1
CONFORMED COPY
WITH EXHIBITS ▇-▇,▇-▇,▇-▇,
▇-▇, ▇-▇, I-1, I-2, J, M, N, O AND P
CONFORMED AS EXECUTED
▇▇▇▇▇▇ SERVICES CORP.
and
▇▇▇▇▇▇ SERVICES (DELAWARE), INC.,
Debtors-In-Possession,
as Borrowers
THE SUBSIDIARIES OF THE BORROWERS NAMED HEREIN,
as Subsidiary Guarantors
BANKERS TRUST COMPANY,
as DIP Agent
BANKERS TRUST COMPANY
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as DIP Co-Arrangers
and
The Various Persons
from time to time parties to this Agreement,
as Lenders
$ 100,000,000
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CREDIT AGREEMENT
DATED AS OF JUNE 28, 1999
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WHITE & CASE LLP
BLAKE, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
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TABLE OF CONTENTS
Page
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Section 1. Revolving Loans.................................................3
1.01 Commitments.....................................................3
1.02 Borrowing Mechanics.............................................4
1.03 Settlements Among the Payments Administrator and the Lenders....5
1.04 Revolving Notes.................................................8
1.05 Conversions and Continuations...................................8
1.06 Pro Rata Borrowings.............................................9
1.07 Interest........................................................9
1.08 Interest Periods................................................9
1.09 Increased Costs, Illegality, etc...............................10
1.10 Compensation...................................................12
1.11 Change of Applicable Lending Office............................13
1.12 Replacement of Lenders.........................................13
Section 2. Letters of Credit..............................................14
2.01 Letters of Credit..............................................14
2.02 Letter of Credit Requests......................................15
2.03 Letter of Credit Participations................................16
2.04 Agreement to Repay Letter of Credit Drawings...................18
2.05 Increased Costs................................................18
2.06 Indemnification from Lenders...................................19
Section 3. Fees; Commitment; Reductions of Commitments....................20
3.01 Fees...........................................................20
3.02 Voluntary Reduction of Commitments.............................20
3.03 Authorization to Charge Loan Accounts..........................21
Section 4. Prepayments; Payments..........................................21
4.01 Voluntary Prepayments..........................................21
4.02 Mandatory Prepayments..........................................21
4.03 Payments and Computations......................................23
4.04 Maintenance of Loan Accounts...................................24
4.05 Statement of Accounting........................................24
4.06 Net Payments...................................................24
(i)
3
Page
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Section 5. Conditions Precedent...........................................26
5.01 Conditions Precedent to Initial Revolving Loans and
Letters of Credit under the DIP Facility......................26
5.02 Conditions to All Credit Events................................30
Section 6. Representations, Warranties and Agreements.....................31
6.01 Company Status.................................................31
6.02 Company Power and Authority....................................32
6.03 No Violation...................................................32
6.04 Governmental Approvals.........................................33
6.05 Priority; Security Interests...................................33
6.06 Financial Statement; Financial Condition; Undisclosed
Liabilities; etc..............................................34
6.07 Litigation.....................................................35
6.08 True and Complete Disclosure...................................35
6.09 Use of Proceeds; Margin Regulations............................35
6.10 Tax Returns and Payments.......................................35
6.11 Compliance with ERISA..........................................36
6.12 Ownership; Subsidiaries........................................37
6.13 Compliance with Statutes, etc..................................37
6.14 Investment Company Act.........................................38
6.15 The Orders.....................................................38
6.16 Environmental Matters..........................................38
6.17 Labor Relations................................................39
6.18 Patents, Licenses, Franchises and Formulas.....................39
6.19 Status of Accounts.............................................39
6.20 Cash Management System.........................................40
6.21 Year 2000 Representation.......................................40
Section 7. Affirmative Covenants..........................................40
7.01 Information Covenants..........................................40
7.02 Books, Records and Inspections.................................44
7.03 Maintenance of Property; Insurance.............................44
7.04 Corporate Franchises...........................................45
7.05 Compliance with Statutes, etc..................................46
7.06 End of Fiscal Years; Fiscal Quarters...........................46
7.07 Performance of Obligations.....................................46
7.08 Further Assurances.............................................46
7.09 Maintenance of Concentration Accounts..........................47
7.10 ERISA..........................................................47
7.11 Payment of Taxes...............................................48
7.12 Compliance with Environmental Laws.............................49
Section 8. Negative Covenants.............................................49
8.01 Liens..........................................................50
(ii)
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Page
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8.02 Consolidation, Merger, Sale of Assets, etc.....................51
8.03 Dividends......................................................53
8.04 Indebtedness...................................................53
8.05 Advances, Investments and Revolving Loans......................54
8.06 Capital Expenditures...........................................55
8.07 Limitation on Repayments, etc..................................55
8.08 Transactions with Affiliates...................................56
8.09 Subsidiaries...................................................56
8.10 Chapter 11 Claims..............................................56
8.11 Restriction on Payment Restrictions Affecting Subsidiaries.....56
8.12 Minimum EBITDA.................................................56
8.13 Change in Business.............................................57
8.14 No Additional Bank Accounts....................................57
8.15 Other Claims...................................................57
8.16 Pre-Arranged Plan..............................................57
Section 9. Events of Default..............................................57
9.01 Payments.......................................................57
9.02 Representations, etc...........................................57
9.03 Covenants......................................................57
9.04 The Cases, etc.................................................58
9.05 ERISA..........................................................59
9.06 DIP Credit Documents...........................................59
9.07 Judgments......................................................60
9.08 Pre-Arranged Plan..............................................60
9.09 Material Disruption in Senior Management, Change of
Control, etc..................................................60
Section 10. Definitions....................................................61
10.01 Defined Terms..................................................61
10.02 Other Definitional Provisions..................................93
Section 11. The DIP Agents.................................................93
11.01 Appointment....................................................93
11.02 Nature of Duties of DIP Agents.................................94
11.03 Lack of Reliance on DIP Agent..................................94
11.04 Certain Rights of the DIP Agents...............................94
11.05 Reliance by DIP Agents.........................................94
11.06 Indemnification of DIP Agents..................................94
11.07 The DIP Agents in their Individual Capacity....................94
11.08 Holders of Revolving Notes.....................................96
11.09 Successor DIP Agents...........................................96
11.10 Collateral Matters.............................................97
11.11 Actions with Respect to Defaults...............................98
11.12 Delivery of Information........................................98
(iii)
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Section 12. Miscellaneous..................................................98
12.01 Payment of Expenses, etc.......................................98
12.02 Survival......................................................100
12.03 Notices.......................................................100
12.04 Benefit of Agreement..........................................100
12.05 No Waiver; Remedies Cumulative................................102
12.06 Payments Pro Rata.............................................102
12.07 Calculations; Computations....................................103
12.08 Governing Law.................................................103
12.09 Counterparts..................................................104
12.10 Headings Descriptive..........................................104
12.11 Amendment or Waiver...........................................104
12.12 Domicile of Revolving Loans...................................105
12.13 Confidentiality...............................................105
12.14 Registry......................................................106
12.15 Limitation on Additional Amounts, etc.........................106
Section 13. Grant of Security Interest; Remedies..........................107
13.01 Grant of Security Interests...................................107
13.02 Power of Attorney.............................................107
13.03 Remedies; Obtaining the Collateral Upon Default...............108
13.04 Remedies; Disposition of the Collateral.......................109
13.05 Waiver of Claims..............................................110
13.06 Application of Proceeds.......................................110
13.07 Remedies Cumulative...........................................111
13.08 Discontinuance of Proceedings.................................111
Section 14. Guaranty......................................................111
14.01 The Guaranty..................................................111
14.02 Nature of Liability...........................................112
14.03 Independent Obligation........................................112
14.04 Authorization.................................................113
14.05 Reliance......................................................113
14.06 Subordination.................................................114
14.07 Waiver........................................................114
14.08 Limitation on Enforcement.....................................115
14.09 Nature of Liability...........................................115
14.10 Currency of Payments..........................................115
Exhibit A Notice of Borrowing
Exhibit B Revolving Note
Exhibit C Letter of Credit Request
Exhibit D 4.06(b)(ii) Certificate
Exhibit E Officer's Certificate
(iv)
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Exhibit F-1 Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
Exhibit F-2 Opinion of Stikeman, ▇▇▇▇▇▇▇
Exhibit F-3 Opinion of ▇▇▇▇▇ ▇▇▇▇▇
Exhibit G-1 Interim Order
Exhibit G-2 Final Order
Exhibit H Borrowing Base Certificate
Exhibit I Pledge Agreement
Exhibit J Acceptable Cash Collateral Order
Exhibit K Assignment and Assumption Agreement
Exhibit L Confidentiality Agreement
Exhibit M Pre-Arranged Plan of Reorganization
Exhibit N Restructuring Term Sheet
Exhibit O Canadian Security Agreement
Exhibit P Bonding Order
SCHEDULE I Commitments
SCHEDULE II Subsidiaries
SCHEDULE III Insurance
SCHEDULE IV Permitted Liens
SCHEDULE V Existing Indebtedness
SCHEDULE VI Borrowing Base Schedule
SCHEDULE VII Chief Executive Offices, Records Locations and Inventory
Locations
SCHEDULE VIII Disbursement Accounts
SCHEDULE IX Existing Investments
SCHEDULE X Litigation
SCHEDULE XI Tax Returns
SCHEDULE XII Waivers
SCHEDULE XIII Companies Not in Good Standing
(v)
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CONFORMED COPY
WITH EXHIBITS ▇-▇,▇-▇,▇-▇,
▇-▇, ▇-▇, I-1, I-2, J, M, N, O AND P
CONFORMED AS EXECUTED
THIS IS A CREDIT AGREEMENT dated as of June 28, 1999 among ▇▇▇▇▇▇ SERVICES
CORP., a corporation existing under the laws of Ontario and a
debtor-in-possession, as a borrower (the "Canadian Borrower"), ▇▇▇▇▇▇ SERVICES
(DELAWARE), INC., a corporation existing under the laws of Delaware and a
debtor-in-possession, as a borrower (the "US Borrower", and together with the
Canadian Borrower, the "Borrowers"), the Subsidiary Guarantors, Bankers Trust
Company ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
W I T N E S S E T H:
WHEREAS, on June 25, 1999 (the "Canadian Petition Date"), the Canadian
Borrower and the Canadian Subsidiary Guarantors (the "Canadian Credit Parties")
commenced voluntary pre-arranged proceedings under the Companies Creditors
Arrangement Act (the "CCAA" and the proceedings commenced thereunder, the
"Canadian Cases") with the Canadian Court and have continued in the possession
of their assets and in the management of their business pursuant to equivalent
provisions of the CCAA;
WHEREAS, on June 28, 1999 (the "Petition Date"), the Borrowers and the US
Subsidiary Guarantors (together with the US Borrower, the "US Credit Parties")
filed voluntary petitions with the Clerk of the US Bankruptcy Court initiating
pre-arranged proceedings under Chapter 11 of the US Bankruptcy Code and have
continued in the possession of their assets and in the management of their
business pursuant to Sections 1107 and 1108 of the US Bankruptcy Code;
WHEREAS, the Lenders and the Pre-Petition Lenders are parties to the
Pre-Petition Credit Agreement, pursuant to which the Pre-Petition Lenders made
loans and other extensions of credit to the Borrowers in an aggregate principal
amount outstanding as of the Petition Date in excess of $1,000,000,000;
WHEREAS, the Borrowers have applied to the Lenders for a revolving credit
and letter of credit facility in an aggregate principal amount not to exceed
$100,000,000 (subject to voluntary reductions in accordance with Section 3.02)
(the "DIP Facility") which (x) may be used to pay all professional fees
incurred by the DIP Agent, the Lenders, the Pre-Petition Agents and the
Pre-Petition Lenders, (y) shall be used (a) to provide for working capital and
general corporate requirements and payments of professional fees and expenses
(including professionals retained pursuant to Sections 327 and 1103 of the US
Bankruptcy Code) of the US Credit Parties during the US Cases and (b) by the US
Credit Parties to (i) make investments in and advances to direct and indirect
subsidiaries of the Canadian Borrower that are not Credit Parties, subject to
an aggregate limitation of $10,000,000 and (ii) after the Canadian Approvals
are obtained, make investments in and advances to the Canadian Credit Parties
through the Maturity Date and (z) shall be used to provide for working capital
and general corporate requirements of the Canadian
8
Borrower and the other Canadian Credit Parties during the Canadian Cases in an
amount not to exceed the Canadian Loan Amount;
WHEREAS, to provide guarantees and assure repayment of the Revolving
Loans, the reimbursement of any drafts drawn under Letters of Credit, and the
payment of the other Obligations of the Borrowers hereunder and under the other
DIP Credit Documents, the Borrowers and the Subsidiary Guarantors will provide
to the DIP Agent and the Lenders, the following pursuant to this Agreement and
the Orders (each as more fully described herein):
(a) a guaranty by (i) each Borrower of the due and punctual
performance of the Obligations of the other Borrower hereunder and under
the Revolving Notes, (ii) each of the US Subsidiary Guarantors of the due
and punctual performance of the Obligations of the Borrowers hereunder
and under the Revolving Notes and (iii) each of the Canadian Subsidiary
Guarantors after the Canadian Approvals are obtained of the due and
punctual performance of the Obligations of the Canadian Borrower
hereunder and under the Revolving Notes;
(b) pursuant to Section 364(c)(1) of the US Bankruptcy Code, with
respect to the Obligations of the Borrowers and the US Subsidiary
Guarantors under the DIP Credit Documents, an administrative expense
claim in the US Cases with priority in payment over any and all
administrative expenses of the kinds specified or ordered pursuant to any
provision of the US Bankruptcy Code, including, but not limited to,
Sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b) and 726
of the US Bankruptcy Code, other than (i) the superpriority claims
granted to the holders of the Account Intermediary Receivable Liens
pursuant to the Acceptable Cash Collateral Order and (ii) the Carve-Out.
(c) the following liens and security interests:
(i) pursuant to Section 364(c)(2) of the US Bankruptcy Code,
first priority liens and security interests on all unencumbered
assets of the Borrowers and the other US Subsidiary Guarantors
(whether heretofore or hereafter acquired) subject only to (x) the
Carve-Out (y) Bonding Liens and (z) the Account Intermediary
Replacement Liens;
(ii) pursuant to Section 364(c)(3) of the US Bankruptcy Code,
junior liens and security interests on all assets of the Borrowers
and the US Subsidiary Guarantors encumbered by the Senior Liens
subject only to (x) the Carve-Out, the Account Intermediary
Replacement Liens and (y) the Bonding Liens;
(iii) pursuant to Section 364(d)(1) of the US Bankruptcy Code,
liens and security interests priming the liens and security
interests granted to the Pre-Petition Agents and Pre-Petition
Lenders under the Pre-Petition Credit Documents, and the Acceptable
Cash Collateral Order subject only to (a) the Carve-Out, (b) the
Senior Liens, (c) the Account Intermediary Replacement Liens and
(d) the Bonding Liens;
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(iv) an enforceable first priority security interest and
charge on all of the Canadian Pre-Petition Collateral (whether
heretofore or hereafter acquired) ranking senior in priority to the
security of the Pre-Petition Agents and the Pre-Petition Lenders in
the Canadian Pre-Petition Collateral;
(v) an enforceable first priority security interest and charge
on all unencumbered assets of the Borrowers and the Subsidiary
Guarantors located in Canada (whether heretofore or hereafter
acquired); and
(vi) an enforceable junior security interest and charge on all
previously encumbered assets (excluding the Canadian Pre-Petition
Collateral) (whether heretofore or hereafter acquired) of the
Borrowers and the Subsidiary Guarantors located in Canada;
(vii) Notwithstanding anything else herein to the contrary,
unless the US Interim Order becomes the US Final Order or if the US
Final Order otherwise so provides, the proceeds of any Chapter 5 of
the US Bankruptcy Code avoidance actions shall not be included in
the Facility Liens
WHEREAS, subject to and upon the terms and conditions herein set forth,
the Lenders are willing to make available to the Borrowers the credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
Section 1. Revolving Loans.
1.01 Commitments. Subject to and upon the terms and conditions set forth
herein, each Lender severally agrees to make, at any time and from time to time
on or after the Effective Date and prior to the Maturity Date, a loan or loans
to each of the Borrowers (each a "Revolving Loan" and collectively the
"Revolving Loans"), which Revolving Loans:
(i) shall, at the option of the applicable Borrower, be either Base
Rate Loans or Eurodollar Loans, provided that (a) all Revolving Loans
made during a period of up to 30 days after the Effective Date, if any,
shall initially be and shall be maintained, until converted in accordance
with the terms hereof, as Base Rate Loans; and (b) any subsequent
Revolving Loans made as part of the same Borrowing shall, unless
otherwise specifically provided herein, be of the same Type;
(ii) may be repaid and reborrowed in accordance with the provisions
hereof;
(iii) shall not exceed for any Lender at any time outstanding that
aggregate principal amount which, when added to such Lender's
Proportionate Share of the aggregate amount of all Letter of Credit
Outstandings, equals the Commitment of such Lender at such time;
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(iv) shall not exceed in aggregate principal amount at any time
outstanding, when combined with the aggregate amount of all Letter of
Credit Outstandings at such time, the Authorized Facility Amount;
(v) shall not exceed in aggregate principal amount at any time
outstanding, the Budgeted Loan Amount; and
(vi) shall not exceed in aggregate principal amount at any time
outstanding, when combined with the aggregate amount of all Letter of
Credit Outstandings at such time, the Borrowing Base Amount.
Additionally, the Revolving Loans made to the Canadian Borrower shall not
exceed in aggregate principal amount at any time outstanding, the Canadian Loan
Amount.
1.02 Borrowing Mechanics. (a) Subject to Section 1.03(b), Borrowings
shall be made on notice from either Borrower to the Payments Administrator,
given not later than 2:00 P.M. New York City time on the first Business Day
prior to the date on which any proposed Borrowing consisting of Base Rate Loans
is requested to be made and on the third Business Day prior to the date on
which any proposed Borrowing consisting of Eurodollar Loans is requested to be
made.
(i) Each Notice of Borrowing shall be given by either telephone,
telecopy, telex, facsimile or cable, and, if by telephone, confirmed in
writing, substantially in the form of Exhibit A (the "Notice of
Borrowing"). Each Notice of Borrowing shall (x) be irrevocable by and
binding on the applicable Borrower and (y) be executed by an Authorized
Officer who shall certify that, to the best of such officer's knowledge
and without personal liability (a) the proposed extension of credit and
its intended use are consistent with the terms of the DIP Credit
Documents and the Budget and is necessary, after utilization and
application of available cash, in order to satisfy the obligations of the
Borrowers and the Subsidiary Guarantors in the ordinary course of
business or as otherwise permitted under this Agreement, (b) unless the
Borrowing is incurred in order to repay Unpaid Drawings pursuant to
Section 2.04(a), the Borrowers and the Subsidiary Guarantors have
observed or performed all of their covenants and other agreements and
have satisfied in all material respects every condition contained in the
DIP Credit Documents and the Orders (as applicable) to be observed,
performed or satisfied by the Borrowers or such Subsidiary Guarantors and
(c) such officer has no knowledge of any Default or Event of Default.
(ii) The Borrowers shall provide the Payments Administrator with a
specimen signature of each of the Authorized Officers, who shall be the
sole Persons authorized to request Revolving Loans on behalf of the
Borrowers. The Payments Administrator shall be entitled to rely
conclusively on such Authorized Officers' authority to request Revolving
Loans on behalf of the Borrowers until the Payments Administrator
receives written notice to the contrary. The Payments Administrator
shall have no duty to verify the authenticity of the signature appearing
on any Notice of Borrowing and, with respect to an oral request for
Revolving Loans, the Payments Administrator, acting in good faith,
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shall have no duty to verify the identity of any individual representing
himself as one of the Authorized Officers authorized to make such request
on behalf of the applicable Borrower. Neither the Payments Administrator
nor any of the Lenders shall incur any liability to the Borrowers as a
result of acting upon any telephonic notice referred to in this Section
1.02(a) which notice the Payments Administrator believes in good faith to
have been given by an Authorized Officer on behalf of the relevant
Borrower or for otherwise acting reasonably and in good faith under this
Section 1.02(a) and, upon the funding of Revolving Loans by the Lenders
in accordance with this Agreement, pursuant to any such telephonic
notice, the relevant Borrower shall be deemed to have made a Borrowing of
Revolving Loans hereunder.
(iii) In a Notice of Borrowing, each Borrower may request one or
more Borrowings on a single day; provided that at no time shall there be
outstanding more than five Borrowings of Eurodollar Loans. Each
Borrowing shall, unless otherwise specifically provided herein, consist
entirely of Revolving Loans of the same Type and shall be in an aggregate
amount for all Lenders of not less than the Minimum Borrowing Amount, if
applicable, for such Borrowing and if greater than the Minimum Borrowing
Amount, such Borrowing shall be in an integral multiple of $1,000,000.
Unless otherwise requested in the applicable Notice of Borrowing, all
Revolving Loans shall be Base Rate Loans. The right of the Borrowers to
choose Eurodollar Loans is subject to the provisions of Section 1.09.
(b) The Lenders hereby authorize the Payments Administrator to make,
and so long as the conditions to Borrowing in Section 5 of this Agreement
remain satisfied, the Payments Administrator on behalf of the Lenders
shall make, Revolving Loans to the Borrowers. If one of the Borrowers
has provided a Notice of Borrowing pursuant to Section 1.02(a) then the
Payments Administrator shall disburse such funds in the manner specified
in the Notice of Borrowings delivered by the applicable Borrower.
1.03 Settlements Among the Payments Administrator and the Lenders. (a)
Except as provided in Section 1.03(b), the Payments Administrator shall give to
each Lender prompt notice of each Notice of Borrowing by telecopy, telex,
facsimile or cable. No later than 12:00 Noon New York City time on the date of
each Borrowing representing the incurrence of Revolving Loans, each Lender will
make available for the Payments Administrator at its Payment Office, in
immediately available funds, its Proportionate Share of such Borrowing. Unless
the Payments Administrator shall have been notified by any Lender prior to the
date of such Borrowing that such Lender does not intend to make available to
the Payments Administrator its portion of such Borrowing to be made on such
date, the Payments Administrator may assume that such Lender will make such
amount available to the Payments Administrator at its Payment Office on such
date of Borrowing, or, if applicable, the date on which the summary statement
described in Section 1.03(b)(i) is received by such Lender, and the Payments
Administrator, in reliance upon such assumption, may but shall not be obligated
to make available the amount of the Borrowing to be provided by such Lender.
Except as provided in Section 1.03(b) and subject to Section 1.03(e), promptly
after its receipt of payments from or on behalf of the Borrowers (other than
amounts payable to the DIP Agent to reimburse the DIP Agent and any Issuing
Lender for fees and expenses payable solely to them), the Payments
-5-
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Administrator will cause such payments to be distributed ratably to the
Lenders. The Lenders will apply such payments in accordance with Section
4.03(d).
(b) Unless the Required Lenders have instructed the Payments Administrator
to the contrary, the Payments Administrator on behalf of the Lenders may, but
shall not be obligated to, make Base Rate Loans under Section 1.02 without
prior notice of the proposed Borrowing to the Lenders on the date on which any
proposed Borrowing consisting of Base Rate Loans is requested to be made upon
notice from either Borrower to the Payments Administrator given no later than
2:00 P.M. New York City time. In the event that the Payments Administrator
makes Base Rate Loans in accordance with this Section 1.03(b), the settlement
procedure among the Lenders and the Payments Administrator shall be as follows:
(i) The amount of each Lender's Proportionate Share of Revolving
Loans shall be computed weekly (or more frequently in the Payment
Administrator's discretion) and shall be adjusted upward or downward on
the basis of the amount of outstanding Revolving Loans as of 5:00 P.M.
New York City time on the last Business Day of the period specified by
the Payments Administrator (such date, the "Settlement Date"). The
Payments Administrator shall deliver to each of the Lenders promptly
after the Settlement Date a summary statement of the amount of
outstanding Revolving Loans for such period. The Lenders shall transfer
to the Payments Administrator, or, subject to Section 1.03(e), the
Payments Administrator shall transfer to the Lenders, such amounts as are
necessary so that (after giving effect to all such transfers) the amount
of Revolving Loans made by each Lender shall be equal to such Lender's
Proportionate Share of the aggregate amount of Revolving Loans
outstanding as of such Settlement Date. If the summary statement is
received by the Lenders prior to 12:00 Noon New York City time on any
Business Day, each Lender shall use its best efforts to make the
transfers described above in immediately available funds no later than
3:00 P.M. New York City time on the day such summary statement was
received; and if such summary statement is received by the Lenders after
12:00 Noon New York City time on such day or, in any event, no later than
3:00 PM New York City time on the next succeeding Business Day. The
obligation of each of the Lenders to transfer such funds shall be
irrevocable and unconditional and without recourse to or warranty by the
Payments Administrator. Each of the Payments Administrator and the
Lenders agree to ▇▇▇▇ their respective books and records on the
Settlement Date to show at all times the Dollar amount of their
respective Proportionate Shares of the outstanding Revolving Loans.
(ii) To the extent that the settlement described above shall not yet
have occurred, upon repayment of Revolving Loans by either Borrower, the
Payments Administrator may apply such amounts repaid directly to the
amounts made available by the Payments Administrator pursuant to this
Section 1.03(b).
(iii) Because the Payments Administrator on behalf of the Lenders
may be advancing and/or may be repaid Revolving Loans prior to the time
when the Lenders will actually advance and/or be repaid Revolving Loans,
interest with respect to Revolving Loans shall be allocated by the
Payments Administrator to each Lender and the Payments Administrator in
accordance with the amount of Revolving Loans actually advanced by
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and repaid to each Lender and the Payments Administrator and shall accrue
from and including the date such Revolving Loans are so advanced to, but
excluding the date such Revolving Loans are either repaid by either
Borrower in accordance with Section 4 or actually settled by the
applicable Lender as described in this Section 1.03(b).
(c) If any amount described in this Section 1.03 is not made available to
the Payments Administrator by a Lender and the Payments Administrator has made
such amount available to either Borrower, the Payments Administrator shall be
entitled to recover such amount on demand from such Lender. If such Lender
does not pay such amount forthwith upon the Payments Administrator's demand
therefor, the Payments Administrator shall promptly notify the relevant
Borrower and such Borrower shall promptly (but in any event no later than five
Business Days after such demand) pay such amount to the Payments Administrator.
The Payments Administrator shall also be entitled to recover from such Lender
and such Borrower (x) interest on such amount in respect of each day from the
date such corresponding amount was made available by the Payments Administrator
to such Borrower to the date such amount is recovered by the Payments
Administrator, at a rate per annum equal to either (i) if paid by such Lender,
the overnight Federal Funds Rate or (ii) if paid by such Borrower, the then
applicable rate of interest, calculated in accordance with Section 1.07 hereof,
plus (y) in each case, an amount equal to any actual direct costs (including
legal expenses) and losses incurred as a result of the failure of such Lender
to provide such amount as provided in this Agreement; provided, however, that
the Payments Administrator shall not be entitled to demand payment by the
relevant Borrower of any amount under clause (y) above unless demand therefor
has been made of the Lender and not paid within five Business Days of such
demand. Nothing herein shall be deemed to relieve any Lender from its duty to
fulfill its obligations hereunder or to prejudice any rights which either
Borrower may have against any Lender as a result of any default by such Lender
hereunder, including, without limitation, the right of such Borrower to seek
reimbursement from any Lender for any amounts paid by such Borrower under
clause (y) above on account of such Lender's default.
(d) The failure of any Lender to make the Revolving Loan to be made by it
as part of any Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its Revolving Loan on the date of such Borrowing, but
no Lender shall be responsible for the failure of any other Lender to make the
Revolving Loan to be made by such other Lender on the date of any Borrowing.
(e) Notwithstanding anything contained herein to the contrary, so long as
any Lender is a Defaulting Lender, the Payments Administrator shall not be
obligated to transfer to such Lender any payments made by either Borrower to
the Payments Administrator for the benefit of such Lender. The Payments
Administrator may hold and, in its discretion, re-lend to the Borrowers the
amount of all such payments received by it for such Lender. For purposes of
voting or consenting to matters with respect to the DIP Credit Documents and
determining Proportionate Share, such Defaulting Lender shall be deemed not to
be a "Lender" and such Lender's Commitment shall be deemed to be zero. This
Section 1.03(e) shall remain effective with respect to such Defaulting Lender
until (x) such Lender is no longer a Defaulting Lender, (y) the Obligations
under this Agreement shall have been paid in full to the Payments Administrator
and/or the Lenders other than the Defaulting Lender or (z) the other Lenders,
the Payments
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Administrator and the Borrowers shall have waived such Defaulting Lender's
default in writing. No Commitment of any Lender shall be increased or
otherwise affected, and performance by either Borrower shall not be excused, by
the operation of this Section 1.03(e).
1.04 Revolving Notes. (a) Each Borrower's obligation to pay the
principal of, and interest on, all Revolving Loans made by each Lender shall be
evidenced by a promissory note duly executed and delivered to such Lender by
each of the Borrowers substantially in the form of Exhibit B hereto (each a
"Revolving Note" and collectively the "Revolving Notes").
(b) Each Revolving Note issued to each Lender shall (i) be payable to the
order of such Lender or its registered assigns and be dated the Effective Date,
(ii) be in a stated principal amount equal to the Commitment of such Lender as
in effect on the date of issuance thereof and be payable in the outstanding
principal amount of the Revolving Loans evidenced thereby from time to time,
(iii) mature on the Maturity Date, (iv) bear interest as provided in Section
1.07 in respect of the Base Rate Loans or Eurodollar Loans, as the case may be,
evidenced thereby and (v) be entitled to the benefits of this Agreement and all
other DIP Credit Documents.
(c) Each Lender will note on its internal records the amount of each
Revolving Loan made by it and each payment in respect thereof and will prior to
any transfer of any of its Revolving Notes endorse on the reverse side thereof
the outstanding principal amount of Revolving Loans evidenced thereby. Failure
to make any such notation or any error in any such notation or endorsement
shall not affect the Borrowers' obligations in respect of such Revolving Loans.
1.05 Conversions and Continuations. After the Effective Date, each
Borrower shall have the option (x) to convert, on any Business Day, all or a
portion equal to not less than the Minimum Borrowing Amount (if applicable) of
the outstanding principal amount of the Revolving Loans made to it pursuant to
one or more Borrowings of one Type of Revolving Loans into a Borrowing of
another Type of Revolving Loans or (y) to continue an outstanding Borrowing of
Eurodollar Loans for an additional Interest Period upon the expiration of the
then current Interest Period, provided that (i) all Revolving Loans made during
a period of up to 30 days after the Effective Date initially shall be
maintained as Base Rate Loans for such 30-day period and thereafter may be
converted to Eurodollar Loans, (ii) no partial conversion of Eurodollar Loans
shall reduce the outstanding principal amount of Eurodollar Loans made pursuant
to any single Borrowing to less than the Minimum Borrowing Amount applicable
thereto, and (iii) Base Rate Loans may only be converted into Eurodollar Loans
if no Default or Event of Default is in existence on the date of the
conversion. Each such conversion or continuation shall be effected by the
applicable Borrower giving the Payments Administrator, at its Notice Office
prior to 12:00 Noon (New York time) notice thereof (i) at least three Business
Days' in the case of conversions into Eurodollar Loans and continuations
thereof or (ii) on the Business Day of the proposed conversion date in the case
of conversions into Base Rate Loans (each a "Notice of Conversion") specifying
the Revolving Loans to be so converted or continued and, if to be converted
into Eurodollar Loans or continued as Eurodollar Loans, the Interest Period to
be initially applicable thereto. The Payments Administrator shall give each
Lender prompt notice of any
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15
such proposed conversion or continuation, as applicable. Notices of Conversion
shall be given by telephone, telecopy, telex, facsimile or cable, confirmed
promptly in writing if by telephone.
1.06 Pro Rata Borrowings. All Borrowings of Revolving Loans under this
Agreement shall be incurred from the Lenders pro rata on the basis of their
respective Proportionate Shares.
1.07 Interest. (a) Each Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan made to it from the date the
proceeds thereof are made available to such Borrower until the conversion or
maturity thereof (whether by acceleration or otherwise) at a rate per annum
which shall be equal to the sum of the Applicable Margin plus the Base Rate in
effect from time to time.
(b) Each Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan made to it from the date of the
Borrowing thereof until the conversion or maturity thereof (whether by
acceleration or otherwise) at a rate per annum which shall, during each
Interest Period applicable thereto, be equal to the sum of the Applicable
Margin plus the Eurodollar Rate for such Interest Period.
(c) At any time that a default in the payment of principal of, or interest
on, any Revolving Loan has occurred and is continuing, to the extent permitted
by law, principal and interest in respect of each such Revolving Loan shall
bear interest at a rate per annum which shall be 2% in excess of the rate of
interest otherwise applicable to such Revolving Loan. Interest which accrues
under this Section 1.07(c) shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, monthly in arrears on the last Business Day of
each calendar month, (ii) in respect of each Eurodollar Loan, on the last day
of each Interest Period applicable thereto and (iii) in respect of any
Revolving Loan, on any repayment, prepayment or conversion date (on the amount
prepaid or converted), or at maturity (whether by acceleration or otherwise).
(e) Upon each Interest Determination Date, the Payments Administrator
shall determine the interest rate applicable to Eurodollar Loans for each
Interest Period and shall promptly notify the Borrowers and the Lenders
thereof. Each such determination shall, absent manifest error, be final and
conclusive and binding on all parties hereto.
1.08 Interest Periods. All Borrowings of Eurodollar Loans shall have an
interest period (the "Interest Period") of one month, provided that:
(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of a different Type or continuation of an
existing Eurodollar Loan) and each Interest Period occurring thereafter
in respect of such Borrowing shall commence on the day on which the next
preceding Interest Period expires;
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(ii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day
of such calendar month;
(iii) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) no Interest Period may be elected at a time when a Default or
Event of Default is then in existence; and
(v) no Interest Period shall extend beyond the Maturity Date.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrowers have failed to elect a new Interest Period to
be applicable to such Borrowing as provided above (or are not permitted to
elect an Interest Period by virtue of the application of clause (iv) above),
the Borrowers shall be deemed to have elected to convert such Borrowing into a
Borrowing of Base Rate Loans effective as of the expiration date of such
current Interest Period.
1.09 Increased Costs, Illegality, etc. (a) In the event that any Lender
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Payments Administrator):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition
of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect
to any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order
or guideline, or any request or directive (whether or not having the
force of law) by any Governmental Authority (including any central bank,
Superintendent of Financial Institutions or other comparable authority or
agency) (whether or not having the force of law) or in the interpretation
or administration thereof and including the introduction of any new law
or governmental rule, regulation, order, guideline or request, such as,
for example, but not limited to: (A) a change in the basis of taxation
of payment to such Lender of the principal of or interest on such
Eurodollar Loan or any other amounts payable hereunder (except for
changes in the rate of tax on, or determined by reference to, the net
income or profits of such Lender, or any franchise tax based on the net
income or profits of such Lender, in either case pursuant to the laws of
the United States of America, the jurisdiction in which it is
incorporated or organized or in which its
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principal office or applicable lending office is located or any
subdivision thereof or therein), but without duplication of any amounts
payable in respect of Taxes pursuant to Section 4.06(a), or (B) a change
in official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of
the Eurodollar Rate and/or (y) other circumstances since the date of this
Agreement affecting such Lender or the interbank Eurodollar market or
the position of such Lender in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan by such Lender has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by such Lender in
good faith with any governmental request (whether or not having force of
law) or (z) impracticable as a result of a contingency occurring after
the date of this Agreement which materially and adversely affects the
interbank Eurodollar market;
then, and in any such event, such Lender (or the Payments Administrator, in the
case of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrowers and, except in the case of clause (i) above, to the
Payments Administrator of such determination (which notice the Payments
Administrator shall promptly transmit to each of the other Lenders). Thereafter
(x) in the case of clause (i) above, Eurodollar Loans shall no longer be
available until such time as the Payments Administrator notifies the Borrowers
and the Lenders that the circumstances giving rise to such notice by the
Payments Administrator no longer exist, and any Notice of Borrowing or Notice
of Conversion given by the Borrowers with respect to Eurodollar Loans which
have not yet been incurred (including by way of conversion) shall be deemed
rescinded by the Borrowers, (y) in the case of clause (ii) above, the Borrowers
shall, subject to the provisions of Section 12.15 (to the extent applicable)
pay to such Lender, upon written demand therefor, such additional amounts (in
the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender in its sole discretion shall determine) as
shall be required to compensate such Lender for such increased costs or
reductions in amounts received or receivable hereunder (a written notice as to
the additional amounts owed to such Lender, showing the basis for the
calculation thereof, submitted to the Borrowers by such Lender in good faith
shall, absent manifest error, be final and conclusive and binding on all the
parties hereto) and (z) in the case of clause (iii) above, the Borrowers shall
take one of the actions specified in Section 1.09(b) as promptly as possible
and, in any event, within the time period required by law. Each of the
Payments Administrator and each Lender agrees that if it gives notice to the
Borrowers of any of the events described in clause (i) or (iii) above, it shall
promptly notify the Borrowers and, in the case of any such Lender, the Payments
Administrator, if such event ceases to exist. If any such event described in
clause (iii) above ceases to exist as to a Lender, the obligations of such
Lender to make Eurodollar Loans and to convert Base Rate Loans into Eurodollar
Loans on the terms and conditions contained herein shall be reinstated.
(b) At any time that any Eurodollar Loan is affected by the circumstances
described in Section 1.09(a)(ii) or (iii), the Borrowers may (and in the case
of a Eurodollar Loan affected by the circumstances described in Section
1.09(a)(iii) shall) either (x) if the affected Eurodollar Loan is then being
made initially or pursuant to a conversion, cancel the respective Borrowing by
giving the Payments Administrator notice by telephone, telecopy, telex,
facsimile
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or cable, immediately confirmed in writing if by telephone on the same date
that the Borrowers were notified by the affected Lender or the Payments
Administrator pursuant to Section 1.09(a)(ii) or (iii) or (y) if the affected
Eurodollar Loan is then outstanding, upon at least three Business Days' written
notice to the Payments Administrator, require the affected Lender to convert
such Eurodollar Loan into a Base Rate Loan, provided that, if more than one
Lender is affected at any time, then all affected Lenders must be treated the
same pursuant to this Section 1.09(b).
(c) If at any time after the date of this Agreement any Lender determines
that the introduction of or any change in any applicable law or governmental
rule, regulation, order, guideline, directive or request (whether or not having
the force of law) concerning capital adequacy, or any change in interpretation
or administration thereof by any Governmental Authority (including any central
bank, Superintendent of Financial Institutions or other comparable authority or
agency) will have the effect of increasing the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender based on the existence of such Lender's Commitment hereunder or its
obligations hereunder, then the Borrowers shall, subject to the provisions of
Section 12.15 (to the extent applicable), pay to such Lender, upon its written
demand therefor, such additional amounts as shall be required to compensate
such Lender or such other corporation for the increased cost to such Lender or
such other corporation or the reduction in the rate of return to such Lender or
such other corporation as a result of such increase or reduction of capital as
the case may be. In determining such additional amounts, each Lender will act
reasonably and in good faith and will use averaging and attribution methods
which are reasonable, provided that such Lender's reasonable good faith
determination of compensation owing under this Section 1.09(c) shall, absent
manifest error, be final and conclusive and binding on all the parties hereto.
Each Lender, upon determining that any additional amounts will be payable
pursuant to this Section 1.09(c), will give prompt written notice thereof to
the Borrowers, which notice shall show the basis for calculation of such
additional amounts.
1.10 Compensation. The Borrowers shall, subject to the provisions of
Section 12.15 (to the extent applicable), compensate each Lender, upon its
written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Lender
to fund its Eurodollar Loans (but excluding any loss of anticipated profits)
which such Lender may sustain: (i) if for any reason (other than a default by
such Lender or the Payments Administrator) a Borrowing of, or conversion from
or into, Eurodollar Loans does not occur on a date specified therefor in a
Notice of Borrowing or Notice of Conversion (whether or not withdrawn by the
Borrowers or deemed withdrawn pursuant to Section 1.09(a)); (ii) if any
repayment or conversion of any of its Eurodollar Loans occurs on a date which
is not the last day of the Interest Period with respect thereto; (iii) if any
prepayment of any of its Eurodollar Loans is not made on any date specified in
a notice of prepayment given by the Borrowers; or (iv) as a consequence of (x)
any other default by the Borrowers to repay their Eurodollar Loans when
required by the terms of this Agreement or any Note held by such Lender or (y)
any election made pursuant to Section 1.09(b).
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1.11 Change of Applicable Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 1.09(a)(ii)
or (iii), 1.09(c), 2.05 or 4.06 with respect to such Lender, it will, if
requested by the Borrowers, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any
Revolving Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Lender and its applicable lending
office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of any such
Section. Nothing in this Section 1.11 shall affect or postpone any of the
obligations of either Borrower or the rights of any Lender provided in Sections
1.09, 2.05 and 4.06.
1.12 Replacement of Lenders. (x) If any Lender becomes a Defaulting
Lender or otherwise defaults in its obligations hereunder, (y) upon the
occurrence of any event giving rise to the operation of Section 1.09(a)(ii) or
(iii), 1.09(c), 2.05 or 4.06 with respect to any Lender which results in such
Lender charging to the Borrowers increased costs in excess of those being
generally charged by the other Lenders or (z) as provided in Section 12.11(b)
in the case of certain refusals by a Lender to consent to certain proposed
changes, waivers, discharges or terminations with respect to this Agreement
which have been approved by the Required Lenders, the Borrowers shall have the
right, if no Default or Event of Default will exist immediately after giving
effect to the respective replacement, to either replace such Lender (the
"Replaced Lender") with one or more other Eligible Transferee or Transferees,
none of whom shall constitute a Defaulting Lender at the time of such
replacement (collectively, the "Replacement Lender") reasonably acceptable to
the DIP Agent, provided that (i) at the time of any replacement pursuant to
this Section 1.12, the Replacement Lender shall enter into one or more
Assignment and Assumption Agreements pursuant to Section 12.04(b) (and with all
fees payable pursuant to said Section 12.04(b) to be paid at such time)
pursuant to which the Replacement Lender shall acquire all of the Commitments
and outstanding Revolving Loans of, and participations in Letters of Credit by,
the Replaced Lender and, in connection therewith, shall pay to (x) the Replaced
Lender in respect thereof an amount equal to the sum of (A) an amount equal to
the principal of, and all accrued interest on, all outstanding Revolving Loans
of the Replaced Lender, (B) an amount equal to all Unpaid Drawings that have
not been repaid with the proceeds of Revolving Loans that have been funded by
(and not reimbursed to) such Replaced Lender, together with all then unpaid
interest with respect thereto at such time and (C) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Lender pursuant to
Section 3.01 and (y) the DIP Agent an amount equal to such Replaced Lender's
Proportionate Share (for this purpose, determined as if the adjustment
described in clause (y) of the immediately succeeding sentence had been made
with respect to such Replaced Lender) of any Unpaid Drawing (which at such time
remains an Unpaid Drawing that has not been repaid with the proceeds of a
Revolving Loan) to the extent such amount was not theretofore funded by such
Replaced Lender, and (ii) all obligations of the Borrowers owing to the
Replaced Lender (other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Lender concurrently with
such replacement. Upon the execution of the respective Assignment and
Assumption Agreements, the payment of amounts referred to in clauses (i) and
(ii) above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate
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Note or Revolving Notes executed by the Borrowers, (x) the Replacement Lender
shall become a Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder, except with respect to indemnification
provisions under this Agreement (including, without limitation, Sections 1.07,
1.09, 1.10, 2.05, 4.06, 12.01 and 12.06), which shall survive as to such
Replaced Lender and (y) in the case of a replacement of a Defaulting Lender
with a Non-Defaulting Lender, the Proportionate Shares of the Lenders shall be
automatically adjusted at such time to give effect to such replacement (and to
give effect to the replacement of a Defaulting Lender with one or more
Non-Defaulting Lenders).
Section 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the US Borrower may, no later than 30 days prior
to the Maturity Date, request that any Issuing Lender issue, at any time and
from time to time on and after the Effective Date and prior to the Maturity
Date, (x) for the account of the US Borrower and for the benefit of any holder
(or any trustee, DIP Agent or other similar representative for any such
holders) of L/C Supportable Obligations of any Credit Party, a letter of credit
in the form of an irrevocable standby letter of credit in a form customarily
used by such Issuing Lender or in such other form as has been approved by such
Issuing Lender (each such letter of credit, a "Standby Letter of Credit") in
support of such L/C Supportable Obligations and (y) for the account of the US
Borrower and for the benefit of sellers of goods and services to any Credit
Party, an irrevocable trade letter of credit in a form customarily used by such
Issuing Lender or in such other form as has been approved by such Issuing
Lender (each such letter of credit, a "Trade Letter of Credit", and each such
Trade Letter of Credit and each Standby Letter of Credit, a "Letter of Credit")
in support of commercial transactions of the Credit Parties. All Letters of
Credit shall be issued on a sight basis only.
(b) Letters of Credit may be issued, at the request of the US Borrower, in
Dollars or in Canadian Dollars.
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued, the Stated Amount of which, when added to the Letter of Credit
Outstandings at such time would exceed $20,000,000 (the "LC Sublimit"), (ii) no
Letter of Credit shall be issued the Stated Amount of which, when added to all
Letter of Credit Outstandings at such time and the aggregate outstanding
principal amount of Revolving Loans at such time, would exceed the lowest of
(x) the Total Commitment (after giving effect to any reduction thereto on such
date), (y) the Authorized Facility Amount and (z) the Borrowing Base Amount,
(iii) each Standby Letter of Credit shall have an expiry date occurring not
later than one year after such Letter of Credit's date of issuance (although
any Letter of Credit may be extendable (whether automatically or otherwise for
successive periods of up to 12 months on terms acceptable to the Issuing
Lender), and (iv) each Trade Letter of Credit shall have an expiry date
occurring not later than 180 days after the issuance thereof.
(d) If any Letter of Credit shall be outstanding on the Consummation Date,
the US Borrower shall, on or prior to the Consummation Date, (i) cause such
Letter of Credit to be returned to the respective Issuing Lender undrawn and
canceled or (ii) either (x) cause a backing
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letter of credit to be issued to the respective Issuing Lender, in a form
satisfactory to such Issuing Lender and the DIP Agent, and issued by a lender
satisfactory to such Issuing Lender and the DIP Agent, in an amount equal to
105% of the Stated Amount of such Letter of Credit or (y) deposit cash or Cash
Equivalents in an account established at BTCo in the name of the DIP Agent for
the benefit of the Lenders as security for the reimbursement obligations in
connection with such Letter of Credit in an amount equal to 105% of the Stated
Amount of such Letter of Credit, such cash or Cash Equivalents to be remitted
to the US Borrower upon the expiration, cancellation or other satisfaction of
such obligations.
(e) Each Issuing Lender may agree, in its sole discretion and BTCo in its
capacity as an Issuing Lender hereby agrees that, in the event a requested
Letter of Credit is not issued by one of the other Issuing Lenders, it will
(subject to the terms and conditions contained herein), at any time and from
time to time on or after the Effective Date and no later than 10 days prior to
the Maturity Date, following its receipt of the respective Letter of Credit
Request, issue for the account of the US Borrower one or more Letters of Credit
in support of such L/C Supportable Obligations of either of the Borrowers or
their Subsidiaries as is permitted to remain outstanding without giving rise to
a Default or Event of Default hereunder; provided that the respective Issuing
Lender shall be under no obligation to issue any Letter of Credit if at the
time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Lender from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Lender or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over such Issuing Lender shall prohibit, or request that
such Issuing Lender refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon
such Issuing Lender with respect to such Letter of Credit any restriction
or reserve or capital requirement (for which such Issuing Lender is not
otherwise compensated) not in effect on the date hereof, or any
unreimbursed loss, cost or expense which was not applicable, in effect or
known to such Issuing Lender as of the date hereof and which such Issuing
Lender in good ▇▇▇▇▇ ▇▇▇▇▇ material to it; or
(ii) such Issuing Lender shall have received notice from any Lender
prior to the issuance of such Letter of Credit of the type described in
the penultimate sentence of Section 2.02(b).
2.02 Letter of Credit Requests. (a) Whenever the US Borrower desires
that a Letter of Credit be issued for its account, the US Borrower shall give
the Payments Administrator and the respective Issuing Lender at least three
Business Days' (or such shorter period as is acceptable to the respective
Issuing Lender) by facsimile written notice thereof. Each notice shall be in
the form of Exhibit C (each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the US Borrower that such Letter of Credit may
be issued in accordance with, and will not violate the requirements of, Section
2.01(c). Unless the respective Issuing Lender has received notice from any
Lender before it issues a Letter of Credit that one or
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more of the conditions specified in Section 5 are not then satisfied, or that
the issuance of such Letter of Credit would violate Section 2.01(e), then such
Issuing Lender may issue the requested Letter of Credit for the account of the
US Borrower in accordance with such Issuing Lender's usual and customary
practices. Upon its issuance or amendment of any Letter of Credit, such
Issuing Lender shall promptly notify in writing each Lender and the DIP Agent
of such issuance or amendment, which notice shall be accompanied, if requested
by any Lender, by a copy of the amendment or of the Letter of Credit actually
issued.
2.03 Letter of Credit Participations. (a) Immediately upon the issuance
by any Issuing Lender of any Letter of Credit, such Issuing Lender shall be
deemed to have sold and transferred to each Lender, other than such Issuing
Lender (each such Lender, in its capacity under this Section 2.03, a
"Participant"), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing Lender,
without recourse or warranty, an undivided interest and participation, to the
extent of such Participant's Proportionate Share in such Letter of Credit, each
drawing made thereunder and the obligations of the US Borrower under this
Agreement with respect thereto (other than the Facing Fees, which shall be for
the account of the respective Issuing Lender), and any security therefor or
guaranty pertaining thereto. Upon any change in the Commitments or
Proportionate Shares of the Lenders pursuant to Section 1.12 or 12.04 or as a
result of a Lender Default, it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic
adjustment to the participations pursuant to this Section 2.03 to reflect the
new Proportionate Shares of the assignor and assignee Lender or of all Lenders,
as the case may be.
(b) In determining whether to pay under any Letter of Credit, such Issuing
Lender shall have no obligation relative to the other Lenders other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to substantially comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by any Issuing Lender under or in connection with any
Letter of Credit if taken or omitted in the absence of gross negligence or
willful misconduct as determined by a court of competent jurisdiction, shall
not create for such Issuing Lender any resulting liability to the Borrowers or
any Lender.
(c) In the event that any Issuing Lender makes any payment under any
Letter of Credit and the US Borrower shall not have reimbursed such amount in
full to such Issuing Lender pursuant to Section 2.04(a), such Issuing Lender
shall promptly notify the Payments Administrator, which shall promptly notify
each Participant of such failure, and each Participant shall promptly and
unconditionally pay to such Issuing Lender the amount of such Participant's
Proportionate Share of such unreimbursed payment in Dollars (or, in the case of
any unreimbursed payment made in a currency other than Dollars, of the US
Dollar Equivalent of such unreimbursed payment, as determined by the Issuing
Lender on the date on which such unreimbursed payment was made by the Issuing
Lender) and in same day funds. If the Payments Administrator so notifies,
prior to 12:00 Noon (New York time) on any Business Day, any Participant
required to fund a payment under a Letter of Credit, such Participant shall use
its best efforts to make available to such Issuing Lender such Participant's
Proportionate Share of the amount of such payment on such Business Day in
Dollars (or, in the case of any unreimbursed payment made in a currency other
than Dollars, of the US Dollar Equivalent thereof) in same day
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funds or in any case, no later than 3:00 P.M. New York City time on the next
succeeding Business Day. If and to the extent such Participant shall not have
so made its Proportionate Share of the amount of such payment available to such
Issuing Lender, such Participant agrees to pay to such Issuing Lender,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is paid to such Issuing Lender at the
overnight Federal Funds Rate. The failure of any Participant to make available
to such Issuing Lender its Proportionate Share of any payment under any Letter
of Credit shall not relieve any other Participant of its obligation hereunder
to make available to such Issuing Lender its Proportionate Share of any Letter
of Credit on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to such
Issuing Lender such other Participant's Proportionate Share of any such
payment.
(d) Whenever any Issuing Lender receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Lender shall pay to each Participant
which has paid its Proportionate Share thereof, in Dollars (or, in the case of
any unreimbursed payment made in a currency other than Dollars, of the US
Dollar Equivalent thereof) and in same day funds, an amount equal to such
Participant's share (based upon the proportionate aggregate amount originally
funded by such Participant to the aggregate amount funded by all Participants)
of the principal amount of such reimbursement obligation and interest thereon
accruing after the payment pursuant to clause (c) above.
(e) The obligations of the Participants to make payments to each Issuing
Lender with respect to Letters of Credit issued by it shall be irrevocable and
not subject to any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other DIP Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the US Borrower may have at any time against a beneficiary named in
a Letter of Credit, any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), the DIP Agent, any
Participant, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between
the US Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the DIP Credit Documents; or
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(v) the occurrence of any Default or Event of Default.
2.04 Agreement to Repay Letter of Credit Drawings. (a) The US Borrower
hereby agrees to reimburse the respective Issuing Lender, by making payment to
the Payments Administrator in immediately available funds in Dollars (or, in
the case of any payment or disbursement made by such Issuing Lender in a
currency other than Dollars, of the US Dollar Equivalent of such payment or
disbursement) at the Payment Office, for any payment or disbursement made by
such Issuing Lender under any Letter of Credit (each such amount, so paid until
reimbursed or repaid with the proceeds of a Revolving Loan in accordance with
the terms hereof, an "Unpaid Drawing"), no later than three Business Days after
the date of such payment or disbursement, with interest on the amount so paid
or disbursed by such Issuing Lender, to the extent not reimbursed prior to
12:00 Noon (New York time) on the date of such payment or disbursement, from
and including the date paid or disbursed to but excluding the date such Issuing
Lender was reimbursed by the US Borrower therefor at a rate per annum which
shall be the Base Rate in effect from time to time plus the Applicable Margin
for Base Rate Loans; provided, however, to the extent such amounts are not
reimbursed prior to 12:00 Noon (New York time) on the fifth Business Day
following the notice of such payment or disbursement, interest shall thereafter
accrue on the amounts so paid or disbursed by such Issuing Lender (and until
reimbursed by the US Borrower) at a rate per annum which shall be the Base Rate
in effect from time to time plus the Applicable Margin for Base Rate Loans plus
2%, in each such case, with interest to be payable on demand; provided further,
however, that even if the conditions to Borrowing set forth herein are not met,
the relevant Borrower may request in accordance with Section 1.02 that the
payments required to be made under this Section 2.04(a) be made from the
proceeds of a Base Rate Loan in an equivalent amount, and, to the extent so
made, the US Borrower's obligations to make such payments shall be discharged.
The respective Issuing Lender shall give the US Borrower prompt notice of each
Drawing under any Letter of Credit, provided that the failure to give any such
notice shall in no way affect, impair or diminish the Borrowers' obligations
hereunder.
(b) The obligations of the US Borrower under this Section 2.04 to
reimburse the respective Issuing Lender with respect to payments on Letters of
Credit (each, a "Drawing") (including, in each case, interest thereon) shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which the US Borrower may have
or have had against any Lender (including in its capacity as issuer of the
Letter of Credit or as Participant), or any nonapplication or misapplication by
the beneficiary of the proceeds of such Drawing, the respective Issuing
Lender's only obligation to the US Borrower being to confirm that any documents
required to be delivered under such Letter of Credit appear to have been
delivered and that they appear to comply on their face with the requirements of
such Letter of Credit. Any action taken or omitted to be taken by any Issuing
Lender under or in connection with any Letter of Credit if taken or omitted in
the absence of gross negligence or willful misconduct, as determined by a court
of competent jurisdiction, shall not create for such Issuing Lender any
resulting liability to either Borrower.
2.05 Increased Costs. If at any time after the date of this Agreement,
the introduction of or any change in any applicable law, rule, regulation,
order, guideline or request or in the interpretation or administration thereof
by any Governmental Authority (including any central
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bank, Superintendent of Financial Institutions or other comparable authority or
agency) charged with the interpretation or administration thereof, or
compliance by any Issuing Lender or any Participant with any request or
directive by any such authority (whether or not having the force of law), or
any change in GAAP, shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by any Issuing Lender or participated in by any Participant, or
(ii) impose on any Issuing Lender or any Participant any other conditions
relating, directly or indirectly, to this Agreement or any Letter of Credit;
and the result of any of the foregoing is to increase the cost to any Issuing
Lender or any Participant of issuing, maintaining or participating in any
Letter of Credit, or reduce the amount of any sum received or receivable by any
Issuing Lender or any Participant hereunder or reduce the rate of return on its
capital with respect to Letters of Credit (except for changes in the rate of
tax on, or determined by reference to, the net income or profits of such
Issuing Lender or such Participant, or any franchise tax based on the net
income or profits of such Lender or Participant, in either case pursuant to the
laws of the United States of America, the jurisdiction in which it is organized
or in which its principal office or applicable lending office is located or any
subdivision thereof or therein), but without duplication of any amounts payable
in respect of Taxes pursuant to Section 4.06(a), then, upon demand to the US
Borrower by such Issuing Lender or any Participant (a copy of which demand
shall be sent by such Issuing Lender or such Participant to the DIP Agent) and
subject to the provisions of Section 12.15 (to the extent applicable), the US
Borrower shall pay to such Issuing Lender or such Participant such additional
amount or amounts as will compensate such Lender for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital. Any Issuing Lender or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 2.05, will give
prompt written notice thereof to the US Borrower, which notice shall include a
certificate submitted to the US Borrower by such Issuing Lender or such
Participant (a copy of which certificate shall be sent by such Issuing Lender
or such Participant to the DIP Agent), setting forth in reasonable detail the
basis for the calculation of such additional amount or amounts necessary to
compensate such Issuing Lender or such Participant. The certificate required
to be delivered pursuant to this Section 2.05 shall, if delivered in good faith
and absent manifest error, be final and conclusive and binding on the US
Borrower.
2.06 Indemnification from Lenders. To the extent the Issuing Lender is
not reimbursed and indemnified by the US Borrower, each Participant will
reimburse and indemnify the Issuing Lender in proportion to its respective
Commitment, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
counsel fees and disbursements) or disbursements of any kind or nature
whatsoever (including all expenses which may be imposed on, incurred by or
asserted against the Issuing Lender in performing its duties hereunder, in any
way relating to or arising out of this Agreement; provided that no Participant
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Issuing Lender's gross negligence or willful misconduct as
determined by a court of competent jurisdiction. The agreements contained in
this Section shall survive any termination of this Agreement and the other DIP
Credit Documents and the payment in full of the Obligations.
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Section 3. Fees; Commitment; Reductions of Commitments.
3.01 Fees. (a) The Payments Administrator shall be entitled to charge
to the account of the Borrowers a commitment commission (the "Commitment
Commission") for distribution to each Non-Defaulting Lender, for the period
from and including the Effective Date until the Maturity Date (or such earlier
date as the Total Commitment shall have been terminated) computed at a rate
equal to 1/2 of 1% per annum on the average Unutilized Commitment of such
Non-Defaulting Lender for each calendar month, to be owed by the Borrowers on a
joint and several basis. Accrued Commitment Commission shall be due and
payable in arrears on the last Business Day of each calendar month, and on the
Maturity Date (or upon such earlier date as the Total Commitment shall be
terminated).
(b) The Payments Administrator shall be entitled to charge to the account
of the US Borrower (i) for pro rata distribution to the Lenders (based upon
their respective Proportionate Shares in each such Letter of Credit) a fee in
respect of each Letter of Credit (the "Letter of Credit Fee") for the period
from and including the date of issuance of such Letter of Credit to the
Termination Date of such Letter of Credit, computed at the rate equal to the
Applicable Margin for Eurodollar Loans per annum on the daily Stated Amount of
such Letter of Credit, and (ii) a fee for the account of each Issuing Lender in
respect of each Letter of Credit issued by it (the "Facing Fee"), for the
period from and including the date of issuance of such Letter of Credit to the
Termination Date of such Letter of Credit, computed at the rate equal to (A) in
the case of Standby Letters of Credit, 0.25% per annum on the daily Stated
Amount of such Standby Letters of Credit and (B) in the case of Trade Letters
of Credit, 0.25% per annum on the daily Stated Amount of such Trade Letter of
Credit. Accrued Letter of Credit fees shall be due and payable in Dollars in
arrears on the last Business Day of each calendar month and on the Maturity
Date (or upon such earlier date as the Total Commitment shall be terminated).
(c) The Payments Administrator shall be entitled to charge to the account
of the US Borrower, upon each payment under, issuance of, or amendment to, any
Letter of Credit, such amount as shall at the time of such event be the
administrative charge which the respective Issuing Lender is generally imposing
in connection with such occurrence with respect to letters of credit. All such
administrative charges are payable in Dollars.
(d) The Borrowers shall pay to the DIP Agent, for its own account, such
fees as have been mutually agreed by the DIP Agent and the Borrowers, including
amounts under the Fee Letter.
(e) All computation of Fees shall be made in accordance with Section
12.07(b).
3.02 Voluntary Reduction of Commitments. Upon at least three Business
Days' prior written notice to the DIP Agent at its Notice Office (which notice
the DIP Agent shall promptly transmit to each of the Lenders), the Borrowers
shall have the right, without premium or penalty, to permanently reduce the
Total Commitment in whole or in part, in integral multiples of $1,000,000,
provided that (x) no such reduction shall exceed the amount of the Aggregate
Unutilized Commitments as in effect immediately before giving effect to such
reduction and
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(y) any such reduction shall apply proportionately to reduce (i) the Commitment
of each Lender that is not a Defaulting Lender and (ii) the Commitment of each
Defaulting Lender as in effect prior to the time such Lender became a
Defaulting Lender.
3.03 Authorization to Charge Loan Accounts. The Borrowers hereby
authorize the Payments Administrator, subject to prior notice to the Borrowers,
to charge the Borrowers' Loan Accounts with the amount of all Fees, other
Expenses and other payments to be paid hereunder, under the Fee Letter and
under the other DIP Credit Documents as and when such payments become due. The
Borrowers confirm that any charges which the Payments Administrator may so make
to the Borrowers' Loan Accounts as herein provided will be made as an
accommodation to the Borrowers and solely at the Payments Administrator's
discretion.
Section 4. Prepayments; Payments.
4.01 Voluntary Prepayments. Each Borrower shall have the right to prepay
Revolving Loans, without premium or penalty, in whole or in part from time to
time on the following terms and conditions: (i) such Borrower shall give the
DIP Agent notice, in writing or by telephone, confirmed in writing, of its
intent to make a prepayment (x) prior to 2 P.M. (New York time) at its Notice
Office at least three Business Days prior to the date of such prepayment in the
case of Eurodollar Loans and (y) prior to 12 Noon (New York time) at its Notice
Office at least one Business Day prior to the date of such prepayment in the
case of Base Rate Loans, which notice in each case shall indicate the amount of
such prepayment and the Type of Revolving Loans to be prepaid and, in the case
of Eurodollar Loans, the specific Borrowing or Borrowings pursuant to which
made, which notice the DIP Agent shall promptly transmit to each of the
Lenders; and (ii) each partial prepayment of any Borrowing shall be in an
aggregate principal amount of at least the Minimum Borrowing Amount, if
applicable, with respect thereto, provided that no partial prepayment of
Eurodollar Loans shall reduce the outstanding Eurodollar Loans made pursuant to
a Borrowing to an amount less than the Minimum Borrowing Amount with respect
thereto. Each prepayment pursuant to this Section 4.01 in respect of any
Revolving Loans made pursuant to a Borrowing shall be applied pro rata among
the Lenders making such Revolving Loans, provided that no such prepayment shall
be applied to any Revolving Loans of a Defaulting Lender at any time when the
Revolving Loans of any Non-Defaulting Lender exceeds such Non-Defaulting
Lender's Proportionate Share of all Revolving Loans then outstanding.
Prepayments of Eurodollar Loans made pursuant to this Section 4.01 on any day
other than the last day of an Interest Period applicable thereto shall be
accompanied by the amounts required under Section 1.10.
4.02 Mandatory Prepayments.
(A) Requirements. (a) If on any date the sum of the aggregate
outstanding principal amount of Revolving Loans plus the Letter of Credit
Outstandings exceeds the lowest of (x) the Total Commitment as then in effect,
(y) the Authorized Facility Amount or (z) the Borrowing Base Amount, the
Borrowers shall repay on such date that principal amount of Revolving Loans as
is equal to such excess. If, after giving effect to the prepayment of all
outstanding Revolving Loans, the Letter of Credit Outstandings exceed the
lowest of (x) the Total Commitment as then in effect, (y) the Authorized
Facility Amount or (z) the Borrowing
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Base Amount, the Borrowers shall pay to the DIP Agent an amount in cash and/or
Cash Equivalents equal to 105% of such excess and the DIP Agent shall hold such
payment in an account established at BTCo in the name of the DIP Agent for the
benefit of the Lenders (and not release same, except as such excess is reduced)
as security for the obligations of the Borrowers.
(b) If on any date the sum of the outstanding principal amount of the
Revolving Loans made by a Defaulting Lender exceeds the Commitment of such
Defaulting Lender as in effect prior to the time such Lender became a
Defaulting Lender and after giving effect to any reduction of the Total
Commitment pursuant to Section 3.02, the Borrowers shall repay the Loans of
such Defaulting Lender in an amount equal to such excess.
(c) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, all then outstanding Revolving Loans shall be repaid in full on the
Maturity Date.
(d) In addition to any other mandatory repayment or prepayment under this
Section 4.02, an amount equal to 100% of the Net Sale Proceeds from the sale of
any assets (other than as permitted by Section 8.02(iv)) of the Borrowers or
any of their Subsidiaries subsequent to the Petition Date shall be applied on
the closing date of such sale (i) to repay the Outstanding Revolving Loans or
(ii) if no Revolving Loans are outstanding on such date, in accordance with the
terms of the Acceptable Cash Collateral Order; provided that, unless an Event
of Default has occurred and is continuing, the amount by which Other Asset Sale
Proceeds exceed $93,000,000 (after post-closing adjustments of no more than
$4,000,000 with respect to Aluminum Proceeds), shall not give rise to a
mandatory prepayment to the extent that such proceeds are held by the DIP Agent
for application in accordance with the Restructuring Term Sheet on the
effective date of the Pre-Arranged Plan.
(B) Application. With respect to each prepayment of Revolving Loans
required pursuant to this Section 4.02, the Borrowers may designate the Types
of Revolving Loans which are to be prepaid and, in the case of Eurodollar
Loans, the specific Borrowing or Borrowings pursuant to which made, provided
that: (i) prepayments of Eurodollar Loans made pursuant to this Section 4.02
on any day other than the last day of an Interest Period applicable thereto
(the "Affected Eurodollar Loans") shall be accompanied by the amounts required
under Section 1.10; provided that the Borrowers may, in lieu of making any
payment required under Section 1.10 as a result of prepaying any Eurodollar
Loan on a day other than the last day of the applicable Interest Period under
this Section 4.02, initially deposit a portion (up to 100%) of the amounts that
otherwise would have been paid in respect of the Affected Eurodollar Loans with
the DIP Agent (which deposit must be equal in amount to the amount of the
Affected Eurodollar Loans not immediately prepaid) to be held as security for
the obligations of the Borrowers hereunder pursuant to a cash collateral
arrangement satisfactory to the DIP Agent, which shall provide for investments
satisfactory to the DIP Agent, with such cash collateral to be directly applied
upon the first occurrence (or occurrences) thereafter of the last day of the
Interest Period applicable to the Affected Eurodollar Loans (or such earlier
date or dates as shall be requested by the relevant Borrower), to repay an
aggregate principal amount of such Loans equal to the Affected Eurodollar Loans
not initially prepaid pursuant to this sentence. Notwithstanding anything to
the contrary contained in the immediately preceding sentence, all amounts
deposited as cash collateral pursuant to the immediately preceding sentence
shall be held for the sole
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benefit of the Lenders whose Revolving Loans would otherwise have been
immediately prepaid with the amounts deposited and upon the taking of any
action by the DIP Agent or the Lenders pursuant to the remedial provisions of
Section 9, any amounts held as cash collateral pursuant to this Section 4.02(B)
shall, subject to the requirements of applicable law, be immediately applied to
repay Loans, (ii) if any prepayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Revolving Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, such Borrowing shall immediately be converted into Base Rate Loans;
(iii) each prepayment in respect of any Revolving Loans made pursuant to a
Borrowing shall be applied pro rata among the Lenders making such Revolving
Loans; and (iv) notwithstanding the provisions of the preceding clause (iii),
no prepayments made pursuant to the first sentence of Section 4.02(A)(a) shall
be applied to the Revolving Loans of a Defaulting Lender. In the absence of a
designation by the Borrowers as described in the preceding sentence, the DIP
Agent shall, subject to the above, make such designation in its sole
discretion.
4.03 Payments and Computations. (a) (i) The Canadian Borrower has
established and shall maintain its Canadian Bank Accounts and shall instruct
all account debtors on the Accounts of the Canadian Credit Parties to remit all
payments to its Canadian Bank Accounts. All amounts received by the Canadian
Credit Parties from any account debtor, in addition to all other cash received
from any other source with respect to the Accounts of the Canadian Credit
Parties, shall, subject to the requirements of Section 8.14, upon receipt be
deposited into a Canadian Bank Account.
(ii) The US Borrower has established and shall maintain its US Collection
Accounts pursuant to the Collection Bank Agreements, and shall instruct all
account debtors on the Accounts of the US Credit Parties to remit all payments
to its US Collection Accounts. All amounts received by the US Borrower from
any account debtor, in addition to all other cash received from any other
source with respect to the Accounts of the US Credit Parties, shall, subject to
the requirements of Section 8.14, upon receipt, be deposited into a US
Collection Account.
(iii) The Canadian Borrower may close collection accounts and/or open new
collection accounts with the prior written consent of the DIP Collateral
Agents.
(iv) The US Borrower may close collection accounts and/or open new
collection accounts with the prior written consent of the DIP Agent.
(b) Upon the terms and subject to the conditions set forth in the
Collection Bank Agreements, all available amounts held in the US Collection
Accounts other than the Union Amounts, shall be wired each Business Day into
the BT Concentration Accounts.
(c) All available funds in the BT Concentration Accounts shall be
transferred on every Business Day to the US Loan Account. Subject to the terms
of the Canadian Bank Accounts, the Canadian Borrower may from time to time
transfer money to the Canadian Loan Account.
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(d) All available amounts held in the Loan Accounts shall be distributed
and applied on a daily basis in the following order: first, to the payment of
any Fees, other Expenses or other Obligations due and payable to the DIP Agent
under any of the DIP Credit Documents; second, to the payment of any Fees,
other Expenses or other Obligations due and payable to any Issuing Lender under
any of the DIP Credit Documents; third, to the ratable payment of any Fees,
other Expenses or other Obligations due and payable to the Lenders under any of
the DIP Credit Documents other than those Obligations specifically referred to
in this Section 4.03(d); fourth, if required by the DIP Agent, to the ratable
payment of interest due on the Revolving Loans; and, fifth, to the ratable
payment of principal due on the Revolving Loans. Any payment received
hereunder shall, unless paid with respect to amounts specifically owing to the
DIP Agent or any Issuing Lender, be distributed and applied by the DIP
Collateral Agents to the payment of the amounts due hereunder and under the
Revolving Notes ratably in accordance with such amounts (or, if a court of
competent jurisdiction shall otherwise specify, as specified by such court).
4.04 Maintenance of Loan Accounts. The Payments Administrator shall
maintain an account in the name of each Borrower (the "US Loan Account" and the
"Canadian Loan Account", respectively) in which such Borrower will be charged
with all loans and advances made by the Lenders to such Borrower or for such
Borrower's account, including the Revolving Loans, the Letter of Credit
Outstandings, the Fees, the other Expenses and any other Obligations. Each
Borrower will be credited, in accordance with Section 4.03 above, with all
amounts received by the Lenders from such Borrower or from others for such
Borrower's account, including, as set forth above, all amounts received by the
Payments Administrator in payment of Accounts and applied to the Obligations.
In no event shall prior recourse to any Loan Accounts and Collateral be a
prerequisite to the Payments Administrator's right to demand payment of any
Obligation upon its maturity. Further, the Payments Administrator shall have no
obligation whatsoever to perform in any respect any of either Borrower's
contracts or obligations relating to the Accounts.
4.05 Statement of Accounting. Promptly after the end of each month the
Payments Administrator shall send each Borrower a statement accounting for the
charges, loans and other transactions occurring among and between the DIP
Agent, the Lenders, the Issuing Lenders and each Borrower during that month.
Such monthly statements shall constitute prima facie evidence of the accuracy
of the information contained therein and shall, absent manifest error, be an
account stated, which is final, conclusive and binding on the Borrowers.
4.06 Net Payments. (a) All payments made by the Borrowers hereunder or
under any Revolving Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.06(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or net profits of a
Lender, or any franchise tax based on the net income or net profits of a
Lender, in either case pursuant to the laws of Canada or the United States of
America or the jurisdiction in which it is incorporated or organized or the
jurisdiction in which the principal office or applicable lending office of such
Lender is located or any subdivision thereof or therein) and all
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interest, penalties or similar liabilities with respect thereto (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, the Borrowers agree to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Revolving Note, after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein or in such Revolving Note. If any amounts are payable in
respect of Taxes pursuant to the preceding sentence of this Section 4.06(a),
then the Borrowers agree to reimburse each Lender, upon the written request of
such Lender, for taxes imposed on or measured by the net income or net profits
of such Lender, or any franchise tax based on the net income or net profits of
such Lender, in either case pursuant to the laws of the jurisdiction in which
such Lender is organized or in which the principal office or applicable lending
office of such Lender is located or under the laws of any political subdivision
or taxing authority of any such jurisdiction in which the principal office or
applicable lending office of such Lender is located and for any withholding of
income or similar taxes as such Lender shall determine are payable by, or
withheld from, such Lender in respect of such amounts so paid to or on behalf
of such Lender pursuant to the preceding sentence and in respect of any amounts
paid to or on behalf of such Lender pursuant to this sentence. The Borrowers
will furnish to the DIP Agent within 45 days after the date the payment of any
Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrowers. The Borrowers agree to indemnify and
hold harmless each Lender, and reimburse such Lender upon its written request,
for the amount of any Taxes so levied or imposed and paid by such Lender.
(b) Each Lender that is neither a resident of Canada nor a United States
person (as such term is defined in Section 7701(a)(30) of the Code) and that
makes Revolving Loans to the US Borrower agrees to deliver to the US Borrower
and the DIP Agent on or prior to the Effective Date, and each such Lender that
is an assignee or transferee of an interest under this Agreement pursuant to
Section 1.12 or 12.04 (unless the respective Lender was already a Lender
hereunder immediately prior to such assignment or transfer) and that is not
such a United States person agrees to deliver to the US Borrower and the DIP
Agent on or prior to the date of such assignment or transfer to such Lender,
(i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying such Lender's
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if such Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section
4.06(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying such
Lender's entitlement to a complete exemption from United States withholding tax
with respect to payments of interest to be made under this Agreement and under
any Revolving Note. In addition, each Lender described in the preceding
sentence (a "Specified Lender") agrees that from time to time after the
Effective Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, it will
deliver to the US Borrower and the DIP Agent two new accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001 (or
successor form), or Form W-8 (or successor form) and a Section 4.06(b)(ii)
Certificate, as the case may be,
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and such other forms as may be required in order to confirm or establish the
entitlement of such Specified Lender to a continued exemption from or reduction
in United States withholding tax with respect to payments by the US Borrower
under this Agreement and any Note, or it shall immediately notify the US
Borrower and the DIP Agent of its inability to deliver any such Form or
Certificate. Notwithstanding anything to the contrary contained in Section
4.06(a), but subject to Section 12.04(b) and the immediately succeeding
sentence, (x) the US Borrower shall be entitled, to the extent it is required
to do so by law, to deduct or withhold income or similar taxes imposed by the
United States (or any political subdivision or taxing authority thereof or
therein) from interest, fees or other amounts payable hereunder for the account
of any Specified Lender for US federal income tax purposes to the extent that
such Specified Lender has not provided to the US Borrower US Internal Revenue
Service Forms that establish a complete exemption from such deduction or
withholding and (y) the US Borrower shall not be obligated pursuant to Section
4.06(a) hereof to gross-up payments to be made to a Specified Lender in respect
of income or similar taxes imposed by the United States if (I) such Specified
Lender has not provided to the US Borrower the Internal Revenue Service Forms
required to be provided to the Borrowers pursuant to this Section 4.06(b) or
(II) in the case of a payment, other than interest, to a Specified Lender
described in clause (ii) above, to the extent that such forms do not establish
a complete exemption from withholding of such taxes. Notwithstanding anything
to the contrary contained in the preceding sentence or elsewhere in this
Section 4.06 and except as set forth in Section 12.04(b), the Borrowers agree
to pay additional amounts and to indemnify each Lender in the manner set forth
in Section 4.06(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any amounts deducted or
withheld by it as described in the immediately preceding sentence as a result
of any changes that are effective after the Effective Date (or, with respect to
any assignee of any Lender, after the date on which the assignment to such
assignee becomes effective) in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of such Taxes.
(c) The provisions of this Section 4.06 are subject to the provisions of
Section 12.15 (to the extent applicable).
Section 5. Conditions Precedent.
5.01 Conditions Precedent to Initial Revolving Loans and Letters of
Credit under the DIP Facility. This Agreement shall become effective, if at
all, on the date (the "Effective Date") not later than July 8, 1999 on which
each of the following conditions is satisfied:
(a) Execution of Agreement; Revolving Notes. (i) Each Credit Party, the
DIP Agent and each other institution then a Lender hereunder shall have signed
a copy hereof (whether the same or different copies) and shall have delivered
the same to the DIP Agent at its Notice Office or, in the case of the Lenders,
shall have given to the DIP Agent telephonic (confirmed in writing) or written
notice (actually received) at such office that the same has been signed and
mailed to it and (ii) there shall have been delivered to the Payments
Administrator for the account of each of the Lenders, the appropriate Revolving
Notes and other DIP Credit Documents executed by the relevant Borrower (and/or
any other Person required thereunder) in the amount, maturity and as otherwise
provided herein and as satisfactory to the DIP Agent.
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(b) Corporate Documents; Proceedings; Officer's Certificates. (i) The
DIP Agent shall have received from each Credit Party a certificate, dated the
Effective Date, signed by a Responsible Officer, Secretary or Assistant
Secretary of such Credit Party and attested to by the Secretary or any
Assistant Secretary of such Credit Party in the form of Exhibit E with
appropriate insertions, together with copies of the Certificate of
Incorporation and By-Laws of each Credit Party and the resolutions of the Board
of Directors of each Credit Party referred to in such certificate, authorizing
and approving the commencement of the Cases and the Borrowings and all other
transactions contemplated by this Agreement, and the foregoing shall be
satisfactory in form and substance to the DIP Agent.
(ii) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated in this Agreement
and the other DIP Credit Documents shall be satisfactory in form and substance
to the DIP Agent, and the DIP Agent shall have received all information and
copies of all documents and papers, including records of corporate proceedings
and governmental approvals, if any, which the DIP Agent reasonably may have
requested in connection therewith, such documents and papers where appropriate
to be certified by proper corporate or governmental authorities.
(c) Opinions of Counsel. The DIP Agent shall have received an opinion in
form and substance satisfactory, addressed to each of the Lenders and dated the
Effective Date, from (i) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois)
counsel to the Borrowers and the Subsidiary Guarantors, covering the matters
set forth in Exhibit F-1 and such other matters incident to the transactions
contemplated herein as the DIP Agent may reasonably request, from (ii)
Stikeman, Elliott, Canadian counsel to the Borrowers and the Subsidiary
Guarantors, covering the matters set forth in Exhibit F-2 and such other
matters incident to the transactions contemplated herein as the DIP Agent may
reasonably request and from (iii) ▇▇▇▇▇ ▇▇▇▇▇, Esq., covering the matters set
forth in Exhibit F-3 and such other matters incident to the transactions
contemplated herein as the DIP Agent may reasonably request.
(d) Orders. The following orders of the US Bankruptcy Court shall have
been entered, shall be in full force and effect and shall not have been stayed,
reversed, vacated or rescinded, all such orders shall be satisfactory to the
DIP Agent and the Lenders and the DIP Agent shall have received:
(i) A copy of an order of the US Bankruptcy Court in the form of
Exhibit G-1 (the "US Interim Order"), which US Interim Order shall
indicate on its face that it has been entered by the US Bankruptcy Court
after notice given and a hearing conducted in accordance with Rule
4001(c) of the Federal Rules of Bankruptcy Procedure no later than 15
days after the date of the commencement of the US Cases), shall be in
full force and effect and shall not have been stayed, reversed, vacated,
rescinded or otherwise modified without the prior written consent of the
DIP Agent and the Required Lenders.
(ii) A copy of an order of the US Bankruptcy Court attached hereto
as Exhibit J (the "Acceptable Cash Collateral Order") pursuant to Section
363(c)(2) of the US Bankruptcy Code, which order shall not have been
stayed, reversed, vacated or otherwise modified without the prior written
consent of the DIP Agent and the Required Lenders.
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(iii) A copy of an order of the US Bankruptcy Court attached hereto
as Exhibit P (the "Bonding Order"), which order shall not have been
stayed, reversed, vacated or otherwise modified without the prior written
consent of the DIP Agent and the Required Lenders.
(iv) The DIP Agent shall be satisfied that all Orders described in
this Section 5.01(d) shall be binding on all existing material creditors
(or other Persons described therein) of the Borrowers and the Subsidiary
Guarantors, and shall be effective to provide the stay of actions,
priorities, liens and other protections for the Borrowers, the Subsidiary
Guarantors, the DIP Agent, the DIP Collateral Agents and the Lenders
purported to be granted thereby.
(e) Payment of Fees, etc. The Borrowers shall have paid all costs, fees
and expenses owing under or in connection with the DIP Credit Documents and the
Fee Letter and due to the DIP Agent or the Lenders on or before the Effective
Date to the extent due and notified to the Borrowers (including, without
limitation, legal fees and expenses and the payment to the DIP Agent for the
benefit of the Lenders (other than the DIP Agents) of all professional fees
incurred by the Lenders (other than the DIP Agents) in an amount not to exceed
$21,875 for each such Lender (other than Foothill) and in an amount not to
exceed $43,750 for Foothill and its participant).
(f) Pledge Agreement. Each US Credit Party shall have duly authorized,
executed and delivered the Pledge Agreement in the form of Exhibit I hereto (as
amended, restated, supplemented or modified from time to time, the "Pledge
Agreement"), which shall be in full force and effect, and arrangements
reasonably satisfactory to the DIP Collateral Agents for the agent under the
Pre-Petition Credit Agreement to hold the collateral subject thereto in pledge
as bailee for the benefit of the Lenders, or to deliver such collateral to the
DIP Agent, shall have been effectuated. The Canadian Borrower shall have taken
all further measures requested by the Lenders necessary pursuant to Canadian
law in order to perfect the security interest of the Lenders in the collateral
of the Borrowers located in Canada.
(g) Adverse Change. Except as (x) relating to the filing of the Cases,
including litigation, if any, with such creditors or interest holders who
object to the Plan of Reorganization and (y) as disclosed in reports and
statements previously provided to the Pre-Petition Agent or the Lenders,
nothing shall have occurred (and the DIP Agent shall have become aware of no
facts or conditions not previously known) which the Borrowers, the Required
Lenders or the DIP Agent shall determine has, or is reasonably likely to have,
a Material Adverse Effect.
(h) Litigation. No litigation, except (x) as relating to the filing of
the Cases, including litigation, if any with such creditors or interest holders
who object to the Plan of Reorganization, (y) as has been disclosed in filings
made by the Credit Parties with the Securities and Exchange Commission (and the
equivalent Canadian authority) or as has been disclosed to the Pre-Petition
Agent or the Pre-Petition Lenders prior to the Effective Date (to the extent
and in the manner so disclosed) or (z) as has been disclosed on Schedule X
hereto (to the extent and in the manner so disclosed) by any entity (private or
governmental) shall be pending or threatened
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(i) which could adversely affect this Agreement or any other DIP Credit
Document or (ii) which the Borrowers, the DIP Agent or the Required Lenders
shall determine is reasonably likely, after giving effect to the commencement
of the Cases, to be material and adverse to the Borrowers, the Subsidiary
Guarantors, their affiliates and their subsidiaries, as a whole.
(i) Pre-Arranged Plan. (i) (A) The Borrowers shall have engaged in
negotiations regarding the Pre-Arranged Plan with the holders (or
representatives of such holders) of claims and interests against the Borrowers
and/or their subsidiaries entitled to vote on the Pre-Arranged Plan, (B) the
Borrowers shall have used their best efforts to obtain written agreements, to
the extent legally permissible, from such holders of claims in terms of amount
of claims and number of holders as required for the approval of the
Pre-Arranged Plan by the relevant classes of claims under the Bankruptcy Code
and the CCAA, committing such holders (a) to vote in favor of the Pre-Arranged
Plan and (b) not to sell or assign their claims except to an entity that agrees
in writing to be bound by the terms of such agreements.
(ii) The Pre-Arranged Plan shall be feasible and there shall exist no
known impediment to confirmation of the Pre-Arranged Plan and consummation
thereof by November 30, 1999.
(j) Approvals. Except for the Canadian Approvals, all necessary
governmental and third party approvals in connection with the transactions
contemplated by the DIP Credit Documents and otherwise referred to herein or
therein shall have been obtained and remain in effect, and all applicable
waiting periods shall have expired without any action being taken by any
competent authority which restrains, prevents or imposes, in the judgment of
the Borrowers, the Required Lenders or the DIP Agent, materially adverse
conditions upon the consummation of such transactions. Additionally, there
shall not exist any judgment, order, injunction or other restraint prohibiting
or imposing material adverse conditions upon the consummation of the
transactions contemplated by the DIP Credit Documents.
(k) Cash Management Systems. (i) The US Collection Accounts, the BT
Concentration Accounts and the Canadian Bank Accounts shall be subject to the
Facility Liens and collection requirements reasonably satisfactory to the DIP
Agent and, if relating to the Canadian Credit Parties, the Bank Account Service
Providers, for the Credit Parties (including any and all accounts used in
connection therewith, the "Cash Concentration Accounts") shall have been
established to the reasonable satisfaction of the DIP Agent and, if relating to
the Canadian Credit Parties, the Bank Account Service Providers and (ii) the
DIP Agent shall have received fully executed copies of the Collection Bank
Agreements, each of which shall be in full force and effect, and of any
Direction Letter that has been addressed to the Account Banks.
(l) Budget. The DIP Agent and the Lenders shall have received the Budget.
(m) Consultants' Reports. The DIP Agent shall have received satisfactory
consultants' reports and projections, updated as of the Effective Date,
necessary to determine advance rates and eligibility requirements to
substantiate and monitor the Borrowing Base Amount with respect to the ISG
division, the US Ferrous division and any other division of the
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Borrowers, the accounts receivable of which are to be included in the Borrowing
Base Amount on the Effective Date.
(n) Borrowing Base Certificate. On the Effective Date, the Borrowers
shall have delivered to the DIP Agent a Borrowing Base Certificate meeting the
requirements of Section 7.01(g), substantially in the form of Exhibit H.
(o) Canadian Security Agreement. On the Effective Date, the Canadian
Credit Parties shall have (i) duly authorized, executed and delivered the
Canadian Security Agreement and (ii) delivered evidence that all measures
necessary pursuant to Canadian law in order to perfect the security interest of
the Lenders purported to be created by the Canadian Security Agreement have
been taken.
5.02 Conditions to All Credit Events. The obligation of each Lender to
make any Revolving Loan (other than a Revolving Loan incurred to repay Unpaid
Drawings pursuant to Section 2.04(a)) and of each Issuing Lender to issue any
Letter of Credit, as the case may be, including in each case on the Effective
Date, is subject, at the time of each such Credit Event, to the satisfaction of
the following conditions:
(a) No Default. There shall exist no Default or Event of Default.
(b) Representations and Warranties. All representations and
warranties herein and in the other DIP Credit Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of
such Credit Event unless such representation and warranty expressly
indicates that it is being made as of any other specific date (in which
case such representation and warranty shall have been true and correct in
all material respects on such specific date).
(c) Orders. (A) The US Interim Order shall have been entered by the
US Bankruptcy Court and shall be in full force and effect and shall not
have been stayed, reversed, rescinded, modified or amended in any respect
(other than (i) modifications thereto increasing the Authorized Facility
Amount (not to exceed the Total Commitment) and (ii) modifications
obtained with the prior written consent of the DIP Agent and the Required
Lenders), provided that upon the date (the "Additional Credit Date")
which is the earlier of (i) the date which is the thirtieth day after the
Effective Date and (ii) the date of the making of any Revolving Loan or
the issuance of any Letter of Credit to the Borrowers the aggregate
amount of either of which, when added to the sum of the principal amount
of all Revolving Loans then outstanding and the Letter of Credit
Outstandings, would exceed the Authorized Facility Amount permitted by
the US Interim Order, the DIP Agent and each of the Lenders shall have
received a certified copy of the US Final Order, provided that if such US
Final Order is not entered within 30 days after the Effective Date, all
interim advances made to the Borrowers shall be due in full. (B)
Additionally, at the time of any Credit Event occurring on and after the
Additional Credit Date, the US Final Order shall have been entered by the
US Bankruptcy Court and be in full force and effect, and shall not have
been stayed, reversed, rescinded, modified or
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amended in any respect (other than modifications with the prior written
consent of the DIP Agent and the Required Lenders). (C) Additionally,
if any of the Orders is the subject of a pending appeal in any respect,
neither the making of the Revolving Loans nor the issuance of any Letter
of Credit nor the performance by the Borrowers of any of their
obligations under any of the DIP Credit Documents (including providing
the Facility Liens and administrative priorities described herein) shall
be the subject of a presently effective stay pending appeal.
(d) Effective Date. The Effective Date shall have occurred.
(e) Notice of Borrowing; Letter of Credit Request. In the case of a
Borrowing, the DIP Agent shall have received a Notice of Borrowing
meeting the requirements of Section 1.02(a). In the case of the issuance
of a Letter of Credit, the respective Issuing Lender shall have received
a Letter of Credit Request meeting the requirements of Section 2.02.
(f) Payment of all fees, costs, expenses. All fees, costs, expenses
and other amounts then due and payable shall have been paid.
(g) Post-Petition Proceeds Account. Except in the case of any
request for a Letter of Credit, there shall be no funds remaining in the
Post-Petition Proceeds Account.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrowers to each of the Lenders that all
the applicable conditions specified in this Section 5 have been satisfied as of
that time. All of the Revolving Notes, certificates, legal opinions and other
documents and papers referred to in this Section 5, unless otherwise specified,
shall be delivered to the DIP Agent at its Notice Office for the account of
each of the Lenders and, except for the Revolving Notes, in sufficient
counterparts or copies for each of the Lenders and shall be reasonably
satisfactory in form and substance to the DIP Agent.
Section 6. Representations, Warranties and Agreements. In order to induce
the Lenders to enter into this Agreement and to make the Revolving Loans, and
issue (or participate in) the Letters of Credit as provided herein, the
Borrowers make the following representations, warranties and agreements as of
the Effective Date (both before and after giving effect to any Credit Event
occurring on such date), all of which shall survive the execution and delivery
of this Agreement and the Revolving Notes and the making of the Revolving Loans
and issuance of the Letters of Credit, with the occurrence of each Credit Event
(other than the incurrence of a Revolving Loan used to repay Unpaid Drawings
pursuant to Section 2.04(a)) on or after the Petition Date being deemed to
constitute a representation and warranty that the matters specified in this
Section 6 are true and correct in all material respects on and as of the
Petition Date and on the date of each such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
6.01 Company Status. Except to the extent that any Credit Party has
failed to pay amounts to various State authorities to remain incorporated in
good standing in the State or
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province of their incorporation or amalgamation as provided in Schedule XIII,
each Credit Party (i) is a duly organized and validly existing Company in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
Company power and authority to own its property and assets and to transact the
business in which it is engaged and, subject to the entry by the US Bankruptcy
Court of the US Interim Order (or the US Final Order when applicable) and the
entry by the Canadian Court of the Canadian Approvals, as applicable, presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the conduct of its business
requires such qualifications except (a) where the failure to be so qualified is
not reasonably likely to have a Material Adverse Effect or (b) where the
failure to be so qualified is the result of the status of the Credit Parties
and each of their Subsidiaries as debtors-in-possession in the Cases.
6.02 Company Power and Authority. Subject to the entry by the US
Bankruptcy Court of the US Interim Order (or the US Final Order when
applicable) and the entry by the Canadian Court of the Canadian Approvals, as
applicable, each Credit Party has the power and authority to execute, deliver
and perform the terms and provisions of each of the DIP Credit Documents to
which it is party and, upon the entry by the US Bankruptcy Court of the US
Interim Order (or the US Final Order when applicable) and the entry by the
Canadian Court of the Canadian Approvals, as applicable, has taken all
necessary Company action to authorize the execution, delivery and performance
by it of each of such DIP Credit Documents. Upon the entry by the US
Bankruptcy Court of the US Interim Order (or the US Final Order when
applicable) and the entry by the Canadian Court of the Canadian Approvals, as
applicable, each Credit Party has duly executed and delivered each of the DIP
Credit Documents to which it is party, and each of such DIP Credit Documents
will be the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms and the Orders.
6.03 No Violation. Upon the entry by the US Bankruptcy Court of the US
Interim Order (or the US Final Order when applicable) and the entry by the
Canadian Court of the Canadian Approvals, as applicable, neither the execution,
delivery or performance by any Credit Party of the DIP Credit Documents to
which it is a party, nor compliance by it with the terms and provisions
thereof, (i) will contravene any provision of any applicable law, statute, rule
or regulation or any applicable order, writ, injunction or decree of any court
or governmental instrumentality, (ii) will conflict with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Collateral
Documents or the Orders) upon any of the material properties or assets of the
Borrowers or any North American Subsidiary pursuant to the terms of, any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument, to which the Borrowers or any
North American Subsidiary is a party or by which it or any of its property or
assets is bound or to which it may be subject, and in any case, entered into
after the Petition Date, or (iii) will violate any provision of the Certificate
of Incorporation or other Company documents of the Borrowers or any North
American Subsidiary except, in the case of clauses (i), (ii) and (iii) above,
such violations or contraventions which are the result of the respective Credit
Party's status as debtor-in-possession in the Cases.
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6.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except the entry of the Orders) or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery and performance by any
Credit Party of any DIP Credit Document or (ii) the legality, validity, binding
effect or enforceability of any DIP Credit Document.
6.05 Priority; Security Interests. (a) All the obligations of the
Borrowers and the US Subsidiary Guarantors constitute allowed administrative
expense claims in the US Cases pursuant to Section 364(c)(1) of the US
Bankruptcy Code having priority over all administrative expenses of the kind
specified or ordered pursuant to any provision of the US Bankruptcy Code,
including but not limited to Section 105, 328, 330, 331, 503(b), 506(c),
507(a), and 507(b) and 726 of the US Bankruptcy Code, including, without
limitation, administrative expenses arising under or out of any superseding
proceeding under Chapter 7 of the US Bankruptcy Code, subject only to (i) any
allowed super-priority administrative claim granted by the US Bankruptcy Court
to the holders of the Account Intermediary Receivable Liens pursuant to the
Acceptable Cash Collateral Order and (ii) the Carve-Out.
(b) As security for the Obligations, the DIP Agent and the Lenders shall
have and are hereby granted (effective upon the date of the US Interim Order
and without the necessity of the execution by the Credit Parties, or filing, or
security agreements, pledge agreements, mortgages, financing statements or
otherwise):
(x) (i) pursuant to Section 364(c)(2) of the Bankruptcy Code, first
priority liens and security interests on all unencumbered assets of the
US Credit Parties (whether heretofore or hereafter acquired) subject only
to (a) the Carve-Out (b) liens and security interests granted to the
bonding companies pursuant to the Bonding Order as necessary to comply
with the bonding requirements of the Credit Parties (the "Bonding Liens")
and (c) the replacement liens provided to the holders of Account
Intermediary Receivable Liens under the Acceptable Cash Collateral Order
(the "Account Intermediary Replacement Liens");
(ii) pursuant to Section 364(c)(3) of the Bankruptcy Code, junior
liens and security interests on all assets encumbered by the Senior
Liens, subject only to (a) the Carve-Out, (b) the Account Intermediary
Replacement Liens, and (c) the Bonding Liens;
(iii) pursuant to Section 364(d)(1) of the Bankruptcy Code, liens
and security interests priming the liens and security interests granted
to the Pre-Petition Agents and the Pre-Petition Lenders under the
Pre-Petition Credit Documents and the Acceptable Cash Collateral Order,
subject only to (a) the Carve-Out, (b) the Senior Liens, (c) the Account
Intermediary Replacement Liens, and (d) the Bonding Liens;
(y) after the Canadian Approvals are obtained,
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(i) an enforceable first priority security interest and charge on
the Canadian Pre-Petition Collateral, ranking in priority to the security
of the Pre-Petition Agents and the Pre-Petition Lenders in the Canadian
Pre-Petition Collateral,
(ii) an enforceable first priority security interest and charge on
all existing and after-acquired unencumbered assets of the Borrowers and
Subsidiary Guarantors located in Canada, and
(iii) an enforceable junior security interest and charge on all
previously encumbered assets (excluding the Canadian Pre-Petition
Collateral), existing and after-acquired, of the Borrowers and the
Subsidiary Guarantors located in Canada (all the foregoing liens
described in clauses (x) and (y) above, the "Facility Liens").
(c) Notwithstanding anything else herein to the contrary, unless the US
Interim Order becomes the US Final Order or if the US Final Order otherwise so
provides, the proceeds of any Chapter 5 of the US Bankruptcy Code avoidance
actions shall not be included in the Facility Liens.
6.06 Financial Statement; Financial Condition; Undisclosed Liabilities;
etc.
(a) The consolidated statements of financial condition of the Borrowers
and their Subsidiaries at December 31, 1998, and the related consolidated
statements of income and cash flow and changes in shareholders' equity of the
Borrowers and their Subsidiaries for such fiscal year, furnished to the Lenders
prior to the Effective Date present fairly in all material respects the
financial condition of the Borrowers and their Subsidiaries at the date of such
statements of financial condition and the results of the operations of the
Borrowers and their Subsidiaries for such fiscal year. All such financial
statements have been prepared in accordance with generally accepted accounting
principles and practices consistently applied except for the omission of
footnotes, and certain reclassifications and interim period adjustments and
accruals (all of which are of a recurring nature and none of which individually,
or in the aggregate, would be material).
(b) Except as resulting from the commencement of the Cases, there has been
no Material Adverse Effect.
(c) On and as of the Effective Date, the Budget previously delivered to
the DIP Agent and the Lenders (i) has been prepared on a basis consistent with
the financial statements referred to in Section 6.06(a) (except as qualified in
the accompanying assumptions), (ii) on the Effective Date, the Borrowers
believe that the Budget was reasonable and attainable, and is based on the good
faith estimates and assumptions of the Borrowers and (iii) there are no
statements or conclusions in the Budget which are based upon or include
information known to the Borrowers to be misleading in any material respect or
which fail to take into account material information regarding the matters
reported therein, it being understood that nothing contained in this Section
6.06(c) shall constitute a representation or warranty of the future financial
performance or results of operations of any Credit Party or that any
projections were prepared in accordance with GAAP.
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6.07 Litigation. Except as has been disclosed in filings made by the
Credit Parties with the Securities and Exchange Commission (and the equivalent
Canadian authority) or as has been disclosed on Schedule X hereto (to the
extent and in the manner so disclosed), there are no actions, suits or
proceedings pending or, to the best knowledge of the Borrowers, threatened that
are reasonably likely to cause or create a Material Adverse Effect.
6.08 True and Complete Disclosure. All factual information (taken as a
whole) furnished by or on behalf of the Borrowers in writing to the DIP Agent
or any Lender (including, without limitation, all information contained in the
DIP Credit Documents) for purposes of or in connection with this Agreement, the
other DIP Credit Documents or any transaction contemplated herein or therein
is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of the Borrowers in writing to the DIP Agent or any
Lender will be, true and accurate in all material respects on the date as of
which such information is dated or certified and not incomplete by omitting to
state any fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was provided.
6.09 Use of Proceeds; Margin Regulations. (a) All proceeds of Revolving
Loans (i) may be used (subject to any restrictions on usage set forth in any
Acceptable Cash Collateral Order) to pay (x) all professional fees incurred by
the DIP Agent, the Lenders, the Pre-Petition Agents and the Pre-Petition
Lenders, and (y) all amounts due and owing to remain incorporated in good
standing in the State or province in which such Credit Party is incorporated or
amalgamated to the extent authorized by the Bankruptcy Courts (ii) shall be
used (A) to provide for working capital and general corporate requirements and
payment of professional fees and expenses (including professionals retained
pursuant to Sections 327 and 1103 of the US Bankruptcy Code) of the US Credit
Parties during the US Cases, (B) by the US Credit Parties to (I) make
investments in and advances (subject to an aggregate limitation of $10,000,000)
to direct and indirect subsidiaries of the Canadian Borrower that are not
Credit Parties, and (II) after the Canadian Approvals are obtained, make
investments in and advances to the Canadian Credit Parties through the Maturity
Date and (iii) shall be used to provide for working capital and general
corporate requirements of the Canadian Borrower and the other Canadian Credit
Parties during the Canadian Cases in an amount not to exceed the Canadian Loan
Amount.
(b) No part of the proceeds of any Revolving Loan will be used by the
Borrowers to purchase or carry any Margin Stock or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock. Neither the making
of any Revolving Loan nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
(c) Letters of Credit shall be issued for the account of the US Borrower
to support the obligations of the Borrowers and their Subsidiaries to the
extent described in Section 6.09(a) (the "L/C Supportable Obligations") or in
support of commercial transactions of the Credit Parties and only in an
aggregate amount not to exceed the LC Sublimit.
6.10 Tax Returns and Payments. Each of the Borrowers, each of the
Domestic Subsidiaries and each of the Canadian Subsidiaries (together with the
Domestic Subsidiaries, the
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"North American Subsidiaries") has timely filed or caused to be timely filed,
on the due dates thereof or within applicable grace periods, with the
appropriate taxing authority, all federal, state, provincial and other material
returns, statements, forms and reports for taxes (the "Returns") required to be
filed by or with respect to the income, properties or operations of the
Borrowers and/or any of their North American Subsidiaries, except as disclosed
on Schedule XI. The Returns accurately reflect in all material respects all
liability for taxes of the Borrowers and their North American Subsidiaries for
the periods covered thereby. Each of the Borrowers and each of their North
American Subsidiaries have paid all material taxes payable by them other than
(x) taxes which are not delinquent, and other than those contested in good
faith and adequately disclosed and for which adequate reserves have been
established or (y) the payment of which is excused or stayed as a result of
such Credit Party's status as a debtor-in-possession in the Cases. Except as
disclosed in the financial statements referred to in Section 6.06(a), neither
of the Borrowers nor any of their North American Subsidiaries has received
written notice of any material action, suit, proceeding, investigation, audit,
or claim now pending or, to the best knowledge of the Borrowers, threatened by
any authority regarding any taxes relating to the Borrowers or any of their
North American Subsidiaries. Except as disclosed on Schedule XII, as of the
Petition Date, none of the Borrowers or any of their North American
Subsidiaries has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to
the payment or collection of taxes of either Borrower or any of their North
American Subsidiaries, or is aware of any circumstances that would cause the
taxable years or other taxable periods of either Borrower or any of their North
American Subsidiaries not to be subject to the normally applicable statute of
limitations.
6.11 Compliance with ERISA. (a) To the actual knowledge of each
Responsible Officer of the Borrowers who executes any DIP Credit Document on
behalf of any Credit Party and without independent investigation: (i) each
Plan (and each related trust, insurance contract or fund) is in compliance in
all respects with its terms and with all applicable laws, including without
limitation ERISA and the Code; each Plan (and each related trust, if any) which
is intended to be qualified under Section 401(a) of the Code has received a
determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; no Plan which is a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an
Unfunded Current Liability; no Plan which is subject to Section 412 of the Code
or Section 302 of ERISA has an accumulated funding deficiency, within the
meaning of such sections of the Code or ERISA, or has applied for or received a
waiver of an accumulated funding deficiency or an extension of any amortization
period, within the meaning of Section 412 of the Code or Section 303 or 304 of
ERISA; all contributions required to be made with respect to a Plan have been
or will be timely made; neither the Borrowers nor any Subsidiary of the
Borrowers nor any ERISA Affiliate has incurred any liability (including any
indirect, contingent or secondary liability) pursuant to Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code or expects to incur any such liability
under any of the foregoing sections; no condition exists which presents a risk
to the Borrowers or any Subsidiary of the Borrowers or any ERISA Affiliate of
incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no proceedings have been instituted to
terminate or appoint a trustee to administer any Plan which is
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subject to Title IV of ERISA; no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment
of assets of any Plan (other than routine claims for benefits) is pending,
expected or threatened; using actuarial assumptions and computation methods
consistent with Part 1 of Subtitle E of Title IV of ERISA, the aggregate
liabilities of the Borrowers and their Subsidiaries and their ERISA Affiliates
to all Plans which are multiemployer plans (as defined in Section 4001(a)(3) of
ERISA) in the event of a complete withdrawal therefrom, as of the close of the
most recent fiscal year of each such Plan ended prior to the date of the most
recent Credit Event, would not exceed $200,000; each group health plan (as
defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which
covers or has covered employees or former employees of the Borrowers, any
Subsidiary of the Borrowers, or any ERISA Affiliate has at all times been
operated in compliance with the provisions of Part 6 of subtitle B of Title I
of ERISA and Section 4980B of the Code; no lien imposed under the Code or ERISA
on the assets of the Borrowers or any Subsidiary of the Borrowers or any ERISA
Affiliate exists or is likely to arise on account of any Plan; and the
Borrowers and their Subsidiaries do not maintain or contribute to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any Plan and,
(ii) each Foreign Pension Plan has been maintained in compliance in all
material respects with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities; all contributions required to be made with respect to a Foreign
Pension Plan have been timely made; neither the Borrowers nor any of their
Subsidiaries has incurred any obligation in connection with the termination of
or withdrawal from any Foreign Pension Plan; the present value of the accrued
benefit liabilities (whether or not vested) under each Foreign Pension Plan,
determined as of the end of the Borrowers' most recently ended fiscal year on
the basis of actuarial assumptions, each of which is reasonable, did not exceed
the current value of the assets of such Foreign Pension Plan allocable to such
benefit liabilities.
(b) Notwithstanding anything to the contrary in this Section 6.11, the
representations made in this Section 6.11 shall only be untrue if the aggregate
effect of all failures and non-compliances of the types described above, other
than those which are excused or stayed by virtue of the status of the Borrowers
and any of their Subsidiaries as debtors-in possession in the Cases or any
other order issued in the Cases, could reasonably be expected to have a
Material Adverse Effect.
6.12 Ownership; Subsidiaries. On the Effective Date, the Borrowers have
no direct or indirect Subsidiaries other than the Subsidiary Guarantors and any
Subsidiaries listed on Schedule II.
6.13 Compliance with Statutes, etc. Each of the Borrowers and each of
their North American Subsidiaries is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed
by, all governmental bodies, domestic or foreign, in respect of the conduct of
its businesses and the ownership of its property, except (x) such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or (y) any statute, regulation,
order or restriction with which the
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Borrowers or their North American Subsidiaries are not required to comply by
virtue of their status as a debtors-in-possession in the Cases or of any order
issued in the Cases.
6.14 Investment Company Act. None of the Borrowers nor any of their
North American Subsidiaries is an "investment company" or a company controlled
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
6.15 The Orders. On the date of the making of the initial Revolving Loan
or Loans or the issuance of the initial Letter or Letters of Credit, whichever
first occurs, the US Interim Order is in full force and effect and has not been
stayed, reversed, rescinded, modified or amended in any respect (except (i) to
the extent superseded by the US Final Order, and (ii) as amended in a manner
which is satisfactory to the DIP Agent) and the obligations of the parties to
the DIP Credit Documents have not been stayed. On and after the Additional
Credit Date, the US Final Order has been entered in form and substance
satisfactory to the DIP Agent and is in full force and effect and has not been
stayed, reversed, rescinded, vacated or otherwise modified without the prior
written consent of the DIP Agent and the Required Lenders. Upon the maturity
(whether by acceleration or otherwise) of any of the Obligations, subject to
Section 9 hereof, the DIP Agent and the Lenders are entitled to immediate
payment in accordance with this Agreement and the Orders of such Obligations
without further application to or order by the Bankruptcy Courts.
6.16 Environmental Matters. (a) Except as disclosed in the notes to the
financial statements of the Canadian Borrower contained in its Form 10-K for
its fiscal year ended December 31, 1998 or its Form 10-Q for its fiscal quarter
ended March 31, 1999, to the actual knowledge of each Responsible Officer of
the Borrowers who executes any DIP Credit Document on behalf of any Credit
Party and without independent investigation: (i) the Borrowers and each of
their Subsidiaries have complied with, and on the date of each Credit Event
will be in compliance with, all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws, (ii) there
are no pending, past or threatened Environmental Claims against the Borrowers
or any of their Subsidiaries or any Real Property owned or operated by the
Borrowers or any of their Subsidiaries, (iii) there are no facts,
circumstances, conditions or occurrences with respect to the business or
operations of the Borrowers or any Real Property at any time owned or operated
by the Borrowers or any of their Subsidiaries or any property adjoining or in
the vicinity of any such Real Property that could reasonably be expected to
form the basis of an Environmental Claim against the Borrowers or any of their
Subsidiaries or any such Real Property, or to cause any such currently owned
Real Property to be subject to any restrictions on the ownership, occupancy,
use or transferability of such Real Property by the Borrowers or any of their
Subsidiaries under any applicable Environmental Law.
