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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 15, 1998
HARVARD INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
Florida 0-21362 21-0715310
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3 Werner Way 08833
Lebanon, New Jersey (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (908) 437-4100
(Former name or former address, if changed from last report)
NONE
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Item 3.
On October 15, 1998, the First Amended and Modified Consolidated Plan
Under Chapter 11 of the Bankruptcy Code of Harvard Industries, Inc. ("Harvard")
and its nine domestic subsidiaries, dated August 19, 1998 (the "Plan of
Reorganization"), was confirmed by the United States Bankruptcy Court for the
District of Delaware. The Plan of Reorganization contemplates a conversion of
substantially all pre-petition unsecured debt into equity of the reorganized
Harvard in the form of common stock (the "New Common Stock"). Under the terms
of the Plan of Reorganization, holders of Harvard's Pay-In-Kind Exchangeable
Preferred Stock ("PIK Preferred Stock") and holders of Harvard's existing
common stock (the "Old Common Stock") will each receive warrants ("Warrants")
to acquire, in the aggregate, approximately 5% of the New Common Stock, with
holders of PIK Preferred Stock each receiving their pro rata share of 66.67% of
the Warrants and holders of the Old Common Stock each receiving their pro rata
share of 33.33% of the Warrants. Upon consummation of the Plan of
Reorganization, the Old Common Stock and PIK Preferred Stock will be canceled
in their entirety.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
2.1 Plan of Reorganization
99.1 Press Release
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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 hereunto duly authorized.
HARVARD INDUSTRIES, INC.
By /s/ D. Craig Bowman
------------------------------------
Name: D. Craig Bowman, Esq.
Title: Vice President, Law and
Secretary
October 29, 1998
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EXHIBIT INDEX
Exhibit
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2.1 Plan of Reorganization
99.1 Press Release
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APPENDIX "1"
DOEHLER-JARVIS, INC., et al.
Debtors' First Amended Consolidated Plan under Chapter 11 of the Bankruptcy Code
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
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IN RE: ) Chapter 11
)
DOEHLER-JARVIS, INC., ) Case Nos. 97-953 (SLR)
HARVARD INDUSTRIES, INC., ) through 97-962 (SLR)
HARVARD TRANSPORTATION, INC., )
DOEHLER-JARVIS GREENEVILLE, INC., ) Jointly Administered
DOEHLER-JARVIS POTTSTOWN, INC., )
DOEHLER-JARVIS TECHNOLOGIES, INC., )
DOEHLER-JARVIS TOLEDO, INC., )
HARMAN AUTOMOTIVE, INC., )
HAYES-ALBION CORPORATION, AND )
THE KINGSTON-WARREN CORPORATION, )
)
DEBTORS. )
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DEBTORS' FIRST AMENDED AND MODIFIED CONSOLIDATED
PLAN UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
August 19, 1998
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WILLKIE FARR & GALLAGHER YOUNG CONAWAY STARGATT & TAYLOR, LLP
Co-Counsel for the Debtors Co-Counsel for the Debtors
787 Seventh Avenue P.O. Box 391
New York, New York 10019 11th Floor, Rodney Square North
Myron Trepper, Esq. Wilmington, Delaware 19899
James L. Patton, Jr., Esq.
S. David Peress, Esq.
FRIED, FRANK, HARRIS, ROSENTHAL, MONHAIT, GROSS & GODDESS
SHRIVER & JACOBSON Co-Counsel for the Official Committee
Co-Counsel for the Official Committee of Unsecured Creditors
of Unsecured Creditors 919 North Market Street
One New York Plaza Mellon Bank Center, Suite 1401
New York, New York 10004 Wilmington, Delaware 19801
Brad Eric Scheler, Esq. Kevin Gross, Esq.
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TABLE OF CONTENTS
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Article I. INTRODUCTION.....................................................................................................1
Article II. DEFINITIONS......................................................................................................1
2.1. "Additional Post-Confirmation Term Loan Amount"..................................................................1
2.2. "Administrative Expense".........................................................................................1
2.3. "Affiliate"......................................................................................................1
2.4. "Allowed"........................................................................................................1
2.5. "Allowed [Class Designation] Claim" or "Allowed [Class Designation] Interest"....................................1
2.6. "Alternative Financing Transaction"..............................................................................1
2.7. "Ballots"........................................................................................................1
2.8. "Bankruptcy Code"................................................................................................1
2.9. "Bankruptcy Court"...............................................................................................2
2.10. "Bankruptcy Rules"...............................................................................................2
2.11. "Business Day"...................................................................................................2
2.12. "Canceled Security"..............................................................................................2
2.13. "Cash"...........................................................................................................2
2.14. "Causes of Action"...............................................................................................2
2.15. "Chapter 11 Cases"...............................................................................................2
2.16. "CIT"............................................................................................................2
2.17. "CIT Commitment Letter"..........................................................................................2
2.18. "Claim"..........................................................................................................2
2.19. "Class"..........................................................................................................2
2.20. "Combination Transactions".......................................................................................2
2.21. "Commission".....................................................................................................2
2.22. "Confirmation"...................................................................................................2
2.23. "Confirmation Date"..............................................................................................2
2.24. "Confirmation Hearing"...........................................................................................2
2.25. "Confirmation Order".............................................................................................2
2.26. "Consulting Agreement"...........................................................................................2
2.27. "Convenience Claim"..............................................................................................2
2.28. "Creditor".......................................................................................................3
2.29. "Creditors' Committee"...........................................................................................3
2.30. "Cure Amount Schedule"...........................................................................................3
2.31. "DGCL"...........................................................................................................3
2.32. "Debtors"........................................................................................................3
2.33. "Debtors-In-Possession"..........................................................................................3
2.34. "Deductible Claim"...............................................................................................3
2.35. "Deficiency Claim"...............................................................................................3
2.36. "Disallowed".....................................................................................................3
2.37. "Disbursing Agent"...............................................................................................3
2.38. "Disclosure Statement"...........................................................................................3
2.39. "Disclosure Statement Hearing"...................................................................................3
2.40. "Disclosure Statement Order".....................................................................................3
2.41. "Disputed Claim".................................................................................................3
2.42. "Disputed Interest"..............................................................................................3
2.43. "Distribution Date"..............................................................................................3
2.44. "Distribution Record Date".......................................................................................3
2.45. "Distributions"..................................................................................................3
2.46. "Doehler-Jarvis".................................................................................................3
2.47. "Effective Date".................................................................................................4
2.48. "11 1/8% Senior Notes"...........................................................................................4
2.49. "11 1/8% Senior Notes Claims"....................................................................................4
2.50. "11 1/8% Senior Note Indenture"..................................................................................4
2.51. "Emergence Bonus Plan"...........................................................................................4
2.52. "Entity".........................................................................................................4
2.53. "Estates"........................................................................................................4
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2.54. "Equity Factor"..................................................................................................4
2.55. "Exchange Act"...................................................................................................4
2.56. "Exercise Agreements"............................................................................................4
2.57. "Face Amount"....................................................................................................4
2.58. "Final Order"....................................................................................................4
2.59. "General Unsecured Claim"........................................................................................4
2.60. "Governmental Unit"..............................................................................................4
2.61. "Greeneville"....................................................................................................4
2.62. "Harman".........................................................................................................4
2.63. "Harvard"........................................................................................................4
2.64. "Hayes-Albion"...................................................................................................4
2.65. "Impaired".......................................................................................................4
2.66. "Incentive Plan".................................................................................................5
2.67. "Indentures".....................................................................................................5
2.68. "Indenture Trustee"..............................................................................................5
2.69. "Indenture Trustee Claim"........................................................................................5
2.70. "Insured Claim"..................................................................................................5
2.71. "Insured Portion"................................................................................................5
2.72. "Intercompany Claim".............................................................................................5
2.73. "Intercreditor Agreement"........................................................................................5
2.74. "Interests"......................................................................................................5
2.75. "Kingston-Warren"................................................................................................5
2.76. "LBI"............................................................................................................5
2.77. "LCPI"...........................................................................................................5
2.78. "Lehman".........................................................................................................5
2.79. "Lehman Commitment Letter".......................................................................................5
2.80. "Management Employment Agreements"...............................................................................5
2.81. "Miscellaneous Secured Claim"....................................................................................5
2.82. "New Board of Directors".........................................................................................5
2.83. "New By-Laws"....................................................................................................5
2.84. "New Certificates of Incorporation"..............................................................................5
2.85. "New Common Stock"...............................................................................................5
2.86. "New Harvard Certificate of Incorporation".......................................................................5
2.87. "New Indenture Trustee"..........................................................................................5
2.88. "New Junior Secured Debentures"..................................................................................6
2.89. "New Junior Secured Debentures Indenture"........................................................................6
2.90. "New Warrant Agreement"..........................................................................................6
2.91. "New Warrants"...................................................................................................6
2.92. "Nondebtor Subsidiaries".........................................................................................6
2.93. "Old Common Stock"...............................................................................................6
2.94. "Old Other Interests"............................................................................................6
2.95. "Oversubscription Options".......................................................................................6
2.96. "Paying Agent"...................................................................................................6
2.97. "PBGC"...........................................................................................................6
2.98. "PBGC Agreement".................................................................................................6
2.99. "PBGC Claims"....................................................................................................6
2.100. "Petition Date"..................................................................................................6
2.101. "PIK Preferred Stock"............................................................................................6
2.102. "Plan"...........................................................................................................6
2.103. "Plan Rate"......................................................................................................6
2.104. "Post-Confirmation Credit Agreement".............................................................................6
2.105. "Post-Confirmation Credit Facility"..............................................................................6
2.106. "Pottstown"......................................................................................................6
2.107. "Prepetition Credit Agreement"...................................................................................6
2.108. "Prepetition Credit Facility"....................................................................................6
2.109. "Prepetition Lenders"............................................................................................7
2.110. "Prepetition Lenders' Claims"....................................................................................7
2.111. "Priority Claim".................................................................................................7
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2.112. "Priority Tax Claim".............................................................................................7
2.113. "Professionals"..................................................................................................7
2.114. "Record Date"....................................................................................................7
2.115. "Registration Statement".........................................................................................7
2.116. "Registration Rights Agreement"..................................................................................7
2.117. "Reorganization Securities"......................................................................................7
2.118. "Reorganized Debtors"............................................................................................7
2.119. "Reorganized Doehler-Jarvis".....................................................................................7
2.120. "Reorganized Greeneville"........................................................................................7
2.121. "Reorganized Harman".............................................................................................7
2.122. "Reorganized Harvard"............................................................................................7
2.123. "Reorganized Hayes-Albion".......................................................................................7
2.124. "Reorganized Kingston-Warren"....................................................................................7
2.125. "Reorganized Pottstown"..........................................................................................7
2.126. "Reorganized Technologies".......................................................................................7
2.127. "Reorganized Toledo".............................................................................................7
2.128. "Reorganized Transportation".....................................................................................7
2.129. "Rights".........................................................................................................7
2.130. "Rights Expiration Date".........................................................................................7
2.131. "Rights Issue Date"..............................................................................................8
2.132. "Rights Plan"....................................................................................................8
2.133. "Scheduled"......................................................................................................8
2.134. "Schedules"......................................................................................................8
2.135. "Secured Claim"..................................................................................................8
2.136. "Secured Deductible Claim".......................................................................................8
2.137. "Securities Act".................................................................................................8
2.138. "Senior Notes"...................................................................................................8
2.139. "Senior Notes Claims"............................................................................................8
2.140. "Senior Notes Indenture".........................................................................................8
2.141. "Subsidiary Common Stock"........................................................................................8
2.142. "Technologies"...................................................................................................8
2.143. "Trust Indenture Act"............................................................................................8
2.144. "Toledo".........................................................................................................8
2.145. "Transportation".................................................................................................8
2.146. "12% Senior Notes"...............................................................................................8
2.147. "12% Senior Notes Claims"........................................................................................8
2.148. "12% Senior Note Indenture"......................................................................................8
2.149. "Unimpaired".....................................................................................................8
2.150. "Unclaimed Property".............................................................................................8
2.151. "Workers Compensation Claims"....................................................................................8
2.152. "Workers Compensation Programs"..................................................................................8
Article III. METHOD OF CLASSIFICATION OF CLAIMS AND INTERESTS AND GENERAL PROVISIONS..........................................9
3.1. Administrative Expenses, Priority Tax Claims.....................................................................9
3.2. Intercompany Claims..............................................................................................9
Article IV. TREATMENT OF ADMINISTRATIVE EXPENSES AND PRIORITY TAX CLAIMS.....................................................9
4.1. Treatment of Allowed Administrative Expenses.....................................................................9
4.2. Treatment of Allowed Priority Tax Claims.........................................................................9
Article V. CLASSIFICATION OF CLAIMS AND INTERESTS..........................................................................10
5.1. Class 1........................................................................................................10
5.2. Class 2........................................................................................................10
5.3. Class 3........................................................................................................10
5.4. Class 4........................................................................................................10
5.5. Class 5........................................................................................................10
5.6. Class 6........................................................................................................10
5.7. Class 7........................................................................................................10
5.8. Class 8........................................................................................................10
5.9. Class 9........................................................................................................10
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5.10. Class 10........................................................................................................10
Article VI. TREATMENT OF CLAIMS AND INTERESTS...............................................................................10
6.1. Treatment of Allowed Class 1 Claims (Priority Claims)...........................................................10
6.2. Treatment of Allowed Class 2 Claims (Prepetition Lenders' Claims)...............................................10
6.3. Treatment of Allowed Class 3 Claims (Miscellaneous Secured Claims)..............................................10
6.4. Treatment of Allowed Class 4 Claims (PBGC Claims)...............................................................11
6.5. Treatment of Allowed Class 5 Claims (General Unsecured Claims)..................................................11
6.6. Treatment of Allowed Class 6 Claims (Convenience Claims)........................................................12
6.7. Treatment of Allowed Class 7 Interests (PIK Preferred Stock Interests)..........................................12
6.8. Treatment of Allowed Class 8 Interests (Old Common Stock Interests).............................................12
6.9. Treatment of Allowed Class 9 Interests (Subsidiary Common Stock Interests)......................................12
6.10. Treatment of Allowed Class 10 Interests (Old Other Interests)...................................................12
6.11. Allowance of Senior Notes Claims................................................................................12
Article VII. MEANS FOR IMPLEMENTATION OF THE PLAN............................................................................13
7.1. Post-Confirmation Financing.....................................................................................13
7.2. Issuance and Exercise of Rights.................................................................................13
7.3. New Common Stock................................................................................................13
7.4. New Warrants....................................................................................................13
7.5. Registration Rights.............................................................................................13
7.6. Corporate Action for Reorganized Debtors........................................................................13
7.7. Directors of the Reorganized Debtors............................................................................14
7.8. Emergence Bonus Plan............................................................................................14
7.9. Incentive Plan..................................................................................................14
7.10. Management Employment Agreements................................................................................14
7.11. Consulting Agreement............................................................................................14
7.12. Approval of Agreements..........................................................................................14
7.13. Retiree Benefits................................................................................................14
7.14. Employee Benefit Plans..........................................................................................14
7.15. Listing of New Common Stock; Registration of Securities.........................................................14
7.16. Distributions to Holders of Allowed Claims and Interests; Source of Cash and Reorganization
Securities for Distributions..................................................................................15
7.17. Distributions to Holders of Senior Notes........................................................................15
7.18. Cancellation and Surrender of Existing Securities; Cancellation of Indentures...................................15
7.19. Release of Liens and Perfection of Liens........................................................................16
7.20. Election of Treatment in Class 6...............................................................................16
7.21. Terms of New Junior Secured Debentures..........................................................................16
Article VIII. DISPUTED CLAIMS, DISPUTED INTERESTS, RESERVES AND MISCELLANEOUS
DISTRIBUTION PROVISIONS.......................................................................................18
8.1. Objections......................................................................................................18
8.2. Amendments to Claims; Claims Filed After the Confirmation Date..................................................18
8.3. Reserves for Disputed Claims and Disputed Interests.............................................................18
8.4. Fluctuation in Value of Securities..............................................................................18
8.5. Payment or Distribution of Disputed Claim or Disputed Interest..................................................18
8.6. Timing of Payment or Distribution When a Disputed Claim or Disputed Interest Becomes
an Allowed Claim or Allowed Interest..........................................................................18
8.7. Excess Reserves.................................................................................................19
8.8. Undeliverable or Unclaimed Distributions........................................................................19
8.9. Allocation of Consideration.....................................................................................19
8.10. Distributions to the Holders of General Unsecured Claims........................................................19
8.11. Limitations on Amounts to be Distributed to Holders of Allowed Deductible Claims................................19
8.12. Transmittal of Distributions and Notices........................................................................20
8.13. Method of Cash Distributions....................................................................................20
8.14. Distributions on Non-Business Days..............................................................................20
8.15. Rounding........................................................................................................20
8.16. Withholding Taxes...............................................................................................20
8.17. Disputed Distribution...........................................................................................20
8.18. Retention of Rights to Pursue Causes of Action..................................................................20
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Article IX. SUBSTANTIVE CONSOLIDATION.......................................................................................20
Article X. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES...........................................................21
10.1. Assumption Generally............................................................................................21
10.2. Approval of Assumptions.........................................................................................21
10.3. Objections to Assumption of Executory Contracts and Unexpired Leases............................................21
10.4. Objections to Proposed "Cure" Amounts...........................................................................22
10.5. Payments Related to Assumption of Executory Contracts and Unexpired Leases......................................22
10.6. Executory Contracts and Unexpired Leases to be Rejected.........................................................22
10.7. Bar Date for Rejection Damages..................................................................................22
10.8. Contracts Entered Into on or After the Petition Date............................................................23
Article XI. DISCHARGE, RELEASES AND INDEMNIFICATION.........................................................................23
11.1. Discharge of All Claims and Interests and Releases..............................................................23
11.2. Claims of Subordination.........................................................................................24
11.3. Indemnification.................................................................................................24
11.4. Conclusion of Chapter 11 Cases and Dissolution of Creditors' Committee..........................................24
Article XII. CONDITIONS TO CONFIRMATION AND CONSUMMATION.....................................................................24
12.1. Conditions to Confirmation......................................................................................24
12.2. Conditions to the Consummation..................................................................................24
12.3. Waiver of Conditions to Confirmation and Consummation...........................................................25
Article XIII. EFFECTS OF PLAN CONFIRMATION....................................................................................25
13.1. Reorganized Debtors as Separate Corporate Entities..............................................................25
13.2. Revesting and Vesting...........................................................................................25
13.3. Injunction......................................................................................................25
Article XIV. ADMINISTRATIVE PROVISIONS.......................................................................................26
14.1. Retention of Jurisdiction.......................................................................................26
14.2. Jurisdiction Over the Reorganized Debtors.......................................................................26
14.3. Cram Down.......................................................................................................27
14.4. Modification of the Plan........................................................................................27
14.5. Exemption from Certain Transfer Taxes...........................................................................27
14.6. Setoffs.........................................................................................................27
14.7. Compromise of Controversies.....................................................................................27
14.8. Withdrawal or Revocation of the Plan............................................................................27
14.9. Successors and Assigns..........................................................................................27
14.10. Governing Law...................................................................................................27
14.11. Notices.........................................................................................................27
14.12. Severability....................................................................................................28
14.13. Interpretation, Rules of Construction, Computation of Time, and Choice of Law...................................28
14.14. No Admissions...................................................................................................28
14.15. Effectuating Documents and Further Transactions.................................................................28
14.16. Section 1125 of the Bankruptcy Code.............................................................................28
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EXHIBIT "A" LEHMAN COMMITMENT LETTER
EXHIBIT "B" CIT COMMITMENT LETTER
EXHIBIT "C" NEW WARRANT AGREEMENT
EXHIBIT "D" COMBINATION TRANSACTIONS
EXHIBIT "E" NEW HARVARD CERTIFICATE OF INCORPORATION
EXHIBIT "F" LIST OF NEW BOARD OF DIRECTORS OF REORGANIZED HARVARD
EXHIBIT "G" PBGC AGREEMENT
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ARTICLE I.
INTRODUCTION
This chapter 11 Plan, dated August 19, 1998, is proposed by (i) Harvard
Industries, Inc., a Florida corporation, and its directly or indirectly owned
subsidiaries, Harvard Transportation, Inc., a Michigan corporation,
Doehler-Jarvis, Inc., a Delaware corporation, Doehler-Jarvis Greeneville, Inc.,
a Delaware corporation, Doehler-Jarvis Pottstown, a Delaware corporation,
Doehler-Jarvis Technologies, Inc., a Delaware corporation, Doehler-Jarvis
Toledo, Inc., a Delaware corporation, Harman Automotive, Inc., a Michigan
corporation, Hayes-Albion Corporation, a Michigan corporation and The
Kingston-Warren Corporation, a New Hampshire corporation in the above-captioned
cases currently pending in the United States Bankruptcy Court for the District
of Delaware under chapter 11 of title 11 of the United States Code and (ii) the
Creditors' Committee (collectively, the "Proponents"). Reference is made to the
Disclosure Statement accompanying the Plan for a discussion of the Debtors'
history, results of operations, historical financial information and properties,
and for a summary and analysis of this chapter 11 Plan. All holders of Claims
against and Interests in the Debtors are encouraged to read this chapter 11 Plan
and the Disclosure Statement in their entirety before voting to accept or reject
the Plan.
ARTICLE II.
DEFINITIONS
Whenever from the context it appears appropriate, each term stated in
either the singular or the plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter gender. In addition to such other terms
as are defined in other Articles of the Plan, the following terms (which appear
in the Plan as capitalized terms) have the following meanings as used in the
Plan:
2.1. "Additional Post-Confirmation Term Loan Amount" means, if the
Debtors enter into an Alternative Financing Transaction which includes the
Rights Plan, the amount, if any, by which the term loan component of the
Post-Confirmation Credit Facility exceeds $50 million.
2.2. "Administrative Expense" means (a) any cost and expense of
administration (including, without limitation, the fees and expenses of
Professionals) asserted or arising under sections 503(b) or 507(b) of the
Bankruptcy Code, (b) a Claim given the status of an Administrative Expense
by Final Order of the Bankruptcy Court, and (c) all fees or charges
assessed against the Debtors' estates under 28 U.S.C. Section 1930.
2.3. "Affiliate" means an affiliate as such term is defined in
section 101(2) of the Bankruptcy Code.
2.4. "Allowed" means with respect to Claims and Interests, (a) any
Claim against, or Interest in, any Debtor, proof of which is timely filed
or by order of the Bankruptcy Court is not or will not be required to be
filed, (b) any Claim or Interest that has been or is hereafter listed in
the Schedules as neither disputed, contingent or unliquidated, and for
which no timely filed proof of claim has been filed, (c) any Interest
registered in the stock register maintained by or on behalf of the
applicable Debtor as of the Record Date or (d) any Claim allowed pursuant
to this Plan and, in each such case in (a), (b) and (c) above, as to which
either (i) no objection to the allowance thereof has been interposed within
the applicable period of time fixed by this Plan, the Bankruptcy Code, the
Bankruptcy Rules or the Bankruptcy Court or (ii) such an objection is so
interposed and the Claim and Interest shall have been allowed by a Final
Order (but only to the extent so allowed).
2.5. "Allowed [Class Designation] Claim" or "Allowed [Class
Designation] Interest" means an Allowed Claim or an Allowed Interest in a
specified class. For example, an Allowed General Unsecured Claim is an
Allowed Claim in the General Unsecured Claims Class and an Allowed Old
Common Stock Interest is an Allowed Interest in the Old Common Stock Class,
as the context requires.
2.6. "Alternative Financing Transaction" means any financing
transaction which, provides the necessary operating funds for the
Reorganized Debtors after the Effective Date on better terms than the
Post-Confirmation Credit Facility and which may include financing pursuant
to the CIT Commitment Letter and/or the New Junior Secured Debentures
issued pursuant to the Rights Plan.
2.7. "Ballots" means the ballots that accompany the Plan and
Disclosure Statement upon which holders of Impaired Claims and Impaired
Interests entitled to vote on the Plan shall indicate their acceptance or
rejection of the Plan.
2.8. "Bankruptcy Code" means title 11 of the United States Code, as
amended from time to time (to the extent any such amendment is applicable
to these Chapter 11 Cases).
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2.9. "Bankruptcy Court" means the United States District Court for
the District of Delaware or, to the extent that such court ceases to
exercise jurisdiction over these Chapter 11 Cases, such other court or
adjunct thereof that exercises jurisdiction over these Chapter 11 Cases.
2.10. "Bankruptcy Rules" means, collectively, the Federal Rules of
Bankruptcy Procedure, as amended, promulgated under section 2075 of
title 28 of the United States Code and the general and local rules of the
Bankruptcy Court, as now in effect or hereafter amended (to the extent any
such amendment is applicable to these Chapter 11 Cases).
2.11. "Business Day" means any day, other than a Saturday, Sunday or
"legal holiday" (as such term is defined in Bankruptcy Rule 9006(a)).
2.12. "Canceled Security" means a security, note or other instrument
evidencing a Claim or Interest outstanding immediately prior to the
Effective Date, which security, note or other instrument represents a Claim
or Interest that is Impaired under this Plan.
2.13. "Cash" means currency, a certified check, a cashier's check or
a wire transfer of good funds from any source or a check drawn on a
domestic bank from the Debtors, Reorganized Debtors or other Entity making
any distribution under this Plan.
2.14. "Causes of Action" means any and all actions, causes of action,
suits, accounts, controversies, agreements, promises, rights to legal
remedies, rights to equitable remedies, rights to payment, and claims,
whether known or unknown, reduced to judgment, not reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, unsecured and whether asserted or assertable directly
or derivatively, in law, equity or otherwise.
2.15. "Chapter 11 Cases" means the cases under chapter 11 of the
Bankruptcy Code concerning the Debtors under case numbers 97-953 (SLR)
through 97-962 (SLR), inclusive, which were commenced on the Petition Date.
2.16. "CIT" means The CIT Group/Business Credit, Inc.
2.17. "CIT Commitment Letter" means the letter, dated August 10,
1998, from CIT to the Debtors committing to provide up to $125 million of
financing under certain terms and conditions specified therein as set forth
in Exhibit "B" to the Plan.
2.18. "Claim" means any right to (a) payment from a Debtor, whether
or not such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (b) an equitable remedy for breach of performance
if such breach gives rise to a right to payment from a Debtor, whether or
not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
2.19. "Class" means one of the classes of Claims or Interests which
are substantially similar in nature to each other, established under
Article V of the Plan pursuant to section 1122 of the Bankruptcy Code.
2.20. "Combination Transactions" shall mean the mergers, dissolutions
and other actions as set forth in Exhibit "D" to the Plan which may, at the
Debtors' option, be implemented and become effective on the Effective Date.
2.21. "Commission" means The Securities and Exchange Commission.
2.22. "Confirmation" means the entry of the Confirmation Order.
2.23. "Confirmation Date" means the date on which the Confirmation
Order is entered on the docket maintained by the Clerk of the Bankruptcy
Court with respect to these Chapter 11 Cases.
2.24. "Confirmation Hearing" means the hearing held by the Bankruptcy
Court to consider confirmation of the Plan pursuant to section 1129 of the
Bankruptcy Code.
2.25. "Confirmation Order" means the order of the Bankruptcy Court
confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
2.26. "Consulting Agreement" means the Consulting Agreement between
Reorganized Harvard and John Adams which will be filed with the Bankruptcy
Court no later that three (3) Business Days prior to the Confirmation Date.
2.27. "Convenience Claim" means any Claim, which would otherwise be a
General Unsecured Claim, against the Debtors that (i) is Allowed in an
amount of $500 or less, or (ii) is Allowed in an amount greater than $500,
but which is reduced pursuant to Section 7.20 of the Plan to an amount of
$500.00 or less.
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2.28. "Creditor" means any Entity that is the holder of a Claim
against any of the Debtors that arose on or before the Petition Date or a
Claim against any of the Debtors' estates of the kind specified in
section 502(g), 502(h) or 502(i) of the Bankruptcy Code.
2.29. "Creditors' Committee" means the Official Committee of
Unsecured Creditors in these Chapter 11 Cases, as appointed by the Office
of the United States Trustee and reconstituted from time to time, which
members are identified in the Disclosure Statement.
2.30. "Cure Amount Schedule" means the schedule setting forth the
proposed amounts to cure all executory contracts to be assumed under
Article X of the Plan.
2.31. "DGCL" means the Delaware General Corporation Law.
2.32. "Debtors" means Harvard, Doehler-Jarvis, Transportation,
Greeneville, Pottstown, Technologies, Toledo, Harman, Hayes-Albion,
Kingston-Warren, the debtors and Debtors-In-Possession in these Chapter 11
Cases.
2.33 "Debtors-In-Possession" means the Debtors as
debtors-in-possession pursuant to sections 1101, 1107 and 1108 of the
Bankruptcy Code.
2.34. "Deductible Claim" means with respect to any Insured Claim, an
amount equal to the applicable deductible, self-insured retention or
retrospective rating under the relevant insurance policy and any
reimbursement obligation of the applicable Debtor to the insurance carrier
for sums expended by the insurance carrier on account of such Claim
(including, without limitation, any costs and expenses relating to the
defense of such Claim). For purposes hereof, the term "Deductible Claim"
shall include any Secured Deductible Claim.
2.35. "Deficiency Claim" means with respect to a Claim that is
partially secured, the amount by which the Allowed amount of such Claim
exceeds the value of the property owned or held by the Debtors which
collateralizes the Claim.
2.36. "Disallowed" means, with respect to Claims and Interests, any
Claim against, or Interest in, any of the Debtors, or a portion thereof,
which has been disallowed by a Final Order of the Bankruptcy Court.
2.37. "Disbursing Agent" means the Entity that is designated under
the Plan to disburse property pursuant to the Plan (which may be
Reorganized Harvard). The initial Disbursing Agent will be identified in
the Disclosure Statement.
2.38. "Disclosure Statement" means the Disclosure Statement that
relates to this Plan and has been approved by the Bankruptcy Court pursuant
to section 1125 of the Bankruptcy Code, as such Disclosure Statement may be
amended, modified, or supplemented (including all exhibits and schedules
annexed thereto or referred to therein).
2.39. "Disclosure Statement Hearing" means the hearing held by the
Bankruptcy Court to consider approval of the Disclosure Statement as
containing adequate information as required by section 1125 of the
Bankruptcy Code.
2.40. "Disclosure Statement Order" means the order of the Court
approving the Disclosure Statement as containing adequate information
pursuant to section 1125 of the Bankruptcy Code.
2.41. "Disputed Claim" means the portion (including, when
appropriate, the whole) of a Claim that is not an Allowed Claim as to
which: (a) a proof of claim has been filed with the Bankruptcy Court, or
deemed filed under applicable law or order of the Bankruptcy Court; (b) an
objection has been or may be timely filed; and (c) such objection has not
been: (i) withdrawn, (ii) overruled or denied in whole or part by a Final
Order, or (iii) granted in whole or part by a Final Order. Before the time
that an objection has been or may be filed, a Claim shall be considered a
Disputed Claim (A) if the amount or classification of the Claim specified
in the proof of claim exceeds the amount or classification of any
corresponding Claim scheduled by the relevant Debtor in its Schedules;
(B) in its entirety, if any corresponding Claim scheduled by the relevant
Debtor has been scheduled as disputed, contingent or unliquidated; or
(C) in its entirety, if no corresponding Claim has been scheduled by the
relevant Debtor in its Schedules.
2.42. "Disputed Interest" means an Interest, or portion thereof, that
has not become an Allowed Interest.
2.43. "Distribution Date" means the Effective Date.
2.44. "Distribution Record Date" means 5:00 p.m. on the Business Day
immediately preceding the Confirmation Date or such other date and time
designated in the Confirmation Order.
2.45. "Distributions" means the distributions in accordance with the
Plan of: (a) Cash; or (b) Reorganization Securities, as the case may be.
2.46. "Doehler-Jarvis" means Doehler-Jarvis, Inc., one of the Debtors
herein.
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2.47. "Effective Date" means either (a) the Business Day that is not
more than seven (7) Business Days after the date all of the conditions
precedent as provided in Section 12.2 of the Plan have been satisfied or
duly waived in accordance with Section 12.3 of this Plan or (b) such other
Business Day as the Proponents select.
2.48. "11 1/8% Senior Notes" means 11 1/8% Senior Notes due 2005,
issued by Harvard under the 11 1/8% Senior Note Indenture and guaranteed by
all of the Debtors other than Transportation.
2.49. "11 1/8% Senior Notes Claims" means the Claims of holders of
11 1/8% Senior Notes (other than the Indenture Trustee Claim) arising under
the 11 1/8% Senior Note Indenture.
2.50. "11 1/8% Senior Note Indenture" means the Indenture, dated as
of July 28, 1995, between the Debtors and the Indenture Trustee to the
11 1/8% Senior Notes, as the same may have been amended as of the Petition
Date.
2.51. "Emergence Bonus Plan" means the Emergence Bonus Plan, a copy
of which will be filed with the Bankruptcy Court no later than three
(3) Business Days prior to the Confirmation Date.
2.52. "Entity" means any individual, corporation, limited or general
partnership, joint venture, association, joint stock company, limited
liability company, estate, entity, trust, trustee, United States Trustee,
unincorporated organization, government, governmental unit (as defined in
the Bankruptcy Code), agency or political subdivision thereof.
2.53. "Estates" means the estates created in these Chapter 11 Cases
for the Debtors by section 541 of the Bankruptcy Code.
2.54. "Equity Factor" means .0266666, or such greater number that the
Debtors and the Creditors' Committee jointly determine on the Effective
Date.
2.55. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.56. "Exercise Agreements" means those agreements among the
Reorganized Debtors and the parties thereto evidencing a commitment to
purchase all of the Junior Secured Debentures which will be entered into in
the event the Reorganized Debtors enter into an Alternative Financing
Transaction which includes the Rights Plan.
2.57. "Face Amount" means, with respect to a particular Claim:
(a) if the Claim is listed in the Schedules and the holder of such Claim
has not filed a proof of Claim with the Bankruptcy Court within the
applicable period of limitation fixed by the Bankruptcy Court pursuant to
the Bankruptcy Code, the Bankruptcy Rules or other applicable law, the
amount of such Claim that is listed in the Schedules as not disputed,
contingent or unliquidated; or (b) if the holder of such Claim has filed a
proof of Claim with the Bankruptcy Court within the applicable period of
limitation fixed by the Bankruptcy Court pursuant to the Bankruptcy Code,
the Bankruptcy Rules or other applicable law, the liquidated amount stated
in such proof of Claim, or such amount as is determined by Final Order of
the Bankruptcy Court; (c) in the case of an Administrative Expense, the
liquidated amount set forth in any application filed with the Bankruptcy
Court or the amount set forth in the Debtors' books and records or such
amount as is determined by a Final Order of the Bankruptcy Court; or
(d) in all other cases, zero (0) or such amount as shall be fixed or
estimated by a Final Order of the Bankruptcy Court.
