Exhibit 99.1
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
)
CHART INDUSTRIES, INC., et al., ) Case No: 03-12114 (JWV)
)
) Jointly Administered
Debtors. )
)
) Related to Docket No. 20
)
)
)
)
)
____________________________________ )
INTERIM ORDER UNDER 11 U.S.C. Sections 361, 363 AND 364
AND FED. R. BANKR. P. 4001 (I) AUTHORIZING SECURED
POSTPETITION FINANCING ON A SUPERPRIORITY BASIS,
(II) AUTHORIZING USE OF CASH COLLATERAL, (III) GRANTING
ADEQUATE PROTECTION AND (IV) SCHEDULING FINAL HEARING
-----------------------------------------------------
Upon the motion (the "Motion") dated July 8, 2003 of the above-captioned
debtors and debtors-in-possession, including Chart Industries, Inc. (the
"Company") and the following subsidiaries of the Company (the "Subsidiary
Guarantors"), CAIRE INC., Chart Asia, Inc., Chart Heat Exchangers Limited
Partnership, Chart Inc., Chart International Holdings, Inc., Chart
International, Inc., Chart Leasing, Inc., Chart Management Company, Inc.,
CoolTel, Inc., GTC of Clarksville, LLC and NexGen Fueling, Inc. (the Company and
the Subsidiary Guarantors collectively, the "Debtors"):
(a) seeking this Court's authorization pursuant to Sections 361, 363(c),
364(c)(l), 364(c)(2), 364(c)(3) and 364(d)(l) of Title 11 of the United States
Code, 11 U.S.C. Sections 101, et seq. (as amended, the "Bankruptcy Code") and
Rules 2002, 4001 and 9014 of the Federal Rules of Bankruptcy Procedure (as
amended, the "Bankruptcy Rules"), for the Company, inter alia, (i) to obtain
secured postpetition financing (the "Postpetition Financing") consisting of a
revolving credit loan and letter of credit facility up to an aggregate principal
amount not to exceed $40,000,000 (the "Commitments") from JPMorgan Chase Bank
("Chase") as administrative agent (the "Agent") and a syndicate of financial
institutions arranged by Chase or J.P. Morgan Securities, Inc. (including Chase,
the "Lenders"), and for the Company to execute a Revolving Credit Agreement with
respect to the Postpetition Financing (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), and for the Company to
execute revolving credit notes (the "Notes"), and for each Subsidiary Guarantor
to guarantee the Notes and all obligations of the Company and each other
Subsidiary Guarantor under the Credit Agreement (the Credit Agreement, the
Notes, and all ancillary documents at any time executed in connection therewith,
collectively, the "Loan Documents"), (ii) to grant the Lenders, pursuant to
Bankruptcy Code Sections 364(c) and 364(d), security interests in all of the
Debtors' presently owned and after-acquired real and personal property to secure
the Debtors' obligations under the Credit Agreement and the other Loan
Documents, and (iii) to grant the Lenders, pursuant to Bankruptcy Code Section
364(c), priority in payment with respect to such obligations over any and all
administrative expenses of the kinds specified in Bankruptcy Code Sections
503(b) and 507(b), other than as described below;
(b) seeking this Court's authorization, pursuant to Bankruptcy Code Section
363(c), to use Cash Collateral (as defined below) and to provide adequate
protection, pursuant to Bankruptcy Code Sections 361, 363(e) and 364(c) in the
priority set forth herein to the prepetition secured lenders (the "Prepetition
Lenders") to the Company pursuant to the Credit Agreement dated as of April 12,
1999 (as amended, supplemented or otherwise
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modified prior to the commencement of these Chapter 11 cases, the "Prepetition
Credit Agreement"), among the Company, the Subsidiary Guarantors, the
Prepetition Lenders, National City Bank as Documentation Agent, and The Chase
Manhattan Bank (n/k/a JPMorgan Chase Bank) as Administrative Agent for the
Prepetition Lenders (in such capacity, the "Prepetition Agent"), the Series 1
Incremental Revolving Credit Agreement, dated as of November 29, 2000, among the
Company, the Subsidiary Guarantors, the Prepetition Agent and the Prepetition
Lenders thereunder (as amended, supplemented or otherwise modified prior to the
commencement of these Chapter 11 cases, the "First Incremental Revolver"), and
the Series 2 Incremental Revolving Credit Agreement, dated as of April 17, 2001,
among the Company, the Subsidiary Guarantors, the Prepetition Agent and the
Prepetition Lenders thereunder (as amended, supplemented or otherwise modified
prior to the commencement of these Chapter 11 cases, the "Second Incremental
Revolver") on account of the prepetition debt (the "Prepetition Obligations")
under the Prepetition Credit Agreement, the First Incremental Revolver and the
Second Incremental Revolver, and all collateral and ancillary documents executed
in connection therewith (individually and collectively the "Prepetition Loan
Documents"), with respect to any diminution in the value of the Prepetition
Lenders' interests in the Prepetition Collateral (as defined below) resulting
from (x) the priming liens and security interests granted in this Interim Order
(defined below) pursuant to Bankruptcy Code Section 364(d) to secure the
Postpetition Financing, (y) the use, sale or lease of the Prepetition
Collateral, and (z) the imposition of the automatic stay pursuant to Bankruptcy
Code Section 362; and
(c) seeking a preliminary hearing (the "Preliminary Hearing") on the Motion
to consider entry of an order pursuant to Bankruptcy Rule 4001 (this "Interim