(b) Except as disclosed in the notes to the financial statements of the
Canadian Borrower contained in its Form 10-K for its fiscal year ended December
31, 1998 or its Form 10-Q for its fiscal quarter ended March 31, 1999, to the
actual knowledge of each Responsible Officer of the Borrowers who executes any
DIP Credit Document on behalf of any Credit Party and without independent
investigation: (i) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Real Property owned
or
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operated by the Borrowers or any of their Subsidiaries where such generation,
use, treatment or storage has violated or could reasonably be expected to
violate any Environmental Law in such a manner so as to cause this
representation to be untrue taking into account Section 6.16(c); or (ii)
Hazardous Materials have not at any time been Released on or from any Real
Property owned or operated by the Borrowers or any of their Subsidiaries where
such Release has violated or could reasonably be expected to violate any
applicable Environmental Law in such a manner so as to cause this
representation to be untrue taking into account Section 6.16(c).
(c) Notwithstanding anything to the contrary in this Section 6.16, the
representations made in this Section 6.16 shall only be untrue if the aggregate
effect of all failures and non-compliances of the types described above, other
than those which are excused or stayed by virtue of the status of the Borrowers
and any of their Subsidiaries as debtors-in-possession in the Cases or any
other order issued in the Cases and other than as disclosed in the notes to the
financial statements of the Canadian Borrower contained in its Form 10-K for
its fiscal year ended December 31, 1998 or its Form 10-Q for its fiscal quarter
ended March 31, 1999, could reasonably be expected to have a Material Adverse
Effect.
6.17 Labor Relations. To the actual knowledge of each Responsible
Officer of the Borrowers who executes any DIP Credit Document on behalf of any
Credit Party and without independent investigation: (a) neither Borrower nor
any of their Subsidiaries is engaged in any unfair labor practice that could
reasonably be expected to have a Material Adverse Effect; and (b) there is (i)
no unfair labor practice complaint pending against either Borrower or any of
their Subsidiaries or threatened against any of them, before the National Labor
Relations Board, and no material grievance or arbitration proceeding arising
out of or under any collective bargaining agreement is so pending against
either Borrower or any of their Subsidiaries or threatened against any of them,
(ii) no strike, labor dispute, slowdown or stoppage pending against either
Borrower or any of their Subsidiaries or threatened against either Borrower or
any of their Subsidiaries and (iii) no union representation proceeding pending
with respect to the employees of the Borrowers or any of their Subsidiaries,
except (with respect to any matter specified in clause (i), (ii) or (iii)
above, either individually or in the aggregate) such as could not reasonably be
expected to have a Material Adverse Effect.
6.18 Patents, Licenses, Franchises and Formulas. Each of the Borrowers
and each of their North American Subsidiaries owns or is licensed to use all
material patents, trademarks, permits, service marks, trade names, copyrights,
licenses, franchises and formulas, or rights with respect to the foregoing, and
has obtained assignments of all material leases and other rights of whatever
nature, reasonably necessary for the present conduct of its business, except as
has been disclosed in filings made by the Credit Parties with the Securities
and Exchange Commission without any known conflict with the rights of others
which, or the failure to obtain or so own which, as the case may be, would
result in a Material Adverse Effect.
6.19 Status of Accounts. Each Account included in the Borrowing Base
Amount is based on an actual and bona fide sale of goods or rendition of
services to customers, made by the Borrowers or the Subsidiary Guarantors; the
goods and inventory, the sale of which gave rise to such Account, if
applicable, and such Account are their exclusive property (in the case of such
goods prior to the sale thereof) and are not subject to any Lien, consignment
arrangement,
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encumbrance, security interest or financing statement whatsoever other than the
Liens created pursuant to the Collateral Documents and the Orders and Permitted
Liens, and, except as otherwise reported or reserved against on the Borrowers'
or the Subsidiary Guarantors' books and records; the customers related to such
Account have accepted the goods or services, and owe and are obligated to pay
the full amounts stated in the invoices according to their terms, without any
dispute, offset, defense, or counterclaim.
6.20 Cash Management System. The US Borrower has either (i) signed a
lockbox agreement (in form and substance satisfactory to the DIP Agent, the
"Lockbox Agreement") with BTCo and the Account Banks, (ii) signed a blocked
account agreement (in form and substance satisfactory to the DIP Agent, the
"Blocked Account Agreement") with BTCo and the Account Banks, (iii) addressed a
direction letter (in form and substance satisfactory to the DIP Agent, the
"Direction Letter") to the Account Banks or (iv) made such other cash
management arrangements as are satisfactory to the DIP Agent.
6.21 Year 2000 Representation. The Borrowers (i) have undertaken a
review of the areas within their respective businesses and operations and those
of their respective subsidiaries that could be adversely affected by the Year
2000 Problem, (ii) have developed a plan to address the Year 2000 Problem and
(iii) are taking actions necessary to meet the schedule and the goals of its
plan to address the Year 2000 Problem and such actions will not have a Material
Adverse Effect.
Section 7. Affirmative Covenants. The Borrowers covenant and agree that,
unless the Required Lenders otherwise consent, on and after the Effective Date
and until the Total Commitment has terminated and all Letters of Credit have
expired or have been terminated or canceled, and the Revolving Loans, all
Unpaid Drawings and the Revolving Notes, together with interest, Fees and all
other Obligations incurred hereunder and thereunder, are paid in full:
7.01 Information Covenants. The Borrowers will furnish to the DIP Agent,
in form and substance reasonably satisfactory to the DIP Agent with copies to
be provided for the Lenders:
(a) Reports, Financial Statements. (i) financial statements and
reports, the Budget, Borrowing Base Certificates, bi-weekly reports
containing comparisons of actual to projected cash flows, descriptions of
proposed asset divestitures and other significant events and rolling (14)
week cash flow forecasts, copies of accountants' letters upon receipt
thereof by the Borrowers and the Subsidiary Guarantors, projections,
officers certificates, monthly reporting packages and other information
reasonably requested by the DIP Agent;
(ii) as soon as available, but in any event not later than 40 days
after the end of each monthly accounting period (which is not a quarter
end) of each fiscal year of the Canadian Borrower, a copy of the
unaudited consolidated balance sheet of the Canadian Borrower and its
Consolidated Subsidiaries as at the end of such monthly accounting
period, together with the related unaudited consolidated statements of
earnings, cash flow and shareholders' equity of the Canadian Borrower and
its Consolidated
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Subsidiaries for such monthly accounting period and the portion of the
fiscal year through the end of such monthly accounting period, setting
forth in each case in comparative form the figures for the previous
fiscal year and the budgeted figures for such monthly accounting period
and the portion of the fiscal year to the end of such monthly accounting
period; and
(iii) as soon as available, but in any event not later than 60 days
after the end of each quarterly accounting period:
(x) a copy of the unaudited consolidated balance sheet of the
Canadian Borrower and its Consolidated Subsidiaries as at the end
of such quarterly accounting period, together with the related
unaudited consolidated statements of earnings, cash flow and
shareholders' equity of the Canadian Borrower and its Consolidated
Subsidiaries for such quarterly accounting period and the portion
of the fiscal year through the end of such quarterly accounting
period, setting forth in each case in comparative form the figures
for the previous fiscal year and the budgeted figures for such
quarterly accounting period and the portion of the fiscal year to
the end of such quarterly accounting period; and
(y) a copy of the unaudited consolidated balance sheet of the
US Credit Parties as at the end of such quarterly accounting
period, together with the related unaudited consolidated statements
of earnings, cash flow and shareholders' equity of the US Credit
Parties for such quarterly accounting period and the portion of the
fiscal year through the end of such quarterly accounting period,
setting forth in each case in comparative form the figures for the
previous fiscal year of the US Credit Parties;
(iv) as soon as available, but in any event within 120 days after
the end of each fiscal year of the Canadian Borrower and its Consolidated
Subsidiaries:
(x) a copy of the audited consolidated balance sheet of the Canadian
Borrower and its Consolidated Subsidiaries as at the end of such fiscal
year, together with the related audited consolidated statements of
earnings, cash flow and shareholders' equity of the Canadian Borrower and
its Subsidiaries for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year and reported on
by Deloitte & Touche or any other independent internationally recognized
firm of chartered accountants or certified public accountants and
budgeted figures for such fiscal year; and
(y) a copy of the unaudited consolidated balance sheet of the
US Credit Parties as at the end of such fiscal year, together with
the related unaudited consolidated statements of earnings, cash
flow and shareholders' equity of the US Credit Parties of such
fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year.
All financial statements will be prepared on a consolidated basis and in
accordance with GAAP (containing any required reconciliations to show all
amounts which for the purpose of this
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Agreement are to be determined in accordance with GAAP in effect on December
31, 1998 as so determined in accordance with GAAP in effect on such date).
Audited financial statements required to be delivered pursuant to this
Agreement will be complete and accompanied by a report of an independent
auditor confirming that the audit was conducted in accordance with generally
accepted auditing standards and confirming that in the auditor's opinion, such
financial statements present fairly in all material respects the consolidated
financial position of the Borrowers at the relevant date and the consolidated
results of their operations and the consolidated changes in their financial
position for the relevant period, in accordance with GAAP.
(b) Officer's Certificates. At the time of the delivery of the financial
statements provided for in Section 7.01(a) hereof, a certificate of a
Responsible Officer of each of the Borrowers to the effect that (i) to the best
of such officer's knowledge and without personal liability no Default or Event
of Default exists since the date of the most recent officer's certificate
delivered pursuant to this Section 7.01(b) or, if any Default or Event of
Default has occurred and is continuing specifying the nature and extent
thereof, which certificate shall set forth the calculations required to
establish whether the Borrowers and their Subsidiaries were in compliance with
the provisions of Sections 8.04(iii), 8.05(ii), 8.05(iii), 8.05(v)(a), 8.06 and
Section 8.12 as at the end of such fiscal quarter or year, as the case may be
and (ii) in such officer's opinion such financial statements present fairly in
all material respects the consolidated financial position of the US Credit
Parties or of the Canadian Borrower and its Consolidated Subsidiaries, as
applicable, as at the date of such statements and for the reporting period
included in such statements (subject to normal year-end audit adjustments).
(c) Notice of Default or Litigation. Promptly, and in any event within
three Business Days after an officer of either Borrower or any of their
Subsidiaries obtains knowledge thereof, notice of (x) the occurrence of any
event which constitutes a Default or Event of Default, which notice shall
specify the nature thereof, the period of existence thereof and what action the
Borrowers propose to take with respect thereto and (y) the commencement of or
any significant development in any litigation or governmental proceeding
pending against the Borrowers or any of their Subsidiaries which is reasonably
likely to have a Material Adverse Effect or a material adverse effect on the
ability of the Borrowers to perform their obligations hereunder or under any
other DIP Credit Document, which in the case of clause (x) and (y) occurs after
the Effective Date.
(d) Other Reports and Filings. Promptly, copies of all financial
information, proxy materials and other information and reports, if any, which
the Borrowers or any of their Subsidiaries shall file with the Securities and
Exchange Commission after the Effective Date or any successor thereto (the
"SEC") or any applicable securities regulatory authority in Canada or deliver
to holders of its Indebtedness after the Effective Date pursuant to the terms
of the documentation governing such Indebtedness (or any trustee, agent or
other representative therefor).
(e) Pleadings, etc. Promptly after the same is available, (x) copies of
all material pleadings, motions, applications, judicial information, financial
information and other documents (i) filed by or on behalf of the Borrowers with
the Bankruptcy Courts in the Cases or (ii) distributed by or on behalf of the
Borrowers to any official committee appointed in the Cases
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(it being understood that any of the foregoing relating to ordinary course of
business matters shall not be deemed material for this clause (e)) and (y)
copies of all pleadings, motions and applications filed by third parties
relating to the Obligations or any Lien securing same, or the preference or
priority thereof.
(f) Environmental Matters. Promptly upon, and in any event within five
Business Days after, an officer of either Borrower or any of their Subsidiaries
obtains knowledge thereof, notice of one or more of the following environmental
matters, in each case, occurring after the Effective Date and not previously
disclosed in filings made with the Securities and Exchange Commission (or the
equivalent Canadian authority) or otherwise disclosed to the Pre-Petition Agent
or its advisors prior to the Effective Date, unless such environmental matters
could not, individually or when aggregated with all other such environmental
matters, be reasonably expected to have a Material Adverse Effect:
(i) any pending or threatened Environmental Claim against either
Borrower or any of their Subsidiaries or any Real Property owned or
operated by either Borrower or any of their Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned or operated by either Borrower or any of their
Subsidiaries that (a) results in noncompliance by either Borrower or any
of their Subsidiaries with any applicable Environmental Law or (b) could
reasonably be expected to form the basis of an Environmental Claim
against either Borrower or any of their Subsidiaries or any such Real
Property;
(iii) any condition or occurrence on any Real Property owned or
operated by either Borrower or any of their Subsidiaries that could
reasonably be expected to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability by
either Borrower or any of their Subsidiaries of such Real Property under
any Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned or operated by either Borrower or any of their Subsidiaries as
required by any Environmental Law or any governmental or other
administrative agency; provided that in any event the Borrowers shall
deliver to each Lender all notices received after the date hereof by them
or any of their Subsidiaries from any government or governmental agency
under, or pursuant to, CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrowers' or such Subsidiary's response thereto. In addition, upon the
request of the DIP Agent, the Borrowers will provide the Lenders with copies of
all material communications with any government or governmental agency relating
to Environmental Laws, all communications with any Person (other than their
attorneys) relating to any Environmental Claim of which notice is required to
be given pursuant to this Section 7.01(f), and such detailed reports of any
such Environmental Claim as may reasonably be requested by the DIP Agent on
behalf of the Lenders.
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(g) Borrowing Base Certificate. The Borrowers shall provide within 15
Business Days of the dates set forth on Schedule VI attached hereto (or more
frequently if requested by the DIP Agent), a borrowing base certificate (the
"Borrowing Base Certificate") in substantially the form of Exhibit H, duly
completed as of such date as the DIP Agent may specify in such request, and
certified by the Canadian Borrower's chief financial officer. In addition,
each Borrowing Base Certificate shall have attached to it such additional
schedules and/or other information, including aging reports and reports on the
status of intercompany loans, as the DIP Agent may reasonably request.
7.02 Books, Records and Inspections. The Borrowers will, and will cause
each of their North American Subsidiaries to, keep proper books of record and
account in which full, true and correct entries in conformity with generally
accepted accounting principles and all requirements of law shall be made of all
dealings and transactions in relation to their business and activities. The
Borrowers will and will cause each of their North American Subsidiaries to, in
all cases at the expense of the Borrowers, permit officers and designated
representatives of the DIP Agent or any Lender to visit and inspect, during
regular business hours and under guidance of officers of the Borrowers or such
North American Subsidiary, any of the properties of the Borrowers or such North
American Subsidiary, and to examine the books of account of the Borrowers or
such North American Subsidiary and discuss the affairs, finances and accounts
of the Borrowers or such North American Subsidiary with, and be advised as to
the same by, its and their officers and, in the case of any Borrower, its
independent accountants (it being understood that such Borrower shall be
entitled to have a representative present at any such discussions), all at such
reasonable times and intervals and to such reasonable extent as the DIP Agent
or such Lender may request for the purposes of (i) inspecting the Collateral
or determining the value thereof, (ii) inspecting and/or copying (at the
Borrowers' expense) any and all records pertaining thereto, (iii) discussing
the affairs, finances and business of the Borrowers with any officers,
employees and directors of the Borrowers or with auditors (it being understood
that the Borrowers shall be entitled to have a representative present at any
such discussions) and (iv) verifying Eligible Accounts Receivable and/or the
Borrowing Base Amount. The Borrowers shall give the DIP Collateral Agents
fifteen days prior written notice of any change in the location of any facility
owned or leased by the Borrowers or any of their Subsidiaries where Collateral
is located or in the location of its chief executive office or place of
business from the locations specified in Schedule VII, and to execute in
advance of such change, cause to be filed and/or delivered to the DIP
Collateral Agents any financing statements or other documents required by the
DIP Agent, all in form and substance reasonably satisfactory to the DIP Agent.
The Borrowers agree to advise the DIP Agent promptly, in sufficient detail, of
any substantial change relating to the type, quantity or quality of the
Collateral, or any event (other than a change in price) which could have an
adverse effect on the value of the Collateral or on the security interests
granted to the DIP Collateral Agents on behalf of the Lenders therein. Any
information obtained by the DIP Agent or any Lender pursuant to this Section
7.02 shall be subject to the provisions of Section 12.13.
7.03 Maintenance of Property; Insurance. (a) Schedule III sets forth a
true and complete listing of all insurance maintained by the Borrowers and
their Subsidiaries as of the Effective Date. The Borrowers will, and will
cause each of their Subsidiaries to, (i) keep all material property necessary
in their business in good working order and condition (ordinary wear
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and tear excepted), (ii) maintain insurance on all their property in at least
such amounts and against at least such risks as in effect on the Effective Date
and (iii) furnish to the DIP Agent, upon written request, full information as
to the insurance carried. In addition to the requirements of the immediately
preceding sentence, the Borrowers will at all times cause insurance of the
types described in Schedule III to be maintained (with the same scope of
coverage as that described in Schedule III) at levels which are at least as
great as the respective amount described opposite the respective type of
insurance on Schedule III under the column headed "Minimum Amount Required to
be Maintained".
(b) The Borrowers will, and will cause their Subsidiaries to, at all times
keep their respective property insured in favor of the DIP Collateral Agents,
and all policies or certificates (or certified copies thereof) with respect to
such insurance (and any other insurance maintained by the Borrowers or any of
their Subsidiaries) (i) shall be endorsed to the DIP Collateral Agents'
satisfaction for the benefit of the DIP Collateral Agents (including, without
limitation, by naming the DIP Collateral Agents as loss payee or as an
additional insured), (ii) shall state that such insurance policies shall not be
canceled without 30 days' prior written notice thereof by the respective
insurer to the DIP Collateral Agents, (iii) shall provide that the respective
insurers irrevocably waive any and all rights of subrogation with respect to
the DIP Collateral Agents and the Lenders, (iv) shall contain the standard
non-contributory mortgagee clause endorsement in favor of the DIP Collateral
Agents with respect to hazard insurance coverage, (v) shall, except in the case
of public liability insurance and workers' compensation insurance, provide that
any losses shall be payable notwithstanding (A) any act or neglect of the
Borrowers or any of their Subsidiaries, (B) the occupation or use of the
properties for purposes more hazardous than those permitted by the terms of the
respective policy if such coverage is obtainable at commercially reasonable
rates and is of the kind from time to time customarily insured against by
Persons owning or using similar property and in such amounts as are customary,
(C) any foreclosure or other proceeding relating to the insured properties if
such coverage is available at commercially reasonable rates or (D) any change
in the title to or ownership or possession of the insured properties and (vi)
shall be deposited with the DIP Collateral Agents.
(c) If either Borrower or any of their Subsidiaries shall fail to maintain
all insurance in accordance with this Section 7.03, or if either Borrower or
any of their Subsidiaries shall fail to so endorse and deposit all policies or
certificates with respect thereto, the DIP Agent and/or the DIP Collateral
Agents shall have the right (but shall be under no obligation) to procure such
insurance and the Borrowers agree to reimburse the DIP Agent or the DIP
Collateral Agents, as the case may be, for all costs and expenses of procuring
such insurance.
7.04 Corporate Franchises. The Borrowers will, and will cause each of
their North American Subsidiaries to, do or cause to be done, all things
necessary in the reasonable business judgment of such Borrowers and North
American Subsidiaries to preserve and keep in full force and effect its
existence, material rights, franchises, licenses, patents and authority to do
business, except where (x) the failure to do so is not reasonably likely to
have a Material Adverse Effect or (y) the failure to do so is excused by virtue
of the status of the Borrowers and their North American Subsidiaries as
debtors-in-possession in the Cases or any order issued in the
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Cases; provided that any transaction permitted by Section 8.02 will not
constitute a breach of this Section 7.04.
7.05 Compliance with Statutes, etc. The Borrowers will, and will cause
each of their North American Subsidiaries to, comply with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed
by, all governmental bodies, domestic or foreign, in respect of the conduct of
their business and the ownership of their property, except such noncompliances
as could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
7.06 End of Fiscal Years; Fiscal Quarters. The Borrowers shall cause (i)
each of their and each of their Subsidiaries' fiscal years to end on December
31, and (ii) each of their and each of their Subsidiaries' fiscal quarters to
end on the last day of each March, June, September and December.
7.07 Performance of Obligations. Each of the Borrowers will, and will
cause each of their North American Subsidiaries to, perform all of their
obligations arising after the Petition Date, and not stayed as a result of the
Cases, under the terms of each material agreement by which it is bound, except
(x) such non-performances as are not reasonably likely to, in the aggregate,
have a Material Adverse Effect or (y) with which the Borrowers and their North
American Subsidiaries are not required to comply by virtue of the status of the
Borrowers and their North American Subsidiaries as debtors-in-possession in the
Cases or any order issued in the Cases.
7.08 Further Assurances. (a) Whenever and so often as reasonably
requested by the DIP Agent, the Borrowers, and each of their Subsidiaries, will
promptly execute and deliver or cause to be executed and delivered all such
other and further instruments, documents or assurances, and promptly do or
cause to be done all such other and further things as may be necessary and
reasonably required in order to further and more fully vest in the DIP
Collateral Agents, the DIP Agent and the Lenders all rights, interests, powers,
benefits, privileges and advantages conferred or intended to be conferred by
this Agreement, the other DIP Credit Documents and the Orders.
(b) Each of the Borrowers, and each of their Subsidiaries, agree that at
any time and from time to time, at the expense of the Borrowers, it will
promptly execute and deliver all further instruments and documents, and take
all further action that may be reasonably necessary or desirable, or that the
DIP Agent may reasonably request, to perfect and protect any Lien granted or
purported to be granted hereby, by the other DIP Credit Documents or the
Orders, or to enable the DIP Collateral Agents to exercise and enforce their
rights and remedies with respect to any Collateral. Without limiting the
generality of the foregoing, the Borrowers will execute and file such financing
or continuation statements, or amendments thereto, and such other instruments
or notices, as may be reasonably necessary or desirable, or that the DIP Agent
may reasonably request, to protect and preserve the Liens granted or purported
to be granted hereby and by the other DIP Credit Documents and the Orders.
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(c) The Borrowers hereby authorize the DIP Collateral Agents to file one
or more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of the Borrowers,
where permitted by law. A carbon, photographic or other reproduction of this
Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.
The DIP Collateral Agents will promptly send the Borrowers any financing or
continuation statements which they file without the signature of the Borrowers
and the DIP Collateral Agents will promptly send such Borrowers the filing or
recordation information with respect thereto.
(d) If a decision is made by the Borrowers to cause any of their
Subsidiaries which are not Credit Parties on the Effective Date to commence a
voluntary proceeding under the US Bankruptcy Code or the CCAA, the Borrowers
will cause such proceeding to be commenced before the US Bankruptcy Court or
the Canadian Court, as appropriate, and in such event the Borrowers shall use
their reasonable best efforts to cause such Subsidiary to become a guarantor or
a co-borrower hereunder, and to pledge such Subsidiary's assets in support of
the Obligations pursuant to appropriate amendments to this Agreement and other
documentation and the approval of the US Bankruptcy Court or the Canadian
Court, as appropriate (in form and substance satisfactory to the DIP Agent).
7.09 Maintenance of Concentration Accounts. The Borrowers will, and will
cause each of their Subsidiaries to, subject to Section 4.03(iii) and (iv),
maintain the US Collection Accounts, the BT Concentration Accounts and the
Canadian Bank Accounts as of the Effective Date and use (i) the US Collection
Accounts, as the principal accounts for day-to-day collections for the US
Borrower and its Domestic Subsidiaries and (ii) the US Loan Account (a) for
deposits of proceeds of sales of assets of the US Borrower and its Domestic
Subsidiaries or deposits resulting from activities other than in the ordinary
course of business and (b) into which all cash in the BT Concentration Accounts
shall be required to be swept daily.
7.10 ERISA. As soon as possible and, in any event, within ten (10) days
after the Borrowers, any Subsidiary of the Borrowers or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following, the
Borrowers will deliver to each of the Lenders a certificate of the Chief
Financial Officer of either of the Borrowers setting forth the full details as
to such occurrence and the action, if any, that the Borrowers, such Subsidiary
or such ERISA Affiliate is required or proposes to take, together with any
notices required or proposed to be given or filed by such Borrowers, such
Subsidiary, the Plan administrator or such ERISA Affiliate to or with the PBGC
or any other government agency, or a Plan participant and any notices received
by such Borrowers, such Subsidiary or ERISA Affiliate from the PBGC or any
other government agency, or a Plan participant with respect thereto: that a
Reportable Event has occurred (except to the extent that the Borrowers have
previously delivered to the Lenders a certificate and notices (if any)
concerning such event pursuant to the next clause hereof); that a contributing
sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title
IV of ERISA is subject to the advance reporting requirement of PBGC Regulation
Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an event
described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation
Section 4043 is reasonably expected to occur with respect to such Plan within
the following thirty (30) days; that an accumulated funding deficiency, within
the meaning of Section 412 of the Code or Section 302 of ERISA, has been
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incurred or an application may be or has been made for a waiver or modification
of the minimum funding standard (including any required installment payments)
or an extension of any amortization period under Section 412 of the Code or
Section 303 or 304 of ERISA with respect to a Plan; that any contribution
required to be made with respect to a Plan or Foreign Pension Plan has not been
timely made; that a Plan has been or may be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a Plan has an
Unfunded Current Liability; that proceedings may be or have been instituted to
terminate or appoint a trustee to administer a Plan which is subject to Title
IV of ERISA; that a proceeding has been instituted pursuant to Section 515 of
ERISA to collect a delinquent contribution to a Plan; that the Borrowers, any
Subsidiary of the Borrowers or any ERISA Affiliate will or may incur any
liability (including any indirect, contingent, or secondary liability) to or on
account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under
Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(i) or
502(l) of ERISA or with respect to a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code; or that the Borrowers or any Subsidiary of the Borrowers may incur any
material liability pursuant to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any Plan
or any Foreign Pension Plan. Upon request, the Borrowers will deliver to each
of the Lenders copies of any records, documents or other information that must
be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of
ERISA. The Borrowers will also deliver to each of the Lenders a complete copy
of the annual report (on Internal Revenue Service Form 5500-series) of each
Plan (including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service. In addition to any certificates or notices delivered to the Lenders
pursuant to the first sentence hereof, copies of annual reports and any
records, documents or other information required to be furnished to the PBGC or
any other government agency, and any material notices received by the
Borrowers, any Subsidiary of the Borrowers or any ERISA Affiliate with respect
to any Plan or Foreign Pension Plan shall be delivered to the Lenders no later
than ten (10) days after the date such annual report has been filed with the
Internal Revenue Service or such records, documents and/or information has been
furnished to the PBGC or any other government agency or such notice has been
received by the Borrowers, the Subsidiary or the ERISA Affiliate, as
applicable. The Borrowers and each of their applicable Subsidiaries shall
ensure that all Foreign Pension Plans administered by it or into which it makes
payments obtains or retains (as applicable) registered status under and as
required by applicable law and is administered in a timely manner in all
respects in compliance with all applicable laws except where the failure to do
any of the foregoing would not be reasonably likely to result in a Material
Adverse Effect.
7.11 Payment of Taxes. The Borrowers will pay and discharge, and will
cause each of their North American Subsidiaries to, pay and discharge all
material taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits, or upon any material properties belonging to it,
in each case arising after the Petition Date and on a timely basis, and all
material lawful claims arising after the Petition Date which, if unpaid, would
become a Lien or charge upon any properties of either Borrower or of any of
their North
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American Subsidiaries, provided that neither the Borrowers nor any of their
North American Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim (x) which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves (in the good faith judgment
of the management of such Person) with respect thereto in accordance with GAAP
or (y) the payment of which is excused or stayed as a result of the Borrowers'
or their Subsidiaries' status as debtors-in-possession in the Cases.
7.12 Compliance with Environmental Laws. (a) The Borrowers will comply,
and will cause each of their North American Subsidiaries to comply, with all
Environmental Laws applicable to the ownership or use of its Real Property now
or hereafter owned or operated by the Borrowers or any of their North American
Subsidiaries, except such non compliance as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, will
within a reasonable time-period pay or cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or cause to be kept
all such Real Property free and clear of any Liens imposed pursuant to such
Environmental Laws. To the extent the Borrowers or their North American
Subsidiaries generate, use, treat, store, release or dispose of, or permit the
generation, use, treatment, storage, Release or disposal of Hazardous Materials
on any Real Property now or hereafter owned or operated by the Borrowers or any
of their North American Subsidiaries, or transport or permit the transportation
of Hazardous Materials to or from any such Real Property, they will do so in
each case in material compliance with all applicable Environmental Laws except
where failure to comply, individually or in the aggregate would have a Material
Adverse Effect.
(b) At the written request of the DIP Agent or the Required Lenders,
which request shall specify in reasonable detail the basis therefor, at any
time and from time to time, the Borrowers will provide, at the Borrowers' sole
cost and expense, an environmental site assessment report concerning any Real
Property now or hereafter owned or operated by the Borrowers or any of their
North American Subsidiaries, prepared by an environmental consulting firm
approved by the DIP Agent, assessing whether the Real Property and the
Borrowers' operations at such Real Property are in compliance with
Environmental Laws, indicating the presence or absence of Hazardous Materials
and determining the potential cost of any removal or remedial action in
connection with any Hazardous Materials on such Real Property; provided, that
such request may be made only if (i) there has occurred and is continuing an
Event of Default, (ii) the DIP Agent reasonably believes that the Borrowers or
any such Real Property is not in material compliance with Environmental Law, or
(iii) circumstances exist that reasonably could be expected to form the basis
of a material Environmental Claim against either Borrower or any such Real
Property. If the Borrowers fail to provide the same within 90 days after such
request was made, the DIP Agent may order the same, and the Borrowers shall
grant and hereby grant to the DIP Agent, the Lenders and their environmental
consultant access to such Real Property and specifically grant the DIP Agent,
the Lenders and their environmental consultant an irrevocable non-exclusive
license, subject to the rights of tenants, to undertake such an assessment, all
at the Borrowers' expense.
Section 8. Negative Covenants. The Borrowers agree that, unless the
Required Lenders otherwise consent, on and after the Effective Date and until
the Total Commitment has terminated and all Letters of Credit (other than
Letters of Credit with respect to which the
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Borrowers have deposited cash collateral or provided a backing letter of credit
as provided in Section 2.01(d)) have expired or have been terminated or
canceled and the Revolving Loans, all Unpaid Drawings and the Revolving Notes,
together with interest, Fees and all other Obligations incurred hereunder and
thereunder, are paid in full:
8.01 Liens. The Borrowers will not, and will not permit any of their
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible)
owned by the Borrowers or any of their Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable with recourse to the
Borrowers or any of their Subsidiaries), or assign any right to receive income
or permit the filing of any financing statement under the UCC or any other
similar notice of Lien under any similar recording or notice statute (except in
connection with the Liens permitted below), or apply to the Bankruptcy Courts
for the authority to do the foregoing, except in connection with, and then only
to be effective on or after the Consummation Date in respect of, the
Pre-Arranged Plan; provided that the provisions of this Section 8.01 shall not
prevent the creation, incurrence, assumption or existence of the following
("Permitted Liens"):
(i) Liens in existence on the Petition Date to the extent described
in Schedule IV hereto, without giving effect to any replacements thereof,
and then only to the extent of the Indebtedness or obligations secured
thereby on the Petition Date, including the Senior Liens ("Permitted
Existing Liens"), and replacement Liens authorized by the Bankruptcy
Courts and acceptable to the DIP Agent to the extent encumbering the same
or similar property as the Permitted Existing Lien being replaced;
(ii) Liens securing the Obligations;
(iii) Liens granted to the Pre-Petition Agents to secure the
Pre-Petition Credit Agreement Obligations and liens created pursuant to
any Acceptable Cash Collateral Order and other Liens satisfactory to the
Required Lenders permitted or created by other orders issued in the
Cases;
(iv) Liens securing Indebtedness in the amount permitted by Section
8.04(iii) of or upon (i) any property or assets acquired (whether by
purchase, merger or otherwise) after the Petition Date, or (ii)
improvements made on any property or assets now owned or hereafter
acquired, in each case, securing the purchase price thereof or created or
incurred simultaneously with, or within 180 days after, such acquisition
or the making of such improvements or existing at the time of such
acquisition (whether or not assumed) or the making of such improvements,
as the case may be, if (x) such Lien shall be limited to the property or
assets so acquired or the improvements so made and (y) the amount of the
obligations or Indebtedness secured by such Lien shall not be increased
after the date of the acquisition of such property or assets or the
making of such improvements;
(v) Liens arising under capitalized leases to the extent permitted
by Section 8.04(iii) provided that (x) such Liens only serve to secure
the payment of Indebtedness
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arising under such Capitalized Lease Obligation and (y) the Lien
encumbering the asset giving rise to the Capitalized Lease Obligation
does not encumber any other asset of the Borrowers or any Subsidiary of
the Borrowers;
(vi) Customary Permitted Liens;
(vii) Liens of a lessor under an operating lease on the property
subject to such lease;
(viii) Liens arising from precautionary UCC financing statement
filings regarding operating leases or consignment arrangements entered
into by either Borrower or any of their Subsidiaries in the ordinary
course of business;
(ix) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 9.07, provided that no
cash or property is deposited or delivered to secure the respective
judgment or award (or any appeal bond in respect thereof, except as
permitted by the following clause (x));
(x) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, (y) to secure the performance of tenders, statutory obligations
(other than excise taxes), surety, stay, customs and appeal bonds,
statutory bonds, bids, leases, government contracts, trade contracts,
performance and return of money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money) incurred in
the ordinary course of business or (z) constituting deposits made in the
ordinary course of business to secure liability for premiums to insurance
carriers, provided that the aggregate amount of deposits at any time
pursuant to sub-clause (y) and sub-clause (z) that are not listed on
Schedule IV shall not exceed $3,000,000 in the aggregate;
(xi) Liens necessary to comply with bonding requirements as approved
by the Required Lenders;
(xii) Liens pursuant to Section 546(b) of the US Bankruptcy Code;
(xiii) Liens not otherwise permitted by the foregoing clauses (i)
through (xii) to the extent attaching to properties and assets with an
aggregate fair value not in excess of, and securing liabilities not in
excess of, $500,000 in the aggregate at any time outstanding; and
(xiv) Liens encumbering the Project Accounts.
8.02 Consolidation, Merger, Sale of Assets, etc. Subject to corporate
restructuring decisions to be made as part of the plan of reorganization and
implementation thereof after the Effective Date, the Borrowers will not, and
will not permit any of their Subsidiaries to, (i) wind up, liquidate or
dissolve its affairs or (ii) enter into any transaction of merger or
consolidation, or (iii) convey, sell, lease or otherwise dispose of (or agree
to do any of the
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foregoing at any future time) all or any part of its property or assets, or
(iv) enter into any partnerships, joint ventures or sale-leaseback
transactions, or (v) purchase or otherwise acquire (in one or a series of
related transactions) any part of the property or assets (other than purchases
or other acquisitions of inventory, materials and equipment in the ordinary
course of business) of any Person, or (vi) apply to the Bankruptcy Courts to do
any of the foregoing, except in connection with, and then only to be effective
on or after the Consummation Date in respect of, the Pre-Arranged Plan, except
that the foregoing shall not preclude:
(i) Capital Expenditures by the Borrowers and their Subsidiaries
shall be permitted to the extent not in violation of Section 8.06;
(ii) investments may be made to the extent permitted by Section
8.05;
(iii) each of the Borrowers and their Subsidiaries may lease (as
lessee) real or personal property in the ordinary course of business (so
long as any such lease does not create a Capitalized Lease Obligation
except to the extent permitted by Section 8.04(iii));
(iv) each of the Borrowers and their Subsidiaries may make sales or
transfers of inventory in the ordinary course of business and consistent
with past practices (including, without limitation, sales or transfers of
inventory by the Borrowers to their Subsidiaries so long as at fair
market value);
(v) the Borrowers and their Subsidiaries may sell or discount, in
each case without recourse and in the ordinary course of business,
overdue accounts receivable arising in the ordinary course of business,
but only in connection with the compromise or collection thereof
consistent with customary industry practice (and not as part of any bulk
sale or financing of receivables);
(vi) transfers of condemned property to the respective governmental
authority or agency that has condemned same (whether by deed in lieu of
condemnation or otherwise), and transfers of properties that have been
subject to a casualty to the respective insurer of such property as part
of an insurance settlement;
(vii) licenses or sublicenses by the Borrowers and their
Subsidiaries of software, trademarks and other intellectual property in
the ordinary course of business and which do not materially interfere
with the business of the Borrowers or any Subsidiary;
(viii) the US Borrower or any Domestic Subsidiary of the Borrowers
may transfer assets or lease to or acquire or lease assets from the US
Borrower or any Domestic Subsidiary and any Domestic Subsidiary may be
merged into the US Borrower (as long as such Borrower is the surviving
corporation of such merger) or any Domestic Wholly-Owned Subsidiary of
the Borrowers;
(ix) the Borrowers or any Subsidiary may enter into consignment
arrangements (as consignor or as consignee) or similar arrangements for
the sale of goods in the ordinary course of business and consistent with
the past practices of the Borrowers and their Subsidiaries prior to the
Effective Date; and
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(x) the Borrowers or any Subsidiary may enter into the Permitted
Asset Sales.
To the extent the Required Lenders waive the provisions of this Section 8.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 8.02 (except to the Borrowers or any of their
Subsidiaries), such Collateral shall be sold free and clear of the Liens
created by the DIP Credit Documents, and the DIP Collateral Agents shall be
authorized to take such actions as they deem appropriate to effect the
foregoing.
8.03 Dividends. The Borrowers will not, and will not permit any of their
Subsidiaries to, authorize, declare or pay any Dividends or return any capital
to, their stockholders or authorize or apply to the Bankruptcy Courts for the
authority to do so, except: any Subsidiary of the Borrowers may make
distributions to any Wholly-Owned Subsidiary of the Borrowers owning such
Subsidiary and to either of the Borrowers; provided that the US Credit Parties
will not declare or pay any Dividends or return any capital to the Canadian
Credit Parties or authorize or apply to the Bankruptcy Courts for the authority
to do so, prior to the date on which the Canadian Approvals have been obtained.
8.04 Indebtedness. The Borrowers will not, and will not permit their
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, or apply to the Bankruptcy Courts for the authority to do so,
except (A) in connection with, and only to the extent incurred on or after the
Consummation Date in respect of, the Pre-Arranged Plan, and (B) as follows:
(i) Indebtedness incurred pursuant to this Agreement and the other
DIP Credit Documents;
(ii) Indebtedness of the Borrowers and their Subsidiaries incurred
prior to, and outstanding on, the Petition Date (including Indebtedness
arising from reimbursement obligations for letter of credit drawings
occurring after the Petition Date on letters of credit outstanding on the
Petition Date) and to the extent such Indebtedness is Indebtedness for
borrowed money or reimbursement obligations under letters of credit, such
Indebtedness is listed on Schedule V hereto ("Existing Indebtedness"),
without giving effect to any extensions, renewals or refinancings
thereof;
(iii) Indebtedness secured by Liens permitted pursuant to Section
8.01(iv) or arising under Capitalized Lease Obligations incurred after
the Petition Date, to the extent all of the foregoing Indebtedness does
not exceed $5,000,000 in the aggregate at any time outstanding;
(iv) Accrued expenses and current trade accounts payable incurred in
the ordinary course of business;
(v) Indebtedness of any Wholly-Owned Subsidiary to the Borrowers or
another Wholly-Owned Subsidiary constituting the purchase price in
respect of intercompany transfers of goods made in the ordinary course of
business to the extent not constituting Indebtedness for borrowed money;
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(vi) Contingent Obligations of the Borrowers or any Subsidiary as a
guarantor of the lessee under any lease pursuant to which either Borrower
or a Subsidiary is the lessee so long as such lease is otherwise
permitted hereunder;
(vii) Indebtedness in respect of Customary Permitted Liens;
(viii) Indebtedness created pursuant to any Acceptable Cash
Collateral Order and other Indebtedness satisfactory to the Required
Lenders permitted or created by other orders issued in the Cases;
(ix) Indebtedness necessary to comply with bonding requirements as
approved by the Required Lenders;
(x) Guarantees by the Borrowers of the performance obligations of
their Subsidiaries;
(xi) Indebtedness under the Canadian Bank Accounts and the US
Collection Accounts;
(xii) Intercompany indebtedness to the extent permitted by Section
8.05(v); provided that the proceeds of such intercompany loans are used
for purposes consistent with Section 6.09; and
(xiii) Indebtedness of any Credit Party to Phencorp in the ordinary
course of business.
8.05 Advances, Investments and Revolving Loans. The Borrowers will not,
and will not permit any of their Subsidiaries to, from and after the Petition
Date lend money or credit or make advances to any Person, or purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any other Person or hold any cash or Cash
Equivalents, or apply to the Bankruptcy Courts for the authority to do any of
the foregoing, except in connection with, and only to the extent made on or
after the Consummation Date in respect of, the Pre-Arranged Plan, except that
the following shall be permitted:
(i) the Borrowers and their Subsidiaries may acquire and hold
accounts receivable owing to any of them, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance
with customary terms;
(ii) the Borrowers and their Subsidiaries may acquire and hold cash
and Cash Equivalents, provided that during any time that Revolving Loans
are outstanding, the Borrowers will not, and will not permit any of the
Subsidiaries to, directly or indirectly maintain in the aggregate, in all
of their checking, savings or other accounts (other than the US
Collection Accounts, the BT Concentration Accounts, the Disbursement
Accounts, the Loan Accounts, the Project Accounts and the Canadian Bank
Accounts) total cash balances and investments (including investments in
Cash Equivalents) other than the Permitted Cash in excess of $5,000,000
for any period of five consecutive days;
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(iii) the Borrowers and their Subsidiaries may make loans and
advances in the ordinary course of business to their respective employees
so long as the aggregate principal amount thereof at any time outstanding
(determined without regard to any write-downs or write-offs of such loans
and advances) shall not exceed $500,000;
(iv) subject to clause (v) below, the Borrowers and their
Subsidiaries may sell or transfer assets to each other to the extent
permitted by Section 8.02;
(v) (a) investments in and advances to direct and indirect
Subsidiaries of the Canadian Borrower that are not Credit Parties,
subject to an aggregate limitation of $10,000,000, (b) investments and
advances to the Canadian Credit Parties after the Canadian Approvals have
been obtained and (c) investments in and advances to the US Credit
Parties;
(vi) investments by the Borrowers and their Subsidiaries existing on
the Effective Date and set forth on Schedule IX;
(vii) investments consisting of promissory notes payable to any
Borrower or any Subsidiary thereof in connection with sales of assets
permitted by Section 8.02; and
(viii) the Borrowers and their Subsidiaries may make cash advances
in the ordinary course of business in an aggregate amount not to exceed
$1,500,000.
8.06 Capital Expenditures. The Borrowers will not, and will not permit
any of their Subsidiaries to, make (i) any Capital Expenditures, except in
accordance with this Section 8.06 and (ii) Capital Expenditures in any period
beginning on January 1, 1999 and ending on the last day of any month described
below exceeding the amount opposite such month set forth below:
Month Amount
-------------- -----------
June 1999 $32,515,000
July 1999 $39,794,000
August 1999 $47,073,000
September 1999 $54,326,000
October 1999 $62,731,000
November 1999 $71,069,000
8.07 Limitation on Repayments, etc. Except as set forth in the First Day
Orders approved on or before the Effective Date, the Borrowers will not, and
will not permit their Subsidiaries to, apply to the Bankruptcy Courts for the
authority to, except in connection with, and only on and after the Consummation
Date for, the Pre-Arranged Plan, (x) make any payment or prepayment on or
redemption or acquisition for value (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities before due
for the purpose of paying when due) of any Indebtedness of the Borrowers
incurred or created prior to the Petition Date, or (y) pay any interest on any
Indebtedness or other obligations of the Borrowers incurred or created prior to
the Petition Date (whether in cash, in-kind, in securities or otherwise), other
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than (a) Trade Payables and other claims authorized to be paid on terms
satisfactory to the DIP Agent as approved by the Bankruptcy Courts; (b) the
payments set forth in any Acceptable Cash Collateral Order or (c) payments of
scheduled lease payments under capitalized leases of the Borrowers existing on
the Petition Date to the extent such leases are not rejected by the Borrowers
or their Subsidiaries in the Cases.
8.08 Transactions with Affiliates. The Borrowers will not, and will not
permit their respective North American Subsidiaries to, apply to the Bankruptcy
Courts for the authority to, except in connection with, and only to the extent
entered into on or after the Consummation Date in respect of, the Pre-Arranged
Plan, enter into any transaction or series of related transactions, whether or
not in the ordinary course of business, with any Affiliate of such Person,
other than on terms and conditions substantially as favorable to such Person as
would be obtainable by such Person at the time in a comparable arm's-length
transaction with a Person other than an Affiliate; provided that this Section
8.08 shall not apply to transactions between Credit Parties.
8.09 Subsidiaries. (a) Except as contemplated by and effected to
consummate the Pre-Arranged Plan, the Borrowers will not, and will not permit
their North American Subsidiaries to, on and after the Effective Date
establish, create or acquire any new Subsidiary.
(b) The Borrowers shall cause their Subsidiaries to conduct their
respective businesses in the ordinary course and in accordance with past
practices.
8.10 Chapter 11 Claims. Except as permitted by Section 6.05, the
Borrowers will not, and will not permit their respective Subsidiaries to (a)
commence or prosecute any defense, action, objection or counterclaim with
respect to the claims, liens or security interests of the Pre-Petition Lenders,
the Pre-Petition Agents, the Lenders and/or the DIP Agent, or (b) apply to the
Bankruptcy Courts for the authority to incur, create, assume, suffer or permit
any claim or Lien against the Borrowers or their Subsidiaries or their
respective assets in the Cases to be pari passu with, or senior to, the Liens
and claims of the Lenders hereunder.
8.11 Restriction on Payment Restrictions Affecting Subsidiaries. The
Borrowers shall not, and shall not permit any Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction (other than pursuant to this Agreement) on the
ability of the Borrowers' Subsidiaries to (a) pay dividends or make any other
distributions on its capital stock or any other interest or participation in
its profits, owned by either Borrower or pay any Indebtedness owed to either
Borrower, (b) make advances or loans to the Borrowers or (c) transfer any of
its properties or assets to the Borrowers, except for such encumbrances or
restrictions existing under or by reason of (i) applicable law, (ii) the DIP
Credit Documents, (iii) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrowers or such
Subsidiary, (iv) restrictions in effect on the Petition Date and (v) customary
restrictions on dispositions of real property interests.
8.12 Minimum EBITDA. The Consolidated EBITDA of the Borrowers and their
Subsidiaries at the end of each month for the previous period of three months
(treated as one accounting period) shall be a positive amount.
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8.13 Change in Business The Borrowers will not and will not permit any
of their Subsidiaries to engage (directly or indirectly) in any business other
than the business of the Borrowers and their Subsidiaries as of the Effective
Date and, except for Phencorp, other businesses reasonably related thereto.
8.14 No Additional Bank Accounts. Unless the Borrowers have obtained the
prior written approval of the DIP Agent, such approval not to be unreasonably
withheld, the Borrowers will not, and will not permit any of their Subsidiaries
within the United States or Canada to, directly or indirectly, open, maintain
or otherwise have any checking, savings or other deposit accounts at any bank
or other financial institution where money is or may be deposited or maintained
with any Person, other than (i) the Loan Accounts (ii) the BT Concentration
Accounts, (iii) the US Collection Accounts, (iv) the Canadian Bank Accounts (v)
the Disbursement Accounts and (vi) the Project Accounts.
8.15 Other Claims. The Borrowers will not and will not permit any of
their Subsidiaries, except in connection with any claims granted to the
Pre-Petition LC Issuers, the Pre-Petition LC Lenders, issuers of letters of
credit under the Permitted LC Facility, the Bank Account Service Providers, the
DIP Lenders, the Pre-Petition Agents and the Pre-Petition Lenders, to apply to
the Bankruptcy Courts for the authority to incur, create, assume, suffer or
permit any claim against the Borrowers or their assets in the Cases to be
entitled to a superpriority under Section 364(c)(1) of the Bankruptcy Code or
in the Canadian Cases.
8.16 Pre-Arranged Plan. The Borrowers will not and will not permit any
of their Subsidiaries (a) to file a plan of reorganization, disclosure
statement or plan of arrangement, as applicable, in the Cases, other than the
Pre-Arranged Plan and the disclosure statement approved by the Required Lenders
with respect thereto, without the consent of the Required Lenders, (b) to
amend, modify or withdraw the Pre-Arranged Plan, or the disclosure statement
approved by the Required Lenders with respect thereto, without the consent of
the Required Lenders (except as provided under the Acceptable Cash Collateral
Order) or (c) to fail to comply with any material applicable provisions of the
Pre-Arranged Plan.
Section 9. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
9.01 Payments. Either Borrower or any Subsidiary Guarantor shall (i)
default in the payment when due of any payment of principal of its Revolving
Loans or Revolving Notes or of any Unpaid Drawing or (ii) default, and such
default shall continue for at least two Business Days, in any payment of
interest on its Revolving Loans or Revolving Notes or on any Unpaid Drawing or
any Fees or any other amounts owing by it hereunder or thereunder; or
9.02 Representations, etc. Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or in any
certificate delivered pursuant hereto or thereto shall prove to be incorrect or
misleading in any material respect when made; or
9.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.09 or any provision
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of Section 8 or (ii) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in Sections 9.01 and
9.02 and clause (i) of this Section 9.03) contained in this Agreement or any
other Credit Document and such default shall continue unremedied for a period
of 20 days after written notice to the Borrowers by the DIP Agent or the
Required Lenders; or
9.04 The Cases, etc. (a) Any of the Cases shall be dismissed; or
(b) Any of the US Cases shall be converted to a case under Chapter 7 of
the US Bankruptcy Code; or a Chapter 11 trustee shall be appointed in any of
the US Cases; or
(c) The entry of an order by the Canadian Court lifting the stay in the
Canadian Cases to permit the enforcement of any security against any Credit
Party or the appointment of a receiver, or the making of a receiving order
against any Credit Party; or
(d) (i) An order of the US Bankruptcy Court shall be entered in any of
the US Cases appointing an examiner with enlarged powers (powers beyond those
set forth in Section 1106(a)(3) and (4) of the US Bankruptcy Code) under
Section 1106(b) of the US Bankruptcy Code or (ii) an order of the Canadian
Court shall be entered having a similar effect; or
(e) An order of (i) the US Bankruptcy Court or (ii) the Canadian Court
shall be entered amending, reversing, supplementing, staying, vacating or
otherwise modifying the DIP Credit Documents, any of the Orders or any
Acceptable Cash Collateral Order, provided that no Event of Default shall occur
under this clause (e) to the extent that any such amendment, supplement or
other modification is entered into with the prior written consent of the DIP
Agent and the Required Lenders; or
(f) the entry of an order by the (i) US Bankruptcy Court or (ii) Canadian
Court granting any other claim superpriority status or a lien equal or superior
to that granted to the DIP Agent and the Lenders, other than orders entered in
respect of (x) reclamation claims pursuant to Section 546(c) of the US
Bankruptcy Code or (y) the Pre-Petition LC Issuers, the Pre-Petition LC
Lenders, the issuers of letters of credit under the Permitted LC Facility or
the Bank Account Service Providers; or
(g) any action taken by the Pre-Petition Agent or the Security Agent under
the Pre-Petition Credit Agreement and related security documentation to
exercise remedies in respect of the Pre-Petition Credit Agreement Obligations;
or
(h) the entry of an order by (i) the Canadian Court or (ii) the US
Bankruptcy Court granting relief from the automatic stay applicable under
Section 362 of the US Bankruptcy Code in the US Cases or lifting the stay in
the Canadian Cases, so as to allow a third party to proceed against any
material asset of the Borrowers or Subsidiary Guarantors taken as a whole; or
(i) the entry of the US Final Order shall not have occurred within 30 days
after the Effective Date; or
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(j) An order shall be entered by either Bankruptcy Court, or application
shall be filed by any Credit Party for the approval of, any claims for recovery
of amounts under Section 506(c) of the US Bankruptcy Code arising from the
preservation or disposal of any Collateral; or
(k) the filing of any pleading by one of the Borrowers or any Subsidiary
Guarantor seeking any of the matters set forth in clauses (a) through (f) or
(h); or
(l) An Acceptable Cash Collateral Order shall not have been entered by the
Bankruptcy Courts or shall not be in full force and effect.
9.05 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to
occur with respect to such Plan within the following thirty (30) days, any Plan
which is subject to Title IV of ERISA shall have had or is likely to have a
trustee appointed to administer such Plan, any Plan which is subject to Title
IV of ERISA is, shall have been or is likely to be terminated or to be the
subject of termination proceedings under ERISA, any Plan shall have an Unfunded
Current Liability, a contribution required to be made with respect to a Plan or
a Foreign Pension Plan has not been timely made, the Borrowers or any
Subsidiary of the Borrowers or any ERISA Affiliate has incurred or is likely to
incur any liability to or on account of a Plan under Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code or on account of a group health plan (as
defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code, or the Borrowers or any Subsidiary of the Borrowers
has incurred or is likely to incur liabilities pursuant to one or more employee
welfare benefit plans (as defined in Section 3(1) of ERISA) that provide
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or Plans or Foreign Pension Plans, or a "default,"
within the meaning of Section 4219(c)(5) of ERISA, shall occur with respect to
any Plan; any applicable law, rule or regulation is adopted, changed or
interpreted, or the interpretation or administration thereof is changed, in
each case after the date hereof, by any governmental authority or agency or by
any court (a "Change in Law"), or, as a result of a Change in Law, an event
occurs following a Change in Law, with respect to or otherwise affecting any
Plan; (b) there shall result from any such event or events the imposition of a
lien, the granting of a security interest, or a liability or a material risk of
incurring a liability; and (c) such lien, security interest or liability,
individually, and/or in the aggregate, in the reasonable opinion of the
Required Lenders, has had, or could reasonably be expected to have, a Material
Adverse Effect; or
9.06 DIP Credit Documents. Any DIP Credit Document shall cease to be in
full force and effect, or any Lien purported to be created by any DIP Credit
Document or any of the Orders in any of the Collateral purported to be covered
thereby shall, for any reason, cease to be
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valid or shall cease to have the priorities set forth in this Agreement, the
other DIP Credit Documents or the Orders; or
9.07 Judgments. (a) One or more judgments giving rise to post-petition
liability or an order as to post-petition liability or debt shall be entered
against either Borrower or any of their Subsidiaries involving in the aggregate
for the Borrowers or any of their Subsidiaries a liability (to the extent not
paid or fully covered (subject to a deductible not in excess of 5% of such
liability) by insurance) of $2,000,000 or more outstanding at any one time, and
either (i) enforcement proceedings shall have been commenced and shall be
continuing by any creditor upon such judgments or orders or (ii) there shall be
any period of 30 consecutive days during which a stay of enforcement of such
judgments or orders, by reason of a pending appeal or otherwise, shall not be
in effect; or
(b) Any non-monetary judgment or order with respect to a post-petition
event shall be rendered against either Borrower or any of their Subsidiaries
which could reasonably be expected to (i) cause or create a Material Adverse
Effect, (ii) have a material adverse effect on the ability of the Borrowers to
perform their obligations under any Credit Document, or (iii) have a material
adverse effect on the rights and remedies of the DIP Agent or any Lender under
any Credit Document, and there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
9.08 Pre-Arranged Plan. A Pre-Arranged Plan Adverse Development shall
occur; or
9.09 Material Disruption in Senior Management, Change of Control, etc.
There shall occur a material disruption in the senior management of either
Borrower (other than (A) the appointment of a chief executive officer approved
by (a) Pre-Petition Lenders holding debt under the Pre-Petition Credit
Agreement which, under the Restructuring Term Sheet, would entitle such holders
to receive a majority of the common shares of the restructured Canadian
Borrower, (b) the board of directors of the Canadian Borrower and (c) the US
Bankruptcy Court and the Canadian Court or (B) a material disruption of the
senior management of the US Borrower if the senior management of the Canadian
Borrower can perform the function of the senior management of the US Borrower)
or a Change of Control shall occur,
then, and in any such event, and at any time thereafter if any Event of Default
shall then be continuing and without further order of or application to the
Bankruptcy Courts, the DIP Agent shall upon the written request of the Required
Lenders, by written notice to the Borrowers, take any or all of the following
actions, without prejudice to the rights of the DIP Agent, any Lender or the
holder of any Revolving Note to enforce its claims against the Borrowers: (i)
declare the Total Commitment terminated, whereupon the Commitment of each
Lender shall forthwith terminate immediately and any Commitment Commission and
Fees shall forthwith become due and payable without any other notice of any
kind; (ii) declare the principal of and any accrued interest in respect of all
Revolving Loans and all Obligations owing hereunder to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrowers;
(iii) terminate any Letter of
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Credit which may be terminated in accordance with its terms; (iv) declare all
reimbursement obligations in respect of all outstanding Letters of Credit,
whether or not then due and payable or matured, to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrowers; (v)
realize on all or part of the Facility Liens without the necessity of obtaining
further relief or order from the Bankruptcy Courts; (vi) impose an
administrative freeze or administrative hold with respect to cash collateral;
(vii) apply any cash collateral held by the DIP Agent; and (viii) exercise any
other rights or remedies (including, without limitation, set-off rights) under
the DIP Credit Documents, the Orders and applicable law; provided, however,
that the DIP Agent may exercise the aforementioned rights and remedies, other
than those provided in (i), (ii) and (vi) above, only after three Business Days
written notice to the Borrowers, the Subsidiary Guarantors, the United States
Trustee and any statutory committee or monitor appointed in the Cases.
Section 10. Definitions.
10.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acceptable Cash Collateral Order" shall have the meaning set forth in
Section 5.01(d)(iii).
"Account Banks" shall mean all the banks which provide bank account and
cash management services to the US Borrower and its Domestic Subsidiaries.
"Account Intermediary Receivable Liens" shall mean liens on Canadian
accounts receivable addressed in documentation entered into in connection with
the establishment of operating accounts of certain of the Canadian Credit
Parties at CIBC and the maintenance of operating accounts of certain of the US
Credit Parties at Comerica Bank.
"Account Intermediary Replacement Liens" shall have the meaning provided
in Section 6.05(b):
"Accounts" shall mean, with respect to any Person, all present and future
accounts, contract rights and other rights to payment for goods sold or leased
(whether or not delivered) or for services rendered in the ordinary course of
business which are not evidenced by an instrument or chattel paper, whether or
not they have been earned by performance, and any letter of credit, guarantee,
security interest or other security issued or granted to secure payment of such
Account by the account debtor thereof.
"Additional Credit Date" shall have the meaning provided in Section
5.02(c).
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled
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"Select Interest Rates," published weekly on Form H.15 as of the date hereof,
or if such publication or a substitute containing the foregoing rate
information shall not be published by the Federal Reserve System for any week,
the weekly average offering rate determined by the DIP Agent on the basis of
quotations for such certificates received by it from three certificate of
deposit dealers in New York of recognized standing or, if such quotations are
unavailable, then on the basis of other sources reasonably selected by the DIP
Agent, by (y) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements as specified in Regulation D applicable on such day to a
three-month certificate of deposit of a member bank of the Federal Reserve
System in excess of $100,000 (including, without limitation, any marginal,
emergency, supplemental, special or other reserves), plus (2) the then daily
net annual assessment rate as estimated by the DIP Agent for determining the
current annual assessment payable by the DIP Agent to the Federal Deposit
Insurance Corporation for insuring three-month certificates of deposit.
"Adjusted Total Commitment" shall mean at any time the Total Commitment
less the aggregate Commitments of all Defaulting Lenders.
"Affiliate" shall mean, with respect to any Person, any other Person (i)
directly or indirectly controlling (including, but not limited to, all
directors and officers of such Person), controlled by, or under direct or
indirect common control with, such Person, or (ii) that directly or indirectly
owns more than 5% of the voting securities of such Person. A Person shall be
deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"Aggregate Unutilized Commitments" shall mean, at any time, the amount
equal to (i) the Total Commitment less (ii) the sum of (x) the aggregate
outstanding principal amount of Revolving Loans and (y) the aggregate Letter of
Credit Outstandings.
"Agreement" shall mean this Credit Agreement, as modified, supplemented or
amended from time to time.
"Aluminum Proceeds" shall mean the Net Sale Proceeds of the Pre-Petition
sale of certain assets of the Borrowers' Aluminum division.
"Applicable Margin" shall mean in the case of Revolving Loans that are
maintained as (x) Base Rate Loans, 2.5%, and (y) Eurodollar Loans, 3.5%.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement in the form of Exhibit K hereto appropriately completed.
"Assignor" shall mean each of the Borrowers and each Subsidiary Guarantor.
"Authorized Facility Amount" shall mean (x) prior to the earlier of the
Additional Credit Date and the issuance of the US Final Order, the Authorized
Interim Advances and (y) thereafter, the Authorized Final Advances.
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"Authorized Final Advances" shall mean the amount authorized by the US
Final Order.
"Authorized Interim Advances" shall mean the lower of (x) the amount
authorized by the US Interim Order and (y) $30,000,000.
"Authorized Officer" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇▇
▇▇▇▇▇, and any other executive officer designated by the Chief Financial
Officer of the Canadian Borrower acceptable to the DIP Agent.
"Bank Account Service Providers" shall mean (a) CIBC in its individual
capacity as the provider of the CIBC Bank Account Services, and (b) Comerica
and its Affiliates in their respective capacities as the providers of the
Comerica Bank Account Services.
"Bankruptcy Courts" shall mean the US Bankruptcy Court and the Canadian
Court.
"Barbados" shall mean Phencorp Reinsurance Company, Inc.
"Base Rate" at any time shall mean the higher of (x) the per annum rate of
interest which is 1/2 of 1% in excess of the Adjusted Certificate of Deposit
Rate and (y) the Prime Lending Rate as in effect from time to time.
"Base Rate Loans" shall mean any Revolving Loan designated as such by the
applicable Borrower at the time of the incurrence thereof or conversion
thereto.
"Bonding Liens" shall have the meaning provided in Section 6.05(b).
"Bonding Order" shall have the meaning provided in Section 5.01(d)(iii).
"Borrowers" shall have the meaning provided in the first paragraph of this
Agreement.
"Borrowers' Obligations" shall mean the principal of and interest on the
Revolving Notes issued under this Agreement, and all other obligations and
indebtedness (including, without limitation, Unpaid Drawings, indemnities, fees
and interest thereon) of the Borrowers, now existing or hereafter incurred
under, arising out of or in connection with this Agreement and the other DIP
Credit Documents and the due performance and compliance with the terms of this
Agreement and the other DIP Credit Documents by the Borrowers.
"Borrowing" shall mean the incurrence of one Type of Revolving Loan by the
applicable Borrower from all the Lenders on a given date (or resulting from
conversions or continuations on a given date), having in the case of Eurodollar
Loans the same Interest Period, provided that Base Rate Loans incurred pursuant
to Section 1.09(b) shall be considered part of the related Borrowing of
Eurodollar Loans.
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"Borrowing Base Amount" shall mean, (A) the sum of up to 80% of the value
of the Eligible Accounts Receivable, and up to 50% of the value of Eligible
Unbilled Accounts Receivable of (i) the Credit Parties constituting part of the
Industrial Services Group (the "ISG division") plus (ii) the US Credit Parties
constituting part of the US Ferrous division, minus (B) the Carve-Out;
provided, however, that the Borrowing Base Amount shall not include assets of
the Canadian Credit Parties until the Canadian Approvals have been obtained.
The DIP Agent shall, in the exercise of its Permitted Discretion, (x) at any
time after the Effective Date be entitled to (i) establish and increase or
decrease reserves against the Eligible Accounts Receivable and Eligible
Unbilled Accounts Receivable of the Credit Parties referred to in the foregoing
clauses (i) and (ii), or (ii) impose additional restrictions (or eliminate the
same) to the standards of "Eligible Accounts Receivable" and "Eligible Unbilled
Accounts Receivable"; provided that the DIP Agent shall not be entitled to
decrease reserves as provided under (x)(i) or eliminate restrictions as
provided under (x)(ii) to levels lower than those in effect on the Effective
Date and (y) upon not less than five days' prior written notice to the
Borrowers reduce or increase the percentages used in calculating the Borrowing
Base Amount in the exercise of its Permitted Discretion to any level equal to
or below the rates stated in (A) above. The DIP Agent may, but shall not be
required to, rely on each Borrowing Base Certificate and any other schedules or
reports delivered to it in connection herewith in determining the eligibility
of Accounts. Reliance thereon by the DIP Agent from time to time shall not be
deemed to limit the right of the DIP Agent to revise the advance rate as
provided in (y) above or standards of eligibility as provided in (x)(i) and
(ii) above. The Borrowing Base Amount will be computed on the dates set forth
on Schedule VI attached hereto (or, if requested by the DIP Agent in the
exercise of its Permitted Discretion, more frequently as so requested) and a
Borrowing Base Certificate presenting its computation will be delivered
promptly as set forth in Section 7.01(g).
"Borrowing Base Certificate" shall have the meaning given to such term in
Section 7.01(g).
"BTCo" shall have the meaning provided in the first paragraph of this
Agreement.
"BT Concentration Accounts" shall mean the Metals Concentration Account
and the ISG Concentration Account.
"Budget" shall mean the budget received by the DIP Agent and the Lenders
dated April 1, 1999 reflecting the projected cash requirements of the Credit
Parties (including, without limitation, utilization of the Pre-Petition
Lenders' cash collateral) from the Effective Date through the Maturity Date,
calculated on a monthly basis, and other cash flow and financial information
that the DIP Agent may have requested.
"Budgeted Loan Amount" shall mean from time to time, the then cumulative
monthly projected utilization of the DIP Facility set forth in the Budget (as
may be amended with the consent of the DIP Agent and the Required Lenders),
plus $10,000,000, which amounts shall be initially (subject to amendment with
the consent of the DIP Agent and the Required Lenders) $17,179,000 through May
31, 1999; $39,165,000 through June 30, 1999; $53,072,000 through July 31, 1999;
$56,677,000 through August 31, 1999; $65,650,000 through September 30, 1999;
$69,797,000 through October 31, 1999; and $76,984,000 through November 30,
1999.
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"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized by law or other government action to close and (ii) with respect to
all notices and determinations in connection with, and payments of principal
and interest on, Eurodollar Loans, any day which is a Business Day described in
clause (i) above and which is also a day for trading by and between banks in
the interbank Eurodollar market.
"Canadian Approvals" shall mean the following orders of the Canadian Court
and consents from the Pre-Petition Lenders:
(A) The DIP Facility, including the security interests and charges
over the assets located in Canada subject to Facility Liens, with the
priority described in Section 6.05(b), shall have been approved by an
order of the Canadian Court in the Canadian Cases, in form and substance
satisfactory to the DIP Agent and the Lenders, which shall also contain
provisions:
1. authorizing the execution and delivery by the Canadian Credit
Parties of all documents, and the granting of all security, required in
connection with the DIP Facility, and providing that such documents or
security shall not be challengeable by any present or future creditors of
the Canadian Credit Parties (provided, however, that such security shall
be junior to the security granted to the Bank Account Service Providers),
2. providing that such documents and security shall be effective
notwithstanding that the execution of such documents and the granting of
such security may result in a breach of any contract or restriction to
which any of the Canadian Credit Parties is bound,
3. prohibiting the granting of any additional security on the assets
of any of the Canadian Credit Parties,
4. providing that the obligations of the Canadian Credit Parties to
the DIP Agent, the Lenders and the Bank Account Service Providers shall
not be subject to, or compromised or affected in any way by, any plan of
compromise or arrangement in the Canadian Cases, and
5. granting relief from the stay in the Canadian Cases to permit
enforcement by (a) the DIP Agent, the DIP Collateral Agents and the
Lenders of the rights and remedies under the DIP Facility and their
security and (b) the Bank Account Service Providers of their rights and
remedies, upon the occurrence of an Event of Default;
(B) The Pre-Petition Lenders shall have agreed, in a manner
acceptable to the DIP Agent and the Lenders, to postpone their security
in the Pre-Petition Collateral to the Facility Liens, and such agreement
and postponement shall be in form and substance satisfactory to the DIP
Agent and the Lenders;
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(C) All orders of the Canadian Court in form and substance
satisfactory to the DIP Agent and the Lenders, authorizing the use by the
Borrowers and the Subsidiary Guarantors of (i) the Pre-Petition Lenders'
cash collateral (other than the cash collateral of the Pre-Petition LC
Issuers, the Pre-Petition LC Lenders, issuers of letters of credit under
the Permitted LC Facility and the Bank Account Service Providers) and
(ii) the Other Asset Sale Proceeds deposited in the Proceeds Account
prior to the commencement of the Cases in accordance with the Proceeds
Agreement;
(D) All other "First Day" Orders or interim orders in the Canadian
Cases necessary or appropriate in the judgment of the DIP Agent and the
Lenders;
(E) The orders of the Canadian Court referred to in (A), (B), (C)
and (D) above shall not have expired or been stayed, reversed, vacated or
otherwise modified without the prior written consent of the DIP Agent and
the Required Lenders; and
(F) The DIP Agent and the Lenders shall be satisfied that all
orders described in (A), (B), (C) and (D) above shall be binding on all
existing material creditors (or other persons described therein) of the
Borrowers and the Subsidiary Guarantors, and shall be effective to
provide the stay of actions, priorities, liens and other protections for
the Borrowers, the Subsidiary Guarantors, the DIP Agent, the DIP
Collateral Agents and the Lenders purported to be granted thereby.
"Canadian Bank Accounts" shall mean the Canadian bank accounts, other than
the Project Accounts, maintained by the Canadian Borrower and the Canadian
Subsidiary Guarantors with CIBC in its capacity as Bank Account Service
Provider.
"Canadian Borrower" shall have the meaning provided in the first paragraph
of this Agreement.
"Canadian Cases" shall have the meaning provided in the second whereas
clause to this Agreement.
"Canadian Court" shall mean the Canadian bankruptcy court or such other
court having jurisdiction over the Canadian Cases from time to time.
"Canadian Credit Parties" shall have the meaning provided in the second
whereas clause to this Agreement.
"Canadian DIP Collateral Agent" shall mean CIBC acting as collateral agent
for the collateral located in Canada pursuant to this Agreement and the
Collateral Documents.
"Canadian Dollars" shall mean freely transferable lawful money of Canada.
"Canadian Loan Account" shall have the meaning provided in Section 4.04.
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"Canadian Loan Amount" shall mean the lower of (x) the amount of the
working capital and general corporate requirements of the Canadian Borrower and
the other Canadian Credit Parties as determined by the DIP Agent from time to
time and (y) $15,000,000.
"Canadian Pre-Petition Collateral" shall mean all the existing and after
acquired assets of the Borrowers and the Subsidiary Guarantors located in
Canada securing obligations to the Pre-Petition Agents and the Pre-Petition
Lenders under the Pre-Petition Credit Agreement.
"Canadian Security Agreement" shall mean the security agreement in the
form of Exhibit O attached hereto.
"Canadian Subsidiary" shall mean all direct and indirect Subsidiaries of
either Borrower incorporated in Canada or any province or territory thereof.
"Canadian Subsidiary Guarantors" shall mean those direct and indirect
Subsidiaries of either Borrower organized in Canada or any province or
territory thereof that are signatories hereto or have executed a joinder
hereto.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures (excluding barter transactions effected in the ordinary course of
business consistent with past practices) by such Person which should be
capitalized in accordance with GAAP, including all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with
GAAP) and the amount of Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under GAAP, are or will be required to be capitalized on the
books of such Person, in each case taken at the amount thereof accounted for as
indebtedness in accordance with GAAP.
"Carve-Out" shall mean a $3,000,000 carve-out for the payment of (i)
allowed and unpaid fees and disbursements incurred by the professionals
retained, pursuant to Sections 327 or 1103(a) of the US Bankruptcy Code in the
US Cases and any statutory committees appointed in the Chapter 11 Cases, and,
after the entry of an order of the Canadian Court approving the DIP Facility on
the terms described in the DIP Credit Documents, the professionals, including
the monitor, retained in the Canadian Cases, and (ii) any unpaid fees payable
pursuant to 28 U.S.C. Section 1930(a)(6) and any unpaid fees payable to the
Clerk of the US Bankruptcy Court or any other similar entity in the Canadian
Cases; provided, however, the Carve-Out shall not be utilized to pay any
professional fees or disbursements incurred in connection with asserting any
claims or causes of action against the Pre-Petition Lenders, the Pre-Petition
Agents, the Security Agent, the holders of the Account Intermediary Receivable
Liens, the Other Account Intermediary Liens or the LC Liens, the Lenders, the
DIP Agent, the DIP Collateral Agents, the DIP Co-Arrangers (including, unless
the US Interim Order shall become the US Final Order, or if the US Final Order
shall so provide, formal discovery proceedings in anticipation thereof) and/or
challenging (whether by defense, objection, counterclaim or otherwise) the
validity, perfection, priority or amount of any claim, lien or security
interest of the Pre-Petition Agents, the Security Agent, the Pre-Petition
Lenders, the DIP Agent, the DIP Collateral Agents, the DIP Co-Arrangers, the
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Lenders and/or the holders of the Account Intermediary Receivable Liens, the
Other Account Intermediary Liens or the LC Liens.
"Cases" shall mean the US Cases and the Canadian Cases.
"Cash Concentration Accounts" shall have the meaning provided in Section
5.01(k).
"Cash Equivalents" shall mean, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or the government
of Canada or any province of Canada or any agency or instrumentality thereof
(provided that the full faith and credit of the United States, the government
of Canada or of such provinces is pledged in support thereof) having maturities
of not more than one year from the date of acquisition, (ii) time deposits and
certificates of deposit of any commercial bank or trust company having, or
which is the principal banking subsidiary of a bank holding company or trust
company organized under the laws of the United States, any State thereof, the
District of Columbia, Canada, any province thereof or any foreign jurisdiction
having, capital, surplus and undivided profits aggregating in excess of
$200,000,000, with maturities of not more than one year from the date of
acquisition by such Person, (iii) repurchase obligations with a term of not
more than 90 days for underlying securities of the types described in clause
(i) above entered into with any bank meeting the qualifications specified in
clause (ii) above, (iv) commercial paper issued by any Person incorporated in
the United States rated at least A-1 or the equivalent thereof by Standard &
Poor's Corporation or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇
Investors Service, Inc., or incorporated in Canada any having such ratings or
an equivalent rating from Canadian Bond Rating Service Inc. or Dominion Bond
Rating Service Limited and in each case maturing not more than one year after
the date of acquisition by such Person, (v) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (iv) above and (vi) demand deposit accounts
maintained in the ordinary course of business not in excess of $100,000 in the
aggregate.
"CCAA" shall have the meaning provided in the second whereas clause to
this Agreement.
"CERCLA" shall mean the Comprehensive Environmental Response Compensation
and Liability Act of 1980, as same may be amended from time to time.
"Change in Law" shall have the meaning provided in Section 9.05 of this
Agreement.
"Change of Control" shall mean the acquisition, whether directly or
indirectly, after the Petition Date by any Person or "group" as defined in
Section 13(d) (3) of the Securities Exchange Act of 1934, as amended (other
than the Persons beneficially owning the shares of common stock of the
Borrowers on the Petition Date), of (i) shares, or the right to vote shares,
constituting more than 30% of the common stock or other voting securities of
the Borrowers or (ii) the power to elect a majority of the Borrowers' board of
directors.
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"Chase Concentration Account" shall mean the account number 00103316692
established at Chase Bank of Texas by the US Borrower.
"Chattel Paper" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"CIBC" shall have the meaning provided in the first paragraph of this
Agreement.
"CIBC Bank Account Services" shall mean the bank account services and cash
management services provided by CIBC in Canada to the Canadian Borrower and
certain of its Canadian Subsidiaries.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of
this Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all the "Collateral" referred to in Section 13,
the Collateral Documents or in the Orders.
"Collateral Documents" shall mean all contracts, instruments and other
documents now or hereafter executed and delivered in connection with this
Agreement, pursuant to which liens and security interests are granted to the
DIP Collateral Agents in the Collateral for the benefit of the Lenders,
including, without limitation, the Pledge Agreement and the Collection Bank
Agreements.
"Collection Bank Agreements" shall mean the existing lockboxes and deposit
agreements and all future similar agreements entered into among the US Borrower
and certain of its subsidiaries, BTCo, and the bank at which the relevant
lock-box or deposit account is maintained.
"Comerica" shall mean Comerica Bank.
"Comerica Bank Account Services" shall mean the bank account and cash
management services provided by Comerica and its Affiliates in the United
States of America to the US Borrower and certain Subsidiaries of the US
Borrower.
"Commitment" shall mean, with respect to each Lender, the amount set forth
opposite such Lender's name in Schedule I, directly below the column entitled
"Commitment" as the same may be (x) reduced or terminated from time to time
pursuant to Sections 3.02 and/or 9 or (y) adjusted from time to time as a
result of assignments to or from such Lender pursuant to Sections 1.12 or
12.04(b).
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Company" shall mean any corporation, limited liability company,
partnership or other business entity (and the adjectival form thereof, where
appropriate).
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"Confidential Material" shall have the meaning provided in Section 12.13.
"Confidentiality Agreement" shall mean an agreement in the form of Exhibit
L hereto.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income of the Borrowers and their Consolidated Subsidiaries, before
Consolidated Net Interest Expense and provision for taxes and without giving
effect to any extraordinary gains or losses or gains or losses from sales of
assets other than inventory sold in the ordinary course of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all non-recurring charges relating to
the Cases plus all amortization of intangibles and depreciation and all
non-cash charges in respect of pension and retiree benefits, in each case that
were deducted in arriving at Consolidated EBIT for such period.
"Consolidated Net Income" shall mean, for any period, the consolidated
net after tax income of the Borrowers and their Consolidated Subsidiaries
determined in accordance with GAAP.
"Consolidated Net Interest Expense" shall mean, for any period, the total
consolidated interest expense of the Borrowers and their Consolidated
Subsidiaries for such period (calculated without regard to any limitations on
the payment thereof) plus, without duplication, that portion of Capitalized
Lease Obligations of the Borrowers and their Consolidated Subsidiaries
representing the interest factor for such period, in each case net of the total
consolidated cash interest income of the Borrowers and their Consolidated
Subsidiaries for such period, but excluding the amortization of any deferred
financing costs incurred in connection with this Agreement.
"Consolidated Subsidiaries" shall mean, as to any Person, all Subsidiaries
of such Person which are consolidated with such Person for financial reporting
purposes in accordance with GAAP.
"Consummation Date" shall mean the earliest to occur of (i) the "Effective
Date" as defined in a Reorganization Plan in the US Cases, (ii) the date of
effectiveness of a Reorganization Plan in the Canadian Cases, (iii) the date of
the substantial consummation (as such term is defined in Section 1101 of the US
Bankruptcy Code) of a Reorganization Plan in the US Cases, and (iv) the date of
the substantial consummation of a Reorganization Plan in the Canadian Cases.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor
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or otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made (or, if less,
the maximum amount of such primary obligation for which such Person may be
liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.
"Contract Rights" shall mean all rights of the Borrowers (including,
without limitation, all rights to payment) under each Contract.
"Contracts" shall mean all contracts between the Assignors and one or more
additional parties but excluding contracts and licenses to the extent that the
terms thereof prohibit the assignment of, or granting of a security interest
in, such contracts and licenses.
"Copyrights" shall mean any United States copyright which the Assignors
now or hereafter have registered with the United States Copyright Office, as
well as any application for a United States or Canadian copyright registration
now or hereafter made with the United States Copyright Office and the relevant
Canadian authorities by the Assignors.
"Credit Event" shall mean the making of any Revolving Loan or the issuance
of any Letter of Credit.
"Credit Parties" shall mean the US Credit Parties and the Canadian Credit
Parties.
"Customary Permitted Liens" shall mean
(i) Liens (other than any Lien imposed under ERISA) for taxes,
assessments or charges of any government authority or claims not yet due
or which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate provisions
are being maintained in accordance with the provisions of generally
accepted accounting principles;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens (other than any Lien
imposed under ERISA) imposed by law created in the ordinary course of
business for amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate
reserves or other appropriate provisions are being maintained in
accordance with generally accepted accounting principles or which in the
aggregate do not detract from the value of the Borrowers' or any
Subsidiary's property or assets or
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materially impair the use thereof in the operation of the business of the
Borrowers or such Subsidiary;
(iii) licenses, leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the conduct
of the business of the Borrowers and their Subsidiaries taken as a whole;
(iv) easements, rights-of-way, restrictions (including zoning
restrictions), encroachments, protrusions and other similar charges or
encumbrances, and minor title deficiencies, in each case whether now or
hereafter in existence, not securing Indebtedness and not materially
interfering with the conduct of the business of the Borrowers or any of
their Subsidiaries;
(v) rights of tenants, subtenants, franchisees or parties in
possession (other than a debtor in possession, trustee in bankruptcy or
receiver of the Borrowers), or options or rights of first refusal,
whether pursuant to leases, subleases, franchise agreements, other
occupancy agreements or otherwise, if such rights were vested on the
Effective Date or created thereafter in the ordinary course of business
in transactions permitted under this Agreement;
(vi) any interest or title of a lessor, sublessor, licensee or
licensor under any lease or license agreement permitted by this
Agreement;
(vii) Liens in favor of a banking institution arising as a matter of
law or pursuant to the agreements regulating the Disbursement Accounts or
the accounts in which the Permitted Cash is maintained encumbering
deposits (including the right of set-off) held by such banking
institutions incurred in the ordinary course of business and which are
within the general parameters customary in the banking industry;
(viii) Liens in favor of customs and revenue authorities arising as
a matter of law to secure the payment of customs duties in connection
with the importation of goods;
(ix) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the purchase or sale of goods
entered into by the Borrowers or any of their Subsidiaries in the
ordinary course of business in accordance with the past practices of the
Borrowers and their Subsidiaries; and
(x) deposits made to secure statutory obligations in the form of
excise taxes.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a Lender
Default is in effect.
"DIP Agent" shall have the meaning provided in the first paragraph of this
Agreement.
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"DIP Agents" shall mean the DIP Agent and the DIP Collateral Agents.
"DIP Co-Arrangers" shall have the meaning provided in the first paragraph
of this Agreement.
"DIP Collateral Agents" shall mean the US DIP Collateral Agent and the
Canadian DIP Collateral Agent.
"DIP Credit Documents" shall mean this Agreement, and once executed and
delivered pursuant to the terms of this Agreement, each Revolving Note, each
Letter of Credit Request, each Notice of Borrowing, each Notice of Conversion
and each Collateral Document.
"DIP Facility" shall have the meaning provided in the fourth whereas
clause of this Agreement.
"Direction Letter" shall have the meaning provided in Section 6.20 of this
Agreement.
"Disbursement Accounts" shall mean the existing disbursement accounts of
the Borrowers and their Subsidiaries among the accounts listed on Schedule VIII
or any disbursement account substituted therefor and approved by the DIP Agent,
such approval not to be unreasonably withheld, which are used to finance the
local operations of the Borrowers and their Subsidiaries.
"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
or authorized or made any other distribution, payment or delivery of property
(other than common stock of such Person) or cash to its stockholders as such,
or redeemed, retired, purchased or otherwise acquired, directly or indirectly,
for consideration any shares of any class of its capital stock outstanding on
or after the Petition Date (or any options or warrants issued by such Person
with respect to its capital stock), or set aside any funds for any of the
foregoing purposes, or shall have permitted any of its Subsidiaries to purchase
or otherwise acquire for consideration any shares of any class of the capital
stock of such Person outstanding on or after the Petition Date (or any options
or warrants issued by such Person with respect to its capital stock). Without
limiting the foregoing, "Dividends" with respect to any Person shall also
include all payments made or required to be made by such Person with respect to
any stock appreciation rights, plans, equity incentive or achievement plans or
any similar plans or setting aside of any funds for the foregoing purposes.
"Documents" shall have the meaning provided in the Uniform Commercial Code
as in effect on the date hereof in the State of New York.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States (expressed in dollars).
"Domestic Subsidiary" shall mean each Subsidiary of the Borrowers
incorporated or organized in the United States or any State or territory
thereof.
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"Domestic Wholly-Owned Subsidiary" shall mean each Domestic Subsidiary
which is a Wholly-Owned Subsidiary of either Borrower.
"Drawing" shall have the meaning provided in Section 2.04(b).
"Effective Date" shall have the meaning provided in Section 5.01.
"Eligible Accounts Receivable" shall mean Accounts of the Credit Parties
constituting part of the ISG division and of the US Credit Parties constituting
part of the US Ferrous division for which invoices have been rendered payable
in Dollars or Canadian Dollars (calculated in the US Dollar Equivalent thereof)
and deemed by the DIP Agent in its Permitted Discretion to be eligible for
inclusion in the calculation of the Borrowing Base Amount. In determining the
amount to be so included, the face amount of such Accounts shall be reduced (i)
by the amount of all returns, discounts, claims, credits, charges, chargebacks,
rebates, retainages or other allowances (but without duplication of any of the
foregoing), and (ii) by the aggregate amount of all reserves, limits and
deductions provided for in this definition and the definition of "Borrowing
Base Amount". Unless otherwise approved in writing by the DIP Agent, no
Account shall be deemed to be an Eligible Account Receivable if:
(a) it arises out of a sale made by any of the Credit Parties to an
Affiliate; or
(b) the Account provides for payment after the date which is 90 days
after the date of the original invoice or the Account remains unpaid 60
days after the date on which the original invoice provides that such
payment is due; or
(c) it is from the same account debtor (or any Subsidiary thereof)
and fifty percent (50%) or more, in face amount, of all Accounts from
such account debtor (or any Subsidiary thereof) are ineligible pursuant
to (b) above; or
(d) the Account, when aggregated with all other Accounts of such
account debtor, exceeds five percent (5%) of all Eligible Accounts
Receivable; provided that any Account deemed ineligible pursuant to this
clause (d) shall only be ineligible to the extent of the amount in excess
of 5% of all Eligible Accounts Receivable; or
(e) (i) the account debtor is also a creditor of any of the Credit
Parties (other than account debtors which have provided to the DIP Agent
a "no-offset" letter in form and substance satisfactory to the DIP
Agent), (ii) the account debtor has disputed its liability on, or the
account debtor has made any claim with respect to, such Account or any
other Account due from such account debtor to any of the Credit Parties,
which has not been resolved or (iii) the Account otherwise is subject to
any right of setoff by the account debtor; provided that any Account
deemed ineligible pursuant to this clause (e) shall only be ineligible to
the extent of the amount owed by any of the Credit Parties to the account
debtor, the amount of such dispute or claim, or the amount of such
setoff, as applicable; or
(f) the account debtor has commenced a voluntary case under US or
Canadian insolvency or bankruptcy laws, as now constituted or hereafter
amended, or made an
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assignment for the benefit of creditors, or if a decree or order for
relief has been entered by a court having jurisdiction over the account
debtor in an involuntary case under US or Canadian insolvency or
bankruptcy laws, as now constituted or hereafter amended, or if any other
petition or other application for relief under US or Canadian insolvency
or bankruptcy laws has been filed by or against the account debtor, or if
the account debtor has filed a certificate of dissolution under
applicable state or provincial law or shall be liquidated, dissolved or
wound up, or shall authorize or commence any action or proceeding for
dissolution, winding-up or liquidation, or if the account debtor has
failed, suspended business, declared itself to be insolvent, is generally
not paying its debts as they become due or has consented to or suffered a
receiver, trustee, liquidator or custodian to be appointed for it or for
all or a significant portion of its assets or affairs, unless the payment
of Accounts from such account debtor is secured in a manner satisfactory
to the DIP Agent or, if the Account from such account debtor arises
subsequent to a decree or order for relief with respect to such account
debtor under US or Canadian insolvency or bankruptcy laws, as now or
hereafter in effect, the DIP Agent shall have determined that the timely
payment and collection of such Account will not be impaired; or
(g) the sale is to an account debtor outside of the United States or
Canada, unless the account debtor thereon has supplied any of the Credit
Parties with an irrevocable letter of credit in form and substance
reasonably satisfactory to the DIP Agent, issued by a financial
institution reasonably satisfactory to the DIP Agent and which has been
duly pledged to the DIP Collateral Agents (together with sufficient
documentation to permit direct draws by the DIP Collateral Agents); or
(h) the sale to the account debtor is on a ▇▇▇▇-and-hold, guaranteed
sale, sale-and-return, sale on approval or consignment basis or made
pursuant to any other written agreement providing for repurchase or
return (other than pursuant to ordinary course of business warranties);
or
(i) the DIP Agent determines in its Permitted Discretion that such
Account may not be paid by reason of the account debtor's financial
inability to pay; or
(j) the account debtor is the Canadian government, the government of
any province of Canada or any department, agency, or instrumentality
thereof unless the Liens of the Lenders in such Accounts shall be
effective as against such government, province, department, agency or
instrumentality in accordance with applicable law; or
(k) the Account does not comply with all applicable legal
requirements, including, where applicable, the Federal Consumer Credit
Protection Act, the Federal Truth in Lending Act, Regulation Z of the
Board of Governors of the Federal Reserve System and comparable laws and
regulations in any other applicable jurisdiction, in each case as
amended; or
(l) the Account arises under a bonded contract of any of the Credit
Parties; or
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(m) the DIP Collateral Agents do not have a valid and perfected
first priority security interest in or Lien on such Account or the
Account does not otherwise conform to the representations and warranties
contained in this Agreement or the other DIP Credit Documents, except
that the value of any Account shall be reduced by the amount of any
obligations secured by Permitted Liens which are prior to the Liens in
favor of the DIP Collateral Agents.
"Eligible Transferee" shall mean and include a commercial bank, financial
institution or other institutional "accredited investor" (as defined in
Regulation D of the Securities Act).
"Eligible Unbilled Accounts Receivable" shall mean for a period up to 30
days after the date that the Credit Parties constituting part of the ISG
division and the US Credit Parties constituting part of US Ferrous division
completed the work with respect thereto and carried on the books of the
Borrowers and their Subsidiaries, an account for which an invoice has not been
rendered by the Credit Parties which would otherwise be an Eligible Account
Receivable had an invoice been rendered on the date of such completion;
provided that the aggregate amount of such Eligible Unbilled Accounts
Receivable shall not exceed $20,000,000.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any permit issued, or any approval
given, under any such Environmental Law (hereafter, "Claims"), including,
without limitation, (a) any and all Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and (b) any
and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment
due to the presence of Hazardous Materials.
"Environmental Law" means any applicable federal, state, provincial,
foreign or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy or rule of common
law now or hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, to the extent binding on the Borrowers or
any of their Subsidiaries, relating to the environment, employee health and
safety or Hazardous Materials, including, without limitation, CERCLA; RCRA; the
Federal Water Pollution Control Act, 33 USC. Section 1251 et seq.; the Toxic
Substances Control Act, 15 USC. Section 2601 et seq.; the Clean Air Act, 42
USC. Section 7401 et seq.; the Safe Drinking Water Act, 42 USC. Section 3803
et seq.; the Oil Pollution Act of 1990, 33 USC. Section 2701 et seq.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 USC. Section
11001 et seq.; the Hazardous Material Transportation Act, 49 USC. Section
1801 et seq.; and the Occupational Safety and Health Act, 29 USC. Section 651
et seq. (to the extent it regulates occupational exposure to Hazardous
Materials); any state and local or foreign counterparts or equivalents, in each
case as amended from time to time; and any similar statute, law, rule,
regulation, ordinance, code, binding and enforceable guideline, binding and
enforceable written policy or rule of common law now or hereafter in effect in
Canada and in each case as amended, or any judicial or administrative
interpretation thereof, including any
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judicial or administrative order, consent decree or judgment to the extent
binding on the Borrower.
"Equipment" shall mean any "equipment," as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Assignors and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, and movable
trade fixtures now or hereafter owned by the Assignors and any and all
additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement, and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with any Borrower or a Subsidiary of such Borrower would
be deemed to be a "single employer" (i) within the meaning of Section 414(b),
(c), (m) or (o) of the Code or (ii) as a result of any Borrower or a
Subsidiary of such Borrower being or having been a general partner of such
person.
"Eurodollar Loan" shall mean any Loan designated as such by the applicable
Borrower at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to first-class
banks in the New York interbank Eurodollar market by the DIP Agent for Dollar
deposits of amounts in immediately available funds comparable to the
outstanding principal amount of the Eurodollar Loan of the DIP Agent with
maturities comparable to the Interest Period applicable to such Eurodollar Loan
commencing two Business Days thereafter as of 10:00 A.M. (New York time) on the
date which is two Business Days prior to the commencement of such Interest
Period, divided (and rounded off to the nearest 1/16 of 1%) by (b) a percentage
equal to 100% minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves required by applicable law) applicable to any member bank of
the Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Event of Default" shall have the meaning provided in Section 9.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Existing Indebtedness" shall have the meaning provided in Section 8.04.
"Expenses" shall mean all present and future invoiced expenses incurred by
or on behalf of the DIP Agent and the DIP Collateral Agents in connection with
this Agreement, any
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other DIP Credit Document or otherwise in their capacity as the DIP Agent and
the DIP Collateral Agents under this Agreement, whether incurred heretofore or
hereafter, which expenses shall include, without being limited to, the cost of
record searches, the reasonable fees and expenses of attorneys and paralegals,
all costs and expenses incurred by the DIP Agent and the DIP Collateral Agents
in opening bank accounts, depositing checks, electronically or otherwise
receiving and transferring funds, and any charges imposed on the DIP Agent and
the DIP Collateral Agents due to insufficient funds of deposited checks and the
standard fee of the DIP Agent and the DIP Collateral Agents relating thereto,
collateral examination fees and expenses, reasonable fees and expenses of
accountants, appraisers or other consultants, experts or advisors employed or
retained by the DIP Agent and the DIP Collateral Agents, out of pocket
syndication fees and expenses, fees and taxes relative to the filing of
financing statements, costs of preparing and recording any other Collateral
Documents, all expenses, costs and fees set forth in Section 3 of this
Agreement, all other fees and expenses required to be paid pursuant to the Fee
Letter and all fees and expenses incurred in connection with releasing
Collateral and the amendment or termination of any of the DIP Credit Documents.
"Expiry Date" shall mean November 30, 1999.
"Facility Lien" shall have the meaning provided in Section 6.05(b).
"Facing Fee" shall have the meaning provided in Section 3.01(b).
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Payments Administrator from three Federal Funds
brokers of recognized standing selected by the Payments Administrator.
"Fee Letter" shall mean that certain letter dated as of April 15, 1999
among BTCo and the Borrowers providing for the payment of fees in connection
with this Agreement.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"First Day Orders" shall mean all orders entered by the Bankruptcy Courts
on or around the Petition Date.
"Foothill" shall mean Foothill Capital Corporation.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrowers or any one or
more of their Subsidiaries primarily for the benefit of employees of the
Borrowers or such Subsidiaries residing outside the United States of America,
which plan, fund or other similar program provides, or results in, retirement
income, a
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deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"GAAP" shall have the meaning provided in Section 12.07(a).
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York and
shall in any event include all of Assignor's claims, rights, powers,
privileges, authority, options, security interests, liens and remedies under
any partnership agreement to which the Assignor is a party or with respect to
any partnership of which the Assignor is a partner.
"Goods" shall have the meaning provided in Uniform Commercial Code as in
effect on the date hereof in the State of New York.
"Governmental Authority" shall mean any government, parliament,
legislature, regulatory authority, agency, commission, tribunal, department,
commission, board, instrumentality, court, arbitration board or arbitrator or
other law, regulation or rule making entity (including a Minister of the Crown)
having or purporting to have jurisdiction on behalf of, or pursuant to the laws
of, any country in which any Credit Party is incorporated, continued,
amalgamated, merged or otherwise created or established or in which any Credit
Party carries on business or holds property, or any province, territory, state,
municipality, district or political subdivision of any such country or of any
such state, province or territory of such country.
"Guaranteed Obligations" shall mean the Borrowers' Obligations.
"Guaranty" shall mean the guaranty issued pursuant to Section 14 hereof.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," "dangerous goods," or
"pollutants," or words of similar import, under any applicable Environmental
Law; and (c) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority under
Environmental Laws.
"Indebtedness" shall mean, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the maximum amount available to be drawn under all letters of credit
issued for the account of such Person and all unpaid drawings in respect of
such letters of credit, (iii) all liabilities of the types described in clauses
(i), (ii), (iv), (v), (vi) and (vii) secured by any Lien on any property owned
by such Person (to the extent of the value of the respective property), whether
or not such liabilities have been assumed by such Person, (iv) the aggregate
amount required to be capitalized under leases under which such
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Person is the lessee, (v) all Contingent Obligations of such Person, (vi) all
obligations of such Person to pay a specified purchase price for goods or
services, whether or not delivered or accepted, i.e., "take-or-pay" or other
similar arrangements and (vii) all obligations of such Person under interest
rate and currency protection or other similar agreements, provided that
Indebtedness shall not include Trade Payables and accrued expenses, in each
case arising in the ordinary course of business.
"Instrument" shall have the meaning provided in Article 9 of the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Interest Determination Date" shall mean, with respect to any Eurodollar
Loan, the second Business Day prior to the commencement of any Interest Period
relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.08.
"Inventory" shall mean all inventory owned by the Borrowers, including
without limitation, merchandise, inventory and goods, and all additions,
substitutions and replacements thereof, wherever located, together with all
goods, supplies, incidentals, packaging materials, labels, materials and any
other items used or usable in manufacturing, processing, packaging or shipping
same; in all stages of production -- from raw materials through work-in-process
to finished goods -- and all products and proceeds of whatever sort and
wherever located and any portion thereof which may be returned, rejected,
reclaimed or repossessed by the DIP Collateral Agents from any Assignor's
customers, and shall specifically include all "inventory" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor.
"ISG Concentration Account" shall mean the concentration account number
▇▇▇▇▇▇▇▇ established at BTCo for the ISG division.
"ISG division" shall have the meaning provided in the definition of
Borrowing Base Amount.
"Issuing Lender" shall mean BTCo and any Lender which at the request of
the Borrowers and with the consent of the DIP Agent agrees, in such Lender's
sole discretion, to become an Issuing Lender for the purpose of issuing Letters
of Credit pursuant to Section 2. The sole Issuing Lender on the Petition Date
is BTCo.
"LC Sublimit" shall have the meaning provided in Section 2.01(c).
"LC Liens" shall mean the liens of the Pre-Petition LC Issuers and the
Pre-Petition LC Lenders under the Pre-Petition Credit Agreement in specified
cash collateral held under Section 5.06 of the Pre-Petition Credit Agreement
and the holders of the liens in specified cash collateral granted in connection
with the Permitted LC Facility in the Pre-Petition Credit Agreement.
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"L/C Supportable Obligations" shall have the meaning provided in Section
6.09(c).
"Lender" shall mean each financial institution listed on Schedule I, as
well as any Person which becomes a "Lender" hereunder pursuant to Sections 1.12
and 12.04(b).
"Lender Default" shall mean (i) the refusal (which has not been retracted)
of a Lender to make available its portion of any Borrowing or to fund its
portion of any unreimbursed payment under Section 2.03(c) or (ii) a Lender
having notified in writing the Borrowers and/or the DIP Agent that it does not
intend to comply with its obligations under Sections 1.01 or 2.03 or having
otherwise repudiated its Commitment.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i)
the aggregate of the Stated Amount of each outstanding Letter of Credit in
respect of which the Termination Date has not occurred and (ii) the aggregate
amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.02(a).
"Licensed Marks" shall mean all marks which each Assignor has been granted
a right to use by contract or license from another party, excluding such rights
which will be subject to involuntary forfeiture pursuant to the terms of any
license or other agreement granting the right or applicable law, if a security
interest were granted therein.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
applicable personal property security legislation in any jurisdiction or any
other similar recording or notice statute, and any lease having substantially
the same effect as any of the foregoing).
"Loan Accounts" shall mean the US Loan Account and the Canadian Loan
Account.
"Lock-Box Agreement" shall have the meaning provided in Section 6.20 of
this Agreement.
"Lock-Up Agreement" shall mean the agreement dated June 21, 1999 agreed to
by the Canadian Borrower on behalf of itself and each of its Affiliates
pursuant to which certain of the Pre-Petition Lenders have agreed, inter alia,
to vote in favor of a plan of reorganization reflecting the terms of the
Restructuring Term Sheet.
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"Margin Stock" shall have the meaning provided in Regulation U of the
Board of Governors of the Federal Reserve System.
"Marks" shall mean any trademarks and service marks now held or hereafter
acquired by the Assignors, which are registered in the United States Patents
and Trademark Office or in any similar office or agency of the United States or
Canada or any state or province thereof or any political subdivision thereof
and any application for such trademarks and service marks, as well as any
unregistered marks used by the Assignors in the United States or Canada and
trade dress including logos, designs, trade names, company names, business
names, fictitious business names and other business identifiers in connection
with which any of these registered or unregistered marks are used in the United
States or Canada.
"Material Adverse Effect" shall mean a material adverse change in the
business, properties, assets, liabilities, condition (financial or otherwise)
or prospects of either Borrower or of the Borrowers and their Subsidiaries
taken as a whole (other than such effects that result solely from the
commencement of the Cases, including litigation, if any, with creditors or
interest holders who object to the plan of reorganization and other than as set
forth on Schedule X (to the extent and in the manner so disclosed)) from that
set forth in their financial statements dated as of March 31, 1999; provided
that any loss of earnings disclosed to the Lenders prior to the Effective Date
shall not be considered a Material Adverse Effect.
"Maturity Date" shall mean the earlier of (x) the Consummation Date and
(y) the Expiry Date.
"Metals Concentration Account" shall mean the concentration account number
▇▇▇▇▇▇▇▇ established at BTCo for the Metals division.
"Minimum Borrowing Amount" shall mean $5,000,000 for Eurodollar Loans.
"Net Sale Proceeds" shall mean for any sale, lease, transfer or other
disposition of assets of the Borrowers or any of their Subsidiaries, the gross
cash proceeds (including any cash received by way of deferred payment pursuant
to a promissory note, receivable or otherwise, but only as and when received)
received by the Borrowers or any of their Subsidiaries from such sale, lease,
transfer or other disposition, net of transaction costs (including, without
limitation, any underwriting, brokerage or other customary selling commissions,
taxes payable within one year of the disposition and reasonable legal, advisory
and other fees and expenses, including title and recording expenses and
reasonable expenses incurred for preparing such assets for sale, associated
therewith), the amount of such gross cash proceeds required to be used to repay
any Indebtedness (other than Indebtedness of the Lenders pursuant to this
Agreement) which is senior to the Indebtedness of the Lenders pursuant to this
Agreement and secured by the respective assets which were sold and, unless and
until the Bank Account Service Providers release their security interests in
such proceeds, the amount of such cash proceeds constituting proceeds of
Canadian accounts receivable received by the Borrowers or such Subsidiary with
respect to such asset sale.
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"Non-Defaulting Lender" shall mean and include each Lender other than a
Defaulting Lender.
"North American Subsidiaries" shall have the meaning provided in Section
6.10 of this Agreement.
"Notice of Borrowing" shall have the meaning provided in Section 1.02(a).
"Notice of Conversion" shall have the meaning provided in Section 1.05.
"Notice Office" shall mean the office of the DIP Agent or Payments
Administrator, as applicable, shown opposite its name on the signature pages
hereof, or such other office as the DIP Agent or Payments Administrator, as
applicable, may hereafter designate in writing as such to the other parties
hereto.
"Obligations" shall mean all amounts owing to the DIP Agent, the DIP
Collateral Agents, any Issuing Lender or any Lender pursuant to the terms of
this Agreement, any other DIP Credit Document or the Orders, including, without
limitation, (i) (x) with respect to the Borrowers, the Borrowers' Obligations,
and (y) with respect to each Assignor which is a Subsidiary Guarantor, all
obligations and indebtedness of such Subsidiary Guarantor, now existing or
hereinafter incurred under, arising out of or in connection with the Guaranty
and the other DIP Credit Documents and the due performance and compliance with
the terms of this Agreement and the other DIP Credit Documents by such
Subsidiary Guarantor, (ii) any and all sums advanced by the DIP Collateral
Agents in order to preserve the Collateral or preserve their security interest
in the Collateral, and (iii) in the event of any proceeding for the collection
or enforcement of any indebtedness, obligations, or liabilities of any Assignor
referred to in clause (i), after an Event of Default shall have occurred and be
continuing, the reasonable expenses of re-taking, holding, preparing for sale
or lease, selling or otherwise disposing of or realizing on the Collateral, or
of any exercise by the DIP Collateral Agents of their rights hereunder,
together with reasonable attorneys' fees and court costs.
"Orders" shall mean and include the Canadian Approvals and the US Orders.
"Other Account Intermediary Liens" means liens on specified cash
collateral which was also addressed in documentation entered into in connection
with the establishment of operating accounts of certain of the Canadian Credit
Parties at CIBC and the maintenance of operating accounts of certain of the US
Credit Parties at Comerica Bank and in other documentation entered into in
connection with the establishment of the Permitted LC Facility under Amending
Agreement No. 3 to the Pre-Petition Credit Agreement (the "Permitted LC
Facility" and such cash collateral, the "Permitted Cash Collateral").
"Other Asset Sale Proceeds" shall mean the Aluminum Proceeds, the Net Sale
Proceeds of other Pre-Petition asset sales consummated with the consent of the
Pre-Petition Lenders, and the Net Sale Proceeds of Permitted Asset Sales other
than the Net Sale Proceeds of the sale of the interest of the Canadian Borrower
in PUMC.
"Participant" shall have the meaning provided in Section 2.03(a).
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"Patents" shall mean any United States or Canadian patent now or hereafter
owned by the Assignors, as well as any application for a United States or
Canadian patent now or hereafter owned by the Assignors.
"Payment Office" shall mean the office of the Payments Administrator
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ or such other office as the
Payments Administrator may designate to the Borrowers from time to time.
"Payments Administrator" shall mean BTCo provided, however, that if BTCo
shall cease to be the DIP Agent hereunder, the Lenders shall have the option to
appoint one of the remaining Lenders as the Payments Administrator by written
notice to the Borrowers.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA or any successor thereto.
"Permitted Asset Sales" shall mean (i) no more than $10,000,000 of asset
sales during the Cases, and (ii) any other asset sales consummated during the
Cases with the consent of the Required Lenders.
"Permitted Cash" shall mean (i) the cash and Cash Equivalents held in bank
accounts or otherwise by Phencorp not to exceed $15,000,000 and (ii) the cash
and Cash Equivalents held in bank accounts or otherwise by Barbados not to
exceed $10,000,000, except for cash and Cash Equivalents held as security by
other parties for the benefit of Barbados.
"Permitted Cash Collateral" shall have the meaning provided in the
definition of Other Account Intermediary Liens.
"Permitted Discretion" shall mean, with respect to the DIP Agent, the DIP
Agent's judgment exercised in good faith based upon its consideration of any
factor which the DIP Agent believes in good faith: (i) will or could adversely
affect the value of any Collateral, the enforceability or priority of the DIP
Collateral Agents' Liens thereon or the amount which the DIP Agent and the
Lenders would be likely to receive (after giving consideration to delays in
payment and costs of enforcement) in the liquidation of such Collateral; (ii)
suggests that any collateral report or financial information delivered to the
DIP Agent by any Person on behalf of the Borrowers or any Subsidiary of the
Borrowers is incomplete, inaccurate or misleading in any material respect; or
(iii) creates or reasonably could be expected to create a Default or Event of
Default. In exercising such judgment, the DIP Agent may consider such factors
already included in or tested by the definition of Eligible Accounts
Receivable, as well as any of the following: (i) the financial and business
climate of the Borrowers' industry; (ii) changes in collection history and
dilution with respect to the Accounts; (iii) significant changes in any
concentration of risk with respect to Accounts; and (iv) any other factors that
significantly increase the credit risk of lending to the Borrowers on the
security of, inter alia, the Accounts. The DIP Agent shall disclose to the
Borrowers the basis on which its Permitted Discretion is exercised; however,
the burden of establishing lack of good faith hereunder shall be on the
Borrowers.
"Permitted Existing Liens" shall have the meaning provided in Section
8.01(i).
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"Permitted LC Facility" shall have the meaning provided in the definition
of Other Account Intermediary Liens.
"Permitted Liens" shall have the meaning provided in Section 8.01.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Petition Date" shall have the meaning provided in the first whereas
clause of this Agreement.
"Phencorp" shall mean Phencorp International Finance Inc.
"Plan" shall mean any pension plan, as defined in Section 3(2) of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
contribute of), the Borrowers or a Subsidiary of the Borrowers or an ERISA
Affiliate, and each such plan for the five year period immediately following
the latest date on which the Borrowers, a Subsidiary of the Borrowers or an
ERISA Affiliate maintained, contributed or had an obligation to contribute to
such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.01(f).
"Pledged Securities" shall mean "Pledged Securities" as defined in the
Pledge Agreement.
"Post-Petition Proceeds Account" shall have the meaning provided in
Exhibit J.
"Pre-Arranged Plan" shall mean the pre-arranged plan of reorganization or
arrangement under Chapter 11 of the US Bankruptcy Code and the CCAA
contemplated in the Lock-up Agreement and the Restructuring Term Sheet.
