Exhibit 99.3A
ORDERED in the Southern District of Florida on December 21 2005
[UNITED STATES BANKRUPTCY COURT SEAL]
/s/ A. Jay Cristol
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A. Jay Cristol, Chief Judge Emeritus
United States Bankruptcy Court
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
www.flsb.uscourts.gov
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IN RE: Chapter 11
EPIXTAR CORP., et al., Case Nos. 05-42040-BKC-AJC through
05-42049-BKC-AJC
Debtors. (Jointly Administered)
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FINAL ORDER AUTHORIZING CALL CENTER DEBTORS
TO OBTAIN SECURED DEBTOR-IN-POSSESSION FINANCING
FROM AND USE CASH COLLATERAL OF LAURUS MASTER FUND, LTD.
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A. This matter is before the Court on the emergency motion (the
"Motion") of the above-captioned debtors and debtors-in-possession (the
"Debtors") in the above-captioned Chapter 11 cases (the "Bankruptcy Cases"),
requesting entry of an order pursuant to Bankruptcy Code ss. 364(c) to obtain
secured debtor-in-possesion financing from Laurus Master Fund, Ltd. ("Lender")
of up to $2,500,000. The Debtors have represented to the Court that Lender was
the Debtors' pre-petition secured lender and that the Debtors had, prior to the
date of commencement of the Bankruptcy Cases (the "Petition Date"), granted
Lender liens, mortgages, pledges and security interests in substantially all
assets of the Debtors (the "Pre-Petition Collateral"), including without
limitation the capital stock of Debtor Epixtar Corp. ("Epixtar") in its
first-tier subsidiaries NOL Group, Inc. ("NOL") and VOXX Corporation ("VOXX"),
and the capital stock of both NOL and VOXX in their respective first-tier and
second tier-subsidiaries.
B. The Debtors and Lender, which was the Debtors' pre-petition senior
secured lender, had previously appeared before the Court on October 12, 2005
(the "Cash Collateral Hearing") at which time the Court heard the Motion of the
Debtors-in-Posession for Authority to Use Cash Collateral and Request for
Expedited Hearing (the "Cash Collateral Motion") at which, among other things,
the Debtors and Lenders agreed to the Debtors' conditional and limited use of
Lender's cash collateral based upon an agreed interim budget.
C. The Debtors have represented to the Court that subsequent to the
Cash Collateral Hearing, (a) Lender informed the Debtors that Lender was
unwilling to consent to (i) the use of cash collateral generated by Epixtar,
VOXX and the subsidiaries of NOL (collectively, the "Call Center Debtors") to
fund the expenses of NOL and the subsidiaries of NOL (collectively, the "ISP
Debtors"), (ii) the use of cash collateral generated by the ISP Debtors to fund
the expenses of the Call Center Debtors, (b) the Debtors informed Lender that
the Call Center Debtors required the use of funds in addition to cash collateral
generated by the Call Center Debtors to fund their necessary expenses essential
to prevent irreparable harm to their estates, and (c) the Debtors informed
Lender that the ISP Debtors were projected to fund their necessary expenses
solely through the use of Lender's cash collateral and did not require financing
therefor.
D. The Debtors have further represented to the Court that after
negotiations between the parties, Lender has agreed, subject to the Court's
approval, to make a debtor-in-possession loan to the Call Center Debtors on the
terms and conditions set forth in (collectively, the "DIP Financing Documents")
this Order, the proposed agreements and accompanying documents and instruments
to be filed with the Court (collectively, the "Post-Petition Agreement") and the
budget annexed hereto (collectively, with any Extension Budget, as such term is
defined below, the "Budget").
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E. The Court, having reviewd the file, having heard arguments of
counsel, having conducted an interim hearing with respect to the Motion on
December 2, 2005 and having entered an interim order with respect to the Motion
on December 2, 2005 (docket no.99) (the "Interim Order"), having determined
that good and sufficient cause exists in support of the relief requested, having
determined that the entry of this Order is necessary to avoid irreparable harm
to the estates, makes the following findings of fact and conclusions of law (to
the extent any findings of fact constitute conclusions of law, they are adopted
as such, and vice versa):
(a) Lender is willing to advance monies to the Call Center
Debtors only upon the conditions contained in this Order;
(b) the Call Center Debtors are unable to obtain sufficient
levels of unsecured credit allowable under Bankruptcy Code ss.
503(b)(1) as an administrative expense necessary to maintain and
conduct its business;
(c) the Call Center Debtors are unable to obtain secured
credit allowable only under Bankruptcy Code ss. 364(c)(1) and (c)(2),
except under the terms and conditions provided in this Order;
(d) it is in the best interest of the Call Center Debtors'
estates that they be allowed to finance their operations under the
terms and conditions set forth herein, as such financing is necessary
to prevent a disruption of their business and to permit the Call Center
Debtors to attempt to achieve a successful reorganization; and
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(e) the Call Center Debtors admit and represent, without
prejudice to the rights of the Official Committee of Unsecured
Creditors (the "Committee") and third parties to challenge same to the
extent set forth below, that as of the Petition Date, in accordance
with the Pre-Petition Agreements, (1) the Call Center Debtors were
indebted to Lender, without defense, counterclaim, recoupment or offset
of any kind, in the aggregate amount of approximately $15.4 million in
respect of loans, advances and other financial accommodations made by
Lender to the Call Center Debtors in accordance with the Pre-Petition
Agreements (the "Pre-Petition Obligations") (which obligations are
being reduced subsequent to the Petition Date in accordance with the
terms of the 9019 Order and the Settlement Stipulation (as such terms
are defined below)), and (2) the Pre-Petition Obligations were secured
by valid, enforceable and properly perfected first priority liens,
mortgages, pledges and security interests in and to the Pre-Petition
Collateral of the Call Center Debtors.