Order") authorizing the Company, inter alia, to utilize the Commitments for up
to an aggregate of $25,000,000 of loans and face amount of letters of credit,
all upon the terms and conditions set forth in the Credit Agreement and the
other Loan Documents and this Interim Order pending a final hearing; and
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(d) requesting that a final hearing (the "Final Hearing") be scheduled and
that notice procedures in respect of the Final Hearing be established by this
Court, to consider entry of a final order authorizing on a final basis, inter
alia, the Postpetition Financing and use of Cash Collateral; and upon the
Declaration of Michael F. Biehl in Support of Chapter 11 Petitions and First-Day
Orders; and due and sufficient notice of the Motion and the Preliminary Hearing
having been given; and the Preliminary Hearing on the Motion having been held
before this Court on July 10, 2003; and upon the entire record made at the
Preliminary Hearing and this Court having found good and sufficient cause
appearing therefor, IT IS HEREBY FOUND that:
A. On July 8, 2003 (the "Filing Date"), the Debtors filed voluntary
petitions for relief with this Court under Chapter 11 of the Bankruptcy Code
(the "Chapter 11 Cases"). The Debtors are continuing in possession of their
property, and operating and managing their businesses, as debtors in possession
pursuant to Bankruptcy Code Sections 1107 and 1108.
B. This Court has jurisdiction over the Chapter 11 Cases and the Motion
pursuant to 28 U.S.C. Sections 157(b) and 1334. Consideration of the Motion
constitutes a core proceeding as defined in 28 U.S.C. Section 157(b)(2).
C. Without prejudice to the rights of any other party (but subject to the
limitations thereon described below in paragraph 14), the Debtors admit that, in
accordance with the terms of the Prepetition Loan Documents, the Debtors are
truly and justly indebted to the Prepetition Lenders, without defense,
counterclaim or offset of any kind, and that as of the Filing Date (i) the
Company was liable to the Prepetition Lenders for principal and accrued
pre-petition interest in the approximate amount of $262,186,978 (as of June 30,
2003) in respect of loans made and letters of credit issued by the Prepetition
Lenders to the Company pursuant to the Prepetition Loan Documents, and (ii) each
Debtor party to a guaranty executed and delivered in respect of the
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Prepetition Obligations was contingently liable to the Prepetition Lenders
pursuant to such guaranty.
D. Without prejudice to the rights of any other party (but subject to the
limitations thereon described below in paragraph 14), the Debtors further admit
that the Prepetition Obligations are secured by valid, enforceable, duly
perfected liens and security interests granted by the applicable Debtors to the
Prepetition Agent, for the ratable benefit of the Prepetition Lenders, on and in
substantially all of the Company's and the other Debtors' real and personal
property and other assets, including without limitation, inventory, accounts
receivable, equipment, general intangibles, and other tangible and intangible
personal property and the proceeds thereof, and the setoff rights described in
the Prepetition Loan Documents and arising by operation of law (the "Prepetition
Collateral"). All the Debtors' cash constitutes proceeds of the Prepetition
Collateral and, therefore, is cash collateral of the Prepetition Lenders within
the meaning of Bankruptcy Code Section 363(a) (the "Cash Collateral").
E. Based upon the record presented at the Preliminary Hearing: (i) the
Debtors do not have sufficient available sources of working capital and
financing to carry on the operation of their businesses without the Postpetition
Financing; (ii) the Debtors' ability to maintain business relationships with
their vendors, suppliers and customers, to pay their employees, purchase raw
materials and supply new inventory and otherwise finance their business
operations, is essential to the Debtors' continued viability; (iii) the Debtors'
critical need for financing is immediate; (iv) in the absence of the
Postpetition Financing, the continued operation of the Debtors' businesses would
not be possible, and serious and irreparable harm to the Debtors and their
estates would occur; and (v) the preservation, maintenance and enhancement of
the going concern value of the Company and the other Debtors are of the utmost
significance and importance to a successful reorganization of the Debtors under
Chapter 11 of the Bankruptcy Code.
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F. Given the Debtors' current financial condition, financing arrangements
and capital structure, the Debtors cannot obtain unsecured credit allowable
under Bankruptcy Code Section 503(b)(1) as an administrative expense. Financing
on a postpetition basis is not otherwise available without the Debtors (i)
granting, pursuant to Bankruptcy Code Section 364(c)(1), claims having priority
over any and all administrative expenses of the kinds specified in Bankruptcy
Code Sections 503(b) and 507(b), other than as described below, and (ii)
securing, pursuant to Bankruptcy Code Section 364(c) and Bankruptcy Code Section
364(d), such indebtedness and obligations with security interests in and liens
upon the property described below, all in accordance with and subject to the
terms of this Interim Order and the Credit Agreement and the other Loan
Documents.
