IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
-------------------------------------------------X
In re: :
: Chapter 11
:
SAFETY COMPONENTS : Case Nos. 00-1644(JJF)
INTERNATIONAL, INC., et al., : through 00-1650(JJF)
:
Debtors. : Jointly Administered
:
:
-------------------------------------------------X
FIRST AMENDED JOINT PLAN OF REORGANIZATION OF
SAFETY COMPONENTS UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
MILBANK, TWEED, HADLEY & McCLOY LLP
1 Chase Manhattan Plaza
New York, New York 10005
(212) 530-5000
- and -
MORRIS, NICHOLS, ARSHT & TUNNELL
1201 North Market Street
P.O. Box 1347
Wilmington, Delaware 19899-1347
(302) 658-9200
Attorneys for Safety Components
International, Inc. et al.,
Debtors and Debtors-in-Possession
Dated: July 19, 2000
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION I DEFINITIONS.................................................................................................1
1.1 "Administrative Expense Claim"...............................................................................1
1.2 "Affiliate"..................................................................................................1
1.3 "Allowed"....................................................................................................1
1.4 "Amended Bylaws".............................................................................................2
1.5 "Amended Certificate of Incorporation".......................................................................2
1.6 "ASCI".......................................................................................................2
1.7 "ASCI Common Stock"..........................................................................................2
1.8 "ASCI Holdings Czech"........................................................................................2
1.9 "ASCI Holdings Czech Common Stock"...........................................................................2
1.10 "ASCI Holdings Germany"......................................................................................2
1.11 "ASCI Holdings Germany Common Stock".........................................................................2
1.12 "ASCI Holdings Mexico".......................................................................................2
1.13 "ASCI Holdings Mexico Common Stock"..........................................................................3
1.14 "ASCI Holdings UK"...........................................................................................3
1.15 "ASCI Holdings UK Common Stock"..............................................................................3
1.16 "Avoidance Action"...........................................................................................3
1.17 "Ballot".....................................................................................................3
1.18 "Bankruptcy Code"............................................................................................3
1.19 "Bankruptcy Rules"...........................................................................................3
1.20 "Business Day"...............................................................................................3
1.21 "Cash".......................................................................................................3
1.22 "Cash Investment Yield"......................................................................................3
1.23 "Causes of Action"...........................................................................................3
1.24 "Claim"......................................................................................................3
1.25 "Claims Agent"...............................................................................................4
1.26 "Class"......................................................................................................4
1.27 "Collateral".................................................................................................4
1.28 "Confirmation Date"..........................................................................................4
1.29 "Confirmation Hearing".......................................................................................4
1.30 "Confirmation Order".........................................................................................4
1.31 "Corporate Indemnities"......................................................................................4
1.32 "Consummation Date Reduction Amount".........................................................................4
1.33 "Court"......................................................................................................4
1.34 "Creditors' Committee".......................................................................................4
1.35 "Cure".......................................................................................................4
1.36 "D&O Policies"...............................................................................................5
1.37 "Debtor Subsidiaries"........................................................................................5
1.38 "Debtors"....................................................................................................5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
1.39 "Debtors-in-Possession"......................................................................................5
1.40 "Disallowed Claim"...........................................................................................5
1.41 "Disallowed Equity Interest".................................................................................5
1.42 "Disclosure Statement".......................................................................................5
1.43 "Disclosure Statement Approval Date".........................................................................5
1.44 "Disclosure Statement Approval Order"........................................................................5
1.45 "Disputed Claim".............................................................................................5
1.46 "Disputed Equity Interest"...................................................................................5
1.47 "Disputed Reserve"...........................................................................................6
1.48 "Distributable Shares".......................................................................................6
1.49 "Distributed Shares".........................................................................................6
1.50 "Distributions"..............................................................................................6
1.51 "Effective Date".............................................................................................6
1.52 "Entity".....................................................................................................6
1.53 "Equity Interest"............................................................................................6
1.54 "Equity Distributable Shares"................................................................................6
1.55 "Estate".....................................................................................................6
1.56 "Excluded Claims"............................................................................................6
1.57 "Final Order"................................................................................................7
1.58 "GAAP".......................................................................................................7
1.59 "Indemnification Parties"....................................................................................7
1.60 "Indemnification Rights".....................................................................................7
1.61 "Indenture"..................................................................................................7
1.62 "Indenture Trustee"..........................................................................................7
1.63 "Intercreditor Agreement"....................................................................................7
1.64 "Liabilities"................................................................................................7
1.65 "Lien".......................................................................................................8
1.66 "Mutual Release".............................................................................................8
1.67 "New Common Stock"...........................................................................................8
1.68 "New Warrants"...............................................................................................8
1.69 "Non-Debtor Affiliates"......................................................................................8
1.70 "Noteholder Claims"..........................................................................................8
1.71 "Noteholder Distributable Shares"............................................................................8
1.72 "Noteholders"................................................................................................8
1.73 "Old Capital Stock"..........................................................................................8
1.74 "Old Common Stock"...........................................................................................9
1.75 "Old Stock Options"..........................................................................................9
1.76 "Person".....................................................................................................9
1.77 "Petition Date"..............................................................................................9
1.78 "Plan".......................................................................................................9
1.79 "Plan Supplement"............................................................................................9
1.80 "Plan Transactions"..........................................................................................9
1.81 "Potential Rejection Claim"..................................................................................9
1.82 "Potential Rejection Claimant"...............................................................................9
</TABLE>
TOC ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
1.83 "Priority Non-Tax Claim".....................................................................................9
1.84 "Priority Tax Claim".........................................................................................9
1.85 "Professional Fees"..........................................................................................9
1.86 "Ratable Proportion"........................................................................................10
1.87 "Record Date"...............................................................................................10
1.88 "Registration Rights Agreement".............................................................................10
1.89 "Reinstated" or "Reinstatement".............................................................................10
1.90 "Rejection/Assignment Schedule".............................................................................10
1.91 "Released Claims"...........................................................................................10
1.92 "Released Parties"..........................................................................................11
1.93 "Reorganization Cases"......................................................................................11
1.94 "Reorganized Safety Components".............................................................................11
1.95 "Reorganized SCI"...........................................................................................11
1.96 "Restructuring Agreement"...................................................................................11
1.97 "Safety Components".........................................................................................11
1.98 "Safety Components DIP Severance Plan"......................................................................11
1.99 "Safety Components Group"...................................................................................11
1.100 "Saudi Receivable"..........................................................................................11
1.101 "Schedules".................................................................................................11
1.102 "SCI".......................................................................................................11
1.103 "SCFTI".....................................................................................................11
1.104 "SCFTI Common Stock"........................................................................................12
1.105 "Secured Claim".............................................................................................12
1.106 "Securities Act"............................................................................................12
1.107 "Securities Class Actions/Suits"............................................................................12
1.108 "Securities Class Action Plaintiffs"........................................................................12
1.109 "Securities Class Action Settlement"........................................................................12
1.110 "Securities Class Action Memorandum of Understanding".......................................................13
1.111 "Securities Fraud Claims"...................................................................................13
1.112 "Securities Fraud Released Parties".........................................................................13
1.113 "Senior DIP Agent"..........................................................................................13
1.114 "Senior DIP Facility".......................................................................................13
1.115 "Senior DIP Loan Agreement".................................................................................13
1.116 "Senior DIP Facility Claims"................................................................................14
1.117 "Senior Exit Facility"......................................................................................14
1.118 "Senior Exit Facility Commitment Letter"....................................................................14
1.119 "Stock Distribution"........................................................................................14
1.120 "Subordinated DIP Agent"....................................................................................14
1.121 "Subordinated DIP Facility".................................................................................14
1.122 "Subordinated DIP Facility Claims"..........................................................................14
1.123 "Subordinated DIP Loan Agreement"...........................................................................14
1.124 "Subordinated DIP Liens"....................................................................................14
1.125 "Subordinated DIP Interest and Fees"........................................................................14
1.126 "Subordinated DIP Loans"....................................................................................15
</TABLE>
TOCiii
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
1.127 "Subordinated Exit Facility"................................................................................15
1.128 "Subordinated Exit Facility Notes"..........................................................................15
1.129 "Subordinated Exit Loan Agreement"..........................................................................15
1.130 "Subordinated Exit Loans"...................................................................................15
1.131 "Subsidiary"................................................................................................15
1.132 "Subsidiaries Amended Bylaws"...............................................................................15
1.133 "Subsidiaries Amended Certificates of Incorporation"........................................................15
1.134 "Subsidiary Common Stock"...................................................................................16
1.135 "10 1/8% Senior Subordinated Notes".........................................................................16
1.136 "United States Trustee".....................................................................................16
1.137 "Unofficial Noteholders' Committee".........................................................................16
1.138 "Unsecured Claim"...........................................................................................16
1.139 "Unsecured Deficiency Claim"................................................................................16
1.140 "VIL".......................................................................................................16
1.141 "Voting Deadline"...........................................................................................16
1.142 "Zummo".....................................................................................................16
1.143 "Zummo Employment Contract".................................................................................16
1.144 "Zummo Shares"..............................................................................................16
SECTION II INTERPRETATION; APPLICATION OF DEFINITIONS, RULES OF CONSTRUCTION AND COMPUTATION OF TIME.................17
SECTION III PAYMENT OF ADMINISTRATIVE EXPENSE CLAIMS, PRIORITY TAX CLAIMS AND OTHER UNCLASSIFIED CLAIMS..............17
3.1 Administrative Expense Claims...............................................................................17
3.2 Payment of Senior DIP Facility Claims.......................................................................18
3.3 Treatment of Subordinated DIP Facility Claims...............................................................18
3.4 Priority Tax Claims.........................................................................................19
SECTION IV CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS.............................................................20
4.1 Summary.....................................................................................................20
4.2 Classification and Treatment:...............................................................................20
4.2.1 Class 1: Priority Non-Tax Claims...........................................................................20
4.2.2 Class 2: Secured Claims....................................................................................20
4.2.3 Class 3: Noteholder Claims.................................................................................20
4.2.4 Class 4: Unsecured Claims..................................................................................21
4.2.5 Class 5: Old Common Stock..................................................................................21
4.2.6 Class 6: Other Equity Interests............................................................................21
4.2.7 Class 7: Subsidiary Common Stock...........................................................................21
SECTION V TREATMENT OF CLAIMS AND EQUITY INTERESTS UNDER THE PLAN...................................................21
5.1 Designation of Treatment....................................................................................21
5.2 Claims Against and Equity Interests in the Debtors..........................................................21
5.2.1 Class 1: Priority Non-Tax Claims...........................................................................21
</TABLE>
TOCiv
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
5.2.2 Class 2: Secured Claims....................................................................................22
5.2.3 Class 3: Noteholder Claims.................................................................................22
5.2.4 Class 4: Unsecured Claims..................................................................................22
5.2.5 Class 5: Old Common Stock..................................................................................23
5.2.6 Class 6: Other Equity Interests............................................................................23
5.2.7 Class 7: Subsidiary Common Stock...........................................................................23
SECTION VI PROVISIONS REGARDING NEW COMMON STOCK AND NEW WARRANTS DISTRIBUTED PURSUANT TO THE PLAN...................23
6.1 New Common Stock............................................................................................23
6.1.1 Authorization...............................................................................................23
6.1.2 Par Value...................................................................................................24
6.1.3 Registration of New Common Stock............................................................................24
6.1.4 Listing of New Common Stock.................................................................................24
6.1.5 Rights......................................................................................................24
6.2 New Warrants................................................................................................24
SECTION VII IMPAIRED AND UNIMPAIRED CLASSES OF CLAIMS AND EQUITY INTERESTS UNDER THE PLAN; ACCEPTANCE OR
REJECTION OF THE PLAN................................................................................................24
7.1 Holders of Claims and Equity Interests Entitled to Vote.....................................................24
7.2 Acceptance by Unimpaired Classes............................................................................25
7.3 Elimination of Vacant Classes...............................................................................25
7.4 Non-consensual Confirmation.................................................................................25
7.5 Revocation of the Plan......................................................................................25
SECTION VIII MEANS OF IMPLEMENTATION OF THE PLAN.....................................................................26
8.1 Transactions on the Effective Date..........................................................................26
8.2 Substantive Consolidation...................................................................................26
8.3 Reorganized Safety Components' Obligations Under the Plan...................................................27
8.4 Continuation of Business....................................................................................27
8.5 Charter and Bylaws..........................................................................................27
8.6 Cancellation of Equity Interests............................................................................27
8.7 The Boards of Directors of Reorganized Safety Components....................................................27
8.8 Operations of Safety Components Between Confirmation and the Effective Date.................................28
8.9 Exclusivity Period..........................................................................................28
8.10 Revesting of Assets.........................................................................................28
8.11 Creditors' Committee........................................................................................28
8.12 Effectuating Documents; Further Transactions................................................................28
8.13 Assumptions of Liabilities..................................................................................29
8.14 Distributions under the Plan................................................................................29
8.15 Substantial Consummation....................................................................................29
8.16 Preservation of Certain Causes of Action; Defenses..........................................................29
8.17 Cancellation of Existing Securities.........................................................................30
8.18 Employment and Related Settlement Terms for Zummo...........................................................30
</TABLE>
TOC v
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SECTION IX DISTRIBUTIONS UNDER THE PLAN..............................................................................31
9.1 Timing of Distributions.....................................................................................31
9.2 Delivery of Distributions...................................................................................31
9.3 Record Date for Distributions...............................................................................32
9.3.1 Record Date for Equity Interests............................................................................32
9.3.2 Record Date for Holders of Claims...........................................................................32
9.4 Time Bar to Cash Payments by Check..........................................................................32
9.5 Manner of Cash Payments Under the Plan......................................................................32
9.6 Disputed Reserves...........................................................................................32
9.7 Limitations upon Funding of Disputed Reserves...............................................................33
9.8 Tax Requirements for Income Generated by Disputed Reserves..................................................33
9.9 Estimation of Claims........................................................................................33
9.10 Distributions After Effective Date..........................................................................34
9.11 Fractional Shares...........................................................................................34
9.12 Fractional Cents............................................................................................34
9.13 De Minimis Distributions....................................................................................34
9.14 Interest on Claims..........................................................................................35
9.15 No Distribution in Excess of Allowed Amount of Claim........................................................35
9.16 Ordinary Course Liabilities.................................................................................35
9.17 Setoffs.....................................................................................................35
9.18 Payment of Taxes on Distributions Received Pursuant to Plan.................................................36
SECTION X DISPUTED CLAIMS AND EQUITY INTEREST UNDER THE PLAN.........................................................36
10.1 Objection Deadline..........................................................................................36
10.2 Prosecution of Objections after the Effective Date..........................................................36
10.3 No Distributions Pending Allowance..........................................................................36
10.4 Withholding of Allocated Distributions......................................................................36
10.5 Distribution When a Disputed Claim or Equity Interest Becomes an Allowed Claim or Equity Interest...........36
SECTION XI CLASS ACTION SETTLEMENT...................................................................................37
11.1 Approval of Securities Class Action Settlement..............................................................37
11.2 Reduction of Judgments against Parties Who Have Cross-Claims against Released Parties.......................37
11.3 Release of Released Parties from all Securities Fraud Claims................................................37
11.4 Release by Safety Components of its Directors, Officers and Employees from all Securities Fraud Claims......38
11.5 Release and Discharge from All Securities Fraud Claims......................................................38
SECTION XII EXECUTORY CONTRACTS AND UNEXPIRED LEASES UNDER THE PLAN..................................................38
12.1 General Treatment...........................................................................................38
12.2 Rejected or Assigned Executory Contracts; Rejection/Assignment Schedule.....................................39
12.3 Limited Survival of the Debtors' Corporate Indemnities......................................................39
12.4 Payments Related to Assumption of Executory Contracts and Unexpired Leases..................................39
</TABLE>
TOC vi
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
12.5 Bar Date for Rejection Damages..............................................................................40
12.6 Compensation and Benefit Programs...........................................................................40
12.7 Retiree Benefits............................................................................................40
SECTION XIII CONDITIONS PRECEDENT TO THE CONFIRMATION DATE AND THE EFFECTIVE DATE....................................40
13.1 Conditions Precedent to the Confirmation of the Plan........................................................40
13.2 Conditions Precedent to the Effective Date of the Plan......................................................43
13.3 Waiver of Conditions Precedent..............................................................................43
13.4 Effect of Failure or Absence of Waiver of Conditions Precedent to the Effective Date of
the Plan....................................................................................................44
SECTION XIV EFFECT OF CONFIRMATION...................................................................................44
14.1 Reorganized Safety Components' Authority....................................................................44
14.2 Vesting and Liens...........................................................................................44
14.3 Discharge of the Debtors....................................................................................44
14.4 Term of Injunctions or Stays................................................................................46
SECTION XV RELEASES, INJUNCTION AND WAIVER OF CLAIMS.................................................................46
15.1 Release of the Debtors, Debtors-in-Possession and Reorganized Safety Components.............................46
15.2 Limited Release of Released Parties by Persons Accepting Distributions Under the Plan.......................46
15.3 Injunction..................................................................................................47
15.4 Avoidance and Recovery Actions..............................................................................47
15.5 Exculpation.................................................................................................47
15.6 Release of Released Parties by Safety Components............................................................47
SECTION XVI RETENTION OF JURISDICTION................................................................................48
16.1 Retention of Jurisdiction...................................................................................48
16.2 Modification of the Plan....................................................................................50
SECTION XVII MISCELLANEOUS PROVISIONS................................................................................50
17.1 Payment of Statutory Fees...................................................................................50
17.2 Role of Indenture Trustee; Fees and Expenses of Indenture Trustee...........................................51
17.3 Impact of Releases upon the Securities and Exchange Commission..............................................51
17.4 Governing Law...............................................................................................51
17.5 Notices.....................................................................................................51
17.6 Further Documents and Action................................................................................54
17.7 Plan Supplement.............................................................................................54
17.8 Plan Controls...............................................................................................54
17.9 Reservation of Rights.......................................................................................54
17.10 Injunction Regarding Worthless Stock Deduction..............................................................54
17.11 Tax Reporting and Compliance................................................................................55
17.12 Binding Effect..............................................................................................55
</TABLE>
TOC vii
<PAGE>
FIRST AMENDED JOINT PLAN OF REORGANIZATION OF
SAFETY COMPONENTS UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
Safety Components International, Inc., Safety Components Fabric
Technologies, Inc., Automotive Safety Components International, Inc., ASCI
Holdings Germany (DE) Inc., ASCI Holdings UK (DE) Inc., ASCI Holdings Mexico
(DE) Inc., and ASCI Holdings Czech (DE) Inc., the Debtors and
Debtors-in-Possession in the above-captioned Reorganization Cases, propose the
following Joint Plan of Reorganization pursuant to the provisions of Chapter 11
of the Bankruptcy Code:
SECTION I
DEFINITIONS
The following terms, when used in the Plan or any subsequent amendments or
modifications thereof, shall have the meanings defined below:
1.1 "Administrative Expense Claim" means any right to payment constituting
a cost or expense of administration of the Reorganization Cases Allowed under
sections 503(b) and 507(a)(1) of the Bankruptcy Code, including, without
limitation, (a) any actual and necessary costs and expenses of preserving the
Estates of the Debtors, (b) any actual and necessary costs and expenses of
operating the businesses of the Debtors, (c) any indebtedness or obligations
incurred or assumed by the Debtors in the ordinary course of business in
connection with the conduct of their business, (d) claims for reclamation
Allowed in accordance with section 546(c)(2) of the Bankruptcy Code pursuant to
a Final Order, (e) any Professional Fees, whether fixed before or after the
Effective Date, and (f) any fees or charges assessed against and payable by the
Estates of the Debtors under section 1930, Chapter 123, title 28, United States
Code, including post-Confirmation Date and post-Effective Date fees and charges.
1.2 "Affiliate" has the meaning ascribed to such term in section 101(2) of
the Bankruptcy Code.