(f) the credit and financial accommodations to be extended
under the DIP Financing Documents are being extended by Lender in good
faith and Lender is entitled to the protection of Bankruptcy Code ss.
364(c);
(g) notice of relief sought by the Motion and the hearings
with respect thereto, believed by the Call Center Debtors to be the
best available notice under the circumstances, has been given pursuant
to Bankruptcy Rule 4001(c) to the Committee's, Lender's and the U.S.
Trustee's respective counsel, to the creditors holding the twenty
largest unsecured claims against the Debtors' estates, and to those
parties who have filed notices of appearance in these Bankruptcy Cases,
and no further notice of, or hearing on, the relief sought in the
Motion is required;
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(h) good and sufficient cause exists for the issuance of this
Order, to prevent immediate and irreparable harm to the Call Center
Debtors' estates; and
(i) the Court has core jurisdiction over the Call Center
Debtors' bankruptcy case, the Motion, and the parties and property
affected by the Motion pursuant to 28 U.S.C. ss.ss. 157(b) and 1334,
and venue is proper before the Court pursuant to 28 U.S.C. ss.ss. 1408
and 1409;
NOW, THEREFORE, IT IS ORDERED:
1. Subject to the Court's entry of the "9019 Order" (as such term is
defined below), the Call Center Debtors are authorized and deemed to ratify and
adopt the Pre-Petition Agreements, including the validity and enforceability of
the Pre-Petition Obligations to Lender thereunder, subject to the rights of the
Committee and third parties to challenge same to the extent set forth below.
2. The Call Center Debtors are authorized (a) to enter into the
Post-Petition Agreement, (b) to borrow funds from and incur debt to Lender
pursuant to the terms and conditions of the DIP Financing Documents in aggregate
principal amount not to exceed $2,500,000, and use Lender's cash collateral, as
such term is defined in Bankruptcy Code ss. 363(a) ("Cash Collateral"), in
accordance with the Budget, from and after the date of the Interim Order,
subject to the execution and delivery of the Post-Petition Agreement, and (c) to
grant to Lender the liens and security interests provided for under the
Post-Petition Agreement and this Order. Lender's obligation to provide such
debtor-in-possession financing to the Call Center Debtors is subject to the
Court's having "so ordered" or otherwise approved (the "9019 Order") that
certain "Stipulation and Order Settling Controversy Pursuant to Bankruptcy Rule
9019" dated December 1, 2005 (as annexed to the Debtors' motion therefor, docket
no. 94, and as amended, modified and/or revised at or prior to the hearing
before the Court for approval thereof pursuant to Bankruptcy Rule 9019, the
"Settlement Stipulation"). The Post-Petition Agreement shall (a) provide, among
other things, that non-default interest on the outstanding principal amount of
the Call Center Debtors' Post-Petition Obligations to Lender shall be charged at
a rate per annum equal to fifteen percent (15%) per annum and shall be comprised
of a current pay component of twelve percent (12%) per annum and a deferred pay
component of three percent (3%) per annum accruing monthly and payable in kind,
in each case, in arrears, commencing on March 1, 2006, and (b) otherwise be
substantially in the form and substance of the pre-petition note and security
agreements between Lender and the Call Center Debtors.
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3. As adequate protection for any post-petition diminution in value of
Lender's interests in the Pre-Petition Collateral of the Call Center Debtors,
including without limitation that caused by the Call Center Debtors' use of the
Pre-Petition Collateral and/or Cash Collateral, including without limitation for
purposes of the "Carve-Out" (as such term is defined below), Lender is granted a
joint and several post-petition claim (the "Adequate Protection Claim") against
the Call Center Debtors' estates.
4. The Adequate Protection Claim and any and all "Obligations" (as such
term is defined in the Post-Petition Agreement) of the Call Center Debtors to
Lender arising subsequent to the date of entry of the Interim Order (the
"Post-Petition Obligations", and together with the Adequate Protection Claim the
"Bankruptcy Claim", which shall not include the Pre-Petition Obligations) shall
have priority in payment over the Pre-Petition Obligations of the Call Center
Debtors and over any other obligations now in existence or incurred hereafter by
the Call Center Debtors, and over any and all administrative expenses or charges
against property arising in the Call Center Debtors' bankruptcy case, including
without limitation those specified in Bankruptcy Code ss.ss. 105, 326, 328, 330,
331, 503(b), 507(a), 507(b), 726, 1113 or 1114, subject only to the Carve-Out;
provided, however, that with respect to the Bankruptcy Claim and solely inter
se, the Post-Petition Obligations shall be senior to the Adequate Protection
Claim, and the Adequate Protection Claim shall be junior and subordinate to
Post-Petition Obligations.[TEXT CUT OFF] Obligations, Lender shall have no
further Adequate Protection Claim.