G. Notice of the Preliminary Hearing and the relief requested in the
Motion has been given to (i) the Office of the United States Trustee, (ii)
counsel to the Prepetition Agent, (iii) the creditors holding the 20 largest
unsecured claims against the Debtors on a consolidated basis, (iv) any party who
filed a request for notices in the Chapter 11 Cases pursuant to Bankruptcy Rule
2002, and (v) any known lienholders of the Debtors. No creditors' committee has
been appointed in the Chapter 11 Cases. Under the circumstances, sufficient and
adequate notice of the Preliminary Hearing and the relief requested in the
Motion has been given pursuant to Bankruptcy Code Sections 102(1), 364(c) and
364(d), Bankruptcy Rules 2002 and 4001(c).
H. Based upon the record presented at the Preliminary Hearing, the
Postpetition Financing has been negotiated in good faith and at arm's length
between the Debtors and the Lenders, and any credit extended, letters of credit
issued and loans made to the Debtors pursuant to the Credit Agreement shall be
deemed to have been extended, issued or made, as the case may be, in good faith
as required by, and within the meaning of, Bankruptcy Code Section 364(e).
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I. The terms of the Postpetition Financing are fair and reasonable,
reflect the Debtors' exercise of prudent business judgment consistent with their
fiduciary duties, and are supported by reasonably equivalent value and fair
consideration.
J. The Debtors have requested immediate entry of this Interim Order
pursuant to Bankruptcy Rules 4001(b)(2) and 4001(c)(2). The permission granted
herein to enter into the Postpetition Financing and obtain funds thereunder, and
the use of Cash Collateral is necessary to avoid immediate and irreparable harm
to the Debtors. This Court concludes that entry of this Interim Order is in the
best interest of the Debtors' respective estates and creditors as its
implementation will, among other things, allow for the continued flow of goods
necessary to sustain the operation of the Debtors' existing businesses and
enhance the Debtors' prospects for successful reorganization.
Based upon the foregoing findings and conclusions, and upon the record made
before this Court at the Preliminary Hearing, and good and sufficient cause
appearing therefor, IT IS HEREBY ORDERED that:
l. The Motion is granted, subject to the terms and conditions set forth in
this Interim Order.
2. The Debtors are expressly authorized and empowered to execute and
deliver the Credit Agreement, substantially in the form attached hereto as
Exhibit A, and the Notes and any other Loan Document to be executed and
delivered in connection therewith. Based upon the record made by the Debtors at
the Preliminary Hearing, the terms and conditions of the Credit Agreement and
the other Loan Documents are approved on an interim basis, and the Company and
the Subsidiary Guarantors are authorized to comply with and perform all of the
terms and conditions contained therein, and the Company is authorized and
directed to repay amounts borrowed, and each Subsidiary Guarantor is further
authorized and directed to repay amounts guaranteed, with interest to the
Lenders in accordance with and subject to the terms and conditions set forth in
the Credit Agreement and the other Loan Documents and this Interim Order. The
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Debtors are further authorized and directed to pay all facility, letter of
credit, agent, commitment and other fees and expenses, including, without
limitation, all reasonable fees and expenses of professionals engaged by the
Agent and the Lenders, in accordance with the terms of the Credit Agreement,
provided, however, that with respect to the fees provided for in section 2.10 of
the Credit Agreement (the "Fees"), pending entry of the final order authorizing
the relief requested in the Motion on a final basis, the Debtors are authorized
to pay only the pro rata portion of such Fees, based on the ratio of the amount
of Postpetition Financing authorized in this Interim Order divided by the total
amount of the Commitments. Prior to requiring any payments of the Fees
authorized hereunder, the Lenders shall first credit to the Debtors any
prepetition payments made on account of such Fees. The Lenders shall provide the
Debtors with invoices for all fees and expenses authorized hereunder, with
copies to the Office of the United States Trustee and counsel to any statutory
committee of unsecured creditors appointed in the Chapter 11 Cases. All loans
made under the Credit Agreement (the "Loans") and interest thereon, together
with all reimbursement and other obligations in respect of letters of credit
issued under the Credit Agreement ("Letters of Credit"), and all reasonable
fees, costs, expenses, indebtedness, obligations and liabilities of the Company
and each Subsidiary Guarantor to the Agent and the Lenders under the Credit
Agreement and the other Loan Documents and this Interim Order are hereinafter
referred to as the "Obligations." In accordance with the terms of the Credit
Agreement, each letter of credit issued under the Prepetition Loan Documents
which is outstanding on the Filing Date shall be (i) continued under the Credit
Agreement, (ii) deemed a Letter of Credit issued and outstanding under the
Credit Agreement, and (iii) included in the Commitments and Obligations
hereunder and under the Credit Agreement.
