EXHIBIT 2.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
:
: Chapter 11
In re: :
: Case No. 01-11490 (MFW)
HAYES LEMMERZ INTERNATIONAL, INC., et al., :
: Jointly Administered
Debtors. :
- - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
MODIFIED FIRST AMENDED JOINT PLAN OF REORGANIZATION
OF HAYES LEMMERZ INTERNATIONAL, INC. AND ITS AFFILIATED
DEBTORS AND DEBTORS IN POSSESSION, AS FURTHER MODIFIED
SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
J. Eric Ivester
Stephen D. Williamson
333 West Wacker Drive
Chicago, Illinois 60606-1285
- and -
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Anthony W. Clark (No. 2051)
Grenville R. Day (No. 3721)
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899-0636
Counsel for Debtors and Debtors in Possession
Dated: April 9, 2003
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TABLE OF CONTENTS
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INTRODUCTION.......................................................................... A-1
ARTICLE I
DEFINITIONS, RULES OF INTERPRETATION,
AND COMPUTATION OF TIME.......................................................... A-3
A. Scope of Definitions....................................................... A-3
B. Definitions................................................................ A-3
1.1 "503 Deadline"...................................................... A-3
1.2 "8.25% Subordinated Notes".......................................... A-3
1.3 "8.25% Subordinated Notes Indenture"................................ A-3
1.4 "8.25% Subordinated Notes Indenture Trustee"........................ A-3
1.5 "9.125% Subordinated Notes"......................................... A-3
1.6 "9.125% Subordinated Notes (due June 2007)"......................... A-3
1.7 "9.125% Subordinated Notes (due July 2007)"......................... A-4
1.8 "9.125% Subordinated Notes Indenture (due June 2007)"............... A-4
1.9 "9.125% Subordinated Notes Indenture (due July 2007)"............... A-4
1.10 "9.125% Subordinated Notes Indentures".............................. A-4
1.11 "9.125% Subordinated Notes Indenture Trustee"....................... A-4
1.12 "11% Subordinated Notes"............................................ A-4
1.13 "11% Subordinated Notes Indenture".................................. A-4
1.14 "11% Subordinated Notes Indenture Trustee".......................... A-4
1.15 "Ad Hoc Prepetition Lender Steering Committee"...................... A-4
1.16 "Additional Equity Modification".................................... A-5
1.17 "Administrative Claim".............................................. A-5
1.18 "Affiliates"........................................................ A-5
1.19 "Allowed Claim"..................................................... A-5
1.20 "Allowed Class _ Claim"............................................. A-5
1.21 "Amended and Restated".............................................. A-5
1.22 "Apollo"............................................................ A-5
1.23 "Asset Transfer Modification"....................................... A-5
1.24 "Avoidance Claims".................................................. A-6
1.25 "Ballot"............................................................ A-6
1.26 "Bank Agent"........................................................ A-6
1.27 "Bankruptcy Code"................................................... A-6
1.28 "Bankruptcy Court".................................................. A-6
1.29 "Bankruptcy Rules".................................................. A-6
1.30 "Bar Date".......................................................... A-6
1.31 "Bar Date Order".................................................... A-6
A-i
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1.32 "BMO"............................................................... A-6
1.33 "BMO-Bowling Green Synthetic Lease"................................. A-6
1.34 "BMO-Bowling Green Synthetic Lease Property"........................ A-7
1.35 "BMO Capital"....................................................... A-7
1.36 "BMO-Northville Synthetic Lease".................................... A-7
1.37 "BMO-Northville Synthetic Lease Property"........................... A-7
1.38 "BMO Synthetic Leases".............................................. A-7
1.39 "BMO Synthetic Lease Claim"......................................... A-7
1.40 "BMO Synthetic Lease Properties".................................... A-7
1.41 "BMO Synthetic Lease Secured Claim"................................. A-7
1.42 "BMO Synthetic Lessors"............................................. A-7
1.43 "Business Day"...................................................... A-7
1.44 "Capped Adequate Protection Payments"............................... A-7
1.45 "Cash".............................................................. A-8
1.46 "Causes of Action".................................................. A-8
1.47 "CBL"............................................................... A-8
1.48 "CBL-Air Conditioner Synthetic Lease"............................... A-8
1.49 "CBL-Other Equipment Synthetic Lease"............................... A-8
1.50 "CBL Synthetic Leases".............................................. A-8
1.51 "CBL Synthetic Lease Claim"......................................... A-8
1.52 "CBL Synthetic Lease Equipment"..................................... A-8
1.53 "CBL Synthetic Lease Secured Claim"................................. A-8
1.54 "CMI-Quaker Alloy".................................................. A-8
1.55 "Certificate"....................................................... A-8
1.56 "Chapter 11 Case(s)"................................................ A-9
1.57 "Claim"............................................................. A-9
1.58 "Claimholder"....................................................... A-9
1.59 "Claims Agent"...................................................... A-9
1.60 "Claims Objection Deadline"......................................... A-9
1.61 "Class"............................................................. A-9
1.62 "Class 5 Trust Distribution Amount"................................. A-9
1.63 "Class 6 Trust Distribution Amount"................................. A-9
1.64 "Class 7 Trust Distribution Amount"................................. A-9
1.65 "Class 8a Trust Distribution Amount"................................ A-9
1.66 "Class 8b Trust Distribution Amount"................................ A-10
1.67 "Compromise Equity Value"........................................... A-10
1.68 "Confirmation Date"................................................. A-10
1.69 "Confirmation Hearing".............................................. A-10
1.70 "Confirmation Hearing Notice"....................................... A-10
1.71 "Confirmation Order"................................................ A-10
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1.72 "Continuing Indemnitees"............................................ A-10
1.73 "Creditors' Committee".............................................. A-10
1.74 "Cure".............................................................. A-10
1.75 "D&O Claims"........................................................ A-11
1.76 "D&O Insurance"..................................................... A-11
1.77 "DIP Agent"......................................................... A-11
1.78 "DIP Credit Agreement".............................................. A-11
1.79 "DIP Facility"...................................................... A-11
1.80 "DIP Facility Claim"................................................ A-11
1.81 "DIP Facility Order"................................................ A-11
1.82 "DIP Lenders"....................................................... A-11
1.83 "Deficiency Claim".................................................. A-11
1.84 "Disallowed Claim".................................................. A-11
1.85 "Disbursing Agent".................................................. A-12
1.86 "Disclosure Statement".............................................. A-12
1.87 "Disputed Claim".................................................... A-12
1.88 "Distribution Date"................................................. A-12
1.89 "Distribution Reserve".............................................. A-12
1.90 "Dresdner".......................................................... A-12
1.91 "Dresdner Synthetic Lease".......................................... A-12
1.92 "Dresdner Synthetic Lease Claim".................................... A-12
1.93 "Dresdner Synthetic Lease Property"................................. A-12
1.94 "Dresdner Synthetic Lease Secured Claim"............................ A-13
1.95 "ERISA"............................................................. A-13
1.96 "Effective Date".................................................... A-13
1.97 "Emergence Share Price"............................................. A-13
1.98 "Employee Retention Plan"........................................... A-13
1.99 "Estates"........................................................... A-13
1.100 "Exchange Act"...................................................... A-13
1.101 "Exhibit"........................................................... A-13
1.102 "Exhibit Filing Date"............................................... A-13
1.103 "Existing Securities"............................................... A-13
1.104 "Expense Advance"................................................... A-13
1.105 "Face Amount"....................................................... A-14
1.106 "Fee and Expense Adequate Protection Payments"...................... A-14
1.107 "Final Order"....................................................... A-14
1.108 "Fiscal Year"....................................................... A-14
1.109 "Foreign Affiliate Adequate Protection Payments".................... A-14
1.110 "General Unsecured Claim"........................................... A-14
1.111 "Golden and Hall Settlement Agreements and Judgments"............... A-14
A-iii
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1.112 "HLI"............................................................... A-15
1.113 "HLI Creditor Trust"................................................ A-15
1.114 "HLI-Funding Corp."................................................. A-15
1.115 "HLI-Funding LLC"................................................... A-15
1.116 "HLI-Import"........................................................ A-15
1.117 "HLI-Netherlands"................................................... A-15
1.118 "Holdback Amount"................................................... A-15
1.119 "Holdback Escrow Account"........................................... A-15
1.120 "Impaired".......................................................... A-15
1.121 "Indemnification Rights"............................................ A-15
1.122 "Indemnitee"........................................................ A-16
1.123 "Indenture(s)"...................................................... A-16
1.124 "Initial Adequate Protection Payment"............................... A-16
1.125 "Insurance Coverage"................................................ A-16
1.126 "Insured Workers' Compensation Programs"............................ A-16
1.127 "Intercompany Claim"................................................ A-16
1.128 "Intercreditor Agreement"........................................... A-16
1.129 "Interest".......................................................... A-16
1.130 "Interestholder".................................................... A-16
1.131 "Internal Revenue Code"............................................. A-16
1.132 "Long Term Incentive Plan".......................................... A-16
1.133 "Merger"............................................................ A-17
1.134 "Merger Agreement".................................................. A-17
1.135 "Michigan Workers' Compensation Programs"........................... A-17
1.136 "Miscellaneous Secured Claim"....................................... A-17
1.137 "Motor Wheel SERP".................................................. A-17
1.138 "Net Trust Recoveries".............................................. A-17
1.139 "New Credit Facility"............................................... A-17
1.140 "New Common Stock".................................................. A-17
1.141 "New Holdco"........................................................ A-17
1.142 "New Holding Company Formation"..................................... A-18
1.143 "New Operating Company"............................................. A-18
1.144 "New Parent Company"................................................ A-18
1.145 "New Preferred Stock"............................................... A-18
1.146 "New Securities".................................................... A-18
1.147 "New Senior Notes................................................... A-18
1.148 "Noteholder"........................................................ A-18
1.149 "Ohio Workers' Compensation Program"................................ A-18
1.150 "Old Common Stock".................................................. A-18
1.151 "Old Common Stock Options".......................................... A-19
A-iv
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1.152 "Other Priority Claim".............................................. A-19
1.153 "PBGC".............................................................. A-19
1.154 "Pension Plan"...................................................... A-19
1.155 "Periodic Distribution Date"........................................ A-19
1.156 "Person"............................................................ A-19
1.157 "Petition Date"..................................................... A-19
1.158 "Plan".............................................................. A-19
1.159 "Plan Schedules".................................................... A-19
1.160 "Postpetition Interest"............................................. A-19
1.161 "Prepetition Agent"................................................. A-20
1.162 "Prepetition Credit Agreement"...................................... A-20
1.163 "Prepetition Credit Facility"....................................... A-20
1.164 "Prepetition Credit Facility Secured Claim"......................... A-20
1.165 "Prepetition Lenders"............................................... A-20
1.166 "Prepetition Lenders' Payment Amount"............................... A-20
1.167 "Priority Tax Claim"................................................ A-20
1.168 "Pro Rata".......................................................... A-20
1.169 "Professional"...................................................... A-21
1.170 "Professional Claim"................................................ A-21
1.171 "Professional Fee Order"............................................ A-21
1.172 "Projections"....................................................... A-21
1.173 "Quarterly Adequate Protection Payments"............................ A-21
1.174 "Record Date"....................................................... A-21
1.175 "Reinstated" or "Reinstatement"..................................... A-21
1.176 "Released Parties".................................................. A-22
1.177 "Remaining Senior Note Proceeds".................................... A-22
1.178 "Reorganized HLI Stock"............................................. A-22
1.179 "Reorganized Debtors"............................................... A-22
1.180 "Reorganized . . ."................................................. A-22
1.181 "Reorganizing Debtors".............................................. A-22
1.182 "Restructuring Transaction(s)"...................................... A-22
1.183 "Retained Actions".................................................. A-23
1.184 "Retained Avoidance Claims"......................................... A-23
1.185 "Retiree Medical Programs".......................................... A-23
1.186 "SEC"............................................................... A-23
1.187 "Scheduled"......................................................... A-23
1.188 "Schedules"......................................................... A-23
1.189 "Secured Claim"..................................................... A-23
1.190 "Security".......................................................... A-23
1.191 "Securities Act".................................................... A-23
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1.192 "Senior Note Claims"................................................ A-24
1.193 "Senior Notes"...................................................... A-24
1.194 "Senior Notes Indenture"............................................ A-24
1.195 "Senior Notes Indenture Trustee".................................... A-24
1.196 "Series A Warrants"................................................. A-24
1.197 "Series B Warrants"................................................. A-25
1.198 "Servicer".......................................................... A-25
1.199 "Short Term Incentive Plan"......................................... A-25
1.200 "Solicitation Procedures Order"..................................... A-25
1.201 "Subordinated Debt Securities Claim"................................ A-26
1.202 "Subordinated Equity Securities Claim".............................. A-26
1.203 "Subordinated Securities Claim"..................................... A-26
1.204 "Subordinated Note Claims".......................................... A-26
1.205 "Subordinated Notes"................................................ A-26
1.206 "Subordinated Notes Indentures"..................................... A-26
1.207 "Subordinated Notes Indenture Trustees"............................. A-26
1.208 "Synthetic Leases".................................................. A-26
1.209 "Synthetic Lease Claims"............................................ A-26
1.210 "Synthetic Lease Property".......................................... A-26
1.211 "Synthetic Lessors"................................................. A-26
1.212 "Synthetic Lessors Secured Claim"................................... A-27
1.213 "Trust Advisory Board".............................................. A-27
1.214 "Trust Agreement"................................................... A-27
1.215 "Trust Assets"...................................................... A-27
1.216 "Trust Avoidance Claims"............................................ A-27
1.217 "Trust Claims"...................................................... A-27
1.218 "Trust Expenses".................................................... A-27
1.219 "Trust Recoveries".................................................. A-27
1.220 "Trustee"........................................................... A-27
1.221 "Unimpaired"........................................................ A-27
1.222 "Unsecured Notes"................................................... A-27
1.223 "Voting Deadline"................................................... A-28
1.224 "Warrants".......................................................... A-28
1.225 "Workers' Compensation Programs".................................... A-28
C. Rules of Interpretation.................................................... A-28
D. Computation of Time........................................................ A-28
E. Exhibits................................................................... A-28
A-vi
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ARTICLE II
ADMINISTRATIVE EXPENSES
AND PRIORITY TAX CLAIMS.......................................................... A-29
2.1 Administrative Claims............................................... A-29
2.2 Priority Tax Claims................................................. A-29
ARTICLE III
CLASSIFICATION OF CLAIMS AND INTERESTS........................................... A-30
3.1 Introduction........................................................ A-30
3.2 Unimpaired Class of Claims.......................................... A-30
3.3 Impaired Classes of Claims.......................................... A-30
(a) Class 2 - Prepetition Credit Facility Secured Claims......... A-30
(b) Class 3 - Synthetic Lessor Secured Claims.................... A-30
(c) Class 4 - Miscellaneous Secured Claims....................... A-31
(d) Class 5 - Senior Note Claims................................. A-31
(e) Class 6 - Subordinated Note Claims........................... A-31
(f) Class 7 - General Unsecured Claims........................... A-31
(g) Class 8 - Subordinated Securities Claims..................... A-31
3.4 Impaired Class of Interests......................................... A-31
ARTICLE IV
PROVISIONS FOR TREATMENT OF
CLAIMS AND INTERESTS............................................................. A-32
4.1 Class 1 (Other Priority Claims)..................................... A-32
4.2 Class 2 (Prepetition Credit Facility Secured Claims)................ A-32
4.3 Class 3a (BMO Synthetic Lease Secured Claims)....................... A-33
(a) BMO Synthetic Lease Secured Claims with
Respect to the BMO-Bowling Green Synthetic Lease............. A-33
(b) BMO Synthetic Lease Secured Claims with
Respect to the BMO-Northville Synthetic Lease................ A-34
(c) Allowed Unsecured Claim...................................... A-35
(d) Adequate Protection/Administrative Claim..................... A-36
4.4 Class 3b (CBL Synthetic Lease Secured Claims)....................... A-36
(a) CBL Synthetic Lease Secured Claims with
Respect to the CBL-Air Conditioner Synthetic Lease........... A-36
(b) CBL Synthetic Lease Secured Claims with
Respect to the CBL-Other Equipment Synthetic Lease........... A-36
A-vii
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4.5 Class 3c (Dresdner Synthetic Lease Secured Claims)........... A-37
4.6 Class 4 (Miscellaneous Secured Claims)....................... A-37
4.7 Class 5 (Senior Note Claims)................................. A-38
4.8 Class 6 (Subordinated Note Claims)........................... A-38
4.9 Class 7 (General Unsecured Claims)........................... A-39
4.10 Class 8a (Subordinated Debt Securities Claims)............... A-40
4.11 Class 8b (Subordinated Equity Securities Claims)............. A-40
4.12 Class 9 (Interests in HLI)................................... A-40
4.13 Intercompany Claims.......................................... A-41
4.14 Reservation of Rights........................................ A-41
ARTICLE V
ACCEPTANCE OR REJECTION OF THE PLAN;
EFFECT OF REJECTION BY ONE OR MORE
IMPAIRED CLASSES OF CLAIMS OR INTERESTS..................................... A-41
5.1 Impaired Classes of Claims and Interests Entitled to Vote.... A-41
5.2 Presumed Acceptances by Unimpaired Classes................... A-42
5.3 Classes Deemed to Reject Plan................................ A-42
5.4 Confirmation Pursuant to Section 1129(b) of the Bankruptcy
Code ........................................................ A-42
5.5 Confirmability and Severability of a Plan.................... A-42
ARTICLE VI
MEANS FOR IMPLEMENTATION OF THE PLAN........................................ A-42
6.1 Continued Corporate Existence................................ A-42
6.2 Corporate Action............................................. A-43
6.3 Certificate of Incorporation and Bylaws...................... A-43
6.4 Cancellation of Existing Securities and Agreements........... A-43
6.5 New Holding Company Formation................................ A-44
6.6 Directors and Officers....................................... A-46
6.7 Employment, Retirement, Indemnification and Other
Agreements and Incentive Compensation Programs............... A-47
6.8 Continuation of Workers' Compensation Programs............... A-49
6.9 Implementation of the Long Term Incentive Program............ A-49
6.10 Termination of the Motor Wheel SERP.......................... A-50
6.11 Enforcement of Subordination Provisions/Intercreditor
Agreements .................................................. A-50
6.12 Issuance of New Securities................................... A-50
6.13 Post-Effective Date Financing................................ A-51
6.14 Restructuring Transactions................................... A-51
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6.15 Preservation of Causes of Action............................. A-52
6.16 Effectuating Documents; Further Transactions................. A-52
ARTICLE VII
UNEXPIRED LEASES AND EXECUTORY CONTRACTS.................................... A-52
7.1 Assumed Contracts and Leases................................. A-52
7.2 Rejected Contracts and Leases................................ A-53
7.3 Payments Related to Assumption of
Executory Contracts and Unexpired Leases..................... A-53
7.4 Rejection Damages Bar Date................................... A-54
ARTICLE VIII
PROVISIONS GOVERNING DISTRIBUTIONS.......................................... A-54
8.1 Time of Distributions........................................ A-54
8.2 No Interest on Claims........................................ A-54
8.3 Disbursing Agent............................................. A-55
8.4 Surrender of Securities or Instruments....................... A-55
8.5 Instructions to Disbursing Agent............................. A-55
8.6 Services of Indenture Trustees, Agents and Servicers......... A-55
8.7 Record Date for Distributions to Prepetition
Lenders and Holders of Unsecured Notes....................... A-56
8.8 Claims Administration Responsibility......................... A-56
8.9 Delivery of Distributions.................................... A-56
8.10 Procedures for Treating and Resolving
Disputed and Contingent Claims............................... A-57
8.11 Fractional Securities; Fractional Dollars.................... A-58
ARTICLE IX
ALLOWANCE AND PAYMENT OF
CERTAIN ADMINISTRATIVE CLAIMS............................................... A-59
9.1 DIP Facility Claim........................................... A-59
9.2 Professional Claims.......................................... A-59
9.3 Substantial Contribution Compensation and Expenses Bar Date.. A-60
9.4 Other Administrative Claims.................................. A-60
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ARTICLE X
HLI CREDITOR TRUST.......................................................... A-60
10.1 Appointment of Trustee....................................... A-60
10.2 Assignment of Trust Assets to the HLI Creditor Trust......... A-61
10.3 The HLI Creditor Trust....................................... A-61
10.4 The Trust Advisory Board..................................... A-63
10.5 Funding of Expense Advance................................... A-64
10.6 Repayment of Expense Advance................................. A-64
10.7 Distributions of Trust Recoveries............................ A-64
ARTICLE XI
EFFECT OF THE PLAN ON CLAIMS AND INTERESTS.................................. A-65
11.1 Revesting of Assets.......................................... A-65
11.2 Discharge of Reorganizing Debtors............................ A-65
11.3 Compromises and Settlements.................................. A-66
11.4 Release of Certain Parties................................... A-66
11.5 Setoffs...................................................... A-66
11.6 Exculpation and Limitation of Liability...................... A-66
11.7 Indemnification Obligations.................................. A-67
11.8 Injunction................................................... A-68
11.9 Release by Holders of Claims or Interests.................... A-68
11.10 Release by Debtors........................................... A-68
ARTICLE XII
CONDITIONS PRECEDENT........................................................ A-69
12.1 Conditions to Confirmation................................... A-69
12.2 Conditions to Consummation................................... A-69
12.3 Waiver of Conditions to Confirmation or Consummation......... A-71
ARTICLE XIII
RETENTION OF JURISDICTION................................................... A-72
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ARTICLE XIV
MISCELLANEOUS PROVISIONS.................................................... A-74
14.1 Binding Effect............................................... A-74
14.2 Modification and Amendments.................................. A-74
14.3 Authorization/Consent of Creditor Constituencies............. A-74
14.4 Withholding and Reporting Requirements....................... A-74
14.5 Allocation of Plan Distributions Between Principal and
Interest .................................................... A-74
14.6 Committees................................................... A-75
14.7 Revocation, Withdrawal, or Non-Consummation.................. A-75
14.8 Severability of Plan Provisions.............................. A-75
14.9 Notices...................................................... A-75
14.10 Term of Injunctions or Stays................................. A-78
14.11 Governing Law................................................ A-78
14.12 No Waiver or Estoppel........................................ A-78
A-xi
EXHIBITS
Exhibit A List of Debtor Plan Proponents and Corresponding Bankruptcy Case Numbers
Exhibit B Nonexclusive List of Retained Actions and Retained Avoidance Claims
Exhibit C Form of HLI Creditor Trust Agreement
Exhibit D Summary of Long Term Incentive Plan
Exhibit E Form of Series A Warrant Agreement
Exhibit F Form of Certificate of Incorporation
Exhibit G Form of Bylaws
Exhibit H Schedule of Rejected Unexpired Leases and Executory Contracts
Exhibit I List of Officers and Directors of the Debtors Who Are Released Parties
Exhibit J Form of Amended and Restated BMO-Northville Synthetic Lease
Exhibit K Form of Amended and Restated CBL-Other Equipment Synthetic Lease
Exhibit L Form of Amended and Restated Dresdner Synthetic Lease
Exhibit M Form of Series B Warrant Agreement
Exhibit N Exclusive List of Trust Avoidance Claims
Exhibit O Summary of New Senior Notes
A-xii
INTRODUCTION
Hayes Lemmerz International, Inc. ("HLI"), those of its direct and
indirect subsidiaries incorporated pursuant to the laws of various states of the
United States (the "U.S. Subsidiaries"), and one subsidiary incorporated in
Mexico, Industrias Fronterizas, S.A. de C.V. ("HLI-Industrias" and, collectively
with HLI and the U.S. Subsidiaries, the "Debtors"), as debtors and
debtors-in-possession in the above-captioned jointly administered chapter 11
reorganization cases, hereby propose the following reorganization plans for the
resolution of the Debtors' outstanding creditor claims and equity interests. A
list of the Debtors proposing plans and their corresponding case numbers is
attached hereto as Exhibit A. Debtors CMI-Quaker Alloy, Inc. ("CMI-Quaker
Alloy"), HLI Netherlands Holdings, Inc. ("HLI-Netherlands"), Hayes Lemmerz
Funding Company, LLC ("HLI-Funding LLC"), Hayes Lemmerz Funding Corporation
("HLI-Funding Corp."), and Hayes Lemmerz International Import, Inc.
("HLI-Import") are not proposing plans and on the Effective Date (as defined
herein) the Chapter 11 Cases (as defined herein) of such Debtors shall be deemed
to be dismissed.
With the exception of HLI-Industrias, none of HLI's subsidiaries
incorporated outside of the United States has commenced a case under chapter 11
of the Bankruptcy Code (as defined herein) or similar proceedings in any other
jurisdictions. These non-Debtor foreign subsidiaries continue to operate their
businesses in the ordinary course of business outside of bankruptcy.
Reference is made to the Disclosure Statement (as defined herein) for
results of operations, projections for future operations, risk factors, a
summary and analysis of the Plan and certain related matters. Other than
CMI-Quaker Alloy, HLI-Netherlands, HLI-Funding LLC, HLI-Funding Corp. and
HLI-Import, each of the Debtors (collectively, the "Reorganizing Debtors") is a
proponent of a Plan contained herein within the meaning of section 1129 of the
Bankruptcy Code. Capitalized terms used but not defined in this Introduction
have the meanings ascribed to them in Article I of this Plan.
The Plan contemplates that each of the Reorganizing Debtors will be
reorganized entities after consummation of the Plan. Additionally, a new holding
company structure will be created. The Plan further contemplates that holders of
the Debtors' prepetition senior secured credit facility will receive a
distribution of cash, a portion of the new equity securities to be issued by one
or more of the Reorganized Debtors and, under certain circumstances, a portion
of the notes that may be issued by the Reorganized Debtors as a high yield
component of their exit financing. The remaining portion of new equity
securities shall be distributed to the Reorganizing Debtors' unsecured creditors
based on their relative priorities vis-B-vis the Reorganizing Debtors and other
creditors. Existing holders of HLI common stock and stock options will receive
no distribution on account of their existing equity interests in HLI.
A-1
These reorganization cases have been consolidated for procedural
purposes only and are being jointly administered pursuant to an order of the
United States Bankruptcy Court for the District of Delaware. Immediately after
consummation of the Plan, certain Debtors will be dissolved or merged (or
combined in another form of transaction) with another Debtor as a means of
implementing this Plan with respect to the Debtors. For voting and distribution
purposes, the Plan contemplates separate classes for each Reorganizing Debtor.
The distributions to be made to the claimants, in each of the classes of
creditor claims and equity interests for each Reorganizing Debtor, are set forth
in Article III herein.
Under section 1125(b) of the Bankruptcy Code, a vote to accept or
reject the Plan may not be solicited from a Claimholder until the Disclosure
Statement has been approved by the Bankruptcy Court and distributed to
Claimholders and Interestholders. ALL CLAIMHOLDERS THAT ARE ELIGIBLE TO VOTE ON
THE PLAN ARE ENCOURAGED TO READ THIS PLAN AND THE DISCLOSURE STATEMENT IN THEIR
ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THIS PLAN.
Subject to the restrictions on modifications set forth in section 1127
of the Bankruptcy Code, Bankruptcy Rule 3019, and Articles XII and XIV of this
Plan, the Debtors expressly reserve their right to alter, amend or modify this
Plan, one or more times, before the Plan's substantial consummation.
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ARTICLE I
DEFINITIONS, RULES OF INTERPRETATION,
AND COMPUTATION OF TIME
A. SCOPE OF DEFINITIONS
For purposes of this Plan, except as expressly provided or unless the
context otherwise requires, all capitalized terms not otherwise defined shall
have the meanings ascribed to them in Article I of this Plan. Any term used in
this Plan that is not defined herein, but is defined in the Bankruptcy Code or
the Bankruptcy Rules, shall have the meaning ascribed to that term in the
Bankruptcy Code or the Bankruptcy Rules. Whenever it appears appropriate from
the context, each term stated in the singular or the plural includes the
singular and the plural, and each pronoun stated in the masculine, feminine or
neuter includes the masculine, feminine and neuter.
B. DEFINITIONS
1.1 "503 DEADLINE" shall have the meaning ascribed to it in
Section hereof.
1.2 "8.25% SUBORDINATED NOTES" means the 8.25% Senior Subordinated
Notes due December 2008, dated as of December 14, 1998, as amended, in the
aggregate principal amount of $250 million, issued by HLI pursuant to the 8.25%
Subordinated Notes Indenture.
1.3 "8.25% SUBORDINATED NOTES INDENTURE" means that certain
indenture dated as of December 14, 1998, as amended, supplemented or otherwise
modified prior to the Petition Date, by and between HLI and Wells Fargo Bank
Minnesota, N.A., as successor indenture trustee, pursuant to which HLI issued
the 8.25% Subordinated Notes.