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5. Pursuant to Bankruptcy Code ss.ss. 362, 363(e) and 364(c), as
security for the Bankruptcy Claim, the Call Center Debtors are authorized to and
do grant to Lender a valid, binding, enforceable and automatically perfected
lien, mortgage, pledge and/or security interest (a "Lien"), subject only to
Liens existing as of the Petition Date that are valid, enforceable and not
subject to avoidance by a trustee under the Bankruptcy Code, in all of the Call
Center Debtors' presently owned or hereafter acquired property and assets,
whether such property and assets were acquired by the Call Center Debtors before
or after the Petition Date, of any kind or nature, whether real or personal,
tangible or intangible, wherever located, including without limitation the
capital stock in any Call Center Debtor owned by any other Call Center Debtor,
and the proceeds and products thereof (collectively, the "Collateral") (to the
extent acquired after the Petition Date, the "Post-Petition Collateral");
provided, however, that (a) Lender's Lien securing the Pre-Petition Obligations
of the Call Center Debtors shall be subject and subordinate to the Lien securing
the Bankruptcy Claim (the "Post-Petition Lien"), and (b) with respect to the
Post-Petition Lien and solely inter se, the Lien securing the Post-Petition
Obligations shall be senior to the Lien securing the Adequate Protection Claim,
and the Lien securing the Adequate Protection Claim shall be subject and
subordinate to the Lien securing the Post-Petition Obligations.
6. Notwithstanding anything in this Order to the contrary:
(a) The Post-Petition Lien, the Adequate Protection Claim and
the Lien securing the Pre-Petition Obligations shall be subject to the
Carve-Out and to post-petition purchase money security interests and
capital leases of the Call Center Debtors permitted pursuant to the
Pre-Petition Agreements and/or the Post-Petition Agreement;
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(b) The Post-Petition Lien shall be senior to the Lien
securing the Pre-Petition Obligations and to the Liens of Sands
Brothers Venture Capital LLC, Sands Brothers Venture Capital II, LLC,
Sands Brothers Venture Capital III, LLC, Sands Brothers Venture Capital
IV, LLC and their respective affiliates (collectively, with Laidlaw &
Company (UK) Ltd. and its affiliates, "Sands").
(c) The Post-Petition Lien of Lender shall not impair the
priority or status of (i) any valid, properly perfected and enforceable
pre-petition Lien in favor of the Miami-Dade County Tax Collector
against personal property of the Call Center Debtors, or (ii) any
post-petition Lien in favor of the Miami-Dade County Tax Collector
against personal property of the Call Center Debtors which may be
entitled to first priority under applicable law.
(d) The Collateral shall include all claims and causes of
action available to the Call Center Debtors and/or their estates,
including those arising pursuant to Chapter 5 of the Bankruptcy Code,
including without limitation the "RSI Escrow Actions" (as such term is
defined below, and which are governed solely by the provisions of the
following subparagraph) and recoveries upon such claims and causes of
action. Notwithstanding the foregoing, other than with respect to the
RSI Escrow Actions, the net recovery from all such claims and causes of
action available to the Call Center Debtors' or their estates shall be
evenly divided between Lender and the Committee or any subsequently
appointed Chapter 11 or Chapter 7 Trustee (for the benefit of the Call
Center Debtors' estates, including general unsecured creditors). The
Committee shall identify and pursue such claims and causes of action
and deduct first from the aggregate gross recoveries thereon the
professional fees and expenses incurred in achieving such recoveries
(the "Net Recoveries"). Lender's 50% share of the Net Recoveries will
be payable to and applied by Lender to reduce the Post-Petition
Obligations. After payment in full of the Post-Petition Obligations,
from whatever source, any remaining portion of Lender's 50% share of
the net recoveries shall first be applied to the payment of interest,
fees and expenses on the $5.0 million remaining portion of Lender's and
Sands' Pre-Petition Obligations as allowed pursuant to the Settlement
Stipulation and thereafter shall be held in escrow pending a
determination of whether the $5.0 million remaining portion of Lender's
and Sands' post confirmation secured debt will be converted into
equity pursuant to the terms and conditions of the Settlement
Stipulation. If all such debt is in fact converted to equity, then the
remaining portion of Lenders' 50% share of the Net Recoveries shall be
available to the Committee or any subsequently appointed Chapter 11 or
Chapter 7 trustee (for the benefit of the Call Center Debtors' estates,
including general unsecured creditors). If any of such debt is not
converted to equity, then the remaining portion of Lender's 50% share
of the Net Recoveries shall be used to repay such debt until paid in
full. Notwithstanding anything herein to the contrary, the Committee's
50% share of the Net Recoveries and any remaining portion of Lender's
50% share of the Net Recoveries shall be free and clear of any and all
liens or claims of Lender, Sands or any other secured creditor
including the Post Petition Lien, the Pre-Petition Lien and the
Adequate Protection Claim.
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(c) For purposes of this Order, "RSI Escrow Actions" shall
mean Epixtar's claims and causes of action and recoveries thereupon
against Realization Services, Inc. ("RSI") and/or Troutman Sanders LLP
as escrow agent ("Troutman") for the recovery of (and equal to the
value of) funds placed into escrow pursuant to that certain Escrow
Agreement dated as of July 20, 2005 among Epixtar, Lender, RSI and
Troutman. The first recoveries against RSI and/or Troutman with respect
to the RSI Escrow Actions up to the value of the funds placed into
escrow shall be directed to Lender or turned over to Lender in the form
received for application in reduction of the Post-Petition Obligations
and shall not be subject to the sharing mechanism of the preceding
paragraph. All recoveries against RSI and/or Troutman in excess of the
value of the funds placed into escrow shall be maintained by Epixtar
and/or the Committee (for the benefit of the Call Center Debtors'
estates, including general unsecured creditors) and shall not be
subject to the sharing mechanism of the preceding subparagraph, nor
subject to the Post-Petition Lien, the Adequate Protection Claim or the
Lien securing the Pre-Petition Obligations.