3. Pending the Final Hearing, the Company is expressly authorized to
obtain Loans and Letters of Credit from the Lenders, and the Subsidiary
Guarantors are expressly authorized to guarantee all Obligations in respect of
such loans and Letters of
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Credit, all on the terms and subject to the conditions set forth in the Credit
Agreement and the other Loan Documents and this Interim Order up to a total of
$25,000,000 (with a sublimit of $25,000,000 for Letters of Credit). The Company
is authorized to use the proceeds of the Loans, to request the issuance of
Letters of Credit and the Company and other Debtors are authorized to use Cash
Collateral in the operation of the Debtors' businesses, provided, that the
proposed Loan, Letter of Credit or use of Cash Collateral is consistent with the
terms of the Credit Agreement and this Interim Order.
4. In accordance with Bankruptcy Code Section 364(c)(1), the Obligations
shall constitute allowed claims with priority in payment over any and all
administrative expenses of the kinds specified or ordered pursuant to any
provision of the Bankruptcy Code, including, but not limited to, Bankruptcy Code
Sections 105, 326, 328, 330, 331, 503(b), 507(a), 507(b) and 506(c), and in
accordance with Bankruptcy Code Section 726 (the "Superpriority Claims"), shall
at all times be senior to the rights of the Prepetition Agent and the
Prepetition Lenders, the Debtors, and any successor trustee or any creditor, in
the Chapter 11 Cases or any subsequent proceedings under the Bankruptcy Code,
and shall be subject only to the Carve-Out (as defined in paragraph 7 below). No
cost or expense of administration under Bankruptcy Code Sections 105, 364(c)(1),
503(b), 507(b) and 506(c) or otherwise, including those resulting from the
conversion of any of the Chapter 11 Cases pursuant to Bankruptcy Code Section
1112, shall be senior to, or pari passu with, the Superpriority Claims of the
Lenders arising out of the Obligations, subject only to the Carve-Out.
5. As security for the Obligations, the Agent and the Lenders shall have
and are hereby granted (effective as of the Filing Date and without the
necessity of the execution by the Debtors of mortgages, deeds of trust, security
agreements, pledge agreements, financing statements or otherwise), valid and
perfected, security interests in, and liens upon (the "Liens"), all present and
after-acquired property of the Debtors of any nature whatsoever, including,
without limitation, all cash contained in any account
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maintained by the Debtors and the proceeds of all causes of action (whether
pursuant to federal law or applicable state law) of the Debtors or their estates
(collectively with all proceeds and products of any or all of the foregoing, the
"Collateral"), subject only to the Carve-Out, as follows:
(a) pursuant to Bankruptcy Code Section 364(c)(2), a first priority,
perfected Lien upon all of the Debtors' right, title and interest in, to
and under all Collateral that is not otherwise encumbered by a validly
perfected security interest or lien on the Filing Date;
(b) pursuant to Bankruptcy Code Section 364(c)(3), a second priority,
junior, perfected Lien upon all of the Debtors' right, title and interest
in, to and under all Collateral (other than as set forth in subparagraph
(c) below) which is subject to any validly perfected security interest or
lien (i) in existence as of the Filing Date and that is not subject to
Bankruptcy Code Section 552(a), or (ii) perfected (but not granted) after
the Filing Date to the extent such perfection in respect of a pre-Filing
Date claim is expressly permitted under the Bankruptcy Code and that is not
subject to Bankruptcy Code Section 552(a), or (iii) that is a Permitted
Encumbrance (as defined in the Credit Agreement) and expressly permitted in
the Credit Agreement to be senior to the Liens granted to the Agent and the
Lenders in this Interim Order to secure the Obligations; and
(c) pursuant to Bankruptcy Code Section 364(d)(1) and the
non-objection of the Prepetition Agent and the Prepetition Lenders, a first
priority, senior, priming, perfected Lien (A) upon all of the Debtors'
right, title and interest in, to and under the Prepetition Collateral,
subject to any validly perfected security interest or lien (other than the
liens and security interests of the Prepetition Agent and the Prepetition
Lenders securing the Prepetition Obligations) (i) in existence as of the
Filing Date and that is not subject to Bankruptcy Code Section 552(a), or
(ii) perfected (but not granted) after the Filing Date to the extent such
perfection in respect of a pre-Filing Date claim is expressly permitted
under the Bankruptcy Code and that is not subject to Bankruptcy Code
Section 552(a), or (iii) that is a Permitted Encumbrance (as defined in the
Credit Agreement) and expressly permitted in the Credit Agreement to be
senior to the Liens granted to the Agent and the Lenders in this Interim
Order to secure the Obligations, and (B) upon any property of the Debtors
upon which Replacement Liens (as defined below) are granted to provide
adequate protection in respect of the Prepetition Obligations, senior to
the Replacement Liens.