1.4 "8.25% SUBORDINATED NOTES INDENTURE TRUSTEE" means Wells Fargo
Bank Minnesota, N.A., in its capacity as successor indenture trustee for the
8.25% Subordinated Notes pursuant to the 8.25% Subordinated Notes Indenture.
1.5 "9.125% SUBORDINATED NOTES" means, collectively, the 9.125%
Subordinated Notes (due June 2007) and the 9.125% Subordinated Notes (due July
2007).
1.6 "9.125% SUBORDINATED NOTES (DUE JUNE 2007)" means the 9.125%
Senior Subordinated Notes due June 2007, dated as of June 30, 1997, as amended,
in the aggregate principal amount of $250 million, issued by HLI pursuant to the
9.125% Subordinated Notes Indenture (due June 2007).
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1.7 "9.125% SUBORDINATED NOTES (DUE JULY 2007)" means the 9.125%
Senior Subordinated Notes due July 2007, dated as of July 15, 1997, as amended,
in the aggregate principal amount of $150 million, issued by HLI pursuant to the
9.125% Subordinated Notes Indenture (due July 2007).
1.8 "9.125% SUBORDINATED NOTES INDENTURE (DUE JUNE 2007)" means
that certain indenture dated as of June 30, 1997, as amended, supplemented or
otherwise modified prior to the Petition Date, by and between HLI and Wells
Fargo Bank Minnesota, N.A., as successor indenture trustee, pursuant to which
HLI issued the 9.125% Subordinated Notes (due June 2007).
1.9 "9.125% SUBORDINATED NOTES INDENTURE (DUE JULY 2007)" means
that certain indenture dated as of July 15, 1997, as amended, supplemented or
otherwise modified prior to the Petition Date, by and between HLI and Wells
Fargo Bank Minnesota, N.A., as successor indenture trustee, pursuant to which
HLI issued the 9.125% Subordinated Notes (due July 2007).
1.10 "9.125% SUBORDINATED NOTES INDENTURES" means, collectively,
the 9.125% Subordinated Notes Indenture (due June 2007) and the 9.125%
Subordinated Notes Indenture (due July 2007).
1.11 "9.125% SUBORDINATED NOTES INDENTURE TRUSTEE" means Wells
Fargo Bank Minnesota, N.A., in its capacity as successor indenture trustee for
the 9.125% Subordinated Notes pursuant to the 9.125% Subordinated Notes
Indentures.
1.12 "11% SUBORDINATED NOTES" means the 11% Senior Subordinated
Notes due July 2006, dated as of July 2, 1996, in the aggregate principal amount
of $250 million, issued by HLI pursuant to the 11% Subordinated Notes Indenture.
1.13 "11% SUBORDINATED NOTES INDENTURE" means that certain
indenture dated as of July 2, 1996, as amended, supplemented or otherwise
modified prior to the Petition Date, by and between HLI and U.S. Bank & Trust,
N.A., as successor indenture trustee, pursuant to which HLI issued the 11%
Subordinated Notes.
1.14 "11% SUBORDINATED NOTES INDENTURE TRUSTEE" means U.S. Bank &
Trust, N.A., in its capacity as successor indenture trustee for the 11%
Subordinated Notes pursuant to the 11% Subordinated Notes Indenture
1.15 "AD HOC PREPETITION LENDER STEERING COMMITTEE" means the
informal committee consisting of the following five Prepetition Lenders based on
their relative holdings, who collectively (including through their affiliates)
hold approximately $250 million of the outstanding principal obligations under
the Prepetition Credit Facility: Foothill Capital Corporation, General Electric
Capital Corporation, Citadel Limited Partnership, R(2) Top Hat, Ltd., and
Sankaty Advisors LLC.
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1.16 "ADDITIONAL EQUITY MODIFICATION" has the meaning set forth in
Section 6.5.
1.17 "ADMINISTRATIVE CLAIM" means a Claim for payment of an
administrative expense of a kind specified in section 503(b) of the Bankruptcy
Code and entitled to priority pursuant to section 507(a)(1) of the Bankruptcy
Code, including, but not limited to, DIP Facility Claims, the actual, necessary
costs and expenses, incurred after the Petition Date, of preserving the Estates
and operating the business of the Debtors, including wages, salaries or
commissions for services rendered after the commencement of the Chapter 11
Cases, Professional Claims, and all fees and charges assessed against the
Estates under chapter 123 of title 28, United States Code, and all Allowed
Claims that are entitled to be treated as Administrative Claims pursuant to a
Final Order of the Bankruptcy Court under section 546(c)(2)(A) of the Bankruptcy
Code.
1.18 "AFFILIATES" shall have the meaning ascribed to such term by
section 101(2) of the Bankruptcy Code.
1.19 "ALLOWED CLAIM" means a Claim or any portion thereof, (a) that
has been allowed by a Final Order of the Bankruptcy Court (or such other court
as a Reorganized Debtor and the holder of such Claim agrees may adjudicate such
Claim and objections thereto), or (b) as to which, on or by the Effective Date,
(i) no proof of claim has been filed with the Bankruptcy Court and (ii) the
liquidated and noncontingent amount of which is Scheduled, other than a Claim
that is Scheduled at zero, in an unknown amount, or as disputed, or (c) for
which a proof of claim in a liquidated amount has been timely filed with the
Bankruptcy Court pursuant to the Bankruptcy Code, any Final Order of the
Bankruptcy Court or other applicable bankruptcy law, and as to which either (i)
no objection to its allowance has been filed within the periods of limitation
fixed by the Plan, the Bankruptcy Code or by any order of the Bankruptcy Court
or (ii) any objection to its allowance has been settled or withdrawn, or has
been denied by a Final Order, or (d) that is expressly allowed in a liquidated
amount in the Plan.
1.20 "ALLOWED CLASS _ CLAIM" means an Allowed Claim in the
specified Class.
1.21 "AMENDED AND RESTATED" means a new document evidencing or
creating indebtedness or obligation of or ownership interest in property of the
Reorganized Debtors that shall become effective as of the Effective Date, the
terms of which are based upon and similar, but not identical to, an existing
document of the same nature. The proposed Amended and Restated document shall be
filed with the Court on or before the Exhibit Filing Date.
1.22 "APOLLO" means Apollo Management V, L.P., the manager of funds
which, collectively, hold in excess of 40% of the Senior Notes.
1.23 "ASSET TRANSFER MODIFICATION" has the meaning set forth in
Section 6.5.
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1.24 "AVOIDANCE CLAIMS" means Causes of Action against Persons
arising under any of sections 502, 510, 541, 542, 543, 544, 545, 547 through 551
and 553 of the Bankruptcy Code, or under related state or federal statutes and
common law, including fraudulent transfer laws, whether or not litigation is
commenced to prosecute such Avoidance Claims, but excluding any and all Claims
released under the Plan. A nonexclusive list of the Retained Avoidance Claims
and an exclusive list of Trust Avoidance Claims are attached hereto as Exhibit B
and Exhibit N, respectively.
1.25 "BALLOT" means each of the ballot forms that are distributed
to holders of Claims who are included in Classes that are entitled to vote to
accept or reject the Plan.
1.26 "BANK AGENT" means the agent for the group of financial
institutions that are parties to the New Credit Facility.
1.27 "BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as
amended and codified in title 11 of the United States Code, 11 U.S.C. Sections
101-1330, as in effect on the date hereof.
1.28 "BANKRUPTCY COURT" means the United States Bankruptcy Court
for the District of Delaware.
1.29 "BANKRUPTCY RULES" means the Federal Rules of Bankruptcy
Procedure and the Official Bankruptcy Forms, as amended, the Federal Rules of
Civil Procedure, as amended, as applicable to the Chapter 11 Cases or
proceedings therein, and the Local Rules of the Bankruptcy Court, as applicable
to the Chapter 11 Cases or proceedings therein, as the case may be.
1.30 "BAR DATE" means the deadline for filing all proofs of claim
or interest established by the Bankruptcy Court as June 3, 2002, including
Claims of governmental units in accordance with section 502(b)(9) of the
Bankruptcy Code.
1.31 "BAR DATE ORDER" means that order entered by the Bankruptcy
Court on March 26, 2002, which, among other things, established the Bar Date.
1.32 "BMO" means the Bank of Montreal.
1.33 "BMO-BOWLING GREEN SYNTHETIC LEASE" means that certain
Participation Agreement dated as of April 8, 1999, among HLI, the BMO Synthetic
Lessors and the subsidiary guaranty parties thereto, together with all related
leases, mortgages, loan agreements, guarantees, guarantee and collateral
agreements, and all other related loan, lease and security documents executed
and delivered in connection therewith, as the same have been amended, amended
and restated, modified or supplemented from time to time.
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1.34 "BMO-BOWLING GREEN SYNTHETIC LEASE PROPERTY" means the land,
buildings, improvements and other property acquired by the Debtors with respect
to their facility in Bowling Green, Kentucky, with financing provided by the BMO
Synthetic Lessors pursuant to the BMO- Bowling Green Synthetic Lease.
1.35 "BMO CAPITAL" means BMO Global Capital Solutions, Inc.
1.36 "BMO-NORTHVILLE SYNTHETIC LEASE" means that certain
Participation Agreement dated as of October 1, 1998, among HLI, the BMO
Synthetic Lessors, and the subsidiary guaranty parties thereto; together with
all related leases, mortgages, loan agreements, guarantees, guarantee and
collateral agreements, and all other related loan, lease and security documents
executed and delivered in connection therewith, as the same have been amended,
amended and restated, modified or supplemented from time to time.
1.37 "BMO-NORTHVILLE SYNTHETIC LEASE PROPERTY" means the land,
buildings, improvements and other property acquired by the Debtors with respect
to their facility in Northville, Michigan, with financing provided by the BMO
Synthetic Lessors pursuant to the BMO-Northville Synthetic Lease.
1.38 "BMO SYNTHETIC LEASES" means, collectively, the BMO-Bowling
Green Synthetic Lease and the BMO-Northville Synthetic Lease.
1.39 "BMO SYNTHETIC LEASE CLAIM" means all Claims of the BMO
Synthetic Lessors arising under or pursuant to the BMO Synthetic Leases.
1.40 "BMO SYNTHETIC LEASE PROPERTIES" means, collectively, the
BMO-Bowling Green Synthetic Lease Property and the BMO-Northville Synthetic
Lease Property.
1.41 "BMO SYNTHETIC LEASE SECURED CLAIM" means that portion of the
BMO Synthetic Lease Claim that is a Secured Claim.
1.42 "BMO SYNTHETIC LESSORS" means, collectively, BMO and BMO
Capital.
1.43 "BUSINESS DAY" means any day, excluding Saturdays, Sundays and
legal holidays, on which commercial banks are open for business in New York
City.
1.44 "CAPPED ADEQUATE PROTECTION PAYMENTS" means the aggregate
amount of the Initial Adequate Protection Payment, Foreign Affiliate Adequate
Protection Payments and Quarterly Adequate Protection Payments paid by the
Debtors to the Prepetition Agent on behalf of the Prepetition Lenders subsequent
to the Petition Date as required pursuant to the DIP Facility Order and/or the
DIP Credit Agreement, which amount shall in no event exceed $39,015,729.30;
provided that the Effective Date occurs on or before July 1, 2003.
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1.45 "CASH" means legal tender of the United States.
1.46 "CAUSES OF ACTION" means any and all actions, proceedings,
causes of action, suits, accounts, controversies, agreements, promises, rights
to legal remedies, rights to equitable remedies, rights to payment and claims,
whether known, unknown, reduced to judgment, not reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured and whether asserted or assertable directly or
derivatively, in law, equity or otherwise.
1.47 "CBL" means CBL Capital Corporation.
1.48 "CBL-AIR CONDITIONER SYNTHETIC LEASE" means that certain
Master Operating Lease with CBL Capital Corporation dated as of June 15, 2000
(together with all related lease amendments, lease supplements, memoranda of
leases, and all other related loan, lease and security documents executed and
delivered in connection therewith, as the same have been amended, amended and
restated, modified or supplemented from time to time).
1.49 "CBL-OTHER EQUIPMENT SYNTHETIC LEASE" means that certain
Master Operating Lease dated October 23, 2000 (together with all related lease
amendments, lease supplements, memoranda of leases, and all other related loan,
lease and security documents executed and delivered in connection therewith, as
the same have been amended, amended and restated, modified or supplemented from
time to time).
1.50 "CBL SYNTHETIC LEASES" means, collectively, the CBL-Air
Conditioner Synthetic Lease and the CBL-Other Equipment Synthetic Lease.
1.51 "CBL SYNTHETIC LEASE CLAIM" means all Claims of CBL arising
under or pursuant to the CBL Synthetic Leases.
1.52 "CBL SYNTHETIC LEASE EQUIPMENT" means that certain equipment
acquired by the Debtors with the financing provided by CBL pursuant to the CBL
Synthetic Leases.
1.53 "CBL SYNTHETIC LEASE SECURED CLAIM" means that portion of the
CBL Synthetic Lease Claim that is a Secured Claim.
1.54 "CMI-QUAKER ALLOY" means CMI-Quaker Alloy, Inc. a Pennsylvania
corporation, debtor in possession in the above-captioned Case No. 01-11531 (MFW)
pending in the Bankruptcy Court.
1.55 "CERTIFICATE" has the meaning set forth in Section 8.4 herein.
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1.56 "CHAPTER 11 CASE(S)" means the Chapter 11 Cases of the Debtors
pending in the Bankruptcy Court.
1.57 "CLAIM" means a claim against the Debtors (or any of them),
whether or not asserted, as defined in section 101(5) of the Bankruptcy Code.
1.58 "CLAIMHOLDER" means a holder of a Claim.
1.59 "CLAIMS AGENT" means Bankruptcy Services, LLC, the Claims,
Noticing and Balloting Agent to the Debtors as approved by Bankruptcy Court on
December 7, 2001.
1.60 "CLAIMS OBJECTION DEADLINE" means that day which is one
hundred eighty (180) days after the Effective Date, as the same may be from time
to time extended by the Bankruptcy Court, without further notice to parties in
interest.
1.61 "CLASS" means a category of Claimholders or Interestholders
described in Article III of the Plan.
1.62 "CLASS 5 TRUST DISTRIBUTION AMOUNT" means, with respect to a
holder of an Allowed Senior Note Claim in Class 5, an amount equal to the
difference between the amount of such Claimholder's Allowed Senior Note Claim
together with Postpetition Interest calculated as if the Chapter 11 Case had not
been filed less (a) the value of the shares of New Common Stock (calculated
using the Emergence Share Price), (b) the Pro Rata share of Remaining Senior
Note Proceeds received by such Claimholder with respect to its Allowed Senior
Note Claim, and (c) if the Debtors implement either the Additional Equity
Modification or the Asset Transfer Modification, the equity value of the shares
of New Preferred Stock or Reorganized HLI Stock.
1.63 "CLASS 6 TRUST DISTRIBUTION AMOUNT" means, with respect to a
holder of an Allowed Subordinated Note Claim, an amount equal to the amount of
such Claimholder's Allowed Subordinated Note Claim.
1.64 "CLASS 7 TRUST DISTRIBUTION AMOUNT" means, with respect to a
holder of an Allowed General Unsecured Claim in Class 7, an amount equal to the
difference between the amount of such Claimholder's Allowed General Unsecured
Claim less (a) the value of the shares of New Common Stock (calculated using the
Emergence Share Price) received by such Claimholder with respect to its Allowed
General Unsecured Claim, and (b) if the Debtors implement either the Additional
Equity Modification or the Asset Transfer Modification, the equity value of the
shares of New Preferred Stock or Reorganized HLI Stock.
1.65 "CLASS 8A TRUST DISTRIBUTION AMOUNT" means, with respect to a
holder of an Allowed Subordinated Debt Securities Claim, an amount equal to the
amount of such Claimholder's Allowed Subordinated Debt Securities Claim.
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1.66 "CLASS 8b TRUST DISTRIBUTION AMOUNT" means, with respect to a
holder of an Allowed Subordinated Equity Securities Claim, an amount equal to
the amount of such Claim holder's Allowed Subordinated Equity Securities Claim.
1.67 "COMPROMISE EQUITY VALUE" means the estimated equity value of
the Reorganized Debtors based upon the total enterprise value used to determine
the compromise and settlement of the Prepetition Lenders' Secured Claim as
provided herein.
1.68 "CONFIRMATION DATE" means the date of entry of the
Confirmation Order.
1.69 "CONFIRMATION HEARING" means the hearing before the Bankruptcy
Court on confirmation of the Plan and related matters under section 1128 of the
Bankruptcy Code.
1.70 "CONFIRMATION HEARING NOTICE" means the notice of, among other
things, the time for submitting Ballots to accept or reject the Plan, the date,
time and place of the Confirmation Hearing and the time for filing objections to
the confirmation of the Plan.
1.71 "CONFIRMATION ORDER" means the order entered by the Bankruptcy
Court confirming the Plan.
1.72 "CONTINUING INDEMNITEES" means: Curtis J. Clawson, HLI's
President, Chief Executive Officer and Chairman of the Board; James A. Yost,
HLI's Vice President, Finance and Chief Financial Officer; Patrick C. Cauley,
Interim General Counsel and Assistant Secretary; Kenneth A. Hiltz, HLI's Chief
Restructuring Officer and former Interim Chief Financial Officer; Brian J.
O'Loughlin, HLI's Chief Information Officer; Joseph Szmadzinski, HLI's former
Interim Chief Information Officer; Herbert S. Cohen, HLI's Chief Accounting
Officer; James L. Stegemiller, President, North American Wheels; Scott T.
Harrison, President, Suspension Components; Giancarlo Dallera, President,
European Wheels; Daniel M. Sandberg, President, Powertrain and Brakes; Fred
Bentley, President, Commercial Highway and Aftermarket; John A. Salvette, Vice
President, Business Development; Edward W. Kopkowski, Vice President of
Operational Excellence; Michael J. Edie, Vice President, Materials and
Logistics; and Larry Karenko, Vice President, Human Resources and
Administration.
1.73 "CREDITORS' COMMITTEE" means the Official Committee of
Unsecured Creditors appointed pursuant to section 1102(a) of the Bankruptcy Code
in the Chapter 11 Cases.
1.74 "CURE" means the distribution of Cash, or such other property
as may be agreed upon by the parties or ordered by the Bankruptcy 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 unpaid
monetary obligations, without interest, or such other amount as may be agreed
upon by the parties, under such executory contract or unexpired lease, to the
extent such obligations are enforceable under the Bankruptcy Code and applicable
non-bankruptcy law.
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1.75 "D&O CLAIMS" means claims or Causes of Action that may be
brought by any of the Debtors and/or Reorganizing Debtors or derivatively in the
name of any of the Reorganizing Debtors against any present or former director
or officer of any Reorganizing Debtor, except to the extent released under this
Plan, and any proceeds that may be realized therefrom (regardless of the source
of payment, including any D&O Insurance).
1.76 "D&O INSURANCE" means insurance maintained by the Debtors
which, among others, covers the Debtors' officers and directors.
1.77 "DIP AGENT" means the administrative agent for the DIP Lenders
under the DIP Credit Agreement.
1.78 "DIP CREDIT AGREEMENT" means that Revolving Credit and
Guaranty Agreement, dated as of December 17, 2001, as amended from time to time
thereafter, among HLI, as borrower, the remaining Debtors, as guarantors, the
DIP Agent and the DIP Lenders, which was executed by the Debtors in connection
with the DIP Facility.
1.79 "DIP FACILITY" means the debtor-in-possession secured
financing facility provided to the Debtors by the DIP Lenders pursuant to the
DIP Credit Agreement and agreements related thereto as authorized by the
Bankruptcy Court pursuant to the DIP Facility Order.
1.80 "DIP FACILITY CLAIM" means all Superpriority Administrative
Claims of the DIP Agent and the DIP Lenders arising under or pursuant to the DIP
Facility.
1.81 "DIP FACILITY ORDER" means, collectively, the interim order
that was entered by the Bankruptcy Court on December 7, 2001, the final order
that was entered by the Bankruptcy Court on January 28, 2002, authorizing and
approving the DIP Facility and the agreements related thereto, and any
subsequent orders approving amendments to the DIP Credit Agreement.
1.82 "DIP LENDERS" means the lenders from time to time party to the
DIP Credit Agreement.
1.83 "DEFICIENCY CLAIM" means a Claim of a Claimholder that asserts
a Secured Claim against the Debtors equal to the amount by which such Claim
exceeds the secured portion thereof.
1.84 "DISALLOWED CLAIM" means a Claim or any portion thereof, that
(a) has been disallowed by a Final Order, (b) is Scheduled at zero or as
contingent, disputed or unliquidated and as to which a proof of claim bar date
has been established but no proof of claim has been timely filed or deemed
timely filed with the Bankruptcy Court pursuant to either the Bankruptcy Code or
any Final Order of the Bankruptcy Court or otherwise deemed timely filed under
applicable law, or (c) is not Scheduled and as to which a proof of claim bar
date has been set but no proof of claim has been timely filed or deemed timely
filed with the Bankruptcy Court pursuant to either the Bankruptcy
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Code or any Final Order of the Bankruptcy Court or otherwise deemed timely filed
under applicable law.
1.85 "DISBURSING AGENT" means the Reorganized Debtors or any Person
designated by the Reorganized Debtors to serve as a disbursing agent under
Article VIII of the Plan.
1.86 "DISCLOSURE STATEMENT" means the written disclosure statement
that relates to this Plan, as approved by the Bankruptcy Court pursuant to
section 1125 of the Bankruptcy Code and Bankruptcy Rule 3017, as such disclosure
statement may be amended, modified or supplemented from time to time.
1.87 "DISPUTED CLAIM" means a Claim or any portion thereof, that is
neither an Allowed Claim nor a Disallowed Claim and includes, without
limitation, Claims that (a) (i) have not been Scheduled by the Debtors or have
been Scheduled at zero, as unknown or as contingent, unliquidated or disputed
and (ii) are not the subject of an objection in the Bankruptcy Court, (b) are
the subject of a proof of claim that differs in nature, amount or priority from
the Schedules, or (c) are the subject of an objection with the Bankruptcy Court
and which objection has not been withdrawn, settled or overruled by a Final
Order of the Bankruptcy Court.
1.88 "DISTRIBUTION DATE" means the Effective Date or as soon
thereafter as is reasonably practicable.
1.89 "DISTRIBUTION RESERVE" means the shares of New Common Stock,
Series B Warrants and, if the Debtors implement either the Additional Equity
Modification or the Asset Transfer Modification, the shares of New Preferred
Stock or Reorganized HLI Stock, respectively, for distribution on account of
Allowed Class 7 Claims to be reserved pending allowance of Disputed Claims in
accordance with Section 8.10(b) of the Plan.
1.90 "DRESDNER" means Dresdner Kleinwort Benson North American
Leasing, Inc.
1.91 "DRESDNER SYNTHETIC LEASE" means that certain Lease and
Security Agreement, dated as of November 30, 1999, between HLI and Dresdner,
together with all related leases, lease supplements, memoranda of leases, and
all other related loan, lease and security documents executed and delivered in
connection therewith, as the same have been amended, amended and restated,
modified or supplemented from time to time.
1.92 "DRESDNER SYNTHETIC LEASE CLAIM" means all Claims of Dresdner
arising under or pursuant to the Dresdner Synthetic Lease.
1.93 "DRESDNER SYNTHETIC LEASE PROPERTY" means the land, buildings
and improvements located at the Debtors' facility in La Mirada, California which
were acquired by Dresdner pursuant to the Dresdner Synthetic Lease.
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1.94 "DRESDNER SYNTHETIC LEASE SECURED CLAIM" means that portion of
the Dresdner Synthetic Lease Claim that is a Secured Claim.
1.95 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, 29 U.S.C. Sections 1301-1461 (2000).
1.96 "EFFECTIVE DATE" means the Business Day on which all
conditions to the consummation of the Plan set forth in Section 12.2 hereof have
been either satisfied or waived as provided in Section 12.3 hereof and is the
day upon which this Plan is substantially consummated.
1.97 "EMERGENCE SHARE PRICE" means a per share price equal to the
Compromise Equity Value of the Reorganized Debtors, less the equity value of the
New Preferred Stock if the Additional Equity Modification is exercised, divided
by the aggregate number of shares of New Common Stock that are to be distributed
to Claimholders on the Effective Date or such other per share price as the
Bankruptcy Court may determine.
1.98 "EMPLOYEE RETENTION PLAN" means that certain Employee
Retention Plan adopted by HLI's board of directors and approved by order of the
Bankruptcy Court on May 28, 2002, as the same may be amended.
1.99 "ESTATES" means the bankruptcy estates of the Debtors created
pursuant to section 541 of the Bankruptcy Code.
1.100 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
1.101 "EXHIBIT" means an exhibit annexed to either this Plan or as
an appendix to the Disclosure Statement.
1.102 "EXHIBIT FILING DATE" means the date on which Exhibits to the
Plan shall be filed with the Bankruptcy Court, which date shall be at least ten
(10) days prior to the Voting Deadline or such later date as may be approved by
the Bankruptcy Court.
1.103 "EXISTING SECURITIES" means, collectively, the Unsecured
Notes, the Old Common Stock, the Old Common Stock Options, and all options,
warrants and rights (whether fixed or contingent, matured or unmatured, disputed
or undisputed), contractual, legal, equitable or otherwise, to acquire any of
the foregoing.
1.104 "EXPENSE ADVANCE" means the aggregate amount of $2 million,
which shall be advanced to the HLI Creditor Trust in six (6) installments, with
the first installment, in the aggregate amount of $500,000, to be advanced as
soon as practicable after the Effective Date, but in no event more than twenty
(20) days after the Effective Date, the second installment, also in the
aggregate amount of $500,000, to be advanced on the date that is one hundred
twenty (120) days after the
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Effective Date, and the remaining four (4) installments, each in the aggregate
amount of $250,000, to be advanced on the dates that are two hundred forty
(240), three hundred sixty (360), four hundred eighty (480) and six hundred
(600) days after the Effective Date, respectively.
1.105 "FACE AMOUNT" means, (a) when used in reference to a Disputed
or Disallowed Claim, the full stated liquidated amount claimed by the
Claimholder in any proof of claim timely filed with the Bankruptcy Court or
otherwise deemed timely filed by any Final Order of the Bankruptcy Court or
other applicable bankruptcy law, and (b) when used in reference to an Allowed
Claim, the allowed amount of such Claim.
1.106 "FEE AND EXPENSE ADEQUATE PROTECTION PAYMENTS" means the
payments made or to be made by the Debtors to the Prepetition Agent and
Prepetition Lenders subsequent to the Petition Date for services rendered
through the Effective Date pursuant to paragraph 14(D) of the DIP Facility Order
and the DIP Credit Agreement.
1.107 "FINAL ORDER" means an order or judgment, the operation or
effect of which has not been stayed, reversed or amended and as to which order
or judgment (or any revision, modification or amendment thereof) the time to
appeal or seek review or rehearing has expired and as to which no appeal or
petition for review or rehearing was filed or, if filed, remains pending.
1.108 "FISCAL YEAR" all references to the Company's Fiscal Year mean
the Company's year ended January 31 of the following year (e.g., "fiscal 2001"
refers to the period beginning on February 1, 2001 and ending on January 31,
2002).
1.109 "FOREIGN AFFILIATE ADEQUATE PROTECTION PAYMENTS" means the
payments in the aggregate amount of $13.4 million made by the Debtors to the
Prepetition Agent on behalf of the Prepetition Lenders subsequent to the
Petition Date pursuant to the DIP Facility Order and the DIP Credit Agreement.
1.110 "GENERAL UNSECURED CLAIM" means a Claim that (a) is not an
Administrative Claim or a Priority Tax Claim and is not classified as a Claim
included within any of Classes 1 through 6, inclusive, or in Class 8; and (b)
includes the Deficiency Claims of the Synthetic Lessors.
1.111 "GOLDEN AND HALL SETTLEMENT AGREEMENTS AND JUDGMENTS" means
the court approved settlement agreements and court judgments in the cases of
Golden, et al., v. Lucas Varity Kelsey Hayes and Hayes Lemmerz International,
Inc., Case No. 93-CB-40530 (E.D. Mich.) and Hall et al., v. Hayes Lemmerz
International - Ohio, Inc. (f/k/a Motor Wheel Corp.) and Hayes Lemmerz
International, Inc., Case No. 2:000-CV-75629 (E.D. Mich.).