7. Notwithstanding Lender's Bankruptcy Claim, the Post-Petition Lien
and the Liens securing the Pre-Petition Obligations, the Collateral and Cash
Collateral may be used by the Call Center Debtors, if sufficient unencumbered
funds are not available from the Call Center Debtor's estate, to pay
(collectively, the "Carve-Out");
(a) the statutory fees of the United States Trustee pursuant
to 28 U.S.C. ss. 1930(a) and any unpaid fees due and owing to the Clerk
of the Court;
(b) the allowed fees and expenses of professionals retained
and approved pursuant to final orders of the Court ("Professionals")
by the Call Center Debtors in aggregate amount not to exceed $200,000,
exclusive of pre-petition retainers;
(c) the allowed fees and expenses of Professionals of the
Committee, and the reasonable expenses of members of the Committee
(other than the fees and expenses of professionals employed by members
of the Committee), in aggregate amount not to exceed $250,000;
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(d) the allowed fees and expenses of any Chapter 7 Trustee
under Bankruptcy Code ss. 726(b), including without limitation the
allowed fees and expenses of the Chapter 7 Trustee's Professionals, in
aggregate amount not to exceed $10,000.
All payments received by Professionals with respect to fees and expenses within
the scope of the Carve-Out (exclusive of pre-petition retainers) shall reduce
the respective Carve-Out on a dollar-for-dollar basis.
8. The Post-Petition Lien shall not be subject to any Lien or any other
interest which is avoided and which would otherwise be preserved for the benefit
of the Call Center Debtors' estate under Bankruptcy Code ss. 551, and the
Post-Petition Lien shall encumber and constitute a prior Lien to any Lien which
is avoided and which would otherwise be so preserved for the benefit of the Call
Center Debtors' estate. Lender shall not be subject to the equitable doctrines
of "marshaling" or any similar claim or doctrine with respect to any Collateral
securing any of the Bankruptcy Claim.
9. The Call Center Debtors waives irrevocably all claims and rights, if
any, it might otherwise assert against the Collateral pursuant to Bankruptcy
Code ss.ss. 506(c) or 552(b).
10. Except from and pursuant to the terms of the Carve-Out, no entity
in the course of this bankruptcy case (whether Chapter 11 or subsequent Chapter
7), shall be permitted to recover from the Collateral (whether directly or
through grant of derivative and/or equitable standing in the name of the Call
Center Debtors and/or the Call Center Debtors' estate) any cost or expense of
preservation or disposition of the Collateral, including, without limitation,
expenses and charges as provided in Bankruptcy Code ss.ss. 506(c) or 552(b)
without the prior written consent of Lender. No entity (other than Professionals
who are beneficiaries of the Carve-Out to the extent of and subject to the terms
and conditions thereof) shall be permitted to recover from the Collateral, or
assert against Lender, any claim with respect to any unpaid administrative
expense of the Call Center Debtors' bankruptcy case, whether or not the Call
Center Debtors' payment of such administrative claim was contemplated by or
included in the Budget.
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11. The Call Center Debtors shall not use Cash Collateral other than in
accordance with the provisions of paragraph "2" this Order and/or for purposes
of the Carve-Out. So long as there are any Obligations outstanding to Lender,
unless Lender shall have given its prior written consent, or the Court enters an
order, upon at least three (3) business days prior written notice to Lender and
after a hearing, there shall not at any time be entered in the Call Center
Debtors' Chapter 11 case any further orders which authorize: (a) under
Bankruptcy Code ss. 363, the use of Cash Collateral in which Lender has an
interest, or the sale, use, or lease, other than in the ordinary course of
business, of property of the Call Center Debtors in which Lender has an
interest, (b) the obtaining of credit or the incurring of indebtedness pursuant
to Bankruptcy Code ss.ss. 364(c) or 364(d), or any other grant of rights against
the Call Center Debtors and/or its estate, secured by a lien, mortgage or
security interest in the Collateral held by Lender or entitled to priority
administrative status which is equal or superior to that granted to Lender
herein, other than post-petition purchase money security interests and capital
leases of the Call Center Debtors permitted pursuant to the Pre-Petition
Agreements and/or the Post-Petition Agreement; or (c) the return of goods by the
Call Center Debtors pursuant to Bankruptcy Code ss. 546(h).
12. The Pre-Petition Obligations shall include Lender's attorneys' and
other professionals' fees and expenses arising from or related to the Cash
Collateral Motion, the Settlement Stipulation and the DIP Financing Documents,
including without limitation the negotiating, closing, documenting and obtaining
of Court approval thereof. The Post-Petition Obligations shall, subject to the
following sentence of this paragraph, also include Lender's reasonable
attorneys' and other professionals' fees and expenses arising from or relating
to (a) all proceedings in connection with any Disposition (as such term is
defined below), and (b) all proceedings in connection with the interpretation,
amendment, modification, enforcement, enforceability, validity or carrying out
of the Post-Petition Agreement, the Interim Order or this Order at any time.