6. The Prepetition Agent and the Prepetition Lenders are granted the
following adequate protection for any diminution in the value of the Prepetition
Agent's and the Prepetition Lenders' interests in the Prepetition Collateral
from the Filing Date
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resulting from (a) the priming of the Prepetition Agent's and the Prepetition
Lenders' liens on the Prepetition Collateral by the Liens granted in this
Interim Order and the Credit Agreement and the other Loan Documents pursuant to
Bankruptcy Code Section 364(d) to secure the Obligations, (b) the use, sale,
lease or other disposition of the Prepetition Collateral (including Cash
Collateral) by the Debtors, and (c) the imposition of the automatic stay
pursuant to Bankruptcy Code Section 362:
(i) the Prepetition Agent and the Prepetition Lenders shall have and
are hereby granted (effective as of the Filing Date and without the
necessity of the execution by the Debtors of any mortgages, security
interests, pledge agreements, financing statements or other documents)
valid and perfected, security interests in, and liens upon (the
"Replacement Liens") all of the Debtors' right, title and interest in, to
and under the Collateral, having a priority immediately junior to the Liens
granted pursuant to this Interim Order and/or the Credit Agreement and the
other Loan Documents to the Agent and the Lenders to secure the
Obligations, and subject in addition to any validly perfected liens which
remained senior (after giving effect to this Interim Order) to the Liens
granted the Agent and the Lenders pursuant to this Interim Order and/or the
Credit Agreement and the other Loan Documents to secure the Obligations;
(ii) the allowed claims of the Prepetition Agent and the Prepetition
Lenders shall be Superpriority Claims having a priority immediately junior
only to the Superpriority Claims granted to the Agent and the Lenders in
respect of the Obligations pursuant to this Interim Order; and
(iii) the Debtors, without further order of, or application to, the
Court are directed and authorized to pay all reasonable out-of-pocket costs
and expenses incurred by the Prepetition Agent and the Prepetition Lenders
during the Chapter 11 Cases (including, without limitation, the reasonable
fees and expenses of counsel and any financial consultants advising the
Prepetition Agent and the Prepetition Lenders, and of internal and third
party consultants and auditors advising the Prepetition Agent in connection
with periodic field audits) that arise out of or relate to the enforcement
and protection of the rights and remedies of the Prepetition Agent and the
Prepetition Lenders in respect of the Prepetition Loan Documents or the
Chapter 11 Cases or any subsequent cases (provided that all such fees and
expenses have been approved by the Prepetition Agent). The Prepetition
Agent shall provide copies of any invoices sent to the Debtors for such
costs and expenses to counsel for any statutory committees appointed in the
Chapter 11 Cases.
7. The Liens and Superpriority Claims granted to the Agent and the Lenders
pursuant to the Credit Agreement and the other Loan Documents and/or this
Interim
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Order shall be subject and subordinate to a carve-out notwithstanding any
provision of this Order, the Credit Agreement or the other Loan Documents to the
contrary, but excluding from such carve-out the Collateral Account as described
below (the "Carve-Out") for: (a) the payment of allowed professional fees and
disbursements incurred by the professionals retained pursuant to Bankruptcy Code
Sections 327 or 1103(a) by the Debtors and any statutory committee of unsecured
creditors appointed in the Chapter 11 Cases (and any disbursements of any member
of such committee) (i) in an aggregate allowed amount not to exceed $1,500,000
(the "Post-Default Carve-Out Amount") on account of such professional fees and
disbursements incurred following the "Default Point" (as defined below), plus
(ii) the aggregate allowed amount (the "Pre-Default Carve-Out Amount") of all
unpaid professional fees and disbursements incurred, accrued or invoiced from
the Filing Date until the Default Point; and (b) quarterly fees required to be
paid pursuant to 28 U.S.C. Section 1930(a)(6) and any fees payable to the Clerk
of the Bankruptcy Court; provided, however, that amounts deposited in the
Collateral Account (as defined in the Credit Agreement) under Section 2.04 of
the Credit Agreement shall not be subject to the Carve-Out, the Pre-Default
Carve-Out Amount or the Post-Default Carve-Out Amount. Notwithstanding anything
in this Interim Order to the contrary, no Loans, Letters of Credit, Cash
Collateral or any portion of the Carve-Out may be used to object to or contest
in any manner, or raise any defense to, the validity, perfection, priority or
enforceability of the Prepetition Obligations, the Obligations, the liens and
security interests securing the Prepetition Obligations or the Liens securing
the Obligations, the Replacement Liens, or to assert any claims or causes of
action against the Prepetition Lenders, the Prepetition Agent, the Lenders or
the Agent, whether through an adversary proceeding, contested matter or
otherwise, provided, however, that Cash Collateral may be used to investigate
the matters described above. Until the Default Point, the Debtors shall be
permitted to pay compensation and reimbursement of expenses, allowed and payable
under Bankruptcy Code Sections 330 and 331, as the same may be payable, and the
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amounts so paid shall be free and clear of the Liens and Superpriority Claims
granted to the Agent and the Lenders pursuant to the Credit Agreement and the
other Loan Documents and/or this Interim Order. As used herein, "Default Point"
means that date when both (x) an Event of Default (as defined in the Credit
Agreement) shall have occurred and (y) the Agent and the Lenders have ceased
making advances or extensions of credit to the Debtors under the Credit
Agreement and the other Loan Documents.