2.58. "Final Order" means an order, ruling or judgment which is in
effect and is not stayed and as to which (a) the time to appeal or petition
for certiorari has expired and as to which no appeal, petition for
certiorari or other proceeding for reargument or rehearing shall then be
pending, or (b) in the event that an appeal, writ of certiorari or
reargument or rehearing thereof has been sought, such order of the
Bankruptcy Court shall have been affirmed by the highest court to which the
order was appealed or certiorari, reargument or rehearing has been denied,
and the time to take any further appeal, petition for certiorari, move for
reargument or rehearing has expired.
2.59. "General Unsecured Claim" means any Claim (including, without
limitation, any Deductible Claim), that is not an Administrative Expense,
Priority Tax Claim, Priority Claim, Prepetition Lenders' Claim,
Miscellaneous Secured Claim, PBGC Claim, Insured Portion or Convenience
Claim.
2.60. "Governmental Unit" means a governmental unit as such term is
defined in section 101(27) of the Bankruptcy Code.
2.61. "Greeneville" means Doehler-Jarvis Greeneville, Inc., one of
the Debtors herein.
2.62. "Harman" means Harman Automotive Inc., one of the Debtors
herein.
2.63. "Harvard" means Harvard Industries, Inc., one of the Debtors
herein.
2.64. "Hayes-Albion" means Hayes-Albion, Inc., one of the Debtors
herein.
2.65. "Impaired" means with respect to any Claim or Interest,
impaired within the meaning of section 1124 of the Bankruptcy Code.
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2.66. "Incentive Plan" means the Incentive Plan, a copy of which will
be filed with the Bankruptcy Court no later than three (3) Business Days
prior to the Confirmation Date.
2.67. "Indentures" means, collectively, the 11 1/8% Senior Notes
Indenture and the 12% Senior Notes Indenture.
2.68. "Indenture Trustee" means any entity identified as the trustee,
paying agent or other similar fiduciary under a bond, note or other debt
instrument (including, but not limited to, the 12% Senior Notes and 11 1/8%
Senior Notes and industrial development or similar bonds and notes for
which a Debtor is the obligor on any note, agreement, lease or similar
document or instrument, the proceeds of which are applied, in whole or in
part, to the payment of principal and/or interest on such industrial
development bond or note), whether or not the agreement evidencing the debt
or delineating its terms is denominated as an indenture.
2.69. "Indenture Trustee Claim" means the fees and expenses of First
Union National Bank, as indenture trustee, under the Indentures, or any
other successor Indenture Trustee, incurred in their capacity as such,
including the fees and expenses of its counsel.
2.70. "Insured Claim" means any Claim arising from an incident or
occurrence that is covered under an applicable Debtor's general liability
insurance policies but shall not include Workers' Compensation Claims
arising out of Workers' Compensation Programs and employee benefit plans.
2.71. "Insured Portion" means the portion of any Insured Claim that
is covered under an applicable Debtor's general liability insurance policy
and would not constitute a Deductible Claim.
2.72. "Intercompany Claim" means any Claim of any Debtor against
another Debtor arising prior to the Effective Date.
2.73. "Intercreditor Agreement" means, if the Rights Plan is
implemented, an intercreditor agreement between the other lenders under an
Alternative Financing Transaction and the New Indenture Trustee.
2.74. "Interests" means the equity interests in the Debtors,
including, without limitation, shares of common stock and shares of
preferred stock of the Debtors and any rights, options, warrants, calls,
subscriptions or other similar rights or agreements, commitments or
outstanding securities obligating the Debtors to issue, transfer or sell
any shares of capital stock of the Debtors.
2.75. "Kingston-Warren" means The Kingston-Warren Corporation, one of
the Debtors herein.
2.76. "LBI" means Lehman Brothers Inc.
2.77. "LCPI" means Lehman Commercial Paper Inc.
2.78. "Lehman" means, collectively, LBI and LCPI.
2.79. "Lehman Commitment Letter" means the letter, dated July 31,
1998, from Lehman to the Debtors committing to provide the
Post-Confirmation Credit Facility under certain terms and conditions
specified therein as set forth in Exhibit "A" to the Plan.
2.80. "Management Employment Agreements" means the Management
Employment Agreements between Reorganized Harvard and Roger Pollazzi,
Theodore Vogtman, Vincent Toscano and Joseph Gagliardi, to be filed prior
to three Business Days before the Confirmation Date.
2.81. "Miscellaneous Secured Claim" means any Secured Claim other
than the Prepetition Lenders' Claim.
2.82. "New Board of Directors" means the board of directors of
Reorganized Harvard, on or after the Effective Date.
2.83. "New By-Laws" means the by-laws for the Reorganized Debtors, in
form and substance reasonably satisfactory to the Creditors' Committee.
2.84. "New Certificates of Incorporation" means the Certificates of
Incorporation of the Reorganized Debtors, in form and substance reasonably
satisfactory to the Creditors' Committee.
2.85. "New Common Stock" means the shares of common stock, par value
$.01 per share, of Reorganized Harvard issued pursuant to the terms of the
Plan (or issuable after the Effective Date) and having the terms set forth
in the New Harvard Certificate of Incorporation.
2.86. "New Harvard Certificate of Incorporation" means the New
Certificate of Incorporation of Reorganized Harvard, substantially in the
form as set forth in Exhibit "E" to the Plan.
2.87. "New Indenture Trustee" means the indenture trustee under the
New Junior Secured Debentures Indenture.
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2.88. "New Junior Secured Debentures" means any and all junior
secured debentures issued under the Plan pursuant to the terms of the New
Junior Secured Debentures Indenture.
2.89. "New Junior Secured Debentures Indenture" means the Indenture,
among the Reorganized Debtors and the New Indenture Trustee to be dated as
of the Effective Date, which will govern the New Junior Secured Debentures,
if the Rights Plan is implemented.
2.90. "New Warrant Agreement" means the document governing the terms
and conditions of the New Warrants substantially in the form of Exhibit
"C."
2.91. "New Warrants" means the warrants to purchase 631,578 shares of
New Common Stock at a price per share of New Common Stock based on a net
equity value of $500 million which shall be exercisable commencing on the
Effective Date and ending on the fifth anniversary date of the Effective
Date.
2.92. "Nondebtor Subsidiaries" means any direct and indirect
subsidiaries of any of the Debtors that are not debtors and
Debtors-In-Possession in these Chapter 11 Cases.
2.93. "Old Common Stock" means all authorized, issued and outstanding
shares of the common stock of Harvard, $0.01 par value, as of the Petition
Date.
2.94. "Old Other Interests" means any Interest, other than an Old
Common Stock Interest, a PIK Preferred Stock Interest or a Subsidiary
Common Stock Interest, including, without limitation, any preferred or
other capital stock of Harvard (other than PIK Preferred Stock) and all
issued, outstanding and unexpired options, warrants, conversion, privilege
or other legal or contractual right to acquire shares of PIK Preferred
Stock and/or Old Common Stock.
2.95. "Oversubscription Options" means, if the Rights Plan is
implemented, the options granted to holders of General Unsecured Claims
that have not been Disallowed as of the Confirmation Date to subscribe for
and purchase, subject to the terms and conditions of the Rights Plan, at
par, up to 100% of the principal amount of the New Junior Secured
Debentures that are not subscribed for upon exercise of the Rights.
2.96. "Paying Agent" means the Disbursing Agent, any Indenture
Trustee, or any other entity contractually authorized and/or obligated to
make Distributions to certain holders of Claims and Interests and similar
intermediaries and agents participating in making or conveying
Distributions as required by the Plan and the Rights Plan.
2.97. "PBGC" means the Pension Benefit Guaranty Corporation.
2.98. "PBGC Agreement" means the agreement substantially in the form
amended hereto as Exhibit "G," between the PBGC and certain of the
Reorganized Debtors.
2.99. "PBGC Claims" means all Claims asserted by the PBGC.
2.100. "Petition Date" means May 8, 1997.
2.101. "PIK Preferred Stock" means all authorized, issued and
outstanding Payable-In-Kind Exchangeable Preferred Shares of Harvard as of
the Petition Date.
2.102. "Plan" means the Debtors' First Amended and Modified
Consolidated Plan of Reorganization under chapter 11 of the Bankruptcy Code
(together with all exhibits thereto), as the same may be amended from time
to time in accordance with the Confirmation Order, section 1127 of the
Bankruptcy Code and the terms hereof.
2.103. "Plan Rate" means the interest rate available on ninety
(90) day United States Treasuries on the Effective Date but in no event
greater than 7.0% interest per annum.
2.104. "Post-Confirmation Credit Agreement" means the credit
agreement which is to be executed as of the Effective Date by the
Reorganized Debtors and which shall contain those terms set forth in the
Lehman Commitment Letter and any and all documents related thereto.
2.105. "Post-Confirmation Credit Facility" means the loans and other
financial accommodations provided to the Reorganized Debtors pursuant to
the Post-Confirmation Credit Agreement.
2.106. "Pottstown" means Doehler-Jarvis Pottstown, Inc., one of the
Debtors herein.
2.107. "Prepetition Credit Agreement" means the Prepetition Loan and
Security Agreement dated October 4, 1996 and as amended December 20, 1996
and April 21, 1997 between the Debtors and CIT as agent for the Prepetition
Lenders.
2.108. "Prepetition Credit Facility" means the loans and other
financial accommodations provided pursuant to the Prepetition Credit
Agreement.
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2.109. "Prepetition Lenders" mean CIT, Congress Financial
Corporation, General Electric Capital Corporation, Heller Financial, Inc.,
Finova Capital Corporation and Foothill Capital Corporation, in their
capacity as lenders under the Prepetition Credit Agreement.
2.110. "Prepetition Lenders' Claims" means the Secured Claims of the
Prepetition Lenders arising under the Prepetition Credit Facility.
2.111. "Priority Claim" means any Claim accorded priority in right of
payment under section 507(a) of the Bankruptcy Code, other than an
Administrative Expense or Priority Tax Claim.
2.112. "Priority Tax Claim" means any Claim for taxes, interest and
penalties against any of the Debtors entitled to priority pursuant to
section 507(a)(8) of the Bankruptcy Code.
2.113. "Professionals" means those persons or Entities: (a) employed
pursuant to an order of the Bankruptcy Court in accordance with
sections 327 or 1103 of the Bankruptcy Code providing for compensation for
services rendered prior to the Effective Date pursuant to sections 327,
328, 329, 330 and 331 of the Bankruptcy Code, or (b) for which compensation
and reimbursement has been allowed by the Bankruptcy Court pursuant to
sections 503(b)(2) or (4) of the Bankruptcy Code.
2.114. "Record Date" means the applicable Voting Record Date and
Distribution Record Date established by Final Order of the Bankruptcy
Court.
2.115. "Registration Statement" means a registration statement
pursuant to section 12 of the 1934 Act.
2.116. "Registration Rights Agreement" means the registration rights
agreement to be entered into on the Effective Date by and among Reorganized
Harvard and certain holders of New Common Stock as of the Effective Date.
2.117. "Reorganization Securities" means New Common Stock and New
Warrants and, if the Rights Plan is implemented, Rights, Oversubscription
Options and New Junior Secured Debentures.
2.118. "Reorganized Debtors" means the Debtors and their successor
entities on and after the effectiveness of this Plan on the Effective Date.
2.119. "Reorganized Doehler-Jarvis" means Doehler-Jarvis on and after
the effectiveness of this Plan on the Effective Date.
2.120. "Reorganized Greeneville" means Greeneville on and after the
effectiveness of this Plan on the Effective Date.
2.121. "Reorganized Harman" means Harman on and after the
effectiveness of this Plan on the Effective Date.
2.122. "Reorganized Harvard" means Harvard on and after the
effectiveness of this Plan on the Effective Date.
2.123. "Reorganized Hayes-Albion" means Hayes-Albion on and after the
effectiveness of this Plan on the Effective Date.
2.124. "Reorganized Kingston-Warren" means Kingston-Warren on and
after the effectiveness of this Plan on the Effective Date.
2.125. "Reorganized Pottstown" means Pottstown on and after the
effectiveness of this Plan on the Effective Date.
2.126. "Reorganized Technologies" means Technologies on and after the
effectiveness of this Plan on the Effective Date.
2.127. "Reorganized Toledo" means Toledo on and after the
effectiveness of this Plan on the Effective Date.
2.128. "Reorganized Transportation" means Transportation on and after
the effectiveness of this Plan on the Effective Date.
2.129. "Rights" means, if the Rights Plan is implemented, the rights
granted to the holders of General Unsecured Claims under the Rights Plan,
and distributed pursuant to the Plan, to purchase in the aggregate, at par,
$44 million (less the Additional Post-Confirmation Term Loan Amount) in
principal amount of New Junior Secured Debentures. Each Right will entitle
a holder thereof to purchase, at par, to the extent that such holder's
General Unsecured Claim has not been Disallowed, a percentage of the
aggregate principal amount of New Junior Secured Debentures that will be
issued under the Plan, which percentage will be based on a fraction, the
numerator of which is the amount of such holder's General Unsecured Claim
that has not been Disallowed as of the Confirmation Date and the
denominator of which is the aggregate amount of all General Unsecured
Claims that have not been Disallowed as of the Confirmation Date.
2.130. "Rights Expiration Date" means the date which is 30 days
following the Rights Issue Date or such later date that the Proponents
jointly decide.
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2.131. "Rights Issue Date" means, if the Rights Plan is implemented,
the day the Confirmation Order becomes a Final Order or such later date
prior to the Effective Date as the Proponents jointly determine.
2.132. "Rights Plan" means the document governing the terms and
conditions of the Rights.
2.133. "Scheduled" means set forth in the Schedules.
2.134. "Schedules" means the schedules of assets and liabilities,
respectively, filed by each of the Debtors in accordance with
section 521(1) of the Bankruptcy Code on or about July 7, 1997 as the same
have been or may hereafter be amended from time to time.
2.135. "Secured Claim" means any Claim that is a secured Claim under
section 506(a) of the Bankruptcy Code.
2.136. "Secured Deductible Claim" means any Deductible Claim secured
by a letter of credit, surety or similar instrument that is collateralized
by property of the Debtors.
2.137. "Securities Act" means the Securities Act of 1933, as amended.
2.138. "Senior Notes" means, collectively, (a) the 12% Senior Notes
and (b) the 11 1/8% Senior Notes.
2.139. "Senior Notes Claims" means, collectively, the 12% Senior
Notes Claims and the 11 1/8% Senior Notes Claims.
2.140. "Senior Notes Indenture" means, collectively, the 12% Senior
Note Indenture and the 11 1/8% Senior Note Indenture.
2.141. "Subsidiary Common Stock" means collectively, any and all
authorized, issued and outstanding Interests in Doehler-Jarvis,
Transportation, Greeneville, Pottstown, Technologies, Toledo, Harman,
Hayes-Albion and Kingston-Warren, as of the Petition Date.
2.142. "Technologies" means Doehler-Jarvis Technologies, Inc., one of
the Debtors herein.
2.143. "Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
2.144. "Toledo" means Doehler-Jarvis Toledo, Inc., one of the Debtors
herein.
2.145. "Transportation" means Harvard Transportation, Inc., one of
the Debtors herein.
2.146. "12% Senior Notes" means 12% Senior Notes due 2004, issued by
Harvard under the 12% Senior Note Indenture and guaranteed by all of the
Debtors other than Transportation.
2.147. "12% Senior Notes Claims" means the Claims of holders of 12%
Senior Notes (other than Indenture Trustee Claims) arising under the 12%
Senior Note Indenture.
2.148. "12% Senior Note Indenture" means the Indenture, dated as of
July 26, 1994, between the Debtors and the Indenture Trustee, with respect
to the 12% Senior Notes, as the same may have been amended as of the
Petition Date.
2.149. "Unimpaired" means a Claim that is not Impaired.
2.150. "Unclaimed Property" means any Cash and Reorganization
Securities unclaimed on or after the applicable Distribution Date made in
respect of the relevant Allowed Claim or Allowed Interest. Unclaimed
Property shall include: (a) checks (and the funds represented thereby) and
Reorganization Securities, mailed to an address of a holder of a Allowed
Claim or Interest and returned as undeliverable without a proper forwarding
address; (b) funds for uncashed checks; and (c) checks (and the funds
represented thereby) and Reorganization Securities not mailed or delivered
because no address to mail or deliver such property was available.
2.151. "Workers' Compensation Claims" means any Claim against the
Debtors held by (i) current and former employees of the Debtors,
(ii) beneficiaries of current and former employees of the Debtors and
(iii) Governmental Units, for payment or reimbursement under and according
to the terms of the Workers' Compensation Programs.
2.152. "Workers' Compensation Programs" means those statutorily
mandated programs in effect on the Petition Date providing compensation,
paid for by third parties, to employees of the Debtors for job-related
injuries or job related illnesses, which were required to be maintained
under provisions of non-bankruptcy law.
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ARTICLE III.
METHOD OF CLASSIFICATION OF CLAIMS AND INTERESTS AND GENERAL PROVISIONS
3.1. Administrative Expenses, Priority Tax Claims. Administrative
Expenses and Priority Tax Claims have not been classified and are excluded
from the Classes set forth in Article V in accordance with
section 1123(a)(1) of the Bankruptcy Code.
3.2. Intercompany Claims. Allowed Intercompany Claims of each Debtor
against all other Debtors and the Nondebtor Subsidiaries are not classified
and are extinguished in connection with the substantive consolidation of
the Debtors pursuant to Article IX.
ARTICLE IV.
TREATMENT OF ADMINISTRATIVE EXPENSES AND PRIORITY TAX CLAIMS
4.1 Treatment of Allowed Administrative Expenses. Unless otherwise
provided for herein, each holder of an allowed Administrative Expense
(including, without limitation, all compensation and reimbursement of
expenses of Professionals pursuant to sections 327, 328, 329, 330, 331,
503(b)(1), 503(b)(4) or 1103 of the Bankruptcy Code) shall be paid 100% of
the unpaid allowed amount of such Administrative Expense in Cash on or as
soon as reasonably practicable after the later of: (a) the Effective Date;
and (b) the date such Administrative Expense becomes allowed, provided,
however, that an allowed Administrative Expense representing obligations
incurred in the ordinary course of business consistent with past practices
shall be paid in full or performed by the Debtors or Reorganized Debtors,
as the case may be, in accordance with its terms and conditions, in the
ordinary course of business consistent with past practices, provided,
further, however, that an allowed Administrative Expense may be paid on
such other terms and conditions as are agreed to between the Debtors, and
following the Effective Date, at the option of the Reorganized Debtors, and
the holder of such allowed Administrative Expense and, prior to the
Effective Date, upon prior written consent of the Creditors' Committee.
4.2. Treatment of Allowed Priority Tax Claims. With respect to each
Allowed Priority Tax Claim, at the option of the Debtors, upon prior
written consent of the Creditors' Committee, and following the Effective
Date, at the option of the Reorganized Debtors, the holder of an Allowed
Priority Tax Claim will be entitled to receive on account of such Allowed
Priority Tax Claim: (a) equal Cash payments made on the last Business Day
of every three (3) month period following the Effective Date, over a period
not exceeding six (6) years after the assessment of the tax on which such
Claim is based, totaling the principal amount of such Claim plus simple
interest on any outstanding balance from the Effective Date calculated at
the Plan Rate; (b) such other treatment agreed to by the holder of such
Allowed Priority Tax Claim and the Debtors or the Reorganized Debtors, as
the case may be, provided such treatment is on more favorable terms to the
Debtors or the Reorganized Debtors, as the case may be, than the treatment
set forth in clause (a) hereof; or (c) payment in full of such Allowed
Priority Tax Claim on or as soon as practicable after the later of:
(i) the Effective Date, or (ii) the date such Priority Tax Claim becomes an
Allowed Priority Tax Claim. The Debtors or Reorganized Debtors, as the case
may be, shall have the right, in their sole discretion, to prepay the
Allowed Priority Tax Claim without penalty of any sort or nature.
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ARTICLE V.
CLASSIFICATION OF CLAIMS AND INTERESTS
Pursuant to section 1122 of the Bankruptcy Code, set forth below is a
designation of classes of Claims and Interests. Administrative Expenses and
Priority Tax Claims of the kinds specified in section 507(a)(1) and
507(a)(8) of the Bankruptcy Code have not been classified and are excluded from
the following classes in accordance with section 1123(a)(1) of the Bankruptcy
Code.
5.1. Class 1 consists of all Priority Claims.
5.2. Class 2 consists of all Prepetition Lenders' Claims.
5.3. Class 3 consists of all Miscellaneous Secured Claims.
5.4. Class 4 consists of all PBGC Claims.
5.5. Class 5 consists of all General Unsecured Claims.
5.6. Class 6 consists of all Convenience Claims.
5.7. Class 7 consists of all PIK Preferred Stock Interests.
5.8. Class 8 consists of all Old Common Stock Interests.
5.9. Class 9 consists of all Subsidiary Common Stock Interests.
5.10. Class 10 consists of all Old Other Interests.
ARTICLE VI.
TREATMENT OF CLAIMS AND INTERESTS
6.1. Treatment of Allowed Class 1 Claims (Priority Claims).
(a) Unless otherwise agreed by the holder of an Allowed Priority
Claim and (i) the Debtors, upon prior written consent of the Creditors'
Committee, or (ii) following the Effective Date, the Reorganized Debtors,
each holder of an Allowed Priority Claim shall be paid 100% of the unpaid
Allowed amount of such Claim in Cash on or as soon as practicable after the
later of: (y) the Effective Date, or (z) the date such Priority Claim
becomes an Allowed Priority Claim.
(b) As more specifically set forth in, and without in any way
limiting, Section 11.1 of this Plan, the distributions provided in this
Section 6.1 are in full settlement, release and discharge of each holder's
Priority Claim.
(c) Class 1 is Unimpaired. Holders of Allowed Priority Claims shall
be deemed to have accepted the Plan.
6.2. Treatment of Allowed Class 2 Claims (Prepetition Lenders' Claims).
(a) The Prepetition Lenders' Claims are Allowed in full. With respect
to each Allowed Prepetition Lenders' Claim, at the option of the Debtors,
upon the prior written consent of the Creditors' Committee, and following
the Effective Date, at the option of the Reorganized Debtors: (i) the
Debtors or Reorganized Debtors, as the case may be, shall pay such Allowed
Prepetition Lenders' Claim, in full, in Cash; or (ii) the Debtors or
Reorganized Debtors, as the case may be, shall provide such other treatment
agreed to by the holder of such Allowed Prepetition Lenders' Claim and the
Debtors or the Reorganized Debtors, as the case may be.
(b) As more specifically set forth in, and without in any way
limiting, Section 11.1 of this Plan, the distributions provided in this
Section 6.2 are in full settlement, release and discharge of each holder's
Prepetition Lenders' Claim.
(c) Class 2 is Impaired. Holders of Allowed Prepetition Lenders'
Claims shall be entitled to vote to accept the Plan.
6.3. Treatment of Allowed Class 3 Claims (Miscellaneous Secured Claims).
(a) With respect to each Allowed Miscellaneous Secured Claim, at the
option of the Debtors, upon prior written consent of the Creditors'
Committee, to be exercised on the Effective Date, or such other date as the
Bankruptcy Court may determine, such Claim shall be treated pursuant to any
of the following alternatives: (A) the Debtors or Reorganized Debtors, as
the case may be, shall execute a written undertaking in favor of the holder
of such Claim, whereby the Debtors or Reorganized Debtors, as the case may
be, assume such Claim and leaves unaltered such holder's legal, equitable
and contractual rights with respect to such Claim, (B) notwithstanding any
contractual provision or applicable law that entitles the holder of such
Claim to demand or receive accelerated payment of such Claim after the
occurrence of a default, the Debtors or Reorganized Debtors, as the case
may be, shall (1) cure any such default that occurred before or after the
Petition Date, other than a default of a kind
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specified in section 365(b)(2) of the Bankruptcy Code, (2) reinstate the
maturity of such Claim as such maturity existed before such default, (3)
compensate the holder of such Claim for any damages incurred as a result of
any reasonable reliance by such holder on such contractual provision or
such applicable law and (4) execute a written undertaking in favor of such
holder, whereby the Debtors or Reorganized Debtors, as the case may be,
assumes such Claim and, except as permitted in clauses (1), (2) and
(3) hereof, does not otherwise alter the legal, equitable or contractual
rights of such holder with respect to such Claim, or (C) the Debtors or the
Reorganized Debtors, as the case may be, shall provide such other treatment
agreed to by the holder of such Allowed Miscellaneous Secured Claim and the
Debtors or the Reorganized Debtors, as the case may be.
(b) Notwithstanding the foregoing, the Debtors, upon prior written
consent of the Creditors' Committee, may elect by sending written notice to
the affected Claim holder on or before the Confirmation Date to (x) pay the
holder of such Allowed Miscellaneous Secured Claim the allowed Amount
thereof, in Cash; (y) distribute to the holder of an Allowed Claim in
Class 3 the property securing such holder's Claim, in which event such
holder shall be entitled within thirty (30) days of such election to file a
proof of claim for any deficiency entitled to treatment as a Claim in
Class 5 or 6, as applicable, or be forever barred from thereafter asserting
a Deficiency Claim against the Debtors or Reorganized Debtors; or
(z) provide to such holder such treatment, including deferred Cash
payments, as shall be consistent with section 1129(b) of the Bankruptcy
Code.
(c) As more specifically set forth in, and without in any way
limiting, Section 11.1 of this Plan, the distributions provided in this
Section 6.3 are in full settlement, release and discharge of each holder's
Miscellaneous Secured Claim.
(d) Class 3 is Impaired. Holders of such Claims shall be entitled to
vote to accept or reject the Plan. Each Miscellaneous Secured Claim
receiving treatment under Section 6.3(b) above shall be deemed to be in a
separate Class for classification, voting and distribution purposes.
6.4. Treatment of Allowed Class 4 Claims (PBGC Claims).
(a) On the Effective Date, the holder of the Allowed Claims in
Class 4 shall receive the treatment provided for in the PBGC Agreement.
(b) As more specifically set forth in, and without in any way
limiting, Section 11.1 of this Plan, the distributions provided in this
Section 6.4 are in full settlement, release and discharge of each holder's
PBGC Claim.
(c) Class 4 is Impaired. Holders of such Claims shall be entitled to
vote to accept or reject the Plan.
6.5. Treatment of Allowed Class 5 Claims (General Unsecured Claims).
(a) On the Effective Date, or as soon thereafter as is practicable,
each holder of an Allowed Claim in Class 5 shall receive shares of New
Common Stock equal to the product of such holder's Allowed General
Unsecured Claim multiplied by the Equity Factor.
(b) Additionally, if the Rights Plan is implemented, on the Rights
Issue Date, each holder of a General Unsecured Claim that has not been
Disallowed as of the Confirmation Date shall be entitled to receive its pro
rata share (determined by dividing the amount of such holder's General
Unsecured Claim to the extent it has not been Disallowed as of the
Confirmation Date by the total amount of General Unsecured Claims that have
not been Disallowed as of the Confirmation Date) of:
(i) 100% of the Rights issued under the Rights Plan, all of which
shall be issued on the Rights Issue Date and exercisable on or prior to
the Rights Expiration Date, by any holder of such Right, to the extent
that such holder's General Unsecured Claim has not been Disallowed as of
the Confirmation Date, with the New Junior Secured Debentures underlying
those Rights exercised to be paid for in Cash at par and issued on the
Effective Date, all in accordance with the terms and conditions as set
forth in the Rights Plan; and
(ii) 100% of the Oversubscription Options issued under the Rights
Plan, all of which shall be issued on the Rights Issue Date and
exercisable on or prior to the Rights Expiration Date, by any holder of
such Oversubscription Option to the extent that such holder's General
Unsecured Claim has not been Disallowed as of the Confirmation Date,
with the New Junior Secured Debentures underlying those Oversubscription
Options exercised to be paid for in Cash at par and issued on the
Effective Date, all in accordance with the terms and conditions the
Rights Plan.
(c) There shall not be a Rights Plan and no New Junior Secured
Debentures shall be issued to the extent that the Debtors do not enter into
an Alternative Financing Transaction that includes the Rights Plan, in
substitution for the Post-Confirmation Credit Facility pursuant to
Section 7.1 of this Plan.
(d) As more specifically set forth in, and without in any way
limiting, Section 11.1 of this Plan, the distributions provided in this
Section 6.5 are in full settlement, release and discharge of each holder's
General Unsecured Claim.
(e) Class 5 is Impaired under the Plan. Holders of such Claims shall
be entitled to vote to accept or reject the Plan.
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6.6. Treatment of Allowed Class 6 Claims (Convenience Claims).
(a) On the Effective Date or as soon thereafter as is practicable,
each holder of an Allowed Convenience Claim shall be paid 100% of its
Allowed Convenience Claim (as reduced in accordance with Section 7.20 of
the Plan), without interest, in Cash.
(b) As more specifically set forth in, and without in any way
limiting, Section 11.1 of this Plan, the distributions provided in this
Section 6.6 are in full settlement, release and discharge of each holder's
General Unsecured Claim and Convenience Claim.
(c) Class 6 is Impaired under the Plan. Holders of such Claims shall
be entitled to vote to accept or reject the Plan.
6.7. Treatment of Allowed Class 7 Interests (PIK Preferred Stock
Interests).
(a) If Class 7 votes to accept this Plan, on the Effective Date, or
as soon as thereafter as is practicable, each holder of an Allowed Interest
in Class 7 shall receive its pro rata share (determined by dividing the
amount of such holder's Allowed PIK Preferred Stock Interest by the total
amount of PIK Preferred Stock Interests that have not been Disallowed as of
the Effective Date) of 66.67% of New Warrants; provided, however, that in
the event Class 7 does not vote to accept the Plan, the holders of
Interests in Class 7 shall receive no distributions of any kind under the
Plan in respect of these Interests.
(b) As more specifically set forth in, and without in any way
limiting, Section 11.1 of this Plan, the distributions provided in this
Section 6.7 are in full settlement, release and discharge of each holder's
PIK Preferred Stock Interests and all other Claims against or Interests in
any and all of the Debtors, if any, directly or indirectly related to or
arising out of the transactions, agreements or instruments upon which such
PIK Preferred Stock Interest was based.
(c) Class 7 is Impaired. Holders of such Interests shall be entitled
to vote to accept or reject the Plan.
6.8. Treatment of Allowed Class 8 Interests (Old Common Stock Interests).
(a) On the Effective Date or as soon thereafter as is practicable,
each holder of an Allowed Interest in Class 8 shall receive its pro rata
share (determined by dividing the amount of such holder's Allowed Old
Common Stock Interest by the total amount of Old Common Stock Interests
that have not been Disallowed as of the Effective Date) of 33.33% of New
Warrants; provided, however, that in the event Class 7 or Class 8 does not
vote to accept the Plan, the holders of Interests in Class 8 shall receive
no distributions of any kind under the Plan in respect of those Interests.
(b) As more specifically set forth in, and without in any way
limiting, Section 11.1 of this Plan, the distributions provided in this
Section 6.8 shall be in full settlement, release and discharge of each
holder's Old Common Stock Interests and all other Claims against or
Interests in any and all of the Debtors, if any, of the holder directly or
indirectly related to or arising out of the transactions, agreements or
instruments upon which such Old Common Stock Interests was based.
(c) Class 8 is Impaired. Holders of such Interests shall be entitled
to vote to accept or reject the Plan.
6.9. Treatment of Allowed Class 9 Interests (Subsidiary Common Stock
Interests).
(a) Subject to the Combination Transactions, each holder of an
Interest in Class 9 shall retain such Interest and its respective share or
shares of common stock of the Debtors representing such Interest.
(b) As more specifically set forth in, and without in any way
limiting, Section 11.1 of this Plan, the distributions provided in this
Section 6.9 are in full settlement, release and discharge of each holder's
Subsidiary Common Stock Interests and all other Claims against or Interests
in any and all of the Debtors, if any, directly or indirectly related to or
arising out of the transactions, agreements or instruments upon which such
Subsidiary Common Stock Interest was based.
(c) Class 9 is Impaired but the holders of Allowed Subsidiary Common
Stock Interests, who are the proponents of this Plan, are deemed to have
accepted the Plan.
6.10. Treatment of Allowed Class 10 Interests (Old Other Interests).
(a) On the Effective Date, all Old Other Interests shall be canceled
and extinguished and holders shall not receive any distribution under the
Plan.
(b) Class 10 is Impaired. Holders of Class 10 Interests are deemed to
have rejected the Plan.
6.11. Allowance of Senior Notes Claims. The aggregate Senior Notes Claims
shall be deemed Allowed in the amount of $308,761,805.66, consisting of an
aggregate Allowed Claim of $102,766,666.67 in respect of the 12% Senior Notes
Claims and an aggregate Allowed Claim of $205,995,138.89 in respect of the
11 1/8% Senior Notes Claims.
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ARTICLE VII.
MEANS FOR IMPLEMENTATION OF THE PLAN
In addition to the provisions set forth elsewhere in this Plan, the
following shall constitute the means for implementation of this Plan.
7.1. Post-Confirmation Financing. On the Effective Date, the transactions
contemplated by the Post-Confirmation Credit Facility and/or an Alternative
Financing Transaction shall be consummated and thereupon become effective.
Attached as Exhibit "A" to this Plan is the Lehman Commitment Letter with
respect to the Post-Confirmation Credit Facility. The Proponents may elect to
pursue an Alternative Financing Transactions to substitute for the
Post-Confirmation Credit Facility. In this regard, the Debtors have executed the
CIT Commitment Letter attached as Exhibit "B" hereto to provide financing which,
in conjunction with the Rights Plan, could be utilized in the event that the
Post-Confirmation Credit Facility cannot be consummated. There can be no
assurances that the Proponents shall have obtained any other Alternative
Financing Transaction as of the Effective Date. In the event the Debtors enter
into an Alternative Financing Transaction, copies of all loan documents in
respect of any Alternative Financing Transaction, if available, shall be filed
with the Bankruptcy Court no later than three (3) Business Days prior to the
Confirmation Date and in no event later than five (5) Business Days prior to the
Effective Date.
7.2. Issuance and Exercise of Rights. The following provisions will be
effective to the extent that the Rights Plan is implemented as part of an
Alternative Financing Transaction pursuant to section 7.1 above.
(a) On the Rights Issue Date, 100% of the Rights and the
Oversubscription Options shall be issued to the holders of General
Unsecured Claims that have not been Disallowed as of the Confirmation Date.