With respect to the fees and expenses under the immediately preceding sentence
of this paragraph, Lender shall provide at least five (5) business days prior
written notice thereof (the "Fee Notice") to the Noticed Parties (as such term
is defined below). The Fee Notice shall be accompanied by copies of such
professionals' invoices to Lender, subject to redaction against disclosure of
privileged and/or confidential information. Such invoices shall become
Post-Petition Obligations without application to or further order of the Court
unless, prior to the expiration of the five (5) business day period, appropriate
pleadings objecting thereto are filed with the Court and served upon Lender by
any of the Noticed Parties. The foregoing provisions are without prejudice to
Lenders' rights under Bankruptcy Code ss. 506(b), the Pre-Petition Agreements
and the Post-Petition Agreement with respect to Lenders' fees, costs and
expenses.
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13. The Call Center Debtors, at their expense, shall continue to keep
the Collateral fully insured against all loss, peril and hazard and make Lender
loss payee as its interests appear under such policies. The Call Center Debtors
shall pay any and all undisputed post-petition taxes, assessments and
governmental charges with respect to such collateral all as provided under the
Pre-Petition Agreements and/or the Post-Petition Agreement, except as otherwise
permitted by the Bankruptcy Code. The Call Center Debtors shall provide Lender
with proof of the foregoing within three (3) business days of written demands
and will give Lender access to its records in this regard.
14. The automatic stay provisions of Bankruptcy Code ss. 362 are
modified to permit (a) the Call Center Debtors to implement and perform the
terms of the DIP Financing Documents, and (b) the Call Center Debtors to create,
and Lender to perfect, any and all post-petition liens, mortgages and security
interests granted hereunder. Lender shall not be required to file UCC financing
statements or other instruments with any other filing authority to perfect any
post-petition lien, mortgage or security interest granted by this Order or take
any other action to perfect such post-petition liens, mortgages and security
interests, which shall be deemed automatically perfected by the docket entry of
the Interim Order by the Clerk of the Court. If, however, Lender shall, in its
sole and absolute discretion, elect for any reason to file, record or serve any
such financing statements or other documents with respect to such post-petition
liens and security interests, the Call Center Debtors shall execute same upon
request and the filing, recording or service thereof (as the case may be) shall
be deemed to have been made at the time and on the date of entry of the Interim
Order.
15. The time of payment of any and all Post-Petition Obligations of the
Call Center Debtors to Lender arising out of or incurred pursuant to the DIP
Financing Documents shall not be altered, extended or impaired by any plan or
plans of reorganization that may hereafter be accepted or confirmed or any
further orders of the Court which may hereafter be entered.
16. Each of the following shall constitute an "Event of Default" for
purposes of this Order:
(a) the Call Center Debtors' Chapter 11 cases are either
dismissed or converted to Chapter 7 cases;
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(b) a trustee, or an examiner with expanded powers to operate
the Call Center Debtors' business, is appointed in the Call Center
Debtors' Chapter 11 cases;
(c) Intentionally omitted.
(d) the Call Center Debtors file any plan of reorganization,
or any plan of reorganization with respect to the Call Center Debtors
is confirmed, that does not comply with the treatment of the
Pre-Petition Obligations and/or the Adequate Protection Claim set forth
in the Settlement Stipulation;
(e) the Call Center Debtors fail to file a plan of
reorganization that complies with the treatment of the Pre-Petition
Obligations and/or the Adequate Protection Claim set forth in the
Settlement Stipulation (a "Complying Plan") and an accompanying
disclosure statement on or before January 15, 2006; the Call Center
Debtors fail to obtain confirmation of a Complying Plan on or before
ninety (90) days after the date of filing of the Complying Plan or the
first hearing date thereafter made available by the Court for such
purpose if the Court will not provide a hearing date for such purpose
prior to such date, and/or the "effective date" of the confirmed
Complying Plan has not occurred within thirty (30) days after the date
of entry of the confirmation order;
(f) the Court enters an order authorizing the sale of all or
substantially all assets of the Call Center Debtors that does not
provide for the payment in full of the Obligations in cash upon the
closing of the sale, unless otherwise agreed by Lender in its sole and
absolute discretion;
(g) the Call Center Debtors cease operations of its present
business or take any material action for the purpose of effecting the
foregoing without the prior written consent of Lender, except to the
extent contemplated by the Budget;
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(h) this Order is reversed, vacated, stayed, amended,
supplemented or otherwise modified in a manner which shall, in the sole
opinion of Lender, materially and adversely affect the rights of Lender
hereunder or shall materially and adversely affect the priority of any
or all of Lender's Liens;
(i) the occurrence of an Event of Default under the
Post-Petition Agreement;
(j) the Call Center Debtors expend any funds or monies for any
purpose other than those set forth on the Budget and/or for the
Carve-Out;
(k) (1) the Call Center Debtors fail to be cash flow positive
on a collective basis from and after the ninetieth (90th) day following
the date of entry of this Order, or (2) the Call Center Debtors miss
their cash flow projections (i.e. receipts less disbursements) as set
forth in the Budget by more than a 10% negative variance (measured
monthly for the first month and thereafter cumulatively) provided,
however, that the Carve-Out shall not be included in calculating the
10% negative variance;
(l) the occurrence of a material adverse change in (1) the
condition (financial or otherwise), operations, assets, business or
business prospects of the Call Center Debtors, (2) the Call Center
Debtors' ability to pay the Post-Petition Obligations in accordance
with the terms of the DIP Financing Documents, or (3) the value of the
Collateral;
(m) non-compliance or default by the Call Center Debtors with
any of the terms and provisions of this Order; provided, however, that
said non-compliance or default shall not be deemed an Event of Default
if curable and cured by the Call Center Debtors with five (5) business
days after notice of such non-compliance or default is given to the
Call Center Debtors' counsel and Committee counsel by Lender.