1.3 "Allowed" means, with reference to any Claim (including any
Administrative Expense Claim) or Equity Interest, (a) any Claim against or
Equity Interest in the Debtors, proof of which was filed within the applicable
period of limitation fixed by the Court in accordance with Rule 3003(c)(3) of
the Bankruptcy Rules (i) as to which no objection to the allowance thereof has
been interposed within the applicable period of limitation fixed by the Plan,
the Bankruptcy Code, the Bankruptcy Rules or a Final Order, (ii) as to which no
action has been commenced to avoid such Claim or Equity Interest within the
applicable period of limitation fixed by the Plan, or (iii) as to which an
objection has been interposed, to the extent such Claim or Equity Interest has
been allowed (whether in whole or in part) by a Final Order, (b) if no proof of
Claim was so filed, any Claim against the Debtors which has been listed by the
Debtors in their respective Schedules, as such Schedules may be amended from
time to time in accordance with Rule 1009 of the Bankruptcy Rules, as liquidated
in amount and not disputed or contingent (or as to which the applicable proof of
Claim has been withdrawn or
<PAGE>
Disallowed), (c) if no proof of Equity Interest was so filed, any Equity
Interest listed in the consolidated stockholders list maintained by Safety
Components as of the Confirmation Date, (d) any Claim arising from the recovery
of property under sections 550 or 553 of the Bankruptcy Code and allowed in
accordance with section 502(h) of the Bankruptcy Code, (e) any Claim allowed
under or pursuant to the terms of the Plan, (f) with respect to a Noteholder
Claim, a Noteholder Claim or any portion thereof held by any Person or Entity
listed on the Indenture Trustee's holder list in accordance with section 2.05 of
the Indenture as of the Record Date, or (g) any Claim that has been allowed by a
Final Order; provided, however, that Claims allowed solely for the purpose of
voting to accept or reject the Plan pursuant to an order of the Court shall not
be considered "Allowed Claims" hereunder. Unless otherwise specified herein or
by order of the Court, "Allowed Claims" shall not, for any purpose under the
Plan, include interest on such Claims from and after the Petition Date.
1.4 "Amended Bylaws" means the amended and restated bylaws of Reorganized
SCI, which shall be in all material respects acceptable to the Creditors'
Committee and substantially in the form contained in the Plan Supplement.
1.5 "Amended Certificate of Incorporation" means the amended and restated
certificate of incorporation of Reorganized SCI, which shall be in all material
respects acceptable to the Creditors' Committee and substantially in the form
contained in the Plan Supplement.
1.6 "ASCI" means Automotive Safety Components International, Inc., a
Delaware corporation and a Debtor and Debtor-in-Possession in Reorganization
Case No. 00-1646 (JJF).
1.7 "ASCI Common Stock" means the common stock of ASCI with a par value of
$0.01 per share, authorized and outstanding on the Petition Date, all of which
is held by SCI.
1.8 "ASCI Holdings Czech" means ASCI Holdings Czech (DE) Inc., a Delaware
corporation and a Debtor and Debtor-in-Possession in Reorganization Case No.
00-1650 (JJF).
1.9 "ASCI Holdings Czech Common Stock" means the common stock of ASCI
Holdings Czech with a par value of $0.01 per share, authorized and outstanding
on the Petition Date, all of which is held by ASCI.
1.10 "ASCI Holdings Germany" means ASCI Holdings Germany (DE) Inc., a
Delaware corporation and a Debtor and Debtor-in-Possession in Reorganization
Case No. 00-1647 (JJF).
1.11 "ASCI Holdings Germany Common Stock" means the common stock of ASCI
Holdings Germany with a par value of $0.01 per share, authorized and outstanding
on the Petition Date, all of which is held by ASCI.
1.12 "ASCI Holdings Mexico" means ASCI Holdings Mexico (DE) Inc., a
Delaware corporation and a Debtor and Debtor-in-Possession in Reorganization
Case No. 00-1649 (JJF).
PLN-2
<PAGE>
1.13 "ASCI Holdings Mexico Common Stock" means the common stock of ASCI
Holdings Mexico with a par value of $0.01 per share, authorized and outstanding
on the Petition Date, all of which is held by ASCI.
1.14 "ASCI Holdings UK" means ASCI Holdings UK (DE) Inc., a Delaware
corporation and a Debtor and Debtor-in-Possession in Reorganization Case No.
00-1648 (JJF).
1.15 "ASCI Holdings UK Common Stock" means the common stock of ASCI
Holdings UK with a par value of $0.01 per share, authorized and outstanding on
the Petition Date, all of which is held by ASCI.
1.16 "Avoidance Action" means any and all avoidance or recovery action
under sections 502(d), 542, 544, 545, 547, 548, 549, 550, 551 and 553 of the
Bankruptcy Code.
1.17 "Ballot" means the form or forms distributed to each holder of an
impaired Claim or Equity Interest on which form or forms such holder of a Claim
or Equity Interest may, among other things, vote to accept or reject the Plan.
1.18 "Bankruptcy Code" means title 11 of the United States Code, as amended
from time to time, as applicable to the Reorganization Cases, as in effect on
the Confirmation Date.
1.19 "Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure as
promulgated by the United States Supreme Court under section 2075, title 28,
United States Code, and the Local Rules of the Court, as amended from time to
time and applicable to the Reorganization Cases.
1.20 "Business Day" means any day other than (i) a Saturday, (ii) a Sunday,
(iii) any other day on which banking institutions in New York, New York are
required or authorized to close by law or executive order, and (iv) the Friday
after Thanksgiving.
1.21 "Cash" means legal tender of the United States of America.
1.22 "Cash Investment Yield" means the net yield earned by Reorganized SCI
from the investment of Cash held pending distribution in accordance with the
provisions of the Plan, including any Cash received by Reorganized Safety
Components on account of dividends and other Distributions on New Common Stock.
1.23 "Causes of Action" means any and all actions, causes of action,
liabilities, obligations, rights, suits, debts, sums of money, damages,
judgments, claims and demands whatsoever, whether known or unknown, existing or
hereafter arising, in law, equity or otherwise, based in whole or in part upon
any act or omission or other event occurring prior to the Petition Date or
during the course of the Reorganization Cases, including through the Effective
Date.
1.24 "Claim" means a claim against any of the Debtors, whether or not
asserted, as defined in section 101(5) of the Bankruptcy Code.
PLN-3
<PAGE>
1.25 "Claims Agent" means Bankruptcy Services, LLC, the Claims and Noticing
Agent for Safety Components pursuant to that certain Order appointing Bankruptcy
Services, LLC as claims and noticing agent, entered on April 11, 2000.
1.26 "Class" means a category of holders of Claims or equity interests
described in Section III hereof.
1.27 "Collateral" means any property, or interest in property, of the
Estate of any of the Debtors subject to a Lien to secure the payment or
performance of a Claim, which Lien is not subject to avoidance or otherwise
invalid under the Bankruptcy Code or applicable state law.
1.28 "Confirmation Date" means the date on which the Clerk of the Court
enters the Confirmation Order on the docket of the Court.
1.29 "Confirmation Hearing" means the hearing held by the Court on
confirmation of the Plan, as it may be adjourned or continued from time to time.
1.30 "Confirmation Order" means the order of the Court confirming the Plan
under section 1129 of the Bankruptcy Code.
1.31 "Corporate Indemnities" means any obligations of any member of Safety
Components, pursuant to its corporate charter, by-laws, other organizational
documents, or agreements entered into any time prior to the Effective Date, to
indemnify its directors, officers, and/or employees with respect to all present
and future actions, suits and proceedings against such member of Safety
Components or such directors, officers, and/or employees, based upon any act or
omission related to service with, or for or on behalf of such member of Safety
Components.
1.32 "Consummation Date Reduction Amount" has the meaning ascribed to such
term in Schedule A hereto.
1.33 "Court" means the United States District Court for the District of
Delaware having jurisdiction over the Reorganization Cases and, to the extent of
any reference under section 157 of title 28 of the United States Code, the unit
of such District Court under section 151 of title 28 of the United States Code.
1.34 "Creditors' Committee" means the official committee of unsecured
creditors appointed by the United States Trustee in the Reorganization Cases on
April 18, 2000 to represent unsecured creditors of the Debtors, as such
committee may be constituted from time to time.
1.35 "Cure" means the Distribution of Cash, or such other property as may
be agreed upon by the parties and/or ordered by the Court, with respect to the
assumption of an executory contract or unexpired lease, pursuant to section
365(b) of the Bankruptcy Code, in an amount equal to all accrued, due and unpaid
monetary obligations, without interest, or such other amount as may be agreed
PLN-4
<PAGE>
upon by the parties or ordered by the Court, under such executory contract or
unexpired lease, to the extent such obligations are enforceable under the
Bankruptcy Code and applicable non-bankruptcy law.
1.36 "D&O Policies" means the National Union Fire Insurance Company of
Pittsburgh policy, dated May 1, 1998, and any and all similar insurance policies
providing insurance coverage to, among others, directors and officers of any
member of Safety Components.
1.37 "Debtor Subsidiaries" means, collectively, Safety Components Fabric
Technologies, Inc., Automotive Safety Components International, Inc., ASCI
Holdings Germany (DE), Inc., ASCI Holdings UK (DE) Inc., ASCI Holdings Mexico
(DE), Inc. and ASCI Holdings Czech (DE), Inc., each of which are either direct
or indirect Subsidiaries of SCI and are Debtors and Debtors-in-Possession in the
Reorganization Cases.
1.38 "Debtors" means, collectively, the members of Safety Components.
1.39 "Debtors-in-Possession" means the Debtors in their capacity as
debtors-in-possession in the Reorganization Cases under sections 1107(a) and
1108 of the Bankruptcy Code.
1.40 "Disallowed Claim" means (a) a Claim, or any portion thereof, that has
been disallowed by a Final Order or (b) unless scheduled by the Debtors as a
fixed, liquidated, non-contingent and undisputed Claim, a Claim as to which a
proof of Claim bar date has been established by the Bankruptcy Code, Bankruptcy
Rules or Final Order of the Court but no proof of Claim has been timely filed or
deemed timely filed with the Court pursuant to either the Bankruptcy Code or any
Final Order of the Court.
1.41 "Disallowed Equity Interest" means an Equity Interest, or any portion
thereof, that has been disallowed by a Final Order.
1.42 "Disclosure Statement" means the disclosure statement relating to the
Plan, including the exhibits and schedules thereto, as the same may be amended,
modified or supplemented from time to time, as approved by the Court pursuant to
the Disclosure Statement Approval Order.
1.43 "Disclosure Statement Approval Date" means the date on which the Clerk
of the Court enters the Disclosure Statement Approval Order on the docket of the
Court approving the adequacy of the Disclosure Statement under section 1125 of
the Bankruptcy Code.
1.44 "Disclosure Statement Approval Order" means the Order approving, among
other things, the Disclosure Statement, entered by the Court on July 19, 2000.
1.45 "Disputed Claim" means a Claim, or any portion thereof, that is
neither an Allowed Claim nor a Disallowed Claim.
1.46 "Disputed Equity Interest" means an Equity Interest, or any portion
thereof, that is neither an Allowed Equity Interest nor a Disallowed Equity
Interest.
PLN-5
<PAGE>
1.47 "Disputed Reserve" means a reserve of Cash, New Common Stock and/or
New Warrants for the relevant Class, established herein for, among other things,
the payment or other satisfaction of Disputed Claims or Disputed Equity
Interests that become Allowed Claims or Allowed Equity Interests after the
Effective Date, which reserve shall be held in trust for the benefit of the
holders of Claims and Equity Interests and, except as provided in Section 9.6 of
the Plan upon closure of a Disputed Reserve, will not constitute property of the
Estates or of Reorganized Safety Components.
1.48 "Distributable Shares" means the shares of New Common Stock
representing 5,000,000 shares of New Common Stock.
1.49 "Distributed Shares" means the shares of New Common Stock that will be
distributed to holders of Allowed Unsecured Claims and holders of Allowed Equity
Interests under Sections V and IX of the Plan, but excluding any shares of New
Common Stock distributed or distributable pursuant to the exercise of the New
Warrants.
1.50 "Distributions" means the distribution to be made in accordance with
the Plan of, as the case may be: (a) Cash, (b) New Common Stock, and/or (c) New
Warrants.
1.51 "Effective Date" means the first Business Day on which (a) all
conditions precedent set forth in Section 13.2 of the Plan have been satisfied
or waived as provided in Section 13.3 of the Plan and (b) no stay of the
Confirmation Order is in effect.
1.52 "Entity" has the meaning assigned to such term in section 101(15) of
the Bankruptcy Code.
1.53 "Equity Interest" means, as of the Petition Date, any capital stock or
other ownership interest in SCI, whether or not transferable, and any, option,
warrant or right to purchase, sell or subscribe for an ownership interest or
other equity security in SCI, including, but not limited to, (i) the Old Capital
Stock and (ii) redemption, conversion, exchange, voting, participation, dividend
rights and liquidation preferences relating to Old Capital Stock.
1.54 "Equity Distributable Shares" means 160,000 shares of New Common
Stock, representing 3.2% of the Distributable Shares of the New Common Stock.
1.55 "Estate" means, as to each Debtor, the estate of such Debtor in its
Reorganization Case created by section 541 of the Bankruptcy Code upon the
commencement of such Reorganization Case.
1.56 "Excluded Claims" means all of Safety Components', the Estates' and
Reorganized Safety Components' rights, title, and interests in and to any and
all of their respective claims or Causes of Actions against any party, including
those relating to, arising from, or on account of: (a) the announcement that SCI
would restate its earnings for certain periods, (b) accounting irregularities,
if any, and (c) the actions or non-actions, if any, of its auditors and/or
accountants with
PLN-6
<PAGE>
respect to the foregoing or with respect to their role as auditor of and
provider of other services, including accounting, to Safety Components prior to
and at the time of the announcement of the restatements other than those claims
and Causes of Action that are being released pursuant to the Securities Class
Action Settlement and/or the Mutual Release. Excluded Claims include, among
other claims and Causes of Action, all claims and Causes of Action that are not
being released pursuant to the Class Action Settlement.
1.57 "Final Order" means an order or judgment of the Court as to which the
time to appeal, petition for certiorari, or move for reargument or rehearing has
expired and as to which no appeal, petition for certiorari or other proceedings
for reargument or rehearing shall then be pending, provided, however, if an
appeal, writ of certiorari, reargument or rehearing thereof has been filed or
sought, such order of the Court shall have been affirmed by the highest court to
which such order was appealed, or certiorari shall have been denied or
reargument or rehearing shall have been denied or resulted in no modification of
such order, and the time to take any further appeal, petition for certiorari or
move for reargument or rehearing shall have expired; provided, further, that the
possibility that a motion under Rule 59 or Rule 60 of the Federal Rules of Civil
Procedure, or any analogous rule under the Bankruptcy Rules, may be filed with
respect to such order shall not cause such order not to be a Final Order.
1.58 "GAAP" means generally accepted accounting principles in the United
States of America.
1.59 "Indemnification Parties" means each Person or Entity that possesses
or asserts an Indemnification Right against any member of Safety Components.
1.60 "Indemnification Rights" means all rights, if any, as to which a
Person or Entity asserts or possesses based upon Corporate Indemnities.
1.61 "Indenture" means that certain Indenture dated as of July 24, 1997,
between SCI, several of SCI's direct and indirect Subsidiaries, and IBJ Schroder
Bank & Trust Company, as Trustee.
1.62 "Indenture Trustee" means the Bank of New York in its capacity as the
successor indenture trustee under the Indenture.
1.63 "Intercreditor Agreement" means that certain Intercreditor and
Subordination Agreement, dated as of April 7, 2000, between the Senior DIP Agent
and the Subordinated DIP Agent.
1.64 "Liabilities" means any and all costs, expenses, actions, Causes of
Action, suits, controversies, damages, claims, liabilities or demands of any
nature, whether known or unknown, foreseen or unforeseen, existing or
hereinafter arising, liquidated or unliquidated, matured or not matured,
contingent or direct, whether arising at common law, in equity, or under any
statute, based in whole or in part on any act or omission or other occurrence
arising or taking place on or prior to the Effective Date.
PLN-7
<PAGE>
1.65 "Lien" has the meaning ascribed to such term in section 101(37) of the
Bankruptcy Code (but a lien that has or may be avoided pursuant to an Avoidance
Action shall not constitute a Lien).
1.66 "Mutual Release" means that certain mutual release to be executed by
Zummo, the members of the Unofficial Noteholders' Committee, Reorganized Safety
Components (in its capacity as successor in interest to Safety Components), and
the other members of the Safety Components Group on the Effective Date, as
provided for in, and in the form and substance substantially similar to the form
annexed to, the Restructuring Agreement. The Mutual Release shall be in the form
contained in the Plan Supplement.
1.67 "New Common Stock" means the shares of Common Stock of Reorganized
SCI, par value $0.01 per share, to be authorized by Reorganized SCI on the
Effective Date.
1.68 "New Warrants" means the new warrants of Reorganized SCI as described
in Section 6.2 hereof, issued on and after the Effective Date and distributed in
the manner provided in the Plan. The New Warrants shall have the terms as set
forth in Section 6.2 of the Plan and shall be in all other material respects
acceptable to the Creditors' Committee and substantially in the form contained
in the Plan Supplement.
1.69 "Non-Debtor Affiliates" means, collectively, Valentec International
Corporation LLC, a Delaware corporation, Valentec Systems, Inc., a Delaware
corporation, Galion, Inc., a Delaware corporation, CSSC, Inc., an Arizona
corporation, VIC Finance, Inc., a Delaware corporation, ASCI Holdings Brazil
(DE), Inc., a Delaware corporation, Automotive Safety Components International
Verwattungs GmbH, a German limited liability partnership, Automotive Safety
Components International GmbH & Co. KG, a German limited partnership, Automotive
Safety Components International, Limited, a United Kingdom corporation,
Automotive Safety Components International, S.A. de C.V., a Mexican corporation,
Automotive Safety Components International, s.r.o., a corporation of the Czech
Republic, and any other entities that SCI owns a majority, directly or
indirectly, of each such entity's voting stock interests.
1.70 "Noteholder Claims" means all claims (including, but not limited to,
all Claims), directly or indirectly, against Safety Components and any other
obligors arising from or under, or relating in any way to, the 10 1/8% Senior
Subordinated Notes and/or the Indenture.
1.71 "Noteholder Distributable Shares" means 4,840,000 shares of New Common
Stock, representing 96.8% of the Distributable Shares of the New Common Stock.
1.72 "Noteholders" means all beneficial holders of the 10 1/8% Senior
Subordinated Notes.
1.73 "Old Capital Stock" means, collectively: (a) the Old Common Stock and
(b) the Old Stock Options.
PLN-8
<PAGE>
1.74 "Old Common Stock" means the Common Stock of SCI with a par value of
$0.01 per share, including all rights, claims and interests attendant thereto,
but excluding the Zummo Shares.
1.75 "Old Stock Options" means any options, warrants or other rights to
purchase Old Common Stock, whenever granted.
1.76 "Person" shall have the meaning ascribed to such term in section
101(41) of the Bankruptcy Code.
1.77 "Petition Date" means April 10, 2000, the date on which the members of
Safety Components filed their Chapter 11 petitions and commenced the
Reorganization Cases.
1.78 "Plan" means this First Amended Joint Plan of Reorganization,
including the Plan Supplement, the schedules (including the Rejection/Assignment
Schedule) and exhibits hereto, either in its present form or as the same may be
amended, modified or supplemented from time to time in accordance with the terms
hereof.
1.79 "Plan Supplement" means the form of documents specified in Section
17.7 of the Plan, which are incorporated herein by reference.
1.80 "Plan Transactions" means the transactions effectuated or to be
effectuated on or before the Effective Date pursuant to the terms of the Plan,
including, but not limited to, the transactions described in Section VIII of the
Plan.
1.81 "Potential Rejection Claim" means the contingent Claim that a
Potential Rejection Claimant may assert for damages arising from the potential
rejection of an unexpired lease or executory contract with any member of Safety
Components pursuant to Section XII of the Plan.
