Accomodation Agreement

General Motors Corporation ("GM") and Harvard Industries, Inc., Doehler-Jarvis, Inc. and Doehler-Jarvis Greenville, Inc. (collectively, "The Harvard Group") enter into this Accommodation Agreement (this "Agreement") this ____ day of March, 1997:


RECITALS


A. Doehler-Jarvis, Inc. ("Doehler-Jarvis") and Doehler-Jarvis Greenville, Inc. ("Greenville") are, respectively, direct and indirect wholly owned subsidiaries of Harvard Industries, Inc. ("Harvard").


B. The Harvard Group (including Doehler-Jarvis and Greenville) are major suppliers of component parts (the "Component Parts") to GM pursuant to various purchase order and/or supply contracts ussed by GM (collectively, the "Purchase Orders").


C. Doehler-Jarvis entered into a supply arrangment with GM to supply the requirements of GM's Delphi Automotive Systems Division ("Delphi") for the V-8 Lower Intake Manifold (the "V-8 Manifold").


D. Prior to the price increase referenced in paragraph 1 below, The Harvard Group asserts that it was incurring significant operating losses in connection with the production of V-8 Manifolds by Doehler-Jarvis and/or Greenville, as applicable. The Harvard Group also advised GM that the financial stability of the Harvard Group could be threatened if Doehler-Jarvis and/or Greenville, as applicable, continued to produce and deliver the V-8 Manifold at the existing contract price and requested that GM grant a price increase and other financial accommodations to the Harvard Group as a condition to continuing to deliver V-8 Manifolds to GM.


E. GM asserts that the Harvard Group's failure or refusal to satisfy GM's requirements for the V-8 Manifold would irreparably injure GM.


F. On July 25, 1996, the parties executed a term sheet (the "Term Sheet") outlining the terms of an agreement pursuant to which the Harvard Group would be granted a price increase on the V-8 Manifold and GM would provide certain additional financial accommodations in consideration for the agreements and commitments of the Harvard Group set forth therein.


G. The parties are entering into this Agreement and the Schedules hereto to memorialize the agreements of the parties set forth in the Term Sheet.


THEREFORE, in consideration of the above recitals (which are part of this Agreement) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, GM and the Harvard Group agree as follows:


2
TERMS AND CONDITIONS


1. V-8 Manifold Price Incease. GM has granted Doehler-Jarvis and/or Greenville, as applicable, a price increase of $7.41 per V-8 Manifold for an effective adjusted price of $45.83 per V-8 Manifold, plus any additional adjustments pursuant to GM's aluminim metal market adjustment policy. The above-referenced price increase was effective for all V-8 Manifolds shipped and delivered on or after Maly 1, 1996.


2. Continued Delivery. As consideration for GM agreeing to the price increase referred to above,


(a) Doehler-Jarvis and/or Greenville, as applicable, shall
deliver to GM conforming V-8 Manifolds pursuant to GM releases and GM
requirements of 24,000 V-8 Manifolds per week (the "Required Amount")
as of October 1, 1996. Doehler-Jarvis and/or Greenville, as
applicable, plans to produce the Required Amount on a 5-day, 3-shift
basis but inititially Doehler-Jarvis and/or Greenville, as applicable,
will work on a 6 or 7-day per week basis, if necessary, to produce the
Required Amount. No later than March 15, 1997, Doehler-Jarvis and/or
Greenville, as applicable, will produce the Required Amount on a 5-day,
3-shift basis, and if required by GM, Doehler-Jarvis and/or Greenville,
as applicable, will work a minimum of two Satureday per four week
period to provide at least 8,800 V-8 Manifolds over and above the
Required Amount during each such four week period; and


(b) The Harvard Group shall continue production and delivery
of all Component Parts called for by the Purchase Orders pursuant to
GM releases (excluding the Bell Housing which has been resourced).


3. No Further Modification. With the exception of engineering, specification or standard changes which may be required by GM in the future, the Harvard Group will not seek any modification to the terms and conditions of contracts and agreements between the Harvard Group and GM, including the Purchase Orders, this Agreement and the Access and Occupancy Agreement, including price increases, for so long as Component Parts are being installed in vehicles. Without limiting the generality of the foregoing, with the exception of engineering, specification or standard changes which may be required by GM in the future, the Harvard Group will not seek any further price increase from GM regarding the V-8 Manifold for so long as such V-8 Manifold is being installed in vehicles.