8. Except as set forth in paragraphs 5, 6 and 7 above, the Liens granted
to the Agent and the Lenders, and the Replacement Liens granted to the
Prepetition Agent and the Prepetition Lenders, pursuant to this Interim Order,
shall be prior and senior to all liens and encumbrances of all other secured
creditors in and to such Collateral granted, or arising, after the Filing Date
(including, without limitation, liens and security interests, if any, granted in
favor of any federal, state, municipal or other governmental unit, commission,
board or court for any liability of the Debtors). The Liens and Replacement
Liens granted pursuant to this Interim Order shall constitute valid and duly
perfected security interests and liens, and the Agent, the Lenders, the
Prepetition Agent and the Prepetition Lenders shall not be required to file or
serve financing statements, notices of lien or similar instruments which
otherwise may be required under federal or state law in any jurisdiction, or
take any action, including taking possession, to validate and perfect such
security interests and liens; and the failure by the Debtors to execute any
documentation relating to the Liens or Replacement Liens shall in no way affect
the validity, perfection or priority of such Liens or Replacement Liens. If,
however, the Agent or any Lender or the Prepetition Agent, in its sole
discretion, shall determine to file any such financing statements, notices of
lien or similar instruments, or to otherwise confirm perfection of such Liens or
Replacement Liens, the Debtors are directed to cooperate with and assist in such
process, the stay imposed by Bankruptcy Code Section 362(a) is hereby lifted to
allow the filing and recording of a certified copy of this Interim Order or any
such financing statements, notices of lien or similar instruments, and all such
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documents shall be deemed to have been filed or recorded at the time of and on
the date of this Interim Order.
9. This Interim Order does not (i) authorize the Debtors to waive any
right to assert a claim under Bankruptcy Code Section 506(c) for any costs and
expenses incurred in connection with the preservation, protection or enhancement
of, or realization by the Agent, the Lenders, the Prepetition Agent or the
Prepetition Lenders upon the Collateral or the Prepetition Collateral, or (ii)
authorize any liens in favor of the Lenders upon any claims under chapter 5 of
the Bankruptcy Code, which provisions of the proposed final order on the Motion
will be considered at the Final Hearing.
10. The Debtors are authorized to perform all acts, and execute and comply
with the terms of such other documents, instruments and agreements in addition
to the Credit Agreement and the other Loan Documents, as the Agent or the
Lenders may reasonably require, as evidence of and for the protection of the
Obligations, or which otherwise may be deemed reasonably necessary by the Agent,
the Lenders, the Prepetition Agent or the Prepetition Lenders to effectuate the
terms and conditions of this Interim Order and the Credit Agreement and the
other Loan Documents, as the case may be. The Debtors, the Agent and the Lenders
are hereby authorized to implement, in accordance with the terms of the Credit
Agreement, any nonmaterial modifications (including without limitation, any
change in the number or composition of the Lenders) of the Credit Agreement
without further Order of this Court.
11. As long as any portion of the Obligations remain unpaid, or any Loan
Document remains in effect, the Debtors shall not seek, and it shall constitute
an Event of Default (as defined in the Credit Agreement) if (a) there shall be
entered any order dismissing any of the Chapter l1 Cases or (b) except as
expressly permitted under the Credit Agreement there shall be entered in any of
the Chapter 11 Cases or any subsequent Chapter 7 case any order which authorizes
under any section of the Bankruptcy Code, including Bankruptcy Code Sections 105
or 364, (i) the granting of any lien or security interest
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in any property of the Debtors in favor of any party other than the Agent and
the Lenders or the Prepetition Agent and the Prepetition Lenders, or (ii) the
obtaining of credit or the incurring of indebtedness that is entitled to
superpriority administrative status equal or superior to that granted to the
Agent, the Lenders, the Prepetition Agent and the Prepetition Lenders pursuant
to this Interim Order, unless, in connection with any transaction cited in
clause (i) or (ii) of this paragraph 11, such order requires that the
Obligations and Prepetition Obligations shall first be indefeasibly paid in full
(including cash collateralization of Letters of Credit in accordance with the
terms of the Credit Agreement).