1.82 "Potential Rejection Claimant" means any party to an unexpired lease
or executory contract with any member of Safety Components that is subject to
rejection under section 365 of the Bankruptcy Code pursuant to Section XII of
the Plan.
1.83 "Priority Non-Tax Claim" means any Claim of a kind specified in
sections 507(a)(3), (4), (5), (6), (7) or (9) of the Bankruptcy Code.
1.84 "Priority Tax Claim" means any Claim of a governmental unit of the
kind specified in sections 502(i) and 507(a)(8) of the Bankruptcy Code.
1.85 "Professional Fees" means any Claim of a professional, retained in
these Reorganization Cases, or any Reorganization Case, pursuant to sections 327
and 1103 of the Bankruptcy Code or otherwise, for compensation or reimbursement
of costs and expenses relating to services incurred prior to and including the
Confirmation Date, when and to the extent any such Claim is Allowed by the Court
pursuant to sections 330, 331, 503(b), or 1103 of the Bankruptcy Code.
PLN-9
<PAGE>
1.86 "Ratable Proportion" means, (i) with reference to any Distribution on
account of any Allowed Claim in any Class, the ratio (expressed as a percentage)
that the amount of such Allowed Claim bears to the aggregate amount of Allowed
Claims of the same Class plus all Disputed Claims in such Class, and (ii) with
reference to any Distribution on account of any Allowed Equity Interest in any
Class, the ratio (expressed as a percentage) that the amount (in number of
shares) of such Allowed Equity Interest bears to the aggregate amount (in number
of shares) of Allowed Equity Interests of the same Class plus all Disputed
Equity Interests in such Class.
1.87 "Record Date" means the record date for determining an entitlement to
receive Distributions under the Plan on account of Allowed Claims or Allowed
Equity Interests, which shall be the Confirmation Date.
1.88 "Registration Rights Agreement" means a registration rights agreement
to be entered into pursuant to Section 6.1.3 of the Plan between Reorganized SCI
and any Person or Entity entitled to become a party to such Registration Rights
Agreement under Section 6.1.3 of the Plan, which agreement shall be in all
material respects acceptable to the Unofficial Noteholders' Committee and in
substantially the form contained in the Plan Supplement.
1.89 "Reinstated" or "Reinstatement" means leaving unaltered the legal,
equitable, and contractual rights to which a Claim entitles the holder of such
Claim so as to leave such Claim unimpaired in accordance with section 1124 of
the Bankruptcy Code, thereby entitling the holder of such Claim to, but not more
than, (a) reinstatement of the original maturity of the obligations on which
such Claim is based, and (b) payment, as provided herein, of an amount of Cash
consisting solely of the sum of (i) matured but unpaid principal installments,
without regard to any acceleration of maturity, accruing prior to the Effective
Date, (ii) accrued but unpaid interest as of the Petition Date, and (iii)
reasonable fees, expenses, and charges, to the extent such fees, expenses, and
charges are Allowed under the Bankruptcy Code and are specifically provided for
in the agreement or agreements on which such Claim is based; provided, however,
that any contractual right that does not pertain to the payment when due of
principal and interest on the obligation on which such Claim is based,
including, but not limited to, financial covenant ratios, negative pledge
covenants, covenants or restrictions on merger or consolidation, and affirmative
covenants regarding corporate existence prohibiting certain transactions or
actions contemplated by the Plan, or conditioning such transactions or actions
on certain factors, shall not be required to be reinstated in order to
accomplish Reinstatement.
1.90 "Rejection/Assignment Schedule" means the schedule of executory
contracts and unexpired leases designated by the Debtors for, as may be the
case, rejection or assumption and assignment as of the Effective Date of the
Plan, pursuant to sections 365 and 1123(b)(2) of the Bankruptcy Code and Section
12.2 of the Plan, which shall be in substantially the form contained in the Plan
Supplement.
1.91 "Released Claims" shall have the meaning ascribed to such term in the
Subordinated DIP Loan Agreement.
PLN-10
<PAGE>
1.92 "Released Parties" shall have the meaning ascribed to such term in
Section 15.2 of the Plan.
1.93 "Reorganization Cases" means the cases commenced under Chapter 11 of
the Bankruptcy Code by the members of Safety Components before the Court, as
referenced by Case Nos. 00-1644 (JJF), 00-1645 (JJF), 00-1646 (JJF); 00-1647
(JJF); 00-1648 (JJF); 00-1649 (JJF); and 00-1650 (JJF), and which are
administratively consolidated under Case No. 00-1644 (JJF).
1.94 "Reorganized Safety Components" means, on and after the Effective
Date, collectively, the members of Safety Components (and any successor thereto
by merger, consolidation or otherwise).
1.95 "Reorganized SCI" means, on and after the Effective Date, SCI (and any
successor thereto by merger, consolidation or otherwise).
1.96 "Restructuring Agreement" means that certain Restructuring Agreement,
dated as of April 6, 2000, by and among members of the Safety Components Group,
Zummo, and the members of the Unofficial Noteholders' Committee.
1.97 "Safety Components" means, collectively, Safety Components
International, Inc., Safety Components Fabric Technologies, Inc., Automotive
Safety Components International, Inc., ASCI Holdings Germany (DE), Inc., ASCI
Holdings UK (DE) Inc., ASCI Holdings Mexico (DE), Inc., and ASCI Holdings Czech
(DE), Inc., each of which are Delaware corporations and are Debtors and
Debtors-in-Possession in the Reorganization Cases.
1.98 "Safety Components DIP Severance Plan" means that certain Key
Executive Severance Plan as authorized by the Court pursuant to an order dated
July 12, 2000.
1.99 "Safety Components Group" means, collectively, Safety Components and
the Non-Debtor Affiliates.
1.100 "Saudi Receivable" has the meaning ascribed to such term in Section
8.18 of the Plan.
1.101 "Schedules" means the respective schedules of assets and liabilities
and the statements of financial affairs filed with the Court on or about May 19,
2000 by the Debtors under section 521 of the Bankruptcy Code and the Official
Bankruptcy Forms of the Bankruptcy Rules, as such schedules and statements have
been or may be supplemented or amended from time to time.
1.102 "SCI" means Safety Components International, Inc., a Delaware
corporation and a Debtor and Debtor-in-Possession in Reorganization Case No.
00-1644 (JJF).
1.103 "SCFTI" means Safety Components Fabric Technologies, Inc., a Delaware
corporation and a Debtor and Debtor-in-Possession in Reorganization Case No.
00-1645 (JJF).
PLN-11
<PAGE>
1.104 "SCFTI Common Stock" means the common stock of SCFTI with a par value
of $0.01 per share, authorized and outstanding on the Petition Date, all of
which is held by SCI.
1.105 "Secured Claim" means a Claim, other than a Senior DIP Facility Claim
or a Subordinated DIP Facility Claim, secured by a Lien on Collateral to the
extent of the value of the Collateral, as determined in accordance with section
506(a) of the Bankruptcy Code, or as otherwise agreed upon in writing by the
Debtors and the holder of such Claim after notice to the Creditors' Committee
and subject to the approval of the Court. To the extent that the value of such
interest is less than the amount of the Claim which has the benefit of such
security, the unsecured portion of such Claim is an Unsecured Deficiency Claim
unless, in any such case, the Class of which such Claim is a part makes a valid
and timely election under section 1111(b) of the Bankruptcy Code to have such
Claim treated as a Secured Claim to the extent Allowed.
1.106 "Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
1.107 "Securities Class Actions/Suits" means the pending actions and
lawsuits relating to the Securities Fraud Claims, including, without limitation,
In re Safety Components International, Inc., Civil Action No. 00-0082 (AJL),
pending in the United States District Court for the District of New Jersey,
which consolidated the following eight actions pending in the United States
District Court for the District of New Jersey: (a) Charles W. Bozman, on his
behalf and on behalf of others similarly situated, vs. Safety Components
International, Inc., Case No. 99-CV-5587, filed November 30, 1999; (b) Dale A.
Waters, M.D., on his behalf and on behalf of others similarly situated, vs.
Safety Components International, Inc., Case No. 99-CV-5316, filed November 12,
1999; (c) Thomas Tylka, individually and on behalf of all others similarly
situated, vs. Safety Components International, Inc., Case No. 99-CV-5502, filed
November 23, 1999; (d) Arnold Mahler, et al., individually and on behalf of all
others similarly situated, vs. Safety Components International, Inc., Case No.
99-CV-5563, filed November 24, 1999; (e) Nicholas Giannantonio, individually and
on behalf of all others similarly situated, vs. Safety Components International,
Inc., Case No. 99-CV-5604, filed December 1, 1999; (f) Dan Communale,
individually and on behalf of all others similarly situated, vs. Safety
Components International, Inc., Case No. 99-CV-5723, filed December 7, 1999; (g)
Mark R. Duncan, individually and on behalf of all others similarly situated, vs.
Safety Components International, Inc., Case No. 99-CV-5984, filed December 17,
1999; and (h) Mahendrakumar Patel, et al., individually and on behalf of all
others similarly situated, vs. Safety Components International, Inc., Case No.
00-CV-0082, filed January 7, 2000.
1.108 "Securities Class Action Plaintiffs" means collectively, (a) the
plaintiffs in the Securities Class Actions/Suits and (b) any other Person or
Entity possessing the same or similar causes of action.
1.109 "Securities Class Action Settlement" means the settlement of the In
re Safety Components International, Inc., Civil Action No. 00-0082 (AJL),
pending in the United States District Court for the District of New Jersey which
settlement shall be in accordance with the terms and
PLN-12
<PAGE>
conditions set forth in the Securities Class Action Memorandum of Understanding,
the Plan and the stipulation of settlement and orders relating thereto, and
shall be reasonably satisfactory to the Creditors' Committee in all material
respects.
1.110 "Securities Class Action Memorandum of Understanding" means that
certain Memorandum of Understanding between the plaintiffs and defendants
relating to In re Safety Components International, Inc., Civil Action No.
00-0082 (AJL), pending in the United States District Court for the District of
New Jersey, a copy of which is annexed hereto as Exhibit 1.
1.111 "Securities Fraud Claims" means all claims, including unknown claims,
demands, rights, liabilities and causes of action of any kind whatsoever, known
or unknown, asserted or which might have been asserted in a direct, derivative
or other capacity against any Person or Entity, including, without limitation,
claims arising out of, relating to, or in connection with (i) Safety Components'
financial statements, financial reporting or internal control systems relating
to Safety Components' financial reporting, (ii) the purchase, sale or other
decision or action made or taken, or declined, failed or refused to be made or
taken, or otherwise foregone, concerning or relating to Equity Interests, (iii)
the facts, transactions, events, occurrences, acts, representations, disclosure,
statements, omissions, or failures to act that were the subject of or were
alleged or could have been alleged in the pending litigation asserted against
SCI, the other members of Safety Components, and other persons and entities,
whether asserted individually or on behalf of a class of plaintiffs which
generally arise from Safety Components' accounting practices, including the
Securities Class Actions/Suits, (iv) the purchase, ownership or sale of the
common stock or other securities of SCI, (v) accounting irregularities or
errors, if any, or alleged accounting irregularities or errors relating to the
Safety Components Group, and (vi) any restatements of SCI's or any member of the
Safety Components Group's financial statements or results of operations.
1.112 "Securities Fraud Released Parties" has the meaning ascribed to such
term in Section 11.3 of the Plan.
1.113 "Senior DIP Agent" means Bank of America, N.A. in its capacity as
agent for the lenders under the Senior DIP Facility.
1.114 "Senior DIP Facility" means the loan facilities provided under the
Senior DIP Loan Agreement.
1.115 "Senior DIP Loan Agreement" means that certain $30,600,000 Senior
Secured Super Priority Debtor-in-Possession Loan and Security Agreement, dated
as of April 7, 2000, as such agreement may be amended from time to time, by and
among SCI and certain other members of Safety Components and the Non-Debtor
Affiliates party thereto, as borrowers, certain other members of Safety
Components and the Non-Debtor Affiliates party thereto, as guarantors, the
Senior DIP Agent, as agent, and the financial institutions party thereto, as
lenders, or any successor or replacement debtor-in-possession loan facility.
PLN-13
<PAGE>
1.116 "Senior DIP Facility Claims" means all Claims of the Senior DIP Agent
and the lenders under the Senior DIP Facility against Safety Components and
their affiliated obligors directly or indirectly arising from or under, or
relating in any way to, the Senior DIP Facility and/or the Senior DIP Loan
Agreement.
1.117 "Senior Exit Facility" means the post-confirmation financing facility
to be entered into on the Effective Date by, among others, Reorganized Safety
Components and the lenders providing such financing.
1.118 "Senior Exit Facility Commitment Letter" means a commitment letter
for the Senior Exit Facility, which shall be in all material respects acceptable
to the Creditors' Committee and substantially the form contained in the Plan
Supplement.
1.119 "Stock Distribution" means the Distribution of New Common Stock to
holders of Allowed Unsecured Claims and Allowed Equity Interests as provided
under Section V of the Plan.
1.120 "Subordinated DIP Agent" means KeyBank National Association, in its
capacity as agent for the lenders under the Subordinated DIP Facility.
1.121 "Subordinated DIP Facility" means the loan facilities provided under
the Subordinated DIP Loan Agreement.
1.122 "Subordinated DIP Facility Claims" means all Claims of the
Subordinated DIP Agent and the lenders under the Subordinated DIP Facility
against Safety Components and their affiliated obligors directly or indirectly
arising from or under, or relating in any way to, the Subordinated DIP Facility
and/or the Subordinated DIP Loan Agreement.
1.123 "Subordinated DIP Loan Agreement" means that certain Subordinated
Secured Superpriority Debtor-in-Possession Credit Agreement, dated as of April
7, 2000, as such agreement may be amended from time to time, by and among SCI,
Automotive Safety Components International Limited, and Automotive Safety
Components International GmbH & Co. KG, as borrowers, certain other Subsidiaries
of SCI party thereto, as guarantors, the Subordinated DIP Agent (as agent), and
Fleet Bank and KeyBank National Association, as lenders.
1.124 "Subordinated DIP Liens" means the Liens granted by members of the
Safety Components Group to secure the Subordinated DIP Facility Claims and their
respective obligations under the Subordinated DIP Facility and Subordinated DIP
Loan Agreement, which Liens, in accordance with the terms of, and to the extent
provided under, the Subordinated DIP Loan Agreement and the Intercreditor
Agreement, are subordinated to the Liens securing the Senior DIP Facility and
subject to subordination in favor of the Senior Exit Facility.
1.125 "Subordinated DIP Interest and Fees" means all interest, fees, costs
and expenses due to, for the account of, or on behalf of the Subordinated DIP
Agent, Fleet Bank and/or KeyBank National Association that are the obligations
of Safety Components under the Subordinated DIP Facility
PLN-14
<PAGE>
and/or the Subordinated DIP Loan Agreement, including, without limitation, to
the extent provided therein, all reasonable attorneys' fees and other
professionals' fees and expenses.
1.126 "Subordinated DIP Loans" means the "Term Loans" as such term is
defined in and used in the Subordinated DIP Loan Agreement.
1.127 "Subordinated Exit Facility" means the loan facilities provided under
the Subordinated Exit Loan Agreement, which facility is subject to the terms and
conditions set forth on Schedule A hereto.
1.128 "Subordinated Exit Facility Notes" means the notes issued on the
Effective Date in accordance with Section 3.3 of the Plan to the holders of the
Subordinated DIP Facility, which notes shall be in all material respects
acceptable to the Creditors' Committee and substantially in the form either
contained in the Plan Supplement if available by such date or as submitted to
the Court on or prior to the date of the Confirmation Hearing.
1.129 "Subordinated Exit Loan Agreement" means the loan agreement giving
effect to the treatment set forth in Section 3.3 of the Plan and the
Subordinated Exit Facility, which loan agreement shall be in all material
respects acceptable to the Creditors' Committee and substantially in the form
either contained in the Plan Supplement if available by such date or as
submitted to the Court on or prior to the date of the Confirmation Hearing.
1.130 "Subordinated Exit Loans" means the "Term Loans" as such term is to
be defined in and used in the Subordinated Exit Loan Agreement.
1.131 "Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more Subsidiaries of the parent or
by the parent and one or more Subsidiaries of the parent.
1.132 "Subsidiaries Amended Bylaws" means the amended and restated bylaws
of the SCI's Subsidiaries, which shall be in all material respects acceptable to
the Creditors' Committee and substantially in the form contained in the Plan
Supplement.
1.133 "Subsidiaries Amended Certificates of Incorporation" means the
amended and restated certificates of incorporation of the SCI's Subsidiaries,
which shall be in all material respects acceptable to the Creditors' Committee
and substantially in the form contained in the Plan Supplement.
PLN-15
<PAGE>
1.134 "Subsidiary Common Stock" means, collectively, SCFTI Common Stock,
ASCI Common Stock, ASCI Holdings Germany Common Stock, ASCI Holdings UK Common
Stock, ASCI Holdings Mexico Common Stock and ASCI Holdings Czech Common Stock.
1.135 "10 1/8% Senior Subordinated Notes" means those certain 10 1/8%
Senior Subordinated Notes due 2007, Series B issued by SCI under the Indenture.
1.136 "United States Trustee" means the Acting United States Trustee appointed
under section 591, title 28, United States Code to serve in the District of
Delaware.
1.137 "Unofficial Noteholders' Committee" means the unofficial committee of
holders of 10 1/8% Senior Subordinated Notes comprised of Sun America
Investments, American International Group, Wayland Investment Fund, LLC, Putnam
Fiduciary Trust Company, The Putnam Advisory Company, Inc. and Putnam Investment
Management, Inc., and certain affiliates of the foregoing, each as holders or
investment managers or advisors for certain discretionary accounts that are
holders or beneficial owners of the 10 1/8% Senior Subordinated Notes.
1.138 "Unsecured Claim" means any Claim against one of the Debtors that is
not an Administrative Expense Claim, Secured Claim, Priority Tax Claim or
Priority Non-Tax Claim.
1.139 "Unsecured Deficiency Claim" means, with reference to a Claim secured
by a Lien against Collateral, an amount equal to the difference between (a) the
aggregate amount of such Claim after giving effect to the operation of section
1111(b)(1)(A) of the Bankruptcy Code and (b) the amount of such Claim that is a
Secured Claim; provided, however, that, in the event that the Class in which
such Secured Claim is classified makes the election under section 1111(b)(2) of
the Bankruptcy Code in accordance with Rule 3014 of the Bankruptcy Rules, the
Unsecured Deficiency Claim otherwise relating to such Secured Claim shall be
extinguished. An Unsecured Deficiency Claim is an Unsecured Claim.
1.140 "VIL" means Valentec International Limited, a United Kingdom company
of which Zummo is the controlling shareholder.
1.141 "Voting Deadline" means the date set by the Court pursuant to the
Disclosure Statement Approval Order by which all Ballots for acceptance or
rejection of the Plan must be received by the Debtors or their Court appointed
agent.
1.142 "Zummo" means Robert A. Zummo, in his capacity as an individual, as
the controlling shareholder of VIL, and as the Chief Executive Officer of Safety
Components.
1.143 "Zummo Employment Contract" has the meaning ascribed to such term in
Section 8.18 of the Plan.
1.144 "Zummo Shares" means the shares of the Common Stock of SCI with a par
value of $0.01 per share held or controlled by Zummo as of the date of the
execution of the Restructuring
PLN-16
<PAGE>
Agreement, including all rights, claims and interests attendant thereto,
regardless of whether such shares, rights, claims or interests are held or
controlled by Zummo or subsequent transferee(s) on the Record Date.