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1.112 "HLI" means Hayes Lemmerz International, Inc., a Delaware
corporation, debtor in possession in the above-captioned Case No. 01-11490 (MFW)
pending in the Bankruptcy Court.
1.113 "HLI CREDITOR TRUST" means the trust which is created pursuant
to this Plan to be administered by the Trustee with the advice and/or direction
of the Trust Advisory Board, all as more specifically set forth in this Plan.
1.114 "HLI-FUNDING CORP." means Hayes Lemmerz Funding Corporation, a
Delaware corporation, debtor in possession in the above-captioned Case No.
01-11509 (MFW) pending in the Bankruptcy Court.
1.115 "HLI-FUNDING LLC" means Hayes Lemmerz Funding Company, LLC, a
Delaware limited liability corporation, debtor in possession in the
above-captioned Case No. 01-11508 (MFW) pending in the Bankruptcy Court.
1.116 "HLI-IMPORT" means Hayes Lemmerz International Import, Inc., a
Delaware corporation, debtor in possession in the above-captioned Case No.
01-11530 (MFW) pending in the Bankruptcy Court.
1.117 "HLI-NETHERLANDS" means HLI-Netherlands Holdings, Inc., a
Delaware corporation, debtor in possession in the above-captioned Case No.
01-11511 (MFW) pending in the Bankruptcy Court.
1.118 "HOLDBACK AMOUNT" means the amount equal to 20% of fees billed
to the Debtors in a given month that was retained by the Debtors as a holdback
on payment of Professional Claims pursuant to the Professional Fee Order.
1.119 "HOLDBACK ESCROW ACCOUNT" means the escrow account established
by the Disbursing Agent into which Cash equal to the Holdback Amount shall be
deposited on the Effective Date for the payment of Allowed Holdback Amounts to
the extent not previously paid or Disallowed.
1.120 "IMPAIRED" refers to any Claim or Interest that is impaired
within the meaning of section 1124 of the Bankruptcy Code.
1.121 "INDEMNIFICATION RIGHTS" means any obligations or rights of
the Debtors to indemnify, reimburse, advance or contribute to the losses,
liabilities or expenses of an Indemnitee pursuant to the Debtors' certificate of
incorporation, bylaws, or policy of providing employee indemnification, or other
applicable law or specific agreement in respect of any claims, demands, suits,
causes of action or proceedings against an Indemnitee based upon any act or
omission related to an Indemnitee's service with, for or on behalf of the
Debtors.
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1.122 "INDEMNITEE" means all present and former directors, officers,
employees, agents or representatives of the Debtors who are entitled to assert
Indemnification Rights.
1.123 "INDENTURE(S)" means, collectively, the 8.25% Notes Indenture,
the 9.125% Notes Indentures, the 11% Subordinated Notes Indenture and the Senior
Notes Indenture.
1.124 "INITIAL ADEQUATE PROTECTION PAYMENT" means the payment in the
aggregate amount of $10 million made by the Debtors to the Prepetition Agent on
behalf of the Prepetition Lenders subsequent to the Petition Date pursuant to
paragraph 14(C)(x) of the DIP Facility Order and the DIP Credit Agreement.
1.125 "INSURANCE COVERAGE" shall have the meaning ascribed to it in
Section 11.7 hereof.
1.126 "INSURED WORKERS' COMPENSATION PROGRAMS" means, collectively,
the Debtors' workers' compensation programs in all states in which they operate
other than Michigan and Ohio pursuant to which the Debtors provide their
employees with workers' compensation coverage for claims arising from or related
to their employment with the Debtors.
1.127 "INTERCOMPANY CLAIM" means a Claim by a Debtor or an Affiliate
of a Debtor against a Reorganizing Debtor.
1.128 "INTERCREDITOR AGREEMENT" means that certain Amended and
Restated Intercreditor and Lien Subordination Agreement dated as of April 8,
1999, as amended, by and among the BMO Synthetic Lessors, the Prepetition Agent
and the Prepetition Lenders.
1.129 "INTEREST" means (a) the legal, equitable, contractual and
other rights (whether fixed or contingent, matured or unmatured, disputed or
undisputed) of any Person with respect to Old Common Stock, Old Common Stock
Option, or any other equity securities of the Debtors and (b) the legal,
equitable, contractual and other rights, whether fixed or contingent, matured or
unmatured, disputed or undisputed, of any Person to purchase, sell, subscribe
to, or otherwise acquire or receive (directly or indirectly) any of the
foregoing.
1.130 "INTERESTHOLDER" means a holder of an Interest.
1.131 "INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended from time to time, and any successor laws.
1.132 "LONG TERM INCENTIVE PLAN" means that certain plan reasonably
acceptable to the Prepetition Agent, the Creditors' Committee and Apollo by
which the Reorganized Debtors shall deliver certain stock options and restricted
stock grants to certain members of management and other employees on or after
the Effective Date, all as is more specifically described on Exhibit D hereto.
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1.133 "MERGER" has the meaning set forth in Section 6.5.
1.134 "MERGER AGREEMENT" means the agreement of merger by and
between New Operating Company and HLI as described in Section 6.5 of the Plan.
1.135 "MICHIGAN WORKERS' COMPENSATION PROGRAMS" means the
self-insured workers' compensation programs maintained in Michigan by the
Debtors that are registered with the state of Michigan, Department of Consumer
and Industry Services pursuant to the Michigan Workers' Disability Compensation
Act, MCL 418.101 et seq.
1.136 "MISCELLANEOUS SECURED CLAIM" means any Secured Claim other
than a Secured Claim arising under the Synthetic Leases, the DIP Facility or the
Prepetition Credit Facility. Miscellaneous Secured Claims include Claims secured
by liens junior in priority to existing liens, whether by operation of law,
contract or otherwise, but solely to the extent of the value, as of the
Effective Date, or such other date as is established by the Bankruptcy Court, of
such Claimholder's interest in the Estates' interest in property of the Estates
after giving effect to all security interests or liens senior in priority.
1.137 "MOTOR WHEEL SERP" means that certain Motor Wheel Supplemental
Executive Retirement Plan maintained by the Debtors prior to the Petition Date.
1.138 "NET TRUST RECOVERIES" means the amount by which the aggregate
amount of Trust Recoveries exceeds the aggregate of the Expense Advance and
incurred and reasonably foreseeable Trust Expenses.
1.139 "NEW CREDIT FACILITY" means the post-Effective Date revolving
credit and term loan facilities and, potentially, a high yield or similar
securities offering, to be extended to the Reorganized Debtors as a means of
implementing the Plan as described in Section 6.13 hereof.
1.140 "NEW COMMON STOCK" means the shares of common stock of New
Holdco par value $.01 authorized under the certificate of incorporation of New
Holdco. The number of shares of New Common Stock: (a) to be made available on
the Effective Date for, and ultimately distributed to, holders of Allowed Claims
in the Chapter 11 Cases shall be 30,000,000; (b) to be distributed pursuant to
the Long Term Incentive Plan shall be the number of shares stated on Exhibit D
attached hereto; and (c) which may be issued pursuant to the Employee Retention
Plan, which amount will not exceed 309,959 shares, which is the maximum number
of shares permitted to be issued under the Employee Retention Plan; and (d) to
be distributed upon the exercise of the Warrants which shall equal 1,914,894
shares.
1.141 "NEW HOLDCO" means a newly-incorporated company that will be
the ultimate parent corporation of the Reorganized Debtors as described in
Section 6.5 of the Plan.
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1.142 "NEW HOLDING COMPANY FORMATION" has the meaning set forth in
Section 6.5 of the Plan
1.143 "NEW OPERATING COMPANY" means a newly-incorporated,
wholly-owned subsidiary of New Parent Company, as described in Section 6.5 of
the Plan.
1.144 "NEW PARENT COMPANY" means a newly-incorporated, wholly-owned
subsidiary of New Holdco, as described in Section 6.5 of the Plan.
1.145 "NEW PREFERRED STOCK" means, if the Debtors determine to
exercise the Additional Equity Modification, the shares of convertible
redeemable preferred stock issued by New Operating Company. Unless the Debtors,
the Prepetition Agent, the Creditors' Committee and Apollo agree otherwise, the
New Preferred Stock would: (a) have a liquidation preference of $10 million; (b)
be redeemable after a period of ten (10) years without penalty at 100% of
liquidation preference plus accrued dividends; (c) provide a dividend of 8% per
annum payable quarterly subject to covenants of indebtedness (otherwise accrued
on a cumulative basis) in Cash or additional New Preferred Stock at the New
Operating Company's discretion; (d) be exchangeable by the holder at any time
into shares of New Common Stock at a conversion price of 125% of the Emergence
Share Price; and (e) vote on a Pro Rata basis according to the value of the New
Preferred Stock relative to the combined equity value of the common stock of New
Operating Company and the New Preferred Stock.
1.146 "NEW SECURITIES" means, collectively, (a) the New Senior
Notes, (b) New Common Stock, (c) if Class 6 votes to accept the Plan, the Series
A Warrants, (d) the Series B Warrants, and (e) if the Debtors implement either
the Additional Equity Modification or the Asset Transfer Modification, the New
Preferred Stock or Reorganized HLI Stock, respectively.
1.147 "NEW SENIOR NOTES" means senior unsecured notes in an amount
up to $25 million that may be issued by the Debtors to the Prepetition Lenders
and which will have terms and conditions identical to the terms and conditions
of the high-yield notes which are to be issued as a component of the New Credit
Facility.
1.148 "NOTEHOLDER" means a holder of an Unsecured Note.
1.149 "OHIO WORKERS' COMPENSATION PROGRAM" means the "monopolistic"
workers' compensation insurance program in which the Debtors plants in Ohio
participate, which is funded through, and administered by, the Ohio Bureau of
Workers' Compensation.
1.150 "OLD COMMON STOCK" means shares of HLI's common stock that
were authorized, issued and outstanding prior to the Effective Date.
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1.151 "OLD COMMON STOCK OPTIONS" means all options, warrants and
rights (whether fixed or contingent, matured or unmatured, disputed or
undisputed), contractual, legal, equitable or otherwise, to acquire shares of
Old Common Stock or other equity interests in HLI.
1.152 "OTHER PRIORITY CLAIM" means a Claim entitled to priority
pursuant to section 507(a) of the Bankruptcy Code other than a Priority Tax
Claim or an Administrative Claim.
1.153 "PBGC" shall mean the Pension Benefit Guaranty Corporation, a
wholly-owned United States government corporation that administers the defined
benefit pension plan termination insurance program under Title IV of ERISA.
1.154 "PENSION PLAN" shall mean the Hayes Lemmerz International
Retirement Income Plan, a defined benefit pension plan covered by Title IV of
ERISA that HLI sponsors.
1.155 "PERIODIC DISTRIBUTION DATE" means (a) the Distribution Date,
as to the first distribution made by the Reorganized Debtors, and (b)
thereafter, (i) the first Business Day occurring one hundred twenty (120) days
after the Distribution Date and (ii) subsequently, the first Business Day
occurring one hundred twenty (120) days after the immediately preceding Periodic
Distribution Date.
1.156 "PERSON" means an individual, corporation, partnership, joint
venture, association, joint stock company, limited liability company, limited
liability partnership, trust, estate, unincorporated organization, governmental
unit (as defined in section 101(27) of the Bankruptcy Code), or other entity.
1.157 "PETITION DATE" means December 5, 2001, the date on which the
Debtors filed their voluntary petitions commencing the Chapter 11 Cases.
1.158 "PLAN" means this modified first amended joint plan of
reorganization, which is jointly proposed by the Reorganizing Debtors for the
resolution of outstanding Claims and Interests in their Chapter 11 Cases, as
such plan may be further amended from time to time in accordance with the
Bankruptcy Code and Bankruptcy Rules.
1.159 "PLAN SCHEDULES" means a schedule annexed to either this Plan
or as an appendix to the Disclosure Statement.
1.160 "POSTPETITION INTEREST" means, collectively, such interest,
reasonable fees, costs, or charges provided for under the agreements between a
Debtor and a Claimholder whose Claim is secured by property of the Estates to
the extent such items have accrued and are payable pursuant to the provisions of
the Bankruptcy Code including, without limitation, section 506(b) of the
Bankruptcy Code.
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1.161 "PREPETITION AGENT" means Canadian Imperial Bank of Commerce,
or any successor thereto, in its capacity as administrative agent under the
Prepetition Credit Agreement.
1.162 "PREPETITION CREDIT AGREEMENT" means that certain Third
Amended and Restated Secured Credit Agreement, dated as of February 3, 1999, as
amended, supplemented or otherwise modified prior to the Petition Date, by and
among HLI, as borrower, the Prepetition Agent and the Prepetition Lenders.
1.163 "PREPETITION CREDIT FACILITY" means all of the financing
accommodations evidenced by the Prepetition Credit Agreement and related
documents.
1.164 "PREPETITION CREDIT FACILITY SECURED CLAIM" means the
aggregate amount of (a) $822,840,729.30 (which amount is the sum of (i)
principal outstanding as of the Petition Date of $748,861,167.09, (ii) letters
of credit funded after the Petition Date but prior to the Effective Date, which
as of January 24, 2003, were in the amount of $1,680,551.20, (iii) accrued
expenses as of the Petition Date in the amount of $31,344.32, (iv) an agreed
adequate protection payment in the aggregate amount of $33,251,937.39; (v) the
Capped Adequate Protection Payments in the aggregate amount of $39,015,729.30;
provided that the Effective Date occurs on or before July 1, 2003), plus (b) Fee
and Expense Adequate Protection Payments.
1.165 "PREPETITION LENDERS" means those Persons holding Claims under
the Prepetition Credit Facility.
1.166 "PREPETITION LENDERS' PAYMENT AMOUNT" means the Cash
distribution to be made to the Prepetition Agent for the Prepetition Lenders on
the Effective Date, which payment is in the aggregate amount of $453,500,000
less the $1,175,000 paid to the Prepetition Agent for the Prepetition Lenders by
the Debtors on or about May 1, 2003, provided that the Effective Date occurs on
or before July 1, 2003; provided further that if the Effective Date occurs after
July 1, 2003, the Prepetition Lenders shall be entitled to retain the $1,175,000
as an additional adequate protection payment.
1.167 "PRIORITY TAX CLAIM" means a Claim entitled to priority
pursuant to section 507(a)(8) of the Bankruptcy Code.
1.168 "PRO RATA" means, from time to time, unless the Plan
specifically provides otherwise, with respect to Allowed Claims, the same
proportion that the Allowed Amount of a Claim of a Creditor in a particular
Class of a Debtor bears to the sum of the aggregate Allowed Amounts of all
Claims (including Disputed Claims, but excluding Disallowed Claims) of that
particular Class of Claims for all Debtors; provided, however, that with respect
to Senior Note Claims in Class 5 and Subordinated Note Claims in Class 6, "Pro
Rata" means the proportion that the principal face amount of the Senior Notes
held by the holder of a Claim in Class 5 bears to the aggregate principal face
amount of the Senior Notes and the proportion that the principal face amount of
the
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Subordinated Notes held by the holder of a Claim in Class 6 bears to the
aggregate principal face amount of the Subordinated Notes.
1.169 "PROFESSIONAL" means those Persons employed in the Chapter 11
Cases pursuant to sections 327 and 1103 or, in the case of AP Services, LLC
section 363, of the Bankruptcy Code or otherwise.
1.170 "PROFESSIONAL CLAIM" means a Claim of a professional retained
in the Chapter 11 Cases pursuant to sections 327 and 1103 or, in the case of AP
Services, LLC section 363, of the Bankruptcy Code or otherwise for compensation
or reimbursement of costs and expenses relating to services rendered or expenses
incurred after the Petition Date and prior to and including the Effective Date.
1.171 "PROFESSIONAL FEE ORDER" means the order entered by the
Bankruptcy Court on March 13, 2002, authorizing the interim payment of
Professional Claims subject to the Holdback Amount.
1.172 "PROJECTIONS" means the financial projections covering the
operations of the Reorganizing Debtors and the Reorganized Debtors through
Fiscal Year 2007 set forth by the Debtors in Appendix E attached to the
Disclosure Statement.
1.173 "QUARTERLY ADEQUATE PROTECTION PAYMENTS" means the payments in
the aggregate amount of $15.6 million made by the Debtors to the Prepetition
Agent on behalf of the Prepetition Lenders subsequent to the Petition Date
pursuant to paragraphs 14(C)(y) and 14(C)(z) of the DIP Facility Order and the
DIP Credit Agreement.
1.174 "RECORD DATE" means the record date for purposes of making
distributions under the Plan on account of Allowed Claims, which date shall be
March 28, 2003.
1.175 "REINSTATED" OR "REINSTATEMENT" means (a) leaving unaltered
the legal, equitable and contractual rights to which a Claim entitles the
Claimholder so as to leave such Claim Unimpaired in accordance with section 1124
of the Bankruptcy Code, or (b) notwithstanding any contractual provision or
applicable law that entitles the Claimholder to demand or receive accelerated
payment of such Claim after the occurrence of a default (i) curing any such
default that occurred before or after the Petition Date, other than a default of
a kind specified in section 365(b)(2) of the Bankruptcy Code; (ii) reinstating
the maturity of such Claim as such maturity existed before such default; (iii)
compensating the Claimholder for any damages incurred as a result of any
reasonable reliance by such Claimholder on such contractual provision or such
applicable law; and (iv) not otherwise altering the legal, equitable or
contractual rights to which such Claim entitles the Claimholder; 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
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or consolidation, "going dark" provisions, 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 cured or reinstated in order to accomplish Reinstatement.
1.176 "RELEASED PARTIES" means, collectively, the Reorganizing
Debtors, the officers of the Reorganizing Debtors as of the date immediately
prior to the Effective Date, the directors of HLI who serve on the executive
committee of HLI's board of directors serving in such capacity after June 6,
2002, the directors of the Reorganizing Debtors other than HLI who serve on the
boards of directors of Reorganizing Debtors other than HLI serving as of the
date immediately prior to the Effective Date, the Reorganized Debtors and the
officers, directors and other employees of the Reorganized Debtors serving in
such capacity after the Effective Date, other than William D. Shovers and
William S. Linski, and with respect to each of the above-named Persons, such
Person's principals, agents, financial advisors, attorneys and other
professionals. For the avoidance of doubt, this definition of "Released Parties"
does not include, among others, Ranko Cucuz, William Shovers, Ronald Kolakowski,
Jesus Bonilla-Valdex, James Jarrett, and Allen Buntin. Attached hereto as
Exhibit I is a list of those of the officers and directors of the Debtors that
are included among the Released Parties.
1.177 "REMAINING SENIOR NOTE PROCEEDS" means the $13,062,329.81 of
proceeds from the issuance of the Senior Notes retained by HLI in a separate
account.
1.178 "REORGANIZED HLI STOCK" means, in the event the Debtors
implement the Asset Transfer Modification, the outstanding common stock of
Reorganized HLI to be issued.
1.179 "REORGANIZED DEBTORS" means, collectively, the Reorganizing
Debtors from and after the Effective Date, including, where the context
requires, (a) their successor in interest by merger as contemplated herein, (b)
any entities created as part of the New Holding Company Formation, as may be
modified by either the Asset Transfer Modification or Additional Equity
Modification, and (c) any non-Debtor Subsidiaries.
1.180 "REORGANIZED . . ." means the applicable Reorganizing Debtor
from and after the Effective Date, subject to the Restructuring Transactions.
1.181 "REORGANIZING DEBTORS" means, collectively, all Debtors other
than CMI-Quaker Alloy, HLI-Funding Corp., HLI-Funding, LLC, HLI-Import and
HLI-Netherlands.
1.182 "RESTRUCTURING TRANSACTION(S)" means a dissolution or winding
up of the corporate existence of a Reorganizing Debtor or the consolidation,
merger, contribution of assets, or other transaction in which a Reorganized
Debtor merges with or transfers substantially all of its assets and liabilities
to a Reorganized Debtor or their Affiliates, on or after the Effective Date as
set forth in Appendix B to the Disclosure Statement.
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1.183 "RETAINED ACTIONS" means (a) all claims, rights of action,
suits and proceedings, whether in law or in equity, whether known or unknown,
which any Reorganizing Debtor may hold against any Person, including, without
limitation, any Causes of Action brought prior to the Petition Date, and actions
against any Persons for failure to pay for products or services provided or
rendered by the Reorganizing Debtors, (b) all claims, Causes of Action, suits
and proceedings relating to strict enforcement of the Reorganizing Debtors'
intellectual property rights, including patents, copyrights and trademarks, and
(c) all claims or Causes of Action seeking the recovery of the Reorganizing
Debtors' or the Reorganized Debtors' accounts receivable or other receivables or
rights to payment created or arising in the ordinary course of the Reorganizing
Debtors' or the Reorganized Debtors' business; provided that any and all claims
released under the Plan are excluded from the foregoing. A nonexclusive list of
the Retained Actions is set forth in Exhibit B attached hereto.
1.184 "RETAINED AVOIDANCE CLAIMS" means all Avoidance Claims other
than Trust Avoidance Claims and any and all Claims released under the Plan.
1.185 "RETIREE MEDICAL PROGRAMS" means the various programs and
collective bargaining agreements in effect as of the Petition Date pursuant to
which the Debtors are obligated to provide medical, denta1, life insurance and
prescription drug benefits to retired employees, including former union workers,
and dependents located in the United States.
1.186 "SEC" means the United States Securities and Exchange
Commission.
1.187 "SCHEDULED" means, with respect to any Claim or Interest, the
status, priority and amount, if any, of such Claim or Interest as set forth in
the Schedules.
1.188 "SCHEDULES" means the schedules of assets and liabilities and
the statements of financial affairs filed in the Chapter 11 Cases by the
Debtors, as such schedules or statements have been or may be amended or
supplemented from time to time in accordance with Bankruptcy Rule 1009 or orders
of the Bankruptcy Court.
1.189 "SECURED CLAIM" means a Claim (to include Postpetition
Interest to the extent permitted by applicable law) secured by a security
interest in or lien on property of the Estates to the extent of the value, as of
the Effective Date or such other date as is established by the Bankruptcy Court,
of such Claimholder's interest in the Estates' interest in property of the
Estates as determined by a Final Order of the Bankruptcy Court pursuant to
section 506 of the Bankruptcy Code or as otherwise agreed upon in writing by the
Debtors and the Claimholder.
1.190 "SECURITY" shall have the meaning ascribed to it in section
101(49) of the Bankruptcy Code.
1.191 "SECURITIES ACT" means the Securities Act of 1933, as amended.
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1.192 "SENIOR NOTE CLAIMS" means all Claims of Claimholders arising
under or pursuant to the Senior Notes Indenture or, when the context requires, a
portion of the Deficiency Claim of the BMO Synthetic Lessors in the amount of
$5.0 million.
1.193 "SENIOR NOTES" means the 11.875% Senior Notes due 2006, dated
as of June 15, 2001, in the aggregate principal amount of $300 million, issued
by HLI pursuant to the Senior Notes Indenture.
1.194 "SENIOR NOTES INDENTURE" means that certain indenture dated as
of June 15, 2001, as amended, supplemented or otherwise modified prior to the
Petition Date, by and between HLI and HSBC Bank USA, as successor indenture
trustee, pursuant to which HLI issued the Senior Notes.
1.195 "SENIOR NOTES INDENTURE TRUSTEE" means HSBC Bank USA in its
capacity as successor indenture trustee for the Senior Notes pursuant to the
Senior Notes Indenture.
1.196 "SERIES A WARRANTS" means the warrants to acquire 957,447
shares in the aggregate of New Common Stock at a price of $25.83 per share
exercisable for a period of three (3) years after the Effective Date to be
issued by New Holdco pursuant to the Plan, if and only if Class 6 votes to
accept the Plan, to holders of Class 6 Subordinated Note Claims pursuant to a
warrant agreement in form and substance substantially as is set forth in the
form attached hereto as Exhibit E, which agreement shall include terms (a)
providing for standard anti-dilution protection (including, but not limited to,
protection for equity issuances at below fair market value, but excluding
protection for shares of New Common Stock issued pursuant to the Long Term
Incentive Plan, Employee Retention Plan and/or the Warrants), (b) requiring the
redemption of all unexercised Series A Warrants for an amount per warrant equal
to the greater of (i) the spread value (the fair market value of the transaction
consideration less the exercise price), (ii) the value of such Series A Warrants
(determined using customary investment banking practices) at any time after
thirty (30) days, but before ninety (90) days, following a merger, consolidation
or similar transaction involving New Holdco, if the holders of New Common Stock
receive consideration in such transaction consisting of anything other than
capital stock or other securities of New Holdco or the surviving or resulting
entity in such transaction, or (iii) $.01, and (c) providing that following a
merger, consolidation or similar transaction involving New Holdco in which the
holders of New Common Stock receive consideration in such transaction consisting
of capital stock or other securities of New Holdco or the surviving or resulting
entity in such transaction, the unexercised Series A Warrants will become
exercisable for such consideration, and if such securities do not constitute
freely tradeable securities in the hands of the Series A Warrant holders, then
the holders of Series A Warrants shall be granted customary registration rights
with respect to such capital stock or other securities issuable upon exercise of
the Series A Warrants. The determination of fair market values set forth in
subparts (b)(i) and (b)(ii) shall be made by a nationally recognized independent
investment banking firm selected by New Holdco's board of directors and shall be
final, conclusive and binding upon all parties.
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1.197 "SERIES B WARRANTS" means the warrants to acquire 957,447
shares in the aggregate of New Common Stock at a price of $25.83 per share
exercisable for a period of five (5) years after the Effective Date to be issued
by New Holdco pursuant to the Plan to holders of Class 7 General Unsecured
Claims pursuant to a warrant agreement in form and substance substantially as is
set forth in the form attached hereto as Exhibit E, which agreement shall
include terms (a) providing for standard anti-dilution protection (including,
but not limited to, protection for equity issuances at below fair market value,
but excluding protection for shares of New Common Stock issued pursuant to the
Long Term Incentive Plan, Employee Retention Plan and/or the Warrants), (b)
requiring the redemption of all unexercised Series B Warrants for an amount per
warrant equal to the greater of (i) the spread value (the fair market value of
the transaction consideration less the exercise price), (ii) the fair market
value of such Series B Warrants (determined using customary investment banking
practices) at any time after thirty (30) days, but before ninety (90) days,
following a merger, consolidation or similar transaction involving New Holdco,
if the holders of New Common Stock receive consideration in such transaction
consisting of anything other than capital stock or other securities of New
Holdco or the surviving or resulting entity in such transaction, or (iii) $.01,
and (c) providing that following a merger, consolidation or similar transaction
involving New Holdco in which the holders of New Common Stock receive
consideration in such transaction consisting of capital stock or other
securities of New Holdco or the surviving or resulting entity in such
transaction, the unexercised Series B Warrants will become exercisable for such
consideration, and if such securities do not constitute freely tradeable
securities in the hands of the Series B Warrant holders, then the holders of
Series B Warrants shall be granted customary registration rights with respect to
such capital stock or other securities issuable upon exercise of the Series B
Warrants. The determination of fair market values set forth in subparts (b)(i)
and (b)(ii) shall be made by a nationally recognized independent investment
banking firm selected by New Holdco's board of directors and shall be final,
conclusive and binding upon all parties.
1.198 "SERVICER" has the meaning ascribed to it in Section 6.4
hereof.
1.199 "SHORT TERM INCENTIVE PLAN" means that Annual Performance Plan
maintained by the Debtors to compensate officers and employees by utilizing a
direct financial incentive to encourage such officers and employees to achieve
results that lead to a more effective operation of the business, administered by
the Compensation Committee of HLI's Board of Directors and approved by the
Bankruptcy Court on May 28, 2002, pursuant to its Order authorizing the Debtors
to, among other things, continue employee benefit plans and programs
postpetition.
1.200 "SOLICITATION PROCEDURES ORDER" means the order of the
Bankruptcy Court approved on February 20, 2003, pursuant to which the Bankruptcy
Court, inter alia, approved the Disclosure Statement and set various procedures
for soliciting and tabulating votes on the Plan, as the same may have been
amended or modified from time to time thereafter.
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1.201 "SUBORDINATED DEBT SECURITIES CLAIM" means a Claim subject to
subordination under section 510(b) of the Bankruptcy Code that arises from the
rescission of a purchase or sale of a debt Security of any Debtor (including,
but not limited to, Senior Notes and Subordinated Notes), or for damages arising
from the purchase or sale of such a debt Security, or for reimbursement,
indemnification, or contribution allowed under section 502 of the Bankruptcy
Code on account of such Claim.