12. Upon the occurrence of and during the continuance of an Event of
Default (as defined in the Credit Agreement): (a) the Agent, acting at the
direction of the Required Lenders (to the extent required in the Credit
Agreement), by notice to the Company (with a copy to the Office of the United
States Trustee and counsel for any statutory committee of unsecured creditors
appointed in the Chapter 11 Cases), and after any applicable notice period
required in the Credit Agreement, is permitted and authorized to terminate the
Commitments and declare the Loans to be due and payable, and the automatic stay
of Bankruptcy Code Section 362(a) is hereby vacated, lifted and modified,
without further order of this Court, to permit the Agent and the Lenders to
exercise any and all of their rights and remedies under the Credit Agreement,
the other Loan Documents and this Interim Order, including, but not limited to,
setting off amounts in any account of the Debtors maintained with the Agent, the
Prepetition Agent, a Lender or a Prepetition Lender, exercising rights and
remedies with respect to any account of the Debtors maintained at any bank or
financial institution, or otherwise enforcing rights and remedies against any
other Collateral; (b) the Debtors shall not have any right to seek relief under
the Bankruptcy Code, including without limitation, under Bankruptcy Code Section
105, to the extent any such relief would in any way restrict or impair the
rights and remedies of the Agent, the Lenders, the Prepetition Agent and the
Prepetition Lenders set
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forth in this Interim Order, the Credit Agreement and the other Loan Documents,
the Prepetition Loan Documents or applicable state law, provided however that
the Debtors reserve the right to seek relief from this Court if the exercise of
rights and remedies by the Agent, the Lenders, the Prepetition Agent or the
Prepetition Lenders is not in accordance with this Interim Order, the Loan
Documents, the Prepetition Loan Documents or applicable state law (including the
Debtors' right to dispute the occurrence of any Event of Default, as defined in
the Credit Agreement, and to have such dispute adjudicated by this Court); (c)
all proceeds of Collateral, and any other payments received by the Agent, any
Lender, the Prepetition Agent, or the Prepetition Lenders after the occurrence
of and during the continuance of an Event of Default shall be applied to the
Obligations and the Prepetition Obligations in the manner set forth in the
Credit Agreement and the Prepetition Loan Documents, respectively, subject only
to the Carve-Out; and (d) if an Event of Default has occurred and is continuing
and the Agent has terminated the Commitments and declared the Loans to be due
and payable, the Debtors' right to use Cash Collateral shall terminate on the
third business day after the Prepetition Agent, acting at the direction of the
prepetition Required Lenders (as defined in the Prepetition Credit Agreement),
provides written notice to the Debtors, the United States Trustee and any
statutory committees appointed in the Chapter 11 Case that use of Cash
Collateral shall terminate.
13. Having been found to be extending credit, issuing Letters of Credit and
making Loans to the Debtors in good faith, based upon the record presented at
the Preliminary Hearing, the Agent and the Lenders shall be entitled to the full
protection of Bankruptcy Code Section 364(e) with respect to the Obligations and
the Liens created or authorized by this Interim Order in the event that this
Interim Order or any authorization contained herein is stayed, vacated, reversed
or modified on appeal. Any stay, modification, reversal or vacation of this
Interim Order shall not affect the validity of any obligation of the Debtors to
the Agent, the Lenders, Prepetition Agent or the Prepetition
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Lenders incurred pursuant to this Interim Order. Notwithstanding any such stay,
modification, reversal or vacation, all Loans made and all Letters of Credit
issued pursuant to this Interim Order and the Credit Agreement, and all use of
Cash Collateral and all Obligations incurred by the Debtors pursuant hereto or
the Credit Agreement and the other Loan Documents prior to the effective date of
such stay, modification, reversal or vacation, shall be governed in all respects
by the original provisions hereof, and the Agent, the Lenders, the Prepetition
Agent and the Prepetition Lenders shall be entitled to all the rights,
privileges and benefits, including without limitation, the Liens, Replacement
Liens and Superpriority Claims granted herein.
14. The provisions of this Interim Order and any actions taken pursuant
hereto shall survive entry of any order which may be entered (a) confirming any
plan of reorganization in any of the Chapter 11 Cases (and the Obligations shall
not be discharged by the entry of any such order or pursuant to Bankruptcy Code
Section 1141(d)(4)); (b) converting any of the Chapter 11 Cases to a Chapter 7
case; or (c) dismissing any of the Chapter 11 Cases, and the terms and
provisions of this Interim Order as well as the Superpriority Claims and Liens
granted pursuant to this Interim Order and the Loan Documents shall continue in
full force and effect notwithstanding the entry of such order, and such
Superpriority Claims and Liens shall maintain their priority as provided by this
Interim Order.