The Rights and Oversubscription Options will not be transferable.
(b) On or before the Rights Expiration Date, each holder that has
exercised the Rights and/or Oversubscription Options held by such holder
shall deliver Cash to the rights agent under the Rights Plan in an amount
sufficient to exercise in full all of the Rights and Oversubscription
Options exercised by such holder in accordance with the terms of the Rights
Plan.
(c) Pursuant to the Exercise Agreements, the parties thereto will
exercise sufficient Oversubscription Options to ensure that following the
consummation of the Rights Plan, the Reorganized Debtors receive aggregate
cash proceeds equal to $44 million less the Additional Post-Confirmation
Term Loan Amount.
(d) To the extent that, as a result of the exercise of
Oversubscription Options, the issuance of the New Junior Secured Debentures
is oversubscribed, the principal amount of all New Junior Secured
Debentures that may be purchased upon the exercise of Oversubscription
Options will be reduced pro rata based on the amount of Unsecured Claims
held by the holders of such Oversubscription Options that have not been
Disallowed as of the Confirmation Date.
7.3. New Common Stock. On the Effective Date, Reorganized Harvard shall
reserve 20 million shares of New Common Stock to be issued to the holders of
Class 5 Claims in accordance with the terms of the Plan.
7.4. New Warrants. Attached as Exhibit "C" to this Plan is a copy of the
New Warrant Agreement.
(a) The New Warrants shall consist of warrants in the aggregate of 5%
of New Common Stock on a fully diluted basis at a price per share of New
Common Stock based on a net equity value of Reorganized Harvard of
$500 million. The New Warrants shall be distributed to the holders of
Allowed Interests in Class 7 and Class 8 as set forth in Sections 6.7 and
6.8 above respectively. The New Warrants shall expire on the fifth
anniversary of the Effective Date.
(b) In the event that Class 7 does not vote to accept the Plan, the
holders of Interests in Class 7 and Class 8 shall receive no distributions
of any kind under the Plan on account of their Interests. In the event that
Class 7 votes to accept the Plan but Class 8 does not vote to accept the
Plan, the holders of Interests in Class 8 shall receive no distributions of
any kind under the Plan on account of their Interests.
7.5. Registration Rights. On the Effective Date, Reorganized Harvard
shall enter into a Registration Rights Agreement which shall be filed by the
Debtors with the Bankruptcy Court no later than a date which is five (5) days
prior to the Confirmation Date.
7.6. Corporate Action for Reorganized Debtors. On the Effective Date,
Harvard shall be reincorporated in the State of Delaware as Reorganized Harvard.
Also on the Effective Date, the Debtors shall implement the Combination
Transactions described in Exhibit "D" of the Plan. On the Effective Date, the
issuance of the New Common Stock, the election or appointment, as the case may
be, of directors and officers pursuant to this Plan, and the other matters
provided in this Plan involving the corporate structure of the Reorganized
Debtors, shall be deemed to have occurred and shall be in effect from and after
the Effective Date pursuant to section 303 of the DGCL without any requirement
of further action by the stockholders or directors of the Debtors or the
Reorganized Debtors. Subject to the Combination Transactions, on the Effective
Date or as soon thereafter as is practicable, each of the Reorganized Debtors
shall file with the Secretary of State of the State of Delaware in accordance
with sections 103 and
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303 of the DGCL, the New Certificates of Incorporation. The New Certificate of
Incorporation for Reorganized Harvard shall provide for, among other things,
(i) the authorization of 50 million shares of New Common Stock, (ii) the
indemnification of officers and directors to the fullest extent permitted by
section 145 of the DGCL, (iii) the cancellation of the PIK Preferred Stock, Old
Common Stock and Old Other Interests and (iv) a prohibition on the issuance of
nonvoting equity securities to the extent, and only to the extent, required by
section 1123(a)(6) of the Bankruptcy Code. The New Certificate of Incorporation
for each of the other Reorganized Debtors shall contain a prohibition on the
issuance of nonvoting equity securities to the extent, and only to the extent,
required by section 1123(a)(6) of the Bankruptcy Code. The New Harvard
Certificate of Incorporation is annexed to this Plan as Exhibit "E."
7.7. Directors of the Reorganized Debtors. On the Effective Date, the
operation of Reorganized Harvard shall become the general responsibility of its
New Board of Directors, subject to, and in accordance with, the New Certificate
of Incorporation and the New By-Laws. The initial New Board of Directors shall
consist of seven (7) members identified on Exhibit "F" to this Plan. Such
directors shall be deemed elected or appointed, as the case may be, pursuant to
the Confirmation Order, but shall not take office and shall not be deemed to be
elected or appointed until the occurrence of the Effective Date. Those directors
and officers not continuing in office shall be deemed to have resigned therefrom
as of the Effective Date pursuant to the Confirmation Order. The New Board of
Directors of Reorganized Harvard will promptly appoint the members of the Board
of Directors for each of the other Reorganized Debtors.
7.8. Emergence Bonus Plan. On the Effective Date, the Reorganized Debtors
shall be deemed to have adopted and shall implement, without further corporate
authority or action, the Emergence Bonus Plan.
7.9. Incentive Plan. The Incentive Plan shall become effective as of the
Effective Date. Grants under the Incentive Plan shall not be effective until
after the Effective Date. In accordance therewith, on the Effective Date,
Reorganized Harvard shall reserve 15% of the New Common Stock on a fully diluted
basis for issuance to consultants, directors, executives and other employees of
the Reorganized Debtors that may be granted under the Incentive Plan.
7.10. Management Employment Agreements. The Management Employment
Agreements shall become effective as of the Effective Date. Such agreements
supersede all employment, severance, retention bonus and other agreements with
respect to Mr. Pollazzi, Mr. Vogtman, Mr. Toscano and Mr. Gagliardi in effect
prior to the Effective Date. On the Effective Date, all Claims and
Administrative Expenses of Mr. Pollazzi, Mr. Vogtman, Mr. Toscano and
Mr. Gagliardi against the Debtors under any employment, severance, retention
bonus and other agreements, if any, between such individual and the Debtors will
be governed by, and completely satisfied in accordance with, the terms and
conditions of each of their Management Employment Agreements.
7.11. Consulting Agreement. The Consulting Agreement shall become
effective as of the Effective Date. Such agreement supersedes all employment,
severance, retention bonus and other agreements with respect to Mr. Adams in
effect prior to the Effective Date. On the Effective Date, without limiting
Article XI of the Plan, all Claims and Administrative Expenses of Mr. Adams
individually against the Debtors under any employment, severance, retention
bonus and other agreements, if any, between John Adams and the Debtors, will be
governed by, and completely satisfied in accordance with, the terms and
conditions of his Consulting Agreement.
7.12. Approval of Agreements. The solicitation of votes on the Plan shall
be deemed a solicitation of the holders of New Common Stock for the approval of
the Emergence Bonus Plan, Incentive Plan and all other agreements and
transactions contemplated by this Plan, including, without limitation, those set
forth in Sections 7.1 through 7.11 and Section 7.21. Entry of the Confirmation
Order shall constitute approval of the Emergence Bonus Plan, Incentive Plan and
such other agreements and transactions as the Confirmation Order shall so
provide.
7.13. Retiree Benefits. After the Effective Date, the payment of retiree
benefits (as defined in section 1114 of the Bankruptcy Code), at the level
established pursuant to section 1114 of the Bankruptcy Code, shall continue for
the duration of the period that the applicable Debtor has obligated itself to
provide such benefits.
7.14. Employee Benefit Plans. Subject to the occurrence of the Effective
Date, all employee benefit plans, policies and programs of the Debtors and the
Debtors' obligations thereunder, shall survive confirmation of the Plan, remain
unaffected thereby, and not be discharged. Except as otherwise provided in this
Plan, employee benefit plans, policies, and programs shall include, without
limitations, all savings plans, retirement pension plans (to the extent not
otherwise affected by the PBGC Agreement), health care plans, disability plans,
severance benefit plans, life, accidental death and dismemberment insurance
plans (to the extent not executory contracts assumed under the Plan) and
Workers' Compensation Programs, but shall exclude all employees' equity or
equity-based incentive plans and Old Other Interests.
7.15. Listing of New Common Stock; Registration of Securiites.
Reorganized Harvard shall use its best efforts to (i) maintain its status as a
reporting company under the Exchange Act and cause, on the Effective Date, the
shares of New Common Stock issued hereunder to be listed on a national
securities exchange or, as to the New Common Stock, quoted in the national
market system of the National Association of Securities Dealers' Automated
Quotation System, (ii) in accordance with the terms of
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the Registration Rights Agreement, file and have declared effective as soon as
possible thereafter a registration statement or registration statements under
the Securities Act for the offering on a continuous or delayed basis in the
future of the shares of New Common Stock (the "Shelf Registration"), (iii) cause
to be filed with the Commission and have declared effective on or prior to the
Effective Date a registration statement on Form 10 under the Exchange Act with
respect to the New Common Stock, (iv) keep the Shelf Registration effective for
a three-year period and (v) supplement or make amendments to the Shelf
Registration, if required under the Securities Act or by the rules and
regulations promulgated thereunder, or in accordance with the terms of the
Registration Rights Agreement, and have such supplements and amendments declared
effective as soon as practicable after filing.
7.16. Distributions to Holders of Allowed Claims and Interests; Source of
Cash and Reorganization Securities for Distributions. On the Effective Date,
Reorganized Harvard shall deliver to the Disbursing Agent sufficient Cash and
Reorganization Securities to (a) make the Distributions to be made on the
Effective Date to the holders of Allowed Claims and Allowed Interests; and
(b) establish reserves for the Classes of Disputed Claims (other than those in
Class 5) and Disputed Interests as set forth below. Payments and other
distributions to be made pursuant to the Plan will be available from (v) the
Reorganized Debtors' funds, including funds provided to the Debtors in
connection with (i) the Post-Confirmation Credit Facility and the New Junior
Secured Debentures and/or (ii) Alternative Financing Transactions and (w) New
Common Stock, (x) New Warrants, (y) Rights and (z) Oversubscription Options.
7.17. Distribution to Holders of Senior Notes. For the purpose of
Distributions to holders of Allowed Senior Notes Claims, the relevant Indenture
Trustee shall be deemed to be the sole holder of all Allowed Senior Notes Claims
evidenced by the Senior Notes under the relevant Indentures. All Distributions
on account of Allowed Senior Notes Claims shall be distributed to such Indenture
Trustee, for further Distribution to holders of Senior Notes pursuant to the
terms of the applicable Indentures. The provisions of the relevant Indenture
shall govern the holding of undeliverable Distributions and the delivery of
Distributions to holders of Allowed Senior Notes Claims. No later than five
(5) Business Days prior to the Effective Date, the Indenture Trustee shall
provide the Debtors with a statement of the Indenture Trustee Claim projected
through the Effective Date. To the extent the Indenture Trustee Claim exceeds
$275,000, such excess portion shall be subject to Bankruptcy Court approval. On
the Effective Date, the Indenture Trustee Claim in an amount up to $275,000
shall be paid in Cash by the Reorganized Debtors upon receipt of an invoice and
the Reorganized Debtors shall reserve Cash on the Effective Date in the amount
by which the Indenture Trustee Claim exceeds $275,000. On the Effective Date,
subject to the payment of the Indenture Trustee Claim up to $275,000, the
establishment of the reserve set forth in the preceding sentence and
confirmation of this Plan occurring on or before December 31, 1998, all liens of
the Indenture Trustee in any Distributions shall be forever released and
discharged. Once each Indenture Trustee has completed performance of all duties
set forth in this Plan and the Confirmation Order and under the terms of the
respective Indentures, such Indenture Trustee, and its successors and assigns,
shall be relieved of all obligations as Indenture Trustee under the relevant
Indentures.
7.18. Cancellation and Surrender of Existing Securities; Cancellation of
Indentures.
(a) Cancellation of Existing Securities and Agreements. On the
Effective Date, the 12% Senior Notes, the 11 1/8% Senior Notes, the PIK
Preferred Stock, the Old Common Stock, the certificates of designations for
the PIK Preferred Stock and the Old Common Stock, and any options,
warrants, calls, subscriptions, or other similar rights or other agreements
or commitments, contractual or otherwise, obligating the Debtors to issue,
transfer, or sell any shares of PIK Preferred Stock, Old Common Stock, or
any other capital stock of the Debtors shall be canceled and the holders
thereof shall have no rights, and such instruments shall evidence no
rights, except the right to receive the Distributions to be made to holders
of such instruments under this Plan. After the Indenture Trustee or its
agents perform the Indenture Trustee's obligations under the Plan, the
Indenture Trustee and its agents, successors and assigns shall be
discharged of all of its obligations associated with the Indentures and
related agreements and released from all Claims arising in these
Chapter 11 Cases, and as of the Effective Date, such Indentures shall be
deemed canceled, except that such cancellation shall not impair the rights
of the holders of the 12% Senior Notes Claims and the 11 1/8% Senior Notes
Claims to receive Distributions under the Plan or the rights of the
Indenture Trustee under its charging lien pursuant to the Indentures to the
extent that the Indenture Trustee has not received payment and, to the
extent applicable, a reserve has been established on account of the
Indenture Trustee Claim.
(b) Surrender of Existing Securities. As a condition to receiving
any Distribution under the Plan, each holder of a promissory note, share
certificate, or other instrument evidencing a Claim or Interest must
surrender such promissory note, share certificate, or other instrument to
the Reorganized Debtors or their designee. The Reorganized Debtors appoint
the Indenture Trustees as their designees to receive the 12% Senior Notes
and the 11 1/8% Senior Notes. Any holder of a Claim or Interest that fails
to (a) surrender such instrument or (b) execute and deliver and affidavit
of loss and/or indemnity reasonably satisfactory to the Reorganized Debtors
and furnish a bond in the form, substance, and amount reasonably
satisfactory to the Reorganized Debtors before the later to occur of
(i) the second anniversary of the Effective Date and (ii) six (6) months
following the date such holder's Claim becomes an Allowed Claim, shall be
deemed to have forfeited all rights, Claims, and/or Interests and may not
participate in any Distribution under the Plan.
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7.19. Release of Liens and Perfection of Liens. Except as otherwise
provided in the Plan or in any contract, instrument or other agreement or
document entered into in connection with the consummation of the Plan: (a) each
holder of (i) a Miscellaneous Secured Claim; (ii) the Prepetition Lenders'
Claim; (iii) a Claim that is purportedly secured; and/or (iv) a judgment,
mechanics or similar lien, shall on or immediately before the Effective Date:
(x) turn over and release to the Reorganized Debtors any and all property of the
Debtors that secures or purportedly secures such Claim, as they pertain to the
properties currently owned or leased by the Debtors or such lien shall
automatically, and without further action by the Debtors or Reorganized Debtors,
be deemed released; and (y) execute such documents and instruments as the
Reorganized Debtors request to evidence such Claim holder's release of such
property or lien; and (b) on the Effective Date, all right, title and interest
in any and all property of the Debtors' estates shall revert or be transferred
to the Reorganized Debtors free and clear of all Claims and Interests,
including, without limitation, liens, escrows, charges, pledges, encumbrances
and/or security interests of any kind. No distribution hereunder shall be made
to or on behalf of any Claim holder unless and until such holder executes and
delivers to the Debtors or Reorganized Debtors such release of liens or
otherwise turns over and releases such Cash, pledge, or other possessory lien.
Any such holder that fails to execute and deliver such release of liens within
120 days of the Effective Date shall be deemed to have no further Claim against
the Debtors, the Reorganized Debtors or their assets or property in respect of
such Claim and shall not participate in any distribution hereunder.
Notwithstanding the immediately preceding sentence, any such holder of a
Disputed Claim shall not be required to execute and deliver such release until
such time as the Claim is Allowed or Disallowed.
7.20. Election of Treatment in Class 6. Each holder of a Claim in
Class 5 may elect, in the Ballot by which it votes to accept or reject the Plan,
to reduce the amount of its Claim to $500.00 or less and thereby be deemed a
holder of a Claim in Class 6 for purposes of voting and payment under the Plan.
Holders of Senior Notes Claims shall not be entitled to make an election into
Class 6 pursuant to this Plan. Any such election shall be effective only upon
the receipt thereof by the Debtors prior to the Confirmation Date. Once the
election is made, and received by the Debtors, such election shall be
irrevocable, but shall not preclude the Debtors or other parties in interest
from objecting to such Claim as reduced.
7.21. Terms of New Junior Secured Debentures. The following is a summary
of certain of the principal economic terms of the New Junior Secured Debentures
which would be issued by the Reorganized Debtors under the Rights Plan. There
will not be a Rights Plan and no New Junior Secured Debentures shall be issued
unless the Debtors enter into an Alternative Financing Transaction which
includes the Rights Plan. If New Junior Secured Debentures are to be issued
under this Plan, a copy of the New Junior Secured Debentures Indenture will be
filed and served at least five (5) Business Days before the Effective Date.
<TABLE>
<S> <C>
Issuer.......................................... Reorganized Debtors.
Aggregate Principal Amount...................... $44 million, consisting of $40 million loan Cash proceeds on the
Effective Date plus $4 million closing fee (as described below).
To the extent that the term loan component of the Post-Confirmation
Credit Facility exceeds $50 million or the Debtors enter into an
Alternative Financing Transaction in substitution of the New Junior
Secured Debentures, the cash proceeds portion of the New Junior Secured
Debentures will be reduced on a dollar for dollar basis and the amount
of the closing fee will be reduced proportionately.
Stated Maturity................................. Fifth anniversary of the Effective Date.
Closing Fee..................................... $4 million. The closing fee shall be payable on the Effective Date and
shall be fully earned and non-refundable as of the Effective Date.
Annual Facility Fee............................. Annual facility fee of (i) 2% of the initial aggregate principal amount
of New Junior Secured Debentures outstanding on the Effective Date and
(ii) for each subsequent payment on each anniversary of the Effective
Date, 1% of the aggregate principal amount of the New Junior Secured
Debentures then outstanding on such anniversary. The annual facility
fee will be payable annually in cash in advance.
Interest Rate................................... Greater of (i) 150 basis points above the highest rate in effect from
time to time on any term loan under the Post-Confirmation Credit
Facility and (ii) 13% annum.
</TABLE>
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<TABLE>
<S> <C>
Interest Payment................................ On each interest payment date, interest (as determined above) will be
payable as follows: (i) 7% in Cash, and (ii) 6%, at the Reorganized
Debtors' option, (a) in the form of New Junior Secured Debentures in
lieu of Cash equal to the amount of such interest or (b) in Cash.
Interest will be payable on a quarterly basis in arrears.
To the extent the interest rate exceeds 13% per annum in accordance
with clause (i) of the Interest Rate provision above, the Cash and pay-
in-kind portion of the interest payment would be increased
proportionally.
Prepayment...................................... The Reorganized Debtors may prepay the New Junior Secured Debentures at
any time with a prepayment premium of 3% of the initial aggregate
principal amount of New Junior Secured Debentures to be prepaid.
Collateral...................................... A lien on all assets and properties of Reorganized Harvard and its
subsidiaries, subject only to the liens that will secure their
obligations to the lenders under the Post-Confirmation Credit Facility
and such other liens as may be acceptable to the holders of the New
Junior Secured Debentures.
Intercreditor Agreement......................... The lenders under the Post-Confirmation Credit Facility and the New
Indenture Trustee will enter into the Intercreditor Agreement. Under
the Intercreditor Agreement, the Reorganized Debtors will be permitted
to prepay the New Junior Secured Debentures with any proceeds received
from the issuance by the Reorganized Debtors of (i) equity or
(ii) indebtedness that would rank either pari passu with, or
subordinate to, the New Junior Secured Debentures.
Covenant on Limitation on Liens and
Debt.......................................... The New Junior Secured Debentures Indenture contains customary
covenants including, without limitation, the following:
(i) No granting of additional liens, except for liens for financing new
equipment and machinery purchases and acquisitions, provided, that such
liens are only against the purchase or acquired assets.
(ii) No Issuer shall incur, create, assume, become or be liable in any
manner with respect to, or permit to exist, any indebtedness, except
(a) indebtedness to the lenders under the Post-Confirmation Credit
Facility, (b) indebtedness permitted under the Post-Confirmation Credit
Facility, and (c) indebtedness outstanding under the New Junior Secured
Debentures.
(iii) Without the prior written consent of the holders of the New
Junior Secured Debentures, (a) no Issuer shall request or become liable
in any manner with respect to, or permit to exist any advance under the
Post-Confirmation Credit Facility that would, after giving effect
thereto, cause all such advances under the Post-Confirmation Credit
Facility to exceed the aggregate amount of advances permitted under the
borrowing base formula in effect under the Post-Confirmation Credit
Facility as of the Effective Date (the "Effective Date Formula"), plus
an agreed upon overadvance amount, and (b) no Issuer shall request,
permit or consent to any waiver, modification or amendment to the
Effective Date Formula or any other provision of the Post-Confirmation
Credit Facility.
</TABLE>
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ARTICLE VIII.
DISPUTED CLAIMS, DISPUTED INTERESTS, RESERVES
AND MISCELLANEOUS DISTRIBUTION PROVISIONS
8.1. Objections. An objection to the allowance of a Claim or Interest
shall be in writing and may be filed with the Court by the Debtors or
Reorganized Debtors, as the case may be, or any other party in interest, at any
time on or before the Objection Deadline. The "Objection Deadline" is the later
of (a) the 120th day following the Effective Date unless such period is extended
by order of the Bankruptcy Court, (b) sixty (60) days after the filing of the
proof of such Claim or Interest or (c) such other date set by order of the
Bankruptcy Court (the application for which may be made on an ex parte basis).
The objecting party shall serve a copy of each such objection upon the holder of
the Claim or Interest to which it pertains and upon the Debtors or Reorganized
Debtors, as the case may be and, prior to the Effective Date, the Creditors'
Committee. The Debtors or the Reorganized Debtors will prosecute each objection
to a Claim or Interest until determined by a Final Order unless the Debtors or
Reorganized Debtors (i) compromise and settle an objection to a Claim or
Interest by written stipulation, subject to Bankruptcy Court approval, if
necessary or (ii) withdraw an objection to a Claim or Interest.
8.2. Amendments to Claims; Claims Filed After the Confirmation
Date. Except as otherwise provided in this Plan, after the Confirmation Date, a
Claim may not be filed or amended without the authorization of the Bankruptcy
Court and, even with such Bankruptcy Court authorization, may be amended by the
holder of such Claim solely to decrease, but not to increase, the Face Amount or
priority. Except as otherwise provided in this Plan, any new or amended Claim
filed after the Confirmation Date shall be deemed disallowed in full and
expunged without any action by the Debtors or Reorganized Debtors, unless the
Claim holder has obtained prior Bankruptcy Court authorization for the filing.
8.3. Reserves for Disputed Claims and Disputed Interests.
(a) On the Effective Date, Reorganized Harvard shall reserve
20 million shares of New Common Stock to be issued to the holders of
Class 5 Claims in accordance with the terms of the Plan.
(b) On the Effective Date, Reorganized Harvard shall transmit to the
Disbursing Agent, and the Disbursing Agent shall reserve for the account of
each holder of a Disputed Claim (other than Class 5 Claims) or Interest,
(i) the property which would otherwise be distributable to such holder on
such date in accordance with the Plan were such Disputed Claim or Disputed
Interest an Allowed Claim or Allowed Interest, as applicable, on such date,
in the Face Amount thereof, or such other amount as ordered by the
Bankruptcy Court or (ii) such other property as such holder and the
Reorganized Debtors may agree. Property reserved under this
Section 8.3(b) shall be set aside and segregated by Class of Claims and
Interests and, in the case of Cash, Cash payments in respect thereof, to
the extent practicable, held by the Disbursing Agent in an interest bearing
escrow fund (which may be a single account for each Class, provided that
separate book entries for each Claim or Interest be maintained by the
Disbursing Agent) to be established and maintained by the Disbursing Agent
pending resolution of such Disputed Claims or Disputed Interests, provided,
however, that Cash shall be invested in a manner consistent with the
requirements of section 345 of the Bankruptcy Code or otherwise ordered by
the Bankruptcy Court. To the extent such Disputed Claim or Disputed
Interest becomes an Allowed Claim or Allowed Interest, the property so
reserved for the holder thereof, together with any proceeds thereon, shall
be distributed by the Disbursing Agent to such holder pursuant to, and to
the extent provided for in, the Plan.
(c) Any voting rights of Reorganization Securities held in reserve in
respect of a Disputed Claim or Disputed Interest shall be suspended until
such securities are released from such reserve.
8.4. Fluctuation in Value of Securities. The value of the Reorganization
Securities held in reserve under Section 8.3 of the Plan is likely to fluctuate.
The Debtors and Reorganized Debtors do not represent or warrant that the value
of any Reorganized Securities will not decline after the Effective Date and they
do not otherwise assume any liability or risk of loss which the holder of a
Disputed Claim or Disputed Interest which becomes an Allowed Claim or Allowed
Interest, as applicable, after the Effective Date may suffer by reason of any
decline in value of a reserved Reorganized Securities pending determination of
the amount of such Disputed Claim. The risk or benefit of any appreciation or
depreciation in the value of any reserved Reorganized Securities shall be borne
by the party to whom such Reorganized Securities is ultimately distributed.
8.5. Payment or Distribution of Disputed Claim or Disputed Interest. No
payment or distribution will be made in respect of a Disputed Claim or Disputed
Interest unless and until such Disputed Claim or Disputed Interest becomes an
Allowed Claim or Allowed Interest. Notwithstanding the foregoing, on or as soon
as practicable after the Objection Deadline, the Reorganized Debtors shall make
Distributions to holders of Disputed Claims or Disputed Interests to the extent,
and only to the extent, the portion of such Claim or Interest is not subject to
a pending objection.
8.6. Timing of Payment or Distribution When a Disputed Claim or Disputed
Interest Becomes an Allowed Claim or Allowed Interest. Subject to the
provisions of this Plan, Cash payments and Distributions with respect to each
Disputed Claim or Disputed Interest that becomes an Allowed Claim or Allowed
Interest that would have otherwise been made had the Claim or Interest been
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an Allowed Claim or Allowed Interest on the Effective Date shall be made within
thirty (30) days after the date that such Disputed Claim or Disputed Interest
becomes an Allowed Claim or Allowed Interest.
8.7. Excess Reserves. Upon any Disputed Claim or Disputed Interest
becoming a Disallowed Claim or Disallowed Interest, as applicable, in whole or
in part, the Cash and Reorganization Securities reserved for the payment of or
distribution on the disallowed portion of such Disputed Claim or Disputed
Interest including any interest attributable thereto, together with any Cash and
non-Cash dividends and interest earned thereon, shall immediately and
irrevocably vest in the Reorganized Debtors and the Disbursing Agent shall
transmit such property to the Reorganized Debtors, whereupon the Reorganized
Debtors shall thereafter be empowered to take whatever steps may be necessary to
exercise control over such property. Shares of New Common Stock that are
reserved pursuant to section 8.3 for issuance but not issued shall remain
authorized but unissued New Common Stock.
8.8. Undeliverable or Unclaimed Distributions. Any Entity that is
entitled to receive a Cash Distribution under this Plan but that fails to cash a
check within 120 days of its issuance shall be entitled to receive a reissued
check from the Reorganized Debtors for the amount of the original check, without
any interest, if such Entity requests the Reorganized Debtors or their designee
to reissue such check and provides the Reorganized Debtors or their designee, as
the case may be, with such documentation as the Reorganized Debtors or their
designee requests to verify that such Entity is entitled to such check, prior to
the later of (a) the second anniversary of the Effective Date or (b) six
(6) months after such Claim becomes an Allowed Claim. If an Entity fails to cash
a check within 120 days of its issuance and fails to request reissuance of such
check prior to the later to occur of (a) the second anniversary of the Effective
Date or (b) six months following the date such Entity's Claim becomes an Allowed
Claim, such Entity shall not be entitled to receive any distribution under this
Plan with respect to the amount of such check. If the distribution to any holder
of an Allowed Claim or Interest is returned to the Reorganized Debtors or their
designee as undeliverable, no further distributions will be made to such holder
unless and until the Reorganized Debtors or their designee is notified in
writing of such holder's then-current address.
All claims for undeliverable distributions must be made on or before the
later to occur of (i) the second anniversary of the Effective Date and (ii) six
months following the date such Entity's Claim becomes an Allowed Claim or
Allowed Interest. After such date, all unclaimed property shall revert to the
Reorganized Debtors and the claim of any holder or successor to such holder with
respect to such property shall be discharged and forever barred notwithstanding
any federal or state escheatment laws to the contrary.
8.9. Allocation of Consideration. The aggregate consideration to be
distributed to the holders of Allowed Claims in each Class under this Plan shall
be treated as first satisfying an amount equal to the stated principal amount of
the Allowed Claim for such holders and any remaining consideration as satisfying
accrued, but unpaid, interest if any.
8.10. Distributions to the Holders of General Unsecured Claims. For
purposes of formulating this Plan, the Debtors have estimated the aggregate
total of Allowed General Unsecured Claims, after the resolution of all disputes,
to be approximately $450,000,000. In connection with the process of resolution
of Disputed Claims, the Bankruptcy Court will determine the amount of ultimately
Allowed General Unsecured Claims and consequently, the final distributions to
holders of Allowed General Unsecured Claims pursuant to this Plan.
8.11. Limitations on Amounts to be Distributed to Holders of Allowed
Deductible Claims. Distributions under the Plan to each holder of an Allowed
Deductible Claim shall be in accordance with the treatment provided under the
Plan for the Class in which such Allowed Deductible Claim is classified and such
distribution shall be in full settlement, release and discharge of each holder's
Allowed Deductible Claim. A holder of an Allowed Deductible Claim shall be
barred from attempts to collect on such Deductible Claim from the applicable
insurance carrier or administrator. Nothing in this section or this Plan shall
constitute a waiver of any claim, debt, right, cause of action or liability that
any entity may hold with respect to the Insured Portion against any other
entity, including the Debtors' insurance carriers. To the extent permitted by
applicable law, the holder of an Insured Claim shall have the right with respect
to the Insured Portion of such Claim to proceed directly against the applicable
Debtor's or Reorganized Debtor's insurance carrier. In addition, in
jurisdictions where a holder of an Insured Portion is prevented from proceeding
directly against the applicable Debtor's insurance carrier, the applicable
Debtor or Reorganized Debtor, as the case may be, will proceed against the
insurance carrier. Any proceeds that are received by the Debtor or Reorganized
Debtor, as the case may be, from the insurance carrier with respect to such
Insured Portion will be distributed to the holder of such Insured Portion. Other
than as set forth in this Section 8.11, the Debtors and Reorganized Debtors will
have no liability with respect to the Insured Claims and no Distributions will
be made to holders of Insured Claims or the Debtors' insurance carriers with
respect to such Claims. Notwithstanding anything in this Plan to the contrary,
in their sole discretion, the Debtors or Reorganized Debtors, as the case may
be, may pay any Secured Deductible Claim, in Cash, even where no proof of claim
is timely filed to prevent any insurance carrier from executing on collateral
held by or for the benefit of such insurance carrier. The treatment set forth in
this Section 8.11 shall be in full settlement, release and discharge of Insured
Claims.
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8.12 Transmittal of Distributions and Notices.
(a) Any property or notice other than Cash Distributions made through
Section 8.13 which an Entity is or becomes entitled to receive pursuant to
the Plan shall be delivered by regular mail, postage prepaid, in an
envelope addressed to that Entity at the address indicated on any notice of
appearance filed by that Entity or his authorized agent prior to the
Effective Date. If no notice of appearance has been filed, notice shall be
sent to the address indicated on a properly filed proof of Claim or
Interest or, absent such a proof of Claim or Interest, the address that is
Scheduled for that Entity or register maintained for register securities.
The date of distribution shall be the date of mailing, and property
distributed in accordance with this Section shall be deemed delivered to
such Entity regardless of whether such property is actually received by
that Entity.
(b) A holder of a Claim or Interest may designate a different address
for notices and distributions by notifying the Debtors or the Reorganized
Debtors, or with respect to a holder of a Senior Notes Claim, the Indenture
Trustee, of that address in writing. The new address shall be effective
upon receipt by the Debtors or Reorganized Debtors, as the case may be.
(c) Notwithstanding anything contrary herein and above, to the extent
that a Distribution is required to be made to a Paying Agent, the address
for the relevant Claim or Interest shall be the address of the relevant
Paying Agent.
8.13. Method of Cash Distributions. Any Cash payment to be made pursuant
to this Plan may be made by draft, check, wire transfer, or as otherwise
required or provided in any relevant agreement or applicable law.
8.14. Distributions on Non-Business Days. Any Distribution due on a day
other than a Business Day shall be made, without interest, on the next Business
Day.
8.15. Rounding. Notwithstanding any other provision of the Plan, only
whole numbers of shares of Reorganization Securities shall be distributed. All
Allowed Claims or Allowed Interests of a holder in a particular Class shall be
aggregated and treated as one Allowed Claim or Allowed Interest for purposes of
distribution. If any calculated distribution on account of such Allowed Claim or
Allowed Interest would otherwise result in the distribution of a number of
shares of New Common Stock or New Warrants that is not a whole number, then the
actual distribution of shares of such stock or such warrants shall be rounded to
the nearest whole number, with one-half being rounded up to the nearest whole
number, unless, in the case of Interests, such rounding results in a Class of
Allowed Interests receiving more than the aggregate number of New Warrants
allotted for distribution to that Class. In such a case, the actual distribution
of New Warrants shall be rounded so that the total amount of New Warrants
distributed to the Class will be no more than the amount allotted for
distribution in that Class. Holders of Allowed Claims or Allowed Interests that
would be entitled to fractional shares of New Common Stock or to fractional New
Warrants but for this provision shall receive no consideration therefor because
such amount would be de minimis.
8.16. Withholding Taxes. Any federal, state or local withholding taxes or
other amounts required to be withheld under applicable law shall be deducted
from distributions hereunder. All Entities holding Claims shall be required to
provide any information necessary to effect the withholding of such taxes.
8.17. Disputed Distribution. If any dispute arises as to the identity of
a holder of an Allowed Claim or an Allowed Interest who is to receive any
distribution, the Disbursing Agent or the Indenture Trustee, as the case may be,
may, in lieu of making such distribution to such Entity, make such distribution
into an escrow account until the disposition thereof shall be determined by
Final Order of the Bankruptcy Court or by written agreement among the interested
parties to such dispute.