4. Sharing Cost Savings. Doehler-Jarvis and/or Greenville, as applicable, will share reductions in costs resulting from reduction in scrap rate and/or implementation of a sand reclamation process on a 50-50 basis with GM as follows:


(a) For the period from July 1 through June 30 (the "Measurement Period") commending July 1, 1996 through the life of the V-8 Manifold Program, Doehler-Jarvis and/or Greenville, as applicable, shall retain 50% of the Cost Savings (as defined below)


2


3
achieved in such Measurement Period and 50% of such Cost Savings shall
be passed on to GM by means of a price reduction on the V-8 Manifold.


(b) For the purposes of this Agreement, "Cost Savings"
resulting from reduction in scrap rate shall mean the difference
between (i) the actual variable manufacturing cost to produce V-8
Manifolds multiplied by the actual scrap rate for the most recently
ended Measurement Period and (ii) the actual variable manufacturing
cost to produce V-8 Manifolds multiplied by the actual scrap rate for
the immediately preceding Measurement Period. For purposes of this
calculation, the beginning actual variable manufacturing cost
multiplied by the actual scrap rate as of June 30, 1996 shall be
$6,9018. The initial variable manufacturing cost and the method for
determining the future values will be computed consistent with the
previously agreed upon method developed between the Company and BBK
Ltd. (GM's representative).


(c) At the end of each Measurement Period, sand and related
disposal Cost Savings resulting from implementation of a sand
reclamation system will be determined by the parties and such Cost
Savings will also be shared by Doehler-Jarvis and/or Greenville, as
applicable, and GM on a 50/50 basis.


5. Payment Terms. For the period commencing August 1, 1996 and ending at the close of business on December 31, 1996, with respect to V-8 Manifolds only, all invoices (a) received by GM from the 15th of the month will be paid by the 10th of the following month, and (b) received by GM from the 16th to the last day of the month will be paid by the 25th of the following month. Payment terms with respect to all other Component Parts shall be those set forth in the underlying Purchase Orders.


6. Molds and Cores. Harvard will make arrangements to obtain, at the Harvard Group's cost, for installation no later than March 15, 1997, three additional sets of the molds described on Schedule 6 ("Molds") at an aggregate cost of approximately $275,000 and one set of core boxes described on Schedule 6 ("Cores") at a cost of approximately $325,000, which Molds and Cores are to be used in connection with the production of V-8 Manifolds. The Harvard Group acknowledges and agrees that upon completion of such Molds and Cores, GM will solely own all right, title and interest in and to the Molds and Cores and the Harvard Group will have no rights whatsoever in such Molds and Cores, other than the right to use such Molds and Cores as bailee at will to produce Component Parts for GM.


7. Business Plan; Access to Information.


(a) On or before 5 days after execution of this Agreement, Harvard Industries, Inc. shall submit a business plan which demonstrates in GM's sole judgment the long-term financial viability of the Greenville manufacturing facility (the "Greenville Plant"). In addition, every six months, Harvard Industries, Inc. shall provide GM consolidated and


3 4
individual balance sheets, income statements and cash flows for
Harvard Industries, Inc., Doehler-Jarvis, Greenville and the
Greenville Plant. The Harvard Group shall also provide GM, upon
request, information or business plans regarding any facility or
business unit or subsidiary of the Harvard Group, on a consolidated or
individual basis as specified on Schedule 7 attached hereto.


(b) The Harvard Group shall provide to GM or its designee full
access to the Greenville Plant to monitor operations and review
financial and costing information. In addition, the Harvard Group
shall provide to GM, copies of all notices of default or
non-compliance received from Agent or any Lender.


(c) GM shall keep all information provided to it by Harvard Group that is labeled "confidential" or "non-public" when received by GM, confidential unless and until such information is in the public domain, and GM will advise its employees who have access to such non-public information that so long as such information is not in the public domain, they should not trade in Harvard securities.