SECTION II
INTERPRETATION; APPLICATION OF
DEFINITIONS, RULES OF CONSTRUCTION AND COMPUTATION OF TIME
Wherever from the context it appears appropriate, each term stated in
either the singular or the plural shall include both the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter. Unless otherwise specified, all
section, schedule or exhibit references in the Plan are to the respective
section of, or schedule or exhibit to, the Plan. For purposes of the Plan (a)
any reference in the Plan to a contract, instrument, release, indenture, or
other agreement or document 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, (b) any reference in the Plan to an
existing document or exhibit filed or to be filed means such document or exhibit
as it may have been or may be amended, modified, or supplemented and (c) unless
otherwise specified, all references in the Plan to Sections, Articles,
Schedules, and Exhibits are references to Sections, Articles, Schedules, and
Exhibits of or to the Plan. The words "herein," "hereof," "hereto," "hereunder,"
and other words of similar meaning refer to the Plan as a whole and not to any
particular section, subsection or clause contained in the Plan. A capitalized
term used herein that is not defined herein shall have the meaning assigned to
that term in the Bankruptcy Code or in the exhibits hereto. The rules of
construction contained in section 102 of the Bankruptcy Code shall apply to the
construction of the Plan. The headings in the Plan are for convenience of
reference only and shall not limit or otherwise affect the provisions of the
Plan. Unless otherwise indicated herein, all references to dollars means United
States dollars. In computing any period of time prescribed or allowed by the
Plan, unless otherwise expressly provided, the provisions of Bankruptcy Rule
9006(a) shall apply.
SECTION III
PAYMENT OF ADMINISTRATIVE
EXPENSE CLAIMS, PRIORITY TAX CLAIMS AND OTHER UNCLASSIFIED CLAIMS
3.1 Administrative Expense Claims.
Allowed Administrative Expense Claims shall be paid in Cash, in full, on
the Effective Date, or as soon as practicable after such Claims become Allowed
Claims if the date of allowance is later than the Effective Date, or in such
amounts and on such other terms either as may be agreed on between the holders
of such Claims and the Debtors or Reorganized Safety Components, or according to
the ordinary business terms agreed upon by, and in the ordinary course of
business of, Safety Components or Reorganized Safety Components and such
holders.
PLN-17
<PAGE>
3.2 Payment of Senior DIP Facility Claims.
All Allowed Senior DIP Facility Claims against the Debtors shall be paid
(a) on the Effective Date in full in Cash, or in a manner otherwise permitted
pursuant to the terms of the Senior DIP Facility and the Senior DIP Loan
Agreement, or (b) on such other terms as may be mutually agreed upon among (i)
the holders of the Senior DIP Facility Claims, (ii) Safety Components or
Reorganized Safety Components, as the case may be, and (iii) the Creditors'
Committee.
3.3 Treatment of Subordinated DIP Facility Claims.
On the Effective Date, holders of Allowed Subordinated DIP Facility Claims,
in full satisfaction, settlement, release, and discharge of and in exchange for
such Allowed Subordinated DIP Facility Claims, shall receive the treatment
afforded to such holders under the Subordinated Exit Facility to be provided by
the Subordinated DIP Lenders. The agreement of such parties to provide the
Subordinated Exit Facility is subject to the terms and conditions set forth on
Schedule A hereto. On the Effective Date, the holders of Allowed Subordinated
DIP Facility Claims shall receive (a) the Subordinated Exit Notes, (b) payment
of the Consummation Date Reduction Amount, if any, and (c) payment in full in
cash of all other amounts (other than principal) due and owing under the
Subordinated DIP Facility, including, to the extent provided thereunder,
Subordinated DIP Interest and Fees. In addition, on the Effective Date, the
holders of Allowed Subordinated DIP Facility Claims shall be deemed to be, and
shall be, automatically released by each member of the Safety Components Group
and each other party in interest in these Reorganization Cases from all Released
Claims and all claims of any type and nature that arise out of or relate to the
financial accommodations extended by the Subordinated DIP Lenders under the
Subordinated DIP Facility and/or the Subordinated DIP Loan Agreement, which
release shall be effective on the Effective Date without any further act of any
Entity. Any Subordinated DIP Lien treated in accordance with the foregoing that
was subordinated or junior to any other Lien in the same Collateral prior to the
Effective Date shall be subordinate or junior to the extent such other Lien is
restructured, otherwise remains in existence following the Effective Date, or is
replaced by the Senior Exit Facility, to the same extent following the Effective
Date and the restructuring contemplated in the Plan. The above-described
treatment shall be in complete satisfaction of the Subordinated DIP Facility
Claims against each member of the Safety Components Group.
PLN-18
<PAGE>
3.4 Priority Tax Claims.
On the Effective Date, or as soon as practicable after such Claim becomes
an Allowed Claim if the date of allowance is later than the Effective Date, a
holder of an Allowed Priority Tax Claim shall be entitled to receive in full
satisfaction, settlement, release, and discharge of and in exchange for such
Allowed Priority Tax Claim (a) deferred Cash payments in an aggregate principal
amount equal to the amount of such Allowed Priority Tax Claim plus interest on
the unpaid portion thereof at the rate of eight percent (8%) per annum from the
Effective Date through the date of payment thereof or (b) such other treatment
as to which the Debtors and such holder shall have agreed upon in writing, with
the approval of the Court and the Creditors' Committee. If deferred Cash
payments are made to a holder of an Allowed Priority Tax Claim, payments of
principal shall be made in annual installments, each such installment amount
being equal to ten percent (10%) of such Allowed Priority Tax Claim plus accrued
and unpaid interest, with the first payment to be due on the first anniversary
of the Effective Date, and subsequent payments to be due on each successive
anniversary of the first payment date or as soon thereafter as is practicable;
provided, however, that any installments remaining unpaid on the date that is
six years after the date of assessment of the tax that is the basis of the
Allowed Priority Tax Claim shall be paid on the first Business Day following
such date, together with any accrued and unpaid interest to the date of payment;
provided, further, that the Debtors and Reorganized Safety Components reserve
the right to pay any Allowed Priority Tax Claim, or any remaining balance of
such Allowed Priority Tax Claim, in full at any time on or after the Effective
Date without premium or penalty.
PLN-19
<PAGE>
SECTION IV
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
4.1 Summary.
For purposes of all confirmation issues, including, without limitation,
voting, confirmation and distribution, except as otherwise provided herein, all
Claims against the Debtors (except for Administrative Expense Claims, Senior DIP
Facility Claims, Subordinated DIP Facility Claims and Priority Tax Claims) and
equity interests in the Debtors are classified as follows:
<TABLE>
<CAPTION>
===================== =================================================== =====================================================
CLASS CLASS NAME STATUS
===================== =================================================== =====================================================
<S> <C> <C>
Class 1 Priority Non-Tax Claims Unimpaired - not entitled to vote
--------------------- --------------------------------------------------- -----------------------------------------------------
Class 2 Secured Claims Unimpaired - not entitled to vote
--------------------- --------------------------------------------------- -----------------------------------------------------
Class 3 Noteholder Claims Impaired - entitled to vote
--------------------- --------------------------------------------------- -----------------------------------------------------
Class 4 Unsecured Claims Impaired - entitled to vote
--------------------- --------------------------------------------------- -----------------------------------------------------
Class 5 Old Common Stock Impaired - entitled to vote
--------------------- --------------------------------------------------- -----------------------------------------------------
Class 6 Other Equity Interests Impaired - deemed rejected and not entitled to vote
--------------------- --------------------------------------------------- -----------------------------------------------------
Class 7 Subsidiary Common Stock Impaired - deemed to have accepted the plan and
not entitled to vote
--------------------- --------------------------------------------------- -----------------------------------------------------
</TABLE>
4.2 Classification and Treatment:
4.2.1 Class 1: Priority Non-Tax Claims.
Class 1 consists of all Priority Non-Tax Claims.
4.2.2 Class 2: Secured Claims.
Class 2 consists of all Secured Claims.
4.2.3 Class 3: Noteholder Claims.
Class 3 consists of all Noteholder Claims against the Debtors.
PLN-20
<PAGE>
4.2.4 Class 4: Unsecured Claims.
Class 4 consists of all Unsecured Claims, including any Deficiency Claims, but
excluding all Noteholder Claims.
4.2.5 Class 5: Old Common Stock.
Class 5 consists of all interests of the holders of Old Common Stock.
4.2.6 Class 6: Other Equity Interests.
Class 6 consists of all equity interests in Safety Components not otherwise
classified in Classes 5 or 7, including, without limitation, the interests of
holders of Old Stock Options and any and all Claims of the types asserted by any
holder of an equity interest in Safety Components described in section 510(b) of
the Bankruptcy Code.
4.2.7 Class 7: Subsidiary Common Stock.
Class 7 consists of all interests in Subsidiary Common Stock.
SECTION V
TREATMENT OF CLAIMS AND EQUITY
INTERESTS UNDER THE PLAN
5.1 Designation of Treatment.
The following treatment set forth in this Section V shall be accorded to
Claims against and equity interests in the Debtors.
5.2 Claims Against and Equity Interests in the Debtors.
5.2.1 Class 1: Priority Non-Tax Claims.
On the Effective Date, a holder of an Allowed Class 1 Priority Non-Tax
Claim shall receive, in full satisfaction, settlement, release, and discharge of
and in exchange for such Allowed Class 1 Priority Non-Tax Claim (a) Cash equal
to the amount of such Allowed Class 1 Priority Non-Tax Claim, or (b) such other
treatment as to which Reorganized Safety Components and such holder shall have
agreed upon in writing.
PLN-21
<PAGE>
5.2.2 Class 2: Secured Claims.
Each holder of an Allowed Secured Claim against a Debtor will be dealt with
as though a separate Class and will be treated as follows: Each holder of an
Allowed Secured Claim against any of the Debtors shall, at the sole option of
the Debtors, receive on the Effective Date on account of its Allowed Secured
Claim (a) treatment as provided under section 1124(2) of the Bankruptcy Code,
with any Cash payments required under section 1124(2) of the Bankruptcy Code
being made on the Effective Date; or (b) such holder's Collateral. If the holder
of an Allowed Secured Claim receives treatment as provided in (a) above, such
holder shall retain the Liens securing the Allowed Secured Claim until paid in
full. Any deficiency amount relating to an Allowed Secured Claim shall be
treated as a Class 4 Unsecured Claim. Notwithstanding the foregoing, the Debtors
and any holder of an Allowed Secured Claim may agree to any alternate treatment
of such Secured Claim, which treatment may include preservation of such holder's
Lien; provided, however, that such treatment shall not provide a return to such
holder having a present value in excess of the amount of such holder's Allowed
Secured Claim. Any such agreement must be presented to the Court and the
Creditors' Committee for approval at or prior to the Effective Date, and shall
not materially and adversely impact the treatment of any other creditor under
the Plan.
5.2.3 Class 3: Noteholder Claims.
On the Effective Date, each holder of an Allowed Noteholder Claim, in full
satisfaction, settlement, release for the benefit of each member of the Safety
Components Group, and discharge of and in exchange for such Allowed Noteholder
Claim, shall receive a Ratable Proportion of the Noteholder Distributable
Shares. The above-described treatment will be in complete satisfaction of the
Allowed Noteholder Claims against each member of the Safety Components Group. On
the Effective Date, the Noteholder Claims shall be deemed Allowed Noteholder
Claims pursuant to the Plan in the aggregate amount of $96,758,537.50.
5.2.4 Class 4: Unsecured Claims.
Each holder of an Allowed Unsecured Claim shall receive, in full
satisfaction, settlement, release, and discharge of and in exchange for such
Allowed Unsecured Claim, Cash Distributions totaling 100% of its Allowed
Unsecured Claim in accordance with the following:
(a) a Cash Distribution equal to 50% of the amount of such holder's
Allowed Unsecured Claim on or before the forty-fifth (45th) day
following the Effective Date, or, if such Unsecured Claim becomes
an Allowed Unsecured Claim after such date, within ten (10) days
after such Unsecured Claim becomes an Allowed Unsecured Claim;
and
(b) a Cash Distribution equal to the remaining 50% of the amount of
such holder's Allowed Unsecured Claim on or before the ninetieth
(90th) day following the Effective Date, or, if such Unsecured
Claim becomes an
PLN-22
<PAGE>
Allowed Unsecured Claim after such date, within ten (10) days
after such Unsecured Claim becomes an Allowed Unsecured Claim.
No interest shall be paid on any Class 4 Allowed Unsecured Claim.
5.2.5 Class 5: Old Common Stock.
On the Effective Date, each holder of Allowed Old Common Stock shall
receive, in full satisfaction, settlement, release, and discharge of and in
exchange for such Old Common Stock, a Ratable Proportion of (a) the Equity
Distributable Shares and (b) the New Warrants.
5.2.6 Class 6: Other Equity Interests.
A holder of any equity interest in any member of Safety Components not
otherwise classified in Class 5 or Class 7 shall receive no distributions under
the Plan on account of such equity interest.
5.2.7 Class 7: Subsidiary Common Stock.
The Subsidiary Common Stock, which is held by members of Safety Components,
shall remain outstanding on and after the Effective Date except as provided in
the Plan. Each holder of Subsidiary Common Stock is a proponent of the Plan and
a member of Safety Components and, as such, shall receive the benefit of the
Distributions made under, and the settlements and transactions reflected in, the
Plan. Such holders shall not be entitled to receive any other Distributions
under the Plan on account of the Subsidiary Common Stock.
SECTION VI
PROVISIONS REGARDING NEW COMMON STOCK
AND NEW WARRANTS DISTRIBUTED PURSUANT TO THE PLAN
6.1 New Common Stock.
6.1.1 Authorization.
The charter of Reorganized SCI shall authorize the issuance of twenty
million (20,000,000) shares of New Common Stock and five million (5,000,000)
shares of preferred stock. Although the shares of such stock are authorized,
other than the Distributable Shares, such shares shall not be issued as of the
Effective Date. On the Effective Date, (a) holders of Allowed Noteholder Claims
and holders of Allowed Class 5 Old Common Stock shall receive, and Reorganized
SCI shall issue, Stock Distributions of the Distributable Shares of the New
Common Stock in accordance with Section V hereof.
PLN-23
<PAGE>
6.1.2 Par Value.
The New Common Stock shall have a par value of $0.01 per share.
6.1.3 Registration of New Common Stock.
Each Person or Entity receiving a distribution of New Common Stock pursuant
to the Plan representing at least 10% of the aggregate New Common Stock issuable
pursuant to the Plan shall be entitled to become a party to the Registration
Rights Agreement.
6.1.4 Listing of New Common Stock.
Reorganized SCI shall use its reasonable best efforts to cause the shares
of New Common Stock to be listed on a national securities exchange or the NASDAQ
National Market.
6.1.5 Rights.
The New Common Stock shall have such rights with respect to dividends,
liquidation, voting, and other matters as set forth in SCI's Amended Certificate
of Incorporation, its Amended Bylaws, and as provided under applicable
non-bankruptcy law.
6.2 New Warrants.
As provided in, and subject to the restrictions set forth in this Plan,
Reorganized SCI shall issue to each holder of Allowed Class 5 Old Common Stock a
Ratable Proportion of New Warrants to purchase an aggregate amount of 681,818
shares of New Common Stock. The New Warrants shall be exercisable in accordance
with the terms thereof during the period from the Effective Date through and
including April 10, 2003. The exercise price of the New Warrants for each share
of New Common Stock of Reorganized SCI shall be $19.99 per share.
SECTION VII
IMPAIRED AND UNIMPAIRED CLASSES OF CLAIMS
AND EQUITY INTERESTS UNDER THE PLAN;
ACCEPTANCE OR REJECTION OF THE PLAN
7.1 Holders of Claims and Equity Interests Entitled to Vote.
(a) Each holder of an Allowed Claim or Allowed Equity Interest, or the
holder of a Claim or Equity Interest that has been temporarily allowed for
voting purposes only under Bankruptcy Rule 3018(a), in an impaired Class of
Claims against or Equity Interests in the Debtors, shall be entitled to vote
separately to accept or reject the Plan as provided in the Disclosure Statement
Approval Order. Any unimpaired Class of Claims shall be deemed to have accepted
the Plan. Any Class of Claims or
PLN-24
<PAGE>
Equity Interests that will not receive or retain any property on account of such
Claims or Equity Interests under the Plan shall be deemed to have rejected the
Plan.
(b) Each of Classes 3, 4 and 5 is impaired under the Plan and the holders
of Allowed Claims or Allowed Equity Interests in such Classes are entitled to
vote on the Plan. In accordance with section 1126(g) of the Bankruptcy Code,
Class 6 is conclusively deemed to have rejected the Plan. Because the Class 7
Equity Interests are held by members of Safety Components who are also
proponents of the Plan, Class 7 is deemed to have accepted the Plan.
7.2 Acceptance by Unimpaired Classes.
Each of Classes 1 and 2 is unimpaired under the Plan and each such Class is
conclusively presumed to have accepted the Plan pursuant to section 1126(f) of
the Bankruptcy Code.
7.3 Elimination of Vacant Classes.
Any Class of Claims that is not occupied as of the date of the commencement
of the Confirmation Hearing by an Allowed Claim or a Claim temporarily allowed
under Bankruptcy Rule 3018 shall be deemed deleted from the Plan for purposes of
voting on or rejection of the Plan, and for purposes of determining acceptance
or rejection of the Plan by such Class under section 1129(a)(8) of the
Bankruptcy Code.
7.4 Non-consensual Confirmation.
The Debtors will request that the Court confirm the Plan in accordance with
section 1129(b) of the Bankruptcy Code in view of the deemed rejection of the
Plan by Class 6. In the event that any of Classes 3, 4, and 5 fail to accept the
Plan, the Debtors reserve their right (i) to modify the Plan in accordance with
Section 16.2 hereof and/or (ii) to request that the Court confirm the Plan in
accordance with section 1129(b) of the Bankruptcy Code notwithstanding such lack
of acceptance by finding that the Plan provides fair and equitable treatment to
any impaired Class of Claims and Equity Interests voting to reject the Plan.
7.5 Revocation of the Plan.
Subject to Section 17.8 hereof, the Debtors may revoke and withdraw the
Plan at any time prior to entry of the Confirmation Order. If the Plan is so
revoked or withdrawn, then it shall be deemed null and void.
PLN-25
<PAGE>
SECTION VIII
MEANS OF IMPLEMENTATION OF THE PLAN
8.1 Transactions on the Effective Date.
On the Effective Date, the following shall occur (unless Safety Components
and the Creditors' Committee agree otherwise):
(a) The following shall be deemed to have occurred simultaneously:
(1) the Amended Bylaws, the Amended Certificate of Incorporation, the
Subsidiaries Amended Bylaws, and the Subsidiaries Amended
Certificates of Incorporation shall become effective and binding
upon Reorganized Safety Components;
(2) the Equity Interests (including the Old Capital Stock) shall be
extinguished in accordance with Section V hereof; and
(3) The capital structure of SCI as set forth in Section 6.1.1 of the
Plan shall be in effect.
(b) The closing of the Senior Exit Facility and the Subordinated Exit
Facility shall occur after the events set forth in Section 8.1(a) have occurred.
In no event shall any of the foregoing events in subsections (a) and (b) occur
unless all of the foregoing events in subsections (a) and (b) occur on the same
Business Day.
8.2 Substantive Consolidation.
On the Effective Date, pursuant to section 105(a) of the Bankruptcy Code,
the Estates of the members of Safety Components will be substantively
consolidated for all purposes related to the Plan, including, without
limitation, for purposes of voting, confirmation, Distributions and Claim
determinations. The substantive consolidation of the Estates of the members of
Safety Components shall have the following effects: (a) all assets and
liabilities of the Estates of the members of Safety Components shall be treated
as though they were assets and liabilities of one estate, (b) no distributions
shall be made under the Plan on account of intercompany Claims among the members
of Safety Components, (c) no distributions shall be made under the Plan on
account of the Subsidiary Common Stock, (d) all guarantees by any member of
Safety Components of the obligations of any other member of Safety Components
and any joint or several liability of members of Safety Components with respect
to other members of the Safety Components Group shall be deemed to be one
obligation of the consolidated Estates and (e) each and every Claim filed or to
be filed in the Reorganization Cases against any member of Safety Component
shall be deemed filed against the consolidated Estates, and shall be deemed to
be one Claim against and obligation of the consolidated Estates. Such
substantive
PLN-26
<PAGE>
consolidation shall not (other than for purposes related to the Plan and the
Distributions to be made hereunder, other than with respect to clause (e) below)
affect (a) the legal and corporate structures of Reorganized Safety
Components,(b) the Subsidiary Common Stock, (c) the obligations owed by any of
the Non-Debtor Affiliates to any members of Safety Components, (d) any
obligations under any executory contracts or unexpired leases assumed in the
Reorganization Cases, and (e) the Senior DIP Facility, the Senior Exit Facility,
the Subordinated DIP Facility and the Subordinated Exit Facility.
