds and Cores are to
be used in connection with the production of V-8 Manifolds. The Harvard Group
acknowledges and agrees that upon completion of such Molds and Cores, GM will
solely own all right, title and interest in and to the Molds and Cores and the
Harvard Group will have no rights whatsoever in such Molds and Cores, other
than the right to use such Molds and Cores as bailee at will to produce
Component Parts for GM.
7. Business Plan; Access to Information.
(a) On or before 5 days after execution of this Agreement,
Harvard Industries, Inc. shall submit a business plan which demonstrates in
GM's sole judgment the long-term financial viability of the Greenville
manufacturing facility (the "Greenville Plant"). In addition, every six
months, Harvard Industries, Inc. shall provide GM consolidated and
3
<PAGE> 4
individual balance sheets, income statements and cash flows for
Harvard Industries, Inc., Doehler-Jarvis, Greenville and the
Greenville Plant. The Harvard Group shall also provide GM, upon
request, information or business plans regarding any facility or
business unit or subsidiary of the Harvard Group, on a consolidated or
individual basis as specified on Schedule 7 attached hereto.
(b) The Harvard Group shall provide to GM or its designee full
access to the Greenville Plant to monitor operations and review
financial and costing information. In addition, the Harvard Group
shall provide to GM, copies of all notices of default or
non-compliance received from Agent or any Lender.
(c) GM shall keep all information provided to it by Harvard
Group that is labeled "confidential" or "non-public" when received by GM,
confidential unless and until such information is in the public domain, and GM
will advise its employees who have access to such non-public information that
so long as such information is not in the public domain, they should not trade
in Harvard securities.
8. Access and Occupancy Agreement. Simultaneously with the
execution of this Agreement, Doehler-Jarvis and Greenville shall execute and
deliver to GM an agreement in the form of Schedule 8 attached hereto, (the
"Access and Occupancy Agreement"). In addition, upon request by GM,
Doehler-Jarvis and Greenville agree to execute or to cause Doehler-Jarvis
Pottstown, Inc. and/or Doehler-Jarvis Toledo, Inc. to execute, an Access and
Occupancy Agreement relating to the plants located in Pottstown and Toledo on
terms and conditions substantially identical to the terms and conditions of
agreement attached hereto as Schedule 8 (a) subject to Ford Motor Company
consenting to the parties entering into such agreement, and (b) if any time
prior to the date on which GM exercises its Right to Occupy under such other
Access and Occupancy Agreements, any single customer, other than Ford, has 25%
or more of the total production at such facility, then subject to such
customer(s)' consent.
9. Tooling Acknowledgement. The Harvard Group agrees that all
tooling, assembly, fixtures, test or checking fixtures, gauges, jigs, patterns,
casting patterns, dies and molds, including, without limitation, the Molds and
Cores referred to in paragraph 6 above, being used by the Harvard Group in
connection with its manufacture of Component Parts for GM, together with all
appurtenances, accessions thereto (collectively the "Tooling"), except for
those specific items of tooling set forth on Schedule 9 (the "Non-GM Owned
Tooling"), are owned by GM and are being held by the Harvard Group and, to the
extent the Harvard Group has transferred the tooling to third parties, by such
parties as bailee at will pursuant to bailment arrangements. The Harvard Group
acknowledges and agrees that any and all tooling being utilized to manufacture
Component Parts for GM, whether pursuant to direct agreements between the
Harvard Group and GM or agreements between the Harvard Group and third parties,
4
<PAGE> 5
except for the Non-GM Owned Tooling. Neither the Harvard Group nor any other
person or entity other than GM has any right, title or interest in the Tooling,
other than the Harvard Group's right, subject to GM's unfettered discretion,
to utilize the Tooling to manufacture the Component Parts. The Harvard Group
hereby grants GM a power of attorney to execute on its behalf and file a notice
financing statement to reflect GM's interest in the Tooling and/or to affix any
plate, stamp or other evidence of GM ownership upon each item of tooling. GM
shall have the right to take immediate possession of the Tooling at any time
without payment of any kind from GM to the Harvard Group. The Harvard Group
agrees to cooperate with GM in GM's taking possession of the Tooling.