8.18. Retention of Rights to Pursue Causes of Action. Pursuant to
section 1123(b)(3) of the Bankruptcy Code, the Reorganized Debtors (as
representatives of the Debtors' estates) will retain and have the exclusive
right to enforce against any Entity any and all Causes of Action (including,
without limitation, all Causes of Action arising under sections 510, 544 through
550 and 553 of the Bankruptcy Code or otherwise arising under the Bankruptcy
Code and/or those arising under other applicable law) that arose before the
Effective Date, including all Causes of Action of a trustee and
debtor-in-possession under the Bankruptcy Code, other than those expressly
released or compromised as part of or pursuant to this Plan.
ARTICLE IX.
SUBSTANTIVE CONSOLIDATION
The Plan contemplates and is predicated upon entry of the Confirmation
Order effecting the substantive consolidation of the Chapter 11 Cases of the
Debtors into a single chapter 11 case solely for the purposes of all actions
associated with confirmation and consummation of the Plan. On the Confirmation
Date or such other date as may be set by a Final Order of the Bankruptcy Court,
but subject to the occurrence of the Effective Date: (i) all Intercompany Claims
by and among the Debtors shall be eliminated and extinguished; (ii) solely for
the purposes of this Plan and the distributions and transactions contemplated
hereby, all assets and liabilities of the Debtors shall be treated as though
they were merged; (iii) all prepetition cross-corporate guarantees of the
Debtors shall be eliminated; (iv) any obligation of any Debtor and all
guarantees thereof executed by one or more of the Debtors shall be deemed to be
one obligation of the consolidated Debtors; (v) any Claims filed or to be filed
in connection with any such obligation
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and such guarantees shall be deemed one Claim against the consolidated Debtors;
(vi) each and every Claim filed in the individual Chapter 11 Case of any of the
Debtors shall be deemed Filed against the consolidated Debtors in the
consolidated Chapter 11 Cases and shall be deemed a single obligation of all of
the Debtors under the Plan on and after the Confirmation Date; (vii) all
duplicative claims (identical in both amount and subject matter) filed against
more than one of the Debtors will be automatically expunged so that only one
Claim survives against the consolidated Debtors but in no way shall be deemed
Allowed by reason of this Section 9.1; and (viii) the consolidated Debtors will
be deemed, for purposes of determining the availability of the right of set-off
under section 553 of the Bankruptcy Code, to be one entity, so that, subject to
other provisions of section 553 of the Bankruptcy Code, the debts due to a
particular Debtor may be offset against claims against such Debtor or another
Debtor. On the Confirmation Date, and in accordance with the terms of the Plan
and the consolidation of the assets and liabilities of the Debtors, all Claims
based upon guarantees of collection, payment or performance made by the Debtors
as to the obligations of another Debtor or of any other Person shall be
discharged, released and of no further force and effect; provided, however, that
nothing herein shall affect the obligations of each of the Debtors under the
Plan. Upon separate motion to the Bankruptcy Court, the Debtors will seek entry
of an order (which may be the Confirmation Order) providing for the substantive
consolidation of the Chapter 11 Cases and the assets and liabilities of the
Debtors. Notwithstanding the provisions of this paragraph, subject to the
Combination Transactions, each of the Debtors shall, as Reorganized Debtors,
continue to exist after the Effective Date as separate corporate entities.
ARTICLE X.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
10.1. Assumption Generally. Except as otherwise provided in this Plan or
in any order of the Bankruptcy Court, subject to the occurrence of the Effective
Date, on the Effective Date, pursuant to section 365 of the Bankruptcy Code, all
executory contracts and unexpired leases not listed on the Schedule of Rejected
Contracts to be served and filed by the Debtors at least five days before the
Confirmation Hearing (the "Schedule of Rejected Contracts"), or which is not the
subject of a motion to reject as of the Confirmation Date, and is not rejected
under Section 10.6 hereof, are assumed, subject to the same rights that the
Debtors or the Reorganized Debtors held or hold at, on, or after the Petition
Date to modify or terminate such agreements under applicable nonbankruptcy law.
Each contract and lease assumed under this Section shall be assumed only to the
extent, if any, that it constitutes an executory contract or unexpired lease,
and nothing contained herein shall constitute an admission by the Debtors or the
Reorganized Debtors that such contract or lease is an executory contract or
unexpired lease or that the Debtors or the Reorganized Debtors have any
liability thereunder. To the extent the Bankruptcy Court, or any other court of
competent jurisdiction, determines, either before, on, or after the Effective
Date, that any agreement in the form of a lease of real or personal property
identified for assumption in this Article X of the Plan, is, in fact, a secured
transaction, the resulting secured indebtedness arising from such determination
shall be treated in accordance with the applicable section of the Plan. Each
executory contract and unexpired lease assumed pursuant to this Article X by any
Debtor shall revest in and be fully enforceable by such Reorganized Debtor in
accordance with its terms, except as modified by the provisions of the Plan, any
order of the Bankruptcy Court authorizing and providing for its assumption, or
applicable federal law.
10.2. Approval of Assumptions. Subject to the occurrence of the Effective
Date, the Confirmation Order (except as otherwise provided therein) shall
constitute an order of the Bankruptcy Court approving the assumptions,
revestments and, to the extent not subject to dispute as set forth in
Section 10.4 hereof, the "cure" amounts described in this Article X and the Cure
Amount Schedule attached to the Schedule of Rejected Contracts pursuant to
section 365 of the Bankruptcy Code effective as of the Effective Date.
10.3. Objections to Assumption of Executory Contracts and Unexpired
Leases.
(a) Any party objecting to the Debtors' proposed assumption of an
executory contract or unexpired lease based on a lack of adequate assurance
of future performance or on any ground other than the adequacy of the
"cure" amount set forth in the Cure Amount Schedule, shall file and serve a
written objection to the assumption of such contract or lease within the
same deadline and in the same manner established for filing objections to
Confirmation of this Plan. Failure to file an objection within the time
period set forth above shall constitute consent to the assumption and
revestment of those contracts and leases, including an acknowledgment that
the proposed assumption provides adequate assurance of future performance.
(b) If any party files an objection to assumption based on any ground
other than the adequacy of the "cure" amount set forth in the Cure Amount
Schedule, and the Bankruptcy Court ultimately determines that the Debtors
cannot assume the executory contract or lease or that the Debtors cannot
provide adequate assurance of future performance as proposed or in any
modified proposal submitted by the Debtors or the Reorganized Debtors, then
the unexpired lease or executory contract shall automatically thereupon be
deemed to have been included on the Schedule of Rejected Contracts and
shall be rejected pursuant to Section 10.6 hereof.
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10.4. Objections to Proposed "Cure" Amounts.
(a) The Debtors believe that any executory contract of the Debtors
that is not listed on the Schedule of Rejected Contracts or in the Cure
Amount Schedule may be assumed by the Debtors without the payment of any
monetary cure amount. Any party to an executory contract or unexpired lease
to be assumed that asserts arrearages or damages pursuant to
section 365(b)(1) of the Bankruptcy Code that exceeds the amount set forth
in the Cure Amount Schedule, or which is not listed therein and pertains to
an executory contract not listed in the Schedule of Rejected Contracts must
file and serve an objection to the proposed cure amount within the same
deadline and in the same manner established for filing objections to
Confirmation of this Plan. Failure to assert arrearages different from the
amount set forth on the Cure Amount Schedule or which pertains to an
executory contract not listed in the Schedule of Rejected Contracts or the
Cure Amount Schedule within the time period set forth above shall
constitute consent to the cure amount set forth in the Cure Amount Schedule
or to the Debtors' position that no cure amount must be paid and an
acknowledgment that the amount identified for "cure" on the Cure Amount
Schedule is the only amount necessary to cover any and all outstanding
defaults under the respective executory contract or unexpired lease to be
assumed and an acknowledgment that no other defaults exist under said
contract or lease.
(b) To the extent that any objections to the amounts set forth in the
Cure Amount Schedule are timely filed and served and such objections are
not resolved between the Debtors and the objecting parties, the Bankruptcy
Court shall resolve such disputes at a hearing to be held at a date to be
determined by the Bankruptcy Court at the Confirmation Hearing. The
resolution of such disputes shall not affect the Debtors' assumption of the
contracts or leases that are subject of such a dispute, but rather shall
affect only the "cure" amount the Debtors must pay in order to assume such
contract or lease. Notwithstanding the immediately preceding sentence, if
the Debtors in their discretion (with the prior written consent of the
Creditors' Committee) determine that the amount asserted to be the
necessary "cure" amount would, if ordered by the Bankruptcy Court, make the
assumption of the contract or lease imprudent, then the Debtors may, prior
to or at the Confirmation Hearing, elect to (1) reject the contract or
lease pursuant to Section 10.6 hereof, or (2) request an expedited hearing
on the resolution of the "cure" dispute, exclude assumption or rejection of
the contract or lease from the scope of the Confirmation Order, and retain
the right to reject the contract or lease pursuant to Section 10.6 hereof
pending the outcome of such dispute.
10.5. Payment Related to Assumption of Executory Contracts and Unexpired
Leases. If not the subject of dispute pursuant to Section 10.4 hereof as of
Confirmation Date, any monetary defaults under each executory contract and
unexpired lease to be assumed under the Plan shall be satisfied by the Debtors,
pursuant to section 365(b)(l) of the Bankruptcy Code, by payment of the amount
set forth in the Cure Amount Schedule or such other amount as ordered by the
Bankruptcy Court or agreed upon by the Debtors in Cash within 60 days following
the Effective Date or on such other terms as agreed to by the parties to such
executory contract or unexpired lease. In the event of a dispute pursuant to
Section 10.4, payment of the amount otherwise payable hereunder shall be made
following entry of a Final Order or agreement by the Debtors or the Reorganized
Debtors, as the case may be, with the consent of the Creditors' Committee if
such agreement is reached prior to the Effective Date, as the case may be, and
the party to the contract or lease.
10.6. Executory Contracts and Unexpired Leases to be Rejected.
(a) Effective as of, and subject to the occurrence of, the Effective
Date, the executory contracts and unexpired leases listed on the Schedule
of Rejected Contracts shall be rejected as of the Effective Date. The
Debtors may amend the Schedule of Rejected Contracts at any time prior to
the Confirmation Hearing (i) with the prior written consent of the
Creditors' Committee, by filing such amendment with the Bankruptcy Court
and serving it on parties directly affected by the amendment; or (ii) with
Bankruptcy Court approval after a hearing on notice to the Creditors'
Committee and the affected parties. Listing a contract or lease by category
above or on the Schedule of Rejected Contracts shall not constitute an
admission by the Debtors or the Reorganized Debtors that such contract or
lease, including related agreements, is an executory contract or unexpired
lease or that the Debtors or the Reorganized Debtors have any liability
thereunder.
(b) The Confirmation Order shall constitute an order of the
Bankruptcy Court approving such rejections on the Confirmation Date,
pursuant to section 365 of the Bankruptcy Code, effective as of the
Effective Date. Any party to an executory contract or unexpired lease
identified for rejection as provided herein may, within the same deadline
and in the same manner established for filing objections to Confirmation,
file any objection thereto. Failure to file any such objection within the
time period set forth above shall constitute consent and agreement to the
rejection.
10.7. Bar Date for Rejection Damages. If the rejection of an executory
contract or unexpired lease pursuant to Section 10.6 above gives rise to a Claim
by the other party or parties to such contract or lease, such Claim, to the
extent that it is timely filed and is a Miscellaneous Secured Claim, shall be
classified in Class 3, and to the extent that it is timely filed and is a
General Unsecured Claim, shall be classified in Class 5 or Class 6, as the case
may be; provided, however, that in either event any Claim arising from the
rejection shall be forever barred and shall not be enforceable against the
Debtors, the Reorganized Debtors, their affiliates, their successors, estates,
or their properties, unless a proof of claim is filed and served on the Debtors
or the Reorganized Debtors within
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thirty (30) days after the earlier of (a) the date of the entry of the first
order of the Bankruptcy Court rejecting the executory contract or unexpired
lease, or (b) the Confirmation Date.
10.8. Contracts Entered Into on or After the Petition Date. On the
Effective Date, all contracts, leases, and other agreements entered into by the
Debtors on or after the Petition Date, which agreements have not been terminated
in accordance with their terms on or before the Confirmation Date shall revest
in and remain in full force and effect as against the Reorganized Debtors and
the other parties to such contracts, leases and other agreements.
ARTICLE XI.
DISCHARGE, RELEASES AND INDEMNIFICATION
11.1. Discharge of All Claims and Interests and Releases.
(a) Except as otherwise specifically provided by this Plan, the
confirmation of this Plan (subject to the occurrence of the Effective Date)
shall discharge the Debtors and Reorganized Debtors from any debt that
arose before the Confirmation Date, and any debt of the kind specified in
sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not a
proof of Claim is filed or is deemed filed, whether or not such Claim is an
Allowed Claim, and whether or not the holder or such Claim has voted on
this Plan.
(b) Except as otherwise specifically provided by this Plan, the
distributions and rights that are provided in this Plan shall be in
complete satisfaction, discharge and release, effective as of the
Confirmation Date (but subject to the occurrence of the Effective Date) of
(i) all Claims and Causes of Action against, liabilities of, liens on,
obligations of and Interests in the Debtors or Reorganized Debtors or the
direct or indirect assets and properties of the Debtors or Reorganized
Debtors whether known or unknown, and (ii) all Causes of Action (whether
known or unknown, either directly or derivatively through the Debtors or
Reorganized Debtors) against, claims (as defined in section 101 of the
Bankruptcy Code) against, liabilities (as guarantor of a Claim or
otherwise) of, liens on the direct or indirect assets and properties of,
and obligations of successors and assigns of, the Debtors, Reorganized
Debtors and their successors and assigns based on the same subject matter
as any Claim or Interest or based on any act or omission, transaction or
other activity or security, instrument or other agreement of any kind or
nature occurring, arising or existing prior to the Effective Date that was
or could have been the subject of any Claim or Interest, in each case
regardless of whether a proof of Claim or Interest was filed, whether or
not Allowed and whether or not the holder of the Claim or Interest has
voted on this Plan.
(c) Except as otherwise specifically provided by this Plan, any
Entity accepting any distribution pursuant to this Plan shall be presumed
conclusively to have released the Debtors, Reorganized Debtors and
successors and assigns of the Debtors from any Cause of Action based on the
same subject matter as the Claim or Interest on which the distribution is
received. The release described in the preceding sentence shall be
enforceable as a matter of contract against any Entity that accepts any
distribution pursuant to this Plan.
(d) On the Effective Date, the Debtors, in consideration for, among
other things, their voluntary resignation, support of the Plan and/or their
waiver of distributions as set forth in Section 11.1(f), hereby release the
officers and directors of the Debtors either holding such office (i)
immediately prior to the Effective Date; or (ii) on November 16, 1997
(collectively, the "Releasees") from any and all Claims or liability based
upon any act or omission related to service prior to the Effective Date
with, for or on behalf of the Debtors or Debtors-In-Possession, except that
the Releasees shall not be released with respect to:
(i) any indebtedness of any such Releasee to the Debtors or
Debtors-In-Possession for money borrowed by such Releasee;
(ii) any setoff or counterclaim the Debtors or
Debtors-In-Possession may have or assert against any such Releasee,
provided that the aggregate amount thereof shall not exceed the
aggregate amount of any Claims held or asserted by such Releasee
against the Debtors or Debtors-In-Possession, as the case may be; and
(iii) claims arising from the fraud, willful misconduct or gross
negligence of such Releasee.
(e) The releases provided by Section 11.1(d) shall not extend, and
not be deemed to extend, to any person or entity other than the Releasees
(including without limitation, any affiliate of any Releasees).
(f) Upon the occurrence of the Effective Date, in exchange for the
releases provided by Section 11.1(d), the Releasees shall be deemed to have
waived any and all Claims and Administrative Expenses except in the case of
officers, for direct or indirect compensation and benefits and
reimbursement of expenses relating to their employment.
Notwithstanding anything to the contrary herein, the Creditors' Committee shall
reserve its rights to conduct an investigation of any officer or director
holding offices as of November 16, 1997 and no longer holding office immediately
prior to the Effective Date and to deliver a written report to the Board of
Directors of Harvard prior to the Confirmation Date, setting forth the details
of any
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alleged claim against any such officer or director which in the view of the
Creditors' Committee would warrant elimination of a release for such person. The
Board of Directors of Harvard shall, prior to the Effective Date, determine
whether, in view of any Creditors' Committee report, a release provided herein
should be granted. The releases embodied in this Plan are in addition to, and
not in lieu of, any other release separately given, conditionally or
unconditionally, by the Debtors or Debtors-In-Possession to any other person or
entity.
11.2. Claims of Subordination. All Claims against and Interests in the
Debtors, and all rights and Claims between or among holders of Claims or
Interests relating in any manner whatsoever to Claims against or Interests in
the Debtors based on any contractual, legal or equitable subordination rights,
shall be terminated upon confirmation of this Plan by the Bankruptcy Court
(subject only to the occurrence of the Effective Date) and discharged in the
manner provided in this Plan, and all such Claims, Interests and rights so based
and all such contractual, legal and equitable subordination rights to which any
Entity may be entitled shall be irrevocably waived upon confirmation of this
Plan by the Bankruptcy Court (subject only to the occurrence of the Effective
Date). Except as otherwise provided in this Plan and to the fullest extent
permitted by applicable law, the rights afforded and the Distributions that are
made in respect of any Claims hereunder shall not be subject to levy,
garnishment, attachment or like legal process by any holder of a Claim or
Interest by reason of any contractual, legal or equitable subordination rights,
so that, notwithstanding any such contractual, legal or equitable subordination,
each holder shall have and receive the benefit of the rights and Distributions
set forth in this Plan.
11.3. Indemnification. Subject to the occurrence of the Effective Date,
the obligations of Harvard to indemnify officers and directors, holding such
offices from and including the Petition Date through and including the
Confirmation Date, against any obligation pursuant to Harvard's certificate of
incorporation, bylaws, or applicable state law shall survive confirmation of the
Plan, remain unaffected by this Plan, and not be discharged.
11.4. Conclusion of Chapter 11 Cases and Dissolution of Creditors'
Committee.
(a) Except with respect to any appeal of an order in the Chapter 11
Cases, and any matters related to any proposed modification of the Plan, on
the Effective Date, the Creditors' Committee shall be dissolved and the
members, employees, agents, advisors and representatives (including,
without limitation, attorneys, financial advisors, and other Professionals)
thereof shall thereupon be released from and discharged of and from all
further authority, duties, responsibilities and obligations related to,
arising from and in connection with the Chapter 11 Cases and shall be
indemnified (including for reasonable attorneys' fees and costs) by the
Reorganized Debtors for any and all acts performed, or omissions, in
connection with the Chapter 11 Cases, except for acts or omissions as shall
constitute fraud, willful misconduct or gross negligence of their duties.
(b) In consideration of the distributions under this Plan, upon the
Effective Date, each holder of a Claim or Interest will be deemed to have
released the Debtors, Reorganized Debtors, the Releasees, the Creditors'
Committee and all Professionals from any and all Causes of Action (other
than the right to enforce the Debtor's obligations under this Plan and the
right to pursue a Claim based on any willful misconduct) arising out of
actions or omissions during the administration of the Debtors' estates.
ARTICLE XII.
CONDITIONS TO CONFIRMATION AND CONSUMMATION
12.1. Conditions to Confirmation. The following conditions shall be met
prior to Confirmation of the Plan.
(a) An order finding that the Disclosure Statement contains adequate
information pursuant to section 1125 of the Bankruptcy Code shall have been
entered.
(b) As of the Confirmation Date, General Unsecured Claims against the
Debtors (whether Disputed or Allowed), in the aggregate, do not exceed
$900 million.
12.2. Conditions to the Consummation. The following are conditions
precedent to consummation of the Plan:
(a) A Confirmation Order confirming the Plan, as such Plan may have
been modified, shall have been entered and become a Final Order in form and
substance reasonably satisfactory to the Proponents.
(b) The Confirmation Order shall authorize and approve substantive
consolidation of the Debtors.
(c) The Registration Statement shall have been filed with the
Commission and no stop order in respect thereof shall have been issued.
(d) The Debtors shall have sufficient Cash, through implementation of
the Post-Confirmation Credit Facility or an Alternative Financing
Transaction, to satisfy all Cash obligations under the Plan due on the
Effective Date.
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(e) Subject to the Combination Transactions, the New Certificates of
Incorporation shall have been filed with the Secretary of State of the
State of each such Entity's State of incorporation in accordance with such
State's corporation laws.
(f) All authorizations, consents and regulatory approvals required,
if any, in connection with the Plan's effectiveness shall have been
obtained.
(g) No order of a court shall have been entered and shall remain in
effect restraining the Debtors from consummating the Plan.
(h) The Debtors shall have received the written consent of the
Creditors' Committee, to the extent required, for any modifications to the
Exhibits and Schedules attached to the Plan.
(i) If New Junior Secured Debentures are to be issued under this
Plan, the New Junior Secured Debentures Indenture shall have been duly
qualified under the Trust Indenture Act.
(j) As of the Effective Date, General Unsecured Claims against the
Debtors (whether Disputed or Allowed), in the aggregate, do not exceed
$750 million.
12.3. Waiver of Conditions to Confirmation and Consummation. The Debtors
may waive, by a writing signed by an authorized representative and subsequently
filed with the Court, one or more of the conditions to confirmation or
consummation of the Plan, provided, that the Debtors must obtain the prior
written consent of the Creditors' Committee in order to waive any of the
conditions set forth in Section 12.1(a) and 12.2(a) through (i).
ARTICLE XIII.
EFFECTS OF PLAN CONFIRMATION
13.1. Reorganized Debtors as Separate Corporate Entities. Notwithstanding
Article IX of this Plan, subject to the Combination Transactions, each of the
Debtors shall, as Reorganized Debtors, continue to exist after the Effective
Date as a separate corporate entity, with all the powers of a corporation under
applicable law, without prejudice to any right to terminate such existence
(whether by merger or otherwise) under applicable law after the Effective Date.
13.2. Revesting and Vesting. Except as otherwise provided in this Plan
and subject to the Combination Transaction, pursuant to section 1123(a)(5) and
1141 of the Bankruptcy Code, all property comprising the Estates of each Debtor
shall revest in the relevant Reorganized Debtors or their successors, free and
clear of all Claims, liens, charges, encumbrances and Interests of creditors and
equity security holders on the Effective Date. As of the Effective Date, each
Reorganized Debtor may operate its businesses and use, acquire and dispose of
property and settle and compromise claims or interests without supervision of
the Court free of any restrictions of the Bankruptcy Code or Bankruptcy Rules,
other than those restrictions expressly imposed by the Plan and Confirmation
Order. Without limiting the foregoing, each Reorganized Debtor may pay the
charges it incurs for professional fees, disbursements, expenses, or related
support services after the Effective Date without any application to the Court.
13.3. Injunction. Except as otherwise provided in the Plan, the
Confirmation Order shall provide, among other things, that all Entities who have
held, hold or may hold Claims against or Interests in any of the Debtors are,
with respect to any such Claims or Interests, permanently enjoined from and
after the Confirmation Date from: (a) commencing, conducting or continuing in
any manner, directly or indirectly, any suit, action or other proceeding of any
kind (including, without limitation, any proceeding in a judicial, arbitral,
administrative or other forum) against or affecting the Debtors or the
Reorganized Debtors, any of their property, or any direct or indirect transferee
of any property of, or direct or indirect successor in interest to, any of the
foregoing Entities, or any property of any such transferee or successor;
(b) enforcing, levying, attaching (including, without limitation, any
pre-judgment attachment), collecting or otherwise recovering by any manner or
means, whether directly or indirectly, of any judgment, award, decree or order
against the Debtors or the Reorganized Debtors, any of their property, or any
direct or indirect transferee of any property of, or direct or indirect
successor in interest to, any of the foregoing Entities, or any property of any
such transferee or successor; (c) creating, perfecting or otherwise enforcing in
any manner, directly or indirectly, any encumbrance of any kind against the
Debtors or the Reorganized Debtors, any of their property, or any direct or
indirect transferee of any property of, or successor in interest to, any of the
foregoing Entities; (d) asserting any right of setoff, subrogation, or
recoupment of any kind, directly or indirectly, against any obligation due the
Debtors or the Reorganized Debtors, any of their property, or any direct or
indirect transferee of any property of, or successor in interest to, any of the
foregoing Entities; and (e) acting or proceeding in any manner, in any place
whatsoever, that does not conform to or comply with the provisions of the Plan.
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ARTICLE XIV.
ADMINISTRATIVE PROVISIONS
14.1. Retention of Jurisdiction. Notwithstanding entry of the
Confirmation Order, the Bankruptcy Court shall retain jurisdiction as is legally
permissible, including, without limitation, for the following purposes:
(a) to determine (i) any Disputed Claims, Disputed Interests and all
related Claims accruing after the Confirmation Date including rights and
liabilities under contracts giving rise to such Claims, (ii) the validity,
extent, priority and nonavoidability of consensual and nonconsensual liens
and other encumbrances and (iii) preconfirmation tax liability pursuant to
section 505 of the Bankruptcy Code;
(b) to allow, disallow, estimate, liquidate or determine any Claim or
Interest against the Debtors and to enter or enforce any order requiring
the filing of any such Claim or Interest before a particular date;
(c) to approve all matters related to the assumption, assumption and
assignment, or rejection of any executory contract or unexpired lease of
any of the Debtors pursuant to section 365 of the Bankruptcy Code and
Article X herein;
(d) to determine requests for payment of administrative expenses
entitled to priority under section 507(a)(1) of the Bankruptcy Code,
including compensation of parties entitled thereto;
(e) to resolve controversies and disputes regarding the
interpretation and implementation of this Plan, any disputes relating to
whether or not a timely and proper proof of claim was filed or whether a
Disallowed Claim or Disallowed Interest should be reinstated;
(f) to implement the provisions of this Plan and entry of orders in
aid of confirmation and consummation of this Plan;
(g) to modify the Plan pursuant to section 1127 of the Bankruptcy
Code;
(h) to adjudicate any and all Causes of Action that arose in these
Chapter 11 Cases preconfirmation or in connection with the implementation
of this Plan, whether or not pending on the Confirmation Date, including
without limitation, any remands of appeals;
(i) to resolve disputes concerning any reserves with respect to
Disputed Claims, Disputed Interests or the administration thereof;
(j) to resolve any disputes concerning whether a person or entity had
sufficient notice of the Chapter 11 Cases, the applicable claims bar date,
the hearing on the approval of the Disclosure Statement as containing
adequate information, the hearing on the confirmation of this Plan for the
purpose of determining whether a Claim or Interest is discharged hereunder
or for any other purpose;
(k) to determine any and all applications, Claims, Interests, pending
adversary proceedings and contested matters (including, without limitation,
any adversary proceeding or other proceeding to recharacterize agreements
or reclassify Claims or Interests) in these Chapter 11 Cases;
(l) to enter and implement such orders as may be appropriate in the
event the Confirmation Order is for any reason stayed, revoked, modified,
or vacated;
(m) to seek the issuance of such orders in aid of execution of the
Plan, to the extent authorized by section 1142 of the Bankruptcy Code;
(n) to consider any modifications of the Plan, to cure any defect or
omission, or reconcile any inconsistency in any order of the Court,
including, without limitation, the Confirmation Order;
(o) to recover all assets of the Debtors and property of their
estates, wherever located, including any Causes of Action under sections
544 through 550 of the Bankruptcy Code;
(p) to hear and resolve matters concerning state, local, and federal
taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy
Code;
(q) to hear any other matter not inconsistent with the Bankruptcy
Code;
(r) to resolve any and all disputes or controversies relating to
Distributions to be made, and/or reserves to be established, under this
Plan; and
(s) to enter a final decree closing the Chapter 11 Cases.
14.2. Jurisdiction Over the Reorganized Debtors. Notwithstanding the
jurisdiction retained in Section 14.1 hereof, from and after the Effective Date,
the Bankruptcy Court shall not have the power to issue any order in the
Chapter 11 Cases which modifies the Reorganization Securities or the rights of
the holders thereof with respect to such Reorganization Securities.
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14.3. Cram Down. If all of the applicable requirements for confirmation
of the Plan are met as set forth in section 1129(a) of the Bankruptcy Code
except subsection (8) thereof, the Debtors may request the Court to confirm the
Plan pursuant to section 1129(b) of the Bankruptcy Code, notwithstanding the
requirements of such subsection (8), on the basis that the Plan is fair and
equitable and does not discriminate unfairly with respect to any Impaired Class
that does not vote to accept this Plan as described in the Disclosure Statement.
14.4. Modification of the Plan. The Debtors reserve the right, in
accordance with the Bankruptcy Code, to alter, amend or modify the Plan prior to
the entry of the Confirmation Order. After the entry of the Confirmation Order,
the Debtors may, upon order of the Bankruptcy Court, alter, amend or modify the
Plan in accordance with section 1127(b) of the Bankruptcy Code, or remedy any
defect or omission or reconcile any inconsistency in the Plan in such manner as
may be necessary to carry out the purpose and intent of the Plan.
14.5. Exemption from Certain Transfer Taxes. Pursuant to
section 1146(c) of the Bankruptcy Code: (i) the issuance, transfer or exchange
of any securities, instruments or documents; (ii) the creation of any other
lien, mortgage, deed of trust or other security interest; or (iii) the making or
assignment of any lease or sublease or the making or delivery of any deed or
other instrument of transfer under, pursuant to, in furtherance of or in
connection with, the Plan, including any deeds, bills of sale or assignments
executed in connection with the Plan or the Confirmation Order shall not be
subject to any stamp tax, transfer tax, intangible tax, recording fee, or
similar tax, charge or expense to the fullest extent provided for under
section 1146(c) of the Bankruptcy Code.
14.6. Setoffs. Except for distributions to holders of Allowed Senior Note
Claims (as to which the Debtors and Reorganized Debtors shall have no right of
setoff and/or recoupment) and as otherwise provided in the Plan, agreements
entered into in connection with the Plan, the Confirmation Order, or in
agreements previously approved by Final Order of the Bankruptcy Court, the
Debtors or Reorganized Debtors, as the case may be, may but will not be required
to, set off against any Claim and the Distributions made with respect to the
Claim, before any distribution is made on account of such Claim, any and all of
the claims, rights and causes of action of any nature that the Debtors or the
Reorganized Debtors may hold against the holder of such Claim; provided,
however, that neither the failure to effect such a setoff, the allowance of any
Claim hereunder, any other action or omission of the Debtors or Reorganized
Debtors, nor any provision of this Plan shall constitute a waiver or release by
the Debtors or the Reorganized Debtors of any such claims, rights and causes of
action that the Debtors or the Reorganized Debtors may possess against such
holder. To the extent the Reorganized Debtors fail to set off against a holder
of a Claim or Interest and seek to collect a claim from the holder of such Claim
or Interest after a distribution to the holder of such Claim or Interest
pursuant to the Plan, the Reorganized Debtors shall be entitled to full recovery
on their claim against the holder of such Claim or Interest.
14.7. Compromise of Controversies. Pursuant to Bankruptcy Rule 9019, and
in consideration for the classification, distribution and other benefits
provided under the Plan, the provisions of this Plan shall constitute a good
faith compromise and settlement of all Claims or controversies resolved pursuant
to the Plan. The entry of the Confirmation Order shall constitute the Bankruptcy
Court's approval of each of the foregoing compromises or settlements, and all
other compromises and settlements provided for in the Plan, and the Bankruptcy
Court's findings shall constitute its determination that such compromises and
settlements are in the best interests of the Debtors, the Reorganized Debtors,
the Estates, and any Entity holding Claims against the Debtors.
14.8. Withdrawal or Revocation of the Plan. The Debtors reserve the right
to revoke or withdraw the Plan prior to the Confirmation Date. If the Plan is
revoked or withdrawn, or if the Confirmation Date does not occur, the Plan shall
have no force and effect.
14.9. Successors and Assigns. The rights, benefits and obligations of any
Entity named or referred to in the Plan shall be binding on, and shall inure to
the benefit of, the heirs, executors, administrators, successors and/or assigns
of such Entity.
14.10. Governing Law. Except to the extent that the Bankruptcy Code or
Bankruptcy Rules are applicable, the rights and obligations arising under this
Plan shall be governed by and construed and enforced in accordance with the laws
of the State of Delaware.
14.11. Notices. All notices, requests or demands for payments provided
for in this Plan shall be in writing and shall be deemed to have been received,
by mail, addressed to:
Harvard Industries, Inc.
3 Werner Way
Lebanon, NJ 08833
Attn.: Roger Pollazzi
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with copies to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
Attn.: Myron Trepper, Esq.
and:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attn.: Brad Eric Scheler, Esq.
Any of the above may, from time to time, change its address for future notices
and other communications hereunder by filing a notice of the change of address
with the Bankruptcy Court. Any and all notices given under this Plan shall be
effective when received.
14.12. Severability. Except as to terms which would frustrate the overall
purpose of this Plan, should any provision in this Plan be determined to be
unenforceable, such determination shall in no way limit or affect the
enforceability and operative effect of any or all other provisions of this Plan.
14.13. Interpretation, Rules of Construction, Computation of Time, and
Choice of Law.
(a) The provisions of the Plan shall control over any descriptions
thereof contained in the Disclosure Statement.
(b) Any term used in the Plan that is not defined in the Plan, either
in Article II (Definitions) or elsewhere, but that is used in the
Bankruptcy Code or the Bankruptcy Rules shall have the meaning assigned to
that term in (and shall be construed in accordance with the rules of
construction under) the Bankruptcy Code or the Bankruptcy Rules. Without
limiting the foregoing, the rules of construction set forth in section 102
of the Bankruptcy Code shall apply to the Plan, unless superseded herein.
(c) Unless specified otherwise in a particular reference, all
references in the Plan to Articles, Sections and Exhibits are references to
Articles, Sections and Exhibits of or to the Plan.
(d) Any reference in the Plan to a contract, document, instrument,
release, bylaw, certificate, indenture or other agreement being in a
particular form or on particular terms and conditions means that such
document shall be substantially in such form or substantially on such terms
and conditions.
(e) Any reference in the Plan to an existing document or Exhibit
means such document or Exhibit as it may have been amended, restated,
modified or supplemented as of the Effective Date without limitation to the
provisions set forth in Article VII of this Plan.
(f) Captions and headings to Articles and Sections in the Plan are
inserted for convenience of reference only and shall neither constitute a
part of the Plan nor in any way affect the interpretation of any provisions
hereof.
(g) In computing any period of time prescribed or allowed by the
Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.
(h) All Exhibits to the Plan are incorporated into the Plan, and
shall be deemed to be included in the Plan, regardless of when filed.
(i) Subject to the provisions of any contract, certificate, bylaws,
instrument, release, indenture or other agreement or document entered into
in connection with the Plan, the rights and obligations arising under the
Plan shall be governed by, and construed and enforced in accordance with,
federal law, including the Bankruptcy Code and Bankruptcy Rules.