"Pre-Arranged Plan Adverse Development" shall mean and include (i) failure
to obtain the confirmation of the Pre-Arranged Plan by October 31, 1999 or,
(ii) failure to consummate such plan by November 30, 1999.
"Pre-Petition" shall mean the period prior to the Petition Date.
"Pre-Petition Agents" shall mean CIBC, as administrative agent, BTCo, as
syndication agent, the Security Agent, and Dresdner Bank Canada and Dresdner
Bank AG New York Branch, as documentation agent under the Pre-Petition Credit
Agreement, their Eligible Affiliates (as defined in the Pre-Petition Credit
Agreement) and their successors and assigns from time to time.
"Pre-Petition Collateral" shall mean all of the existing and
after-acquired assets of the Borrowers and the Subsidiary Guarantors
constituting collateral securing obligations to the Pre-Petition Agents and the
Pre-Petition Lenders under the Pre-Petition Credit Agreement.
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"Pre-Petition Credit Agreement" shall mean the Credit Agreement, dated as
of August 11, 1997, among the Canadian Borrower, as a borrower in Canada, the
US Borrower (f/k/a ▇▇▇▇▇▇ Environmental (Delaware) Inc.), as a borrower in the
United States of America, CIBC, as administrative agent, BTCo, as syndication
agent, CIBC and BTCo, as co-arrangers and the various Persons from time to time
parties to the Pre-Petition Credit Agreement as lenders, and all schedules.
"Pre-Petition Credit Agreement Obligations" shall mean all present and
future indebtedness, liabilities and obligations of any kind, nature or
description whatsoever (whether direct or indirect, joint or several, absolute
or contingent, matured or unmatured and whether as principal debtor, guarantor,
surety or otherwise and for greater certainty, of the Canadian Borrower and all
of its Subsidiaries to each of the Security Agent, the administrative agent
under the Pre-Petition Credit Agreement, the Pre-Petition Lenders, the other
agents under the Pre-Petition Credit Agreement and their respective Eligible
Affiliates under, in connection with or with respect to each of the
Pre-Petition Credit Agreement and the Credit Documents (as such term is defined
therein) and Lender/Borrower Hedging Arrangement (as such term is defined
therein), and any unpaid balance thereof.
"Pre-Petition LC Issuers" shall mean the entities identified as LC Issuers
in the Pre-Petition Credit Agreement in such capacities (as the Pre-Petition
Credit Agreement is in effect on the Effective Date).
"Pre-Petition LC Lenders" shall mean the entities identified as LC Lenders
in the Pre-Petition Credit Agreement in such capacities (as the Pre-Petition
Credit Agreement is in effect on the Effective Date).
"Pre-Petition Lenders" shall mean the lenders party to the Pre-Petition
Credit Agreement.
"Pre-Petition Senior Liens" shall mean the pre-existing validly perfected
and unavoidable liens and security interests that were senior to the
Pre-Petition Lenders' liens and security interests as of the Petition Date.
"Prime Lending Rate" shall mean the per annum rate of interest which the
DIP Agent announces from time to time as its prime lending rate, the Prime
Lending Rate to change when and as such prime lending rate changes. The Prime
Lending Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer. The DIP Agent may make
commercial loans or other loans at rates of interest at, above or below the
Prime Lending Rate.
"Proceeds" shall have the meaning provided in the Uniform Commercial Code
as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the DIP Collateral Agents or the Borrowers from time to time with respect to
any of the Collateral, (ii) any and all payments (in any form whatsoever) made
or due and payable to the Borrowers from time to time in connection with any
requisition, confisca-
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tion, condemnation, seizure or forfeiture of all or any part of the Collateral
by any governmental authority (or any person acting under color of governmental
authority) and (iii) any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral.
"Proceeds Account" shall mean the account established pursuant to the
Proceeds Agreement into which Other Asset Sale Proceeds were deposited prior to
the Petition Date.
"Proceeds Agreement" shall mean the "Proceeds Agreement" dated April 5,
1999 made by and among the Borrowers, the Subsidiary Guarantors and the
Pre-Petition Lenders.
"Project Account" shall mean any bank account, approved by the DIP Agent,
that is maintained by any Borrower or any of its Subsidiaries for the sole
purpose of collecting and disbursing funds received from a customer of such
Borrower or such Subsidiary to the extent necessary and for the sole purpose of
facilitating the completion by such Borrower or such Subsidiary of a specific
project contracted for by such customer so long as the amounts therein are
appropriately related to the subject project.
"Proportionate Share" shall mean (subject to the provisions of Section
1.03(e)), with respect to any Lender, a fraction (expressed as a percentage),
the numerator of which shall be the amount of such Lender's Commitment and the
denominator of which shall be the Total Commitments or, if the Commitments are
terminated, a fraction the numerator of which shall be the amount of such
Lender's Revolving Loans and the denominator of which shall be the aggregate
amount of then outstanding Revolving Loans of all the Lenders.
"PUMC" shall mean the ▇▇▇▇▇▇ Utilities Management Corporation.
"RCRA" shall mean the Resource Conservation and Recovery Act, as same may
be amended from time to time 42 USC. Section 6901 et seq.
"Real Property" shall mean all of the right, title and interest of any
Person in and to land, improvements and fixtures, including leaseholds.
"Real Property Collateral" shall mean all of the Borrowers' right, title
and interest in and to:
(i) all ownership or leasehold interests in any land owned or leased
by the Borrowers or their Subsidiaries (the "Land") and in the buildings
and improvements now or hereafter erected on the Land (collectively, the
"Improvements") and all personal property, including, but not limited to,
that portion of the personal property that constitutes fixtures,
attachments, appliances, equipment, machinery and other tangible personal
property now or hereafter attached to said Improvements or now or at any
time hereafter located on the Land and/or Improvements and necessary for
the continued operation of the Land and/or Improvements;
(ii) all appurtenant rights and easements, rights of way, and other
rights used in connection with the Land and/or the Improvements;
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(iii) all leasehold estates, and any or other agreements relating to
the use and occupancy of the Land and/or the Improvements or any portion
thereof;
(iv) all rents, issues and profits of the Land and/or Improvements;
(v) all the right, title, other claim or demand, including claims or
demands with respect to the proceeds of insurance in effect with respect
thereto, which the Borrowers or their Subsidiaries now has or may
hereafter acquire in the Land and/or Improvements, and any and all awards
made for the taking by eminent domain, or by any proceedings or purchase
in lieu thereof, of the whole or any part of the Land and/or
Improvements;
(vi) if relating to a leasehold interest in the Land and/or
Improvements, all right, title and interest of the Borrowers or their
Subsidiaries in and to all modifications, extensions and renewals of the
lease evidencing such leasehold estate and to all rights to renew or
extend the term of such lease and all credits, deposits, options,
privileges and rights of the Borrowers or their Subsidiaries as lessees
thereunder, and any modifications, extensions and renewals thereof; and
(vii) all general intangibles, contract rights and accounts
receivable arising from any of the foregoing, any and all replacements
and renewals of or additions and substitutions to any of the foregoing
and all proceeds of any of the foregoing.
"Receivables" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York (including each Account), now or hereafter owned by a Credit Party and, in
any event, shall include, but shall not be limited to, all of any Credit
Party's rights to payment for goods sold or leased or services performed by any
Credit Party, whether now in existence or arising from time to time hereafter,
including, without limitation, rights evidenced by an account, note, contract,
security agreement, chattel paper or other evidence of indebtedness or
security, together with (i) all security pledged, assigned, hypothecated or
granted to or held by any Credit Party to secure the foregoing, (ii) all of the
Credit Parties' rights, title and interest in and to any goods, the sale of
which gave rise thereto, (iii) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (iv) all powers of attorney
for the execution of any evidence of indebtedness or security or other writing
in connection therewith, (v) all books, records, ledger cards, and invoices
relating thereto, (vi) all evidences of the filing of financing statements and
other statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured
parties, and certificates from filing or other registration officers, (vii) all
credit information, reports and memoranda relating thereto and (viii) all other
writings related in any way to the foregoing.
"Register" shall have the meaning provided in Section 12.14.
"Registered Marks" shall mean all trademarks and service marks for which
the Borrowers own federal registrations issued by the United States Patent and
Trademark Office, the Canadian Intellectual Property Office - Patents Branch
and the Canadian Intellectual Property Office - Trademarks Branch .
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"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.
"Reorganization Plan" shall mean any plan of reorganization or arrangement
(including the Pre-Arranged Plan) in the Cases.
"Replaced Lender" shall have the meaning provided in Section 1.12.
"Replacement Lender" shall have the meaning provided in Section 1.12.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27, or .28 of PBGC Regulation Section 4043.
"Required Lenders" at any time shall mean Non-Defaulting Lenders whose
Commitments represent an amount greater than 50% of the Adjusted Total
Commitment (or, if the Adjusted Total Commitment has been terminated, of the
Adjusted Total Commitment as in effect immediately prior to such termination).
"Responsible Officer" shall mean any of the Chairman of the Board of
Directors, Vice Chairman of the Board of Directors, President, Executive Vice
President, Vice President/Corporate Accounting, Vice President/Treasurer or
Chief Financial Officer of the relevant Credit Party.
"Restructuring Term Sheet" shall mean the term sheet dated June 21, 1999
in the form of Exhibit N agreed to by the Canadian Borrower on behalf of itself
and each of its Affiliates, which sets forth the principal terms and conditions
for the restructuring of the Borrowers and their Affiliates under the
Pre-Arranged Plan.
"Returns" shall have the meaning provided in Section 6.10.
"Revolving Loan" shall have the meaning provided in Section 1.01.
"Revolving Note" shall have the meaning provided in Section 1.04(a).
"RMF Accounts" shall mean the lockboxes number 200846/200055/201561 and
the deposit account number 00103167442 held by RMF Global Management, a
subsidiary of the US Borrower at Chase Bank of Texas.
"SEC" shall have the meaning provided in Section 7.01(d).
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"Section 4.06(b)(ii) Certificate" shall have the meaning provided in
Section 4.06(b)(ii).
"Securities Act" shall mean the Securities Act of 1933, as amended, as in
effect from time to time.
"Security Agent" shall mean the security agent under the Security Agency
Agreement dated as of March 16, 1998 among the Borrowers, CIBC as security
agent, and CIBC as administrative agent.
"Senior Liens" shall mean the Pre-Petition Senior Liens, the LC Liens, the
Account Intermediary Receivable Liens and the Other Account Intermediary Liens.
"Settlement Date" shall have the meaning given to such term in Section
1.03(b)(i).
"Specified Lender" shall have the meaning provided in Section 4.06(b).
"Standby Letters of Credit" shall have the meaning provided in Section
2.01(a) of this Agreement.
"Stated Amount" of each Letter of Credit shall mean the maximum amount
available to be drawn thereunder, determined without regard to whether any
conditions to drawing could then be met, as such amount may be reduced from
time to time in accordance with the terms of such Letter of Credit; provided
that the "Stated Amount" of each Letter of Credit denominated in a currency
other than Dollars shall be, on any date of calculation, the US Dollar
Equivalent of the maximum amount available to be drawn in the respective
currency thereunder (determined without regard to whether any conditions to
drawing could then be met).
"Subsidiary" shall mean, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Subsidiary Guarantors" shall mean all Canadian Subsidiary Guarantors and
all US Subsidiary Guarantors as debtors-in-possession in the Cases, provided,
however that the Subsidiaries of the Borrowers incorporated in Canada or in any
province or territory thereof shall not be Subsidiary Guarantors prior to the
date that the Canadian Approvals have been obtained.
"Taxes" shall have the meaning provided in Section 4.06.
"Termination Date" shall mean with respect to each Letter of Credit (x) if
no drawing is made thereunder, the final expiration date thereof or such
earlier date on which such Letter of Credit was cancelled and returned to the
respective Issuing Lender or (y) if a drawing or
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drawings are made thereunder, the date of payment of the final drawing
thereunder as provided by the terms thereof.
"Total Commitment" shall mean, at any time, the sum of the Commitments of
each of the Lenders (which on the Effective Date shall be $100,000,000).
"Total Refractory Accounts" shall mean lockbox number 200500 and the
deposit account number 00101836618 maintained by Total Refractory, a Subsidiary
of the US Borrower at Chase Bank of Texas.
"Trade Letters of Credit" shall have the meaning provided in Section
2.01(a) of this Agreement.
"Trade Payables" shall mean, as of any date of determination, the accounts
payable of the Borrowers determined in accordance with generally accepted
accounting principles in favor of trade vendors.
"Type" shall mean any type of Revolving Loan determined with respect to
the interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar
Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if any, by
which the value of the accumulated plan benefits under the Plan determined on
a plan termination basis in accordance with actuarial assumptions at such time
consistent with those prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds the fair market value of all plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions).
"Union Amounts" shall mean the amounts retained in the Total Refractory
Accounts and the RMF Global Management Accounts to the extent necessary for
Total Refractory and RMF Global Management, Subsidiaries of the US Borrower, to
comply with their payroll and related obligations.
"United States" and "US" shall each mean the United States of America.
"Unpaid Drawings" shall have the meaning provided in Section 2.04(a).
"Unutilized Commitment" shall mean for each Lender, at any time, the
amount, if positive, equal to (x) such Lender's Commitment at such time less
(y) the sum of (i) the aggregate outstanding principal amount of all Revolving
Loans made by such Lender and (ii) such Lender's Proportionate Share of the
Letter of Credit Outstandings at such time that have not been converted to
Revolving Loans.
"US Bankruptcy Code" shall mean title 11 of the United States Code
entitled "Bankruptcy", as in effect from time to time.
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"US Bankruptcy Court" shall mean the United States Bankruptcy Court for
the District of Delaware or such other court having jurisdiction over the US
Cases from time to time.
"US Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"US Cases" shall mean the Chapter 11 cases of the Borrowers and the US
Subsidiary Guarantors pending in the US Bankruptcy Court.
"US Collection Accounts" shall mean the existing lock box and deposit
accounts established by the US Credit Parties in the United States for the
collection of payments made in respect of Accounts of the US Credit Parties,
and all such present and future accounts to be opened by the US Borrower or its
Domestic Subsidiaries with the consent of the DIP Agent, other than the Project
Accounts, including without limitation, the Chase Concentration Account.
"US Credit Parties" shall have the meaning provided in the first whereas
clause to this Agreement.
"US DIP Collateral Agent" shall mean BTCo acting as collateral agent for
the collateral located in the United States pursuant to this Agreement and the
Collateral Documents.
"US Dollar Equivalent" of an amount denominated in Canadian Dollars shall
mean, at any time for the determination thereof, the amount of Dollars
necessary to purchase Canadian Dollars at the spot exchange rate quoted by the
DIP Agent as of 12:00 noon (New York time) on the date two Business Days prior
to the date of determination thereof for purchase on such date; provided (i)
that the US Dollar Equivalent of any Unpaid Drawing in a currency other than
Dollars shall be determined at the time the drawing under the related Letter of
Credit was paid or disbursed by the Issuing Lender, and (ii) for purposes of
calculating fees pursuant to Section 3.01(a) and (b), the US Dollar Equivalent
shall be revalued on a monthly basis using the spot rate quoted in the Wall
Street Journal on the first Business Day of each month.
"US Final Order" shall mean an order of the US Bankruptcy Court in
substantially the form of Exhibit G-2, as determined by the DIP Agent, or as
otherwise acceptable to the Required Lenders.
"US Interim Order" shall mean an order of the US Bankruptcy Court in the
form of Exhibit G-1.
"US Loan Account" shall have the meaning provided in Section 4.04.
"US Orders" shall mean and include the US Interim Order and the US Final
Order.
"US Pre-Petition Collateral" shall mean all of the existing and
after-acquired assets of the Borrowers and the Subsidiary Guarantors located in
the US constituting collateral securing obligations to the Pre-Petition Lenders
and the Pre-Petition Agents under the Pre-Petition Credit Agreement.
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"US Subsidiary Guarantors" shall mean those direct and indirect
subsidiaries of the Borrowers organized in the United States or any state
thereof that are signatories hereto or have executed a joinder hereto.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than directors' qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
"written" or "in writing" shall mean any form of written communication or
a communication by means of telex, telecopier or facsimile device, telegraph or
cable.
"Year 2000 Problem" shall mean any significant risk that computer hardware
or software used in the Borrowers' or their respective Subsidiaries business or
operations will not store and provide data input information without creating
an ambiguity as to the century.
10.02 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Revolving Notes, any other DIP Credit Document or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in the Revolving Notes, any other DIP Credit
Document and any certificate or other document made or delivered pursuant
hereto, accounting terms relating to the Borrowers and their Subsidiaries not
defined in subsection 10.01 and accounting terms partly defined in subsection
10.01 to the extent not defined, shall have the respective meanings given to
them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, subsection,
schedule and exhibit references are to this Agreement unless otherwise
specified.
Section 11. The DIP Agents.
11.01 Appointment. (a) Each Lender hereby designates (i) BTCo as DIP
Agent (for purposes of this Section 11, the term "DIP Agent" shall include BTCo
as Payments Administrator, and as US DIP Collateral Agent) and (ii) CIBC as
Canadian DIP Collateral Agent under the Collateral Documents to act as herein
specified. Each Lender hereby irrevocably authorizes, and each holder of any
Revolving Note or participation in any Letter of Credit by the acceptance of a
Revolving Note or participation shall be deemed irrevocably to authorize, the
DIP Agent and the DIP Collateral Agents to take such action on its behalf under
the provisions of this Agreement and the Revolving Notes and any other
instruments and agreements referred to herein and to exercise such powers and
to perform such duties hereunder and thereunder as are specifically delegated
to or required of the DIP Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto. The DIP Collateral Agents shall
hold all
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Collateral and the Payments Administrator shall hold all payments of principal,
interest, Fees, charges and other Expenses received pursuant to this Agreement
or any other DIP Credit Document for the benefit of the Lenders to be
distributed as provided herein. The DIP Agent and the DIP Collateral Agents
may perform any of their duties hereunder by or through its agents or
employees.
(b) The provisions of this Section 11 are solely for the benefit of the
DIP Agent, the DIP Collateral Agent and the Lenders, and neither Borrower nor
any of the Borrowers' Subsidiaries shall have any rights as a third party
beneficiary of any of the provisions hereof (other than Sections 11.09 and
11.10(c)). In performing its functions and duties under this Agreement, the
DIP Agent and the DIP Collateral Agent shall act solely as agents of the
Lenders and do not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for the Borrowers
or any of the Borrowers' Subsidiaries.
11.02 Nature of Duties of DIP Agents. Neither the DIP Agent nor the DIP
Collateral Agents shall have duties or responsibilities except those expressly
set forth in this Agreement and the other DIP Credit Documents. Neither the
DIP Agent, the DIP Collateral Agents, nor any of their officers, directors,
employees or agents shall be liable for any action taken or omitted by it as
such hereunder or in connection herewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the DIP Agent and the DIP
Collateral Agents shall be mechanical and administrative in nature; neither the
DIP Agent nor the DIP Collateral Agents shall have by reason of this Agreement
or the other DIP Credit Documents a fiduciary relationship in respect of any
Lender; and nothing in this Agreement or the other DIP Credit Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
the DIP Agent or the DIP Collateral Agents any obligations in respect of this
Agreement or the other DIP Credit Documents except as expressly set forth
herein or therein.
11.03 Lack of Reliance on DIP Agent. (a) Independently and without
reliance upon the DIP Agent, each Lender, to the extent it deems appropriate,
has made and shall continue to make (i) its own independent investigation of
the financial or other condition and affairs of the Borrowers and their
Subsidiaries in connection with the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrowers and their Subsidiaries, and, except as expressly provided in this
Agreement, the DIP Agent and the DIP Collateral Agents shall not have any duty
or responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before the making of the Revolving Loans or at any
time or times thereafter.
(b) The DIP Agent and the DIP Collateral Agents shall not be responsible
to any Lender for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, priority or sufficiency of this Agreement or
the other DIP Credit Documents or the financial or other condition of the
Borrowers or any of their Subsidiaries. The DIP Agent and the DIP Collateral
Agents shall not be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or the other DIP Credit Documents, or the
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financial condition of the Borrowers or any of Borrowers' Subsidiaries, or the
existence or possible existence of any Default or Event of Default, unless
specifically requested to do so in writing by any Lender.
11.04 Certain Rights of the DIP Agents. The DIP Agent and the DIP
Collateral Agents shall have the right to request instructions from the
Required Lenders at any time. If the DIP Agent and the DIP Collateral Agents
shall request instructions from the Required Lenders with respect to any act or
action (including the failure to act) in connection with this Agreement or the
other DIP Credit Documents, the DIP Agent and the DIP Collateral Agents shall
be entitled to refrain from such act or taking such action unless and until the
DIP Agent or the DIP Collateral Agents shall have received instructions from
the Required Lenders, and the DIP Agent and the DIP Collateral Agents shall not
incur liability to any Person by reason of so refraining. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the DIP
Agent or the DIP Collateral Agents as a result of the DIP Agent or the DIP
Collateral Agents acting or refraining from acting hereunder in accordance with
the instructions of the Required Lenders.
11.05 Reliance by DIP Agents. The DIP Agent and the DIP Collateral
Agents shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, statement, certificate, telex, teletype
or telecopier message, cablegram, radiogram, order or other documentary,
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper person. The DIP Agent and
the DIP Collateral Agents may consult with legal counsel (including counsel for
the Borrowers with the consent of the Borrowers and with respect to matters
concerning the Borrowers and their Subsidiaries), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
11.06 Indemnification of DIP Agents. To the extent the DIP Agent and the
DIP Collateral Agents and their advisors are not reimbursed and indemnified by
the Borrowers, each Lender will reimburse and indemnify the DIP Agent and the
DIP Collateral Agents and their advisors in proportion to its respective
Commitment, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
reasonable counsel fees and disbursements) or disbursements of any kind or
nature whatsoever (including all reasonable expenses) which may be imposed on,
incurred by or asserted against the DIP Agent and the DIP Collateral Agents in
performing their duties hereunder, in any way relating to or arising out of
this Agreement or for any payments made by the DIP Agent or the DIP Collateral
Agents to their advisors; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the DIP
Agent's or the DIP Collateral Agents' gross negligence or willful misconduct.
The agreements contained in this Section shall survive any termination of this
Agreement and the other DIP Credit Documents and the payment in full of the
Obligations.
11.07 The DIP Agents in their Individual Capacity. With respect to their
obligation to lend under this Agreement, the Revolving Loans made by them and
the Revolving Notes issued to them, and their participation in Letters of
Credit issued hereunder, the DIP Agent and
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the DIP Collateral Agents shall have the same rights and powers hereunder as
any other Lender or holder of a Revolving Note or participation interests and
may exercise the same as though it was not performing the duties specified
herein; and the terms "Lenders," "Required Lenders," "holders of Revolving
Notes," or any similar terms shall, unless the context clearly otherwise
indicates, include the DIP Agent and the DIP Collateral Agents in their
individual capacity. The DIP Agent and the DIP Collateral Agents may accept
deposits from, lend money to, acquire equity interests in, and generally engage
in any kind of banking, trust, financial advisory or other business with the
Borrowers or any Affiliate of the Borrowers as if it were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrowers for services in connection with this Agreement and otherwise without
having to account for the same to the Lenders.
11.08 Holders of Revolving Notes. The DIP Agent and the DIP Collateral
Agents may deem and treat the payee of any Revolving Note as the owner thereof
for all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the DIP Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Revolving Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Revolving Note or of any Revolving Note or Revolving Notes issued in exchange
therefor.
11.09 Successor DIP Agents. (a) The DIP Agent and the DIP Collateral
Agents may, upon five Business Days' notice to the Lenders and the Borrowers,
resign at any time (effective pursuant to the following provisions of this
Section 11.09) by giving written notice thereof to the Lenders and the
Borrowers. Such resignation of the DIP Agent or DIP Collateral Agents shall
also operate as a resignation as an Issuing Lender and as Payments
Administrator. Upon any such resignation, the Required Lenders shall have the
right, upon five days' notice and approval by the Borrowers (which approval
shall not be unreasonably withheld or delayed), to appoint a successor DIP
Agent (which shall also serve as a successor Issuing Lender) or a successor DIP
Collateral Agent. If no successor DIP Agent or DIP Collateral Agent (i) shall
have been so appointed by the Required Lenders and (ii) shall have accepted
such appointment, within thirty days after the retiring DIP Agent's or DIP
Collateral Agent's giving of notice of resignation, then, upon five days'
notice and approval by the Borrowers (which approval shall not be unreasonably
withheld or delayed), the retiring DIP Agent or DIP Collateral Agent may, on
behalf of the Lenders, appoint a successor DIP Agent or DIP Collateral Agent,
which shall also serve as a successor Issuing Lender. In the event that no
successor DIP Agent or DIP Collateral Agent is appointed pursuant to the
foregoing provisions, the DIP Agent's or DIP Collateral Agent's resignation
shall become effective on the date which is forty-five days after the retiring
DIP Agent's or DIP Collateral Agent's giving of notice of resignation, and the
Required Lenders shall perform the duties of the DIP Agent hereunder.
(b) Upon the acceptance of any appointment as DIP Agent or DIP Collateral
Agent hereunder by a successor DIP Agent or DIP Collateral Agent, such
successor DIP Agent or DIP Collateral Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring DIP Agent or DIP Collateral Agent, and the retiring DIP Agent or DIP
Collateral Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring DIP Agent's or DIP Collateral Agents'
resignation hereunder as
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DIP Agent or DIP Collateral Agent, the provisions of this Section 11 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was DIP Agent or DIP Collateral Agent under this Agreement.
11.10 Collateral Matters. (a) Each Lender authorizes and directs the
DIP Collateral Agents to enter into the Collateral Documents for the benefit of
the Lenders. Each Lender hereby agrees, and each holder of any Revolving Note
or participant in Letters of Credit by the acceptance thereof will be deemed to
agree, that, except as otherwise set forth herein, any action taken by the
Required Lenders in accordance with the provisions of this Agreement or the
Collateral Documents, and the exercise by the Required Lenders of the powers
set forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the Lenders.
The DIP Collateral Agents are hereby authorized on behalf of all of the
Lenders, without the necessity of any notice to or further consent from any
Lender, from time to time prior to an Event of Default, to take any action with
respect to any Collateral or Collateral Documents which may be necessary to
perfect and maintain perfected the security interests in and Liens upon the
Collateral granted pursuant to the Collateral Documents.
(b) The Lenders hereby authorize the DIP Collateral Agents, at their
option and in their discretion, upon the direction of the DIP Agent to release
any Lien granted to or held by the DIP Collateral Agents upon any Collateral
(i) upon termination of the Commitments and payment and satisfaction of all of
the Obligations at any time arising under or in respect of this Agreement or
the DIP Credit Documents or the transactions contemplated hereby or thereby,
(ii) constituting property being sold or disposed of upon receipt of the
proceeds of such sale by the DIP Collateral Agents which proceeds are required
by the terms hereof to be remitted to the DIP Agent by the Borrowers if the
Borrowers certify to the DIP Collateral Agents that the sale or disposition is
made in compliance with Section 8.02 hereof (and the DIP Collateral Agents may
rely conclusively on any such certificate, without further inquiry) or (iii) if
approved, authorized or ratified in writing by the Required Lenders, unless
such release is required to be approved by all of the Lenders hereunder. Upon
request by the DIP Agent at any time, the Lenders will confirm in writing the
DIP Collateral Agents' authority to release particular types or items of
Collateral pursuant to this Section 11.10.
(c) Upon any sale and transfer of Collateral which is expressly permitted
pursuant to the terms of this Agreement, or consented to in writing by the
Required Lenders or all of the Lenders, as applicable, and upon at least five
Business Days' prior written request by the Borrowers, the DIP Collateral
Agents shall (and are hereby irrevocably authorized by the Lenders to) execute
such documents as may be necessary to evidence the release of the Liens granted
to the DIP Collateral Agents for the benefit of the Lenders herein or pursuant
hereto upon the Collateral that was sold or transferred; provided that (i) the
DIP Collateral Agents shall not be required to execute any such document on
terms which, in the DIP Collateral Agents' opinion, would expose the DIP
Collateral Agents to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse,
representation or warranty and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations
of the Borrowers or any of their Subsidiaries in respect of) all interests
retained by the Borrowers or any of their Subsidiaries, including, without
limitation, the proceeds of the sale, all of which shall continue to constitute
part of the Collateral. In the event of any sale
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or transfer of Collateral, or any foreclosure with respect to any of the
Collateral, the DIP Collateral Agents shall be authorized to deduct all of the
Expenses reasonably incurred by the DIP Collateral Agents from the proceeds of
any such sale, transfer or foreclosure.
(d) The DIP Collateral Agents shall have no obligation whatsoever to the
Lenders or to any other Person to assure that the Collateral exists or is owned
by the Borrowers or any of their Subsidiaries or is cared for, protected or
insured or that the Liens granted to the DIP Collateral Agents herein or
pursuant hereto have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise or to continue exercising at all or in any manner or under any duty
of care, disclosure or fidelity any of the rights, authorities and powers
granted or available to the DIP Collateral Agents in this Section 11.10 or in
any of the Collateral Documents, it being understood and agreed that in respect
of the Collateral, or any act, omission or event related thereto, the DIP
Collateral Agents may act in any manner they may deem appropriate, in their
sole discretion, given the DIP Collateral Agents' own interest in the
Collateral as one of the Lenders and that the DIP Collateral Agents shall have
no duty or liability whatsoever to the Lenders, except for their gross
negligence or willful misconduct.
11.11 Actions with Respect to Defaults. In addition to the DIP Agent's
right to take actions on its own accord as permitted under this Agreement, the
DIP Agent shall take such action with respect to an Event of Default as shall
be directed by the Required Lenders; provided that until the DIP Agent shall
have received such directions, the DIP Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Event of Default as it shall deem advisable and in the best interests of the
Lenders.
11.12 Delivery of Information. The DIP Agent shall not be required to
deliver to any Lender originals or copies of any documents, instruments,
notices, communications or other information received by the DIP Agent from the
Borrowers, any Subsidiary, the Required Lenders, any Lender or any other Person
under or in connection with this Agreement or any other Credit Document except
(i) as specifically provided in this Agreement or any other DIP Credit Document
and (ii) as specifically requested from time to time in writing by any Lender
with respect to a specific document, instrument, notice or other written
communication received by and in the possession of the DIP Agent at the time of
receipt of such request and then only in accordance with such specific request.
Section 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrowers shall: (i) whether or not
the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the DIP Agent and the DIP Collateral Agents
(including, without limitation, the reasonable fees and disbursements of White
& Case LLP, Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and local counsel) in connection with the
preparation, execution, delivery and administration of this Agreement and the
other DIP Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto, of
the DIP Agent in connection with its syndication efforts with respect to this
Agreement and of the DIP Agent and the DIP Collateral Agents and, following and
during the continuation of an Event of
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Default, each of the Lenders in connection with the enforcement of this
Agreement and the other DIP Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of counsel for the DIP Agent and the DIP Collateral
Agents and, following and during the continuation of an Event of Default, for
each of the Lenders) which expenses shall include, without being limited to the
cost of record searches, the reasonable fees and expenses of attorneys and
paralegals, all reasonable costs and expenses incurred by the DIP Agent and the
DIP Collateral Agents in opening bank accounts, depositing checks,
electronically or otherwise receiving and transferring funds, and any charges
imposed on the DIP Agent and the DIP Collateral Agents due to insufficient
funds of deposited checks and the standard fees of the DIP Agent and the DIP
Collateral Agents relating thereto, collateral examination fees and expenses,
reasonable fees and expenses of accountants, appraisers or other consultants,
experts or advisors employed or retained by the DIP Agent and the DIP
Collateral Agents; (ii) pay and hold each of the Lenders harmless from and
against any and all present and future stamp, excise and other similar taxes
with respect to the foregoing matters and save each of the Lenders harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Lender) to pay
such taxes; and (iii) indemnify the DIP Agent, the DIP Collateral Agents and
each Lender, and each of their respective officers, directors, employees,
representatives (each, an "Indemnitee") from and hold each of them harmless
against any and all liabilities, obligations (including removal or remedial
actions), losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses and disbursements (including reasonable attorneys' and consultants'
fees and disbursements) (all of such liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses and disbursements
collectively, the "Indemnified Amounts") incurred by, imposed on or assessed
against any of them as a result of, or arising out of, or in any way related
to, or by reason of, (a) any investigation, litigation or other proceeding
(whether or not the DIP Agent, the DIP Collateral Agents or any Lender is a
party thereto) related to the entering into and/or performance of this
Agreement or any other DIP Credit Document or the use of any Letter of Credit
or the proceeds of any Revolving Loans hereunder or the consummation of any
transactions contemplated herein or in any other DIP Credit Document or the
exercise of any of their rights or remedies provided herein or in the other DIP
Credit Documents, or (b) the actual or alleged presence of Hazardous Materials
in the air, surface water or groundwater or on the surface or subsurface of any
Real Property owned or at any time operated by the Borrowers or any of their
Subsidiaries, the generation, storage, transportation, handling or disposal of
Hazardous Materials at any location, whether or not owned or operated by the
Borrowers or any of their Subsidiaries, the non-compliance of any Real Property
with foreign, federal, state, provincial and local laws, regulations, and
ordinances (including applicable permits thereunder) applicable to any Real
Property, or any Environmental Claim asserted against the Borrowers, any of
their Subsidiaries or any Real Property owned or at any time operated by the
Borrowers or any of their Subsidiaries, including, in each case, without
limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified); provided, however, that no
Borrower shall have any obligation to any Indemnitee for any Indemnified
Amounts to the extent such Indemnified Amounts resulted from the gross
negligence or willful misconduct of such
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Indemnitee as determined by a court of competent jurisdiction. To the extent
that the undertaking to indemnify, pay or hold harmless the DIP Agent, the DIP
Collateral Agents or any Lender set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the
Borrowers shall make the maximum contribution to the payment and satisfaction
of each of the indemnified liabilities which is permissible under applicable
law.
12.02 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.09, 1.10, 2.05, 4.06, 12.01 and 12.06 shall, subject
to Section 12.15 (to the extent applicable), survive the execution and delivery
of this Agreement and the Revolving Notes and the making and repayment of the
Revolving Loans.
12.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to the US Borrower,
at the US Borrower's address specified opposite its signature below; if to the
Canadian Borrower, at the Canadian Borrower's address specified opposite its
signature below; if to a Subsidiary Guarantor, at such Subsidiary Guarantor's
address specified opposite its signature below; if to any Lender, at its
address specified opposite its signature below; and if to the DIP Agent, at its
Notice Office; or, as to any Credit Party or the DIP Agent, at such other
address as shall be designated by such party in a written notice to the other
parties hereto and, as to each Lender, at such other address as shall be
designated by such Lender in a written notice to the Borrowers and the DIP
Agent. All such notices and communications shall, when mailed, telegraphed,
telexed, telecopied, or cabled or sent by overnight courier, be effective when
deposited in the mails with first-class postage prepaid, delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
sent by telex or telecopier, except that notices and communications to the DIP
Agent and the Borrowers shall not be effective until received by the DIP Agent
or the Borrowers, as the case may be.
12.04 Benefit of Agreement. (a) This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, no Borrower may assign or
transfer any of its rights, obligations or interest hereunder or under any DIP
Credit Document without the prior written consent of the Lenders. Each Lender
may at any time grant participations in any of its rights hereunder or under
any of the Revolving Notes to another financial institution, including, without
limitation, investment funds, provided that in the case of any such
participation, the participant shall not have any rights under this Agreement
or any of the other DIP Credit Documents (the participant's rights against such
Lender in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the participant relating thereto) and all
amounts payable by either of the Borrowers hereunder shall be determined as if
such Lender had not sold such participation, except that the participant shall
be entitled to the benefits of Sections 1.09, 2.04 and 4.06 to the extent that
such Lender would be entitled to such benefits if the participation had not
been entered into or sold, and, provided further, that no Lender shall
transfer, grant or assign any participation under which the participant shall
have rights to approve any amendment to or waiver of this Agreement or any
other DIP Credit Document except to the extent such amendment or waiver would
(i) extend the final scheduled maturity of any Revolving Loan or Revolving Note
or Letter of Credit (unless such Letter of Credit is not extended beyond the
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Maturity Date) in which such participant is participating, or reduce the rate
or extend the time of payment of interest or Fees thereon (except in connection
with a waiver of the applicability of any post-default increase in interest
rates), or reduce the principal amount thereof (it being understood that any
amendment or modification to the financial definitions in this Agreement shall
not constitute a reduction in the rate of interest for purposes of this clause
(i)), or increase such participant's participating interest in any Commitment
over the amount thereof then in effect (it being understood that (x) a waiver
of any Default or Event of Default or of a mandatory prepayment, shall not
constitute a change in the terms of any Commitment and (y) an increase in any
Commitment or Revolving Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) release all or substantially all of the Collateral which support
the Revolving Loans in which such participant is participating (except as
expressly permitted in any DIP Credit Documents), (iii) consent to the
assignment or transfer by the Borrowers of any of their rights and obligations
under this Agreement, (iv) reduce the percentage specified in the definition of
Required Lenders or (v) amend, modify or waive any provision of this Section
12.04.
(b) Notwithstanding the foregoing, any Lender (or any Lender together with
one or more other Lenders) may, with the consent of the DIP Agent (which
consent shall not be unreasonably withheld or delayed), (x) assign all or a
portion of its Commitment (and related outstanding Obligations hereunder) to
its parent company or individual parent and/or any Affiliate of such Lender
which is at least 50% owned by such Lender, its parent company or individual
parent or to one or more Lenders or (y) assign all, or if less than all, a
portion equal to at least $5,000,000 in the aggregate for the assigning Lender
or assigning Lenders, of such Commitments hereunder to one or more Eligible
Transferees, each of which assignees shall become a party to this Agreement as
a Lender by execution of an Assignment and Assumption Agreement, provided that,
(i) at such time Schedule I shall be deemed modified to reflect the Commitments
of such new Lender and of the existing Lenders, (ii) upon surrender of the old
Revolving Notes, new Revolving Notes will be issued, at the Borrowers' expense,
to such new Lender and to the assigning Lender, such new Revolving Notes to be
in conformity with the requirements of Section 1.04 (with appropriate
modifications) to the extent needed to reflect the revised Commitments, and
(iii) the DIP Agent shall receive at the time of each such assignment from the
assigning or assignee Lender other than an assignment to an affiliate of such
Lender, the payment of a non-refundable assignment fee of $3,500 and, provided
further, that such transfer or assignment will not be effective until recorded
by the DIP Agent on the Register pursuant to Section 12.14 hereof. To the
extent of any assignment pursuant to this Section 12.04(b), the assigning
Lender shall be relieved of its obligations hereunder with respect to its
assigned Commitments. At the time of each assignment pursuant to this Section
12.04(b) to a Person which is not already a Lender hereunder and which is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) for federal income tax purposes, the respective assignee Specified Lender
shall provide to the Borrowers and the DIP Agent the appropriate Internal
Revenue Service Forms (and, if applicable, a Section 4.06(b)(ii) Certificate)
described in Section 4.06(b). To the extent that an assignment of all or any
portion of a Lender's Commitments and related outstanding Obligations pursuant
to Section 1.12 or this Section 12.04(b) would, at the time of such assignment,
result in increased costs under Sections 1.09, 1.10, 2.05 or 4.06 from those
being charged by the respective assigning Lender prior to such
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assignment, then the Borrowers shall not be obligated to pay such increased
costs (although the Borrowers shall be obligated to pay any other increased
costs of the type described above resulting from changes after the date of the
respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its rights under this Agreement and/or its Revolving Loans and/or
Revolving Note hereunder to a Federal Reserve Bank in support of borrowings
made by such Lender from such Federal Reserve Bank.
12.05 No Waiver; Remedies Cumulative. No failure or delay on the part of
the DIP Agent, the DIP Collateral Agents, any Issuing Lender or any Lender or
any holder of a Note in exercising any right, power or privilege hereunder or
under any other DIP Credit Document and no course of dealing between any Credit
Party and the DIP Agent, the DIP Collateral Agents, any Issuing Lender or any
Lender or the holder of any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
under any other DIP Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights, powers and remedies herein or in any other DIP Credit
Document expressly provided are cumulative and not exclusive of any rights,
powers or remedies which the DIP Agent, the DIP Collateral Agents, any Issuing
Lender or any Lender or the holder of any Note would otherwise have. No notice
to or demand on any Credit Party in any case shall entitle any Credit Party to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the DIP Agent, the DIP Collateral Agents,
any Issuing Lender, the Lenders or the holder of any Note to any other or
further action in any circumstances without notice or demand.
12.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the DIP Agent agrees that promptly after its receipt of each payment
from or on behalf of the Borrowers in respect of any Obligations of the
Borrowers hereunder or under any DIP Credit Document, it shall distribute such
payment to the Lenders (other than any Lender which has consented in writing to
waive its pro rata share of any such payment) pro rata based upon their
respective shares, if any, of the Obligations with respect to which such
payment was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the DIP Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Revolving Loans, Unpaid Drawings, Commitment Commission or Letter of
Credit Fees, of a sum which with respect to the related sum or sums received by
other Lenders is in a greater proportion than the total of such Obligation then
owed and due to such Lender bears to the total of such Obligation then owed and
due to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations of the
respective Credit Party to such Lenders in such amount as shall result in a
proportional participation by all the Lenders in such amount; provided that if
all or any portion of such excess amount is thereafter recovered from such
Lender, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
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(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 12.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, different
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
12.07 Calculations; Computations. (a) The financial statements to be
furnished to the DIP Agent on behalf of the Lenders pursuant hereto shall be
made and prepared in accordance with generally accepted accounting policies and
principles in the United States or Canada, as applicable, consistently applied
throughout the periods involved (except as set forth in the notes thereto or as
otherwise disclosed in writing by the Borrowers to the DIP Agent on behalf of
the Lenders) (with the foregoing generally accepted accounting principles
herein called "GAAP"). All calculations and computations determining
compliance with Section 8 shall utilize accounting principles and policies in
conformity with those used to prepare the financial statements referred to in
Section 6.06(a).
(b) All computations of interest, Commitment Commission and Fees hereunder
shall be made by the Payments Administrator on the basis of a year of 360 days
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest, Commitment Commission or
Fees are payable.
(c) All interest payments to be made under this Agreement will be paid
without allowance or deduction for deemed re-investment or otherwise, both
before and after maturity and before and after default and/or judgment, if any,
until payment of the amount on which such interest is accruing, and interest
will accrue on overdue interest, if any. For the purposes of the Interest Act
(Canada) and disclosure under such act, whenever interest to be paid under this
Agreement is to be calculated on the basis of a year of 360 days or any other
period of time that is less than a calendar year, the yearly rate of interest
to which the rate determined pursuant to such calculation is equivalent is the
rate so determined multiplied by the actual number of days in the calendar year
in which the same is to be ascertained and divided by either 360 or such other
period of time, as the case may be.
(d) For purposes of this Agreement, the US Dollar Equivalent of Canadian
Dollars shall be calculated on the second Business Day of each week. The US
Dollar Equivalent for all reimbursement obligations with respect to Letters of
Credit issued in a currency other than Dollars shall be determined by using the
US Dollar Equivalent thereof as in effect on the date the respective Unpaid
Drawing was paid or disbursed by the Issuing Lender. The US Dollar Equivalent
for Canadian Dollars shall remain in effect until the same is recalculated by
BTCo as provided above and notice of such recalculation is received by the US
Borrower, it being understood that until such notice is received, the US Dollar
Equivalent shall be that US Dollar Equivalent as last reported to the US
Borrower by BTCo. BTCo shall promptly notify the US Borrower and the Lenders
of each determination of the US Dollar Equivalent for Canadian Dollars.
12.08 Governing Law. This Agreement and the other DIP Credit Documents
and the rights and obligations of the Borrowers hereunder and thereunder shall
be construed in accordance with and be governed by the law of the State of New
York.
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12.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrowers and the
DIP Agent.
12.10 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
12.11 Amendment or Waiver. (a) Neither this Agreement nor any other DIP
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the respective Credit Party thereto and the Required
Lenders; provided, however, that no such change, waiver, discharge or
termination shall, without the consent of each Lender and that certain
participant Abelco Finance LLC (other than a Defaulting Lender) (with
Obligations being directly affected thereby), (i) extend the final scheduled
maturity of any Revolving Loan or Revolving Note or extend the stated maturity
of any Letter of Credit beyond the Maturity Date, or reduce the rate or extend
the time of payment of interest or Fees thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates), or
reduce the principal amount thereof (except to the extent repaid in cash), (ii)
amend, modify or waive any provision of this Section 12.11, (iii) reduce the
percentage specified in the definition of Required Lenders (it being understood
that, with the consent of the Required Lenders, additional extensions of credit
pursuant to this Agreement may be included in the determination of the Required
Lenders on substantially the same basis as the extensions of Commitments are
included on the Effective Date), (iv) release all or substantially all of the
Collateral from the security interests and Liens created pursuant to the DIP
Credit Documents and the Orders (except as set forth in the DIP Credit
Documents), or (v) consent to the assignment or transfer by the Borrowers of
any of their rights and obligations under this Agreement; provided further,
that no such change, waiver, discharge or termination shall (w) increase the
Commitments of any Lender over the amount thereof then in effect without the
consent of such Lender (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of Default or of a
mandatory reduction in the Total Commitment shall not constitute an increase of
the Commitment of any Lender, and that any change to the Borrowing Base Amount
or an increase in the available portion of any Commitment of any Lender shall
not constitute an increase in the Commitment of such Lender), (x) without the
consent of the DIP Agent, amend, modify or waive any provision of Section 2 or
alter its rights or obligations with respect to Letters of Credit, (y) without
the consent of the DIP Agent, amend, modify or waive any provision of Annex A
as same applies to such DIP Agent or any other provision as same relates to the
rights or obligations of such DIP Agent, (z) without the consent of the DIP
Collateral Agents, amend, modify or waive any provision relating to the rights
or obligations of the DIP Collateral Agents. Notwithstanding anything to the
contrary contained herein, the modifications contemplated by Section 12.04, to
the extent needed to make new Lenders party to this Agreement, shall be
permitted in accordance with the terms thereof. All amendments effected in
compliance with this Section 12.11 shall be effective and enforceable against
all parties hereto without further application to, or order of, the Bankruptcy
Courts.
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(b) If, in connection with any proposed change, waiver, discharge or
termination to or of any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 12.11(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then the
Borrowers shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described below, to replace each
such non-consenting Lender or Lenders with one or more Replacement Lenders
pursuant to Section 1.12 so long as at the time of such replacement, each such
Replacement Lender consents to the proposed change, waiver, discharge or
termination, provided that in any event the Borrowers shall not have the right
to replace a Lender, terminate its Commitment or repay its Revolving Loans
solely as a result of the exercise of such Lender's right pursuant to clause
(i) of Section 12.11(a) not to have its Commitment increased (and the
withholding of any required consent by such Lender).
12.12 Domicile of Revolving Loans. Each Lender may transfer and carry
its Revolving Loans at, to or for the account of any office, Subsidiary or
Affiliate of such Lender. Notwithstanding anything to the contrary contained
herein, to the extent that a transfer of Revolving Loans pursuant to this
Section 12.12 would, at the time of such transfer, result in increased costs
under Section 1.09, 1.10, 2.05 or 4.06 from those being charged by the
respective Lender prior to such transfer, then the Borrowers shall not be
obligated to pay such increased costs (although the Borrowers shall be
obligated to pay any other increased costs of the type described above
resulting from changes giving rise to such increased costs after the date of
the respective transfer).
12.13 Confidentiality. (a) Subject to the provisions of clause (b) of
this Section 12.13, each Lender agrees that it will use its best efforts not to
disclose without the prior consent of the Borrowers (other than to its
employees, auditors, advisors or counsel or to another Lender if the Lender or
such Lender's holding or parent company in its sole discretion determines that
any such party should have access to such information, provided such Persons
shall be subject to the provisions of this Section 12.13 to the same extent as
such Lender) any information with respect to the Borrowers or any of their
Subsidiaries which is now or in the future furnished pursuant to this Agreement
or any other Credit Document and which is designated by the Borrowers to the
Lenders in writing as confidential (collectively, the "Confidential Material"),
provided that any Lender may disclose any Confidential Material (a) as has
become generally available to the public, (b) as may be required or appropriate
in any report, statement or testimony submitted to any municipal, state,
provincial or federal regulatory body having or claiming to have jurisdiction
over such Lender or to the Federal Reserve Board or the Federal Deposit
Insurance Corporation or similar organizations (whether in the United States,
Canada or elsewhere) or their successors, (c) as may be required or appropriate
in respect to any summons or subpoena or in connection with any litigation, (d)
in order to comply with any law, order, regulation or ruling applicable to such
Lender, (e) to the DIP Agent or the DIP Collateral Agents and (f) to any
prospective or actual transferee or participant in connection with any
contemplated transfer of any of the Revolving Notes or Commitments or any
interest therein by such Lender, provided, that such prospective transferee or
participant executes a Confidentiality Agreement with such Lender containing
provisions substantially the same as to those contained in this Section.
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(b) Each Credit Party hereby acknowledges and agrees that each Lender may
share with any of its Affiliates any Confidential Material related to any
Credit Party (including, without limitation, any nonpublic customer information
regarding the creditworthiness of the Credit Parties, provided such Persons
shall be subject to the provisions of this Section 12.13 to the same extent as
such Lender).
12.14 Registry. The Borrowers hereby designate the DIP Agent to serve as
the Borrowers' agent, solely for purposes of this Section 12.14, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Lenders, the Revolving Loans made by each of the Lenders
and each repayment in respect of the principal amount of the Revolving Loans of
each Lender. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrowers' obligations in respect of such
Revolving Loans. With respect to any Lender, the transfer of the Commitments
of such Lender and the rights to the principal of, and interest on, any
Revolving Loan made pursuant to such Commitments shall not be effective until
such transfer is recorded on the Register maintained by the DIP Agent with
respect to ownership of such Commitments and Revolving Loans and prior to such
recordation all amounts owing to the transferor with respect to such
Commitments and Revolving Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Commitments and
Revolving Loans shall be recorded by the DIP Agent on the Register only upon
the acceptance by the DIP Agent of a properly executed and delivered Assignment
and Assumption Agreement pursuant to Section 12.04(b). Coincident with the
delivery of such an Assignment and Assumption Agreement to the DIP Agent for
acceptance and registration of assignment or transfer of all or part of a
Revolving Loan, or as soon thereafter as practicable, the assigning or
transferor Lender shall surrender the Note evidencing such Revolving Loan, and
thereupon one or more new Revolving Notes in the same aggregate principal
amount shall be issued to the assigning or transferor Lender and/or the new
Lender. The Borrowers agrees to indemnify the DIP Agent from and against any
and all losses, claims, damages and liabilities of whatsoever nature which may
be imposed on, asserted against or incurred by the DIP Agent in performing its
duties under this Section 12.14.
12.15 Limitation on Additional Amounts, etc. Notwithstanding anything to
the contrary contained in Sections 1.09, 1.10, 2.05 or 4.06 of this Agreement,
unless a Lender gives notice to the Borrowers that they are obligated to pay an
amount under any such Section within one year after the later of (x) the date
the Lender incurs the respective increased costs, Taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return
on capital or (y) the date such Lender has actual knowledge of its expense or
liability, reductions in amounts received or receivable or reduction in return
on capital, then such Lender shall only be entitled to be compensated for such
amount by the Borrowers pursuant to said Section 1.09, 1.10, 2.05 or 4.06, as
the case may be, to the extent the costs, Taxes, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital
are incurred or suffered on or after the date which occurs one year prior to
such Lender giving notice to the Borrowers that they are obligated to pay the
respective amounts pursuant to said Section 1.09, 1.10, 2.05 or 4.06, as the
case may be. This Section 12.15 shall have no applicability to any Section of
this Agreement other than said Sections 1.09, 1.10, 2.05 or 4.06.
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Section 13. Grant of Security Interest; Remedies.
13.01 Grant of Security Interests. (a) (i) Each Canadian Subsidiary
Guarantor does hereby assign and transfer unto the DIP Collateral Agents, and
does hereby grant to the DIP Collateral Agents for the benefit of the Lenders,
as security for the prompt and complete payment and performance when due of all
of its Obligations and for the Obligations of the Canadian Borrower, (ii) each
US Subsidiary Guarantor does hereby assign and transfer unto the DIP Collateral
Agents, and does hereby grant to the DIP Collateral Agents for the benefit of
the Lenders, as security for the prompt and complete payment and performance
when due of all of the Obligations of the Borrowers and the Subsidiary
Guarantors and (iii) each Borrower does hereby assign and transfer unto the DIP
Collateral Agents, and does hereby grant to the DIP Collateral Agents for the
benefit of the Lenders, as security for the prompt and complete payment and
performance when due of all of the Obligations of such Borrower and of the
other Borrower, a continuing security interest of first priority (subject to
the Permitted Cash Collateral, Senior Liens and the Carve-Out) in all of the
right, title and interest of such Assignor in, to and under all of the
following, whether now existing or hereafter from time to time acquired: (i)
each and every bank account; (ii) each and every Receivable; (iii) all
Inventory; (iv) the BT Concentration Accounts and all monies, securities and
instruments deposited or required to be deposited in the BT Concentration
Accounts; (v) the US Collection Accounts and all monies, securities and
instruments deposited in the US Collection Accounts; (vi) the Canadian Bank
Accounts and all monies, securities and instruments deposited in the Canadian
Bank Accounts; (vii) all Contracts, together with all Contract Rights arising
thereunder; (viii) all Equipment including, without limitation, all of the
vehicles and rolling stock (and the certificates of title and other
registrations relating thereto); (ix) all Marks, together with the
registrations and right to all renewals thereof, and the goodwill of the
business of the Borrowers symbolized by the Marks; (x) all Patents and
Copyrights; (xi) all computer programs of such Assignor and all intellectual
property rights therein and all other proprietary information of such Assignor,
including, but not limited to, trade secrets; (xii) all other Goods, General
Intangibles, Chattel Paper, Documents and Instruments (other than the Pledged
Securities); (xiii) all Real Property Collateral; (xiv) all other interests in
personal property of any nature whatsoever; and (xv) all Proceeds and products
of any and all of the foregoing (all of the above, collectively, the
"Collateral"), but excluding, unless the US Interim Order shall become the US
Final Order or the US Final Order shall otherwise so provide, the proceeds of
avoidance actions pursuant to Chapter 5 of the US Bankruptcy Code.
(b) The security interest of the DIP Collateral Agents under this
Agreement extends to all Collateral of the kind described in preceding clause
(a) which each Assignor owns as of the Effective Date and which each Assignor
may acquire at any time during the continuation of this Agreement, and is
entitled to all rights, priorities and benefits afforded by the US Bankruptcy
Code, the UCC and any other relevant law.
13.02 Power of Attorney. Each Assignor hereby absolutely and irrevocably
constitutes and appoints the DIP Collateral Agents as such Assignor's true and
lawful agents and attorneys-in-fact, with full power of substitution after the
occurrence of and during the continuation of an Event of Default (in the name
of such Assignor): (a) to act, require, demand, receive, compound and give
acquittance for any and all monies and claims for monies due or to become due
to the Borrowers under or arising out of the Collateral, to endorse any checks
or
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other instruments or orders in connection therewith and to file any claims or
take any action or institute any proceedings which the DIP Collateral Agents
may reasonably deem to be necessary or advisable to protect the interests of
the Lenders; (b) to execute and do all such assurances, acts and things which
each Assignor is required to do but has failed to do under the covenants and
provisions contained in this Agreement; (c) to take any and all such action as
the DIP Collateral Agents or any of their sub-agents, nominees or attorneys
may, in their sole and absolute discretion, reasonably determine as necessary
or advisable for the purpose of maintaining, preserving or protecting the
security constituted by this Agreement or any of the rights, remedies, powers
or privileges of the DIP Collateral Agents under this Agreement; and (d)
generally, in the name of each Assignor, exercise all or any of the powers,
authorities and discretions, conferred on or reserved to the DIP Collateral
Agents by or pursuant to this Agreement, and (without prejudice to the
generality of any of the foregoing) to seal and deliver or otherwise perfect
any deed, assurance, agreement, instrument or act as the DIP Collateral Agents
may deem proper in or for the purpose of exercising any of such powers,
authorities or discretions. Each Assignor hereby ratifies and confirms, and
hereby agrees to ratify and confirm, whatever lawful acts the DIP Collateral
Agents or any of the DIP Collateral Agents' sub-agents, nominees or attorneys
shall do or purport to do in the exercise of the power of attorney granted to
the DIP Collateral Agents pursuant to this Section 13.02, which power of
attorney, being given for security, is irrevocable.
13.03 Remedies; Obtaining the Collateral Upon Default. Each Assignor
agrees that, if any Event of Default shall have occurred and be continuing,
then and in every such case, to the extent any such action is not inconsistent
with the Orders and Section 9 (including, without limitation, the final proviso
to Section 9, as if references to the DIP Agent therein refer to the DIP
Collateral Agents), the DIP Collateral Agents, in addition to any rights now or
hereafter existing under applicable law, and without application to or order of
the Bankruptcy Courts, shall have all rights as a secured creditor under the
Uniform Commercial Code in all relevant jurisdictions and may:
(a) personally, or by agents or attorneys, immediately retake
possession of the Collateral or any part thereof, from any Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon any
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor; and
(b) instruct the obligor or obligors on any agreement, instrument or
other obligation (including, without limitation, the Receivables and the
Contracts) constituting the Collateral to make any payment required by
the terms of such instrument, agreement or obligation directly to the
Cash Concentration Accounts; and
(c) withdraw all monies, securities and instruments in the Cash
Concentration Accounts for application to the Obligations; and
(d) sell, assign or otherwise liquidate, or direct any Assignor to
sell, assign or otherwise liquidate, any or all of the Collateral or any
part thereof, and take possession of
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the proceeds of any such sale, assignment or liquidation for application
to the Obligations; and
(e) take possession of the Collateral or any part thereof, by
directing any Assignor in writing to deliver the same to the DIP
Collateral Agents at any place or places designated by the DIP Collateral
Agents, in which event such Assignor shall at its own expense:
(i) forthwith cause the same to be moved to the place or
places so designated by the DIP Collateral Agents and there
delivered to the DIP Collateral Agents,
(ii) store and keep any Collateral so delivered to the DIP
Collateral Agents at such place or places pending further action by
the DIP Collateral Agents as provided in Section 13.04, and
(iii) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be necessary
to protect the same and to preserve and maintain them in good
condition; and
(f) license or sublicense (to the extent not in violation of the
license), whether on an exclusive or nonexclusive basis, any Marks,
Patents or Copyrights included in the Collateral for such term and on
such conditions and in such manner as the DIP Collateral Agents shall in
their sole judgment determine;
it being understood that each Assignor's obligation to so deliver the
Collateral is of the essence of this Agreement and that, accordingly,
upon application to a court of equity having jurisdiction, the DIP
Collateral Agents shall be entitled to a decree requiring specific
performance by such Assignor of such obligation.
13.04 Remedies; Disposition of the Collateral. Upon the occurrence and
continuance of an Event of Default, and to the extent not inconsistent with the
Orders and Section 9 (including, without limitation, the final proviso to
Section 9, as if references therein to the DIP Agent refer to the DIP
Collateral Agents), without application to or order of the Bankruptcy Courts,
any Collateral repossessed by the DIP Collateral Agents under or pursuant to
Section 13.03, and any other Collateral whether or not so repossessed by the
DIP Collateral Agents, may be sold, assigned, leased or otherwise disposed of
under one or more contracts or as an entirety, and without the necessity of
gathering at the place of sale the property to be sold, and in general in such
manner, at such time or times, at such place or places and on such terms as the
DIP Collateral Agents may, in compliance with any mandatory requirements of
applicable law, determine to be commercially reasonable. Any of the Collateral
may be sold, assigned, leased or otherwise disposed of, in the condition in
which the same existed when taken by the DIP Collateral Agents or after any
overhaul or repair which the DIP Collateral Agents shall determine to be
commercially reasonable. Any such disposition which shall be a private sale or
other private proceeding permitted by such requirements shall be made upon not
less than 10 days' written notice to the applicable Assignor specifying the
time at which such disposition is to be
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made and the intended sale price or other consideration therefor, and shall be
subject, for the 10 days after the giving of such notice, to the right of such
Assignor or any nominee of such Assignor to acquire the Collateral involved at
a price or for such other consideration at least equal to the intended sale
price or other consideration so specified. Any such disposition which shall be
a public sale permitted by such requirements shall be made upon not less than
10 days' written notice to the relevant Assignor specifying the time and place
of such sale and, in the absence of applicable requirements of law, shall be by
public auction (which may, at the DIP Collateral Agents' option, be subject to
reserve), after publication of notice of such auction not less than 10 days
prior thereto in two newspapers in general circulation in New York City or
Toronto. To the extent permitted by any such requirement of law, the DIP
Collateral Agents on behalf of the Lenders and/or the holders of the Revolving
Notes may bid for and become the purchaser of the Collateral or any item
thereof, offered for sale in accordance with this Section 13.04 without
accountability to any Assignor (except to the extent of surplus money received
as provided in Section 13.06). If, under mandatory requirements of applicable
law, the DIP Collateral Agents shall be required to make disposition of the
Collateral within a period of time which does not permit the giving of notice
to such Assignor as hereinabove specified, the DIP Collateral Agents need give
such Assignor only such notice of disposition as shall be reasonably
practicable.
13.05 Waiver of Claims. Except as otherwise provided in this Agreement,
EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE
AND JUDICIAL HEARING IN CONNECTION WITH THE DIP COLLATERAL AGENTS' TAKING
POSSESSION OR THE DIP COLLATERAL AGENTS' DISPOSITION OF ANY OF THE COLLATERAL,
INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY
PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR WOULD
OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY SUCH STATUTE OF THE UNITED STATES,
CANADA OR OF ANY STATE OR PROVINCE THEREOF, and each Assignor hereby further
waives, to the extent permitted by law:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the DIP Collateral Agents' gross
negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the DIP
Collateral Agents' rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each
Assignor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all such
laws.
13.06 Application of Proceeds. (a) The proceeds of any Collateral of an
Assignor obtained pursuant to Section 13.03 or disposed of pursuant to Section
13.04 as well as,
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after the occurrence of any Event of Default, any other amounts received or
receivable by the DIP Collateral Agents hereunder (whether held in the BT
Concentration Account, received pursuant to this Section 13.06 or otherwise)
shall be applied in accordance with, and in the manner set forth in, the
Orders.
(b) It is understood that each Assignor shall remain liable to the extent
of any deficiency between the amount of the proceeds of the Collateral and the
amount of all unpaid Obligations of such Assignor.
13.07 Remedies Cumulative. Each and every right, power and remedy hereby
specifically given to the DIP Collateral Agents shall be in addition to every
other right, power and remedy specifically given under this Agreement, the
Orders or the other DIP Credit Documents or now or hereafter existing at law or
in equity, or by statute and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time or simultaneously and as often and in such order as may be deemed
expedient by the DIP Collateral Agents. All such rights, powers and remedies
shall be cumulative and the exercise or the beginning of exercise of one shall
not be deemed a waiver of the right to exercise of any other or others. No
delay or omission of the DIP Collateral Agents in the exercise of any such
right, power or remedy and no renewal or extension of any of the Obligations
shall impair any such right, power or remedy or shall be construed to be a
waiver of any Default or Event of Default or an acquiescence therein. No
notice to or demand on any Assignor in any case shall entitle it or any other
Assignor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of the DIP Collateral
Agents to any other or further action in any circumstances without notice or
demand. In the event that the DIP Collateral Agents shall bring any suit to
enforce any of their rights hereunder and shall be entitled to judgment, then
in such suit the DIP Collateral Agents may recover reasonable expenses,
including attorneys' fees, and the amounts thereof shall be included in such
judgment.
13.08 Discontinuance of Proceedings. In case the DIP Collateral Agents
shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the DIP Collateral Agents, then and in every
such case each Assignor, the DIP Collateral Agents and each holder of any of
the Obligations shall be restored to their former positions and rights
hereunder with respect to the Collateral subject to the security interests
created under this Agreement, and all rights, remedies and powers of the DIP
Collateral Agents shall continue as if no such proceeding had been instituted.
Section 14. Guaranty.
14.01 The Guaranty. In order to induce the Lenders to enter into this
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by each Subsidiary Guarantor and each Borrower from the
proceeds of the Revolving Loans and the issuance of the Letters of Credit, each
Subsidiary Guarantor and each Borrower hereby agrees with the Lenders as
follows: (i) each US Subsidiary Guarantor hereby unconditionally and
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irrevocably, jointly and severally, guarantees as primary obligor and not
merely as surety the full and prompt payment when due, whether upon maturity,
by acceleration or otherwise, of any and all of the Guaranteed Obligations of
the Borrowers to the Lenders, (ii) each Canadian Subsidiary Guarantor hereby
unconditionally and irrevocably, severally, guarantees as primary obligor and
not merely as surety the full and prompt payment when due, whether upon
maturity, by acceleration or otherwise, of any and all of the Guaranteed
Obligations of the Canadian Borrower to the Lenders and (iii) each Borrower
hereby unconditionally and irrevocably, jointly and severally, guarantees as
primary obligor and not merely as surety the full and prompt payment when due,
whether upon maturity, by acceleration or otherwise, of any and all of the
Guaranteed Obligations of the other Borrower to the Lenders. If any or all of
the Guaranteed Obligations of the US Borrower to the Lenders become due and
payable hereunder, each US Subsidiary Guarantor and the Canadian Borrower,
jointly and severally, unconditionally promises to pay such Guaranteed
Obligations to the Lenders, or order, on demand, together with any and all
reasonable expenses which may be incurred by the DIP Agent or the Lenders in
collecting any of the Guaranteed Obligations. If any or all of the Guaranteed
Obligations of the Canadian Borrower to the Lenders became due and payable
hereunder, each US Credit Party, jointly and severally, and each Canadian
Subsidiary, severally, unconditionally promises to pay such Guaranteed
Obligations to the Lenders, or order, on demand, together with any and all
reasonable expenses which may be incurred by the DIP Agent or the Lenders in
collecting any of the Guaranteed Obligations. Notwithstanding the foregoing,
the Subsidiary Guarantors shall not include the subsidiaries of the Borrowers
incorporated in Canada until the Canadian Approvals have been obtained.
14.02 Nature of Liability. The liability of each Subsidiary Guarantor
hereunder is exclusive and independent of any security for or other guaranty of
the Guaranteed Obligations of the Borrowers whether executed by such Subsidiary
Guarantor, any other Subsidiary Guarantor, any other guarantor or by any other
party, and the liability of each Subsidiary Guarantor hereunder shall not be
affected or impaired by (a) any direction as to application of payment by the
Borrowers or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Guaranteed Obligations of the Borrowers, or (c) any payment on or in reduction
of any such other guaranty or undertaking, or (d) any dissolution, termination
or increase, decrease or change in personnel by the Borrowers, or (e) any
payment made to the DIP Agent or the Lenders on the indebtedness which the DIP
Agent or such Lenders repay the Borrowers pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each Subsidiary Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.
14.03 Independent Obligation. The obligations of each Subsidiary
Guarantor hereunder are independent of the obligations of any other Subsidiary
Guarantor, any other guarantor or the Borrowers, and a separate action or
actions may be brought and prosecuted against such Subsidiary Guarantor whether
or not action is brought against any other Subsidiary Guarantor, any other
guarantor or the Borrowers and whether or not any other Subsidiary Guarantor,
any other guarantor or the Borrowers be joined in any such action or actions.
Each Subsidiary Guarantor waives, to the fullest extent permitted by law, the
benefit of any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the
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Borrowers or other circumstance which operates to toll any statute of
limitations as to the Borrowers shall operate to toll the statute of
limitations as to the Subsidiary Guarantor.
14.04 Authorization. Each Subsidiary Guarantor authorizes the DIP Agent
and the Lenders without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing
its liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew, increase, accelerate or alter,
any of the Guaranteed Obligations (including any increase or decrease in
the rate of interest thereon), any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the Guaranty
herein made shall apply to the Guaranteed Obligations as so changed,
extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrowers or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrowers or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrowers to their creditors other
than the Lenders;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrowers to the Lenders regardless of
what liability or liabilities of such Subsidiary Guarantor or the
Borrowers remain unpaid; and/or
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements
referred to herein, or otherwise amend, modify or supplement this
Agreement or any of such other instruments or agreements.
14.05 Reliance. It is not necessary for the DIP Agent or the Lenders to
inquire into the capacity or powers of the Borrowers or their Subsidiaries or
the officers, directors, partners or agents acting or purporting to act on
their behalf, and any Guaranteed Obligations
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made or created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
14.06 Subordination. Any of the indebtedness of (i) the Borrowers
relating to the Guaranteed Obligations now or hereafter owing to any U.S.
Subsidiary Guarantor, and of (ii) the Canadian Borrower relating to the
Guaranteed Obligations of the Canadian Subsidiary Guarantors is hereby
subordinated to the Guaranteed Obligations of the Borrowers owing to the DIP
Agent and the Lenders, provided that payment may be made by the Borrowers on
any such indebtedness owing to such Subsidiary Guarantor so long as the same is
not prohibited by this Agreement and provided further that if the DIP Agent so
requests at a time when an Event of Default exists, all such indebtedness
relating to the Guaranteed Obligations of the Borrowers to such Subsidiary
Guarantor shall be collected, enforced and received by such Subsidiary
Guarantor as trustee for the Lenders and be paid over to the DIP Agent on
behalf of the Lenders on account of the Guaranteed Obligations of the Borrowers
to the Lenders, but without affecting or impairing in any manner the liability
of such Subsidiary Guarantor under the other provisions of this Guaranty.
Prior to the transfer by any Subsidiary Guarantor of any note or negotiable
instrument evidencing any of the indebtedness relating to the Guaranteed
Obligations of the Borrowers to such Subsidiary Guarantor, such Subsidiary
Guarantor shall ▇▇▇▇ such note or negotiable instrument with a legend that the
same is subject to this subordination.
14.07 Waiver. (a) Each Subsidiary Guarantor and each Borrower waives
any right (except as shall be required by applicable statute and cannot be
waived) to require the DIP Agent, the DIP Collateral Agents or the Lenders to
(i) proceed against the Borrowers, the other Borrower any other Subsidiary
Guarantor, any other guarantor or any other party, (ii) proceed against or
exhaust any security held from the Borrowers, the other Borrower, any other
Subsidiary Guarantor, any other guarantor or any other party or (iii) pursue
any other remedy in the DIP Agent's, the DIP Collateral Agents' or the Lenders'
power whatsoever. Each Subsidiary Guarantor and each Borrower waives (except
as shall be required by applicable statute and cannot be waived) any defense
based on or arising out of any defense of the Borrowers, the other Borrower,
any other Subsidiary Guarantor, any other guarantor or any other party other
than payment in full of the Guaranteed Obligations, including, without
limitation, any defense based on or arising out of the disability of the
Borrowers, the other Borrower, any other Subsidiary Guarantor, any other
guarantor or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrowers other than payment in full of the Guaranteed
Obligations. The DIP Agent, the DIP Collateral Agents and the Lenders may, at
their election, foreclose on any security held by the DIP Agent, the DIP
Collateral Agents or the Lenders by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable (to the
extent such sale is permitted by applicable law), or exercise any other right
or remedy the DIP Agent, the DIP Collateral Agents and the Lenders may have
against the Borrowers or any other party, or any security, without affecting or
impairing in any way the liability of any Subsidiary Guarantor hereunder except
to the extent the Guaranteed Obligations have been paid. Each Subsidiary
Guarantor waives any defense arising out of any such election by the DIP Agent,
the DIP Collateral Agents and the Lenders, even though such election operates
to impair or extinguish any right of reimbursement or subrogation or other
right or remedy of such Subsidiary Guarantor against the Borrowers or any other
party or any security.
-114-
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(b) Each Subsidiary Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional Guaranteed Obligations. Each Subsidiary Guarantor assumes all
responsibility for being and keeping itself informed of the Borrowers'
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks which such Subsidiary Guarantor assumes and incurs
hereunder, and agrees that the DIP Agent, the DIP Collateral Agents and the
Lenders shall have no duty to advise such Subsidiary Guarantor of information
known to them regarding such circumstances or risks.
14.08 Limitation on Enforcement. The Lenders agree that this Guaranty
may be enforced only by the action of the DIP Agent, in each case acting upon
the instructions of the Required Lenders and that no Lender shall have any
right individually to seek to enforce or to enforce this Guaranty, it being
understood and agreed that such rights and remedies may be exercised by the DIP
Agent for the benefit of the Lenders upon the terms of this Agreement. The
Lenders further agree that this Guaranty may not be enforced against any
director, officer, employee or stockholder of any Subsidiary Guarantor, other
than any stockholder which is a Subsidiary Guarantor.
14.09 Nature of Liability. It is the desire and intent of each
Subsidiary Guarantor, each Borrower and the Lenders that this Guaranty shall be
enforced against each Subsidiary Guarantor and each Borrower to the fullest
extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. If, however, and to the extent
that, the obligations of each Subsidiary Guarantor and each Borrower under this
Guaranty shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state, provincial or
federal law relating to fraudulent conveyances or transfers), then the amount
of the Guaranteed Obligations of each Subsidiary Guarantor and each Borrower
shall be deemed to be reduced and each Subsidiary Guarantor shall pay the
maximum amount of the Guaranteed Obligations which would be permissible under
applicable law.
14.10 Currency of Payments. All Obligations shall be repaid by each
Borrower as required under this Agreement in Dollars. Any payment on account
of an amount payable under any DIP Credit Document in Dollars made to or for
the account of the DIP Agent or a Lender in a currency (the "other currency")
other than Dollars, whether pursuant to a judgment or order of any court or
tribunal or otherwise and whether arising from the conversion of any amount
denominated in one currency into any other currency for the purpose of making
or filing a claim, obtaining an order or judgment, enforcing an order or
judgment or otherwise, shall constitute a discharge of the applicable
Borrower's and the Subsidiary Guarantors' obligation under such DIP Credit
Document up to the US Dollar Equivalent. If the US Dollar Equivalent which the
DIP Agent or such Lender is able to purchase in the normal course of its
business within one Business Day after receipt by it of such payment is less
than the amount in Dollars originally due to it under such DIP Credit Document,
such Borrower and the Subsidiary Guarantors shall indemnify and save the DIP
Agent and the Lenders, as the case may be, harmless from and against any loss
or damage arising as a result of such deficiency. This indemnity shall
constitute an obligation separate and independent from any other obligation
-115-
122
contained in any DIP Credit Document, shall give rise to a separate and
independent cause of action, shall apply irrespective of any indulgence granted
by the DIP Agent or any Lender from time to time, shall continue in full force
and effect notwithstanding any judgment or order for a liquidated sum in
respect of an amount due under any DIP Credit Document or under any judgment or
order and shall not merge in any order of foreclosure made in respect of any
security interest given to or for the benefit of the DIP Agent and the Lenders.
-116-
123
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
Telephone: ▇▇▇▇▇▇ SERVICES CORP.
Facsimile: Debtor and Debtor-in-Possession
By: /s/ M. ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Title: Secretary
124
Telephone: ▇▇▇▇▇▇ SERVICES (DELAWARE), INC.
Facsimile: Debtor and Debtor-in-Possession
By: /s/ M. ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Title: Secretary
125
Telephone: RESI ACQUISITION (DELAWARE) CORPORATION
Facsimile: ALLWASTE TANK CLEANING, INC.
ALLWASTE TEXQUISITION, INC.
21ST CENTURY ENVIRONMENTAL MANAGEMENT, INC. OF RHODE ISLAND
ALLWORTH, INC.
21ST CENTURY ENVIRONMENTAL MANAGEMENT, INC.
ALRC, INC.
21ST CENTURY ENVIRONMENTAL MANAGEMENT, INC. OF NEVADA
APLC, INC.
21ST CENTURY ENVIRONMENTAL MANAGEMENT, INC. OF PUERTO RICO
BEC/▇▇▇▇▇▇, INC.
ACE/ALLWASTE ENVIRONMENTAL SERVICES OF INDIANA, INC.
BURLINGTON ENVIRONMENTAL INC. (DELAWARE)
ADVANCED ENERGY CORPORATION
BURLINGTON ENVIRONMENTAL INC. (WASHINGTON)
ADVANCED ENVIRONMENTAL SYSTEMS, INC.
BUTCO, INC.
ALL SAFETY AND SUPPLY, INC.
CAPPCO TUBULAR PRODUCTS USA, INC.
ALLIES STAFFING, INC.
CHEM-FAB, INC.
ALLQUEST CAPITAL, INC.
CHEM-FREIGHT, INC.
ALLSCAFF, INC.
CHEMICAL POLLUTION CONTROL, INC. OF FLORIDA - A 21ST CENTURY
ENVIRONMENTAL MANAGEMENT COMPANY
ALLWASTE ASBESTOS ABATEMENT HOLDINGS, INC.
CHEMICAL POLLUTION CONTROL, INC. OF NEW YORK - A 21ST CENTURY
ENVIRONMENTAL MANAGEMENT COMPANY
ALLWASTE ASBESTOS ABATEMENT, INC.
CHEMICAL RECLAMATION SERVICES, INC.
126
ALLWASTE ASBESTOS ABATEMENT OF NEW ENGLAND, INC.
COUSINS WASTE CONTROL CORPORATION
CYANOKEM, INC.
ALLWASTE RAILCAR CLEANING, INC.
DEEP CLEAN, INC.
ALLWASTE RECOVERY SYSTEMS, INC.
DM ACQUISITION CORPORATION
ALLWASTE SERVICES OF EL PASO, INC.
▇▇▇▇▇▇ INDUSTRIAL SERVICES (DELAWARE), INC.
GASOLINE TANK SERVICE COMPANY, INC.
▇▇▇▇▇▇ INDUSTRIAL SERVICES (USA), INC.
GEORGIA RECOVERY SYSTEMS
GRS/LAKE ▇▇▇▇▇▇▇, LTD.
HARTNEY CORPORATION
▇▇▇▇▇▇ INDUSTRIAL SERVICES GROUP, INC.
HYDRO-ENGINEERING & SERVICE, INC.
▇▇▇▇▇▇ INDUSTRIAL SERVICES OF TEXAS, INC.
INDUSTRIAL CONSTRUCTION SERVICES COMPANY, INC.
▇▇▇▇▇▇/▇.▇. ▇▇▇▇▇▇▇, INC.
INDUSTRIAL SERVICES TECHNOLOGIES, INC.
▇▇▇▇▇▇ MECHANICAL SERVICES OF LOUISIANA, INC.
INTERMETCO U.S., INC.
▇▇▇▇▇▇ METALS, INC.
INTERMETCO U.S.A. LTD.
▇▇▇▇▇▇ METALS (NEW YORK) INC.
IST HOLDING CORP.
▇▇▇▇▇▇ METALS (USA), INC.
▇▇▇▇▇ & LUTHER SERVICES, INC.
▇▇▇▇▇▇ METALS RECOVERY (DELAWARE) INC.
JESCO INDUSTRIAL SERVICE, INC.
▇▇▇▇▇▇ METALS RECOVERY (USA) INC.
LUNTZ ACQUISITION (DELAWARE) CORPORATION
▇▇▇▇▇▇ MID-ATLANTIC, INC.
LUNTZ CORPORATION
▇▇▇▇▇▇ OIL RECYCLING, INC.
MAC-TECH, INC.
▇▇▇▇▇▇ ▇▇▇▇▇ RECOVERY SYSTEMS, INC.
NORTHLAND ENVIRONMENTAL, INC.
▇▇▇▇▇▇ PLANT SERVICES, INC.
NORTRU, INC.
127
▇▇▇▇▇▇ RECLAMATION SERVICES, HOUSTON, INC.
ONEIDA ASBESTOS ABATEMENT INC.
▇▇▇▇▇▇ REFRACTORY AND CORROSION CORPORATION
ONEIDA ASBESTOS REMOVAL, INC.
▇▇▇▇▇▇ REFRACTORY SERVICES, INC.
▇▇▇▇▇▇ AUTOMOTIVE, LTD.
▇▇▇▇▇▇ SCAFFOLD CORPORATION
▇▇▇▇▇▇ CHEMI-SOLV, INC.
▇▇▇▇▇▇/SECO INDUSTRIES, INC.
▇▇▇▇▇▇ CHEMISOLV HOLDINGS, INC.
▇▇▇▇▇▇ SERVICES/ATLANTA, INC.
▇▇▇▇▇▇ CORROSION SERVICES, INC.
▇▇▇▇▇▇ ENTERPRISE SERVICE CORPORATION
▇▇▇▇▇▇ SERVICES HAWAII, LTD.
▇▇▇▇▇▇ ENVIRONMENTAL OF IDAHO CORPORATION
▇▇▇▇▇▇ SERVICES/LOUISIANA, INC.
▇▇▇▇▇▇ ENVIRONMENTAL SERVICES, INC.
▇▇▇▇▇▇ SERVICES/MISSOURI, INC.
▇▇▇▇▇▇ ENVIRONMENTAL SERVICES CORPORATION
▇▇▇▇▇▇ SERVICES/MOBILE, INC.
▇▇▇▇▇▇ ENVIRONMENTAL (WASHINGTON) INC.
▇▇▇▇▇▇ SERVICES/NORTH ATLANTIC, INC.
▇▇▇▇▇▇ SERVICES/NORTH CENTRAL, INC.
RMF GLOBAL, INC.
▇▇▇▇▇▇ SERVICES/OHIO, INC.
RMF INDUSTRIAL CONTRACTING, INC.
▇▇▇▇▇▇ SERVICES/OKLAHOMA, INC.
SERV-TECH CONSTRUCTION AND MAINTENANCE, INC.
▇▇▇▇▇▇ SERVICES (PENNSYLVANIA), INC.
SERV-TECH ENGINEERS, INC.
▇▇▇▇▇▇ SERVICES/SOUTH CENTRAL, INC.
SERV-TECH EPC, INC.
▇▇▇▇▇▇ SERVICES/SOUTHWEST, INC.
SERV-TECH INTERNATIONAL SALES, INC.
▇▇▇▇▇▇ ST, INC.
SERV-TECH OF NEW MEXICO, INC.
▇▇▇▇▇▇ ST PIPING, INC.
SERV-TECH SERVICES, INC.
▇▇▇▇▇▇ TECHNICAL SERVICES, INC.
SOLVENT RECOVERY CORPORATION
128
▇▇▇▇▇▇ TRANSPORTATION AND REMEDIATION, INC.
SOUTHEAST ENVIRONMENTAL SERVICES COMPANY., INC.
▇▇▇▇▇▇ ▇▇▇▇ INDUSTRIAL SERVICES, INC.
TERMCO CORPORATION
▇▇▇▇▇▇/▇▇▇▇▇▇▇, INC.
TERMINAL TECHNOLOGIES, INC.
PIPING COMPANIES, INC.
THERMALKEM, INC.
PIPING HOLDINGS CORP.
TIPCO ACQUISITION CORP.
PIPING MECHANICAL CORPORATION
TOTAL REFRACTORY SYSTEMS, INC.
PRS HOLDING, INC.
UNITED DRAIN OIL SERVICE, INC.
PSC ENTERPRISES, INC.
UNITED INDUSTRIAL MATERIALS, INC.
REPUBLIC ENVIRONMENTAL RECYCLING (NEW JERSEY), INC.
2766906 CANADA INC.
REPUBLIC ENVIRONMENTAL SYSTEMS (PENNSYLVANIA), INC.
SERVTECH CANADA, INC.
REPUBLIC ENVIRONMENTAL SYSTEMS (TECHNICAL SERVICES GROUP), INC.
721646 ALBERTA LTD.
REPUBLIC ENVIRONMENTAL SYSTEMS (TRANSPORTATION GROUP), INC.
ST DELTA CANADA, INC.
RESOURCE RECOVERY CORPORATION
ALLWASTE OF CANADA LTD.
RHO-CHEM CORPORATION
SABLIX INC.
RMF ENVIRONMENTAL, INC.
CALIGO RECLAMATION LTD.
▇▇▇▇▇▇ ANALYTICAL SERVICES CORPORATION
800151 ONTARIO INC.
▇▇▇▇▇▇ ENTERPRISES INC./LES ENTREPRISES ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ INVESTMENT CORP.
▇▇▇▇▇▇ ENVIRONMENTAL (ATLANTIC) LIMITED
▇▇▇▇▇▇ PLASMA METALS INC.
1195613 ONTARIO INC.
912613 ONTARIO LTD.
129
▇▇▇▇▇▇ ENVIRONMENTAL (ELMIRA) INC.
PSC/IML ACQUISITION CORP.
1233793 ONTARIO INC.
NORTRU, LTD.
▇▇▇▇▇▇ ENVIRONMENTAL SERVICES LIMITED
RECYCLAGE D'ALUMINUM QUEBEC INC./QUEBEC ALUMINUM RECYCLING INC.
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ INC.
842578 ONTARIO LIMITED
DELSAN DEMOLITION LIMITED
ALLIES STAFFING LTD.
Debtors And Debtors-In-Possession
By: /s/ M. ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Title: Secretary
130
ARNOS CORP.
By:_______________________________
Title:
131
BANKERS TRUST COMPANY
Individually and as US DIP Collateral Agent, DIP
Agent and DIP Co-Arranger
By: /s/ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Title: Managing Director
132
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Senior Managing Director
133
CANADIAN IMPERIAL BANK OF COMMERCE
Individually, as Canadian DIP Collateral Agent and as
DIP Co-Arranger
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
Title: Vice-President
▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Title: Managing Director
135
COMERICA BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Title: First Vice President
136
FOOTHILL CAPITAL CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------
Title: Vice President
137
SOCIETE GENERALE (CANADA)
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Title: Managing Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------
Title: Director
138
THE TORONTO-DOMINION BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Title: AVP Corporate Finance
139
ARNOS CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Title: Vice President
140
Exhibit A
FORM OF NOTICE OF BORROWING
[Date]
Bankers Trust Company ("BTCo"), [______________] as
DIP Agent for the Lenders
party to the DIP Credit
Agreement referred
to below and as Payments Administrator thereunder
[ADDRESS]
Attention:
Ladies and Gentlemen:
The undersigned, [▇▇▇▇▇▇ Services Corp.] [▇▇▇▇▇▇ Services
(Delaware), Inc.], refers to the Credit Agreement, dated as of
________________, 1999 (as amended, restated or otherwise modified from
time to time, the "DIP Credit Agreement", unless otherwise defined
herein, capitalized terms used herein shall have the meaning set forth
in the DIP Credit Agreement), among ▇▇▇▇▇▇ SERVICES CORP., a
corporation existing under the laws of Ontario (the "Canadian
Borrower"), ▇▇▇▇▇▇ SERVICES (DELAWARE), INC., a corporation existing
under the laws of Delaware (the "US Borrower", and together with the
Canadian Borrower, the "Borrowers"), certain subsidiaries of the
Borrowers located in Canada and in the United States (the "Subsidiary
Guarantors"), Bankers Trust Company ("BTCo"), as administrative agent
for the Lenders (the "DIP Agent"), Canadian Imperial Bank of Commerce
and BTCo, as co-arrangers (the "DIP Co-Arrangers"), and the lenders
from time to time parties to the DIP Credit Agreement (the "Lenders"),
and pursuant to Section 1.02 of the DIP Credit Agreement, hereby gives
you irrevocable notice that the undersigned hereby requests a Borrowing
under the DIP Credit Agreement, and in that connection sets forth below
the information relating to such Borrowing (the "Proposed Borrowing")
as required by Section 1.02 of the DIP Credit Agreement:
(i) The Business Day of the Proposed Borrowing is __________,
19__.(1)
(ii) The aggregate principal amount of the Proposed Borrowing is
$___________.
(iii) The Proposed Borrowing is to consist of [Base Rate Loans]
[Eurodollar Loans].
__________
[FN]
(1) May be either a Business Day or same day notice in the case of Base Rate
Loans and at least three Business Days after the date hereof in the case of
Eurodollar Loans.
141
Exhibit A
Page 2
(iv) The Interest Period for the Proposed Borrowing is [one
month](2), [two months], [three months].
The undersigned hereby certifies, to the knowledge of the
undersigned and without personal liability, that the following statements are
true and correct in all material respects on the date hereof, and will be true
and correct in all material respects on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the DIP
Credit Documents are and will be true and correct in all material respects, both
before and after giving effect to the Proposed Borrowing and to the application
of the proceeds thereof, as though made on such date (it being understood and
agreed that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material respects
only as of such specified date);
(B) the Proposed Borrowing and its intended use are consistent
with the terms of the DIP Credit Documents and the Budget and is necessary,
after utilization and application of available cash, in order to satisfy the
obligations of the Borrowers and Subsidiary Guarantors in the ordinary course of
business or as permitted under the DIP Credit Agreement;
(C) the Borrowers and the Subsidiary Guarantors have observed
or performed all of their covenants and other agreements and have satisfied in
all material respects every condition contained in the DIP Credit Documents and
the Orders (as applicable) to be observed, performed or satisfied by the
Borrowers or such Subsidiary Guarantors; and
(D) no Default or Event of Default has occurred and is
continuing.
Very truly yours,
[▇▇▇▇▇▇ Services Corp.]
[▇▇▇▇▇▇ Services (Delaware), Inc.],
Debtor and Debtor-in-Possession
By: ____________________________________
Title:
__________
[FN]
(2) All Eurodollar Loans shall have an Interest Period of one month.
142
Exhibit B
FORM OF REVOLVING NOTE
$___________ New York, New York
___________, 1999
FOR VALUE RECEIVED, [▇▇▇▇▇▇ Services Corp.] [▇▇▇▇▇▇ Services
(Delaware), Inc.] as borrower and as debtor-in-possession under [Chapter 11 of
the United States Bankruptcy Code (the "Bankruptcy Code") (the "US Borrower")]
[the Companies Creditors Arrangement Act (the "Canadian Borrower")], hereby
promises to pay to the order of ____________________ (the "Lender"), in lawful
money of the United States of America in immediately available funds, at the
office of Bankers Trust Company (the "DIP Agent") located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Maturity Date (as defined in the DIP
Credit Agreement referred to below) the principal sum of _________________
DOLLARS ($___________) or, if less, the unpaid principal amount of all Revolving
Loans (as defined in the DIP Credit Agreement referred to below) made by the
Lender pursuant to the DIP Credit Agreement referred to below. Unless otherwise
defined herein, capitalized terms used herein shall have the meaning set forth
in the DIP Credit Agreement.
The [US Borrower] [Canadian Borrower] promises also to pay
interest on the unpaid principal amount of each Revolving Loan evidenced hereby
in like money at said office from the date of the borrowing thereof to, but
excluding, the date repaid at the rates and at the times provided in Section
1.07 of the DIP Credit Agreement referred to below.
This Note is one of the Revolving Notes referred to in the
Credit Agreement, dated as of ___________ ___, 1999 (as amended, restated or
otherwise modified from time to time, the "DIP Credit Agreement"), among ▇▇▇▇▇▇
SERVICES CORP., a corporation existing under the laws of Ontario, as a borrower
(the "Canadian Borrower"), ▇▇▇▇▇▇ SERVICES (DELAWARE), INC., a corporation
existing under the laws of Delaware, as a borrower (the "US Borrower", and
together with the Canadian Borrower, the "Borrowers"), certain subsidiaries of
the Borrowers located in Canada and in the United States (the "Subsidiary
Guarantors"), Bankers Trust Company ("BTCo"), as administrative agent for the
Lenders in the manner and to the extent described in the DIP Credit Documents
(the "DIP Agent"), Canadian Imperial Bank of Commerce and BTCo as co-arrangers
(the "DIP Co-Arrangers), and the lenders from time to time parties to the DIP
Credit Agreement (the "Lenders"), and is entitled to the benefits thereof and
the other DIP Credit Documents referred to therein.
The obligation of the [US Borrower] [Canadian Borrower]
evidenced by this Note constitutes allowed administrative expenses entitled to
priority over all administrative expenses of the kind specified in Sections
503(b) and 507(b) of the US Bankruptcy Code, subject only to certain exceptions
contained in the DIP Credit Agreement. Pursuant to [Sections 364(c) and 364(d)
of the US Bankruptcy Code] [equivalent provision of the CCAA], this Note is
secured by certain Collateral referred to in the DIP Credit Documents (as
defined in the DIP Credit
143
Exhibit B
Page 2
Agreement), reference to which documents is hereby made for a description of the
Collateral provided thereby and the rights of the Lenders and the DIP Agent and
the DIP Collateral Agents in respect of such Collateral. This Note is subject to
voluntary prepayment and mandatory repayment prior to the Maturity Date, in
whole or in part, as provided in the DIP Credit Agreement.
In case an Event of Default (as defined in the DIP Credit
Agreement) shall occur and be continuing, the principal of and accrued interest
on this Note may be declared to be due and payable in the manner and with the
effect provided in the DIP Credit Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
[▇▇▇▇▇▇ SERVICES CORP.]
[▇▇▇▇▇▇ SERVICES (DELAWARE) INC.],
Debtor and Debtor-in-Possession
By: ___________________________________
Title:
144
Exhibit C
FORM OF LETTER OF CREDIT REQUEST
No. _________________(1) Dated _________________(2)
Bankers Trust Company ("BTCo"), individually and as DIP Agent and Payments
Administrator under the Credit Agreement (as amended, modified or supplemented
from time to time, the "DIP Credit Agreement"), dated as of __________ ___,
1999 among ▇▇▇▇▇▇ SERVICES CORP., a corporation existing under the laws of
Ontario (the "Canadian Borrower"), ▇▇▇▇▇▇ SERVICES (DELAWARE), INC., a
corporation existing under the laws of Delaware (the "US Borrower", and
together with the Canadian Borrower, the "Borrowers"), certain subsidiaries of
the Borrowers located in Canada and in the United States (the "Subsidiary
Guarantors"), BTCo, as administrative agent for the Lenders (the "DIP Agent"),
Canadian Imperial Bank of Commerce and BTCo as co-arrangers (the "DIP
Co-Arrangers), and the lenders from time to time parties to the DIP Credit
Agreement (the "Lenders").
Attention:
Ladies and Gentlemen:
The undersigned hereby requests that [Name of Issuing Lender],
in its individual capacity, issue a [Standby Letter of Credit] [Trade Letter of
Credit] for the account of the undersigned on _____________(3) (the "Date of
Issuance") in the aggregate stated amount of __________________.(4)
For purposes of this Letter of Credit Request, unless
otherwise defined, all capitalized terms used herein shall have the respective
meanings provided in the DIP Credit Agreement.
_________________
[FN]
(1) Letter of Credit Request Number.
(2) Date of Letter of Credit Request.
(3) Insert Date of Issuance which shall be a Business Day and shall be at
least three Business Days (or such shorter period as is acceptable to
the Issuing Lender) from the date hereof.
(4) Aggregate initial stated amount of Letter of Credit.
145
Exhibit C
Page 2
The beneficiary of the requested Letter of Credit will be
___________,(5) and such Letter of Credit will be in support of ____________(6)
and will have a stated termination date of __________________.(7)
The undersigned hereby certifies, to the knowledge of the
undersigned and without personal liability, that:
(1) The representations and warranties contained in the DIP
Credit Documents will be true and correct in all material respects on the Date
of Issuance, both before and after giving effect to the issuance of the Letter
of Credit requested hereby (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
(2) No Default or Event of Default has occurred and is
continuing.
_________________
[FN]
(5) Insert name and address of beneficiary.
(6) Insert description of L/C Supportable Obligations or description of
commercial transactions of the Credit Parties which are being
supported.
(7) Insert last date upon which drafts may be presented which (i), in the
case of Standby Letters of Credit, may not be later than one year of
such Letter of Credit's date of issuance and (ii), in the case of Trade
Letters of Credit, may not be later than 180 days after the Date of
Issuance.
146
Exhibit C
Page 3
Copies of all documentation with respect to the supported
transaction are attached hereto.
[▇▇▇▇▇▇ SERVICES (DELAWARE), INC.]
Debtor and Debtor-in-Possession
By: _____________________________________
Title:
147
Exhibit D
FORM OF SECTION 4.06(b)(ii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of
__________ ___, 1999 among ▇▇▇▇▇▇ SERVICES CORP., a corporation existing under
the laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), ▇▇▇▇▇▇ SERVICES (DELAWARE), INC., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower",
and together with the Canadian Borrower, the "Borrowers"), certain subsidiaries
of the Borrowers located in Canada and in the United States (the "Subsidiary
Guarantors"), Bankers Trust Company ("BTCo"), as administrative agent for the
Lenders (the "DIP Agent"), Canadian Imperial Bank of Commerce and BTCo as
co-arrangers, (in such capacity, the "DIP Co-Arrangers), and the lenders from
time to time parties to the DIP Credit Agreement (the "Lenders") (as amended,
restated or otherwise modified from time to time, the "DIP Credit Agreement").
Pursuant to the provisions of Section 4.06(b)(ii) of the DIP Credit Agreement,
the undersigned hereby certifies that it is not a "bank" as such term is used in
Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended.
[NAME OF LENDER]
By: ___________________________________
Title:
Date: ___________________, 1999
148
Exhibit E
[NAME OF CREDIT PARTY]
Officer's Certificate
I, the undersigned, [Title] of [Name of Credit Party], a
corporation organized and existing under the laws of [the State] [the Province]
of [ ] (the "Company"), DO HEREBY CERTIFY THAT:
1. This Certificate is furnished pursuant to Section 5.01(b)
of that certain Credit Agreement, dated as of __________ ___, 1999 among ▇▇▇▇▇▇
SERVICES CORP., a corporation existing under the laws of Ontario and a
debtor-in-possession, as a borrower (the "Canadian Borrower"), ▇▇▇▇▇▇ SERVICES
(DELAWARE), INC., a corporation existing under the laws of Delaware and a
debtor-in-possession, as a borrower (the "US Borrower", and together with the
Canadian Borrower, the "Borrowers"), certain subsidiaries of the Borrowers
located in Canada and in the United States (the "Subsidiary Guarantors"),
Bankers Trust Company ("BTCo"), as administrative agent for the Lenders (in such
capacity, the "DIP Agent"), Canadian Imperial Bank of Commerce and BTCo as
co-arrangers (the "DIP Co-Arrangers"), and the lenders from time to time parties
to the DIP Credit Agreement (the "Lenders") (such Credit Agreement, as in effect
on the date of this Certificate, being herein called the "DIP Credit
Agreement"). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the DIP Credit Agreement.
2. The following named individuals are elected officers of the
Company and each holds the office of the Company set forth opposite such
individual's name. The signature written opposite the name and title of such
officer is such individual's correct signature.
Name(1) Title Signature
---- ----- ---------
_______________________ ________________________ _________________________
_______________________ ________________________ _________________________
_______________________ ________________________ _________________________
_______________________ ________________________ _________________________
_______________________ ________________________ _________________________
_________________
[FN]
(1) Include name, title and signature of each officer who will sign any DIP
Credit Document, including the officer, secretary or assistant
secretary who will sign the certification at the end of this
Certificate.
149
Exhibit E
Page 2
3. Attached hereto as Exhibit A is a copy of the Certificate
of Incorporation of the Company as filed in the [Office of the Secretary of
State] [equivalent Canadian governmental authority of [ ]
on _________ __, ____, together with all amendments thereto adopted through
the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of
the By-Laws of the Company which were duly adopted, are in full force and effect
on the date hereof.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on __________ __, ____ by unanimous written
consent of the Board of Directors of the Company, and said resolutions have not
been rescinded, amended or modified. Except as attached hereto as Exhibit C, no
resolutions have been adopted by the Board of Directors of the Company which
deal with the execution, delivery or performance of any of the DIP Credit
Documents to which the Company is a party.
6. To the knowledge of the undersigned and without personal
liability, on the date hereof, the representations and warranties contained in
the DIP Credit Agreement and in the other DIP Credit Documents to which the
Company is a party are true and correct in all material respects, both before
and after giving effect to each Credit Event to occur on the date hereof and the
application of the proceeds thereof (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).(2)
7. To the knowledge of the undersigned and without personal
liability, on the date hereof, no Default or Event of Default has occurred and
is continuing under any DIP Credit Document to which the Company is a party or
would result from the Credit Events to occur on the date hereof or from the
application of the proceeds thereof.(3)
8. To the knowledge of the undersigned and without personal
liability, there is no proceeding for the dissolution or liquidation of the
Company or threatening its existence.
________________
[FN]
(2) Insert only in US Borrower's and Canadian Borrower's Officer's Certificate.
(3) Insert only in US Borrower's and Canadian Borrower's Officer's Certificate.
150
Exhibit E
Page 3
IN WITNESS WHEREOF, I have hereunto set my hand this __ day of
____________, 1999.
By: ___________________________________
Name:
Title:
151
Exhibit E
Page 4
I, the undersigned, [Secretary/Assistant Secretary] of the
Company DO HEREBY CERTIFY THAT:
1. [Name] is the duly elected and qualified [Title] of the
Company and the signature above is his/her genuine signature.
2. The certifications made by [Name of person making above
certifications] in Items 2, 3, 4, 5, 6, 7 and 8 above are true
and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this __ day of
_________ 1999.
By: ________________________________
Name:
Title:
152
EXHIBIT F-1
July 9, 1999
To Each Addressee
Listed on Schedule I hereto
Re: ▇▇▇▇▇▇ Services Corp.
Ladies and Gentlemen:
We have acted as special counsel to (i) ▇▇▇▇▇▇ Services Corp., a
corporation existing under the laws of Ontario and a debtor and
debtor-in-possession (the "Canadian Borrower") in a pending case under Chapter
11 of the US Bankruptcy Code ("Chapter 11"), which case is being jointly
administered with the cases of the US Borrower and certain of the Subsidiary
Guarantors (each as defined below) pending under Chapter 11 (collectively, with
the Chapter 11 case of the Canadian Borrower, the "Chapter 11 Cases"); (ii)
▇▇▇▇▇▇ Services (Delaware), Inc., a corpora tion existing under the laws of
Delaware and a debtor and debtor-in-possession in the Chapter 11 Cases (the "US
Borrower" and together with the Canadian Borrower, the "Borrowers"); and (iii)
each of the entities listed on Schedule II, each of which is a direct or
indirect subsidiary of the Canadian Borrower (each, individually, a "Subsid iary
Guarantor" and, collectively, the "Subsidiary Guarantors"), in connection with
the preparation, execution and delivery of the Post-Petition Credit Agreement,
dated as of June 28, 1999 (the "Credit Agreement"), among the Borrowers, the
Subsidiary Guarantors, Bankers Trust Company, as administrative agent (in such
capacity, the "DIP Agent") for the Lenders (as defined below), Bankers Trust
Company and Canadian Imperial Bank of Commerce, as co-arrangers (in such
capacity, the "DIP Co-Arrangers"), and the various financial institutions from
time to time party thereto (collectively, the "Lenders"). This opinion is being
delivered pursuant to Section 5.01(c)(i) of the Credit Agreement. Capitalized
terms used herein and not otherwise
153
July 9, 1999
Page 2
defined herein shall have the same meanings herein as ascribed thereto in the
Credit Agreement.
In our examination we have assumed the genuineness of all signatures
including indorsements, the legal capacity of natural persons, the authenticity
of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photostatic copies,
and the authenticity of the originals of such copies. As to any facts material
to this opinion which we did not independently establish or verify, we have
relied upon representations of the Borrowers and the other Opinion Parties (as
defined below) and of public officials, including the facts set forth in the
Officer's Certificate described below.
In rendering the opinions set forth herein, we have examined and relied on
originals or copies of the following:
(1) the Credit Agreement;
(2) the Revolving Notes (each a "Note" and, collectively, the
"Notes") issued on the date hereof to the applicable Lenders;
(3) the Pledge Agreement, dated as of June 28, 1999, by and among the
US Borrower, the US Subsidiary Guar antors, and Bankers Trust
Company and Canadian Imperial Bank of Commerce as DIP Collateral
Agents (in such capacity, the "DIP Collateral Agents" and,
together with the DIP Agent, the "Agents") (the "Pledge
Agreement");
(4) the Order, dated June 28, 1999 (the "Interim Order"), a copy of
which is annexed hereto as Exhibit A;
(5) the Order, dated June 28, 1999 (the "Cash Collateral Order"), a
copy of which is annexed hereto as Exhibit B;
154
July 9, 1999
Page 3
(6) the Certificate of the Borrowers and the Subsidiary Guarantors
(collectively, the "Opinion Parties"), dated the date hereof, a
copy of which is annexed hereto as Exhibit C (the "Officer's
Certificate"); and
(7) such other documents as we have deemed necessary or appropriate
as a basis for the opinions set forth below.
We express no opinion as to the laws of any jurisdiction other than (i) the
Applicable Laws of the State of New York and (ii) the Applicable Laws of the
United States of America. We have relied with your consent as to matters of the
laws of the State of New York on the opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP dated the date hereof and addressed to us.
The documents listed at items 1, 2 and 3 above shall hereinafter be
referred to collectively as the "Loan Documents". The following terms shall have
the following meanings when used herein:
(i) "Applicable Laws" shall mean those laws, rules and regula tions which,
in our experience, are normally applicable to transactions of the type
contemplated by the Loan Documents (including the US Bankruptcy Code)
without our having made any special investigation as to the
applicability of any specific law, rule or regulation and which are
not the subject of a specific opinion herein referring to a particular
law or laws; and
(ii) "Governmental Approval" shall mean any consent, approval, license,
authorization or validation of, or filing, recording or registration
with, any governmental authority pursuant to Applicable Laws of the
State of New York or the Applicable Laws of the United States of
America.
Based upon the foregoing and subject to the limitations, qualifica tions,
exceptions and assumptions set forth herein, we are of the opinion that:
155
July 9, 1999
Page 4
1. Each of the Loan Documents constitutes the valid and binding obligation
of each Opinion Party thereto enforceable against such Opinion Party in
accordance with its terms under the laws of the State of New York. Our opinion
in this paragraph is subject to the following qualifications:
(a) enforcement of the Loan Documents is subject to the US Bankruptcy
Court's general powers (including its powers as a court of equity), to
applicable New York state bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
by general principles of equity (regardless of whether enforcement is
sought in equity or at law);
(b) certain of the remedial provisions with respect to the collateral
including waivers with respect to the exercise of remedies against the
collateral contained in the Credit Agreement and the Pledge Agreement may
be unenforceable in whole or in part, but the inclusion of such provisions
does not affect the validity of any such agreement, taken as a whole, and
each of the Credit Agreement and the Pledge Agreement, each taken as a
whole, together with applicable law, contains adequate provisions for the
practical realization of the benefits of the security interest created
thereby;
(c) enforcement of the Credit Agreement and the Pledge Agreement as it
relates to the grant of a security interest in the Collat eral may be
subject to the terms of instruments, leases, contracts or other agreements
between each Opinion Party thereto and the other parties to such
agreements, the rights of such other parties and any claims or defenses of
such other parties against such Opinion Parties arising under or outside
such instruments, leases or contracts or other agreements;
(d) we express no opinion as to the creation, perfection or priority
of any lien on or security interest in the Collateral purported to be
created by any Loan Document;
(e) we express no opinion regarding any other provi sion of any Loan
Document to the extent that it authorizes or permits any
156
July 9, 1999
Page 5
purchaser of a participation interest from any Lender to set off or apply
any deposit, property or indebtedness with respect to any participation
interest;
(f) we express no opinion as to the enforceability of any rights to
contribution or indemnification provided for in the Loan Docu ments which
are violative of the public policy underlying any law, rule or regulation
(including any federal or state securities law, rule or regulation); and
(g) the enforceability of the Loan Documents may be limited to the
extent any term or provision of the Loan Documents conflicts or is found to
conflict with any term or provision of the Interim Order.
2. The execution and delivery by each Opinion Party of each Loan Document
to which it is a party and the performance by each such Opinion Party of its
obligations thereunder do not violate any provision of any Applicable Law of the
State of New York or any Applicable Law of the United States of America.
3. Other than the entry by the US Bankruptcy Court of the Interim Order,
the Cash Collateral Order and the US Final Order, no Governmental Ap proval,
which has not been obtained or taken and is not in full force and effect, is
required under any Applicable Law of the State of New York or the United States
of America to authorize, or is required in connection with, the execution,
delivery or performance of any Loan Documents.
4. The Interim Order was entered on the docket of the Clerk of the US
Bankruptcy Court for the US Cases of the Borrower and the US Subsidiary
Guarantors (the "Docket") on June 28, 1999 (the "Effective Time"). Based solely
upon our review of the Docket as it existed as of 9:30 a.m. on July 9, 1999, (x)
we believe that the Interim Order is in full force and effect and (y) no order
amending, staying, vacating or rescinding the Interim Order has been entered by
the US Bankruptcy Court. In connection with the foregoing, please note that
there may be a delay between the time when papers are filed with the US
Bankruptcy Court and the time when such papers entered into the Docket. To our
knowledge, as of the Effective Time, no order amending, staying, vacating or
rescinding the Interim Order has been entered by the US Bankruptcy Court.
157
July 9, 1999
Page 6
QUALIFICATIONS AND ASSUMPTIONS
A. In rendering the foregoing opinions as they relate to or are affected by
the Interim Order, we have the following qualifications and assumptions relating
to the Interim Order:
(a) we have assumed that each interested party, to the extent entitled
thereto, has received or will receive due, sufficient and ▇▇▇ ▇▇▇▇▇ notice
of the Interim Order and the US Bankruptcy Court's interim hearing on the
Interim Order;
(b) you have not asked for, and we express no opinion herein, on the
substantive effect of the Interim Order or the US Final Order or the
provisions thereof;
(c) we have assumed that the evidence in the record at the preliminary
hearing was adequate to support the relief requested in the Motion (as
defined in the Interim Order) and the entry of the Interim Order; and
(d) in rendering our opinions in paragraphs 1, 2 and 3, we have relied
on the terms of the Interim Order as in effect at the Effective Time and
reflected on the Docket at such time, and we express no opinion as to
whether the Interim Order may be subject to subsequent alteration or
revocation by the US Bankruptcy Court or another court of competent
jurisdiction or effects of any such alteration or revocation on the
transactions contemplated by the Loan Documents.