Likewise, effective immediately upon written notice to the Harvard Group,
without further notice or court hearings, which rights, if any, are hereby
waived, GM shall have the right to immediately enter the Harvard Group's
premises and take possession of any and all Tooling without payment of any kind
from GM to the Harvard Group, and the Harvard Group agrees to provide GM or its
nominee with such access. The fact that GM's right to possession of the
Tooling is and shall be independent of GM's obligation to make payments to
the Harvard Group (including payments for tooling refurbishment, repair or
construction) shall not affect any other obligation GM may have to make such
payments to the Harvard Group after GM has taken possession of the Tooling.
Further, nothing in this acknowledgement is intended to affect any claims the
Harvard Group may have against GM for taking possession of any property which is
determined to not to be the property of GM.
10. Second Assembly Line. The Harvard Group hereby acknowledges and
agrees that the second assembly line described in Schedule 10, including,
without limitation, all equipment, machinery, test, assembly or checking
fixtures, parts, hardware, software and all appurtenances, accessions and
accessories thereto (the "Second Line") currently being installed at the
Harvard Group's Greenville Plant is solely owned by GM and neither the Harvard
Group nor any other person or entity other than GM has any right, title or
interest in the Second Line, other than the Harvard Group's right, subject to
GM's unfettered discretion, to utilize the Second Line to manufacture V-8
Manifolds. The Harvard Group hereby grants GM the power of attorney to execute
on its behalf and file a notice financing statement to reflect GM's ownership
interest in the Second Line and/or to affix any plate, stamp or other evidence
of GM's ownership upon each item of the Second Line. GM shall have the right to
take immediate possession of the Second Line at any time without payment of any
kind from GM to the Harvard Group and the Harvard Group agrees to cooperate
with GM in GM's taking possession of the Second Line. Likewise, effective
immediately upon written notice to the Harvard Group, without further notice or
court hearing, which rights, if any, are hereby waived, GM shall have the right
to enter the Harvard Group's premises and take possession of all or any part of
the Second Line without payment of any kind from GM to the Harvard Group, and
the Harvard Group agrees to provide GM or its nominees with such access.
11. Fees and Expenses. The Harvard Group hereby agrees to reimburse
GM for all legal and consultant fees and expenses incurred by GM in connection
with the Harvard Group, ("GM's Costs") for services rendered on or after June
1, 1996. GM shall have the right to offset
5
<PAGE> 6
GM's Costs from amounts owed by GM to the Harvard Group in amount not to exceed
$20,000 per month. GM's Costs in excess of $20,000 per month may be carried
forward and set off in future months, provided that no monthly set off shall
exceed $20,000.
12. Premium Costs. The Harvard Group has paid to GM the sum of
$550,000 representing reimbursement of premium costs incurred by GM in 1995
under its Purchase Orders with GM.
13. Amendment to Purchase Orders. The Purchase Orders are hereby
amended effective immediately to include the following as paragraph 32 to the
Purchase Order terms and conditions:
"32. Access Rights. This Purchase Order is subject to all terms
and conditions of that certain Access and Occupancy Agreement dated
March __, 1997 between, among other parties, Buyer and Seller and
consented to by The CIT Group/Business Credit, Inc. (as agent and
lender). The Access and Occupancy Agreement is incorporated by
reference and shall also be deemed a part of this Purchase Order
for all purposes.
14. Agreements of Lenders and Lessor.
(a) Simultaneously with the execution of this Agreement, Harvard
Industries, Inc. shall deliver to GM the consent and acknowledgement of
the Harvard Group's Lenders in the form of Schedule 14-A attached hereto.
(b) It is a condition precedent to GM's duties and obligations
under this Agreement that simultaneously with the execution of this Agreement,
the Lenders enter into the Acknowledgement attached hereto as Schedule 14-A.
15. Bid List. So long as the Harvard Group fully complies with all of
the terms and conditions of this Agreement in all material respects, the Access
and Occupancy Agreement and the Purchase Orders (as amended hereby), GM shall
permit the Harvard Group to bid on future GM programs, but GM shall have no
obligation whatsoever to award future business to the Harvard Group and
reserves all rights to award such future business in GM's absolute discretion.