14.14. No Admissions. Notwithstanding anything herein to the contrary,
nothing contained in the Plan shall be deemed as an admission by the Debtors
with respect to any matter set forth herein, including, without limitation,
liability on any Claim or the propriety of a Claims' classification.
14.15. Effectuating Documents and Further Transactions. The Debtors and
Reorganized Debtors shall be authorized to execute, deliver, file or record such
documents, contracts, instruments, releases, and other agreements and take such
other action as may be necessary to effectuate and further evidence the terms
and conditions of the Plan.
14.16. Section 1125 of the Bankruptcy Code. (i) The Debtors and the
Creditors' Committee have, and upon Confirmation of this Plan shall be deemed to
have, solicited acceptances of this Plan in good faith and in compliance with
the applicable provisions of the Bankruptcy Code and (ii) the Debtors and each
of the members of the Creditors' Committee (and each of their respective
affiliates, agents, directors, officers, employees, advisors, and attorneys)
have participated in good faith and in compliance with the applicable provisions
of the Bankruptcy Code in the offer, issuance, sale, and purchase of the
securities offered and sold under this Plan, and therefore are not, and on
account of such offer, issuance, sale, solicitation, and/or purchase will not
be, liable at any time for the violation of any applicable law, rule, or
regulation governing the solicitation of acceptances or rejections of this Plan
or the offer, issuance, sale, or purchase of the securities offered and sold
under this Plan.
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Dated: Wilmington, Delaware
August 19, 1998
DOEHLER-JARVIS, INC.
Debtor and Debtor in Possession
By: /s/ D. CRAIG BOWMAN
---------------------------
Vice President
HARVARD INDUSTRIES, INC.
Debtor and Debtor in Possession
By: /s/ ROGER POLLAZZI
---------------------------
Chief Operating Officer
HARVARD TRANSPORTATION, INC.
Debtor and Debtor in Possession
By: /s/ D. CRAIG BOWMAN
---------------------------
Vice President
DOEHLER-JARVIS GREENEVILLE, INC.
Debtor and Debtor in Possession
By: /s/ D. CRAIG BOWMAN
---------------------------
Vice President
DOEHLER-JARVIS POTTSTOWN, INC.
Debtor and Debtor in Possession
By: /s/ D. Craig Bowman
---------------------------
Vice President
DOEHLER-JARVIS TECHNOLOGIES, INC.
Debtor and Debtor in Possession
By: /s/ D. Craig Bowman
---------------------------
Vice President
-29-
<PAGE>
DOEHLER-JARVIS TOLEDO, INC.
Debtor and Debtor in Possession
By: /s/ D. Craig Bowman
---------------------------
Vice President
HARMAN AUTOMOTIVE, INC.
Debtor and Debtor in Possession
By: /s/ D. Craig Bowman
---------------------------
Vice President
HAYES-ALBION CORPORATION
Debtor and Debtor in Possession
By: /s/ D. Craig Bowman
---------------------------
Vice President
THE KINGSTON-WARREN CORPORATION
Debtor and Debtor in Possession
By: /s/ D. Craig Bowman
---------------------------
Vice President
THE OFFICIAL COMMITTEE OF
UNSECURED CREDITORS
BY:
FRIED, FRANK, HARRIS SHRIVER &
JACOBSON
Co-Counsel to the Official Committee
of Unsecured Creditors
By: /s/ Brad Eric Scheler
---------------------------
Name: Brad Eric Scheler
A Member of the Firm
-30-
<PAGE>
EXHIBIT "A"
DOEHLER-JARVIS, INC., et al.
Lehman Commitment Letter
<PAGE>
LEHMAN BROTHERS INC. LEHMAN COMMERCIAL PAPER INC.
3 World Financial Center 3 World Financial Center
New York, New York 10285 New York, New York 10285
July 31, 1998
Harvard Industries, Inc.
------------------------
Senior Secured Credit Facilities
--------------------------------
Commitment Letter
-----------------
Harvard Industries, Inc.
3 Werner Way
Lebanon, New Jersey 08833
Attention: Mr. Ted Vogtman
Chief Financial Officer
Ladies and Gentlemen:
You have advised Lehman Commercial Paper, Inc. ("LCPI") and
Lehman Brothers Inc. ("LBI") that Harvard Industries, Inc., a Florida
corporation (the "Borrower"), is a debtor and debtor in possession in a
bankruptcy case (the "Bankruptcy Case") voluntarily commenced under Chapter 11
of the United States Bankruptcy Code (the "Code") in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). You
have further advised LCPI and LBI that the Borrower intends, following
confirmation and upon consummation of the Borrower's plan of reorganization,
which shall be in form and substance satisfactory to LBI and LCPI (the "Plan"),
to, among other things, refinance the Borrower's existing $175,000,000 senior
secured post-petition financing pursuant to Section 364 of the Bankruptcy Code.
In that connection, you have requested that LBI agree to structure, arrange and
syndicate senior secured credit facilities in an aggregate amount of up to
$165,000,000 (the "Credit Facilities"), and that LCPI commit to provide the
entire principal amount of the Credit Facilities.
LBI is pleased to advise you that it is willing to act as
exclusive advisor and arranger for the Credit Facilities.
Furthermore, LCPI is pleased to advise you of its commitment
to provide the entire amount of the Credit Facilities upon the terms and
subject to the conditions set forth or referred to in this commitment letter
(the "Commitment Letter") and in the Summary of Terms and Conditions attached
hereto as Exhibit A (the "Term Sheet").
It is agreed that LBI will act as the sole and exclusive
advisor and arranger for the Credit Facilities and that LBI will, in such
capacity, perform the duties and exercise the authority customarily performed
and exercised by it in such role. You agree that no other agents, co-agents or
arrangers will be appointed, no other titles will be awarded and no
compensation (other than that expressly contemplated by the Term Sheet and the
Fee Letter referred to below) will be paid in connection with the Credit
Facilities unless you and we shall so agree.
<PAGE>
We intend to syndicate the Credit Facilities to a group of
financial institutions (together with LCPI, the "Lenders") identified by us in
consultation with you. LBI intends to commence syndication efforts promptly
upon the execution of this Commitment Letter by you, and you agree actively to
assist LBI in completing a syndication satisfactory to it. Such assistance
shall include (a) your using commercially reasonable efforts to ensure that the
syndication efforts benefit materially from your existing lending
relationships, (b) direct contact between senior management and advisors of the
Borrower and the proposed Lenders, (c) assistance in the preparation of a
Confidential Information Memorandum and other marketing materials to be used in
connection with the syndication and (d) the hosting, with LBI, of one or more
meetings of prospective Lenders. You also agree that, at your expense, you will
work with LBI and LCPI to procure a rating for the Credit Facilities by Moody's
Investors Service, Inc. and Standard & Poor's Ratings Group.
LBI will manage all aspects of the syndication, including
decisions as to the selection of institutions to be approached and when they
will be approached, when their commitments will be accepted, which institutions
will participate, the allocations of the commitments among the Lenders and the
amount and distribution of fees among the Lenders. To assist LBI in its
syndication efforts, you agree promptly to prepare and provide to LBI and LCPI
all information with respect to the Borrower and its subsidiaries, the Plan and
the other transactions contemplated hereby, including all financial information
and projections (the "Projections"), as we may reasonably request in connection
with the arrangement and syndication of the Credit Facilities. You hereby
represent and covenant that (a) all information (including, without limitation,
the disclosure statement related to the Plan) other than the Projections (the
"Information") that has been or will be made available to LBI and LCPI by you
or any of your representatives is or will be, when furnished, complete and
correct in all material respects and does not or will not, when furnished,
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are made
and (b) the Projections that have been or will be made available to LBI and
LCPI by you or any of your representatives have been or will be prepared in
good faith based upon reasonable assumptions. You understand that in arranging
and syndicating the Credit Facilities we may use and rely on the Information
and Projections without independent verification thereof.
As consideration for LCPI's commitment hereunder and LBI's
agreement to perform the services described herein, you agree to pay to LCPI
the nonrefundable fees set forth in Annex I to the Term Sheet and in the Fee
Letter dated the date hereof and delivered herewith (the "Fee Letter").
The commitments and agreements of LBI and LCPI described
herein are subject to (a) there not occurring or becoming known to us any
material adverse condition or material adverse change in or affecting the
business, operations, property, condition (financial or otherwise) or prospects
of the Borrower and its subsidiaries, taken as a whole (other than the
continuation of the Bankruptcy Case and the consequences that would normally
result therefrom); (b) our not becoming aware after the date hereof of any
information or other matter affecting the Borrower or the transactions
contemplated hereby which is inconsistent in a material and adverse manner with
any such information or other matter disclosed to us prior to the date hereof,
(c) there not having occurred a material disruption of or material adverse
change in financial, banking or capital market conditions that, in our
judgment, could materially impair the syndication of the Credit Facilities, (d)
our satisfaction that prior to and during the syndication of the Credit
Facilities (but subsequent to your executing and delivering this Commitment
Letter) there shall be no competing offering, placement or arrangement of any
debt securities or bank financing by or on behalf of the Borrower or any
affiliate thereof, (e) the entry by the Bankruptcy Court of a final order in
form and substance satisfactory to LBI and LCPI confirming the Plan in
accordance with Section 1129 of the Code, (f) the negotiation, execution and
delivery of definitive documentation with respect to the Credit
2
<PAGE>
Facilities satisfactory to LCPI and its counsel and the occurrence of the
Closing Date thereunder on or before October 31, 1998 and (g) the other
conditions set forth or referred to in the Term Sheet. The terms and conditions
of LCPI's commitment hereunder and of the Credit Facilities are not limited to
those set forth herein and in the Term Sheet. Those matters that are not
covered by the provisions hereof and of the Term Sheet are subject to the
approval and agreement of LCPI and the Borrower.
You agree (a) to indemnify and hold harmless LBI, LCPI, their
respective affiliates and their respective officers, directors, employees,
advisors, and agents (each, an "indemnified person") from and against any and
all losses, claims, damages and liabilities to which any such indemnified
person may become subject arising out of or in connection with this Commitment
Letter, the Credit Facilities, the use of the proceeds thereof, the Plan or any
related transaction or any claim, litigation, investigation or proceeding
relating to any of the foregoing, regardless of whether any indemnified person
is a party thereto, and to reimburse each indemnified person upon demand for
any legal or other expenses incurred in connection with investigating or
defending any of the foregoing, provided that the foregoing indemnity will not,
as to any indemnified person, apply to losses, claims, damages, liabilities or
related expenses to the extent they are found by a final, non-appealable
judgment of a court to arise from the willful misconduct or gross negligence of
such indemnified person or of such other indemnitee of which such indemnified
person is an officer, director, employee, advisor, agent, affiliate or
controlling person, and (b) to reimburse LBI and LCPI and their affiliates for
all reasonable out-of-pocket expenses (including consultant's fees and
expenses, due diligence expenses, syndication expenses, travel expenses,
printing and distribution expenses, expenses associated with lenders' meetings,
and reasonable fees, charges and disbursements of counsel) incurred in
connection with the Credit Facilities and any related documentation (including
this Commitment Letter, the Term Sheet, the Fee Letter and the definitive
financing documentation) or the administration, amendment, modification or
waiver thereof. No indemnified person shall be liable for any indirect or
consequential damages in connection with its activities related to the Credit
Facilities.
You acknowledge that LBI and its affiliates (the term "LBI"
being understood to refer hereinafter in this paragraph to include such
affiliates, including LCPI) may be providing debt financing, equity capital or
other services (including financial advisory services) to other companies in
respect of which you may have conflicting interests regarding the transactions
described herein and otherwise. LBI will not use confidential information
obtained from you by virtue of the transactions contemplated by this Commitment
Letter or their other relationships with you in connection with the performance
by LBI of services for other companies or persons, and LBI will not furnish any
such information to other companies or persons. You also acknowledge that LBI
has no obligation to use in connection with the transactions contemplated by
this Commitment Letter, or to furnish to you, confidential information obtained
from other companies or persons. You also acknowledge and agree that LBI may
disclose confidential information obtained from you by virtue of the
transactions contemplated by this Commitment Letter to any actual or potential
syndicate participant, provided that each such participant has been notified of
the confidential nature of such information.
This Commitment Letter shall not be assignable by you without
the prior written consent of LBI and LCPI (and any purported assignment without
such consent shall be null and void), is intended to be solely for the benefit
of the parties hereto and is not intended to confer any benefits upon, or
create any rights in favor of, any person other than the parties hereto. This
Commitment Letter may not be amended or waived except by an instrument in
writing signed by you and LBI and LCPI. This Commitment Letter may be executed
in any number of counterparts, each of which shall be an original, and all of
which, when taken together, shall constitute one agreement. Delivery of an
executed signature page of this Commitment Letter by facsimile transmission
shall be effective as delivery of a manually executed counterpart hereof. This
Commitment Letter and the Fee Letter are the only agreements that
3
<PAGE>
have been entered into among us with respect to the Credit Facilities and set
forth the entire understanding of the parties with respect thereto. This
Commitment Letter shall be governed by, and construed in accordance with, the
laws of the State of New York.
This Commitment Letter is delivered to you on the
understanding that neither this Commitment Letter, the Term Sheet or the Fee
Letter nor any of their terms or substance shall be disclosed, directly or
indirectly, to any other person except (a) to your directors, officers, agents
and advisors who are directly involved in the consideration of this matter, (b)
to the Official Creditors Committee in the Bankruptcy Case and its advisors
(legal and financial), or (c) as may be compelled in a judicial or
administrative proceeding or as otherwise required by law (in which case you
agree to inform us promptly thereof); provided that the foregoing restrictions
shall cease to apply (except in respect of the Fee Letter and its terms and
substance) after this Commitment Letter has been accepted by you.
The compensation, reimbursement, indemnification and
confidentiality provisions contained herein and in the Fee Letter shall remain
in full force and effect regardless of whether definitive financing
documentation shall be executed and delivered and notwithstanding the
termination of this Commitment Letter or LCPI's commitment hereunder.
LBI also will provide financial advisory services to the
Borrower with respect to the transaction to which this Commitment Letter
relates. The Borrower agrees that LBI has the right to place advertisements in
financial and other newspapers and journals at its own expense describing its
services to the Borrower. Furthermore, the Borrower agrees to include a
reference to LBI's role as financial advisor in any press release announcing
the transaction.
If the foregoing correctly sets forth our agreement, please
indicate your acceptance of the terms hereof and of the Term Sheet and the Fee
Letter by returning to LCPI executed counterparts hereof and of the Fee Letter
not later than 5:00 p.m., New York City time, on August 8, 1998. The
commitments and agreements of LBI and LCPI herein will expire at such time in
the event LCPI has not received such executed counterparts in accordance with
the immediately preceding sentence. Moreover, the commitments and agreements of
LBI and LCPI herein will expire at 5:00 p.m., New York City time, on August 21,
1998, in the event LCPI has not received payment of 25% of the Underwriting Fee
pursuant to the Fee Letter by such time.
4
<PAGE>
LBI and LCPI are pleased to have been given the opportunity
to assist you in connection with this financing, and we look forward to working
with you.
Very truly yours,
LEHMAN COMMERCIAL PAPER INC.
By:
-----------------------------------
Title: Authorized Signatory
LEHMAN BROTHERS INC.
By:
-----------------------------------
Title: Authorized Signatory
Accepted and agreed to as of the date first written above by:
HARVARD INDUSTRIES, INC.
By:
-----------------------------------
Title:
5
<PAGE>
Exhibit A
HARVARD INDUSTRIES, INC.
$165,000,000 CREDIT FACILITIES
Summary of Terms and Conditions
July 31, 1998
-------------------------------
I. Parties
-------
Borrower: Harvard Industries, Inc., a Florida or
Delaware corporation, as the case may be,
as a reorganized debtor (the "Borrower").
Guarantors: Each of the Borrower's direct and
indirect subsidiaries (the "Guarantors";
the Borrower and the Guarantors,
collectively, the "Credit Parties").
Advisor and Arranger: Lehman Brothers Inc. (in such capacity,
the "Arranger").
Syndication Agent: Lehman Commercial Paper Inc. (the
"Syndication Agent").
Administrative Agent: Lehman Commercial Paper Inc. (the
"Administrative Agent").
Lenders: A syndicate of banks, financial
institutions and other entities arranged
by the Syndication Agent (collectively,
the "Lenders").
II. Types and Amounts of
--------------------
Credit Facilities
-----------------
A. Term Loan Facilities
Types and Amounts of Term Loan Facilities (the "Term Loan
Facilities: Facilities") in an aggregate amount of
$100,000,000 (the loans thereunder,
the "Term Loans") as follows:
Tranche B Term Loan Facility: A four-year
term loan facility (the "Tranche B Term
Loan Facility") in an aggregate principal
amount equal to $50,000,000 (the loans
thereunder, the "Tranche B Term Loans").
The Tranche B Term Loans shall be
repayable in quarterly installments in an
aggregate principal amount for each year
following the Closing Date (as defined
below) equal to the amount set forth
opposite such year below (with the
installments in each such year being
equal in amount):
<PAGE>
<TABLE>
<CAPTION>
Period Principal Amount
------ -----------------
<S> <C>
Closing Date to First Anniversary $1,000,000
First Anniversary to Second $1,000,000
Anniversary
Second Anniversary to Third $1,000,000
Anniversary
Third Anniversary to Fourth $1,000,000
Anniversary
</TABLE>
provided that the principal amount
outstanding shall be paid in full at
maturity.
Tranche C Term Loan Facility: A four and
one-half-year term loan facility (the
"Tranche C Term Loan Facility") in an
aggregate principal amount equal to
$50,000,000 (the loans thereunder, the
"Tranche C Term Loans"). The Tranche C
Term Loans shall be repayable in
quarterly installments in an aggregate
principal amount for each year following
the Closing Date (as defined below) equal
to the amount set forth opposite such
year below (with the installments in each
such year being equal in amount):
<TABLE>
<CAPTION>
Period Principal Amount
------ ----------------
<S> <C>
Closing Date to First Anniversary $1,000,000
First Anniversary to Second $1,000,000
Anniversary
Second Anniversary to Third $1,000,000
Anniversary
Third Anniversary to Fourth $1,000,000
Anniversary
Fourth Anniversary to End of Six- $500,000
Month Period Thereafter
</TABLE>
provided that the principal amount
outstanding shall be paid in full at
maturity.
On the basis of market reception during
the syndication process, the Syndication
Agent may determine, in its sole
discretion, to increase or decrease the
amount of the Tranche B Term Loan
Facility, and to correspondingly decrease
or increase the amount of the Tranche C
Term Loan Facility, provided that the
aggregate amount of the Term Loan
Facilities will equal $100,000,000.
2
<PAGE>
Availability: The Term Loans shall be made in a single
drawing on the Closing Date (as defined
below).
Purpose: The proceeds of the Term Loans shall be
used to refinance indebtedness and
other obligations of the Borrower under
the existing senior secured DIP
post-petition financing pursuant to
Section 364 of the Bankruptcy Code
pursuant to the Borrower's plan of
reorganization (the "Plan"), which Plan
shall be in form and substance reasonably
satisfactory to the Syndication Agent, in
the Borrower's Chapter 11 case under the
Bankruptcy Code, following confirmation
thereof in accordance with Section 1129
of the Bankruptcy Code by the Bankruptcy
Court and upon consummation thereof (the
"Reorganization"), and to pay related
fees and expenses.
B. Revolving Credit
----------------
Facility
--------
Type and Amount of Facility: Three-year revolving credit facility (the
"Revolving Credit Facility"; together
with the Term Loan Facility, the "Credit
Facilities") in the amount of $65,000,000
(the loans thereunder, the "Revolving
Credit Loans").
Availability: The Revolving Credit Facility shall be
available on a revolving basis during the
period commencing on the Closing Date and
ending on the third anniversary thereof
(the "Revolving Credit Termination
Date").
Letters of Credit: A portion of the Revolving Credit
Facility not in excess of $25,000,000
shall be available for the issuance of
letters of credit (the "Letters of
Credit") by a Lender to be selected in
the syndication process, which Lender
shall be reasonably satisfactory to the
Borrower (in such capacity, the "Issuing
Lender"). No Letter of Credit shall have
an expiration date after the earlier of
(a) one year after the date of issuance
and (b) five business days prior to the
Revolving Credit Termination Date,
provided that any Letter of Credit with a
one-year tenor may provide for the
renewal thereof for additional one-year
periods (which shall in no event extend
beyond the date referred to in clause (b)
above).
Drawings under any Letter of Credit shall
be reimbursed by the Borrower (whether
with its own funds or with the proceeds
of Revolving Credit Loans) on the same
business day. To the extent that the
Borrower does not so reimburse the
Issuing Lender, the Lenders under the
Revolving Credit Facility shall be
irrevocably and unconditionally obligated
to reimburse the Issuing Lender on a pro
rata basis.
Swing Line Loans: A portion of the Revolving Credit
Facility not in excess of $10,000,000
shall be available for swing line loans
(the "Swing Line Loans") from a Lender to
be selected in the syndication process
(in such capacity, the "Swing Line
Lender") on same-day notice. Any such
Swing Line
3
<PAGE>
Loans will reduce availability under the
Revolving Credit Facility on a
dollar-for-dollar basis. Each Lender
under the Revolving Credit Facility shall
acquire, under certain circumstances, an
irrevocable and unconditional pro rata
participation in each Swing Line Loan.
Maturity: The Revolving Credit Termination Date.
Purpose: The proceeds of the Revolving Credit Loans
shall be used to finance the working
capital needs of the Borrower and its
subsidiaries in the ordinary course of
business.
III. Certain Payment
---------------
Provisions
----------
Fees and Interest Rates: As set forth on Annex I.
Optional Prepayments and Loans may be prepaid and commitments
Commitment Reductions: may be reduced by the Borrower in minimum
amounts to be agreed upon. Optional
prepayments of the Term Loans
shall be applied to the Tranche B Term
Loans and the Tranche C Term Loans
ratably and to the installments thereof
in inverse order of maturity and may not
be reborrowed. Notwithstanding the
foregoing, so long as any Tranche B Term
Loans are outstanding, each holder of
Tranche C Term Loans shall have the right
to refuse all or any portion of such
prepayment allocable to its Tranche C
Term Loans, as the case may be, and the
amount so refused will be applied to
prepay the Tranche B Term Loans.
Mandatory Prepayments and The following amounts shall be applied to
Commitment Reductions: prepay the Term Loans and reduce the
Revolving Credit Facility:
(a) 100% of the net proceeds of any sale
or issuance of equity or the incurrence
of certain indebtedness after the Closing
Date by the Borrower or any of its
subsidiaries;
(b) 100% of the net proceeds of any sale
or other disposition (including as a
result of casualty or condemnation) by
the Borrower or any of its subsidiaries
of any assets (except for the sale of
inventory in the ordinary course of
business and certain other dispositions
to be agreed on); provided that,
notwithstanding the foregoing, so long as
no event of default has occurred and is
continuing, the Borrower shall be
permitted to exclude (i) the net proceeds
of any sale of the assets constituting
the Toledo, Greeneville, Tiffin, and
Harman facilities (collectively, the
"Designated Facilities") and (ii) the net
proceeds of a disposition arising from
casualty or condemnation provided that,
in each case, the Borrower reinvests such
net proceeds within one year of the
receipt thereof to acquire assets useful
to the business; and
(c) 100% of excess cash flow (to be
defined in a mutually satisfactory
manner) for each fiscal year of the
Borrower (commencing with the
4
<PAGE>
fiscal year in which the Closing Date
occurs).
The amounts generated pursuant to clauses
(a), (b) and (c) above shall be applied,
first, to the prepayment of the Tranche B
Term Loans, second, to the permanent
reduction of the Revolving Credit Facility
and, third, to the prepayment of the
Tranche C Term Loans. Each such prepayment
of the Term Loans shall be applied to the
installments thereof in inverse order of
maturity and may not be reborrowed. The
Revolving Credit Loans shall be prepaid
and the Letters of Credit shall be cash
collateralized or replaced to the extent
such extensions of credit exceed the
amount of the Revolving Credit Facility.
Tranche C Prepayment Premium: Optional prepayments and mandatory
prepayments of the Tranche C Term Loans
shall be accompanied by the payment of a
premium in the amounts set forth below
during the periods set forth below:
<TABLE>
<CAPTION>
Period Prepayment Premium (expressed
------ as a % of prepayment amount)
----------------------------
<S> <C>
Closing Date to First Anniversary 3%
First Anniversary to Second 2%
Anniversary
Second Anniversary to Third 1%
Anniversary
</TABLE>
IV. Collateral The obligations of each Credit Party in
---------- respect of the Credit Facilities shall be
secured by a perfected security interest
in all of its tangible and intangible
assets (including, without limitation,
intellectual property, real property and
all of the capital stock of each of its
direct and indirect subsidiaries), except
for those assets as to which the
Syndication Agent shall determine in its
sole discretion that the costs of
obtaining such a security interest are
excessive in relation to the value of the
security to be afforded thereby. It is
understood that the Lenders shall release
their security interests in the assets
comprising each Designated Facility upon
the closing of the sale of such
Designated Facility.
The Revolving Credit Facility and the
Tranche B Term Loan Facility shall rank
first in priority with respect to all
assets of each Credit Party constituting
collateral; and the Tranche C Term Loan
Facility shall rank second in priority
with respect to all assets of each Credit
Party constituting collateral.
V. Certain Conditions
------------------
Initial Conditions: The availability of the Credit Facilities
shall be conditioned upon satisfaction
of, among other things, the following
conditions precedent (the date upon which
all such conditions precedent shall be
satisfied,
5
<PAGE>
the "Closing Date") on or before October
31, 1998:
(a) Each Credit Party shall have executed
and delivered satisfactory definitive
financing documentation with respect to
the Credit Facilities (the "Credit
Documentation").
(b) The entry of a final order of the
Bankruptcy Court, no later than October
31, 1998, in form and substance
satisfactory to the Syndication Agent
confirming the Plan in accordance with
Section 1129 of the Bankruptcy Code,
which order shall be in full force and
effect and shall not have been stayed,
reversed, vacated or otherwise modified.
(c) The Reorganization shall have been
consummated pursuant to satisfactory
documentation, and no provision thereof
shall have been waived, amended,
supplemented or otherwise modified.
(d) The Lenders, the Administrative
Agent, the Syndication Agent and the
Arranger shall have received all fees
required to be paid, and all expenses for
which invoices have been presented, on or
before the Closing Date.
(e) All governmental and third party
approvals (including landlords' and other
consents) necessary or, in the discretion
of the Syndication Agent, advisable in
connection with the Reorganization, the
financing contemplated hereby and the
continuing operations of the Borrower and
its subsidiaries shall have been obtained
and be in full force and effect, and all
applicable waiting periods shall have
expired without any action being taken or
threatened by any competent authority
which would restrain, prevent or
otherwise impose adverse conditions on
the Reorganization or the financing
thereof.
(f) The Lenders shall have received (i)
satisfactory audited consolidated
financial statements of the Borrower for
the two most recent fiscal years ended
prior to the Closing Date as to which
such financial statements are available
and (ii) satisfactory unaudited interim
consolidated financial statements of the
Borrower for each quarterly period ended
subsequent to the date of the latest
financial statements delivered pursuant
to clause (i) of this paragraph as to
which such financial statements are
available.
(g) The Lenders shall have received a
satisfactory pro forma consolidated
balance sheet of the Borrower as at the
date of the most recent consolidated
balance sheet delivered pursuant to
paragraph (f) above, adjusted to give
effect to the consummation of the
Reorganization and the financings
contemplated hereby as if such
transactions had occurred on such date.
(h) The financial projections included in
the disclosure statement related to the
Plan shall be substantially the same as
the financial
6
<PAGE>
projections heretofore provided to the
Arranger.
(i) The Lenders shall have received the
results of a recent lien search in each
relevant jurisdiction with respect to the
Borrower and its subsidiaries, and such
search shall reveal no liens on any of
the assets of the Borrower or its
subsidiaries except for liens permitted
by the Credit Documentation or liens to
be discharged on or prior to the Closing
Date pursuant to documentation (which may
include the Plan and the order confirming
the Plan) satisfactory to the
Administrative Agent.
(j) The pre- and post-consummation fees
and expenses to be incurred in connection
with the Reorganization and the financing
thereof shall not exceed $21,500,000 in
the aggregate.
(k) The Lenders shall have received such
legal opinions (including opinions (i)
from counsel to the Borrower and its
subsidiaries and (ii) from such special
and local counsel as may be required by
the Syndication Agent), documents and
other instruments as are customary for
transactions of this type or as they may
reasonably request.
On-Going Conditions: The making of each extension of credit
shall be conditioned upon (a) the
accuracy of all representations and
warranties in the Credit Documentation
(including, without limitation, the
material adverse change and litigation
representations) and (b) there being no
default or event of default in existence
at the time of, or after giving effect to
the making of, such extension of credit.
As used herein and in the Credit
Documentation a "material adverse change"
shall mean any event, development or
circumstance that has had or could
reasonably be expected to have a material
adverse effect on (a) the business,
assets, property, condition (financial or
otherwise) or prospects of the Borrower
and its subsidiaries taken as a whole, or
(b) the validity or enforceability of any
of the Credit Documentation or the rights
and remedies of the Administrative Agent
and the Lenders thereunder.
VI. Certain Document Matters
The Credit Documentation shall contain
representations, warranties, covenants
and events of default customary for
financings of this type and other terms
deemed appropriate by the Lenders,
including, without limitation:
Representations and Warranties: Financial statements (including pro forma
financial statements); absence of
undisclosed liabilities; no material
adverse change; corporate existence;
compliance with law; corporate power and
authority; enforceability of Credit
Documentation; no conflict with law or
contractual obligations; no material
litigation; no default; ownership of
property; liens; intellectual property;
no burdensome restrictions; taxes;
Federal Reserve regulations; ERISA;
Investment Company Act;
7
<PAGE>
subsidiaries; environmental matters;
solvency; labor matters; accuracy of
disclosure; creation and perfection of
security interests; and Year 2000
matters.
Affirmative Covenants: Delivery of financial statements,
reports, accountants' letters,
projections, officers' certificates and
other information requested by the
Lenders; payment of other obligations;
continuation of business and maintenance
of existence and material rights and
privileges; compliance with laws and
material contractual obligations;
maintenance of property and insurance;
maintenance of books and records; right
of the Lenders to inspect property and
books and records; notices of defaults,
litigation and other material events;
compliance with environmental laws;
further assurances (including, without
limitation, with respect to security
interests in after-acquired property);
and agreement to obtain within 90 days
after the Closing Date interest rate
protection for at least $60,000,000 of
the Credit Facilities on terms and
conditions satisfactory to the
Syndication Agent.
Financial Covenants: Financial covenants (including, without
limitation, (i) minimum EBITDA/interest,
(ii) maximum debt/ EBITDA, (iii) minimum
fixed charge coverage and (iv) maximum
capital expenditures).
Negative Covenants: Limitations, subject to certain
exceptions to be agreed upon, on:
indebtedness (including preferred stock
of subsidiaries); liens (with an
exception, to the extent it constitutes a
lien, for the rights of General Motors
Corporation under the Accommodation
Agreement and the Access and Occupancy
Agreement); guarantee obligations;
mergers, consolidations, liquidations and
dissolutions; sales of assets (with
exceptions for Designated Facilities);
leases; dividends and other payments in
respect of capital stock; capital
expenditures; investments, loans and
advances; optional payments and
modifications of subordinated and other
debt instruments; transactions with
affiliates; sale and leasebacks; changes
in fiscal year; negative pledge clauses;
changes in lines of business.
Events of Default: Nonpayment of principal when due;
nonpayment of interest, fees or other
amounts after a grace period to be agreed
upon; material inaccuracy of
representations and warranties; violation
of covenants (subject, in the case of
certain affirmative covenants, to a grace
period to be agreed upon); cross-default;
bankruptcy events; certain ERISA events;
material judgments; actual or asserted
invalidity of any material guarantee or
security document or security interest;
and a change of control (the definition
of which is to be agreed).
Voting: Amendments and waivers with respect to
the Credit Documentation shall require
the approval of Lenders holding not less
than a majority of the aggregate amount
of the Term Loans, Revolving Credit Loans
and unused commitments under the Credit
Facilities, except that (a) the consent
of each Lender affected thereby shall be
required with respect to (i) reductions
in the amount or extensions of the
scheduled date of
8
<PAGE>
amortization or final maturity of any
Loan, (ii) reductions in the rate of
interest or any fee or extensions of any
due date thereof and (iii) increases in
the amount or extensions of the expiry
date of any Lender's commitment and (b)
the consent of 100% of the Lenders shall
be required with respect to (i)
modifications to any of the voting
percentages and (ii) releases of all or
substantially all of the Guarantors or
all or substantially all of the
collateral.
Assignments and Participations: The Lenders shall be permitted to assign
and sell participations in their Loans
and commitments, subject, in the case of
assignments (other than assignments (i)
by the Syndication Agent, (ii) to another
Lender or to an affiliate of a Lender or
(iii) of funded Term Loans), to the
consent of the Syndication Agent, the
Administrative Agent, and the Borrower
(which consent in each case shall not be
unreasonably withheld). Non-pro rata
assignments shall be permitted. In the
case of partial assignments (other than
to another Lender or to an affiliate of a
Lender), the minimum assignment amount
shall be (x) in the case of the Revolving
Credit Facility and the Tranche B Term
Loan Facility, $5,000,000, and (y) in the
case of the Tranche C Term Loan Facility,
$1,000,000, in each case unless otherwise
agreed by the Borrower, the Syndication
Agent and the Administrative Agent.
Participants shall have the benefit of
yield protection and increased cost
provisions to the same extent as their
fronting lenders. Voting rights of
participants shall be limited to those
matters with respect to which the
affirmative vote of the Lender from which
it purchased its participation would be
required as described under "Voting"
above. Pledges of Loans in accordance
with applicable law shall be permitted
without restriction. Promissory notes
shall be issued under the Credit
Facilities only upon request.
Yield Protection: The Credit Documentation shall contain
customary provisions (a) protecting the
Lenders against increased costs or loss
of yield resulting from changes in
reserve, tax, capital adequacy and other
requirements of law and from the
imposition of or changes in withholding
or other taxes and (b) indemnifying the
Lenders for "breakage costs" incurred in
connection with, among other things, any
prepayment of a Eurodollar Loan (as
defined in Annex 1) on a day other than
the last day of an interest period with
respect thereto.
Expenses and Indemnification: The Borrower shall pay (a) all reasonable
out-of-pocket expenses of the
Administrative Agent, the Syndication
Agent and the Arranger associated with
the syndication of the Credit Facilities
and the preparation, execution, delivery
and administration of the Credit
Documentation and any amendment or waiver
with respect thereto (including the
reasonable fees, disbursements and other
charges of counsel) and (b) all
out-of-pocket expenses of the
Administrative Agent, the Syndication
Agent and the Lenders (including the
fees, disbursements and other charges of
counsel) in connection with the
enforcement of the Credit Documentation.