8. Access and Occupancy Agreement. Simultaneously with the execution of this Agreement, Doehler-Jarvis and Greenville shall execute and deliver to GM an agreement in the form of Schedule 8 attached hereto, (the "Access and Occupancy Agreement"). In addition, upon request by GM, Doehler-Jarvis and Greenville agree to execute or to cause Doehler-Jarvis Pottstown, Inc. and/or Doehler-Jarvis Toledo, Inc. to execute, an Access and Occupancy Agreement relating to the plants located in Pottstown and Toledo on terms and conditions substantially identical to the terms and conditions of agreement attached hereto as Schedule 8 (a) subject to Ford Motor Company consenting to the parties entering into such agreement, and (b) if any time prior to the date on which GM exercises its Right to Occupy under such other Access and Occupancy Agreements, any single customer, other than Ford, has 25% or more of the total production at such facility, then subject to such customer(s)' consent.


9. Tooling Acknowledgement. The Harvard Group agrees that all tooling, assembly, fixtures, test or checking fixtures, gauges, jigs, patterns, casting patterns, dies and molds, including, without limitation, the Molds and Cores referred to in paragraph 6 above, being used by the Harvard Group in connection with its manufacture of Component Parts for GM, together with all appurtenances, accessions thereto (collectively the "Tooling"), except for those specific items of tooling set forth on Schedule 9 (the "Non-GM Owned Tooling"), are owned by GM and are being held by the Harvard Group and, to the extent the Harvard Group has transferred the tooling to third parties, by such parties as bailee at will pursuant to bailment arrangements. The Harvard Group acknowledges and agrees that any and all tooling being utilized to manufacture Component Parts for GM, whether pursuant to direct agreements between the Harvard Group and GM or agreements between the Harvard Group and third parties,


4 5 except for the Non-GM Owned Tooling. Neither the Harvard Group nor any other person or entity other than GM has any right, title or interest in the Tooling, other than the Harvard Group's right, subject to GM's unfettered discretion, to utilize the Tooling to manufacture the Component Parts. The Harvard Group hereby grants GM a power of attorney to execute on its behalf and file a notice financing statement to reflect GM's interest in the Tooling and/or to affix any plate, stamp or other evidence of GM ownership upon each item of tooling. GM shall have the right to take immediate possession of the Tooling at any time without payment of any kind from GM to the Harvard Group. The Harvard Group agrees to cooperate with GM in GM's taking possession of the Tooling. Likewise, effective immediately upon written notice to the Harvard Group, without further notice or court hearings, which rights, if any, are hereby waived, GM shall have the right to immediately enter the Harvard Group's premises and take possession of any and all Tooling without payment of any kind from GM to the Harvard Group, and the Harvard Group agrees to provide GM or its nominee with such access. The fact that GM's right to possession of the Tooling is and shall be independent of GM's obligation to make payments to the Harvard Group (including payments for tooling refurbishment, repair or construction) shall not affect any other obligation GM may have to make such payments to the Harvard Group after GM has taken possession of the Tooling. Further, nothing in this acknowledgement is intended to affect any claims the Harvard Group may have against GM for taking possession of any property which is determined to not to be the property of GM.


10. Second Assembly Line. The Harvard Group hereby acknowledges and agrees that the second assembly line described in Schedule 10, including, without limitation, all equipment, machinery, test, assembly or checking fixtures, parts, hardware, software and all appurtenances, accessions and accessories thereto (the "Second Line") currently being installed at the Harvard Group's Greenville Plant is solely owned by GM and neither the Harvard Group nor any other person or entity other than GM has any right, title or interest in the Second Line, other than the Harvard Group's right, subject to GM's unfettered discretion, to utilize the Second Line to manufacture V-8 Manifolds. The Harvard Group hereby grants GM the power of attorney to execute on its behalf and file a notice financing statement to reflect GM's ownership interest in the Second Line and/or to affix any plate, stamp or other evidence of GM's ownership upon each item of the Second Line. GM shall have the right to take immediate possession of the Second Line at any time without payment of any kind from GM to the Harvard Group and the Harvard ...