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17. Upon the occurrence of an Event of Default, as such term is defined
in the preceding paragraph of this Order and the giving of written notice
thereof by facsimile or e-mail transmission (the "Default Notice") by Lender to
the Call Center Debtors', the Committee's and the U.S. Trustee's respective
counsel (the "Noticed Parties"), or upon the occurrence of the Expiration Date
(as such term is defined below);
(a) Lender shall have no further obligation to make loans,
advances, and/or other financial accommodations to the Call Center
Debtors;
(b) Lender shall have the right, free of the restrictions of
Bankruptcy Code ss. 362 or under any section of the Bankruptcy Code or
applicable law or rule, to take immediate reasonable action to protect
the Collateral from harm, theft and/or dissipation;
(c) with respect to any Event of Default, the Noticed Parties
shall have five (5) business days from the receipt of the Default
Notice (the "Remedy Notice Period") to cure the default (if curable) or
obtain an order of the Court on notice to Lender enjoining or
restraining Lender from exercising its rights and remedies based upon
the Event of Default specified in the Default Notice ("Restraint on
Remedies"), provided that the sole grounds on which any of the Noticed
Parties may seek a Restraint on Remedies shall be to allege either
non-occurrence, non-continuance (if applicable) or timely cure of the
Event of Default specified in the Default Notice;
(d) the Call Center Debtors shall cease the use of Collateral
and/or Cash Collateral, Lender may impose an "administrative freeze"
with respect to any funds of the Call Center Debtors at or on deposit
with Lender, the Post-Petition Obligations shall be due and payable,
and Lender shall have the right, free of the restrictions of Bankruptcy
Code ss. 362 or under any other section of the Bankruptcy Code or
applicable law or rule, to exercise its contractual, legal and
equitable rights and remedies as to all or such part of the Collateral
to the extent of the Post-Petition Obligations as Lender, in its sole
and absolute discretion, shall elect: (1) with respect any Event of
Default, five (5) business days after the expiration of the Remedy
Notice Period unless a Restraint on Remedies has timely been obtained
from the Court; or (2) upon the occurrence of the Expiration Date,
immediately.
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18. The Call Center Debtors shall provide Lender with such written
reports, certified by an officer of the Call Center Debtors acceptable to Lender
to be accurate to the best of such officer's knowledge, information and belief,
as are required under the Pre-Petition Agreements and the Post-Petition
Agreement, and such additional written reports as Lender, in its reasonable
discretion, shall require.
19. Lender shall have the right, upon one (1) business day telephone or
facsimile-transmitted written notice to the Call Center Debtors, at any time
during the Call Center Debtors' normal business hours, to inspect, audit,
examine, check, make copies of or extracts from the books, accounts, checks,
orders, invoices, bills of lading, correspondence and other records of the Call
Center Debtors, and to inspect, audit and monitor all or any part of the
Collateral, and the Call Center Debtors shall make all of same available to
Lender and its respective representatives, for such purposes, provided that such
audit shall not unreasonably disrupt the Call Center Debtors' ordinary course
business operations. Lender's agents, employees, independent contractors,
representatives or retained professionals may make recommendations to Call
Center Debtors regarding cost-cutting measures and the implementation thereof as
contemplated by the Budget and/or any draft or final business plan of the Call
Center Debtors, and to discuss any of the foregoing with Call Center Debtors'
officers, retained professional or employees, all without Lender being deemed to
be in control of, or a fiduciary for, any of Call Center Debtors. The failure of
the Call Center Debtors to follow any such recommendations shall not be an Event
of Default under this Order or under the Post-Petition Agreement.
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20. Except as otherwise permitted pursuant to the Settlement
Stipulation and the Budget, until such time as all Obligations of the Call
Center Debtors to Lender have been repaid in full, the pre-petition clearing,
dominion, lockbox and similar accounts maintained by or on behalf of the Call
Center Debtors pursuant to the Pre-Petition Agreements at certain banking
institutions for the collection of the proceeds of Lender's Collateral
(including without limitation receivables and other proceeds arising from the
Call Center Debtors' sales of inventory and/or performance of services) in the
ordinary course of the Call Center Debtors' business ("Collections"), and the
payment procedures under which such accounts are administered (collectively, the
"Collection Accounts and Procedures"), shall continue in full force and effect
unless otherwise directed by Lender. Without limitation of the foregoing, from
and after the date of the Interim Order, the Call Center Debtors shall remit to
Lender such cash, cash equivalents and checks as are Collections to Lender,
and/or shall cause customers and account debtors of the Call Center Debtors to
remit such cash, cash equivalent and checks as are Collections to Lender, in
accordance with the Collection Accounts and Procedures and in accordance with
the terms and conditions of the Pre-Petition Agreements. Lender shall make
Collections and/or Cash Collateral available to the Call Center Debtors in
accordance with the Budget subject to the terms and conditions of this Order.
21. To the extent that as of the date of this Order, the Call Center
Debtors maintains custody and/or control of any cash, cash equivalents or
checks, whether in its possession, in bank accounts, in lockbox accounts or
otherwise, in contravention of the requirements of the Collection Accounts and
Procedures, and such cash, cash equivalents or checks are proceeds of Lender's
Collateral, upon entry of this Order the Call Center Debtors shall deliver such
cash, cash equivalents or checks, and the proceeds thereof, to Lender.