9
<PAGE>
The Administrative Agent, the Syndication
Agent, the Arranger and the Lenders (and
their affiliates and their respective
officers, directors, employees, advisors
and agents) will have no liability for,
and will be indemnified and held harmless
against, any loss, liability, cost or
expense incurred in respect of the
financing contemplated hereby or the use
or the proposed use of proceeds thereof
(except to the extent resulting from the
gross negligence or willful misconduct of
the indemnified party or of such other
indemnitee of which such indemnified
person is an officer, director, employee,
advisor, agent, affiliate or controlling
person).
Governing Law and Forum: State of New York.
Counsel to the Administrative Simpson Thacher & Bartlett.
Agent, the Syndication Agent
and the Arranger:
10
<PAGE>
Annex I
-------
Interest and Certain Fees
-------------------------
Interest Rate Options: The Borrower may elect that the Loans
comprising each borrowing bear
interest at a rate per annum equal to:
the Base Rate plus the Applicable
Margin; or
the Eurodollar Rate plus the
Applicable Margin.
provided, that all Swing Line Loans
shall bear interest based upon the Base
Rate.
As used herein:
"Base Rate" means the highest of (i) the
rate of interest publicly announced by
Citibank, N.A. as its prime rate in
effect at its principal office in New
York City (the "Prime Rate"), (H) the
secondary market rate for three-month
certificates of deposit (adjusted for
statutory reserve requirements) plus 1%
and (iii) the federal funds effective
rate from time to time plus 0.5%.
"Applicable Margin" means (a) during the
period from the Closing Date through
December 31, 1998, (i) 2.00% in the case
of Base Rate Loans which are Tranche B
Term Loans, (ii) 3.00% in the case of
Eurodollar Loans which are Tranche B
Term Loans, (iii) 2.75% in the case of
Base Rate Loans which are Tranche C Term
Loans, (iv) 3.75% in the case of
Eurodollar Loans which are Tranche C
Term Loans, (v) 2.00% in the case of
Base Rate Loans which are Revolving
Credit Loans and (vi) 3.00% in the case
of Eurodollar Loans which are Revolving
Credit Loans and (b) thereafter, a
percentage to be determined based on
leverage.
"Eurodollar Rate" means the rate
(adjusted for statutory reserve
requirements for eurocurrency
liabilities) at which eurodollar deposits
for one, two, three or six months (as
selected by the Borrower) are offered in
the interbank eurodollar market.
Interest Payment Dates: In the case of Loans bearing interest
based upon the Base Rate ("Base Rate
Loans"), quarterly in arrears.
In the case of Loans bearing interest
based upon the Eurodollar Rate
("Eurodollar Loans"), on the last day of
each relevant interest period and, in the
case of any interest period longer than
three months, on each successive date
three months after the first day of such
interest period.
Commitment Fees: The Borrower shall pay a
commitment fee calculated at the rate of
0.75% per annum on the average daily
unused portion of the
<PAGE>
Revolving Credit Facility, payable
quarterly in arrears. Swing Line Loans
shall, for purposes of the commitment fee
calculations only, not be deemed to be a
utilization of the Revolving Credit
Facility.
Letter of Credit Fees: The Borrower shall pay a commission on
all outstanding Letters of Credit at a
per annum rate equal to the Applicable
Margin then in effect with respect to
Eurodollar Revolving Credit Loans on the
face amount of each such Letter of
Credit. Such commission shall be shared
ratably among the Lenders participating
in the Revolving Credit Facility and
shall be payable quarterly in arrears.
In addition to letter of credit
commission, a fronting fee equal to .25%
per annum on the face amount of each
Letter of Credit shall be payable
quarterly in arrears to the Issuing
Lender for its own account. In addition,
customary administrative, issuance,
amendment, payment and negotiation
charges shall be payable to the Issuing
Lender for its own account.
Default Rate: At any time when the Borrower is in
default in the payment of any amount of
principal due under the Credit Facilities,
such amount shall bear interest at 2%
above the rate otherwise applicable
thereto. Overdue interest, fees and other
amounts shall bear interest at 2% above
the rate applicable to Base Rate Loans.
Rate and Fee Basis: All per annum rates shall be calculated on
the basis of a year of 360 days (or
365/366 days, in the case of Base Rate
Loans the interest rate payable on which
is then based on the Prime Rate) for
actual days elapsed.
<PAGE>
EXHIBIT "B"
DOEHLER-JARVIS, INC., et al.
CIT Commitment Letter
<PAGE>
The CIT Group
Business Credit
1211 Avenue of the Americas
New York, NY 10036
212-536-1200
[LOGO]
August 10, 1998
The companies listed on
Schedule A hereto
c/o Harvard Industries, Inc.
3 Werner Way
Suite 210
Lebanon, NJ 08833
Attention: Roger Pollazzi
Dear Roger:
It has been a pleasure working with you towards our providing the companies
listed on Schedule A hereto (the "Borrowers") with a credit facility to
refinance present debt incurred pursuant to the Post-Petition Loan and
Security Agreement dated May 8, 1997, as amended, and provide working capital
loans thereafter. In connection therewith, The CIT Group/Business Credit, Inc.
(the "Lender") is pleased to inform you that we have approved a secured
committed credit facility to the Borrowers in the aggregate amount of
$125,000,000 ("Line of Credit"), consisting of, and subject to, the following:
Revolving Line of Credit
1. A revolving Line of Credit (the "Revolving Line of Credit") evidenced by
a Financing Agreement ("Agreement") providing for revolving advances
("Revolving Loans") and Letters of Credit (as hereinafter defined) up to
the lesser of (a) $75,000,000 or (b) (i) the sum of'(A) eighty-five
percent (85%) of eligible accounts receivable plus (B) sixty percent
(60%) of eligible raw and finished inventory plus (C) twenty-five
percent (25%) of eligible work in process inventory of each of the
Borrowers plus (D) thirty-three percent (33%) of eligible tooling
inventory (subject to tooling being in place and in use at all times) in
the aggregate at any time. After giving effect to all Revolving Loans
and Letters of Credit to be extended at closing, the Borrowers' excess
revolving loan availability, at the closing only, must be at least
$25,000,000. Such requirement contemplates that all of the Borrowers'
debts, obligations and payables are then current in accordance with its
usual business practices.
<PAGE>
Term Loan
2. A Term Loan in the amount of $50,000,000 ("Term Loan") to be amortized
on an annual basis as follows:
Year 1 $ 1,500,000
Year 2 $ 1,500,000
Year 3 $ 7,500,000
Year 4 $ 7,500,000
Year 5 $ 7,500,000
Maturity $24,500,000
-----------
Total $50,000,000
===========
Letter of Credit Subline
3. Within the Revolving Line of Credit, the Lender will assist the
Borrowers in opening up to $25,000,000 at any time of standby letters of
credit (the "Letters of Credit") for business purposes unrelated to the
purchase of inventory. All Letters of Credit shall be reserved from
availability.
Term
4. The Agreement shall have an initial term of five years from the
effective date of the Borrowers' Plan of Reorganization confirmed by the
U.S. Bankruptcy Court (the "Effective Date").
Interest Rates and Fees
5. Interest shall be computed and payable monthly on: (i) all outstanding
Revolving Loans under the Agreement at a rate equivalent to The Chase
Manhattan Bank Rate plus the Applicable Margin or, at the Borrowers'
option, LIBOR plus the Applicable Margin; and (ii) the Term Loan at a
rate equivalent to The Chase Manhattan Bank Rate plus the Applicable
Margin or, at the Borrowers' option, LIBOR plus the Applicable Margin.
The Chase Manhattan Bank Rate is the rate of interest per annum
announced by The Chase Manhattan Bank from time to time as its prime
rate in effect at its principal office in the City of New York. Such
rate is not intended to be the lowest rate charged by The Chase
Manhattan Bank to its borrowers. The Borrowers may elect to use LIBOR
provided (i) the Borrowers give the Lender three business days prior
notice of such election and (ii) there is then no unwaived or uncured
default under the Agreement.
The Applicable Margin shall be determined by utilizing an Applicable
Margin Grid, with the applicable pricing levels to be determined by the
Lender upon receipt prior to Closing of a revised financial plan of the
Borrowers, in form and substance satisfactory to the Lender. Such
Applicable Margin Grid shall increase and decrease Applicable Margins
for each interest rate option based upon the Borrowers' consolidated
EBITDA, determined monthly on a rolling 12 month basis, upon receipt of
the Borrowers' most recent monthly interim financial statements,
provided no Default or Event of Default under the Agreement has occurred
or is continuing. Any increases or decreases to the Applicable Margin
will commence on the first day of each month immediately following
receipt of such financial statements, and will remain in effect (so long
as no Default or Event of Default under the Agreement shall be in
existence) until the Lender's receipt of the Borrowers' subsequent
monthly financial statements demonstrating that the Applicable Margin
should be increased or decreased, as the case may be. The Borrowers'
initial
-2-
<PAGE>
interest rate options from the Closing until the date such financial
statements first become available shall be (i) for Revolving Loans, The
Chase Manhattan Bank Rate plus 0.50% per annum or, at the Borrowers'
option, LIBOR plus 2.50% per annum; and (ii) for the Term Loan, The
Chase Manhattan Bank Rate plus 0.75% per annum or, at the Borrowers'
option, LIBOR plus 3.00% per annum.
Collections will be credited to the Borrowers' account upon the Lender's
receipt of good funds at its bank account in New York, New York.
6. In addition to passing along all charges imposed on the Lender by the
Letter of Credit issuing bank, the Lender shall earn a fee equal to one
and one quarter percent (1.25%) per annum, payable monthly, on the face
amount of each standby Letter of Credit.
7. An Unused Line Fee of one-half percent (0.50%) per annum, shall be
payable at the end of each month, computed on the difference between the
Revolving Line of Credit and the sum of (i) the average daily Revolving
Loan balance due the Lender plus (ii) the average daily balance of
outstanding Letters of Credit.
8. An Agent Fee (the "Agent Fee"), in the amounts set forth in that certain
letter issued by the Lender to the Borrowers in conjunction with this
letter (the "Rate & Fee Letter"), shall be payable on the date of
closing and annually thereafter.
9. An Arrangement Fee (the "Arrangement Fee"), in the amount set forth in
the Rate & Fee Letter, shall be payable on the date of closing.
10. A Facility Fee (the "Facility Fee"), shall be payable in the amounts and
at the times set forth in the Rate & Fee Letter.
11. A Commitment Extension Fee, shall be payable in the amounts and at the
times set forth in the Rate & Fee Letter.
12. The Borrowers may prepay at any time, in whole in part, the Term Loan,
and may terminate the Agreement at any time. The Term Loan shall be due
and payable in full upon any termination of the Agreement. Should the
Borrowers so terminate the Agreement during the period from the closing
date through the third anniversary thereof, the Lender shall earn and
shall be paid an Early Termination Fee determined by multiplying the
Line of Credit by the following percentages:
Year 1 3.0%
Year 2 2.0%
Year 3 1.0%
thereafter 0.0%
-3-
<PAGE>
Collateral
13. To secure all obligations due the Lender by the Borrowers, (i) the
Borrowers will grant the Lender a first and exclusive lien on all of the
Borrowers' present and future accounts receivable, inventory,
trademarks, patents, general intangibles, equipment, real estate, and
all other assets and properties, and the proceeds of each of the
foregoing, and (i) the Borrowers' current shareholders (except for the
shareholders of Harvard Industries, Inc.) will pledge to the Lender the
issued and outstanding stock of any subsidiaries of the Borrowers and
the proceeds of each of the foregoing.
Guarantees
14. Each Borrower shall provide the Lender with an unconditional and
unlimited guarantee.
Covenants
15. The Agreement will contain such warranties, representations, covenants
and events of default as are customary for financing transactions of
this type, including but not limited to the following: (i) restrictions
on the Borrowers' ability to finance equipment during the first three
years following Closing in excess of the following aggregate cumulative
amounts: (x) from Closing until the first anniversary thereof,
$4,000,000; (y) from Closing until the second anniversary thereof,
$8,000,000; and (z) from Closing until the third anniversary thereof,
$12,000,000; and (ii) a requirement that the Borrowers shall have
received net sale proceeds of not less than $8,000,000 in the aggregate
from the sale of equipment and real property by DJ-Toledo prior to
December 31, 1998, and $15,000,000 in the aggregate from the sale of
such equipment and real property prior to June 30, 1999. The Borrowers
will provide to the Lender, among other things, monthly interim
financial statements. The year-end statements must be certified by an
independent public accountant mutually acceptable to each of the Lender
and the Borrowers. The Agreement also will contain a provision that if
the assets of Doehler-Jarvis Greeneville Inc. ("Greeneville") are sold,
the net proceeds thereof will be applied first to the Term Loan to the
extent of the Term Loan allocable to Greeneville, and thereafter to the
Revolving Loans.
Out of Pocket Expenses
16. The Borrowers shall reimburse the Lender (whether or not this
transaction is consummated) for out-of-pocket costs and expenses
(including reasonable fees and expenses of outside legal counsel)
incurred in connection with the Agreement, including, but not limited
to, those incurred by the Lender in connection with the preparation,
execution and closing of this financing transaction, and the perfection
of liens and security interests.
Conditions of Closing
17. The foregoing is furnished as a means of affording the Borrowers a guide
to, and an outline of, the material terms and conditions of the
commitment. Moreover, you appreciate that the foregoing is subject to:
(a) successful completion of all the above items;
-4-
<PAGE>
(b) the execution and delivery of appropriate legal documentation
which must be satisfactory in form and substance to each of the
Borrowers and the Lender and to their respective counsel;
(c) the Lender's satisfaction with the financial condition of the
Borrowers and an updated examination of the books and records of
the Borrowers;
(d) the absence of any material adverse change in the financial
condition, business, prospects, profitability, assets or
operations of the Borrowers from June 30, 1998. It is understood
and agreed that any adverse change in the terms, conditions,
assumptions or projections supplied to the Lender by the Borrowers
and on which the Lender based its decision to issue this letter
may, in the Lender's reasonable business discretion, be construed
by the Lender as a material adverse change;
(e) the secured subordinated debt currently held by MagTen and
Pacholder shall have been increased to not less than $40,000,000
(from $25,000,000), shall bear interest at a rate of between 11.0%
and 14.5% per annum, shall have a maturity date later than the
maturity date of the secured credit facilities offered by the
Lender hereby and shall contain PIK and other features
satisfactory to the Lender. The terms and provisions of such
secured subordinated debt (including the terms of the
subordination and the respective priorities of claims, security
interests and liens, and the procedures for the enforcement
thereof, each as set forth in an appropriate intercreditor
agreement) must be satisfactory to the Lender in all respects;
(f) the Lender's receipt of, and satisfaction with, an appraisal
indicating (i) an orderly liquidation value ("OLV") of the
Borrowers' real estate of at least $4,000,000, and (ii) an OLV of
the Borrowers' machinery and equipment and
construction-in-progress of at least $70,000,000 (inclusive of
Greenville), in each case as of the Effective Date. The appraisals
must be performed by an appraiser mutually agreed upon who will be
retained by the Lender but paid for by the Borrower;
(g) the terms of the Borrowers' Plan of Reorganization (including the
Disclosure Statement prepared in connection therewith) shall be
acceptable to the Lender;
(h) all existing senior management of the Borrowers, comprising Roger
Pollazzi, Ted Vogtman, Vince Toscano and Joseph Gagliardi, shall
remain in place following the Effective Date;
(i) all claims by any parties in interest relating to the Prepetition
Loan Agreement shall have been released (on terms and conditions
satisfactory to the Lender in its sole discretion) as of the
earliest of (i) the date on which the Borrowers accept this
commitment as provided herein; (ii) the date on which this
commitment is approved by the Court (the "Court") having
jurisdiction of the Borrowers' chapter 11 cases; and (iii) the
date on which a plan of reorganization is confirmed by the Court
with respect to any of the Borrowers; and
(j) the Effective Date shall occur on or prior to December 31, 1998.
-5-
<PAGE>
Confidentiality
18. This letter together with the Rate & Fee Letter and the financing
arrangements described herein are delivered with the understanding that
neither this letter nor the substance of the proposed financing
arrangements contained herein shall be disclosed by the Borrowers to
anybody outside their organization, except to those professional
advisors who are in a confidential relationship with the Borrowers and
require knowledge thereof to perform their duties (such as legal
counsel, accountants and financial advisors), or where disclosure is
required by law.
We each hereby expressly waive any right to trial by jury of any claim, action
or cause of action arising under this letter, any transaction related thereto,
or any other instrument, document or agreement executed or delivered in
connection herewith, whether sounding in contract, tort or otherwise.
This letter together with the Rate & Fee Letter (a) embodies the entire
agreement and understanding between the parties hereto with respect to the
subject matter of this letter and supersedes all prior agreements,
commitments, arrangements, negotiations or understandings, whether oral or
written, of the parties with respect thereto, and (b) can be changed only by a
writing signed by each of the parties hereto and shall bind and benefit each
of such parties and their respective successors and assigns.
If the foregoing is acceptable to you, please so indicate by signing and
returning to us the enclosed copies of this letter and the Rate & Fee Letter
not later than the close of business on August 18, 1998, together with that
portion of the Facility Fee payable upon acceptance hereof. If not accepted by
you as herein provided, this commitment shall expire at the close of business
on August 18, 1998. If accepted in accordance with the terms hereof and upon
payment of all amounts required herein and in the Rate & Fee Letter, the
financing offered herein will expire at the close of business on the earlier
of (i) the Effective Date and (ii) October 31, 1998 unless the definitive
documents contemplated hereunder have been fully executed. Notwithstanding the
foregoing, if accepted as provided above, the financing offered herein may be
extended, at your option, on a month to month basis from October 31, 1998 to
the close of business on December 31, 1998, upon payment to the Lender of the
Commitment Extension Fee in the amounts set forth in the Rate & Fee Letter.
-6-
<PAGE>
Upon our receipt from you of executed copies of this letter and the Rate & Fee
Letter and all amounts payable pursuant hereto and pursuant to the Rate & Fee
Letter, we will sign below to confirm our acceptance and return a fully
executed copy to you. We welcome the opportunity to work with you on this
transaction and we hope to hear from you soon. Should you have any questions
or comments, please feel free to contact us at anytime.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/
--------------------------------
Title: Vice President
Read and Agreed on this day of , 1998;
------ --------
The Borrowers listed on
Schedule A hereto
By:/s/
-----------------------------------
Title: Chief Operating Officer
Commitment Letter Timely Accepted;
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/
--------------------------------
Title: Vice President
-7-
<PAGE>
Schedule A
Harvard Industries, Inc.
The Kingston-Warren Corporation
Hannon Automotive, Inc.
Hayes-Albion Corporation
Doehler-Jarvis, Inc.
Doehler-Jarvis Greeneville, Inc.
Doehler-Jarvis Pottstown, Inc.
Doehler-Jarvis Technologies, Inc.
Doehler-Jarvis Toledo, Inc.
<PAGE>
EXHIBIT "C"
DOEHLER-JARVIS, INC., et al.
New Warrant Agreement
<PAGE>
HARVARD INDUSTRIES, INC.
and
[ ]
as Warrant Agent
---------------------------------------------
Warrants to Purchase 631,578 Shares of Common Stock
---------------------------------------------
WARRANT AGREEMENT
Dated as of , 1998
<PAGE>
TABLE OF CONTENTS
[page references are to original document, not exhibit]
<TABLE>
<S> <C>
Page
1. DEFINITIONS.....................................................................................................................1
2. APPOINTMENT OF WARRANT AGENT....................................................................................................2
2.1. Appointment......................................................................................................2
3. REGISTRATION, FORM AND EXECUTION OF WARRANTS....................................................................................2
3.1. Registration.....................................................................................................2
3.2. Form of Warrant..................................................................................................2
3.3. Countersignature of Warrants.....................................................................................2
4. EXERCISE OF WARRANTS............................................................................................................2
4.1. Manner of Exercise...............................................................................................2
4.2. Payment of Taxes.................................................................................................3
4.3. Fractional Shares................................................................................................3
5. TRANSFER, DIVISION AND COMBINATION..............................................................................................3
5.1. Transfer.........................................................................................................3
5.2. Division and Combination.........................................................................................3
5.3. Maintenance of Books.............................................................................................3
6. ADJUSTMENTS.....................................................................................................................3
6.1. Adjustment for Change in Capital Stock...........................................................................4
6.2. Adjustment for Rights Issue......................................................................................4
6.3. Adjustment for Other Distributions...............................................................................4
6.4. Adjustment for Common Stock Issue................................................................................5
6.5. Adjustment for Convertible Securities Issue......................................................................5
6.6. Market Price.....................................................................................................6
6.7. Consideration Received...........................................................................................6
6.8. When Adjustment May Be Deferred..................................................................................7
6.9. When No Adjustment Required......................................................................................7
6.10. Notice of Adjustment.............................................................................................7
6.11. Voluntary Reduction..............................................................................................7
6.12. Notice of Certain Transactions...................................................................................7
6.13. Preservation of Purchase Rights Upon Reclassification, Consolidation, etc........................................7
6.14. Adjustment to the Number of Shares Purchasable Upon Exercise of Warrants;
Current Warrant Price Not Less than Par Value....................................................................7
6.15. Other Dilutive Events............................................................................................8
6.16. Company Determination Final......................................................................................8
6.17. Form of Warrants.................................................................................................8
7. NOTICES TO HOLDERS..............................................................................................................8
7.1. Notice of Adjustments............................................................................................8
7.2. Notice of Corporate Action.......................................................................................8
8. COVENANTS.......................................................................................................................8
9. RESERVATION AND AUTHORIZATION OF COMMON STOCK:
REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY..............................................................8
10. STOCK AND WARRANT TRANSFER BOOKS...............................................................................................9
11. LOSS OR MUTILATION.............................................................................................................9
12. OFFICE OF COMPANY..............................................................................................................9
13. WARRANT AGENT..................................................................................................................9
13.1. Merger or Consolidation or Change of Name of Warrant Agent.......................................................9
13.2. Certain Terms and Conditions Concerning the Warrant Agent........................................................9
13.3. Change of Warrant Agent.........................................................................................10
</TABLE>
(i)
<PAGE>
<TABLE>
<S> <C>
13.4. Disposition of Proceeds on Exercise of Warrants, Inspection of Warrant
Agreement.......................................................................................................11
14. MISCELLANEOUS.................................................................................................................11
14.1. Notice Generally................................................................................................11
14.2. Successors and Assigns..........................................................................................11
14.3. Amendment.......................................................................................................12
14.4. Third-Party Beneficiaries.......................................................................................12
14.5. Severability....................................................................................................12
14.6. Headings........................................................................................................12
14.7. Governing Law...................................................................................................12
14.8. Counterparts....................................................................................................12
</TABLE>
EXHIBITS
Exhibit A--Form of Warrant Certificate
Exhibit B--Warrant Agent Fees
(ii)
<PAGE>
THIS WARRANT AGREEMENT (this "Warrant Agreement"), dated as of
, 1998, is made by and between Harvard Industries, Inc., a
Delaware corporation (the "Company"), and , a
corporation, as warrant agent (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, the Company will issue to holders of Allowed Interests in Class 7
and 8 under the Plan (as defined below), warrants, as hereinafter described (the
"Warrants"), to purchase up to an aggregate of 631,578 shares of its Common
Stock pursuant to Articles 6.7 and 6.8 of the Plan, as confirmed by the United
States Bankruptcy Court for the District of Delaware (the "Court"), by order
entered , 1998, under Title 11 of the United States Code; and
WHEREAS, the purpose of this Warrant Agreement is to set forth the terms
and conditions which shall govern the issuance of all of the Warrants, the
purchase of Common Stock of the Company upon the exercise thereof, the
adjustments in the terms and price of such Warrants pursuant to the
anti-dilution provisions hereof and such other terms and conditions as
hereinafter set forth;
WHEREAS, the Company has requested the Warrant Agent to act on behalf of
the Company, and the Warrant Agent is willing so to act, in connection with the
issuance, division, transfer, exchange and exercise of Warrants;
NOW, THEREFORE, in consideration of the foregoing and for the purpose of
defining the terms and provisions of the Warrants and the respective rights and
obligations thereunder and hereunder of the Company, the Warrant Agent, and the
Holders (as defined below), and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and affirmed, the
Company and the Warrant Agent hereby agree as follows:
1. DEFINITIONS.
As used in this Warrant Agreement, the following terms have the respective
meanings set forth below:
"Additional Shares of Common Stock" shall mean all shares of Common Stock
issued by the Company after the Effective Date, other than Warrant Stock.
"Business Day" shall mean any day that is not a Saturday or Sunday or a day
on which banks are required or permitted to be closed in the State of New York.
"Common Stock" shall mean (except where the context otherwise indicates)
the Common Stock, $.01 par value per share, of the Company as constituted on the
Effective Date or shortly thereafter, and any capital stock into which such
Common Stock may thereafter be changed, and shall also include shares of common
stock of any successor or acquiring corporation received by or distributed to
the holders of Common Stock of the Company in the circumstances contemplated by
Section 6.
"Company" shall have the meaning assigned to such term in the first
paragraph of this Warrant Agreement.
"Court" shall have the meaning assigned to such term in the recitals to
this Warrant Agreement.
"Current Warrant Price" shall mean, in respect of a share of Common Stock
at any date herein specified, $41.67 per share of Common Stock, subject to
adjustment in accordance with Section 6.
"Effective Date" shall have the meaning set forth in the Plan.
"Expiration Date" shall mean , 2003.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as from time to time in effect.
"Holder" shall mean the Person in whose name a Warrant is registered in the
warrant register of the Company maintained by or on behalf of the Company for
such purpose.
"Majority Holders" shall mean the Holders of Warrants exercisable for in
excess of 50% of the aggregate number of shares of Common Stock then purchasable
upon exercise of all Warrants.
"NASD" shall mean the National Association of Securities Dealers, Inc., or
any successor corporation thereto.
"Outstanding" shall mean, when used with reference to Common Stock, at any
date as of which the number of shares thereof is to be determined, all issued
shares of Common Stock, except shares then owned or held by or for the account
of the Company or any subsidiary thereof, and shall include all shares issuable
in respect of outstanding scrip or any certificates representing fractional
interests in shares of Common Stock.
"Person" shall mean any individual, sole proprietorship, partnership, joint
venture, trust, incorporated organization, association, corporation, limited
liability company, limited liability partnership, institution, public benefit
corporation, entity or government (whether federal, state, county, city,
municipal or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).
<PAGE>
"Plan" shall mean the Debtors' First Amended and Modified Consolidated Plan
of Reorganization under Chapter 11 of the Bankruptcy Code dated August 19, 1998,
filed by the Company and its subsidiaries and the Official Committee of
Unsecured Creditors, as co-proponents, as may be amended, modified or
supplemented in accordance with the terms thereof.
"Warrant Agent" shall have the meaning assigned to such term in the first
paragraph of this Warrant Agreement and shall include any successor Warrant
Agent hereunder.
"Warrant Agent's Principal Office" shall mean the principal office of the
Warrant Agent in __________ (or such other office of the Warrant Agent or any
successor thereto hereunder acceptable to the Company as set forth in a written
notice provided to the Company and the Holders).
"Warrant Agreement" shall have the meaning assigned to such term in the
first paragraph of this Warrant Agreement.
"Warrant Price" shall mean an amount equal to (1) the number of shares of
Common Stock being purchased upon exercise of a Warrant pursuant to
Section 4.1, multiplied by (2) the Current Warrant Price as of the date of such
exercise.
"Warrants" shall have the meaning assigned to such term in the recitals to
this Warrant Agreement, and shall include all warrants issued upon transfer,
division or combination of, or in substitution for, any thereof. All Warrants
shall at all times be identical as to terms and conditions and date, except as
to the number of shares of Common Stock for which they may be exercised.
"Warrant Stock" shall mean the shares of Common Stock purchased by the
Holders of the Warrants upon the exercise thereof.
2. APPOINTMENT OF WARRANT AGENT.
2.1. Appointment. The Company hereby appoints the Warrant Agent to act
as agent for the Company in accordance with the instructions set forth in this
Warrant Agreement, and the Warrant Agent hereby accepts such appointment.
3. REGISTRATION, FORM AND EXECUTION OF WARRANTS.
3.1. Registration. All Warrants shall be numbered and shall be
registered in a warrant register maintained at the Warrant Agent's Principal
Office by the Warrant Agent as they are issues. The Company and the Warrant
Agent shall be entitled to treat a Holder as the owner in fact for all purposes
whatsoever of each Warrant registered in such Holder's name.
3.2. Form of Warrant. The text of each Warrant and of the Election to
Purchase Form and Assignment Form shall be substantially as set forth in Exhibit
A attached hereto. Each Warrant shall be executed on behalf of the Company by
its President or one of its Vice Presidents, under its corporate seal reproduced
thereon or facsimile thereof attested by its Secretary or an Assistant
Secretary. The signature of any of such officers on the Warrants may be manual
or facsimile.
Warrants bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrants or did not hold such
offices on the date of this Warrant Agreement.
Warrants shall be dated as of the date of countersignature thereof by the
Warrant Agent either upon initial issuance or upon division, exchange,
substitution or transfer.
3.3. Countersignature of Warrants. Each Warrant shall be manually
countersigned by the Warrant Agent (or any successor to the Warrant Agent then
acting as warrant agent under this Warrant Agreement) and shall not be valid for
any purpose unless so countersigned. Warrants may be countersigned, however, by
the Warrant Agent (or by its successor as warrant agent hereunder) and may be
delivered by the Warrant Agent, notwithstanding that the persons whose manual
signatures appear thereon as proper officers of the Company shall have ceased to
be such officers at the time of such countersignature, issuance or delivery. The
Warrant Agent shall, upon written instructions of the President, a Vice
President, the Secretary, or an Assistant Secretary of the Company, countersign,
issue and deliver Warrants entitling the Holders thereof to purchase not more
than 1,000,000 shares of Common Stock (subject to adjustment as set forth
herein) and shall countersign and deliver such Warrants as otherwise provided in
this Warrant Agreement.
4. EXERCISE OF WARRANTS.
4.1. Manner of Exercise. From and after the Effective Date and until
5:00 p.m., New York City time, on the Expiration Date, a Holder may exercise any
of its Warrants, on any Business Day, for all or any part of the number of
shares of Common Stock purchasable thereunder.
In order to exercise a Warrant, in whole or in part, a Holder shall deliver
to the Company at the Warrant Agent's Principal Office, (1) a written notice of
such Holder's election to exercise such Warrant, which notice shall include the
number of shares of Common Stock to be purchased, (2) payment of the Warrant
Price for the account of the Company and (3) such Warrant. Such notice shall be
substantially in the form of the Election to Purchase Form set forth on the
reverse side of the form of Warrant
-2-
<PAGE>
Certificate attached as Exhibit A hereto, duly executed by such Holder or its
agent or attorney. Upon receipt thereof, the Warrant Agent shall, as promptly as
practicable, and in any event within five Business Days thereafter, deliver or
cause to be delivered to such Holder an executed certificate or certificates
representing the aggregate number of full shares of Common Stock issuable upon
such exercise. The stock certificate or certificates so delivered shall be, to
the extent possible, in such denomination or denominations as such Holder shall
request in the notice and shall be registered in the name of such Holder or such
other name as shall be designated in such notice. Each Warrant shall be deemed
to have been exercised and such certificate or certificates shall be deemed to
have been issued, and such Holder or any other Person so designated to be named
therein shall be deemed to have become a holder of record of such shares for all
purposes, as of the date such notice, together with cash, or certified check or
official bank check or wire transfer in lawful money of the United States of
America for payment of the Warrant Price and such Warrant, is received by the
Warrant Agent as described above and all taxes required to be paid by such
Holder, if any, pursuant to Section 4.2 prior to the issuance of such shares
have been paid. If any Warrant shall have been exercised in part, the Warrant
Agent shall, at the time of delivery of the certificate or certificates
representing Warrant Stock, deliver to the Holder a new Warrant evidencing the
rights of such Holder to purchase the unpurchased shares of Common Stock called
for by such Warrant, which new Warrant shall in all other respects be identical
with the Warrant exercised in part, or, at the request of such Holder,
appropriate notation may be made on such exercised Warrant and the same returned
to such Holder. Notwithstanding any provision herein to the contrary, the
Warrant Agent shall not be required to register shares in the name of any Person
who acquired a Warrant (or part thereof) or any Warrant Stock otherwise than in
accordance with such Warrant and this Warrant Agreement.
Payment of the Warrant Price shall be made at the option of the Holder by
certified or official bank check or wire transfer or any combination thereof,
duly executed by such Holder or by such Holder's attorney duly authorized in
writing.
4.2. Payment of Taxes. All shares of Common Stock issuable upon the
exercise of any Warrant pursuant to the terms hereof shall be validly issued,
fully paid and nonassessable and without any preemptive rights. The Holder shall
pay all expenses in connection with, and all taxes and other governmental
charges that may be imposed with respect to, the issuance or delivery of
Warrants or Common Stock.
4.3. Fractional Shares. The Company shall not be required to issue a
fractional share of Common Stock upon exercise of any Warrant. Whenever any
distribution of warrants exercisable into fractional shares of Common Stock
would otherwise be called for, the actual distribution thereof will reflect a
rounding up or down to the nearest share of Common Stock, provided that,
whenever any distribution of a Warrant that is exercisable into exactly one-half
of a share of Common Stock would otherwise be called for, the actual
distribution will reflect a rounding down to the nearest share of Common Stock.
5. TRANSFER, DIVISION AND COMBINATION.
5.1. Transfer. Transfer of any Warrant and all rights hereunder, in
whole or in part, shall be registered in the warrant register of the Company to
be maintained for such purpose at the Warrant Agent's Principal Office, upon
surrender of such Warrant at the Warrant Agent's Principal Office, together with
a written assignment of such Warrant substantially in the form set forth on the
reverse side of the form of Warrant Certificate attached as Exhibit A hereto
duly executed by the Holder or its agent or attorney and payment of all funds
sufficient to pay any taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment and subject to Section 9 hereof, the
Company shall execute and the Warrant Agent shall countersign and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of such Warrant not so assigned,
and the surrendered Warrant shall promptly be cancelled. A Warrant, if properly
assigned, may be exercised by a new Holder for the purchase of shares of Common
Stock without having a new warrant issued.