8.3 Reorganized Safety Components' Obligations Under the Plan.
From and after the Effective Date, Reorganized Safety Components will
perform the obligations of the members of Safety Components under the Plan.
8.4 Continuation of Business.
On and after the Effective Date, Reorganized Safety Components shall
continue to engage in business.
8.5 Charter and Bylaws.
The Amended Bylaws and Amended Certificate of Incorporation of SCI and the
Subsidiaries Amended Bylaws and the Subsidiaries Amended Certificates of
Incorporation shall be filed as part of the Plan Supplement and shall contain
such provisions as are necessary to satisfy the provisions of the Plan and, to
the extent necessary, to prohibit the issuance of nonvoting equity securities
(other than any warrants) as required by section 1123(a)(6) of the Bankruptcy
Code, subject to further amendment of the Amended Bylaws, the Amended
Certificate of Incorporation, the Subsidiaries Amended Bylaws and the
Subsidiaries Amended Certificates of Incorporation, after the Effective Date, as
permitted by applicable law. Except as otherwise provided herein, such Amended
Bylaws, Amended Certificate of Incorporation, Subsidiaries Amended Bylaws and
Subsidiaries Amended Certificates of Incorporation shall contain such
indemnification provisions applicable to the officers, directors and employees
of Reorganized Safety Components and such other Persons as may, in the
discretion of the Board of Directors of Reorganized Safety Components, be
appropriate.
8.6 Cancellation of Equity Interests.
On the Effective Date, all existing Equity Interests shall, without any
further action, be cancelled, annulled and extinguished and any certificates
representing such Equity Interests shall be null and void (except to the extent
provided under Section 5.2.7 hereunder).
8.7 The Boards of Directors of Reorganized Safety Components.
On the Effective Date, the existing Board of Directors of each member of
Safety Components shall be deemed to have resigned. The initial Board of
Directors for each of Reorganized Safety Components shall be identical and shall
consist of five (5) directors, who will be selected prior to the commencement of
the Confirmation Hearing in accordance with the terms of the Restructuring
PLN-27
<PAGE>
Agreement. A list setting forth the identities of the members of the Boards of
Directors for each member of Reorganized Safety Components, to the extent
available, shall be filed as part of the Plan Supplement, or otherwise, shall be
submitted to the Court on or prior to the date of the Confirmation Hearing.
8.8 Operations of Safety Components Between Confirmation and the Effective
Date.
Safety Components shall continue to operate as Debtors-in-Possession during
the period from the Confirmation Date through and until the Effective Date.
8.9 Exclusivity Period.
Subject to further order of the Court, Safety Components shall, pursuant to
section 1121 of the Bankruptcy Code, retain the exclusive right to amend the
Plan and solicit acceptances thereof until the Effective Date (or until the
earliest date on which the Effective Date can no longer occur pursuant to
Section 13.4 of the Plan).
8.10 Revesting of Assets.
Pursuant to section 1141(b) of the Bankruptcy Code, except as otherwise
provided in the Plan, the property of the Estates and Safety Components shall
revest in Reorganized Safety Components on the Effective Date of the Plan. From
and after the Effective Date, Reorganized Safety Components may operate their
businesses and may use, acquire, and dispose of property free of any
restrictions imposed under the Bankruptcy Code, the Bankruptcy Rules, and the
Court. As of the Effective Date, all property of Safety Components and
Reorganized Safety Components shall be free and clear of all Claims, Liens and
interests, except as specifically provided in the Plan or in the Confirmation
Order. Without limiting the foregoing, Reorganized Safety Components may,
without application to or approval by the Court, pay Professional Fees and
expenses that Reorganized Safety Components may incur after the Effective Date.
8.11 Creditors' Committee.
The Creditors' Committee (a) shall cease to exist on the Effective Date,
provided that the Creditors' Committee shall retain standing to appear at any
hearing regarding the allowance of Professional Fees, (b) as appropriate, may
interpose objections to such Professional Fees, and (c) shall be entitled to
obtain reimbursement for the reasonable fees and expenses of its professionals
relating to the foregoing.
8.12 Effectuating Documents; Further Transactions.
The Chairman of the Board of Directors, the President, the Chief Operating
Officer, the Chief Executive Officer, the Chief Financial Officer, or any other
appropriate officer of each of the members of Safety Components or Reorganized
Safety Components, as the case may be, shall be, and hereby are, authorized to
execute, deliver, file, and record such contracts, instruments, releases,
PLN-28
<PAGE>
indentures, certificates, and other agreements or documents, and take such other
actions as may be necessary or appropriate to effectuate and further evidence
the terms and conditions of the Plan. The Secretary or Assistant Secretary of
Safety Components shall be authorized to certify or attest to any of the
foregoing, if necessary.
8.13 Assumptions of Liabilities.
The Liabilities and obligations to make the Distributions as required under
Sections III, IV and V of the Plan shall be assumed by Reorganized Safety
Components, which shall have the Liability for, and obligation to make, all
Distributions of Cash, New Common Stock, New Warrants or other securities to be
issued or distributed by Reorganized Safety Components under the Plan.
Reorganized Safety Components shall also assume all Liabilities and obligations
to pay any expenses of Safety Components in consummating the Plan and in
performing its duties as set forth in the Plan.
8.14 Distributions under the Plan.
On the Effective Date or such later date that Distributions are required to
be made on account of Allowed Claims or Equity Interests, Safety Components or
Reorganized Safety Components, as the case may be, shall make, or shall make
adequate reserve for, the Distributions required to be made to all holders of
Claims and Equity Interests (whether or not Allowed) under the Plan. Cash
necessary to make the Distributions required under the Plan shall be provided
from all excess Cash of Safety Components or Reorganized Safety Components (if
any), the Senior Exit Facility, or any other source. All Distributions reserved
pursuant to this Section shall be held by Safety Components or Reorganized
Safety Components, in trust, for the benefit of the holders of Claims or Equity
Interests entitled to received such Distributions. Cash Distributions reserved
under the Plan shall be placed in one segregated account.
8.15 Substantial Consummation.
Substantial consummation of the Plan under section 1101(2) of the
Bankruptcy Code shall not be deemed to occur, the Reorganization Cases shall
remain open and not be deemed fully administered, and no final decree closing
these Reorganization Cases shall be entered pursuant to section 350(a) of the
Bankruptcy Code and Bankruptcy Rule 3022, until the Effective Date, at the
earliest.
8.16 Preservation of Certain Causes of Action; Defenses.
Except as otherwise provided in the Plan, including in Section 15.4 of the
Plan, in accordance with section 1123(b) of the Bankruptcy Code, Reorganized
Safety Components, as successor-in-interest to Safety Components and the
Estates, shall retain and may enforce such claims, rights and Causes of Action
that are property of Safety Components and the Estates, including, but not
limited to, the Excluded Claims, and Reorganized Safety Components shall retain
and enforce all defenses and counterclaims to all Claims asserted against Safety
Components or the Estates, including, but not limited to, setoff, recoupment and
any rights under section 502(d) of the Bankruptcy Code.
PLN-29
<PAGE>
Reorganized Safety Components may pursue such claims, rights or Causes of
Action, as appropriate, in accordance with their best interests, as determined
by the Board of Directors of Reorganized SCI.
8.17 Cancellation of Existing Securities.
On the Effective Date, except as otherwise provided for herein, (i) all
securities, equity interests, notes, bonds, indentures, and other instruments or
documents evidencing or creating any indebtedness, equity interest or obligation
of any member of Safety Components (except such notes or other instruments
evidencing indebtedness or obligations of any member of Safety Components that
are Reinstated under the Plan) shall be extinguished and canceled, and (ii) the
obligations of members of Safety Components under any agreements, indentures, or
certificates of designation governing any securities, equity interests, notes,
bonds, indentures, and other instruments or documents evidencing or creating any
indebtedness, equity interest or obligation of the members of Safety Components
(except such notes or other instruments evidencing indebtedness or obligations
of the members of Safety Components that are Reinstated under the Plan), as the
case may be, shall be discharged.
8.18 Employment and Related Settlement Terms for Zummo.
Safety Components or Reorganized Safety Components, as the case may be,
will continue to pay Zummo only compensation and health/insurance benefits
(other than bonuses) provided for in, and according to the terms of, the April
19, 1999 employment contract between SCI and Zummo (the "Zummo Employment
Agreement") for a period of two years from the Effective Date, payable over a
period of twenty-four months; provided, however, that any amount which SCI is
entitled to receive from Zummo as a result of the payment of past compensation
to Zummo or an affiliate of SCI shall reduce the amounts payable to Zummo under
the Zummo Employment Agreement, as amended pursuant to this Section. Any
reduction referred to in the preceding sentence shall be made ratably over a
twenty-four month period commencing on or about March 1, 2000; after that
twenty-four month period, the amounts payable to Zummo shall be restored to the
amount due under the Zummo Employment Agreement, as amended pursuant to this
Section. After the Effective Date, Zummo will serve, at the discretion of the
Board of Directors of Reorganized SCI, as a business consultant to Reorganized
Safety Components. Through and including the Effective Date, Zummo's role will
be limited to assisting, to the extent requested by the Board of Directors of
SCI, SCI in achieving an orderly transition of the business to a new chief
executive officer of Reorganized SCI. Notwithstanding anything in the Plan or
Confirmation Order to the contrary, Zummo shall not receive any Distributions on
account of any equity securities or interests that he owns in any member of the
Safety Components Group (including on account of the Zummo Shares). On the
Effective Date, Zummo, the members of the Unofficial Noteholders' Committee,
Reorganized Safety Components (in its capacity as successor in interest to
Safety Components), and the other members of the Safety Components Group will
execute the Mutual Release. On the Effective Date, Zummo will cause VIL to grant
to Reorganized SCI a first-priority lien on and security interest in an account
receivable identified in the Schedules and owing by the Saudi Arabian government
to VIL in the amount of $564,000 (the "Saudi Receivable"). Upon payment to SCI
or Reorganized SCI, as the case may be, of the Saudi Receivable, SCI will
release VIL from all further obligations related to its $1.2 million debt to
SCI. If the Saudi Receivable is not paid to SCI or Reorganized SCI on or before
July 1, 2001, SCI shall reduce any payments due Zummo under the
PLN-30
<PAGE>
Zummo Employment Agreement, as amended pursuant to this Section, by the full
amount of the Saudi Receivable. Zummo shall continue to abide by all of the
terms of the non-competition agreement set forth in section 9 of the Zummo
Employment Agreement, except that notwithstanding section 9.4 of the Zummo
Employment Agreement, Zummo's obligation not to compete shall terminate on the
second anniversary of the Effective Date. The above-described treatment with
respect to Zummo, VIL, the Debtors and the members of the Unofficial
Noteholders' Committee, shall, upon entry of the Confirmation Order, pursuant to
Bankruptcy Rule 9019(a), constitute a valid, binding and enforceable settlement
of all of the Debtors' claims and Causes of Action against Zummo and VIL and all
of Zummo's claims and Causes of Action against the Debtors as of the Effective
Date.
SECTION IX
DISTRIBUTIONS UNDER THE PLAN
9.1 Timing of Distributions.
If any payment or act under the Plan is required to be made or performed on
a date that is not a Business Day, then the making of such payment or the
performance of such act may be completed on the next succeeding Business Day,
but shall be deemed to have been completed as of the required date.
9.2 Delivery of Distributions.
Subject to Bankruptcy Rule 9010, and except as otherwise provided herein,
(a) Distributions to holders of Allowed Claims shall be made at the address of
each of such holders as set forth in the Schedules filed with the Court unless
superseded by the address set forth on proofs of Claim filed by such holders (or
at the last known address of such holders if no proof of Claim or proof of
Equity Interest is filed or if the Debtors have been notified in writing of a
change of address) and (b) Distributions to holders of Allowed Class 5 Old
Common Stock shall be made at the address of each of such holders as set forth
in the consolidated stockholders list or transfer ledger maintained by Safety
Components unless superseded by the address set forth on proofs of Equity
Interests filed by such holders (or at the last known address of such holders if
no proof of Equity Interest is filed or if the Debtors have been notified in
writing of a change of address). If any Distribution to any holder of an Allowed
Unsecured Claim or an Allowed Class 5 Old Common Stock is returned as
undeliverable, Reorganized SCI shall use reasonable efforts to determine the
current address of such holder, but no Distribution to any such holder shall be
made unless and until Reorganized SCI has determined the then current address of
such holder, at which time such Distribution to such holder shall be made to
such holder without interest. Amounts in respect of any undeliverable
Distributions made through Reorganized SCI shall be returned to and held, in
trust, by Reorganized SCI until such Distributions are claimed. Cash
Distributions that are not claimed by the expiration of one year from the
Effective Date shall be deemed unclaimed property under section 347(b) of the
Bankruptcy Code and shall revest in Reorganized SCI. Distributions of New Common
Stock and Warrants that are not claimed by the expiration of one year from the
Effective Date shall be deemed unclaimed property under section 347(b) of the
Bankruptcy Code and shall revest in, and automatically be canceled and
extinguished by,
PLN-31
<PAGE>
Reorganized SCI. After the expiration of the one year period referenced in the
two preceding sentences, the claim of any holder to such Distributions shall be
discharged and forever barred. Nothing contained in the Plan shall require
Safety Components or Reorganized Safety Components to attempt to locate any
holder of an Allowed Claim or an Allowed Equity Interest.
9.3 Record Date for Distributions.
9.3.1 Record Date for Equity Interests.
At the close of business on the Record Date, the consolidated stockholders
list or transfer ledger for the Equity Interests shall be closed, and there
shall be no further changes in the record holders of the Equity Interests.
Reorganized Safety Components, agents and servicers shall have no obligation to
recognize any transfer of such Equity Interests occurring after the Record Date.
Reorganized Safety Components, agents and servicers shall be entitled instead to
recognize and deal for all purposes hereunder with only those record holders
stated on the consolidated stockholders list or transfer ledger as of the close
of business on the Record Date.
9.3.2 Record Date for Holders of Claims.
Except as otherwise provided in an order of the Court that is not subject
to any stay, the transferees of Claims that are transferred pursuant to
Bankruptcy Rule 3001 on or prior to the Record Date will be treated as the
holders of such Claims for all purposes, notwithstanding that any period
provided by Bankruptcy Rule 3001 for objecting to such transfer has not expired
by the Record Date.
9.4 Time Bar to Cash Payments by Check.
Checks issued by either Safety Components or Reorganized Safety Components
on account of Allowed Claims shall be null and void if not negotiated within
ninety (90) days after the date of issuance thereof. Requests for reissuance of
any check shall be made in writing directly to Reorganized Safety Components by
the holder of the Allowed Claim with respect to which such check originally was
issued on or before the later of the first anniversary of the Effective Date and
the first anniversary of the date on which the Claim at issue became an Allowed
Claim. After such dates, all Claims in respect of void checks shall be
discharged and forever barred, and the proceeds of such checks shall revest in
and become the property of Reorganized Safety Components.
9.5 Manner of Cash Payments Under the Plan.
Cash payments made pursuant to the Plan shall be in United States dollars
by checks drawn on a domestic bank selected by Reorganized Safety Components or
by wire transfer from a domestic bank, at the option of Reorganized Safety
Components, as the case may be.
9.6 Disputed Reserves.
On the Effective Date or such later date that Distributions are required to
be made on account of Allowed Claims or Equity Interests, and after making all
Distributions required to be made
PLN-32
<PAGE>
on any such date under the Plan, Reorganized SCI shall establish a separate
Disputed Reserve for each of the Classes, each of which Disputed Reserve shall
be administered by Reorganized SCI. Reorganized SCI shall reserve the Ratable
Proportion of all Cash and New Common Stock (from the Noteholder Distributable
Shares) allocated for each Disputed Claim, or such amount as may be agreed by
the holder of such Claim and Reorganized Safety Components (or, prior to the
Effective Date, the Debtor liable on such Claim), or as may otherwise be
determined by order of the Court. From the Equity Distributable Shares and New
Warrants, Reorganized SCI shall reserve the Ratable Proportion of all New Common
Stock and New Warrants allocated for each Disputed Equity Interest, or such
amount as may be agreed by the holder of such Equity Interest and Reorganized
Safety Components (or, prior to the Effective Date, SCI), or as may otherwise be
determined by order of the Court. All Cash, New Common Stock and New Warrants,
as applicable, allocable to the relevant Class hereunder shall be distributed by
Reorganized SCI to the relevant Disputed Reserve on the Effective Date or such
later date that Distributions are required to be made on account of Allowed
Claims or Equity Interests. Each Disputed Reserve shall be closed and
extinguished by Reorganized Safety Components upon the receipt of a written
certification of Reorganized SCI that all Distributions and other dispositions
of all Cash, New Warrants and/or New Common Stock required to be made hereunder
have been made in accordance with the terms of the Plan. Upon closure of a
Disputed Reserve, (a) all Cash (including any Cash Investment Yield and any Cash
dividends on New Common Stock) held in such Disputed Reserve shall revest in and
become the property of Reorganized Safety Components, and (b) all New Common
Stock and New Warrants shall revest in, become the property of, and
automatically be canceled and extinguished by, Reorganized Safety Components.
9.7 Limitations upon Funding of Disputed Reserves.
Except as expressly set forth in the Plan, Reorganized Safety Components
shall have no duty to fund the Disputed Reserves.
9.8 Tax Requirements for Income Generated by Disputed Reserves.
Reorganized SCI shall pay, or cause to be paid, out of the funds held in a
particular Disputed Reserve, any tax imposed by any federal, state or local
taxing authority on the income generated by the funds or property held in such
Disputed Reserve. Reorganized SCI shall file, or cause to be filed, any tax or
information return related to the Disputed Reserve that is required by any
federal, state or local taxing authority.
9.9 Estimation of Claims.
Any of the Debtors and Reorganized Safety Components may, at any time,
request that the Court estimate any contingent or unliquidated Claim for which
any of the Debtors is liable under the Plan, including any Claim for taxes, to
the extent permitted by section 502(c) of the Bankruptcy Code regardless of
whether Safety Components or Reorganized Safety Components has previously
objected to such Claim or whether the Court has ruled on any such objection, and
the Court will retain jurisdiction to estimate any Claim at any time during
litigation concerning any objection to any Claim, including during the pendency
of any appeal relating to any such objection. In the event that the Court
estimates
PLN-33
<PAGE>
any contingent or unliquidated Claim, that estimated amount will constitute
either the Allowed amount of such Claim or a maximum limitation on such Claim,
as determined by the Court. If the estimated amount constitutes a maximum
limitation on such Claim, the Debtors or Reorganized Safety Components may elect
to pursue supplemental proceedings to object to any ultimate allowance of such
Claim. All of the aforementioned Claims objection, estimation and resolution
procedures are cumulative and not necessarily exclusive of one another. Claims
may be estimated and subsequently compromised, settled, withdrawn or resolved by
any mechanism approved by the Court.
9.10 Distributions After Effective Date.
Distributions made after the Effective Date shall be deemed to have been
made on the Effective Date.
9.11 Fractional Shares.
Notwithstanding any other provision of the Plan to the contrary, no
fractional shares shall be issued pursuant to the Plan. Whenever any payment of
a fraction of a share under the Plan would otherwise be required, the actual
Distribution made shall reflect a rounding of such fraction to the nearest whole
share (up or down), with half shares or less being rounded down and fractions in
excess of half of a share being rounded up.