1.202 "SUBORDINATED EQUITY SECURITIES CLAIM" means a Claim subject
to subordination under section 510(b) of the Bankruptcy Code that arises from
the rescission of a purchase or sale of an equity Security of any Debtor
(including, but not limited to, Old Common Stock and Old Common Stock Options),
or for damages arising from the purchase or sale of such an equity Security, or
for reimbursement, indemnification, or contribution allowed under section 502 of
the Bankruptcy Code on account of such Claim.
1.203 "SUBORDINATED SECURITIES CLAIM" means, collectively, all
Subordinated Debt Securities Claims and all Subordinated Equity Securities
Claims.
1.204 "SUBORDINATED NOTE CLAIMS" means, collectively, all Claims of
Claimholders arising under or pursuant to the Indentures (other than the Senior
Notes Indenture).
1.205 "SUBORDINATED NOTES" means, collectively, the 8.25%
Subordinated Notes, the 9.125% Subordinated Notes and the 11% Subordinated
Notes.
1.206 "SUBORDINATED NOTES INDENTURES" means, collectively, the 8.25%
Subordinated Notes Indenture, 9.125% Subordinated Notes Indentures and the 11%
Subordinated Notes Indenture.
1.207 "SUBORDINATED NOTES INDENTURE TRUSTEES" means, collectively,
the 8.25% Subordinated Notes Indenture Trustee, 9.125% Subordinated Notes
Indenture Trustee and the 11% Subordinated Notes Indenture Trustee.
1.208 "SYNTHETIC LEASES" mean, collectively, the BMO Synthetic
Leases, the CBL Synthetic Leases and the Dresdner Synthetic Lease.
1.209 "SYNTHETIC LEASE CLAIMS" mean, collectively, the BMO Synthetic
Lease Claim, the CBL Synthetic Lease Claim and the Dresdner Synthetic Lease
Claim.
1.210 "SYNTHETIC LEASE PROPERTY" means, collectively, the BMO
Synthetic Lease Property, the CBL Synthetic Lease Equipment, and the Dresdner
Synthetic Lease Property.
1.211 "SYNTHETIC LESSORS" means, collectively, the BMO Synthetic
Lessors, CBL and Dresdner.
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1.212 "SYNTHETIC LESSORS SECURED CLAIM" means the Secured Claims of
the BMO Synthetic Lessors, CBL and Dresdner.
1.213 "TRUST ADVISORY BOARD" means the board that is to be created
pursuant to Section 10.4 of this Plan for the purpose of advising the Trustee
with respect to decisions affecting the HLI Creditor Trust.
1.214 "TRUST AGREEMENT" means that certain Trust Agreement which is
to govern the HLI Creditor Trust, substantially in the form attached as Exhibit
C to this Plan, pursuant to which, among other things, the Trust Assets shall be
liquidated and distributed to the Claimholders in a manner consistent with the
terms of this Plan.
1.215 "TRUST ASSETS" means those assets owned by the HLI Creditor
Trust including, without limitation, the Expense Advance to be paid to the HLI
Creditor Trust pursuant to the Plan, the Trust Claims, and any and all proceeds
of the foregoing and interest accruing with respect thereto, but excluding any
and all Claims released under the Plan.
1.216 "TRUST AVOIDANCE CLAIMS" mean those of the Avoidance Claims
that are specifically listed on Exhibit N hereto and are to be transferred to
the HLI Creditor Trust; provided that Retained Avoidance Claims and any and all
claims released under the Plan are excluded from the foregoing.
1.217 "TRUST CLAIMS" means Trust Avoidance Claims and D&O Claims.
1.218 "TRUST EXPENSES" means all reasonable costs, expenses and fees
incurred by the Trustee in the administration of its duties under the Trust
Agreement, including, but not limited to, prosecution of Trust Claims,
collection of Trust Recoveries and as otherwise contemplated by the Trust
Agreement, and the reasonable and necessary expenses of the Trust Advisory Board
in the administration of their duties under the Trust Agreement.
1.219 "TRUST RECOVERIES" means any and all proceeds received by the
HLI Creditor Trust from (a) the prosecution to, and collection of, a final
judgment of a Trust Claim against a Person or (b) the settlement or other
compromise of a Trust Claim against a Person, but does not include the Expense
Advance.
1.220 "TRUSTEE" means the trustee of the HLI Creditor Trust as
contemplated by the Trust Agreement.
1.221 "UNIMPAIRED" refers to any Claim which is not Impaired.
1.222 "UNSECURED NOTES" means, collectively, the Senior Notes and
the Subordinated Notes.
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1.223 "VOTING DEADLINE" means the deadline for voting on the Plan,
as the same may from time to time be modified, set forth in the Solicitation
Procedures Order.
1.224 "WARRANTS" means, collectively, the Series A Warrants and
Series B Warrants.
1.225 "WORKERS' COMPENSATION PROGRAMS" means, collectively, the
Insured Workers' Compensation Programs, the Ohio Workers' Compensation Program
and the Michigan Workers' Compensation Programs.
C. RULES OF INTERPRETATION
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, (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, (d)
the words "herein" and "hereto" refer to the Plan in its entirety rather than to
a particular portion of the Plan, (e) captions and headings to Articles and
Sections are inserted for convenience of reference only and are not intended to
be a part of or to affect the interpretation of the Plan, and (f) the rules of
construction set forth in section 102 of the Bankruptcy Code and in the
Bankruptcy Rules shall apply. In the event there are any inconsistencies between
the Plan, the Plan Schedules or any other document contemplated herein to be
created, executed or implemented pursuant to the Plan, the provisions of the
Plan shall control. To the extent there is a conflict between the contents of
the Disclosure Statement and the terms of the Plan, the terms of the Plan shall
control.
D. COMPUTATION OF TIME
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.
E. EXHIBITS
All Exhibits are incorporated into and are a part of the Plan as if set
forth in full herein and, to the extent not annexed hereto, such Exhibits shall
be filed with the Bankruptcy Court on or before the Exhibit Filing Date. After
the Exhibit Filing Date, copies of Exhibits can be obtained upon written request
to Skadden, Arps, Slate, Meagher & Flom (Illinois), 333 W. Wacker Drive,
Chicago, Illinois 60606 (Attn: J. Eric Ivester, Esq.), counsel to the Debtors,
by downloading such exhibits from the Court's website at www.deb.uscourts.gov.,
or on the Claims Agent's Internet website, www.bsillc.com. To the extent any
Exhibit is inconsistent with the terms of the Plan, unless otherwise ordered by
the Bankruptcy Court, the Plan shall control.
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ARTICLE II
ADMINISTRATIVE EXPENSES
AND PRIORITY TAX CLAIMS
2.1 ADMINISTRATIVE CLAIMS. Subject to the provisions of Articles
VIII and IX of this Plan, on the first Periodic Distribution Date occurring
after the later of (a) the date an Administrative Claim becomes an Allowed
Administrative Claim or (b) the date an Administrative Claim becomes payable
pursuant to any agreement between a Debtor (or a Reorganized Debtor) and the
holder of such Administrative Claim, an Allowed Administrative Claimholder in
any Reorganizing Debtor's Chapter 11 Case shall receive, in full satisfaction,
settlement, release, and discharge of and in exchange for such Administrative
Claim, (x) Cash equal to the unpaid portion of such Allowed Administrative Claim
or (y) such other treatment as to which the Reorganizing Debtors (or the
Reorganized Debtors) and such Claimholder shall have agreed upon in writing;
provided, however, that Allowed Administrative Claims with respect to
liabilities incurred by the Reorganizing Debtors in the ordinary course of
business during the Chapter 11 Cases shall be paid in the ordinary course of
business in accordance with the terms and conditions of any agreements relating
thereto.
2.2 PRIORITY TAX CLAIMS. With respect to each Allowed Priority Tax
Claim in any Reorganizing Debtor's Chapter 11 Case, at the sole option of the
Reorganizing Debtors (or the Reorganized Debtors after the Effective Date), the
Allowed Priority Tax Claimholder shall be entitled to receive on account of such
Priority Tax Claim, in full satisfaction, settlement, release, and discharge of
and in exchange for such Priority Tax Claim, (a) equal Cash payments made on the
last Business Day of every three (3) month period following the Effective Date,
over a period not exceeding six (6) years after the assessment of the tax on
which such Claim is based, totaling the principal amount of such Claim plus
simple interest on any outstanding balance from the Effective Date calculated at
a fixed rate of 5% per annum from the Effective Date, (b) such other treatment
agreed to by the Allowed Priority Tax Claimholder and the Reorganizing Debtors
(or the Reorganized Debtors), provided such treatment is on more favorable terms
to the Reorganizing Debtors (or the Reorganized Debtors after the Effective
Date) than the treatment set forth in subsection (a) above, or (c) payment in
full in Cash; provided, however, that the treatment described in subsection
2.2(c) shall not be selected without the consent of the Prepetition Agent, which
shall not be unreasonably withheld.
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ARTICLE III
CLASSIFICATION OF CLAIMS AND INTERESTS
3.1 INTRODUCTION.
Pursuant to section 1122 of the Bankruptcy Code, set forth below is a
designation of classes of Claims against and Interests in the Reorganizing
Debtors. A Claim or Interest is placed in a particular Class for purposes of
voting on the Plan and of receiving distributions pursuant to the Plan only to
the extent that such Claim or Interest is an Allowed Claim or an Allowed
Interest in that Class and such Claim or Interest has not been paid, released or
otherwise settled prior to the Effective Date. In accordance with section
1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims
of the kinds specified in sections 507(a)(1) and 507(a)(8) of the Bankruptcy
Code have not been classified, and their treatment is set forth in Article II
herein.
This Plan, though proposed jointly, constitutes a separate plan
proposed by each Reorganizing Debtor. Therefore, except as expressly specified
herein, the classifications set forth below shall be deemed to apply separately
with respect to each plan proposed by each Reorganizing Debtor.
3.2 UNIMPAIRED CLASS OF CLAIMS. Class 1 consists of all Other
Priority Claims. Class 1 is deemed to have accepted the Plan and, therefore, is
not entitled to vote.
3.3 IMPAIRED CLASSES OF CLAIMS. Classes 2, 3a, 3b, 3c, 4, 5, 6, 7
are entitled to vote on the Plan. Classes 8a and 8b are deemed to have rejected
the Plan and, therefore, are not entitled to vote.
(a) CLASS 2 - PREPETITION CREDIT FACILITY SECURED CLAIMS.
Class 2 consists of the Prepetition Credit Facility Secured Claims. This Class
is applicable only to the Chapter 11 Cases of HLI and the Debtors that
guaranteed HLI's obligations under the Prepetition Credit Facility.
(b) CLASS 3 - SYNTHETIC LESSOR SECURED CLAIMS. Class 3
consists of separate subclasses for the Synthetic Lessor Secured Claims. Each
subclass is deemed to be a separate Class for all purposes under the Bankruptcy
Code. The unsecured portion of the Claims of the Synthetic Lessors shall be
classified and treated as Class 7 Claims against the appropriate Debtor.
(1) CLASS 3A - BMO SYNTHETIC LEASE SECURED CLAIMS.
Class 3a consists of BMO Synthetic Lease Secured Claims. This Class is
applicable only to HLI and the Debtors that guaranteed HLI's obligations under
the BMO Synthetic Leases.
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(2) CLASS 3B - CBL SYNTHETIC LEASE SECURED CLAIMS.
Class 3b consists of the CBL Synthetic Lease Secured Claims. This Class is
applicable only to the Chapter 11 Cases of HLI and the Debtors that guaranteed
HLI's obligations under the CBL-Other Equipment Synthetic Lease.
(3) CLASS 3C - DRESDNER SYNTHETIC LEASE SECURED
CLAIMS. Class 3c consists of the Dresdner Synthetic Lease Secured Claims. This
Class is applicable only to the Chapter 11 Case of HLI.
(c) CLASS 4 - MISCELLANEOUS SECURED CLAIMS. Class 4
consists of Miscellaneous Secured Claims that may exist against a particular
Reorganizing Debtor.
(d) CLASS 5 - SENIOR NOTE CLAIMS. Class 5 consists of all
Senior Note Claims and a portion of the Deficiency Claim of the BMO Synthetic
Lessors in the amount of $5.0 million. This Class is applicable only to the
Chapter 11 Cases of HLI and the Debtors that guaranteed HLI's obligations under
the Senior Notes and the applicable Indenture.
(e) CLASS 6 - SUBORDINATED NOTE CLAIMS. Class 6 consists
of all Subordinated Note Claims. This Class is applicable only to the Chapter 11
Cases of HLI and the Debtors that guaranteed HLI's obligations under the
Subordinated Notes and the applicable Indenture.
(f) CLASS 7 - GENERAL UNSECURED CLAIMS. Class 7 consists
of all General Unsecured Claims that may exist against a particular Debtor.
(g) CLASS 8 - SUBORDINATED SECURITIES CLAIMS. Class 8
consists of two separate subclasses for the Subordinated Securities Claims. Each
subclass is deemed to be a separate Class for all purposes under the Bankruptcy
Code. Each subclass is applicable only to the Chapter 11 Case of HLI. Both
subclasses are deemed to have rejected the Plan and, therefore, neither subclass
is entitled to vote.
(1) CLASS 8a - SUBORDINATED DEBT SECURITIES
CLAIMS. Class 8a consists of all of all Subordinated Debt Securities Claims that
may exist against a particular Debtor.
(2) CLASS 8b - SUBORDINATED EQUITY SECURITIES
CLAIMS. Class 8b consists of all of all Subordinated Equity Securities Claims
that may exist against a particular Debtor.
3.4 IMPAIRED CLASS OF INTERESTS. Class 9 consists of Interests in
the HLI Chapter 11 Case. Class 9 is deemed to have rejected this Plan and,
therefore, is not entitled to vote.
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ARTICLE IV
PROVISIONS FOR TREATMENT OF
CLAIMS AND INTERESTS
4.1 CLASS 1 (OTHER PRIORITY CLAIMS). Except as otherwise provided
in and subject to Section 8.10 herein, on the first Periodic Distribution Date
occurring after the later of (a) the date an Other Priority Claim becomes an
Allowed Other Priority Claim or (b) the date an Other Priority Claim becomes
payable pursuant to any agreement between a Reorganizing Debtor (or a
Reorganized Debtor) and the holder of such other Priority Claim, the holder of
an Allowed Other Priority Claim shall receive, in full satisfaction, settlement,
release, and discharge of and in exchange for such Other Priority Claim, (x)
Cash equal to the amount of such Allowed Other Priority Claim or (y) such other
treatment as to which the applicable Reorganizing Debtor (or Reorganized Debtor)
and such Claimholder shall have agreed in writing.
4.2 CLASS 2 (PREPETITION CREDIT FACILITY SECURED CLAIMS). The
consideration to be paid to the Prepetition Lenders and the release and waivers
made by and in favor of the Prepetition Lenders as provided in the Plan
represent a compromise and settlement, pursuant to Section 1123(b)(3) of the
Bankruptcy Code and Bankruptcy Rule 9019, of the Prepetition Credit Facility
Secured Claims, including such Claims relating to alleged lien perfection
issues. In the event the Plan is not confirmed or the Effective Date does not
occur by July 1, 2003, or such later date as agreed by the Debtors, the
Prepetition Agent, the Creditors' Committee and Apollo, such compromise and
settlement shall be deemed to be null and void and nothing set forth in the Plan
shall be deemed to alter, affect or limit the rights of any party. The treatment
to be provided to the Prepetition Lenders under the Plan in full satisfaction,
settlement and discharge of and in exchange for their Allowed Prepetition Credit
Facility Secured Claim, is as follows:
(a) On the Effective Date, the Prepetition Credit
Facility Secured Claim shall be deemed an Allowed Claim and each holder of an
Allowed Prepetition Credit Facility Secured Claim shall receive its pro rata
share of (i) the Prepetition Lenders' Payment Amount, (ii) $25 million of New
Senior Notes or in lieu thereof, at the sole discretion of the Debtors, either
Cash in the aggregate amount of $25 million or a combination of Cash and New
Senior Notes in the aggregate amount of $25 million based upon the principal
amount of New Senior Notes, (iii) 15,930,000 shares of New Common Stock (subject
to dilution only by shares of New Common Stock issued pursuant to or on account
of the Employee Retention Plan, the Long Term Incentive Plan and/or the
Warrants), and (iv) if the Debtors implement either the Additional Equity
Modification or the Asset Transfer Modification, 53.1% of the shares of New
Preferred Stock or 53.1% shares of Reorganized HLI Stock, respectively. These
distributions shall be made by the Disbursing Agent directly to the Prepetition
Agent for immediate transmittal to the Prepetition Lenders without deduction,
setoff or recoupment for anything except for reasonable actual out of pocket
expenses of the Prepetition Agent for expenses incurred and outstanding prior to
the Effective Date.
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(b) On the Effective Date, or as soon thereafter as
practicable, the Reorganizing Debtors shall replace, cash collateralize or
provide back to back letters of credit for letters of credit issued under the
Prepetition Credit Facility that are outstanding as of the Effective Date.
(c) As of the Effective Date, provided that the Effective
Date occurs on or prior to July 1, 2003, the Prepetition Credit Facility Secured
Claim shall be deemed an Allowed Claim in the aggregate amount of
$822,840,729.30 exclusive of outstanding letters of credit and without deduction
for the Fee and Expense Adequate Protection Payments.
(d) Each Prepetition Lender shall be entitled to retain
that portion of the Capped Adequate Protection Payments and prepetition interest
paid pursuant to the DIP Facility Order previously received by such Prepetition
Lender.
(e) Each Prepetition Lender shall be deemed to have
waived its right to any further Quarterly Adequate Protection Payments and/or
Foreign Affiliate Adequate Protection Payments that may come due subsequent to
January 31, 2003, but prior to July 1, 2003. In addition to amounts provided for
in satisfaction of the Prepetition Credit Facility Secured Claim as set forth in
this Section 4.2(e), the Prepetition Agent and the Prepetition Lenders shall be
entitled to continue to receive Fee and Expense Adequate Protection Payments
accruing through the Effective Date and to retain all previously received Fee
and Expense Adequate Protection Payments without applying such amounts to reduce
the Prepetition Credit Facility Secured Claim; provided, however, that any
waivers or releases provided herein shall be deemed null and void in the event
the Effective Date does not occur on or prior to July 1, 2003 or such other date
as the Prepetition Agent may agree in writing.
4.3 CLASS 3a (BMO SYNTHETIC LEASE SECURED CLAIMS). On the
Effective Date, or as soon thereafter as practicable, the Allowed BMO Synthetic
Lease Secured Claims, in full satisfaction, settlement, release and discharge of
and in exchange for such Allowed BMO Synthetic Lease Secured Claims, shall be
accorded the following treatment:
(a) BMO SYNTHETIC LEASE SECURED CLAIMS WITH RESPECT TO
THE BMO-BOWLING GREEN SYNTHETIC LEASE. (i) Except as the BMO Synthetic Lessors
and the Debtors shall have otherwise agreed, the Debtors shall surrender
possession of the BMO-Bowling Green Synthetic Lease Property as of the Effective
Date to permit a sale of the BMO-Bowling Green Synthetic Lease Property. The
Debtors' court approved sales agent, with full cooperation of the Debtors, will
market the BMO-Bowling Green Synthetic Lease Property for sale and the Debtors
will carry the cost of maintenance and preservation of the BMO-Bowling Green
Synthetic Lease Property during the sale process and shall be reimbursed from
any net proceeds from such sale in excess of $6 million, if any. The Debtors'
court approved sales agent will keep BMO on behalf of the BMO Synthetic Lessors
fully apprised of the marketing process, including providing copies of the
marketing materials, listing agreement, and expressions of interest and seeking
approval from BMO on behalf of the BMO Synthetic Lessors of any offers to
purchase. Holdover rent, if any, to be paid beginning on the first
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Business Day of the calendar month following the Effective Date, on a monthly
basis, in the amount of $26,000 ("Holdover Rent") through the date which the
Debtors vacate the BMO-Bowling Green Synthetic Lease Property. In the event that
the Debtors receive a bona fide offer to purchase the BMO-Bowling Green
Synthetic Lease Property greater than or equal to $3 million and the property
has been listed for sale for a period of at least nine months commencing from
the earlier of the Effective Date or the date such property is listed for sale,
and such offer is rejected by the BMO Synthetic Lessors, the cost of maintenance
and preservation of the BMO-Bowling Green Synthetic Lease Property shall shift
to the BMO Synthetic Lessors.
(ii) Except as the BMO Synthetic Lessors and the
Debtors shall have otherwise agreed, the value of the BMO-Bowling Green
Synthetic Lease Property for Plan purposes shall be $6.0 million as of the
Effective Date (the "Kentucky Property Value"). The net proceeds realized from
the sale of the BMO-Bowling Green Synthetic Lease Property (after deducting all
applicable costs of sale, including but not limited to marketing costs,
commissions, maintenance costs, and security costs relating to the BMO-Bowling
Green Synthetic Lease Property) shall be retained by the BMO Synthetic Lessors,
including any good faith or earnest money deposit which shall be deposited in an
account subject to the lien and security interest of the BMO Synthetic Lessors
and paid in cash to BMO on behalf of the BMO Synthetic Lessors on or before
thirty (30) days after the closing date of any sale of the BMO-Bowling Green
Synthetic Lease Property. As part of the settlement and compromise and in
consideration for the settlement with the BMO Synthetic Lessors, the Debtors
shall also convey, or cause CBL to convey, a first and sole lien and security
interest to the BMO Synthetic Lessors in the CBL Synthetic Lease Equipment
located on the BMO-Bowling Green Synthetic Lease Property and presently the
subject of the CBL-Air Conditioner Synthetic Lease, and such shall be additional
mortgaged property and collateral to be sold for the benefit of the BMO
Synthetic Lessors. The BMO-Bowling Green Synthetic Lease Property shall be sold
for the benefit of the BMO Synthetic Lessors as a secured lender with the full
cooperation and assistance of the Debtors. The proceeds of the sale shall be
paid to BMO on behalf of the BMO Synthetic Lessors less sale costs and such
other costs as set forth herein. The Debtors shall be responsible to pay any
property tax and mechanics liens on the BMO-Bowling Green Synthetic Lease
Property to the party or authority entitled to receive such payment; provided,
however, that if the Debtors dispute in good faith such property taxes or
mechanics liens, the Debtors shall contest them by appropriate proceedings and
shall provide an indemnity, in form and substance acceptable to the title
company, with respect to such property taxes and mechanics liens. The payment of
the net sale proceeds realized from the sale of the BMO-Bowling Green Synthetic
Lease Property shall be in full satisfaction and discharge of the BMO Synthetic
Lease Secured Claim on account of the BMO-Bowling Green Synthetic Lease
Property.
(b) BMO SYNTHETIC LEASE SECURED CLAIMS WITH RESPECT TO
THE BMO-NORTHVILLE SYNTHETIC LEASE. (i) Except as the BMO Synthetic Lessors and
the Debtors shall have otherwise agreed, all Allowed BMO Synthetic Lease Secured
Claims arising under the BMO-Northville Synthetic Lease shall be satisfied in
full, settled, released, and discharged and exchanged for rights and claims
against the Reorganized Debtors under the Amended and Restated
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BMO-Northville Synthetic Lease (a form of which will be filed by the Exhibit
Filing Date as the amended and restated Exhibit J); provided, however, that (A)
the principal amount of the Amended and Restated BMO-Northville Synthetic Lease
shall be $22.6 million, (B) the interest rate of the Amended and Restated
BMO-Northville Synthetic Lease shall be the greater of LIBOR + 400 basis points
and 5%, (C) the term of the Amended and Restated BMO-Northville Synthetic Lease
shall be 5 years (subject to a purchase option described in clause (I) below)
with two one year renewal options exercisable solely at the option of the
Debtors, (D) the principal shall be amortized in an amount equal to 1% of the
principal amount each year during the term of the Amended and Restated
BMO-Northville Synthetic Lease, (E) a first mortgage and security interest on
the BMO-Northville Synthetic Lease Property shall continue in favor of the BMO
Synthetic Lessors, (F) no junior liens or security interests shall be created
under the Amended and Restated BMO-Northville Synthetic Lease, (G) subsidiary
guarantees shall be made available but only to the extent permitted by the
lenders under the New Credit Facility (which consent the Debtors have obtained
in principle), (H) the covenants in the Amended and Restated BMO-Northville
Synthetic Lease shall be in keeping with those typically provided in single
property mortgage financing transactions, and (I) the Amended and Restated
BMO-Northville Synthetic Lease shall provide that Reorganized HLI shall have (1)
the right to purchase the BMO-Northville Synthetic Lease Property at any time
during the term of the Amended and Restated BMO-Northville Synthetic Lease by
payment of the remaining principal amount thereof and any accrued and unpaid
interest thereon and any expenses that the BMO Synthetic Lessors paid on behalf
of the Debtors that are reimbursable under the Amended and Restated
BMO-Northville Synthetic Lease and (2) the obligation to purchase the
BMO-Northville Synthetic Lease Property upon expiration of the Amended and
Restated BMO-Northville Synthetic Lease by payment of the remaining principal
amount thereof and any accrued and unpaid interest thereon and any expenses that
the BMO Synthetic Lessors paid on behalf of the Debtors that are reimbursable
under the Amended and Restated BMO-Northville Synthetic Lease.
(ii) Reorganized HLI shall (i) take over the
defense of the Wayne County civil action pending in the U.S. District Court for
the Eastern District of Michigan seeking payment of approximately $747,000 for
costs of property improvements of the BMO-Northville Synthetic Lease Property,
and (ii) indemnify the BMO Synthetic Lessors for any costs, including attorneys
fees, which were incurred by the BMO Synthetic Lessors prior to the date that
Reorganized HLI assumed the defense of the action, and any amounts payable to
Wayne County and/or the BMO Synthetic Lessors in connection with such action.
Reorganized HLI shall reimburse the BMO Synthetic Lessors for any indemnified
costs in the form of cash payment to be made by Reorganized HLI to BMO on behalf
of the BMO Synthetic Lessors within 30 days of receipt of demand for
indemnification from the BMO Synthetic Lessors, any such obligation to be
treated as an additional part of the secured obligation to the BMO Synthetic
Lessors or Administrative Claim against Reorganized HLI.
(c) ALLOWED UNSECURED CLAIM. The BMO Synthetic Lessors
shall be deemed to have an Allowed General Unsecured Claim in the amount of $8.1
million, provided that the BMO Synthetic Lessors shall assign $5.0 million of
such Claim to the holders of the Class 5 Senior Note
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Claims in exchange for treatment as the holder an Allowed Claim in the amount of
$5.0 million in Class 5. The remaining Claim of the BMO Synthetic Lessors in the
amount of $3.1 million shall be treated as a Class 7 General Unsecured Claim in
accordance with the terms of the Plan.
(d) ADEQUATE PROTECTION/ADMINISTRATIVE CLAIM. In
consideration of settlement of Claims and issues relating to payment for use or
adequate protection or rent due to the BMO Synthetic Lessors, the Debtors shall
pay to BMO on behalf of the BMO Synthetic Lessors, a sum equal to 46.5% of
prepetition and postpetition interest through the Effective Date at the
nondefault rate payable in three (3) equal payments on (i) a date no later than
twenty (20) days after the Effective Date, (ii) on the first Business Day
following the 90th day after the Effective Date, and (iii) on the first Business
Day following the 120th day after the Effective Date. In addition, the Debtors
shall reimburse the BMO Synthetic Lessors for up to $400,000 on account of legal
fees incurred by the BMO Synthetic Lessors in connection with the Chapter 11
Cases on a date no later than 20 days following the Effective Date. The BMO
Synthetic Lessors shall provide actual invoices detailing such legal fees to the
Debtors for their review and approval. These payments shall be deemed cash
payments constituting adequate protection or use of property and such payments
shall be entitled to an Administrative Claim status.
4.4 CLASS 3b (CBL SYNTHETIC LEASE SECURED CLAIMS). On the
Effective Date, or as soon thereafter as practicable, the Allowed CBL Synthetic
Lease Secured Claims, in full satisfaction, settlement, release and discharge of
and in exchange for such Allowed CBL Synthetic Lease Secured Claims, shall be
accorded the following treatment:
(a) CBL SYNTHETIC LEASE SECURED CLAIMS WITH RESPECT TO
THE CBL-AIR CONDITIONER SYNTHETIC LEASE. On the Effective Date, except as CBL
and the Debtors shall have otherwise agreed, all CBL Synthetic Lease Secured
Claims arising under the CBL-Air Conditioner Synthetic Lease shall be deemed to
be Allowed Claims in the aggregate amount of $650,000 and CBL shall receive in
full satisfaction, settlement, release, and discharge of and in exchange for the
CBL Synthetic Lease Secured Claims with respect to the CBL-Air Conditioner
Synthetic Lease (i) Cash in the aggregate amount of $650,000 and (ii) Allowed
General Unsecured Claim in an amount equal to $1.05 million. CBL's Allowed
General Unsecured Claim provided for under this Section 4.4(a) shall be treated
as a Class 7 General Unsecured Claim in accordance with the terms of the Plan.