5.2. Division and Combination. Any Warrant may be divided or combined
with other Warrants upon presentation thereof at the Warrant Agent's Principal
Office, together with a written notice specifying the names and denominations in
which new Warrants are to be issued, signed by the Holder or its agent or
attorney. Subject to compliance with Section 5.1, as to any transfer which may
be involved in such division or combination, the Company shall execute and the
Warrant Agent shall countersign and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
5.3. Maintenance of Books. The Warrant Agent agrees to maintain, at
the Warrant Agent's Principal Office, the warrant register for the registration
of Warrants and the registration of transfer of the Warrants.
6. ADJUSTMENTS.
The Current Warrant Price and the number of Warrant Stock issuable upon the
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 6.
-3-
<PAGE>
6.1. Adjustment for Change in Capital Stock.
If the Company:
<TABLE>
<S> <C> <C>
(a) pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock;
(b) subdivides its outstanding shares of Common Stock into a greater number of shares;
(c) combines its outstanding shares of Common Stock into a smaller number of shares;
(d) makes a distribution on Common Stock in shares of its capital stock other than Common Stock; or
(e) issues by reclassification of Common Stock any shares of its capital stock;
</TABLE>
then the exercise right and the Current Warrant Price in effect immediately
prior to such action shall be adjusted so that the holder of Warrants may
receive upon exercise of the Warrants the number of shares of capital stock of
the Company which it would have owned immediately following such action if it
had exercised the Warrants immediately prior to such action. The adjustment
shall become effective immediately after the record date in the case of a
distribution and immediately after the effective date in the case of a
combination or reclassification.
If, after an adjustment, the holder of Warrants may receive shares of two
or more classes of capital stock of the Company, the Company and the holders of
a majority of the Warrants shall mutually agree upon the allocation of the
adjusted exercise price between the classes of capital stock. After such
Allocation, the exercise privilege and the Current Warrant Price of each class
of capital stock shall thereafter be subject to adjustment on terms comparable
to those applicable to Common Stock in this Section 6.
6.2. Adjustment for Rights Issue. If the Company distributes any
rights, options or warrants to all holders of Common Stock entitling them for a
period expiring within 60 days after the record date mentioned below to purchase
shares of Common Stock at a price per share less than the current market price
per share on that record date, the Current Warrant Price shall be adjusted in
accordance with the formula:
<TABLE>
<S> <C> <C> <C>
W(1) = W * ((O * M) + (N * P)) / (M * (O + N))
where:
W(1) = the adjusted Current Warrant Price.
W = the then current Current Warrant Price.
O = the number of shares of Common Stock outstanding on the record date.
N = the number of additional shares of Common Stock offered or issuable on the exercise of the rights,
options or warrants.
P = the offering price per share of the additional shares subject to the rights or warrants.
M = current market price per share of Common Stock on the record date.
</TABLE>
The adjustment shall be made successively whenever any such rights, options
or warrants are issued and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the rights,
options or warrants.
If at the end of the period during which such warrants or rights are
exercisable, which period shall not exceed 60 days, not all warrants or rights
shall have been exercised, the Current Warrant Price shall be immediately
readjusted to what it would have been if "N" in the above formula had been the
number of shares actually issued.
This Section 6.2 does not apply to: (a) the Warrants issued by the Company
pursuant to the Plan or (b) options issued pursuant to the Company's Incentive
Plan or Emergence Bonus Plan (as such terms are described in the Plan) or any
similar plan.
6.3. Adjustment for Other Distributions. If the Company distributes to
all holders of Common Stock any of its assets (other than any cash dividends
periodically paid to holders of Common Stock from profits or retained earnings
of the Company, but only to the extent such distributions are (i) on a per share
basis not in excess of 4% of the per share market price of the Common Stock on
the date such distributions are made and (ii) made pursuant to a policy of
quarterly cash dividends adopted by the Company and publicly announced) or debt
securities or any rights or warrants to purchase assets, debt securities or
other securities of the Company, the Current Warrant Price shall be adjusted in
accordance with the formula:
<TABLE>
<S> <C> <C> <C>
W(1) = W * (M--F) / M
where:
W(1) = the adjusted Current Warrant Price.
W = the then current Current Warrant Price.
M = the current market price per share of Common Stock on the record date mentioned below.
F = the aggregate fair market value (as determined by an Appraiser chosen
</TABLE>
-4-
<PAGE>
in accordance with Section 6.6), on the record date, of the assets (including
cash), securities, rights or warrants so distributed divided by the number of
outstanding shares of Common Stock on the record date;
provided, that, in the event that the value of F exceeds the value of M, or
in the event that the value of M exceeds the value of F by less than 10%, in
lieu of the foregoing adjustment, adequate provision shall be made so that the
holders of the Warrants shall receive, upon exercise of the Warrants and the
payment of the current Warrant Price, a pro rata share of the aggregate
distribution based upon the maximum number of shares of Common Stock at the time
issuable to such holders (determined without regard to whether the Warrants are
exercisable at such time).
The adjustment shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution.
If at the end of the period during which any such warrants or rights are
exercisable, which period shall not exceed 90 days, not all of such warrants or
rights shall have been exercised, the Current Warrant Price shall be immediately
readjusted to what it would have been if "F" in the above formula had not
included the fair market value on the record date of the expired warrants or
rights, but were still divided by the same number of outstanding shares of
Common Stock.
This Section 6.3 does not apply to distributions of rights, options or
warrants referred to in Section 6.2.
6.4. Adjustment for Common Stock Issue. If the Company issues shares
of Common Stock for consideration per share less than the current market price
per share on the date the Company fixes the offering price of such additional
shares, the Current Warrant Price shall be adjusted in accordance with the
formula:
<TABLE>
<S> <C> <C> <C>
W(1) = W * ((O * M) + P) / (A * M)
where:
W(1) = the adjusted Current Warrant Price.
W = the then current Current Warrant Price.
O = the number of shares outstanding immediately prior to the issuance of such additional shares.
P = the aggregate consideration received for the issuance of such additional shares.
M = the current market price per share on the date of issuance of such additional shares.
A = the number of shares outstanding immediately after the issuance of such additional shares.
</TABLE>
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
This Section 6.4 does not apply to:
(a) issuances of Common Stock pursuant to the Plan,
(b) issuances of Common Stock to directors,
consultants, officers or empoyees of the Company
and its subsidiaries under the Incentive Plan, the
Emergence Bonus Plan or any similar plans
(c) any of the transactions or distributions described
in Sections 6.2, 6.3 or 6.5,
(d) the exercise of the Warrants issued by the Company
pursuant to the Plan,
(e) the conversion or exchange of securities
convertible or exchangeable for Common Stock and
the exercise of rights or warrants issued to the
holders of Common Stock, in each case only if the
issuance of such securities, rights or warrants
were subject to the provisions of this Section 6,
or
(f) issuances of Common Stock pursuant to a public
offering pursuant to a firm commitment
underwriting.
6.5. Adjustment for Convertible Securities Issue. If the Company
issues any securities convertible into or exchangeable or exercisable for Common
Stock (other than the securities issued in transactions described in
Sections 6.2 and 6.3) for consideration per share of Common Stock initially
deliverable upon conversion, exchange or exercise of such securities less than
the current market price per share on the date of issuance of such securities
the Current Warrant Price shall be adjusted in accordance with the formula:
<TABLE>
<S> <C> <C> <C>
W(1) = W * ((O * M) + P + (D * E)) / (M * (O + D))
where:
W(1) = the adjusted Current Warrant Price.
</TABLE>
-5-
<PAGE>
<TABLE>
<S> <C> <C> <C>
W = the then current Current Warrant Price.
O = the number of shares outstanding immediately prior to the issuance of such securities which are
convertible into or exchangeable or exercisable for Common Stock.
P = the aggregate consideration received for the issuance of such securities.
M = the current market price per share of Common Stock on the date of issuance of such securities.
D = the maximum number of shares deliverable upon conversion, exchange or exercise of such securities at
the initial conversion, exchange or exercise rate.
E = the conversion, exchange or exercise price per share of Common Stock of such securities.
</TABLE>
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion, exchange or
exercise of such securities has not been issued when such securities are no
longer outstanding, then the Current Warrant Price shall immediately be
readjusted to the Current Warrant Price which would then be in effect had the
adjustment upon the issuance of such securities been made on the basis of the
actual number of shares of Common Stock issued upon conversion, exchange or
exercise of such securities.
This Section 6.5 does not apply to:
(1) any of the transactions or distributions described
in Sections 6.2 and 6.3,
(2) issuances of Common Stock to directors,
consultants, officers or empoyees of the Company
and its subsidiaries under the Incentive Plan, the
Emergence Bonus Plan or any similar plans, or
(3) issuances of securities convertible into or
exchangeable or exercisable for Common Stock
pursuant to a public offering pursuant to a firm
commitment underwriting.
6.6. Market Price. The "current market price" per share of Common
Stock on any date is the average of the Quoted Prices of the Common Stock for 15
consecutive trading days commencing 16 days before the date in question. The
"Quoted Price" of the Common Stock is the last reported sales price of the
Common Stock as reported by the Nasdaq National Market, or if the Common Stock
is listed on another national securities exchange, the last reported sales price
of the Common Stock on such exchange which shall be for consolidated trading if
applicable to such exchange, or if neither so reported or listed, the last
reported bid price of the Common Stock. In the absence of one or more such
quotations, the current market price shall be determined by mutual agreement of
the Company and the holders of a majority of the Warrants or, in the absence of
such mutual agreement, shall be determined in good faith by a nationally
recognized investment banking firm that is a member firm of the NASD and
independent of the Company and chosen in accordance with the following sentence
(an "Appraiser"). The Appraiser shall be chosen by mutual agreement of the
holders of a majority of the Warrants and the Company; provided, that if there
shall be a disagreement as to the selection of any Appraiser, then each of the
Company and the holders of a majority of the Warrants shall choose one
investment banking firm satisfying-the foregoing criteria and those two firms
then shall agree upon a third such investment banking firm who shall act as the
Appraiser. If applicable, in connection with the sale of units consisting of
Common Stock and other securities, such investment bank shall take into
consideration the value of each component of such unit. If there shall be more
than one class of Common Stock outstanding, the "current market price" per share
of Common Stock shall be the highest of the "current market prices" per share of
such classes of Common Stock.
6.7. Consideration Received. For purposes of any computation with
respect to consideration received pursuant to Sections 6.4 and 6.5, the
following shall apply:
(a) in the case of the issuance of shares of Common Stock for cash,
the consideration shall be the amount of such cash (provided that in no
case shall any deduction be made for any commissions, discounts or other
expenses incurred by the Company for any underwriting of the issue or
otherwise in connection therewith) plus, where the issuance is pursuant to
the exercise of an option, warrant or right, all cash amounts paid to the
Company for such option, warrant or right at its issue, including without
limitation, any amount allocable to such option, warrant, or right if
issued together with other securities in a unit;
(b) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof as determined
by an Appraiser, whose determination shall be given to the holders of the
Warrants; and
(c) in the case of the issuance of securities convertible into or
exchangeable for shares of Common Stock, the aggregate consideration
received therefor shall be deemed to be the consideration received by the
Company for the issuance of such securities plus the additional minimum
consideration, if any, to be received by the Company upon the conversion or
-6-
<PAGE>
exchange thereof (the consideration in each case to be determined in the
same manner as provided in clauses (a) and (b) of this Section 6.7).
6.8. When Adjustment May Be Deferred. If the amount of any adjustment
of the Current Warrant Price required pursuant to this Section 6 would be less
than one percent (1%) of the Current Warrant Price in effect at the time such
adjustment is otherwise so required to be made, such amount shall be carried
forward and adjustment with respect thereto made at the time of and together
with any subsequent adjustment which, together with such amount and any other
amount or amounts so carried forward, shall aggregate at least one percent (1%)
of such Current Warrant Price. All calculations under this Section 6 shall be
made to the nearest cent or to the nearest 1/100th of a share, as the case may
be.
6.9. When No Adjustment Required. No adjustment need be made for (a)
rights to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends, the Company's Incentive Plan or Emergence Bonus Plan or any similar
plans, and (b) a change in the par value or no par value of Common Stock;
provided, that the Company shall not increase the par value to exceed the
Current Warrant Price. To the extent the Warrants become exercisable into cash,
no adjustment need be made thereafter as to the cash. Interest will not accrue
on the cash.
6.10. Notice of Adjustment. Whenever an event occurs which requires an
adjustment to the Current Warrant Price or number of shares of Warrant Stock,
the Company shall promptly mail (first class) to the holders of the Warrants a
notice of such event and the computation of the adjustment. The Company shall
provide the holders of the Warrants with a certificate from the Company's chief
financial officer briefly stating the facts requiring the adjustment and the
manner of computing it.
6.11. Voluntary Reduction. The Company from time to time may reduce
the Current Warrant Price by any amount for any period of time if the period is
at least 20 days and if the reduction is irrevocable during the period. A
reduction of the Current Warrant Price pursuant to this Section 6.11 does not
change or adjust the Current Warrant Price otherwise in effect for purposes of
Sections 6.1, 6.2, 6.3, 6.4 or 6.5. The Company in its discretion may make such
reductions in the Current Warrant Price in addition to those required by this
Section 6 as it considers to be advisable in order that any event treated for
federal income tax purposes as a dividend of stock or stock rights shall not be
taxable to the recipients.
6.12. Notice of Certain Transactions. If the Company takes any action
that would require an adjustment pursuant to Sections 6.1, 6.2, 6.3, 6.4 or 6.5,
the Company shall mail (first class) to the holders of the Warrants a notice
stating the proposed record date for a dividend or distribution or the proposed
effective date of a subdivision, combination, reclassification, consolidation,
merger, transfer, lease, liquidation or dissolution or any other transaction or
event requiring an adjustment in the Current Warrant Price. The Company shall
mail the notice at least 15 days before such date; provided, however, that in no
event must the Company give the holders of the Warrants notice prior to the
public announcement of the event requiring such adjustment. Failure to mail the
notice or any defect in it shall not affect the validity of the transaction.
6.13. Preservation of Purchase Rights Upon Reclassification,
Consolidation. etc. If the Company consolidates or merges with or into, or
transfers or leases all or substantially all its assets to, any person, upon
consummation of such transaction, the Warrants shall automatically become
exercisable for the kind and amount of securities, cash or other assets that the
holder of a Warrant would have owned immediately after the consolidation, merger
or transfer or lease if the holder had exercised the Warrant immediately before
the effective date of the transaction. Concurrently with the consummation of
such transaction, the corporation formed by or surviving any such consolidation
or merger if other than the Company, or the person to which such sale or
conveyance shall have been made, shall enter into a supplemental Warrant
Agreement so providing and further providing for adjustments which shall be as
nearly equivalent as may be practical to the adjustments provided for in this
Section. The successor Company shall mail to Warrant holders a notice describing
the supplemental Warrant Agreement.
If the issuer of securities deliverable upon exercise of Warrants under the
supplemental Warrant Agreement is an affiliate of the formed, surviving,
transferee or lessee corporation, that issuer shall join in the supplemental
Warrant Agreement.
If this Section 6.13 applies to any transaction, Sections 6.1, 6.2, 6.3,
6.4 and 6.5 shall not apply to such transaction. The provisions of this
Section 6.13 shall similarly apply to successive consolidations, mergers, sales
or conveyances.
6.14. Adjustment to the Number of Shares Purchasable Upon Exercise of
Warrants; Current Warrant Price Not Less than Par Value. Upon each adjustment
of the Current Warrant Price pursuant to this Section 6, each Warrant shall
thereupon evidence the right to purchase that number of shares of Common Stock
(calculated to the nearest hundredth of a share) obtained by multiplying the
number of shares of Common Stock purchasable immediately prior to such
adjustment upon exercise of the Warrant by the Current Warrant Price in effect
immediately prior to such adjustment and dividing the product so obtained by the
Current Warrant Price in effect immediately after such adjustment. The
adjustment pursuant to this Section 6.14 to the number of shares of Common Stock
purchasable upon exercise of a Warrant shall be made each time an adjustment of
the Current Warrant Price is made pursuant to this Section 6 (or would be made
but for the proviso in Section 6.3). In no event shall the Current Warrant Price
be adjusted below the par value per share of the Common Stock, provided,
however, that in the event such adjustment would
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<PAGE>
have been made but for this sentence, the number of shares issuable upon
exercise of a Warrant shall be adjusted in accordance with the remainder of this
Section 6.14 as though such adjustment in the Current Warrant Price had been
made.
6.15. Other Dilutive Events. In case any event shall occur as to which
the provisions of this Section 6 are not strictly applicable but the failure to
make any adjustment would not fairly protect the purchase rights represented by
the Warrants in accordance with the essential intent and principles of such
sections, then, in each such case, the Company shall make a good faith
adjustment to the Current Warrant Price and number of shares of Warrant Stock
into which each Warrant is exercisable in accordance with the intent of this
Section 6.
6.16. Company Determination Final. Absent manifest error, any
determination that the Company or the Board of Directors of the Company must
make in good faith pursuant to Sections 6.3, 6.6 or 6.8, shall be conclusive, if
reasonable.
6.17. Form of Warrants. The Company may, at its option, issue new
warrant certificates evidencing Warrants in such form as may be approved by its
Board of Directors to reflect any adjustment or change in the Current Warrant
Price per Warrant Stock and the number or kind or class of shares or other
securities or property purchasable under the Warrant Certificates made in
accordance with the provisions of this Agreement.
7. NOTICES TO HOLDERS.
7.1. Notice of Adjustments. Whenever the number of shares of Common
Stock for which a Warrant is exercisable, or whenever the price at which a share
of such Common Stock may be purchased upon exercise of the Warrants, shall be
adjusted pursuant to Section 6, the Company shall forthwith prepare a
certificate to be executed by the chief financial officer of the Company setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated, specifying the number of shares of
Common Stock for which a Warrant is exercisable and describing the number and
kind of any other shares of stock or other property for which a Warrant is
exercisable, and any change in the purchase price or prices thereof, after
giving effect to such adjustment or change. The Company shall promptly cause a
signed copy of such certificate to be delivered to each Holder in accordance
with Section 14.1.
7.2. Notice of Corporate Action. In case:
(a) of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or
of the conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of
Common Stock issuable upon exercise of the Warrants (other than a change in
par value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination); or
(b) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be given to each of the Holders at his or
her address appearing on the Warrant register, at least 10 days prior to the
applicable record date hereinafter specified, or promptly in the case of events
for which there is no record date, in accordance with Section 14.1, a written
notice stating the date on which any such consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up is expected to become effective
or consummated, and the date as of which it is expected that holders of record
of shares of Common Stock shall be entitled to exchange such shares for
securities or other property, if any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up. The failure to give the notice required by this Section 7.2 or any defect
therein shall not affect the legality or validity of any consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any action.
8. COVENANTS.
The Company will (1) not increase the par value of any shares of Common
Stock receivable upon the exercise of a Warrant above the amount payable
therefor upon such exercise immediately prior to such increase in par value and
(2) take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of any Warrant.
9. RESERVATION AND AUTHORIZATION OF COMMON STOCK: REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTHORITY.
From and after the Effective Date, the Company shall at all times reserve
and keep available for issue upon the exercise of Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants. All shares of Common Stock
which shall be so issuable, when issued upon exercise of any Warrant and payment
therefor in accordance with the terms of this Warrant Agreement and such
Warrant, shall be duly and validly issued and fully paid and nonassessable, and
not subject to preemptive rights.
Before taking any action which would cause an adjustment reducing the
Current Warrant Price below the then par value, if any, of the shares of Common
Stock issuable upon exercise of the Warrants, the Company shall take any
corporate action which
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<PAGE>
may be necessary in order that the Company may validly and legally issue fully
paid and nonassessable shares of such Common Stock at such adjusted Current
Warrant Price.
10. STOCK AND WARRANT TRANSFER BOOKS.
The Company will not at any time, except upon dissolution, liquidation or
winding up of the Company, close its stock transfer books or Warrant transfer
books so as to result in preventing or delaying the exercise or transfer of any
Warrant.
11. LOSS OR MUTILATION.
Upon receipt by the Company and the Warrant Agent from any Holder of
evidence reasonably satisfactory to them of the ownership of and the loss,
theft, destruction or mutilation of such Holder's Warrant and indemnity
reasonably satisfactory to them, and in case of mutilation upon surrender and
cancellation thereof, the Company will execute and the Warrant Agent will
countersign and deliver in lieu thereof a new Warrant of like tenor to such
Holder.
12. OFFICE OF COMPANY.
As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency (which may be the principal executive offices of
the Company) where the Warrants may be presented for exercise, registration of
transfer, division or combination as provided in this Warrant Agreement. The
Company shall initially maintain such an agency at the Warrant Agent's Principal
Offices.
13. WARRANT AGENT.
13.1. Merger or Consolidation or Change of Name of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided that such
corporation must be eligible for appointment as a successor Warrant Agent under
the provisions of Section 13.3 hereof if at the time such successor to the
Warrant Agent shall succeed to the agency created by this Warrant Agreement any
of the Warrants shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the predecessor
Warrant Agent and deliver such Warrants so countersigned; and if at that time
any of the Warrants shall not have been countersigned, any successor to the
Warrant Agent may countersign such Warrants either in the name of the
predecessor Warrant Agent or in the name of the successor Warrant Agent; and in
all such cases Warrants shall have the full force provided in the Warrants and
in this Warrant Agreement. If at any time the name of the Warrant Agent shall be
changed and at such time Warrants shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignatures under its prior
name and deliver such Warrants so countersigned; and if at that time any of the
Warrants shall not have been countersigned, the Warrant Agent may countersign
such Warrants either in its prior name or in its changed name; and in all such
cases such Warrants shall have the full force provided in the Warrants and in
this Warrant Agreement.
13.2. Certain Terms and Conditions Concerning the Warrant Agent. The
Warrant Agent undertakes the duties and obligations imposed by this Warrant
Agreement upon the following terms and conditions, by all of which the Company
and the Holders, by their acceptance of Warrants, shall be bound:
(a) Correctness of Statements. The statements contained herein
and in the Warrants shall be taken as statements of the Company and the
Warrant Agent assumes no responsibility for the correctness of any of the
same except such as describe the Warrant Agent or action taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution of
the Warrants except as herein otherwise provided.
(b) Breach of Covenants. The Warrant Agent shall not be
responsible for any failure of the Company to comply with any of the
covenants contained in this Warrant Agreement or in the Warrants to be
complied with specifically by the Company.
(c) Performance of Duties. The Warrant Agent may execute and
exercise any of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys or agents
(which shall not include its employees) and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) Reliance on Counsel. The Warrant Agent may consult at any
time with legal counsel satisfactory to it (who may be counsel for the
Company) and the Warrant Agent shall incur no liability or responsibility
to the Company or to any Holder in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the opinion or
the advice of such counsel provided that such counsel shall have been
selected with due care.
(e) Proof of Actions Taken. Whenever in the performance of its
duties under this Warrant Agreement the Warrant Agent shall deem it
necessary or desirable that any fact or matter be proved or established by
the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed)
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<PAGE>
may be deemed conclusively to be proved and established by a certificate
signed by the President, a Vice President, the Secretary or an Assistant
Secretary of the Company and delivered to the Warrant Agent; and such
certificate shall be full authorization to the Warrant Agent for any action
taken or suffered in good faith by it under the provisions of this Warrant
Agreement in reliance upon such certificate.
(f) Compensation. The Company agrees to pay the Warrant Agent
compensation as set forth in the fee schedule attached hereto as Exhibit B
for all services rendered by the Warrant Agent in the performance of its
duties under this Warrant Agreement, to reimburse the Warrant Agent for all
expenses, taxes and governmental charges and other charges of any kind and
nature incurred by the Warrant Agent in the performance of its duties under
this Warrant Agreement, and to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments, costs and
counsel fees, for anything done or omitted by the Warrant Agent in the
performance of its duties under this Warrant Agreement except as a result
of the Warrant Agent's gross negligence, willful misconduct, unlawful
conduct or bad faith.
(g) Legal Proceedings. The Warrant Agent shall be under no
obligation to institute any action, suit or legal proceeding or to take any
other action likely to involve expense unless the Company or one or more
Holders shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses that may be incurred, but this
provision shall not affect the power of the Warrant Agent to take such
action as the Warrant Agent may consider proper, whether with or without
any such security or indemnity. All rights of action under this Warrant
Agreement or under any of the Warrants may be enforced by the Warrant Agent
without the possession of any of the Warrants or the production thereof at
any trial or other proceeding relative thereto, and any such action, suit
or proceeding instituted by the Warrant Agent shall be brought in its name
as Warrant Agent, and any recovery of judgment shall be for the ratable
benefit of the Holders, as their respective rights or interests may appear.
(h) Other Transactions in Securities of the Company. The Warrant
Agent and any stockholder, director, officer or employee of the Warrant
Agent may buy, sell or deal in any of the Warrants or other securities of
the Company or become pecuniarily interested in any transaction in which
the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Warrant
Agent under this Warrant Agreement. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) Liability of Warrant Agent. The Warrant Agent shall act
hereunder solely as agent, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything that
it may do or refrain from doing in connection with this Warrant Agreement
except for its own gross negligence, willful misconduct, unlawful conduct
or bad faith.
(j) Reliance on Documents. The Warrant Agent will not incur any
liability or responsibility to the Company or to any Holder for any action
taken in reliance on any notice, resolution, waiver, consent, order,
certificate, or other paper, document or instrument reasonably believed by
it to be genuine and to have been signed, sent or presented by the proper
party or parties.
(k) Validity of Agreements. The Warrant Agent shall not be under
any responsibility in respect of the validity of this Warrant Agreement or
the execution and delivery hereof (except the due execution and delivery
hereof by the Warrant Agent) or in respect of the validity or execution of
any Warrant (except its countersignature and delivery thereof); nor shall
the Warrant Agent by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any Warrant Stock (or
other stock) to be issued pursuant to this Warrant Agreement or any
Warrant, or as to whether any Warrant Stock (or other stock) will, when
issued, be validly issued, fully paid and nonassessable, or as to the
Warrant Price or the number or amount of Warrant Stock or other securities
or other property issued upon exercise of any Warrant.
(l) Instructions from Company. The Warrant Agent is hereby
authorized and directed to accept instructions with respect to the
performance of its duties hereunder from the President, a Vice President,
the Secretary or any Assistant Secretary of the Company, and to apply to
such officers for advice or instructions in connection with its duties, and
shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer or officers.
13.3. Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Warrant Agreement by giving to the Company
30 days advance notice in writing. The Warrant Agent may be removed by like
notice to the Warrant Agent from the Company. If the Warrant Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent, then any Holder may apply to the Court for the
appointment of a successor to the Warrant Agent. Pending the appointment of the
successor warrant agent, the Company shall perform the duties of the Warrant
Agent. Any successor warrant agent, whether appointed by the Company or the
Court, shall be a bank or trust company, in good standing, incorporated under
the laws of the United States of America or any state thereof and having at the
time of its appointment as
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<PAGE>
warrant agent a combined capital and surplus of at least $50,000,000. After
appointment, the successor warrant agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Warrant Agent without further act or deed; but the former Warrant Agent shall
deliver and transfer to the successor warrant agent any property at the time
held by it hereunder, and execute and deliver any further assurance, conveyance,
act or deed necessary for the purpose. Failure to file any notice provided for
in this Section 13.3, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Warrant Agent or the
appointment of the successor warrant agent, as the case may be. In the event of
such resignation or removal, the successor warrant agent shall mail, first
class, to each Holder, written notice of such removal or resignation and the
name and address of such successor warrant agent.
13.4. Disposition of Proceeds on Exercise of Warrants, Inspection of
Warrant Agreement. The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay to the Company all
immediately available funds received by the Warrant Agent for the purchase of
the Warrant Stock through the exercise of such Warrants. The Warrant Agent
shall, upon request of the Company from time to time, deliver to the Company
such complete reports of registered ownership of the Warrants and such complete
records or transactions with respect to the Warrants and the shares of Common
Stock as the Company may request. The Warrant Agent shall also make available to
the Company for inspection by the Company's agents or employees, from time to
time as the Company may request, such original books of accounts and records
maintained by the Warrant Agent in connection with the issuance and exercise of
Warrants hereunder, such inspections to occur at the Warrant Agent's Principal
Office. The Warrant Agent shall keep copies of this Warrant Agreement and any
notices given or received hereunder available for inspection by the Company or
the Holders at the Warrant Agent's Principal Office. The Company shall supply
the Warrant Agent from time to time with such numbers of copies of this Warrant
Agreement as the Warrant Agent may request.
14. MISCELLANEOUS.
14.1. Notice Generally. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Warrant Agreement shall be sufficiently given
or made if in writing and either delivered in person with receipt acknowledged
or sent by registered or certified mail, return receipt requested, postage
prepaid or by telecopy and confined by telecopy answerback, addressed as
follows:
(a) If to any Holder or holder of Warrant Stock, at its last known
address appearing on the warrant register of the Company maintained for
such purpose.
(b) If to the Company, at:
Harvard Industries, Inc.
3 Werner Way
Lebanon, New Jersey 08833
Attention: Roger Pollazzi
Telephone: (908) 437-4100
Facsimile: (908) 236-0071
(c) If to the Warrant Agent, at:
[Insert]
Attention:
Telephone:
Facsimile:
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback or five Business Days after the same shall have been deposited in the
United States mail, certified with return receipt requested, whichever is
earlier. Failure or delay in delivering copies of an notice, demand, request,
approval, declaration, delivery or other communication to the Person designated
above to receive a copy shall in no way adversely affect the effectiveness of
such notice, demand, request, approval, declaration, delivery or other
communication.
14.2. Successors and Assigns. All covenants and provisions of this
Warrant Agreement by or for the benefit of the Company or the Warrant Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
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<PAGE>
14.3. Amendment. This Warrant Agreement and the Warrants may only be
modified or amended or the provisions hereof and thereof waived with the written
consent of the Company, the Warrant Agent and the Majority Holders; provided,
that no Warrant may be modified or amended to reduce the number of shares of
Common Stock for which such Warrant is exercisable or to increase the price at
which such shares may be purchased upon exercise of such Warrant (other than
giving effect to any adjustment as provided herein and therein) without the
prior written consent of the Holder thereof.
14.4. Third-Party Beneficiaries. All covenants and provisions of this
Warrant Agreement shall inure to the benefit of each holder from time to time of
Common Stock.
14.5. Severability. Wherever possible, each provision of this Warrant
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Warrant Agreement.
14.6. Headings. The headings used in this Warrant Agreement are for
the convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant Agreement.
14.7. Governing Law. This Warrant Agreement and the Warrants shall be
governed by the laws of the State of New York, without regard to the provisions
thereof relating to conflict of laws.
14.8. Counterparts. This Warrant Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
one and the same instrument.
IN WITNESS WHEREOF, each of the Company and the Warrant Agent has caused
this Warrant Agreement to be duly executed by its duly authorized officers as of
the date first above written.
HARVARD INDUSTRIES, INC.
By:______________________________________
Name:
Title:
__________________________________, as
Warrant Agent
By:______________________________________
Name:____________________________________
Title:___________________________________
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<PAGE>
EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
WARRANT TO PURCHASE COMMON STOCK
OF HARVARD INDUSTRIES, INC.
<TABLE>
<S> <C>
Warrant Certificate No.: Number of Warrants:
CUSIP No.
</TABLE>
See Reverse for Certain Definitions
Exercisable from and after , until 5:00 p.m., New York
City time on , 2003.
This Warrant Certificate certifies that [ ] or registered
assigns, is the registered holder of the number of Warrants set forth above
expiring at 5:00 p.m., New York City time, on , or, if such
date is not a business day, the next succeeding business day (the "Warrants") to
purchase Common Stock, par value $0.01 per share (the "Common Stock"), of
Harvard Industries, Inc., a Delaware corporation (the "Company"). The Common
Stock issuable upon exercise of Warrants is hereinafter referred to as the
"Warrant Stock." Subject to the immediately succeeding paragraph, each Warrant
entitles the holder upon exercise to purchase from the Company on or before
5:00 p.m., New York City time, on , 2003 or, if such date is
not a business day, the next succeeding business day, one share of Common Stock,
at the purchase price of $ per share, each subject to adjustment as set
forth herein and in the Warrant Agreement dated as of , 1998
(the "Warrant Agreement") by and between the Company and , a
corporation, as warrant agent (the "Warrant Agent") in whole
or in part on and subject to the terms and conditions set forth herein and in
the Warrant Agreement. Such purchase shall be payable in lawful money of the
United States of America by certified or official bank check or wire transfer or
any combination thereof to the order of the Warrant Agent for the account of the
Company at the principal office of the Warrant Agent, but only subject to the
conditions set forth herein and in the Warrant Agreement. The number of shares
of Common Stock for which each Warrant is exercisable, and the price at which
such shares may be purchased upon exercise of each Warrant, are subject to
adjustment upon the occurrence of certain events as set forth in the Warrant
Agreement. Whenever the number of shares of Common Stock for which a Warrant is
exercisable, or the price at which a share of such Common Stock may be purchased
upon exercise of the Warrants, is adjusted pursuant to the Warrant Agreement,
the Company shall cause to be given to each of the registered holders of the
Warrants at such holders' addresses appearing on the warrant register written
notice of such adjustment by first class mail postage pre-paid.
No Warrant may be exercised before p.m., New York City time, on
, 1998 or after 5:00 p.m., New York City time, on
, 2003 or, if such date is not a business day, the next
succeeding business day, and to the extent not exercised by such time such
Warrants shall become void.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse side hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.
THIS WARRANT CERTIFICATE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE PROVISIONS THEREOF RELATING TO CONFLICT OF LAWS.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
signed by its President and has caused its corporate seal to be affixed hereunto
or imprinted hereon.
Dated:
(Seal)
<TABLE>
<S> <C>
Attest: HARVARD INDUSTRIES, INC.
__________________________________________
By: _________________________________
Name: ____________________________________ Name: _______________________________
Title: Secretary
Title: ______________________________
COUNTERSIGNED:
_______________, as Warrant Agent
By: _________________________________
Name: _______________________________
Title: ______________________________
[Authorized Signature]
</TABLE>
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<PAGE>
[FORM OF REVERSE OF WARRANT CERTIFICATE]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring at 5:00 p.m., New York City time, on
, 2003 or, if such date is not a business day, the next
succeeding business day, entitling the holder on exercise to purchase shares of
Common Stock, par value $0.01 per share, of the Company, and are issued or to be
issued pursuant to the Warrant Agreement, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Warrant Agent, the Company and the
Holders (the words "Holders" or "Holder" meaning the registered holders or
registered holder of the Warrants). A copy of the Warrant Agreement may be
obtained by the Holder hereof upon written request to the Company.