9.12 Fractional Cents.
Notwithstanding any other provision of the Plan to the contrary, no payment
of fractional cents shall be made pursuant to the Plan. Whenever any payment of
a fraction of a cent under the Plan would otherwise be required, the actual
Distribution made shall reflect a rounding of such fraction to the nearest whole
penny (up or down), with half pennies or less being rounded down and fractions
in excess of half of a penny being rounded up.
9.13 De Minimis Distributions.
Notwithstanding anything to the contrary contained in the Plan, Reorganized
SCI shall not be required to distribute, and shall not distribute, Cash to the
holder of an Allowed Claim if the amount of Cash to be distributed on account of
such Claim is less than $15. Any holder of an Allowed Claim on account of which
the amount of Cash to be distributed is less than $15 shall have such Claim
discharged and shall be forever barred from asserting any such Claim against the
Debtors, Reorganized Safety Components or their respective property. Any Cash
not distributed pursuant to this provision shall be the property of Reorganized
Safety Components, free of any restrictions thereon.
PLN-34
<PAGE>
9.14 Interest on Claims.
Except as specifically provided for in the Plan or the Confirmation Order,
interest shall not accrue on Claims, and no holder of a Claim shall be entitled
to interest accruing on or after the Petition Date on any Claim. Interest shall
not accrue or be paid on any Disputed Claim in respect of the period from the
Petition Date to the date a final Distribution is made thereon if and after such
Disputed Claim becomes an Allowed Claim. Except as expressly provided herein, no
pre-petition Claim shall be Allowed to the extent that it is for postpetition
interest or other similar charges.
9.15 No Distribution in Excess of Allowed Amount of Claim.
Notwithstanding anything to the contrary herein, no holder of an Allowed
Claim shall receive in respect of such Claim any Distribution (of a value set
forth herein or in the Disclosure Statement) in excess of the Allowed Amount of
such Claim.
9.16 Ordinary Course Liabilities.
Except as specifically provided for in the Plan, including in Section 12.5,
holders of Claims against the Debtors (other than Claims for Professional Fees)
based on Liabilities incurred after the Petition Date in the ordinary course of
the Debtors' businesses shall not be required to file any request for payment of
such Claims. Such Claims shall be assumed and paid by Reorganized Safety
Components, in the ordinary course of business of Reorganized Safety Components,
in accordance with the terms and subject to the conditions of any agreements
governing, instruments evidencing or other documents relating to, the
transaction underlying such Claims, without any further action by the holders of
such Claims.
9.17 Setoffs.
Except as otherwise provided in the Plan, Safety Components or Reorganized
Safety Components, as the case may be, may, but shall not be required to, set
off against any Claim and the Distributions to be made pursuant to the Plan in
respect of such Claim, any Claims of any nature whatsoever that the Debtors may
have against the holder of such Claim, but neither the failure to do so nor the
allowance of any Claim under the Plan shall constitute a waiver or release by
Safety Components or Reorganized Safety Components of any right of setoff any of
them may have against the holder of such Claim.
PLN-35
<PAGE>
9.18 Payment of Taxes on Distributions Received Pursuant to Plan.
All Persons and Entities that receive Distributions under the Plan shall be
responsible for reporting and paying, as applicable, taxes on account of such
Distributions.
SECTION X
DISPUTED CLAIMS AND EQUITY INTEREST UNDER THE PLAN
10.1 Objection Deadline.
As soon as practicable, but in no event later than 90 days after the
Effective Date, unless otherwise ordered by the Court, objections to Claims and
Equity Interests shall be filed with the Court and served upon the holders of
each such Claim or Equity Interest to which objections are made.
10.2 Prosecution of Objections after the Effective Date.
On and after the Effective Date, except as to applications for allowances
of Professional Fees or as otherwise ordered by the Court, the filing,
litigation, settlement, or withdrawal of all objections to Claims and Equity
Interests, including pending objections, shall be the responsibility of
Reorganized SCI. Any Claim, other than a Claim for Professional Fees, that is
not an Allowed Claim shall be determined, resolved, or litigated by Reorganized
SCI. Prior to the Effective Date, the filing, litigation, settlement, or
withdrawal of all objections shall be the responsibility of the Debtors.
10.3 No Distributions Pending Allowance.
Notwithstanding any other provision hereof, if any portion of a Claim or
Equity Interest is a Disputed Claim or Disputed Equity Interest, no payment or
Distribution provided hereunder shall be made on account of the portion of such
Claim or Equity Interest that is a Disputed Claim or Disputed Equity Interest
unless and until such Disputed Claim or Disputed Equity Interest becomes an
Allowed Claim or an Allowed Equity Interest, but the payment or Distribution
provided hereunder shall be made on account of the portion of such Claim or
Equity Interest that is an Allowed Claim or Allowed Equity Interest.
10.4 Withholding of Allocated Distributions.
Reorganized SCI shall withhold from the property to be distributed under
the Plan, and place in trust for the benefit of holders of Disputed Claims and
Disputed Equity Interests, Distributions in an amount sufficient to be
distributed on account of such Disputed Claims and Disputed Equity Interests,
which Distributions shall be deposited in the applicable Disputed Reserve.
10.5 Distribution When a Disputed Claim or Equity Interest Becomes an
Allowed Claim or Equity Interest.
PLN-36
<PAGE>
Distributions to each holder of a Disputed Claim or Disputed Equity
Interest, to the extent that such Claim or Equity Interest ultimately becomes an
Allowed Claim or Allowed Equity Interest (and to the extent that the holder of
such Claim or Equity Interest has not received prior Distributions on account of
such Claim or Equity Interest), shall be made in accordance with the provisions
of the Plan governing the Class of Claims or Equity Interests in which such
Claim or Equity Interest is classified.
SECTION XI
CLASS ACTION SETTLEMENT
11.1 Approval of Securities Class Action Settlement.
The entry of the Confirmation Order shall constitute the Court's finding
and determination that the Securities Class Action Settlement (a) is in the best
interest of Safety Components' estates, (b) is fair, equitable and reasonable,
(c) is made in good faith, and (d) is approved by the Court. Subject to
obtaining the approval of the Securities Class Action Settlement by the Court,
on the Effective Date Reorganized SCI will take all actions necessary or
reasonably required to effect the matters set forth in the Securities Class
Action Settlement.
11.2 Reduction of Judgments against Parties Who Have Cross-Claims against
Released Parties.
If any Securities Class Action Plaintiff obtains a judgment against any
third party based upon the facts and circumstances relating to a Securities
Fraud Claim, such judgment shall be reduced to the extent that a court of
competent jurisdiction determines that, but for the provisions of the Plan, such
third party would have been able to obtain a judgment against one or more of the
Released Parties in connection with such facts and circumstances.
11.3 Release of Released Parties from all Securities Fraud Claims.
In exchange for the Indemnification Parties making available to the
Securities Class Action Plaintiffs a portion of the proceeds from the D&O
Policies, pursuant to, and to the extent provided under, the Securities Class
Action Settlement, on the Effective Date all Persons and Entities shall be
presumed conclusively to have released (a) any Released Parties, (b) any
Indemnification Parties, and (c) any and all current and former directors,
officers, agents, attorneys, accountants, advisors, financial advisors of the
foregoing (collectively, the Persons and Entities set forth in (a), (b) and (c)
above, the "Securities Fraud Released Parties"), and the employees of any
Securities Fraud Released Party, from any Cause of Action based on, arising
from, or in any way connected with the Securities Fraud Claims. The release
described in the preceding sentence shall be enforceable as a matter of contract
law against any Person or Entity that holds a Securities Fraud Claim. Nothing
herein shall affect the ability of the Securities Class Action Plaintiffs to
obtain the proceeds of the D&O Policies provided pursuant to the Securities
Class Action Settlement. Nothing in this Section 11.3 of the
PLN-37
<PAGE>
Plan shall affect or impair the preservation of the Excluded Claims by
Reorganized Safety Components in accordance with Section 8.16 of the Plan.
11.4 Release by Safety Components of its Directors, Officers and Employees
from all Securities Fraud Claims.
On the Effective Date, Safety Components shall be deemed to have released
its present and former directors, officers and employees from any and all
Securities Fraud Claims that are property of Safety Components (including
derivative claims and claims which the Debtors and Debtors-in-Possession
otherwise have legal authority to assert, compromise or settle in connection
with the Reorganization Cases), and any and all such released Securities Fraud
Claims shall be deemed waived and extinguished as of the Effective Date.
11.5 Release and Discharge from All Securities Fraud Claims.
In accordance with their classification and treatment as Class 6 Other
Equity Interests, all Securities Fraud Claims, whether held by the Securities
Class Action Plaintiffs or any other Person or Entity, shall be discharged on
the Effective Date, and Safety Components shall be released from all such
Claims, which discharge and release shall be effective and binding on the
Effective Date, regardless of whether the Securities Class Action Settlement
becomes effective and binding.
SECTION XII
EXECUTORY CONTRACTS AND UNEXPIRED LEASES UNDER THE PLAN
12.1 General Treatment.
The Plan constitutes a motion by each member of Safety Components to
assume, as of the Effective Date, all executory contracts and unexpired leases
to which any member of Safety Components is a party except for: (a) the
executory contracts and unexpired leases specifically listed on the
Rejection/Assignment Schedule, which shall either be rejected or assumed and
assigned as described therein, and (b) the executory contracts and unexpired
leases dealt with herein or pursuant to a Final Order of the Court entered on or
before the Effective Date. The Confirmation Order shall constitute an order of
the Court approving such assumptions pursuant to section 365 of the Bankruptcy
Code as of the Effective Date. Each assumed executory contract and unexpired
lease of Safety Components that relates to the use or occupancy of real property
shall include (a) all modifications, amendments, supplements, restatements, or
other agreements made directly or indirectly by any agreement, instrument, or
other document that in any manner affects such executory contract or unexpired
lease, and (b) all executory contracts or unexpired leases appurtenant to the
premises, including all easements, licenses, permits, rights, privileges,
immunities, options, rights of first refusal, powers, uses, usufructs,
reciprocal easement agreements, vaults, tunnel or bridge agreements, or
franchises, and any other interests in real estate or rights in rem related to
such premises, unless any of the foregoing agreements has been rejected pursuant
to a Final Order of the Court.
PLN-38
<PAGE>
12.2 Rejected or Assigned Executory Contracts; Rejection/Assignment
Schedule.
Except as otherwise provided herein or pursuant to a Final Order of the
Court, effective as of the Confirmation Date, all executory contracts and
unexpired leases of the Debtors specifically listed on the Rejection/Assignment
Schedule shall be deemed to be automatically, as set forth therein, (a) rejected
or (b) assumed and assigned, as the case may be, as of the Confirmation Date.
The Confirmation Order shall constitute an order of the Court approving such (a)
rejections or (b) assumptions and assignments, as the case may be, pursuant to
section 365 of the Bankruptcy Code as of the Confirmation Date. Safety
Components may at any time on or before the Confirmation Date amend the
Rejection/Assignment Schedule to delete therefrom or add thereto any executory
contract or unexpired lease, in which event such executory contract or unexpired
lease shall be deemed to be rejected, assumed and assigned, or assumed, as the
case may be. The Debtors shall provide notice of any amendments to the
Rejection/Assignment Schedule to the parties to the executory contracts or
unexpired leases affected thereby, counsel to the Creditors' Committee, and to
parties who have requested notice pursuant to Bankruptcy Rule 2002. The fact
that any contract or lease is listed on the Rejection/Assignment Schedule shall
not constitute or be construed to constitute an admission that such contract or
lease is an executory contract or unexpired lease within the meaning of section
365 of the Bankruptcy Code or that Safety Components or any successor in
interest to any member of Safety Components (including Reorganized Safety
Components) has any liability thereunder.
12.3 Limited Survival of the Debtors' Corporate Indemnities.
Notwithstanding anything in the Plan to the contrary, the Corporate
Indemnities shall be deemed and treated as separate executory contracts for each
express beneficiary thereof and treated as follows:
(a) the Indemnification Rights of officers, directors and employees
who remain employed by Safety Components as of or after the first
day immediately following the Petition Date shall be fully
assumed as of the Effective Date pursuant to Sections 365 and
1123(b)(2) of the Bankruptcy Code; and
(b) all other Indemnification Rights shall be deemed rejected as of
the Confirmation Date pursuant to Sections 365 and 1123(b)(2) of
the Bankruptcy Code, provided, however, that such rejection shall
have no effect upon any party's rights to insurance coverage
available under the D&O Policies (after giving effect to the
Class Action Settlement and the distributions from the D&O
Policies provided thereunder).
12.4 Payments Related to Assumption of Executory Contracts and Unexpired
Leases.
Any monetary amounts by which each executory contract and unexpired lease
to be assumed under the Plan may be in default shall be satisfied by Cure, under
section 365(b)(1) of the Bankruptcy Code. In the event of a dispute regarding
(a) the nature or the amount of any Cure, (b) the ability of Reorganized Safety
Components to provide "adequate assurance of future performance"
PLN-39
<PAGE>
(within the meaning of section 365 of the Bankruptcy Code) under the contract or
lease to be assumed, or (c) any other matter pertaining to assumption, Cure
shall occur following the entry of a Final Order resolving the dispute.
12.5 Bar Date for Rejection Damages.
If the rejection by Safety Components, pursuant to the Plan, of an
executory contract or unexpired lease results in a Claim or Administrative
Expense Claim, then such Claim or Administrative Expense Claim shall be
discharged and barred forever and shall not be enforceable against Safety
Components or Reorganized Safety Components or any of their property, unless a
proof of Claim or proof of Administrative Expense Claim is filed with the clerk
of the Court and served upon counsel to Safety Components and counsel to the
Creditors' Committee within thirty (30) days after the earlier to occur of (a)
the Confirmation Date and (b) the entry of an order by the Court authorizing
rejection of the subject executory contract or lease.
12.6 Compensation and Benefit Programs.
Except as provided in Sections 12.1 and 12.2 of the Plan, all employment
and severance practices and policies, and all compensation and benefit plans,
policies, and programs, of Safety Components applicable to their directors,
officers or employees, including, without limitation, the Safety Components DIP
Severance Plan, are treated as executory contracts under the Plan and are hereby
assumed pursuant to sections 365(a) and 1123(b)(2) of the Bankruptcy Code.
12.7 Retiree Benefits.
Payments, if any, due to any person for the purpose of providing or
reimbursing payments for retired employees and their spouses and dependents for
medical, surgical, or hospital care benefits, or benefits in the event of
sickness, accident, disability, or death under any plan, fund, or program
(through the purchase of insurance or otherwise) maintained or established in
whole or in part by Safety Components prior to the Petition Date shall be
continued for the duration of the period Safety Components is obligated to
provide such benefits.
SECTION XIII
CONDITIONS PRECEDENT TO THE
CONFIRMATION DATE AND THE EFFECTIVE DATE
13.1 Conditions Precedent to the Confirmation of the Plan.
The following are conditions precedent to confirmation of the Plan that
must be satisfied, unless waived in accordance with Section 13.3 of the Plan:
PLN-40
<PAGE>
(a) Entry of the Confirmation Order. The Confirmation Order shall be in
form and substance acceptable to Safety Components and the Creditors'
Committee, and shall, among other things:
(i) decree that the assets of Reorganized Safety Components shall be
free and clear of all Claims, Liens and encumbrances (except any
Liens granted to secure the Senior Exit Facility, the
Subordinated Exit Facility or as otherwise expressly provided in
the Plan);
(ii) decree that the Confirmation Order shall supersede any Court
orders issued prior to the Confirmation Date that may be
inconsistent with the Confirmation Order;
(iii) decree that, except with respect to obligations specifically
contemplated by the Plan, each member of Safety Components is
discharged effective on the Effective Date (in accordance with
the Plan) from any Claims and any "debts" (as that term is
defined in section 101(12) the Bankruptcy Code), and Safety
Components' liability in respect thereof is extinguished
completely, whether reduced to judgment or noncontingent,
asserted or unasserted, fixed or not, matured or unmatured,
disputed or undisputed, legal or equitable or known or unknown
that arose from any agreement of any member of Safety Components
entered into or obligation of such member of Safety Components
incurred before the Effective Date, or from any conduct of any
members of Safety Components prior to the Effective Date, or
whether such interest accrued before or after the Petition Date;
(iv) decree that all transfers of assets of Safety Components
contemplated under the Plan, and the transfer of equity of
Reorganized SCI contemplated under the Plan, shall be free and
clear of all Claims, Liens and all encumbrances against such
assets and equity;
(v) authorize the implementation of the Plan in accordance with its
terms;
(vi) provide that any transfers effected or mortgages entered into or
to be effected or entered into under the Plan, including the
mortgages to secure Reorganized Safety Components' obligations
under the Senior Exit Facility and/or the Subordinated Exit
Facility, shall be and are exempt from any state, city or other
municipality transfer taxes, mortgage recording taxes and any
other stamp or similar tax under section 1146(c) of the
Bankruptcy Code;
(vii) approve the other settlements, transactions and agreements to be
effected pursuant to the Plan in all respects;
(viii) provide that all executory contracts or unexpired leases
assumed by Safety Components and assigned during these
Reorganization Cases or under the Plan shall remain in full force
and effect notwithstanding any provision in such contract or
lease (including those provisions described in sections 365(b)(2)
and (f) of the Bankruptcy Code) that prohibits such assignment or
transfer or that enables or requires termination of such contract
or lease;
PLN-41
<PAGE>
(ix) provide that all executory contracts or unexpired leases assumed
by Safety Components during these Reorganization Cases or under
the Plan shall remain in full force and effect for the benefit of
Reorganized Safety Components;
(x) provide that the transfers of property by Safety Components to
Reorganized Safety Components (A) are or shall be legal, valid,
and effective transfers of property, (B) vest or shall vest
Reorganized Safety Components with good title to such property
free and clear of all Liens, Claims, encumbrances, and interests,
except as expressly provided in the Plan or Confirmation Order,
(C) do not and shall not constitute avoidable transfers under the
Bankruptcy Code or under applicable bankruptcy or non-bankruptcy
law, and (D) do not and shall not subject Reorganized Safety
Components to any liability by reason of such transfer under the
Bankruptcy Code or under applicable non-bankruptcy law,
including, without limitation, any laws affecting successor or
transferee liability;
(xi) find that the Plan does not provide for the liquidation of all or
substantially all of the property of Safety Components and that
confirmation of the Plan is not likely to be followed by the
liquidation of Reorganized Safety Components or the need for
further financial reorganization;
(xii) determine that any objection, not previously withdrawn or
settled, to the adequacy of the information contained in the
Disclosure Statement is overruled, and that the information
contained in the Disclosure Statement was adequate for the
purpose of soliciting votes for acceptance of the Plan;
(xiii) find that the Plan complies with all applicable provisions of
the Bankruptcy Code, including, without limitation, that the Plan
was proposed in good faith and that the Confirmation Order was
not procured by fraud;
(xiv) except as expressly provided in the Plan, provide that all
Equity Interests shall be extinguished and cancelled effective
upon the Effective Date;
(xv) determine that the Securities Class Action Settlement and the
settlement and resolution of the Securities Fraud Claims as
provided herein, and the settlement and resolution of the
Debtors' claims and Causes of Action against Zummo and Zummo's
claims and Causes of Actions against the Debtors as provided
herein, are approved and authorized in all respects, effective as
of the Effective Date, and that such settlements and resolutions
are in the best interests of the Estates; and
(xvi) determine that the substantive consolidation of the members of
Safety Components as provided in the Plan is approved and
authorized, and that such substantive consolidation is in the
best interests of the Estates.
(b) Senior Exit Facility. A binding Senior Exit Facility Commitment
Letter, on terms acceptable to Safety Components and the Creditors'
Committee, shall have been obtained and shall not have been
terminated, and the lenders committing to provide such financing shall
be reasonably acceptable to Safety Components and the Creditors'
Committee.