(b) CBL SYNTHETIC LEASE SECURED CLAIMS WITH RESPECT TO
THE CBL-OTHER EQUIPMENT SYNTHETIC LEASE. (i) On the Effective Date, except as
CBL and the Debtors shall have otherwise agreed, all CBL Synthetic Lease Secured
Claims arising under the CBL-Other Equipment Synthetic Lease shall be deemed to
be Allowed Claims in the aggregate amount of $23 million and CBL shall receive
in full satisfaction, settlement, release, and discharge of and in exchange for
the CBL Synthetic Lease Secured Claims with respect to the CBL Other Equipment
Synthetic Lease a secured promissory note in the principal amount of $23 million
issued under the New Credit Facility to be entered into by the Reorganized
Debtors on the effective date of the Plan, which promissory
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note will have the same terms and be secured by the same collateral that will
secure the Term B Loans under the New Credit Facility.
(ii) Except as CBL and the Debtors shall have
otherwise agreed, CBL, as holder of Allowed CBL Synthetic Lease Secured Claims
arising under the CBL-Other Equipment Synthetic Lease, shall be entitled to an
Allowed General Unsecured Claim in an amount equal to $2.1 million. CBL's
Allowed General Unsecured Claim provided for under this Section 4.4(b)(ii) shall
be treated as a Class 7 General Unsecured Claim in accordance with the terms of
the Plan.
4.5 CLASS 3c (DRESDNER SYNTHETIC LEASE SECURED CLAIMS). Except as
Dresdner and the Debtors shall have otherwise agreed, on the Effective Date, all
Allowed Dresdner Synthetic Lease Secured Claims shall be, in the discretion of
the Reorganized Debtors, either: (a) satisfied in full, settled, released, and
discharged and exchanged for rights and claims against the Reorganized Debtors
under the Amended and Restated Dresdner Synthetic Lease (a form of which is
attached hereto as Exhibit L); provided, however, that (i) the principal amount
of the Amended and Restated Dresdner Synthetic Lease shall be approximately
$8.35 million, (ii) the interest rate shall be LIBOR + 150 basis points, (iii)
the Amended and Restated Dresdner Synthetic Lease shall have a term of five (5)
years from the Effective Date, (iv) 50% of the principal amount outstanding
under the Amended and Restated Dresdner Synthetic Lease shall commence
amortization on a straight-line basis on December 1, 2004 and continue
amortizing through the remaining term thereof, and (v) the Amended and Restated
Dresdner Synthetic Lease shall provide that Reorganized HLI shall have (A) the
right to purchase the Dresdner Synthetic Lease Property at anytime during the
term by payment of the remaining principal amount thereof and any accrued and
unpaid interest thereon and (B) the obligation to purchase the Dresdner
Synthetic Lease Property upon expiration of the Amended and Restated Dresdner
Synthetic Lease by payment of the remaining principal amount thereof and any
accrued and unpaid interest thereon; or (b) paid in full in Cash, subject to the
consent of the Prepetition Agent, the Creditors' Committee and Apollo, which
consent shall not be unreasonably withheld.
4.6 CLASS 4 (MISCELLANEOUS SECURED CLAIMS). Except as otherwise
provided in and subject to Section 8.10 herein, and unless the holder of an
Allowed Miscellaneous Secured Claim and the Reorganizing Debtors shall have
otherwise agreed, the legal, equitable, and contractual rights of Allowed
Miscellaneous Secured Claimholders with respect to Allowed Miscellaneous Secured
Claims shall be Reinstated on the Effective Date. The Debtors' failure to object
to such Miscellaneous Secured Claims in the Chapter 11 Cases shall be without
prejudice to the Reorganized Debtors' right to contest or otherwise defend
against such Claims in the Bankruptcy Court or other appropriate non-bankruptcy
forum (at the option of the Reorganizing Debtors or the Reorganized Debtors, as
the case may be) when and if such Claims are sought to be enforced by the
Miscellaneous Secured Claimholder. Notwithstanding section 1141(c) or any other
provision of the Bankruptcy Code, all prepetition liens on property of the
Reorganizing Debtors held by or on behalf of the Miscellaneous Secured
Claimholders with respect to such Claims shall survive the Effective
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Date and continue in accordance with the contractual terms of the underlying
agreements with such Claimholders until, as to each such Claimholder, the
Allowed Claims of such Miscellaneous Secured Claimholder are paid in full,
subject to the consent of the Prepetition Agent, the Creditors' Committee and
Apollo, which consent shall not be unreasonably withheld.
4.7 CLASS 5 (SENIOR NOTE CLAIMS). On the Effective Date, the
Senior Note Claims shall be deemed Allowed Claims in the aggregate amount of
$316,130,000. On the first Periodic Distribution Date, the Disbursing Agent
shall deliver directly to the Senior Notes Indenture Trustee for distribution to
each holder of Senior Notes as of the Record Date pursuant to the Senior Notes
Indenture, or with respect to the BMO Synthetic Lessors, directly to the BMO
Synthetic Lessors, in full satisfaction, settlement, release, and discharge of
and in exchange for each Senior Note Claim a distribution of: (a) such
Claimholder's Pro Rata amount of 13,470,000 shares of New Common Stock (subject
to dilution only by shares of New Common Stock issued pursuant to or on account
of the Employee Retention Plan, the Long Term Incentive Plan, the Series A
Warrants and/or the Series B Warrants); (b) such Claimholders' Pro Rata share of
the Remaining Senior Note Proceeds; (c) such Claimholder's Pro Rata share of the
distributions to be made on a $5.0 million portion of the BMO Synthetic Lessors'
Allowed Class 7 General Unsecured Claim all as is more specifically described in
Section 4.3(c) of this Plan; (d) with respect to Senior Notes only, subject to
certain repayment obligations to be owed by the HLI Creditor Trust to the
Reorganized Debtors as set forth in Section 10.6 herein, Cash in the aggregate
amount of $250,000, and (e) if the Debtors implement either the Additional
Equity Modification or the Asset Transfer Modification, such Claimholder's Pro
Rata amount of either 44.9% of the shares of New Preferred Stock or 44.9% of the
shares of Reorganized HLI Stock, respectively. A holder of an Allowed Senior
Note Claim also shall have a right to receive distributions from the HLI
Creditor Trust of such Claimholder's Pro Rata share of one-third (1/3) of the
Net Trust Recoveries, subject to certain repayment obligations to be owed by the
HLI Creditor Trust to the Reorganized Debtors as set forth in Section 10.6
herein; provided, however, that the amount of Net Trust Recoveries payable to a
holder of an Allowed Senior Note Claim shall not exceed such Claimholder's Class
5 Trust Distribution Amount. In the event that all Class 5 Trust Distribution
Amounts are fully paid and satisfied, the remaining Net Trust Recoveries, if
any, payable to holders of Allowed Senior Note Claims shall be paid on a Pro
Rata basis to holders of Allowed Subordinated Note Claims and Allowed General
Unsecured Claims.
4.8 CLASS 6 (SUBORDINATED NOTE CLAIMS). If, and only if, Class 6
votes to accept the Plan, on the Effective Date, the Subordinated Note Claims
shall be deemed Allowed Claims in the aggregate amount of $885,919,552. The
subordination provisions in the Indentures shall be given effect so that the
distributions to which holders of Subordinated Note Claims would otherwise be
entitled to receive will be distributed directly to the holders of Prepetition
Credit Facility Secured Claims and Senior Note Claims until such Claims are paid
in full together with such interest, fees and other charges which such
Claimholders may be entitled to receive, to be determined as if the Chapter 11
Cases had not been commenced. Notwithstanding the foregoing, if Class 6 votes to
accept the Plan, the subordination provisions in the Indentures shall be deemed
to be waived (only to the extent necessary) for the limited purpose of allowing
the holders of Allowed Subordinated
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Notes Claims to receive distributions of Series A Warrants and Net Trust
Recoveries as set forth in this Section 4.8. If and only if Class 6 votes to
accept the Plan, on the first Periodic Distribution Date, the Disbursing Agent
shall deliver directly to the Subordinated Notes Indenture Trustees for
distribution to each holder of Subordinated Notes pursuant to the Subordinated
Notes Indentures, in full satisfaction, settlement, release, and discharge of
and in exchange for such Subordinated Note Claim, a distribution of: (a) such
Claimholder's Pro Rata amount of the Series A Warrants (subject to dilution only
by shares of New Common Stock issued pursuant to or on account of the Employee
Retention Plan or the Long Term Incentive Plan, the Series A Warrants and/or the
Series B Warrants); and (b) subject to certain repayment obligations to be owed
by the HLI Creditor Trust to the Reorganized Debtors as set forth in Section
10.6 herein, Cash in the aggregate amounts of (i) $125,000 with respect to the
8.25% Subordinated Notes, (ii) $125,000 with respect to the 9.125% Subordinated
Notes, and (iii) $125,000 with respect to the 11% Subordinated Notes. If and
only if Class 6 votes to accept the Plan, a holder of an Allowed Subordinated
Note Claim also shall have a right to receive distributions from the HLI
Creditor Trust of such Claimholder's Pro Rata share of one-third (1/3) of the
Net Trust Recoveries, subject to certain repayment obligations to be owed by the
HLI Creditor Trust to the Reorganized Debtors as set forth in Section 10.6
herein; provided, however, that the amount of Net Trust Recoveries payable to a
holder of an Allowed Subordinated Note Claim shall not exceed such Claimholder's
Class 6 Trust Distribution Amount. In the event that all Class 6 Trust
Distribution Amounts are fully paid and satisfied, the remaining Net Trust
Recoveries, if any, payable to holders of Allowed Subordinated Note Claims shall
be paid on a Pro Rata basis to holders of Allowed Senior Note Claims and Allowed
General Unsecured Claims.
4.9 CLASS 7 (GENERAL UNSECURED CLAIMS). Except as otherwise
provided in and subject to Section 8.10 herein, on the first Periodic
Distribution Date occurring after the later of (a) the date a General Unsecured
Claim becomes an Allowed General Unsecured Claim or (b) the date a General
Unsecured Claim becomes payable pursuant to any agreement between a Reorganizing
Debtor (or a Reorganized Debtor) and the holder of such General Unsecured Claim,
the Disbursing Agent shall deliver to such Claimholder, in full satisfaction,
settlement, release, and discharge of and in exchange for each and every General
Unsecured Claim of such Claimholder: (x) a distribution of such Claimholder's
Pro Rata amount of 600,000 shares of New Common Stock (subject to dilution only
by shares of New Common Stock issued pursuant to or on account of the Employee
Retention Plan, the Long Term Incentive Plan, the Series A Warrants and/or the
Series B Warrants); (y) a distribution of such Claimholder's Pro Rata amount of
the Series B Warrants (subject to dilution only by shares of New Common Stock
issued pursuant to or on account of the Employee Retention Plan or the Long Term
Incentive Plan and/or the Series A Warrants); and (z) if the Debtors implement
either the Additional Equity Modification or the Asset Transfer Modification,
such Claimholder's Pro Rata amount of either 2% of the shares of New Preferred
Stock or 2% of the shares of Reorganized HLI Stock, respectively. A holder of an
Allowed General Unsecured Claim also shall have the right to receive
distributions from the HLI Creditor Trust of a Pro Rata share of one-third (1/3)
of the Net Trust Recoveries; provided, however, that the amount of Net Trust
Recoveries payable to a holder of an Allowed General Unsecured Claim shall not
exceed such Claimholder's Class 7 Trust Distribution Amount. In the event that
all Class 7 Trust Distribution
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Amounts are fully paid and satisfied, the remaining Net Trust Recoveries, if
any, payable to holders of Allowed General Unsecured Claims shall be paid on a
Pro Rata basis to holders of Allowed Senior Note Claims and Allowed Subordinated
Note Claims.
4.10 CLASS 8a (SUBORDINATED DEBT SECURITIES CLAIMS). HLI'S CHAPTER
11 CASE. Subordinated Debt Securities Claims shall be cancelled, released, and
extinguished. Except as otherwise provided in and subject to Section 8.10
herein, if, and only if, all Class 5 Trust Distribution Amounts, Class 6 Trust
Distribution Amounts and Class 7 Trust Distribution Amounts are fully paid and
satisfied from distributions of Net Trust Recoveries from the HLI Creditor
Trust, then a holder of an Allowed Subordinated Debt Securities Claim shall have
a right to receive distributions from the HLI Creditor Trust of such
Claimholders' Pro Rata share of the remaining Net Trust Recoveries available
after paying all Class 5 Trust Distribution Amounts, Class 6 Trust Distribution
Amounts and Class 7 Trust Distribution Amounts; provided, however, that the
amount of Net Trust Recoveries payable to a holder of an Allowed Subordinated
Debt Securities Claim shall not exceed such Claimholder's Class 8a Trust
Distribution Amount. The Debtors believe that Net Trust Recoveries will not be
sufficient to fully pay and satisfy all Class 5 Trust Distribution Amounts,
Class 6 Trust Distribution Amounts and Class 7 Trust Distribution Amounts and,
therefore, the Plan provides that holders of Class 8a Subordinated Debt
Securities Claims are not receiving a distribution.
4.11 CLASS 8b (SUBORDINATED EQUITY SECURITIES CLAIMS). HLI'S
CHAPTER 11 CASE. Subordinated Equity Securities Claims shall be cancelled,
released, and extinguished. Except as otherwise provided in and subject to
Section 8.10 herein, if, and only if, all Class 5 Trust Distribution Amounts,
Class 6 Trust Distribution Amounts, Class 7 Trust Distribution Amounts and Class
8a Trust Distribution Amounts are fully paid and satisfied from distributions of
Net Trust Recoveries from the HLI Creditor Trust, then a holder of an Allowed
Subordinated Equity Securities Claim shall have a right to receive distributions
from the HLI Creditor Trust of such Claimholders' Pro Rata share of the
remaining Net Trust Recoveries available after paying all Class 5 Trust
Distribution Amounts, Class 6 Trust Distribution Amounts, Class 7 Trust
Distribution Amounts and Class 8a Trust Distribution Amounts; provided, however,
that the amount of Net Trust Recoveries payable to a holder of an Allowed
Subordinated Equity Securities Claim shall not exceed such Claimholder's Class
8b Trust Distribution Amount. The Debtors believe that Net Trust Recoveries will
not be sufficient to fully pay and satisfy all Class 5 Trust Distribution
Amounts, Class 6 Trust Distribution Amounts, Class 7 Trust Distribution Amounts
and Class 8a Trust Distribution Amounts and, therefore, the Plan provides that
holders of Class 8b Subordinated Equity Securities Claims are not receiving a
distribution.
4.12 CLASS 9 (INTERESTS IN HLI). Interests in HLI shall be
cancelled, released, and extinguished, and holders of such Interests shall
receive no distribution. If, and only if, all Class 5 Trust Distribution
Amounts, Class 6 Trust Distribution Amounts, Class 7 Trust Distribution Amounts,
Class 8a Trust Distribution Amounts and Class 8b Trust Distribution Amounts are
fully paid and satisfied from distributions of Net Trust Recoveries from the HLI
Creditor Trust, then a
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holder of an Allowed Interest in HLI shall have a right to receive distributions
from the HLI Creditor Trust of such Claimholders' Pro Rata share of the
remaining Net Trust Recoveries available after paying all Class 5 Trust
Distribution Amounts, Class 6 Trust Distribution Amounts, Class 7 Trust
Distribution Amounts, Class 8a Trust Distribution Amounts and Class 8b Trust
Distribution Amounts. The Debtors believe that Net Trust Recoveries will not be
sufficient to fully pay and satisfy all Class 5 Trust Distribution Amounts,
Class 6 Trust Distribution Amounts, Class 7 Trust Distribution Amounts, Class 8a
Trust Distribution Amounts, and Class 8b Trust Distribution Amounts and,
therefore, the Plan provides that holders of Class 9 Interests in HLI are not
receiving a distribution. On the Effective Date, Interests in all other
Reorganizing Debtors shall be Reinstated, subject to the Restructuring
Transactions.
4.13 INTERCOMPANY CLAIMS. All Intercompany Claims will, in the sole
discretion of the applicable Reorganizing Debtor or Reorganized Debtor, (a) be
preserved and Reinstated, (b) be released, waived and discharged as of the
Effective Date, or (c) be contributed to the capital of the obligor corporation.
4.14 RESERVATION OF RIGHTS. Except as otherwise explicitly provided
in the Plan, nothing will affect the Debtors' or the Reorganized Debtors' rights
and defenses, both legal and equitable, with respect to any Unimpaired Claims,
including, but not limited to, all rights with respect to legal and equitable
defenses to alleged rights of setoff or recoupment of Unimpaired Claims. Except
to the extent a Reorganized Debtor expressly assumes an obligation or liability
of a Debtor or another Reorganized Debtor, the Plan will not operate to impose
liability on any Reorganized Debtor for the Claims against any other Debtor or
the debts and obligations of any other Debtor or Reorganized Debtor, and from
and after the Effective Date, each Reorganized Debtor, subject to the
Restructuring Transactions, will be separately liable for its own obligations.
ARTICLE V
ACCEPTANCE OR REJECTION OF THE PLAN;
EFFECT OF REJECTION BY ONE OR MORE
IMPAIRED CLASSES OF CLAIMS OR INTERESTS
5.1 IMPAIRED CLASSES OF CLAIMS AND INTERESTS ENTITLED TO VOTE.
Except as otherwise provided in the Solicitation Procedures Order and Sections
5.3 and 6.11 of the Plan, each Impaired Class of Claims that will receive or
retain property or any interest in property under the Plan shall be entitled to
vote to accept or reject the Plan. Pursuant to section 1126(c) of the Bankruptcy
Code and except as provided in section 1126(e) of the Bankruptcy Code, an
Impaired Class of Claims has accepted the Plan if the holders of at least
two-thirds (2/3) in dollar amount and more than one-half (1/2) in number of the
holders of Allowed Claims of such Class actually voting on the Plan have voted
to accept the Plan.
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5.2 PRESUMED ACCEPTANCES BY UNIMPAIRED CLASSES. Class 1 Other
Priority Claims are Unimpaired by the Plan. Under section 1126(f) of the
Bankruptcy Code and/or the Solicitation Procedures Order, such Claimholders are
conclusively presumed to have accepted the Plan, and the votes of such
Claimholders will not be solicited.
5.3 CLASSES DEEMED TO REJECT PLAN. Because holders of Class 8
Subordinated Securities Claims and Class 9 Interests are not receiving a
distribution on account of such Claims and Interests under the Plan, they are
conclusively presumed to have rejected the Plan, and the votes of such holders
will not be solicited.
5.4 CONFIRMATION PURSUANT TO SECTION 1129(b) OF THE BANKRUPTCY
CODE. To the extent that any Impaired Class entitled to vote rejects the Plan or
is deemed to have rejected it, the Reorganizing Debtors will request
confirmation of the Plan, as it may be modified from time to time, under section
1129(b) of the Bankruptcy Code.
5.5 CONFIRMABILITY AND SEVERABILITY OF A PLAN. The confirmation
requirements of section 1129 of the Bankruptcy Code must be satisfied separately
with respect to each Reorganizing Debtor. The Debtors reserve the right to
alter, amend, modify, revoke or withdraw the Plan as it applies to any
particular Reorganizing Debtor; provided, however, that any such alteration,
amendment or modification that adversely affects the Prepetition Agent, the
Prepetition Lenders, the Creditors' Committee and/or Apollo shall be subject to
the consent of the Prepetition Agent (in the case of alterations, amendments or
modifications that adversely affect the Prepetition Agent or the Prepetition
Lenders), the Creditors' Committee (in the case of alterations, amendments or
modifications that adversely affect creditors holding Senior Note Claims,
Subordinated Note Claims or General Unsecured Claims) and/or Apollo (in the case
of alterations, amendments or modifications that adversely affect the holders
of Senior Note Claims). A determination by the Bankruptcy Court that the Plan,
as it applies to any particular Reorganizing Debtor, is not confirmable pursuant
to section 1129 of the Bankruptcy Code shall not limit or affect (a) the
confirmability of the Plan as it applies to any other Reorganizing Debtor or (b)
the Debtors' ability to modify the Plan, as it applies to any particular Debtor,
to satisfy the confirmation requirements of section 1129 of the Bankruptcy Code.
ARTICLE VI
MEANS FOR IMPLEMENTATION OF THE PLAN
6.1 CONTINUED CORPORATE EXISTENCE. Subject to the New Holding
Company Formation, as may be modified by either the Asset Transfer Modification
or Additional Equity Modification, the Merger and the Restructuring
Transactions, each of the Reorganizing Debtors shall continue to exist after the
Effective Date as a separate corporate entity, with all the powers of a
corporation under applicable law in the jurisdiction in which it is incorporated
and pursuant to the certificate of
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incorporation and bylaws in effect prior to the Effective Date, except to the
extent such certificate of incorporation and bylaws are amended by this Plan,
without prejudice to any right to terminate such existence (whether by merger or
otherwise) under applicable law after the Effective Date.
6.2 CORPORATE ACTION. Each of the matters provided for under the
Plan involving the corporate structure of the Debtors or corporate action to be
taken by or required of the Debtors shall, as of the Effective Date, be deemed
to have occurred and be effective as provided herein, and shall be authorized
and approved in all respects without any requirement of further action by
stockholders, creditors, or directors of the Debtors.
6.3 CERTIFICATE OF INCORPORATION AND BYLAWS. The certificate of
incorporation and bylaws of each of the Reorganized Debtors shall be amended as
necessary to satisfy the provisions of the Plan and the Bankruptcy Code. The
articles of New Holdco shall among other things: (a) authorize 100,000,000
shares of New Common Stock, $0.01 par value per share; (b) authorize 1,000,000
shares of preferred stock; (c) authorize the Warrants; and (d) pursuant to
section 1123(a)(6) of the Bankruptcy Code, add (x) a provision prohibiting the
issuance of non-voting equity securities for a period of two (2) years from the
Effective Date, and, if applicable, (y) a provision setting forth an appropriate
distribution of voting power among classes of equity securities possessing
voting power, including, in the case of any class of equity securities having a
preference over another class of equity securities with respect to dividends,
adequate provisions for the election of directors representing such preferred
class in the event of default in the payment of such dividends. The form of
Certificate of Incorporation of New Holdco is attached hereto as Exhibit F, and
the form of bylaws of New Holdco is attached hereto as Exhibit G, both of which
shall be reasonably acceptable to the Prepetition Agent, the Creditors'
Committee and Apollo.
6.4 CANCELLATION OF EXISTING SECURITIES AND AGREEMENTS. On the
Effective Date, except as otherwise specifically provided for herein, (a) the
Existing Securities and any other note, bond, indenture, or other instrument or
document evidencing or creating any indebtedness or obligation of the
Reorganizing Debtors or ownership interest in HLI, and all options warrants and
rights (whether fixed or contingent, matured or unmatured, disputed or
undisputed, contractual, legal, equitable or otherwise) to acquire any of the
foregoing, except such notes or other instruments evidencing indebtedness or
obligations of the Reorganizing Debtors that are Reinstated under the Plan,
shall be cancelled, and (b) the obligations of or Claims against the
Reorganizing Debtors and Interests in HLI under, relating, or pertaining to any
agreements, indenture, certificates of designation, bylaws, or certificate or
articles of Incorporation or similar document governing the Existing Securities
and any other note, bond, indenture, or other instrument or document evidencing
or creating any indebtedness or obligation of the Reorganizing Debtors, except
such notes or other instruments evidencing indebtedness or obligations of the
Reorganizing Debtors that are Reinstated under the Plan, as the case may be,
shall be released and discharged; provided, however, that the Indentures and any
other agreement that governs the rights of the Claimholders and that is
administered by an indenture trustee, an agent, or a servicer (each hereinafter
referred to as a "Servicer") shall continue in effect solely for purposes of (i)
allowing such Servicer to make the
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distributions to be made on account of such Claims under the Plan as provided in
Article VIII of the Plan, (ii) preserving for such Servicer any rights,
including indemnification rights, it may have with respect to the Claimholders
under such Indenture or other agreement, and (iii) permitting such Servicer to
maintain any rights or liens it may have for fees, costs, and expenses under
such Indenture or other agreement; provided, further, that the preceding
provision shall not affect the discharge of Claims against or Interests in the
Reorganizing Debtors under the Bankruptcy Code, the Confirmation Order, or this
Plan, or result in any expense or liability to the Reorganized Debtors. The
Reorganized Debtors shall not have any obligations to any Servicer (or to any
Disbursing Agent replacing such Servicer) for any fees, costs, or expenses
except (i) to reimburse the Prepetition Agent in its capacity as Prepetition
Agent for the Prepetition Lenders for reasonable fees and expenses up to an
aggregate amount of $1 million incurred in connection with Causes of Action
brought by third parties against the Prepetition Agent in its capacity as
Prepetition Agent for the Prepetition Lenders, if any, which are not released
pursuant to the Plan, or (ii) as expressly provided in Section 8.6 hereof;
provided, however, that nothing herein shall preclude any Servicer (or any
Disbursing Agent replacing such Servicer) from being paid or reimbursed for
prepetition or postpetition fees, costs, and expenses from the distributions
being made by such Servicer (or any Disbursing Agent replacing such Servicer)
pursuant to such Indenture or other agreement in accordance with the provisions
set forth therein, all without application to or approval by the Bankruptcy
Court. Notwithstanding the foregoing, the provisions of the Prepetition Credit
Agreement governing the relationship of the Prepetition Agent and the
Prepetition Lenders, including, without limitation, those provisions relating to
the Prepetition Agent's rights of indemnity from the Prepetition Lenders, shall
not be affected by the Plan, Confirmation or the occurrence of the Effective
Date.
6.5 NEW HOLDING COMPANY FORMATION.
(a) On or prior to the Effective Date, the Reorganizing
Debtors shall enter into the following transactions in the following order
(collectively, the "New Holding Company Formation"):
(i) New Holdco will be incorporated as a new
corporation;
(ii) New Holdco will cause New Parent Company to
be incorporated as a new wholly-owned subsidiary, and New Holdco will
contribute Cash, the New Common Stock, Series A Warrants (if Class 6
votes to accept the Plan) and Series B Warrants to New Parent Company;
(iii) New Parent Company will in turn cause New
Operating Company to be incorporated as a new wholly-owned subsidiary,
and will contribute the Cash, the New Common Stock, Series A Warrants
(if Class 6 votes to accept the Plan) and Series B Warrants received
from New Holdco to New Operating Company; and
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(iv) HLI will merge (the "Merger") with and into
New Operating Company pursuant to an agreement (the "Merger
Agreement"), with New Operating Company surviving.
(b) New Operating Company will distribute the (i)
Prepetition Lenders' Payment Amount, (ii) New Common Stock, (iii) Series A
Warrants (if Class 6 votes to accept the Plan), (iv) Series B Warrants and, (v)
$25 million of New Senior Notes or, in lieu thereof, at the sole discretion of
the Debtors, either Cash in an aggregate amount of $25 million or a combination
of Cash and New Senior Notes equal to $25 million, to holders of Allowed Claims
in exchange for their Allowed Claims pursuant to the provisions of the Plan.
(c) New Operating Company will elect pursuant to Internal
Revenue Code section 338 to treat the acquisition of the stock of HLI's
subsidiary corporations pursuant to the Merger as if New Operating Company
acquired the assets owned by such subsidiaries at their respective fair market
values.
(d) Notwithstanding the foregoing, subject to the consent
of the Prepetition Agent, Apollo and the Creditors' Committee, which consent
shall not be unreasonably withheld, the Debtors may determine to enter into one
of two modifications to the New Holding Company Formation.
(i) Pursuant to the first potential modification
(the "Asset Transfer Modification"), instead of entering into the
Merger Agreement and implementing the Merger, the Debtors may cause HLI
to transfer substantially all of its assets to New Operating Company in
exchange for Cash, New Common Stock, Series A Warrants (if Class 6
votes to accept the Plan) and Series B Warrants which shall be
distributed to holders of Allowed Claims in exchange for such Claims
pursuant to the provisions of the Plan. The remaining assets of HLI
would be retained by Reorganized HLI. In addition, Reorganized HLI
would issue the Reorganized HLI Stock to holders of Allowed Claims in
Classes 2, 5 and 7 such that those holders would own all of the
Reorganized HLI Stock in the same proportion in which they own the New
Common Stock.