16. Harvard Release. Except for Harvard Reserved Claims, as defined
below, Doehler-Jarvis, Inc., Doehler-Jarvis Greenville, Inc. and Harvard
Industries, Inc., on behalf of themselves and all of their subsidiaries hereby
release and waive all claims and causes of action of any kind or nature against
GM, its officers, agents, employees, and attorneys, and covenant not to sue GM,
based upon any facts or claims existing as of July 25, 1996. The foregoing
release and covenant not to sue does not release or affect claims arising from
facts and occurrences after July 25, 1996. For the purposes of this Agreement,
"Harvard Reserve Claims" means claims for goods delivered
6
<PAGE> 7
to GM and not yet paid for and claims for Tooling refurbishment and repair.
Nothing in this Agreement shall be construed as an admission by GM as to the
validity or enforceability of any of Harvard Reserved Claims. NOTWITHSTANDING
THE FOREGOING, IF GM BREACHES ANY TERM OR CONDITON OF THIS AGREEMENT OR THE
ACCESS AND OCCUPANCY AGREEMENT, THEN THE RELEASE AND COVENANT NOT TO SUE
PROVIDED BY THE HARVARD GROUP IN THIS PARAGRAPH 16 SHALL BE NULL AND VOID AB
INITIO AND HAVE NO FORCE OR EFFECT WHATSOEVER, BUT GM'S RELEASE AND COVENANT
NOT TO SUE SET FORTH IN PARAGRAPH 17 SHALL NOT BE AFFECTED THEREBY AND SHALL
CONTINUE TO BE AND REMAIN VALID AND IN FULL FORCE AND EFFECT.
17. GM Release. Except for GM Reserved Claims as defined below, GM
hereby releases and waives all claims and causes of action of any kind or
nature against Harvard Industries, Inc., Doehler-Jarvis, Inc. and
Doehler-Jarvis Greenville, Inc., its officers, agents, employees and attorneys,
and covenants not to sue such entities, based upon any facts or claims as of
July 25, 1996. The foregoing release and covenant not to sue does not release
or affect claims arising from facts and occurrences after July 25, 1996,
including, without limitation, any claims related to goods delivered to GM
after July 25, 1996. For the purposes of this Agreement "GM Reserved Claims"
means claims with respect to goods delivered prior to the date of this Agreement
which have been rejected and/or returned by GM. Nothing in this Agreement
shall be construed to be an admission by Harvard Industries, Inc.,
Doehler-Jarvis, Inc. and Doehler-Jarvis Greenville, Inc., as to the validity or
enforceability of any of the GM Reserved Claims. NOTWITHSTANDING THE FOREGOING,
IF THE HARVARD GROUP BREACHES ANY TERM OR CONDITION OF THIS AGREEMENT OR THE
LICENSE AND OCCUPANCY AGREEMENT, THEN THE RELEASE AND COVENANT NOT TO SUE
PROVIDED BY GM IN THIS PARAGRAPH 17 SHALL BE NULL AND VOID AB INITIO AND HAVE NO
FORCE OR EFFECT WHATSOEVER, BUT THE HARVARD GROUP'S RELEASE AND COVENANT NOT TO
SUE SET FORTH IN PARAGRAPH 16 SHALL NOT BE AFFECTED THEREBY AND SHALL CONTINUE
TO BE AND REMAIN VALID AND IN FULL FORCE AND EFFECT.
18. Severability. any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
19. Section Headings, etc. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof. All references to Sections, Schedules and Exhibits are to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified.
7
<PAGE> 8
20. No Waiver; Cumulative Remedies. GM shall not by any act, delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
under this Agreement or any breach of the terms and conditions of this
Agreement. A waiver by GM of any right or remedy under this Agreement on any
one occasion shall not be construed as a bar to any right or remedy which GM
would otherwise have had on any future occasion. No failure to exercise nor
any delay in exercising on the part of GM any right, power or privilege under
this Agreement, shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Agreement preclude
any other or future exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies under this Agreement are cumulative and
may be exercised singly or concurrently, and are not exclusive of any rights
and remedies provided by any other agreements or applicable law.