B. In rendering the foregoing opinions, we also have assumed, with your
consent, that:
(a) each Opinion Party has been duly incorporated or formed, as
applicable, and is validly existing and in good standing under the laws of
the jurisdiction of its incorporation or formation, as applicable; provided
that we call to your attention that (i) the Opinion Parties listed on
Exhibit D are not in good standing in their respective jurisdictions of
organi-
158
July 9, 1999
Page 7
zation and (ii) the Opinion Parties listed on Exhibit E are not validly
existing in their respective jurisdictions of organization;
(b) each Opinion Party has the requisite power and authority,
corporate or otherwise, to execute, deliver and perform all of its
obligations under each of the Loan Documents to which it is a party, and
the execution and delivery of such Loan Documents and the consummation by
each Opinion Party of the transactions contemplated thereby have been duly
authorized by all requisite action, corporate or otherwise, on the part of
such Opinion Party;
(c) each of the Loan Documents has been duly exe cuted and delivered
by each Opinion Party that is a party thereto;
(d) the execution and delivery by each Opinion Party of the Loan
Documents to which it is a party and the performance of its obligations
thereunder do not and will not conflict with, contravene, violate or
constitute a default under (i) the articles or certificate of incorporation
or the by-laws (or the equivalent organizational and governing documents)
of such Opinion Party, (ii) any law, rule, or regulation to which any
Opinion Party is subject including, without limitation, the Investment
Company Act of 1940, as amended, and the Public Utilities Holding Company
Act of 1935, as amended (other than Applicable Laws, as to which we express
our opinion in paragraph 2 herein), (iii) any judicial or administrative
order or decree of any governmental authority or (iv) any consent,
approval, license, authorization or validation of, or filing, recording or
registration with any governmental authority (other than Governmental
Approvals as to which we express our opinion in paragraph 3 herein); and
(e) no authorization, consent or other approval of, notice to or
filing with any court, governmental authority or regulatory body (other
than Governmental Approvals as to which we express our opinion in paragraph
3 herein) is required to authorize or is required in connection with the
execution, delivery or performance by each Opinion Party of any Loan
Document to which it is a party or the transactions contemplated thereby.
159
July 9, 1999
Page 8
We understand that you are separately receiving an opinion, with respect to
certain of the foregoing assumptions from ▇▇▇▇▇ ▇▇▇▇▇, Esq., General Counsel to
the Canadian Borrower and we are advised that such opinion contains
qualifications. Our opinions herein stated are based on the assumptions
specified above and we express no opinion as to the effect on the opinions
herein stated of the qualifications contained in such other opinion.
C. Finally, our opinions are also subject to the following assumptions and
qualifications:
(a) each Loan Document constitutes the legal, valid and binding
obligation of each party to such Loan Document (other than the Opinion
Parties) enforceable against such party (other than the Opinion Parties) in
accordance with its terms;
(b) we express no opinion as to the effect on the opinions expressed
herein of (i) the compliance or non-compliance of any Agent, Lender or
other party (other than the Opinion Parties to the extent set forth herein)
to the Loan Documents with any state, federal or other laws or regulations
applicable to them or (ii) the legal or regulatory status or the nature of
the business of any DIP Agent, DIP Co-Arranger, DIP Collateral Agent,
Lender or other such party;
(c) each Lender, each DIP Co-Arranger, the DIP Agent and the DIP
Collateral Agent has acted in good faith in the execution, deliv ery and
performance of the Loan Documents and the transactions contem plated
thereby;
(d) in rendering our opinions expressed herein, we express no opinion
as to the applicability or effect of any fraudulent transfer or similar law
on the Loan Documents or any transactions contemplated thereby;
(e) we call to your attention that the execution, delivery and
performance by the Opinion Parties of the Loan Documents, the grant by the
Opinion Parties pursuant thereto of security interests and other
160
July 9, 1999
Page 9
liens in respect of their assets, the issuance by each Borrower of the
Notes to which it is a party and the borrowing by the Borrowers of
Borrowings thereunder may violate or constitute defaults under other
agreements and instruments to which any Opinion Party or its property is
subject, and, in giving our opinion in paragraph 1 herein, we are relying
upon the effective ness of the Interim Order and the US Bankruptcy Code;
and
(f) we call to your attention that (i) the Subsidiary Guarantors
listed on Exhibit D are not in good standing in their respective
jurisdictions of organization and (ii) the Subsidiary Guarantors listed on
Exhibit E are not validly existing in their respective jurisdictions of
organiza tion and, in each case, we express no opinion as to the effect of
such failure to be in good standing on the opinions expressed herein.
161
July 9, 1999
Page 10
This opinion is being furnished only to the addressees named above in
connection with the Loan Documents and is solely for their benefit and is not to
be used, circulated, quoted, relied upon or otherwise referred to by any other
Person or for any other purpose without our prior written consent, except that
(i) an assignee of a Lender which becomes a party to (and a Lender under) the
Credit Agreement pursuant to subsection 12.04(b) of the Credit Agreement may
rely on this opinion as if it were addressed and delivered to such assignee on
the date hereof; and (ii) you may deliver a copy of this opinion to (A) any
permitted assignee, transferee or participant in respect of your interest under
the Credit Agreement, or (B) any regulatory authority having jurisdiction over
any Agent or Lender; provided that, except as set forth in the preceding clause
(i), no Person who receives a copy of this opinion pursuant to the preceding
clause (ii) may use, quote, rely upon or otherwise refer to this opinion.
Very truly yours,
162
Schedule I to
SASM&F (Illinois) Opinion
Addressees of Opinion
Bankers Trust Company, as Administrative Agent, DIP Agent and Co-Arranger
Canadian Imperial Bank of Commerce, as Co-Arranger
Arnos Corp.
Bankers Trust Company
Bear ▇▇▇▇▇▇▇ & Co. Inc.
Canadian Imperial Bank of Commerce
Comerica Bank
Foothill Capital Corporation
Societe Generale Canada
The Chase Manhattan Bank
The Toronto-Dominion Bank
163
Schedule II to
SASM&F (Illinois) Opinion
Subsidiaries
1195613 Ontario Inc.
1233793 Ontario Inc.
21st Century Environmental Management, Inc.
21st Century Environmental Management, Inc. of Rhode Island
21st Century Environmental Management, Inc. of Nevada
21st Century Environmental Management, Inc. of Puerto Rico
2766906 Canada Inc.
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc.
721646 Alberta Ltd.
800151 Ontario Inc.
842578 Ontario Limited
912613 Ontario Ltd.
Ace/Allwaste Environmental Services of Indiana, Inc.
Advanced Energy Corporation
Advanced Environmental Systems, Inc.
All Safety and Supply, Inc.
Allies Staffing, Inc.
Allies Staffing Ltd.
AllQuest Capital, Inc.
AllScaff, Inc.
Allwaste Asbestos Abatement Holdings, Inc.
Allwaste Asbestos Abatement, Inc.
Allwaste Asbestos Abatement of New England, Inc.
Allwaste of Canada Ltd.
Allwaste Railcar Cleaning, Inc.
Allwaste Recovery Systems, Inc.
Allwaste Services of El Paso, Inc.
Allwaste Tank Cleaning, Inc.
Allwaste Texquisition, Inc.
Allworth, Inc.
164
ALRC, Inc.
APLC, Inc.
BEC/▇▇▇▇▇▇, Inc.
Burlington Environmental Inc. (Delaware)
Burlington Environmental Inc. (Washington)
Butco, Inc.
Caligo Reclamation Ltd.
Cappco Tubular Products USA, Inc.
Chem-Fab, Inc.
Chem-Freight, Inc.
Chemical Pollution Control, Inc. of New York - A 21st Century Environmental
Management Company
Chemical Pollution Control, Inc. of Florida - A 21st Century Environmental
Management Company
Chemical Reclamation Services, Inc.
Cousins Waste Control Corporation
CyanoKEM, Inc.
Deep Clean, Inc.
Delsan Demolition Limited
DM Acquisition Corporation
Gasoline Tank Service Company Inc.
Georgia Recovery Systems
GRS/Lake ▇▇▇▇▇▇▇, Ltd.
Hartney Corporation
Hydro-Engineering & Service, Inc.
Industrial Construction Services Company, Inc.
Industrial Services Technologies, Inc.
Intermetco U.S., Inc.
Intermetco U.S.A. Ltd.
IST Holding Corp.
▇▇▇▇▇ & Luther Services, Inc.
Jesco Industrial Service, Inc.
Luntz Acquisition (Delaware) Corporation
Luntz Corporation
Mac-Tech, Inc.
Northland Environmental, Inc.
Nortru, Inc.
165
Nortru, Ltd.
Oneida Asbestos Abatement Inc.
Oneida Asbestos Removal, Inc.
▇▇▇▇▇▇ Analytical Services Corporation
▇▇▇▇▇▇ Automotive, Ltd.
▇▇▇▇▇▇ Chemi-Solv, Inc.
▇▇▇▇▇▇ Chemisolv Holdings, Inc.
▇▇▇▇▇▇ Corrosion Services, Inc.
▇▇▇▇▇▇ Enterprise Service Corporation
▇▇▇▇▇▇ Enterprises Inc./Les Entreprises ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ Environmental (Atlantic) Limited
▇▇▇▇▇▇ Environmental (Elmira) Inc.
▇▇▇▇▇▇ Environmental of Idaho Corporation
▇▇▇▇▇▇ Environmental Services Corporation
▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Environmental Services Limited
▇▇▇▇▇▇ Environmental (Washington) Inc.
▇▇▇▇▇▇ Industrial Services (Delaware), Inc.
▇▇▇▇▇▇ Industrial Services (USA), Inc.
▇▇▇▇▇▇ Industrial Services Group, Inc.
▇▇▇▇▇▇ Industrial Services of Texas, Inc.
▇▇▇▇▇▇ Investment Corp.
▇▇▇▇▇▇/▇.▇. ▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇▇ Mechanical Services of Louisiana, Inc.
▇▇▇▇▇▇ Metals (New York), Inc.
▇▇▇▇▇▇ Metals (USA), Inc.
▇▇▇▇▇▇ Metals, Inc.
▇▇▇▇▇▇ Metals Recovery (Delaware), Inc.
▇▇▇▇▇▇ Metals Recovery (USA), Inc.
▇▇▇▇▇▇ Mid-Atlantic, Inc.
▇▇▇▇▇▇ Oil Recycling, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇ Recovery Systems, Inc.
▇▇▇▇▇▇ Plant Services, Inc.
▇▇▇▇▇▇ Plasma Metals Inc.
▇▇▇▇▇▇ Reclamation Services, Houston, Inc.
▇▇▇▇▇▇ Refractory and Corrosion Corporation
▇▇▇▇▇▇ Refractory Services, Inc.
166
▇▇▇▇▇▇ Scaffold Corporation
▇▇▇▇▇▇/SECO Industries, Inc.
▇▇▇▇▇▇ Services (Pennsylvania), Inc.
▇▇▇▇▇▇ Services/Atlanta, Inc.
▇▇▇▇▇▇ Services Hawaii, Ltd.
▇▇▇▇▇▇ Services/Louisiana, Inc.
▇▇▇▇▇▇ Services/Missouri, Inc.
▇▇▇▇▇▇ Services/Mobile, Inc.
▇▇▇▇▇▇ Services/North Atlantic, Inc.
▇▇▇▇▇▇ Services/North Central, Inc.
▇▇▇▇▇▇ Services/Ohio, Inc.
▇▇▇▇▇▇ Services/Oklahoma, Inc.
▇▇▇▇▇▇ Services/South Central, Inc.
▇▇▇▇▇▇ Services/Southwest, Inc.
▇▇▇▇▇▇ ST, Inc.
▇▇▇▇▇▇ ST Piping, Inc.
▇▇▇▇▇▇ Technical Services, Inc.
▇▇▇▇▇▇ Transportation and Remediation, Inc.
▇▇▇▇▇▇ ▇▇▇▇ Industrial Services, Inc.
▇▇▇▇▇▇/▇▇▇▇▇▇▇, Inc.
Piping Companies, Inc.
Piping Holdings Corp.
Piping Mechanical Corp.
PRS Holding, Inc.
PSC Enterprises, Inc.
PSC/IML Acquisition Corp.
Recyclage d'Aluminium Quebec Inc./Quebec Aluminum Recycling Inc.
Republic Environmental Recycling (New Jersey), Inc.
Republic Environmental Systems (Pennsylvania), Inc.
Republic Environmental Systems (Technical Services Group), Inc.
Republic Environmental Systems (Transportation Group), Inc.
RESI Acquisition (Delaware) Corporation
Resource Recovery Corporation
Rho-Chem Corporation
RMF Environmental, Inc.
RMF Global, Inc.
RMF Industrial Contracting, Inc.
167
Sablix Inc.
Serv-Tech Construction and Maintenance, Inc.
Serv-Tech Engineers, Inc.
Serv-Tech EPC, Inc.
Serv-Tech International Sales, Inc.
Serv-Tech of New Mexico, Inc.
Serv-Tech Services, Inc.
ServTech Canada, Inc.
Solvent Recovery Corporation
Southeast Environmental Services Company, Inc.
ST Delta Canada, Inc.
Termco Corporation
Terminal Technologies, Inc.
ThermalKEM Inc.
TIPCO Acquisition Corp.
Total Refractory Systems, Inc.
United Industrial Materials, Inc.
United Drain Oil Service, Inc.
168
Exhibit A to
SASM&F Opinion
Interim Order
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: )
) Chapter 11
▇▇▇▇▇▇ SERVICES (DELAWARE) INC., et al., )
) Case No. 99-_______
Debtors. ) Through 99-_______ (____)
)
) Jointly Administered
INTERIM ORDER AUTHORIZING
DEBTORS TO OBTAIN POST-PETITION
FINANCING PURSUANT TO 11 U.S.C. SECTIONS 364(c) AND 364(d)
Upon the motion (the "Motion") dated June 28, 1999 of ▇▇▇▇▇▇ Services Corp.
("PSC") and certain of its subsidiaries incorporated in the United States, each
as a debtor and debtor in possession (each a "Debtor" and collectively, the
"Debtors"), (a) seeking this Court's authorization pursuant to Sections
364(c)(1), (2) and (3) and 364(d)(1) 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(c) and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy
Rules"), for PSC and its wholly-owned subsidiary, ▇▇▇▇▇▇ Services (Delaware),
Inc., a Debtor herein ("PSI", and together with PSC, the "Borrowers"), inter
alia (1) to obtain post-petition financing (the "Post-Petition Financing") in an
aggregate principal amount not to exceed $100,000,000, from Bankers Trust
Company ("BTCo"), as agent (in such capacity, the "DIP Agent") and a syndicate
169
of financial institutions arranged by Canadian Imperial Bank of Commerce
("CIBC") and BTCo (including the DIP Agent, "the DIP Lenders"), which syndicate
may include any or all of the Pre-Petition Lenders (as defined below), and for
the Debtors herein (other than the Borrowers) to guaranty the payment of the
Borrowers' obligations in respect of the Post-Petition Financing; for the
subsidiaries of the Borrowers incorporated in Canada (each a "Canadian Entity"
and, collectively with PSC, the "Canadian Entities"(1), and together with the
Debtors other than the Borrowers, the "Guarantors") to guaranty the payment of
PSC's obligations in respect of the Post-Petition Financing and for each of the
Borrowers to guaranty the payment of the other Borrower's obligations in respect
of the Post-Petition Financing; and for the Borrowers and the Guarantors to
execute a Credit Agreement with respect to the Post-Petition Financing (as
amended, supplemented or otherwise modified from time to time, the
"Post-Petition Credit Agreement"); and for the Borrowers to execute revolving
credit notes (the "Notes"); and for each (i) Debtor (other than the Borrowers)
to guarantee the Notes, (ii) Canadian Entity (other than PSC) to guaranty the
Notes executed by PSC, and (iii) Borrower to guaranty the Notes of the other
Borrower, all as in accordance with the Post-Petition Credit Agreement (the
Post-Petition Credit Agreement, the Notes, and all ancillary documents as any
time executed in connection therewith, collectively, the "Post-Petition Credit
Documents"); and (ii) to grant the DIP Lenders,
____________
(1) PSC, together with all of its direct and indirect subsidiaries, are
collectively referred to herein as the "▇▇▇▇▇▇ Entities." This Interim
Order does not reflect the consent to jurisdiction by any ▇▇▇▇▇▇ Entity
that is not otherwise subject to the jurisdiction of this Court.
Furthermore, the obligations of the Canadian Entities (other than PSC)
under this Order are expressly conditioned upon the court in the Canadian
Cases (as defined below) authorizing and directing the Canadian Entities to
enter into their obligations hereunder (the "Canadian Approvals").
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for the obligations of the Debtors and the Canadian Entities under the
Post-Petition Credit Documents: (A) pursuant to Section 364(c)(1) of the
Bankruptcy Code, claims having administrative expense priority, over any and all
other administrative expenses of the kind specified in Sections 503(b) and
507(b) of the Bankruptcy Code, including, without limitation, administration
expenses arising in connection with any superseding proceeding under Chapter 7
of the Bankruptcy Code, subject only to (1) the superpriority claims granted to
the holders of the Account Intermediary Receivable Liens (as defined below)
pursuant to that certain Stipulation and Other Authorizing and Restricting Use
of Cash Collateral and Granting Adequate Protection of Secured Claims (the "Cash
Collateral Order") and (2) the Carve-Out (as defined below); (B) pursuant to
Section 364(c)(2) of the Bankruptcy Code, first priority liens and security
interests on all unencumbered assets of the Debtors located in the United States
(whether heretofore or hereafter acquired), subject only to (1) the Bonding
Liens (as defined below), (2) the replacement liens granted to the holders of
the Account Intermediary Receivable Liens pursuant to the Cash Collateral Order
(the "Account Intermediary Replacement Liens"), and (3) the Carve-out; (C)
pursuant to Section 364(c)(3) of the Bankruptcy Code, junior liens and security
interests on all assets located in the United States encumbered by the Senior
Liens (as defined below) (whether heretofore or hereafter acquired), subject
only to (1) the Bonding Liens, (2) the Account Intermediary Replacement Liens,
and (3) the Carve-Out; and (D) pursuant to Section 364(d)(1) of the Bankruptcy
Code, liens and security interests priming the liens and security interests
granted to the Pre-Petition Lenders (as defined below) and the Pre-Petition
Agents (as defined below) under the Pre-Petition Credit Documents (whether
heretofore or hereafter acquired), subject only to (1) the Bonding Liens, (2)
the Senior Liens, (3) the Account Intermediary Replacement Liens, and (4) the
Carve-Out; (b) seeking a preliminary hearing (the
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"Preliminary Hearing") on the Motion to consider entry of an interim order
pursuant to Bankruptcy Rule 4001(c) (the "Interim Order") authorizing the
Borrowers to cause letters of credit to be issued under the Post-Petition
Financing up to the aggregate face amount of $12,000,000 upon the terms and
conditions set forth in the Post-Petition Credit Documents and this Interim
Order pending the Final Hearing referred to below; and (c) requesting that the
final hearing (the "Final Hearing") be scheduled by this court to consider entry
of a final order pursuant to Bankruptcy Rule 4001(c) (the "Final Order")
authorizing, inter alia, the Post-Petition Financing; and appropriate notice of
the Motion under the circumstances having been given; and Preliminary Hearing on
the Motion having been held before this Court on June__, 1999; and upon the
record made at the Preliminary Hearing, and this court having found good and
sufficient cause appearing therefor;
IT IS HEREBY FOUND AND DETERMINED THAT:
A. This Court has jurisdiction over this matter pursuant to 28 U.S.C.
ss157(b) and 1334. Consideration of this matter constitutes a core proceeding as
defined in 28 U.S.C. s157(b)2. The statutory predicates for the relief sought
herein are Sections 105, 361, 362, 363 and 364 of the Bankruptcy Code and Rule
4001(c) of the Bankruptcy Rules. Venue of the Chapter 11 Cases (as defined
below) and the motion seeking approval of this Order in this District is proper
pursuant to 28 U.S.C. ss1408 and 1409.
B. On June 25, 1999 (the "Petition Date"), the Debtors filed petitions
for relief (the "Chapter 11 Cases") pursuant to Chapter 11 of the Bankruptcy
Code with the Clerk of the United States Bankruptcy Court for the District of
Delaware. The Chapter 11 Cases have
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been consolidated for procedural purposes only. Also on the Petition Date, the
Canadian Entities commenced insolvency proceedings under the Companies'
Creditors Arrangement Act (the "CCAA," and the proceedings commenced
thereunder, the "Canadian Cases" and, together with the Chapter 11 Cases, the
"Cases") in the Superior Court of Ontario (the "Canadian Court").
C. The Debtors have continued in the management and operation of their
business and property as debtors in possession pursuant to Sections 1107 and
1108 of the Bankruptcy Code. No trustee, examiner or creditors committee has
been appointed in the Chapter 11 Cases, nor has any request for the appointment
of a trustee or examiner been made.
D. PSC and its direct and indirect subsidiaries are an integrated metals
recovery and industrial services company which provides metals recovery and
processing services, by-products recovery, and industrial outsourcing services
to major industry sectors with over 230 locations in the United States, Canada
and Europe. PSC's primary base of operations is in the United States. PSC is
organized into two operating divisions, the Metals Services Group and the
Industrial Services Group. The Metals Services Group is one of the largest
ferrous scrap processors in North America and the United Kingdom and has
approximately 2,000 employees. The Industrial Services Group is an integrated
provider of by-products recovery and industrial outsourcing with a network of
over 200 facilities and approximately 10,000 employees. For the year ended
December 31, 1998, PSC had revenue of approximately $2.0 billion.
E. Prior to the Petition Date, the lenders (the "Pre-Petition Lenders")
from time to time party to that certain Credit Agreement dated as of August 11,
1997 (the "Pre-Petition Credit Agreement") among the Pre-Petition Lenders, the
Borrowers, CIBC, as
-5-
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇, as Syndication Agent, and CIBC and BTCo, as
Co-Arrangers, (CIBC and BTCo, collectively in their capacity as agents under the
Pre-Petition Credit Agreement, the "Pre-Petition Agents") loaned money or
extended financial accommodations (the "Pre-Petition Loans") to the Borrowers
pursuant to the Pre-Petition Credit Agreement. The Borrowers' Restricted
Subsidiaries (as defined in the Pre-Petition Credit Agreement), including each
of the subsidiaries that are Debtors herein, executed guarantees of the
Borrowers' obligations under the Pre-Petition Credit Agreement. The obligations
of the Debtors, other than PSC, under the Pre-Petition Credit Agreement and the
guarantees were secured in accordance with that certain U.S. Security Agreement
dated as of March 16, 1998, as well as various mortgages and other security
documents, and the obligations of the Canadian Entities under the Pre-Petition
Credit Agreement and the guarantees were secured in accordance with that certain
Canadian Security Agreement dated as of March 16, 1998, as well as various
mortgages and other security documents (all guarantees and security documents,
collectively with the Credit Agreement, the "Pre-Petition Credit Documents").
F. The ▇▇▇▇▇▇ Entities have acknowledged the validity, priority and
perfection of the liens and security interests of the Pre-Petition Lenders in
virtually all of their assets, including, without limitation, all funds on
deposit at the banks at which the Debtors' and the Canadian Entities' maintain
their cash management system, all proceeds of the Debtors' and the
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Canadian Entities' accounts and all other proceeds of the Pre-Petition Lenders'
collateral (the "Cash Collateral")(2)
G. In light of their immediate and critical need to use the Cash
Collateral, the ▇▇▇▇▇▇ Entities have sought authorization to use the Cash
Collateral, on an interim basis, pursuant to the terms of the Cash Collateral
Order. The Cash Collateral Order provides for the granting of certain
replacement liens, security interests and superpriority administrative claims to
the Pre-Petition Lenders and the holders of the Account Intermediary Receivable
Liens as adequate
-------------------
(2) Specifically, the ▇▇▇▇▇▇ Entities have acknowledged in the Cash Collateral
Order that, except for relatively de minimis exceptions, the Pre-Petition
Lenders' liens and security interests in the assets of the ▇▇▇▇▇▇ Entities
are not subject to avoidance, defense, objection, action, counterclaim,
setoff or subordination, except such liens and security interests are
junior and subordinate to (a) the liens and security interests granted to
the DIP Agent and the DIP Lenders herein and under the Post-Petition Credit
Documents, (b) pre-existing validly perfected and unavoidable liens and
security interests that were senior to the Pre-Petition Lenders' liens and
security interests as of the Petition Date (the "Pre-Petition Senior
Liens"), (c) the liens of the LC Issuers and the LC Lenders under the
Pre-Petition Credit Agreement in specified cash collateral held under
Section 5.06 of the Pre-Petition Credit Agreement and the holders of the
liens in specified cash collateral granted in connection with the Permitted
LC Facility in the Pre-Petition Credit Agreement (the "LC Liens"), (d)
liens on Canadian accounts receivable addressed in documentation entered
into in connection with the establishment of operating accounts of certain
of the Canadian Entities at CIBC and the maintenance of operating accounts
of certain of the Debtors at Comerica Bank (the "Account Intermediary
Receivable Liens"), and (e) liens on specified cash collateral which was
also addressed in documentation entered into in connection with the
establishment of operating accounts of certain of the Canadian Entities at
CIBC and the maintenance of operating accounts of certain of the Debtors at
Comerica Bank and in other documentation entered into in connection with
the establishment of the Permitted LC Facility under Amending Agreement
No.3 to the Pre-Petition Credit Agreement (the "Other Account Intermediary
Liens", and together with the Pre-Petition Senior Liens, the LC Liens and
the Account Intermediary Receivable Liens, the "Senior Liens").
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protection for the use and diminution in value of the Cash Collateral and the
other Pre-Petition Collateral subject to such liens and security interests.
H. In addition to the use of the Cash Collateral, the Debtors also have a
critical need to access the sources of working capital and financing
contemplated under the Post-Petition Credit Documents in order to enable them
to meet their working capital and general corporate requirements during the
anticipated duration of these cases. The Debtors have an urgent need for letter
of credit capacity in the amount of $12 million, pending any final relief on
the Motion, to avoid any immediate and irreparable harm to their estates. The
Debtors are unable to obtain unsecured credit allowable under Section 503(b)(1)
of the Bankruptcy Code as an administrative expense or solely through the
granting of liens pursuant to Sections 364(c)(2) or (c)(3) of the Bankruptcy
Code. Because virtually all of the assets of the ▇▇▇▇▇▇ Entities are pledged to
the Pre-Petition Lenders and the Pre-Petition Agents to secure the obligations
of the Borrowers and the Guarantors in respect of the Pre-Petition Credit
Documents, new borrowing facilities are unavailable to the Debtors without the
Debtors (a) granting to the DIP Lenders claims, with respect to all
obligations and indebtedness under the Post-Petition Credit Documents, having
priority over any and all administrative expenses of the kind specified in
Sections 503(b) and 507(b) of the Bankruptcy Code (other than the Carve-Out and
the superpriority claims granted to the holders of the Account Intermediary
Receivable Liens in the Cash Collateral Order) and (b) securing such obligations
and indebtedness with various senior and junior liens on the assets of the
▇▇▇▇▇▇ Entities pursuant to Sections 364(c)(2), (c)(3) and (d)(1) of the
Bankruptcy Code (each subject to the Senior Liens, the Bonding Liens, the
Account
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Intermediary Replacement Liens and the Carve-Out, and as otherwise described
more fully herein).
I. The ability of the Debtors and the Canadian Entities to finance their
operations and the availability to them of sufficient working capital and
liquidity and other financial accommodations is vital to their ability to
maintain their operations. The Post-Petition Financing is required to enable (i)
the Borrowers to finance the working capital and general corporate requirements
of the Debtors during the Cases (ii) the US Credit Parties to (a) make necessary
investments in and advances to direct and indirect subsidiaries of PSC that are
not Credit Parties(1), subject to an aggregate limitation of $10,000,000 and (b)
after the Canadian Approvals are obtained, make investments in and advances to
the Canadian Entities through the Maturity Date, and (iii) the Borrowers to
finance the working capital and general corporate requirements of PSC and the
Other Canadian Entities during the Canadian Cases in an amount not to exceed
the Canadian Loan Amount.
J. The preservation and maintenance of the going concern value of the
Debtors and the Canadian Entities is of utmost significance and importance to a
successful reorganization of the Debtors and the Canadian Entities pursuant to
the provisions of Chapter 11 of the Bankruptcy Code and the CCAA. The entry of
this Interim Order (i) will minimize the disruption to the business of the
Debtors and the Canadian Entities which would otherwise result
__________________
(1) Capitalized terms not otherwise defined herein have the meanings ascribed
to such terms in the Post-Petition Credit Agreement.
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177
from the filing of the petitions commencing the Cases, (ii) will increase the
likelihood that the Debtors and the Canadian Entities will be reorganized
pursuant to the Bankruptcy Code and the CCAA, (iii) is in the best interest of
the Debtors and the Canadian Entities and their estates and (iv) is necessary to
avoid immediate and irreparable harm to the Debtors and the Canadian Entities,
their creditors, and their assets, businesses, goodwill, reputation, employees
and franchises.
K. The Post-Petition Financing has been negotiating in good faith and at
arms' length among the Debtors, the Canadian Entities, the DIP Agent and the DIP
Lenders, with all parties represented by counsel, and any loans made to, and any
letter of credit issued for the account of, the Borrowers by the DIP Lenders
pursuant to the Post-Petition Credit Agreement shall be deemed to have been
extended in good faith, as that term is used in Section 364(e) of the Bankruptcy
Code, and the liens and priorities granted to the DIP Agent and the DIP Lenders
pursuant to this Interim Order and the Post-Petition Credit Documents shall be
entitled to the protections of Section 364(e) of the Bankruptcy Code.
L. It is a condition precedent to availability under the Post-Petition
Financing that the Debtors are allowed to use the Cash Collateral in accordance
with and pursuant to the terms of the Cash Collateral Order. The Cash Collateral
Order expressly contemplates the granting of liens, security interests and
superpriority administrative claims to the DIP Lenders, subject to the
Carve-Out, pursuant to the DIP Credit Documents and this Interim Order, (a) with
priority over the liens, security interests and superpriority administrative
claims provided to the Pre-Petition Lenders pursuant to the Pre-Petition Credit
Documents and the Cash Collateral Order, (b) junior and subordinate to the liens
and security interests provided to the holders of the
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Senior Liens and the Bonding Liens, and (c) junior and subordinate to the
superpriority administrative claims provided to the holders of the Account
Intermediary Receivable Liens pursuant to the Cash Collateral Order. The
Required Lenders (as defined in the Pre-Petition Credit Agreement) and the
holders of the Account Intermediary Receivable Liens have consented and agreed
to the liens, security interests and superpriority administrative claims (and
the priority thereof) granted pursuant to the DIP Credit Documents and this
Interim Order and the Court expressly finds that such consent, in addition to
the protections afforded in the Cash Collateral Order, constitutes adequate
protection under, and satisfies the requirements of, Section 364(d) of the
Bankruptcy Code.
IT IS HEREBY ORDERED AND ADJUDGED that:
1. 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 Post-Petition Credit Agreement, the Notes and any other
Post-Petition Credit Documents to be executed in connection therewith, all in
substantially the form annexed to the Post-Petition Credit Agreement. The terms
and conditions of the Post-Petition Credit Documents are approved, and the
Borrowers and the Guarantors are authorized and directed to comply with and
perform all of the terms and conditions contained therein, to repay amounts
borrowed and, in the case of each Guarantor, to repay amounts guaranteed, with
interest to the DIP Lenders in accordance with and subject to the terms and
conditions set forth in the Post-Petition Credit Agreement, the Notes, the other
Post-Petition Credit Documents and this Interim
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179
Order. The Debtors are further authorized to pay amounts to various state
authorities to remain incorporated in good standing in such states, including
any and all amounts that may have been due and owing as of the Petition Date, in
order to comply with the provisions of the Post-Petition Credit Documents. The
Debtors are further authorized and directed to pay all fees and expenses,
including, without limitation, all reasonable fees and expenses of
professionals engaged by the DIP Agent and the DIP Lenders, in accordance with
the terms of the Post-Petition Credit Agreement. All loans made under the
Post-Petition Credit Agreement ("Loans") and interest thereon together with all
reimbursement and other obligations in respect of letters of credit issued
under the Post-Petition Credit Agreement ("Letters of Credit"), and fees,
costs, expenses, and other indebtedness, obligations and liabilities of the
Borrowers and the Guarantors to the DIP Agent and the DIP Lenders under the
Post-Petition Credit Documents and this Interim Order are hereinafter referred
to as the "Obligations."
3. The Debtors are authorized to make, execute, deliver and perform any
and all modifications and amendments to the Post-Petition Credit Documents
which are not material and as may be agreed upon in writing by the Debtors, the
Canadian Entities, the DIP Agent and the DIP Lenders (pursuant to the
Post-Petition Credit Agreement) without further order of this Court; provided
that modifications and amendments to the Post-Petition Credit Documents that
are material may not be made without further order of this Court. The
obligations of the Debtors under the Post-Petition Credit Documents are legal,
valid and binding and are enforceable against the Debtors in accordance with
their terms.
4. The Borrowers are expressly authorized to incur indebtedness for
letters of credit from the DIP Lenders in the aggregate amount of $12,000,000
of the proposed Post-Petition Financing pending final relief on the Motion. All
borrowings under the Post-Petition
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180
Financing are subject to the budget dated April 1, 1999 to be filed with the
Court (the "Budget") and as otherwise permitted in the Post-Petition Credit
Documents.
5. In accordance with Section 364(c)(1) of the Bankruptcy Code, the
Obligations shall constitute claims ("Super-Priority 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, Sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b) and
726 of the Bankruptcy Code, other than (i) the superpriority claims granted to
the holders of the Account Intermediary Receivable Liens pursuant to the Cash
Collateral Order and (ii) the Carve-Out. No cost or expense of administration
under Sections 105, 364(c)(1), 503(b), 506(c), 507(b) of the Bankruptcy Code or
otherwise, including those resulting from the conversion of any of the Chapter
11 Cases pursuant to Section 1112 of the Bankruptcy Code, shall be senior to, or
pari passu with, the Super-Priority Claims of the DIP Agent and the DIP Lenders
arising out of the Obligations, subject only to the superpriority claims granted
to the holders of the Account Intermediary Receivable Liens pursuant to the Cash
Collateral Order and the Carve-Out.
6. As security for the Obligations, the DIP Agent and the DIP Lenders
shall have and are hereby granted (effective upon the date of this Interim Order
and without the necessity of the execution by the Debtors or the Canadian
Entities, or filing, of security agreements, pledge agreements, mortgages,
financing statements or otherwise):
(i) pursuant to Section 364(c)(2) of the Bankruptcy Code, first
priority liens and security interests on all unencumbered assets of the
Debtors (whether heretofore or hereafter acquired), subject only to (a) the
Carve-Out, (b) liens and security interests granted to the bonding
companies pursuant to the Stipulation and order Authorizing Debtors to
Obtain Post-Petition Surety Bonds and to Enter into Indemnity Agreement and
Intercreditor Agreement as necessary to comply
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with the bonding requirements of the ▇▇▇▇▇▇ Entities (as defined in the
Pre-Petition Credit Agreement) (the "Bonding Liens"), and (c) the Account
Intermediary Replacement Liens;
(ii) pursuant to Section 364(c)(3) of the Bankruptcy Code, junior
liens and security interests on all assets encumbered by the Senior Liens,
subject only to (a) the Carve-Out, (b) the Account Intermediary Replacement
Liens, and (c) the Bonding Liens;
(iii) pursuant to Section 364(d)(1) of the Bankruptcy Code, liens and
security interests priming the liens and security interests granted to the
Pre-Petition Agents and the Pre-Petition Lenders under the Pre-Petition
Credit Documents, subject only to (a) the Carve-Out, (b) the Senior Liens,
(c) the Account Intermediary Replacement Liens, and (d) the Bonding Liens.
The liens and security interests provided to the DIP Agent and the DIP Lenders
in this paragraph are hereafter collectively referred to as the "Post-Petition
DIP Liens," and the assets securing the Post-Petition Liens are hereafter
referred to as the "Post-Petition DIP Collateral." Notwithstanding anything
else herein to the contrary, unless this order shall become a final order, the
proceeds of any Chapter 5 avoidance actions shall not be included in the
Post-Petition DIP Liens.
7. The Post-Petition DIP Liens shall, from and after the date of
effectiveness of the Post-Petition Credit Documents, be deemed perfected as of
the commencement of the Cases and shall not be subject to or pari passu with any
lien or security interest existing as of the Petition Date (other than the
Senior Liens). Subject only to the Bonding Liens, the Account Intermediary
Replacement Liens, and the Carve-Out, no lien or security interest in the
property of the Debtors granted or arising on or after the Petition 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) shall be created or permitted
to be pari passu with, or senior to, the Post-Petition DIP Liens.
8. The Super-Priority Claims granted to the DIP Agent and the DIP Lenders
pursuant to the Post-Petition Credit Agreement and this Interim Order shall be
subject only to (a) following the occurrence and during the continuance of an
Event of Default (as such terms is
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defined in the Post-Petition Credit Agreement), a $3,000,000 carve-out (the
"Carve-Out") for the payment of (i) allowed and unpaid fees and disbursements
incurred by the professionals retained, pursuant to Sections 327 or 1103(a) of
the Bankruptcy Code, by the Debtors and any statutory committees appointed in
the Chapter 11 Cases, and, after the entry of an order of the Canadian Court
approving the DIP Financing on the terms described in the Post-Petition Credit
Documents (the "Canadian Order"), the professionals, including the monitor,
retained in the Canadian Cases, and (ii) any unpaid fees payable pursuant to 28
U.S.C. s. 1930(a)(6) and any unpaid fees payable to the Clerk of this Court or
in the similar entity in the Canadian Cases, and (b) the superpriority claims
granted to the holders of Account Intermediary Replacement Liens pursuant to the
Cash Collateral Order.
9. The Carve-Out shall not be utilized to pay any professional fees or
disbursements incurred in connection with asserting any claims or causes of
action against the DIP Agent, DIP Lenders, the Pre-Petition Agents, the
Pre-Petition Lenders, the holders of the Account Intermediary Receivable Liens,
the Other Account Intermediary Liens or the LC Liens, or the collateral or
security agents under the Pre-Petition Credit Documents or the Post-Petition
Credit Documents (including formal discovery proceedings in anticipation
thereof) and/or challenging (whether by defense, objection, counterclaim or
otherwise) the validity, perfection, priority or amount of any lien or claim of
the DIP Agent, the DIP Lenders, the Pre-Petition Agents, the Pre-Petition
Lenders, the holders of the Account Intermediary Receivable Liens, the Other
Account Intermediary Liens or LC Liens, or the collateral or security agents
under the Pre-Petition Credit Documents or the Post-Petition Credit Documents.
So long as no Default or Event of Default shall have occurred and be continuing,
the Debtors shall be permitted to pay
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compensation and reimbursement of expenses under Sections 330 and 331 of the
Bankruptcy Code, as the same may be due and payable, and the same shall not
reduce the Carve-Out.
10. All superpriority administrative claims, all liens and security
interests granted to the Pre-Petition Agents and the Pre-Petition Lenders shall,
upon the entry of this Interim Order, be junior and subordinate to the
Super-Priority Claims and the Post-Petition Liens granted to the DIP Agent and
the DIP Lenders pursuant to the Post-Petition Credit Documents and this Interim
Order. Any ambiguity or inconsistency between the Cash Collateral Order and this
Interim Order shall be resolved to give full effect to this Interim Order.
11. Neither the DIP Agent nor the DIP Lenders shall be required to file or
record financing statements, mortgages, notices of lien or similar instruments
in any jurisdiction or take any other action in order to validate, create or
perfect the Post-Petition DIP Liens granted to them pursuant to this Interim
Order and the Post-Petition Credit Documents. If the DIP Lenders shall file or
record such financing statements, mortgages, notices of lien or similar
instruments or otherwise confirm perfection of Post-Petition DIP Liens, the
Debtors shall cooperate and comply with the requests of the DIP Lenders and all
such documents shall be deemed to have been filed or recorded on the date of
commencement of the Cases, and the automatic stay provisions of Section 362 of
the Bankruptcy Code are modified to permit the execution, delivery and filing of
such documents.
12. The DIP Agent and the DIP Lenders shall have all remedies permitted
under this Interim Order and the Post-Petition Credit Documents and upon their
exercise of any such rights thereunder or hereunder, the Debtors shall cooperate
and comply with any requests of the DIP Agent and the DIP Lenders relating
thereto.
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13. In determining to make loans or to issue letters of credit under the
Post-Petition Credit Documents or to collect the Obligations, or in exercising
any rights or remedies as and when permitted under the Post-Petition Credit
Documents or this Interim Order, neither the DIP Agent nor the DIP Lenders shall
be deemed to be in control of the operations of any Debtor or to be acting as a
"responsible person" or "owner or operator" with respect to the operation or
management of any Debtor (as such terms, or any similar terms, are used in the
United States Comprehensive Environmental Response, Compensation and Liability
Act, as amended, or any similar federal or state statute).
14. The Debtors are authorized to do and perform all acts, to make,
execute and deliver all instruments and documents (including, without
limitation, the execution of additional security agreements, mortgages and
financing statements) and to pay fees and reimburse expenses which may be
required pursuant to the terms of the Post-Petition Financing, without further
application to or order of this court, including, without limitation: (i) the
execution and performance of the Post-Petition Credit Documents, (ii) the
payment of the DIP Agent and the DIP Lenders, on a non-refundable basis, of the
fees set forth in all documentation relating to the DIP facility, including,
without limitation, facility fees, commitment fees, agent's administration fees,
letter of credit fees, fronting fees, other reasonable fees, costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
and all amounts owing at any time in respect of the indemnification provisions
of the Post-Petition Credit Documents.
15. All collateral sold or otherwise disposed of by the DIP Agent and/or
the DIP Lenders pursuant to the terms of this Interim Order and the
Post-Petition Credit Documents shall be sold or otherwise disposed of free and
clear of any interests in such property pursuant to
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Sections 363(b)(1) and 363(f) of the Bankruptcy Code without any further
application to or order of this Court and with three Business Days' notice to
counsel to the Debtors, counsel for any official committee or committees
appointed in the Cases and the United States Trustee. Such sales may be
scheduled and noticed and neither the DIP Agent nor the DIP Lenders shall have
any duty to marshal assets or to be bound by any other doctrine which could
prohibit or restrict the ability of the DIP Lenders in choosing to foreclose or
realize upon any portion of the Post-Petition DIP Collateral, subject to the
conditions that (x) the DIP Agent and the DIP Lenders shall be obligated to
apply the proceeds of any realization by the DIP Lenders from the foreclosure on
the Post-Petition DIP Collateral in the manner set forth in paragraph 16 below
and (y) the DIP Agent and the DIP Lenders shall not exercise the rights set
forth in this paragraph upon any Post-Petition DIP Collateral securing the
Senior Liens or the Bonding Liens unless (i) with respect to collateral other
than receivables, the Post-Petition DIP Collateral is sold subject to such
Senior Lien or Bonding Lien, or (ii) the holder of such Senior Lien or Bonding
Lien otherwise consents. The right of the DIP Agent and the DIP Lenders to
exercise all of their remedies with respect to the liens and security interests
encumbering the Post-Petition DIP Collateral and securing the obligations of the
Debtors to the DIP Lenders with respect to the Post-Petition Financing in
accordance with the provisions of this Interim Order without delay is an
integral and fundamental part of the Post-Petition Financing, and all advances
made by the DIP Lenders under the Post-Petition Credit Agreement are made in
reliance upon such right.
16. The proceeds of any Post-Petition DIP Collateral obtained as a result
of any exercise of remedies pursuant to the terms of this Interim Order or any
of the Post-Petition Credit Documents shall be applied, subject to the
Carve-Out, as follows:
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(i) first, to the payment of any and all expenses and fees
(including reasonable attorneys' fees and expenses) incurred by the DIP
Agent and the DIP Lenders in obtaining, taking possession of, removing,
insuring, repairing, storing and disposing of Post-Petition Collateral;
(ii) second, to the extent proceeds remain after the payment
pursuant to preceding clause (i), if the Post-Petition Collateral is
encumbered by a Senior Lien, Bonding Lien or Account Intermediary
Replacement Lien and such Post-Petition Collateral has not been sold
subject to such Senior Lien, Bonding Lien or Account Intermediary
Replacement Lien, an amount equal to the outstanding obligations owing to
the holder of such Senior Lien, Bonding Lien or Account Intermediary
Replacement Lien which are secured thereby shall be paid into an escrow
fund and held by an escrow agent satisfactory to such holder as substitute
collateral for such obligations, and/or be paid directly to such holders,
as the Court may deem appropriate in the circumstances;
(iii) third, to the extent proceeds remain after the payment pursuant
to preceding clauses (i) and (ii), the Total Commitment under the DIP
Facility shall be permanently reduced or cash-collateralized in an amount
equal to such proceeds,
(iv) fourth, to the extent proceeds remain after the payment
pursuant to preceding clauses (i), (ii) and (iii), an amount equal to the
outstanding Obligations owing to the DIP Lenders shall be paid to the DIP
Agent, for the ratable benefit of the DIP Lenders, for application to such
Obligations; and
(v) fifth, to the extent proceeds remain after the payment pursuant
to preceding clauses (i), (ii), (iii) and (iv), if the Total Commitment
under the Post-Petition Credit Agreement has been terminated, and no
Letters of Credit (other than letters of credit with respect to which the
Borrowers have deposited cash collateral as provided in the Post-Petition
Credit Documents), Loans or other Obligation to the DIP Agent or the DIP
Lenders under the Post-Petition Credit Documents or this Interim Order
remains outstanding, any surplus then remaining shall be paid as ordered by
the Court.
17. The DIP Agent and the DIP Lenders shall be entitled to exercise all
rights and remedies as and when permitted under, and upon such notice as
expressly required in, this Interim Order and the Post-Petition Credit
Documents, and in connection with their exercise of any such rights and remedies
thereunder or hereunder in accordance with the terms of the Post-Petition Credit
Documents, and Debtors shall cooperate and comply with the requests of the DIP
Lenders and the DIP Agent with respect to the enforcement thereof.
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18. Upon three Business Days' notice of the occurrence of an Event of
Default to counsel to the Debtors, counsel for any official committee that may
be appointed in the Cases and counsel to the holders of the Account Intermediary
Receivable Liens and the Other Account Intermediary Liens and the United States
Trustee, the automatic stay provisions of Section 362 of the Bankruptcy Code
shall be deemed vacated and modified to the extent necessary so as to permit the
DIP Agent and the DIP Lenders to exercise all rights and remedies provided for
in this Interim Order and in the Post-Petition Credit Documents, or otherwise
available under applicable nonbankruptcy law, without filing further pleadings
or application to or order of this Court; provided, however, that the DIP Agent
and the DIP Lenders may terminate the Commitments, accelerate the Loans and
impose an administrative freeze or administrative hold with respect to any cash
collateral held by the DIP Agent immediately upon the occurrence of an Event of
Default.
19. Notwithstanding any other provisions of this order, upon the occurrence
of a Triggering Event, as defined in the Inter-Creditor Agreement (which is
attached as Exhibit [ ] to the Motion for Approval of Stipulation and Order
Authorizing Debtors to Obtain Post-Petition Surety Bonds and To Enter Into
Indemnity Agreements), the Surety Participants (as defined in the Inter-Creditor
Agreement) shall upon three business days' notice to counsel to the Debtors,
counsel to the DIP Agent and the DIP Lenders, counsel to the holders of the
Account Intermediary Receivable Liens and the Other Account Intermediary Liens,
and the United States Trustee, be entitled to pursue any and all remedies and
rights referred to in paragraph 7(b) of the Inter-Creditor Agreement, unless the
Court orders otherwise.
20. Accounts established or maintained pursuant to the terms of the
Post-Petition Credit Agreement or the Cash Collateral Order shall not be subject
to the provisions of
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Section 345(b) of the Bankruptcy Code so that neither the Debtors nor the DIP
Agent nor any other holder of such accounts shall be required to post a bond or
deposit securities in connection with any deposit into such accounts.
21. The provisions of this Interim Order shall be binding upon and inure
to the benefit of the DIP Agents, the DIP Lenders, the Debtors and the Canadian
Entities and their respective successors and assigns. Moreover, this Interim
Order shall bind any trustee hereinafter appointed for the estates of the
Debtors, whether in this Chapter 11 proceeding or in the event of conversion of
the Chapter 11 Cases to a liquidation under Chapter 7 of the Bankruptcy Code, to
the fullest extent permitted by law including notice provisions. Such binding
effect is an integral part of this transaction and the DIP Financing. The
Debtors shall jointly and severally be obligated to repay all Obligations of the
Debtors and the Canadian Entities in respect of the DIP Financing (other than
certain obligations with respect to letters of credit then outstanding with
respect to which the Debtors will be required to deposit cash collateral as
provided in the Post-Petition Credit Documents) on the earlier of the Maturity
Date or the Termination Date.
22. The Debtors waive their rights, to the fullest extent permitted by law
and consistent with their fiduciary obligations, to seek an order, or to consent
to any right brought by any other party for an order dismissing or converting
any of the Cases under Section 305 or 1112 of the Bankruptcy Code or otherwise,
without the consent of the DIP Lenders, unless prior to the entry thereof:
(i) all obligations (excluding Letters of Credit that have been cash
collateralized or subject to backing letters of credit in accordance with
the provisions of the Post-Petition Credit Agreement) shall have been paid
in full, or
(ii) all material assets of the Debtors and the Canadian Entities
shall have been liquidated and the proceeds thereof distributed in
accordance with the priorities established by the Cash Collateral Order,
this Interim Order and the Post-Petition Credit Documents.
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23. The provisions of this Interim Order shall be immediately effective
upon entry of this Interim Order by the Court, and any actions taken pursuant
hereto shall survive entry of, and shall govern with respect to any conflict
with, any order which may be entered confirming any plan of reorganization or
which may be entered dismissing the Chapter 11 Cases or converting the Chapter
11 Cases to Chapter 7 liquidations or lifting the stay in the Canadian Cases to
permit the appointment of a receiver or a receiver and manager (or any entity
with substantially similar powers) of the assets of any Canadian Entity. The
terms and provisions of this Interim Order as well as the Super-Priority Claims
and the Post-Petition Liens, and all rights of the DIP Agents and the DIP
Lenders and the Obligations created or arising pursuant hereto and pursuant to
the Post-Petition Credit Documents, shall continue in the Chapter 11 Cases and
in any superseding proceedings under the Bankruptcy Code, and in Canada in any
superseding proceedings under the CCAA, and the Super-Priority Claims and the
Post-Petition DIP Liens shall maintain their priority as provided by the Cash
Collateral Order this Interim Order and the Post-Petition Credit Documents until
satisfied and discharged in accordance with the terms of the Post-Petition
Credit Documents or otherwise modified in accordance with the terms thereof. If
any or all of the provisions of this Interim Order are hereafter modified (other
than in accordance with the terms of the Post-Petition Credit Agreement),
vacated or stayed, such stay, modification or vacation shall not affect the
validity of any of the Obligations incurred prior to the effective date of such
stay, modification or vacation, or the validity and enforceability of any
security interest, lien, priority or right authorized or created hereby or
pursuant to the Post-Petition Credit Documents. Notwithstanding any such stay,
modification or vacation, the Obligations incurred prior to the affective date
of such stay, modification or vacation shall be governed in all respects by the
original provisions of this Interim Order, and the DIP Agent and each DIP Lender
shall be
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entitled to all the rights, remedies, privileges and benefits, including the
security interests, liens and priorities granted herein and pursuant to the
Post-Petition Credit Documents, with respect to such Obligations. All advances
under the Post-Petition Credit Agreement are made in reliance upon this Interim
Order, and the Obligations in respect of such advances made prior to the
effective date of any stay, modification or vacation of this Interim Order
cannot (i) be subordinated, (ii) lose their super-priority status or (iii) be
deprived of the benefit of the status of the liens granted to the DIP Agent and
the DIP Lenders, as a result of any subsequent order in the Cases.
24. In the event of any express conflict between the terms of this Interim
Order and the terms of the Post-Petition Credit Documents, the terms of this
Interim Order shall control.
25. The provisions of this Interim Order shall immediately be binding upon
and inure to the benefit of the DIP Agent, the Pre-Petition Agents, the DIP
Lenders, the Pre-Petition Lenders, the Debtors, and their respective successors
and assigns, including any trustee or other fiduciary hereafter appointed in the
Chapter 11 Cases a legal representative of the Debtors or the Debtors' estates,
a trustee in bankruptcy, or a receiver and manager (or any entity with
substantially similar powers) in the Canadian Cases.
26. The Debtors shall, within three (3) days of the date hereof, mail
notice of the approval of this Interim Order, in the form as annexed as an
Exhibit to the Motion, together with a copy of this Interim Order, to each of
their utility service providers and lessors of non-residential real property,
and to the parties having been given notice of the Preliminary Hearing and to
any other party which has filed a request for notices with the Court and to
counsel for any
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committee appointed pursuant to Section 1102 of the Bankruptcy Code. The notice
of approval of this Interim Order shall state that any party in interest
objecting to this Interim Order as a final Order shall file written objections
with the Clerk of the United States Bankruptcy Court for the District of
Delaware no later than July 22, 1999 at 4:00 p.m. (the "Objection Deadline"),
which objections shall be served so that the same are received on or before such
date by: (a) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq., Stikeman, Elliott, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., attorneys for the Debtors; (b) White & Case
LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq., Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., and Young, Conaway, Stargatt
& ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: S. ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., attorneys for the DIP Agents and the DIP
Lenders, (c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇, PLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., attorneys for
Comerica Bank in its capacity as a holder of Account Intermediary Receivable
Liens and Other Account Intermediary Liens, (d) Sidley & Austin, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇▇▇▇ ▇▇▇▇▇, Esq., and Osler, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇, 1 First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., attorneys for CIBC in its capacity as a holder
of Account Intermediary Receivable Liens and Other Account Intermediary Liens,
and (e) the Office of the United States Trustee.
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27. If no such written objection is timely served and filed in accordance
with paragraph 26, this Interim Order shall be deemed the Final Order on the
Objection Deadline and this Interim Order shall continue on a final basis and
remain in full force and effect and shall constitute final authority for the
balance of the Post-Petition Financing, and any objection by any party in
interest to the terms of this Interim Order and the relief requested in the
Motion shall be deemed forever waived. If a timely objection is served and
filed, a final hearing to consider the Motion will be held on July 27, 1999 at
2:00 p.m.
Dated: Wilmington, Delaware
June 28, 1999
/s/ Judge ▇. ▇▇▇▇▇▇▇
-------------------------------
UNITED STATES BANKRUPTCY JUDGE
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Exhibit B to
SASM&F Opinion
Cash Collateral Order
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: )
) Chapter 11
▇▇▇▇▇▇ SERVICES (DELAWARE), )
INC., et al., ) Case No. 99-_____
) Through 99- _____ (____)
Debtors. )
) Jointly Administered
STIPULATION AND ORDER AUTHORIZING AND
RESTRICTING USE OF CASH COLLATERAL AND
GRANTING ADEQUATE PROTECTION OF CERTAIN SECURED CLAIMS
This Stipulation and Order (the "Stipulation and Order") is made by and
among ▇▇▇▇▇▇ Services (Delaware), Inc. ("PSI"), ▇▇▇▇▇▇ Services Corp. ("PSC",
and together with PSI, the "Borrowers") and each of their affiliates that are
Restricted Subsidiaries' (as defined in the Pre-Petition Credit Agreement (as
defined below)) (the Restricted Subsidiaries, together with the Borrowers, the
"▇▇▇▇▇▇ Entities")(2), and the lenders party to the Credit Agreement dated as
of August 11, 1997, as amended from time to time through the Petition Date, as
defined below (as
_______________
(1) Capitalized terms not defined herein shall have the meanings ascribed to
such terms in the Pre-Petition Credit Agreement (as defined below).
(2) This Stipulation and Order reflects the contractual agreement of each of
the ▇▇▇▇▇▇ Entities but does not reflect the consent to jurisdiction by any
▇▇▇▇▇▇ Entity that is not otherwise subject to the jurisdiction of this
Court. Furthermore, the rights and obligations of the Canadian Entities (as
defined below) under this Stipulation and Order are expressly conditioned
upon the court in the Canadian Cases (as defined below) authorizing the
Canadian Entities to enter into this Stipulation and Order.
194
amended, the "Pre-Petition Credit Agreement") among the Borrowers, Canadian
Imperial Bank of Commerce ("CIBC"), as Administrative Agent (in such capacity,
the "Pre-Petition Administrative Agent"), Bankers Trust Company ("BTCo"), as
Syndication Agent, and CIBC and BTCo, as Co-Arrangers, (CIBC and BTCo
collectively, the "Pre-Petition Agents"), the various lenders from time to time
parties thereto (collectively, the "Pre-Petition Lenders"), and the holders of
the Account Intermediary Receivable Liens (as defined below) and the Other
Account Intermediary Liens (as defined below).
Findings of Fact and Conclusions of Law
THE COURT HEREBY FINDS:
A. This Court has jurisdiction over this matter pursuant to 28 U.S.C.
Sections 157(b) and 1334. Consideration of this matter constitutes a core
proceeding as defined in 28 U.S.C. Section 157(b)(2). The statutory predicates
for the relief sought herein are Sections 105, 361, 362, 363 and 364 of title
11 of the United States Code (the "Bankruptcy Code") and Rule 4001(b), (c) and
(d) of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules").
Venue of the Chapter 11 Cases (as defined below) and the motion seeking
approval of this Stipulation and Order in this District is proper pursuant to
28 U.S.C. Sections 1408 and 1409.
B. On June 25, 1999 (the "Petition Date"), PSC and certain of its direct
and indirect subsidiaries incorporated in the United States, including PSI
(collectively, the "Debtors") filed petitions for relief (the "Chapter 11
Cases") pursuant to Chapter 11 of the Bankruptcy Code with the Clerk of the
United States Bankruptcy Court for the District of Delaware (the "Court"). The
Chapter 11 Cases have been consolidated for procedural purposes only. On June
25, 1999, PSC and certain direct and indirect subsidiaries of PSC incorporated
in Canada (the "Canadian
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Entities") filed insolvency proceedings in the Superior Court of Ontario (the
"Canadian Court") under the Companies' Creditors Arrangement Act (the "CCAA").
The proceeding commenced under the CCAA is hereinafter referred to as the
"Canadian Case" and, collectively with the Chapter 11 Cases, the "Cases").
C. The Debtors have continued in the management and operation of their
business and property as debtors in possession pursuant to Sections 1107 and
1108 of the Bankruptcy Code. No trustee, examiner or creditors committee has
been appointed in the Chapter 11 Cases, nor has any request for the appointment
of a trustee or examiner been made.
D. PSC and its direct and indirect subsidiaries are an integrated metals
recovery and industrial services company which provides metals recovery and
processing services, by-products recovery, and industrial outsourcing services
to major industry sectors with over 230 locations in the United States, Canada
and Europe. PSC's primary base of operations is in the United States. PSC is
organized into two operating divisions, the Metals Services Group and the
Industrial Services Group. The Metals Services Group is one of the largest
ferrous scrap processors in North America and the United Kingdom and has
approximately 2,000 employees. The Industrial Services Group is an integrated
provider of by-products recovery and industrial outsourcing with a network of
over 200 facilities and approximately 10,000 employees. For the year ended
December 31, 1998, PSC had revenue of $2.0 billion.
E. Prior to the Petition Date, the Pre-Petition Lenders loaned money to,
and issued letters of credit for the account of, the Borrowers (such loans and
letters of credit collectively, the "Pre-Petition Loans") pursuant to the
Pre-Petition Credit Agreement. The Restricted Subsidiaries, including each of
the Borrowers' subsidiaries that are Debtors herein, executed guarantees of the
Borrowers' obligations under the Pre-Petition Credit Agreement and
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each Borrower executed a guaranty of the other Borrower's obligations under the
Pre-Petition Credit Agreement. The obligations of the Debtors, other than PSC,
under the Pre-Petition Credit Agreement and the guarantees were secured in
accordance with that certain U.S. Security Agreement dated as of March 16, 1998,
as well as various mortgages and other security documents, and the obligations
of the Canadian Entities under the Pre-Petition Credit Agreement and the
guarantees were secured in accordance with that certain Canadian Security
Agreement dated as of March 16, 1998, as well as various mortgages and other
security documents (all guarantees and security documents collectively with the
Credit Agreement, the "Pre-Petition Credit Documents").
F. The ▇▇▇▇▇▇ Entities acknowledge that:
1. As of the Petition Date, the ▇▇▇▇▇▇ Entities were, and remain,
indebted to the Pre-Petition Lenders, without defense, counterclaim or
offset of any kind, in the approximate amount of $1 billion (collectively,
the "Indebtedness"). The Indebtedness constitutes a legal, valid and
binding obligation of the ▇▇▇▇▇▇ Entities, enforceable in accordance with
the terms of the Pre-Petition Credit Documents, no offsets, defenses or
counterclaims to the Indebtedness exist, and no portion of the Indebtedness
is subject to avoidance or subordination pursuant to the Bankruptcy Code or
other applicable law.
2. Except for de minimis exceptions,(3) and subject to the Senior
Liens (as defined below), by reason of the Pre-Petition Credit Documents,
the Indebtedness is
------------------------
(3) The Debtors believe that the Pre-Petition Lenders' security interests in
certain of the
(continued...)
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secured by valid and enforceable first-priority liens and security
interests granted by the ▇▇▇▇▇▇ Entities to CIBC as security agent, for the
ratable benefit of the Pre-Petition Lenders, upon all of the ▇▇▇▇▇▇
Entities' right, title and interest in, to and under the property of each
described in the Pre-Petition Credit Documents to which they are a party,
constituting substantially all of the ▇▇▇▇▇▇ Entities' present and future
undertaking, property and assets of any kind, including, without
limitation, (i) real property, (ii) accounts receivable, (iii) contracts
and contract rights, (iv) inventory, (v) equipment, including without
limitation, rolling stock, (vi) trademarks, service marks and trade names,
together with the registrations and right to all renewals thereof, and the
goodwill symbolized by such trademarks, service marks and trade names,
(vii) patents, (viii) copyrights, (ix) computer programs and all
intellectual property rights therein and all proprietary information and
trade secrets, (x) all other goods, general intangibles, chattel paper,
documents, investment property, securities and instruments, and (xi) all
proceeds and products of any of the foregoing (collectively, the
"Pre-Petition Collateral").
---------------
(...continued)
Debtors' vehicles (with an estimated value of $20,000,000) are either not
properly perfected or have been perfected within the last 90 days. The
Debtors have expressly reserved their rights to contest the validity of the
Pre-Petition Lenders' liens and security interest in these vehicles and any
other collateral which may have been perfected within 90 days of the
Petition Date.
The foregoing is a general description of the Pre-Petition Collateral and
is not intended to limit the collateral in which the Pre-Petition Lenders
hold a security interest or lien as set forth in the Pre-Petition Credit
Documents. For purposes of this Stipulation and Order, "proceeds" shall
mean proceeds as defined in the Uniform Commercial Code as enacted in the
State of New York, as well as (x) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to the ▇▇▇▇▇▇ Entities from time to
time with respect to any of the Pre-Petition Collateral or Post-Petition
Collateral (as defined below) and (y) any and all payments (in any form
whatsoever) made or due and payable to the ▇▇▇▇▇▇ Entities in
(continued...)
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3. Except as disclosed in footnote 3, the Pre-Petition Lenders'
liens and security interests in the Pre-Petition Collateral are not subject
to avoidance, defense, objection, action, counterclaim, setoff or
subordination, except such liens and security interests are junior and
subordinate to (a) the liens and security interests granted to the lenders
and agents under the post-petition financing described below (the "DIP
Financing Liens"), (b) pre-existing validly perfected and unavoidable liens
and security interests that were senior to the Pre-Petition Lenders' liens
and security interests as of the Petition Date and other rights, if any,
that may be prior under applicable law (the "Pre-Petition Senior Liens"),
(c) the liens of the LC Issuers and the LC Lenders under the Pre-Petition
Credit Agreement in specified cash collateral held under Section 5.06 of
the Pre-Petition Credit Agreement and the holders of liens in specified
cash collateral granted in connection with the Permitted LC Facility in the
Pre-Petition Credit Agreement (the "LC Liens"), (d) liens on Canadian
accounts receivable and the proceeds thereof addressed in documentation
executed in connection with the establishment and maintenance of operating
accounts of certain of the Canadian Entities at CIBC and the maintenance of
operating accounts of certain of the Debtors at Comerica Bank (the "Account
Intermediary Receivable Liens"), and (e) liens on specified cash collateral
which was also addressed in documentation executed in connection with the
establishment and maintenance of operating accounts of certain of the
Canadian Entities at CIBC and the
_________________
(...continued)
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Pre-Petition Collateral or
Post-Petition Collateral, by any governmental body, authority, bureau or
agency (or any person under color of governmental authority).
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maintenance of operating accounts of certain of the Debtors at Comerica
Bank and in other documentation entered into in connection with the
establishment of the Permitted LC Facility under Amending Agreement No. 3
to the Pre-Petition Credit Agreement (the "Other Account Intermediary
Liens", and together with the DIP Financing Liens, the Pre-Petition Senior
Liens, the LC Liens and the Account Intermediary Receivable Liens, the
"Senior Liens").
4. The LC Liens, the Account Intermediary Receivable Liens, and the
Other Account Intermediary Liens in the Pre-Petition Collateral securing
the claims of the holders of such liens, are not subject to avoidance,
defense, objection, action, counterclaim, setoff or subordination.
5. By reason of the foregoing described liens and security
interests, the Pre-Petition Lenders have valid and perfected first-priority
liens, subject to the Senior Liens, as applicable, on, among other things,
all of the Debtors and the Canadian Entities cash collateral, as such term
is defined in the Bankruptcy Code, including, without limitation, all funds
on deposit at the banks at which the Debtors' and the Canadian Entities'
maintain their cash management system, all proceeds of the Debtors' and the
Canadian Entities' accounts and all other proceeds of the Pre-Petition
Collateral (the "Cash Collateral").
6. By reason of the foregoing described liens and security
interests, the holders of the LC Liens, the Account Intermediary Receivable
Liens and the Other Account Intermediary Liens have valid an perfected
first-priority liens in that portion of the Cash Collateral securing such
liens.
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G. An immediate and critical need exists for the ▇▇▇▇▇▇ Entities to use
the Cash Collateral in order to continue the operation of their business.
Without such funds, the ▇▇▇▇▇▇ Entities will not be able to pay their payroll
and other direct operating expenses and obtain goods and services needed to
carry on their business in a manner that will avoid irreparable harm to the
Debtors' estates. The ability of the ▇▇▇▇▇▇ Entities to use the Cash Collateral
and to have available to them sufficient working capital and liquidity through
the incurrence of credit in respect of the Cash Collateral is vital to the
confidence of their major customers and vendors and their employees and to the
preservation and maintenance of the going concern values of the Debtors'
estates. Additionally, it is a condition precedent to availability under the DIP
Financing (defined below) that the ▇▇▇▇▇▇ Entities are allowed to utilize the
Cash Collateral as described herein.
H. The Pre-Petition Collateral securing the Indebtedness constitutes
substantially all of the Debtors' assets. The Pre-Petition Lenders and the
holders of the Account Intermediary Receivable Liens and the Other Account
Intermediary Liens object to the use by the Debtors of the Pre-Petition
Collateral, including the Cash Collateral, except on the terms of this
Stipulation and Order. The Debtors are unable to obtain the required funds to
replace such Cash Collateral, in the form of unsecured credit or unsecured debt
allowable under Section 503(b)(1) of the Bankruptcy Code as an administrative
expense pursuant to Section 364(a) or (b) of the Bankruptcy Code, unsecured debt
having the priority afforded by Section 364(c)(1) of the Bankruptcy Code, or
debt secured as described in Section 364(c)(2) or (3) of the Bankruptcy Code.
I. The Pre-Petition Agents, the Pre-Petition Lenders and the holders of
the Account Intermediary Receivable Liens and the Other Account Intermediary
Liens are willing to
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consent and agree to the Debtors' and the Canadian Entities' use of the Cash
Collateral, subject to the conditions set forth herein. The Pre-Petition
Lenders, the Pre-Petition Agents and holders of the Account Intermediary
Receivable Liens and the Other Account Intermediary Liens have acted in good
faith in consenting to and negotiating the terms upon which they have agreed to
provide the cash collateral arrangements contemplated by this Stipulation and
Order.
J. Pursuant to a credit agreement dated as of June 28, 1999 (as amended
from time to time pursuant to the terms thereof, together with all agreements,
documents and instruments delivered in connection therewith, the "DIP Credit
Agreement"), the Debtors have moved for authorization to enter into and access a
revolving credit and letter of credit facility to be provided by all or a
sub-group of the Pre-Petition Lenders providing up to $100,000,000 in aggregate
debtor-in-possession financing (the "DIP Financing"), to be used to finance the
working capital and general corporate requirements of the Debtors and the
Canadian Entities during the Cases.
K. As set forth in the motions filed in the Cases seeking interim and
final approval for the DIP Financing (any such interim and final orders,
collectively, the "DIP Order" and, together with the DIP Credit Agreement, the
"DIP Financing Documents"), the DIP Financing is to be secured by, among other
things, a lien senior to the liens of the Pre-Petition Lenders and the
Pre-Petition Agents on the Pre-Petition Collateral securing the Indebtedness
pursuant to Section 364(d)(1) of the Bankruptcy Code.
L. Pursuant to the Bankruptcy Code, the Debtors are required to provide
adequate protection to the Pre-Petition Lenders and the holders of the Account
Intermediary Receivable Liens and the Other Account Intermediary Liens in
respect of their use of the Pre-Petition Collateral (including the Cash
Collateral) and in respect of the liens granted to the agent
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and lenders under the DIP Credit Agreement. The protections provided pursuant
to the terms and conditions of this Stipulation and Order shall be deemed to
constitute adequate protection of the interests of the Pre-Petition Agents, the
Pre-Petition Lenders and the holders of the Account Intermediary Receivable
Liens and the Other Account Intermediary Liens in the Cash Collateral for so
long as the Debtors shall be entitled to use the Cash Collateral pursuant to
this Stipulation and Order, and/or for so long as the Canadian Entities shall
be entitled to use the Cash Collateral in the Post-Petition Proceeds Account
(as defined below) pursuant to this Stipulation and Order and pursuant to an
order of the Canadian Court.
M. Notice of this Stipulation and the motion for a preliminary hearing
(the "Preliminary Hearing") in connection herewith (the "Motion") has been
provided to (i) the Office of the United States Trustee; (ii) the Pre-Petition
Agents; (iii) the agent under the DIP Credit Agreement, (iv) the known holders
of the material Senior Liens, and (v) the twenty largest unsecured creditors of
the Debtors. Appropriate notice of the Preliminary Hearing and the relief
requested in the Motion has been given pursuant to Sections 102(1) and 363 of
the Bankruptcy Code and Bankruptcy Rules 2002, 4001(b), 4001(c) and 4001(d).
N. Good cause has been shown for the entry of this Order. Among other
things, entry of this Order will minimize disruption of the Debtors' business
and operations and the business and operations of the ▇▇▇▇▇▇ Entities generally,
and permit them to meet payroll and other operating expenses, obtain needed
supplies and retain customer and supplier confidence by demonstrating an ability
to maintain customer delivery schedules and vendor payment schedules. The
financing and cash collateral use arrangement authorized hereunder and access to
the DIP Financing are vital to avoid immediate and irreparable harm to the
Debtors' estates and to allow
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the Debtors to operate in the ordinary course of business. Consummation of such
financing and cash collateral arrangements therefore are in the best interests
of the Debtors' estates.
O. The credit and adequate protection arrangements authorized hereunder
have been negotiated in good faith and at arm's length among the ▇▇▇▇▇▇
Entities, the Pre-Petition Agents, the Pre-Petition Lenders and the holders of
the Account Intermediary Receivable Liens and the Other Account Intermediary
Liens, and the terms of such arrangements are fair and reasonable under the
circumstances and reflect the ▇▇▇▇▇▇ Entities' exercise of prudent business
judgment consistent with their fiduciary duties and are supported by reasonably
equivalent value and fair consideration.
P. The Debtors have requested immediate entry of this Stipulation and
Order pursuant to Bankruptcy Rule 4001(b)(2) and (c)(2). The permission granted
herein to use the Cash Collateral is necessary to avoid immediate and
irreparable harm to the Debtors, their estates, and to the ▇▇▇▇▇▇ Entities
generally. Entry of this Stipulation and Order is in the best interests of the
Debtors' respective estates and creditors as its implementation will, among
other things, sustain the operation of the Debtors' existing business and
enhance the Debtors' prospects for successful reorganization.
Based on the foregoing.
IT IS HEREBY STIPULATED, CONSENTED, AGREED AND ORDERED as follow:
Effectiveness of Stipulation
1. This Stipulation and Order shall have no force or effect, and the
Debtors shall not be authorized to use any of the Cash Collateral, unless and
until it is approved by the Court.
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Management of Cash Collateral
2. The Debtors shall establish and maintain a cash management system as
provided in the DIP Credit Agreement. The Canadian Entities shall maintain bank
account arrangements as provided in the DIP Credit Agreement and as ordered by
the Canadian Court. All funds subject to such cash management systems and bank
account arrangements shall be subject to the liens and superpriority
administrative claims of the Pre-Petition Agents, the Pre-Petition Lenders and
the holders of Account Intermediary Receivable Liens and the Other Account
Intermediary Liens, as hereinafter provided.
3. Subject to the approval of this Stipulation and Order, BTCo, in its
capacity as administrative agent under the DIP Credit Agreement (in such
capacity, the "DIP Agent"), shall establish and maintain an interest-bearing
account (the "Post-Petition Proceeds Account") into which the Pre-Petition
Administrative Agent shall transfer, subject to the relative priorities (without
the need to take any steps to maintain perfection in respect thereof) of the
Pre-Petition Agents, the Pre-Petition Lenders and the holders of the Account
Intermediary Receivable Liens, any funds remaining in the account (the
"Pre-Petition Proceeds Account") established pursuant to the Proceeds Agreement
dated April 5, 1999, as amended, made by and among the ▇▇▇▇▇▇ Entities and the
Pre-Petition Lenders. All funds deposited into the Post-Petition Proceeds
Account shall be subject to the liens and superpriority administrative claims of
the Pre-Petition Agents, the Pre-Petition Lenders and the holders of the Account
Intermediary Receivable Liens, as hereinafter provided.
4. The Debtors shall direct that the proceeds of all post-petition asset
sales other than proceeds obtained from the sale or transfer of inventory in the
normal course of business (the "Post-Petition Asset Sales"), including any
non-cash proceeds in the form of
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instruments and bills of exchange, net only of reasonable costs and expenses and
of payment of indebtedness secured by any Pre-Petition Senior Liens on such
assets that are not assumed by the acquirer of such assets, be delivered
directly to the DIP Agent on the closing dates thereof, subject to the Account
Intermediary Receivable Liens, if and to the extent applicable.
5. The DIP Agent shall use the cash proceeds of Post-Petition Asset
Sales, other than any funds generated by a sale, if any, of the US Ferrous
division of the ▇▇▇▇▇▇ Entities (the "US Ferrous Proceeds"), first to repay any
amounts then outstanding under the DIP Financing Documents or pursuant to
paragraph 35 hereof, and shall deposit any balance of such funds into the
Post-Petition Proceeds Account; provided, however, that all proceeds of
Post-Petition Asset Sales received by the DIP Agent plus all cash proceeds at
any time deposited into the Pre-Petition Proceeds Account (without giving effect
to any disbursements from the Pre-Petition Proceeds Account prior to the
Petition Date) in excess of $93,000,000 (after post-closing adjustments of no
greater than $4,000,000 with respect to the proceeds of the pre-petition sale of
certain assets of the aluminum division of the ▇▇▇▇▇▇ Entities deposited into
the Pre-Petition Proceeds Account), shall be deposited into a separate
interest-bearing account to be established by the DIP Agent (the "Excess
Proceeds Account"), and all funds deposited into the Excess Proceeds Account
shall be held by the DIP Agent (a) in the absence of an event of default under
the DIP Credit Agreement, for application in accordance with the provisions of
the pre-arranged plan of reorganization to be filed by the Debtors as
contemplated by the Lock-up Agreement dated as of June 21, 1999 among the ▇▇▇▇▇▇
Entities and the Pre-Petition Lenders parties thereto (the "Plan"), or, (b) upon
the occurrence of an event of default under the DIP Credit Agreement which
results in the termination of the commitments of the lenders under the DIP
Financing, to repay any amounts outstanding under the DIP Financing Documents.
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Use of Cash Collateral
6. In the absence of an Event of Default (as defined below), and except
as provided below, (a) Cash Collateral shall be advanced from the Post-Petition
Proceeds Account to the Debtors and the Canadian Entities in accordance with and
to the extent permitted in the Budget, as described below, (b) the Debtors (and
the Canadian Entities subject to an order of the Canadian Court) shall be
authorized to use all other Cash Collateral (excluding any Cash Collateral
securing the LC Liens or the Other Account Intermediary Liens, or Cash
Collateral deposited in the Excess Proceeds Account) in the ordinary course of
business, subject to any restrictions imposed by (i) the Bankruptcy Code (as
modified by Order of the Court), (ii) the DIP Financing Documents, and (iii) the
Stipulation and Order Authorizing Debtors to Obtain Post-Petition Surety Bonds
and to Enter into Indemnity Agreements, (the "Bond Order") and (c) the DIP Agent
shall withdraw funds from the Post-Petition Proceeds Account or from any other
Cash Collateral held by the DIP Agent (excluding any Cash Collateral deposited
into the Excess Proceeds Account) to the extent necessary to repay amounts
outstanding under the DIP Financing Documents. The Debtors and the Canadian
Entities hereby waive any and all rights to use the Cash Collateral securing the
LC Liens or the Other Account Intermediary Liens, or any Cash Collateral
deposited in the Excess Proceeds Account.
7. If at the relevant time any of the Cash Collateral held in the
Post-Petition Proceeds Account is subject to the Account Intermediary Receivable
Liens, all releases of Cash Collateral from the Post-Petition Proceeds Account
(a) shall be deemed to have been made by the holders of the Account Intermediary
Receivable Liens in the same proportion as the amount of funds subject to the
Account Intermediary Receivable Liens then in the Post-Petition Proceeds Account
bears to the total funds then in the Post-Petition Proceeds Account, and (b)
shall be
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deemed to have been made by the Pre-Petition Lenders in the same proportion
as the amount of funds not subject to the Account Intermediary Receivable Liens
then in the Post-Petition Proceeds Account bears to the total funds then in the
Post-Proceeds Account. All releases of Cash Collateral other than from the
Post-Petition Proceeds Account shall be deemed to have been made by the
Pre-Petition Lenders only.
8. The Debtors may not use Cash Collateral hereunder if the right of the
Debtors and the Canadian Entities to use Cash Collateral has terminated
pursuant to the provisions of this Stipulation and Order.
9. Notwithstanding anything herein to the contrary, no Cash Collateral
may be used to object to or contest in any manner, or raise any objections,
counterclaims or defenses to, the validity, perfection, priority or
enforceability of the claims or liens of the Pre-Petition Agents, the
Pre-Petition Lenders, the holders of the Account Intermediary Receivable Liens,
the Other Account Intermediary Liens, the LC Liens, or the DIP Financing
Liens, or the liens of claims of the collateral and security agents under the
Pre-Petition Credit Documents or under the DIP Financing Documents, or assert
any claims or causes of action against the Pre-Petition Agents, the
Pre-Petition Lenders, the holders of the Account Intermediary Receivable Liens,
the Other Account Intermediary Liens, the LC Liens or the DIP Financing Liens
or the collateral and security agents under the Pre-Petition Credit Documents
or under the DIP Financing Documents.
10. Any and all Cash Collateral payments or other proceeds remitted
(including payments or proceeds remitted pursuant to paragraph 29 hereof), or
deemed to be remitted, the Pre-Petition Administrative Agent for the benefit
of the Pre-Petition Lenders pursuant to this Stipulation and Order (i) shall
(subject to the Senior Liens and the Carve-Out (as defined below), as
applicable) be received by the Pre-Petition Agents for the benefit of the Pre-
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Petition Lenders free and clear of any claim, charge, deduction, assessment or
other liability, including, without limitation, any such claim, charge or
deduction arising out of or based on, directly or indirectly, Sections 506(c) or
552(b) of the Bankruptcy Code, all of which are hereby waived by the ▇▇▇▇▇▇
Entities and (ii) shall be paid and applied, and deemed paid and applied,
subject to Section 502(b)(2) of the Bankruptcy Code, after making any payments
(or establishing any reserves) required in respect of the Senior Liens and the
Carve-Out, as applicable, in accordance with the provisions of the Pre-Petition
Credit Agreement.
The Budget
11. PSC and PSI have prepared a budget dated April 1, 1999 (the "Budget"),
a copy of which will be filed promptly with the Court, which has been approved
in form and substance by the Pre-Petition Agents and the Required Lenders. The
Budget reflects projected utilization of DIP Financing and Cash Collateral held
in the Post-Petition Proceeds Account, from the Petition Date through the
maturity date of the DIP Financing, calculated on a monthly basis.
12. Notwithstanding anything contained herein to the contrary, no funds
shall be released to the Debtors or the Canadian Entities from the Post-Petition
Proceeds Account (a) except upon a written request of an Authorized Officer (as
defined in the DIP Credit Agreement), in the form annexed as Exhibit A,
accompanied by a certificate of such Authorized Officer, in the form annexed as
Exhibit B, certifying the availability of the amount requested pursuant to the
Budget and representing that (i) the ▇▇▇▇▇▇ Entities require the amount
requested in order to maintain operations as reflected in the Budget and such
funds are not readily available elsewhere, and (ii) no Event of Default has
occurred under this Stipulation and Order that has not been cured or waived, or
(b) in excess of the Available Amount as calculated in Exhibit B.
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Right to Inspect: Copies of Documents
13. The ▇▇▇▇▇▇ Entities agree and are hereby directed to allow the
Pre-Petition Agents and the holders of the Account Intermediary Receivable
Liens to send representatives, including accountants and appraisers, to the
premises of any of the ▇▇▇▇▇▇ Entities to examine the books, records, operations
and assets of the ▇▇▇▇▇▇ Entities and to provide such representatives full
access to the ▇▇▇▇▇▇ Entities.
14. The ▇▇▇▇▇▇ Entities will provide the Pre-Petition Administrative Agent
and the holders of the Account Intermediary Receivable Liens with copies of any
and all documents that they provide to the DIP Agent, any statutory or
unofficial committee appointed or appearing in the Cases, or the Office of the
United States Trustee, or file in the Cases. Such documents shall be provided at
the same time that they are filed in the Cases or provided to any of the
entities identified in the immediately preceding sentence. The ▇▇▇▇▇▇ Entities
shall also provide the Pre-Petition Administrative Agent and the holders of the
Account Intermediary Receivable Liens with copies of all business plans,
restructuring proposals, and similar documents as they become available to the
▇▇▇▇▇▇ Entities, and upon the request of the Pre-Petition Administrative Agent
or the holders of the Account Intermediary Receivable Liens, shall promptly
provide all consultants' reports and appraisals, including all audits,
projections and other reports prepared by the accountants or financial advisors
to any of the ▇▇▇▇▇▇ Entities.
15. Except in the event of an emergency or as otherwise provided herein or
ordered by the Court, the Debtors and the Canadian Entities shall provide
co-counsel to the Pre-Petition Lenders and co-counsel to the holders of the
Account Intermediary Receivable Liens with at least five (5) days' prior notice
of all motions, applications, requests or other papers filed by the Debtors or
the Canadian Entities in, or in connection with, the Cases that could reasonably
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be expected to directly impact the claims, liens or rights of the Pre-Petition
Lenders or the holders of the Account Intermediary Receivable Liens.
Debtors' Actions Outside of Ordinary Course
16. The Debtors shall not take any action outside the ordinary course of
their business without the prior approval of the Court following no less than
ten (10) days' prior notice to counsel to the Pre-Petition Lenders and counsel
to the holders of the Account Intermediary Receivable Liens and as required
under Bankruptcy Rule 2002(a)(2), except in the event of an emergency, in which
case the Debtors shall provide at least three (3) business days' prior notice
together with a written explanation of the exigent circumstances requiring such
shortened notice. Notwithstanding the foregoing, absent the approval of the
Required Lenders, the Debtors shall not (a) make any payments outside the
ordinary course of business to any of their officers, directors, employees,
representatives or agents, other than the management retention arrangements
approved by the Required Lenders or (b) sell assets outside the ordinary course
of business.
17. The Debtors shall deliver to the Pre-Petition Agents evidence
satisfactory to the Pre-Petition Agents that adequate insurance is maintained on
all material tangible Pre-Petition Collateral and Post-Petition Collateral (as
defined below) as required under the Pre-Petition Credit Documents.
Grant of Security Interests and Liens
18. As adequate protection for the use by the Debtors and the Canadian
Entities of the Cash Collateral that is subject to the Account Intermediary
Receivable Liens, and for the granting of the Bonding Liens (defined below)
pursuant to the Bond Order, (i) the holders of the Account Intermediary
Receivable Liens are hereby granted valid and perfected security
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interests in and to and liens (the "Account Intermediary Replacement Liens")
upon all of the Debtors' and their respective estates' assets and interests in
presently owned or hereafter acquired real and personal property of any kind or
nature, wherever located, (excluding, unless the Stipulation and Order shall
become a final order, the proceeds of any Chapter 5 avoidance actions) to the
extent that the granting of the Bonding Liens or the use of the Cash Collateral
results in a decrease in the value of the holders of the Account Intermediary
Receivable Liens interests in such Cash Collateral during such period as the
Debtors and the Canadian Entities shall be entitled to use Cash Collateral
pursuant to this Stipulation and Order (the "Post-Petition U.S. Collateral"),
and (ii) the Canadian Entities shall, if requested by the Holders of the Account
Intermediary Receivable Liens, endeavor to obtain an order in the Canadian Cases
granting the holders of the Account Intermediary Receivable Liens valid and
perfected security interests in and to, and liens upon, all of the Canadian
Entities' and their respective estates' assets and interests in presently owned
or hereafter acquired real and personal property of any kind or nature, wherever
located (the "Post-Petition Canadian Collateral," and collectively with the
Post-Petition U.S. Collateral, the "Post-Petition Collateral"). Such security
interests and liens shall be subject only to: (a) liens and security interests
necessary to comply with bonding requirements of the ▇▇▇▇▇▇ Entities as granted
by the ▇▇▇▇▇▇ Entities from time to time (the "Bonding Liens"), (b) the LC
Liens, (c) the Other Account Intermediary Liens, (d) the Carve-Out (as defined
below), and (e) the Pre-Petition Senior Liens.
19. As adequate protection for the use by the Debtors and the Canadian
Entities of the Cash Collateral and the other Pre-Petition Collateral, for the
granting of the Pre-Petition Lenders' consent to the Bonding Liens pursuant to
the Bond Order, and for the priming liens securing the DIP Financing Liens, the
Pre-Petition Agents and the Pre-Petition Lenders are hereby granted valid and
perfected security interests in and to, and liens upon (the "Pre-Petition
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Lender Replacement Liens"), the Post-Petition U.S. Collateral (excluding, unless
this Stipulation and Order shall become a final order, the proceeds of any
Chapter 5 avoidance actions) to the extent that the granting of the Bonding
Liens and the DIP Financing Liens or the use of the Cash Collateral and the
other Pre-Petition Collateral results in a decrease in the value of the holders
of the Pre-Petition Lenders' interests in such Cash Collateral or the Other
Pre-Petition Collateral during such period as the Debtors and the Canadian
Entities shall be entitled to use Cash Collateral pursuant to this Stipulation
and Order. Such security interests and liens shall be subject only to: (a) the
Bonding Liens, (b) the Senior Liens, (c) following the occurrence and during the
continuance of an Event of Default (as such term is defined in the DIP Credit
Agreement), a $3,000,000 Carve-Out (as defined in the order granting the DIP
Financing Liens), and (d) the Account Intermediary Replacement Liens in the
Post-Petition Collateral granted in the immediately preceding paragraph.
20. The Carve-Out shall not be utilized to pay professional fees and
disbursements incurred in connection with asserting any claims or causes of
action (excluding, unless this Stipulation and Order shall become a final order)
formal discovery proceedings in anticipation thereof against the Pre-Petition
Lenders, the Pre-Petition Agents, the holders of the Account Intermediary
Receivable Liens, the Other Account Intermediary Liens, or the DIP Financing
Liens or the collateral or security agents under the Pre-Petition Credit
Documents or the DIP Financing Documents, and/or challenging (whether by
defense, objection, counterclaim or otherwise, including formal discovery
proceedings in anticipation thereof) the validity, perfection, priority or
amount of any lien or claim of the Pre-Petition Agents, the Pre-Petition
Lenders, the holders of the Account Intermediary Receivable Liens, the Other
Account Intermediary Liens, or the DIP Financing Liens, or any lien or claim of
the agents or lenders under the DIP Financing Documents, or the collateral or
security agents under the Pre-Petition Credit Documents or the DIP Financing
Documents. Except as expressly
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set forth herein, the liens and security interests granted in this Stipulation
and Order shall not be (i) subject to any lien or security interest which is
avoided and preserved for the benefit of the Debtors' estates under Section 551
of the Bankruptcy Code or (ii) subordinated to or made pari passu with any other
lien or security interest under Section 364 of the Bankruptcy Code or otherwise.
21. Nothing contained herein shall constitute a waiver of, and the
Pre-Petition Agents, the Pre-Petition Lenders and the holders of the Account
Intermediary Receivable Liens shall have, the rights provided in Section 507(b)
of the Bankruptcy Code.
22. This Stipulation and Order shall be sufficient and conclusive evidence
of the validity, perfection and enforceability of the Pre-Petition Lender
Replacement Liens and the Account Intermediary Replacement Liens in and upon the
Post-Petition U.S. Collateral without the necessity of filing or recording any
financing statements, mortgages, deeds of trust, notices or other documents
which may otherwise be required under the law of any jurisdiction, or the taking
of any other action to validate or perfect the Pre-Petition Lender Replacement
Liens and the Account Intermediary Replacement Liens.
23. If the Pre-Petition Agents, the Pre-Petition Lenders or the holders of
the Account Intermediary Receivable Liens shall, in their discretion, elect for
any reason to file or record any such financing statements, mortgages, deeds of
trust, notices or other documents with respect to such security interests and
liens, the filing or recording thereof shall be deemed to have been made as of
the Petition Date.
24. The Pre-Petition Agents, the Pre-Petition Lenders and the holders of
the Account Intermediary Receivable Liens, may, in their discretion, file a
photostatic copy of this Stipulation and Order as a financing statement in any
jurisdiction in which the Debtors have real
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or personal property, and in such event, the subject filing or recording officer
is authorized to file or record such copy of this Stipulation and Order.
25. The Debtors and their officers are hereby authorized and directed to
execute any security agreements, mortgages, assignments, financing statements,
instruments or documents as may be reasonably requested by the Pre-Petition
Agents, the Pre-Petition Lenders or the holders of the Account Intermediary
Receivables Liens, to evidence and perfect the security interests and mortgage
liens granted or confirmed hereunder including, without limitation, continuation
statements with respect to the liens and security interests of the Pre-Petition
Agents and the Pre-Petition Lenders on the Pre-Petition Collateral. The
signature of any officer of a Debtor appearing on any one or more of the
agreements or other documents relating to this Stipulation and Order shall bind
such Debtor and its estate.
Administrative Claims
26. In addition to the grants of liens and security interests herein, the
holders of the Account Intermediary Receivable Liens shall have any claims
against the Debtors to the extent that the use of the Cash Collateral results in
a decrease in the value of the interests of the holders of the Account
Intermediary Receivable Liens in the Cash Collateral on or after the Petition
Date, such claims shall be allowed administrative expense claims with priority
in payment over all administrative expense claims and unsecured claims against
the Debtors now existing or hereafter arising, of any kind or nature whatsoever
including, without limitation, administrative expenses of the kinds specified in
Section 326, 330, 331, 503(b), 506(c), 507(a), 507(b) and 726 of the Bankruptcy
Code. Except as expressly provided herein, no cost or expense of administration
under Sections 105, 364(c)(l), 503(b), 506(c) or 507(b) of the Bankruptcy Code
or otherwise, including those resulting from, the conversion of any of the
Chapter 11 Cases
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pursuant to Section 1112 of the Bankruptcy Code, shall be senior to, or pari
passu with, the administrative claims of the holders of the Account Intermediary
Receivable Liens.
27. In addition to the grants of liens and security interests herein and
subject to: (a) the Carve-Out; (b) the superpriority claims provided to the DIP
Agent and the lenders under the DIP Financing Documents; and (c) the
superpriority claims granted pursuant to this Stipulation and Order to the
holders of the Account Intermediary Receivable Liens, if the Pre-Petition Agents
or the Pre-Petition Lenders shall have any claims against the Debtors to the
extent that the use of the Cash Collateral and the other Pre-Petition Collateral
and the granting of the Bonding Liens and the DIP Financing Liens results in a
decrease in the value of the interests of the Pre-Petition Lenders' in the
Pre-Petition Collateral or the Cash Collateral on or after the Petition Date,
such claims shall be allowed administrative expense claims with priority in
payment over all administrative expense claims and unsecured claims against the
Debtors now existing or hereafter arising, of any kind or nature whatsoever
including, without limitation, administrative expenses of the kinds specified in
Sections 326, 330, 331, 503(b), 506(c), 507(a), 507(b) and 726 of the Bankruptcy
Code. Except as expressly provided herein, no cost expense of administration
under Sections 105, 364(c)(1), 503(b), 506(c) or 507(b) of the Bankruptcy Code
or otherwise, including those resulting from the conversion of any of the
Chapter 11 Cases pursuant to Section 1112 of the Bankruptcy Code, shall be
senior to, or pari passu with, the administrative claims of the Pre-Petition
Agents and the Pre-Petition Lenders.
Events of Default
28. An "Event of Default" under this Stipulation and Order will exist
(until waived or cured) upon the occurrence of any of the following:
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(i) failure of the ▇▇▇▇▇▇ Entities to perform or comply with the
provisions of this Stipulation and Order (or any equivalent or
substantially similar order in the Canadian Cases) in any respect;
(ii) an occurrence of a default under the DIP Credit Agreement;
(iii) entry of an order appointing a Chapter 11 trustee in any of the
Chapter 11 Cases, or appointing an examiner having enlarged powers beyond
those set forth under Section 1106(a)(3) and (4) of the Bankruptcy Code;
(iv) entry of an order dismissing any of the Cases, or converting any
of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code,
or lifting the stay in the Canadian Cases to permit the appointment of a
receiver or receiver and manager (or any entity with substantially similar
powers) of any of the assets of any Canadian Entity;
(v) entry of an order amending, supplementing, staying, reversing,
vacating or otherwise modifying this Stipulation and Order, or the entry of
an order in the Canadian Cases having the equivalent effect, without the
prior consent of the Required Lenders, other than a ministerial amendment
or modification of this Stipulation and Order;
(vi) entry of an order granting any other claim superpriority status
or a lien equal or superior to the Pre-Petition Lenders' claims and liens,
without the prior consent of the Required Lenders, other than pursuant to
or as permitted by this Stipulation and Order and the DIP Order;
(vii) amendment, modification or withdrawal of the Plan or the plan of
arrangement filed in the Canadian Cases, or the disclosure statements filed
with
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respect thereto (the "Disclosure Statement"), without the consent of the
Required Lenders, other than a ministerial amendment or modification of
such plans or the disclosure statements;
(viii) entry of an order granting relief from the automatic stay in
the Chapter 11 Cases, or lifting the stay in the Canadian Cases, so as to
allow a third party to proceed against any material asset of the Debtors
or the Canadian Entities;
(ix) the filing of any pleading by any of the ▇▇▇▇▇▇ Entities
seeking any of the matters set forth in clauses (iii) through (viii);
(x) failure to (a) obtain approval of the Disclosure Statement by
August 31, 1999, (b) obtain confirmation of the Plans by October 31, 1999
and (c) to consummate the Plans by November 30, 1999; or
(xi) an order shall be entered by the Bankruptcy Court, or an
application shall be filed by any ▇▇▇▇▇▇ Entity for the approval of an
order, surcharging any amounts under Section 506(c) of the Bankruptcy Code
against the Pre-Petition Collateral or the Post-Petition Collateral.
Remedies
29. Immediately upon the occurrence of an Event of Default specified in
sub-paragraphs (iii) and (iv) of paragraph 28, the ▇▇▇▇▇▇ Entities' rights to
use the Cash Collateral shall terminate automatically. In the case of any other
Event of Default specified in paragraph 28, the ▇▇▇▇▇▇ Entities' rights to use
the Cash Collateral shall terminate upon written notice to counsel to the
Debtors by the Pre-Petition Administrative Agent (at the direction of the
Required Lenders). In addition, upon three (3) business days' prior written
notice to (i) counsel to the
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Debtors,(ii) the DIP Agent, (iii) the counsel to the holders of the Account
Intermediary Receivable Liens and the Other Account Intermediary Liens, and
(iv) any official committee that may be appointed in the Cases, given by the
Pre-Petition Administrative Agent (at the direction of the Required Lenders),
of the occurrence of an Event of Default, the automatic stay imposed pursuant
to Section 362 of the Bankruptcy Code shall be deemed lifted, modified and
vacated, without further order of this Court, to permit the Pre-Petition
Agents, and the Pre-Petition Lenders to exercise, subject to the Senior Liens,
the Bonding Liens, the liens and security interests of the holders of the
Account Intermediary Receivable Liens in the Post-Petition Collateral
described in paragraph 18 hereof, and the Carve-Out, any and all of their
rights and remedies granted under the Pre-Petition Credit Documents, this
Stipulation and Order and applicable law, including, without limitation,
foreclosing upon and selling all or a portion of the Pre-Petition Collateral
or the Post-Petition Collateral. The Pre-Petition Agents and the Pre-Petition
Lenders shall have the right to exercise such rights and remedies, subject to
the Senior Liens and the Bonding Liens, the liens and security interests of the
holders of the Account Intermediary Receivable Liens in the Post-Petition
Collateral described in paragraph 18 hereof, and the Carve-Out, as to all or
such part of the Pre-Petition Collateral and the Post-Petition Collateral as
the Required Lenders shall, in their sole discretion elect. The ▇▇▇▇▇▇ Entities
shall cooperate and comply with the requests of the Pre-Petition Agents and the
Pre-Petition Lenders in connection with the exercise of such rights and
remedies. The Pre-Petition Agents and the Pre-Petition Lenders liens shall be
entitled to apply the payments or proceeds of the Pre-Petition Collateral and
the Post-Petition Collateral in accordance with the provisions of this
Stipulation and Order, without regard to the doctrine of "marshaling" or any
other similar doctrine with respect to any of their Pre-Petition Collateral or
Post-Petition Collateral or otherwise. Any
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failure or delay of the Pre-Petition Agents or the Pre-Petition Lenders to seek
relief under this paragraph shall not constitute a waiver of any of their
rights.
30. Notwithstanding any other provisions of this order, upon the
occurrence of a Triggering Event, as defined in the Inter-Creditor Agreement
(which is attached as Exhibit B to the Motion for Approval of Stipulation and
Order Authorizing Debtors to Obtain Post-Petition Surety Bonds and To Enter Into
Indemnity Agreements), the Surety Participants (as defined in the Inter-Creditor
Agreement) shall upon three business days' notice to counsel to the Debtors,
counsel to the Pre-Petition Agents and the Pre-Petition Lenders, counsel to the
holders of the Account Intermediary Receivable Liens and the Other Account
Intermediary Liens, and the United States Trustee, be entitled to pursue any and
all remedies and rights referred to in paragraph 7.1(b) of the Inter-Creditor
Agreement, unless the Court orders otherwise.
Miscellaneous Provisions
31. The liens, security interests, priorities, superpriority
administrative claims and other rights and remedies granted to the Pre-Petition
Agents, the Pre-Petition Lenders and the holders of the Account Intermediary
Receivable Liens and the Other Account Intermediary Liens by the provisions of
this Stipulation and Order and any actions taken pursuant hereto shall survive,
and shall not be modified, altered or impaired in any manner by (a) any other
financing or extension of credit or incurrence of debt by the ▇▇▇▇▇▇ Entities
(pursuant to Section 364 of the Bankruptcy Code or otherwise); (b) the entry of
an order dismissing any of the Chapter 11 Cases, or converting any of the
Chapter 11 Cases to Chapter 7; (c) the entry of an order confirming any plan of
reorganization; or (d) any act or omission whatsoever. The terms and provisions
of this Stipulation and Order as well as the superpriority administrative
claims, liens and security interests granted pursuant to this Stipulation and
Order, the Pre-Petition Credit Documents and
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the documents creating the Account Intermediary Receivable Liens and the Other
Account Intermediary Liens shall continue in the Chapter 11 Cases and any
subsequent Chapter 7 cases under the Bankruptcy Code. The superpriority
administrative claims, liens and security interests granted pursuant to this
Stipulation and Order, the Pre-Petition Credit Documents and the documents
creating the Account Intermediary Receivable Liens and the Other Account
Intermediary Liens shall continue in full force and shall maintain their
priority as provided in this Stipulation and Order until all of the ▇▇▇▇▇▇
Entities' obligations to the Pre-Petition Agents, the Pre-Petition Lenders, and
the holders of the Account Intermediary Receivable Liens and the Other Account
Intermediary Liens are indefeasibly paid in full in cash or discharged.
32. Other than (i) the Bonding Liens, (ii) any liens or security interests
granted to the holders of the Account Intermediary Receivable Liens, and (iii)
the DIP Financing Liens, no security interests, liens, encumbrances, or
mortgages shall be granted under Section 364(d) of the Bankruptcy Code or
otherwise to any other entity if they are or are proposed to be senior to or
pari passu with any security interests, liens, encumbrances, or mortgages
previously granted to the Pre-Petition Agents and the Pre-Petition Lenders or
granted under this Stipulation and Order to the Pre-Petition Agents and the
Pre-Petition Lenders.
33. Other than the Bonding Liens, no security interests, liens,
encumbrances, or mortgages shall be granted under Section 364(d) of the
Bankruptcy Code or otherwise to any other entity if they are or are proposed to
be senior to or pari passu with any security interests, liens, encumbrances, or
mortgages previously granted to the holders of the Account Intermediary
Receivable Liens or the Other Account Intermediary Liens (in their capacity as
holders of such liens) or granted under this Stipulation and Order to the
holders of the Account Intermediary Receivable Liens (in their capacity as
holders of Account Intermediary Receivable Liens).
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34. The ▇▇▇▇▇▇ Entities shall not use or dispose of any property (other
than Cash Collateral) in which the Pre-Petition Agents, the Pre-Petition Lenders
or the holders of the Account Intermediary Receivable Liens have a perfected
security interest or lien, under Sections 363(b), 363(c)(2), or 365 of the
Bankruptcy Code or otherwise, unless the proceeds of all such dispositions of
property are promptly deposited into the loan accounts established under DIP
Financing Documents, the Post-Petition Proceeds Account, or the Excess Proceeds
Account, as applicable, or are otherwise treated in accordance with this
Stipulation and Order and the DIP Financial Documents.
35. The Debtors agree, and are hereby authorized and directed to pay, as
additional adequate protection pursuant to Section 361 of the Bankruptcy Code,
promptly upon demand, all fees and expenses of the Pre-Petition Agents and
counsel for the Pre-Petition Lenders and the Pre-Petition Agents collectively,
all fees and expenses of any accountants, financial advisors or other
professionals that may be retained by the Pre-Petition Agents (or counsel to the
Pre-Petition Agents or the Pre-Petition Lenders) in connection with the Cases,
and all fees and expenses of counsel for the holders of the Account Intermediary
Receivable Liens and the Other Account Intermediary Liens, all without further
order of this Court, including, without limitation, the fees and disbursements
of White & Case LLP, Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ Stargatt &
▇▇▇▇▇▇, LLP, as co-counsel for the Pre-Petition Lenders and the Pre-Petition
Agents collectively, and the fees and disbursements of KPMG LLP, accountants to
the Pre-Petition Lenders and the Pre-Petition Agents collectively. The
obligations of the Debtors pursuant to the immediately preceding sentence shall
also include all unpaid fees and disbursements of the respective professionals
accrued prior to the Petition Date.
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36. As further adequate protection pursuant to Section 361 of the
Bankruptcy Code, the holders of the LC Liens are hereby authorized (to the
extent approved by the Canadian Court) to apply any cash collateral held under
Section 5.06 of the Pre-Petition Credit Agreement, or under the Permitted LC
Facility, in accordance with the provisions of the Pre-Petition Credit
Agreement, or the Permitted LC Facility, as applicable, and the holders of the
Other Account Intermediary Liens are hereby authorized (to the extent approved
by the Canadian Court) to apply any cash collateral held pursuant to their
pre-petition documentation if and when they are entitled to do so in accordance
with those documents.
37. Except as otherwise provided herein, the provisions of this
Stipulation and Order shall immediately be binding upon and inure to the benefit
of the Pre-Petition Agents, the Pre-Petition Lenders, the DIP Agent, the holders
of the Account Intermediary Receivable Liens, the holders of the LC Liens, the
holders of the Other Account Intermediary Liens, and the ▇▇▇▇▇▇ Entities and
their respective successors and assigns, including, but not limited to, any
trustee in bankruptcy or other fiduciary hereinafter appointed as a legal
representative of any of the Debtors or the Debtors' estates or the Canadian
Entities or the Canadian Entities' estates. The obligations of the ▇▇▇▇▇▇
Entities hereunder shall be joint and several.
38. By entering into and performing under this Stipulation and Order, or
by consenting to the use of Cash Collateral hereunder, neither the Pre-Petition
Agents, the Pre-Petition Lenders nor the holders of the Account Intermediary
Receivable Liens shall be deemed to be in control of the operations of any of
the ▇▇▇▇▇▇ Entities or to be acting as a "responsible person" or "owner or
operator" with respect to the operation or management of any of the ▇▇▇▇▇▇
Entities.
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39. The ▇▇▇▇▇▇ Entities have waived any entitlement to assert a claim
under Section 506(c) of the Bankruptcy Code for any costs and expenses incurred
in connection with the preservation, protection or enhancement of, or
realization by the holders of the Account Intermediary Receivable Liens, the
Pre-Petition Agents or the Pre-Petition Lenders on, the Pre-Petition Collateral
or the Post-Petition Collateral, or the realization by the holders of the Other
Account Intermediary Liens or the holders of the LC Liens on the collateral
securing their claims.
40. No rights are intended to be created hereunder for the benefit of any
third party or creditor or any direct, indirect or incidental beneficiary,
except as specifically provided herein.
41. This Stipulation and Order shall constitute findings of fact and
conclusions of law and shall take effect and be fully enforceable immediately
upon execution hereof.
42. The automatic stay imposed by virtue of Section 362 of the Bankruptcy
Code is hereby modified to permit the Pre-Petition Agents, the Pre-Petition
Lenders, the holders of the Account Intermediary Receivable Liens, the holders
of the LC Liens and the holders of the Other Account Intermediary Liens to take
any action authorized by the terms of this Stipulation and Order, including,
without limitation, any action in respect of the filing or recording of the
Post-Petition Collateral.
43. Except as specifically provided herein, execution of this Stipulation
and Order by the Pre-Petition Agents and the holders of the Account Intermediary
Receivable Liens is not intended and shall not be deemed to be a waiver of any
of the rights or remedies of the Pre-Petition Agents, the Pre-Petition Lenders
and the holders of the Account Intermediary Receivable Liens under applicable
law, any of the Pre-Petition Credit Documents, or the
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documents creating the Account Intermediary Receivable Liens, including,
without limitation, their rights to request additional adequate protection, to
seek relief from the automatic stay, to seek the appointment of a trustee,
responsible party or examiner, to make any contention respecting valuation of
any of their collateral or respecting methods of valuation, to claim they are
entitled to be paid interest at a default rate, or to take any other action
that may be necessary to protect their interests.
44. No waiver, modification, or amendment of any of the provisions hereof
shall be effective unless set forth in writing, signed by the parties hereto (at
the direction of the Required Lenders with respect to the interests of the
Pre-Petition Lenders) and approved by the Court.
45. This Stipulation and Order is entered in a "core" proceeding as
defined in, inter alia 28 U.S.C. Section 157(b)92)(A), (M) and (O), is a final
order, and is valid and fully effective upon its entry.
46. Any stay, modification, reversal or vacation of this Stipulation and
Order shall not affect the liens, security interests and superpriority
administrative claims granted herein, in the Pre-Petition Credit Documents, or
in the documents creating the Account Intermediary Receivable Liens or the Other
Account Intermediary Liens, or the validity, enforceability or priority of any
of the obligations of the ▇▇▇▇▇▇ Entities to the Pre-Petition Agents, the
Pre-Petition Lenders or the holders of the Account Intermediary Receivable Liens
or the Other Account Intermediary Liens incurred pursuant to this Stipulation
and Order. Notwithstanding any such stay, modification, reversal or vacation of
this Stipulation and Order, all uses of Cash Collateral and obligations incurred
by the ▇▇▇▇▇▇ Entities pursuant hereto prior to the effective date of such stay,
modification, reversal or vacation shall be governed in all respects by the
original
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provisions hereof, and the Pre-Petition Agent, the Pre-Petition Lenders and the
holders of the Account Intermediary Receivable Liens or the Other Account
Intermediary Liens shall be entitled to all rights, privileges, benefits and
remedies, including without limitation, the liens, security interests and
priorities (as applicable) granted herein.