(ii) Pursuant to the second potential
modification (the "Additional Equity Modification"), New Operating
Company would issue the New Preferred Stock and pursuant to the Merger
Agreement and this Plan, HLI would merge with and into New Operating
Company and New Operating Company would distribute (x) the Cash, New
Common Stock, Series A Warrants (if Class 6 votes to accept the Plan)
and Series B Warrants received from New Holdco to holders of Allowed
Claims in exchange for their Allowed Claims and (y) the New Preferred
Stock to holders of Allowed Claims in Classes 2, 5 and 7 such that
those holders would own all of the New Preferred Stock in the same
proportion in which they own the New Common Stock.
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(e) Notwithstanding the foregoing provisions, if the
Debtors determine that the New Holding Company Formation, as may be modified by
either the Asset Transfer Modification or Additional Equity Modification, is
undesirable, then the Debtors shall not enter into such transactions. Instead,
the shares and warrants distributed to Claimholders pursuant to the Plan shall
be, respectively, shares of, and warrants to purchase shares of, Reorganized HLI
rather than shares of, and warrants to purchase shares, of New Holdco, and
Reorganized HLI shall remain the parent corporation of the Reorganized Debtors.
The Debtors shall give the Prepetition Agent, the Creditors' Committee and
Apollo notice of any decision not to enter into the New Holding Company
Formation at least ten (10) days prior to the Effective Date.
6.6 DIRECTORS AND OFFICERS.
(a) The existing senior officers of the Debtors shall
serve as senior officers of New Holdco in their current capacities after the
Effective Date, subject to the terms of the applicable employment agreements and
the rights of the Boards of Directors.
(b) On the Effective Date, the term of the current
members of the board of directors of HLI shall expire. From and after the
Effective Date, the initial board of directors of New Holdco shall consist of
seven (7) directors. The initial board of directors of New Holdco shall include
Curtis Clawson (or in the event of his death, incapacity, resignation or
dismissal, the chief executive officer of HLI). The remaining six (6) members of
the initial board of directors of New Holdco shall be selected by the
Prepetition Lenders and the Senior Noteholders based upon the relative holdings
of the Prepetition Credit Facility and Senior Notes, respectively. Specifically,
three (3) directors of New Holdco shall be selected by the Prepetition Agent and
the Ad Hoc Prepetition Lender Steering Committee on behalf of the Prepetition
Lenders, of which one (1) director shall be designated by the Ad Hoc Prepetition
Lender Steering Committee and the other two (2) directors shall be designated by
the mutual agreement of the Prepetition Agent and the Ad Hoc Prepetition Lender
Steering Committee (with both such parties having an equal vote); provided that
the two parties designated for those two director positions shall have
participated prior to their designation in the background screening and
interview process administered by the professional recruiting firm of Spencer
Stuart Management Consultants N.V. Two (2) directors shall be selected by
Apollo, with the advice and participation of the Senior Noteholders that express
an interest to Apollo in participating in such process based upon their
respective holdings of Senior Notes and the number of shares of New Common Stock
that they will receive under the Modified Plan, and one (1) director (the
"Jointly Designated Director") shall be selected by mutual agreement of (x) the
Prepetition Agent and the Ad Hoc Prepetition Lender Steering Committee and (y)
Apollo, with the advice and participation of Senior Noteholders that express an
interest to Apollo in participating in such process based upon their respective
holdings of Senior Notes and the number of shares of New Common Stock that they
will receive under the Modified Plan; provided that the party designated for
that director position shall previously have participated in the background
screening and interview process administered by the professional recruiting firm
of Spencer Stuart Management Consultants N.V.; and provided further that the
board of directors, collectively, including any required committee
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thereof, shall comply with any other qualification, experience, and independence
requirements under applicable law, including the Sarbanes-Oxley Act of 2002 and
the rules then in effect of the stock exchange or quotation system (including
the benefit of any transition periods available under applicable law) on which
New Common Stock is listed or is anticipated to be listed, when such stock is
listed. Thereafter, the board of directors of New Holdco shall be subject to the
provisions of the certificate of incorporation and bylaws of New Holdco.
(c) The Persons designating board members shall file with
the Bankruptcy Court and give to each other and the Debtors written notice of
the identities of such members on a date that is not less than ten (10) days
prior to the Voting Deadline; provided, however, that if and to the extent that
any party fails to file and give such notice by such date, they may otherwise
give notice of the designation of any board members prior to or at the
Confirmation Hearing. In the event that certain members of the board of
directors have not been designated prior to or at the Confirmation Hearing, then
the total number of directors that have been designated as of the Confirmation
Hearing shall be deemed to comprise the board of directors of New Holdco until
such time as the un- designated members ultimately are designated; provided that
at least five (5) members of the board of directors of New Holdco have been
designated prior to or at the Confirmation Hearing. After the notices of the
identities of the new board members are filed with the Bankruptcy Court, the
Claims Agent shall post such notices on its Internet website at www.bsillc.com.
(d) Pursuant to the certificate of incorporation of New
Holdco, the board of directors of New Holdco will be divided into three classes,
with each class consisting, as nearly as possible, of an equal number of
directors. Class I shall consist of the Chief Executive Officer of New Holdco
and the Jointly Designated Director. Class II shall consist of one of the
directors designated by Apollo, pursuant to process set forth in Section 6.6(b)
herein, and the director designated by the Ad Hoc Prepetition Lender Steering
Committee. Class III will consist of the second director designated by Apollo
and the two directors selected pursuant to the mutual agreement of the
Prepetition Agent and the Ad Hoc Prepetition Lender Steering Committee. Only one
class of directors will be slated for election each year and directors may be
removed from the board for cause.
6.7 EMPLOYMENT, RETIREMENT, INDEMNIFICATION AND OTHER AGREEMENTS
AND INCENTIVE COMPENSATION PROGRAMS.
(a) Upon the occurrence of the Effective Date, the
Reorganized Debtors shall continue the Pension Plan, meet the minimum funding
standards under ERISA and the Internal Revenue Code, pay all PBGC insurance
premiums, and administer and operate the Pension Plan in accordance with its
terms and ERISA. Nothing in this Plan shall be deemed to discharge, release, or
relieve the Debtors, Reorganized Debtors, any member of the Debtors' controlled
groups (as defined in 29 U.S.C. Section 1301(a)(14)), or any other party, in any
capacity, from any current or future liability with respect to the Pension Plan,
and the PBGC and the Pension Plan shall not be enjoined or precluded from
enforcing such liability as a result of the Plan's provisions or consummation.
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Upon the Effective Date of the Plan, the PBGC shall be deemed to have withdrawn
with prejudice any proofs of claim it filed during the Chapter 11 Cases.
(b) Upon the occurrence of the Effective Date, the
Reorganized Debtors shall continue to pay benefits under the Retiree Medical
Programs at the levels and for the duration of the periods that the Reorganizing
Debtors are otherwise obligated to provide such benefits, including any
obligations under the Golden and Hall Settlement Agreements and Judgments.
Nothing in this Plan shall be deemed to discharge, release, or relieve the
Debtors or the Reorganized Debtors from any liability with respect to the
Retiree Medical Programs and the beneficiaries of the Retiree Medical Programs
or their representatives shall not be enjoined or precluded from enforcing such
liability as a result of the Plan's provisions or confirmation. Upon the
Effective Date of the Plan, the three protective proofs of claim filed by class
counsel under the Golden and Hall Settlement Agreements and Judgments (Proofs of
Claim Nos. 2719, 2726 and 2987), the two protective proofs of claim filed by the
authorized representative of the International Union, United Automobile,
Aerospace and Agricultural Implement Workers of America and its Locals (Proofs
of Claim Nos. 3524, 3525) and the protective proof of claim filed by PACE
International Union (Proof of Claim No. 3071) shall be deemed to be withdrawn
with prejudice. Notwithstanding anything to the contrary herein, the Reorganized
Debtors shall maintain all of their existing rights, including, but not limited
to, the right to amend or terminate Retiree Medical Programs, where such rights
are not specifically prohibited by the Golden and Hall Settlement Agreements and
Judgments or collective bargaining agreements with the unions mentioned above.
(c) Except as otherwise provided herein with respect to
the Motor Wheel SERP, to the extent that any of the Debtors has in place as of
the Effective Date employment, severance (change in control), retirement,
indemnification and other agreements with their respective active directors,
officers and employees who will continue in such capacities after the Effective
Date, or retirement income plans, welfare benefit plans and other plans for such
Persons, such agreements, programs and plans (each of which either (i) were
approved by the Bankruptcy Court during the Chapter 11 Cases pursuant to, and
fully described in, either the Debtors' "first day motion" regarding employee
benefit programs or the Debtors' motion to implement the Employee Retention
Plan, or (ii) with respect to certain employment agreements, were entered into
in the ordinary course of business after the Petition Date) will remain in place
after the Effective Date, and Reorganized Debtors will continue to honor such
agreements, programs and plans; provided, however, that in the case of
indemnification, the extent of the Reorganized Debtors' obligations shall be as
specified and limited in Section 11.7 of this Plan. Benefits provided under such
agreements or plans may include benefits under qualified and non-qualified
retirement plans; health and dental coverage; short and long term disability
benefits; death and supplemental accidental death benefits; vacation; leased
car; club memberships; financial consulting, tax preparation and estate planning
as well as an annual physical examination, each paid or provided commensurate
with an employee's position in accordance with the Company's policies then in
effect; provided, however, that notwithstanding anything to the contrary
contained in this Plan, the Indemnification Rights of any directors, officers
and employees shall be as specified and limited in Section 11.7 of this Plan,
and any agreement
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providing for indemnification in excess of such limited rights shall be deemed
rejected. Such agreements and plans also may include equity, bonus and other
incentive plans in which officers and other employees of the Reorganized Debtors
may be eligible to participate, including the Short Term Incentive Plan;
provided, however, that pursuant to the Long Term Incentive Plan, there shall be
reserved for certain members of management and other employees of the
Reorganized Debtors a certain number of shares of New Common Stock and other
securities all as more fully described in Section 6.9 below. However, as of the
Effective Date, the Reorganized Debtors shall have the authority to terminate,
amend or enter into employment, retirement, indemnification and other agreements
with its respective active directors, officers and employees and to terminate,
amend or implement retirement income plans, welfare benefit plans and other
plans for active employees, subject to the existing contractual rights, if any,
of the directors, officers and employees affected thereby.
(d) Notwithstanding anything contained herein to the
contrary, the terms of the Employee Retention Plan shall not be modified,
altered, or amended. Retention Bonuses and Restructuring Performance Bonuses
(each as defined in the Employee Retention Plan) shall be paid in the amounts
and at such times (or as soon thereafter as reasonably practicable) as
contemplated by the Employee Retention Program.
6.8 CONTINUATION OF WORKERS' COMPENSATION PROGRAMS. Upon
occurrence of the Effective Date, the Reorganizing Debtors shall continue the
Workers' Compensation Programs in accordance with applicable state laws. Nothing
in the Plan shall be deemed to discharge, release, or relieve the Debtors or
Reorganized Debtors from any current or future liability with respect to any of
the Workers' Compensation Programs. The Reorganized Debtors shall be responsible
for all valid claims for benefits and liabilities under the Workers'
Compensation Programs regardless of when the applicable injuries were incurred.
Any and all obligations under the Workers' Compensation Programs, including any
assessments with respect to the Michigan Workers' Compensation Programs and
retrospectively rated premium rate adjustments from the Ohio Bureau of Workers'
Compensation, shall be paid in accordance with the terms and conditions of
Workers' Compensation Programs and in accordance with all applicable laws.
6.9 IMPLEMENTATION OF THE LONG TERM INCENTIVE PROGRAM. The
Reorganized Debtors shall implement the Long Term Incentive Plan in order to
promote the growth and general prosperity of the Reorganized Debtors by offering
incentives to key employees who are primarily responsible for the growth of the
Reorganized Debtors, and to attract and retain qualified employees and thereby
benefit the shareholders of the Reorganized Debtors based on growth of the
Reorganized Debtors. The Long Term Incentive Plan will be administered by the
Compensation Committee of New Holdco's Board of Directors. In applying and
interpreting the provisions of the Long Term Incentive Plan, the decisions of
the Compensation Committee of New Holdco, pursuant to authority to be granted by
the Board of Directors of New Holdco, shall be final. The Compensation Committee
of New Holdco shall have the right to amend, modify or to rescind the Long Term
Incentive Plan in
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whole or in part at any time subject to any existing contract rights the
participants in such plan may hold.
Exhibit D hereto is a summary of the Long Term Incentive Plan and of
components of compensation to be paid to management after the Effective Date to
the extent that the terms and provisions differ from such management member's
current compensation.
6.10 TERMINATION OF THE MOTOR WHEEL SERP. As of the Effective Date,
the Motor Wheel SERP shall be deemed to be terminated and the Reorganized
Debtors' obligations thereunder shall cease. Each participant in the Motor Wheel
SERP shall be granted an Allowed General Unsecured Claim against HLI equal to
the amount of accrued deferred compensation as is currently reflected on the
Debtors' books and records with respect to such participant's Motor Wheel SERP
allocation as of the Petition Date.
6.11 ENFORCEMENT OF SUBORDINATION PROVISIONS/INTERCREDITOR
AGREEMENTS. Except with respect to the limited waiver of the subordination
provisions of the Indentures necessary to allow the distributions of Series A
Warrants and Net Trust Recoveries to be made to the holders of Subordinated Note
Claims (in the event that Class 6 votes to accept the Plan), the subordination
provisions in the Subordinated Notes Indentures applicable to Subordinated Note
Claims shall be enforced and, accordingly, any distributions to which they would
otherwise be entitled will be distributed directly to the Prepetition Lenders
and the Senior Noteholders until such claims have been satisfied in full
including all interest, fees and other charges payable under either the
Prepetition Credit Agreement or the Senior Note Indenture with such obligations
to be determined as if the Chapter 11 Cases had not been commenced.
Additionally, the terms of the Intercreditor Agreement shall be enforced with
respect to the various rights and remedies between the Prepetition Lenders and
the BMO Synthetic Lessors.
6.12 ISSUANCE OF NEW SECURITIES.
(a) As described in Section 6.5 herein, or before the
Distribution Date, New Holdco shall issue the New Common Stock and Warrants for
distribution to Claimholders in accordance with the terms of this Plan and New
Operating Company shall issue the New Senior Notes, up to $25 million of which
may be distributed in accordance with the terms of this Plan to the Prepetition
Lenders. The issuance of the New Senior Notes, New Common Stock and Warrants and
the distribution thereof to Claimholders shall be exempt from registration under
applicable securities laws pursuant to section 1145(a) of the Bankruptcy Code.
(b) New Holdco shall use all commercially reasonable
efforts to list the New Common Stock on either the New York Stock Exchange or
the Nasdaq Stock Market as New Holdco may determine in its discretion reasonably
exercised, or, if the New Common Stock is not approved for listing on either
exchange, on a national securities exchange or for quotation on a national
automated interdealer quotation system as promptly as practicable, but shall
have no liability if it is
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unable to do so. Persons receiving distributions of New Common Stock, by
accepting such distributions, shall have agreed to cooperate with New Holdco's
reasonable requests to assist New Holdco in its efforts to list the New Common
Stock on a securities exchange or quotation system.
(c) If the Debtors implement the Additional Equity
Modification as described in Section 6.5 herein, New Operating Company shall
issue the New Preferred Stock for distribution to holders of Allowed Claims in
Classes 2, 5, and 7 such that such holders would own the New Preferred Stock in
the same proportion in which they own the own the New Common Stock. If the
Debtors determine to implement the Additional Equity Modification, the issuance
of the New Preferred Stock and the distribution thereof to Claimholders shall be
exempt from registration under applicable securities laws pursuant to section
1145(a) of the Bankruptcy Code.
(d) If the Debtors implement the Asset Transfer
Modification as described in Section 6.5 herein, Reorganized HLI shall issue the
Reorganized HLI Stock for distribution to holders of Allowed Claims in Classes
2, 5 and 7 such that such holders would own all of the Reorganized HLI Stock in
the same proportion in which they own the New Common Stock. If the Debtors
implement the Asset Transfer Modification, the issuance of the Reorganized HLI
Stock and distribution thereof to Claimholders shall be exempt from registration
under applicable laws pursuant to section 1145(a) of the Bankruptcy Code.
6.13 POST-EFFECTIVE DATE FINANCING. The Reorganizing Debtors expect
to enter into the New Credit Facility in order to obtain the funds necessary to:
(a) repay the DIP Facility Claims; (b) make other payments required to be made
on the Effective Date; and (c) conduct its post- reorganization operations.
Documents evidencing the New Credit Facility, or commitment letters with respect
thereto, shall be filed by the Debtors with the Bankruptcy Court no later than
the Confirmation Date. Notice of any material modification to the New Credit
Facility or the commitment letters with respect thereto after its filing with
the Bankruptcy Court shall be provided to the Prepetition Agent, the DIP Agent,
and the Creditors' Committee. In the Confirmation Order, the Bankruptcy Court
shall approve the New Credit Facility in substantially the form filed with the
Bankruptcy Court and authorize the Reorganizing Debtors to execute the same
together with such other documents as the New Credit Facility lenders may
reasonably require in order to effectuate the treatment afforded to such parties
under the New Credit Facility.
6.14 RESTRUCTURING TRANSACTIONS. On or prior to the Effective Date,
the Reorganized Debtors shall take such actions as may be necessary or
appropriate to effect the relevant Restructuring Transactions. Such actions may
include: (a) the execution and delivery of appropriate agreements or other
documents of merger, consolidation or reorganization containing terms that are
consistent with the terms of this Plan and that satisfy the requirements of
applicable law; (b) the execution and delivery of appropriate instruments of
transfer, assignment, assumption or delegation of any property, right,
liability, duty or obligation on terms consistent with the terms of this Plan;
(c) the filing of appropriate certificates of incorporation, merger or
consolidation with the appropriate governmental authorities under applicable
law; and (d) all other actions that such Debtor determines
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are necessary or appropriate, including the making of filings or recordings in
connection with the relevant Restructuring Transaction. Subject to Section 6.2
herein, the form of each Restructuring Transaction shall be determined by the
Boards of Directors of a Reorganizing Debtor party to any Restructuring
Transaction. In the event a Restructuring Transaction is a merger transaction,
upon the consummation of such Restructuring Transaction, each party to such
merger shall cease to exist as a separate corporate entity and thereafter the
surviving Reorganizing Debtor shall assume and perform the obligations of each
Reorganizing Debtor under this Plan. In the event a Reorganizing Debtor is
liquidated, the Reorganizing Debtors (or the Reorganizing Debtor which owned the
stock of such liquidating Debtor prior to such liquidation) shall assume and
perform such obligations.
6.15 PRESERVATION OF CAUSES OF ACTION. In accordance with section
1123(b)(3) of the Bankruptcy Code and except as otherwise provided in the Plan
and/or the Confirmation Order, the Reorganized Debtors shall retain and may (but
are not required to) enforce all Retained Actions and all Retained Avoidance
Claims, but not Trust Claims (which shall be transferred to the HLI Creditor
Trust and preserved for its benefit pursuant to the Plan), and other similar
claims arising under applicable state laws, including, without limitation,
fraudulent transfer claims, if any, and all other Causes of Action of a trustee
and debtor-in-possession under the Bankruptcy Code. A nonexclusive list of
Retained Actions and Retained Avoidance Claims and an exclusive list of Trust
Avoidance Claims are set forth on Exhibit B and Exhibit N, respectively. The
Debtors or the Reorganized Debtors, in their sole discretion will determine
whether to bring, settle, release, compromise, or enforce any rights (or decline
to do any of the foregoing) with respect to the Retained Actions. The
Reorganized Debtors or any successors may pursue such litigation claims in
accordance with the best interests of the Reorganized Debtors or any successors
holding such rights of action. The failure of the Debtors to specifically list
any claim, right of action, suit or proceeding in the Debtors' Schedules or in
Exhibit B does not, and will not be deemed to, constitute a waiver or release by
the Debtors of such claim, right of action, suit or proceeding, and the
Reorganized Debtors will retain the right to pursue such claims, rights of
action, suits or proceedings in their sole discretion and, therefore, no
preclusion doctrine, collateral estoppel, issue preclusion, claim preclusion,
estoppel (judicial, equitable or otherwise) or laches will apply to such claim,
right of action, suit or proceeding upon or after the confirmation or
consummation of the Plan.
6.16 EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS. The Chairman of
the Board of Directors, the Chief Executive Officer, or any other officer of any
of the Reorganizing Debtors shall be authorized to execute, deliver, file, or
record such contracts, instruments, releases, indentures, and other agreements
or documents, and take such 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 any of the Reorganizing Debtors shall be
authorized to certify or attest to any of the foregoing actions.
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ARTICLE VII
UNEXPIRED LEASES AND EXECUTORY CONTRACTS
7.1 ASSUMED CONTRACTS AND LEASES. Each executory contract and
unexpired lease to which the Reorganizing Debtors are a party shall be deemed
automatically assumed and Reinstated as of the Effective Date, unless such
executory contract or unexpired lease (a) shall have been previously rejected by
the Debtors, (b) is the subject of a motion to reject filed, or a notice of
rejection served pursuant to order of the Bankruptcy Court, on or before the
Confirmation Date, (c) is listed on the schedule of rejected contracts and
leases annexed hereto as Exhibit H, or (d) or expired prior to the Effective
Date and/or is no longer executory on the Effective Date by its own terms. The
Confirmation Order shall constitute an order of the Bankruptcy Court approving
such assumptions, pursuant to section 365(b)(1) of the Bankruptcy Code and, to
the extent applicable, section 365(b)(3) of the Bankruptcy Code, as of the
Effective Date.
Each executory contract and unexpired lease that is assumed and relates
to the use, ability to acquire, 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 affect 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, reciprocal easement agreements, 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 Bankruptcy Court or is otherwise rejected as a part of this Plan.
7.2 REJECTED CONTRACTS AND LEASES. Except with respect to
executory contracts and unexpired leases that have previously been rejected or
are the subject of a motion to reject filed, or a notice of rejection served
pursuant to an order of the Bankruptcy Court, on or before the Confirmation
Date, all executory contracts and unexpired leases set forth on Exhibit H shall
be deemed automatically rejected as of the Effective Date or such earlier date
as the Debtors may have unequivocally terminated their performance under such
lease or contract; provided, however, that neither the inclusion by the Debtors
of a contract or lease on Exhibit H nor anything contained in this Plan shall
constitute an admission by the Debtors that such lease or contract is an
unexpired lease or executory contract or that any Debtor, or any of the Debtors'
Affiliates, has any liability thereunder. The Confirmation Order shall
constitute an order of the Bankruptcy Court approving such rejections, pursuant
to section 365 of the Bankruptcy Code. The Debtors reserve the right to file a
motion on or before the Confirmation Date to reject any executory contract or
unexpired lease.
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7.3 PAYMENTS RELATED TO ASSUMPTION OF EXECUTORY CONTRACTS AND
UNEXPIRED LEASES. The provisions (if any) of each executory contract and
unexpired lease to be assumed and Reinstated under this Plan which are or may be
in default shall be satisfied solely by Cure. Within ten (10) days after the
Effective Date (the "Cure Claims Notification Date"), the Debtors shall mail a
notice of proposed Cure amount to any and all parties subject to executory
contracts or unexpired leases assumed by the Debtors. Such notice shall set
forth, among other things, the amount the Debtors propose to pay to such parties
as Cure pursuant to Bankruptcy Code section 365(b) as reflected in the Debtors'
books and records (the "Proposed Cure"). Any Person who disputes the Proposed
Cure must file with the Bankruptcy Court an objection (a "Cure Claim Objection")
to the Proposed Cure no later than thirty (30) days after the Cure Claims
Notification Date (the "Cure Claim Objection Deadline"). Any party failing to
submit a Cure Claim Objection by the Cure Claim Objection Deadline shall be
forever barred from asserting, collecting, or seeking to collect any amounts in
excess of the Proposed Cure against the Debtors or Reorganized Debtors. Any Cure
Claim Objection shall be resolved consensually by the parties, by the Bankruptcy
Court or at the mutual election of the parties in any non-Bankruptcy forum. Cure
Claim Objections shall be set for status at subsequent hearings following the
Cure Claims Objection Deadline with separate evidentiary hearings to be set by
the Bankruptcy Court as needed. If the Debtors do not receive a Cure Claim
Objection by the Cure Claims Objection Deadline, then the Debtors shall pay the
Proposed Cure, if any, within five (5) days of the Cure Claims Objection
Deadline. No later than such date, the Debtors also will pay the undisputed
portion of Cure to any party who filed a Cure Claims Objection. In the event of
a dispute regarding (a) the nature or the amount of any Cure, (b) the ability of
the Reorganized Debtors or any assignee to provide "adequate assurance of future
performance" (within the meaning of section 365(b) of the Bankruptcy Code) under
the contract or lease to be assumed, or (c) any other matter pertaining to
assumption, Cure shall be paid by the Debtors as soon as reasonably practicable
after such agreement or Final Order (but in no event any later than twenty (20)
days thereafter).
7.4 REJECTION DAMAGES BAR DATE. If the rejection by the Debtors
(pursuant to the Plan or otherwise) of an executory contract or unexpired lease
results in a Claim, then such Claim shall be forever barred and shall not be
enforceable against either the Debtors or the Reorganized Debtors or such
entities' properties unless a proof of claim is filed with the clerk of the
Bankruptcy Court and served upon counsel to the Debtors and the Prepetition
Agent within thirty (30) days after service of the earlier of (a) notice of the
Confirmation Order or (b) other notice that the executory contract or unexpired
lease has been rejected.
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ARTICLE VII
PROVISIONS GOVERNING DISTRIBUTIONS
8.1 TIME OF DISTRIBUTIONS. Except as otherwise provided for herein
or ordered by the Bankruptcy Court, distributions under the Plan shall be made
on a Periodic Distribution Date.
8.2 NO INTEREST ON CLAIMS. Unless otherwise specifically provided
for in the Plan, the Confirmation Order, or the DIP Credit Agreement or the DIP
Facility Order, Postpetition Interest shall not accrue or be paid on Claims, and
no Claimholder shall be entitled to interest accruing on or after the Petition
Date on any Claim, right, or Interest. Additionally, and without limiting the
foregoing, interest shall not accrue or be paid on any Disputed Claim in respect
of the period from the Effective Date to the date a final distribution is made
when and if such Disputed Claim becomes an Allowed Claim.
8.3 DISBURSING AGENT. The Disbursing Agent shall make all
distributions required under this Plan except with respect to a holder of a
Claim whose distribution is governed by an Indenture or other agreement and is
administered by a Servicer, which distributions shall be deposited with the
appropriate Servicer, who shall deliver such distributions to the holders of
Claims in accordance with the provisions of this Plan and the terms of the
Indenture or other governing agreement; provided, however, that if any such
Servicer is unable to make such distributions, the Disbursing Agent, with the
cooperation of such Servicer, shall make such distributions. Notwithstanding the
foregoing, the distributions pursuant to Section 4.2 hereof shall be made
directly to the Prepetition Agent for immediate transmittal to the Prepetition
Lenders without deduction, setoff or recoupment for anything except for
reasonable actual out of pocket expenses of the Prepetition Agent incurred and
outstanding prior to the Effective Date.
8.4 SURRENDER OF SECURITIES OR INSTRUMENTS. On or before the
Distribution Date, or as soon as practicable thereafter, each holder of an
instrument evidencing either a Claim, including, without limitation, a Claim on
account of the Indenture (as to each, a "Certificate"), shall surrender such
Certificate to the Disbursing Agent, or, with respect to indebtedness that is
governed by the Indenture or other agreement, the respective Servicer, and such
Certificate shall be cancelled. No distribution of property hereunder shall be
made to or on behalf of any such holder unless and until such Certificate is
received by the Disbursing Agent or the respective Servicer or the
unavailability of such Certificate is reasonably established to the satisfaction
of the Disbursing Agent or the respective Servicer. Any holder who fails to
surrender or cause to be surrendered such Certificate, or fails to execute and
deliver an affidavit of loss and indemnity reasonably satisfactory to the
Disbursing Agent or the respective Servicer prior to the second anniversary of
the Effective Date, shall be deemed to have forfeited all rights and Claims in
respect of such Certificate and shall not participate in any distribution
hereunder, and all property in respect of such forfeited distribution, including
any dividends or interest attributable thereto, shall revert to the Reorganized
Debtors notwithstanding any federal or state escheat laws to the contrary.
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8.5 INSTRUCTIONS TO DISBURSING AGENT. Prior to any distribution on
account of any Claim pursuant to an Indenture, the Servicer with respect to an
Indenture shall (a) inform the Disbursing Agent as to the amount of properly
surrendered claim pursuant thereto and (b) instruct the Disbursing Agent, in a
form and manner that the Disbursing Agent reasonably determines to be
acceptable, of the names of such Claimholders who have properly surrendered
Debentures.