21. Waivers and Amendments, Successors and Assigns, Governing Law.
None of the terms or provisions of this Agreement may be waived, altered,
modified or amended except by a written instrument, duly executed by Harvard
Industries, Inc., Doehler-Jarvis, Inc., Doehler-Jarvis Greenville, Inc., and
GM. This Agreement and all obligations of the parties hereunder shall be
binding upon the successors and assigns of such parties, and shall, together
with the rights and remedies of the parties hereunder, inure to the benefit of
such parties and their successors and assigns. The Harvard Group may not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of GM, except in connection with a merger, consolidation or
transfer of all or substantially all of the assets of any member of The Harvard
Group and assumption by the transferee of all of the transferor's obligations
hereunder and subject to any otherwise applicable limitations on assignment of
the Purchase Orders. This Agreement shall be governed by, and be construed
and interpreted in accordance with, the laws of the State of Michigan, without
regard to principles regarding conflict of laws.
22. Notices. All notices, requests and other communications that are
required or may be given under this Agreement shall be in writing, and shall be
deemed to have been given on the date of delivery, if delivered by hand,
telecopy or courier, or three (3) days after mailing, if mailed by certified or
registered mail, postage prepaid, return receipt requested, and addressed as set
forth below (which addresses may be changed, from time to time, by notice given
in the manner provided in this Section):
If to the Harvard Group: Harvard Industries, Inc.
2502 N. Rocky Point Drive
Suite 960
Tampa, FL 33607
Attn: Richard T. Dawson, Esq.
8
<PAGE> 9
and a copy to: Holland & Knight LLP
400 North Ashley Drive
Suite 2300
Tampa, FL 33602
Attn: Michael L. Jamieson, Esq.
If to GM: General Motors Corporation
Worldwide Purchasing
Delphi Automotive Systems
Energy & Engine Management Systems
4800 S. Saginaw St.
P.O. Box 1360
Flint, MI 48501-1360
Attn: Kenneth E. Szymczak, Director
with a copy to: Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, Michigan 48226
Attn: Robert B. Weiss, Esq.
23. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
24. Entire Agreement; Conflicts. This Agreement together with any
other agreements and schedules executed in connection with this Agreement
constitutes the entire understanding of the parties in connection with the
subject matter hereof and supersedes all prior oral or written agreements among
the parties, including, without limitation, the Term Sheet. To the extent any
terms or conditions of this Agreement are inconsistent or conflict with terms of
any prior agreements between the parties, the terms of this Agreement shall
govern and control.
25. Preservation of Rights under Purchase Orders. The purpose of this
Agreement is to expand upon the rights and interests of GM under the Purchase
Orders and by entering into this Agreement GM is not waiving or limiting any
rights GM has under the Purchase Orders.
26. Representations and Warranties by Harvard Industries, Inc. Harvard
Industries, Inc. represents and warrant to GM that Doehler-Jarvis, Inc. is a
Delaware corporation in good standing in the state of Delaware and
Doehler-Jarvis Greenville, Inc. is a Delaware corporation in good standing in
the State of Delaware, and that each of such corporations are either direct or
indirect wholly owned subsidiaries of Harvard Industries, Inc. Harvard
Industries, Inc. has no
9
<PAGE> 10
subsidiaries other than Doehler-Jarvis, Greenville and all of the other
entities listed on Schedule 26 hereto.
27. CONSULTATION WITH COUNSEL. THE PARTIES HERETO ACKNOWLEDGE THAT
THEY HAVE BEEN GIVEN THE OPPORTUNITY TO CONSULT WITH COUNSEL BEFORE EXECUTING
THIS AGREEMENT AND ARE EXECUTING SUCH AGREEMENT WITHOUT DURESS OR COERCION AND
WITHOUT RELIANCE ON ANY PRESENTATIONS, WARRANTIES AND COMMITMENTS SET FORTH IN
THIS AGREEMENT.
28. WAIVER OF JURY TRIAL. THE PARTIES HERETO ACKNOWLEDGE THAT THE
RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT THIS RIGHT MAY BE
WAIVED. THE PARTIES EACH HEREBY KNOWINGLY, VOLUNTARILY AND WITHOUT COERCION,
WAIVE ALL RIGHTS TO A TRIAL BY JURY OF ALL DISPUTES ARISING OUT OF OR IN
RELATION TO THIS AGREEMENT OR ANY OTHER AGREEMENTS BETWEEN THE PARTIES. NO
PARTY SHALL BE DEEMED TO HAVE RELINQUISHED THE BENEFIT OF THIS WAIVER OF JURY
TRIAL UNLESS SUCH RELINQUISHMENT IS IN A WRITTEN INSTRUMENT SIGNED BY THE PARTY
TO WHICH SUCH RELINQUISHMENT WILL BE CHARGED.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date and year first written above.