Warrants may be exercised at any time on and after p.m., New York City
time, on , 1998 and on or before 5:00 p.m., New York City
time, on , 2003 or, if such date is not a business day, the
next succeeding business day. The Holder of Warrants evidenced by this Warrant
Certificate may exercise them by surrendering this Warrant Certificate, with the
form of election to purchase set forth hereon properly completed and executed,
together with payment of the purchase price by certified or official bank check
or wire transfer or any combination thereof to the order of the Warrant Agent
for the account of the Company and the other required documentation. In the
event that upon any exercise of Warrants evidenced hereby the number of Warrants
exercised shall be less than the total number of Warrants evidenced hereby,
there shall be issued to the Holder hereof or his assignee a new Warrant
Certificate evidencing the number of Warrants not exercised.
The Warrant Agreement provides that the number of shares of Common Stock
for which each Warrant is exercisable, and the price at which such shares may be
purchased upon exercise of each Warrant, are subject to adjustment upon the
occurrence of certain events as set forth in the Warrant Agreement. The Company
shall not be required to issue any fractional share of Common Stock upon the
exercise of any Warrant, but the Company shall round up or down to the nearest
share of Common Stock as provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Warrant Agent
by the registered Holder thereof in person or by such Holder's legal
representative or attorney duly authorized in writing, may be exchanged, in the
manner and subject to the limitations provided in the Warrant Agreement, but
without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement
without charge except for any tax imposed in connection therewith.
-3-
<PAGE>
[ELECTION TO PURCHASE FORM]
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably exercises this
Warrant for the purchase of Shares of Common Stock of HARVARD
INDUSTRIES, INC. and herewith makes payment therefor, all at the price and on
the terms and conditions specified in this Warrant and the Warrant Agreement and
requests that certificates for the shares of Common Stock hereby purchased (and
any securities or other property issuable upon such exercise) be issued in the
name of and delivered to whose address is
and, if such shares of Common Stock shall not include all of the shares of
Common Stock issuable as provided in this Warrant, that a new Warrant of like
tenor and date for the balance of the shares of Common Stock issuable hereunder
be delivered to the undersigned.
----------------------------------------------
(Name of Registered Owner)
----------------------------------------------
(Signature of Registered Owner)
----------------------------------------------
(Street Address)
----------------------------------------------
(City) (State) (Zip Code)
NOTICE: The signature on this election to purchase must correspond with the name
as written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
-4-
<PAGE>
[ASSIGNMENT FORM]
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
Common Stock set forth below:
Name and Address of Assignee No. of Shares of Common Stock
- ---------------------------- -----------------------------
and does hereby irrevocably constitute and appoint
attorney-in-fact to register such transfer on the books of HARVARD INDUSTRIES,
INC. maintained for the purpose, with full power of substitution in the
premises.
Dated: ___________________________ Print Name: _________________________
Signature: __________________________
Witness: ____________________________
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
<PAGE>
EXHIBIT B
------------------------------------------------
as Warrant Agent
Schedule of Fees
[To be inserted]
<PAGE>
EXHIBIT "D"
DOEHLER-JARVIS, INC., et al.
Combination Transactions
<PAGE>
EXHIBIT "D"
COMBINATION TRANSACTIONS
1. Harvard Industries, Inc., a Florida corporation, will be merged with
Harvard Merger Corporation, a newly formed Delaware corporation, which will
simultaneously change its name to Harvard Industries, Inc.
2. Doehler-Jarvis Pottstown, Inc. to change its name to Pottstown Precision
Casting, Inc.
<PAGE>
EXHIBIT "E"
DOEHLER-JARVIS, INC., et al.
New Harvard Certificate of Incorporation
<PAGE>
CERTIFICATE OF INCORPORATION
OF
HARVARD INDUSTRIES, INC.
FIRST: The name of the Corporation is:
HARVARD INDUSTRIES, INC.
SECOND: The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware, as from time to time amended.
FOURTH:
(a) The total number of shares of capital stock which the Corporation
shall have authority to issue is 100,000,000 shares. Of these (i)
50,000,000 shares shall be shares of Common Stock having a par value of
$0.01 per share (the "Common Stock"), and (ii) 50,000,000 shares shall be
shares of Preferred Stock, having a par value of $0.01 per share (the
"Preferred Stock"). Except as otherwise provided by law, the shares of
capital stock of the Corporation regardless of class, may be issued by the
Corporation from time to time in such amounts, for such lawful
consideration and for such corporate purpose(s) as the Board of Directors
may from time to time determine.
(b) Preferred Stock may be issued in one or more series as may be
determined from time to time by the Board of Directors. Authority is hereby
expressly granted to the Board of Directors to authorize the issuance of
one or more series of Preferred Stock, and, subject to Article FIFTH, to
fix by resolution or resolutions providing for the issue of each such
series the voting powers, designations, preferences, and relative,
participating, optional, redemption, conversion, exchange or other special
rights, qualifications, limitations or restrictions of such series, and the
number of shares in each series, to the full extent now or hereafter
permitted by law.
FIFTH: The Corporation shall not create, designate, authorize or cause to
be issued any class or series of nonvoting stock. For purposes of this Article
FIFTH, any class or series of stock, including any series of Preferred Stock,
that has only such voting rights as are mandated by the General Corporation Law
of the State of Delaware, shall be deemed to be nonvoting stock subject to the
restrictions of this Article FIFTH.
SIXTH: In furtherance and not in limitation of the powers conferred by law,
subject to any limitations contained elsewhere in this Certificate of
Incorporation, by-laws of the Corporation may be adopted, amended or repealed by
a majority of the board of directors of the Corporation, but any by-laws adopted
by the board of directors may also be amended or repealed by the stockholders
entitled to vote thereon. Election of directors need not be by written ballot.
SEVENTH:
(a) A director of the Corporation shall not be personally liable
either to the Corporation or to any of its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability
for (i) any breach of the director's duty of loyalty to the Corporation or
its stockholders, or (ii) acts or omissions which are not in good faith or
which involve intentional misconduct or knowing violation of the law, or
(iii) any matter in respect of which such director shall be liable under
Section 174 of Title 8 of the General Corporation Law of the State of
Delaware or any amendment thereto or successor provision thereto, or
(iv) any transaction from which the director shall have derived an improper
personal benefit. Neither amendment nor repeal of this paragraph (a) nor
the adoption of any provision of this Certificate of Incorporation
inconsistent with this paragraph (a) shall eliminate or reduce the effect
of this paragraph (a) in respect of any matter occurring, or any cause of
action, suit or claim that, but for this paragraph (a) of this Article
SEVENTH, would accrue or arise, prior to such amendment, repeal or adoption
of an inconsistent provision. If the General Corporation Law of Delaware is
hereafter amended to permit further elimination or limitation of the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted
by the General Corporation Law of Delaware as so amended.
(b) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to, or testifies in, any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter, a "proceeding"), other than
an action by or in the right of the Corporation, by reason of the fact that
such person is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
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<PAGE>
director, officer, employee or agent of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise
(hereinafter, an "Indemnitee"), whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or
agent or in any other capacity while serving as such a director, officer,
employee or agent. The Indemnitee shall be indemnified and held harmless by
the Corporation to the full extent authorized by the General Corporation
Law of Delaware, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than said
law permitted the Corporation to provide prior to such amendment), or by
other applicable law as then in effect, against all expense, liability and
loss (including attorneys' fees, judgments, fines, excise taxes under the
Employee Retirement Income Security Act of 1974, as amended from time to
time ("ERISA"), penalties and amounts to be paid in settlement) actually
and reasonably incurred or suffered by such Indemnitee in connection
therewith. The Corporation may adopt by-laws or enter into agreements with
any such person for the purpose of providing for such indemnification.
(c) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to, or testifies in, any proceeding by
or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that such person is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, employee benefit plan, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or
settlement of such action or suit if such person acted in good faith and in
a manner such person reasonably believed to be in or not opposed to the
best interests of the Corporation, provided that no indemnification shall
be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Corporation unless and only to
the extent that the Court of Chancery of the State of Delaware or the court
in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
(d) Any indemnification under this Article SEVENTH (unless ordered by
a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the circumstances
because he/she has met the applicable standard of conduct set forth in the
General Corporation Law of Delaware, as the same exists or hereafter may be
amended (but, in the case of any such amendment, only to the extent that
such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment). Such determination shall be made with respect to a person who
is a director or officer at the time of such determination (A) by a
majority vote of the directors who were not parties to such action, suit or
proceeding (the "Disinterested Directors"), even though less than a quorum,
or (B) by a committee of Disinterested Directors designated by a majority
vote of such directors, even though less than a quorum, or (C) if there are
no Disinterested Directors or if the Disinterested Directors so direct, by
independent legal counsel in a written opinion, or (D) by the stockholders.
(e) Costs, charges and expenses (including attorneys' fees) incurred
by a director, officer, employee or agent of the Corporation in defending a
civil or criminal action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay all amounts so advanced in the event
that it shall ultimately be determined that such director, officer,
employee or agent is not entitled to be indemnified by the Corporation as
authorized in this Article SEVENTH. The majority of the Disinterested
Directors may, in the manner set forth above, and upon approval of such
director, officer, employee or agent of the Corporation, authorize the
Corporation's counsel to represent such person, in any action, suit or
proceeding, whether or not the Corporation is a party to such action, suit
or proceeding.
(f) Any indemnification or advance of costs, charges and expenses
under this Article SEVENTH shall be made promptly, and in any event within
60 days upon the written request of the director, officer, employee or
agent. The right to indemnification of advances as granted by this Article
SEVENTH shall be enforceable by the director, officer, employee or agent,
as the case may be, in any court of competent jurisdiction, if the
Corporation denies such request, in whole or in part, or if no disposition
thereof is made within 60 days. Such person's costs and expenses incurred
in connection with successfully establishing his/her right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the Corporation. It shall be a defense to any such action
(other than an action brought to enforce a claim for the advance of costs,
charges and expenses under this Article SEVENTH where the required
undertaking, if any, has been received by the Corporation) that the
claimant has not met the standard of conduct set forth in the General
Corporation Law of Delaware, as the same exists or hereafter may be amended
(but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than said law permitted the Corporation to provide prior to such
amendment), but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, its independent legal counsel and its stockholders) to have made
a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because
he/she has met the
-2-
<PAGE>
applicable standard of conduct set forth in the General Corporation Law of
Delaware, as the same exists or hereafter may be amended (but, in the case
of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law
permitted the Corporation to provide prior to such amendment), nor the fact
that there has been an actual determination by the Corporation (including
its Board of Directors, its independent legal counsel and its stockholders)
that the claimant has not met such applicable standard of conduct, shall be
a defense to the action or create a presumption that the claimant has not
met the applicable standard of conduct.
(g) The indemnification and advancement of expenses provided by this
Article SEVENTH shall not be deemed exclusive of any other rights to which
a person seeking indemnification or advancement of expenses may be entitled
under any law (common or statutory), by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in
his/her official capacity and as to action in another capacity while
holding office or while employed by or acting as agent for the Corporation,
and shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the estate, heirs,
executors and administers of such person. All rights to indemnification
under this Article SEVENTH shall be deemed to be a contract between the
Corporation and each director, officer, employee or agent of the
Corporation who serves or served in such capacity at any time while this
Article SEVENTH is in effect. Any repeal or modification of this Article
SEVENTH shall not in any way diminish any rights to indemnification of such
director, officer, employee or agent or the obligations of the Corporation
arising hereunder with respect to any action, suit or proceeding arising
out of, or relating to, any actions, transactions or facts occurring prior
to the final adoption of such modification or repeal. For the purposes of
this Article SEVENTH, references to the "Corporation" include all
constituent corporations absorbed in a consolidation or merger as well as
the resulting or surviving corporation, so that any person who is or was a
director, officer, employee or agent of such a constituent corporation or
is or was serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall stand in the same position
under the provisions of this Article SEVENTH, with respect to the resulting
or surviving corporation, as he or she would if he or she had served the
resulting or surviving corporation in the same capacity.
(h) The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was or has agreed to become a
director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him/her and incurred by
him/her or on his/her behalf in any such capacity, or arising out of
his/her status as such, whether or not the Corporation would have the power
to indemnify him/her against such liability under the provisions of this
Article SEVENTH, provided, however, that such insurance is available on
acceptable terms, which determination shall be made by a vote of a majority
of the Board of Directors.
(i) If this Article SEVENTH or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Corporation
shall nevertheless indemnify each person entitled to indemnification under
the first paragraph of this Article SEVENTH as to all expense, liability
and loss (including attorneys' fees, judgments, fines, ERISA excise taxes,
penalties and amounts to be paid in settlement) actually and reasonably
incurred or suffered by such person and for which indemnification is
available to such person pursuant to this Article SEVENTH to the full
extent permitted by any applicable portion of this Article SEVENTH that
shall not have been invalidated and to the full extent permitted by
applicable law.
EIGHTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation at any time
in the manner now or hereafter prescribed in this Certificate of Incorporation
and by the laws of the State of Delaware, and all rights conferred by
stockholders herein are granted subject to such reservation.
NINTH: The Corporation expressly elects not to be governed by Section 203
of the General Corporation Law of the State of Delaware.
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<PAGE>
EXHIBIT "F"
DOEHLER-JARVIS, INC., et al.
List of New Board of Directors of Reorganized Harvard
<PAGE>
EXHIBIT "F"
BOARD OF DIRECTORS OF REORGANIZED HARVARD
Roger G. Pollazzi--Chairman
Thomas R. Cochill
Raymond Garfield, Jr.
Donald P. Hilty
Andre R. Horn
George A. Poole, Jr.
James P. Shanahan, Jr.
<PAGE>
EXHIBIT "G"
DOEHLER-JARVIS, INC., et al.
PBGC Agreement
<PAGE>
August , 1998
AGREEMENT BETWEEN HARVARD INDUSTRIES, INC.
AND THE PENSION BENEFIT GUARANTY CORPORATION
I. PRELIMINARY STATEMENT
The following are the terms of the agreement ("Agreement") between:
(a) Harvard Industries, Inc. and the members of its controlled group (as that
term is defined by section 4001(a)(14) of the Employee Retirement Income
Security Act of 1974, as amended, 29 U.S.C. Section Section 1301-1461 ("ERISA"))
("Harvard") and (b) the Pension Benefit Guaranty Corporation ("PBGC"), regarding
the single employer defined benefit pension plans for which Harvard is a
contributing sponsor (as that term is defined by section 4001(a)(13) of ERISA)
("Harvard Plans").(1) This Agreement is enforceable pursuant to its terms, and
is contingent on consummation of Harvard's "First Amended and Modified
Consolidated Plan under Chapter 11 of the Bankruptcy Code" (as may be amended or
modified, the "Plan of Reorganization") in the Chapter 11 cases captioned In re
Doehler-Jarvis, Inc., et al., Case Nos. 97-953 through 97-962 (SLR) (Bankr. D.
Del.), The Plan of Reorganization shall expressly provide for implementation of
the provisions of this Agreement. A copy of this Agreement shall be annexed to
the Plan of Reorganization. The Official Committee of Unsecured Creditors of
Doehler-Jarvis, Inc., et al. (the "Committee") has accepted the terms of this
Agreement, but shall have no obligations thereunder. This Agreement shall be
effective on confirmation of the Plan of Reorganization, subject to the
occurrence of the effective date thereof. Provided such effective date shall
have occurred, the effective date of this Agreement shall be the confirmation
date of the Plan of Reorganization (the "Effective Date").
II. PBGC OBLIGATIONS
A. Standstill on Remedies. In consideration of the performance by Harvard
of its obligations hereunder, PBGC will forbear from using the remedies provided
by section 4042(a)(4) or 4062(e) of ERISA in connection with (i) the cessation
of operations at the Toledo, Ohio facility of Doehler-Jarvis Toledo, Inc., or
(ii) the implementation of initial post-confirmation exit financing (the
"Initial Post-Confirmation Exit Financing"), or any subsequent refinancing
thereof within five years from the Effective Date which does not increase the
amount of principal indebtedness of Harvard subject to security interests in any
of the assets or properties of Harvard, unless any of the following take place:
1. Harvard fails to make a required quarterly or annual minimum
funding contribution for any of the Harvard Plans, provided, however, that
if any unpaid minimum funding contribution is paid within sixty days of the
due date for the payment, then PBGC shall cease pursuing said remedies
under section 4042(a)(4) or section 4062(e) of ERISA then pending and this
standstill shall be reinstated;
2. Harvard commences a proceeding or petition for the winding up of
any of its business affairs or otherwise proposes to sell all or
substantially all of its assets, unless the conditions contained in section
IV.C. below are met; or
3. Harvard or any member of the Harvard controlled group files or has
filed against it a petition for relief under title 11 of the United States
Code, provided that this standstill shall be reinstated should an
involuntary petition for relief be withdrawn or dismissed within 90 days of
filing.
B. Termination of 1994 Settlement Agreement. In consideration for
Harvard's entering into this Agreement and upon consummation of the Plan of
Reorganization in a manner consistent with the provisions of this Agreement, the
Settlement Agreement (the "Prior Agreement") dated July 26, 1994, by and between
the Harvard Companies and PBGC, shall be terminated, and the consideration
provided to the PBGC by Harvard as set forth in this Agreement shall be in full
settlement, release and discharge of any and all rights and claims of the PBGC
against Harvard, directly or indirectly, related to or arising under the Prior
Agreement. In addition, PBGC hereby acknowledges that it shall have no pre- or
post-termination claim against Harvard by reason of the termination, settlement,
release and discharge of the Prior Agreement.
III. HARVARD OBLIGATIONS
A. The Plan of Reorganization and the confirmation order shall provide
that on the confirmation date, Harvard, as reorganized, shall be a contributing
sponsor of all of the Harvard Plans.
B. Notwithstanding the notice requirements set forth in Article V.B.
herein, there shall be no plan merger or other transfer of plan assets or
liabilities between: (a) the Doehler-Jarvis Pension Plan for Wage Basis
Employees ("Doehler-Jarvis Plan"); and (b) any of the other Harvard Plans. In no
event shall there be any use of any credit balance maintained in the funding
standard account of any of the other Harvard Plans for the benefit of the
funding standard account of the Doehler-Jarvis Plan. Further, no
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(1) The single employer defined benefit pension plans for which Harvard is a
contributing sponsor as of the effective date of this Agreement are set
forth in Exhibit A attached hereto. The term "Harvard Plans" as used
herein includes any successor plans or any single employer defined
benefit pension plans of which Harvard becomes a contributing sponsor.
<PAGE>
defined benefit pension plan that is covered by Title IV of ERISA that is not
listed on Exhibit A to this Agreement shall be merged into any of the Harvard
Plans without PBGC's consent.
C. In order to secure minimum funding contributions required for the
Doehler-Jarvis Plan and underfunding of the Doehler-Jarvis Plan, Harvard shall
provide PBGC, for the benefit of the Doehler-Jarvis Plan and PBGC, with a pledge
of new common stock of Reorganized Harvard ("New Common Stock"), in an amount
equal to what the PBGC would have received as an unsecured general creditor of
Harvard having an allowed Class 5 Claim (as such term is defined in the Plan of
Reorganization) of $18.7 million, less the amount of all contributions made to
the Doehler-Jarvis Plan after April 15, 1998 and prior to the Effective Date
(the number of shares of New Common Stock received by the PBGC pursuant to this
provision, taking into account all such contributions made prior to the
Effective Date, is referred to herein as the "Harvard Stock Pledge"). The
Harvard Stock Pledge shall be held in escrow, which shall be established and be
subject to the following terms and conditions:
1. The identity of the bank or other financial institution acting as
escrow agent for the Harvard Stock Pledge shall be designated by the PBGC,
subject to Harvard's consent, and the form of escrow agreement shall be
subject to approval of Harvard and PBGC;
2. Except to the extent released in accordance with Article III.C.4.
below, the Harvard Stock Pledge shall be maintained and continue to be held
in escrow until the earlier of (a) five years from the Effective Date of
the Plan of Reorganization or (b) the date on which this Agreement is
terminated in accordance with Article IV hereof (such earlier date
described in (a) or (b) hereof, the "Release Date"). On the Release Date
the Harvard Stock Pledge shall be delivered to Harvard;
3. Subject to the limitations that (a) no sales of any shares of New
Common Stock may be made during the 90-day period commencing with the
consummation of the Plan of Reorganization and (b) all sales of shares of
New Common Stock after such 90-day period shall be in compliance with and
subject to the limitations set forth in Rule 144(e)(1) and (f) of the
Securities Act of 1933 as if the same applied to the PBGC, shares of New
Common Stock held by the escrow agent will be subject to sale at any time,
in the discretion of a third party approved by Harvard and PBGC, based on
prudent investment standards. The proceeds of all such sales shall continue
to be held in escrow or delivered from escrow in accordance with the
provisions of this Agreement relating to the Harvard Stock Pledge. All
references in this Agreement to the Harvard Stock Pledge shall be deemed to
include the proceeds of any such sales of New Common Stock, and all
property in which such proceeds may be reinvested from time to time, as
increased or decreased by the investment earnings or losses thereon and any
release in accordance with Article III.C.4 below thereof;
4. The escrow agent shall deliver all property held in escrow under
the Harvard Stock Pledge, together with any accumulated dividends or
distributions, from escrow to the PBGC in the event any one of the
following has occurred: (a) Harvard has failed to make a required quarterly
or annual minimum funding contribution for the Doehler-Jarvis Plan, and
such failure has continued for sixty days from the due date for the
contribution; (b) PBGC receives a Notice of Intent to Terminate the
Doehler-Jarvis Plan in a distress termination under section 4041(c) of
ERISA; (c) Harvard commences a proceeding or petition for the winding up of
any of its business affairs or otherwise consummates the sale of all or
substantially all of its assets, unless the conditions contained in Article
IV.C. of this Agreement are met; or (d) Harvard, in whole or in part, files
or has filed against it a petition for relief under title 11 of the United
States Code, and such petition for relief has not been withdrawn or
dismissed within 90 days of filing;
5. Amounts received by PBGC from the escrow agent shall be: (a) used
to pay minimum funding contributions due from time to time to any of the
Harvard Plans; (b) used to satisfy any liability under section 4062 of
ERISA with respect to the Harvard Plans; or (c) held until the Agreement is
terminated. PBGC shall return the excess and unused amounts so distributed,
if any, to Harvard. Taxes on earnings on the escrowed amounts so
distributed shall be charged to the escrow account. After-tax interest
earned on escrowed amounts shall be available for distribution to Harvard,
PBGC, or the Harvard Plans, as the case may be; and
6. (a) In the event that, during the term of the Initial
Post-Confirmation Exit Financing, any dividend or other distributions are
paid to Harvard shareholders within five years from the Effective Date that
would cause an event of default under the Initial Post-Confirmation Exit
Financing, Harvard will not use the credit balances that existed under the
Harvard Plans on the last day of the plan year preceding the plan year in
which the dividend or distribution was paid in determining the contribution
required to be made to satisfy the minimum funding standard of section 412
of the Internal Revenue Code ("IRC") for the plan year in which the
dividend or distribution was paid.
(b) In the event that, after the term of the Initial
Post-Confirmation Exit Financing, any dividend or other distributions are
paid to Harvard shareholders within five years from the Effective Date,
Harvard will not use the credit balances that existed under the Harvard
Plans on the last day of the plan year preceding the plan year in which the
dividend or distribution was paid in determining the contribution required
to be made to satisfy the minimum funding standard of section 412 of the
IRC for the plan year in which the dividend or distribution was paid.
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<PAGE>
IV. TERMINATION OF AGREEMENT
This Agreement shall terminate upon the earliest of A., B., C. or D. below;
and in the case of A., B. and C., only if Harvard is then current on its minimum
funding obligations to the Harvard Plans:
A. The date on which none of the Harvard Plans have any unfunded
benefit liabilities, as determined under section 4001(a)(18) of ERISA, as
of the last day of the plan year for each plan for any two consecutive plan
years (the last day of the plan year in the second consecutive year being
the measurement date); provided, however, that if the sum of the aggregate
unfunded liabilities of all Harvard Plans that have unfunded benefits as of
the last day of any two consecutive plan years is less than $1 million
("Aggregate Underfunding"), Harvard will have satisfied the conditions of
this paragraph provided it has contributed in cash an amount equal to such
Aggregate Underfunding by no later than September 15 of the first calendar
year following the end of the second such plan year;
B. The date on which Harvard obtains ratings on its unsecured debt
from Standard & Poor's and Moody's of at least BBB- and Baa3, respectively;
C. If there is a change of the Harvard controlled group, and the
unsecured debt of the new controlled group has been rated BBB- by Standard
& Poor's and Baa3 by Moody's, or better, for the two consecutive years
prior to a rating date (which rating date is subsequent to the date of the
change of the controlled group), and such ratings are reaffirmed taking
into account the change of controlled group; or
D. The date on which all of the Harvard Plans have been successfully
terminated in standard terminations under section 4041(b) of ERISA.
V. NOTICE REQUIREMENTS
Harvard shall provide to the Director of PBGC's Corporate Finance and
Negotiations Department ("CFND"):
A. Copies of any notices otherwise required to be filed with the
Internal Revenue Service ("IRS") or PBGC concerning any of the Harvard
Plans within 20 days of the time the filing is made;
B. Written notice 30 days prior to any plan merger or any transfers
of liabilities or assets described in section 414(1) of the IRC to or from
any of the Harvard Plans (other than mergers or transfers involving amounts
less than three percent of assets or liabilities in any plan year);
C. Written notice 30 days prior to any change in any of the Harvard
Plan's actuarial assumptions or methods for the purposes of the minimum
funding standard of section 412 of the IRC (other than changes that are
required by law), which changes shall be subject to PBGC's consent, with
consent not to be unreasonably withheld;
D. Written notice as soon as practicable after delivery or receipt of
any notice of default under any debt instrument of Harvard;
E. A copy of plan amendments for any of the Harvard Plans within ten
days after adoption;
F. Written notice within ten days of any missed quarterly or annual
minimum funding contribution required to be made to any of the Harvard
Plans;
G. During periods when Harvard's common stock is publicly traded and
its filings with the Securities and Exchange Commission are current, copies
of SEC Forms 10-K and 10-Q, within 20 days of filing; if such Forms are not
timely filed, quarterly and audited annual financial statements for
Harvard;
H. Written notice, including the status of affected employees,
30 days prior to any: (a) cessation of operations at any Harvard facility;
or (b) any sale, transfer or other disposition of assets of Harvard where
such assets represent ten percent or more of the book value of the assets
of Harvard on a consolidated basis, or have generated ten percent or more
of the consolidated revenues, or have generated ten percent or more of the
consolidated operating income of Harvard in the preceding fiscal year;
I. Written notice 30 days (or as soon as practicable) prior to any
change of the identity of any contributing sponsor of any of the Harvard
Plans, or if a contributing sponsor of any of the Harvard Plans is to
become a member of any other controlled group;
J. Annual Actuarial Valuation Reports for each of the Harvard Plans
for each plan year when prepared, but in any event by no later than
December 1 of the current plan year; and
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K. A certified actuarial statement specifying each of the Harvard
Plans' credit balance at the end of the preceding plan year, and supporting
calculations, by no later than seven months after the end of each plan
year, commencing with the 1998 plan year (i.e., the initial statement must
be filed no later than August 1, 1999).
VI. ACCEPTANCE OF PLAN OF REORGANIZATION
The PBGC hereby agrees to support confirmation of, and vote to accept, the
Plan of Reorganization, provided such Plan continues to contain provisions that
require implementation of this Agreement. Upon consummation of the Plan of
Reorganization, all proofs of claim of the PBGC shall be deemed withdrawn, with
prejudice.
VII. PRESERVATION OF RIGHTS
Neither the operation of the Agreement (e.g., release of Harvard Stock
Pledge) nor termination of the Agreement in accordance with the provisions
hereof shall, in and of itself, constitute a basis for PBGC to take any adverse
action against any of the Harvard Plans. Nothing in the Agreement shall restrict
or diminish Harvard's right to dispute or contest any basis that PBGC may
thereafter raise to terminate any one or more of the Harvard Plans and/or the
amount of the termination liability asserted by the PBGC in the event of the
involuntary termination of any one or more of the Harvard Plans.
VIII. EXECUTION OF ANCILLARY AGREEMENT
Harvard and the PBGC shall use their best efforts to select an escrow agent
and finalize and execute a definitive escrow agreement consistent with the
provisions of this Agreement as soon as practicable and in no event later than
ten (10) days prior to confirmation of the Plan of Reorganization.
IX. GENERAL
A. Nothing in this Agreement shall relieve Harvard or any other person of
their obligations under ERISA or the IRC.
B. This Agreement and the rights and obligations of the parties hereunder
shall be governed by and construed in accordance with ERISA, the IRC, and the
laws of the District of Columbia (except the laws of the District of Columbia
governing choice of laws), except to the extent such laws are preempted by
federal law.
C. No failure of any of the parties to this Agreement to enforce at any
time any of the provisions of this Agreement and no course of dealing between or
among any of the members of Harvard and/or the PBGC shall be construed to be a
waiver of any such provision, or shall in any way affect the validity of this
Agreement or the right of any party to enforce each and every one of the
provisions of this Agreement.
D. This Agreement constitutes the entire final agreement with respect to
the matters provided for herein, and no other agreement or understanding exists
except as expressly set forth herein.
E. This Agreement shall not be modified or amended, except by written
instrument signed by the parties hereto.
F. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision or
provisions of this Agreement, which shall remain in full force and effect.
G. This Agreement shall inure to the benefit of, and may be enforced
solely by, the parties hereto, and, in each case, their respective successors
and assigns.
H. This Agreement may be executed in any number of identical counterparts,
each of which shall be deemed an original as against the party who signed it,
and all of which together shall constitute one and the same instrument.
I. Any notices, requests or other communications hereunder shall be in
writing, and shall be deemed to have been duly given when mailed by United
States registered or certified mail postage prepaid, or upon receipt if
overnight delivery service, telegraph, telecopy, or telex is used, addressed as
follows:
To the PBGC:
Chief Negotiator and Director
Corporate Finance and Negotiations Department
Pension Benefit Guaranty Corporation
Suite 270
1200 K Street N.W.
Washington, D.C. 20005-4026
(202) 842-2643 (telefacsimile number)
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General Counsel
Pension Benefit Guaranty Corporation
Suite 340
1200 K Street N.W.
Washington, D.C. 20005-4026
(202) 326-4112 (telefacsimile number)
To Harvard:
Roger Pollazzi
Chief Executive Officer
Harvard Industries, Inc.
3 Werner Way, Suite 210
Lebanon, NJ 08833
(908) 236-0071 (telefacsimile number)
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-6099
Attn: Stephen T. Lindo
(212) 728-8111 (telefacsimile number)
To Official Committee of Unsecured Creditors of Doehler-Jarvis, Inc., et al. (so
long as the Committee has not been dissolved):
c/o Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, NY 10004
Attn: Lawrence A. First
(212) 859-4000 (telefacsimile number)
J. All of the parties to this Agreement hereby represent and warrant that
they have full power and authority to enter into this Agreement, that all
necessary corporate approvals or other appropriate action has been taken to
cause them to possess such power and authority and that this Agreement
constitutes a legal, valid and binding obligation of each of the parties hereto
enforceable against each of the parties hereto.
K. The captions set forth in this Agreement have been inserted for
convenience of reference only and shall not in any way affect the meaning or
construction of any of the provisions of this Agreement.
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ACCEPTED AND AGREED:
<TABLE>
<S> <C>
HARVARD INDUSTRIES, INC. on its Own Behalf PENSION BENEFIT GUARANTY CORPORATION
and on Behalf of All of the Members
of its Controlled Group:
By: __________________________________________ By: ___________________________________
Roger Pollazzi Andrea E. Schneider
Its: President and Chief Operating Officer Its: Chief Negotiator, and Director,
Corporate Finance and
Negotiations Department
Dated: _______________________________________ Dated: ________________________________
</TABLE>
ACCEPTED AND ACKNOWLEDGED:
OFFICIAL COMMITTEE OF UNSECURED CREDITORS
OF DOEHLER-JARVIS, INC., et al.
By: __________________________________________
Richard Kuersteiner
Its: Co-Chairman
By: __________________________________________
Don Navarro
Its: Co-Chairman
Dated: _______________________________________
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EXHIBIT A TO AGREEMENT BETWEEN HARVARD INDUSTRIES, INC.
AND THE PENSION BENEFIT GUARANTY CORPORATION
SINGLE EMPLOYER DEFINED BENEFIT PENSION PLANS
FOR WHICH HARVARD IS A CONTRIBUTING SPONSOR
Doehler-Jarvis Pension Plan for Wage Basis Employees
Harvard Industries Albion Division Hourly-Rate Employees' Pension Plan
Harvard Industries, Inc. Bryan Division Hourly-Rate Employees' Pension Plan
Harvard Industries, Inc. Spencerville Division Hourly-Rate Employees' Pension
Plan
Harvard Industries Jackson Division Hourly-Rate Employees' Pension Plan
Harvard Retirement Plan
Harvard Retirement Plan for Frozen Pension Benefits
Retirement Plan for Union Employees, Harman Automotive, Inc.
<PAGE>
HARVARD
INDUSTRIES, INC.
NEWS FROM HARVARD
- -------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
For more information, contact:
Joe Gagliardi
and
Jerry Tighe
HARVARD INDUSTRIES
908-437-4100
or
Andy Barlow
PUBLIC COMMUNICATIONS INC.
813-226-2772
Harvard Industries' Reorganization Plan Confirmed
LEBANON, N.J. - (October 16, 1998) - Harvard Industries, Inc.
announced the confirmation of its first amended Plan of Reorganization dated
August 19, 1998, by the Honorable Sue L. Robinson in the United States
Bankruptcy Court for the District of Delaware.
Exit financing for the Plan of Reorganization will be provided from
credit facilities structured and arranged by Lehman Brothers Inc. Lehman
Commercial Paper Inc. has provided a commitment subject to standard terms and
conditions to fund the entire principal amount of the credit facilities in an
aggregate amount of up to $165 million. The Plan is expected to be fully
effective within 30 days.
"We are very pleased with this outcome," said Roger G. Pollazzi,
Harvard's Chief Executive Officer. "The new management team has worked
extremely hard to restructure Harvard operationally and financially. The time
has arrived when we can put these Chapter 11 issues behind us and execute our
plan for growth and increased profitability."
Harvard Industries, Inc., designs, develops and manufactures a broad
range of components for automotive original equipment manufacturers, the
automotive aftermarket and industrial and construction equipment applications
worldwide. Headquartered in Lebanon, N.J., Harvard's 4,500 employees at 14
plants in the United States and Canada produce total vehicle sealing systems, a
variety of polymer products, high-strength steel assemblies and a wide array of
high-strength aluminum, magnesium and iron products.