47. Except for the ▇▇▇▇▇▇ Entities (who, subject to footnote 3 hereof,
have herein acknowledged the validity, enforceability and priority of the claims
of the Pre-Petition Agents, the Pre-Petition Lenders, the holders of the Account
Intermediary Receivable Liens, the holders of the Other Account Intermediary
Liens and the holders of the LC Liens and the perfection of the liens and
security interests in the Pre-Petition Collateral of the Pre-Petition Agents,
the Pre-Petition Lenders, the holders of the Account Intermediary Receivable
Liens, the holders of the Other Account Intermediary Liens and the holders of
the LC Liens, and who hereby waive any right to commence or prosecute any
defense, action, objection or counterclaim with respect to the claims, liens or
security interests of the Pre-Petition Agents, the Pre-Petition Lenders, the
holders of the Account Intermediary Receivable Liens, the holders of the Other
Account Intermediary Liens or the holders of the LC Liens), any party in
interest, including any statutory committee of unsecured creditors, shall
commence any adversary proceeding or contested matter challenging the validity,
enforceability or priority of the claims of the Pre-Petition Lenders, the
Pre-Petition Agents, the holders of the Account Intermediary Receivable Liens,
the holders of the Other Account Intermediary Liens or the holders of the LC
Liens, or the perfection of the liens or security interests in the Pre-Petition
Collateral of the Pre-Petition Agents, the Pre-Petition Lenders, the holders of
the Account Intermediary Receivable Liens, the holders of the Other Account
Intermediary Liens or the holders of the LC Liens, no later than the date that
is sixty (60) days from the date that the first statutory committee of unsecured
creditors
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is appointed in accordance with Section 1102(a) of the Bankruptcy Code. If no
such adversary proceeding or contested matter is properly commenced as of such
date, the Pre-Petition Agents', the Pre-Petition Lenders' and the holders of the
Account Intermediary Receivable Liens' and the other Account Intermediary Liens
claims shall constitute allowed claims, not subject to subordination, setoff,
counterclaim, defense or objection, for all purposes, and the holders of the
Account Intermediary Receivable Liens' and the Other Account Intermediary Liens,
the Pre-Petition Agents' and the Pre-Petition Lenders' liens and security
interests in the Pre-Petition Collateral shall be deemed legal, valid, binding,
perfected, enforceable and otherwise unavoidable, and shall not be subject to
any other or further challenge by any party in interest seeking to exercise the
rights of the Debtors' estates.
48. Any reversal or modification of this Stipulation and Order on appeal
shall not affect the validity of any obligation incurred hereunder by the ▇▇▇▇▇▇
Entities, or any claim, lien, security interest or superpriority administrative
claim provided to the Pre-Petition Agents, the Pre-Petition Lenders or the
holders of Account Intermediary Receivable Liens hereunder, it appearing that
the financial accommodations extended to the ▇▇▇▇▇▇ Entities hereunder are being
extended by the Pre-Petition Agents, the Pre-Petition Lenders and the holders of
the Account Intermediary Receivable Liens in "good faith" as contemplated by
Section 364(e) of the Bankruptcy Code.
49. The Debtors shall, within three (3) days subsequent to the date
hereof, mail notice of the approval of this Stipulation and Order, together with
a copy of this Stipulation and Order, to the parties having been given notice of
the Preliminary Hearing and to any other party which has filed a request for
notices with the Court and to counsel for any committee appointed pursuant to
Section 1102 of the Bankruptcy Code. The notice of approval of this
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Stipulation and Order shall state that any party in interest objecting to this
Stipulation and Order as a final order shall file written objections with the
Clerk of the United States Bankruptcy Court for the District of Delaware no
later than July 22, 1999 at 4:30 p.m. (the "Objection Deadline"), which
objections shall be served so that the same are received on or before such date
by: (a) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Stikeman, Elliott,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq. Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. attorneys
for the ▇▇▇▇▇▇ Entities; (b) White & Case LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., Blake, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq., and Young, Conaway, Stargatt & ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: S. ▇▇▇▇▇ ▇▇▇▇▇▇,
Esq., attorneys for the Pre-Petition Agents and the Pre-Petition Lenders,
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇, PLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., attorneys for
Comerica Bank in its capacity as a holder of Account Intermediary Receivable
Liens and Other Account Intermediary Liens, (d) Sidley & Austin, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇▇▇▇ ▇▇▇▇▇, Esq., and Osler, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇, 1 First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., attorneys for CIBC in its capacity as a
holder of Account Intermediary Receivable Liens and Other Account Intermediary
Liens, and (e) the Office of the United States Trustee.
50. If no written objections are timely served and filed, this Stipulation
and Order shall be deemed a Final Order on the Objection Deadline, and shall
continue on a final
-35-
228
basis and remain in full force and effect and shall constitute authority for
the use of Cash Collateral from the date hereof through November 30, 1999 (the
"Interim Period") unless (i) such date is extended with the written agreement
of the Pre-Petition Agents (at the direction of the Required Lenders) or (ii)
such authority is terminated before such date as a result of the occurrence of
an Event of Default. If a timely objection is served and filed, a final hearing
to consider the Motion will be held on July 27, 1999 at 2:00 p.m.
Dated: Wilmington, Delaware
June 28, 1999
/s/ Judge ▇. ▇▇▇▇▇▇▇
------------------------------
UNITED STATES BANKRUPTCY JUDGE
The terms of this Stipulation and Order are hereby
agreed and consented to by the following:
▇▇▇▇▇▇ SERVICES CORP.
on its own behalf, and
on behalf of each of the
Restricted Subsidiaries
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Financial ▇▇▇▇▇▇
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: /s/ ▇.▇. ▇▇▇▇▇▇
------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Title: General Manager
CANADIAN IMPERIAL BANK OF COMMERCE,
as Account Intermediary Security Agent
By: /s/ ▇.▇. ▇▇▇▇▇▇
------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Title: General Manager
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229
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as a holder of Account Intermediary
Receivable Liens and Other Account
Intermediary Liens
By: /s/ ▇.▇. ▇▇▇▇▇▇
--------------------------
Name: ▇. ▇. ▇▇▇▇▇▇
Title: GENERAL MANAGER
BANKERS TRUST COMPANY,
as Syndication Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
COMERICA BANK,
as a holder of Account Intermediary
Receivable Liens and
Other Account Intermediary Liens
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: First Vice President
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230
EXHIBIT A
REQUEST AND DIRECTION
To: Bankers Trust Company, as DIP Agent
Re: Request for release of Cash Collateral from Post-Petition Proceeds Account
WHEREAS:
A. The Debtors and the Canadian Entities have requested authorization to
expend Cash Collateral held in the Post-Petition Proceeds Account in
accordance with the Stipulation and Order
B. Capitalized terms used but not defined in this Request and Direction have
the meanings given to such terms in the Stipulation and Order.
THIS REQUEST AND DIRECTION WITNESSES THAT the Debtors and the Canadian Entities
hereby irrevocably request and direct that the DIP Agent release and deliver
$-- (the "Requested Amount") of Cash Collateral from the Post-Petition Proceeds
Account pursuant to the Stipulation and Order, and acknowledge that this shall
be the DIP Agent's good and sufficient authority for doing so.
DATED as of --, 1999.
▇▇▇▇▇▇ SERVICES CORP.
By:
------------------------------------
Name:
Title:
231
EXHIBIT B
CERTIFICATE
TO: Bankers Trust Company, as DIP Agent
RE: Request for release of Cash Collateral from Post-Petition Proceeds
Account
I, , in my capacity as an Authorized Officer of PSC, certify
on behalf of PSC, and without personal liability, as follows:
1. Capitalized terms used but not otherwise defined in this Certificate have
the respective meanings given to such terms in the Stipulation and Order.
2. This Certificate is furnished to you pursuant to the Stipulation and Order
in connection with a request and direction (the "REQUEST AND DIRECTION")
delivered today to the DIP Agent by the Debtors and the Canadian Entities
(the "Requesting Parties") requesting the release and delivery of $
(the "REQUESTED AMOUNT") to the Requesting Parties.
3. I have made, or caused to be made, such examinations or investigations as
are, in my opinion, necessary to make the statements of fact contained in
this Certificate and I have furnished this Certificate with the intent that
it may be relied on by the DIP Agent as a basis for releasing the Requested
Amount in accordance with the Request and Direction.
4. As the date of this Certificate and to the best of my knowledge, no Event
of Default has occurred under the Stipulation and Order that has not been
cured or waived.
5. The ▇▇▇▇▇▇ Entities require the Requested Amount in order to maintain
operations as reflected in the Budget and such funds are not readily
available elsewhere.
6. The Requested Amount is less than or equal to the amount of Cash Collateral
available to be released from the Post-Petition Proceeds Account by the DIP
Agent to the Requesting Parties as of the date of this Certificate (the
"Available Amount"), such Available Amount being calculated as follows:
I. (a) Aggregate amount of authorized
cash withdrawals from Post-Petition
Proceeds Account plus authorized
draws under DIP Facility set out in $_____________________
Budget for all prior calendar months
(b) Plus, authorized cash withdrawals
from Post-Petition Proceeds
232
Exhibit B
Page 2
Account plus authorized draws
under DIP Facility set out in Budget $__________________
for current calendar month
(c) Plus $10,000,000
(d) Subtotal (I(a) + I(b) + I(c)) $__________________
II. (a) Aggregate amount of actual cash
withdrawals from Post-Petition
Proceeds Account plus actual draws
under DIP Financing for all prior $__________________
calendar months
(b) Requested Amount $__________________
(c) Subtotal (II(a) + II(b)) $__________________
III. (a) I(d) - II(c) $__________________
(b) Amount held in Post-Petition Proceeds Account $__________________
IV. Lesser of III(a) and III(b) = Available
Amount $__________________
Dated as of - day of - , 1999
- , in my capacity as__________________ of ▇▇▇▇▇▇ Services Corp., an
Authorized Officer
____________________________________
233
BUDGET
The authorized amount of cash withdrawals at any time from the
Post-Petition Proceeds Account plus authorized draws under the DIP Facility is
the then cumulative amounts set forth below:
Month Cumulative
----- ----------
April $39,212,000 $ 39,212,000
May 32,472,000 71,684,000
June 21,986,000 93,670,000
July 13,907,000 107,577,000
August 3,605,000 111,182,000
September 8,973,000 120,155,000
October 4,107,000 124,262,000
November 7,227,000 131,489,000
234
EXHIBIT C TO
SASM&F (ILLINOIS) OPINION
OFFICER'S CERTIFICATE
The undersigned duly elected and authorized officer of ▇▇▇▇▇▇ Services Corp., a
corporation existing under the laws of Ontario (the "Canadian Borrower"), and
▇▇▇▇▇▇ Services (Delaware), Inc., a corporation existing under the laws of
Delaware, (the "US Borrower", and together with the Canadian Borrower, the
"Borrowers"), and each of the entities referred to as Subsidiary Guarantors in
the Credit Agreement referred to below (the "Subsidiary Guarantors", and
together with the Borrowers, the "Opinion Parties") does hereby certify to
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois) ("SASM&F") and its affiliates,
in connection with the opinion of counsel to be given by SASM&F (the "SASM&F
Opinion") pursuant to Section 5.01(c) of the Credit Agreement, dated as of June
28, 1999 (the "Credit Agreement"), among the Borrowers, the Subsidiary
Guarantors, Bankers Trust Company, as administrative agent (in such capacity,
the "DIP Agent") for the Lenders (as defined below), Bankers Trust Company and
Canadian Imperial Bank of Commerce, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and each of the Lenders from time to time party thereto
(collectively, the "Lenders"), the following:
1. Terms used in this Officer's Certificate (this "Certificate") and not defined
herein have the same meanings as in the Credit Agreement.
2. Due inquiry has been made of all persons deemed necessary or appropriate to
verify or confirm the statements contained herein.
3. SASM&F and its affiliates may rely on the representations and warranties that
each of the Opinion Parties has made in each of the Loan Documents to which it
is a party. The undersigned has made a careful review of the representations and
warranties of each of the Opinion Parties contained in each of the Loan
Documents and hereby confirms, to the best of the undersigned's knowledge and
belief, that such representations and warranties are true, correct and complete
on and as of the date of this Certificate.
4. Less than 25 percent of the assets of each of the Opinion Parties on a
consolidated basis and on an unconsolidated basis consist of margin stock (as
235
such term is defined in Regulation U of the Board of Governors of the Federal
Reserve System).
5. The Canadian Borrower is engaged primarily, directly and through its
wholly-owned subsidiaries and its Majority-Owned Subsidiaries (as hereinafter
defined), in the business of providing metals recovery and industrial services
and (i) is not and does not hold itself out as being, engaged primarily nor does
it propose to engage primarily, in the business of investing, reinvesting or
trading in Securities (as hereinafter defined), (ii) has not and is not engaged
in, and does not propose to engage in, the business of issuing Face-Amount
Certificates of the Installment Type (as hereinafter defined) and has no such
certificate outstanding and (iii) is not engaged and does not propose to engage
in the business of investing, reinvesting, owning, holding or trading in
Securities, whether or not as its primary activity, and does not own or propose
to acquire Investment Securities (as hereinafter defined) having a Value
exceeding 40% of the Value of the total assets of the Canadian Borrower
(exclusive of Government Securities (as hereinafter defined)) on an
unconsolidated basis.
6. Neither of the Borrowers nor any of their subsidiaries or affiliates which
are controlled by one or both of the Borrowers (directly or indirectly) owns or
operates facilities that are used for the generation, transmission, or
distribution of electric energy for sale ("electric utility facilities").
7. Neither of the Borrowers nor any of their respective subsidiaries or
affiliates which are controlled by one or both of the Borrowers (directly or
indirectly) owns or operates facilities that are used for the distribution at
retail of natural or manufactured gas for heat, light, or power ("gas utility
facilities").
8. Neither of the Borrowers nor any of their respective subsidiaries or
affiliates which are controlled by one or both of the Borrowers (directly or
indirectly), or through one or more intermediary companies, owns, controls or
holds with power to vote (a) five percent (5%) or more of the outstanding
securities, such as notes, drafts, stock, treasury stock, bonds, debentures,
certificates of interest or participation in any profit sharing agreements or in
oil, gas, other mineral royalties or leases, collateral-trust certificates,
preorganization certificates or subscriptions, transferable shares, investment
contracts,
236
voting-trust certificates, certificate of deposit for a security, receiver's or
trustee's certificates, or any other instrument commonly known as a "security"
(including certificates of interest or participation in, temporary or interim
certificates for, receipt for, guaranty of, assumption of liability on, or
warrants or right to subscribe to or purchase any of the foregoing) presently
entitling it to vote in the direction or management of, or any such instrument
issued under or pursuant to any trust, agreement, or arrangement whereby a
trustee or trustees or agent or agents for the owner or holder of such
instrument is presently entitled to vote in the direction or management of, any
corporation, partnership, association, joint-stock company, joint venture or
trust that owns or operates any electric utility facilities or gas utility
facilities, or (b) any other interest, directly or indirectly, or through one or
more intermediary entities, in any corporation, partnership, association,
joint-stock company, joint venture or trust that owns or operates any electric
utility facilities or gas utility facilities.
9. Neither of the Borrowers nor any of their respective subsidiaries or
affiliates has received notice that the Securities and Exchange Commission has
determined, or may determine, that either of the Borrowers or any of their
subsidiaries or affiliates exercises a controlling influence over the management
or direction of the policies of a gas utility company or an electric utility
company as to make it subject to the obligations, duties and liabilities imposed
on holding companies by the Public Utility Holding Company Act of 1935, as
amended.
10. As used in paragraph 5 of this certificate, the following terms shall have
the following meanings:
"Control" means the power to exercise a controlling influence over the
management or policies of a company, unless such power is solely the result of
an official position with such company;
"Face-Amount Certificate of the Installment Type" means any certificate,
investment contract, or other Security that represents an obligation on the part
of its issuer to pay a stated or determinable sum or sums at a fixed or
determinable date or dates more than 24 months after the date of issuance, in
consideration
237
of the payment of periodic installments of a stated or determinable amount;
"Government Securities" means all Securities issued or guaranteed as to
principal or interest by the United States, or by a person controlled or
supervised by and acting as an instrumentality of the government of the United
States pursuant to authority granted by the Congress of the United States; or
any certificate of deposit for any of the foregoing;
"Investment Securities" includes all Securities except (A) Government
Securities, (B) Securities issued by employees' securities companies, and (C)
Securities issued by Majority-Owned Subsidiaries of the Canadian Borrower which
are not engaged and do not propose to be engaged in activities within the scope
of clause (i), (ii) or (iii) of paragraph 5 of this Certificate;
"Majority-Owned Subsidiary" of a person means a company 50% or more of the
outstanding Voting Securities of which are owned by such person, or by a company
which, within the meaning of this paragraph, is a Majority-Owned Subsidiary of
such person. Notwithstanding the foregoing, a company shall not be considered a
Majority-Owned Subsidiary of a person if Control of such company rests with
someone other than such person;
"Security" means any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, preorganization certificate or
subscription, transferrable share, investment contract, voting-trust
certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas, or other mineral rights, any put, call, straddle, option,
or privilege on any security (including a certificate of deposit) or on any
group or index of securities (including any interest therein or based on the
value thereof), or any put, call, straddle, option, or privilege entered into on
a national securities exchange relating to foreign currency, or, in general, any
interest or instrument commonly known as a "security," or any certificate of
interest or participation in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to or purchase, any of the
foregoing;
238
"Value" means (i) with respect to Securities owned at the end of the last
preceding fiscal quarter for which market quotations are readily available, the
market value at the end of such quarter; (ii) with respect to other Securities
and assets owned at the end of the last preceding fiscal quarter, fair value at
the end of such quarter, as determined in good faith by or under the direction
of the board of directors; and (iii) with respect to securities and other assets
acquired after the end of the last preceding fiscal quarter, the cost thereof;
"Voting Security" means any security presently entitling the owner or holder
hereof to vote for the election of directors of a company.
The undersigned is executing this Certificate on behalf of the Borrowers, and
shall incur no personal liability in connection herewith except in connection
with any knowingly false statement contained herein.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of July
__,1999.
By:_____________________________
▇▇▇▇▇ ▇▇▇▇▇
Corporate Secretary
239
EXHIBIT D TO
SASM&F (ILLINOIS) OPINION
Subsidiary Guarantors Not in Good Standing
Allwaste Tank Cleaning Inc.
Burlington Environmental Inc. (a Delaware corporation)
Cappco Tubular Products USA, Inc.
Republic Environmental Recycling (New Jersey), Inc.
21st Century Environmental Management, Inc.
Ace/Allwaste Environmental Services of Indiana, Inc.
Allwaste Asbestos Abatement Holdings, Inc.
Allwaste Asbestos Abatement, Inc.
Allwaste Asbestos Abatement of New England, Inc.
Allwaste Texquisition, Inc.
Hydro Engineering & Services, Inc.
Industrial Services Technologies, Inc.
IST Holding Corp.
Oneida Asbestos Removal Inc.
Piping Holdings Corp.
Piping Mechanical Corporation
Republic Environmental Systems (Technical Services Group), Inc.
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, Inc.
Serv-Tech International Sales, Inc.
240
EXHIBIT E TO
SASM&F (ILLINOIS) OPINION
Subsidiary Guarantors Not Validly Existing
21st Century Environmental Management, Inc.
Ace/Allwaste Environmental Services of Indiana, Inc.
Allwaste Asbestos Abatement Holdings, Inc.
Allwaste Asbestos Abatement, Inc.
Allwaste Asbestos Abatement of New England, Inc.
Allwaste Texquisition, Inc.
Hydro Engineering & Services, Inc.
Industrial Services Technologies, Inc.
IST Holding Corp.
Oneida Asbestos Removal Inc.
Piping Holdings Corp.
Piping Mechanical Corporation
Republic Environmental Systems (Technical Services Group), Inc.
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, Inc.
241
EXHIBIT F-2
July 9, 1999
To each Addressee
Listed on Schedule I hereto
Ladies and Gentlemen:
RE: ▇▇▇▇▇▇ SERVICES CORP.
We have acted as Ontario counsel to (i) ▇▇▇▇▇▇ Services Corp. (the
"CANADIAN BORROWER"); and (ii) each of the entities listed on Schedule II (each,
a "CANADIAN SUBSIDIARY GUARANTOR" and, collectively, the "CANADIAN SUBSIDIARY
GUARANTORS") in connection with the execution and delivery of the Canadian
Security Documents (as hereinafter defined) which are delivered pursuant to and
in connection with a credit agreement dated as of June 28, 1999 (the "DIP CREDIT
AGREEMENT") made among the Canadian Borrower and ▇▇▇▇▇▇ Services (Delaware),
Inc., as Borrowers, Bankers Trust Company, as DIP Agent for the Lenders, Bankers
Trust Company and Canadian Imperial Bank of Commerce, as DIP Co-Arrangers, and
the various financial institutions from time to time party thereto as Lenders.
Capitalized terms used in this opinion which we have not defined have the
meanings given to them in the DIP Credit Agreement. This opinion is being
provided to you pursuant to Section 5.01(c)(ii) of the DIP Credit Agreement.
We have participated in the preparation of and have examined executed
copies of the following documents and instruments:
(a) the DIP Credit Agreement;
(b) a general security agreement made as of June 28, 1999 by the Canadian
Borrower and each of the Canadian Subsidiary Guarantors, among others,
in favour of the Canadian DIP Collateral Agent ; and
(c) a securities and debt pledge agreement made as of June 28, 1999 by the
Canadian Borrower and each of the Canadian Subsidiary Guarantors,
among others, in favour of the Canadian DIP Collateral Agent.
242
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The documents and instruments set forth in (b) and (c) above are referred to,
collectively, as the "CANADIAN SECURITY DOCUMENTS".
We have examined and relied upon an order of the Superior Court of Justice
(Ontario) dated June 25, 1999 pursuant to which the Court ordered, among other
things, that the Canadian Borrower and the Canadian Subsidiary Guarantors are
authorized and directed to enter into a Credit Agreement substantially in the
form of the DIP Credit Agreement attached to the affidavit of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
sworn June 24, 1999 (the "Order").
We have also examined and relied upon, without independent verification,
certificates of ▇▇▇▇▇ ▇▇▇▇▇, General Counsel of the Canadian Borrower, copies of
which are attached to this opinion.
The following terms shall have the following meanings when used in this
opinion:
"APPLICABLE LAWS" shall mean those laws, rules and regulations of the
Province of Ontario or of Canada applicable in the Province of Ontario
which, in our experience, are normally applicable to transactions of the
type contemplated by the DIP Credit Agreement and the Canadian Security
Documents (including without limitation the Companies' Creditors
Arrangement Act (Canada), the Bankruptcy and Insolvency Act (Canada), the
Personal Property Security Act (Ontario), the Canada Business Corporations
Act and the Business Corporations Act (Ontario)) without our having made
any special investigation as to the applicability of any specific law, rule
or regulation and which are not the subject of a specific opinion herein
referring to a particular law or laws; and
"GOVERNMENTAL APPROVAL" shall mean any consent, approval, authorization or
validation of, or filing with, any governmental authority pursuant to
Applicable Laws.
In our examination of all documents we have assumed that:
(a) all individuals had the requisite legal capacity;
(b) all signatures are genuine;
(c) all documents submitted to us as originals are complete and authentic
and all photostatic, certified, notarial, facsimile or other copies
conform to the originals;
(d) all facts set forth in the official public records, indices and filing
systems and all certificates and documents supplied by public
243
-3-
officials or otherwise conveyed to us by public officials are
complete, true and accurate;
(e) all facts set forth in the certificates supplied by the respective
officers and directors of the Canadian Borrower and the Canadian
Subsidiary Guarantors are true and accurate; and
(f) the DIP Credit Agreement and each of the Canadian Security Documents
have been duly authorized, executed and delivered by each party
thereto other than the Canadian Borrower and the Canadian Subsidiary
Guarantors and constitute legal, valid and binding agreements
enforceable against such parties in accordance with their terms.
In addition, in rendering our opinion herein, we also have assumed that:
(a) the Canadian Borrower and each Canadian Subsidiary Guarantor is a
validly existing corporation under the laws of the jurisdiction of its
incorporation, continuance or amalgamation, as applicable;
(b) the Canadian Borrower and each Canadian Subsidiary Guarantor have the
requisite power and authority, corporate or otherwise, to execute,
deliver and perform all of their respective obligations under the DIP
Credit Agreement and each of the Canadian Security Documents to which
each is a party, and the execution and delivery of the DIP Credit
Agreement and such Canadian Security Documents and the consummation by
the Canadian Borrower and each Canadian Subsidiary Guarantor of the
transactions contemplated thereby have been duly authorized by all
requisite action, corporate or otherwise, on the part of the Canadian
Borrower and each such Canadian Subsidiary Guarantor, as the case may
be;
(c) the DIP Credit Agreement and each of the Canadian Security Documents
have been duly executed and delivered by the Canadian Borrower and
each Canadian Subsidiary Guarantor that is a party thereto;
(d) the execution and delivery by the Canadian Borrower and each Canadian
Subsidiary Guarantor of the DIP Credit Agreement and the Canadian
Security Documents to which each is a party and the performance of its
obligations thereunder do not and will not conflict with, contravene,
violate or constitute a default under (i) the articles or certificate
of incorporation or the by-laws (or the equivalent organizational and
governing documents) of the
244
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Canadian Borrower or such Canadian Subsidiary Guarantor, as the case
may be, (ii) any law, rule or regulation to which the Canadian
Borrower or any Canadian Subsidiary Guarantor is subject (other than
Applicable Laws, as to which we express our opinion in paragraph 8);
(iii) any judicial or administrative order or decree of any
governmental authority; or (iv) any consent, approval, authorization
or validation of, or filing, recording or registration with any
governmental authority (other than Governmental Approvals as to which
we express our opinion in paragraph 9); and
(e) no authorization, consent or other approval of, notice to or filing
with any court, governmental authority or regulatory body (other than
Governmental Approvals as to which we express our opinion in paragraph
9) is required to authorize or is required in connection with the
execution, delivery or performance by the Canadian Borrower or any
Canadian Subsidiary Guarantor of the DIP Credit Agreement or any
Canadian Security Document to which it is a party or the transactions
contemplated thereby.
We understand that you are separately receiving an opinion, with respect to
certain of the foregoing assumptions from ▇▇▇▇▇ ▇▇▇▇▇, Esq. and we are advised
that such opinion contains qualifications. Our opinion herein stated is based on
the assumptions specified above and we express no opinion as to the effect on
the opinion herein stated of the qualifications contained in such other opinion.
Our opinion is expressed only with respect to the laws of the Province of
Ontario and the laws of Canada applicable in Ontario in effect on the date of
this opinion.
Based upon the foregoing and subject to the qualifications set forth below,
we are of the opinion that:
1. Each of the Canadian Security Documents to which the Canadian Borrower is a
party constitutes a legal, valid and binding agreement of the Canadian
Borrower enforceable against the Canadian Borrower in accordance with its
terms.
2. Each of the Canadian Security Documents to which each Canadian Subsidiary
Guarantor is a party constitutes a legal, valid and binding agreement of
such Canadian Subsidiary Guarantor enforceable against such Canadian
Subsidiary Guarantor in accordance with its terms.
3. A court of competent jurisdiction (an "ONTARIO COURT") in the Province of
Ontario would, where applicable, give effect to the choice of the laws of
the State of New York ("NEW YORK LAW") as the proper law governing the
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DIP Credit Agreement, provided that such applicable choice of law is bona
fide (in the sense that it was not made with a view to avoiding the
consequences of the laws of any other jurisdiction) and provided that such
applicable choice of law is not contrary to the public policy, as that term
is understood under the laws of the Province of Ontario ("ONTARIO LAW"). To
the best of our knowledge, there are no reasons based on public policy, as
that term is understood under Ontario Law as at the date of this opinion,
for avoiding the choice of New York Law to govern the DIP Credit Agreement.
4. In an action on a final and conclusive judgement in personam of any New
York court (a "NEW YORK COURT") that is not impeachable as void or voidable
or otherwise ineffective under New York Law, an Ontario Court would,
subject to paragraph 3 above, give effect to the provisions in the DIP
Credit Agreement whereby the Canadian Borrower and the Canadian Subsidiary
Guarantors have submitted to the non-exclusive jurisdiction of a New York
Court.
5. If the DIP Credit Agreement is sought to be enforced in the Province of
Ontario in accordance with the laws applicable to the DIP Credit Agreement
as chosen by the parties, namely New York Law, an Ontario Court would,
subject to paragraph 3 above, recognize the choice of New York Law and,
upon appropriate evidence as to such law being adduced, apply such law to
contract issues, provided that none of the provisions of the DIP Credit
Agreement or of applicable New York Law is contrary to public policy, as
that term is understood under Ontario Law, except that (i) in matters of
procedure Ontario Law will be applied, (ii) an Ontario court will retain
discretion to decline to hear such action if it is contrary to public
policy, as that term is understood under Ontario Law, for such court to do
so, or if such court is not the proper forum to hear such action or if
concurrent proceedings are being brought elsewhere, and (iii) an Ontario
Court may not enforce an obligation enforceable under New York Law where
performance of the obligation would be illegal by the law of the place of
performance or which constitutes the direct or indirect enforcement of a
foreign revenue, penal or expropriation law. To the best of our knowledge,
there are no reasons based on public policy, as that term is understood
under Ontario Law as at the date of this opinion, for avoiding enforcement
of the DIP Credit Agreement in accordance with its terms.
6. Ontario Law permits an action to be brought in an Ontario Court on a final
and conclusive judgment in personam of a New York Court respecting the
enforcement of the DIP Credit Agreement that is not impeachable as
246
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void or voidable or otherwise ineffective under New York Law for a sum
certain in money provided that,
(a) the court rendering such judgment had jurisdiction over the judgment
debtor as recognized by an Ontario Court (and submission by the
Canadian Borrower and the Canadian Subsidiary Guarantors to the
jurisdiction of a New York Court pursuant to the DIP Credit Agreement
will be sufficient for this purpose);
(b) such judgment was not obtained by fraud or in a manner contrary to
natural justice and the enforcement thereof would not be inconsistent
with public policy, as such term is understood under Ontario Law;
(c) the enforcement of such judgment does not constitute, directly or
indirectly, the enforcement of foreign revenue, expropriatory or penal
laws;
(d) no new admissible evidence, right or defence relevant to the action is
discovered prior to the rendering of the judgment by the Ontario
Court;
(e) the motion to enforce such judgment is commenced within six years of
the date of such judgement; and
(f) the enforcement of the judgment would not be contrary to any order
made by the Attorney-General of Canada under the Foreign
Extraterritorial Measures Act (Canada) or the Competition Tribunal
under the Competition Act (Canada) in respect of certain judgments,
laws and directives having effects on competition in Canada.
7. If Ontario Law, rather than New York Law, were to apply to the DIP Credit
Agreement, the DIP Credit Agreement would constitute a legal, valid and
legally binding obligation of the Canadian Borrower and each of the
Canadian Subsidiary Guarantors enforceable against each such person in
accordance with its terms. The opinion expressed in this paragraph is
included at your request and with your acknowledgement that an Ontario
Court would not necessarily apply Ontario Law to determine the legality,
validity and interpretation of the DIP Credit Agreement if New York Law
were pleaded and proved.
8. The execution and delivery by the Canadian Borrower and each of the
Canadian Subsidiary Guarantors of the DIP Credit Agreement and each of the
Canadian Security Documents to which it is a party and the
247
-7-
performance by the Canadian Borrower and each of the Canadian Subsidiary
Guarantors of its obligations thereunder do not contravene any provision of
any Applicable Law.
9. Other than the entry by the Superior Court of Justice (Ontario) of the
Order, no Governmental Approval, which has not been obtained or taken and
is not in full force and effect, is required under any Applicable Law to
authorize, or is required in connection with, the execution, delivery,
performance or enforceability of the DIP Credit Agreement or any of the
Canadian Security Documents.
10. The Order has been entered and has not been amended, stayed, vacated or
rescinded.
The opinions expressed above are subject to the following qualifications:
(a) except to the extent provided in the Order, the enforceability of the
Canadian Security Documents may be limited by bankruptcy, winding-up,
insolvency, arrangement, fraudulent preference and conveyance,
assignment and preference and other similar laws of general
application affecting the enforcement of creditor's rights;
(b) a court may exercise discretion in the granting of equitable remedies
such as specific performance and injunction;
(c) the enforceability of the DIP Credit Agreement and the Canadian
Security Documents may be limited by general principles of law
relating to the conduct of the DIP Agents and the Lenders prior to
execution of or in the administration or performance of the DIP Credit
Agreement and the Canadian Security Documents, including, without
limitation, (i) undue influence, unconscionability, duress,
misrepresentation and deceit, (ii) estoppel and waiver, (iii) laches,
and (iv) reasonableness and good faith in the exercise of
discretionary powers;
(d) the DIP Agents and the Lenders may be required to give the Canadian
Borrower and the Canadian Subsidiary Guarantors a reasonable time to
repay following a demand for payment prior to taking any action to
enforce right of repayment or before exercising any of the rights and
remedies expressed to be exercisable by the DIP Agents and the Lenders
in the DIP Credit Agreement or in any of the Canadian Security
Documents;
(e) no opinion is expressed as to the title of the Canadian Borrower or
any Canadian Subsidiary Guarantor to any property or as to the
248
-8-
rank or priority of any security interest that may be created by the
Canadian Security Documents;
(f) we express no opinion as to the perfection of any mortgage, charge or
security interest nor have we effected any registrations in any
property or assets;
(g) no opinion is expressed as to the creation of any security interest
(i) with respect to (x) any property or assets which are not
identifiable or traceable or (y) any property which may be governed by
the provisions of an Act of the Parliament of Canada including,
without limitation, any vessel registered under the Canada Shipping
Act and any patents, trademarks or other intellectual property; or
(ii) in (x) property consisting of a receivable, licence, approval,
privilege, franchise, permit, lease or agreement (collectively,
"SPECIAL PROPERTY") to the extent that the terms of the Special
Property or any applicable law prohibit the assignment or require as a
condition of assignability, a consent, approval or other authorization
or registration which has not been made or given; or (y) federal Crown
debts to the extent the Financial Administration Act (Canada) has not
been complied with;
(h) we express no opinion as to whether a security interest may be created
in permits, quotas, licences or other property which is neither
personal property nor an interest in land;
(i) the Personal Property Security Act (Ontario), the Registry Act
(Ontario) and the Land Titles Act (Ontario) impose certain obligations
on secured creditors which cannot be varied by contract. The
legislation may also affect the enforcement of certain rights and
remedies under the Canadian Security Documents to the extent that
these rights and remedies are inconsistent with or contrary to the
legislation;
(j) a court may decline to accept the factual and legal determinations of
a party notwithstanding that a contract or instrument provides that
the determinations of that party shall be conclusive;
(k) a court might not allow the Lenders or the DIP Agents to exercise
rights to accelerate the performance of obligations or otherwise seek
the enforcement of the DIP Credit Agreement or the Canadian Security
Documents based upon the occurrence of a default deemed immaterial;
249
-9-
(l) no opinion is given as to the enforceability of any provision of the
DIP Credit Agreement or the Canadian Security Documents providing for
the severance of illegal or unenforceable provisions from the
remaining provisions of the Canadian Security Documents;
(m) a receiver or receiver and manager appointed pursuant to the
provisions of any Canadian Security Document may, for certain
purposes, be treated by a court as being the agent of the secured
party and not solely the agent of the debtor (and the secured party
may not be deemed to be acting as the agent and attorney of the debtor
in making such appointment), notwithstanding any agreement to the
contrary;
(n) the recoverability of costs and expenses may be limited to those a
court considers to be reasonably incurred and the court has the
discretion to determine by whom and to what extent costs and expenses
incidental to court proceedings shall be paid;
(o) rights of indemnification may be limited under applicable law;
(p) the Currency Act (Canada) precludes a court in Canada from giving
judgment in any currency other than Canadian currency;
(q) any provision of the DIP Credit Agreement or the Canadian Security
Documents that provides for a forfeiture of a deposit or any other
property or which provides for a particular calculation of damages
upon breach may not be enforceable if it is interpreted by a court to
be a penalty or if the court determines that relief from forfeiture is
appropriate;
(r) pursuant to the provisions of section 8 of the Interest Act (Canada),
no fine, penalty or rate of interest may be exacted on any arrears of
principal or interest secured by a mortgage on real property that has
the effect of increasing the charge on the arrears beyond the rate of
interest payable on principal money not in arrears;
(s) our opinion herein does not apply to Section 13 of the DIP Credit
Agreement;
(t) we express no opinion as to the enforceability of any provision of the
DIP Credit Agreement or any of the Canadian Security Documents:
250
-10-
(i) which purports to waive any or all defences which might be
available to, or constitute a discharge of the liability of, the
Canadian Borrower or the Canadian Subsidiary Guarantors;
(ii) to the extent it purports to exculpate the Lenders, the DIP
Agents or any receiver, manager or receiver manager from
liability in respect of acts or omissions which may be illegal,
fraudulent or involve wilful misconduct; and
(iii) which states that modifications, amendments or waivers are not
binding unless in writing; and
(u) the enforceability of the DIP Credit Agreement and the Canadian
Security Documents may be limited to the extent any term or provision
of the DIP Credit Agreement, the Canadian Security Documents or any
other DIP Credit Document conflicts or is found to conflict with any
term or provision of the Order.
This opinion is solely for the benefit of the addressees and their
permitted assigns and not for the benefit of any other person. It is rendered
solely in connection with the transaction to which it relates. It may not be
quoted, in whole or in part, or otherwise referred to or used for any other
purpose without our prior written consent.
Yours truly,
251
SCHEDULE I
ADDRESSEES
Bankers Trust Company, as DIP Agent, DIP Co-Arranger and Lender
Canadian Imperial Bank of Commerce, as Canadian DIP Collateral Agent, DIP
Co-Arranger and Lender
The Lenders under the DIP Credit Agreement
Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇ & Case
252
SCHEDULE II
CANADIAN SUBSIDIARY GUARANTORS
2766906 Canada Inc. ServTech Canada, Inc.
721646 Alberta Ltd. ST Delta Canada, Inc.
Allwaste of Canada Ltd. Sablix Inc.
Caligo Reclamation Ltd. ▇▇▇▇▇▇ Analytical Services Corporation
▇▇▇▇▇▇ Enterprises Inc./ ▇▇▇▇▇▇ Environmental (Atlantic) Limited
Les Entreprises ▇▇▇▇▇▇ Inc.
1195613 Ontario Inc. ▇▇▇▇▇▇ Environmental (Elmira) Inc.
1233793 Ontario Inc. ▇▇▇▇▇▇ Environmental Services Limited
2842-7979 Quebec Inc. Delsan Demolition Limited
800151 Ontario Inc. ▇▇▇▇▇▇ Investment Corp.
842578 Ontario Limited ▇▇▇▇▇▇ Plasma Metals Inc.
912613 Ontario Ltd. PSC/IML Acquisition Corp.
Nortru, Ltd. Recyclage d'Aluminium Quebec Inc./Quebec
Allies Staffing Ltd. Aluminium Recycling Inc.
253
▇▇▇▇▇▇ SERVICES CORP.
CERTIFICATE OF OFFICER
(FINANCIAL ASSISTANCE - OBCA)
TO: Bankers Trust Company, as DIP Agent, DIP Co-Arranger and Lender
Canadian Imperial Bank of Commerce, as Canadian DIP Collateral Agent,
DIP Co-Arranger and Lender
The Lenders under the credit agreement dated as of June 28, 1999 made
among ▇▇▇▇▇▇ Services Corp., ▇▇▇▇▇▇ Services (Delaware), Inc.,
Bankers Trust Company and Canadian Imperial Bank of Commerce,
among others
Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇ & Case
Stikeman, ▇▇▇▇▇▇▇
-------------------------------------------------------------------------------
The undersigned, ▇▇▇▇▇ ▇▇▇▇▇, duly appointed Executive Vice-President,
General Counsel and Corporate Secretary of ▇▇▇▇▇▇ Services Corp. (the
"CORPORATION"), certifies for and on behalf of the Corporation, and not in his
personal capacity and without personal liability, intending that the same may be
relied upon by each of you without further enquiry, as follows:
1. I am the Executive Vice-President, General Counsel and Corporate
Secretary of the Corporation and as such have knowledge of the
ownership of the Corporation's subsidiaries;
2. I have made all enquiries and examined all records as I have considered
necessary in respect of the matters hereinafter certified;
3. attached as Schedule "A" is a true and complete description of the
registered and beneficial ownership of all of the securities of each of
the corporations listed therein; and
4. the Corporation is the holding body corporate (within the meaning of
such term for the purposes of Section 20 of the Business Corporations
Act (Ontario) (the "OBCA")) of each of the corporations listed on
Schedule "B" and each such corporation is a wholly owned subsidiary
(within the meaning of such term for the purposes of Section 20 of the
OBCA) of the Corporation.
DATED at Toronto this 9th day of July, 1999.
▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
254
SCHEDULE "A"
1. All of the issued and outstanding securities of Allwaste of Canada Ltd.
("ALLWASTE") are held by and for the benefit of ▇▇▇▇▇▇ Services Corp.
("PSC").
2. All of the issued and outstanding securities of Caligo Reclamation Ltd.
are held by and for the benefit of Allwaste.
3. All of the issued and outstanding securities of ▇▇▇▇▇▇ Enterprises
Inc./Les Entreprises ▇▇▇▇▇▇ Inc. ("▇▇▇▇▇▇ ENTERPRISES") are held by and
for the benefit of PSC.
4. All of the issued and outstanding securities of 1195613 Ontario Inc.
are held by and for the benefit of ▇▇▇▇▇▇ Enterprises.
5. All of the issued and outstanding securities of 1233793 Ontario Inc.
are held by and for the benefit of ▇▇▇▇▇▇ Enterprises.
6. All of the issued and outstanding securities of 800151 Ontario Inc. are
held by and for the benefit of ▇▇▇▇▇▇ Enterprises.
7. All of the issued and outstanding securities of 842578 Ontario Limited
are held by and for the benefit of ▇▇▇▇▇▇ Enterprises.
8. All of the issued and outstanding securities of 912613 Ontario Ltd. are
held by and for the benefit of ▇▇▇▇▇▇ Enterprises.
9. All of the issued and outstanding securities of Nortru, Ltd. are held
by and for the benefit of Nortru Inc. All of the issued and outstanding
securities of Nortru Inc. are held by and for the benefit of ▇▇▇▇▇▇
Industrial Services (USA), Inc. ("▇▇▇▇▇▇ USA"). All of the issued and
outstanding securities of ▇▇▇▇▇▇ USA, are held by and for the benefit
of ▇▇▇▇▇▇ Services (Delaware), Inc. ("▇▇▇▇▇▇ DELAWARE"). All of the
issued and outstanding securities of ▇▇▇▇▇▇ Delaware are held by and
for the benefit of ▇▇▇▇▇▇ Enterprises.
10. All of the issued and outstanding securities of Allies Staffing Ltd.
are held by and for the benefit of Allies Staffing, Inc. All of the
issued and outstanding securities of Allies Staffing Inc. are held by
and for the benefit of PSC Enterprises, Inc. All of the issued and
outstanding securities of PSC Enterprises Inc. are held by and for the
benefit of ▇▇▇▇▇▇ Industrial Services Group, Inc. All of the issued and
outstanding securities of ▇▇▇▇▇▇ Industrial Services Group, Inc. are
held by and for the benefit of ▇▇▇▇▇▇ USA.
255
-2-
11. All of the issued and outstanding securities of ServTech Canada, Inc.
("SERVTECH") are held by and for the benefit of ▇▇▇▇▇▇ ST, Inc. All of
the issued and outstanding securities of ▇▇▇▇▇▇ ST, Inc. are held by
and for the benefit of ▇▇▇▇▇▇ USA.
12. All of the issued and outstanding securities of ST Delta Canada, Inc.
are held by and for the benefit of ServTech.
13. All of the issued and outstanding securities of ▇▇▇▇▇▇ Analytical
Services Corporation are held by and for the benefit of PSC.
14. All of the issued and outstanding securities of ▇▇▇▇▇▇ Environmental
(Elmira) Inc. are held by and for the benefit of PSC.
15. All of the issued and outstanding securities of ▇▇▇▇▇▇ Environmental
Services Limited ("▇▇▇▇▇▇ ENVIRONMENTAL") are held by and for the
benefit of PSC.
16. All of the issued and outstanding securities of Delsan Demolition
Limited are held by and for the benefit of ▇▇▇▇▇▇ Environmental.
17. All of the issued and outstanding securities of ▇▇▇▇▇▇ Investment Corp.
are held by and for the benefit of PSC.
18. All of the issued and outstanding securities of ▇▇▇▇▇▇ Plasma Metals
Inc. are held by and for the benefit of PSC.
19. All of the issued and outstanding securities of PSC/IML Acquisition
Corp. are held by and for the benefit of PSC.
256
SCHEDULE "B"
Allwaste of Canada Ltd. Allies Staffing Ltd.
Caligo Reclamation Ltd. ServTech Canada, Inc.
▇▇▇▇▇▇ Enterprises Inc./ ST Delta Canada, Inc.
Les Entreprises ▇▇▇▇▇▇ Inc.
1195613 Ontario Inc. ▇▇▇▇▇▇ Analytical Services Corporation
1233793 Ontario Inc. ▇▇▇▇▇▇ Environmental (Elmira) Inc.
800151 Ontario Inc. ▇▇▇▇▇▇ Environmental Services Limited
842578 Ontario Limited Delsan Demolition Limited
912613 Ontario Ltd. ▇▇▇▇▇▇ Investment Corp.
Nortru, Ltd. ▇▇▇▇▇▇ Plasma Metals Inc.
PSC/IML Acquisition Corp.
257
▇▇▇▇▇▇ SERVICES CORP.
CERTIFICATE OF OFFICER
(FINANCIAL ASSISTANCE - CBCA)
TO: Bankers Trust Company, as DIP Agent, DIP Co-Arranger and Lender
Canadian Imperial Bank of Commerce, as Canadian DIP Collateral Agent,
DIP Co-Arranger and Lender
The Lenders under the credit agreement dated as of June 28, 1999 made
among ▇▇▇▇▇▇ Services Corp., ▇▇▇▇▇▇ Services (Delaware), Inc.,
Bankers Trust Company and Canadian Imperial Bank of Commerce,
among others
Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇ & Case
Stikeman, ▇▇▇▇▇▇▇
-------------------------------------------------------------------------------
The undersigned, ▇▇▇▇▇ ▇▇▇▇▇, duly appointed Executive Vice-President,
General Counsel and Corporate Secretary of ▇▇▇▇▇▇ Services Corp. (the
"CORPORATION"), certifies for and on behalf of the Corporation, and not in his
personal capacity and without personal liability, intending that the same may be
relied upon by each of you without further enquiry, as follows:
1. I am the Executive Vice-President, General Counsel and Corporate
Secretary of the Corporation and as such have knowledge of the
ownership of the Corporation's subsidiaries;
2. I have made all enquiries and examined all records as I have considered
necessary in respect of the matters hereinafter certified;
3. attached as Schedule "A" is a true and complete description of the
registered and beneficial ownership of all of the securities of each of
the corporations listed therein; and
4. the Corporation is the holding body corporate (within the meaning of
such term for the purposes of Section 44 of the Canada Business
Corporations Act (the "CBCA")) of each of the corporations listed on
Schedule "B" and each such corporation is a wholly-owned subsidiary
(within the meaning of such term for the purposes of Section 44 of the
CBCA) of the Corporation.
DATED at Toronto this 9th day of July, 1999.
▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
258
SCHEDULE "A"
1. All of the issued and outstanding securities of 2766906 Canada Inc. are
held by and for the benefit of ▇▇▇▇▇▇ Services Corp. ("PSC").
2. All of the issued and outstanding securities of Recylage d'Aluminium
Quebec Inc./Quebec Aluminium Recycling Inc. are held by and for the
benefit of PSC.
259
SCHEDULE "B"
2766906 Canada Inc.
Recyclage d'Aluminium Quebec Inc./
Quebec Aluminium Recycling Inc
260
EXHIBIT F-3
July 9, 1999
The Persons listed on Schedule I hereto
RE: ▇▇▇▇▇▇ SERVICES CORP. CREDIT AGREEMENT
Ladies and Gentlemen:
I am General Counsel to ▇▇▇▇▇▇ Services Corp., a corporation existing under the
laws of Ontario and a debtor and debtor-in-possession (the "Canadian Borrower")
in a pending case under Chapter 11 of the U.S. Bankruptcy Code ("Chapter 11"),
which case is being jointly administered with the cases of the "US Borrower" (as
defined below), and certain of the Subsidiary Guarantors (each as defined below)
pending under Chapter 11 (collectively, with the Chapter 11 case of the Canadian
Borrower, the "Chapter 11 Cases"). In my capacity as General Counsel, I am
authorized to furnish opinions on behalf of the Canadian Borrower and its
subsidiaries that may be required in connection with various matters. This
opinion is being furnished in connection with the preparation, execution and
delivery of the Credit Agreement, dated as of June 28, 1999 (the "Credit
Agreement"), among the Canadian Borrower, ▇▇▇▇▇▇ Services (Delaware), Inc., a
corporation existing under the laws of Delaware and a debtor and
debtor-in-possession in the Chapter 11 Cases (the "US Borrower" and together
with the Canadian Borrower, the "Borrowers"), and each of the entities listed on
Schedule II, each of which is a direct or indirect subsidiary of the Canadian
Borrower (each, individually, a "Subsidiary Guarantor" and, collectively, the
"Subsidiary Guarantors"), Bankers Trust Company, as administrative agent (in
such capacity, the "DIP Agent") for the Lenders (as defined below), Bankers
Trust Company and Canadian Imperial Bank of Commerce, as co-arrangers (in such
capacity, the "DIP Co-Arrangers"), and the various financial institutions from
time to time party thereto (collectively, the "Lenders"). This opinion is being
delivered pursuant to Section 5.01(c)(iii) of the Credit Agreement. Capitalized
terms used herein and not otherwise defined herein shall have the same meanings
herein as ascribed thereto in the Credit Agreement.
In rendering the opinions set forth herein, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of:
261
(1) the Credit Agreement;
(2) the Revolving Notes (each a "Note" and, collectively, the "Notes") issued
on the date hereof to the applicable Lenders;
(3) the Pledge Agreement, dated as of June 28, 1999, by and among the US
Borrower, the U.S. Subsidiary Guarantors, and Bankers Trust Company and
Canadian Imperial Bank of Commerce as DIP Collateral Agents (in such
capacity, the "DIP Collateral Agents" and, together with the DIP Agent, the
"Agents") (the "Pledge Agreement");
(4) the Orders;
(5) copies of the Articles of Incorporation, Certificates of Incorporation,
Certificates of Formation, By-Laws, Operating Agreements, or equivalent
organizational documents of each of the Borrowers, together with the
Subsidiary Guarantors (collectively, the "Opinion Parties");
(6) copies of resolutions of the Boards of Directors or other governing bodies
of each of the Opinion Parties adopted on June 24, 1999;
(7) certificates of good standing or certificates of existence for each of the
Opinion Parties (other than the Opinion Parties listed on Exhibit A hereto
(collectively, the "Excluded Subsidiaries");
(8) certificates of public officials; and
(9) such other documents as I have deemed necessary or appropriate as a basis
for the opinions set forth below.
The documents listed at items (a), (b) and (c) above shall hereinafter be
referred to collectively as the "Loan Documents". In rendering the opinions set
forth herein, I have also made such inquiries of officers and representatives of
the Opinion Parties as I have deemed relevant or necessary as the basis for such
opinions. I have relied upon, and assume the accuracy of, such certificates and
other statements, documents, records, and papers with respect to the factual
matters set forth therein and I have assumed the genuineness of all of the
signatures and the authenticity of all documents submitted
Page 2
262
to me as originals and the conformity to original documents of all documents
submitted to me as certified or photostatic copies.
With your permission, I have further assumed the due authorization, execution
and delivery of the Loan Documents by all of the parties thereto other than the
Opinion Parties, and that all parties thereto other than the Opinion Parties
have complied or will comply with all applicable laws and regulations in
connection with the consummation of the transactions contemplated thereby.
Based on the foregoing and subject to the qualifications stated herein, I am of
the opinion that:
1. Each of the Opinion Parties, other than the Excluded Subsidiaries, that
exists under the laws of Canada or the provinces thereof, is duly organized
and validly existing under the laws of its jurisdiction of formation. Each
of the Opinion Parties, other than the Excluded Subsidiaries, that exists
under the laws of the United States or the states thereof, is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of formation. Each of the Opinion Parties other than the
Excluded Subsidiaries is duly authorized to do business in each
jurisdiction in which it owns or leases property and where the failure to
do so would have a material adverse effect on the business, property,
condition (financial or otherwise) or results of operations of such Opinion
Party (a "Material Adverse Effect").
2. Each of the Opinion Parties has all requisite power and authority to enter
into and perform its obligations under the Loan Documents.
3. The execution and delivery by each Opinion Party of the Loan Documents to
which it is a party and the performance by each such Opinion Party of its
respective obligations thereunder have been duly authorized by all
necessary proceedings, corporate or otherwise, on the part of such Opinion
Party.
4. The Loan Documents have been duly executed and delivered by each Opinion
Party that is a party thereto.
5. The execution and delivery by each Opinion Party of the Loan Documents to
which it is a party and the performance of its obligation thereunder do not
conflict with, contravene, violate or constitute a default under and are
not in
Page 3
263
contravention of (i) its articles of incorporation or bylaws (or other
equivalent organizational documents) or (ii) any judicial or administrative
order or decree of any governmental authority.
I am qualified to practice law in the Province of Ontario, Canada, and I do not
purport to express any opinion herein concerning any laws other than the laws of
the Province of Ontario, Canada and the laws of Canada applicable therein and,
solely with respect to the opinion expressed in paragraph 1 regarding certain of
the Opinion Parties organized under the laws of the State of Delaware, the
General Corporation Law of the State of Delaware.
This opinion is predicated solely upon laws and regulations in existence as of
the present date and as they presently apply, and to the facts as they presently
exist. I assume no obligation to revise or supplement this opinion should the
present facts change or the present laws be changed by legislative action,
judicial decision or otherwise.
I call to your attention that the execution, delivery and performance by the
Opinion Parties of the Loan Documents, the grant by the Opinion Parties pursuant
thereto of security interests and other liens in respect of their assets, the
issuance by each Borrower of the Notes to which it is a party and the borrowing
by the Borrowers of Borrowings thereunder may violate or constitute defaults
under other agreements and instruments to which any Opinion Party or its
property is subject, and, in giving my opinion in paragraph 1 herein, I am
relying upon the effectiveness of the Interim Order. In addition, I call to your
attention that (i) the Excluded Subsidiaries listed under the heading
"Subsidiaries Not in Good Standing" on Exhibit A hereto are not in good standing
in their respective jurisdictions of organization and (ii) the Excluded
Subsidiaries listed under the heading "Subsidiaries Not Validly Existing" on
Exhibit A hereto are not validly existing in their respective jurisdictions of
organization and, in each case, I express no opinion as to the effect of such
failure to be in good standing or to be validly existing on the opinions
expressed herein.
This opinion is being furnished only to the addressees named above in connection
with the Loan Documents and is solely for their benefit and is not to be used,
circulated, quoted, relied upon or otherwise referred to by any other Person or
for any other purpose without my prior written consent, except that (i) an
assignee of a Lender which becomes a party to (and a Lender under) the Credit
Agreement pursuant to
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264
subsection 12.04(b) of the Credit Agreement may rely on this opinion as if it
were addressed and delivered to such assignee on the date hereof.
Very truly yours,
▇▇▇▇▇▇ SERVICES CORP.
▇▇▇▇▇ ▇▇▇▇▇
Executive Vice President, General Counsel
& Corporate Secretary
Page 5
265
SCHEDULE I
----------
Addressees of Opinion
---------------------
Bankers Trust Company, as Administrative Agent, DIP Agent and Co-Arranger
Canadian Imperial Bank of Commerce, as Co-Arranger
Arnos Corp.
Bankers Trust Company
Bear ▇▇▇▇▇▇▇ & Co. Inc.
Canadian Imperial Bank of Commerce
Comerica Bank
Foothill Capital Corporation
Societe Generale Canada
The Chase Manhattan Bank
The Toronto-Dominion Bank
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois)
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
Stikeman, ▇▇▇▇▇▇▇
Page 6
266
SCHEDULE II
-----------
Subsidiary Guarantors
---------------------
1195613 Ontario Inc.
1233793 Ontario Inc.
21st Century Environmental Management, Inc.
21st Century Environmental Management, Inc. of Rhode Island
21st Century Environmental Management, Inc. of Nevada
21st Century Environmental Management, Inc. of Puerto Rico
2766906 Canada Inc.
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc.
721646 Alberta Ltd.
800151 Ontario Inc.
842578 Ontario Limited
912613 Ontario Ltd.
Ace/Allwaste Environmental Services of Indiana, Inc.
Advanced Energy Corporation
Advanced Environmental Systems, Inc.
All Safety and Supply, Inc.
Allies Staffing, Inc.
Allies Staffing Ltd.
AllQuest Capital, Inc.
AllScaff, Inc.
Allwaste Asbestos Abatement Holdings, Inc.
Allwaste Asbestos Abatement, Inc.
Allwaste Asbestos Abatement of New England, Inc.
Allwaste of Canada Ltd.
Allwaste Railcar Cleaning, Inc.
Allwaste Recovery Systems, Inc.
Allwaste Services of El Paso, Inc.
Allwaste Tank Cleaning, Inc.
Allwaste Texquisition, Inc.
Allworth, Inc.
ALRC, Inc.
APLC, Inc.
BEC/▇▇▇▇▇▇, Inc.
Burlington Environmental Inc. (Delaware)
Page 7
267
Burlington Environmental Inc. (Washington)
Butco, Inc.
Caligo Reclamation Ltd.
Cappco Tubular Products USA, Inc.
Chem-Fab, Inc.
Chem-Freight, Inc.
Chemical Pollution Control, Inc. of New York - A 21st Century Environmental
Management Company
Chemical Pollution Control, Inc. of Florida - A 21st Century Environmental
Management Company
Chemical Reclamation Services, Inc.
Cousins Waste Control Corporation
CyanoKEM, Inc.
Deep Clean, Inc.
Delsan Demolition Limited
DM Acquisition Corporation
Gasoline Tank Service Company Inc.
Georgia Recovery Systems
GRS/Lake ▇▇▇▇▇▇▇, Ltd.
Hartney Corporation
Hydro-Engineering & Service, Inc.
Industrial Construction Services Company, Inc.
Industrial Services Technologies, Inc.
Intermetco U.S., Inc.
Intermetco U.S.A. Ltd.
IST Holding Corp.
▇▇▇▇▇ & Luther Services, Inc.
Jesco Industrial Service, Inc.
Luntz Acquisition (Delaware) Corporation
Luntz Corporation
Mac-Tech, Inc.
Northland Environmental, Inc.
Nortru, Inc.
Nortru, Ltd.
Oneida Asbestos Abatement Inc.
Oneida Asbestos Removal, Inc.
▇▇▇▇▇▇ Analytical Services Corporation
▇▇▇▇▇▇ Automotive, Ltd.
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268
▇▇▇▇▇▇ Chemi-Solv, Inc.
▇▇▇▇▇▇ Chemisolv Holdings, Inc.
▇▇▇▇▇▇ Corrosion Services, Inc.
▇▇▇▇▇▇ Enterprise Service Corporation
▇▇▇▇▇▇ Enterprises Inc./Les Entreprises ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ Environmental (Atlantic) Limited
▇▇▇▇▇▇ Environmental (Elmira) Inc.
▇▇▇▇▇▇ Environmental of Idaho Corporation
▇▇▇▇▇▇ Environmental Services Corporation
▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Environmental Services Limited
▇▇▇▇▇▇ Environmental (Washington) Inc.
▇▇▇▇▇▇ Industrial Services (Delaware), Inc.
▇▇▇▇▇▇ Industrial Services (USA), Inc.
▇▇▇▇▇▇ Industrial Services Group, Inc.
▇▇▇▇▇▇ Industrial Services of Texas, Inc.
▇▇▇▇▇▇ Investment Corp.
▇▇▇▇▇▇/▇.▇. ▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇▇ Mechanical Services of Louisiana, Inc.
▇▇▇▇▇▇ Metals (New York), Inc.
▇▇▇▇▇▇ Metals (USA), Inc.
▇▇▇▇▇▇ Metals, Inc.
▇▇▇▇▇▇ Metals Recovery (Delaware), Inc.
▇▇▇▇▇▇ Metals Recovery (USA), Inc.
▇▇▇▇▇▇ Mid-Atlantic, Inc.
▇▇▇▇▇▇ Oil Recycling, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇ Recovery Systems, Inc.
▇▇▇▇▇▇ Plant Services, Inc.
▇▇▇▇▇▇ Plasma Metals Inc.
▇▇▇▇▇▇ Reclamation Services, Houston, Inc.
▇▇▇▇▇▇ Refractory and Corrosion Corporation
▇▇▇▇▇▇ Refractory Services, Inc.
▇▇▇▇▇▇ Scaffold Corporation
▇▇▇▇▇▇/SECO Industries, Inc.
▇▇▇▇▇▇ Services (Pennsylvania), Inc.
▇▇▇▇▇▇ Services/Atlanta, Inc.
▇▇▇▇▇▇ Services Hawaii, Ltd.
▇▇▇▇▇▇ Services/Louisiana, Inc.
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269
▇▇▇▇▇▇ Services/Missouri, Inc.
▇▇▇▇▇▇ Services/Mobile, Inc.
▇▇▇▇▇▇ Services/North Atlantic, Inc.
▇▇▇▇▇▇ Services/North Central, Inc.
▇▇▇▇▇▇ Services/Ohio, Inc.
▇▇▇▇▇▇ Services/Oklahoma, Inc.
▇▇▇▇▇▇ Services/South Central, Inc.
▇▇▇▇▇▇ Services/Southwest, Inc.
▇▇▇▇▇▇ ST, Inc.
▇▇▇▇▇▇ ST Piping, Inc.
▇▇▇▇▇▇ Technical Services, Inc.
▇▇▇▇▇▇ Transportation and Remediation, Inc.
▇▇▇▇▇▇ ▇▇▇▇ Industrial Services, Inc.
▇▇▇▇▇▇/▇▇▇▇▇▇▇, Inc.
Piping Companies, Inc.
Piping Holdings Corp.
Piping Mechanical Corp.
PRS Holding, Inc.
PSC Enterprises, Inc.
PSC/IML Acquisition Corp.
Recyclage d'Aluminium Quebec Inc./Quebec Aluminum Recycling Inc.
Republic Environmental Recycling (New Jersey), Inc.
Republic Environmental Systems (Pennsylvania), Inc.
Republic Environmental Systems (Technical Services Group), Inc.
Republic Environmental Systems (Transportation Group), Inc.
RESI Acquisition (Delaware) Corporation
Resource Recovery Corporation
Rho-Chem Corporation
RMF Environmental, Inc.
RMF Global, Inc.
RMF Industrial Contracting, Inc.
Sablix Inc.
Serv-Tech Construction and Maintenance, Inc.
Serv-Tech Engineers, Inc.
Serv-Tech EPC, Inc.
Serv-Tech International Sales, Inc.
Serv-Tech of New Mexico, Inc.
Serv-Tech Services, Inc.
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ServTech Canada, Inc.
Solvent Recovery Corporation
Southeast Environmental Services Company, Inc.
ST Delta Canada, Inc.
Termco Corporation
Terminal Technologies, Inc.
ThermalKEM Inc.
TIPCO Acquisition Corp.
Total Refractory Systems, Inc.
United Industrial Materials, Inc.
United Drain Oil Service, Inc.
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Exhibit A
---------
Excluded Subsidiaries
---------------------
Subsidiaries Not in Good Standing
---------------------------------
Allwaste Tank Cleaning Inc.
Burlington Environmental Inc. (a Delaware corporation)
Cappco Tubular Products USA, Inc.
Republic Environmental Recycling (New Jersey), Inc.
21st Century Environmental Management, Inc.
Ace/Allwaste Environmental Services of Indiana, Inc.
Allwaste Asbestos Abatement Holdings, Inc.
Allwaste Asbestos Abatement, Inc.
Allwaste Asbestos Abatement of New England, Inc.
Allwaste Texquisition, Inc.
Hydro Engineering & Services, Inc.
Industrial Services Technologies, Inc.
IST Holding Corp.
Oneida Asbestos Removal Inc.
Piping Holdings Corp.
Piping Mechanical Corporation
Republic Environmental Systems (Technical Services Group), Inc.
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, Inc.
Serv-Tech International Sales, Inc.
Subsidiaries Not Validly Existing
---------------------------------
21st Century Environmental Management, Inc.
Ace/Allwaste Environmental Services of Indiana, Inc.
Allwaste Asbestos Abatement Holdings, Inc.
Allwaste Asbestos Abatement, Inc.
Allwaste Asbestos Abatement of New England, Inc.
Allwaste Texquisition, Inc.
Hydro Engineering & Services, Inc.
Industrial Services Technologies, Inc.
IST Holding Corp.
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Oneida Asbestos Removal Inc.
Piping Holdings Corp.
Piping Mechanical Corporation
Republic Environmental Systems (Technical Services Group), Inc.
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, Inc.
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EXHIBIT ▇-▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: )
) Chapter 11
▇▇▇▇▇▇ SERVICES (DELAWARE) INC., et al., )
) Case No. 99-_______
Debtors. ) Through 99-_______ (____)
)
) Jointly Administered
INTERIM ORDER AUTHORIZING
DEBTORS TO OBTAIN POST-PETITION
FINANCING PURSUANT TO 11 U.S.C. SECTIONS 364(c) AND 364(d)
Upon the motion (the "Motion") dated June 28, 1999 of ▇▇▇▇▇▇ Services Corp.
("PSC") and certain of its subsidiaries incorporated in the United States, each
as a debtor and debtor in possession (each a "Debtor" and collectively, the
"Debtors"), (a) seeking this Court's authorization pursuant to Sections
364(c)(1), (2) and (3) and 364(d)(1) 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(c) and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy
Rules"), for PSC and its wholly-owned subsidiary, ▇▇▇▇▇▇ Services (Delaware),
Inc., a Debtor herein ("PSI", and together with PSC, the "Borrowers"), inter
alia (1) to obtain post-petition financing (the "Post-Petition Financing") in an
aggregate principal amount not to exceed $100,000,000, from Bankers Trust
Company ("BTCo"), as agent (in such capacity, the "DIP Agent") and a syndicate
274
of financial institutions arranged by Canadian Imperial Bank of Commerce
("CIBC") and BTCo (including the DIP Agent, "the DIP Lenders"), which syndicate
may include any or all of the Pre-Petition Lenders (as defined below), and for
the Debtors herein (other than the Borrowers) to guaranty the payment of the
Borrowers' obligations in respect of the Post-Petition Financing; for the
subsidiaries of the Borrowers incorporated in Canada (each a "Canadian Entity"
and, collectively with PSC, the "Canadian Entities"(1), and together with the
Debtors other than the Borrowers, the "Guarantors") to guaranty the payment of
PSC's obligations in respect of the Post-Petition Financing and for each of the
Borrowers to guaranty the payment of the other Borrower's obligations in respect
of the Post-Petition Financing; and for the Borrowers and the Guarantors to
execute a Credit Agreement with respect to the Post-Petition Financing (as
amended, supplemented or otherwise modified from time to time, the
"Post-Petition Credit Agreement"); and for the Borrowers to execute revolving
credit notes (the "Notes"); and for each (i) Debtor (other than the Borrowers)
to guarantee the Notes, (ii) Canadian Entity (other than PSC) to guaranty the
Notes executed by PSC, and (iii) Borrower to guaranty the Notes of the other
Borrower, all as in accordance with the Post-Petition Credit Agreement (the
Post-Petition Credit Agreement, the Notes, and all ancillary documents as any
time executed in connection therewith, collectively, the "Post-Petition Credit
Documents"); and (ii) to grant the DIP Lenders,
____________
(1) PSC, together with all of its direct and indirect subsidiaries, are
collectively referred to herein as the "▇▇▇▇▇▇ Entities." This Interim
Order does not reflect the consent to jurisdiction by any ▇▇▇▇▇▇ Entity
that is not otherwise subject to the jurisdiction of this Court.
Furthermore, the obligations of the Canadian Entities (other than PSC)
under this Order are expressly conditioned upon the court in the Canadian
Cases (as defined below) authorizing and directing the Canadian Entities to
enter into their obligations hereunder (the "Canadian Approvals").
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275
for the obligations of the Debtors and the Canadian Entities under the
Post-Petition Credit Documents: (A) pursuant to Section 364(c)(1) of the
Bankruptcy Code, claims having administrative expense priority, over any and all
other administrative expenses of the kind specified in Sections 503(b) and
507(b) of the Bankruptcy Code, including, without limitation, administration
expenses arising in connection with any superseding proceeding under Chapter 7
of the Bankruptcy Code, subject only to (1) the superpriority claims granted to
the holders of the Account Intermediary Receivable Liens (as defined below)
pursuant to that certain Stipulation and Other Authorizing and Restricting Use
of Cash Collateral and Granting Adequate Protection of Secured Claims (the "Cash
Collateral Order") and (2) the Carve-Out (as defined below); (B) pursuant to
Section 364(c)(2) of the Bankruptcy Code, first priority liens and security
interests on all unencumbered assets of the Debtors located in the United States
(whether heretofore or hereafter acquired), subject only to (1) the Bonding
Liens (as defined below), (2) the replacement liens granted to the holders of
the Account Intermediary Receivable Liens pursuant to the Cash Collateral Order
(the "Account Intermediary Replacement Liens"), and (3) the Carve-out; (C)
pursuant to Section 364(c)(3) of the Bankruptcy Code, junior liens and security
interests on all assets located in the United States encumbered by the Senior
Liens (as defined below) (whether heretofore or hereafter acquired), subject
only to (1) the Bonding Liens, (2) the Account Intermediary Replacement Liens,
and (3) the Carve-Out; and (D) pursuant to Section 364(d)(1) of the Bankruptcy
Code, liens and security interests priming the liens and security interests
granted to the Pre-Petition Lenders (as defined below) and the Pre-Petition
Agents (as defined below) under the Pre-Petition Credit Documents (whether
heretofore or hereafter acquired), subject only to (1) the Bonding Liens, (2)
the Senior Liens, (3) the Account Intermediary Replacement Liens, and (4) the
Carve-Out; (b) seeking a preliminary hearing (the
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276
"Preliminary Hearing") on the Motion to consider entry of an interim order
pursuant to Bankruptcy Rule 4001(c) (the "Interim Order") authorizing the
Borrowers to cause letters of credit to be issued under the Post-Petition
Financing up to the aggregate face amount of $12,000,000 upon the terms and
conditions set forth in the Post-Petition Credit Documents and this Interim
Order pending the Final Hearing referred to below; and (c) requesting that the
final hearing (the "Final Hearing") be scheduled by this court to consider entry
of a final order pursuant to Bankruptcy Rule 4001(c) (the "Final Order")
authorizing, inter alia, the Post-Petition Financing; and appropriate notice of
the Motion under the circumstances having been given; and Preliminary Hearing on
the Motion having been held before this Court on June__, 1999; and upon the
record made at the Preliminary Hearing, and this court having found good and
sufficient cause appearing therefor;
IT IS HEREBY FOUND AND DETERMINED THAT:
A. This Court has jurisdiction over this matter pursuant to 28 U.S.C.
ss157(b) and 1334. Consideration of this matter constitutes a core proceeding as
defined in 28 U.S.C. s157(b)2. The statutory predicates for the relief sought
herein are Sections 105, 361, 362, 363 and 364 of the Bankruptcy Code and Rule
4001(c) of the Bankruptcy Rules. Venue of the Chapter 11 Cases (as defined
below) and the motion seeking approval of this Order in this District is proper
pursuant to 28 U.S.C. ss1408 and 1409.
B. On June 25, 1999 (the "Petition Date"), the Debtors filed petitions
for relief (the "Chapter 11 Cases") pursuant to Chapter 11 of the Bankruptcy
Code with the Clerk of the United States Bankruptcy Court for the District of
Delaware. The Chapter 11 Cases have
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277
been consolidated for procedural purposes only. Also on the Petition Date, the
Canadian Entities commenced insolvency proceedings under the Companies'
Creditors Arrangement Act (the "CCAA," and the proceedings commenced
thereunder, the "Canadian Cases" and, together with the Chapter 11 Cases, the
"Cases") in the Superior Court of Ontario (the "Canadian Court").
C. The Debtors have continued in the management and operation of their
business and property as debtors in possession pursuant to Sections 1107 and
1108 of the Bankruptcy Code. No trustee, examiner or creditors committee has
been appointed in the Chapter 11 Cases, nor has any request for the appointment
of a trustee or examiner been made.
D. PSC and its direct and indirect subsidiaries are an integrated metals
recovery and industrial services company which provides metals recovery and
processing services, by-products recovery, and industrial outsourcing services
to major industry sectors with over 230 locations in the United States, Canada
and Europe. PSC's primary base of operations is in the United States. PSC is
organized into two operating divisions, the Metals Services Group and the
Industrial Services Group. The Metals Services Group is one of the largest
ferrous scrap processors in North America and the United Kingdom and has
approximately 2,000 employees. The Industrial Services Group is an integrated
provider of by-products recovery and industrial outsourcing with a network of
over 200 facilities and approximately 10,000 employees. For the year ended
December 31, 1998, PSC had revenue of approximately $2.0 billion.
E. Prior to the Petition Date, the lenders (the "Pre-Petition Lenders")
from time to time party to that certain Credit Agreement dated as of August 11,
1997 (the "Pre-Petition Credit Agreement") among the Pre-Petition Lenders, the
Borrowers, CIBC, as
-5-
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇, as Syndication Agent, and CIBC and BTCo, as
Co-Arrangers, (CIBC and BTCo, collectively in their capacity as agents under the
Pre-Petition Credit Agreement, the "Pre-Petition Agents") loaned money or
extended financial accommodations (the "Pre-Petition Loans") to the Borrowers
pursuant to the Pre-Petition Credit Agreement. The Borrowers' Restricted
Subsidiaries (as defined in the Pre-Petition Credit Agreement), including each
of the subsidiaries that are Debtors herein, executed guarantees of the
Borrowers' obligations under the Pre-Petition Credit Agreement. The obligations
of the Debtors, other than PSC, under the Pre-Petition Credit Agreement and the
guarantees were secured in accordance with that certain U.S. Security Agreement
dated as of March 16, 1998, as well as various mortgages and other security
documents, and the obligations of the Canadian Entities under the Pre-Petition
Credit Agreement and the guarantees were secured in accordance with that certain
Canadian Security Agreement dated as of March 16, 1998, as well as various
mortgages and other security documents (all guarantees and security documents,
collectively with the Credit Agreement, the "Pre-Petition Credit Documents").
F. The ▇▇▇▇▇▇ Entities have acknowledged the validity, priority and
perfection of the liens and security interests of the Pre-Petition Lenders in
virtually all of their assets, including, without limitation, all funds on
deposit at the banks at which the Debtors' and the Canadian Entities' maintain
their cash management system, all proceeds of the Debtors' and the
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279
Canadian Entities' accounts and all other proceeds of the Pre-Petition Lenders'
collateral (the "Cash Collateral")(2)
G. In light of their immediate and critical need to use the Cash
Collateral, the ▇▇▇▇▇▇ Entities have sought authorization to use the Cash
Collateral, on an interim basis, pursuant to the terms of the Cash Collateral
Order. The Cash Collateral Order provides for the granting of certain
replacement liens, security interests and superpriority administrative claims to
the Pre-Petition Lenders and the holders of the Account Intermediary Receivable
Liens as adequate
-------------------
(2) Specifically, the ▇▇▇▇▇▇ Entities have acknowledged in the Cash Collateral
Order that, except for relatively de minimis exceptions, the Pre-Petition
Lenders' liens and security interests in the assets of the ▇▇▇▇▇▇ Entities
are not subject to avoidance, defense, objection, action, counterclaim,
setoff or subordination, except such liens and security interests are
junior and subordinate to (a) the liens and security interests granted to
the DIP Agent and the DIP Lenders herein and under the Post-Petition Credit
Documents, (b) pre-existing validly perfected and unavoidable liens and
security interests that were senior to the Pre-Petition Lenders' liens and
security interests as of the Petition Date (the "Pre-Petition Senior
Liens"), (c) the liens of the LC Issuers and the LC Lenders under the
Pre-Petition Credit Agreement in specified cash collateral held under
Section 5.06 of the Pre-Petition Credit Agreement and the holders of the
liens in specified cash collateral granted in connection with the Permitted
LC Facility in the Pre-Petition Credit Agreement (the "LC Liens"), (d)
liens on Canadian accounts receivable addressed in documentation entered
into in connection with the establishment of operating accounts of certain
of the Canadian Entities at CIBC and the maintenance of operating accounts
of certain of the Debtors at Comerica Bank (the "Account Intermediary
Receivable Liens"), and (e) liens on specified cash collateral which was
also addressed in documentation entered into in connection with the
establishment of operating accounts of certain of the Canadian Entities at
CIBC and the maintenance of operating accounts of certain of the Debtors at
Comerica Bank and in other documentation entered into in connection with
the establishment of the Permitted LC Facility under Amending Agreement
No.3 to the Pre-Petition Credit Agreement (the "Other Account Intermediary
Liens", and together with the Pre-Petition Senior Liens, the LC Liens and
the Account Intermediary Receivable Liens, the "Senior Liens").
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280
protection for the use and diminution in value of the Cash Collateral and the
other Pre-Petition Collateral subject to such liens and security interests.
H. In addition to the use of the Cash Collateral, the Debtors also have a
critical need to access the sources of working capital and financing
contemplated under the Post-Petition Credit Documents in order to enable them
to meet their working capital and general corporate requirements during the
anticipated duration of these cases. The Debtors have an urgent need for letter
of credit capacity in the amount of $12 million, pending any final relief on
the Motion, to avoid any immediate and irreparable harm to their estates. The
Debtors are unable to obtain unsecured credit allowable under Section 503(b)(1)
of the Bankruptcy Code as an administrative expense or solely through the
granting of liens pursuant to Sections 364(c)(2) or (c)(3) of the Bankruptcy
Code. Because virtually all of the assets of the ▇▇▇▇▇▇ Entities are pledged to
the Pre-Petition Lenders and the Pre-Petition Agents to secure the obligations
of the Borrowers and the Guarantors in respect of the Pre-Petition Credit
Documents, new borrowing facilities are unavailable to the Debtors without the
Debtors (a) granting to the DIP Lenders claims, with respect to all
obligations and indebtedness under the Post-Petition Credit Documents, having
priority over any and all administrative expenses of the kind specified in
Sections 503(b) and 507(b) of the Bankruptcy Code (other than the Carve-Out and
the superpriority claims granted to the holders of the Account Intermediary
Receivable Liens in the Cash Collateral Order) and (b) securing such obligations
and indebtedness with various senior and junior liens on the assets of the
▇▇▇▇▇▇ Entities pursuant to Sections 364(c)(2), (c)(3) and (d)(1) of the
Bankruptcy Code (each subject to the Senior Liens, the Bonding Liens, the
Account
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281
Intermediary Replacement Liens and the Carve-Out, and as otherwise described
more fully herein).
I. The ability of the Debtors and the Canadian Entities to finance their
operations and the availability to them of sufficient working capital and
liquidity and other financial accommodations is vital to their ability to
maintain their operations. The Post-Petition Financing is required to enable (i)
the Borrowers to finance the working capital and general corporate requirements
of the Debtors during the Cases (ii) the US Credit Parties to (a) make necessary
investments in and advances to direct and indirect subsidiaries of PSC that are
not Credit Parties(1), subject to an aggregate limitation of $10,000,000 and (b)
after the Canadian Approvals are obtained, make investments in and advances to
the Canadian Entities through the Maturity Date, and (iii) the Borrowers to
finance the working capital and general corporate requirements of PSC and the
Other Canadian Entities during the Canadian Cases in an amount not to exceed
the Canadian Loan Amount.
J. The preservation and maintenance of the going concern value of the
Debtors and the Canadian Entities is of utmost significance and importance to a
successful reorganization of the Debtors and the Canadian Entities pursuant to
the provisions of Chapter 11 of the Bankruptcy Code and the CCAA. The entry of
this Interim Order (i) will minimize the disruption to the business of the
Debtors and the Canadian Entities which would otherwise result
__________________
(1) Capitalized terms not otherwise defined herein have the meanings ascribed
to such terms in the Post-Petition Credit Agreement.
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282
from the filing of the petitions commencing the Cases, (ii) will increase the
likelihood that the Debtors and the Canadian Entities will be reorganized
pursuant to the Bankruptcy Code and the CCAA, (iii) is in the best interest of
the Debtors and the Canadian Entities and their estates and (iv) is necessary to
avoid immediate and irreparable harm to the Debtors and the Canadian Entities,
their creditors, and their assets, businesses, goodwill, reputation, employees
and franchises.
K. The Post-Petition Financing has been negotiating in good faith and at
arms' length among the Debtors, the Canadian Entities, the DIP Agent and the DIP
Lenders, with all parties represented by counsel, and any loans made to, and any
letter of credit issued for the account of, the Borrowers by the DIP Lenders
pursuant to the Post-Petition Credit Agreement shall be deemed to have been
extended in good faith, as that term is used in Section 364(e) of the Bankruptcy
Code, and the liens and priorities granted to the DIP Agent and the DIP Lenders
pursuant to this Interim Order and the Post-Petition Credit Documents shall be
entitled to the protections of Section 364(e) of the Bankruptcy Code.
L. It is a condition precedent to availability under the Post-Petition
Financing that the Debtors are allowed to use the Cash Collateral in accordance
with and pursuant to the terms of the Cash Collateral Order. The Cash Collateral
Order expressly contemplates the granting of liens, security interests and
superpriority administrative claims to the DIP Lenders, subject to the
Carve-Out, pursuant to the DIP Credit Documents and this Interim Order, (a) with
priority over the liens, security interests and superpriority administrative
claims provided to the Pre-Petition Lenders pursuant to the Pre-Petition Credit
Documents and the Cash Collateral Order, (b) junior and subordinate to the liens
and security interests provided to the holders of the
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Senior Liens and the Bonding Liens, and (c) junior and subordinate to the
superpriority administrative claims provided to the holders of the Account
Intermediary Receivable Liens pursuant to the Cash Collateral Order. The
Required Lenders (as defined in the Pre-Petition Credit Agreement) and the
holders of the Account Intermediary Receivable Liens have consented and agreed
to the liens, security interests and superpriority administrative claims (and
the priority thereof) granted pursuant to the DIP Credit Documents and this
Interim Order and the Court expressly finds that such consent, in addition to
the protections afforded in the Cash Collateral Order, constitutes adequate
protection under, and satisfies the requirements of, Section 364(d) of the
Bankruptcy Code.
IT IS HEREBY ORDERED AND ADJUDGED that:
1. 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 Post-Petition Credit Agreement, the Notes and any other
Post-Petition Credit Documents to be executed in connection therewith, all in
substantially the form annexed to the Post-Petition Credit Agreement. The terms
and conditions of the Post-Petition Credit Documents are approved, and the
Borrowers and the Guarantors are authorized and directed to comply with and
perform all of the terms and conditions contained therein, to repay amounts
borrowed and, in the case of each Guarantor, to repay amounts guaranteed, with
interest to the DIP Lenders in accordance with and subject to the terms and
conditions set forth in the Post-Petition Credit Agreement, the Notes, the other
Post-Petition Credit Documents and this Interim
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284
Order. The Debtors are further authorized to pay amounts to various state
authorities to remain incorporated in good standing in such states, including
any and all amounts that may have been due and owing as of the Petition Date, in
order to comply with the provisions of the Post-Petition Credit Documents. The
Debtors are further authorized and directed to pay all fees and expenses,
including, without limitation, all reasonable fees and expenses of
professionals engaged by the DIP Agent and the DIP Lenders, in accordance with
the terms of the Post-Petition Credit Agreement. All loans made under the
Post-Petition Credit Agreement ("Loans") and interest thereon together with all
reimbursement and other obligations in respect of letters of credit issued
under the Post-Petition Credit Agreement ("Letters of Credit"), and fees,
costs, expenses, and other indebtedness, obligations and liabilities of the
Borrowers and the Guarantors to the DIP Agent and the DIP Lenders under the
Post-Petition Credit Documents and this Interim Order are hereinafter referred
to as the "Obligations."
3. The Debtors are authorized to make, execute, deliver and perform any
and all modifications and amendments to the Post-Petition Credit Documents
which are not material and as may be agreed upon in writing by the Debtors, the
Canadian Entities, the DIP Agent and the DIP Lenders (pursuant to the
Post-Petition Credit Agreement) without further order of this Court; provided
that modifications and amendments to the Post-Petition Credit Documents that
are material may not be made without further order of this Court. The
obligations of the Debtors under the Post-Petition Credit Documents are legal,
valid and binding and are enforceable against the Debtors in accordance with
their terms.
4. The Borrowers are expressly authorized to incur indebtedness for
letters of credit from the DIP Lenders in the aggregate amount of $12,000,000
of the proposed Post-Petition Financing pending final relief on the Motion. All
borrowings under the Post-Petition
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Financing are subject to the budget dated April 1, 1999 to be filed with the
Court (the "Budget") and as otherwise permitted in the Post-Petition Credit
Documents.
5. In accordance with Section 364(c)(1) of the Bankruptcy Code, the
Obligations shall constitute claims ("Super-Priority 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, Sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b) and
726 of the Bankruptcy Code, other than (i) the superpriority claims granted to
the holders of the Account Intermediary Receivable Liens pursuant to the Cash
Collateral Order and (ii) the Carve-Out. No cost or expense of administration
under Sections 105, 364(c)(1), 503(b), 506(c), 507(b) of the Bankruptcy Code or
otherwise, including those resulting from the conversion of any of the Chapter
11 Cases pursuant to Section 1112 of the Bankruptcy Code, shall be senior to, or
pari passu with, the Super-Priority Claims of the DIP Agent and the DIP Lenders
arising out of the Obligations, subject only to the superpriority claims granted
to the holders of the Account Intermediary Receivable Liens pursuant to the Cash
Collateral Order and the Carve-Out.
6. As security for the Obligations, the DIP Agent and the DIP Lenders
shall have and are hereby granted (effective upon the date of this Interim Order
and without the necessity of the execution by the Debtors or the Canadian
Entities, or filing, of security agreements, pledge agreements, mortgages,
financing statements or otherwise):
(i) pursuant to Section 364(c)(2) of the Bankruptcy Code, first
priority liens and security interests on all unencumbered assets of the
Debtors (whether heretofore or hereafter acquired), subject only to (a) the
Carve-Out, (b) liens and security interests granted to the bonding
companies pursuant to the Stipulation and order Authorizing Debtors to
Obtain Post-Petition Surety Bonds and to Enter into Indemnity Agreement and
Intercreditor Agreement as necessary to comply
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with the bonding requirements of the ▇▇▇▇▇▇ Entities (as defined in the
Pre-Petition Credit Agreement) (the "Bonding Liens"), and (c) the Account
Intermediary Replacement Liens;
(ii) pursuant to Section 364(c)(3) of the Bankruptcy Code, junior
liens and security interests on all assets encumbered by the Senior Liens,
subject only to (a) the Carve-Out, (b) the Account Intermediary Replacement
Liens, and (c) the Bonding Liens;
(iii) pursuant to Section 364(d)(1) of the Bankruptcy Code, liens and
security interests priming the liens and security interests granted to the
Pre-Petition Agents and the Pre-Petition Lenders under the Pre-Petition
Credit Documents, subject only to (a) the Carve-Out, (b) the Senior Liens,
(c) the Account Intermediary Replacement Liens, and (d) the Bonding Liens.
The liens and security interests provided to the DIP Agent and the DIP Lenders
in this paragraph are hereafter collectively referred to as the "Post-Petition
DIP Liens," and the assets securing the Post-Petition Liens are hereafter
referred to as the "Post-Petition DIP Collateral." Notwithstanding anything
else herein to the contrary, unless this order shall become a final order, the
proceeds of any Chapter 5 avoidance actions shall not be included in the
Post-Petition DIP Liens.
7. The Post-Petition DIP Liens shall, from and after the date of
effectiveness of the Post-Petition Credit Documents, be deemed perfected as of
the commencement of the Cases and shall not be subject to or pari passu with any
lien or security interest existing as of the Petition Date (other than the
Senior Liens). Subject only to the Bonding Liens, the Account Intermediary
Replacement Liens, and the Carve-Out, no lien or security interest in the
property of the Debtors granted or arising on or after the Petition 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) shall be created or permitted
to be pari passu with, or senior to, the Post-Petition DIP Liens.
8. The Super-Priority Claims granted to the DIP Agent and the DIP Lenders
pursuant to the Post-Petition Credit Agreement and this Interim Order shall be
subject only to (a) following the occurrence and during the continuance of an
Event of Default (as such terms is
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defined in the Post-Petition Credit Agreement), a $3,000,000 carve-out (the
"Carve-Out") for the payment of (i) allowed and unpaid fees and disbursements
incurred by the professionals retained, pursuant to Sections 327 or 1103(a) of
the Bankruptcy Code, by the Debtors and any statutory committees appointed in
the Chapter 11 Cases, and, after the entry of an order of the Canadian Court
approving the DIP Financing on the terms described in the Post-Petition Credit
Documents (the "Canadian Order"), the professionals, including the monitor,
retained in the Canadian Cases, and (ii) any unpaid fees payable pursuant to 28
U.S.C. s. 1930(a)(6) and any unpaid fees payable to the Clerk of this Court or
in the similar entity in the Canadian Cases, and (b) the superpriority claims
granted to the holders of Account Intermediary Replacement Liens pursuant to the
Cash Collateral Order.
9. The Carve-Out shall not be utilized to pay any professional fees or
disbursements incurred in connection with asserting any claims or causes of
action against the DIP Agent, DIP Lenders, the Pre-Petition Agents, the
Pre-Petition Lenders, the holders of the Account Intermediary Receivable Liens,
the Other Account Intermediary Liens or the LC Liens, or the collateral or
security agents under the Pre-Petition Credit Documents or the Post-Petition
Credit Documents (including formal discovery proceedings in anticipation
thereof) and/or challenging (whether by defense, objection, counterclaim or
otherwise) the validity, perfection, priority or amount of any lien or claim of
the DIP Agent, the DIP Lenders, the Pre-Petition Agents, the Pre-Petition
Lenders, the holders of the Account Intermediary Receivable Liens, the Other
Account Intermediary Liens or LC Liens, or the collateral or security agents
under the Pre-Petition Credit Documents or the Post-Petition Credit Documents.
So long as no Default or Event of Default shall have occurred and be continuing,
the Debtors shall be permitted to pay
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compensation and reimbursement of expenses under Sections 330 and 331 of the
Bankruptcy Code, as the same may be due and payable, and the same shall not
reduce the Carve-Out.
10. All superpriority administrative claims, all liens and security
interests granted to the Pre-Petition Agents and the Pre-Petition Lenders shall,
upon the entry of this Interim Order, be junior and subordinate to the
Super-Priority Claims and the Post-Petition Liens granted to the DIP Agent and
the DIP Lenders pursuant to the Post-Petition Credit Documents and this Interim
Order. Any ambiguity or inconsistency between the Cash Collateral Order and this
Interim Order shall be resolved to give full effect to this Interim Order.
11. Neither the DIP Agent nor the DIP Lenders shall be required to file or
record financing statements, mortgages, notices of lien or similar instruments
in any jurisdiction or take any other action in order to validate, create or
perfect the Post-Petition DIP Liens granted to them pursuant to this Interim
Order and the Post-Petition Credit Documents. If the DIP Lenders shall file or
record such financing statements, mortgages, notices of lien or similar
instruments or otherwise confirm perfection of Post-Petition DIP Liens, the
Debtors shall cooperate and comply with the requests of the DIP Lenders and all
such documents shall be deemed to have been filed or recorded on the date of
commencement of the Cases, and the automatic stay provisions of Section 362 of
the Bankruptcy Code are modified to permit the execution, delivery and filing of
such documents.
12. The DIP Agent and the DIP Lenders shall have all remedies permitted
under this Interim Order and the Post-Petition Credit Documents and upon their
exercise of any such rights thereunder or hereunder, the Debtors shall cooperate
and comply with any requests of the DIP Agent and the DIP Lenders relating
thereto.
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13. In determining to make loans or to issue letters of credit under the
Post-Petition Credit Documents or to collect the Obligations, or in exercising
any rights or remedies as and when permitted under the Post-Petition Credit
Documents or this Interim Order, neither the DIP Agent nor the DIP Lenders shall
be deemed to be in control of the operations of any Debtor or to be acting as a
"responsible person" or "owner or operator" with respect to the operation or
management of any Debtor (as such terms, or any similar terms, are used in the
United States Comprehensive Environmental Response, Compensation and Liability
Act, as amended, or any similar federal or state statute).
14. The Debtors are authorized to do and perform all acts, to make,
execute and deliver all instruments and documents (including, without
limitation, the execution of additional security agreements, mortgages and
financing statements) and to pay fees and reimburse expenses which may be
required pursuant to the terms of the Post-Petition Financing, without further
application to or order of this court, including, without limitation: (i) the
execution and performance of the Post-Petition Credit Documents, (ii) the
payment of the DIP Agent and the DIP Lenders, on a non-refundable basis, of the
fees set forth in all documentation relating to the DIP facility, including,
without limitation, facility fees, commitment fees, agent's administration fees,
letter of credit fees, fronting fees, other reasonable fees, costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
and all amounts owing at any time in respect of the indemnification provisions
of the Post-Petition Credit Documents.
15. All collateral sold or otherwise disposed of by the DIP Agent and/or
the DIP Lenders pursuant to the terms of this Interim Order and the
Post-Petition Credit Documents shall be sold or otherwise disposed of free and
clear of any interests in such property pursuant to
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Sections 363(b)(1) and 363(f) of the Bankruptcy Code without any further
application to or order of this Court and with three Business Days' notice to
counsel to the Debtors, counsel for any official committee or committees
appointed in the Cases and the United States Trustee. Such sales may be
scheduled and noticed and neither the DIP Agent nor the DIP Lenders shall have
any duty to marshal assets or to be bound by any other doctrine which could
prohibit or restrict the ability of the DIP Lenders in choosing to foreclose or
realize upon any portion of the Post-Petition DIP Collateral, subject to the
conditions that (x) the DIP Agent and the DIP Lenders shall be obligated to
apply the proceeds of any realization by the DIP Lenders from the foreclosure on
the Post-Petition DIP Collateral in the manner set forth in paragraph 16 below
and (y) the DIP Agent and the DIP Lenders shall not exercise the rights set
forth in this paragraph upon any Post-Petition DIP Collateral securing the
Senior Liens or the Bonding Liens unless (i) with respect to collateral other
than receivables, the Post-Petition DIP Collateral is sold subject to such
Senior Lien or Bonding Lien, or (ii) the holder of such Senior Lien or Bonding
Lien otherwise consents. The right of the DIP Agent and the DIP Lenders to
exercise all of their remedies with respect to the liens and security interests
encumbering the Post-Petition DIP Collateral and securing the obligations of the
Debtors to the DIP Lenders with respect to the Post-Petition Financing in
accordance with the provisions of this Interim Order without delay is an
integral and fundamental part of the Post-Petition Financing, and all advances
made by the DIP Lenders under the Post-Petition Credit Agreement are made in
reliance upon such right.
16. The proceeds of any Post-Petition DIP Collateral obtained as a result
of any exercise of remedies pursuant to the terms of this Interim Order or any
of the Post-Petition Credit Documents shall be applied, subject to the
Carve-Out, as follows:
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(i) first, to the payment of any and all expenses and fees
(including reasonable attorneys' fees and expenses) incurred by the DIP
Agent and the DIP Lenders in obtaining, taking possession of, removing,
insuring, repairing, storing and disposing of Post-Petition Collateral;
(ii) second, to the extent proceeds remain after the payment
pursuant to preceding clause (i), if the Post-Petition Collateral is
encumbered by a Senior Lien, Bonding Lien or Account Intermediary
Replacement Lien and such Post-Petition Collateral has not been sold
subject to such Senior Lien, Bonding Lien or Account Intermediary
Replacement Lien, an amount equal to the outstanding obligations owing to
the holder of such Senior Lien, Bonding Lien or Account Intermediary
Replacement Lien which are secured thereby shall be paid into an escrow
fund and held by an escrow agent satisfactory to such holder as substitute
collateral for such obligations, and/or be paid directly to such holders,
as the Court may deem appropriate in the circumstances;
(iii) third, to the extent proceeds remain after the payment pursuant
to preceding clauses (i) and (ii), the Total Commitment under the DIP
Facility shall be permanently reduced or cash-collateralized in an amount
equal to such proceeds,
(iv) fourth, to the extent proceeds remain after the payment
pursuant to preceding clauses (i), (ii) and (iii), an amount equal to the
outstanding Obligations owing to the DIP Lenders shall be paid to the DIP
Agent, for the ratable benefit of the DIP Lenders, for application to such
Obligations; and
(v) fifth, to the extent proceeds remain after the payment pursuant
to preceding clauses (i), (ii), (iii) and (iv), if the Total Commitment
under the Post-Petition Credit Agreement has been terminated, and no
Letters of Credit (other than letters of credit with respect to which the
Borrowers have deposited cash collateral as provided in the Post-Petition
Credit Documents), Loans or other Obligation to the DIP Agent or the DIP
Lenders under the Post-Petition Credit Documents or this Interim Order
remains outstanding, any surplus then remaining shall be paid as ordered by
the Court.
17. The DIP Agent and the DIP Lenders shall be entitled to exercise all
rights and remedies as and when permitted under, and upon such notice as
expressly required in, this Interim Order and the Post-Petition Credit
Documents, and in connection with their exercise of any such rights and remedies
thereunder or hereunder in accordance with the terms of the Post-Petition Credit
Documents, and Debtors shall cooperate and comply with the requests of the DIP
Lenders and the DIP Agent with respect to the enforcement thereof.
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18. Upon three Business Days' notice of the occurrence of an Event of
Default to counsel to the Debtors, counsel for any official committee that may
be appointed in the Cases and counsel to the holders of the Account Intermediary
Receivable Liens and the Other Account Intermediary Liens and the United States
Trustee, the automatic stay provisions of Section 362 of the Bankruptcy Code
shall be deemed vacated and modified to the extent necessary so as to permit the
DIP Agent and the DIP Lenders to exercise all rights and remedies provided for
in this Interim Order and in the Post-Petition Credit Documents, or otherwise
available under applicable nonbankruptcy law, without filing further pleadings
or application to or order of this Court; provided, however, that the DIP Agent
and the DIP Lenders may terminate the Commitments, accelerate the Loans and
impose an administrative freeze or administrative hold with respect to any cash
collateral held by the DIP Agent immediately upon the occurrence of an Event of
Default.
19. Notwithstanding any other provisions of this order, upon the occurrence
of a Triggering Event, as defined in the Inter-Creditor Agreement (which is
attached as Exhibit [ ] to the Motion for Approval of Stipulation and Order
Authorizing Debtors to Obtain Post-Petition Surety Bonds and To Enter Into
Indemnity Agreements), the Surety Participants (as defined in the Inter-Creditor
Agreement) shall upon three business days' notice to counsel to the Debtors,
counsel to the DIP Agent and the DIP Lenders, counsel to the holders of the
Account Intermediary Receivable Liens and the Other Account Intermediary Liens,
and the United States Trustee, be entitled to pursue any and all remedies and
rights referred to in paragraph 7(b) of the Inter-Creditor Agreement, unless the
Court orders otherwise.
20. Accounts established or maintained pursuant to the terms of the
Post-Petition Credit Agreement or the Cash Collateral Order shall not be subject
to the provisions of
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Section 345(b) of the Bankruptcy Code so that neither the Debtors nor the DIP
Agent nor any other holder of such accounts shall be required to post a bond or
deposit securities in connection with any deposit into such accounts.
21. The provisions of this Interim Order shall be binding upon and inure
to the benefit of the DIP Agents, the DIP Lenders, the Debtors and the Canadian
Entities and their respective successors and assigns. Moreover, this Interim
Order shall bind any trustee hereinafter appointed for the estates of the
Debtors, whether in this Chapter 11 proceeding or in the event of conversion of
the Chapter 11 Cases to a liquidation under Chapter 7 of the Bankruptcy Code, to
the fullest extent permitted by law including notice provisions. Such binding
effect is an integral part of this transaction and the DIP Financing. The
Debtors shall jointly and severally be obligated to repay all Obligations of the
Debtors and the Canadian Entities in respect of the DIP Financing (other than
certain obligations with respect to letters of credit then outstanding with
respect to which the Debtors will be required to deposit cash collateral as
provided in the Post-Petition Credit Documents) on the earlier of the Maturity
Date or the Termination Date.
22. The Debtors waive their rights, to the fullest extent permitted by law
and consistent with their fiduciary obligations, to seek an order, or to consent
to any right brought by any other party for an order dismissing or converting
any of the Cases under Section 305 or 1112 of the Bankruptcy Code or otherwise,
without the consent of the DIP Lenders, unless prior to the entry thereof:
(i) all obligations (excluding Letters of Credit that have been cash
collateralized or subject to backing letters of credit in accordance with
the provisions of the Post-Petition Credit Agreement) shall have been paid
in full, or
(ii) all material assets of the Debtors and the Canadian Entities
shall have been liquidated and the proceeds thereof distributed in
accordance with the priorities established by the Cash Collateral Order,
this Interim Order and the Post-Petition Credit Documents.
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23. The provisions of this Interim Order shall be immediately effective
upon entry of this Interim Order by the Court, and any actions taken pursuant
hereto shall survive entry of, and shall govern with respect to any conflict
with, any order which may be entered confirming any plan of reorganization or
which may be entered dismissing the Chapter 11 Cases or converting the Chapter
11 Cases to Chapter 7 liquidations or lifting the stay in the Canadian Cases to
permit the appointment of a receiver or a receiver and manager (or any entity
with substantially similar powers) of the assets of any Canadian Entity. The
terms and provisions of this Interim Order as well as the Super-Priority Claims
and the Post-Petition Liens, and all rights of the DIP Agents and the DIP
Lenders and the Obligations created or arising pursuant hereto and pursuant to
the Post-Petition Credit Documents, shall continue in the Chapter 11 Cases and
in any superseding proceedings under the Bankruptcy Code, and in Canada in any
superseding proceedings under the CCAA, and the Super-Priority Claims and the
Post-Petition DIP Liens shall maintain their priority as provided by the Cash
Collateral Order this Interim Order and the Post-Petition Credit Documents until
satisfied and discharged in accordance with the terms of the Post-Petition
Credit Documents or otherwise modified in accordance with the terms thereof. If
any or all of the provisions of this Interim Order are hereafter modified (other
than in accordance with the terms of the Post-Petition Credit Agreement),
vacated or stayed, such stay, modification or vacation shall not affect the
validity of any of the Obligations incurred prior to the effective date of such
stay, modification or vacation, or the validity and enforceability of any
security interest, lien, priority or right authorized or created hereby or
pursuant to the Post-Petition Credit Documents. Notwithstanding any such stay,
modification or vacation, the Obligations incurred prior to the affective date
of such stay, modification or vacation shall be governed in all respects by the
original provisions of this Interim Order, and the DIP Agent and each DIP Lender
shall be
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entitled to all the rights, remedies, privileges and benefits, including the
security interests, liens and priorities granted herein and pursuant to the
Post-Petition Credit Documents, with respect to such Obligations. All advances
under the Post-Petition Credit Agreement are made in reliance upon this Interim
Order, and the Obligations in respect of such advances made prior to the
effective date of any stay, modification or vacation of this Interim Order
cannot (i) be subordinated, (ii) lose their super-priority status or (iii) be
deprived of the benefit of the status of the liens granted to the DIP Agent and
the DIP Lenders, as a result of any subsequent order in the Cases.
24. In the event of any express conflict between the terms of this Interim
Order and the terms of the Post-Petition Credit Documents, the terms of this
Interim Order shall control.
25. The provisions of this Interim Order shall immediately be binding upon
and inure to the benefit of the DIP Agent, the Pre-Petition Agents, the DIP
Lenders, the Pre-Petition Lenders, the Debtors, and their respective successors
and assigns, including any trustee or other fiduciary hereafter appointed in the
Chapter 11 Cases a legal representative of the Debtors or the Debtors' estates,
a trustee in bankruptcy, or a receiver and manager (or any entity with
substantially similar powers) in the Canadian Cases.
26. The Debtors shall, within three (3) days of the date hereof, mail
notice of the approval of this Interim Order, in the form as annexed as an
Exhibit to the Motion, together with a copy of this Interim Order, to each of
their utility service providers and lessors of non-residential real property,
and to the parties having been given notice of the Preliminary Hearing and to
any other party which has filed a request for notices with the Court and to
counsel for any
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committee appointed pursuant to Section 1102 of the Bankruptcy Code. The notice
of approval of this Interim Order shall state that any party in interest
objecting to this Interim Order as a final Order shall file written objections
with the Clerk of the United States Bankruptcy Court for the District of
Delaware no later than July 22, 1999 at 4:00 p.m. (the "Objection Deadline"),
which objections shall be served so that the same are received on or before such
date by: (a) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq., Stikeman, Elliott, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., attorneys for the Debtors; (b) White & Case
LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq., Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., and Young, Conaway, Stargatt
& ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: S. ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., attorneys for the DIP Agents and the DIP
Lenders, (c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇, PLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., attorneys for
Comerica Bank in its capacity as a holder of Account Intermediary Receivable
Liens and Other Account Intermediary Liens, (d) Sidley & Austin, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇▇▇▇ ▇▇▇▇▇, Esq., and Osler, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇, 1 First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., attorneys for CIBC in its capacity as a holder
of Account Intermediary Receivable Liens and Other Account Intermediary Liens,
and (e) the Office of the United States Trustee.
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27. If no such written objection is timely served and filed in accordance
with paragraph 26, this Interim Order shall be deemed the Final Order on the
Objection Deadline and this Interim Order shall continue on a final basis and
remain in full force and effect and shall constitute final authority for the
balance of the Post-Petition Financing, and any objection by any party in
interest to the terms of this Interim Order and the relief requested in the
Motion shall be deemed forever waived. If a timely objection is served and
filed, a final hearing to consider the Motion will be held on July 27, 1999 at
2:00 p.m.
Dated: Wilmington, Delaware
June 28, 1999
/s/ Judge ▇. ▇▇▇▇▇▇▇
-------------------------------
UNITED STATES BANKRUPTCY JUDGE
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EXHIBIT H
▇▇▇▇▇▇ SERVICES CORP.
▇▇▇▇▇▇ SERVICES (DELAWARE), INC.
Borrowing Base Certificate as of _____________________
To: Bankers Trust Company ("BTCo"), as DIP Agent under the DIP Credit
Agreement dated as of June_______ 1999 (as amended, restated or otherwise
modified from time to time the "DIP Credit Agreement"), among the
Borrowers, the Subsidiary Guarantors, BTCo, as DIP Agent, Canadian Imperial
Bank of Commerce and BTCo, as DIP Co-Arrangers, and the Lenders.
Each capitalized term used herein shall have the meaning provided therefor
in the DIP Credit Agreement, or, if such term is not defined therein, it shall
have the meaning provided therefor in the Borrowers' Interim internal management
reports.
I. Accounts Receivable Activity
(000 of US$)
Industrial Services US Ferrous Total Grand
Billed Unbilled Billed Unbilled Billed Unbilled Total
------------------- ---------------- ---------------- -----
Beginning Accounts
Receivable (date) 0 0 0 0 0 0 0
Sales 0 0 0 0 0 0 0
Collections
Credits and Other Adjustments 0 0 0 0 0 0 0
---------------------------------------------------------------
Ending Accounts Receivable
(date) 0 0 0 0 0 0 0
II. Accounts Receivable Availability
Total Accounts Receivable 0 0 0 0 0 0 0
Less: Ineligibles 0 0 0 0 0 0 0
---------- ------------ ------------ -------
Eligible Accounts Receivable 0 0 0 0 0 0 0
Eligible Accounts
Receivable @ 80% 0 0 0 0
Eligible Accounts
Receivable @ 50% 0 0 0 0
---------- ------------ ------------- -------
III. A/R AVAILABILITY
Less: 0
Carve-Out 0
IV. TOTAL AVAILABILITY
Less: 0
Revolving Loans Outstanding (US Borrower) 0
Revolving Loans Outstanding (Canadian Borrower) 0
Letters of Credit Outstandings 0
----------- ------------- ------------- ------
V. TOTAL OUTSTANDINGS 0
VI. NET AVAILABILITY BEFORE RESERVES 0
Less: Other Reserves Pursuant to the 0
Terms of the DIP Credit Agreement
------
VII. NET AVAILABILITY 0
299
The undersigned, the chief financial officer of the Canadian Borrower,
hereby certifies that all of the information provided above is true and correct
as of the date first above written. The representations and warranties contained
herein are those of the Borrowers and not of the individual officer in its
personal capacity.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
____ day of _________.
▇▇▇▇▇▇ SERVICES CORPORATION
By: ____________________________
Name:
Title:
▇▇▇▇▇▇ SERVICES (DELAWARE), INC.