DOEHLER-JARVIS, INC.
By: /s/ Roger L. Burtraw
-----------------------------------
Its: President
-------------------------------
(signatures continued on next page)
10
<PAGE> 11
(signatures continued from previous page)
STATE OF Michigan )
) SS
COUNTY OF Oakland )
The foregoing instrument was acknowledged before me this 12 day of
March, 1997 by Roger L. Burtraw, the President, of Doehler-Jarvis, Inc., a
Delaware corporation, on behalf of the corporation.
/s/ Karen L. Niemisto
---------------------------------------
Karen L. Niemisto, Notary Public
Oakland County, Michigan
My commission expires: 5/20/97.
HARVARD INDUSTRIES, INC.
By: /s/ Roger L. Burtraw
------------------------------------
Its: President
-------------------------------
STATE OF Michigan )
) SS
COUNTY OF Oakland )
The foregoing instrument was acknowledged before me this 12 day of
March, 1997 by Roger L. Burtraw, the President, of Harvard Industries, Inc., a
Florida corporation, on behalf of the corporation.
/s/ Karen L. Niemisto
---------------------------------------
Karen L. Niemisto, Notary Public
Oakland County, Michigan
My commission expires: 5/20/97.
(signatures continued on next page)
11
<PAGE> 12
(signatures continued from previous page)
DOEHLER-JARVIS GREENVILLE, INC.
By: /s/ Roger L. Burtraw
------------------------------------
Its: President
-------------------------------
STATE OF Michigan )
) SS
COUNTY OF Oakland )
The foregoing instrument was acknowledged before me this 12 day of
March, 1997 by Roger L. Burtraw, the President, of Doehler-Jarvis Greenville,
Inc., a Delaware corporation, on behalf of the corporation.
/s/ Karen L. Niemisto
---------------------------------------
Karen L. Niemisto, Notary Public
Oakland County, Michigan
My commission expires: 5/20/97.
GENERAL MOTORS CORPORATION
By:
------------------------------------
Its: President
-------------------------------
STATE OF )
) SS
COUNTY OF )
The foregoing instrument was acknowledged before me this _____ day of
___________, 1997 by Roger L. Burtraw, the President of General Motors
Corporation, a Delaware corporation, on behalf of the corporation.
---------------------------------------
, Notary Public
-----------------------
County, Michigan
---------------------
My commission expires:
--------
(signatures continued on next page)
12
<PAGE> 13
**2 [signatures continued from previous page]
DOEHLER-JARVIS GREENVILLE, INC.
By:
-----------------------------------
Its:
-------------------------------
STATE OF )
) SS
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this ___ day of
_____________, 1997 by ________________________________________, the _________
__________________, of Doehler-Jarvis Greenville, Inc., a __________
corporation, on behalf of the corporation.
------------------------------
, Notary Public
--------------
County,
--------------
My commission expires:
--------
GENERAL MOTORS CORPORATION
By: /s/
-----------------------------------
Its:
-------------------------------
STATE OF )
) SS
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this ___ day of
_____________, 1997 by ________________________________________, the _________
__________________ of General Motors Corporation, a Delaware corporation, on
behalf of the corporation.
------------------------------
, Notary Public
--------------
County,
--------------
My commission expires:
--------
13
<PAGE> 14
SCHEDULES
6 - MOLDS AND CORE BOXES
8 - ACCESS AND OCCUPANCY AGREEMENT
9 - NON-GM-OWNED TOOLING
10 - SECOND ASSEMBLY LINE
14-A - LENDERS' ACKNOWLEDGEMENT
26 - HARVARD SUBSIDIARIES
13
<PAGE> 15
SCHEDULE 6
MOLDS AND CORE BOXES
1. Three (3) Production Molds:
#31, #32, & #33
2. Core Boxes:
#22 - Frame Cores
#25 - Runners
#30 - "H" Core & Water Crossover
#35 - EGR Passage
14
<PAGE> 16
SCHEDULE 7
INFORMATION TO BE PROVIDED
The Harvard Group will provide GM information or business plans on an
individual basis for the following facilities, business units or subsidiaries
of the Harvard Group.
Harvard Industries, Inc. - corporate business unit
Harvard Interiors, a business unit of Harvard Industries, Inc.