8.6 SERVICES OF INDENTURE TRUSTEES, AGENTS AND SERVICERS. The
services, with respect to consummation of the Plan, of Servicers under the
Indentures and other agreements that govern the rights of Claimholders shall be
as set forth elsewhere in this Plan, and the Reorganized Debtors shall reimburse
any Servicer in the ordinary course for reasonable and necessary services
performed by it as contemplated by, and in accordance with, this Plan, without
the need for the filing of an application with, or approval by, the Bankruptcy
Court.
8.7 RECORD DATE FOR DISTRIBUTIONS TO PREPETITION LENDERS AND
HOLDERS OF UNSECURED NOTES. At the close of business on the Record Date, the
transfer ledgers of the Prepetition Agent and the Servicers of the Indentures
shall be closed, and there shall be no further changes in such record holders.
Reorganized HLI, the Prepetition Agent, and the Servicers for such Indentures
and the Disbursing Agent shall have no obligation to recognize any transfer of
Claims under the Prepetition Credit Facility or Certificates for Unsecured Notes
occurring after the Record Date. The Reorganized Debtors, the Prepetition Agent,
the Servicers for such Certificates and the Disbursing Agent shall be entitled
instead to recognize and deal for all purposes hereunder with only those record
holders stated on the transfer ledgers as of the close of business on the Record
Date.
8.8 CLAIMS ADMINISTRATION RESPONSIBILITY. The Reorganized Debtors
will retain responsibility for administering, disputing, objecting to,
compromising, or otherwise resolving and making distributions to all Claims
against the Reorganizing Debtors, including but not limited to Administrative
Claims, Priority Tax Claims, Other Priority Claims, Prepetition Credit Facility
Secured Claims, Synthetic Lessors Secured Claims, Miscellaneous Secured Claims,
Senior Note Claims, Subordinated Note Claims, General Unsecured Claims and
Subordinated Securities Claims; provided, however, that the foregoing shall not
be deemed to divest the rights, if any, of any party in interest to object to
Claims.
8.9 DELIVERY OF DISTRIBUTIONS. Distributions to Allowed
Claimholders shall be made by the Disbursing Agent or the appropriate Servicer,
as the case may be (a) at the addresses set forth on the proofs of claim or
interest filed by such Claimholders or Servicers (or at the last known addresses
of such Claimholders if no proof of claim or interest is filed or if the Debtors
have been notified in writing of a change of address), (b) at the addresses set
forth in any written notices of address changes delivered to the Disbursing
Agent after the date of any related proof of claim or interest, (c) at the
addresses reflected in the Schedules if no proof of claim or interest has been
filed and the Disbursing Agent has not received a written notice of a change of
address, or (d) in the case of a Claimholder whose Claim is governed by an
Indenture or other agreement and is administered by a Servicer, at the addresses
contained in the official records of such Servicer. If any Claimholder's
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distribution is returned as undeliverable, no further distributions to such
Claimholder shall be made unless and until the Disbursing Agent or the
appropriate Servicer is notified of such Claimholder's then current address, at
which time all missed distributions shall be made to such Claimholder without
interest. Amounts in respect of undeliverable distributions shall be returned to
the Reorganized Debtors until such distributions are claimed. All claims for
undeliverable distributions shall be made on or before the second anniversary of
the Effective Date. After such date, all unclaimed property shall revert to the
Reorganized Debtors. Upon such reversion, the claim of any Claimholder, or their
successors, with respect to such property shall be discharged and forever barred
notwithstanding any federal or state escheat laws to the contrary.
8.10 PROCEDURES FOR TREATING AND RESOLVING DISPUTED AND CONTINGENT
CLAIMS.
(a) No Distributions Pending Allowance. No payments or
distributions shall be made with respect to all or any portion of a Disputed
Claim unless and until all objections to such Disputed Claim have been settled
or withdrawn or have been determined by a Final Order, and the Disputed Claim
has become an Allowed Claim. All objections to Claims must be filed on or before
the Claims Objection Deadline.
(b) Distribution Reserve. The Disbursing Agent shall
withhold a separate Distribution Reserve from the property to be distributed to
holders of Class 7 General Unsecured Claims. The amount of New Common Stock,
Series B Warrants and, if the Debtors implement either the Additional Equity
Modification or the Asset Transfer Modification, the New Preferred Stock or
Reorganized HLI Stock, respectively, withheld as a part of the Distribution
Reserve shall be equal to the amount the Reorganized Debtors reasonably
determine is necessary to satisfy the distributions required to be made,
respectively, to the Claimholders in such Classes when the allowance or
disallowance of each Claim is ultimately determined. The Disbursing Agent may
request estimation for any Disputed Claim that is contingent or unliquidated
(but is not required to do so). The Disbursing Agent will also place in the
Distribution Reserve any dividends, payments, or other distributions made on
account of, as well as any obligations arising from, the property withheld in
the Distribution Reserve, to the extent that such property continues to be
withheld in the Distribution Reserve at the time such distributions are made or
such obligations arise. If practicable, the Disbursing Agent will invest any
Cash that is withheld as the Distribution Reserve in a manner that will yield a
reasonable net return, taking into account the safety of the investment. Nothing
in the Plan or the Disclosure Statement will be deemed to entitle the
Claimholder of a Disputed Claim to Postpetition Interest on such Claim.
(c) Distributions After Allowance. Payments and
distributions from the Distribution Reserve to each respective Claimholder on
account of a Disputed Claim, to the extent that it ultimately becomes an Allowed
Claim, will be made in accordance with provisions of the Plan that govern
distributions to such Claimholders. On the first Periodic Distribution Date
following the date when a Disputed Claim becomes an Allowed Claim, the
Disbursing Agent will distribute to the Claimholder any Cash, New Common Stock,
Series B Warrants and, if the Debtors implement either
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the Additional Equity Modification or the Asset Transfer Modification, the New
Preferred Stock or Reorganized HLI Stock, respectively, New Preferred Stock from
the Distribution Reserve that would have been distributed on the dates
distributions were previously made to Claimholders had such Allowed Claim been
an Allowed Claim on such dates. After a Final Order has been entered, or other
final resolution has been reached with respect to all Disputed Claims, any
remaining Cash, New Common Stock, Series B Warrants and, if the Debtors
implement either the Additional Equity Modification or the Asset Transfer
Modification, New Preferred Stock or Reorganized HLI Stock, respectively, held
in the Distribution Reserve will be distributed Pro Rata to Allowed Claimholders
in accordance with the other provisions of this Plan. Subject to Section 8.2
hereof, all distributions made under subsection 8.10(c) hereof on account of an
Allowed Claim will be made together with any dividends, payments, or other
distributions made on account of, as well as any obligations arising from, the
distributed property as if such Allowed Claim had been an Allowed Claim on the
dates distributions were previously made to Allowed Claimholders included in the
applicable class.
The Disbursing Agent and the Servicers shall be required to vote any
shares of the New Common Stock, Series B Warrants and, if the Debtors implement
either the Additional Equity Modification or the Asset Transfer Modification,
the shares of New Preferred Stock or Reorganized HLI Stock, respectively, held
in the Distribution Reserve or by such Servicer pursuant to the provisions of a
voting trust agreement that shall require that shares of New Common Stock,
Series B Warrants and, if the Debtors implement either the Additional Equity
Modification or the Asset Transfer Modification, the New Preferred Stock or
Reorganized HLI Stock, respectively, in the Distribution Reserve or held by a
Servicer be voted in the same proportion as shares not held in the Distribution
Reserve or by such Servicer.
(d) De Minimis Distributions. Neither the Distribution
Agent nor any Servicer shall have any obligation to make a distribution on
account of an Allowed Claim from any Distribution Reserve or otherwise if (a)
the aggregate amount of all distributions authorized to be made from such
Distribution Reserve or otherwise on the Periodic Distribution Date in question
is or has a value less than $250,000, or (b) if the amount to be distributed to
the specific holder of the Allowed Claim on the particular Periodic Distribution
Date does not constitute a final distribution to such holder and is or has a
value less than $50.
8.11 FRACTIONAL SECURITIES; FRACTIONAL DOLLARS. No fractional
shares or amounts of New Securities will be issued or distributed under the
Plan. Each Person entitled to receive New Securities will receive the total
whole number of New Securities to which such Person is entitled. Whenever any
distributions to a Person would otherwise call for distribution of a fraction of
a New Security, the actual distribution of such New Security will be rounded to
the next higher or lower whole number with fractions of less than or equal to
one-half (1/2) being rounded to the next lower whole number. No consideration
will be provided in lieu of fractional New Securities that are rounded down. The
total number of New Securities to be distributed to each Class of Claims will be
adjusted as necessary to account for the rounding provided herein. Any other
provision of the Plan notwithstanding, neither the Debtors, the Disbursing Agent
nor the Servicer will be required to make
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distributions or payments of fractions of dollars. Whenever any payment of a
fraction of one dollar under the Plan would otherwise be called for, the actual
payment made will reflect a rounding of such fraction to the nearest whole
dollar (up or down), with one-half (1/2) dollars being rounded down.
ARTICLE IX
ALLOWANCE AND PAYMENT OF
CERTAIN ADMINISTRATIVE CLAIMS
9.1 DIP FACILITY CLAIM. On the Effective Date, all obligations of
the Debtors under the DIP Facility shall be paid in full in Cash or otherwise
satisfied in a manner acceptable to such Claimholders in accordance with the
terms of the DIP Facility and the DIP Credit Agreement including, without
limitation, replacement of letters of credit issued under the DIP Facility with
substitute letters of credit, Cash collateralization of such letters of credit
or provision of back to back letters of credit. Upon compliance with the
preceding sentence, all liens and security interests granted to secure such
obligations shall be deemed cancelled and shall be of no further force and
effect.
9.2 PROFESSIONAL CLAIMS.
(a) Final Fee Applications. All final requests for
payment of Professional Claims must be filed no later than sixty (60) days after
the Effective Date. After notice and a hearing in accordance with the procedures
established by the Bankruptcy Code and prior orders of the Bankruptcy Court, the
allowed amounts of such Professional Claims shall be determined by the
Bankruptcy Court.
(b) Payment of Interim Amounts. Subject to the Holdback
Amount, as soon as practicable after the Effective Date, the Debtors or the
Reorganized Debtors shall pay all amounts owing to Professionals for all
outstanding amounts relating to prior periods through the Effective Date. In
order to receive payment on the Effective Date for unbilled fees and expenses
incurred through such date, the Professionals shall estimate fees and expenses
due for periods that have not been billed as of the Effective Date and shall
deliver such estimate to counsel for the Debtors, the Prepetition Agent, Apollo
and the Creditors' Committee. Within fifteen (15) days after the Effective Date,
a Professional receiving payment for the estimated period shall submit a
detailed invoice covering such period in the manner and providing the detail as
set forth in the Professional Fee Order.
(c) Holdback Escrow Account. On the Effective Date, the
Debtors or the Reorganized Debtors shall pay to the Disbursing Agent, in order
to fund the Holdback Escrow Account, Cash equal to the aggregate Holdback Amount
for all Professionals. The Disbursing Agent
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shall maintain the Holdback Escrow Account in trust for the Professionals with
respect to whom fees have been held back pursuant to the Professional Fee Order.
Such funds shall not be considered property of the Reorganized Debtors. Holdback
Amounts owing to the Professionals shall be paid to such Professionals by the
Disbursing Agent from the Holdback Escrow Account when such claims are finally
allowed by the Bankruptcy Court. When all Professional Claims have been paid in
full, amounts remaining in the Holdback Escrow Account, if any, shall be paid to
the Reorganized Debtors. The remaining amount of Professional Claims owing to
the Professionals as of the Effective Date other than the Holdback Amount shall
be paid to such Professionals by the Reorganized Debtors.
(d) Post-Effective Date Compensation. Upon the Effective
Date, any requirement that professionals comply with sections 327 through 331 of
the Bankruptcy Code in seeking retention or compensation for services rendered
after such date will terminate.
9.3 SUBSTANTIAL CONTRIBUTION COMPENSATION AND EXPENSES BAR DATE.
Any Person who requests compensation or expense reimbursement for making a
substantial contribution in the Chapter 11 Cases pursuant to sections 503(b)(3),
503(b)(4), and 503(b)(5) of the Bankruptcy Code must file an application with
the clerk of the Bankruptcy Court, on or before a date which is thirty (30) days
after the Effective Date (the "503 Deadline"), and serve such application on
counsel for the Debtors and the Prepetition Agent and as otherwise required by
the Bankruptcy Court and the Bankruptcy Code on or before the 503 Deadline, or
be forever barred from seeking such compensation or expense reimbursement.
9.4 OTHER ADMINISTRATIVE CLAIMS. All other requests for payment of
an Administrative Claim (other than as set forth in Sections 9.2 and 9.3 of this
Plan) must be filed with the Bankruptcy Court and served on counsel for the
Debtors and the Prepetition Agent no later than thirty (30) days after the
Effective Date. Unless the Debtors, the Reorganized Debtors or another
party-in-interest objects to an Administrative Claim by the Claims Objection
Deadline, such Administrative Claim shall be deemed allowed in the amount
requested. In the event that the Debtors or the Reorganized Debtors object to an
Administrative Claim, the Bankruptcy Court shall determine the allowed amount of
such Administrative Claim. Notwithstanding the foregoing, no request for payment
of an Administrative Claim need be filed with respect to an Administrative Claim
which is paid or payable by either Debtor in the ordinary course of business.
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ARTICLE X
HLI CREDITOR TRUST
10.1 APPOINTMENT OF TRUSTEE.
(a) The Trustee for the HLI Creditor Trust shall be
designated by the Creditors' Committee. The Trustee shall be independent of the
Debtors and Reorganized Debtors. At least ten (10) days prior to the Voting
Deadline, the Creditors' Committee shall file with the Bankruptcy Court a notice
designating the Person who it has selected as Trustee; provided, however, that
if and to the extent the Creditors' Committee fails to file such notice or
otherwise give notice of its designation of the Person it has selected as
Trustee prior to or at the Confirmation Hearing, the Debtors shall designate the
Trustee by announcing the identity of such Person at the Confirmation Hearing.
The Person designated as Trustee shall file with the Bankruptcy Court prior to
the Confirmation Hearing an affidavit demonstrating that such Person is
disinterested as defined by section 101(14) of the Bankruptcy Code. The Person
so designated by the Creditors' Committee shall become the Trustee upon the
Bankruptcy Court entering an order approving the Trustee designated by the
Creditors' Committee after consideration of the same and any objections thereto
at the Confirmation Hearing.
(b) The Trustee shall have and perform all of the duties,
responsibilities, rights and obligations set forth in the Trust Agreement and
shall be entitled to reasonable compensation as set forth therein without
further application to or order of the Bankruptcy Court.
10.2 ASSIGNMENT OF TRUST ASSETS TO THE HLI CREDITOR TRUST. On the
Effective Date, the Debtors shall transfer and shall be deemed to have
transferred to the HLI Creditor Trust, for and on behalf of the beneficiaries of
the Trust, the Trust Assets including the Trust Claims (subject to the
obligation to repay the Expense Advance).
10.3 THE HLI CREDITOR TRUST.
(a) Without any further action of the directors or
shareholders of the Debtors, on the Effective Date, the Trust Agreement,
substantially in the form of Exhibit C to this Plan, shall become effective. The
Trustee shall accept the HLI Creditor Trust and sign the Trust Agreement on that
date and the HLI Creditor Trust will then be deemed created and effective.
(b) Interests in the HLI Creditor Trust shall be
uncertificated and shall be non- transferable except upon death of the interest
holder or by operation of law. Holders of interests in the HLI Creditor Trust
shall have no voting rights with respect to such interests. The HLI Creditor
Trust shall have a term of three (3) years from the Effective Date, without
prejudice to the rights of the Trust Advisory Board to extend such term
conditioned upon the HLI Creditor Trust's not then becoming subject to the
Exchange Act. Subject to the consent of the Trust Advisory Board, which
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consent shall not be unreasonably withheld, the terms of the Trust may be
amended by the Debtors prior to the Effective Date or the Trustee after the
Effective Date to the extent necessary to ensure that the Trust will not become
subject to the Exchange Act.
(c) The Trustee shall have full authority to take any
steps necessary to administer the Trust Agreement, including, without
limitation, the duty and obligation to liquidate Trust Assets, to make
distributions to the holders of Claims entitled to distributions from the Trust
and, if authorized by majority vote of those members of the Trust Advisory Board
authorized to vote, to pursue and settle Trust Claims. Upon such assignments
(which, as stated above, shall be transferred on the Effective Date), the
Trustee, on behalf of the HLI Creditor Trust, shall assume and be responsible
for all of the Debtors' responsibilities, duties and obligations with respect to
the subject matter of such assignments, and the Debtors, the Disbursing Agent
and the Reorganized Debtors shall have no other further rights or obligations
with respect thereto.
(d) The Trustee shall take such steps as it deems
necessary (having first obtained such approvals from the Trust Advisory Board as
may be necessary, if any) to reduce the Trust Assets to Cash to make
distributions required hereunder, provided that the Trustee's actions with
respect to disposition of the Trust Assets should be taken in such a manner so
as reasonably to maximize the value of the Trust Assets.
(e) All costs and expenses associated with the
administration of the HLI Creditor Trust, including those rights, obligations
and duties described in Section 10.3(c) of this Plan, shall be the
responsibility of and paid by the HLI Creditor Trust. Notwithstanding the
foregoing, the Reorganized Debtors shall cooperate with the Trustee in pursuing
such Trust Recoveries and shall afford reasonable access during normal business
hours, upon reasonable notice, to personnel and books and records of the
Reorganized Debtors to representatives of the HLI Creditor Trust to enable the
Trustee to perform the Trustee's tasks under the Trust Agreement and this Plan;
provided, however, that the Reorganized Debtors will not be required to make
expenditures in response to such requests determined by them to be unreasonable.
Other than distributions set forth in Section 10.6, the Reorganized Debtors
shall not be entitled to compensation or reimbursement (including reimbursement
for professional fees) with respect to fulfilling their obligations as set forth
in this subsection 10.3(e). The Bankruptcy Court retains jurisdiction to
determine the reasonableness of either a request for assistance and/or a related
expenditure. Any requests for assistance shall not interfere with the
Reorganized Debtors' business operations.
(f) The Trustee may retain such law firms, accounting
firms, experts, advisors, consultants, investigators, appraisers, auctioneers or
other professionals as it may deem necessary (collectively, the "Trustee
Professionals"), in its sole discretion, to aid in the performance of its
responsibilities pursuant to the terms of this Plan including, without
limitation, the liquidation and distribution of Trust Assets. The Trustee
Professionals shall continue to prepare monthly statements in the same manner
and in the same detail as required pursuant to the Professional Fee Order, and
the Trustee Professionals shall serve such statements on each member of the
Trust Advisory Board.
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In the event two or more members of the Trust Advisory Board object to the
reasonableness of such fees and expenses, the matter shall be submitted to the
Bankruptcy Court for approval of the reasonableness of such fees and expenses.
(g) For federal income tax purposes, it is intended that
the HLI Creditor Trust be classified as a liquidating trust under section
301.7701-4 of the Treasury regulations and that such trust is owned by its
beneficiaries. Accordingly, for federal income tax purposes, it is intended that
the beneficiaries be treated as if they had received a distribution of an
undivided interest in each of the Trust Assets and then contributed such
interests to the HLI Creditor Trust.
(h) The Trustee shall be responsible for filing all
federal, state and local tax returns for the HLI Creditor Trust. The Trustee
shall comply with all withholding and reporting requirements imposed by any
federal, state, local or foreign taxing authority, and all distributions made by
the Trustee shall be subject to any such withholding and reporting requirements.
The Trustee shall provide to holders of interests in the HLI Creditor Trust
copies of annual, audited financial statements, with such copies to be made
available on an Internet website to be maintained by the Trustee and notice of
which shall be given by the Trustee to such interest holders.
10.4 THE TRUST ADVISORY BOARD.
(a) The Trust Advisory Board shall be composed of three
(3) members which shall be designated by the Creditors' Committee. On or before
the date that is ten (10) days prior to the Voting Deadline, such parties shall
file with the Bankruptcy Court a notice of the identities of such members and
serve such notice on each other; provided, however, that if and to the
Creditors' Committee fail to file such notice or otherwise give notice of the
identities of such members prior to or at the Confirmation Hearing, the Debtors
shall designate the members of the Trust Advisory Board by announcing their
identities at the Confirmation Hearing. After the notices of the identities of
the Trust Advisory Board members are filed with the Bankruptcy Court, the Claims
Agent shall post such notices on its Internet website at www.bsillc.com. The
Trust Advisory Board shall adopt such bylaws as it may deem appropriate. The
Trustee shall consult regularly with the Trust Advisory Board when carrying out
the purpose and intent of the HLI Creditor Trust. Members of the Trust Advisory
Board shall be entitled to compensation in accordance with the Trust Agreement
and to reimbursement of the reasonable and necessary expenses incurred by them
in carrying out the purpose of the Trust Advisory Board, without further
application to or order of the Bankruptcy Court. Reimbursement of the reasonable
and necessary expenses of the members of the Trust Advisory Board and their
compensation to the extent provided for in the Trust Agreement shall be payable
by the HLI Creditor Trust.
(b) In the case of an inability or unwillingness of any
member of the Trust Advisory Board to serve, such member shall be replaced by
designation of the remaining members of the Trust Advisory Board. If any
position on the Trust Advisory Board remains vacant for more than thirty (30)
days, such vacancy shall be filled within fifteen (15) days thereafter by the
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designation of the Trustee without the requirement of a vote by the other
members of the Trust Advisory Board.
(c) Upon the certification by the Trustee that all assets
transferred into Trust have been distributed, abandoned or otherwise disposed
of, the members of the Trust Advisory Board shall resign their positions,
whereupon they shall be discharged from further duties and responsibilities.
(d) The Trust Advisory Board may, by majority vote,
approve all settlements of Trust Claims which the Trustee may propose, subject
to Bankruptcy Court approval of such settlements after notice and a hearing,
provided, however, that the Trustee may seek Bankruptcy Court approval of a
settlement of a Trust Claim if the Trust Advisory Board fails to act on a
proposed settlement of such Trust Claim within thirty (30) days of receiving
notice of such proposed settlement by the Trustee.
(e) The Trust Advisory Board may, by majority vote,
authorize the Trustee to invest the corpus of the Trust in prudent investments
other than those described in section 345 of the Bankruptcy Code.
(f) The Trust Advisory Board may remove the Trustee in
the event of gross negligence or willful misconduct. In the event the requisite
approval is not obtained, the Trustee may be removed by the Bankruptcy Court for
cause shown. In the event of the resignation or removal of the Trustee, the
Trust Advisory Board shall, by majority vote, designate a person to serve as
successor Trustee.
(g) The Trust Advisory Board may require a fidelity bond
from the Trustee in such reasonable amount as may be agreed to by majority vote
of the Trust Advisory Board.
(h) The Trust Advisory Board shall govern its proceedings
through the adoption of bylaws, which the Trust Advisory Board may adopt by
majority vote. No provision of such bylaws shall supersede any express provision
of the Plan.
10.5 FUNDING OF EXPENSE ADVANCE. The Reorganized Debtors shall fund
the Expense Advance in the amounts and on the dates described in Section 1.104
herein and deliver such funds to the Trustee to be used by the Trustee
consistent with the purpose of the HLI Creditor Trust and subject to the terms
and conditions of this Plan and the Trust Agreement.
10.6 REPAYMENT OF EXPENSE ADVANCE. Immediately upon receipt, all
Trust Recoveries shall be paid to the Reorganized Debtors first to repay the
Expense Advance (without interest). After repayment of the Expense Advance, (a)
all Net Trust Recoveries to which the holders of Senior Notes are otherwise
entitled will first be used to repay (without interest) the Reorganized Debtors
for the amounts that they expended pursuant to Section 4.7(d) herein; and (b)
all Net Trust
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Recoveries to which the holders of Subordinated Notes are otherwise entitled
will first be used to repay (without interest) the Reorganized Debtors for the
amounts that they expended pursuant to Sections 4.8(b)(i), 4.8(b)(ii) and
4.8(b)(iii) herein. Notwithstanding anything herein to the contrary, if any
portion of the Expense Advance is retained by the HLI Creditor Trust after it
winds up its affairs pursuant to the Trust Agreement, such amount shall be
returned to the Reorganized Debtors.
10.7 DISTRIBUTIONS OF TRUST RECOVERIES. Except as otherwise
provided in Section 10.6, the Trustee shall make distributions of Trust
Recoveries as follows: first, up to $500,000 in Trust Recoveries shall be placed
into a reserve account, which amount may be used only to pay Trust Expenses or
to make repayments on the Expense Advance, as determined by the Trustee, and may
not be used for any other purpose until such time as the Expense Advance has
been fully repaid and the Reorganized Debtors have no further obligation to make
any portion of the Expense Advance; second to repay the Expense Advance; third,
to pay the Trust Expenses; fourth, to repay amounts, if any, borrowed by the
Trustee in accordance with the Trust Agreement; and fifth, subject to the
repayment pursuant to Section 10.6 herein of the amounts expended under Sections
4.7(d) and 4.8(b)(i) though (b)(iii), to pay the distributions to Claimholders
entitled to receive distributions from the HLI Creditor Trust as required by
this Plan. The Trustee shall make distributions of Net Trust Recoveries to
Claimholders entitled to receive distributions from the HLI Creditor Trust at
least semi-annually beginning with a calendar quarter that is not later than the
end of the second calendar quarter after the Effective Date; provided, however,
that the Trustee shall not be required to make any such semi-annual distribution
in the event that the aggregate amount of Net Trust Recoveries available for
distribution to such Claimholders is not sufficient, in the Trustee's discretion
(after consultation with the Trust Advisory Board) to distribute monies to such
Claimholders. From time to time, but no less frequently than quarterly, the
Trustee, in consultation with the Trust Advisory Board, shall estimate the
amount of Net Trust Recoveries required to pay then outstanding and reasonably
anticipated Trust Expenses. The Cash portion of Net Trust Recoveries in excess
of such actual and estimated Trust Expenses shall be made available for
distribution to Claimholders in the amounts, on the dates and subject to the
other terms and conditions provided in this Plan. The Trustee will make
continuing efforts to dispose of the Trust Assets, make timely distributions,
and not unduly prolong the duration of the HLI Creditor Trust.
ARTICLE XI
EFFECT OF THE PLAN ON CLAIMS AND INTERESTS
11.1 REVESTING OF ASSETS. Except as otherwise explicitly provided
in this Plan, including but not limited to the New Holding Company Formation, as
may be modified by the Additional Equity Modification or the Asset Transfer
Modification, on the Effective Date all property comprising the Estates
(including Retained Actions and Retained Avoidance Claims) shall revest in each
of the Debtors and, ultimately, in the Reorganized Debtors, free and clear of
all Claims, liens, charges, encumbrances, rights and Interests of creditors and
equity security holders (other than as
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expressly provided herein). As of the Effective Date, each of the Reorganized
Debtors may operate their businesses and use, acquire, and dispose of property
and settle and compromise Claims without supervision of the Bankruptcy Court,
free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than
those restrictions expressly imposed by the Plan and Confirmation Order.
11.2 DISCHARGE OF REORGANIZING DEBTORS. Pursuant to section 1141(d)
of the Bankruptcy Code, except as otherwise specifically provided in this Plan
or in the Confirmation Order, the distributions and rights that are provided in
this Plan shall be in complete satisfaction, discharge, and release, effective
as of the Confirmation Date (but subject to the occurrence of the Effective
Date), of Claims and Causes of Action, whether known or unknown, against,
liabilities of, liens on, obligations of, rights against, and Interests in the
Reorganizing Debtors or any of their assets or properties, regardless of whether
any property shall have been distributed or retained pursuant to the Plan on
account of such Claims, rights, and Interests, including, but not limited to,
demands and liabilities that arose before the Confirmation Date, any liability
(including withdrawal liability) to the extent such Claims relate to services
performed by employees of the Reorganizing Debtors prior to the Petition Date
and that arise from a termination of employment or a termination of any employee
or retiree benefit program regardless of whether such termination occurred prior
to or after the Confirmation Date, and all debts of the kind specified in
sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, in each case whether
or not (i) a proof of claim or interest based upon such debt, right, or Interest
is filed or deemed filed under section 501 of the Bankruptcy Code, (ii) a Claim
or Interest based upon such debt, right, or Interest is allowed under section
502 of the Bankruptcy Code, or (iii) the holder of such a Claim, right, or
Interest accepted the Plan. The Confirmation Order shall be a judicial
determination of the discharge of all liabilities of and Interests in the
Reorganizing Debtors, subject to the Effective Date occurring. Notwithstanding
anything to the contrary herein, the Plan shall not discharge any claims that
may be held by the SEC against any non-Debtor parties or enjoin or restrain the
SEC from instituting or enforcing any such claims against any non-Debtor
parties.