PLN-42
<PAGE>
(c) Finality of Disclosure Statement Approval Order. The Disclosure
Statement Approval Order shall have been entered and be a Final Order.
13.2 Conditions Precedent to the Effective Date of the Plan.
The Plan shall not become effective and the Effective Date shall not occur
unless and until the following conditions shall have been satisfied or waived in
accordance with Section 13.3 of the Plan:
(a) Confirmation Order. The Confirmation Date shall have occurred and the
Confirmation Order, in form and substance acceptable to the Debtors
and the Creditors' Committee, shall have been signed by the judge
presiding over the Reorganization Cases, and shall have become a Final
Order.
(b) Closing of the Senior Exit Facility. The Senior Exit Facility shall
have closed, or shall be closed concurrently with the Effective Date
of the Plan, with the terms and amount reasonably acceptable to Safety
Components and the Creditors' Committee, and the lenders providing
such financing reasonably acceptable to Safety Components and the
Creditors' Committee.
(c) Closing of the Subordinated Exit Facility. The Subordinated Exit
Facility shall have closed, or shall be closed concurrently with the
Effective Date of the Plan, with the terms and amount reasonably
acceptable to Safety Components and the Creditors' Committee.
(d) Conditions to the Confirmation Date Remain Satisfied. All conditions
precedent to the Confirmation Date shall have been satisfied and shall
continue to be satisfied.
(e) Execution of Documents. All actions, documents and agreements
necessary to implement the provisions of the Plan to be effectuated on
or prior to the Effective Date shall reasonably satisfactory to Safety
Components and the Creditors' Committee and such actions, documents
and agreements shall have been effected or executed and delivered.
(f) Amended Charter Documents. Reorganized Safety Components' certificates
of incorporation and bylaws shall have been amended as provided in the
Plan.
13.3 Waiver of Conditions Precedent.
Each of the conditions precedent in Sections 13.1 and 13.2 hereof may be
waived or modified, in whole or in part by Safety Components, subject to SCI
obtaining the written consent for such waiver by the Creditors' Committee (which
consent shall not be unreasonably withheld). Any such waiver or modification of
a condition precedent in Sections 13.1 and 13.2 hereof may be effected at any
time, without notice (other than to the Creditors' Committee), without leave or
order of the Court and
PLN-43
<PAGE>
without any other formal action. Notwithstanding the foregoing, the condition
set forth in section 13.2(c) can be waived or modified, in whole or in part,
only upon obtaining the written consent of the Subordinated DIP Agent and Fleet
Bank in its capacity as a lender under the Subordinated DIP facility, which
consent shall not be unreasonably withheld.
13.4 Effect of Failure or Absence of Waiver of Conditions Precedent to the
Effective Date of the Plan.
In the event that one or more of the conditions specified in Section 13.2
of the Plan have not occurred (or been waived) on or before 90 days after the
Confirmation Date, upon notification submitted by the Debtors to the Court and
counsel for the Creditors' Committee, (a) the Confirmation Order shall be
vacated, (b) no distributions under the Plan shall be made, (c) the Debtors and
all holders of Claims and Equity Interests shall be restored to the status quo
ante as of the day immediately preceding the Confirmation Date as though the
Confirmation Date never occurred and (d) the Debtors' obligations with respect
to the Claims and Equity Interests shall remain unchanged and nothing contained
herein shall constitute or be deemed a waiver or release of any Claims or Equity
Interests by or against the Debtors or any other Person or Entity or to
prejudice in any manner the rights of the Debtors or any Person or Entity in any
further proceedings involving the Debtors.
SECTION XIV
EFFECT OF CONFIRMATION
14.1 Reorganized Safety Components' Authority.
Until the Effective Date, the Court shall retain custody and jurisdiction
of the Debtors, their properties, interests in property and operations. On the
Effective Date, Reorganized Safety Components, their properties and interests in
property and operations (other than the New Common Stock, the New Warrants and
Cash to be distributed pursuant to the Plan, which, to the extent not
distributed by the Debtors, shall be held in trust by Reorganized SCI) shall be
released from the custody and jurisdiction of the Court, except as provided in
Section 16.1 hereof.
14.2 Vesting and Liens.
On the Effective Date, all property of the Debtors will be vested in
Reorganized Safety Components free and clear of all Liens (except for the Liens
granted to secure the Senior Exit Facility, the Subordinated Exit Facility or as
expressly provided herein).
14.3 Discharge of the Debtors.
(a) Scope. Except as otherwise provided in the Plan, the Confirmation Order
(including any right to receive Distributions under the Plan), the Senior Exit
Facility, or the Subordinated Exit Facility, in accordance with section
1141(d)(1) of the Bankruptcy Code, the Plan and the Confirmation Order shall
discharge, effective as of the Effective Date, all debts of, Claims against,
PLN-44
<PAGE>
Liens on, and Equity Interests in each of the Debtors, their assets, or
properties, which debts, Claims, Liens, and Equity Interests arose at any time
before the entry of the Confirmation Order. The discharge of the Debtors shall
be effective as to each Claim or Equity Interest, regardless of whether a proof
of Claim or Equity Interest therefor was filed, whether the holder thereof votes
to accept the Plan, or whether the Claim or Equity Interest is an Allowed Claim
or an Allowed Equity Interest. On the Effective Date, as to every discharged
Claim and Equity Interest, any holder of such Claim or Equity Interest
(including, without limitation, any holder of options to purchase Old Capital
Stock) shall be precluded from asserting against Safety Components or
Reorganized Safety Components, or their successors or their assets or
properties, any other or further Claim or Equity Interest based upon any
document, instrument, act, omission, transaction, or other activity of any kind
or nature that occurred before the Confirmation Date.
(b) Injunction. Except as otherwise provided in the Plan or Confirmation
Order (including any right to receive Distributions under the Plan) or a
separate order of the Court, as of the Effective Date, all entities that have
held, currently hold or may hold a Claim or other debt or liability that is
discharged or an Equity Interest or other right of an equity security holder
that is terminated and canceled pursuant to the terms of the Plan, are
permanently enjoined from taking any of the following actions on account of any
such discharged Claims, debts or liabilities or terminated and canceled Equity
Interests or rights: (1) commencing or continuing in any manner any action or
other proceeding against any member of Safety Components, Reorganized Safety
Components, the Estates or properties and interests in properties of each of the
foregoing; (2) enforcing, attaching, collecting or recovering in any manner any
judgment, award, decree or order against the any member of Safety Components,
Reorganized Safety Components, the Estates or properties and interests in
properties of each of the foregoing; (3) creating, perfecting or enforcing any
lien or encumbrance against any member of Safety Components, Reorganized Safety
Components, the Estates or properties and interests in properties of each of the
foregoing; (4) asserting a setoff, right of subrogation or recoupment of any
kind against any obligation due to any member of Safety Components, Reorganized
Safety Components, the Estates or properties and interests in properties of each
of the foregoing; and (5) commencing or continuing any action, in any manner, in
any place that does not comply with or is inconsistent with the provisions of
the Plan and the Confirmation Order. Such injunction shall extend to all
successors of the Debtors, the Creditors' Committee and its members, and the
Unofficial Noteholders' Committee and its members, and their respective
properties and interests in property.
(c) Release of Collateral. Unless a particular Secured Claim is Reinstated:
(i) each holder of: (A) a Secured Claim; and/or (B) a Claim that is purportedly
secured shall on or immediately before the Effective Date: (x) turn over and
release to the relevant member of Safety Components (or its successor, as the
case may be) any and all property of the relevant member of Safety Components
that secures or purportedly secures such Claim; and (y) execute such documents
and instruments as Reorganized Safety Components requires to evidence such
claimant's release of such property; and (ii) on the Effective Date, all claims,
right, title and interest in such property shall revert to Reorganized Safety
Components (or the successor to any member of Safety Components, as the case may
be) free and clear of all Claims and Equity Interests, including, without
limitation, Liens, charges, pledges, interests, encumbrances and/or security
interests of any kind.
PLN-45
<PAGE>
14.4 Term of Injunctions or Stays.
Unless otherwise provided herein or in the Confirmation Order, all
injunctions or stays provided for in the Reorganization Cases pursuant to
sections 105 or 362 of the Bankruptcy Code, or otherwise, and in existence on
the Confirmation Date, shall remain in full force and effect until the Effective
Date.
SECTION XV
RELEASES, INJUNCTION
AND WAIVER OF CLAIMS
15.1 Release of the Debtors, Debtors-in-Possession and Reorganized Safety
Components.
Without limiting the provisions of Section 14.3 above, from and after the
Effective Date, Safety Components, the Debtors-in-Possession, and Reorganized
Safety Components are released from all Liabilities from the beginning of time,
except as expressly provided in the Plan.
15.2 Limited Release of Released Parties by Persons Accepting Distributions
Under the Plan.
Except as otherwise specifically provided for by the Plan, any Person
accepting any Distribution pursuant to the Plan shall be presumed conclusively
to have released the following parties (but solely in respect of their specific
capacities as listed below) (a) the Creditors' Committee and the present and
former members thereof (including ex officio members), (b) the Unofficial
Noteholders' Committee and the members thereof, (c) the Indenture Trustee, (d)
the Senior DIP Agent and the lenders under the Senior DIP Facility, (e) the
Subordinated DIP Agent and the lenders under the Subordinated DIP Facility
(including in their capacity as pre-petition secured lenders to Safety
Components), and (f) all present or former directors, officers, agents,
attorneys, affiliates, employees, accountants, advisors, financial advisors of
the foregoing (collectively, the foregoing parties (but solely in respect of the
capacities listed above), the "Released Parties"), from any claim or Cause of
Action based on, arising from, or in any way connected with (A) the same subject
matter as the Claim or Equity Interest on which the Distribution is received,
(B) the Reorganization Cases, (C) the Plan, (D) the negotiation, formulation and
preparation of the Plan and any of the terms, settlements and compromises
reflected in the Plan, the Restructuring Agreement, the Senior DIP Loan
Agreement, the Subordinated DIP Loan Agreement and/or the Securities Class
Action Settlement. The release described in the preceding sentence shall be
enforceable as a matter of contract law against any Person or Entity that
accepts any Distribution pursuant to the Plan. Nothing in this Section 15.2 of
the Plan shall affect or impair the preservation of the Excluded Claims in
accordance with Section 8.16 of the Plan.
PLN-46
<PAGE>
15.3 Injunction.
The satisfaction, release, and discharge pursuant to Sections 14.3, 15.1,
15.2, 15.5 and 15.6 hereof shall also act as an injunction against any Person or
Entity commencing or continuing any action, employment of process, or act to
collect, offset, or recover any Claim or Cause of Action satisfied, released, or
discharged under the Plan to the fullest extent authorized or provided by the
Bankruptcy Code, including, without limitation, to the extent provided for or
authorized by sections 524 and 1141 thereof.
15.4 Avoidance and Recovery Actions.
As of the Effective Date, Safety Components and Reorganized Safety
Components waive the right to prosecute and release, on behalf of themselves and
their Estates, any Avoidance Actions that belong to or could have been raised by
or on behalf of Safety Components or the Debtors-in-Possession or their
respective Estates, other than any such actions that were commenced on or before
the Effective Date. Reorganized Safety Components, as the successor to Safety
Components, shall retain and may prosecute any such Avoidance Actions that may
be pending on the Effective Date, and may, whether or not an Avoidance Action
has been commenced prior to the Effective Date, assert the claim or Cause of
Action underlying such Avoidance Action as a defense or counterclaim to any
Claim or action, including, but not limited to, any rights under section 502(d)
of the Bankruptcy Code.
15.5 Exculpation.
None of the Debtors, Reorganized Safety Components, or any of the Released
Parties shall have or incur any liability to any holder of a Claim or Equity
Interest for any act or omission in connection with, related to, or arising out
of, (A) the Reorganization Cases, (B) the pursuit of confirmation of the Plan,
(C) the consummation of the Plan or the administration of the Plan or the
property to be distributed under the Plan, (D) the Plan, (E) the negotiation,
formulation and preparation of the Plan and any of the terms, settlements and
compromises reflected in the Plan, the Restructuring Agreement, the Senior DIP
Loan Agreement, the Subordinated DIP Loan Agreement and/or the Securities Class
Action Settlement, and, in all respects, the Debtors, Reorganized Safety
Components, and each of the Released Parties shall be entitled to rely upon the
advice of counsel with respect to their duties and responsibilities under the
Plan.
15.6 Release of Released Parties by Safety Components.
As of the Effective Date, Safety Components and Reorganized Safety
Components hereby release and are permanently enjoined from any prosecution or
attempted prosecution of any and all Causes of Action which they have, may have
or claim to have, which are property of, assertable on behalf of or derivative
of the Debtors, against the Released Parties (but solely in their capacities as
Released Parties); provided, however, that the foregoing shall not operate as a
waiver of or release from any Causes of Action arising out of any express
contractual obligation owing to, or offset rights possessed by, Safety
Components or any reimbursement obligation with respect to a loan or advance
PLN-47
<PAGE>
made by Safety Components. Nothing in this Section 15.6 of the Plan shall affect
or impair the preservation of the Excluded Claims in accordance with Section
8.16 of the Plan.
SECTION XVI
RETENTION OF JURISDICTION
16.1 Retention of Jurisdiction.
The Court may retain jurisdiction, and if the Court exercises its retained
jurisdiction, shall have exclusive jurisdiction, of all matters arising out of,
and relating to, the Reorganization Cases and the Plan pursuant to, and for the
purposes of, sections 105(a) and 1142 of the Bankruptcy Code and for, among
other things, the following purposes:
(i) To hear and determine pending motions for the assumption or
rejection of executory contracts or unexpired leases, if any are
pending, and the allowance of Claims resulting therefrom;
(ii) To determine any and all adversary proceedings, applications and
contested matters;
(iii) To consider and rule on the compromise and settlement of any
Claim against or Cause of Action on behalf of Safety Components
or its Estates;
(iv) To ensure that Distributions to holders of Allowed Claims and
Allowed Equity Interests are accomplished as provided herein;
(v) To hear and determine any timely objections to Administrative
Expense Claims or to proofs of Claim and Equity Interests filed,
both before and after the Confirmation Date, including any
objections to the classification of any Claim or Equity Interest,
and to Allow or Disallow any Disputed Claim or Disputed Equity
Interest, in whole or in part;
(vi) To hear and determine any and all applications for the allowance
of Professional Fees;
(vii) 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;
(viii) To issue such orders in aid of execution of the Plan, in
accordance with section 1142 of the Bankruptcy Code;
(ix) To consider any modifications of the Plan, to cure any defect or
omission, or reconcile any inconsistency in the Plan, including
any exhibit thereto, or in any order of the Court, including the
Confirmation Order, as may be necessary to carry out the purposes
and intent of the Plan and to implement and effectuate the Plan;
(x) To hear and determine all applications for awards of compensation
for services rendered and reimbursement of expenses relating to
implementation and effectuation of the Plan;
PLN-48
<PAGE>
(xi) To hear and determine disputes arising in connection with the
interpretation, implementation or enforcement of the Plan,
including, but not limited to, disputes relating to the Plan
Transactions;
(xii) To hear and determine disputes regarding (a) the treatment to be
accorded to the Subordinated DIP Facility Claims pursuant to
Section 3.3 of the Plan, and (b) the terms, conditions and
provisions of the Subordinated Exit Facility, the Subordinated
Exit Loan Agreement and/or the Subordinated Exit Facility Notes;
(xiii) To hear and determine matters concerning state, local and
federal taxes in accordance with sections 346, 505 and 1146 of
the Bankruptcy Code;
(xiv) To compel the conveyance of property and other performance
contemplated under the Plan and documents executed in connection
herewith;
(xv) To enforce remedies upon any default under the Plan;
(xvi) To enforce, interpret and determine any disputes arising in
connection with any orders, stipulations, judgments and rulings
entered in connection with the Reorganization Cases (whether or
not the Reorganization Cases have been closed);
(xvii) To resolve any cases, controversies, suits or disputes that may
arise in connection with the consummation, interpretation or
enforcement of the Plan, or any Person's or Entity's obligations
incurred in connection herewith;
(xviii) To determine any other matters that may arise in connection
with or relate to the Plan, the Disclosure Statement, the
Confirmation Order or any contract, instrument, release,
indenture or other agreement or document created in connection
with the Plan (including, but not limited to, the Plan
Supplement) or the Disclosure Statement;
(xix) To issue injunctions, enter and implement other orders or take
such other actions as may be necessary or appropriate to
restrain interference by any Person or Entity with the
occurrence of the Effective Date or enforcement of the Plan;
(xx) To determine any other matters that may arise in connection with
or relate to the Plan, the Disclosure Statement, or the
Confirmation Order; and
(xxi) To issue such orders as may be necessary or appropriate in aid
of confirmation and/or to facilitate consummation of the Plan;
(xxii) To determine such other matters as may be provided for in the
Confirmation Order or other orders of the Court as may be
authorized under the provisions of the Bankruptcy Code or any
other applicable law;
(xxiii) To hear and determine (a) all motions, applications, adversary
proceedings, and contested and litigated matters pending on the
Effective Date, and (b) all claims by or against any member of
Safety Components arising under the Bankruptcy Code or
non-bankruptcy law, if made applicable by the Bankruptcy Code,
whether such claims are commenced before or after the Effective
Date;
PLN-49
<PAGE>
(xxiv) To hear and determine pending motions for the assumption or
rejection of executory contracts or unexpired leases pursuant to
Section 12.8 of the Plan, if any, and the allowance of Claims
resulting therefrom;
(xxv) To hear any other matter not inconsistent with the Bankruptcy
Code;
(xxvi) To hear and determine matters concerning state, local and
federal taxes in accordance with sections 346, 505 and 1146 of
the Bankruptcy Code; and
(xxvii) To enter a final decree closing the Reorganization Cases.
16.2 Modification of the Plan.
(a) Subject to Sections 7.5 and 17.8 of the Plan, Safety Components may
alter, amend, or modify the Plan or any Exhibits thereto under section 1127(a)
of the Bankruptcy Code at any time prior to the Confirmation Date; provided,
however, that after the Disclosure Statement Approval Date no alteration,
amendment or modification of the Plan that would materially and adversely change
the treatment of Class 3 Noteholder Claims or Class 4 Unsecured Claims may be
made without prior approval of the Creditors' Committee, which approval shall
not be unreasonably withheld. Safety Components shall provide
parties-in-interest with notice of such amendments or modifications as may be
required by the Bankruptcy Rules or order of the Court and shall, in any event,
provide such notice to counsel for the Creditors' Committee. A holder of a Claim
or Equity Interest that has accepted the Plan shall be deemed to have accepted
the Plan, as altered, amended, modified or clarified, if the proposed
alteration, amendment, modification or clarification does not materially and
adversely change the treatment of the Claim or Equity Interest of such holder.
(b) After the Confirmation Date and prior to substantial consummation (as
defined in section 1101(2) of the Bankruptcy Code) of the Plan, Safety
Components or Reorganized Safety Components, as the case may be, may, under
section 1127(b) of the Bankruptcy Code, institute proceedings in the Court to
remedy any defect or omission or to reconcile any inconsistencies in the Plan,
the Disclosure Statement approved with respect to the Plan, or the Confirmation
Order, and such matters as may be necessary to carry out the purpose and effect
of the Plan so long as such proceedings do not adversely affect the treatment of
holders of Claims or holders of Equity Interests under the Plan; provided,
however, that, to the extent required, prior notice of such proceedings shall be
served in accordance with the Bankruptcy Rules or an order of the Court. A
holder of a Claim or Equity Interest that has accepted the Plan shall be deemed
to have accepted the Plan, as altered, amended, modified or clarified, if the
proposed alteration, amendment, modification or clarification does not
materially and adversely change the treatment of the Claim or Equity Interest of
such holder.