Harman Automotive, Inc., a wholly-owned subsidiary of Harvard
Industries, Inc.
Doehler-Jarvis, Inc., a wholly-owned subsidiary of Harvard Industries,
Inc., including individual breakdowns for the following wholly owned
subsidiaries of Doehler-Jarvis, Inc.:
Doehler-Jarvis - Greenville, Inc.
Doehler-Jarvis - Pottstown, Inc.
Doehler-Jarvis - Toledo, Inc.
The Harvard Group will provide GM information and business plans on a
consolidated basis for Harvard Industries, Inc. "Other Automotive" business
unit which includes:
Kingston-Warren Corporation, a wholly owned subsidiary of Harvard
Industries, Inc.
Hayes-Albion Corporation, a wholly owned subsidiary of Harvard
Industries, Inc.; and
Trim Trends, a business unit of Hayes-Albion Corporation
15
<PAGE> 17
SCHEDULE 8
ACCESS AND
OCCUPANCY AGREEMENT
16
<PAGE> 18
SCHEDULE 9
NON-GM-OWNED TOOLING
Purchase Order #TXFSX Rev.000 and Rev. 001:
<TABLE>
<CAPTION>
ITEM DELIVERY DATE % COMPLETED
<S> <C> <C>
Production Die #1 In 100%
Production Die #2 9/19/97 40%
Production Die #3 1/5/98 30%
Production Dies #4 & #5 TBD 0%
One (1) Holder Die TBD 0%
Degate Saw 9/1/97 20%
Trim Die 9/1/97 20%
</TABLE>
Purchase Order #TXFSY Rev. 000 and Rev. 001:
<TABLE>
<CAPTION>
ITEM DELIVERY DATE % COMPLETED
<S> <C> <C>
Production Die #1 In 100%
Production Die #2 6/9/97 75%
Production Die #3 7/21/97 70%
Production Die #4 9/2/97 50%
Production Die #5 12/19/97 25%
Production Dies #6-9 TBD 0%
Dedicated Mandrel Removal In* 100%
Dedicated Mandrel Liner 3/17/97 90%
Fixture
Dedicated Saw Degate 3/10/97 90%
</TABLE>
17
<PAGE> 19
<TABLE>
<S> <C> <C>
Dedicated AutoTrim Line 3/17/97 90%
Leak Tester (Audit) 4/15/97 80%
Mandrel/Fixture Loader 3/17/97 80%
Liner/Fixture Loader 3/17/97 80%
</TABLE>
*Mandrel/Linder equipment includes automated heating, loading, and delivery
mechanisms for delivery to production dies.
Purchase Order #TXF2T Rev. 000 and Rev. 001:
<TABLE>
<CAPTION>
ITEM DELIVERY DATE % COMPLETE
<S> <C> <C>
Three (3) Single Cavity #1 Die (Dev./Prod.): In 100%
Dies #2 Die: 6/20/97 60%
#3 Die: 7/21/97 50%
Two (2) Sets Core Boxes Box #1: In 100%
Box #2: 2/24/97 95%
One Pressure Tester In 100%
One Set Gages Completed by 5/15/97 75%
CNC "Weep Groove" 6/25/97 40%
Machine (P.O. Rev. 001)
</TABLE>
18
<PAGE> 20
SCHEDULE 10
SECOND ASSEMBLY LINE
19
<PAGE> 21
Schedule 10
Second Assembly Line
The second assembly line purchased by General Motors for the
Greeneville plant consists of the following:
Four (4) Dial Index Machines, the serial numbers are:
1848
1849
1850
1851
Six (6) Ateq Pressure Testers, the serial numbers are;
954M2501
954M2502
958M7401
200N1961
200N2962
694K609-01
<PAGE> 22
SCHEDULE 14-A
LENDERS' ACKNOWLEDGEMENT
While not a party to the foregoing agreement (the "Accommodation
Agreement") by and among the General Motors Corporation ("GM"), Doehler-Jarvis,
Inc. ("Doehler-Jarvis"), Doehler-Jarvis Greenville, Inc. ("Greenville") and
Harvard Industries, Inc. ("Harvard"), CIT Group/Business Credit, Inc. for
itself and as agent for Congress Financial Corporation General Electric Capital
Corporation Heller Financial, Inc., Finova Capital Corporation and Foothill
Capital Corporation, (collectively, "Lenders") are parties to various loan and/
or security agreements with Doehler-Jarvis, Greenville and/or Harvard. In such
capacity, Lenders acknowledge, consent to, and agree to the entry into by
Doehler-Jarvis, Greenville and Harvard of the Accommodation Agreement. The fact
that Lenders are executing this Acknowledgement shall not in any way make
Lenders guarantors or sureties for Harvard's, Doehler-Jarvis' or Greenville's
performance under the Accommodation Agreement.