15. The findings contained in paragraphs C and D shall be binding upon all
parties in interest, including but not limited to, the Debtors and any statutory
committee of unsecured creditors, unless (a) a party in interest with standing
in the Debtors' Chapter 11 Cases (including any statutory committee of unsecured
creditors) has properly filed an adversary proceeding or contested matter
(subject to the limitations set forth in paragraph 7 above) no later than the
date that is the earlier of (x) sixty (60) days after the appointment of any
statutory committee of unsecured creditors and (y) the date that the Court
enters an order confirming a chapter 11 plan in any of the Chapter 11 Cases (the
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"Claim Deadline") (i) challenging the validity, enforceability, extent or
priority of the Prepetition Obligations or the Prepetition Agent's and the
Prepetition Lenders' security interest and liens on the Prepetition Collateral
in respect thereof or (ii) otherwise asserting any claims or causes of action
against the Prepetition Agent or the Prepetition Lenders, and (b) the Court
rules in favor of the plaintiff in any such adversary proceeding or contested
matter properly filed by the Claim Deadline. If no such adversary proceeding or
contested matter is properly filed by the Claim Deadline, (i) the Prepetition
Obligations shall constitute allowed claims in the amount set forth in paragraph
C of this Interim Order for all purposes in the Chapter 11 Cases and any
subsequent Chapter 7 cases, (ii) the Prepetition Agent's and the Prepetition
Lenders' security interest and liens on the Prepetition Collateral shall be
deemed legal, valid, binding, perfected and otherwise unavoidable, (iii) the
Prepetition Obligations in the amount set forth in paragraph C of this Interim
Order and the Prepetition Agent's and the Prepetition Lenders' security interest
and liens on the Prepetition Collateral shall not be subject to subordination,
avoidance or any challenge by any party in interest seeking to exercise the
rights of the Debtors' estate, including, without limitation, any successor
thereto, and (iv) as a result of the foregoing, the repayment of any Prepetition
Obligations in accordance with the terms of this Interim Order and the Credit
Agreement and the other Loan Documents shall constitute an indefeasible payment
and shall be final and binding for all purposes. Any releases or allowance of
claims contained in a chapter 11 plan confirmed by this Court, or contained in
the order confirming such chapter 11 plan, shall be final and binding in any
contested matter or adversary proceeding referred to in this paragraph 15.
16. The Debtors shall not, without the consent of the Agent, enter into any
agreement to return any inventory to any of their creditors for application
against any prepetition indebtedness under Section 546(g) of the Bankruptcy Code
or consent to any
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creditor taking any set-off against any of its prepetition indebtedness based
upon any such return pursuant to Section 553(b)(1) of the Bankruptcy Code or
otherwise.
17. Entry of this Interim Order shall be without prejudice to any and all
rights, remedies, claims and causes of action which the Prepetition Agent, the
Prepetition Lenders, the Agent or the Lenders may have against the Debtors or
third parties, and without prejudice to the right of the Prepetition Agent, the
Prepetition Lenders, the Agent or the Lenders to seek relief from the automatic
stay in effect pursuant to Bankruptcy Code Section 362, or any other relief in
the Chapter 11 Cases, and the right of the Debtors and any other party in
interest to oppose any such relief. The provisions of this Interim Order shall
be binding upon and inure to the benefit of the Agent, the Lenders, the
Prepetition Agent, the Prepetition Lenders, the Debtors, and their respective
successors and assigns, including any trustee or other fiduciary hereafter
appointed in the Chapter 11 Cases as a legal representative of the Debtors or
the Debtors' estates.
18. In the event of any inconsistency between the terms of this Interim
Order and the terms of the Credit Agreement and the other Loan Documents, the
terms of this Interim Order shall control.
19. The Debtors shall, on or before July 15, 2003, mail copies of a notice
of entry of this Interim Order, together with a copy of this Interim Order, a
copy of the Motion and a copy of the Credit Agreeement (without exhibits) to (i)
the Office of the United States Trustee, (ii) counsel to the Prepetition Agent,
(iii) the creditors holding the 20 largest unsecured claims against the Debtors
on a consolidated basis, (iv) counsel to any statutory committees appointed in
these Chapter 11 Cases, (v) any party who filed a request for notices in the
Chapter 11 Cases pursuant to Bankruptcy Rule 2002 prior to
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July 12, 2003, and (vi) any known lienholders of the Debtors. The notice of
entry of this Interim Order shall state that any party in interest objecting to
the Postpetition Financing and the entry of a final order approving the
Postpetition Financing shall file written objections with the Clerk of the
United States Bankruptcy Court for the District of Delaware, no later than
August 1, 2003, at 4:00 p.m., which shall be served so the objections are
received on or before such date and time by: (a) Debtors' counsel: Skadden,
Arps, Slate, Meagher & Flom LLP, One Rodney Square, P.O. Box 636, Wilmington,
Delaware 19899-0636 (Attn: Mark S. Chehi, Esq. and David R. Hurst, Esq.), and
Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York
10036-6522 (Attn: Alexandra Margolis, Esq. and Laura Engelhardt, Esq.); (b)
Agent's counsel: Milbank, Tweed, Hadley & McCloy LLP, 601 S. Figueroa St., Suite
3000, Los Angeles, CA 90017 (Attn: Greg Bray, Esq. and Fred Neufeld, Esq.), and
Richards, Layton & Finger, P.A., One Rodney Sq., P.O. Box 551, Wilmington, DE
19899-0551 (Attn: Mark D. Collins, Esq.); and (c) the Office of the United
States Trustee, 844 King Street, Suite 2313, Lockbox 35, Wilmington DE 19801.
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20. The Final Hearing to consider the Motion shall be held on August 12,
2003, at 4:00 p.m.
Dated: Wilmington, Delaware
July 10, 2003
/s/ Jerry W. Venters
-----------------------------------
Honorable Jerry W. Venters
United States Bankruptcy Judge
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