22. Except as otherwise permitted pursuant to the Settlement
Stipulation and the Budget, the Call Center Debtors and any successor to the
Call Center Debtors, including without limitation any successor trustee or
trustees, shall (a) assign or direct to Lender any and all payments, proceeds or
other consideration ("Proceeds") realized upon the sale, liquidation, collection
or disposition of the Collateral other than in the ordinary course of the Call
Center Debtors' business (a "Disposition"), including without limitation the
proceeds of sales other than in the ordinary course of business authorized
pursuant to Bankruptcy Code ss. 363 and/or or any plan of reorganization, and
(b) immediately deliver any and all Proceeds which come into their possession to
Lender in the form received, which Proceeds shall be applied to reduce the
Obligations. In furtherance of the foregoing, neither the Call Center Debtors
nor the Committee shall seek to cause the escrow of, enjoin Lender's receipt of,
or otherwise withhold from Lender any Proceeds of any Disposition, and any order
of the Court authorizing a Disposition shall provide for Lender's receipt of
Proceeds in accordance with the provisions of this paragraph.
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23. Except as otherwise permitted pursuant to the Settlement
Stipulation and the Budget and subject to the Carve-Out, Lender is authorized,
notwithstanding the provisions of Bankruptcy Code ss. 362, to retain and apply
Collections and Proceeds (whether received in the ordinary course of the Call
Center Debtors' business, or pursuant to a Disposition, or as recoveries of any
claim or cause of action of the Call Center Debtors that is included in the
Collateral, or otherwise) (a) first to the repayment of the Bankruptcy Claim in
accordance with the provisions of the Post-Petition Agreement and of this Order,
and (b) second to the repayment of the Pre-Petition Obligations as set forth in
the Pre-Petition Agreements in accordance with the provisions of Bankruptcy Code
ss. 506(b) and of this Order. Such applications of Collections and Proceeds
shall be free and clear of any claim, charge, assessment or other liability
including, without limitation, any such claim or charge arising out of or based
on, directly or indirectly, Bankruptcy Code ss.ss. 506(c) or 552(b).
24. Without prejudice to the rights of the Committee and third parties
to the extent set forth in the following paragraph of this Order, (a) the
validity, extent, priority, perfection, enforceability and non-avoidability of
Lender's and Sands' pre-petition claims against the Debtors and/or of Lender's
and Sands' Liens shall not be subject to challenge by any of the Debtors (for
purposes of this paragraph, the term "Debtors" shall include the Debtors
together with their estates, successors and assigns), (b) the Debtors shall not
seek to avoid or challenge (whether pursuant to Chapter 5 of the Bankruptcy Code
or otherwise) any transfer made by or on behalf of the Debtors to or for the
benefit of Lender or Sands prior to the Petition Date, and (c) the Debtors
release, waive and affirmatively agree not to allege or otherwise pursue any or
all defenses, affirmative defenses, counterclaims, claims, causes of action,
recoupments, setoffs or other rights that it may have to contest or impose
liability or seek equitable relief against Lender and/or Sands arising from or
relating to (1) any Defaults or Events of Default (as defined in the
Pre-Petition Agreements) which were or could have been declared by Lender or
Sands as of the Petition Date, (2) any provisions of the Pre-Petition
Agreements, (3) the amount of the Debtors' indebtedness to Lender or Sands as of
the Petition Date, (4) the conduct of Lender or Sands in administering the
pre-petition business relationship between the Debtors and Lender and Sands,
including without limitation "lender liability" and/or "deepening insolvency"
claims and causes of action, and/or (5) any and all other pre-petition acts or
omissions. Lender shall have no Carve-Out obligations to the Call Center Debtors
or to any of the Call Center Debtors' Professionals with respect to any
investigation or litigation (whether threatened or pending) by the Call Center
Debtors with respect to any matter released, waived or specified as not subject
to challenge by the Call Center Debtors pursuant to this paragraph.
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25. Notwithstanding the Debtors' release and waiver set forth in the
preceding paragraph of this Order, the Committee and any third party shall have
through and until January 16, 2006 to commence an adversary proceeding against
Lender and/or Sands for the purpose of (1) challenging the validity, extent,
priority, perfection, enforceability and non-avoidability of Lender's and Sands'
pre-petition claims against the Debtors and/or Liens, (2) seeking to avoid or
challenge (whether pursuant to Chapter 5 of the Bankruptcy Code or otherwise)
any transfer made by or on behalf of the Debtors to or for the benefit of Lender
or Sands prior to the Petition Date, and/or (3) seeking damages or equitable
relief against Lender or Sands with respect to any legal or equitable claim or
cause of action available to the Debtors or the Debtors' estates, including
without limitation with respect to the conduct of Lender or Sands in
administering the pre-petition business relationship between the Debtors and
Lender and Sands, including without limitation "lender liability" and/or
"deepening insolvency" claims and causes of action. If the Committee or any
third party fails to commence such an adversary proceeding or file such a motion
(a "Challenge") within the applicable time period shall be barred forever from
doing so. Notwithstanding the foregoing, (a) the Debtors' release and waiver set
forth in the preceding paragraph of this Order shall be binding upon the
Committee and third parties upon entry of the 9019 Order, and (b) the claims and
causes of action, if any, of third parties against Lender and/or Sands which are
direct and not derivative of claims or causes of action of the Debtors and/or
the Debtors' estates are excluded from the foregoing release and waiver and
shall be retained in full by any such a third party. The foregoing is without
prejudice to any and all of Lender's and Sands' legal and equitable claims,
counterclaims, defenses and/or rights of offset and setoff in response to any
such Challenge, all of which are reserved, expect that Lender shall not object
to the Committee's standing (derivative, equitable or otherwise) to timely
commence a Challenge on behalf of the Debtors' estates including under and
pursuant to Bankruptcy Code ss.ss. 1103(c)(5) and 1109(b). The foregoing shall
in no event revive, renew or reinstate any applicable statute of limitations
which may have expired prior to the date of initiation of such Challenge.