By: ____________________________
Name:
Title:
300
SCHEDULE "A"
Accounts Receivable ineligibles as of _____________, ______
Industrial Services US Ferrous Total
------------------- ------------------ ------------------- Grand
Billed Unbilled Billed Unbilled Billed Unbilled Total
------ -------- ------ -------- ------ -------- -----
Receivables > 60 days past due 0 0 0 0 0 0 0
Credits Balances > 60 days past due 0 0 0 0 0 0 0
Extended Terms Accounts 0 0 0 0 0 0 0
Contra Offset (A/P) < 60 days past due 0 0 0 0 0 0 0
Cross-Age @50% < 60 days past due 0 0 0 0 0 0 0
Foreign < 60 days past due 0 0 0 0 0 0 0
Canadian Recievalbes < 60 days past due 0 0 0 0 0 0 0
Non-Trade Receivables 0 0 0 0 0 0 0
Affiliate/Intercompany Receivables 0 0 0 0 0 0 0
Freight Receivables 0 0 0 0 0 0 0
Retainage 0 0 0 0 0 0 0
Concentration > 5% of Eligible A/R 0 0 0 0 0 0 0
Accrued Volume Discounts 0 0 0 0 0 0 0
Sales Tax Payable 0 0 0 0 0 0 0
▇▇▇▇ & Hold Reserve 0 0 0 0 0 0 0
Government Receivables 0 0 0 0 0 0 0
Debtor Bankrupt or insolvent 0 0 0 0 0 0 0
BEC Receivables 0 0 0 0 0 0 0
Soave Receivables 0 0 0 0 0 0 0
Unbilled > 30 days 0 0 0 0 0 0 0
Canadian Unbilled < 30 days 0 0 0 0 0 0 0
Static Reserve (Unbilled Only) 0 0 0 0 0 0 0
Other 0 0 0 0 0 0 0
Other 0 0 0 0 0 0 0
------ ------- ------ -------- ------ -------- -----
Total Ineligibles 0 0 0 0 0 0 0
301
OTHER SCHEDULES
B. U.S. FERROUS ELIGIBILITY CALCULATION
See Attached
C. ISG ELIGIBILITY CALCULATION
See attached
D. EXTRAPOLATED INELIGIBLES - BASED ON JDE REPORTS (ISG)
See attached
E. STATUS OF INTERCOMPANY LOANS
F. OTHER SCHEDULES PURSUANT TO THE TERMS OF THE DIP CREDIT AGREEMENT
302
EXHIBIT I-1
CONFORMED
AS EXECUTED
US PLEDGE AGREEMENT
-------------------
PLEDGE AGREEMENT, dated as of June 28, 1999 (as same may be amended,
amended and restated, modified or supplemented from time to time, this
"Agreement"), made by ▇▇▇▇▇▇ SERVICES (DELAWARE), INC., a Delaware corporation,
as a borrower (the "US Borrower"), the US Subsidiary Guarantors (as defined in
the DIP Credit Agreement referred to below) and each other Domestic Subsidiary
of the US Borrower that is required to execute a counterpart hereof pursuant to
Section 25 of this Agreement (the "Pledgors", and each, a "Pledgor"), and
Bankers Trust Company ("BTCo"), not in its individual capacity but solely as US
DIP Collateral Agent (as defined in the DIP Credit Agreement) (including any
successor collateral agent, collectively, the "Pledgee") for the benefit of the
Lenders, the Issuing Lender and the DIP Agent (as defined in the DIP Credit
Agreement) (such Lenders, the Issuing Lender and the DIP Agent are hereinafter
called the "Lender Creditors" or the "Secured Creditors"). Except as otherwise
defined herein, terms used herein and defined in the DIP Credit Agreement shall
be used herein as so defined.
W I T N E S S E T H :
---------------------
WHEREAS, the US Borrower, ▇▇▇▇▇▇ Services Corp. (the "Canadian Borrower"
and together with the US Borrower, the "Borrowers"), the Subsidiary Guarantors,
the financial institutions from time to time party thereto (the "Lenders"),
BTCo, as DIP Agent for the Lenders and Canadian Imperial Bank of Commerce
("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP Co-Arrangers"),
have entered into a Credit Agreement, dated as of June 28, 1999, providing for
the making of Revolving Loans to the Borrowers and the issuance of, and
participation in, Letters of Credit as contemplated therein (as used herein, the
term "DIP Credit Agreement" means the Credit Agreement described above in this
paragraph, as the same may be amended, modified or supplemented from time to
time;
WHEREAS, pursuant to Section 14 of the DIP Credit Agreement, (i) the
Canadian Subsidiary Guarantors have guaranteed to the Secured Creditors the
payment when due of all obligations and liabilities of the Canadian Borrower
under or with respect to the DIP Credit Documents, (ii) the US Subsidiary
Guarantors have jointly and severally guaranteed to the Secured Creditors the
payment when due of all obligations and liabilities of the Borrowers under or
with respect to the DIP Credit Documents and (iii) each Borrower has guaranteed
to the Secured Creditors the payment when due of all obligations and liabilities
of the other Borrower under or with respect to the DIP Credit Documents.
WHEREAS, it is a condition precedent to the making of Revolving Loans to
the Borrowers and the issuance of, and participation in, Letters of Credit for
the account of the US Borrower under the DIP Credit Agreement that each Pledgor
shall have executed and delivered to the Pledgee this Agreement and granted a
security interest in, and lien on, substantially all of the Pledgor's assets and
the proceeds thereof pursuant to Sections 364(c) and 364(d) of the US Bankruptcy
Code;
303
WHEREAS, such security interest and lien has been granted by the Orders;
WHEREAS, to supplement the Orders without in any way diminishing or
limiting the effect of the Orders or the security interests and liens granted
thereunder, the parties hereto desire to more fully set forth their respective
rights in connection with such security interests and liens;
WHEREAS, this Agreement has been approved by the Orders;
WHEREAS, each Pledgor will obtain benefits from the incurrence of Revolving
Loans by the Borrowers and the issuance of Letters of Credit for the account of
the US Borrower under the DIP Credit Agreement and, accordingly, desires to
execute this Agreement in order to satisfy the conditions precedent described in
the preceding paragraph and to induce the Lenders to make Revolving Loans to the
Borrowers and participate in Letters of Credit, to induce the Issuing Lenders to
issue Letters of Credit for the account of the US Borrower;
NOW, THEREFORE, in consideration of the benefits accruing to each Pledgor,
the receipt and sufficiency of which are hereby acknowledged, each Pledgor
hereby makes the following representations and warranties to the Pledgee and
hereby covenants and agrees with the Pledgee for the benefit of Secured
Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor for the
benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including, without limitation, indemnities, Fees and interest
thereon) of such Pledgor owing to the Lender Creditors, whether now
existing or hereafter incurred under, arising out of, or in connection with
the DIP Credit Agreement and the other DIP Credit Documents to which such
Pledgor is a party and the due performance and compliance by such Pledgor
with all of the terms, conditions and agreements contained in the DIP
Credit Agreement and such other DIP Credit Documents to which such Pledgor
is a party (all such obligations, liabilities and indebtedness under this
clause (i) being herein collectively called the "DIP Credit Agreement
Obligations");
(ii) any and all sums advanced by the Pledgee in order to preserve the
Collateral (as hereinafter defined) pledged by such Pledgor and/or preserve
its security interest therein;
(iii) in the event of any proceeding for the collection of the
Obligations (as defined below) or the enforcement of this Agreement, after
an Event of Default (such term, as used in this Agreement, shall mean any
Event of Default under, and as defined in, the DIP Credit Agreement and
shall in any event include, without limitation, any payment default (after
the expiration of any applicable grace period) on any of the Obligations
(as defined below)) shall have occurred and be continuing, the reasonable
expenses of retaking, holding, preparing for sale or lease, selling or
otherwise disposing
304
of or realizing on the Collateral, or of any exercise by the Pledgee of its
rights hereunder, together with reasonable attorneys' fees and court costs;
and
(iv) all amounts paid by any Indemnitee to which such Indemnitee has
the right to reimbursement under Section 11 of this Agreement.
all such obligations, liabilities, indebtedness, sums and expenses set forth in
clauses (i) through (iv) of this Section 1 being collectively called the
"Obligations", it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITIONS; ANNEXES. (a) Unless otherwise defined herein, all
capitalized terms used herein and defined in the DIP Credit Agreement shall be
used herein as therein defined. Reference to singular terms shall include the
plural and vice versa.
(b) The following capitalized terms used herein shall have the definitions
specified below:
"Adverse Claim" has the meaning given such term in Section 8-102(a)(1) of
the UCC.
"Agreement" has the meaning set forth in the first paragraph hereof.
"Certificated Security" has the meaning given such term in Section
8-102(a)(4) of the UCC.
"Clearing Corporation" has the meaning given such term in Section
8-102(a)(5) of the UCC.
"Collateral" has the meaning set forth in Section 3.1 hereof.
"Collateral Accounts" means any and all accounts established and maintained
by the Pledgee in the name of any Pledgor to which Collateral may be credited.
"DIP Credit Agreement" has the meaning set forth in the Recitals hereto.
"DIP Credit Agreement Obligations" has the meaning set forth in Section 1
hereof.
"Domestic Corporation" has the meaning set forth in the definition of
"Stock."
"Event of Default" has the meaning set forth in Section 1 hereof.
"Financial Asset" has the meaning given such term in Section 8-102(a)(9) of
the UCC.
"Foreign Corporation" has the meaning set forth in the definition of
"Stock."
305
"Indemnitees" has the meaning set forth in Section 11 hereof.
"Instrument" has the meaning given such term in Section 9-105(1)(i) of the
UCC.
"Investment Property" has the meaning given such term in Section 9-115(f)
of the UCC.
"Lender Creditors" has the meaning set forth in the first paragraph hereof.
"Lenders" has the meaning set forth in the Recitals hereto.
"Limited Liability Company Assets" means all assets, whether tangible or
intangible and whether real, personal or mixed (including, without limitation,
all limited liability company capital and interest in other limited liability
companies), at any time owned or represented by any Limited Liability Company
Interest.
"Limited Liability Company Interests" means all limited liability company
membership interest at any time owned by any Pledgor in any limited liability
company; provided that only the interest in any directly or indirectly
wholly-owned Subsidiary of the Borrowers may be pledged hereunder.
"Non-Voting Stock" means all capital stock which is not Voting Stock.
"Notes" means (x) all intercompany notes at any time issued to any Pledgor
and (y) all other promissory notes from time to time issued to, or held by, any
Pledgor.
"Obligations" has the meaning set forth in Section 1 hereof.
"Partnership Assets" means all assets, whether tangible or intangible and
whether real, personal or mixed (including, without limitation, all partnership
capital and interest in other partnerships), at any time owned or represented by
any Partnership Interest.
"Partnership Interest" means all general partnership interest or limited
partnership interest at any time owned by any Pledgor in any general partnership
or limited partnership; provided that only the interests in any directly or
indirectly wholly-owned Subsidiary of the Borrowers may be pledged hereunder.
"Pledged Notes" has the meaning set forth in Section 3.5 hereof.
"Pledgee" has the meaning set forth in the first paragraph hereof.
"Pledgor" has the meaning set forth in the first paragraph hereof.
"Proceeds" has the meaning given such term in Section 9-306(l) of the UCC.
"Required Lenders" has the meaning given such term in the DIP Credit
Agreement.
306
"Secured Creditors" has the meaning set forth in the first paragraph
hereof.
"Secured Debt Agreements" has the meaning set forth in Section 5 hereof.
"Securities Account" has the meaning given such term in Section 8-501(a) of
the UCC.
"Securities Act" means the Securities Act of 1933, as amended, as in effect
from time to time.
"Security" and "Securities" has the meaning given such term in Section
8-102(a)(15) of the UCC and shall in any event include all Stock and Notes (to
the extent same constitute "Securities" under Section 8-102(a)(15)).
"Security Entitlement" has the meaning given such term in Section
8-102(a)(17) of the UCC.
"Stock" means (x) with respect to corporations incorporated under the laws
of the United States or any State or territory thereof (each a "Domestic
Corporation"), all of the issued and outstanding shares of capital stock of any
Domestic Corporation at any time owned by any Pledgor and (y) with respect to
corporations that are not Domestic Corporations (each a "Foreign Corporation"),
all of the issued and outstanding shares of capital stock of any Foreign
Corporation at any time owned by any Pledgor, provided that only the stock of
any directly or indirectly wholly-owned Subsidiary of the Borrowers may be
pledged hereunder.
"Termination Date" has the meaning set forth in Section 19 hereof.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York from time to time; provided that all references herein to specific sections
or subsections of the UCC are references to such sections or subsections, as the
case may be, of the Uniform Commercial Code as in effect in the State of New
York on the date hereof.
"Uncertificated Security" has the meaning given such term in Section
8-102(a)(18) of the UCC.
"Voting Stock" means all classes of capital stock of any Foreign
Corporation entitled to vote.
3. PLEDGE OF SECURITY INTEREST, ETC.
3.1 Pledge. To secure the Obligations now or hereafter owed or to be
performed by such Pledgor, each Pledgor does hereby grant, pledge and assign to
the Pledgee for the benefit of the Secured Creditors, and does hereby create a
continuing security interest (subject to those Liens permitted to exist with
respect to the Collateral pursuant to the terms of all Secured Debt Agreements
then in effect) in favor of the Pledgee for the benefit of the Secured Creditors
in, all of the right, title and interest of such Pledgor in and to the
following, whether now existing or hereafter from time to time acquired
(collectively, the "Collateral"):
307
(a) each of the Collateral Accounts (to the extent a security interest
therein is not created pursuant to the DIP Credit Agreement), including any
and all assets of whatever type or kind deposited by such Pledgor in such
Collateral Account, whether now owned or hereafter acquired, existing or
arising, including, without limitation, all Financial Assets, Investment
Property, moneys, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited or required by the DIP Credit
Agreement or any other Secured Debt Agreement to be deposited in such
Collateral Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from time to time
representing or evidencing the same, and all dividends, interest,
distributions, cash and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all of the foregoing;
(b) subject to the proviso to the last sentence of Section 3.3 hereof,
all Securities owned by such Pledgor from time to time; provided that only
the interest in any directly or indirectly wholly-owned Subsidiary of the
Borrowers may be pledged hereunder;
(c) subject to the proviso to the last sentence of Section 3.3 hereof,
all Limited Liability Company Interests owned by such Pledgor from time to
time, whether now existing or hereafter acquired, including, without
limitation:
(A) all the capital thereof and its interest in all profits,
losses, Limited Liability Company Assets and other distributions to
which such Pledgor shall at any time be entitled in respect of such
Limited Liability Company Interests;
(B) all other payments due or to become due to such Pledgor in
respect of such Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority,
options, security interests, liens and remedies, if any, under any
limited liability company agreement or operating agreement, or at law
or otherwise, in each case in respect of such Limited Liability
Company Interests;
(D) all present and future claims, if any, of such Pledgor
against any such limited liability company for moneys loaned or
advanced, for services rendered or otherwise;
(E) all of such Pledgor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
such Pledgor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of such Pledgor in respect of such Limited Liability Company
Interests
308
and any such limited liability company, to make determinations, to
exercise any election (including, but not limited to, election of
remedies) or option or to give or receive any notice, consent,
amendment, waiver or approval, together with full power and authority
to demand, receive, enforce, collect or receipt for any of the
foregoing or for any Limited Liability Company Asset, to enforce or
execute any checks, or other instruments or orders, to file any claims
and to take any action in connection with any of the foregoing (with
all the foregoing rights only to be exercisable upon the occurrence
and during the continuation of an Event of Default; and
(F) all other property hereafter delivered in substitution for or
in addition to any of the foregoing, all certificates and instruments
representing or evidencing such other property and all cash,
securities, interest, dividends, rights and other property at any time
and from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all thereof;
(d) subject to the proviso to the last sentence of Section 3.3 hereof,
all Partnership Interests owned by such Pledgor from time to time, whether
now existing or hereafter acquired, including, without limitation:
(A) all the capital thereof and its interest in all profits,
losses, Partnership Assets and other distributions to which such
Pledgor shall at any time be entitled in respect of such Partnership
Interests;
(B) all other payments due or to become due to such Pledgor in
respect of such Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority,
options, security interests, liens and remedies, if any, under any
partnership agreement or operating agreement, or at law or otherwise,
in each case, in respect of such Partnership Interests;
(D) all present and future claims, if any, of such Pledgor
against any such partnership for moneys loaned or advanced, for
services rendered or otherwise;
(E) all of such Pledgor's rights under any partnership agreement
or operating agreement or at law to exercise and enforce every right,
power, remedy, authority, option and privilege of such Pledgor
relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of such Pledgor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option
309
or to give or receive any notice, consent, amendment, waiver or
approval, together with full power and authority to demand, receive,
enforce, collect or receipt for any of the foregoing or for any
Partnership Asset, to enforce or execute any checks, or other
instruments or orders, to file any claims and to take any action in
connection with any of the foregoing; and
(F) all other property hereafter delivered in substitution for or
in addition to any of the foregoing, all certificates and instruments
representing or evidencing such other property and all cash,
securities, interest, dividends, rights and other property at any time
and from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all thereof;
(e) subject to the proviso to the last sentence of Section 3.3 hereof,
all Security Entitlements of such Pledgor from time to time in any and all
of the foregoing; provided that only the interest in any directly or
indirectly wholly-owned Subsidiary of the Borrowers may be pledged
hereunder;
(f) subject to the proviso to the last sentence of Section 3.3 hereof,
all Financial Assets and Investment Property of such Pledgor from time to
time; provided that only the interest in any directly or indirectly
wholly-owned Subsidiary of the Borrowers may be pledged hereunder; and
(g) all Proceeds of any and all of the foregoing.
3.2 Procedures. (a) To the extent that any Pledgor at any time or from time
to time owns, acquires or obtains any right, title or interest in any
Collateral, such Collateral shall automatically (and without the taking of any
action by the respective Pledgor) be pledged pursuant to Section 3.1 of this
Agreement and, in addition thereto, such Pledgor shall (to the extent provided
below) take the following actions as set forth below (as promptly as practicable
and in any event within 45 days after it obtains such Collateral or, in the case
of Collateral owned by such Pledgor on the date hereof, within 45 days after the
date hereof) for the benefit of the Pledgee and the Secured Creditors:
(i) each Pledgor hereby pledges and deposits as security with the
Security Agent acting as bailee (the "Bailee") under the Agency Agreement
in the form attached hereto as Annex H (the "Agency Agreement") all
Certificated Security (other than a Certificated Security credited on the
books of a Clearing Corporation), and all Notes and hereby confirms that
the certificates or instruments therefor duly endorsed in blank or
accompanied by undated stock powers duly executed in blank by such Pledgor,
as applicable, previously delivered to the Bailee shall be deemed delivered
in furtherance of the foregoing pledge;
(ii) with respect to an Uncertificated Security (other than an
Uncertificated Security credited on the books of a Clearing Corporation),
the respective Pledgor shall cause the issuer of such Uncertificated
Security to duly authorize and execute, and deliver to the Pledgee, an
agreement for the benefit of the Pledgee and the Secured Creditors
310
substantially in the form of Annex G hereto (appropriately completed to the
satisfaction of the Pledgee and with such modifications, if any, as shall
be satisfactory to the Pledgee) pursuant to which such issuer agrees to
comply with any and all instructions originated by the Pledgee without
further consent by the registered owner and not to comply with instructions
regarding such Uncertificated Security (and any Partnership Interests and
Limited Liability Company Interests issued by such issuer) originated by
any other Person other than a court of competent jurisdiction;
(iii) with respect to a Certificated Security, Uncertificated
Security, Partnership Interest or Limited Liability Company Interest
credited on the books of a Clearing Corporation (including a Federal
Reserve Lender, Participants Trust Company or The Depository Trust
Company), the respective Pledgor shall promptly notify the Pledgee thereof
and shall promptly take all actions required (i) to comply with the
applicable rules of such Clearing Corporation and (ii) to perfect the
security interest of the Pledgee under applicable law (including, in any
event, under Sections 9-115 (4)(a) and (b), 9-115 (1)(e) and 8-106 (d) of
the UCC). The Pledgor further agrees to take such actions as the Pledgee
deems necessary or desirable to effect the foregoing;
(iv) with respect to a Partnership Interest or a Limited Liability
Company Interest (other than a Partnership Interest or Limited Liability
Interest credited on the books of a Clearing Corporation), (1) if such
Partnership Interest or Limited Liability Company Interest is represented
by a certificate, the procedure set forth in Section 3.2(a)(i), and (2) if
such Partnership Interest or Limited Liability Company Interest is not
represented by a certificate, the procedure set forth in Section
3.2(a)(ii); and
(v) with respect to cash, to the extent not otherwise provided in the
DIP Credit Agreement, (i) establishment by the Pledgee of a cash account in
the name of such Pledgor over which the Pledgee shall have exclusive and
absolute control and dominion (and no withdrawals or transfers may be made
therefrom by any Person except with the prior written consent of the
Pledgee) and (ii) deposit of such cash in such cash account.
(b) In addition to the actions required to be taken pursuant to the
proceeding Section 3.2(a), each Pledgor shall take the following additional
actions with respect to the Securities and Collateral owned by such Pledgor (as
defined below):
(i) with respect to all Collateral owned by such Pledgor whereby or
with respect to which the Pledgee may obtain "control" thereof within the
meaning of Section 8-106 of the UCC (or under any provision of the UCC as
same may be amended or supplemented from time to time, or under the laws of
any relevant State), the respective Pledgor shall take all actions as may
be requested from time to time by the Pledgee so that "control" of such
Collateral is obtained and at all times held by the Pledgee; and
(ii) each Pledgor shall from time to time cause appropriate financing
statements (on Form UCC-1 or other appropriate form) under the Uniform
Commercial Code as in effect in the various relevant States, on form
covering all Collateral owned by such Pledgor and pledged hereunder (with
the form of such financing statements to be
311
satisfactory to the Pledgee), to be filed in the relevant filing offices so
that at all times the Pledgee has a security interest in all Investment
Property and other Collateral owned by such Pledgor which is perfected by
the filing of such financing statements (in each case to the maximum extent
perfection by filing may be obtained under the laws of the relevant States,
including, without limitation, Section 9-115(4)(b) of the UCC).
3.3 Subsequently Acquired Collateral. If any Pledgor shall acquire (by
purchase, stock dividend or otherwise) any additional Collateral at any time or
from time to time after the date hereof, such Collateral shall automatically
(and without any further action being required to be taken) be subject to the
pledge and security interests created pursuant to Section 3.1 and, furthermore,
the Pledgor will promptly thereafter take (or cause to be taken) all action with
respect to such Collateral in accordance with the procedures set forth in
Section 3.2, and will promptly thereafter deliver to the Pledgee (i) a
certificate executed by a principal executive officer of such Pledgor describing
such Collateral and certifying that the same has been duly pledged in favor of
the Pledgee (for the benefit of the Secured Creditors) hereunder and (ii)
supplements to Annexes A through F hereto as are necessary to cause such annexes
to be complete and accurate at such time. Without limiting the foregoing, each
Pledgor shall be required to pledge hereunder any shares of stock at any time
and from time to time after the date hereof acquired by such Pledgor of any
Foreign Corporation, provided that (x) no Pledgor (to the extent that it is the
US Borrower or a Domestic Subsidiary of the US Borrower) shall be required at
any time to pledge hereunder more than 65% of (a) the Voting Stock of any
Foreign Corporation or (b) all of the issued and outstanding capital stock or
other ownership or equity interests of any other issuer that is not organized
under the laws of the United States, or any state or territory thereof, to the
extent the undistributed earnings of such issuer are treated as a deemed
dividend to such Pledgor for Federal income tax purposes, and (y) each Pledgor
shall be required to pledge hereunder 100% of any Non-Voting Stock at any time
and from time to time acquired by such Pledgor of any Foreign Corporation.
3.4 Transfer Taxes. Each pledge of Collateral under Section 3.1 or Section
3.3 shall be accompanied by any transfer tax stamps required in connection with
the pledge of such Collateral.
3.5 Definition of Pledged Notes. All Notes at any time pledged or required
to be pledged hereunder are hereinafter called the "Pledged Notes".
3.6 Certain Representations and Warranties Regarding the Collateral. Each
Pledgor represents and warrants that on the date hereof (i) each Subsidiary of
such Pledgor, and the direct ownership thereof, is listed in Annex A hereto;
(ii) the Stock held by such Pledgor and required to be pledged by such Pledgor
hereunder consists of the number and type of shares of the stock of the
corporations as described in Annex B hereto; (iii) such Stock constitutes that
percentage of the issued and outstanding capital stock of the issuing
corporation as is set forth in Annex B hereto; (iv) the Notes held by such
Pledgor consist of the promissory notes described in Annex C hereto where such
Pledgor is listed as the lender; (v) the Limited Liability Company Interests
held by such Pledgor and required to be pledged by such Pledgor hereunder
consist of the number and type of interests of the Persons described in Annex D
hereto; (vi) each such Limited Liability Company Interest constitutes that
percentage of the issued and outstanding
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equity interest of the issuing Person as set forth in Annex D hereto; (vii) the
Partnership Interests held by such Pledgor and required to be pledged by such
Pledgor hereunder consist of the number and type of interests of the Persons
described in Annex E hereto; (viii) each such Partnership Interest constitutes
that percentage or portion of the entire partnership interest of the Partnership
as set forth in Annex E hereto; (ix) such Pledgor owns no other Securities,
Limited Liability Company Interests or Partnership Interests other than any such
Securities, Limited Liability Company Interests and Partnership Interests
expressly excluded from the pledge hereunder by the terms hereof. Each Pledgor
further warrants that promptly and in any event within 45 days after the
Petition Date such Pledgor will comply with the respective procedure set forth
in Section 3.2(a) with respect to each item of Collateral described in Annexes A
through E hereto.
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall have the
right to appoint one or more sub-agents (including the Bailee) for the purpose
of retaining physical possession of the Collateral, which may be held (in the
discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or
assigned in blank or in favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there shall
have occurred and be continuing an Event of Default (or a Default under Section
9.04(b) of the DIP Credit Agreement), each Pledgor shall be entitled to exercise
all voting rights attaching to any and all Collateral owned by it, and to give
consents, waivers or ratifications in respect thereof provided that no vote
shall be cast or any consent, waiver or ratification given or any action taken
which would violate, result in breach of any covenant contained in, or be
inconsistent with, any of the terms of this Agreement, the DIP Credit Agreement,
any other DIP Credit Document (collectively, the "Secured Debt Agreements"), or
which would have the effect of impairing the value of the Collateral or any part
thereof or the position or interests of the Pledgee or any Secured Creditor
therein. All such rights of a Pledgor to vote and to give consents, waivers and
ratifications shall cease in case an Event of Default (or a Default under
Section 9.04(b) of the DIP Credit Agreement) shall occur and be continuing and
Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until an Event of Default
(or a Default under Section 9.04(b) of the DIP Credit Agreement) shall have
occurred and be continuing, all cash dividends, cash distributions, cash
Proceeds and other cash amounts payable in respect of the Collateral shall be
paid to the respective Pledgor. Subject to Section 3.2 hereof, the Pledgee shall
be entitled to receive directly, and to retain as part of the Collateral:
(i) all other or additional stock, notes, limited liability company
interests, partnership interests, instruments or other securities or
property (excluding cash dividends other than when an Event of Default (or
a Default under Section 9.04(b) of the DIP Credit Agreement) shall have
occurred and be continuing) paid or distributed by way of dividend or
otherwise in respect of the Collateral;
(ii) all other or additional stock, notes, limited liability company
interests, partnership interests, instruments or other securities or
property (including, but not
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limited to, cash) paid or distributed in respect of the Collateral by way
of stock-split, spin-off, split-up, reclassification, combination of shares
or similar rearrangement; and
(iii) all other or additional stock, notes, limited liability company
interests, partnership interests, instruments or other securities or
property (including, but not limited to, cash) which may be paid in respect
of the Collateral by reason of any consolidation, merger, exchange of
stock, conveyance of assets, liquidation or similar corporate
reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive the proceeds of the Collateral in any form in
accordance with Section 3 of this Agreement. All dividends, distributions or
other payments which are received by the respective Pledgor contrary to the
provisions of this Section 6 or Section 7 shall be received in trust for the
benefit of the Pledgee, shall be segregated from other property or funds of such
Pledgor and shall be forthwith paid over to the Pledgee as Collateral in the
same form as so received (with any necessary endorsement).
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT OR CERTAIN DEFAULTS. In case an
Event of Default shall have occurred and be continuing, then and in every such
case to the extent any such action is not inconsistent with the Orders and
Section 9 of the DIP Credit Agreement (including, without limitation, the final
proviso to Section 9 thereof, as if references to the DIP Agent therein refer to
the Pledgee), the Pledgee shall be entitled to exercise all of the rights,
powers and remedies (whether vested in it by this Agreement or by any other
Secured Debt Agreement or by law) for the protection and enforcement of its
rights in respect of the Collateral, including, without limitation, all the
rights and remedies of a secured party upon default under the Uniform Commercial
Code of the State of New York, and the Pledgee shall be entitled, without
limitation, to exercise any or all of the following rights, which each Pledgor
hereby agrees to be commercially reasonable:
(i) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 6 to such Pledgor;
(ii) to transfer all or any part of the Collateral into the Pledgee's
name or the name of its nominee or nominees;
(iii) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect upon
any Pledged Note (including, without limitation, to make any demand for
payment thereon);
(iv) to vote all or any part of the Collateral (whether or not
transferred into the name of the Pledgee) and give all consents, waivers
and ratifications in respect of the Collateral and otherwise act with
respect thereto as though it were the outright owner thereof (each Pledgor
hereby irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of such Pledgor, with full power of substitution to do
so);
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(v) at any time or from time to time to sell, assign and deliver, or
grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time or
place of sale or adjournment thereof or to redeem or otherwise (all of
which are hereby waived by each Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of credit
risk, and for such price or prices and on such terms as the Pledgee in its
absolute discretion may determine; provided that at least 10 days' prior
notice of the time and place of any such sale shall be given to the
applicable Pledgor. The Pledgee shall not be obligated to make such sale of
Collateral regardless of whether any such notice of sale has theretofore
been given. Each purchaser at any such sale shall hold the property so sold
absolutely free from any claim or right on the part of each Pledgor, and
each Pledgor hereby waives and releases to the fullest extent permitted by
law any right or equity of redemption with respect to the Collateral,
whether before or after sale hereunder, all rights, if any, of marshalling
the Collateral and any other security for the Obligations or otherwise, and
all rights, if any, of stay and/or appraisal which it now has or may at any
time in the future have under rule of law or statute now existing or
hereafter enacted. At any such sale, unless prohibited by applicable law,
the Pledgee on behalf of all Secured Creditors (or certain of them) may bid
for and purchase (by bidding in Obligations or otherwise) all or any part
of the Collateral so sold free from any such right or equity of redemption.
Neither the Pledgee nor any Secured Creditor shall be liable for failure to
collect or realize upon any or all of the Collateral or for any delay in so
doing nor shall any of them be under any obligation to take any action
whatsoever with regard thereto; and
(vi) to set-off any and all Collateral against any and all
Obligations, and to withdraw any and all cash or other Collateral from any
and all Collateral Accounts and to apply such cash and other Collateral to
the payment of any and all Obligations;
provided that, upon the occurrence of a Default under Section 9.04(b) of the DIP
Credit Agreement, the Pledgee may exercise the rights specified in clause (i)
above.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the Pledgee
provided for in this Agreement or any other Secured Debt Agreement, or now or
hereafter existing at law or in equity or by statute shall be cumulative and
concurrent and shall be in addition to every other such right, power or remedy.
The exercise or beginning of the exercise by the Pledgee or any Secured Creditor
of any one or more of the rights, powers or remedies provided for in this
Agreement or any other Secured Debt Agreement or now or hereafter existing at
law or in equity or by statute or otherwise shall not preclude the simultaneous
or later exercise by the Pledgee or any Secured Creditor of all such other
rights, powers or remedies, and no failure or delay on the part of the Pledgee
or any Secured Creditor to exercise any such right, power or remedy shall
operate as a waiver thereof. Unless otherwise required by the DIP Credit
Documents, no notice to or demand on any Pledgor in any case shall entitle such
Pledgor to any other or further notice or demand in similar other circumstances
or constitute a waiver of any of the rights of the Pledgee or any Secured
Creditor to any other or further action in any circumstances without demand or
notice. The Secured Creditors agree that this Agreement may be enforced only by
the action of the Pledgee, acting upon the instructions of the Required Lenders
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and that no other Secured Creditor shall have any right individually to seek to
enforce or to enforce this Agreement or to realize upon the security to be
granted hereby, it being understood and agreed that such rights and remedies may
be exercised by the Pledgee for the benefit of the Secured Creditors upon the
terms of this Agreement and the other DIP Credit Documents.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee upon
any sale or other disposition of the Collateral pursuant to the terms of this
Agreement, together with all other moneys received by the Pledgee hereunder,
shall be applied as set forth in the Orders.
(b) It is understood and agreed that the Pledgors shall remain jointly and
severally liable to the extent of any deficiency between the amount of proceeds
of the Collateral hereunder and the aggregate amount of the Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to indemnify
and hold harmless the Pledgee, each Secured Creditor and their respective
successors, assigns, employees, agents and servants (individually an
"Indemnitee", and collectively, the "Indemnitees") from and against any and all
claims, demands, losses, judgments and liabilities (including liabilities for
penalties) of whatsoever kind or nature, and (ii) to reimburse each Indemnitee
for all reasonable costs and expenses, including reasonable attorneys' fees, in
each case arising out of or resulting from this Agreement or the exercise by any
Indemnitee of any right or remedy granted to it hereunder or under any other
Secured Debt Agreement (but excluding any claims, demands, losses, judgments and
liabilities (including liabilities for penalties) or expenses of whatsoever kind
or nature to the extent incurred or arising by reason of gross negligence or
willful misconduct of such Indemnitee). In no event shall any Indemnitee
hereunder be liable, in the absence of gross negligence or willful misconduct on
its part, for any matter or thing in connection with this Agreement other than
to account for monies or other property actually received by it in accordance
with the terms hereof. If and to the extent that the obligations of any Pledgor
under this Section 11 are unenforceable for any reason, each Pledgor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law. The indemnity obligations
of each Pledgor contained in this Section 11 shall continue in full force and
effect notwithstanding the full payment of all the Revolving Notes issued under
the DIP Credit Agreement, the termination of all Letters of Credit, and the
payment of all other Obligations and notwithstanding the discharge thereof.
12. FURTHER ASSURANCES; POWER OF ATTORNEY. (a) Each Pledgor agrees that it
will join with the Pledgee in executing and, at such Pledgor's own expense, file
and
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refile under the Uniform Commercial Code such financing statements, continuation
statements and other documents in such offices as the Pledgee (acting on its own
or on the instructions of the Required Lenders) may reasonably deem necessary or
appropriate and wherever required or permitted by law in order to perfect and
preserve the Pledgee's security interest in the Collateral hereunder and hereby
authorizes the Pledgee to file financing statements and amendments thereto
relative to all or any part of the Collateral without the signature of such
Pledgor where permitted by law, and agrees to do such further acts and things
and to execute and deliver to the Pledgee such additional conveyances,
assignments, agreements and instruments as the Pledgee may reasonably require or
deem advisable to carry into effect the purposes of this Agreement or to further
assure and confirm unto the Pledgee its rights, powers and remedies hereunder or
thereunder.
(b) Each Pledgor hereby appoints the Pledgee such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, from time to time after the occurrence
and during the continuance of an Event of Default, in the Pledgee's discretion
to take any action and to execute any instrument which the Pledgee may deem
necessary or advisable to accomplish the purposes of this Agreement.
13. THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will hold or cause the
Bailee to hold in accordance with this Agreement all items of the Collateral at
any time received under this Agreement. It is expressly understood and agreed
that the obligations of the Pledgee as holder of the Collateral and interests
therein and with respect to the disposition thereof, and otherwise under this
Agreement, are only those expressly set forth in this Agreement. The Pledgee
shall act hereunder on the terms and conditions set forth herein and in Section
11 of the DIP Credit Agreement.
14. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise dispose of,
grant any option with respect to, or mortgage, pledge or otherwise encumber any
of the Collateral or any interest therein (except in accordance with the terms
of this Agreement and the DIP Credit Documents).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a) Each
Pledgor represents, warrants and covenants that:
(i) it is the legal, beneficial and record owner of, and has good and
marketable title to, all Collateral pledged by it consisting of one or more
Securities and that it has sufficient interest in all Collateral in which a
security interest is purported to be created hereunder for such security
interest to attach (subject, in each case, to no pledge, lien, mortgage,
hypothecation, security interest, charge, option, Adverse Claim or other
encumbrance whatsoever, except the liens and security interests created by
this Agreement or as otherwise permitted by the DIP Credit Agreement);
(ii) subject to the entry by the US Bankruptcy Court of the US Interim
Order (or the US Final Order when applicable), it has full power, authority
and legal right to pledge all the Collateral pledged by it pursuant to this
Agreement;
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(iii) upon the entry by the US Bankruptcy Court of the US Interim
Order (or the US Final Order where applicable), this Agreement has been
duly authorized, executed and delivered by such Pledgor and constitutes a
legal, valid and binding obligation of such Pledgor enforceable against
such Pledgor in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law);
(iv) except for the entry of the Orders, no consent, license, permit,
approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is
required to be obtained by such Pledgor in connection with (a) the
execution, delivery or performance by such Pledgor of this Agreement, (b)
the validity or enforceability of this Agreement as to such Pledgor (except
as set forth in clause (iii) above), (c) the perfection or enforceability
of the Pledgee's security interest in the Collateral pledged by such
Pledgor or (d) except for compliance with or as may be required by
applicable securities laws, the exercise by the Pledgee of any of its
rights or remedies provided herein as against such Pledgor;
(v) upon the entry by the US Bankruptcy Court of the US Interim Order
(or the US Final Order where applicable), the execution, delivery and
performance of this Agreement by such Pledgor (i) will not violate any
provision of any applicable law or regulation or of any order, judgment,
writ, award or decree of any court, arbitrator or governmental authority,
domestic or foreign, applicable to such Pledgor, or of the certificate of
incorporation, operating agreement, limited liability company agreement or
by-laws of such Pledgor or of any securities issued by such Pledgor or any
of its Subsidiaries, or of any material mortgage, deed of trust, indenture,
lease, loan agreement, credit agreement or other contract, agreement or
instrument or undertaking to which such Pledgor or any of its Subsidiaries
is a party or which purports to be binding upon such Pledgor or any of its
Subsidiaries or upon any of their respective assets and (ii) will not
result in the creation or imposition of (or the obligation to create or
impose) any lien or encumbrance on any of the assets of such Pledgor or any
of its Subsidiaries except as contemplated by this Agreement (other than
the Liens created by the Collateral Documents or the Orders);
(vi) all of the Collateral pledged by such Pledgor (consisting of
Securities, Limited Liability Company Interests or Partnership Interests)
has been duly and validly issued, is fully paid and non-assessable and is
subject to no options to purchase or similar rights;
(vii) each of the Pledged Notes constitutes, or when executed by the
obligor thereof will constitute, the legal, valid and binding obligation of
such obligor, enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law); and
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(viii) upon the entry by the US Bankruptcy Court of the US Interim
Order (or the US Final Order when applicable), the pledge, collateral
assignment and delivery to the Pledgee of the Collateral pledged by such
Pledgor consisting of certificated securities pursuant to this Agreement
creates a valid and perfected first priority security interest in such
Securities, and the proceeds thereof, subject to no prior Lien or
encumbrance or to any agreement purporting to grant to any third party a
Lien or encumbrance on the property or assets of such Pledgor which would
include the Securities (other than Permitted Liens) and the Pledgee is
entitled to all the rights, priorities and benefits afforded by the UCC or
other relevant law as enacted in any relevant jurisdiction to perfect
security interests in respect of such Collateral; and
(ix) "control" (as defined in Section 8-106 of the UCC) has been
obtained by the Pledgee (or the Bailee) over all Collateral consisting of
Securities (including Notes which are Securities) with respect to which
such "control" may be obtained pursuant to Section 8-106 of the UCC.
(b) Each Pledgor covenants and agrees that it will defend the Pledgee's
right, title and security interest in and to the Collateral pledged by it and
the proceeds thereof against the claims and demands of all persons whomsoever;
and each Pledgor covenants and agrees that upon the entry by the US Bankruptcy
Court of the US Interim Order (or the US Final Order when applicable) it will
have like title to and right to pledge any other property at any time hereafter
pledged to the Pledgee as Collateral hereunder and will likewise defend the
right thereto and security interest therein of the Pledgee and the Secured
Creditors.
16. CHIEF EXECUTIVE OFFICE; RECORDS. The chief executive office of each
Pledgor is located at the address specified in Annex F hereto. Each Pledgor will
not move its chief executive office except to such new location as such Pledgor
may establish in accordance with the last sentence of this Section 16. The
originals of all documents in the possession of such Pledgor evidencing all
Collateral owned by such Pledgor, including but not limited to all Limited
Liability Company Interests and Partnership Interests, and the only original
books of account and records of the Pledgor relating thereto are, and will
continue to be, kept at such chief executive office at the location specified in
Annex F hereto, or at such new locations as the Pledgor may establish in
accordance with the last sentence of this Section 16. All Limited Liability
Company Interests and Partnership Interests are, and will continue to be,
maintained at, and controlled and directed (including, without limitation, for
general accounting purposes) from, such chief executive office location
specified in Annex F hereto, or such new locations as the Pledgor may establish
in accordance with the last sentence of this Section 16. No Pledgor shall
establish a new location for such offices until (i) it shall have given to the
Pledgee not less than 30 days' prior written notice of its intention so to do,
clearly describing such new location and providing such other information in
connection therewith as the Pledgee may reasonably request and (ii) with respect
to such new location, it shall have taken all action, satisfactory to the
Pledgee, to maintain the security interest of the Pledgee in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect. Promptly after establishing a new location for such offices in
accordance with the immediately preceding sentence, the respective Pledgor shall
deliver to the Pledgee a supplement to Annex F hereto so as to cause such Annex
F hereto to be complete and accurate.
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17. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each Pledgor
under this Agreement shall be absolute and unconditional and shall remain in
full force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever (other than termination of this Agreement pursuant to Section 19
hereof), including, without limitation:
(i) any renewal, extension, amendment or modification of, or addition
or supplement to or deletion from any Secured Debt Agreement (other than
this Agreement in accordance with its terms), or any other instrument or
agreement referred to therein, or any assignment or transfer of any
thereof;
(ii) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such agreement or instrument or this
Agreement (other than a waiver, consent or extension with respect to this
Agreement in accordance with its terms);
(iii) any furnishing of any additional security to the Pledgee or its
assignee or any acceptance thereof or any release of any security by the
Pledgee or its assignee;
(iv) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof;
or
(v) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
any Pledgor or any Subsidiary of any Pledgor, or any action taken with
respect to this Agreement by any trustee or receiver, or by the Bankruptcy
Courts in the Cases, whether or not such Pledgor shall have notice or
knowledge of any of the foregoing.
18. REGISTRATION, ETC. (a) If there shall have occurred and be continuing
and after written notice as provided in the Orders, an Event of Default and
acceleration of the Revolving Notes in accordance with the DIP Credit Agreement
then, in every such case, upon receipt by any Pledgor from the Pledgee of a
written request or requests that such Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Collateral consisting of
Securities, Limited Liability Company Interests or Partnership Interests, such
Pledgor as soon as practicable and at its expense will use its best efforts to
cause such registration to be effected (and be kept effective) and will use its
best efforts to cause such qualification and compliance to be effected (and be
kept effective) as may be so requested and as would permit or facilitate the
sale and distribution of such Collateral consisting of Securities, Limited
Liability Company Interests or Partnership Interests, including, without
limitation, registration under the Securities Act of 1933, as then in effect (or
any similar statute then in effect), appropriate qualifications under applicable
blue sky or other state securities laws and appropriate compliance with any
other governmental requirements; provided, that the Pledgee shall furnish to
such Pledgor such information regarding the Pledgee as such Pledgor may request
in writing and as shall be required in connection with any such registration,
qualification or compliance. Each Pledgor will cause the Pledgee to be kept
reasonably advised in writing as to the progress of each such registration,
qualification or
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compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars and other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify, to
the extent permitted by law, the Pledgee and all other Secured Creditors
participating in the distribution of such Collateral consisting of Securities,
Limited Liability Company Interests or Partnership Interests against all claims,
losses, damages and liabilities caused by any untrue statement (or alleged
untrue statement) of a material fact contained therein (or in any related
registration statement, notification or the like) or by any omission (or alleged
omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same may have been caused by an untrue statement or omission based upon
information furnished in writing to such Pledgor by the Pledgee expressly for
use therein.
(b) If at any time when the Pledgee shall determine to exercise its right
to sell all or any part of the Collateral consisting of Securities, Limited
Liability Company Interests or Partnership Interests pursuant to Section 7, and
such Collateral or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Securities Act of 1933, as then
in effect, the Pledgee may, in its sole and absolute discretion, sell such
Collateral or part thereof by private sale in such manner and under such
circumstances as the Pledgee may deem necessary or advisable in order that such
sale may legally be effected without such registration. Without limiting the
generality of the foregoing, in any such event the Pledgee, in its sole and
absolute discretion: (i) may proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such Collateral or
part thereof shall have been filed under such Securities Act; (ii) may approach
and negotiate with a single possible purchaser to effect such sale; and (iii)
may restrict such sale to a purchaser who will represent and agree that such
purchaser is purchasing for its own account, for investment, and not with a view
to the distribution or sale of such Collateral or part thereof. In the event of
any such sale, the Pledgee shall incur no responsibility or liability for
selling all or any part of the Collateral at a price which the Pledgee, in its
sole and absolute discretion, may in good ▇▇▇▇▇ ▇▇▇▇ reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might be realized if the sale were deferred until the registration as aforesaid.
19. TERMINATION; RELEASE. (a) On the Termination Date (as defined below),
this Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 11 hereof shall survive any such
termination) and the Pledgee, at the request and expense of the respective
Pledgor, will execute and deliver to such Pledgor a proper instrument or
instruments acknowledging the satisfaction and termination of this Agreement
(including, without limitation, UCC termination statements and instruments of
satisfaction, discharge and/or reconveyance), and will duly assign, transfer and
deliver to such Pledgor (without recourse and without any representation or
warranty) such of the Collateral as may be in the possession of the Pledgee (but
not of the Bailee) and as has not theretofore been sold or otherwise applied or
released pursuant to this Agreement, together with any moneys at the time held
by the Pledgee or any of its sub-agents hereunder and, with respect to any
Collateral consisting of an Uncertificated Security (other than an
Uncertificated Security credited on the books of a Clearing Corporation), a
Partnership Interest or a Limited Liability Company Interest, a termination of
the agreement relating thereto executed and delivered by the issuer of such
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Uncertificated Security pursuant to Section 3.2(a)(ii) or by the respective
partnership or limited liability company pursuant to Section 3.2(a)(iv). As used
in this Agreement, "Termination Date" shall mean the date upon which the Total
Commitments have been terminated, no Letter of Credit or Revolving Note is
outstanding (and all Revolving Loans have been paid in full), all Letters of
Credit have been terminated, and all other Obligations then due and payable have
been paid in full.
(b) In the event that any part of the Collateral is sold or otherwise
disposed of in connection with a sale or disposition permitted by Section 8.02
of the DIP Credit Agreement or is otherwise released at the direction of the
Required Lenders (or all the Lenders if required by Section 11.10 of the DIP
Credit Agreement), and the proceeds of such sale or sales or from such release
are applied in accordance with the terms of the DIP Credit Agreement to the
extent required to be so applied, the Pledgee, at the request and expense of the
respective Pledgor will duly assign, transfer and deliver to such Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold or released and as may be in
possession of the Pledgee or any of its sub-agents and has not theretofore been
released pursuant to this Agreement.
(c) At any time that any Pledgor desires that Collateral be released as
provided in the foregoing Section 19(a) or (b), it shall deliver to the Pledgee
a certificate signed by a principal executive officer of such Pledgor stating
that the release of the respective Collateral is permitted pursuant to Section
19(a) or (b). If reasonably requested by the Pledgee (although the Pledgee shall
have no obligation to make any such request), the relevant Pledgor shall furnish
appropriate legal opinions (from counsel reasonably acceptable to the Pledgee)
to the effect set forth in the immediately preceding sentence.
(d) The Pledgee shall have no liability whatsoever to any Secured Creditor
as the result of any release of Collateral by it in accordance with this Section
19.
20. NOTICES, ETC. All notices and other communications hereunder shall be
in writing and shall be delivered or mailed by first class mail, postage
prepaid, addressed:
(i) if to any Pledgor, at its address set forth opposite its signature
below;
(ii) if to the Pledgee, at:
Bankers Trust Company
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇;
(iii) if to any Lender (other than the Pledgee), at such address as
such Lender shall have specified in the DIP Credit Agreement;
322
or at such address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
21. THE PLEDGEE. The Pledgee will hold, or cause the Bailee to hold, in
accordance with this Agreement, all items of the Collateral at any time received
by it under this Agreement. It is expressly understood and agreed that the
obligations of the Pledgee with respect to the Collateral, interests therein and
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in the UCC and this Agreement.
22. WAIVER; AMENDMENT. Except as contemplated in Section 25 hereof, none of
the terms and conditions of this Agreement may be changed, waived, discharged or
terminated in any manner whatsoever unless such change, waiver, discharge or
termination is in writing duly signed by each Pledgor to be bound thereby and
the DIP Collateral Agents (with the consent of the Required Lenders or, to the
extent required by Section 11.10 of the DIP Credit Agreement, all of the
Lenders), provided, however, that no such change, waiver, modification or
variance shall be made to Section 9 hereof or this Section 22 without the
consent of each Secured Creditor adversely affected thereby.
23. MISCELLANEOUS. This Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect,
subject to release and/or termination as set forth in Section 19, (ii) be
binding upon each Pledgor, its successors and assigns; provided, however, that
no Pledgor shall assign any of its rights or obligations hereunder without the
prior written consent of the Pledgee (with the prior written consent of the
Required Lenders or to the extent required by Section 11.10 of the DIP Credit
Agreement, all of the Lenders), and (iii) inure, together with the rights and
remedies of the Pledgee hereunder, to the benefit of the Pledgee, the Secured
Creditors and their respective successors, transferees and assigns. THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK. The headings of the several sections and subsections in this
Agreement are for purposes of reference only and shall not limit or define the
meaning hereof. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument. In the event that any provision of this Agreement shall prove to
be invalid or unenforceable, such provision shall be deemed to be severable from
the other provisions of this Agreement which shall remain binding on all parties
hereto.
24. WAIVER OF JURY TRIAL. Each Pledgor hereby irrevocably waives all right
to a trial by jury in any action, proceeding or counterclaim arising out of or
relating to this agreement or the transactions contemplated hereby.
25. ADDITIONAL PLEDGORS. It is understood and agreed that any Subsidiary of
the Borrowers that is required to execute a counterpart of this Agreement after
the date hereof pursuant to the DIP Credit Agreement shall automatically become
a Pledgor hereunder by executing a counterpart hereof and delivering the same to
the Pledgee.
26. RECOURSE. This Agreement is made with full recourse to the Pledgors and
pursuant to and upon all the representations, warranties, covenants and
agreements on the
323
part of the Pledgors contained herein and in the other Secured Debt Agreements
and otherwise in writing in connection herewith or therewith.
27. LIMITED OBLIGATIONS. It is the desire and intent of each Pledgor and
the Secured Creditors that this Agreement shall be enforced against each Pledgor
to the fullest extent permissible under the laws and public policies applied in
each jurisdiction in which enforcement is sought. Notwithstanding anything to
the contrary contained herein, in furtherance of the foregoing, it is noted that
the obligations of each Pledgor constituting a Subsidiary Guarantor have been
limited as provided in Section 14 of the DIP Credit Agreement.
28. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER. (a) Nothing
herein shall be construed to make the Pledgee or any other Secured Creditor
liable as a member of any limited liability company or partnership and neither
the Pledgee nor any other Secured Creditor by virtue of this Agreement or
otherwise (except as referred to in the following sentence) shall have any of
the duties, obligations or liabilities of a member of any limited liability
company or partnership. The parties hereto expressly agree that, unless the
Pledgee shall become the absolute owner of Collateral consisting of a Limited
Liability Company Interest or Partnership Interest pursuant hereto, this
Agreement shall not be construed as creating a partnership or joint venture
among the Pledgee, any other Secured Creditor and/or any Pledgor.
(b) Except as provided in the last sentence of paragraph (a) of this
Section 28, the Pledgee, by accepting this Agreement, did not intend to become a
member of any limited liability company or partnership or otherwise be deemed to
be a co-venturer with respect to any Pledgor or any limited liability company or
partnership either before or after an Event of Default shall have occurred. The
Pledgee shall have only those powers set forth herein and the Secured Creditors
shall assume none of the duties, obligations or liabilities of a member of any
limited liability company or partnership or any Pledgor except as provided in
the last sentence of paragraph (a) of this Section 28.
(c) The Pledgee and the other Secured Creditors shall not be obligated to
perform or discharge any obligation of any Pledgor as a result of the pledge
hereby effected.
(d) The acceptance by the Pledgee of this Agreement, with all the rights,
powers, privileges and authority so created, shall not at any time or in any
event obligate the Pledgee or any other Secured Creditor to appear in or defend
any action or proceeding relating to the Collateral to which it is not a party,
or to take any action hereunder or thereunder, or to expend any money or incur
any expenses or perform or discharge any obligation, duty or liability under the
Collateral.
324
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this Agreement
to be executed by their duly elected officers duly authorized as of the date
first above written.
Addresses:
----------
▇▇▇▇▇▇ SERVICES (DELAWARE), INC.,
as Pledgor
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
LCD 1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ By: /s/ M. ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Title: Secretary
325
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ RESI ACQUISITION (DELAWARE)
▇.▇. ▇▇▇ ▇▇▇▇ CORPORATION
LCD 1 ALLWASTE TANK CLEANING, INC.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ALLWASTE TEXQUISITION, INC.
21ST CENTURY ENVIRONMENTAL
MANAGEMENT, INC. OF RHODE ISLAND
ALLWORTH, INC.
21ST CENTURY ENVIRONMENTAL
MANAGEMENT, INC.
ALRC, INC.
21ST CENTURY ENVIRONMENTAL
MANAGEMENT, INC. OF NEVADA
APLC, INC.
21ST CENTURY ENVIRONMENTAL
MANAGEMENT, INC. OF PUERTO RICO
BEC/▇▇▇▇▇▇, INC.
ACE/ALLWASTE ENVIRONMENTAL SERVICES OF
INDIANA, INC.
BURLINGTON ENVIRONMENTAL INC.
(DELAWARE)
ADVANCED ENERGY CORPORATION
BURLINGTON ENVIRONMENTAL INC.
(WASHINGTON)
ADVANCED ENVIRONMENTAL SYSTEMS, INC.
BUTCO, INC.
ALL SAFETY AND SUPPLY, INC.
CAPPCO TUBULAR PRODUCTS USA, INC.
ALLIES STAFFING, INC.
CHEM-FAB, INC.
ALLQUEST CAPITAL, INC.
CHEM-FREIGHT, INC.
ALLSCAFF, INC.
CHEMICAL POLLUTION CONTROL, INC. OF
FLORIDA - A 21ST CENTURY
ENVIRONMENTAL MANAGEMENT COMPANY
ALLWASTE ASBESTOS ABATEMENT
HOLDINGS, INC.
CHEMICAL POLLUTION CONTROL, INC. OF
NEW YORK - A 21ST CENTURY
ENVIRONMENTAL MANAGEMENT COMPANY
ALLWASTE ASBESTOS ABATEMENT, INC.
CHEMICAL RECLAMATION SERVICES, INC.
326
ALLWASTE ASBESTOS ABATEMENT OF NEW
ENGLAND, INC.
COUSINS WASTE CONTROL CORPORATION
CYANOKEM, INC.
ALLWASTE RAILCAR CLEANING, INC.
DEEP CLEAN, INC.
ALLWASTE RECOVERY SYSTEMS, INC.
DM ACQUISITION CORPORATION
ALLWASTE SERVICES OF EL PASO, INC.
▇▇▇▇▇▇ INDUSTRIAL SERVICES
(DELAWARE), INC.
GASOLINE TANK SERVICE COMPANY, INC.
▇▇▇▇▇▇ INDUSTRIAL SERVICES (USA), INC.
GEORGIA RECOVERY SYSTEMS
GRS/LAKE ▇▇▇▇▇▇▇, LTD.
▇▇▇▇▇▇▇ CORPORATION
▇▇▇▇▇▇ INDUSTRIAL SERVICES GROUP, INC.
HYDRO-ENGINEERING & SERVICE, INC.
▇▇▇▇▇▇ INDUSTRIAL SERVICES OF TEXAS, INC.
INDUSTRIAL CONSTRUCTION SERVICES
COMPANY, INC.
▇▇▇▇▇▇/▇.▇. ▇▇▇▇▇▇▇, INC.
INDUSTRIAL SERVICES TECHNOLOGIES, INC.
▇▇▇▇▇▇ MECHANICAL SERVICES OF
LOUISIANA, INC.
INTERMETCO U.S., INC.
▇▇▇▇▇▇ METALS, INC.
INTERMETCO U.S.A. LTD.
▇▇▇▇▇▇ METALS (NEW YORK) INC.
IST HOLDING CORP.
▇▇▇▇▇▇ METALS (USA), INC.
▇▇▇▇▇ & LUTHER SERVICES, INC.
▇▇▇▇▇▇ METALS RECOVERY (DELAWARE)INC.
JESCO INDUSTRIAL SERVICE, INC.
▇▇▇▇▇▇ METALS RECOVERY (USA) INC.
LUNTZ ACQUISITION (DELAWARE)CORPORATION
▇▇▇▇▇▇ MID-ATLANTIC, INC.
LUNTZ CORPORATION
▇▇▇▇▇▇ OIL RECYCLING, INC.
MAC-TECH, INC.
▇▇▇▇▇▇ ▇▇▇▇▇ RECOVERY SYSTEMS, INC.
NORTHLAND ENVIRONMENTAL, INC.
▇▇▇▇▇▇ PLANT SERVICES, INC.
NORTRU, INC.
327
▇▇▇▇▇▇ RECLAMATION SERVICES, HOUSTON, INC.
ONEIDA ASBESTOS ABATEMENT INC.
▇▇▇▇▇▇ REFRACTORY AND CORROSION CORPORATION
ONEIDA ASBESTOS REMOVAL, INC.
▇▇▇▇▇▇ REFRACTORY SERVICES, INC.
▇▇▇▇▇▇ AUTOMOTIVE, LTD.
▇▇▇▇▇▇ SCAFFOLD CORPORATION
▇▇▇▇▇▇ CHEMI-SOLV, INC.
▇▇▇▇▇▇/SECO INDUSTRIES, INC.
▇▇▇▇▇▇ CHEMISOLV HOLDINGS, INC.
▇▇▇▇▇▇ SERVICES/ATLANTA, INC.
▇▇▇▇▇▇ CORROSION SERVICES, INC.
▇▇▇▇▇▇ ENTERPRISE SERVICE CORPORATION
▇▇▇▇▇▇ SERVICES HAWAII, LTD.
▇▇▇▇▇▇ ENVIRONMENTAL OF IDAHO CORPORATION
▇▇▇▇▇▇ SERVICES/LOUISIANA, INC.
▇▇▇▇▇▇ ENVIRONMENTAL SERVICES, INC.
▇▇▇▇▇▇ SERVICES/MISSOURI, INC.
▇▇▇▇▇▇ ENVIRONMENTAL SERVICES CORPORATION
▇▇▇▇▇▇ SERVICES/MOBILE, INC.
▇▇▇▇▇▇ ENVIRONMENTAL (WASHINGTON) INC.
▇▇▇▇▇▇ SERVICES/NORTH ATLANTIC, INC.
▇▇▇▇▇▇ SERVICES/NORTH CENTRAL, INC.
RMF GLOBAL, INC.
▇▇▇▇▇▇ SERVICES/OHIO, INC.
RMF INDUSTRIAL CONTRACTING, INC.
▇▇▇▇▇▇ SERVICES/OKLAHOMA, INC.
SERV-TECH CONSTRUCTION AND MAINTENANCE, INC.
▇▇▇▇▇▇ SERVICES (PENNSYLVANIA), INC.
SERV-TECH ENGINEERS, INC.
▇▇▇▇▇▇ SERVICES/SOUTH CENTRAL, INC.
SERV-TECH EPC, INC.
▇▇▇▇▇▇ SERVICES/SOUTHWEST, INC.
SERV-TECH INTERNATIONAL SALES, INC.
▇▇▇▇▇▇ ST, INC.
SERV-TECH OF NEW MEXICO, INC.
▇▇▇▇▇▇ ST PIPING, INC.
SERV-TECH SERVICES, INC.
328
▇▇▇▇▇▇ TECHNICAL SERVICES, INC.
SOLVENT RECOVERY CORPORATION
▇▇▇▇▇▇ TRANSPORTATION AND REMEDIATION, INC.
SOUTHEAST ENVIRONMENTAL SERVICES
COMPANY, INC.
▇▇▇▇▇▇ ▇▇▇▇ INDUSTRIAL SERVICES, INC.
TERMCO CORPORATION
▇▇▇▇▇▇/▇▇▇▇▇▇▇, INC.
TERMINAL TECHNOLOGIES, INC.
PIPING COMPANIES, INC.
THERMALKEM, INC.
PIPING HOLDINGS CORP.
TIPCO ACQUISITION CORP.
PIPING MECHANICAL CORPORATION
TOTAL REFRACTORY SYSTEMS, INC.
PRS HOLDING, INC.
UNITED DRAIN OIL SERVICE, INC.
PSC ENTERPRISES, INC.
UNITED INDUSTRIAL MATERIALS, INC.
REPUBLIC ENVIRONMENTAL RECYCLING
(NEW JERSEY), INC.
REPUBLIC ENVIRONMENTAL SYSTEMS
(PENNSYLVANIA), INC.
REPUBLIC ENVIRONMENTAL SYSTEMS
(TECHNICAL SERVICES GROUP) INC.
REPUBLIC ENVIRONMENTAL SYSTEMS
(TRANSPORTATION GROUP), INC.
RESOURCE RECOVERY CORPORATION
RHO-CHEM CORPORATION
RMF ENVIRONMENTAL, INC.
as Pledgors
By: /s/ M. ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Title: Secretary
329
BANKERS TRUST COMPANY,
not in its individual capacity but solely
as US DIP Collateral Agent and Pledgee
By: /s/ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------
Title: Managing Director
330
ANNEX A
-------
LIST OF US PLEDGOR SUBSIDIARIES
SUBSIDIARY PARENT
---------- ------
21st Century Environmental Management, Inc. Luntz Acquisition (Delaware) Corporation
21st Century Environmental Management, Inc. 21st Century Environmental Management, Inc.
of Rhode Island
21st Century Environmental Management, Inc. 21st Century Environmental Management, Inc.
of Puerto Rico
21st Century Environmental Management, Inc. 21st Century Environmental Management, Inc.
of Nevada
Ace/Allwaste Environmental Services of ▇▇▇▇▇▇ Environmental Services, Inc.
Indiana, Inc.
Advanced Energy Corporation Advanced Environmental Systems, Inc.
Advanced Environmental Systems, Inc. Industrial Services Technologies, Inc.
All Safety and Supply, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
Allies Staffing, Inc. PSC Enterprises, Inc.
Allies Staffing Ltd. Allies Staffing, Inc.
AllQuest Capital, Inc. PSC Enterprises, Inc.
AllScaff, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
Allwaste Asbestos Abatement Holdings, Inc. ▇▇▇▇▇▇ Industrial Services Group, Inc.
Allwaste Asbestos Abatement, Inc. ▇▇▇▇▇▇ Industrial Services Group, Inc.
Allwaste Asbestos Abatement of New Allwaste Asbestos Abatement, Inc.
1
331
SUBSIDIARY PARENT
---------- ------
England, Inc.
Allwaste Environmental Services/North ▇▇▇▇▇▇ Environmental Services, Inc.
Central, Inc.
Allwaste Railcar Cleaning, Inc. Allwaste Tank Cleaning, Inc.
Allwaste Recovery Systems, Inc. Allwaste Tank Cleaning, Inc.
Allwaste Services of El Paso, Inc. ▇▇▇▇▇ & ▇▇▇▇▇▇ Services, Inc.
Allwaste Tank Cleaning, Inc. ▇▇▇▇▇▇ Industrial Services Group, Inc.
Allwaste Texquisition, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
Allworth, Inc. Nortru, Inc.
ALRC, Inc. ▇▇▇▇▇▇ Industrial Services Group, Inc.
APLC, Inc. ▇▇▇▇▇▇ Industrial Services Group, Inc.
BEC/▇▇▇▇▇▇, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
Burlington Environmental Inc. ▇▇▇▇▇▇ Environmental (Washington) Inc.
Burlington Environmental Inc. Burlington Environmental Inc.
Butco, Inc. Intermetco U.S., Inc.
Caligo Reinigungages m.b.H. ▇▇▇▇▇▇ Industrial Services Group, Inc.
Cappco Tubular Products USA, Inc. Intermetco U.S.A. Ltd.
Chem-Fab, Inc. IST Holding Corp.
Chem-Freight, Inc. RESI Acquisition (Delaware) Corporation
Chemical Pollution Control, Inc. of 21st Century Environmental Management, Inc.
New York - A 21st Century Environmental
Management Company
Chemical Pollution Control, Inc. of 21st Century Environmental Manage-
2
332
SUBSIDIARY PARENT
---------- ------
Florida - A 21st Century Environmental ment, Inc.
Management Company
Chemical Reclamation Services, Inc. Nortru, Inc.
Chemisolv Limited ▇▇▇▇▇▇ Chemisolv Holdings, Inc.
Cousins Waste Control Corporation ▇▇▇▇▇▇ Industrial Services (USA), Inc.
CyanoKEM, Inc. Nortru, Inc.
D&L, Inc. ▇▇▇▇▇▇ Metals (USA), Inc.
Deep Clean, Inc. ▇▇▇▇▇▇ Automotive, Ltd.
Delta Maintenance, Inc. DM Acquisition Corporation
DM Acquisition Corporation ▇▇▇▇▇▇ ST, Inc.
Dotspec Ltd. ▇▇▇▇▇▇ ST, Inc.
▇.▇. ▇▇▇▇▇▇▇▇ & Associates, Inc. Serv-Tech Engineers, Inc.
Gasoline Tank Service Company, Inc. Termco Corporation
Georgia Recovery Systems Allwaste Recovery Systems, Inc. - 7.5%
GRS/Lake ▇▇▇▇▇▇▇, Ltd. - 92.5%
GRS/Lake ▇▇▇▇▇▇▇, Ltd. Allwaste Recovery Systems, Inc. - 50%
Allwaste Tank Cleaning, Inc. - 50%
▇▇▇▇▇▇▇ Corporation ▇▇▇▇▇▇ Refractory and Corrosion Corporation
Hydro-Engineering & Service, Inc. Piping Mechanical Corporation
Industrial Construction Services Company, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
Industrial Services Technologies, Inc. ▇▇▇▇▇▇ ST, Inc.
Intermetco U.S., Inc. ▇▇▇▇▇▇ Metals (USA), Inc.
3
333
SUBSIDIARY PARENT
---------- ------
Intermetco U.S.A. Ltd. ▇▇▇▇▇▇ Metals (USA), Inc.
International Catalyst, Inc. Advanced Energy Corporation
IST Holding Corp. Industrial Services Technologies, Inc.
▇▇▇▇▇ & Luther Services, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
Jesco Industrial Service, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
Luntz Acquisition (Delaware) Corporation Luntz Corporation
Mac-Tech, Inc. ▇▇▇▇▇▇ ST, Inc.
Northland Environmental, Inc. 21st Century Environmental Management, Inc.
Nortru, Inc. ▇▇▇▇▇▇ Industrial Services (USA), Inc.
Nortru, Ltd. Nortru, Inc.
Oneida Asbestos Abatement Inc. Oneida Asbestos Removal, Inc.
Oneida Asbestos Removal, Inc. Allwaste Asbestos Abatement, Inc.
Petrochem Field Services de Venezuela, S.A. Philip ST, Inc. - 70%
Serv-Tech EPC, Inc. - 30%
▇▇▇▇▇▇ Automotive, Ltd. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Chemi-Solv, Inc. ▇▇▇▇▇▇ Chemisolv Holdings, Inc.
▇▇▇▇▇▇ Chemisolv Holdings, Inc. ▇▇▇▇▇▇ ST, Inc.
▇▇▇▇▇▇ Corrosion Services, Inc. ▇▇▇▇▇▇▇ Corporation
▇▇▇▇▇▇ Enterprise Service Corporation ▇▇▇▇▇▇ ST, Inc.
▇▇▇▇▇▇ Environmental (Washington) Inc. ▇▇▇▇▇▇ Industrial Services (USA), Inc.
▇▇▇▇▇▇ Environmental of Idaho ▇▇▇▇▇▇ Industrial Services (USA), Inc.
4
334
SUBSIDIARY PARENT
---------- ------
Corporation
▇▇▇▇▇▇ Environmental Services Corporation Burlington Environmental Inc.
▇▇▇▇▇▇ Environmental Services, Inc. ▇▇▇▇▇▇ Industrial Services Group, Inc.
▇▇▇▇▇▇ Industrial Services (Delaware), Inc. ▇▇▇▇▇▇ Services (Delaware), Inc.
▇▇▇▇▇▇ Industrial Services (USA), Inc. ▇▇▇▇▇▇ Services (Delaware), Inc.
▇▇▇▇▇▇ Industrial Services Group, Inc. ▇▇▇▇▇▇ Industrial Services (USA), Inc.
▇▇▇▇▇▇ Industrial Services of Texas, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇/▇.▇. ▇▇▇▇▇▇▇, Inc. ▇▇▇▇▇▇ Environmental Services, Inc
▇▇▇▇▇▇ Mechanical Services of Louisiana, Inc. ▇▇▇▇▇▇ ST, Inc.
▇▇▇▇▇▇ Metals (New York) Inc. ▇▇▇▇▇▇ Metals Recovery (USA) Inc.
▇▇▇▇▇▇ Metals (USA), Inc. ▇▇▇▇▇▇ Services (Delaware), Inc.
▇▇▇▇▇▇ Metals, Inc. ▇▇▇▇▇▇ Metals Recovery (USA) Inc.
▇▇▇▇▇▇ Metals Recovery (Delaware) Inc. ▇▇▇▇▇▇ Services (Delaware), Inc.
▇▇▇▇▇▇ Metals Recovery (USA) Inc. ▇▇▇▇▇▇ Metals (USA), Inc.
▇▇▇▇▇▇ Mid-Atlantic, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Oil Recycling, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇ Recovery Systems, Inc. PRS Holding, Inc.
▇▇▇▇▇▇ Plant Services, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Reclamation Services, Houston, Inc. Chemical Reclamation Services, Inc.
5
335
SUBSIDIARY PARENT
---------- ------
▇▇▇▇▇▇ Refractory and Corrosion ▇▇▇▇▇▇ ST, Inc.
Corporation
▇▇▇▇▇▇ Refractory Services, Inc. ▇▇▇▇▇▇ Refractory and Corrosion
Corporation
▇▇▇▇▇▇ Scaffold Corporation ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇/SECO Industries, Inc. ▇▇▇▇▇▇ ST, Inc.
▇▇▇▇▇▇ Services (Pennsylvania), Inc. ▇▇▇▇▇▇ Services (Delaware), Inc.
▇▇▇▇▇▇ Services/Atlanta, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Services Hawaii, Ltd. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Services/Louisiana, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Services/Missouri, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Services/Mobile, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Services/North Atlantic, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Services/North Central, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Services/Ohio, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Services/Oklahoma, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Services/South Central, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ Services/Southwest, Inc. ▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇▇▇ ST, Inc. ▇▇▇▇▇▇ Industrial Services (USA), Inc.
▇▇▇▇▇▇ ST Piping, Inc. ▇▇▇▇▇▇ ST, Inc.
▇▇▇▇▇▇ Technical Services, Inc. ▇▇▇▇▇▇ ST, Inc.
▇▇▇▇▇▇ Transportation and Remediation, Inc. Philip West Industrial Services, Inc.
6
336
SUBSIDIARY PARENT
---------- ------
Philip West Industrial Services, Inc. Philip Environmental Services, Inc.
Philip/Whiting, Inc. Philip Environmental Services, Inc.
Piping Companies, Inc. Piping Holdings Corp.
Piping Holdings Corp. IST Holding Corp.
Piping Mechanical Corporation IST Holding Corp.
PRS Holding, Inc. Philip ST, Inc.
PSC Enterprises, Inc. Philip Industrial Services Group, Inc.
Republic Environmental Recycling RESI Acquisition (Delaware) Corporation
(New Jersey), Inc.
Republic Environmental Systems RESI Acquisition (Delaware) Corporation
(Transportation Group), Inc.
Republic Environmental Systems (Technical RESI Acquisition (Delaware) Corporation
Services Group) Inc.
Republic Environmental Systems RESI Acquisition (Delaware) Corporation
(Pennsylvania), Inc.
RESI Acquisition (Delaware) Corporation Luntz Corporation
Resource Recovery Corporation Burlington Environmental Inc.
Rho-Chem Corporation Nortru, Inc.
RMF Environmental, Inc. RMF Industrial Contracting, Inc.
RMF Global, Inc. Philip Industrial Services (USA), Inc.
RMF Industrial Contracting, Inc. RMF Global, Inc.
Serv-Tech Construction and Maintenance, Inc. Serv-Tech EPC, Inc.
Serv-Tech Engineers, Inc. Serv-Tech EPC, Inc.
7
337
SUBSIDIARY PARENT
---------- ------
Serv-Tech EPC, Inc. Philip ST, Inc.
Serv-Tech Europe GMBH Philip ST, Inc.
Serv-Tech International Sales, Inc. Philip ST, Inc.
Serv-Tech of New Mexico, Inc. Philip ST, Inc.
Serv-Tech Services, Inc. Philip ST, Inc.
ServTech Canada, Inc. Philip ST, Inc.
Sessa, S.A. de C.V. Nortru, Inc.
Solvent Recovery Corporation Burlington Environmental Inc.
Southeast Environmental Services Chemical Reclamation Services, Inc.
Company, Inc.
Termco Corporation Burlington Environmental Inc.
Terminal Technologies, Inc. Philip ST, Inc.
ThermalKEM, Inc. Nortru, Inc.
TIPCO Acquisition Corp. Philip/SECO Industries, Inc.
Total Refractory Systems, Inc. Hartney Corporation
United Drain Oil Service, Inc. Burlington Environmental Inc.
United Industrial Materials, Inc. Hartney Corporation
8
338
ANNEX B
LIST OF PLEDGED STOCK
SUB-CLAUSE
OF
SECTION
3.2(A)
TYPE NUMBER OF
OF OF PERCENTAGE PLEDGE
PLEDGOR PLEDGED SHARES SHARES SHARES OWNED AGREEMENT
------- -------------- ------ ------ ----- ---------
Luntz Corporation Luntz Acquisition (Delaware) Common 100 100% (i)
Corporation
RESI Acquisition (Delaware) Common 1,000 100% (i)
Corporation
Luntz Acquisition 21st Century Environmental Common 12,545,949 100% (i)
(Delaware) Management, Inc.
Corporation
21st Century 21st Century Environmental Common 100 100% (i)
Environmental Management, Inc. of Nevada
Management, Inc.
21st Century Environmental Common 100 100% (i)
Management, Inc. of Puerto Rico
21st Century Environmental Common 100 100% (i)
Management, Inc. of Rhode Island
Chemical Pollution Control, Inc. Common 100 100% (i)
of Florida - A 21st Century
Environmental Management Company
Chemical Pollution Control, Inc. Common 100 100% (i)
of New York - A 21st Century
Environmental Management Company
Northland Environmental, Inc. Common 100 100% (i)
1
339
SUB-CLAUSE
OF
SECTION
3.2(A)
TYPE NUMBER OF
OF OF PERCENTAGE PLEDGE
PLEDGOR PLEDGED SHARES SHARES SHARES OWNED AGREEMENT
------- -------------- ------ ------ ----- ---------
RESI Acquisition Chem-Freight, Inc. Common 750 100% (i)
(Delaware)
Corporation
Republic Environmental Recycling Common 100 100% (i)
(New Jersey), Inc.
Republic Environmental Systems Common 1,000 100% (i)
(Pennsylvania), Inc.
Republic Environmental System Common 100 100% (i)
(Technical Services Group) Inc.
Republic Environmental Systems Common 1,000 100% (i)
(Transportation group), Inc.
Philip Services Philip Industrial Services (USA), Common 200 100% (i)
(Delaware), Inc. Inc.
Philip Metals (USA), Inc. Common 100 100% (i)
Philip Services (Pennsylvania), Common 100 100% (i)
Inc.
Philip Industrial Services Common 100 100% (i)
(Delaware), Inc.
Philip Metals Recovery (Delaware) Common 100 100% (i)
Inc.
Philip Industrial Cousins Waste Control Corporation Common 5 100% (i)
Services (USA),
Inc.
Nortru, Inc. Class A 66,262.69 100% (i)
Class B 12,886.02 100% (i)
2
340
SUB-CLAUSE
OF
SECTION
3.2(A)
TYPE NUMBER OF
OF OF PERCENTAGE PLEDGE
PLEDGOR PLEDGED SHARES SHARES SHARES OWNED AGREEMENT
------- -------------- ------ ------ ----- ---------
Philip Environmental of Common 10 100% (i)
Idaho Corporation
Philip Environmental Common 1 100% (i)
(Washington) Inc.
Philip Industrial Services Common 100 100% (i)
Group, Inc.
Philip ST, Inc. Common 100 100% (i)
RMF Global, Inc. Common 100 100% (i)
Nortru, Inc. Allworth, Inc. Common 200 100% (i)
Chemical Reclamation Services, Common 1,000 100% (i)
Inc.
CyanoKEM, Inc. Common 50,000 100% (i)
Nortru, Ltd. Common 100 100% (i)
Rho-Chem Corporation Common 1,540 100% (i)
Sessa, S.A. de C.B. Common 3,000 100% (i)
ThermalKEM, Inc. Common 1,000 100% (i)
Chemical Philip Reclamation Services, Common 325 100% (i)
Reclamation Houston, Inc.
Services, Inc.
Southeast Environmental Services Common 2,000 100% (i)
Company, Inc.
Philip Burlington Environmental Inc. Common 7,590,000 100% (i)
Environmental
(Washington) Inc.
3
341
SUB-CLAUSE
OF
SECTION
3.2(A)
TYPE NUMBER OF
OF OF PERCENTAGE PLEDGE
PLEDGOR PLEDGED SHARES SHARES SHARES OWNED AGREEMENT
------- -------------- ------ ------ ----- ---------
Burlington Burlington Environmental Inc. Common 463,917 100% (i)
Environmental Inc.
Philip Environmental Services Common 21,000 100% (i)
Corporation
Solvent Recovery Corporation Common 3,100 100% (i)
Burlington Resource Recovery Corporation Common 1,000 100% (i)
Environmental Inc.
Termco Corporation Common 1,400 100% (i)
Termco Corporation Gasoline Tank Service Company, Common 868 100% (i)
Inc.
United Drain Oil Service, Inc. Common 45,000 100% (i)
Philip Industrial ALRC, Inc. Common 1,000 100% (i)
Services Group,
Inc.
APLC, Inc. Common 1,000 100% (i)
Allwaste Asbestos Abatement Common 1,000 100% (i)
Holdings, Inc.
Allwaste Asbestos Abatement, Inc. Common 100,000 100% (i)
Allwaste Tank Cleaning, Inc. Common 1,000 100% (i)
Philip Environmental Services, Inc. Common 100,000 100% (i)
PSC Enterprises, Inc. Common 1,000 100% (i)
Allwaste Asbestos Allwaste Asbestos Abatement of New Common 1 100% (i)
Abatement, Inc. England, Inc.
4
342
SUB-CLAUSE
OF
SECTION
3.2(A)
TYPE NUMBER OF
OF OF PERCENTAGE PLEDGE
PLEDGOR PLEDGED SHARES SHARES SHARES OWNED AGREEMENT
------- -------------- ------ ------ ----- ---------
Oneida Asbestos Removal, Inc. Common 100 100% (i)
Oneida Asbestos Oneida Asbestos Abatement Inc. Common 100 100% (i)
Removal, Inc.
Allwaste Tank Allwaste Railcar Cleaning, Inc. Common 1,000 50% (i)
Cleaning, Inc.
Allwaste Recovery Systems, Inc. Common 1,000 100% (i)
Philip Ace/Allwaste Environmental Services Common 1,000 100% (i)
Environmental of Indiana, Inc.
Services, Inc.
All Safety and Supply, Inc. Common 1,000 100% (i)
AllScaff, Inc. Common 1,000 100% (i)
Allwaste Environmental Common 100,000 100% (i)
Services/North Central, Inc.
Allwaste Texquisition, Inc. Common 1,000 100% (i)
BEC/Philip, Inc. Common 15 100% (i)
Industrial Construction Services Common 1,000 100% (i)
Company, Inc.
James & Luther Services, Inc. Common 1,000 100% (i)
Jesco Industrial Service, Inc. Common 1,000 100% (i)
Philip Industrial Services of Texas, Common 1,000 100% (i)
Inc.
Philip Services/Louisiana, Inc. Common 1,000 100% (i)
5
343
SUB-CLAUSE
OF
SECTION
3.2(A)
TYPE NUMBER OF
OF OF PERCENTAGE PLEDGE
PLEDGOR PLEDGED SHARES SHARES SHARES OWNED AGREEMENT
------- -------------- ------ ------ ----- ---------
Philip Mid-Atlantic, Inc. Common 1,000 100% (i)
Philip Services/Missouri, Inc. Common 1,000 100% (i)
Philip Services/Mobile, Inc. Common 8,000 100% (i)
Philip Services/North Atlantic, Common 1,000 100% (i)
Inc.
Philip Services/North Central, Common 16.40 100% (i)
Inc.
Philip Services/Ohio, Inc. Common 100 100% (i)
Philip Oil Recycling, Inc. Common 10 100% (i)
Philip Services/Oklahoma, Inc. Common 10,000 100% (i)
Philip Plant Services, Inc. Common 1,000 100% (i)
Philip Scaffold Corporation Common 1,000 100% (i)
Philip Services/Atlanta, Inc. Common 1,000 100% (i)
Philip Services/Southwest, Inc. Common 1,000 100% (i)
Philip Services South Central, Common 40,000 100% (i)
Inc.
Philip West Industrial Services, Common 1,000 100% (i)
Inc.
Philip/J.D. Meagher, Inc. Common 2,000 100% (i)
Philip/Whiting, Inc. Common 1,000 100% (i)
James & Allwaste Services of El Paso, Common 100,000 100% (i)
6
344
SUB-CLAUSE
OF
SECTION
3.2(A)
TYPE NUMBER OF
OF OF PERCENTAGE PLEDGE
PLEDGOR PLEDGED SHARES SHARES SHARES OWNED AGREEMENT
------- -------------- ------ ------ ----- ---------
Luther Services, Inc.
Inc.
Philip Deep Clean, Inc. Common 500 100% (i)
Automotive, Ltd.
Philip West Philip Transportation and Common 100 100% (i)
Industrial Remediation, Inc.
Services, Inc.
PSC Enterprises, Allies Staffing, Inc. Common 1,000 100% (i)
Inc.
AllQuest Capital, Inc. Common 1,000 100% (i)
Allies Staffing, Allies Staffing Ltd. Common 100 100% (i)
Inc.
Philip ST, Inc. Dotspec Ltd. Ordinary 700 100% (i)
Philip Chemisolv Holdings, Inc. Common 1,000 100% (i)
DM Acquisition Corporation Common 1,000 100% (i)
Industrial Services Common 5,000 100% (i)
Technologies, Inc.
Mac-Tech, Inc. Common 1,000 100% (i)
Petrochem Field Services de Common 1 70% (i)
Venezuela, S.A.
Philip Enterprise Service Common 1,000 100% (i)
Corporation
Philip Mechanical Services of Common 100 100% (i)
Louisiana, Inc.
7
345
SUB-CLAUSE
OF
SECTION
3.2(A)
TYPE NUMBER OF
OF OF PERCENTAGE PLEDGE
PLEDGOR PLEDGED SHARES SHARES SHARES OWNED AGREEMENT
------- -------------- ------ ------ ----- ---------
Philip Refractory and Corrosion Common 1,000 100% (i)
Corporation
Philip ST Piping, Inc. Series A 490 100% (i)
Common 7,000 100% (i)
Common 2,000 100% (i)
Philip Technical Services, Inc. Common 680 100% (i)
Philip/SECO Industries, Inc. Common 49,444 100% (i)
PRS Holding, Inc. Common 1,000 100% (i)
Serv-Tech EPC, Inc. Common 1,000 100% (i)
Serv-Tech Europe GMBH Common 3 100% (i)
Serv-Tech International Sales, Inc. Common 1,000 100% (i)
Serv-Tech of New Mexico, Inc. Common 500 100% (i)
Serv-Tech Services, Inc. Common 10,000 100% (i)
ServTech Canada, Inc. Common 1 100% (i)
Terminal Technologies, Inc. Common 1,000 100% (i)
Philip Chemisolv Chemisolv Limited Ordinary 1,000 100% (i)
Holdings, Inc.
Philip Chemi-Solv, Inc. Common 1,000 100% (i)
DM Acquisition Delta Maintenance, Inc. Common 23 100% (i)
Corporation
8
346
SUB-CLAUSE
OF
SECTION
3.2(A)
TYPE NUMBER OF
OF OF PERCENTAGE PLEDGE
PLEDGOR PLEDGED SHARES SHARES SHARES OWNED AGREEMENT
------- -------------- ------ ------ ----- ---------
Industrial Advanced Environmental Series A 11,656,910 100% (i)
Services Systems, Inc. Preferred
Technologies, Inc.
Series B 12,295,585 100% (i)
Preferred
IST Holding Corp. Common 1,000 100% (i)
Advanced Advanced Energy Corporation Common 2,500,003 100% (i)
Environmental
Systems, Inc.
Advanced Energy International Catalyst, Inc. Common 109,598 100% (i)
Corporation
IST Holding Corp. Chem-Fab, Inc. Common 9,987 100% (i)
Piping Holdings Corp. Common 1,500 100% (i)
Piping Mechanical Corporation Common 880,000 100% (i)
Piping Holdings Piping Companies, Inc. Common 1,877 100% (i)
Corp.
Piping Mechanical Hydro-Engineering & Service, Common 1,000 100% (i)
Corp. Inc.
Philip Refractory Hartney Corporation Common 15,000 100% (i)
and Corrosion
Corporation
Philip Refractory Services, Common 10,000 100% (i)
Inc.
Hartney Philip Corrosion Services, Common 10,000 100% (i)
Corporation Inc.
9
347
SUB-CLAUSE
OF
SECTION
3.2(A)
TYPE NUMBER OF
OF OF PERCENTAGE PLEDGE
PLEDGOR PLEDGED SHARES SHARES SHARES OWNED AGREEMENT
------- -------------- ------ ------ ----- ---------
Total Refractory Systems, Inc. Common 1,000 100% (i)
United Industrial Materials, Inc. Common 1,000 100% (i)
Philip/SECO TIPCO Acquisition Corp. Common 1,000 100% (i)
Industries, Inc.
PRS Holding, Inc. Philip Petro Recovery Systems, Inc. Common 174 100% (i)
Serv-Tech EPC, Petrochem Field Services de Common 1 30% (i)
Inc. Venezuela, S.A.
Serv-Tech Construction and Common 1,000 100% (i)
Maintenance, Inc.
Serv-Tech Engineers, Inc. Common 1,000 100% (i)
Serv-Tech F.C. Schaffer & Associates, Inc. Class A 379 100% (i)
Engineers, Inc. Voting
Class B 981 100% (i)
Non-Voting
RMF Global, Inc. RMF Industrial Contracting, Inc. Common 1,000 100% (i)
RMF Industrial RMF Environmental, Inc. Common 100 100% (i)
Contracting, Inc.
Philip Metals D & L, Inc. Common 2,000 100% (i)
(USA), Inc.
Intermetco U.S., Inc. Common 1,000 100% (i)
10
348
SUB-CLAUSE
OF
SECTION
3.2(A)
TYPE NUMBER OF
OF OF PERCENTAGE PLEDGE
PLEDGOR PLEDGED SHARES SHARES SHARES OWNED AGREEMENT
------- -------------- ------ ------ ----- ---------
Philip Metals Recovery Common 10 100% (i)
(USA), Inc.
Intermetco U.S., Butco, Inc. Common 1 100% (i)
Inc.
Intermetco U.S.A. Cappco Tubular Products USA, Common 500 100% (i)
Ltd. Inc.
Philip Metals Philip Metals (New York) Inc. Common 15,000 100% (i)
Recovery (USA)
Inc.
Philip Metals, Inc. Common 1 100% (i)
11
349
ANNEX C
-------
LIST OF PLEDGED NOTES
None.
350
ANNEX D
-------
LIST OF LIMITED LIABILITY COMPANY INTERESTS
None.
351
ANNEX E
-------
LIST OF PARTNERSHIP INTERESTS
SUB-CLAUSE
OF
SECTION
3.2(A)
TYPE OF
OF PERCENTAGE PLEDGE
PLEDGOR NAME OF PARTNERSHIP INTEREST OWNED AGREEMENT
------- ------------------- -------- ----- ---------
Allwaste Tank Cleaning, Inc. GRS/Lake Charles, Ltd. Limited 50% (iv)(2)
Allwaste Recovery Systems, GRS/Lake Charles, Ltd. Limited 50% (iv)(2)
Inc.
Georgia Recovery Systems General 7.5% (iv)(2)
Philip Environmental Philip Automotive, Ltd. Limited 100% (iv)(1)
Services, Inc.
Philip Services Hawaii, Ltd. Limited 100% (iv)(1)
Philip Metals (USA), Inc. Intermetco U.S.A. Ltd. Limited 100% (iv)(1)
GRS/Lake Charles, Ltd. Georgia Recovery Systems General 92.5% (iv)(2)
352
ANNEX F
LIST OF CHIEF EXECUTIVE OFFICES
Debtor Name Chief Executive Office Additional Locations
----------- ---------------------- --------------------
21st Century Environmental Rhode Island: Hamilton:
Management, Inc. of Rhode Island 25 Graystone Street 651 Burlington St. E.
Warwick, RI 02886 Hamilton, Ontario L8L 7W2
21st Century Environmental Nevada: Rhode Island:
Management, Inc. of Nevada 2095 Newlands Drive 25 Graystone Street
Fernley, NV 89408 Warwick, RI 02886
21st Century Environmental Rhode Island: Hamilton:
Management, Inc. 25 Graystone Street 100 King St. W.
Warwick, RI 02886 P.O. Box 2440
LCD 1
Hamilton, Ontario
L8N 4J6
21st Century Environmental Rhode Island: Hamilton:
Management, Inc. of Puerto Rico 25 Graystone Street 651 Burlington St. E.
Warwick, RI 02886 Hamilton, Ontario L8L 7W2
Ace/Allwaste Environmental Services Texas:
of Indiana, Inc. 5151 San Felipe
Houston, TX 77056
Advanced Energy Corporation Texas: Texas:
5151 San Felipe 4313 FM 2351
Houston, TX 77056 Friendswood, TX 77546
Advanced Environmental Systems, Inc. Texas: Denver:
5151 San Felipe Republic Plaza
Houston, TX 77056 370 Seventeenth
Suite 2300
Denver, CO 80202
All Safety and Supply, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Allies Staffing, Inc. Texas:
5151 San Felipe
Houston, TX 77056
AllQuest Capital, Inc. Texas:
5151 San Felipe
Houston, TX 77056
AllScaff, Inc. Texas:
1
353
Debtor Name Chief Executive Office Additional Locations
----------- ---------------------- --------------------
5151 San Felipe
Houston, TX 77056
Allwaste Asbestos Abatement Texas:
Holdings, Inc. 5151 San Felipe
Houston, TX 77056
Allwaste Asbestos Abatement, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Allwaste Asbestos Abatement of New Texas:
England, Inc. 5151 San Felipe
Houston, TX 77056
Allwaste Environmental Texas:
Services/North Central, Inc. 5151 San Felipe
Houston, TX 77056
Allwaste Railcar Cleaning, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Allwaste Recovery Systems, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Allwaste Services of El Paso, Inc. Texas: Hamilton:
5151 San Felipe 100 King St. W.
Houston, TX 77056 P.O. Box 2440
LCD 1
Hamilton, Ontario
L8N 4J6
Allwaste Tank Cleaning, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Allwaste Texquisition, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Allworth, Inc. Michigan: Alabama:
515 Lycaste Rd. 500 Medco Rd.
Detroit, MI 48214 Birmingham, AL 35217
ALRC, Inc. Texas:
5151 San Felipe
Houston, TX 77056
APLC, Inc. Texas:
5151 San Felipe
2
354
Debtor Name Chief Executive Office Additional Locations
----------- ---------------------- --------------------
Houston, TX 77056
BEC/Philip, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Burlington Environmental Inc. Washington:
100 Oakesdale Ave.
S.W.
Renton, WA 98055
Burlington Environmental Inc. Washington: Texas:
100 Oakesdale Ave. 5151 San Felipe
S.W. Houston, TX 77056
Renton, WA 98055
Michigan:
515 Lycaste Rd.
Detroit, MI 48214
Butco, Inc. Hamilton:
519 Parkdale N.
Hamilton, Ontario l8H 5Y6
Cappco Tubular Products USA, Inc. Georgia:
109 Dent Drive
Bldg. #1
Cartersville, GA 30121-5192
Chem-Fab, Inc. Texas: Texas:
5151 San Felipe 217 Commerce Rd.
Houston, TX 77056 P.O. Box 2257
Freeport, TX 77541
Chem-Freight, Inc. Pennsylvania:
2337 North Penn Road
Hatfield, PA 19440-1908
Chemical Pollution Control, Inc. of Florida: Rhode Island:
Florida - A 21st Century 3248 SW 15th St. 25 Graystone Street
Environmental Management Company Deerfield Beach, FL 33442 Warwick, RI 02886
Chemical Pollution Control, Inc. of New York: Rhode Island:
New York - A 21st Century 120 South 4th St. 25 Graystone Street
Environmental Management Company Bayshore, NY 11706 Warwick, RI 02886
Chemical Reclamation Services, Inc. Michigan: Texas:
515 Lycaste Rd. 405 Powell St.
Detroit, MI 48214 Avalon, TX 76623
Cousins Waste Control Corporation Ohio:
1701 East Matzinger Rd.
Toledo, OH 43612
3
355
Debtor Name Chief Executive Office Additional Locations
----------- ---------------------- --------------------
CyanoKEM, Inc. Michigan:
12381 Schaefer Hgwy.
Detroit, MI 48227
D & L, Inc. Pennsylvania:
547 Clydesdale Dr.
Philadelphia, PA 18938
Deep Clean, Inc. Texas: Hamilton:
5151 San Felipe 100 King St. W.
Houston, TX 77056 P.O. Box 2440
LCD 1
Hamilton, Ontario
L8N 4J6
Delta Maintenance, Inc. Texas:
5151 San Felipe
Houston, TX 77056
DM Acquisition Corporation Texas:
5151 San Felipe
Houston, TX 77056
F.C. Schaffer & Associates, Inc. Hamilton: Texas:
100 King St. W. 5151 San Felipe
P.O. Box 2440 LCD1 Houston, TX 77056
Hamilton, Ontario L8N 4J6
Gasoline Tank Service Company, Inc. Washington:
100 Oakesdale Ave.
S.W.
Renton, WA 98055
Georgia Recovery Systems Texas:
5151 San Felipe
Houston, TX 77056
GRS/Lake Charles, Ltd. Texas:
5151 San Felipe
Houston, TX 77056
Hartney Corporation Texas:
5151 San Felipe
Houston, TX 77056
Hydro-Engineering & Service, Inc. Texas: Denver:
5151 San Felipe Republic Plaza
Houston, TX 77056 370 Seventeenth
Suite 2300
Denver, CO 80202
Industrial Construction Services Texas:
4
356
Debtor Name Chief Executive Office Additional Locations
----------- ---------------------- --------------------
Company, Inc. 5151 San Felipe
Houston, TX 77056
Industrial Services Technologies, Texas: Denver:
Inc. 5151 San Felipe Republic Plaza
Houston, TX 77056 370 Seventeenth
Suite 2300
Denver, CO 80202
Intermetco U.S., Inc. Hamilton:
519 Parkdale N.
Hamilton, Ontario L8H 5Y6
Intermetco U.S.A. Ltd. Hamilton:
519 Parkdale N.
Hamilton, Ontario l8H 5Y6
International Catalyst, Inc. Texas: Texas:
5151 San Felipe 4313 FM 2351
Houston, TX 77056 Friendswood, TX 77546
IST Holding Corp. Texas: Denver:
5151 San Felipe Republic Plaza
Houston, TX 77056 370 Seventeenth
Suite 2300
Denver, CO 80202
James & Luther Services, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Jesco Industrial Service, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Luntz Acquisition (Delaware) Hamilton:
Corporation 100 King St. W.
P.O. Box 2440
LCD 1
Hamilton, Ontario L8N 4J6
Luntz Corporation Ohio: 237 East Tuscarawas
Canton, OH 44701
Mac-Tech, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Northland Environmental, Inc. Rhode Island: Hamilton:
275 Allens Ave. 651 Burlington St. E.
Providence, RI 02905-5003 Hamilton, Ontario L8L 7W2
5
357
Debtor Name Chief Executive Office Additional Locations
----------- ---------------------- --------------------
Nortru, Inc. Michigan:
515 Lycaste Rd.
Detroit, MI 48214
Oneida Asbestos Abatement Inc. Texas:
5151 San Felipe
Houston, TX 77056
Oneida Asbestos Removal, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Automotive, Ltd. Texas:
5151 San Felipe
Houston, TX 77056
Philip Chemi-Solv, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Chemisolv Holdings, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Corrosion Services, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Enterprise Service Texas:
Corporation 5151 San Felipe
Houston, TX 77056
Philip Environmental of Idaho Hamilton:
Corporation 100 King St. W.
P.O. Box 2440 LCD 1
Hamilton, Ontario L8N 4J6
Philip Environmental Services Texas: Pennsylvania:
Corporation 5151 San Felipe 550 Pinetown Rd.
Houston, TX 77056 Fort Washington, PA 19034
Philip Environmental Services, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Environmental (Washington) Washington: Texas:
Inc. 100 Oakesdale Ave. 5151 San Felipe
S.W. Houston, TX 77056
Renton, WA 98055
Michigan:
515 Lycaste Rd.
Detroit, MI 48214
6
358
Debtor Name Chief Executive Office Additional Locations
----------- ---------------------- --------------------
Philip Industrial Services Hamilton:
(Delaware), Inc. 100 King St. W.
P.O. Box 2440 LCD1
Hamilton, Ontario L8N 4J6
Philip Industrial Services (USA), Hamilton:
Inc. 100 King St. W.
P.O. Box 2440 LCD1
Hamilton, Ontario L8N 4J6
Records Located In Texas:
5151 San Felipe
Houston, TX 77056
Philip Industrial Services Group, Texas: Hamilton:
Inc. 5151 San Felipe 100 King St. W.
Houston, TX 77056 P.O. Box 2440 LCD1
Hamilton, Ontario L8N 4J6
Philip Industrial Services of Texas:
Texas, Inc. 5151 San Felipe
Houston, TX 77056
Philip/J.D. Meagher, Inc. Hamilton:
100 King St. W.
P.O. Box 2440 LCD1
Hamilton, Ontario L8N 4J6
Philip Mechanical Services of Texas:
Louisiana, Inc. 5151 San Felipe
Houston, TX 77056
Philip Metals (New York) Inc. New York:
6223 Thompson Rd.
East Syracuse, NY 13057
Philip Metals (USA), Inc. Hamilton:
100 King St. W.
P.O. Box 2440 LCD1
Hamilton, Ontario L8N 4J6
Philip Metals, Inc. Ohio:
20521 Chagrin Blvd.
Cleveland, OH 44122
Philip Metals Recovery (Delaware) Hamilton:
Inc. 100 King St. W.
P.O. Box 2440 LCD1
Hamilton, Ontario L8N 4J6
Philip Metals Recovery (USA) Inc. Hamilton:
7
359
Debtor Name Chief Executive Office Additional Locations
----------- ---------------------- --------------------
100 King St. W.
P.O. Box 2440 LCD 1
Hamilton, Ontario L8N 4J6
Philip Mid-Atlantic, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip MPS Industrial Services, Hamilton:
L.L.C. 100 King St. W.
P.O. Box 2440 LCD1
Hamilton, Ontario L8N 4J6
Philip Oil Recycling, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Petro Recovery Systems, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Plant Services, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Reclamation Services, Texas:
Houston, Inc. 4050 Homestead Road
Houston, TX 77028
Philip Refractory and Corrosion Sugarland, TX Texas:
Corporation 5151 San Felipe
Houston, TX 77056
Philip Refractory Services, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Scaffold Corporation Texas:
5151 San Felipe
Houston, TX 77056
Philip/SECO Industries, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Services (Delaware), Inc. Hamilton:
100 King St. W.
P.O. Box 2440 LCD1
Hamilton, Ontario L8N 4J6
Philip Services (Delaware), L.L.C. Hamilton:
100 King St. W.
8
360
Debtor Name Chief Executive Office Additional Locations
----------- ---------------------- --------------------
P.O. Box 2440 LCD1
Hamilton, Ontario L8N 4J6
Philip Services (Pennsylvania), Inc. Hamilton: Pennsylvania:
100 King St. W. One Mellon Bank Center
P.O. Box 2440 LCD 1 500 Grant St.
Hamilton, Ontario L8N 4J6 53rd Floor
Pittsburgh, PA 15219
Philip Services/Atlanta, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Services Hawaii, Ltd. Texas:
5151 San Felipe
Houston, TX 77056
Philip Services/Louisiana, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Services/Missouri, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Services/Mobile, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Services/North Atlantic, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Services/North Central, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Services/Ohio, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Services/Oklahoma, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Services/South Central, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Services/Southwest, Inc. Texas:
5151 San Felipe
Houston, TX 77056
9
361
Debtor Name Chief Executive Office Additional Locations
----------- ---------------------- --------------------
Philip ST, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip ST Piping, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Technical Services, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Transportation and Texas:
Remediation, Inc. 5151 San Felipe
Houston, TX 77056
Philip West Industrial Services, Texas:
Inc. 5151 San Felipe
Houston, TX 77056
Philip/Whiting, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Piping Companies, Inc. Texas: Sand Springs:
5151 San Felipe 1520 South 129th Ave.
Houston, TX 77056 Sand Springs, OK 74063
Piping Holdings Corp. Texas: Sand Springs:
5151 San Felipe 1520 South 129th Ave.
Houston, TX 77056 Sand Springs, OK 74063
Piping Mechanical Corporation Texas: Sand Springs:
5151 San Felipe 1520 South 129th Ave.
Houston, TX 77056 Sand Springs, OK 74063
PRS Holding, Inc. Texas:
5151 San Felipe
Houston, TX 77056
PSC Enterprises, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Republic Environmental Recycling New Jersey: Pennsylvania:
(New Jersey), Inc. Cenco Blvd. 2337 North Penn Road
P.O. Box 275 Hatfield, PA 19440-1908
Clayston, NJ 08312
Republic Environmental Systems Pennsylvania: Hamilton:
(Pennsylvania), Inc. 2337 North Penn Road 100 King St. W.
P.O. Box 2440 LCD1
10
362
Debtor Name Chief Executive Office Additional Locations
----------- ---------------------- --------------------
Hatfield, PA 19440-1908 Hamilton, Ontario L8N 4J6
Republic Environmental Systems New Jersey: Pennsylvania:
(Technical Services Group) Inc. Cenco Blvd. 2337 North Penn Road
P.O. Box 275 Hatfield, PA 19440-1908
Clayston, NJ 08312
Republic Environmental Systems Pennsylvania: Hamilton:
(Transportation Group), Inc. 21 Church Road 100 King St. W.
Hatfield, PA 19440 P.O. Box 2440 LCD1
Hamilton, Ontario L8N 4J6
RESI Acquisition (Delaware) Hamilton:
Corporation 100 King St. W.
P.O. Box 2440 LCD 1
Hamilton, Ontario L8N 4J6
Resource Recovery Corporation Washington: Texas:
100 Oakesdale Ave. 5151 San Felipe
S.W. Houston, TX 77056
Renton, WA 98055
Michigan:
515 Lycaste Rd.
Detroit, MI 48214
Rho-Chem Corporation Washington: California:
100 Oakesdale Ave. 425 Isis Ave.
S.W. Inglewood, CA 90301
Renton, WA 98055
RMF Environmental, Inc. Ohio:
671 Spencer Street
Toledo, OH 43609
RMF Global, Inc. Ohio:
671 Spencer Street
Toledo, OH 43609
RMF Industrial Contracting, Inc. Ohio:
671 Spencer Street
Toledo, OH 43609
Serv-Tech Construction and Hamilton: Texas:
Maintenance, Inc. 100 King St. W. 5151 San Felipe
P.O. Box 2440 LCD1 Houston, TX 77056
Hamilton, Ontario L8N 4J6
Serv-Tech Engineers, Inc. Hamilton: Texas:
100 King St. W. 5151 San Felipe
P.O. Box 2440 LCD1 Houston, TX 77056
Hamilton, Ontario L8N 4J6
11
363
Debtor Name Chief Executive Office Additional Locations
----------- ---------------------- --------------------
Serv-Tech EPC, Inc. Hamilton: Texas:
100 King St. W. 5151 San Felipe
P.O. Box 2440 LCD1 Houston, TX 77056
Hamilton, Ontario L8N 4J6
Serv-Tech of New Mexico, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Serv-Tech Services, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Solvent Recovery Corporation Missouri: Texas:
700 Mulberry St. 5151 San Felipe
Kansas, MO 64101 Houston, TX 77056
Southeast Environmental Services Texas:
Company, Inc. 4050 Homestead Road
Houston, TX 77028
Termco Corporation Washington: Texas:
100 Oakesdale Ave. 5151 San Felipe
S.W. Houston, TX 77056
Renton, WA 98055
Michigan:
515 Lycaste Rd.
Detroit, MI 48214
Terminal Technologies, Inc. Texas:
5151 San Felipe
Houston, TX 77056
ThermalKEM, Inc. Michigan: South Carolina:
515 Lycaste Rd. 2324 Vernadale Rd.
Detroit, MI 48214 Rock Hill, SC 29731
TIPCO Acquisition Corp. Texas:
5151 San Felipe
Houston, TX 77056
Total Refractory Systems, Inc. Texas:
5151 San Felipe
Houston, TX 77056
United Drain Oil Service, Inc. Washington: Texas:
1629 E. Alexander Ave. 5151 San Felipe
Tacoma, WA 98421 Houston, TX 77056
Michigan:
515 Lycaste Rd.
Detroit, MI 48214
12
364
Debtor Name Chief Executive Office Additional Locations
----------- ---------------------- --------------------
United Industrial Materials, Inc. Texas:
5151 San Felipe
Houston, TX 77056
13
365
ANNEX G
Form of Agreement Regarding Uncertificated Securities, Limited Liability
Company Interests and Partnership Interests
-------------------------------------------
AGREEMENT (as amended, modified or supplemented from time to time, this
"Agreement"), dated as of _________ __, _____, among each of the undersigned
pledgors (each a "Pledgor" and, collectively, the "Pledgors"), __________, not
in their individual capacities but solely as DIP Collateral Agents (the
"Pledgee"), and __________, as the issuer of the Uncertificated Securities,
Limited Liability Company Interests and/or Partnership Interests (each as
defined below) (the "Issuer").
W I T N E S S E T H :
---------------------
WHEREAS, each Pledgor and the Pledgee are entering into a Pledge Agreement,
dated as of __________, 1999 (as amended, amended and restated, modified or
supplemented from time to time, the "Pledge Agreement"), under which, among
other things, in order to secure the payment of the Obligations (as defined in
the Pledge Agreement), each Pledgor will pledge to the Pledgee for the benefit
of the Secured Creditors (as defined in the Pledge Agreement), and grant a
security interest in favor of the Pledgee for the benefit of the Secured
Creditors in, all of the right, title and interest of such Pledgor in and to any
and all (1) "uncertificated securities" (as defined in Section 8-102(a)(18) of
the Uniform Commercial Code, as adopted in the State of New York)
("Uncertificated Securities"), (2) Partnership Interests (as defined in the
Pledge Agreement) and (3) Limited Liability Company Interests (as defined in the
Pledge Agreement), in each case issued from time to time by the Issuer, whether
now existing or hereafter from time to time acquired by such Pledgor (with all
of such Uncertificated Securities, Partnership Interests and Limited Liability
Company Interests being herein collectively called the "Issuer Pledged
Interests"); and
WHEREAS, each Pledgor desires the Issuer to enter into this Agreement in
order to perfect the security interest of the Pledgee under the Pledge Agreement
in the Issuer Pledged Interests, to vest in the Pledgee control of the Issuer
Pledge Interests and to provide for the rights of the parties under this
Agreement;
NOW THEREFORE, in consideration of the premises and the mutual promises and
agreements contained herein, and for other valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Each Pledgor hereby irrevocably authorizes and directs the Issuer, and
the Issuer hereby agrees, to comply with any and all instructions and orders
originated by the Pledgee (and its successors and assigns) regarding any and all
of the Issuer Pledged Interests without the further consent by the registered
owner (including the respective Pledgor), and not to comply with any
instructions or orders regarding any or all of the Issuer Pledged Interests
originated by
366
Annex G
Page 2
any person or entity other than the Pledgee (and its successors and assigns) or
a court of competent jurisdiction.