11.3 COMPROMISES AND SETTLEMENTS. Pursuant to Bankruptcy Rule
9019(a), the Debtors may compromise and settle various Claims (a) against them
and (b) that they have against other Persons. The Debtors expressly reserve the
right (with Bankruptcy Court approval, following appropriate notice and
opportunity for a hearing) to compromise and settle Claims against them and
claims that they may have against other Persons, other than Trust Claims, up to
and including the Effective Date. After the Effective Date, such right shall
pass to the Reorganized Debtors as contemplated in Section 11.1 of this Plan.
11.4 RELEASE OF CERTAIN PARTIES. As of the Confirmation Date, but
subject to the Effective Date, and except as otherwise expressly provided in the
Plan, the Reorganizing Debtors and the Reorganized Debtors will be deemed to
have released the Released Parties, from any and all claims (as such term is
defined in section 101(5) of the Bankruptcy Code), obligations, rights, Causes
of Action, and liabilities which the Debtors or the Estates are entitled to
assert, whether known or unknown, foreseen or unforeseen, existing or hereafter
arising, based in whole or in part upon any
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act or omission, transaction, or occurrence in any way relating to the Debtors,
these Chapter 11 Cases, or the Plan. Notwithstanding anything to the contrary
herein, the Plan shall not release any claims that may be held by the SEC
against any non-Debtor parties or enjoin or restrain the SEC from instituting or
enforcing any such claims against any non-Debtor parties.
11.5 SETOFFS. The Debtors may, but shall not be required to, set
off against any Claim, and the payments or other distributions to be made
pursuant to the Plan in respect of such Claim, claims of any nature whatsoever
that the Debtors may have against such Claimholder; but neither the failure to
do so nor the allowance of any Claim hereunder shall constitute a waiver or
release by the Debtors or the Reorganized Debtors of any such claim that the
Debtors or the Reorganized Debtors may have against such Claimholder.
11.6 EXCULPATION AND LIMITATION OF LIABILITY. Except as otherwise
specifically provided in this Plan, the Debtors, the Reorganized Debtors, the
Creditors' Committee, the members of the Creditors' Committee in their
capacities as such, the Prepetition Lenders, the Prepetition Agent, the DIP
Lenders, the DIP Agent, any of such parties' respective present officers,
directors (but with respect to such parties related to the Debtors, only the
Released Parties shall be covered hereby), employees, advisors, attorneys,
representatives, financial advisors, investment bankers, or agents and any of
such parties' successors and assigns, shall not have or incur, and are hereby
released from, any claim, obligation, Cause of Action, or liability to one
another or to any Claimholder or Interestholder, or any other party in interest,
or any of their respective agents, employees, representatives, financial
advisors, attorneys or Affiliates, or any of their successors or assigns, for
any act or omission in connection with, relating to, or arising out of the
filing the Chapter 11 Cases, negotiation and filing of the Plan, the pursuit of
confirmation of the Plan, the consummation of the Plan, the administration of
the Plan or the property to be distributed under the Plan, except for their
willful misconduct or gross negligence, and in all respects shall be entitled to
reasonably rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan.
11.7 INDEMNIFICATION OBLIGATIONS.
(a) Except as specifically provided in Section 6.7 of the
Plan, in satisfaction and compromise of the Indemnitee's Indemnification Rights,
all Indemnification Rights except those held by (i) Persons included in either
the definition of "Directors and Officers" or the "Insureds" in either of the
policies providing the Debtors' D&O Insurance as of December 15, 2002, and (ii)
Professionals, but only to the extent that they have expressly been granted
Indemnification Rights in the retention agreements filed with the Bankruptcy
Court and only to the extent that such Indemnification Rights have previously
been approved by order of the Bankruptcy Court and are determined to be valid
and enforceable, shall be released and discharged on and as of the Effective
Date.
(b) On and after the Effective Date, the Indemnification
Rights excepted from the release and discharge (i) shall remain in full force
and effect and shall not be modified, reduced,
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discharged, or otherwise affected in any way by the Chapter 11 Cases with
respect to the Continuing Indemnitees and Professionals as provided in
subsection (a)(ii) of this Section 11.7, (ii) shall be limited to the coverage
provided in the Debtors' D&O Insurance as of December 15, 2002 and any
additional Insurance Coverage purchased pursuant to this Section 11.7 plus an
additional $10 million in the aggregate with respect to the directors of HLI who
serve on the executive committee of HLI's board of directors serving in such
capacity after June 6, 2002 (other than Curtis J. Clawson, who is a Continuing
Indemnitee) and former independent directors Anthony Grillo and Ray H. Witt, and
the Reorganized Debtors shall not be liable to make any payments beyond the
additional $10 million in excess of any such coverage actually paid by the D&O
Insurance or the Insurance Coverage to or for the benefit of any such
Indemnitee, and (iii) shall be limited to the coverage provided in the Debtors'
D&O Insurance as of December 15, 2002 and any additional Insurance Coverage
purchased pursuant to this Section 11.7 with respect to all other Persons
included in subsection (a)(i) of this Section 11.7, and the Reorganized Debtors
shall not be liable to make any payments in excess of any such coverage actually
paid by the D&O Insurance or the Insurance Coverage to or for the benefit of any
such Indemnitee.
(c) The Debtors or Reorganized Debtors, as the case may
be, covenant to use commercially reasonable efforts to purchase and maintain D&O
Insurance at an aggregate cost not to exceed $500,000, providing coverage for
those Persons described in subsection (a)(i) of this Section 11.7 for a period
of two (2) years after the Effective Date insuring such parties in respect of
any claims, demands, suits, Causes of Action, or proceedings against such
Persons based upon any act or omission related to such Person's service with,
for, or on behalf of the Debtors or the Reorganized Debtors in at least the
scope and amount as currently maintained by the Debtors (the "Insurance
Coverage").
(d) Subject to the limitations in subsection (c) above,
the Debtors or the Reorganized Debtors, as the case may be, hereby indemnify
such Persons referred to in subsection (c) above to the extent of, and agree to
pay for, any deductible or retention amount that may be payable in connection
with any claim covered under the foregoing Insurance Coverage or any prior
similar policy.
11.8 INJUNCTION. The Confirmation Order shall provide that
satisfaction, release, and discharge pursuant to Article XI of this Plan shall
also act as an injunction against any Person 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 this Plan to the
fullest extent permissible under applicable law, including, without limitation,
to the extent provided for or authorized by sections 524 and 1141 of the
Bankruptcy Code.
11.9 RELEASE BY HOLDERS OF CLAIMS OR INTERESTS. As of the Effective
Date, in consideration for the obligations of the Debtors, the Reorganized
Debtors and their Estates under the Plan and other contracts, instruments,
releases, agreements or documents to be entered into, or delivered in connection
with, the Plan, each Claimholder in a Class that receives distributions under
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the Plan, the Creditors' Committee and the HLI Creditor Trust, and their
respective agents, employees, representatives, financial advisors, attorneys and
Affiliates, and their successors and assigns, to the fullest extent permissible
under applicable law, will be deemed to forever release, waive and discharge any
and all claims (as such term in defined in section 101(5) of the Bankruptcy
Code), obligations, rights, Causes of Action, Retained Actions, Avoidance
Claims, Retained Avoidance Claims, Trust Avoidance Claims and liabilities,
whether known or unknown, foreseen or unforeseen, existing or hereafter arising,
based in whole or in part upon any act or omission, transaction, or occurrence
taking place on, or prior to, the Effective Date in any way relating to the
Debtors, these Chapter 11 Cases, or the Plan that such entity has, had or may
have against the Prepetition Agent, the Prepetition Lenders, the DIP Agent and
the DIP Lenders (and any of their respective officers, directors, employees,
agents, affiliates and other representatives).
11.10 RELEASE BY DEBTORS. As of the Effective Date, in consideration
for the obligations of the Prepetition Agent, the Prepetition Lenders, the DIP
Agent and the DIP Lenders, the Debtors, their Estates and the Reorganized
Debtors, to the fullest extent permissible under applicable law, will be deemed
to forever release, waive and discharge any and all claims (as defined in
section 101(5) of the Bankruptcy Code), obligations, rights, Causes of Action,
Retained Actions, Avoidance Claims, Retained Avoidance Claims, Trust Avoidance
Claims and liabilities, whether known or unknown, foreseen or unforeseen,
existing or hereafter arising, based in whole or in part upon any act or
omission, transaction, or occurrence taking place on, or prior to, the Effective
Date in any way relating to the Debtors, these Chapter 11 Cases, the Plan, the
Prepetition Credit Agreement, the Prepetition Credit Facility, the DIP Credit
Agreement or the DIP Facility that the Debtors have, had or may have against the
Prepetition Agent, the Prepetition Lenders, the DIP Agent and the DIP Lenders
(and any of their respective officers, directors, employees, agents, affiliates
and other representatives).
ARTICLE XII
CONDITIONS PRECEDENT
12.1 CONDITIONS TO CONFIRMATION. The following are conditions
precedent to confirmation of the Plan that may be satisfied or waived in
accordance with Section 12.3 of the Plan:
(a) The Bankruptcy Court shall have approved a disclosure
statement with respect to the Plan in form and substance reasonably acceptable
to the Debtors.
(b) The Confirmation Order shall be in form and substance
reasonably acceptable to the Debtors, the Creditors' Committee, Apollo and the
Prepetition Agent.
(c) The Debtors shall have received a binding,
unconditional (except for a normal "market-out," "material adverse change" or
other similar conditions, conditions relating to the
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issuance of and/or subscriptions to any high yield securities that are to be
issued as a part of the New Credit Facility and for conditions relating to the
occurrence of the Effective Date) commitment for the New Credit Facility on
terms and conditions reasonably satisfactory to the Debtors, subject to the
consent of the Prepetition Agent, the Creditors' Committee and Apollo, which
consent shall not be unreasonably withheld.
12.2 CONDITIONS TO CONSUMMATION. The following are conditions
precedent to the occurrence of the Effective Date, each of which may be
satisfied or waived in accordance with Section 12.3 of the Plan:
(a) The Bankruptcy Court shall have entered one or more
orders (which may include the Confirmation Order) authorizing the rejection of
unexpired leases and executory contracts by the Debtors as contemplated by
Section 7.2 hereof.
(b) The Debtors shall have entered into the New Credit
Facility (which shall be in a form and substance reasonably acceptable to the
Debtors, subject to the consent of the Prepetition Agent, the Creditors'
Committee and Apollo, which consent shall not be unreasonably withheld) and all
conditions precedent to the consummation thereof (other than the occurrence of
the Effective Date of the Plan) shall have been waived or satisfied in
accordance with the terms thereof and the lenders under the New Credit Facility
shall be ready to fund the amounts required by the Debtors upon the Effective
Date including, without limitation, the Prepetition Lenders' Payment Amount.
(c) The Confirmation Order in form and substance
reasonably acceptable to the Debtors, the Prepetition Agent, the Creditors'
Committee and Apollo shall have been entered by the Bankruptcy Court and shall
be a Final Order, and no request for revocation of the Confirmation Order under
section 1144 of the Bankruptcy Code shall have been made, or, if made, shall
remain pending.
(d) The Confirmation Date shall have occurred and the
Confirmation Order shall, among other things, provide that:
(i) the provisions of the Confirmation Order and
the Plan are nonseverable and mutually dependent;
(ii) all executory contracts or unexpired leases
assumed by the Debtors during the Chapter 11 Cases or under the Plan
shall be assigned and transferred to, and remain in full force and
effect for the benefit of, the Reorganized Debtors, notwithstanding any
provision in such contract or lease (including those described in
sections 365(b)(2) and 365(f) of the Bankruptcy Code) that prohibits
such assignment or transfer or that enables or requires termination of
such contract or lease;
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(iii) the transfers of property by the Debtors (A)
to the Reorganized Debtors (1) are or shall be legal, valid, and
effective transfers of property, (2) vest or shall vest the Reorganized
Debtors with good title to such property free and clear of all liens,
charges, Claims, encumbrances, or Interests, except as expressly
provided in the Plan or Confirmation Order, (3) do not and shall not
constitute avoidable transfers under the Bankruptcy Code or under
applicable nonbankruptcy law, and (4) do not and shall not subject the
Reorganized Debtors to any liability by reason of such transfer under
the Bankruptcy Code or under applicable nonbankruptcy law, including,
without limitation, any laws affecting successor or transferee
liability, and (B) to Claimholders under the Plan are for good
consideration and value and are in the ordinary course of the Debtors'
businesses;
(iv) except as expressly provided in the Plan or
the Confirmation Order, the Reorganized Debtors are discharged
effective upon the Effective Date from any "debt" (as that term is
defined in section 101(12) of the Bankruptcy Code), and the
Reorganizing Debtors' liability in respect thereof is extinguished
completely, whether reduced to judgment or not, liquidated or
unliquidated, contingent or noncontingent, asserted or unasserted,
fixed or unfixed, matured or unmatured, disputed or undisputed, legal
or equitable, known or unknown, or that arose from any agreement of the
Reorganizing Debtors entered into or obligation of the Reorganizing
Debtors incurred before the Effective Date, or from any conduct of the
Reorganizing Debtors prior to the Effective Date, or that otherwise
arose before the Effective Date, including, without limitation, all
interest, if any, on any such debts, whether such interest accrued
before or after the Petition Date;
(v) the Plan does not provide for the
liquidation of all or substantially all of the property of the Debtors
and its confirmation is not likely to be followed by the liquidation of
the Reorganized Debtors or the need for further financial
reorganization;
(vi) all Interests in HLI are terminated
effective upon the Effective Date; and
(vii) the New Common Stock and Warrants (including
the offer of New Common Stock through any warrant, option, right to
subscribe, or conversion privilege or the sale of the New Common Stock
upon exercise of such warrant, option, right to subscribe, or
conversion privilege) to be issued under the Plan, the New Senior
Notes, if issued, and, if the Debtors implement either the Additional
Equity Modification or the Asset Transfer Modification, the New
Preferred Stock or Reorganized HLI Stock, respectively, to be issued
under the Plan, in exchange for Claims against the Debtors are exempt
from registration under the Securities Act of 1933 pursuant to, and to
the extent provided by, section 1145 of the Bankruptcy Code.
(e) The Debtors shall have sufficient Cash to make
distributions required under the Plan including, but not limited to, the
Prepetition Lenders' Payment Amount and the DIP Facility Claim.
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In the event that the foregoing conditions are not satisfied or waived by July
1, 2003 (or such later date as may be agreed upon by the Debtors, the
Prepetition Agent, the Creditors' Committee and Apollo), then the Confirmation
Order shall be vacated and this Plan shall be of no further force or effect.
12.3 WAIVER OF CONDITIONS TO CONFIRMATION OR CONSUMMATION. The
conditions set forth in Sections 12.1 and 12.2 of the Plan may be waived by the
Debtors in their discretion without any notice to parties in interest or the
Bankruptcy Court and without a hearing; provided that any such waiver shall
require the prior written consent of the Prepetition Agent, the Creditors'
Committee and Apollo. The failure to satisfy or waive any condition to the
Confirmation Date or the Effective Date may be asserted by the Debtors in their
discretion regardless of the circumstances giving rise to the failure of such
condition to be satisfied (including any action or inaction by the Debtors). The
failure of the Debtors to exercise any of the foregoing rights (and the consent
or failure to consent of the Prepetition Agent, the Creditors' Committee or
Apollo to the same) shall not be deemed a waiver of any other rights, and each
such right shall be deemed an ongoing right, which may be asserted at any time.
ARTICLE XIII
RETENTION OF JURISDICTION
Pursuant to sections 105(a) and 1142 of the Bankruptcy Code,
the Bankruptcy Court shall have exclusive jurisdiction of all matters arising
out of, and related to, the Chapter 11 Cases and the Plan, including, among
other, the following matters:
(a) to hear and determine pending motions for (i) the
assumption or rejection or (ii) the assumption and assignment of executory
contracts or unexpired leases to which the Debtors are a party or with respect
to which the Debtors may be liable, and to hear and determine the allowance of
Claims resulting therefrom including the amount of Cure, if any, required to be
paid;
(b) to adjudicate any and all adversary proceedings,
applications, and contested matters that may be commenced or maintained pursuant
to the Chapter 11 Cases or the Plan, proceedings to adjudicate the allowance of
Disputed Claims, and all controversies and issues arising from or relating to
any of the foregoing;
(c) to adjudicate any and all disputes arising from the
distribution of Cash and New Securities by the Disbursing Agent;
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(d) to adjudicate any and all disputes arising from the
distribution of Trust Assets and/or Trust Recoveries by the HLI Creditor Trust
and any issues related to the Expense Advance and/or repayment of advances for
either the Senior Notes Indenture Trustee or the Subordinated Notes Indenture
Trustees as contemplated in Section 10.6 herein;
(e) to ensure that distributions to Allowed Claimholders
are accomplished as provided herein;
(f) to hear and determine any and all objections to the
allowance of Claims and the estimation of Claims, both before and after the
Confirmation Date, including any objections to the classification of any Claim,
and to allow or disallow any Claim, in whole or in part;
(g) to enter and implement such orders as may be
appropriate if the Confirmation Order is for any reason stayed, revoked,
modified, or vacated;
(h) to issue orders in aid of execution, implementation,
or consummation of the Plan;
(i) to consider any modifications of the Plan, to cure
any defect or omission, or to reconcile any inconsistency in any order of the
Bankruptcy Court, including, without limitation, the Confirmation Order;
(j) to hear and determine all applications for
compensation and reimbursement of Professional Claims under the Plan or under
sections 330, 331, 503(b), 1103, and 1129(a)(4) of the Bankruptcy Code;
(k) to determine requests for the payment of Claims
entitled to priority under section 507(a)(1) of the Bankruptcy Code, including
compensation of and reimbursement of expenses of parties entitled thereto;
(l) to hear and determine disputes arising in connection
with the interpretation, implementation, or enforcement of the Plan, the
Confirmation Order, including disputes arising under agreements, documents, or
instruments executed in connection with this Plan;
(m) to hear and determine all suits or adversary
proceedings to recover assets of the Debtors and property of its Estates,
wherever located;
(n) to hear and determine matters concerning state,
local, and federal taxes in accordance with sections 346, 505, and 1146 of the
Bankruptcy Code;
(o) to hear any other matter not inconsistent with the
Bankruptcy Code;
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(p) to hear and determine all disputes involving the
existence, nature, or scope of the Debtors' discharge, including any dispute
relating to any liability arising out of the termination of employment or the
termination of any employee or retiree benefit program, regardless of whether
such termination occurred prior to or after the Effective Date;
(q) to enter a final decree closing the Chapter 11 Cases;
and
(r) to enforce all orders previously entered by the
Bankruptcy Court.
Unless otherwise specifically provided herein or in a prior order of the
Bankruptcy Court, the Bankruptcy Court shall have exclusive jurisdiction to hear
and determine disputes concerning Claims, Interests, Retained Actions, Retained
Avoidance Claims, and any motions to compromise or settle such disputes. The
Bankruptcy Court shall not have exclusive jurisdiction with respect to Trust
Claims held by the HLI Creditor Trust.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 BINDING EFFECT. The Plan shall be binding upon and inure to
the benefit of the Debtors, the Reorganized Debtors, all present and former
Claimholders, all present and former Interestholders, other parties in interest
and their respective heirs, successors, and assigns.
14.2 MODIFICATION AND AMENDMENTS. The Debtors 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 Hearing subject to the prior consent
of the Prepetition Agent, Apollo and the Creditors' Committee to the extent that
any such alteration or modification alters the treatment afforded either the
Prepetition Lenders, the Senior Noteholders, the Subordinated Noteholders or the
General Unsecured Claimholders, respectively. After the Confirmation Date and
prior to substantial consummation of the Plan as defined in section 1101(2) of
the Bankruptcy Code, the Debtors may, under section 1127(b) of the Bankruptcy
Code, institute proceedings in the Bankruptcy Court to remedy any defect or
omission or reconcile any inconsistencies in the Plan, the Disclosure Statement,
or the Confirmation Order, and such matters as may be necessary to carry out the
purposes and effects of the Plan.
14.3 AUTHORIZATION/CONSENT OF CREDITOR CONSTITUENCIES.
Notwithstanding anything in this Plan to the contrary, the consent or approval
of Apollo or the Creditors' Committee shall not be required (unless otherwise
provided in the Bankruptcy Code) until such party has announced its irrevocable
support for the Plan either by voting to accept the Plan in the case of Apollo
or, in the case of the Creditors' Committee, through a written communication to
each of the creditors in Class 5, Class 6 and Class 7 stating the Creditors'
Committee supports the Plan and is recommending such
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creditors vote in favor of the Plan. In the event Class 2 votes to reject the
Plan, the Prepetition Agent shall retain those rights to consent to and/or
approve of various provisions of the Plan provided that the Prepetition Agent
has publicly supported confirmation of the Plan.
14.4 WITHHOLDING AND REPORTING REQUIREMENTS. In connection with the
Plan and all instruments issued in connection therewith and distributions
thereunder, the Debtors, the Disbursing Agent and the Trustee shall comply with
all withholding and reporting requirements imposed by any federal, state, local,
or foreign taxing authority, and all distributions contemplated hereunder shall
be subject to any such withholding and reporting requirements.
14.5 ALLOCATION OF PLAN DISTRIBUTIONS BETWEEN PRINCIPAL AND
INTEREST. To the extent that any Allowed Claim entitled to a distribution under
the Plan is composed of indebtedness and accrued but unpaid interest thereon,
such distribution shall, to the extent permitted by applicable law, be allocated
for United States federal income tax purposes to the principal amount of the
Claim first and then, to the extent the consideration exceeds the principal
amount of the Claim, to the portion of the Claim representing accrued but unpaid
interest. $750,573,062.51 of the value to be distributed to the Prepetition
Lenders pursuant to Section 4.2(a) herein shall be deemed to be allocated
entirely to principal and the Debtors shall not withhold any state or federal
tax from such distributions. The remaining value to be distributed to the
Prepetition Lenders pursuant to Section 4.2(a) herein shall be deemed to be
allocated entirely to interest.
14.6 COMMITTEES. Effective on the Effective Date, the Creditors'
Committee shall dissolve automatically, whereupon its members, professionals,
and agents shall be released from any further duties and responsibilities in the
Chapter 11 Cases and under the Bankruptcy Code, except with respect to
applications for Professional Claims.
14.7 REVOCATION, WITHDRAWAL, OR NON-CONSUMMATION.
(a) Right to Revoke or Withdraw. The Debtors reserve the
right to revoke or withdraw the Plan at any time prior to the Effective Date.
(b) Effect of Withdrawal, Revocation, or
Non-Consummation. If the Debtors revoke or withdraw the Plan prior to the
Effective Date, or if the Confirmation Date or the Effective Date does not
occur, then the Plan, any settlement, or compromise embodied in the Plan
(including the fixing or limiting to an amount certain any Claim or Interest or
Class of Claims or Interests), the assumption or rejection of executory
contracts or unexpired leases effected by the Plan, and any document or
agreement executed pursuant to the Plan shall be null and void. In such event,
nothing contained herein, and no acts taken in preparation for consummation of
the Plan, shall be deemed to constitute a waiver or release of any Claims by or
against or Interests in the Debtors or any other Person, to prejudice in any
manner the rights of the Debtors or any Person in any further proceedings
involving the Debtors, or to constitute an admission of any sort by the Debtors
or any other Person.
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14.8 SEVERABILITY OF PLAN PROVISIONS. If, prior to the Confirmation
Date, any term or provision of the Plan is held by the Bankruptcy Court to be
illegal, impermissible, invalid, void or unenforceable, or otherwise to
constitute grounds for denying confirmation of the Plan, the Bankruptcy Court
shall, with the consent of the Debtors, the Prepetition Agent, the Creditors'
Committee and Apollo have the power to interpret, modify or delete such term or
provision (or portions thereof) to make it valid or enforceable to the maximum
extent practicable, consistent with the original purpose of the term or
provision held to be invalid, void or unenforceable, and such term or provision
shall then be operative as interpreted, modified or deleted. Notwithstanding any
such interpretation, modification or deletion, the remainder of the terms and
provisions of the Plan shall in no way be affected, impaired or invalidated by
such interpretation, modification or deletion.
14.9 NOTICES. Any notice required or permitted to be provided to
the Debtors, the Creditors' Committee, the DIP Agent, the Bank Agent, or the
Prepetition Agent under the Plan shall be in writing and served by (a) certified
mail, return receipt requested, (b) hand delivery, or (c) overnight delivery
service, to be addressed as follows:
If to the Debtors:
Hayes Lemmerz International, Inc.
15300 Centennial Drive
Northville, Michigan 48167
Attn: General Counsel
with copies to:
Skadden, Arps, Slate,
Meagher & Flom (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606-1285
Attn: J. Eric Ivester, Esq.
Stephen D. Williamson, Esq.
- and -
Skadden, Arps, Slate,
Meagher & Flom LLP
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899-0636
Attn: Anthony W. Clark, Esq.
Grenville R. Day, Esq.
Michael W. Yurkewicz, Esq.
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If to the Creditors' Committee:
Akin Gump Strauss Hauer & Feld LLP
590 Madison Avenue
New York, New York 10022
Attn: Daniel H. Golden, Esq.
David H. Botter, Esq.
Robert J. Stark, Esq.
- and -
Klett Rooney Lieber & Schorling
The Brandywine Building
1000 West Street, Suite 1410
Wilmington, Delaware 19801
Attn: Teresa K.D. Currier
If to the DIP Agent and/or to the Prepetition Agent:
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attn: Mr. Robert N. Greer
Mr. Harold Birk
with copies to:
Clifford Chance US LLP
200 Park Avenue
New York, New York 10166-0153
Attn: Margot B. Schonholtz, Esq.
John S. Mairo, Esq.
- and -
Potter Anderson & Corroon LLP
Hercules Plaza
1313 N. Market Street
P.O. Box 951
Wilmington, Delaware 19899-0951
Attn: Laurie Selber Silverstein, Esq.
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If to Apollo:
Apollo Management V, L.P.
c/o Stutman, Treister & Glatt
3699 Wilshire Boulevard, Suite 900
Los Angeles, California 90010-2739
Attn: Isaac M. Pachulski, Esq.
14.10 TERM OF INJUNCTIONS OR STAYS. Unless otherwise provided herein
or in the Confirmation Order, all injunctions or stays provided for in the
Chapter 11 Cases under section 105 or 362 of the Bankruptcy Code or otherwise,
and extant on the Confirmation Date, shall remain in full force and effect until
the Effective Date.
14.11 GOVERNING LAW. Unless a rule of law or procedure is supplied
by federal law (including the Bankruptcy Code and Bankruptcy Rules) or unless
otherwise specifically stated, the laws of the State of Delaware shall govern
the construction and implementation of the Plan, any agreements, documents, and
instruments executed in connection with the Plan, and corporate governance
matters.
14.12 NO WAIVER OR ESTOPPEL. Each Claimholder or Interestholder
shall be deemed to have waived any right to assert that its Claim or Interest
should be Allowed in a certain amount, in a certain priority, secured or not
subordinated by virtue of an agreement made with the Debtors and/or their
counsel, the Creditors' Committee and/or its counsel, or any other Person, if
such agreement was not disclosed in the Plan, the Disclosure Statement, or
papers filed with the Bankruptcy Court prior to the Confirmation Date.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Dated: Northville, Michigan
April 9, 2003
HAYES LEMMERZ INTERNATIONAL, INC. AND
ITS SUBSIDIARIES THAT ARE ALSO DEBTORS AND
DEBTORS IN POSSESSION IN THE CHAPTER 11 CASES
By: /s/ Curtis J. Clawson
-----------------------------------------
Curtis J. Clawson
President, Chief Executive Officer and
Chairman of the Board of Hayes Lemmerz
International, Inc.
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606-1285
Attn: J. Eric Ivester
Stephen D. Williamson
- and -
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899-0636
Attn: Anthony W. Clark (No. 2051)
Grenville R. Day (No. 3721)
Michael W. Yurkewicz (No. 4165)
By: /s/ Anthony W. Clark
----------------------------------
ATTORNEYS FOR HAYES LEMMERZ
INTERNATIONAL, INC. AND ITS SUBSIDIARIES
THAT ARE ALSO DEBTORS AND DEBTORS
IN POSSESSION IN THE CHAPTER 11 CASES
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