Nothing contained herein shall limit the Court's ability to fashion an
appropriate remedy should the Court determine, by final order resulting from an
adversary proceeding or motion timely commenced in accordance with the
provisions of this paragraph, such Challenge adverse to Lender or Sands. Lender
shall have no Carve-Out obligations to any person or entity (including without
limitation the Committee) or to any of Professional of any such person or entity
with respect to any Challenge (whether threatened or pending) against Lender or
Sands with respect to any matter set forth in this paragraph, except that the
Carve-Out may be used by the Committee for the investigation of any matter set
forth in this paragraph.
26. Lender shall be entitled to the benefits and protections of this
Order, including the protections afforded pursuant to Bankruptcy Code ss.
364(e), with respect to all loans, advances and/or financial accommodations made
by Lender to or for the benefit of the Call Center Debtors pursuant to this
Order. Pursuant to the provisions of Bankruptcy Code ss. 364(e), the
Post-Petition Lien shall be binding on the Call Center Debtors or any successor
trustee or trustees even if this Order is reversed or modified on appeal.
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27. The terms and conditions of this Order shall be: (a) immediately
enforceable pursuant to Bankruptcy Rule 8005; and (b) not be stayed absent (1)
an application by a party in interest for such stay in conformance with such
Bankruptcy Rule 8005, and (2) a hearing upon notice to the Call Center Debtors
and Lender.
28. The provisions of this Order and any actions taken pursuant hereto
shall survive entry of any orders which may be entered confirming any plan of
reorganization or which may be entered converting this case from Chapter 11 to
Chapter 7 of the Bankruptcy Code. The terms and provisions of this Order, as
well as the claims, liens, mortgages, pledges and security interests granted by
this Order, shall continue in this or any superseding case under the Bankruptcy
Code and shall continue notwithstanding any dismissal of the Call Center
Debtors' bankruptcy case (and any such order of dismissal shall so provide), and
such claims, liens, mortgages and security interests shall maintain their
priority as provided by this Order until the Call Center Debtors' Obligations to
Lender are satisfied in full. No Proceeds, Cash Collateral or Carve-Out may be
used by any party in interest seeking to modify any of the rights granted to
Lenders under this Order or any other DIP Financing Document without Lender's
prior written consent.
29. Lender and the Call Center Debtors may amend, modify, supplement
and/or waive the provisions of the Pre-Petition Agreements and/or Post-Petition
Agreement, without further order of the Court, provided that such amendments,
modifications, supplements and/or waivers that are non-material, technical
and/or ministerial.
30. To the extent that any of the provisions of this Order shall
conflict with any of the provisions of the Pre-Petition Agreements or the
Post-Petition Agreement, this Order is deemed to control and shall supersede the
conflicting provision(s) in said agreement(s). To the extent that any of the
provisions of this Order shall conflict with any prior order of the Court
authorizing the Call Center Debtors to continue the use of pre-petition bank
accounts, cash management systems and/or business forms, or any similar orders,
then this Order is deemed to control and supersede the conflicting provision(s)
in said orders.
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31. The DIP Financing Documents shall be in effect for the period
commencing with the date of entry of the Interim Order through and including the
earlier of (w) September 4, 2006, (x) the last business day of the last Budget
period set forth on the initial Budget annexed to the Interim Order or on any
Extension Budget, (y) the date of completion of an initial public offering of
common stock of VOXX as reorganized entity or (z) the effect date of any plan of
reorganization of the Call Center Debtors unless such plan of reorganization
provides for the continuation of the DIP Facility subsequent to such effective
date on the same terms and conditions as set forth in the DIP Financing
Documents as a post-confirmation secured credit facility between Lender and the
Call Center Debtors as reorganized entities (the earliest to occur of any such
dates being the "Expiration Date"). For purposes of this Order, an "Extension
Budget" shall be any Budget for any period following the expiration of the
Budget annexed to the Interim Order that (a) is mutually agreeable to Lender,
the Call Center Debtors and the Committee, or (b) has been authorized by further
order of the Court upon prior written notice to any of Lender and/or the
Committee that may not have approved such Budget and a hearing. Creditors shall
have ten (10) days from the entry of this order within which to file and serve
any objection to the relief granted herein; in the event no such objections are
timely filed and served, this order shall become final and non-appealable.
[INITIALS, ILLEGIBLE]
###
Submitted by:
Michael D. Seese, Esq.
KLUGER, PERETZ, KAPLAN & BERLIN, P.L.
Attorneys for the Debtors
Miami Center, 17th Floor
201 S. Biscayne Boulevard
Miami, FL 33131
Telephone: (305) 379-9000
Facsimile: (305) 351-3801
Copies to:
Michael D. Seese (Seese is directed to serve a copy of this order upon all
interested parties and file a certificate of service).
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