2. The Issuer hereby certifies that (i) no notice of any security interest,
lien or other encumbrance or claim affecting the Issuer Pledged Interests (other
than the security interest of the Pledgee) has been received by it, and (ii) the
security interest of the Pledgee in the Issuer Pledged Interests has been
registered in the books and records of the Issuer.
3. The Issuer hereby represents and warrants that (i) the pledge by the
Pledgors of, and the granting by the Pledgors of a security interest in, the
Issuer Pledged Interests to the Pledgee, for the benefit of the Secured
Creditors, does not violate the charter, by-laws, partnership agreement,
membership agreement or any other agreement governing the Issuer or the Issuer
Pledged Interests, and (ii) the Issuer Pledged Interests are fully paid and
nonassessable.
4. All notices, statements of accounts, reports, prospectuses, financial
statements and other communications to be sent to any Pledgor by the Issuer in
respect of the Issuer will also be sent to the Pledgee at the following address:
Bankers Trust Company
1 Bankers Trust Plaza
New York, New York 10005
Attention: _____________
Tel: (212) _____________
Fax: (212) _____________
5. Until the Pledgee shall have delivered written notice to the Issuer that
all of the Obligations have been paid in full and this Agreement is terminated,
subject to Section 6 of the Pledge Agreement, the Issuer will send any and all
redemptions, distributions, interest or other payments in respect of the Issuer
Pledged Interests from the Issuer for the account of the Pledgor only by wire
transfers to the following address:
______________________
______________________
______________________
______________________
[Account Information]
ABA No.: ___________________________
Account in the Name of: ___________
Account No.: ______________________
6. Except as expressly provided otherwise in Sections 4 and 5, all notices,
instructions, orders and communications hereunder shall be sent or delivered by
mail, telex, telecopy or overnight courier service and all such notices and
communications shall, when mailed, telexed, telecopied or sent by overnight
courier, be effective when deposited in the mails or delivered to the overnight
courier, prepaid and properly addressed for delivery on such or the next
Business Day, or sent by telex or telecopier, except that notices and
communications to the
367
Annex G
Page 3
Pledgee shall not be effective until received by the Pledgee. All notices and
other communications shall be in writing and addressed as follows:
(a) if to any Pledgor, at:
__________________________
__________________________
Attention:________________
Tel.::____________
Fax:______________
(b) if to the Pledgee, at:
Bankers Trust Company
1 Bankers Trust Plaza
New York, New York 10005
Attention: ______________
Tel: (212) ______________
Fax: (212) ______________
(c) if to the Issuer, at:
__________________________
__________________________
Attention: ______________
Telephone No.:____________
Telecopier No.:___________
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. As used in this
Section 6, "Business Day" means any day other than a Saturday, Sunday, or other
day in which banks in New York are authorized to remain closed.
7. This Agreement shall be binding upon the successors and assigns of each
Pledgor and the Issuer and shall inure to the benefit of and be enforceable by
the Pledgee and its successors and assigns. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
shall constitute one instrument. In the event that any provision of this
Agreement shall prove to be invalid or unenforceable, such provision shall be
deemed to be severable from the other provisions of this Agreement which shall
remain binding on all parties hereto. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
except in writing signed by the Pledgee, the Issuer and any Pledgor which at
such time owns any Issuer Pledged Interests.
368
Annex G
Page 4
8. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to its principles of conflict of
laws.
IN WITNESS WHEREOF, each Pledgor, the Pledgee and the Issuer have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.
[ ],
as a Pledgor
By_____________________________
Name:
Title:
[ ],
as a Pledgor
By_____________________________
Name:
Title:
[ ],
as a Pledgor
By_____________________________
Name:
Title:
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as DIP Collateral Agent and
Pledgee
By_____________________________
Name:
Title:
369
Annex G
Page 5
CANADIAN IMPERIAL BANK OF COMMERCE,
not in its individual capacity but
solely as DIP Collateral Agent and
Pledgee
By_____________________________
Name:
Title:
[ ],
the Issuer
By_____________________________
Name:
Title:
370
ANNEX H
TO
PLEDGE AGREEMENT
----------------
AGENCY AGREEMENT
----------------
AGENCY AGREEMENT (this "Agreement") dated as of June 28, 1999 between
Bankers Trust Company ("BTCo") as US DIP Collateral Agent and Canadian Imperial
Bank of Commerce ("CIBC") , as Canadian DIP Collateral Agent and Security Agent.
W I T N E S S E T H:
--------------------
WHEREAS, Philip Services Corp. (the "Canadian Borrower"), Philip Services
(Delaware) Inc. (the "U.S. Borrower", and together with the Canadian Borrower,
the "Borrowers"), the Subsidiary Guarantors, the financial institutions from
time to time party thereto (the "Lenders"), BTCo, as DIP Agent for the Lenders
and CIBC and BTCo, as co-arrangers (in such capacity, the "DIP Co-Arrangers"),
have entered into a Credit Agreement, dated as of June 28, 1999, providing for
the making of Revolving Loans to the Borrowers and the issuance of, and
participation in, Letters of Credit as contemplated therein (as used herein, the
term "DIP Credit Agreement" means the Credit Agreement described above in this
paragraph, as the same may be amended, modified or supplemented from time to
time);
All capitalized terms used herein and not defined herein shall have the
meanings provided in the DIP Credit Agreement;
WHEREAS, in satisfaction of a condition to the Lenders making credit
available to the Borrowers under the DIP Credit Agreement, the Pledgors are
contemporaneously with the execution of this Agreement executing and delivering
to Bankers Trust Company as US DIP Collateral Agent a Pledge Agreement dated as
of June 28, 1999 (the "Pledge Agreement") to evidence and govern the pledge and
security interest in the capital stock, notes, accounts or other ownership or
equity interests described therein (together with the proceeds thereof, the
"Pledged Collateral");
WHEREAS, the pledge and security interest in the Pledged Collateral in
favor of the DIP Collateral Agents for the benefit of the Lenders constitute a
first priority security interest therein;
WHEREAS, CIBC, as Agent (in such capacity, "Agent") currently holds the
Pledged Collateral pursuant to the Pre-Petition Credit Agreement in pledge to
secure the Borrowers' obligations under the Pre-Petition Credit Agreement
outstanding on the Petition Date;
WHEREAS, in order to avoid unnecessary delay that might result if the
Pledged Collateral were to have to be transferred to the DIP Collateral Agents,
the Agent and the DIP Collateral Agents desire to enter into this Agency
Agreement in order to provide the basis on which the Agent will act as bailee
for the DIP Collateral Agents in respect of the Pledged Collateral;
371
Annex H TO PLEDGE AGREEMENT
Page 2
NOW, THEREFORE, it is agreed:
1. The DIP Collateral Agents hereby appoint the Agent as, and the Agent
hereby agrees to act as, bailee (in such capacity, the "Bailee") for the DIP
Collateral Agents in respect of the Pledged Collateral on the following basis:
(iv) The Bailee shall have no duties or responsibilities except those
expressly set forth herein and nothing herein shall restrict the rights of
the Bailee under the Acceptable Cash Collateral Order. Neither the Bailee
nor any of its officers, directors, employees or agents shall be liable for
any action taken or omitted by it as such hereunder, unless caused by its
or their gross negligence or willful misconduct. The duties of the Bailee
shall be mechanical and administrative in nature and shall consist solely
of (x) holding in pledge (in accordance with those same practices it
utilized in holding the Pledged Collateral as Agent under the Pre-Petition
Pledge Agreement) as bailee the Pledged Collateral for the benefit of the
DIP Collateral Agents and the other Lenders and (y) delivering all or any
of the Pledged Collateral to the DIP Collateral Agents at such time or
times as directed to do so in writing by the DIP Collateral Agents,
provided that the DIP Collateral Agents shall only give any such notice
after the Obligations have been accelerated and provided further that prior
to such delivery the DIP Collateral Agents shall have executed and
delivered to the Agent an Agency Agreement in form and substance
satisfactory to the DIP Collateral Agents and the Agent pursuant to which
the DIP Collateral Agents agree, subject and without prejudice to the
exercise of such other of its rights or remedies in its capacity as DIP
Collateral Agents with respect to the Collateral as are provided under
Section 9 of the DIP Credit Agreement, that it will hold the Collateral as
bailee for the benefit of the Pre-Petition Lenders on a junior and
subordinate basis. The Bailee shall not have the right to take any other
action with respect to the Pledged Collateral.
(v) If the Bailee shall request instructions from the DIP Collateral
Agents with respect to any act or action (including failure to act) in
connection with its role as Bailee hereunder, the Bailee shall be entitled
to refrain from such act or taking such action unless and until it shall
have received instructions in writing from the DIP Collateral Agents, and
to the extent requested, indemnification in form and substance reasonably
satisfactory to the Agent in respect of actions to be taken; and the Bailee
shall not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, the DIP Collateral Agents and the other Lenders
shall not have any right of action whatsoever against the Bailee as a
result of the Bailee acting or refraining from acting hereunder in
accordance with the instructions of the DIP Collateral Agents consistent
with this Agreement.
(vi) The Bailee shall be entitled to rely, and shall be fully
protected in relying, upon any written notice, signed or sent by employees,
officers or agents of the DIP Collateral Agents, and, with respect to all
legal matters pertaining to its duties hereunder, upon advice of counsel
selected by it.
372
Annex H TO PLEDGE AGREEMENT
Page 3
(vii) To the extent the Bailee is not reimbursed and indemnified by
the Borrowers, the Lenders (or if they failed to do so, the DIP Collateral
Agents) will reimburse and indemnify the Bailee for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against the Bailee in
performing its duties hereunder except for those resulting solely from the
Bailee's own gross negligence or willful misconduct.
(viii) The Bailee may resign from the performance of all of its
functions and duties under this Agreement at any time by giving 20 Business
Days' prior written notice to the DIP Collateral Agents. Such resignation
shall take effect only upon delivery by the Bailee to the DIP Collateral
Agents of all Pledged Collateral then held by Bailee. In any event, the
Agent's duties as Bailee shall terminate once the Total Commitment under
the DIP Credit Agreement has been terminated and all Obligations have been
paid in full.
2. It is hereby acknowledged and agreed that the Agent will continue to
hold the Collateral in place pursuant to the Pre-Petition Credit Agreement for
the benefit of the Pre- Petition Lenders provided that until the Total
Commitment under the DIP Credit Agreement has been terminated and all
Obligations have been paid in full the Agent shall not take any action with
respect to the Pledged Collateral (except as specifically provided herein or
directed or permitted in writing by the DIP Collateral Agents) or in respect to
the enforcement of remedies under the Pre-Petition Credit Agreement.
373
ANNEX H
TO
PLEDGE AGREEMENT
----------------
IN WITNESS WHEREOF, the DIP Collateral Agents and the Agents have caused
the Agreement to be executed by their duly elected officers duly authorized as
of the date first written above.
BANKERS TRUST COMPANY,
US DIP Collateral Agent
By:_______________________
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Security Agent and Canadian DIP
Collateral Agent
By:_______________________
Title:
374
EXHIBIT I-2
CANADIAN SECURITIES AND DEBT PLEDGE AGREEMENT
FROM PHILIP SERVICES CORP. AND ITS SUBSIDIARIES
THIS SECURITIES AND DEBT PLEDGE AGREEMENT is made as of June 28, 1999 by
each of the Pledgors in favour of CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC"),
as Canadian DIP Collateral Agent.
WHEREAS:
A. In order to induce the Lenders to make or to continue to make financial
accommodation to Philip, the Pledgors are willing to execute and deliver this
Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged by each of the Pledgors, each of the
Pledgors severally (and not jointly or jointly and severally) agrees with the
Canadian DIP Collateral Agent as follows:
1. DEFINITIONS. Capitalized terms not otherwise defined in this Agreement
shall have the meanings given to them in the DIP Credit Agreement, and the
following terms shall have the following meanings:
"ADDITIONAL PLEDGED COLLATERAL" shall mean, relative to any Pledgor, all
Pledged Collateral, from time to time held or acquired in any manner by such
Pledgor, other than the Initially Pledged Collateral of such Pledgor.
"BOOKS AND RECORDS" shall mean, relative to any Pledgor, all books,
records, files, papers, disks, documents and other repositories of data
recording in any form or medium, evidencing or relating to the Pledged
Collateral of such Pledgor which are at any time owned by such Pledgor or to
which such Pledgor (or any Person on such Pledgor's behalf) has access.
"CANADIAN DIP COLLATERAL AGENT" shall mean CIBC in its capacity as
Canadian DIP Collateral Agent on behalf of and for the benefit of the Lenders
in accordance with the DIP Credit Agreement and shall include its successors
and assigns in such capacity.
"CERTIFICATED SECURITY" shall mean a Security that is represented by a
certificate.
"CLEARING CORPORATION" shall mean a Person which is a "Clearing
corporation" as defined in Section 8-102(a)(5) of the New York Uniform
Commercial Code or which is a "clearing agency" as defined in the Securities
Act (Ontario).
"CREDIT PROVIDERS" shall mean the Canadian DIP Collateral Agent, the DIP
Agent, the DIP Co-Arrangers and the Lenders and "CREDIT PROVIDER" shall mean
any one of the Credit Providers.
"DIP CREDIT AGREEMENT" shall mean the June 28, 1999 credit agreement
between Philip and Philip Services (Delaware), Inc., as debtors in possession
and borrowers, the Subsidiaries of
375
- 2 -
such borrowers named in such agreement as parties to such agreement, Bankers
Trust Company, as DIP Agent, Bankers Trust Company and Canadian Imperial Bank
of Commerce, as DIP Co-Arrangers, and the Persons from time to time parties to
such agreement as lenders, as such credit agreement may from time to time be
supplemented, amended, restated or consolidated.
"INITIALLY PLEDGED COLLATERAL" shall mean, relative to any Pledgor, all
Pledged Collateral of such Pledgor held on the date of this Agreement by such
Pledgor (or in the case of a Person which becomes a Pledgor as a result of the
execution and delivery of a Supplement, on the date of such execution and
delivery of such Supplement by such Person).
"ISSUER" shall mean, at any time, any Person which is at such time an
issuer of any Securities which constitute part of the Pledged Collateral of any
Pledgor.
"LIABILITIES" shall mean, relative to any Pledgor, all present and future
indebtedness, liabilities and obligations of any and every kind, nature or
description whatsoever and however incurred (whether direct or indirect, joint
or several, absolute or contingent, matured or unmatured and whether as
principal debtor, guarantor, surety or otherwise and, for greater certainty,
including interest that, but for any filing made relative to such Pledgor under
the provisions of any applicable bankruptcy or insolvency statute, would accrue
on any such indebtedness, liabilities and obligations) of such Pledgor to each
of the Credit Providers under, in connection with or with respect to each of
the Secured Credit Documents, and any unpaid balance thereof.
"LIMITED LIABILITY COMPANY ASSETS" shall mean all assets, whether tangible
or intangible and whether real, personal or mixed (including, without
limitation, all limited liability company capital and interest in other limited
liability companies), at any time owned or represented by any Limited Liability
Company Interest.
"LIMITED LIABILITY COMPANY INTERESTS" shall mean all limited liability
company membership interest at any time owned by any Pledgor in any limited
liability company which is a direct or indirect wholly-owned Subsidiary of such
Pledgor.
"OBLIGOR" shall mean, at any time, any Person which is at such time an
obligor under any indebtedness which constitutes part of the Pledged Collateral
of any Pledgor.
"ORGANIZATIONAL DOCUMENTS" shall mean, with respect to any Person, such
Person's articles or other charter documents, by-laws, unanimous shareholder
agreement, partnership agreement, joint venture agreement, operating agreement
or trust agreement, as applicable, and any and all other similar agreements,
documents and instruments relative to such Person.
"PARTNERSHIP ASSETS" shall mean all assets, whether tangible or intangible
and whether real, personal or mixed (including, without limitation, all
partnership capital and interest in other partnerships), at any time owned or
represented by any Partnership Interest.
376
- 3 -
"PARTNERSHIP INTERESTS" shall mean all general partnership interest or
limited partnership interest at any time owned by any Pledgor in any general
partnership or limited partnership which is a direct or indirect wholly-owned
Subsidiary of such Pledgor.
"PHILIP" shall mean Philip Services Corp., a corporation existing under
the laws of the Province of Ontario, together with its successors by
amalgamation, merger or otherwise.
"PLEDGE CONFIRMATION" shall have the meaning specified in subsection 7(f).
"PLEDGED COLLATERAL" relative to any Pledgor, shall have the meaning
specified in Section 2.
"PLEDGED DEBT" shall mean, relative to any Pledgor, all present and future
indebtedness, liabilities and obligations (monetary or otherwise) of any kind,
nature or description whatsoever (whether direct or indirect, joint or several,
absolute or contingent, matured or unmatured) of each Subsidiary of such
Pledgor to such Pledgor.
"PLEDGED SECURITIES" shall mean, relative to any Pledgor, all present and
future Securities issued by any directly or indirectly wholly-owned Subsidiary
of such Pledgor and from time to time held, owned or acquired by such Pledgor.
"PLEDGORS" shall mean the signatories to this Agreement other than the
Canadian DIP Collateral Agent together with each other Person which from time
to time becomes a Pledgor under this Agreement by executing and delivering to
the Canadian DIP Collateral Agent a Supplement to this Agreement as provided
for in Section 23 of this Agreement, and "PLEDGOR" shall mean any of the
Pledgors.
"PPSA" shall mean the Personal Property Security Act (Ontario), as such
legislation may be amended, renamed or replaced from time to time (and includes
all regulations from time to time made under such legislation).
"PRE-PETITION AGENT" shall mean CIBC as security agent under the Security
Agency Agreement dated as of March 16, 1998 among the Borrowers, CIBC as
security agent and CIBC as administrative agent.
"PROCEEDS" shall have the meaning given to that term in the PPSA.
"RECEIVER" shall mean a receiver, a manager or a receiver and manager.
"SECURED CREDIT DOCUMENTS" shall mean (a) the DIP Credit Agreement, and
(b) all other present and future DIP Credit Documents as the same may from time
to time be supplemented, amended, restated or consolidated.
"SECURITY" shall have the meaning given to such term in Part VI of the
Business Corporations Act (Ontario) and, for greater certainty, shall include
Limited Liability Company Interests and Partnership Interests.
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"SUPPLEMENT" shall have the meaning specified in Section 23 hereof.
"UNCERTIFICATED SECURITY" shall mean a Security that is not represented by
a certificate.
2. GRANT OF SECURITY INTEREST. As general and continuing security for the due
payment and performance of its Liabilities (including the payment of any such
Liabilities that would become due but for any automatic stay under the
provisions of the Bankruptcy and Insolvency Act (Canada), the United States
Bankruptcy Code or any analogous provisions of any other applicable law in
Canada, the United States of America or any other jurisdiction), each Pledgor
assigns and pledges to and in favour of the Canadian DIP Collateral Agent, and
grants to the Canadian DIP Collateral Agent a continuing security interest in:
(a) the Pledged Securities of such Pledgor, together with all
replacements of any such Pledged Securities and substitutions for
any such Pledged Securities and all certificates and instruments
evidencing such Pledged Securities;
(b) all interest and dividends, whether in cash, kind or stock,
received or receivable upon or in respect of any of the Pledged
Securities of such Pledgor and all moneys or other property payable
or paid on account of any return or repayment of capital in respect
of any of the Pledged Securities of such Pledgor or otherwise
distributed in respect of such Pledged Securities or which will in
any way be charged to, or payable or paid out of, the capital of the
applicable Issuer on account of any such Pledged Securities;
(c) with respect to all present and future Limited Liability
Company Interests owned by such Pledgor from time to time:
(i) all the capital of, and all of such Pledgor's interest in
all profits, losses, Limited Liability Company Assets and
other distributions to which such Pledgor shall at any time
be entitled in respect of, such Limited Liability Company
Interests;
(ii) all other payments due or to become due to such Pledgor in
respect of such Limited Liability Company Interests,
whether under any limited liability company agreement or
otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(iii) all of such Pledgor's claims, rights, powers, privileges,
authority, options, security interests, liens and remedies,
if any, under any limited liability company agreement or
operating agreement, or at law or otherwise, in each case
in respect of such Limited Liability Company Interests;
(iv) all present and future claims, if any, of such Pledgor
against any such limited liability company for moneys
loaned or advanced, for services rendered or otherwise;
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(v) all of such Pledgor's rights under any limited liability
company agreement or operating agreement or at law to
exercise and enforce every right, power, remedy, authority,
option and privilege of such Pledgor relating to such
Limited Liability Company Interests, including any power to
terminate, cancel or modify any limited liability company
agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf
of and in the name of such Pledgor in respect of such
Limited Liability Company Interests and any such limited
liability company, to make determinations, to exercise any
election (including, but not limited to, election of
remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full
power and authority to demand, receive, enforce, collect or
receipt for any of the foregoing or for any Limited
Liability Company Asset, to enforce or execute any checks,
or other instruments or orders, to file any claims and to
take action in connection with any of the foregoing (with
all the foregoing rights only to be exercisable upon the
occurrence and during the continuation of an Event of
Default; and
(vi) all other property at any time in the future delivered in
substitution for or in addition to any of the foregoing,
all certificates and instruments representing or evidencing
such other property and all cash, securities, interest,
dividends, rights and other property at any time and from
time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the
foregoing or any or all of such other property;
(d) with respect to all present and future Partnership Interests
owned by such Pledgor from time to time, all of such Pledgor's
right, title and interest in each partnership to which each such
interest relates, whether now existing or hereafter acquired,
including, without limitation:
(i) all the capital of, and all of such Pledgor's interest in
all profits, losses, Partnership Assets and other
distributions to which such Pledgor shall at any time be
entitled in respect of, such Partnership Interests;
(ii) all other payments due or to become due to such Pledgor in
respect of such Partnership Interests, whether under any
partnership agreement or otherwise, whether as contractual
obligations, damages, insurance proceeds or otherwise;
(iii) all of its claims, rights, powers, privileges, authority,
options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or
at law or otherwise, in each case, in respect of such
Partnership Interests;
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(iv) all present and future claims, if any, of such Pledgor
against any such partnership or any of the partners of such
partnership for moneys loaned or advanced, for services
rendered or otherwise;
(v) all of such Pledgor's rights under any partnership
agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and
privilege of such Pledgor relating to such Partnership
Interests, including any power to terminate, cancel or
modify any partnership agreement or operating agreement, to
execute any instruments and to take any and all other
action on behalf of and in the name of such Pledgor in
respect of such Partnership Interests and any such
partnership, to make determinations, to exercise any
election (including, but not limited to, election of
remedies) or option or to give or receive any notice,
consent amendment, waiver or approval, together with full
power and authority to demand, receive, enforce, collect or
receipt for any of the foregoing or for any Partnership
Asset, to enforce or execute any checks, or other
instruments or orders, to file any claims and to take any
action in connection with any of the foregoing; and
(vi) all other property at any time in the future delivered in
substitution for or in addition to any of the foregoing,
all certificates and instruments representing or evidencing
such other property and all cash, securities, interest,
dividends, rights and other property at any time and from
time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the
foregoing or any or all of such other property;
(e) the Pledged Debt of such Pledgor, together with all replacements of
any such Pledged Debt and substitutions for any such Pledged Debt and
all instruments evidencing such Pledged Debt;
(f) all additional indebtedness from time to time owed to such Pledgor by
any Obligor and the instruments evidencing such indebtedness, and all
interest, cash and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such indebtedness;
(g) all other property that may at any time be received or receivable by
or otherwise distributed to such Pledgor in respect of, or in
substitution for, or in exchange for, any of the foregoing; and
(h) all cash, securities and other Proceeds of any of the foregoing and
all rights and interests of such Pledgor in respect thereof or
evidenced thereby, including all moneys received from time to time by
such Pledgor in connection with any sale or disposition of any of the
Pledged Securities or any of the Pledged Debt of such Pledgor;
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(collectively relative to each Pledgor, the "PLEDGED COLLATERAL" of such
Pledgor).
3. DELIVERY OF PLEDGED COLLATERAL. Each of the Pledgors, concurrently with its
execution and delivery of this Agreement (or, if applicable, concurrently with
its execution and delivery of a Supplement) in connection with the Initially
Pledged Collateral of such Pledgor, and immediately on acquiring the same in
connection with all Additional Pledged Collateral of such Pledgor:
(a) with respect to all such Pledged Collateral which are Certificated
Securities (other than a Certificated Security credited in the books
of a Clearing Corporation), will deliver to the Pre-Petition Agent
acting as bailee all certificates, instruments and securities
representing or evidencing such Pledged Collateral of such Pledgor in
suitable form for transfer by delivery, or accompanied by duly
executed instruments of transfer or assignment in blank, in each case
satisfactory to the Canadian DIP Collateral Agent, all of which
certificates, instruments and securities shall remain in the custody
of the Pre-Petition Agent acting as bailee and all such instruments,
certificates and securities previously delivered to the bailee shall
be deemed delivered in furtherance of the foregoing pledge;
(b) with respect to all such Collateral which are Uncertificated
Securities (other than an Uncertificated Security credited on the
books of a Clearing Corporation), will cause the Issuer of such
Uncertificated Security to duly authorize and execute, and deliver to
the Canadian DIP Collateral Agent, an agreement for the benefit of
the Canadian DIP Collateral Agent and the Credit Providers, in form
and substance satisfactory to the Canadian DIP Collateral Agent,
acting reasonably, pursuant to which such Issuer agrees to comply
with any and all instructions originated by the Canadian DIP
Collateral Agent without further consent by the registered owner and
not to comply with instructions regarding such Uncertificated
Security (and any Partnership Interests and Limited Liability Company
Interests issued by such Issuer) originated by any other Person other
than a court of competent jurisdiction;
(c) with respect to all such Collateral which is a Certificated Security
or an Uncertificated Security (including for greater certainty, a
Partnership Interest or a Limited Liability Company Interest)
credited on the books of a Clearing Corporation, will promptly notify
the Canadian DIP Collateral Agent thereof and will promptly (i) take
all actions required to comply with the applicable rules of such
Clearing Corporation, (ii) take all actions required to perfect the
security interest of the Canadian DIP Collateral Agent in such
Collateral under applicable law, and (iii) take all such further and
other actions as the Canadian DIP Collateral Agent, acting
reasonably, deems necessary or desirable to effect the foregoing.
If the Organizational Documents of any Issuer restrict the transfer of the
Securities of such Issuer, then the applicable Pledgor will also deliver to the
Canadian DIP Collateral Agent a
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certified copy of a resolution of the directors or shareholders of such Issuer
(as required) consenting to the transfers contemplated by this Agreement,
including any prospective transfer of the Pledged Collateral by the Canadian
DIP Collateral Agent or its nominee upon a realization on the security
constituted by this Agreement in accordance with this Agreement. All Pledged
Collateral that is in registrable form may, at the option of the Canadian DIP
Collateral Agent, be registered in the name of Canadian DIP Collateral Agent or
its nominee. Each Pledgor agrees to execute and deliver to the appropriate
Persons, promptly if and when required by the Canadian DIP Collateral Agent,
all such instruments, documents and agreements as the Canadian DIP Collateral
Agent in its discretion may deem necessary to effect a change in the
shareholders' register of any Issuer of any Pledged Collateral of such Pledgor
or in the books and records of any Obligor under any Pledged Collateral of such
Pledgor from such Pledgor to the Canadian DIP Collateral Agent or a nominee of
the Canadian DIP Collateral Agent. In addition, the Canadian DIP Collateral
Agent shall have the right to exchange certificates, instruments or securities
representing or evidencing any Pledged Collateral for certificates, instruments
or securities of smaller or larger denominations. If the Canadian DIP
Collateral Agent so requests, any endorsement on any certificate representing
any of the Pledged Collateral will also be guaranteed by a Canadian or United
States bank or other financial institution acceptable to the Canadian DIP
Collateral Agent.
4. ATTACHMENT; NO OBLIGATION TO ADVANCE. Each of the Pledgors confirms that
value has been given by the Canadian DIP Collateral Agent and the other Credit
Providers to such Pledgor, that such Pledgor has rights in its Pledged
Collateral existing at the date of this Agreement, and the Canadian DIP
Collateral Agent and the other Credit Providers have not agreed to postpone the
time for attachment of the Liens created by this Agreement to any of the
Pledged Collateral of such Pledgor. The Liens created by this Agreement
relative to the Pledged Collateral of each Pledgor will have effect and be
deemed to be effective whether or not the Liabilities of such Pledgor or any
part thereof are owing or in existence before or after or upon the date of this
Agreement or the date of any Supplement, as the case may be. The execution and
delivery of this Agreement or any Supplement by any Pledgor shall not oblige
the Credit Providers to make any financial accommodation available to Philip or
any of its Subsidiaries.
5. REPRESENTATIONS AND WARRANTIES. Each of the Pledgors represents and
warrants with respect to itself that:
(a) Title; No Other Security Interests. Except for (i) the Liens
created by this Agreement, and (ii) any other Liens expressly
permitted under the Secured Credit Documents, such Pledgor is the
exclusive legal and beneficial owner of, and has good title to, the
Pledged Collateral of such Pledgor free and clear of any Liens. No
security agreement, financing statement or other notice with respect
to any or all of the Pledged Collateral of such Pledgor is on file
or on record in any public office, except for filings in favour of
the Canadian DIP Collateral Agent or any holder of a Permitted Lien.
(b) Authority. Subject to the entry by the US Bankruptcy Court
of the US Interim Order and the entry by the Canadian Court of the
Canadian Approvals, as
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applicable, each Pledgor has the power and authority to execute,
deliver and perform the terms and provisions of this Agreement and,
upon the entry by the US Bankruptcy Court of the US Interim Order and
the entry by the Canadian Court of the Canadian Approvals, as
applicable, has taken all necessary Company action to authorize the
execution, delivery and performance by it of this Agreement.
(c) Consents. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except the
entry of the Orders) or exemption by, any governmental or public body
or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and
performance by any Pledgor of this Agreement or (ii) the legality,
validity, binding effect or enforceability of this Agreement.
(d) Execution and Delivery; Enforceability. Upon the entry by the US
Bankruptcy Court of the US Interim Order and the entry by the
Canadian Court of the Canadian Approvals, each Pledgor has duly
executed and delivered this Agreement, and this Agreement will be the
legal, valid and binding obligation of such Pledgor enforceable in
accordance with its terms and the Orders.
(e) Percentage of Issued Securities. The Pledged Securities of such
Pledgor listed in Schedule A hereto constitute at the date of this
Agreement the percentage specified in Schedule A hereto of the issued
and outstanding Securities of each of the applicable Issuers listed
in such Schedule.
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All agreements, representations,
warranties and covenants made by each of the Pledgors in this Agreement are
material, will be considered to have been relied on by each of the Credit
Providers and will survive the execution and delivery of this Agreement, the
execution and delivery of any Supplement and any investigation made at any time
by or on behalf of any one or more of the Credit Providers and any disposition
or payment of the Liabilities of such Pledgor until repayment and performance in
full of the Liabilities of such Pledgor and termination of all rights of each
Person that, if exercised, would result in the existence of Liabilities of such
Pledgor.
7. COVENANTS. Each of the Pledgors severally (and not jointly or jointly and
severally) covenants and agrees that such Pledgor:
(a) Further Documentation. Will from time to time, at the expense of
such Pledgor, promptly and duly authorize, execute and deliver such
further instruments and documents, and take such further action, as
the Canadian DIP Collateral Agent may request for the purpose of
obtaining or preserving the full benefits of, and the rights and
powers granted by, this Agreement (including the filing of any
financing statements or financing change statements under any
applicable law with respect to the Liens created by this Agreement).
Such Pledgor acknowledges that this Agreement has been prepared based
on existing applicable laws and that a change in such laws, or the
laws of other jurisdictions, may require the
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execution and delivery of different forms of security documentation.
Accordingly, such Pledgor agrees that the Canadian DIP Collateral
Agent will have the right to require that this Agreement be amended,
supplemented or replaced by such Pledgor, and that such Pledgor will
immediately on request by the Canadian DIP Collateral Agent
authorize, execute and deliver any such amendment, supplement or
replacement (i) to reflect any changes in such laws, whether arising
as a result of statutory amendments, court decisions or otherwise,
(ii) to facilitate the creation and registration of appropriate
security in all appropriate jurisdictions, or (iii) if such Pledgor
merges or amalgamates with any other Person or enters into any
corporate reorganization, in each case in order to confer on the
Canadian DIP Collateral Agent Liens similar to, and having the same
effect and priority as, the Liens created by this Agreement.
(b) Payment of Expenses; Indemnification. Will pay on demand, and will
indemnify and save each of the Credit Providers harmless from, any
and all liabilities, costs and expenses (including legal fees and
expenses and any sales, goods and services, harmonized sales and
goods and services or other similar taxes payable to any governmental
authority with respect to any such liabilities, costs and expenses)
(i) incurred by the Canadian DIP Collateral Agent in the preparation,
registration, administration or enforcement against such Pledgor of
this Agreement, or (ii) incurred by the Canadian DIP Collateral Agent
in performing or observing any of the other covenants of such Pledgor
under this Agreement.
(c) Limitations on Other Liens. Will not create, incur or permit to
exist, and will defend the Pledged Collateral of such Pledgor
against, and will take such other action as is necessary to remove,
any and all Liens on and claims in respect of the Pledged Collateral
of such Pledgor other than the Liens created by this Agreement or as
otherwise expressly permitted pursuant to the provisions of the
Secured Credit Documents, and will defend the right, title and
interest of the Canadian DIP Collateral Agent in and to the Pledged
Collateral of such Pledgor against the claims and demands of all
Persons.
(d) Limitations on Dispositions of Pledged Collateral. Will not sell or
otherwise dispose of any of the Pledged Collateral of such Pledgor
except to the extent that such sale or other disposition is permitted
pursuant to the provisions of the Secured Credit Documents and then
only subject to and in compliance with the applicable provisions of
the Secured Credit Documents.
(e) Notices. Will advise the Canadian DIP Collateral Agent promptly, in
reasonable detail, of (i) any Lien (other than the Liens created by
this Agreement and any Liens expressly permitted pursuant to the
provisions of the Secured Credit Documents) on, or claim asserted
against, any of the Pledged Collateral of such Pledgor, (ii) any
change in the location of the principal place of business or chief
executive office of such Pledgor, (iii) any change in the name of
such Pledgor, and (iv) any merger or amalgamation of such Pledgor
with any other Person, and
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will not effect or permit any of the changes referred to in clauses
(ii), (iii) or (iv) above unless all filings have been made and all
other actions taken that are required in order for the Canadian DIP
Collateral Agent for the benefit of the Credit Providers to continue
at all times following such change to have a valid and perfected Lien
in respect of all of the Pledged Collateral of such Pledgor.
(f) Pledge Deliveries and Confirmations. Will deliver to the Canadian
DIP Collateral Agent under this Agreement immediately upon
acquisition thereof by such Pledgor:
(i) any and all additional Securities of each wholly-owned
Issuer acquired (directly or indirectly) by such Pledgor
after the date of this Agreement;
(ii) any and all Securities of any Person that, after the date
of this Agreement, becomes, as a result of any occurrence,
a wholly-owned Subsidiary of such Pledgor and which
Securities are owned or held by such Pledgor;
(iii) any and all instruments or other evidences of additional
indebtedness from time to time after the date of this
Agreement which are owed to such Pledgor by any Obligor;
and
(iv) any and all instruments or other evidences of additional
indebtedness from time to time after the date of this
Agreement owed to such Pledgor by any Person that, after
the date of this Agreement, becomes, as a result of any
occurrence, a wholly-owned Subsidiary of such Pledgor.
Such Pledgor agrees that it will, upon obtaining any additional
Securities or instruments or other evidences of additional
indebtedness referred to above, promptly (and in any event within 10
Business Days following the end of the calendar month in which the
same were obtained) deliver to the Canadian DIP Collateral Agent a
pledge confirmation (a "PLEDGE CONFIRMATION"), duly executed by such
Pledgor, substantially in the form of Schedule B to this Agreement
with respect to the additional Pledged Securities pledged by such
Pledgor under this Agreement. Each Pledgor authorizes the Canadian
DIP Collateral Agent to attach each Pledge Confirmation delivered to
the Canadian DIP Collateral Agent by such Pledgor to this Agreement
and agrees that for greater certainty all Pledged Securities listed
on any Pledge Confirmation delivered to the Canadian DIP Collateral
Agent by such Pledgor shall be considered for all purposes of this
Agreement to be Pledged Collateral of such Pledgor, provided however,
that the failure of any Pledgor to execute and deliver a Pledge
Confirmation with respect to any additional Pledged Securities of
such Pledgor shall not impair the Lien of the Canadian DIP Collateral
Agent in such additional Pledged Securities or otherwise adversely
affect the rights and
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remedies of the Canadian DIP Collateral Agent under this Agreement
with respect to such additional Pledged Securities.
8. VOTING RIGHTS. Unless an Event of Default has occurred and is continuing,
each Pledgor will be entitled to exercise all voting power from time to time
exercisable in respect of the Pledged Collateral of such Pledgor and give
consents, waivers and ratifications in respect thereof; provided, however, that
no vote will be cast or consent, waiver or ratification given or action taken
which would be prejudicial to the interests of the Credit Providers or which
would have the effect of reducing the value of the Pledged Collateral of such
Pledgor as security for the Liabilities of such Pledgor or imposing any
restriction on the transferability of any of the Pledged Collateral of such
Pledgor. Unless an Event of Default has occurred and is continuing, the
Canadian DIP Collateral Agent shall, from time to time at the request and
expense of any Pledgor, execute, in respect of all Pledged Securities of such
Pledgor that are registered in the name of the Canadian DIP Collateral Agent,
valid proxies appointing such Pledgor as its proxy to attend, vote and act for
and on behalf of the Canadian DIP Collateral Agent at any and all meetings of
each Issuer of Pledged Securities of such Pledgor that are registered in the
name of the Canadian DIP Collateral Agent and to execute and deliver, consent
to or approve or disapprove of or withhold consent to any resolutions in
writing of shareholders of each such Issuer for and on behalf of the Canadian
DIP Collateral Agent. Immediately upon the occurrence and during the
continuance of any Event of Default, all such rights of each Pledgor to vote
and give consents, waivers and ratifications will cease and the Canadian DIP
Collateral Agent or any nominee of the Canadian DIP Collateral Agent will be
entitled to exercise all such voting rights and to give all such consents,
waivers and ratifications.
9. DIVIDENDS; INTEREST. Unless an Event of Default has occurred and is
continuing, each Pledgor will be entitled to receive any and all cash
dividends, interest, principal payments and other forms of cash distribution on
the Pledged Collateral of such Pledgor which it is otherwise entitled to
receive, but any and all stock and/or liquidating dividends, distributions of
property, returns of capital or other distributions made on or in respect of
the Pledged Collateral of such Pledgor, whether resulting from a subdivision,
combination or reclassification of the outstanding capital stock of any Issuer
or received in exchange for the Pledged Collateral of such Pledgor or any part
thereof or as a result of any amalgamation, merger, consolidation, acquisition
or other exchange of property to which any Issuer may be a party or otherwise,
and any and all cash and other property received in exchange for any Pledged
Collateral of such Pledgor, will be and become part of the Pledged Collateral
of such Pledgor subject to the Liens created by this Agreement and, if received
by such Pledgor, unless otherwise applied by such Pledgor in a manner expressly
permitted by the Canadian DIP Collateral Agent, will immediately be delivered
to the Canadian DIP Collateral Agent or its nominee (accompanied, if
appropriate, by proper and duly executed instruments of assignment or transfer
in accordance with the Canadian DIP Collateral Agent's instructions) to be held
subject to the terms of this Agreement; and if any of the Pledged Collateral of
any such Pledgor has been registered in the name of the Canadian DIP Collateral
Agent or its nominee, the Canadian DIP Collateral Agent will execute and
deliver (or cause to be executed and delivered) to such Pledgor all such
dividend orders and other instruments as such Pledgor may request for the
purpose of enabling such Pledgor to receive the dividends or other payments
which such Pledgor is authorized to receive and retain pursuant to
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this Section. If an Event of Default has occurred and is continuing, all
rights of each Pledgor pursuant to this Section will cease and the Canadian DIP
Collateral Agent will have the sole and exclusive right and authority to
receive and retain the cash dividends, interest, principal payments and other
forms of cash distribution which such Pledgor would otherwise be authorized to
retain pursuant to this Section. Any money and other property paid over to or
received by the Canadian DIP Collateral Agent pursuant to the provisions of
this Section will be retained by the Canadian DIP Collateral Agent as
additional Pledged Collateral of the applicable Pledgor and be applied in
accordance with the provisions of this Agreement.
10. RIGHTS ON DEFAULT. If any Event of Default shall have occurred and be
continuing, then and in every such case the security constituted by this
Agreement relative to each Pledgor shall become enforceable and, to the extent
any such action is not inconsistent with the Orders and Section 9 of the DIP
Credit Agreement, the Canadian DIP Collateral Agent, in addition to any rights
now or hereafter existing under applicable law, and without application to or
order of the Bankruptcy Courts, may, personally or by agent, at such time or
times as the Canadian DIP Collateral Agent in its discretion may determine, do
any one or more of the following:
(a) Rights under PPSA, etc. Exercise against such Pledgor and
any or all of the Pledged Collateral of such Pledgor all of the
rights and remedies granted to secured parties under the PPSA and
any other applicable statute, or otherwise available to the Canadian
DIP Collateral Agent by contract, under statute, at law or in
equity.
(b) Dispose of Pledged Collateral. Realize on any or all of the
Pledged Collateral of such Pledgor and sell, lease, assign, give
options to purchase, or otherwise dispose of and deliver any or all
of the Pledged Collateral of such Pledgor (or contract to do any of
the above), in one or more parcels at any public or private sale, at
any exchange, broker's board or office of the Canadian DIP
Collateral Agent or elsewhere, on such terms and conditions as the
Canadian DIP Collateral Agent may deem advisable and at such prices
as it may deem best, for cash or on credit or for future delivery.
(c) Court-Approved Disposition of Pledged Collateral. Obtain
from any court of competent jurisdiction an order for the sale or
foreclosure of any or all of the Pledged Collateral of such Pledgor.
(d) Purchase by Credit Providers. At any public sale, and to the
extent permitted by law on any private sale, bid for and purchase,
or permit any Credit Provider to bid for or purchase, any or all of
the Pledged Collateral of such Pledgor offered for sale and, upon
compliance with the terms of such sale, hold, retain, sell or
otherwise dispose of such Pledged Collateral without any further
accountability to such Pledgor or any other Person with respect to
such holding, retention, sale or other disposition, except as
required by law. In any such sale to the Canadian DIP Collateral
Agent, the Canadian DIP Collateral Agent may, for the purpose of
making payment for all or any part of the Pledged Collateral of any
Pledgor so
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purchased, use any claim for Liabilities of such Pledgor then due
and payable to the Credit Providers as a credit against the
purchase price.
(e) Collect Pledged Debt. Notify the Obligors under any Pledged
Debt of such Pledgor of the assignment of such Pledged Debt to the
Canadian DIP Collateral Agent and direct such Obligors to make
payment of all amounts due or to become due to such Pledgor in
respect of such Pledged Debt directly to the Canadian DIP Collateral
Agent and, upon such notification and at the expense of such
Pledgor, enforce collection of any such Pledged Debt, and adjust,
settle or compromise the amount or payment of such Pledged Debt, in
such manner and to such extent as the Canadian DIP Collateral Agent
deems appropriate in the circumstances.
(f) Transfer of Pledged Collateral. Transfer all or part of the
Pledged Collateral of such Pledgor into the name of the Canadian DIP
Collateral Agent or its nominee, with or without disclosing that the
Pledged Collateral of such Pledgor is subject to the Liens created
by this Agreement.
(g) Vote Pledged Collateral. Vote any or all of the Pledged
Collateral of such Pledgor (whether or not transferred to the
Canadian DIP Collateral Agent or its nominee) and give or withhold
all consents, waivers and ratifications in respect thereof and
otherwise act with respect thereto as though it were the outright
owner thereof.
(h) Appoint Receiver. Appoint by instrument in writing one or
more Receivers of any or all of the Pledged Collateral of such
Pledgor with such rights, powers and authority (including any or all
of the rights, powers and authority of the Canadian DIP Collateral
Agent under this Agreement) as may be provided for in the instrument
of appointment or any supplemental instrument, and remove and
replace any such Receiver from time to time. To the extent
permitted by applicable law, any Receiver appointed by the Canadian
DIP Collateral Agent will (for purposes relating to responsibility
for the Receiver's acts or omissions) be considered to be the agent
of such Pledgor and not of the Canadian DIP Collateral Agent or the
Credit Providers.
(i) Court-Appointed Receiver. Obtain from any court of competent
jurisdiction an order for the appointment of a Receiver of any or
all of the Pledged Collateral of such Pledgor.
(j) Exercise Other Rights. Exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options
pertaining to any of the Pledged Collateral of such Pledgor as if it
were the absolute owner thereof, including the right to exchange at
its discretion any and all of the Pledged Collateral of such Pledgor
upon the amalgamation, merger, consolidation, reorganization,
recapitalization or other readjustment of any Issuer or upon the
exercise by any Issuer or the Canadian DIP Collateral Agent of any
right,
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privilege or option pertaining to any of the Pledged Collateral of
such Pledgor, and in connection therewith, to deposit and deliver
any and all of the Pledged Collateral of such Pledgor with any
committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may
determine, all without liability except to account for property
actually received by the Canadian DIP Collateral Agent.
The Canadian DIP Collateral Agent may exercise any or all of the foregoing
rights and remedies without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except as required by applicable
law) to or on such Pledgor or any other Person, and such Pledgor waives each
such demand, presentment, protest, advertisement and notice to the extent
permitted by applicable law. None of the above rights or remedies will be
exclusive of or dependent on or merge in any other right or remedy against such
Pledgor or any other Pledgor, and one or more of such rights and remedies may
be exercised independently or in combination from time to time whether against
such Pledgor or against such Pledgor and any or all other Pledgors. Without
prejudice to the ability of the Canadian DIP Collateral Agent to dispose of the
Pledged Collateral of such Pledgor in any manner which is commercially
reasonable, each Pledgor acknowledges that a disposition of Pledged Collateral
of such Pledgor by the Canadian DIP Collateral Agent which takes place
substantially in accordance with the following provisions will be deemed to be
commercially reasonable:
(i) Pledged Collateral of such Pledgor may be disposed of in whole or
in part;
(ii) Pledged Collateral of such Pledgor may be disposed of by public
auction, public tender or private contract, with or without
advertising and without any other formality;
(iii) any purchaser of Pledged Collateral of such Pledgor may be a
customer of any of the Credit Providers;
(iv) a sale or other disposition of Pledged Collateral of such Pledgor
may be on such terms and conditions as to credit or otherwise as
the Canadian DIP Collateral Agent, in its sole discretion, may deem
advantageous; and
(v) the Canadian DIP Collateral Agent may establish an upset or reserve
bid or price in respect of Pledged Collateral of such Pledgor.
11. SALE OF SECURITIES. The Canadian DIP Collateral Agent is authorized, in
connection with any offer or sale of any Pledged Collateral of a Pledgor, to
comply with any limitation or restriction as it may be advised by counsel is
necessary to comply with applicable law, including compliance with procedures
that may restrict the number of prospective bidders and purchasers, requiring
that prospective bidders and purchasers have certain qualifications, and
restricting prospective bidders and purchasers to Persons who will represent
and agree that they are purchasing for their own account or investment and not
with a view to the distribution or resale of such Pledged Collateral of such
Pledgor. Each Pledgor further agrees that compliance with
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any such limitation or restriction will not result in a sale of the Pledged
Collateral of such Pledgor being considered or deemed not to have been made in
a commercially reasonable manner, and neither the Canadian DIP Collateral Agent
or any Credit Provider will be liable or accountable to such Pledgor for any
reasonable discount allowed by reason of the fact that such Pledged Collateral
of such Pledgor is sold in compliance with any such limitation or restriction.
12. APPLICATION OF PROCEEDS. All Proceeds of Pledged Collateral of a Pledgor
received by the Canadian DIP Collateral Agent shall be applied in accordance
with, and in the manner set forth in, the Orders.
13. CONTINUING LIABILITY OF PLEDGORS. Each of the Pledgors will remain liable
for any Liabilities of such Pledgor that are outstanding following realization
of all or any part of the Pledged Collateral of such Pledgor and the
application of the Proceeds of such Pledged Collateral.
14. CANADIAN DIP COLLATERAL AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT. Each
Pledgor hereby absolutely and irrevocably constitutes and appoints the Canadian
DIP Collateral Agent as such Pledgor's true and lawful agent and
attorney-in-fact, with full power of substitution after the occurrence of and
during the continuation of an Event of Default (in the name of such Pledgor):
(a) to act, require, demand, receive, compound and give acquittance for any and
all moneys and claims for monies due or to become due to such Pledgor under or
arising out of the Collateral of such Pledgor, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or take
any action or institute any proceedings which the Canadian DIP Collateral Agent
may reasonably deem to be necessary or advisable to protect the interests of
the Credit Providers; (b) to execute and do all such assurances, acts and
things which such Pledgor is required to do but has failed to do under the
covenants and provisions contained in this Agreement; (c) to take any and all
such action as the Canadian DIP Collateral Agent or any of its sub-agents,
nominees or attorneys may, in their sole and absolute discretion, reasonably
determine as necessary or advisable for the purpose of maintaining, preserving
or protecting the Security Interests constituted by this Agreement or any of
the rights, remedies, powers or privileges of the Canadian DIP Collateral Agent
by or pursuant to this Agreement, and (without prejudice to the generality of
any of the foregoing) to seal and deliver or otherwise perfect any deed,
assurance, agreement, instrument or act as the Canadian DIP Collateral Agent
may deem proper in or for the purpose of exercising any of such powers,
authorities or discretions. Each Pledgor hereby ratifies and confirms, and
hereby agrees to ratify and confirm, whatever lawful acts the Canadian DIP
Collateral Agent or any of the Canadian DIP Collateral Agent's sub-agents,
nominees or attorneys shall do or purport to do in the exercise of the power of
attorney granted to the Canadian DIP Collateral Agent pursuant to this Section,
which power of attorney, being given for security, is coupled with an interest
and is irrevocable.
15. PERFORMANCE BY CANADIAN DIP COLLATERAL AGENT OF PLEDGORS' OBLIGATIONS. If
any Pledgor fails to perform or comply with any of the obligations of such
Pledgor under this Agreement, the Canadian DIP Collateral Agent may, but need
not, perform or otherwise cause the performance or compliance of such
obligation, provided that such performance or compliance will not constitute a
waiver, remedy or satisfaction of such failure. The expenses of
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the Canadian DIP Collateral Agent incurred in connection with any such
performance or compliance will be payable by such Pledgor to the Canadian DIP
Collateral Agent immediately on demand, and until paid, any such expenses will
form part of the Liabilities of such Pledgor and will be secured by the Liens
created by this Agreement over the Pledged Collateral of such Pledgor.
16. INTEREST. If any amount payable by a Pledgor to the Canadian DIP
Collateral Agent or any other Credit Provider under this Agreement is not paid
when due, to the extent that the DIP Credit Agreement does not provide for
interest on such unpaid amount, such Pledgor will pay to the Canadian DIP
Collateral Agent or such other Credit Provider, as the case may be, to the
extent permitted by law, immediately on demand, interest on such amount from
the date due until paid, at a nominal rate per annum equal at all times to the
Base Rate in effect from time to time plus 2 %, which rate per annum will
change automatically without notice to such Pledgor as and when the Base Rate
changes. All amounts payable by any Pledgor to the Canadian DIP Collateral
Agent or any other Credit Provider under this Agreement, and all interest on
all such amounts, will form part of the Liabilities of such Pledgor and will be
secured by the Liens created by this Agreement over the Pledged Collateral of
such Pledgor.
17. SEVERABILITY. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction or against any Pledgor will, as to that
jurisdiction and such Pledgor, be ineffective to the extent of such prohibition
or unenforceability and will be severed from the balance of this Agreement, all
without affecting the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction or
against any other Pledgor.
18. RIGHTS OF CANADIAN DIP COLLATERAL AGENT; LIMITATIONS ON CREDIT PROVIDERS'
OBLIGATIONS. None of the Canadian DIP Collateral Agent, any other Credit
Provider, any Receiver or any agent of any of the foregoing (including, in
Alberta or British Columbia, any sheriff) (i) will be liable to any Pledgor or
any other Person for any failure or delay in exercising any of its rights under
this Agreement (including any failure to take possession of, collect, sell,
lease or otherwise dispose of any Pledged Collateral of such Pledgor, or to
preserve rights against prior parties); (ii) is required to take, or will have
any liability for any failure to take or delay in taking, any steps necessary
or advisable to preserve rights against other Persons under any Pledged
Collateral of any Pledgor in its possession; or (iii) will be liable for any,
and each Pledgor will bear the full risk of all, loss or damage to any and all
of the Pledged Collateral of such Pledgor (including any Pledged Collateral of
such Pledgor in the possession of any such Person) caused for any reason other
than the gross negligence or willful misconduct of such Person.
19. DEALINGS BY CANADIAN DIP COLLATERAL AGENT. The Canadian DIP Collateral
Agent will not be obliged to exhaust its recourse against any Pledgor or any
other Person or against any other security it may hold in respect of the
Liabilities of any Pledgor before realizing upon or otherwise dealing with the
Pledged Collateral of such Pledgor in such manner as the Canadian DIP
Collateral Agent may consider desirable. The Canadian DIP Collateral Agent or
the Credit Providers may grant extensions of time and other indulgences, take
and give up security, accept compositions, grant releases and discharges and
otherwise deal with each Pledgor and any other
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Person, and with any or all of the Pledged Collateral of each Pledgor, and with
other security and sureties, as the Canadian DIP Collateral Agent and the
Credit Providers may see fit, all without prejudice to the Liabilities of any
Pledgor or to the rights and remedies of the Canadian DIP Collateral Agent
under this Agreement. The powers conferred on the Canadian DIP Collateral
Agent under this Agreement are solely to protect the interests of the Canadian
DIP Collateral Agent and the Credit Providers in the Pledged Collateral of each
of the Pledgors and will not impose any duty upon the Canadian DIP Collateral
Agent to exercise any such powers.
20. COMMUNICATION. All notices and other communications given under or with
respect to this Agreement will be in writing and may be sent by facsimile,
mailed or delivered to the Canadian DIP Collateral Agent at its address
Canadian Imperial Bank of Commerce, 161 Bay Street, 8th Floor, BCE Place,
Toronto, Ontario, M5J 2S8, (facsimile (416) 956-3830) for the attention of the
Manager-Agency, or to any Pledgor care of Philip at 100 King Street West, P.O.
Box 2440 LCD 1, Hamilton, Ontario, L8N 4J6 (facsimile (905) 521-9160))
attention General Counsel or, as to any such Person, at such other address or
facsimile number as may be designated by such Person in a notice to the others
given as required hereby. Except as otherwise provided in this Agreement, all
such communications will be deemed to have been duly given when (a) transmitted
by facsimile if transmitted prior to 4:00 p.m. (local time at the place of
delivery) on a Business Day and otherwise on the Business Day following
transmission, (b) personally delivered or (c) in the case of a mailed notice,
upon receipt, in each case given or addressed as aforesaid.
21. RELEASE OF INFORMATION. Each of the Pledgors authorizes the Canadian DIP
Collateral Agent to provide a copy of this Agreement and such other information
as may be requested of the Canadian DIP Collateral Agent by any Credit Provider
and by any other Persons entitled thereto pursuant to any applicable law or
court order, and otherwise with the consent of such Pledgor.
22. WAIVERS AND INDEMNITY. To the extent permitted by applicable law, each of
the Pledgors unconditionally and irrevocably waives (i) all claims, damages and
demands it may acquire against any Credit Provider arising out of the exercise
by the Canadian DIP Collateral Agent or any Receiver of any rights or remedies
under this Agreement or at law, and (ii) all of the rights, benefits and
protections given by any present or future statute that imposes limitations on
the rights, powers or remedies of a secured party or on the methods of, or
procedures for, realization of security, including any "seize or sue" or
"anti-deficiency" statute or any similar provision of any other statute. No
Credit Provider will, by any act or delay, be deemed to have waived any right
or remedy hereunder or to have acquiesced in any Event of Default or in any
breach of any of the terms and conditions hereof. Neither the taking of any
judgment nor the exercise of any power of seizure or sale will extinguish the
liability of any Pledgor to pay the Liabilities of such Pledgor, nor will the
same operate as a merger of any covenant contained in this Agreement or of any
other liability, nor will the acceptance of any payment or other security
constitute or create any novation. Each of the Pledgors severally (and not
jointly or jointly and severally) agrees to indemnify the Canadian DIP
Collateral Agent and the Credit Providers from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(except by reason of the
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gross negligence or wilful misconduct of such Person) which may be imposed on,
incurred by, or asserted against the Canadian DIP Collateral Agent or any
Credit Provider and arising by reason of any action (including any action
referred to in this Agreement) or inaction or omission to do any act legally
required by such Pledgor. These indemnifications will survive the
satisfaction, release or extinguishment of the Liabilities of each Pledgor and
the Liens created by this Agreement.
23. ADDITION OF PLEDGORS. Additional Persons may from time to time after the
date of this Agreement become Pledgors under this Agreement by executing and
delivering to the Canadian DIP Collateral Agent a supplemental agreement (a
"SUPPLEMENT") to this Agreement in substantially the form attached as Schedule
C to this Agreement. Effective from and after the date of the execution and
delivery by any Person to the Canadian DIP Collateral Agent of a Supplement:
(a) such Person shall be, and shall be deemed for all purposes to
be, a Pledgor under this Agreement with the same force and effect,
and subject to the same agreements, representations, indemnities,
liabilities, obligations and Liens, as if such Person had been an
original signatory to this Agreement as a Pledgor;
(b) all Persons identified in such Supplement, or in any schedule
or exhibit to such Supplement, as Issuers or Obligors shall be, and
shall be deemed for all purposes to be, Issuers and Obligors as
defined in this Agreement; and
(c) all securities of any Issuers (including any Issuers referred
to in clause (b) of this Section) and all indebtedness from any
Obligors (including any Obligors referred to in clause (b) of this
Section) identified in such Supplement, or in any schedule or
exhibit to such Supplement, as Initially Pledged Collateral of any
Person which becomes a Pledgor pursuant to such Supplement shall be,
and shall be deemed for all purposes to be, Initially Pledged
Collateral of such Pledgor as defined in this Agreement.
The execution and delivery of a Supplement by any additional Person shall not
require the consent of any Pledgor and all of the Liabilities of each Pledgor
under this Agreement, and all Liens granted by each Pledgor under this
Agreement, shall remain in full force and effect notwithstanding the addition
of any new Pledgor to this Agreement.
24. AMALGAMATION. If any Pledgor is a corporation, such Pledgor acknowledges
that if it amalgamates or merges with any other corporation or corporations,
then (i) the term "Pledgor", where used in this Agreement, will extend to and
include the continuing corporation from such amalgamation or merger, (ii) the
term "Liabilities", where used in this Agreement in connection with such
Pledgor, will extend to and include the Liabilities of each of the amalgamating
or merging corporations at the time of such amalgamation or merger and the
Liabilities of the continuing corporation from such amalgamation or merger
arising thereafter, and (iii) the Pledged Collateral of such Pledgor and the
Liens created by this Agreement over the Pledged Collateral of such Pledgor
will extend to and include all of the Pledged Collateral of each of the
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amalgamating or merging corporations at the time of such amalgamation or merger
and to any and all Pledged Collateral of the continuing corporation from such
amalgamation or merger thereafter owned or acquired.
25. RELEASE OF PLEDGOR. Promptly following any release of any Pledgor from all
of its Liabilities (including any such release effected by the operation of an
express provision of the Secured Credit Documents previously providing for the
release of such Liabilities in specified circumstances), the Canadian DIP
Collateral Agent, without affecting in any manner whatsoever any of the
Liabilities of any other Pledgor or any of the Liens created by this Agreement
over the Pledged Collateral of any other Pledgor, will release such Pledgor and
the Pledged Collateral of such Pledgor then subject to the Liens created by
this Agreement from this Agreement and from the Liens created by this
Agreement. Upon such release, and at the request and expense of such Pledgor,
the Canadian DIP Collateral Agent shall execute and deliver such releases,
discharges, instruments and resolutions as such Pledgor may reasonably request.
26. ADDITIONAL SECURITY. This Agreement is in addition to, and not in
substitution of, any and all other security documents previously or
concurrently delivered by any Pledgor to the Canadian DIP Collateral Agent or
to any Credit Provider, all of which other security documents shall remain in
full force and effect.
27. SEVERAL AGREEMENT; ALTERATION OR WAIVER. No provision of this Agreement
may be changed, waived, discharged or terminated except with the written
consent of each Pledgor directly affected thereby and the written consent of
the Canadian DIP Collateral Agent. This Agreement shall be construed as a
separate agreement with respect to each Pledgor and, subject to the first
sentence of this Section, may be amended, modified, supplemented, waived or
released with respect to any Pledgor, or any representations, agreements,
covenants, indemnities, Liabilities or Pledged Collateral of, or any Lien from,
any Pledgor, without the approval of any other Pledgor and without affecting
the liabilities or obligations of any other Pledgor under this Agreement. Any
waiver will be effective only in the specific instance, and only for the
specific purpose, in respect of which the waiver is given. No failure by any
Credit Provider to exercise, and no delay in exercising, any right under this
Agreement will operate as a waiver of any right, nor will any single or partial
exercise of any right under this Agreement against any Pledgor preclude any
other or further exercise of such right against such Pledgor, the exercise of
such right against any other Pledgor or the exercise of any other right against
such Pledgor or against any other Pledgor.
28. GOVERNING LAW; ATTORNMENT. This Agreement is a contract made under, and
will for all purposes be governed by and interpreted and enforced according to,
the laws of the Province of Ontario (including the laws of Canada applicable in
such Province), excluding any conflict of laws rule or principle that might
refer these matters to the laws of another jurisdiction, and without prejudice
to or limitation of any other rights or remedies available to the Canadian DIP
Collateral Agent or the Credit Providers under the laws of any other
jurisdiction. Each of the Pledgors irrevocably submits to the jurisdiction of
the courts of the Province of Ontario and to the Supreme Court of Canada
without prejudice to the right of the Credit Providers to commence an action
against such Pledgor in any other jurisdiction. Each of the Pledgors agrees
that service
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of all writs, processes, statements, correspondence and summonses in any suit,
action or proceeding brought against such Pledgor under or in respect of this
Agreement in the Province of Ontario may be made upon such Pledgor at such
Pledgor's address for notices as provided for in Section 20 of this Agreement,
and each of the Pledgors irrevocably appoints Philip as such Pledgor's true and
lawful attorney-in-fact in such Pledgor's name, place and stead to accept such
service of any and all writs, processes, statements, correspondence and
summonses, and agrees that the failure of Philip to give any notice thereof to
such Pledgor shall not impair or affect the validity of such service or of any
judgment based thereon. Each of the Pledgors further irrevocably consents to
the service of any writs, processes, statements, correspondence and summonses
in any suit, action or proceeding in such courts by the mailing thereof by
registered or certified mail, postage prepaid to such Pledgor at such Pledgor's
address for notice as provided for in Section 20 of this Agreement. Nothing in
this Section shall be deemed to in any way limit the ability of the Canadian
DIP Collateral Agent or any other Credit Provider to serve any such writs,
processes, statements, correspondence or summonses in any other manner
permitted by applicable law or to obtain jurisdiction over any Pledgor in such
other jurisdictions, and in such manner, as may be permitted by applicable law.
Each of the Pledgors irrevocably waives any objection which it may now or in
the future have based on lack of personal jurisdiction over such Pledgor or
which it may have to the laying of venue of any such suit, action or proceeding
brought in the courts of the Province of Ontario or the Supreme Court of Canada
and further irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an improper venue or
in an inconvenient forum.
29. WAIVER OF JURY TRIAL. Because disputes arising in connection with complex
financial transactions of the nature provided for under this Agreement and the
other Secured Credit Documents are most quickly and economically resolved by an
experienced and expert person and the Pledgors and the Credit Providers wish
applicable laws to apply (rather than arbitration rules), the parties desire
that their disputes be resolved by a judge applying such applicable laws.
Therefore, to achieve the best combination of the benefits of the judicial
system and of arbitration, the Pledgors and the Credit Providers waive all
right to trial by jury in any action, suit, or proceeding brought to resolve
any dispute, whether in contract, tort, or otherwise, between any Pledgor and
the Credit Providers arising out of, connected with, related to, or incidental
to the relationship established between them in connection with this Agreement.
30. DELIVERY AND COMPLETENESS OF AGREEMENT. Upon this Agreement (or a
Supplement as provided for in Section 23 hereof), bearing the signature of a
Person claiming to have authority to bind a Pledgor, coming into the possession
of the Canadian DIP Collateral Agent, and irrespective of whether this
Agreement (or any such Supplement) has been executed by any other Pledgor, this
Agreement (and such Supplement) will be deemed to be finally and irrevocably
executed and delivered by, and be effective and binding on, and enforceable
against, such Pledgor free from any promise or condition affecting or limiting
the liabilities or obligations of such Pledgor under or in respect of this
Agreement. No statement, representation, agreement or promise by any officer,
employee or agent of any Credit Provider, unless expressly set forth in this
Agreement, forms any part of this Agreement or has induced the making of this
Agreement by any Pledgor or in any way affects any of the liabilities or
obligations of any Pledgor under this Agreement. This Agreement constitutes
the entire agreement between the Credit Providers
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and each of the Pledgors with respect to the subject matter of this Agreement
and cancels and supersedes any prior understandings and agreements between the
Credit Providers and each such Pledgor with respect to this Agreement (without
affecting any other security previously or concurrently delivered by any
Pledgor to the Credit Providers).
31. ENFORCEMENT BY CANADIAN DIP COLLATERAL AGENT. The Credit Providers agree
that this Agreement and the security constituted by this Agreement may be
enforced only by the action of the Canadian DIP Collateral Agent acting on
behalf of the Credit Providers and that no other Credit Provider shall have any
rights individually to seek to enforce or to enforce this Agreement or any of
the security constituted by the Agreement, it being understood and agreed that
such rights and remedies may be exercised by the Canadian DIP Collateral Agent
for the benefit of the Credit Providers upon the terms of this Agreement.
32. INTERPRETATION. Unless otherwise expressly provided in this Agreement, if
any matter in this Agreement is subject to the consent or approval of the
Canadian DIP Collateral Agent or is to be acceptable to the Canadian DIP
Collateral Agent, such consent, approval or determination of acceptability will
be in the sole discretion of the Canadian DIP Collateral Agent. If any
provision in this Agreement refers to any action taken or to be taken by any
Pledgor, or which such Pledgor is prohibited from taking, such provision will
be interpreted to include any and all means, direct or indirect, of taking, or
not taking, such action. The division of this Agreement into sections and
paragraphs, and the insertion of headings, is for convenience of reference only
and will not affect the construction or interpretation of this Agreement.
Unless the context otherwise requires, words importing the singular include the
plural and vice versa, and words importing gender include all genders. Any
reference in this Agreement to "Section" means the relevant Section of this
Agreement. When used in this Agreement , the word "including" or "includes"
shall mean including or includes "without limitation". Any reference in this
Agreement to something being permitted by the Secured Credit Documents is
intended to be a reference to such thing being permitted by all of the Secured
Credit Documents. In the event of any conflict between the provisions of this
Agreement and the provisions (other than Section 13) of the DIP Credit
Agreement, the provisions of the DIP Credit Agreement will prevail.
33. SUCCESSORS AND ASSIGNS. This Agreement will enure to the benefit of, and
be binding on, each of the Pledgors and its successors and permitted assigns,
and will enure to the benefit of, and be binding on, the Canadian DIP
Collateral Agent and the other Credit Providers and their respective successors
and assigns. No Pledgor may assign this Agreement, or any of its rights or
obligations under this Agreement, without the prior written consent of the
Canadian DIP Collateral Agent.
34. ACKNOWLEDGMENT OF RECEIPT/WAIVER. Each of the Pledgors acknowledges
receipt of an executed copy of this Agreement and, to the extent permitted by
applicable law, waives the right to receive a copy of any financing statement,
financing change statement or verification statement registered or issued in
connection with this Agreement.
35. COUNTERPARTS AND FACSIMILE. This Agreement may be executed in
counterparts. Each executed counterpart shall be deemed to be an original and
all counterparts taken together shall
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constitute one and the same Agreement. Delivery of an executed signature page
to this Agreement by any Pledgor by facsimile transmission shall be as
effective as delivery of a manually executed copy of this Agreement by such
Pledgor.
36. LANGUAGE. The parties to this Agreement expressly request and require that
this Agreement and all related documents be drafted in English. Les parties
aux presentes conviennent et exigent que cette Convention et tous les documents
qui s'y rattachent soient rediges en Anglais.
IN WITNESS OF WHICH each of the undersigned has executed this agreement as
of the date shown on the first page of this Agreement.
CANADIAN IMPERIAL BANK OF COMMERCE, as
Canadian DIP Collateral Agent
by:___________________________________
name:
title:
PHILIP SERVICES CORP.
PHILIP ENTERPRISES INC./LES ENTREPRISES
PHILIP INC.
PHILIP ANALYTICAL SERVICES CORPORATION
PHILIP ENVIRONMENTAL (ATLANTIC) LIMITED
PHILIP ENVIRONMENTAL (ELMIRA) INC.
PHILIP ENVIRONMENTAL SERVICES LIMITED
PHILIP INVESTMENT CORP.
PSC/IML ACQUISITION CORP.
RECYCLAGE D'ALUMINIUM QUEBEC INC./QUEBEC
ALUMINIUM RECYCLING INC.
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1195613 ONTARIO INC.
1233793 ONTARIO INC.
842578 ONTARIO LIMITED
ALLWASTE OF CANADA LTD.
CALIGO RECLAMATION LTD.
ALLIES STAFFING LTD.
SERVTECH CANADA, INC.
ST DELTA CANADA, INC.
PHILIP INTERNATIONAL DEVELOPMENT INC.
PHILIP SERVICES INDUSTRIAIS DO BRAZIL LTDA
2766906 CANADA INC.
721646 ALBERTA LTD.
800151 ONTARIO INC.
912613 ONTARIO LTD.
PHILIP PLASMA METALS INC.
CALIGO PARTNERSHIP
BY ITS PARTNER ALLWASTE OF CANADA LTD.
DELSAN DEMOLITION LIMITED
NORTRU, LTD.
SERV-TECH EUROPE GMBH
P.S.P.E. SERVICOS PRESTADOS AS EMPRESAS
UNIPESSOAL LIMITADA
SABLIX INC.
398
- 25 -
P.S.C. PHILIP SERVICES IBERICA, S.L.
2842-7979 QUEBEC INC.
in each case by:
________________________________________
____________________
Authorized Signatory
399
SCHEDULE A TO
CANADIAN SECURITIES AND DEBT PLEDGE AGREEMENT
% of Issued and
Oustanding Securities
Pledgor Issuers of Issuer
===================== ==================================== =====================
Philip Services Corp. Arc Dust Processing (Barbados) 100%
Limited
Luntz Corporation 100%
Philip Enterprises Inc./Les 100%
Entreprises Philip Inc.
Phencorp Reinsurance Company Inc. 100%
Philip Analytical Services 100%
Corporation
Philip Environmental (Atlantic) 100%
Limited
Philip Environmental (Elmira) Inc. 100%
Philip Environmental Services 100%
Limited
Philip International Development 100%
Inc.
Philip Investment Corp. 100%
PSC/IML Acquisition Corp. 100%
Recylage d'Aluminium Quebec 100%
Inc./Quebec Aluminum Recycling Inc.
Cecatur Holdings 100%
Allwaste of Canada Ltd. 100%
2766906 Canada Ltd. 100%
721646 Alberta Ltd. 100%
Philip Enterprises Phencorp International Finance, Inc. 100%
Inc./Les Entreprises Phencorp International B.V. 100%
Philip. Philip Services (Europe) Limited 100%
1195613 Ontario Inc. 100%
1233793 Ontario Inc. 100%
842578 Ontario Limited 100%
Philip Services (Delaware), Inc. 100%
-------------------------------- --------------------
400
- 2 -
% of Issued and
Oustanding Securities
Pledgor Issuers of Issuer
=========================== ========================= =======================
Luntz Corporation 100%
2842-7979 Quebec Inc. 100%
800151 Ontario Inc. 100%
912613 Ontario Ltd. 100%
Philip Plasma Metals Inc. 100%
Philip Analytical Services
Corporation
Philip Environmental
(Atlantic) Limited
Philip Environmental
(Elmira) Inc.
Philip Environmental
Services Limited Delsan Demolition Limited 100%
Philip Investment Corp.
PSC/IML Acquisition Corp.
Recyclage d'Aluminium
Quebec Inc./Quebec
Aluminum Recycling Inc.
1195613 Ontario Inc.
1233793 Ontario Inc.
842578 Ontario Limited
Allwaste of Canada Ltd. Caligo Reclamation Ltd. 100%
Caligo Reclamation Ltd.
Allies Staffing Ltd.
ServTech Canada, Inc. ST Delta Canada, Inc. 100%
ST Delta Canada, Inc.
Philip Services
Industriais do Brazil Ltda
2766906 Canada Inc.
721646 Alberta Ltd.
800151 Ontario Inc.
912613 Ontario Ltd.
401
- 3 -
% of Issued and
Oustanding Securities
Pledgor Issuers of Issuer
============================ ======================= =====================
Philip Plasma Metals Inc.
Caligo Partnership
Delsan Demolition Limited
Nortru, Ltd.
Serv-Tech Europe GmbH Refinery Maintenance 100%
International Limited
P.S.P.E. Servicos Prestados
As Empresas Unipessoal
Limitada
P.S.C. Philip Services
Iberica, S.L.
Sablix Inc.
402
SCHEDULE B TO
CANADIAN SECURITIES AND DEBT PLEDGE AGREEMENT
FROM PHILIP SERVICES CORP. AND ITS SUBSIDIARIES
PLEDGE CONFIRMATION NO.
TO
CANADIAN SECURITIES AND DEBT PLEDGE AGREEMENT
This Pledge Confirmation is made as of by
(the "PLEDGOR") in favour of Canadian Imperial Bank of Commerce, as Canadian
DIP Collateral Agent.
WHEREAS:
A. Reference is made to the Canadian Securities and Debt Pledge Agreement (the
"SECURITIES PLEDGE AGREEMENT") dated as of June , 1999 from the Pledgor and
certain other Persons in favour of the Canadian DIP Collateral Agent for the
benefit of the Credit Providers.
B. Capitalized terms used but not otherwise defined in this Pledge Confirmation
have the respective meanings given to such terms in the Securities Pledge
Agreement including the definitions of terms incorporated in the Securities
Pledge Agreement by reference to other agreements.
C. Subsection 7(f) of the Securities Pledge Agreement provides for the delivery
of Pledge Confirmations from time to time by Pledgors with respect to
additional Pledged Securities of such Pledgors.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which are acknowledged by the Pledgor, the Pledgor covenants and agrees with
the Canadian DIP Collateral Agent for the benefit of the Credit Providers as
follows:
1. This Pledge Confirmation is being delivered to the Canadian DIP
Collateral Agent pursuant to subsection 7(f) of, and may be attached by the
Canadian DIP Collateral Agent to, the Securities Pledge Agreement.
2. For greater certainty, the Pledged Securities listed on this Pledge
Confirmation are part of, and shall be deemed for all purposes to form part of,
the Pledged Collateral of the Pledgor and shall secure the Liabilities of the
Pledgor.
3. This Pledge Confirmation is a contract made under, and will for all
purposes be governed by and interpreted and enforced according to, the laws of
the Province of Ontario (and
403
- 2 -
the laws of Canada applicable in such Province) excluding any conflict of laws
rule or principle which might refer these matters to the laws of another
jurisdiction.
IN WITNESS OF WHICH this Pledge Confirmation has been duly executed and
delivered by the Pledgor as of the date shown on the first page of this Pledge
Confirmation.
(name of Pledgor)
by: _______________________________
name:
title:
404
EXHIBIT 1 TO PLEDGE CONFIRMATION NO. TO SECURITIES AND DEBT PLEDGE AGREEMENT
-------------------------------------------------------------------------------
% of Issued and Outstanding
Pledgor Issuers Additional Pledged Security Securities of Issuer
405
SCHEDULE C TO
CANADIAN SECURITIES AND DEBT PLEDGE AGREEMENT
FROM PHILIP SERVICES CORP. AND ITS SUBSIDIARIES
SUPPLEMENT NO.
TO
CANADIAN SECURITIES AND DEBT PLEDGE AGREEMENT
This Supplement is made as of , in favour of
Canadian Imperial Bank of Commerce as Canadian DIP Collateral Agent.
WHEREAS:
A. Reference is made to the Canadian Securities and Debt Pledge Agreement dated
as of June , 1999 from PHILIP SERVICES CORP. and certain of its Subsidiaries in
favour of the Canadian DIP Collateral Agent for the benefit of the Credit
Providers (the "SECURITIES PLEDGE AGREEMENT").
B. Capitalized terms used but not otherwise defined in this Supplement have the
respective meanings given to such terms in the Securities Pledge Agreement
including the definitions of terms incorporated in the Securities Pledge
Agreement by reference to other agreements.
C. Section 23 of the Securities Pledge Agreement provides that additional
Persons may from time to time after the date of the Securities Pledge Agreement
become Pledgors under the Securities Pledge Agreement by executing and
delivering to the Canadian DIP Collateral Agent a supplemental agreement to the
Securities Pledge Agreement in the form of this Supplement.
D. Each of the undersigned (each a "NEW PLEDGOR") is a Subsidiary of Philip and
a condition to the Credit Providers continuing to make certain financial
accommodation available to Philip is that each of the New Pledgors becomes a
Pledgor under the Securities Pledge Agreement by executing and delivering this
Supplement to the Canadian DIP Collateral Agent.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which are acknowledged by each of the New Pledgors, each of the New Pledgors
severally (and not jointly or jointly and severally) covenants and agrees with
the Canadian DIP Collateral Agent for the benefit of the Credit Providers as
follows:
1. Each of the New Pledgors has received a copy of, and has reviewed, the
Securities Pledge Agreement and the other Secured Credit Documents in existence
on the date of this Supplement and is executing and delivering this Supplement
to the Canadian DIP Collateral Agent pursuant to Section 23 of the Securities
Pledge Agreement.
2. Effective from and after the date this Supplement is executed and
delivered to the Canadian DIP Collateral Agent by any New Pledgor (and
irrespective of whether this
406
- 2 -
Supplement or the Securities Pledge Agreement has been executed and delivered
by any other Person):
(a) such New Pledgor is, and shall be deemed for all purposes to
be, a Pledgor under the Securities Pledge Agreement with the same
force and effect, and subject to the same agreements,
representations, indemnities, liabilities, obligations and Liens, as
if such New Pledgor had been, effective as of the date of this
Supplement, an original signatory to the Securities Pledge Agreement
as a Pledgor;
(b) each of the Persons identified in Exhibit 1 to this
Supplement under the heading "Issuers" or "Obligors" shall be, and
shall be deemed for all purposes to be, Issuers and Obligors as
defined in the Securities Pledge Agreement; and
(c) all securities of any Issuer and all indebtedness from any
Obligor listed or described opposite the name of such New Pledgor
under the heading "Initially Pledged Collateral" in Exhibit 1 to
this Supplement shall be, and shall be deemed for all purposes to
be, Initially Pledged Collateral of such New Pledgor as defined in
the Securities Pledge Agreement.
In furtherance of the foregoing each New Pledgor severally (and not jointly or
jointly and severally), as security for the payment and performance of the
Liabilities (including the payment of any such Liabilities that would become
due but for any automatic stay under the provisions of the Bankruptcy and
Insolvency Act (Canada), the United States Bankruptcy Code or any analogous
provisions of any other applicable law in Canada, the United States of America
or any other jurisdiction) of such New Pledgor assigns and pledges to and in
favour of the Canadian DIP Collateral Agent, and grants to the Canadian DIP
Collateral Agent a continuing security interest in, the Pledged Collateral of
such New Pledgor. Each reference to a Pledgor in the Securities Pledge
Agreement shall be deemed to include each New Pledgor. The terms and
provisions of the Securities Pledge Agreement are incorporated by reference in
this Supplement.
3. Each of the New Pledgors represents and warrants with respect to itself
to the Canadian DIP Collateral Agent and the Credit Providers that (a) this
Supplement has been duly authorized, executed and delivered by such New Pledgor
and constitutes a legal, valid and binding obligation of such New Pledgor
enforceable against such New Pledgor in accordance with its terms, and (b) each
of the representations and warranties made or deemed to have been made by such
New Pledgor under the Securities Pledge Agreement as a Pledgor are true and
correct on the date of this Supplement.
4. Upon this Supplement bearing the signature of any Person claiming to
have authority to bind any New Pledgor coming into the possession of the
Canadian DIP Collateral Agent, and irrespective of whether this Supplement or
the Securities Pledge Agreement has been executed by any other Person, this
Supplement and the Securities Pledge Agreement will be deemed to be finally and
irrevocably executed and delivered by, and be effective and binding on, and
enforceable against, such New Pledgor free from any promise or condition
affecting or limiting the liabilities of such New Pledgor and such New Pledgor
shall be, and shall be deemed
407
- 3 -
for all purposes to be, a Pledgor under the Securities Pledge Agreement. No
statement, representation, agreement or promise by any officer, employee or
agent of any Credit Provider, unless expressly set forth in this Supplement
forms any part of this Supplement or has induced any of the New Pledgors to
enter into this Supplement and the Securities Pledge Agreement or in any way
affects any of the agreements, obligations or liabilities of any New Pledgor
under the Securities Pledge Agreement.
5. This Supplement may be executed in counterparts. Each executed
counterpart shall be deemed to be an original and all counterparts taken
together shall constitute one and the same Supplement. Delivery of an
executed signature page to this Supplement by any of the New Pledgors by
facsimile transmission shall be as effective as delivery of a manually executed
copy of this Supplement by such New Pledgor.
6. This Supplement is a contract made under, and will for all purposes be
governed by and interpreted and enforced according to, the laws of the Province
of Ontario (and the laws of Canada applicable in such Province) excluding any
conflict of laws rule or principle which might refer these matters to the laws
of another jurisdiction.
7. This Supplement and the Securities Pledge Agreement shall be binding
upon each of the New Pledgors and the successors of each of the New Pledgors.
None of the New Pledgors shall assign its rights and obligations under this
Supplement or the Securities Pledge Agreement or any interest in this
Supplement or the Securities Pledge Agreement
.
IN WITNESS OF WHICH this Supplement has been duly executed and delivered
by each of the undersigned as of the date shown on the first page of this
Supplement.
[SIGNATURES OF NEW PLEDGORS]
408
EXHIBIT 1 TO SUPPLEMENT NO. TO SECURITIES AND DEBT PLEDGE AGREEMENT
-------------------------------------------------------------------------
% of Issued and Outstanding
Pledgor Issuers Initially Pledged Collateral Securities of Issuer
409
Exhibit J
Cash Collateral Order
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: )
) Chapter 11
PHILIP SERVICES (DELAWARE), )
INC., et al., ) Case No. 99-_____
) Through 99- _____ (____)
Debtors. )
) Jointly Administered
STIPULATION AND ORDER AUTHORIZING AND
RESTRICTING USE OF CASH COLLATERAL AND
GRANTING ADEQUATE PROTECTION OF CERTAIN SECURED CLAIMS
This Stipulation and Order (the "Stipulation and Order") is made by and
among Philip Services (Delaware), Inc. ("PSI"), Philip Services Corp. ("PSC",
and together with PSI, the "Borrowers") and each of their affiliates that are
Restricted Subsidiaries' (as defined in the Pre-Petition Credit Agreement (as
defined below)) (the Restricted Subsidiaries, together with the Borrowers, the
"Philip Entities")(2), and the lenders party to the Credit Agreement dated as
of August 11, 1997, as amended from time to time through the Petition Date, as
defined below (as
_______________
(1) Capitalized terms not defined herein shall have the meanings ascribed to
such terms in the Pre-Petition Credit Agreement (as defined below).
(2) This Stipulation and Order reflects the contractual agreement of each of
the Philip Entities but does not reflect the consent to jurisdiction by any
Philip Entity that is not otherwise subject to the jurisdiction of this
Court. Furthermore, the rights and obligations of the Canadian Entities (as
defined below) under this Stipulation and Order are expressly conditioned
upon the court in the Canadian Cases (as defined below) authorizing the
Canadian Entities to enter into this Stipulation and Order.
410
amended, the "Pre-Petition Credit Agreement") among the Borrowers, Canadian
Imperial Bank of Commerce ("CIBC"), as Administrative Agent (in such capacity,
the "Pre-Petition Administrative Agent"), Bankers Trust Company ("BTCo"), as
Syndication Agent, and CIBC and BTCo, as Co-Arrangers, (CIBC and BTCo
collectively, the "Pre-Petition Agents"), the various lenders from time to time
parties thereto (collectively, the "Pre-Petition Lenders"), and the holders of
the Account Intermediary Receivable Liens (as defined below) and the Other
Account Intermediary Liens (as defined below).
Findings of Fact and Conclusions of Law
THE COURT HEREBY FINDS:
A. This Court has jurisdiction over this matter pursuant to 28 U.S.C.
Sections 157(b) and 1334. Consideration of this matter constitutes a core
proceeding as defined in 28 U.S.C. Section 157(b)(2). The statutory predicates
for the relief sought herein are Sections 105, 361, 362, 363 and 364 of title
11 of the United States Code (the "Bankruptcy Code") and Rule 4001(b), (c) and
(d) of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules").
Venue of the Chapter 11 Cases (as defined below) and the motion seeking
approval of this Stipulation and Order in this District is proper pursuant to
28 U.S.C. Sections 1408 and 1409.
B. On June 25, 1999 (the "Petition Date"), PSC and certain of its direct
and indirect subsidiaries incorporated in the United States, including PSI
(collectively, the "Debtors") filed petitions for relief (the "Chapter 11
Cases") pursuant to Chapter 11 of the Bankruptcy Code with the Clerk of the
United States Bankruptcy Court for the District of Delaware (the "Court"). The
Chapter 11 Cases have been consolidated for procedural purposes only. On June
25, 1999, PSC and certain direct and indirect subsidiaries of PSC incorporated
in Canada (the "Canadian
-2-
411
Entities") filed insolvency proceedings in the Superior Court of Ontario (the
"Canadian Court") under the Companies' Creditors Arrangement Act (the "CCAA").
The proceeding commenced under the CCAA is hereinafter referred to as the
"Canadian Case" and, collectively with the Chapter 11 Cases, the "Cases").
C. The Debtors have continued in the management and operation of their
business and property as debtors in possession pursuant to Sections 1107 and
1108 of the Bankruptcy Code. No trustee, examiner or creditors committee has
been appointed in the Chapter 11 Cases, nor has any request for the appointment
of a trustee or examiner been made.
D. PSC and its direct and indirect subsidiaries are an integrated metals
recovery and industrial services company which provides metals recovery and
processing services, by-products recovery, and industrial outsourcing services
to major industry sectors with over 230 locations in the United States, Canada
and Europe. PSC's primary base of operations is in the United States. PSC is
organized into two operating divisions, the Metals Services Group and the
Industrial Services Group. The Metals Services Group is one of the largest
ferrous scrap processors in North America and the United Kingdom and has
approximately 2,000 employees. The Industrial Services Group is an integrated
provider of by-products recovery and industrial outsourcing with a network of
over 200 facilities and approximately 10,000 employees. For the year ended
December 31, 1998, PSC had revenue of $2.0 billion.
E. Prior to the Petition Date, the Pre-Petition Lenders loaned money to,
and issued letters of credit for the account of, the Borrowers (such loans and
letters of credit collectively, the "Pre-Petition Loans") pursuant to the
Pre-Petition Credit Agreement. The Restricted Subsidiaries, including each of
the Borrowers' subsidiaries that are Debtors herein, executed guarantees of the
Borrowers' obligations under the Pre-Petition Credit Agreement and
-3-
412
each Borrower executed a guaranty of the other Borrower's obligations under the
Pre-Petition Credit Agreement. The obligations of the Debtors, other than PSC,
under the Pre-Petition Credit Agreement and the guarantees were secured in
accordance with that certain U.S. Security Agreement dated as of March 16, 1998,
as well as various mortgages and other security documents, and the obligations
of the Canadian Entities under the Pre-Petition Credit Agreement and the
guarantees were secured in accordance with that certain Canadian Security
Agreement dated as of March 16, 1998, as well as various mortgages and other
security documents (all guarantees and security documents collectively with the
Credit Agreement, the "Pre-Petition Credit Documents").
F. The Philip Entities acknowledge that:
1. As of the Petition Date, the Philip Entities were, and remain,
indebted to the Pre-Petition Lenders, without defense, counterclaim or
offset of any kind, in the approximate amount of $1 billion (collectively,
the "Indebtedness"). The Indebtedness constitutes a legal, valid and
binding obligation of the Philip Entities, enforceable in accordance with
the terms of the Pre-Petition Credit Documents, no offsets, defenses or
counterclaims to the Indebtedness exist, and no portion of the Indebtedness
is subject to avoidance or subordination pursuant to the Bankruptcy Code or
other applicable law.
2. Except for de minimis exceptions,(3) and subject to the Senior
Liens (as defined below), by reason of the Pre-Petition Credit Documents,
the Indebtedness is
------------------------
(3) The Debtors believe that the Pre-Petition Lenders' security interests in
certain of the
(continued...)
-4-
413
secured by valid and enforceable first-priority liens and security
interests granted by the Philip Entities to CIBC as security agent, for the
ratable benefit of the Pre-Petition Lenders, upon all of the Philip
Entities' right, title and interest in, to and under the property of each
described in the Pre-Petition Credit Documents to which they are a party,
constituting substantially all of the Philip Entities' present and future
undertaking, property and assets of any kind, including, without
limitation, (i) real property, (ii) accounts receivable, (iii) contracts
and contract rights, (iv) inventory, (v) equipment, including without
limitation, rolling stock, (vi) trademarks, service marks and trade names,
together with the registrations and right to all renewals thereof, and the
goodwill symbolized by such trademarks, service marks and trade names,
(vii) patents, (viii) copyrights, (ix) computer programs and all
intellectual property rights therein and all proprietary information and
trade secrets, (x) all other goods, general intangibles, chattel paper,
documents, investment property, securities and instruments, and (xi) all
proceeds and products of any of the foregoing (collectively, the
"Pre-Petition Collateral").
---------------
(...continued)
Debtors' vehicles (with an estimated value of $20,000,000) are either not
properly perfected or have been perfected within the last 90 days. The
Debtors have expressly reserved their rights to contest the validity of the
Pre-Petition Lenders' liens and security interest in these vehicles and any
other collateral which may have been perfected within 90 days of the
Petition Date.
The foregoing is a general description of the Pre-Petition Collateral and
is not intended to limit the collateral in which the Pre-Petition Lenders
hold a security interest or lien as set forth in the Pre-Petition Credit
Documents. For purposes of this Stipulation and Order, "proceeds" shall
mean proceeds as defined in the Uniform Commercial Code as enacted in the
State of New York, as well as (x) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to the Philip Entities from time to
time with respect to any of the Pre-Petition Collateral or Post-Petition
Collateral (as defined below) and (y) any and all payments (in any form
whatsoever) made or due and payable to the Philip Entities in
(continued...)
-5-
414
3. Except as disclosed in footnote 3, the Pre-Petition Lenders'
liens and security interests in the Pre-Petition Collateral are not subject
to avoidance, defense, objection, action, counterclaim, setoff or
subordination, except such liens and security interests are junior and
subordinate to (a) the liens and security interests granted to the lenders
and agents under the post-petition financing described below (the "DIP
Financing Liens"), (b) pre-existing validly perfected and unavoidable liens
and security interests that were senior to the Pre-Petition Lenders' liens
and security interests as of the Petition Date and other rights, if any,
that may be prior under applicable law (the "Pre-Petition Senior Liens"),
(c) the liens of the LC Issuers and the LC Lenders under the Pre-Petition
Credit Agreement in specified cash collateral held under Section 5.06 of
the Pre-Petition Credit Agreement and the holders of liens in specified
cash collateral granted in connection with the Permitted LC Facility in the
Pre-Petition Credit Agreement (the "LC Liens"), (d) liens on Canadian
accounts receivable and the proceeds thereof addressed in documentation
executed in connection with the establishment and maintenance of operating
accounts of certain of the Canadian Entities at CIBC and the maintenance of
operating accounts of certain of the Debtors at Comerica Bank (the "Account
Intermediary Receivable Liens"), and (e) liens on specified cash collateral
which was also addressed in documentation executed in connection with the
establishment and maintenance of operating accounts of certain of the
Canadian Entities at CIBC and the
_________________
(...continued)
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Pre-Petition Collateral or
Post-Petition Collateral, by any governmental body, authority, bureau or
agency (or any person under color of governmental authority).
-6-
415
maintenance of operating accounts of certain of the Debtors at Comerica
Bank and in other documentation entered into in connection with the
establishment of the Permitted LC Facility under Amending Agreement No. 3
to the Pre-Petition Credit Agreement (the "Other Account Intermediary
Liens", and together with the DIP Financing Liens, the Pre-Petition Senior
Liens, the LC Liens and the Account Intermediary Receivable Liens, the
"Senior Liens").
4. The LC Liens, the Account Intermediary Receivable Liens, and the
Other Account Intermediary Liens in the Pre-Petition Collateral securing
the claims of the holders of such liens, are not subject to avoidance,
defense, objection, action, counterclaim, setoff or subordination.
5. By reason of the foregoing described liens and security
interests, the Pre-Petition Lenders have valid and perfected first-priority
liens, subject to the Senior Liens, as applicable, on, among other things,
all of the Debtors and the Canadian Entities cash collateral, as such term
is defined in the Bankruptcy Code, including, without limitation, all funds
on deposit at the banks at which the Debtors' and the Canadian Entities'
maintain their cash management system, all proceeds of the Debtors' and the
Canadian Entities' accounts and all other proceeds of the Pre-Petition
Collateral (the "Cash Collateral").
6. By reason of the foregoing described liens and security
interests, the holders of the LC Liens, the Account Intermediary Receivable
Liens and the Other Account Intermediary Liens have valid an perfected
first-priority liens in that portion of the Cash Collateral securing such
liens.
-7-
416
G. An immediate and critical need exists for the Philip Entities to use
the Cash Collateral in order to continue the operation of their business.
Without such funds, the Philip Entities will not be able to pay their payroll
and other direct operating expenses and obtain goods and services needed to
carry on their business in a manner that will avoid irreparable harm to the
Debtors' estates. The ability of the Philip Entities to use the Cash Collateral
and to have available to them sufficient working capital and liquidity through
the incurrence of credit in respect of the Cash Collateral is vital to the
confidence of their major customers and vendors and their employees and to the
preservation and maintenance of the going concern values of the Debtors'
estates. Additionally, it is a condition precedent to availability under the DIP
Financing (defined below) that the Philip Entities are allowed to utilize the
Cash Collateral as described herein.
H. The Pre-Petition Collateral securing the Indebtedness constitutes
substantially all of the Debtors' assets. The Pre-Petition Lenders and the
holders of the Account Intermediary Receivable Liens and the Other Account
Intermediary Liens object to the use by the Debtors of the Pre-Petition
Collateral, including the Cash Collateral, except on the terms of this
Stipulation and Order. The Debtors are unable to obtain the required funds to
replace such Cash Collateral, in the form of unsecured credit or unsecured debt
allowable under Section 503(b)(1) of the Bankruptcy Code as an administrative
expense pursuant to Section 364(a) or (b) of the Bankruptcy Code, unsecured debt
having the priority afforded by Section 364(c)(1) of the Bankruptcy Code, or
debt secured as described in Section 364(c)(2) or (3) of the Bankruptcy Code.
I. The Pre-Petition Agents, the Pre-Petition Lenders and the holders of
the Account Intermediary Receivable Liens and the Other Account Intermediary
Liens are willing to
-8-
417
consent and agree to the Debtors' and the Canadian Entities' use of the Cash
Collateral, subject to the conditions set forth herein. The Pre-Petition
Lenders, the Pre-Petition Agents and holders of the Account Intermediary
Receivable Liens and the Other Account Intermediary Liens have acted in good
faith in consenting to and negotiating the terms upon which they have agreed to
provide the cash collateral arrangements contemplated by this Stipulation and
Order.
J. Pursuant to a credit agreement dated as of June 28, 1999 (as amended
from time to time pursuant to the terms thereof, together with all agreements,
documents and instruments delivered in connection therewith, the "DIP Credit
Agreement"), the Debtors have moved for authorization to enter into and access a
revolving credit and letter of credit facility to be provided by all or a
sub-group of the Pre-Petition Lenders providing up to $100,000,000 in aggregate
debtor-in-possession financing (the "DIP Financing"), to be used to finance the
working capital and general corporate requirements of the Debtors and the
Canadian Entities during the Cases.
K. As set forth in the motions filed in the Cases seeking interim and
final approval for the DIP Financing (any such interim and final orders,
collectively, the "DIP Order" and, together with the DIP Credit Agreement, the
"DIP Financing Documents"), the DIP Financing is to be secured by, among other
things, a lien senior to the liens of the Pre-Petition Lenders and the
Pre-Petition Agents on the Pre-Petition Collateral securing the Indebtedness
pursuant to Section 364(d)(1) of the Bankruptcy Code.
L. Pursuant to the Bankruptcy Code, the Debtors are required to provide
adequate protection to the Pre-Petition Lenders and the holders of the Account
Intermediary Receivable Liens and the Other Account Intermediary Liens in
respect of their use of the Pre-Petition Collateral (including the Cash
Collateral) and in respect of the liens granted to the agent
-9-
418
and lenders under the DIP Credit Agreement. The protections provided pursuant
to the terms and conditions of this Stipulation and Order shall be deemed to
constitute adequate protection of the interests of the Pre-Petition Agents, the
Pre-Petition Lenders and the holders of the Account Intermediary Receivable
Liens and the Other Account Intermediary Liens in the Cash Collateral for so
long as the Debtors shall be entitled to use the Cash Collateral pursuant to
this Stipulation and Order, and/or for so long as the Canadian Entities shall
be entitled to use the Cash Collateral in the Post-Petition Proceeds Account
(as defined below) pursuant to this Stipulation and Order and pursuant to an
order of the Canadian Court.
M. Notice of this Stipulation and the motion for a preliminary hearing
(the "Preliminary Hearing") in connection herewith (the "Motion") has been
provided to (i) the Office of the United States Trustee; (ii) the Pre-Petition
Agents; (iii) the agent under the DIP Credit Agreement, (iv) the known holders
of the material Senior Liens, and (v) the twenty largest unsecured creditors of
the Debtors. Appropriate notice of the Preliminary Hearing and the relief
requested in the Motion has been given pursuant to Sections 102(1) and 363 of
the Bankruptcy Code and Bankruptcy Rules 2002, 4001(b), 4001(c) and 4001(d).
N. Good cause has been shown for the entry of this Order. Among other
things, entry of this Order will minimize disruption of the Debtors' business
and operations and the business and operations of the ▇▇▇▇▇▇ Entities generally,
and permit them to meet payroll and other operating expenses, obtain needed
supplies and retain customer and supplier confidence by demonstrating an ability
to maintain customer delivery schedules and vendor payment schedules. The
financing and cash collateral use arrangement authorized hereunder and access to
the DIP Financing are vital to avoid immediate and irreparable harm to the
Debtors' estates and to allow
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the Debtors to operate in the ordinary course of business. Consummation of such
financing and cash collateral arrangements therefore are in the best interests
of the Debtors' estates.
O. The credit and adequate protection arrangements authorized hereunder
have been negotiated in good faith and at arm's length among the ▇▇▇▇▇▇
Entities, the Pre-Petition Agents, the Pre-Petition Lenders and the holders of
the Account Intermediary Receivable Liens and the Other Account Intermediary
Liens, and the terms of such arrangements are fair and reasonable under the
circumstances and reflect the ▇▇▇▇▇▇ Entities' exercise of prudent business
judgment consistent with their fiduciary duties and are supported by reasonably
equivalent value and fair consideration.
P. The Debtors have requested immediate entry of this Stipulation and
Order pursuant to Bankruptcy Rule 4001(b)(2) and (c)(2). The permission granted
herein to use the Cash Collateral is necessary to avoid immediate and
irreparable harm to the Debtors, their estates, and to the ▇▇▇▇▇▇ Entities
generally. Entry of this Stipulation and Order is in the best interests of the
Debtors' respective estates and creditors as its implementation will, among
other things, sustain the operation of the Debtors' existing business and
enhance the Debtors' prospects for successful reorganization.
Based on the foregoing.
IT IS HEREBY STIPULATED, CONSENTED, AGREED AND ORDERED as follow:
Effectiveness of Stipulation
1. This Stipulation and Order shall have no force or effect, and the
Debtors shall not be authorized to use any of the Cash Collateral, unless and
until it is approved by the Court.
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Management of Cash Collateral
2. The Debtors shall establish and maintain a cash management system as
provided in the DIP Credit Agreement. The Canadian Entities shall maintain bank
account arrangements as provided in the DIP Credit Agreement and as ordered by
the Canadian Court. All funds subject to such cash management systems and bank
account arrangements shall be subject to the liens and superpriority
administrative claims of the Pre-Petition Agents, the Pre-Petition Lenders and
the holders of Account Intermediary Receivable Liens and the Other Account
Intermediary Liens, as hereinafter provided.
3. Subject to the approval of this Stipulation and Order, BTCo, in its
capacity as administrative agent under the DIP Credit Agreement (in such
capacity, the "DIP Agent"), shall establish and maintain an interest-bearing
account (the "Post-Petition Proceeds Account") into which the Pre-Petition
Administrative Agent shall transfer, subject to the relative priorities (without
the need to take any steps to maintain perfection in respect thereof) of the
Pre-Petition Agents, the Pre-Petition Lenders and the holders of the Account
Intermediary Receivable Liens, any funds remaining in the account (the
"Pre-Petition Proceeds Account") established pursuant to the Proceeds Agreement
dated April 5, 1999, as amended, made by and among the ▇▇▇▇▇▇ Entities and the
Pre-Petition Lenders. All funds deposited into the Post-Petition Proceeds
Account shall be subject to the liens and superpriority administrative claims of
the Pre-Petition Agents, the Pre-Petition Lenders and the holders of the Account
Intermediary Receivable Liens, as hereinafter provided.
4. The Debtors shall direct that the proceeds of all post-petition asset
sales other than proceeds obtained from the sale or transfer of inventory in the
normal course of business (the "Post-Petition Asset Sales"), including any
non-cash proceeds in the form of
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instruments and bills of exchange, net only of reasonable costs and expenses and
of payment of indebtedness secured by any Pre-Petition Senior Liens on such
assets that are not assumed by the acquirer of such assets, be delivered
directly to the DIP Agent on the closing dates thereof, subject to the Account
Intermediary Receivable Liens, if and to the extent applicable.
5. The DIP Agent shall use the cash proceeds of Post-Petition Asset
Sales, other than any funds generated by a sale, if any, of the US Ferrous
division of the ▇▇▇▇▇▇ Entities (the "US Ferrous Proceeds"), first to repay any
amounts then outstanding under the DIP Financing Documents or pursuant to
paragraph 35 hereof, and shall deposit any balance of such funds into the
Post-Petition Proceeds Account; provided, however, that all proceeds of
Post-Petition Asset Sales received by the DIP Agent plus all cash proceeds at
any time deposited into the Pre-Petition Proceeds Account (without giving effect
to any disbursements from the Pre-Petition Proceeds Account prior to the
Petition Date) in excess of $93,000,000 (after post-closing adjustments of no
greater than $4,000,000 with respect to the proceeds of the pre-petition sale of
certain assets of the aluminum division of the ▇▇▇▇▇▇ Entities deposited into
the Pre-Petition Proceeds Account), shall be deposited into a separate
interest-bearing account to be established by the DIP Agent (the "Excess
Proceeds Account"), and all funds deposited into the Excess Proceeds Account
shall be held by the DIP Agent (a) in the absence of an event of default under
the DIP Credit Agreement, for application in accordance with the provisions of
the pre-arranged plan of reorganization to be filed by the Debtors as
contemplated by the Lock-up Agreement dated as of June 21, 1999 among the ▇▇▇▇▇▇
Entities and the Pre-Petition Lenders parties thereto (the "Plan"), or, (b) upon
the occurrence of an event of default under the DIP Credit Agreement which
results in the termination of the commitments of the lenders under the DIP
Financing, to repay any amounts outstanding under the DIP Financing Documents.
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Use of Cash Collateral
6. In the absence of an Event of Default (as defined below), and except
as provided below, (a) Cash Collateral shall be advanced from the Post-Petition
Proceeds Account to the Debtors and the Canadian Entities in accordance with and
to the extent permitted in the Budget, as described below, (b) the Debtors (and
the Canadian Entities subject to an order of the Canadian Court) shall be
authorized to use all other Cash Collateral (excluding any Cash Collateral
securing the LC Liens or the Other Account Intermediary Liens, or Cash
Collateral deposited in the Excess Proceeds Account) in the ordinary course of
business, subject to any restrictions imposed by (i) the Bankruptcy Code (as
modified by Order of the Court), (ii) the DIP Financing Documents, and (iii) the
Stipulation and Order Authorizing Debtors to Obtain Post-Petition Surety Bonds
and to Enter into Indemnity Agreements, (the "Bond Order") and (c) the DIP Agent
shall withdraw funds from the Post-Petition Proceeds Account or from any other
Cash Collateral held by the DIP Agent (excluding any Cash Collateral deposited
into the Excess Proceeds Account) to the extent necessary to repay amounts
outstanding under the DIP Financing Documents. The Debtors and the Canadian
Entities hereby waive any and all rights to use the Cash Collateral securing the
LC Liens or the Other Account Intermediary Liens, or any Cash Collateral
deposited in the Excess Proceeds Account.
7. If at the relevant time any of the Cash Collateral held in the
Post-Petition Proceeds Account is subject to the Account Intermediary Receivable
Liens, all releases of Cash Collateral from the Post-Petition Proceeds Account
(a) shall be deemed to have been made by the holders of the Account Intermediary
Receivable Liens in the same proportion as the amount of funds subject to the
Account Intermediary Receivable Liens then in the Post-Petition Proceeds Account
bears to the total funds then in the Post-Petition Proceeds Account, and (b)
shall be
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deemed to have been made by the Pre-Petition Lenders in the same proportion
as the amount of funds not subject to the Account Intermediary Receivable Liens
then in the Post-Petition Proceeds Account bears to the total funds then in the
Post-Proceeds Account. All releases of Cash Collateral other than from the
Post-Petition Proceeds Account shall be deemed to have been made by the
Pre-Petition Lenders only.
8. The Debtors may not use Cash Collateral hereunder if the right of the
Debtors and the Canadian Entities to use Cash Collateral has terminated
pursuant to the provisions of this Stipulation and Order.
9. Notwithstanding anything herein to the contrary, no Cash Collateral
may be used to object to or contest in any manner, or raise any objections,
counterclaims or defenses to, the validity, perfection, priority or
enforceability of the claims or liens of the Pre-Petition Agents, the
Pre-Petition Lenders, the holders of the Account Intermediary Receivable Liens,
the Other Account Intermediary Liens, the LC Liens, or the DIP Financing
Liens, or the liens of claims of the collateral and security agents under the
Pre-Petition Credit Documents or under the DIP Financing Documents, or assert
any claims or causes of action against the Pre-Petition Agents, the
Pre-Petition Lenders, the holders of the Account Intermediary Receivable Liens,
the Other Account Intermediary Liens, the LC Liens or the DIP Financing Liens
or the collateral and security agents under the Pre-Petition Credit Documents
or under the DIP Financing Documents.
10. Any and all Cash Collateral payments or other proceeds remitted
(including payments or proceeds remitted pursuant to paragraph 29 hereof), or
deemed to be remitted, the Pre-Petition Administrative Agent for the benefit
of the Pre-Petition Lenders pursuant to this Stipulation and Order (i) shall
(subject to the Senior Liens and the Carve-Out (as defined below), as
applicable) be received by the Pre-Petition Agents for the benefit of the Pre-
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Petition Lenders free and clear of any claim, charge, deduction, assessment or
other liability, including, without limitation, any such claim, charge or
deduction arising out of or based on, directly or indirectly, Sections 506(c) or
552(b) of the Bankruptcy Code, all of which are hereby waived by the ▇▇▇▇▇▇
Entities and (ii) shall be paid and applied, and deemed paid and applied,
subject to Section 502(b)(2) of the Bankruptcy Code, after making any payments
(or establishing any reserves) required in respect of the Senior Liens and the
Carve-Out, as applicable, in accordance with the provisions of the Pre-Petition
Credit Agreement.
The Budget
11. PSC and PSI have prepared a budget dated April 1, 1999 (the "Budget"),
a copy of which will be filed promptly with the Court, which has been approved
in form and substance by the Pre-Petition Agents and the Required Lenders. The
Budget reflects projected utilization of DIP Financing and Cash Collateral held
in the Post-Petition Proceeds Account, from the Petition Date through the
maturity date of the DIP Financing, calculated on a monthly basis.
12. Notwithstanding anything contained herein to the contrary, no funds
shall be released to the Debtors or the Canadian Entities from the Post-Petition
Proceeds Account (a) except upon a written request of an Authorized Officer (as
defined in the DIP Credit Agreement), in the form annexed as Exhibit A,
accompanied by a certificate of such Authorized Officer, in the form annexed as
Exhibit B, certifying the availability of the amount requested pursuant to the
Budget and representing that (i) the ▇▇▇▇▇▇ Entities require the amount
requested in order to maintain operations as reflected in the Budget and such
funds are not readily available elsewhere, and (ii) no Event of Default has
occurred under this Stipulation and Order that has not been cured or waived, or
(b) in excess of the Available Amount as calculated in Exhibit B.