SECTION XVII
MISCELLANEOUS PROVISIONS
17.1 Payment of Statutory Fees.
All fees payable pursuant to section 1930, title 28, United States Code,
shall be paid on the Effective Date.
PLN-50
<PAGE>
17.2 Role of Indenture Trustee; Fees and Expenses of Indenture Trustee.
Notwithstanding any other provision in this Plan, as soon as practicable
after the Record Date, the Indenture Trustee shall provide to Safety Components
a list setting forth the identities of holders of any Class 3 Noteholder Claim
and such other information that Safety Components may require to effect such
Distributions to holders of Class 3 Noteholder Claims. In satisfaction of its
obligations to make distributions to holders of Class 3 Noteholder Claims,
Safety Components shall deliver the Distributions reserved for holders of Class
3 Noteholder Claims to the Indenture Trustee who, in turn, shall deliver the
Distributions to holders of Class 3 Noteholder Claims. The reasonable fees and
expenses of the Indenture Trustee, in accordance with customary charges for such
services, including reasonable legal fees and expenses, shall be allowed as
Administrative Expense Claims against SCI, pursuant to section 503(b) of the
Bankruptcy Code.
17.3 Impact of Releases upon the Securities and Exchange Commission.
Notwithstanding any other provision in this Plan, the releases provided
under the Plan that benefit any Person or Entity other than Safety Components or
Reorganized Safety Components, including, but not limited to, the releases
provided under Sections 11.3 and 15.2 of the Plan, shall not release any claims
(as defined in section 101 of the Bankruptcy Code and including any Securities
Fraud Claims) or Causes of Action of the Securities and Exchange Commission with
respect to such Persons or Entities. The releases of Safety Components and
Reorganized Safety Components provided under the Plan, however, shall be binding
upon the Securities and Exchange Commission.
17.4 Governing Law.
Except to the extent that the Bankruptcy Code or other federal law is
applicable, or to the extent a schedule or exhibit hereto or instrument,
agreement or other document executed under the Plan provides otherwise, the
rights, duties and obligations arising under the Plan, and the instruments,
agreements and other documents executed in connection with the Plan, shall be
governed by, and construed and enforced in accordance with, the internal laws of
the State of New York.
17.5 Notices.
All notices, requests and demands to be effective shall be in writing
(including by facsimile transmission) and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when actually delivered
or, in the case of notice by facsimile transmission, when received and
telephonically confirmed, addressed as follows:
PLN-51
<PAGE>
To Safety Components or Reorganized Safety Components:
Safety Components
40 Emery Street
Greenville, SC 29605
Attn: Mr. Brian P. Menezes
Telephone: (864) 240-2725
Facsimile: (864) 240-2726
with a copy to:
Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaza
New York, NY 10005-1413
Attn: Luc A. Despins, Esq.
Michael J. Edelman, Esq.
Telephone: (212) 530-5000
Facsimile : (212) 530-5219
and
Morris, Nichols, Arsht & Tunnell
1201 North Market Street
Wilmington, DE 19801
Attn: Robert J. Dehney, Esq.
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
PLN-52
<PAGE>
To The Creditors' Committee:
Sun America Investments
1 SunAmerica Center
175 Water Street, 25th Floor
New York, New York 10038
Attn: Ms. Kaye Handley
Telephone: (212) 458-2000
Facsimile: (212) 458-2241
With a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attn: Michael F. Walsh, Esq.
Marc D. Puntus, Esq.
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
and
Richards, Layton & Finger P.A.
One Rodney Square
P.O. Box 551
Wilmington, DE 19899
Attn: Mark Collins, Esq.
Telephone: (302) 658-6541
Facsimile: (302) 658-6548
PLN-53
<PAGE>
17.6 Further Documents and Action.
Safety Components and Reorganized Safety Components shall execute, and are
authorized to file with the Court, such agreements and other documents, take or
cause to be taken such action, and deliver such documents or information as may
be necessary or appropriate to effect and further evidence the terms and
conditions of the Plan and to consummate the transactions and transfers
contemplated by the Plan. Safety Components and Reorganized Safety Components,
and all other parties, shall execute any and all documents and instruments that
must be executed under or in connection with the Plan in order to implement the
terms of the Plan or to effectuate the Distributions under the Plan, provided
that such documents and instruments are reasonably acceptable to such party or
parties.
17.7 Plan Supplement.
Except as otherwise provided in the Plan, forms of the following documents
shall be contained in the Plan Supplement and filed with the Clerk of the Court
at least seven (7) days prior to the Voting Deadline: the Rejection/Assignment
Schedule, the Mutual Release, the Amended Certificate of Incorporation, the
Amended Bylaws, the Subsidiaries Amended Bylaws, the Subsidiaries Amended
Certificates of Incorporation, the Senior Exit Facility Commitment Letter, and
the New Warrants, and, if available by such date, the Subordinated Exit Facility
Notes, the Subordinated Exit Loan Agreement, and/or the list of the initial
members of the Boards of Directors. Upon its filing with the Court, the Plan
Supplement may be inspected in the office of the Clerk of the Court during
normal Court hours. Holders of Claims or Equity Interests may obtain a copy of
the Plan Supplement upon written request to Safety Components in accordance with
Section 17.5 of the Plan.
17.8 Plan Controls.
To the extent the Plan is inconsistent with the Disclosure Statement, the
provisions of the Plan shall be controlling.
17.9 Reservation of Rights.
If the Plan is not confirmed by a Final Order, or if the Plan is confirmed
and does not become effective, the rights of all parties in interest in the
Reorganization Cases are and will be reserved in full. Any concessions or
settlements reflected herein, if any, are made for purposes of the Plan only,
and if the Plan does not become effective, no party in interest in the
Reorganization Cases shall be bound or deemed prejudiced by any such concession
or settlement.
17.10 Injunction Regarding Worthless Stock Deduction.
At the Confirmation Hearing, the Debtors may request that the Court include
in the Confirmation Order a provision enjoining any "50-percent shareholder" of
SCI within the meaning of section 382(g)(4)(D) of the Internal Revenue Code of
1986, as amended, from claiming a worthless
PLN-54
<PAGE>
stock deduction with respect to Old Common Stock for any taxable year of such
shareholder ending prior to the Effective Date.
17.11 Tax Reporting and Compliance.
In connection with the Plan and all instruments issued in connection
therewith and Distributions thereon, Safety Components, and Reorganized Safety
Components, shall comply with all withholding and reporting requirements imposed
by any federal, state, local or foreign taxing authority and all Distributions
hereunder shall be subject to any such withholding and reporting requirements.
No holder of an Allowed Claim against Safety Components shall effectuate any
withholding with respect to the cancellation or satisfaction of such Allowed
Claim under the Plan. Reorganized Safety Components is hereby authorized to
request an expedited determination of taxes under section 505(b) of the
Bankruptcy Code for all taxable periods of Safety Components ending after the
Petition Date through, and including, the Effective Date of the Plan.
17.12 Binding Effect.
The rights, benefits and obligations of any Entity named or referred to in
the Plan, or whose actions may be required to effectuate the terms of the Plan
shall be binding on, and shall inure to the benefit of, any heir, executor,
administrator, successor or assign of such Entity (including, but not limited
to, any trustee appointed for Safety Components under Chapters 7 or 11 of the
Bankruptcy Code). The Confirmation Order shall provide that the terms and
provisions of the Plan and the Confirmation Order shall survive and remain
effective after entry of any order which may be entered converting any of Safety
Components' Reorganization Cases to a case under Chapter 7 of the Bankruptcy
Code, and the terms and provisions of the Plan shall continue to be effective in
this or any superseding case under the Bankruptcy Code.
[END OF TEXT]
PLN-55
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed the Plan as
of the date first above written.
SAFETY COMPONENTS INTERNATIONAL,
INC.
By:
Name:
Title:
SAFETY COMPONENTS FABRIC
TECHNOLOGIES, INC.
By:
Name:
Title:
AUTOMOTIVE SAFETY COMPONENTS
INTERNATIONAL, INC.
By:
Name:
Title:
ASCI HOLDINGS GERMANY (DE), INC.
By:
Name:
Title:
PLN-56
<PAGE>
ASCI HOLDINGS UK (DE), INC.
By:
Name:
Title:
ASCI HOLDINGS MEXICO (DE), INC.
By:
Name:
Title:
ASCI HOLDINGS CZECH (DE), INC.
By:
Name:
Title:
PLN-57
<PAGE>
SCHEDULE A
Terms and Conditions of the Subordinated Exit Facility
Subject to the terms and conditions set forth in Schedules 4 and 5 to the
Subordinated DIP Loan Agreement, which schedules are incorporated herein in
their entirety and made a part of the Plan, the holders of the Allowed
Subordinated Claims agree to convert the Subordinated DIP Facility into a
post-Effective Date exit facility. Copies of the aforementioned schedules 4 and
5 are annexed to this Schedule A.
PLN-SCH-A-1
<PAGE>
Schedule 4
Conditions to Exit Facility
Each of the following conditions must be satisfied, unless waived by the
Administrative Agent and the Lenders: (i) Safety Components shall have entered
into a senior credit facility (the "Senior Exit Facility") providing for
extensions of credit in an amount not less than the amount required to repay all
indebtedness under the Senior DIP Facility and otherwise in form and substance
reasonably satisfactory to the Administrative Agent and the Lenders in all
material respects customary for facilities of this type, (ii) none of the
Obligors, any creditor of any Obligor or any other party in interest shall have
(a) challenged the validity, enforceability, allowance, perfection or priority
of any of the claims and security interests of the Lenders under the Prepetition
Credit Documents or the Subordinated DIP Facility Documents or the Closing Date
Repayment (unless such challenge has been withdrawn or dismissed) or (b)
otherwise asserted any Released Claim (unless such claim or assertion thereof
has been withdrawn or dismissed), (iii) the absence of any Event of Default,
(iv) the Administrative Agent and the Lenders shall have received payment of all
accrued and unpaid interest, fees and reasonable expenses (including without
limitation, reasonable attorneys' and other professionals' fees and expenses)
under the Subordinated DIP Facility Documents, including without limitation, all
accrued interest under Section 2.3, and (v) the Plan of Reorganization shall
provide for (a) the conversion to equity of all indebtedness under the Senior
Notes as provided in the Restructuring Agreement, (b) the complete release by
each Obligor, each creditor of each Obligor and each other party in interest of
all Released Claims and all claims of any type or nature that arise out of or
relate to the financial accommodations extended by the Lenders under the
Subordinated DIP Facility Documents and (c) treatment of the Term Loans and the
Subordinated Exit Facility Term Loans consistent with the terms of this
Agreement (including as specified on Schedule 5) and the Final Order.
PLN-SCH-A-2
<PAGE>
Schedule 5
Subordinated Exit Facility Terms and Conditions
Subject to the satisfaction of the terms and conditions set forth on Schedule 4
and the other terms and conditions set forth below, the Lenders will agree that
the Term Loans may remain outstanding after consummation of a Plan of
Reorganization as term loans ("Subordinated Exit Facility Term Loans")
subordinated to the Senior Exit Facility on substantially the same terms and
conditions as provided in this Agreement and the Intercreditor Agreement, with
the following modifications and additional terms:
Type and Amount: Subordinated Exit Facility Term Loans in a principal amount
equal to the principal amount of the Term Loans outstanding
on the Consummation Date less an amount equal to 50% of the
amount by which the availability under the Senior Exit
Facility on the Consummation Date exceeds $35,000,000 (the
"Consummation Date Reduction Amount"). On the Consummation
Date, the Term Loans outstanding on such date will be paid
in an amount equal to the Consummation Date Reduction
Amount.
Maturity Date: The earlier of (i) the third anniversary of the Closing Date
of the Subordinated DIP Facility and (ii) the second
anniversary of the Consummation Date.
Interest: Interest will be paid in cash on a monthly basis.
Prepayments: At the end of each of Safety Component's fiscal quarters, to
the extent Consolidated EBITDA exceeds (i) for the first
full fiscal quarter after the Consummation Date, $4,000,000
or (ii) for each fiscal quarter thereafter, $3,750,000, the
Subordinated Exit Facility Term Loans shall be prepaid in an
amount equal to 65% of the amount in excess of $4,000,000 or
$3,750,000, as the case may be. For purposes hereof,
"Consolidated EBITDA" means with respect to Safety
Components on a consolidated basis with its subsidiaries for
any period, net income for such period (a) plus, without
duplication and to the extent deducted in computing net
income for such period, the sum of (i) income taxes, (ii)
interest expense, (iii) depreciation and amortization
expense and (iv) other non-cash charges reasonably
acceptable to the Administrative Agent, (b) minus, to the
extent included in net income for such period, extraordinary
gains (all such amounts to be determined in accordance with
GAAP).
Collateral and
Subordination: The Subordinated Exit Facility Term Loans will be secured by
the Collateral on substantially the same terms as provided
herein and such security interests will be subordinated to
the security interests granted to secure the Senior Exit
Facility on substantially the same terms and conditions as
provided in the Intercreditor Agreement. In addition, if
required by the terms of the Senior Exit Facility, the
security interest in any assets of the Obligors securing the
Subordinated Exit Facility Term Loans which are not included
in the collateral for the Senior DIP Facility will be
subordinated to the security interest, if any, in such
assets granted in favor of such providers of the Senior Exit
Facility on substantially the same terms
PLN-SCH-A-3
<PAGE>
and conditions as provided in the Intercreditor Agreement
with respect to the other Collateral.
Conditions Safety Components shall have entered into a Senior Exit
Precedent: Facility satisfactory to the Administrative Agent and the
Lenders (i) satisfying the conditions specified on Schedule
4, (ii) having subordination terms similar to those in the
Intercreditor Agreement, except that the payments and
prepayments described herein, including, without limitation,
interest, costs, expenses, required prepayments and the
payment in full of the outstanding Subordinated Facility
Term Loans on the Maturity Date will be permitted whether
or not any amounts remain outstanding under the Senior Exit
Facility at the time of such payment, and (iv) having other
terms.
and conditions customarily found in loan documents for
financings of this type. No Obligor shall be obligated with
respect to any indebtedness which is senior to the
Subordinated Exit Facility Term Loans other than the
indebtedness under the Senior Exit Facility.
Covenants: The covenants incorporated by reference herein from the
Senior DIP Facility Documents will be modified to conform to
those contained in the documentation for the Senior Exit
Facility, subject to the Lenders' reasonable satisfaction
therewith.
Other Terms: Such other modifications to this Agreement, and such other
terms and conditions, as may be appropriate for facilities
of this type.
PLN-SCH-A-4
<PAGE>
The Plan Modifications
The following Plan Modifications to the First Amended Joint Plan of
Reorganization of Safety Components under Chapter 11 of the Bankruptcy Code,
dated July 19, 2000 (as amended and modified, the "Plan"), are as follows, with
the deletions shown by overstrike text surrounded by brackets and additions
shown by bold and double underlined text:
I. Section 1.88 of the Plan is modified as follows:
"Registration Rights Agreement" means a registration rights agreement to be
entered into pursuant to Section 6.1.3 of the Plan between Reorganized SCI
and any Person or Entity entitled to become a party to such Registration
Rights Agreement under Section 6.1.3 of the Plan, which agreement shall be
in all material respects acceptable to the Unofficial Noteholders'
Committee and in substantially the form AS FILED WITH THE COURT BY SAFETY
COMPONENTS ON OR BEFORE THE EFFECTIVE DATE [contained in the Plan
Supplement].
II. Section 6.1.4 of the Plan will be deleted in its entirety as follows:
[Listing of New Common Stock. Reorganized SCI shall use its reasonable best
efforts to cause the shares of New Common Stock to be listed on a national
securities exchange or the NASDAQ National Market.] INTENTIONALLY OMITTED.
III. Section 12.3(a) of the Plan is modified as follows:
Limited Survival of the Debtors' Corporate Indemnities. Notwithstanding
anything in the Plan to the contrary, the Corporate Indemnities shall be
deemed and treated as separate executory contracts for each express
beneficiary thereof and treated as follows:
(a) the Indemnification Rights of officers, directors and employees who
remain employed by Safety Components as of or after the first day
immediately following the Petition Date (COLLECTIVELY, SUCH OFFICERS,
DIRECTORS AND EMPLOYEES, THE "BANKRUPTCY D&O'S") shall be fully
assumed as of the Effective Date pursuant to Sections 365 and
1123(b)(2) of the Bankruptcy Code; [and] PROVIDED, HOWEVER, THAT,
NOTWITHSTANDING THE FOREGOING, (I)(X) TO THE EXTENT THAT THE CARVE-OUT
FROM RELEASES UNDER THE PLAN PROVIDED FOR PURSUANT TO SECTION 17.3 OF
THE PLAN CAUSES SAFETY COMPONENTS OR REORGANIZED SAFETY COMPONENTS TO
INCUR LIABILITIES AND/OR OBLIGATIONS UNDER SECTION 12.3(A) OF THE PLAN
WITH RESPECT TO THE INDEMNIFICATION RIGHTS OF
<PAGE>
BANKRUPTCY D&O'S WHO WILL NOT SERVE AS OFFICERS OR DIRECTORS OF
REORGANIZED SAFETY COMPONENTS ON THE DAY AFTER THE EFFECTIVE DATE (THE
"FORMER D&O'S") (SUCH LIABILITIES AND/OR OBLIGATIONS TO THE FORMER
D&O'S RELATING TO SECTION 17.3 OF THE PLAN, THE "CARVE-OUT
INDEMNIFICATION CLAIMS"), THE AGGREGATE AMOUNT OF SUCH CARVE-OUT
INDEMNIFICATION CLAIMS FOR ALL FORMER D&O'S SHALL IN NO EVENT EXCEED
AND SHALL BE CAPPED FOR ALL PURPOSES AT $2,000,000; AND (Y)
FURTHERMORE, SAFETY COMPONENTS AND REORGANIZED SAFETY COMPONENTS SHALL
BE OBLIGATED FOR THE CARVE OUT INDEMNIFICATIONS CLAIMS ONLY TO THE
EXTENT THAT ANY FORMER D&O's ASSERT SUCH CLAIMS WITHIN EIGHTEEN-MONTHS
AFTER THE EFFECTIVE DATE (WHICH CLAIMS MUST BE VALIDLY BASED UPON SOME
TANGIBLE ACTION TAKEN BY A THIRD PARTY THAT CAUSES OR WILL CAUSE A
FORMER D&O TO INCUR COSTS AND EXPENSES THAT ARE COVERED BY A CORPORATE
INDEMNITY), AND AFTER SUCH EIGHTEEN-MONTH PERIOD, EXCEPT WITH RESPECT
TO CLAIMS VALIDLY ASSERTED PRIOR TO SUCH EIGHTEEN-MONTH PERIOD, SAFETY
COMPONENTS AND REORGANIZED SAFETY COMPONENTS SHALL HAVE NO FURTHER
LIABILITY OR OBLIGATION WHATSOEVER WITH RESPECT TO THE CARVE-OUT
INDEMNIFICATION CLAIMS TO THE FORMER D&O'S. NOTWITHSTANDING ANYTHING
TO THE CONTRARY HEREIN, BUT SUBJECT TO THE LIMITATIONS SET FORTH ABOVE
WITH RESPECT TO CARVE-OUT INDEMNIFICATION CLAIMS, THE OBLIGATIONS OF
SAFETY COMPONENTS AND REORGANIZED SAFETY COMPONENTS UNDER THIS SECTION
12.3(A) SHALL BE LIMITED TO AN AGGREGATE AMOUNT NOT TO EXCEED
$5,000,000 WITH RESPECT TO ALL FORMER D&O's. THE FOREGOING LIMITATIONS
UPON THE CORPORATE INDEMNITIES FOR THE FORMER D&O'S SHALL NOT AFFECT
OR IMPAIR THE INDEMNIFICATION RIGHTS OF OFFICERS AND DIRECTORS WHO
CONTINUE TO SERVE AS OFFICERS OR DIRECTORS OF REORGANIZED SAFETY
COMPONENTS ON THE DAY AFTER THE EFFECTIVE DATE.