Lenders acknowledge and agree that they have no liens or security
interest in or to (a) the Tooling, except for the Non-GM Owned Tooling, and (b)
the Second Line (each as defined in the Agreement). Lenders also acknowledge
and agree that any and all Tooling being used to manufacture parts for GM,
whether pursuant to direct agreements between Doehler-Jarvis and/or Greenville,
as applicable, and GM or agreements between Doehler-Jarvis and/or Greenville,
as applicable, and third parties is subject to the terms of this
acknowledgement and included within the definition of Tooling, except for the
Non-GM Owned Tooling.
Lenders further acknowledge that, subject to the terms of the
Accommodation Agreement, GM shall have the right to take immediate possession
of the Second Line and the Tooling, except for the Non-GM Owned Tooling, at any
time without payment of any kind from GM to Lenders, Doehler-Jarvis or
Greenville, and Lenders will not interfere in any way should GM decide to
exercise such right.
Lenders' acknowledgement and consent as set forth herein is provided in
reliance upon, and with the express understanding that, the Accommodation
Agreement will not be amended without the prior written consent of the Lenders.
CIT GROUP/BUSINESS CREDIT, INC. for itself
and as agent for the Lenders
By: /s/ Frank Grimaldi
-----------------------------------
Name: Frank Grimaldi
------------------------------
Title: Vice President
-----------------------------
Date: April 16 , 1997
-----------------------
20
<PAGE> 1
EXHIBIT 12.1
HARVARD INDUSTRIES INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
DIVIDENDS ON PREFERRED STOCK
(In thousands of dollars)
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
----------------------- -----------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Pre-tax income (loss) from continuing operations................$ (167,629) $ (20,413) $ (197,309) $ (21,237)
Add: Fixed charges............................................... 12,469 10,545 24,657 20,829
----------- ---------- ----------- ----------
Income as adjusted...............................................$ (155,160) $ (9,868) $ (172,652) $ (408)
=========== ========== =========== ==========
Fixed charges:
Interest on indebtedness.....................................$ 12,144 $ 10,311 $ 24,332 $ 20,361
Portion of rents representative of the interest factor....... 325 234 325 468
----------- ---------- ----------- ----------
Fixed charges................................................ 12,469 10,545 24,657 20,829
Dividends on preferred stock and accretion....................... 4,224 3,712 8,448 7,422
----------- ---------- ----------- ----------
Fixed charges and dividends on preferred stock...................$ 16,693 $ 14,257 $ 33,105 $ 28,251
=========== ========== =========== ==========
Ratio of earnings over fixed charges and dividends
on preferred stock .......................................... n/a x n/a x n/a x n/a
Deficiency of earnings over fixed charges and
dividends on preferred stock.................................$ (171,853) $ (24,125) $ (205,757) $ (28,659)
=========== ========== =========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 2,448
<SECURITIES> 0
<RECEIVABLES> 100,762
<ALLOWANCES> 0
<INVENTORY> 57,896
<CURRENT-ASSETS> 163,330
<PP&E> 419,901
<DEPRECIATION> 144,278
<TOTAL-ASSETS> 478,563
<CURRENT-LIABILITIES> 573,302
<BONDS> 0
122,943
0
<COMMON> 70
<OTHER-SE> (352,512)
<TOTAL-LIABILITY-AND-EQUITY> 478,563
<SALES> 396,487
<TOTAL-REVENUES> 396,487
<CGS> 400,434
<TOTAL-COSTS> 400,434
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24,332
<INCOME-PRETAX> (197,309)
<INCOME-TAX> 1,013
<INCOME-CONTINUING> (198,322)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (198,322)
<EPS-PRIMARY> (29.47)
<EPS-DILUTED> 0
</TABLE>