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Right to Inspect: Copies of Documents
13. The ▇▇▇▇▇▇ Entities agree and are hereby directed to allow the
Pre-Petition Agents and the holders of the Account Intermediary Receivable
Liens to send representatives, including accountants and appraisers, to the
premises of any of the ▇▇▇▇▇▇ Entities to examine the books, records, operations
and assets of the ▇▇▇▇▇▇ Entities and to provide such representatives full
access to the ▇▇▇▇▇▇ Entities.
14. The ▇▇▇▇▇▇ Entities will provide the Pre-Petition Administrative Agent
and the holders of the Account Intermediary Receivable Liens with copies of any
and all documents that they provide to the DIP Agent, any statutory or
unofficial committee appointed or appearing in the Cases, or the Office of the
United States Trustee, or file in the Cases. Such documents shall be provided at
the same time that they are filed in the Cases or provided to any of the
entities identified in the immediately preceding sentence. The ▇▇▇▇▇▇ Entities
shall also provide the Pre-Petition Administrative Agent and the holders of the
Account Intermediary Receivable Liens with copies of all business plans,
restructuring proposals, and similar documents as they become available to the
▇▇▇▇▇▇ Entities, and upon the request of the Pre-Petition Administrative Agent
or the holders of the Account Intermediary Receivable Liens, shall promptly
provide all consultants' reports and appraisals, including all audits,
projections and other reports prepared by the accountants or financial advisors
to any of the ▇▇▇▇▇▇ Entities.
15. Except in the event of an emergency or as otherwise provided herein or
ordered by the Court, the Debtors and the Canadian Entities shall provide
co-counsel to the Pre-Petition Lenders and co-counsel to the holders of the
Account Intermediary Receivable Liens with at least five (5) days' prior notice
of all motions, applications, requests or other papers filed by the Debtors or
the Canadian Entities in, or in connection with, the Cases that could reasonably
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be expected to directly impact the claims, liens or rights of the Pre-Petition
Lenders or the holders of the Account Intermediary Receivable Liens.
Debtors' Actions Outside of Ordinary Course
16. The Debtors shall not take any action outside the ordinary course of
their business without the prior approval of the Court following no less than
ten (10) days' prior notice to counsel to the Pre-Petition Lenders and counsel
to the holders of the Account Intermediary Receivable Liens and as required
under Bankruptcy Rule 2002(a)(2), except in the event of an emergency, in which
case the Debtors shall provide at least three (3) business days' prior notice
together with a written explanation of the exigent circumstances requiring such
shortened notice. Notwithstanding the foregoing, absent the approval of the
Required Lenders, the Debtors shall not (a) make any payments outside the
ordinary course of business to any of their officers, directors, employees,
representatives or agents, other than the management retention arrangements
approved by the Required Lenders or (b) sell assets outside the ordinary course
of business.
17. The Debtors shall deliver to the Pre-Petition Agents evidence
satisfactory to the Pre-Petition Agents that adequate insurance is maintained on
all material tangible Pre-Petition Collateral and Post-Petition Collateral (as
defined below) as required under the Pre-Petition Credit Documents.
Grant of Security Interests and Liens
18. As adequate protection for the use by the Debtors and the Canadian
Entities of the Cash Collateral that is subject to the Account Intermediary
Receivable Liens, and for the granting of the Bonding Liens (defined below)
pursuant to the Bond Order, (i) the holders of the Account Intermediary
Receivable Liens are hereby granted valid and perfected security
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interests in and to and liens (the "Account Intermediary Replacement Liens")
upon all of the Debtors' and their respective estates' assets and interests in
presently owned or hereafter acquired real and personal property of any kind or
nature, wherever located, (excluding, unless the Stipulation and Order shall
become a final order, the proceeds of any Chapter 5 avoidance actions) to the
extent that the granting of the Bonding Liens or the use of the Cash Collateral
results in a decrease in the value of the holders of the Account Intermediary
Receivable Liens interests in such Cash Collateral during such period as the
Debtors and the Canadian Entities shall be entitled to use Cash Collateral
pursuant to this Stipulation and Order (the "Post-Petition U.S. Collateral"),
and (ii) the Canadian Entities shall, if requested by the Holders of the Account
Intermediary Receivable Liens, endeavor to obtain an order in the Canadian Cases
granting the holders of the Account Intermediary Receivable Liens valid and
perfected security interests in and to, and liens upon, all of the Canadian
Entities' and their respective estates' assets and interests in presently owned
or hereafter acquired real and personal property of any kind or nature, wherever
located (the "Post-Petition Canadian Collateral," and collectively with the
Post-Petition U.S. Collateral, the "Post-Petition Collateral"). Such security
interests and liens shall be subject only to: (a) liens and security interests
necessary to comply with bonding requirements of the ▇▇▇▇▇▇ Entities as granted
by the ▇▇▇▇▇▇ Entities from time to time (the "Bonding Liens"), (b) the LC
Liens, (c) the Other Account Intermediary Liens, (d) the Carve-Out (as defined
below), and (e) the Pre-Petition Senior Liens.
19. As adequate protection for the use by the Debtors and the Canadian
Entities of the Cash Collateral and the other Pre-Petition Collateral, for the
granting of the Pre-Petition Lenders' consent to the Bonding Liens pursuant to
the Bond Order, and for the priming liens securing the DIP Financing Liens, the
Pre-Petition Agents and the Pre-Petition Lenders are hereby granted valid and
perfected security interests in and to, and liens upon (the "Pre-Petition
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Lender Replacement Liens"), the Post-Petition U.S. Collateral (excluding, unless
this Stipulation and Order shall become a final order, the proceeds of any
Chapter 5 avoidance actions) to the extent that the granting of the Bonding
Liens and the DIP Financing Liens or the use of the Cash Collateral and the
other Pre-Petition Collateral results in a decrease in the value of the holders
of the Pre-Petition Lenders' interests in such Cash Collateral or the Other
Pre-Petition Collateral during such period as the Debtors and the Canadian
Entities shall be entitled to use Cash Collateral pursuant to this Stipulation
and Order. Such security interests and liens shall be subject only to: (a) the
Bonding Liens, (b) the Senior Liens, (c) following the occurrence and during the
continuance of an Event of Default (as such term is defined in the DIP Credit
Agreement), a $3,000,000 Carve-Out (as defined in the order granting the DIP
Financing Liens), and (d) the Account Intermediary Replacement Liens in the
Post-Petition Collateral granted in the immediately preceding paragraph.
20. The Carve-Out shall not be utilized to pay professional fees and
disbursements incurred in connection with asserting any claims or causes of
action (excluding, unless this Stipulation and Order shall become a final order)
formal discovery proceedings in anticipation thereof against the Pre-Petition
Lenders, the Pre-Petition Agents, the holders of the Account Intermediary
Receivable Liens, the Other Account Intermediary Liens, or the DIP Financing
Liens or the collateral or security agents under the Pre-Petition Credit
Documents or the DIP Financing Documents, and/or challenging (whether by
defense, objection, counterclaim or otherwise, including formal discovery
proceedings in anticipation thereof) the validity, perfection, priority or
amount of any lien or claim of the Pre-Petition Agents, the Pre-Petition
Lenders, the holders of the Account Intermediary Receivable Liens, the Other
Account Intermediary Liens, or the DIP Financing Liens, or any lien or claim of
the agents or lenders under the DIP Financing Documents, or the collateral or
security agents under the Pre-Petition Credit Documents or the DIP Financing
Documents. Except as expressly
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set forth herein, the liens and security interests granted in this Stipulation
and Order shall not be (i) subject to any lien or security interest which is
avoided and preserved for the benefit of the Debtors' estates under Section 551
of the Bankruptcy Code or (ii) subordinated to or made pari passu with any other
lien or security interest under Section 364 of the Bankruptcy Code or otherwise.
21. Nothing contained herein shall constitute a waiver of, and the
Pre-Petition Agents, the Pre-Petition Lenders and the holders of the Account
Intermediary Receivable Liens shall have, the rights provided in Section 507(b)
of the Bankruptcy Code.
22. This Stipulation and Order shall be sufficient and conclusive evidence
of the validity, perfection and enforceability of the Pre-Petition Lender
Replacement Liens and the Account Intermediary Replacement Liens in and upon the
Post-Petition U.S. Collateral without the necessity of filing or recording any
financing statements, mortgages, deeds of trust, notices or other documents
which may otherwise be required under the law of any jurisdiction, or the taking
of any other action to validate or perfect the Pre-Petition Lender Replacement
Liens and the Account Intermediary Replacement Liens.
23. If the Pre-Petition Agents, the Pre-Petition Lenders or the holders of
the Account Intermediary Receivable Liens shall, in their discretion, elect for
any reason to file or record any such financing statements, mortgages, deeds of
trust, notices or other documents with respect to such security interests and
liens, the filing or recording thereof shall be deemed to have been made as of
the Petition Date.
24. The Pre-Petition Agents, the Pre-Petition Lenders and the holders of
the Account Intermediary Receivable Liens, may, in their discretion, file a
photostatic copy of this Stipulation and Order as a financing statement in any
jurisdiction in which the Debtors have real
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or personal property, and in such event, the subject filing or recording officer
is authorized to file or record such copy of this Stipulation and Order.
25. The Debtors and their officers are hereby authorized and directed to
execute any security agreements, mortgages, assignments, financing statements,
instruments or documents as may be reasonably requested by the Pre-Petition
Agents, the Pre-Petition Lenders or the holders of the Account Intermediary
Receivables Liens, to evidence and perfect the security interests and mortgage
liens granted or confirmed hereunder including, without limitation, continuation
statements with respect to the liens and security interests of the Pre-Petition
Agents and the Pre-Petition Lenders on the Pre-Petition Collateral. The
signature of any officer of a Debtor appearing on any one or more of the
agreements or other documents relating to this Stipulation and Order shall bind
such Debtor and its estate.
Administrative Claims
26. In addition to the grants of liens and security interests herein, the
holders of the Account Intermediary Receivable Liens shall have any claims
against the Debtors to the extent that the use of the Cash Collateral results in
a decrease in the value of the interests of the holders of the Account
Intermediary Receivable Liens in the Cash Collateral on or after the Petition
Date, such claims shall be allowed administrative expense claims with priority
in payment over all administrative expense claims and unsecured claims against
the Debtors now existing or hereafter arising, of any kind or nature whatsoever
including, without limitation, administrative expenses of the kinds specified in
Section 326, 330, 331, 503(b), 506(c), 507(a), 507(b) and 726 of the Bankruptcy
Code. Except as expressly provided herein, no cost or expense of administration
under Sections 105, 364(c)(l), 503(b), 506(c) or 507(b) of the Bankruptcy Code
or otherwise, including those resulting from, the conversion of any of the
Chapter 11 Cases
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pursuant to Section 1112 of the Bankruptcy Code, shall be senior to, or pari
passu with, the administrative claims of the holders of the Account Intermediary
Receivable Liens.
27. In addition to the grants of liens and security interests herein and
subject to: (a) the Carve-Out; (b) the superpriority claims provided to the DIP
Agent and the lenders under the DIP Financing Documents; and (c) the
superpriority claims granted pursuant to this Stipulation and Order to the
holders of the Account Intermediary Receivable Liens, if the Pre-Petition Agents
or the Pre-Petition Lenders shall have any claims against the Debtors to the
extent that the use of the Cash Collateral and the other Pre-Petition Collateral
and the granting of the Bonding Liens and the DIP Financing Liens results in a
decrease in the value of the interests of the Pre-Petition Lenders' in the
Pre-Petition Collateral or the Cash Collateral on or after the Petition Date,
such claims shall be allowed administrative expense claims with priority in
payment over all administrative expense claims and unsecured claims against the
Debtors now existing or hereafter arising, of any kind or nature whatsoever
including, without limitation, administrative expenses of the kinds specified in
Sections 326, 330, 331, 503(b), 506(c), 507(a), 507(b) and 726 of the Bankruptcy
Code. Except as expressly provided herein, no cost expense of administration
under Sections 105, 364(c)(1), 503(b), 506(c) or 507(b) of the Bankruptcy Code
or otherwise, including those resulting from the conversion of any of the
Chapter 11 Cases pursuant to Section 1112 of the Bankruptcy Code, shall be
senior to, or pari passu with, the administrative claims of the Pre-Petition
Agents and the Pre-Petition Lenders.
Events of Default
28. An "Event of Default" under this Stipulation and Order will exist
(until waived or cured) upon the occurrence of any of the following:
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(i) failure of the ▇▇▇▇▇▇ Entities to perform or comply with the
provisions of this Stipulation and Order (or any equivalent or
substantially similar order in the Canadian Cases) in any respect;
(ii) an occurrence of a default under the DIP Credit Agreement;
(iii) entry of an order appointing a Chapter 11 trustee in any of the
Chapter 11 Cases, or appointing an examiner having enlarged powers beyond
those set forth under Section 1106(a)(3) and (4) of the Bankruptcy Code;
(iv) entry of an order dismissing any of the Cases, or converting any
of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code,
or lifting the stay in the Canadian Cases to permit the appointment of a
receiver or receiver and manager (or any entity with substantially similar
powers) of any of the assets of any Canadian Entity;
(v) entry of an order amending, supplementing, staying, reversing,
vacating or otherwise modifying this Stipulation and Order, or the entry of
an order in the Canadian Cases having the equivalent effect, without the
prior consent of the Required Lenders, other than a ministerial amendment
or modification of this Stipulation and Order;
(vi) entry of an order granting any other claim superpriority status
or a lien equal or superior to the Pre-Petition Lenders' claims and liens,
without the prior consent of the Required Lenders, other than pursuant to
or as permitted by this Stipulation and Order and the DIP Order;
(vii) amendment, modification or withdrawal of the Plan or the plan of
arrangement filed in the Canadian Cases, or the disclosure statements filed
with
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respect thereto (the "Disclosure Statement"), without the consent of the
Required Lenders, other than a ministerial amendment or modification of
such plans or the disclosure statements;
(viii) entry of an order granting relief from the automatic stay in
the Chapter 11 Cases, or lifting the stay in the Canadian Cases, so as to
allow a third party to proceed against any material asset of the Debtors
or the Canadian Entities;
(ix) the filing of any pleading by any of the ▇▇▇▇▇▇ Entities
seeking any of the matters set forth in clauses (iii) through (viii);
(x) failure to (a) obtain approval of the Disclosure Statement by
August 31, 1999, (b) obtain confirmation of the Plans by October 31, 1999
and (c) to consummate the Plans by November 30, 1999; or
(xi) an order shall be entered by the Bankruptcy Court, or an
application shall be filed by any ▇▇▇▇▇▇ Entity for the approval of an
order, surcharging any amounts under Section 506(c) of the Bankruptcy Code
against the Pre-Petition Collateral or the Post-Petition Collateral.
Remedies
29. Immediately upon the occurrence of an Event of Default specified in
sub-paragraphs (iii) and (iv) of paragraph 28, the ▇▇▇▇▇▇ Entities' rights to
use the Cash Collateral shall terminate automatically. In the case of any other
Event of Default specified in paragraph 28, the ▇▇▇▇▇▇ Entities' rights to use
the Cash Collateral shall terminate upon written notice to counsel to the
Debtors by the Pre-Petition Administrative Agent (at the direction of the
Required Lenders). In addition, upon three (3) business days' prior written
notice to (i) counsel to the
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Debtors,(ii) the DIP Agent, (iii) the counsel to the holders of the Account
Intermediary Receivable Liens and the Other Account Intermediary Liens, and
(iv) any official committee that may be appointed in the Cases, given by the
Pre-Petition Administrative Agent (at the direction of the Required Lenders),
of the occurrence of an Event of Default, the automatic stay imposed pursuant
to Section 362 of the Bankruptcy Code shall be deemed lifted, modified and
vacated, without further order of this Court, to permit the Pre-Petition
Agents, and the Pre-Petition Lenders to exercise, subject to the Senior Liens,
the Bonding Liens, the liens and security interests of the holders of the
Account Intermediary Receivable Liens in the Post-Petition Collateral
described in paragraph 18 hereof, and the Carve-Out, any and all of their
rights and remedies granted under the Pre-Petition Credit Documents, this
Stipulation and Order and applicable law, including, without limitation,
foreclosing upon and selling all or a portion of the Pre-Petition Collateral
or the Post-Petition Collateral. The Pre-Petition Agents and the Pre-Petition
Lenders shall have the right to exercise such rights and remedies, subject to
the Senior Liens and the Bonding Liens, the liens and security interests of the
holders of the Account Intermediary Receivable Liens in the Post-Petition
Collateral described in paragraph 18 hereof, and the Carve-Out, as to all or
such part of the Pre-Petition Collateral and the Post-Petition Collateral as
the Required Lenders shall, in their sole discretion elect. The ▇▇▇▇▇▇ Entities
shall cooperate and comply with the requests of the Pre-Petition Agents and the
Pre-Petition Lenders in connection with the exercise of such rights and
remedies. The Pre-Petition Agents and the Pre-Petition Lenders liens shall be
entitled to apply the payments or proceeds of the Pre-Petition Collateral and
the Post-Petition Collateral in accordance with the provisions of this
Stipulation and Order, without regard to the doctrine of "marshaling" or any
other similar doctrine with respect to any of their Pre-Petition Collateral or
Post-Petition Collateral or otherwise. Any
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failure or delay of the Pre-Petition Agents or the Pre-Petition Lenders to seek
relief under this paragraph shall not constitute a waiver of any of their
rights.
30. Notwithstanding any other provisions of this order, upon the
occurrence of a Triggering Event, as defined in the Inter-Creditor Agreement
(which is attached as Exhibit B to the Motion for Approval of Stipulation and
Order Authorizing Debtors to Obtain Post-Petition Surety Bonds and To Enter Into
Indemnity Agreements), the Surety Participants (as defined in the Inter-Creditor
Agreement) shall upon three business days' notice to counsel to the Debtors,
counsel to the Pre-Petition Agents and the Pre-Petition Lenders, counsel to the
holders of the Account Intermediary Receivable Liens and the Other Account
Intermediary Liens, and the United States Trustee, be entitled to pursue any and
all remedies and rights referred to in paragraph 7.1(b) of the Inter-Creditor
Agreement, unless the Court orders otherwise.
Miscellaneous Provisions
31. The liens, security interests, priorities, superpriority
administrative claims and other rights and remedies granted to the Pre-Petition
Agents, the Pre-Petition Lenders and the holders of the Account Intermediary
Receivable Liens and the Other Account Intermediary Liens by the provisions of
this Stipulation and Order and any actions taken pursuant hereto shall survive,
and shall not be modified, altered or impaired in any manner by (a) any other
financing or extension of credit or incurrence of debt by the ▇▇▇▇▇▇ Entities
(pursuant to Section 364 of the Bankruptcy Code or otherwise); (b) the entry of
an order dismissing any of the Chapter 11 Cases, or converting any of the
Chapter 11 Cases to Chapter 7; (c) the entry of an order confirming any plan of
reorganization; or (d) any act or omission whatsoever. The terms and provisions
of this Stipulation and Order as well as the superpriority administrative
claims, liens and security interests granted pursuant to this Stipulation and
Order, the Pre-Petition Credit Documents and
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the documents creating the Account Intermediary Receivable Liens and the Other
Account Intermediary Liens shall continue in the Chapter 11 Cases and any
subsequent Chapter 7 cases under the Bankruptcy Code. The superpriority
administrative claims, liens and security interests granted pursuant to this
Stipulation and Order, the Pre-Petition Credit Documents and the documents
creating the Account Intermediary Receivable Liens and the Other Account
Intermediary Liens shall continue in full force and shall maintain their
priority as provided in this Stipulation and Order until all of the ▇▇▇▇▇▇
Entities' obligations to the Pre-Petition Agents, the Pre-Petition Lenders, and
the holders of the Account Intermediary Receivable Liens and the Other Account
Intermediary Liens are indefeasibly paid in full in cash or discharged.
32. Other than (i) the Bonding Liens, (ii) any liens or security interests
granted to the holders of the Account Intermediary Receivable Liens, and (iii)
the DIP Financing Liens, no security interests, liens, encumbrances, or
mortgages shall be granted under Section 364(d) of the Bankruptcy Code or
otherwise to any other entity if they are or are proposed to be senior to or
pari passu with any security interests, liens, encumbrances, or mortgages
previously granted to the Pre-Petition Agents and the Pre-Petition Lenders or
granted under this Stipulation and Order to the Pre-Petition Agents and the
Pre-Petition Lenders.
33. Other than the Bonding Liens, no security interests, liens,
encumbrances, or mortgages shall be granted under Section 364(d) of the
Bankruptcy Code or otherwise to any other entity if they are or are proposed to
be senior to or pari passu with any security interests, liens, encumbrances, or
mortgages previously granted to the holders of the Account Intermediary
Receivable Liens or the Other Account Intermediary Liens (in their capacity as
holders of such liens) or granted under this Stipulation and Order to the
holders of the Account Intermediary Receivable Liens (in their capacity as
holders of Account Intermediary Receivable Liens).
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34. The ▇▇▇▇▇▇ Entities shall not use or dispose of any property (other
than Cash Collateral) in which the Pre-Petition Agents, the Pre-Petition Lenders
or the holders of the Account Intermediary Receivable Liens have a perfected
security interest or lien, under Sections 363(b), 363(c)(2), or 365 of the
Bankruptcy Code or otherwise, unless the proceeds of all such dispositions of
property are promptly deposited into the loan accounts established under DIP
Financing Documents, the Post-Petition Proceeds Account, or the Excess Proceeds
Account, as applicable, or are otherwise treated in accordance with this
Stipulation and Order and the DIP Financial Documents.
35. The Debtors agree, and are hereby authorized and directed to pay, as
additional adequate protection pursuant to Section 361 of the Bankruptcy Code,
promptly upon demand, all fees and expenses of the Pre-Petition Agents and
counsel for the Pre-Petition Lenders and the Pre-Petition Agents collectively,
all fees and expenses of any accountants, financial advisors or other
professionals that may be retained by the Pre-Petition Agents (or counsel to the
Pre-Petition Agents or the Pre-Petition Lenders) in connection with the Cases,
and all fees and expenses of counsel for the holders of the Account Intermediary
Receivable Liens and the Other Account Intermediary Liens, all without further
order of this Court, including, without limitation, the fees and disbursements
of White & Case LLP, Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ Stargatt &
▇▇▇▇▇▇, LLP, as co-counsel for the Pre-Petition Lenders and the Pre-Petition
Agents collectively, and the fees and disbursements of KPMG LLP, accountants to
the Pre-Petition Lenders and the Pre-Petition Agents collectively. The
obligations of the Debtors pursuant to the immediately preceding sentence shall
also include all unpaid fees and disbursements of the respective professionals
accrued prior to the Petition Date.
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36. As further adequate protection pursuant to Section 361 of the
Bankruptcy Code, the holders of the LC Liens are hereby authorized (to the
extent approved by the Canadian Court) to apply any cash collateral held under
Section 5.06 of the Pre-Petition Credit Agreement, or under the Permitted LC
Facility, in accordance with the provisions of the Pre-Petition Credit
Agreement, or the Permitted LC Facility, as applicable, and the holders of the
Other Account Intermediary Liens are hereby authorized (to the extent approved
by the Canadian Court) to apply any cash collateral held pursuant to their
pre-petition documentation if and when they are entitled to do so in accordance
with those documents.
37. Except as otherwise provided herein, the provisions of this
Stipulation and Order shall immediately be binding upon and inure to the benefit
of the Pre-Petition Agents, the Pre-Petition Lenders, the DIP Agent, the holders
of the Account Intermediary Receivable Liens, the holders of the LC Liens, the
holders of the Other Account Intermediary Liens, and the ▇▇▇▇▇▇ Entities and
their respective successors and assigns, including, but not limited to, any
trustee in bankruptcy or other fiduciary hereinafter appointed as a legal
representative of any of the Debtors or the Debtors' estates or the Canadian
Entities or the Canadian Entities' estates. The obligations of the ▇▇▇▇▇▇
Entities hereunder shall be joint and several.
38. By entering into and performing under this Stipulation and Order, or
by consenting to the use of Cash Collateral hereunder, neither the Pre-Petition
Agents, the Pre-Petition Lenders nor the holders of the Account Intermediary
Receivable Liens shall be deemed to be in control of the operations of any of
the ▇▇▇▇▇▇ Entities or to be acting as a "responsible person" or "owner or
operator" with respect to the operation or management of any of the ▇▇▇▇▇▇
Entities.
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39. The ▇▇▇▇▇▇ Entities have waived any entitlement to assert a claim
under Section 506(c) of the Bankruptcy Code for any costs and expenses incurred
in connection with the preservation, protection or enhancement of, or
realization by the holders of the Account Intermediary Receivable Liens, the
Pre-Petition Agents or the Pre-Petition Lenders on, the Pre-Petition Collateral
or the Post-Petition Collateral, or the realization by the holders of the Other
Account Intermediary Liens or the holders of the LC Liens on the collateral
securing their claims.
40. No rights are intended to be created hereunder for the benefit of any
third party or creditor or any direct, indirect or incidental beneficiary,
except as specifically provided herein.
41. This Stipulation and Order shall constitute findings of fact and
conclusions of law and shall take effect and be fully enforceable immediately
upon execution hereof.
42. The automatic stay imposed by virtue of Section 362 of the Bankruptcy
Code is hereby modified to permit the Pre-Petition Agents, the Pre-Petition
Lenders, the holders of the Account Intermediary Receivable Liens, the holders
of the LC Liens and the holders of the Other Account Intermediary Liens to take
any action authorized by the terms of this Stipulation and Order, including,
without limitation, any action in respect of the filing or recording of the
Post-Petition Collateral.
43. Except as specifically provided herein, execution of this Stipulation
and Order by the Pre-Petition Agents and the holders of the Account Intermediary
Receivable Liens is not intended and shall not be deemed to be a waiver of any
of the rights or remedies of the Pre-Petition Agents, the Pre-Petition Lenders
and the holders of the Account Intermediary Receivable Liens under applicable
law, any of the Pre-Petition Credit Documents, or the
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documents creating the Account Intermediary Receivable Liens, including,
without limitation, their rights to request additional adequate protection, to
seek relief from the automatic stay, to seek the appointment of a trustee,
responsible party or examiner, to make any contention respecting valuation of
any of their collateral or respecting methods of valuation, to claim they are
entitled to be paid interest at a default rate, or to take any other action
that may be necessary to protect their interests.
44. No waiver, modification, or amendment of any of the provisions hereof
shall be effective unless set forth in writing, signed by the parties hereto (at
the direction of the Required Lenders with respect to the interests of the
Pre-Petition Lenders) and approved by the Court.
45. This Stipulation and Order is entered in a "core" proceeding as
defined in, inter alia 28 U.S.C. Section 157(b)92)(A), (M) and (O), is a final
order, and is valid and fully effective upon its entry.
46. Any stay, modification, reversal or vacation of this Stipulation and
Order shall not affect the liens, security interests and superpriority
administrative claims granted herein, in the Pre-Petition Credit Documents, or
in the documents creating the Account Intermediary Receivable Liens or the Other
Account Intermediary Liens, or the validity, enforceability or priority of any
of the obligations of the ▇▇▇▇▇▇ Entities to the Pre-Petition Agents, the
Pre-Petition Lenders or the holders of the Account Intermediary Receivable Liens
or the Other Account Intermediary Liens incurred pursuant to this Stipulation
and Order. Notwithstanding any such stay, modification, reversal or vacation of
this Stipulation and Order, all uses of Cash Collateral and obligations incurred
by the ▇▇▇▇▇▇ Entities pursuant hereto prior to the effective date of such stay,
modification, reversal or vacation shall be governed in all respects by the
original
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provisions hereof, and the Pre-Petition Agent, the Pre-Petition Lenders and the
holders of the Account Intermediary Receivable Liens or the Other Account
Intermediary Liens shall be entitled to all rights, privileges, benefits and
remedies, including without limitation, the liens, security interests and
priorities (as applicable) granted herein.
47. Except for the ▇▇▇▇▇▇ Entities (who, subject to footnote 3 hereof,
have herein acknowledged the validity, enforceability and priority of the claims
of the Pre-Petition Agents, the Pre-Petition Lenders, the holders of the Account
Intermediary Receivable Liens, the holders of the Other Account Intermediary
Liens and the holders of the LC Liens and the perfection of the liens and
security interests in the Pre-Petition Collateral of the Pre-Petition Agents,
the Pre-Petition Lenders, the holders of the Account Intermediary Receivable
Liens, the holders of the Other Account Intermediary Liens and the holders of
the LC Liens, and who hereby waive any right to commence or prosecute any
defense, action, objection or counterclaim with respect to the claims, liens or
security interests of the Pre-Petition Agents, the Pre-Petition Lenders, the
holders of the Account Intermediary Receivable Liens, the holders of the Other
Account Intermediary Liens or the holders of the LC Liens), any party in
interest, including any statutory committee of unsecured creditors, shall
commence any adversary proceeding or contested matter challenging the validity,
enforceability or priority of the claims of the Pre-Petition Lenders, the
Pre-Petition Agents, the holders of the Account Intermediary Receivable Liens,
the holders of the Other Account Intermediary Liens or the holders of the LC
Liens, or the perfection of the liens or security interests in the Pre-Petition
Collateral of the Pre-Petition Agents, the Pre-Petition Lenders, the holders of
the Account Intermediary Receivable Liens, the holders of the Other Account
Intermediary Liens or the holders of the LC Liens, no later than the date that
is sixty (60) days from the date that the first statutory committee of unsecured
creditors
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442
is appointed in accordance with Section 1102(a) of the Bankruptcy Code. If no
such adversary proceeding or contested matter is properly commenced as of such
date, the Pre-Petition Agents', the Pre-Petition Lenders' and the holders of the
Account Intermediary Receivable Liens' and the other Account Intermediary Liens
claims shall constitute allowed claims, not subject to subordination, setoff,
counterclaim, defense or objection, for all purposes, and the holders of the
Account Intermediary Receivable Liens' and the Other Account Intermediary Liens,
the Pre-Petition Agents' and the Pre-Petition Lenders' liens and security
interests in the Pre-Petition Collateral shall be deemed legal, valid, binding,
perfected, enforceable and otherwise unavoidable, and shall not be subject to
any other or further challenge by any party in interest seeking to exercise the
rights of the Debtors' estates.
48. Any reversal or modification of this Stipulation and Order on appeal
shall not affect the validity of any obligation incurred hereunder by the ▇▇▇▇▇▇
Entities, or any claim, lien, security interest or superpriority administrative
claim provided to the Pre-Petition Agents, the Pre-Petition Lenders or the
holders of Account Intermediary Receivable Liens hereunder, it appearing that
the financial accommodations extended to the ▇▇▇▇▇▇ Entities hereunder are being
extended by the Pre-Petition Agents, the Pre-Petition Lenders and the holders of
the Account Intermediary Receivable Liens in "good faith" as contemplated by
Section 364(e) of the Bankruptcy Code.
49. The Debtors shall, within three (3) days subsequent to the date
hereof, mail notice of the approval of this Stipulation and Order, together with
a copy of this Stipulation and Order, to the parties having been given notice of
the Preliminary Hearing and to any other party which has filed a request for
notices with the Court and to counsel for any committee appointed pursuant to
Section 1102 of the Bankruptcy Code. The notice of approval of this
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Stipulation and Order shall state that any party in interest objecting to this
Stipulation and Order as a final order shall file written objections with the
Clerk of the United States Bankruptcy Court for the District of Delaware no
later than July 22, 1999 at 4:30 p.m. (the "Objection Deadline"), which
objections shall be served so that the same are received on or before such date
by: (a) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Stikeman, Elliott,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq. Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. attorneys
for the ▇▇▇▇▇▇ Entities; (b) White & Case LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., Blake, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq., and Young, Conaway, Stargatt & ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: S. ▇▇▇▇▇ ▇▇▇▇▇▇,
Esq., attorneys for the Pre-Petition Agents and the Pre-Petition Lenders,
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇, PLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., attorneys for
Comerica Bank in its capacity as a holder of Account Intermediary Receivable
Liens and Other Account Intermediary Liens, (d) Sidley & Austin, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇▇▇▇ ▇▇▇▇▇, Esq., and Osler, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇, 1 First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., attorneys for CIBC in its capacity as a
holder of Account Intermediary Receivable Liens and Other Account Intermediary
Liens, and (e) the Office of the United States Trustee.
50. If no written objections are timely served and filed, this Stipulation
and Order shall be deemed a Final Order on the Objection Deadline, and shall
continue on a final
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444
basis and remain in full force and effect and shall constitute authority for
the use of Cash Collateral from the date hereof through November 30, 1999 (the
"Interim Period") unless (i) such date is extended with the written agreement
of the Pre-Petition Agents (at the direction of the Required Lenders) or (ii)
such authority is terminated before such date as a result of the occurrence of
an Event of Default. If a timely objection is served and filed, a final hearing
to consider the Motion will be held on July 27, 1999 at 2:00 p.m.
Dated: Wilmington, Delaware
June 28, 1999
/s/ Judge ▇. ▇▇▇▇▇▇▇
------------------------------
UNITED STATES BANKRUPTCY JUDGE
The terms of this Stipulation and Order are hereby
agreed and consented to by the following:
▇▇▇▇▇▇ SERVICES CORP.
on its own behalf, and
on behalf of each of the
Restricted Subsidiaries
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Financial ▇▇▇▇▇▇
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: /s/ ▇.▇. ▇▇▇▇▇▇
------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Title: General Manager
CANADIAN IMPERIAL BANK OF COMMERCE,
as Account Intermediary Security Agent
By: /s/ ▇.▇. ▇▇▇▇▇▇
------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Title: General Manager
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445
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as a holder of Account Intermediary
Receivable Liens and Other Account
Intermediary Liens
By: /s/ ▇.▇. ▇▇▇▇▇▇
--------------------------
Name: ▇. ▇. ▇▇▇▇▇▇
Title: GENERAL MANAGER
BANKERS TRUST COMPANY,
as Syndication Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
COMERICA BANK,
as a holder of Account Intermediary
Receivable Liens and
Other Account Intermediary Liens
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: First Vice President
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446
EXHIBIT A
REQUEST AND DIRECTION
To: Bankers Trust Company, as DIP Agent
Re: Request for release of Cash Collateral from Post-Petition Proceeds Account
WHEREAS:
A. The Debtors and the Canadian Entities have requested authorization to
expend Cash Collateral held in the Post-Petition Proceeds Account in
accordance with the Stipulation and Order
B. Capitalized terms used but not defined in this Request and Direction have
the meanings given to such terms in the Stipulation and Order.
THIS REQUEST AND DIRECTION WITNESSES THAT the Debtors and the Canadian Entities
hereby irrevocably request and direct that the DIP Agent release and deliver
$-- (the "Requested Amount") of Cash Collateral from the Post-Petition Proceeds
Account pursuant to the Stipulation and Order, and acknowledge that this shall
be the DIP Agent's good and sufficient authority for doing so.
DATED as of --, 1999.
▇▇▇▇▇▇ SERVICES CORP.
By:
------------------------------------
Name:
Title:
447
EXHIBIT B
CERTIFICATE
TO: Bankers Trust Company, as DIP Agent
RE: Request for release of Cash Collateral from Post-Petition Proceeds
Account
I, , in my capacity as an Authorized Officer of PSC, certify
on behalf of PSC, and without personal liability, as follows:
1. Capitalized terms used but not otherwise defined in this Certificate have
the respective meanings given to such terms in the Stipulation and Order.
2. This Certificate is furnished to you pursuant to the Stipulation and Order
in connection with a request and direction (the "REQUEST AND DIRECTION")
delivered today to the DIP Agent by the Debtors and the Canadian Entities
(the "Requesting Parties") requesting the release and delivery of $
(the "REQUESTED AMOUNT") to the Requesting Parties.
3. I have made, or caused to be made, such examinations or investigations as
are, in my opinion, necessary to make the statements of fact contained in
this Certificate and I have furnished this Certificate with the intent that
it may be relied on by the DIP Agent as a basis for releasing the Requested
Amount in accordance with the Request and Direction.
4. As the date of this Certificate and to the best of my knowledge, no Event
of Default has occurred under the Stipulation and Order that has not been
cured or waived.
5. The ▇▇▇▇▇▇ Entities require the Requested Amount in order to maintain
operations as reflected in the Budget and such funds are not readily
available elsewhere.
6. The Requested Amount is less than or equal to the amount of Cash Collateral
available to be released from the Post-Petition Proceeds Account by the DIP
Agent to the Requesting Parties as of the date of this Certificate (the
"Available Amount"), such Available Amount being calculated as follows:
I. (a) Aggregate amount of authorized
cash withdrawals from Post-Petition
Proceeds Account plus authorized
draws under DIP Facility set out in $_____________________
Budget for all prior calendar months
(b) Plus, authorized cash withdrawals
from Post-Petition Proceeds
448
Exhibit B
Page 2
Account plus authorized draws
under DIP Facility set out in Budget $__________________
for current calendar month
(c) Plus $10,000,000
(d) Subtotal (I(a) + I(b) + I(c)) $__________________
II. (a) Aggregate amount of actual cash
withdrawals from Post-Petition
Proceeds Account plus actual draws
under DIP Financing for all prior $__________________
calendar months
(b) Requested Amount $__________________
(c) Subtotal (II(a) + II(b)) $__________________
III. (a) I(d) - II(c) $__________________
(b) Amount held in Post-Petition Proceeds Account $__________________
IV. Lesser of III(a) and III(b) = Available
Amount $__________________
Dated as of - day of - , 1999
- , in my capacity as__________________ of ▇▇▇▇▇▇ Services Corp., an
Authorized Officer
____________________________________
449
BUDGET
The authorized amount of cash withdrawals at any time from the
Post-Petition Proceeds Account plus authorized draws under the DIP Facility is
the then cumulative amounts set forth below:
Month Cumulative
----- ----------
April $39,212,000 $ 39,212,000
May 32,472,000 71,684,000
June 21,986,000 93,670,000
July 13,907,000 107,577,000
August 3,605,000 111,182,000
September 8,973,000 120,155,000
October 4,107,000 124,262,000
November 7,227,000 131,489,000
450
EXHIBIT K
---------
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Date __________, 19__
Reference is made to the Credit Agreement described in Item 2 of Annex I
hereto (as such Credit Agreement may hereafter be amended, modified, extended,
renewed, replaced or supplemented from time to time, the "DIP Credit
Agreement"). Unless defined in Annex I hereto, terms defined in the DIP Credit
Agreement are used herein as therein defined. ___________ (the "Assignor") and
__________ (the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without recourse
and without representation or warranty (other than as expressly provided
herein), and the Assignee hereby purchases and assumes from the Assignor, that
interest in and to all of the Assignor's rights and obligations under the DIP
Credit Agreement as of the date hereof which represents the percentage interest
specified in Item 4 of Annex I hereto (the "Assigned Share") of all of the
outstanding rights and obligations under the DIP Credit Agreement, including,
without limitation, all rights and obligations with respect to the Assigned
Share of all or any portion of the Total Commitment and of any outstanding
Revolving Loans and Letters of Credit. After giving effect to such sale and
assignment, the Assignee's Commitment will be as set forth in Item 4 of Annex I
hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the DIP Credit
Agreement or the other DIP Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the DIP Credit
Agreement or the other DIP Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrowers or any of their Subsidiaries or the performance or observance by the
Borrowers or any of their Subsidiaries of any of their obligations under the DIP
Credit Agreement or the other DIP Credit Documents to which they are a party or
any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the DIP Credit
Agreement and the other DIP Credit Documents, together with copies of the Budget
and the financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption Agreement; (ii) agrees
that it will, independently and without reliance upon the DIP Agent, the
Assignor or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the DIP Credit Agreement; (iii) confirms that
it is an Eligible Transferee under Section 12.04(b) of the DIP Credit Agreement;
(iv) appoints and authorizes the DIP Agent and the DIP Collateral Agents to take
such action as agents on its behalf and to exercise such powers under the DIP
Credit Agreement and the other DIP Credit Documents as are delegated to the DIP
Agent and the DIP Collateral Agent, as the case may be, by the terms thereof,
together with such powers as are reasonably incidental thereto; [and] (v) agrees
that it will perform in
451
Exhibit K
Page 2
accordance with their terms all of the obligations which by the terms of the DIP
Credit Agreement are required to be performed by it as a Lender [; and (vi) to
the extent legally entitled to do so, attaches the forms described in Section
12.04(b) of the DIP Credit Agreement].1
4. Following the execution of this Assignment and Assumption Agreement by
the Assignor and the Assignee, an executed original hereof (together with all
attachments) will be delivered to the DIP Agent. The effective date of this
Assignment and Assumption Agreement shall be the date of execution hereof by the
Assignor and the Assignee and the receipt of the consent of the DIP Agent, to
the extent required by Section 12.04(b) of the DIP Credit Agreement, receipt by
the DIP Agent of the assignment fee referred to in such Section 12.04(b), and
the registration of the transfer as provided by Section 12.14 of the DIP Credit
Agreement.
5. Upon the delivery of a fully executed original hereof to the DIP Agent,
as of the Settlement Date, (i) the Assignee shall be a party to the DIP Credit
Agreement and, to the extent provided in this Assignment and Assumption
Agreement, have the rights and obligations of a Lender thereunder and under the
other DIP Credit Documents and (ii) the Assignor shall, to the extent provided
in this Assignment and Assumption Agreement, relinquish its rights and be
released from its obligations under the DIP Credit Agreement and the other DIP
Credit Documents.
6. It is agreed that the Assignee shall be entitled to (x) all interest on
the Assigned Share of the Loans at the rates specified in Item 6 of Annex I; (y)
all Commitment Commission (if applicable) on the Assigned Share of the
Commitment at the rate specified in Item 7 of Annex I hereto; and (z) all Letter
of Credit Fees (if applicable) on the Assignee's participation in all Letters of
Credit at the rate specified in Item 8 of Annex I hereto, which, in each case,
accrue on and after the Settlement Date, such interest and, if applicable,
Commitment Commission and Letter of Credit Fees, to be paid by the DIP Agent
directly to the Assignee. It is further agreed that all payments of principal
made on the Assigned Share of the loans which occur on and after the Settlement
Date will be paid directly by the DIP Agent to the Assignee. Upon the Settlement
Date, the Assignee shall pay to the Assignor an amount specified by the Assignor
in writing which represents the Assigned Share of the principal amount of the
respective loans made by the Assignor pursuant to the DIP Credit Agreement which
are outstanding on the Settlement Date, net of any closing costs, and which are
being assigned hereunder. The Assignor and the Assignee shall make all
appropriate adjustments in payments under the DIP Credit Agreement for periods
prior to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
_______________
[FN]
1 Include if the Assignee is organized under the laws of a jurisdiction
outside of the United States.
452
Exhibit K
Page 3
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Assignment and Assumption Agreement, as of
the date first above written, such execution also being made on Annex I hereto.
Accepted this ______ day of [NAME OF ASSIGNOR]
__________, 19___ as Assignor
By_______________________________
Title:
[NAME OF ASSIGNEE]
as Assignee
By_______________________________
Title:
[Acknowledged and Agreed:
___________________________, as DIP Agent
By_______________________________________
Title:
[ISSUING LENDER], as Issuing Lender
By_______________________________________
Title:
[▇▇▇▇▇▇ SERVICES CORP.]
[▇▇▇▇▇▇ SERVICES (DELAWARE) INC.]
By_______________________________________
Title: ]2
__________________
[FN]
2 The consent of the DIP Agent is required for assignments pursuant to
Section 12.04(b) of the DIP Credit Agreement.
453
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. Borrowers: ▇▇▇▇▇▇ Services Corp.
▇▇▇▇▇▇ Services (Delaware) Inc.
2. Name and Date of DIP Credit Agreement:
Credit Agreement, dated as of ________________, among ▇▇▇▇▇▇ SERVICES
CORP., a corporation existing under the laws of Ontario (the "Canadian
Borrower"), ▇▇▇▇▇▇ SERVICES (DELAWARE), INC., a corporation existing under
the laws of Delaware (the "US Borrower", and together with the Canadian
Borrower, the "Borrowers"), certain subsidiaries of the Borrowers
incorporated in Canada and in the United States (the "Subsidiary
Guarantors"), Bankers Trust Company ("BTCo"), as administrative agent for
the Lenders (the "DIP Agent"), Canadian Imperial Bank of Commerce and BTCo
as co-arrangers (the "DIP Co-Arrangers"), and the lenders from time to time
parties to the DIP Credit Agreement (the "Lenders").
3. Date of Assignment and Assumption Agreement:
4. Amounts (as of date of item #3 above):
Commitment
----------
a. Aggregate Amount for all
Lenders $___________
b. Assigned Share ___________%
c. Amount of Assigned Share
$___________
5. Settlement Date:
6. Rate of Interest to the As set forth in Section 1.07 of the DIP Credit
Agreement (unless Assignee otherwise agreed to by the Assignor and the
Assignee)3
_________________
[FN]
3 The Borrowers and the DIP Agents shall direct the entire amount of the
interest to the Assignee at the rate set forth in Section 1.07 of the DIP
Credit Agreement, with the Assignor and Assignee effecting the agreed upon
sharing of the interest through payments by the Assignee to the Assignor.
454
Annex I
Page 2
7. Commitment Commission: As set forth in Section 3.01(a) of
the DIP Credit Agreement (unless
otherwise agreed to by the Assignor and
the Assignee)4
8. Letter of Credit Fees to As set forth in Section 3.01(b) of the
the Assignee: DIP Credit Agreement (unless otherwise
agreed to by the Assignor and the
Assignee)5
9. Notice:
ASSIGNOR:
_______________________
_______________________
_______________________
_______________________
Attention:
Telephone:
Telecopier:
Reference:
ASSIGNEE:
_______________________
_______________________
_______________________
_______________________
Attention:
Telephone:
Telecopier:
Reference:
___________________
[FN]
4 Insert "Not Applicable" in lieu of text if no portion of the Total
Commitment is being assigned. Otherwise, the Borrowers and the DIP Agents
shall direct the entire amount of the Commitment Commission to the Assignee
at the rate set forth in Section 3.01(a) of the DIP Credit Agreement, with
the Assignor and the Assignee effecting the agreed upon sharing of
Commitment Commission through payment by the Assignee to the Assignor.
5 Insert "Not Applicable" in lieu of text if no portion of the Total
Commitment is being assigned. The Borrowers and the DIP Agent shall direct
the entire amount of the Letter of Credit Fees to the Assignee at the rate
set forth in Section 3.01(b) of the DIP Credit Agreement, with the Assignor
and the Assignee effecting the agreed upon sharing of Letter of Credit Fees
through payment by the Assignee to the Assignor.
455
Annex I
Page 3
Payment Instructions:
ASSIGNOR:
_______________________
_______________________
_______________________
_______________________
Attention:
Telephone:
Telecopier:
Reference:
ASSIGNEE:
_______________________
_______________________
_______________________
_______________________
Attention:
Telephone:
Telecopier:
Reference:
456
Annex I
Page 4
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By_____________________________ By_____________________________
_____________________________ _____________________________
(Print Name and Title) (Print Name and Title)
457
EXHIBIT L
[FORM OF CONFIDENTIALITY AGREEMENT]
[DATE]
[Insert Name and Address of
the Prospective Assignee or Participant]
Ladies and Gentlemen:
We refer to the Credit Agreement (the "DIP Credit Agreement") dated as of
__________ ___, 1999 among ▇▇▇▇▇▇ SERVICES CORP., a corporation existing under
the laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), ▇▇▇▇▇▇ SERVICES (DELAWARE), INC., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower",
and together with the Canadian Borrower, the "Borrowers"), certain subsidiaries
of the Borrowers located in Canada and in the United States (the "Subsidiary
Guarantors", and together with the Borrowers, the "Credit Parties"), Bankers
Trust Company ("BTCo"), as administrative agent for the Lenders (in such
capacity, the "DIP Agent"), Canadian Imperial Bank of Commerce and BTCo, as
co-arrangers (in such capacity, the "DIP Co-Arrangers"), and the lenders from
time to time parties to the DIP Credit Agreement (the "Lenders"). The Borrowers
are applying to the Lenders for a revolving credit and letter of credit facility
in an aggregate principal amount not to exceed $100,000,000 (the "Financing").
All capitalized terms used herein but not defined herein shall have the meaning
provided in the DIP Credit Agreement.
As used herein, the term "Material" means any information concerning the
Credit Parties which is furnished by or on behalf of the Credit Parties,
provided that the term "Material" does not include information which (i) was or
becomes generally available to the public other than as a result of a disclosure
by the Credit Parties, or their employees, banks, agents or advisors, or (ii)
was or becomes available on a non-confidential basis from a source other than
the Credit Parties or their respective advisors provided that such source is not
bound by a confidentiality agreement with the Credit Parties.
We are prepared to provide you with a copy of [_________________] (the
"Confidential Memorandum") and additional information ("Supplemental Materials")
as necessary or which may be provided pursuant to the information provisions
under the Credit Agreement. Pursuant to Section 12.13 of the Credit Agreement,
we are required to have you, as a prospective assignee or participant in the
Revolving Loans, enter into this Confidentiality Agreement (the "Agreement")
before receiving the Confidential Memorandum and the Supplemental Materials.
Such Materials will be made available to you upon your execution of
458
Exhibit L
Page 2
this Agreement. In consideration thereof, you agree that the Confidential
Memorandum, the Supplemental Materials and all other Materials will be kept
confidential, in accordance with your customary procedure for handling
confidential information and in accordance with safe and sound banking
practices, and not be used by you except in connection with the proposed
Financing discussed above.
You agree to cause your affiliates, directors, officers, employees,
representatives, attorneys, accountants and advisors to be bound by the terms of
this Agreement. This Agreement shall inure to the benefit of the Credit Parties.
In this connection, we acknowledge that you may make disclosure (a) as may
be required or appropriate in any report, statement or testimony submitted to
any municipal, state, provincial or federal regulatory body having or claiming
to have jurisdiction over you or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States, Canada or elsewhere) or their successors, (b) as may be required or
appropriate in respect to any summons or subpoena or in connection with any
litigation, (c) in order to comply with any law, order, regulation or ruling
applicable to you and (d) to the DIP Agent or the DIP Collateral Agents. You
also agree to request confidential treatment of the Materials or the
Supplemental Materials to the extent permitted by law.
459
Exhibit L
Page 3
Please indicate your agreement to the foregoing at the place provided
below.
Very truly yours,
[Insert Name of Lender]
By_______________________________
Title:
The foregoing is agreed to as
of the date of this letter.
By _______________________________
Title:
By _______________________________
Title:
▇▇▇
▇▇▇▇▇▇▇ ▇
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
- - - X IN RE :
CHAPTER 11
▇▇▇▇▇▇ SERVICES (DELAWARE), INC., ET AL. CASE NO. 99-02385 (MFW)
(JOINTLY ADMINISTERED)
DEBTORS.
JOINT PLAN OF REORGANIZATION OF ▇▇▇▇▇▇ SERVICES (DELAWARE), INC., ET AL.
SKADDEN, ARPS, SLATE, ▇▇▇▇▇▇▇ & ▇▇▇▇ (ILLINOIS)
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
-and-
SKADDEN, ARPS, SLATE, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (I.D.#2991)
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Attorneys for ▇▇▇▇▇▇ Services (Delaware), Inc., et al.
Dated:
461
TABLE OF CONTENTS
PAGE
TABLE OF
EXHIBITS..................................................................................................................vii
INTRODUCTION..............................................................................................................1
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION,
COMPUTATION OF TIME AND GOVERNING LAW............................................................................1
A. Scope of Definitions; Rules of Construction.............................................................1
B. Definitions.............................................................................................1
C. Rules of Interpretation................................................................................11
D. Computation of Time....................................................................................12
ARTICLE II.
CLASSIFICATION OF CLAIMS AND INTERESTS..........................................................................12
A. Introduction...........................................................................................12
B. Unclassified Claims....................................................................................12
1. DIP Facility Claims................................................................................12
2. Administrative Claims..............................................................................12
3. Priority Tax Claims................................................................................12
C. Summary of Classified Claims and Interests.............................................................12
D. Classification of Unimpaired Classes of Claims and Interests ..........................................13
1. Class 1: Other Priority Claims....................................................................13
2. Class 2: Other Secured Claims.....................................................................13
3. Class 3: General Unsecured Claims.................................................................13
4. Class 4: Intercompany Claims of Non-Debtors.......................................................13
5. Class 5: Subsidiary Interests.....................................................................13
E. Classification of Impaired Classes of Claims and Interests.............................................13
1. Class 6: Secured Lender Claims....................................................................13
2. Class 7: All Impaired Unsecured Claims............................................................13
3. Class 8A: Old Common Shares.......................................................................13
4. Class 8B: Securities Claims in the Securities Actions.............................................13
5. Class 8C: Other Securities Claims.................................................................14
6. Class 9: Other Equity Securities..................................................................14
ARTICLE III.
TREATMENT OF CLAIMS AND INTERESTS...............................................................................14
A. Unclassified Claims....................................................................................14
1. DIP Facility Claims................................................................................14
2. Administrative Claims..............................................................................14
3. Priority Tax Claims................................................................................14
B. Unimpaired Classes of Claims and Interests.............................................................14
1. Class 1: Other Priority Claims....................................................................14
2. Class 2: Other Secured Claims.....................................................................15
3. Class 3: General Unsecured Claims.................................................................15
4. Class 4: Intercompany Claims of Non-Debtors.......................................................15
5. Class 5: Subsidiary Interests.....................................................................15
C. Impaired Classes Of Claims and Interests...............................................................15
1. Class 6: Secured Lender Claims....................................................................15
2. Class 7: Impaired Unsecured Claims................................................................16
3. Class 8A: Old Common Shares.......................................................................17
4. Class 8B: Securities Claims in the Securities Actions..............................................17
5. Class 8C: Other Securities Claims..................................................................17
6. Class 9: Other Equity Securities...................................................................17
D. Special Provision Regarding Unimpaired Claims..........................................................17
E. Accrual Of Post-Petition Interest......................................................................17
ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN............................................................................18
i
462
A. Continued Corporate Existence..........................................................................18
B. Corporate Action.......................................................................................18
1. Cancellation of Old Securities and Agreements......................................................18
2. Certificate of Incorporation and Bylaws............................................................18
3. Restructuring Transactions.........................................................................18
4. Shareholder Rights Plan............................................................................19
5. Reverse Stock Split................................................................................19
6. Shareholder Approval...............................................................................19
C. Plan Transactions .....................................................................................19
1. New Securities.....................................................................................19
2. New Senior Secured Debt............................................................................19
3. New Guaranties.....................................................................................19
4. Exit Facility......................................................................................20
D. Directors and Officers.................................................................................20
E. Revesting of Assets; Releases of Liens.................................................................20
F. Preservation of Rights of Action.......................................................................20
G. Effectuating Documents; Further Transactions...........................................................20
H. Exemption from Certain Transfer Taxes..................................................................20
I. Releases and Related Matters...........................................................................21
1. Releases by Debtors................................................................................21
2. Releases by Holders of Lender Claims, Claims and Interests........................................21
3. Injunction Related to Releases....................................................................22
J. Substantive Consolidation for Purposes of Treating Impaired Claims.....................................22
K. Contribution and Indemnity Claims Other Than Assumed Indemnification Obligations.......................23
L. Assumed Indemnification Obligations....................................................................23
ARTICLE V.
ACCEPTANCE OR REJECTION OF THE PLAN.............................................................................23
A. Classes Entitled to Vote...............................................................................23
B. Acceptance by Impaired Classes.........................................................................23
C. Cramdown...............................................................................................23
ARTICLE VI.
SECURITIES TO BE ISSUED IN CONNECTION WITH THE PLAN.............................................................23
ARTICLE VII.
PROVISIONS GOVERNING DISTRIBUTIONS..............................................................................24
A. Distributions for Claims Allowed as of the Effective Date..............................................24
B. Interest on Claims.....................................................................................24
C. Distributions by Disbursing Agent and the Indenture Trustee............................................24
D. Record Date for Distributions to Holders of Lender Claims and Old Debentures...........................24
E. Means of Cash Payment..................................................................................24
F. Calculation of Distribution Amounts....................................................................24
1. New Common Shares..................................................................................25
2. New Debt Securities................................................................................25
G. Delivery of Distributions..............................................................................25
H. Surrender of Securities and Instruments................................................................25
1. Notes and Old Debentures...........................................................................25
2. Lost, Mutilated or Destroyed Notes or Old Debentures...............................................25
3. Failure to Surrender Canceled Note or Old Debentures...............................................26
I. Withholding and Reporting Requirements.................................................................26
J. Setoffs................................................................................................26
ARTICLE VIII.
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES............................................................................................26
A. Assumed Contracts and Leases...........................................................................26
B. Payments Related to Assumption of Contracts and Leases.................................................27
C. Rejected Contracts and Leases..........................................................................27
D. Compensation and Benefit Programs......................................................................27
ARTICLE IX.
PROCEDURES FOR RESOLVING DISPUTED,
CONTINGENT, AND UNLIQUIDATED CLAIMS AND DISPUTED INTERESTS......................................................27
ii
463
A. Prosecution of Objections..............................................................................27
B. No Distributions Pending Allowance.....................................................................27
C. Disputed Class 7 Distribution Reserve..................................................................27
D. Distributions After Allowance of Class 7 Claim.........................................................28
E. Distribution Procedures for Class 8 Claims and Interests...............................................28
ARTICLE X.
CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN...............................................28
A. Conditions To Confirmation.............................................................................28
B. Conditions to Effective Date...........................................................................28
C. Waiver of Conditions...................................................................................29
ARTICLE XI.
MODIFICATIONS AND AMENDMENTS....................................................................................30
ARTICLE XII.
RETENTION OF JURISDICTION.......................................................................................30
ARTICLE XIII.
COMPROMISES AND SETTLEMENTS.....................................................................................31
ARTICLE XIV.
MISCELLANEOUS PROVISIONS........................................................................................31
A. Bar Dates For Certain Post-Petition Claims.............................................................31
1. Administrative Claims; Substantial Contribution Claims.............................................31
2. Professional Fee Claims............................................................................32
B. Payment of Statutory Fees..............................................................................32
C. Severability of Plan Provisions........................................................................32
D. Successors and Assigns.................................................................................32
E. Releases and Satisfaction of Subordination Rights......................................................32
F. Discharge of the Debtors; Injunction...................................................................32
1. Discharge..........................................................................................32
2. Injunction.........................................................................................33
G. Committees.............................................................................................33
H. Exculpation and Limitation of Liability; Indemnity.....................................................34
I. Binding Effect.........................................................................................35
J. Revocation, Withdrawal or Non-Consummation.............................................................35
K. Plan Supplement........................................................................................35
L. Notices................................................................................................35
M. Payment of Certain Fees and Expenses...................................................................35
N. Prepayment.............................................................................................36
O. Term of Injunctions or Stays...........................................................................36
P. Governing Law..........................................................................................36
iii
464
iv
465
v
466
vi
467
TABLE OF EXHIBITS
EXHIBIT NAME
A List of Subsidiary Debtors
B List of Impaired Unsecured Claims
C Summary of Terms of New Unsecured Convertible Notes
vii
468
INTRODUCTION
▇▇▇▇▇▇ Services (Delaware), Inc., a Delaware corporation ("PSI"),
▇▇▇▇▇▇ Services Corp., an Ontario corporation ("PSC"), and those entities listed
on Exhibit A hereto (the "Subsidiary Debtors") hereby propose the following
joint plan of reorganization (the "Plan") for the resolution of their
outstanding creditor Claims and equity Interests. Reference is made to the
Disclosure Statement (as that term is defined herein), distributed
contemporaneously herewith, for a discussion of the Debtors' history,
businesses, properties, results of operations, projections for future
operations, risk factors, a summary and analysis of the Plan, and certain
related matters, including the New Securities to be issued under the Plan. The
Debtors are the proponents of this Plan within the meaning of section 1129 of
the Bankruptcy Code.
All holders of Claims and all holders of Interests are encouraged to
read this Plan and the Disclosure Statement in their entirety before voting to
accept or reject this Plan. Subject to certain restrictions and requirements set
forth in section 1127 of the Bankruptcy Code and Fed. R. Bankr. P. 3019 and
Article XI of this Plan, the Debtors reserve the right to alter, amend, modify,
revoke or withdraw this Plan prior to its substantial consummation.
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION,
COMPUTATION OF TIME AND GOVERNING LAW
A. SCOPE OF DEFINITIONS; RULES OF CONSTRUCTION
For purposes of this Plan, except as expressly provided or unless the
context otherwise requires, all capitalized terms not otherwise defined shall
have the meanings ascribed to them in Article I of this Plan. Any term used in
this Plan that is not defined herein, but is defined in the Bankruptcy Code or
the Bankruptcy Rules, shall have the meaning ascribed to that term in the
Bankruptcy Code or the Bankruptcy Rules. Whenever the context requires, such
terms shall include the plural as well as the singular number, the masculine
gender shall include the feminine, and the feminine gender shall include the
masculine.
B. DEFINITIONS
1.1 "Account Intermediaries" means (a) CIBC in its capacity as the
provider of the CIBC Bank Account Services and (b) Comerica and its Affiliates
in their respective capacities as the providers of Comerica Bank Account
Services.
1.2 "Administrative Claim" means a Claim for payment of an
administrative expense of a kind specified in section 503(b) or 1114(e)(2) of
the Bankruptcy Code and entitled to priority pursuant to section 507(a)(1) of
the Bankruptcy Code, including, but not limited to, (a) the actual, necessary
costs and expenses, incurred after the Petition Date, of preserving the Estates
and operating the businesses of the Debtors, including wages, salaries or
commissions for services rendered after the commencement of the Chapter 11
Cases, (b) Professional Fee Claims, (c) all fees and charges assessed against
the Estates under 28 U.S.C. ss. 1930 and (d) all Allowed Claims that are
entitled to be treated as Administrative Claims pursuant to a Final Order of the
Bankruptcy Court under section 546(c)(2)(A)of the Bankruptcy Code.
1.3 "Allowed Claim" means a Claim or any portion thereof (a) as to
which no objection to allowance or request for estimation has been interposed on
or before the Effective Date or the expiration of such other applicable period
of limitation fixed by the Bankruptcy Code, the Bankruptcy Rules or the
Bankruptcy Court, (b) as to which any objection to its allowance has been
settled, waived through payment, or withdrawn, or has been denied by a Final
Order, (c) that has been allowed by a Final Order, (d) as to which the liability
of the Debtors, or any of them, and the amount thereof are determined by final
order of a court of competent jurisdiction other than the Bankruptcy Court, or
(e) that is expressly allowed in a liquidated amount in the Plan; provided,
however, that, with respect to an Administrative Claim, "Allowed Claim" means an
Administrative Claim allowed in accordance with Section XIV.A of this Plan;
provided further, however, that all Class 1, 2, 3 and 4 Claims, if any, shall,
except as otherwise provided herein, be treated for all purposes as if the
Chapter 11 Cases were not filed, and the determination of whether any such
Claims shall be allowed and/or the amount of any such Claims (as to which no
proof of Claim need be filed) shall be determined, resolved or adjudicated, as
the case may be, in the manner in which such Claim would have been determined,
resolved or adjudicated if the Chapter 11 Cases had not been commenced.
1.4 "Allowed" means, when used in reference to a Claim or Interest
within a particular Class, an Allowed Claim or Allowed Interest of the type
described in such Class.
1.5 "Allowed Class . . . Claim" means an Allowed Claim in the
particular Class described.
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1.6 "Allowed Class . . . Interest" means an Interest in the particular
Class described (a) that has been allowed by a Final Order, (b) for which (i) no
objection to its allowance has been filed within the periods of limitation fixed
by the Bankruptcy Code or by any Final Order of the Bankruptcy Court or (ii) any
objection to its allowance has been settled or withdrawn, or (c) that is
expressly allowed in the Plan.
1.7 "Amended and Restated Term Credit Agreement" means collectively,
the Amended and Restated Credit Agreement, together with ancillary documents, to
be entered into among Reorganized PSC and Reorganized PSI and holders of Secured
Lender Claims as of the Effective Date, pursuant to which the New Senior Secured
Term Debt and New Secured PIK Debt will be governed, which agreement shall be
substantially in the form included in the Plan Supplement.
1.8 "Amended Certificates of Incorporation and Bylaws" means the
Reorganized Debtors' certificates of incorporation and bylaws, as amended by the
Plan.
1.9 "Assumed Indemnification Obligations" means (a) the obligations of
PSC pursuant to section 7.02 of its bylaws to indemnify current and former
directors and officers), on the terms and subject to the limitations described
therein, if and to the extent that such indemnification is permissible under the
Ontario Business Corporations Act or such other applicable governing corporate
statute and (b) the obligations of the Debtors other than PSC to indemnify
current and former directors and officers under their respective bylaws to the
extent such indemnification obligations are not more expansive than those of PSC
under section 7.02 of its bylaws if and to the extent such indemnification is
permissible under the applicable governing corporate statute of the applicable
Debtor; in each case, including any affirmative obligation of the Debtors to
indemnify current and former directors and officers in connection with any
governmental, regulatory or enforcement investigation or action.
1.10 "Ballots" means each of the ballot forms distributed with the
Disclosure Statement to holders of Impaired Claims and/or Interests entitled to
vote under Article II hereof in connection with the solicitation of acceptances
of the Plan.
1.11 "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
codified in title 11 of the United States Code, 11 U.S.C. ▇▇.▇▇. 101-1330, as
now in effect or hereafter amended.
1.12 "Bankruptcy Court" means the United States Bankruptcy Court for
the District of Delaware or such other court as may have jurisdiction over the
Chapter 11 Cases.
1.13 "Bankruptcy Rules" means collectively the Federal Rules of
Bankruptcy Procedure and the Official Bankruptcy Forms, as amended, the Federal
Rules of Civil Procedure, as amended, as applicable to the Chapter 11 Cases or
proceedings therein, and the Local Rules of the Bankruptcy Court, as applicable
to the Chapter 11 Cases or proceedings therein, as the case may be.
1.14 "BTCo" means Bankers Trust Company.
1.15 "Bar Date(s)" means the date(s), if any, designated by the
Bankruptcy Court as the last dates for filing Proofs of Claim or Interest
against the Debtors.
1.16 "Business Day" means any day, excluding Saturdays, Sundays
or "legal holidays" (as defined in Fed. R. Bankr. P. 9006(a)), on which
commercial banks are open for business in New York, New York.
1.17 "Canadian Bankruptcy Court" means the Ontario Superior Court
of Justice.
1.18 "Canadian Debtors" means PSC and the Subsidiaries that have
commenced proceedings in the Canadian Bankruptcy Court under the CCAA.
1.19 "Canadian Impaired Unsecured Claims" means the claims against the
Canadian Debtors allowed by the Canadian Bankruptcy Court and classified as
impaired unsecured claims under the Canadian Plan.
1.20 "Canadian Plan" means the Plan of Compromise and Arrangement
proposed by the Canadian Debtors in their CCAA proceedings.
1.21 "Cash" means legal tender of the United States or equivalents
thereof.
1.22 "CCAA" means the Companies' Creditors Arrangement Act (Canada).
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1.23 "Chapter 11 Cases" means the jointly administered Chapter 11
cases of the Debtors.
1.24 "▇▇▇▇▇▇ Actions" means the actions filed by a group of former
shareholders of the Southern-Foundry Supply group of companies captioned ▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇ v. ▇▇▇▇▇▇ Metals
Inc., et al., Case No:99 Civ. 2797 (MBM) (S.D.N.Y.) (dismissed); and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ v. ▇▇▇▇▇▇ Metals Inc., previously known as ▇▇▇▇▇▇ Metals (Ohio) Inc.,
▇▇▇▇▇▇ Services Corp., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇, No: CV9801642, in the
Circuit Court of Jefferson County, Alabama (subsequently dismissed in favor of
arbitration), and any and all actions that could be asserted by such Plaintiffs
based upon the facts that have been or could be alleged in these actions or any
other facts arising out of the acquisition by PSC of the Southern-Foundry Supply
group of companies.
1.25 "▇▇▇▇▇▇ Claims" means any Claims arising out of the ▇▇▇▇▇▇
Actions.
1.26 "CIBC" means Canadian Imperial Bank of Commerce.
1.27 "CIBC Bank Account Services" means "CIBC Bank Account
Services" as defined in the Pre-Petition Credit Agreement.
1.28 "Claim" means a claim against the Debtors, or any of them, whether
or not asserted, as defined in section 101(5) of the Bankruptcy Code.
1.29 "Claims Objection Deadline" means the last day for filing
objections to Disputed Claims (other than Claims set forth in Section 1.54(a)),
which day shall be 30 days after the filing of a Proof of Claim for such Claim.
1.30 "Claims Estimation Deadline" means the last day for filing a
request for estimation of a Disputed Class 7 Claim for the purpose of
establishing the Disputed Class 7 Claims Reserve, which day shall be 15 days
after the Confirmation Date.
1.31 "Class" means a category of holders of Claims or Interests,
as described in Article II below.
1.32 "Class 7 Distribution Date" means the date, occurring as soon as
practicable after the Effective Date, upon which distributions are made by the
Reorganized Debtors to holders of Allowed Class 7 Claims; provided, however,
that in no event shall the Class 7 Distribution Date occur prior to the
estimation of all Disputed Class 7 Claims for the purpose of establishing the
Disputed Class 7 Distribution Reserve as set forth in Section IX.C.
1.33 "Class 7 Election" means that election to be made by Qualifying
Class 7 Creditors on the Ballot to be submitted on or before the Voting Deadline
as to a distribution of New Unsecured PIK Notes or New Unsecured Convertible
Notes pursuant to Section III.C.2.
1.34 "Class 8 Solicitation Order" means a Final Order of the Bankruptcy
Court or other court of competent jurisdiction in form and substance
satisfactory to PSC providing that Class 8 is not entitled to vote on the Plan
and Class 8 is deemed to have rejected the Plan.
1.35 "Collateral" means any property or interest in the property of a
Debtor's Estate subject to a Lien to secure the payment or performance of a
Claim, which Lien is not subject to avoidance under the Bankruptcy Code or
otherwise invalid under the Bankruptcy Code or applicable state law.
1.36 "Comerica Bank Account Services" means "Comerica Bank Account
Services" as defined in the Pre-Petition Credit Agreement.
1.37 "Confirmation" means entry by the Bankruptcy Court of the
Confirmation Order.
1.38 "Confirmation Date" means the date of entry by the clerk of
the Bankruptcy Court of the Confirmation Order.
1.39 "Confirmation Hearing" means the hearing to consider confirmation
of the Plan under section 1128 of the Bankruptcy Code.
1.40 "Confirmation Order" means the order entered by the Bankruptcy
Court confirming the Plan.
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1.41 "Credit Documents" means the "Credit Documents" as defined in the
Pre-Petition Credit Agreement.
1.42 "Creditor" means any Person who holds a Claim against any of
the Debtors.
1.43 "Creditors' Committee" means the committee of unsecured creditors
appointed pursuant to section 1102(a) of the Bankruptcy Code in the Chapter 11
Cases.
1.44 "Cure" means the distribution of Cash, or such other property as
may be agreed upon by the parties or ordered by the Bankruptcy Court, with
respect to the assumption of an executory contract or unexpired lease, pursuant
to section 365(b) of the Bankruptcy Code, in an amount equal to all unpaid
monetary obligations, without interest, or such other amount as may be agreed
upon by the parties, under such executory contract or unexpired lease, to the
extent such obligations are enforceable under the Bankruptcy Code and applicable
bankruptcy law.
1.45 "Debtor(s)" means individually PSI, PSC and each of the Subsidiary
Debtors, and collectively, PSI, PSC and the Subsidiary Debtors, including in
their capacity as debtors-in-possession pursuant to sections 1107 and 1108 of
the Bankruptcy Code, and as reorganized hereunder.
1.46 "Deloitte & Touche" means Deloitte & Touche, its successors and
affiliates.
1.47 "Dilution" means dilution subsequent to the Effective Date (a) to
the extent necessary to give effect to the convertibility of the New Secured PIK
Debt, the New Unsecured Convertible Notes and the exercise of the Management
Options or (b) otherwise as a result of the issuance of common shares,
implementation of other management incentive programs or other action taken by
the board of directors of Reorganized PSC.
1.48 "DIP Agent" means BTCo, in its capacity as administrative agent
under the DIP Facility Agreement.
1.49 "DIP Co-Arrangers" means BTCo and CIBC, in their capacities as
co-arrangers of the DIP Facility.
1.50 "DIP Facility" means the debtor-in-possession credit facility to
be provided to the Debtors during the Chapter 11 Cases in the principal amount
of $100 million of available credit, pursuant to the DIP Facility Agreement.
1.51 "DIP Facility Agreement" means the Credit Agreement between PSC
and PSI as borrowers, the Subsidiary Debtors as guarantors, certain other
Subsidiaries as guarantors, the DIP Agent, and the DIP Co-Arrangers, and the
other lender signatories thereto.
1.52 "DIP Facility Claim" means a Claim arising under or as a result
of the DIP Facility.
1.53 "Disbursing Agent" means Reorganized PSC or any party designated
by Reorganized PSC, in its sole discretion, to serve as a disbursing agent under
the Plan and, with respect to the Old Debentures, shall mean the indenture
trustee under the Old Indenture.
1.54 "Disclosure Statement" means the written disclosure statement
that relates to the Plan, as amended, supplemented or modified from time to time
and that is prepared and distributed in accordance with section 1125 of the
Bankruptcy Code and Fed. R. Bankr. P. 3018.
1.55 "Disputed Class 7 Claim" means any Class 7 Claim which has not
been Allowed pursuant to the Plan or a Final Order of the Bankruptcy Court, and
(a) if no Proof of Claim has been, or is deemed to have been,
filed by the applicable Bar Date, which has been or hereafter is listed on the
Impaired Unsecured Claims List as unliquidated, contingent or disputed, and
which has not been resolved by written agreement of the parties or an order of
the Bankruptcy Court;
(b) if a Proof of Claim has been filed, or is deemed to have
been, filed by the applicable Bar Date (i) a Claim for which a corresponding
Class 7 Claim has been listed on the Impaired Unsecured Claims List as
unliquidated, contingent or disputed; (ii) a Class 7 Claim for which a
corresponding Class 7 Claim has been listed on the Impaired Unsecured Claims
list as other than unliquidated, contingent or disputed, but the amount of such
Class 7 Claim as asserted in the Proof of Claim varies from the amount of such
Claim as listed in the Impaired Unsecured Claims List; (iii) a Class 7 Claim
listed on the Impaired Unsecured Claims List for which a Proof of Claim has or
has not been filed to which a party in interest has timely filed an objection to
such Class 7 Claim in accordance with the Plan, the Bankruptcy Code, the
Bankruptcy Rules and any orders
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of the Bankruptcy Court; or (iv) as to which a Debtor or other party in interest
has timely filed an objection or request for estimation in accordance with the
Plan, the Bankruptcy Code, the Bankruptcy Rules, and any orders of the
Bankruptcy Court, by the Claims Estimation Deadline, or which is otherwise
disputed by a Debtor in accordance with applicable law, which objection, request
for estimation or dispute has not been withdrawn, or determined by a Final
Order;
(c) for which a Proof of Claim was required to be filed by
order of the Bankruptcy Court but as to which a Proof of Claim was not timely or
properly filed; or
(d) that is disputed in accordance with the provisions of this
Plan.
1.56 "Disputed Class 7 Claim Amount" means (a) if a liquidated amount
is set forth in the Proof of Claim relating to a Disputed Class 7 Claim, (i) the
liquidated amount set forth in the Proof of Claim relating to the Disputed Class
7 Claim; (ii) an amount agreed to by the Debtors and the holder of such Class 7
Disputed Claim; or (iii) if a request for estimation is filed by the Debtors or
other parties in interest by the Claims Estimation Deadline, the amount at which
such Claim is estimated by the Bankruptcy Court; (b) if no liquidated amount is
set forth in the Proof of Claim relating to a Disputed Class 7 Claim, (i) an
amount agreed to by the Debtors and the holder of such Class 7 Disputed Claim or
(ii) the amount estimated by the Bankruptcy Court with respect to such Disputed
Class 7 Claim, provided, however, that the Debtors or other parties in interest
must file a request for estimation of such Disputed Class 7 Claim no later than
the Claims Objection Deadline; or (c) if the Claim was listed on the Impaired
Unsecured Claims List as unliquidated, contingent or disputed and no Proof of
Claim was filed, or deemed to have been filed, by the applicable Bar Date and
the Claim has not been resolved by written agreement of the parties or an order
of the Bankruptcy Court, zero.
1.57 "Disputed Class 7 Distribution Reserve" means the reserve, if any,
established and maintained by the Disbursing Agent, into which the Reorganized
Debtors shall deposit the amount of New Unsecured PIK Notes, New Unsecured
Convertible Notes and New Common Shares that would have been distributed on the
Class 7 Distribution Date to holders of Disputed Class 7 Claims if such Claims
had been undisputed or noncontingent Claims on the Class 7 Distribution Date,
pending the allowance of such Claims.
1.58 "Distribution Date" means the date, occurring as soon as
practicable after the Effective Date, upon which distributions are made by the
Reorganized Debtors, to holders of Allowed DIP Facility, Allowed Administrative,
Allowed Priority Tax and Allowed Class 6 Claims; provided, however, that in no
event shall the Distribution Date occur later than thirty (30) Business Days
after the Effective Date.
1.59 "Distribution Record Date" means the record date for purposes of
making distributions under the Plan on account of Allowed Claims or Interests,
which date shall be the Confirmation Date or such other date designated in the
Confirmation Order.
1.60 "Effective Date" means the Business Day on which all conditions to
the consummation of the Plan as set forth in Section X.B hereof have been
satisfied or waived as provided in Section X.C hereof and is the effective date
of the Plan.
1.61 "Estate(s)" means individually the estate of each Debtor in the
Chapter 11 Cases, and, collectively, the estates of all Debtors in the Chapter
11 Cases, created pursuant to section 541 of the Bankruptcy Code.
1.62 "Excess Proceeds Account" means a separate interest-bearing
account established by the DIP Agent into which Net Asset Sale Proceeds of all
asset sales of PSC and the Subsidiaries consummated on or after the Petition
Date are deposited and into which all proceeds at any time deposited into the
Pre-Petition Proceeds Account (without giving effect to any disbursements from
the Pre-Petition Proceeds Account prior to the Petition Date) in excess of
$93,000,000 (after post-closing adjustments of no greater than $4,000,000
deposited into the Pre-Petition Proceeds Account with respect to the sale of
certain assets of PSC's aluminum division prior to the Petition Date) shall also
be deposited, which funds shall be held by the DIP Agent to be distributed in
accordance with this Plan on the Effective Date.
1.63 "Excluded Indemnification Obligations" means (i) the obligations
of the Debtors to indemnify any current or former officers, directors or
employees solely as to claims actually asserted as of the Petition Date, or
claims asserted after the Petition Date in the following actions or in actions
initiated after the Petition Date, in each case arising out of the same nucleus
of operative facts alleged in the following actions as of the Petition Date: (A)
the consolidated, putative class action entitled In re ▇▇▇▇▇▇ Services, Corp
Securities Litigation, 98 CV 835 (MBM), previously pending against PSC in the
United States District Court for the Southern District of New York, the putative
class action ▇▇▇▇▇▇▇ v. ▇▇▇▇▇▇ Services Corp., et al., File No. 4166 CP 98
(Ontario Court, General Division), (B) the action filed by a group of former
shareholders of the ▇▇▇▇▇▇▇-▇▇▇▇ Metals group of companies on October 6, 1998,
with the American Arbitration Association captioned In re ▇▇▇▇ Arbitration, Case
No. 39 Y 1680012 98 and the litigation styled ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇. ▇▇ ▇▇▇.
▇▇▇▇ (▇▇▇) (S.D.N.Y.) (dismissed and pending appeal),
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and (C) the actions filed by a group of former shareholders of the
Southern-Foundry Supply group of companies captioned ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇ v. ▇▇▇▇▇▇ Metals Inc., et al., Case
No:99 Civ. 2797 (MBM) (S.D.N.Y.) (dismissed); and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ v. ▇▇▇▇▇▇
Metals Inc., previously known as ▇▇▇▇▇▇ Metals (Ohio) Inc., ▇▇▇▇▇▇ Services
Corp., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇, No: CV9801642, in the Circuit Court of
Jefferson County, Alabama (subsequently dismissed in favor of arbitration); (ii)
any claims for reimbursement, contribution or indemnity that may be asserted by
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇; and (iii) any claims for
reimbursement, contribution or indemnity asserted by present or former
professionals or advisors of the Debtors or Subsidiaries, including, without
limitation, Deloitte & Touche, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Incorporated, accountants,
auditors, financial consultants, underwriters or attorneys as to claims arising
out of the matters alleged in the Securities Actions, the ▇▇▇▇▇▇ Actions, the
▇▇▇▇ Actions, or in any action initiated after the Petition Date based upon
similar factual allegations or alleging similar causes of action and any
indemnification obligation of such professionals or advisors of the kind
described in section 510(b) of the Bankruptcy Code; provided, however, that
"Excluded Indemnification Obligations" shall not include Assumed Indemnification
Obligations in connection with any governmental, regulatory or enforcement
investigation or action or Assumed Indemnification Obligations to pay the
reasonable defense costs of any individual who was a director, officer or
employee of a Debtor as of the Petition Date in connection with any third party
complaint or claim by Deloitte & Touche against such officer, director or
employee in connection with any action commenced by the Debtors, the Reorganized
Debtors or the Lenders against Deloitte & Touche arising out of the same nucleus
of operative facts alleged in the Securities Actions, the ▇▇▇▇▇▇ Actions or the
▇▇▇▇ Actions.
1.64 "Exit Facility" means the new senior secured credit facility in an
aggregate principal amount of approximately $125 million, which the Reorganized
Debtors anticipate entering into as a condition to the consummation of the Plan.
1.65 "Exit Lender(s)" means the lender(s) under the Exit Facility.
1.66 "Face Amount" means (a) when used in reference to a Disputed
Claim, the full stated amount claimed by the holder of such Claim in any Proof
of Claim timely filed with the Bankruptcy Court or otherwise deemed timely filed
by any Final Order of the Bankruptcy Court or other applicable bankruptcy law,
and (b) when used in reference to an Allowed Claim, the allowed amount of such
Claim.
1.67 "Final Order" means an order or judgment of the Bankruptcy Court,
or other court of competent jurisdiction, as entered on the docket in the
Chapter 11 Cases, the operation or effect of which has not been stayed,
reversed, or amended and as to which order or judgment (or any revision,
modification or amendment thereof) the time to appeal or seek review or
rehearing has expired and as to which no appeal or petition for review or
rehearing was filed or, if filed, remains pending.
1.68 "General Unsecured Claim" means a Claim against the Debtors, that
is not a DIP Facility Claim, Administrative Claim, Priority Tax Claim, Other
Priority Claim, Other Secured Claim, Intercompany Claim of a Non-Debtor, Lender
Claim or Impaired Unsecured Claim.
1.69 "Impaired" means, when used with reference to a Claim or Interest,
a Claim or Interest that is impaired within the meaning of section 1124 of the
Bankruptcy Code.
1.70 "Impaired Trade Claims" means Claims in excess of $50,000 of trade
vendors who do not agree to continue to provide trade credit to the Debtors in
accordance with terms provided prior to the Petition Date or who have not
actually provided such terms during the Chapter 11 Cases.
1.71 "Impaired Unsecured Claims" means collectively the Claims listed
on the Impaired Unsecured Claims List, the Unsecured Lender Claims, the Old
Debenture Claims, Impaired Trade Claims and Claims of parties to executory
contracts and leases that are rejected in the Chapter 11 Cases.
1.72 "Impaired Unsecured Claims List" means the list of Impaired
Unsecured Claims attached hereto as Exhibit B as amended or supplemented from
time to time.
1.73 "Indenture Trustee" means First Union National Bank or its
successor, in either case in its capacity as indenture trustee for the Old
Debentures.
1.74 "Intercompany Claim" means, as the case may be, any Claim of (a)
any Subsidiary against a Debtor, (b) any Subsidiary against any other
Subsidiary, or (c) PSC against any Subsidiary.
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1.75 "Interest" means (a) the legal, equitable, contractual and other
rights of any Person (including any 401K plan or plan participant) with respect
to Old Common Shares, Old Stock Options or any Other Equity Securities of any
Debtor and (b) the legal, equitable, contractual or other rights of any Person
to acquire or receive any of the foregoing.
1.76 "Lender" means a "Lender" as defined in the Pre-Petition Credit
Agreement, CIBC as Administrative Agent, BTCo as syndication agent, CIBC and
BTCo as co-arrangers, and their individual successors and assigns.
1.77 "Lender Claim" means a Claim of a Lender arising under or as a
result of the Pre-Petition Credit Facility Agreements.
1.78 "Lender Lock-up Agreement" means the letter agreement dated as of
April 5, 1999, as amended and restated as of June 21, 1999, and as may be
amended further subsequent to the date hereof, among PSC and the lenders
signatories thereto with respect to the principal terms and conditions of this
Plan.
1.79 "Lien" means a charge against or interest in property to secure
payment of a debt or performance of an obligation.
1.80 "▇▇▇▇ Actions" means the action filed by a group of former
shareholders of the ▇▇▇▇▇▇▇-▇▇▇▇ Metals group of companies on October 6, 1998,
with the American Arbitration Association captioned In re ▇▇▇▇ Arbitration, Case
▇▇. ▇▇ ▇ ▇▇▇ ▇▇▇▇▇ 98, the litigation styled ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇. ▇▇ ▇▇▇.
▇▇▇▇ (▇▇▇) (S.D.N.Y.) (dismissed and pending appeal) and any and all actions
that could be asserted by such Plaintiffs based upon the facts that have been or
could be alleged in this action or any other facts arising out of the
acquisition by PSC of the ▇▇▇▇▇▇▇-▇▇▇▇ Metals group of companies.
1.81 "▇▇▇▇ Claims" means any Claims arising out of the ▇▇▇▇ Actions.
1.82 "Litigation Claims" means the claims, rights of action, suits, or
proceedings, whether in law or in equity, whether known or unknown, that the
Debtors or their Estates may hold against any Person, which are to be retained
by the Reorganized Debtors pursuant to Section IV.F of this Plan as set forth in
the Plan Supplement.
1.83 "Management Option Agreement(s)" means the stock option
agreement(s) to be entered into by Reorganized PSC and the Management Option
Plan Participants, pursuant to which the Management Options will be granted.
1.84 "Management Option Plan" means a stock option plan to be adopted
by the Board of Directors of Reorganized PSC on or after the Effective Date.
1.85 "Management Option Plan Participants" means the employees of
Reorganized PSC entitled to participate in the Management Option Plan.
1.86 "Management Options" means the options to be issued by Reorganized
PSC to the Management Option Plan Participants to purchase PSC Common Shares
pursuant to the provisions of the Management Option Agreement to be entered into
under the Management Option Plan, subject to Dilution.
1.87 "Net Asset Sale Proceeds" means the cash proceeds of asset sales
of PSC and the Subsidiaries net only of reasonable costs and expenses and the
payment of Other Secured Claims (excluding the Secured Claims of the Account
Intermediaries) secured by Liens on such assets senior to the Liens securing the
Secured Lender Claims on such assets.
1.88 "Net Asset Sale Proceeds Pool" means the amount of cash in the
Excess Proceeds Account equal to 66-2/3% of the first $200,000,000 of any Net
Asset Sale Proceeds of the U.S. Ferrous division, if the US Ferrous division is
sold, plus 75% of all other Net Asset Sale Proceeds in the Excess Proceeds
Account.
1.89 "New Common Shares" means shares of common shares of Reorganized
PSC authorized under Section IV.C.1 of the Plan, and for the purposes of the
Reverse Stock Split, shall include the shares of common shares of Reorganized
PSC, if any, to be retained by holders of Allowed Class 8A Interests under the
Plan.
1.90 "New Debt Securities" means collectively the New Secured PIK Debt,
the New Unsecured PIK Notes and the New Unsecured Convertible Notes.
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1.91 "New Guaranties" means collectively the secured guaranties of the
Reorganized Subsidiary Debtors (in existence after giving effect to the
Restructuring Transactions) and the other Restricted Subsidiaries to be entered
into as of the Effective Date to guaranty and secure the New Senior Secured Term
Debt and the New Secured PIK Debt.
1.92 "New Securities" means collectively the New Common Shares, New
Secured PIK Debt, New Unsecured PIK Notes, New Unsecured Convertible Notes and
Management Options.
1.93 "New Secured PIK Debt" means the 10% Secured Convertible PIK Debt
due 2004 of Reorganized PSC, in the aggregate principal amount of $100 million,
to be issued and distributed pursuant to the Plan on the Distribution Date and
governed by the terms of the Amended and Restated Term Credit Agreement, the
original face amount of which are convertible until maturity at the option of
the holders into 25% of the PSC Common Shares, in the aggregate, on a fully
diluted basis as of the Effective Date and having usual anti-dilution provisions
applicable in a public offering of convertible debt, including giving effect to
the issuance of any PSC Common Shares under the Shareholder Rights Plan.
1.94 "New Senior Secured Term Debt" means the secured term debt of
Reorganized PSI due 2004, to be governed by the terms of the Amended and
Restated Term Credit Agreement, to be distributed under the Plan on the
Distribution Date in the aggregate principal amount of $250 million minus an
amount equal to the Net Asset Sale Proceeds Pool.
1.95 "New Unsecured Convertible Notes" means the 3% Unsecured
Convertible Notes due 2019 of Reorganized PSC, to be governed by the terms of
the New Unsecured Convertible Notes Indenture, in an aggregate face amount not
to exceed $18 million, to be issued and distributed pursuant to the Plan on the
Class 7 Distribution Date, and having the terms set forth in Exhibit C;
provided, however, that no New Unsecured Convertible Notes will be issued if
Class 7 votes to reject the Plan.
1.96 "New Unsecured Convertible Notes Indenture" means the indenture to
be entered into between Reorganized PSC and an entity to be selected prior to
the Effective Date, as indenture trustee, under which the New Unsecured
Convertible Notes shall be issued, which indenture shall be substantially in the
form included in the Plan Supplement.
1.97 "New Unsecured PIK Notes Indenture" means the indenture to be
entered into between Reorganized PSC and an entity to be selected prior to the
Effective Date, as indenture trustee, under which the New Unsecured PIK Notes
shall be issued, which indenture shall be substantially in the form included in
the Plan Supplement.
1.98 "New Unsecured PIK Notes" means the 6% Unsecured PIK Notes due
2009 of Reorganized PSC, in the aggregate principal amount not to exceed $60
million, to be issued and distributed pursuant to the Plan on the Class 7
Distribution Date and governed by the terms of the New Unsecured PIK Notes
Indenture; provided, however, that no New Unsecured PIK Notes will be issued if
Class 7 votes to reject the Plan and the class of holders of Canadian Impaired
Unsecured Claims votes to reject the Canadian Plan.
1.99 "Old Common Shares" means the common shares of PSC issued
and outstanding as of the Petition Date.
1.100 "Old Debentures" means the 7 1/4% Convertible Subordinated
Debentures due 2014, issued and outstanding under the Old Indenture.
1.101 "Old Indenture" means the Indenture, dated June 1, 1989, between
Allwaste, Inc. and TCT, as trustee, as modified by the First Supplemental
Indenture, dated as of July 30, 1997, between Allwaste, Inc., PSC and TCT, as
trustee, pursuant to which the Old Debentures were issued and are outstanding.
1.102 "Old Securities" means collectively the Old Common Shares, the
Other Equity Securities and the Old Debentures.
1.103 "Old Stock Options" means the outstanding options to purchase
Old Common Shares, as of the Petition Date.
1.104 "Ordinary Course Professionals' Order" means an order entered by
the Bankruptcy Court authorizing the Debtors, or any of them, to retain, employ
and pay certain professionals, as specified in the order, which are not involved
in the administration of the Chapter 11 Cases, in the ordinary course of
business, without further order of the Bankruptcy Court.
1.105 "Other Equity Securities" means collectively the Old Stock
Options, together with any other options, warrants, conversion rights, rights of
first refusal or other rights, contractual or otherwise, to acquire or receive
any Old Common Shares or other ownership interests in any Debtor or of an
affiliate of any Debtor, and any contracts, subscriptions,
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commitments or agreements pursuant to which the non-debtor party was or could
have been entitled to receive shares, securities or other ownership interests in
any Debtor, excluding Subsidiary Interests.
1.106 "Other Priority Claim" means a Claim entitled to priority
pursuant to section 507(a) of the Bankruptcy Code other than a DIP Facility
Claim, a Priority Tax Claim or an Administrative Claim.
1.107 "Other Secured Claims" means collectively the Secured Claims of
the Account Intermediaries and all other Secured Claims against the Debtors, as
the case may be, other than the Secured Lender Claims included in Class 6.
1.108 "Other Securities Claims" means the ▇▇▇▇▇▇ Claims, ▇▇▇▇ Claims,
and any and all Claims arising from the recission or right of recission of a
purchase or sale of a security or Interest of any Debtor or of an affiliate of
any Debtor, or for damages arising from the purchase or sale of such a security
or Interest (excluding the Securities Claims classified in Class 8B) or for
reimbursement, indemnification or contribution allowed under section 502 of the
Bankruptcy Code on account of such Claims or on account of the Securities
Actions or any actions initiated after the Petition Date that may be
subordinated pursuant to section 510(b) of the Bankruptcy Code (including,
without limitation, Excluded Indemnification Obligations) if not disallowed
pursuant to Section IV.K; provided, however, that "Other Securities Claims"
shall not include Assumed Indemnification Obligations.
1.109 "Person" means Person as defined in section 101 (41) of the
Bankruptcy Code.
1.110 "Petition Date" means the dates on which the Debtors filed their
petitions for relief commencing the Chapter 11 Cases.
1.111 "Phencorp" means Phencorp International Finance Inc.
1.112 "Plan" means this Chapter 11 reorganization plan and all exhibits
annexed hereto or referenced herein, as the same may be amended, modified or
supplemented from time to time with the consent of the Required Lenders.
1.113 "Plan Supplement" means the compilation of documents and forms of
documents specified in the Plan which will be filed with the Bankruptcy Court
not later than five (5) Business Days prior to date of the commencement of the
Confirmation Hearing.
1.114 "Pre-Petition Credit Agreement" means the Credit Agreement dated
as of August 11, 1997, among PSC, as borrower in Canada, PSI, as borrower in the
United States, the Lenders, CIBC, as administrative agent for the Lenders, BTCo,
as syndication agent, and CIBC and BTCo, as co-arrangers, as amended by amending
agreements dated as of October 31, 1997, February 19, 1998, June 24, 1998,
October 20, 1998, and December 4, 1998.
1.115 "Pre-Petition Credit Facility Agreements" mean the Pre-Petition
Credit Agreement, the Credit Documents and the Lender Lock-up Agreement.
1.116 "Pre-Petition Proceeds Account" means the account established
under the Proceeds Agreement into which proceeds of certain asset sales were
deposited prior to the Petition Date.
1.117 "Priority Tax Claim" means a Claim that is entitled to priority
pursuant to section 507(a)(8) of the Bankruptcy Code.
1.118 "Proceeds Agreement" means the Proceeds Agreement dated April 5,
1999, as amended, made by and among PSC, the Subsidiaries and the Lenders.
1.119 "Professional" means any professional employed in the Chapter 11
Cases pursuant to section 327 or 1103 of the Bankruptcy Code or otherwise and
any professionals seeking compensation or reimbursement of expenses in
connection with the Chapter 11 Cases pursuant to section 503(b)(4) of the
Bankruptcy Code.
1.120 "Professional Fee Claim" means a Claim of a Professional for
compensation or reimbursement of costs and expenses relating to services
incurred after the Petition Date and prior to and including the Effective Date.
1.121 "Pro Rata" means, at any time, the proportion that the Face
Amount of a Claim in a particular Class bears to the aggregate Face Amount of
all Claims (including Disputed Claims) in such Class, unless the Plan provides
otherwise.
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1.122 "Proof of Claim" means collectively (i) the proof of claim that
must be filed by certain holders of Impaired Unsecured Claims pursuant to an
Order of the Bankruptcy Court entered on June 28, 1999, and (ii) any other proof
of claim filed in the Chapter 11 Cases as required by the Plan, the Bankruptcy
Code, the Bankruptcy Rules or any order of the Bankruptcy Court.
1.123 "Protocol" means the Cross-Border Insolvency Protocol entered in
the Chapter 11 Cases and the CCAA cases of the Canadian Debtors.
1.124 "PSC Common Shares" means the common shares of Reorganized PSC
outstanding after giving effect to the issuance of the New Common Shares and the
Reverse Stock Split.
1.125 "Qualifying Class 7 Creditors" means the holders of Class 7
Impaired Unsecured Claims other than CIBC and its affiliates that as of the
Voting Record Date are holders of Impaired Unsecured Claims in a liquidated
amount.
1.126 "Registration Rights Agreement" means an agreement to be entered
into between Reorganized PSC and certain holders of Allowed Lender Claims with
respect to rights of registration as to the New Common Shares in substantially
the form included in the Plan Supplement.
1.127 "Reinstated" or "Reinstatement" means (i) leaving unaltered the
legal, equitable and contractual rights to which a Claim or Interest entitles
the holder of such Claim or Interest so as to leave such Claim or Interest
unimpaired in accordance with section 1124 of the Bankruptcy Code or (ii)
notwithstanding any contractual provision or applicable law that entitles the
holder of such Claim or Interest to demand or receive accelerated payment of
such Claim or Interest after the occurrence of a default (a) curing any such
default that occurred before or after the Petition Date, other than a default of
a kind specified in section 365(b)(2) of the Bankruptcy Code; (b) reinstating
the maturity of such Claim or Interest as such maturity existed before such
default; (c) compensating the holder of such Claim or Interest for any damages
incurred as a result of any reasonable reliance by such holder on such
contractual provision or such applicable law; or (d) not otherwise altering the
legal, equitable or contractual rights to which such Claim or Interest entitles
the holder of such Claim or Interest; provided, however, that any contractual
right that does not pertain to the payment when due of principal and interest on
the obligation on which such Claim or Interest is based, including, but not
limited to, financial covenant ratios, negative pledge covenants, covenants or
restrictions on merger or consolidation, and affirmative covenants regarding
corporate existence prohibiting certain transactions or actions contemplated by
the Plan, or conditioning such transactions or actions on certain factors, shall
not be required to be reinstated in order to accomplish Reinstatement.
1.128 "Reorganized PSC" means PSC or its successor, on and after the
Effective Date.
1.129 "Reorganized PSI" means PSI, on and after the Effective Date.
1.130 "Reorganized Debtor(s)" means individually any Debtor and
collectively all Debtors, on or after the Effective Date.
1.131 "Reorganized Subsidiary Debtor(s)" means individually any Debtor
and collectively all Debtors, on or after the Effective Date.
1.132 "Required Lenders" means the "Required Lenders" as defined in the
Pre-Petition Credit Agreement.
1.133 "Restricted Subsidiaries" means "Restricted Subsidiaries" as
defined in the Pre-Petition Credit Agreement.
1.134 "Restructuring Transactions" has the meaning ascribed thereto in
Section IV.B.3 hereof.
1.135 "Reverse Stock Split" means the reverse stock split of
Reorganized PSC to be implemented only if Class 7 votes to accept the Plan,
which if so implemented shall be done simultaneously with the Effective Date
pursuant to which each ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ Shares shall be consolidated into one PSC
Common Share and as a result 24,000,000 shares of PSC Common Shares will be
issued and outstanding.
1.136 "Schedules" means the schedules of assets and liabilities and the
statements of financial affairs, if any, filed in the Bankruptcy Court by the
Debtors as such schedules or statements as may be amended or supplemented from
time to time in accordance with Fed. R. Bankr. P. 1009 or orders of the
Bankruptcy Court.
1.137 "Secondary Liability Claim" means a Claim that arises from a
Debtor being liable as a guarantor of, or otherwise being jointly, severally, or
secondarily liable for, any contractual, or tort, or other obligation of another
Debtor,
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including any Claim based on (a) guaranties of collection, payment, or
performance; (b) indemnity bonds, obligations to indemnify or obligations to
hold harmless; (c) performance bonds; (d) contingent liabilities arising out of
contractual obligations or out of undertakings (including any assignment or
other transfer) with respect to leases, operating agreements or other similar
obligations made or given by a Debtor relating to the obligations or performance
of another Debtor; (e) vicarious liability; or (f) any other joint or several
liability that any Debtor may have in respect of any obligation that is the
basis of a Claim.
1.138 "Secured Claim" means a Claim that is secured by a Lien on
property in which an Estate has an interest or that is subject to setoff under
section 553 of the Bankruptcy Code, to the extent of the value of the Claim
holder's interest in the Estate's interest in such property or to the extent of
the amount subject to setoff, as applicable, as determined pursuant to section
506(a) of the Bankruptcy Code.
1.139 "Secured Lender Claim" means a Secured Claim of a Lender arising
under or as a result of the Pre-Petition Credit Facility Agreements.
1.140 "Securities Act" means the Securities Act of 1933, 15
U.S.C.ss.ss.77a-77aa, as now in effect or hereafter amended.
1.141 "Securities Actions" means collectively (i) the consolidated,
putative class action entitled In re ▇▇▇▇▇▇ Services Corp. Securities
Litigation, 98 CV 835 (MBM), previously pending against PSC in the United States
District Court for the Southern District of New York and (ii) the putative class
action entitled ▇▇▇▇▇▇▇ v. ▇▇▇▇▇▇ Services Corp., et al., File No. 4166 CP 98
(Ontario Court, General Division).
1.142 "Securities Claim" means a Claim of any Person as to causes of
action asserted in the Securities Actions or Claims arising out of the ownership
of Old Common Shares, excluding the Other Securities Claims.
1.143 "Security Agent" means the "Security Agent" as defined in the
Pre-Petition Credit Agreement.
1.144 "Shareholder Rights Plan" means the Shareholder Rights Plan to be
implemented on the Effective Date for Reorganized PSC substantially in the form
included in the Plan Supplement.
1.145 "Subsidiaries" means collectively all of the direct and indirect
subsidiaries of PSC.
1.146 "Subsidiary Debtors" means the direct and indirect subsidiaries
of PSC listed on Exhibit A.
1.147 "Subsidiary Interests" means collectively the issued and
outstanding shares of stock of the Subsidiaries as of the Petition Date.
1.148 "Substantial Contribution Claim" means a claim for compensation
or reimbursement of expenses incurred in making a substantial contribution in
the Chapter 11 Cases pursuant to section 503(b)(3),(4) or (5) of the Bankruptcy
Code.
1.149 "TCT" means Texas Commerce Trust Company of New York.
1.150 "Unimpaired" means, when used with reference to a Claim or
Interest, a Claim or Interest that is not impaired within the meaning of section
1124 of the Bankruptcy Code.
1.151 "Unimpaired Claim" means a Claim that is not an Impaired Claim.
1.152 "Unsecured Lender Claim" means a Claim of a Lender arising under
or as a result of the Pre-Petition Credit Facility Agreements that is not a
Secured Lender Claim.
1.153 "Voting Deadline" means the voting deadline on the Plan as set by
an order of the Bankruptcy Court.
1.154 "Voting Record Date" means the voting record date as to the Plan
as set by an order of the Bankruptcy Court.
C. RULES OF INTERPRETATION
For purposes of the Plan (a) any reference in the Plan to a contract,
instrument, release, indenture, or other agreement or document's being in a
particular form or on particular terms and conditions means that such document
shall be substantially in such form or substantially on such terms and
conditions; (b) any reference in the Plan to an existing document or exhibit
filed
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or to be filed means such document or exhibit as it may have been or may be
amended, modified, or supplemented; (c) unless otherwise specified, all
references in the Plan to Sections, Articles, Schedules, and Exhibits are
references to Sections, Articles, Schedules, and Exhibits of or to the Plan; (d)
the words "herein" and "hereto" refer to the Plan in its entirety rather than to
a particular portion of the Plan; (e) captions and headings to Articles and
Sections are inserted for convenience of reference only and are not intended to
be a part of or to affect the interpretation of the Plan, and (f) the rules of
construction set forth in section 102 of the Bankruptcy Code and in the
Bankruptcy Rules shall apply.
D. COMPUTATION OF TIME
In computing any period of time prescribed or allowed by the Plan, the
provisions of Fed. R. Bankr. P. 9006(a) shall apply.
ARTICLE II.
CLASSIFICATION OF CLAIMS AND INTERESTS
A. INTRODUCTION
The Plan is premised on the substantive consolidation of the Debtors
only with respect to the treatment of Class 6, 7 and 8 Claims, as provided in
Section IV.J. The Plan does not contemplate the substantive consolidation of the
Debtors with respect to the other Classes of Claims or Interests. All Claims and
Interests, except DIP Facility Claims, Administrative Claims and Priority Tax
Claims, are placed in the Classes set forth below. In accordance with section
1123(a)(1) of the Bankruptcy Code, DIP Facility Claims, Administrative Claims
and Priority Tax Claims, as described below, have not been classified.
A Claim or Interest is placed in a particular Class only to the extent
that the Claim or Interest falls within the description of that Class and is
classified in other Classes to the extent that any portion of the Claim or
Interest falls within the description of such other Classes. A Claim is also
placed in a particular Class for the purpose of receiving distributions pursuant
to the Plan only to the extent that such Claim is an Allowed Claim in that Class
and such Claim has not been paid, released, or otherwise settled prior to the
Effective Date.
B. UNCLASSIFIED CLAIMS (NOT ENTITLED TO VOTE ON THE PLAN)
1. DIP Facility Claims
2. Administrative Claims
3. Priority Tax Claims
C. SUMMARY OF CLASSIFIED CLAIMS AND INTERESTS
Class Status
Class 1 - Other Priority Claims Unimpaired - not entitled to vote
Class 2 - Other Secured Claims Unimpaired - not entitled to vote
Class 3 - General Unsecured Claims Unimpaired - not entitled to vote
Class 4 - Intercompany Claims of Non-Debtors Unimpaired (except for Intercompany Claims of Phencorp
against PSI, Luntz Acquisition (Delaware) Corporation, RESI
Acquisition (Delaware) Corporation and Industrial Services
Technology, Inc. ) - not entitled to vote (Phencorp deemed to
accept)
Class 5 - Subsidiary Interests Unimpaired - not entitled to vote
Class 6 - Secured Lender Claims Impaired - entitled to vote
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Class 7 - Impaired Unsecured Claims Impaired - entitled to vote
Class 8A - Old Common Shares Impaired - entitled to vote, unless the Class 8 Solicitation
Order is entered
Class 8B - Securities Claims in the Securities Actions Impaired - entitled to vote, unless the Class 8 Solicitation
Order is entered
Class 8C - Other Securities Claims Impaired - entitled to vote unless the Class 8 Solicitation
Order is entered
Class 9 - Other Equity Securities Impaired - deemed to reject
D. CLASSIFICATION OF UNIMPAIRED CLASSES OF CLAIMS AND INTERESTS (DEEMED TO
HAVE ACCEPTED THE PLAN AND THEREFORE NOT ENTITLED TO VOTE)
1. Class 1: Other Priority Claims
Class 1 consists of all Other Priority Claims.
2. Class 2: Other Secured Claims
Class 2 consists of separate subclasses for each Other Secured Claim
secured by a Lien upon property in which an Estate has an interest.
Each subclass is deemed to be a separate Class for all purposes under
the Bankruptcy Code.
3. Class 3: General Unsecured Claims
Class 3 consists of all General Unsecured Claims.
4. Class 4: Intercompany Claims of Non-Debtors
Class 4 consists of all Intercompany Claims of all Non-Debtors against
Debtors.
5. Class 5: Subsidiary Interests
Class 5 consists of the Subsidiary Interests.
E. CLASSIFICATION OF IMPAIRED CLASSES OF CLAIMS AND INTERESTS. (Classes 6 and 7
are entitled to vote on the Plan. If the Class 8 Solicitation Order is entered,
then Classes 8A, 8B and 8C will be deemed to have rejected the Plan and,
therefore, will not be entitled to vote. If the Class 8 Solicitation Order is
not entered, then Classes 8A, 8B and 8C will be entitled to vote.)
1. Class 6: Secured Lender Claims
Class 6 consists of all Secured Lender Claims. Notwithstanding anything
contained in this Plan to the contrary, the Secured Lender Claims shall
be deemed Allowed Class 6 Claims in the aggregate amount of $ ,000,000
plus accrued interest through the Petition Date.
2. Class 7: All Impaired Unsecured Claims
Class 7 consists of all Impaired Unsecured Claims.
3. Class 8A: Old Common Shares
Class 8A consists of the Interests of holders of Old Common Shares.
4. Class 8B: Securities Claims in the Securities Actions
Class 8B consists of all the Securities Claims of the putative
plaintiffs in the Securities Actions.
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5. Class 8C: Other Securities Claims
Class 8C consists of all Other Securities Claims.
6. Class 9: Other Equity Securities
Class 9 consists of the Interests of holders of Other Equity
Securities.
ARTICLE III.
TREATMENT OF CLAIMS AND INTERESTS
A. UNCLASSIFIED CLAIMS
1. DIP Facility Claims
On the Effective Date or the date such DIP Facility Claim becomes
payable pursuant to any agreement between PSC and the holder of such DIP
Facility Claim, each holder of an Allowed DIP Facility Claim shall receive in
full satisfaction, settlement, release and discharge of and in exchange for such
Allowed DIP Facility Claim (a) cash equal to the unpaid portion of such Allowed
DIP Facility Claim or (b) such other treatment as to which PSC, with the consent
of the Required Lenders, and such holder shall have agreed upon in writing.
2. Administrative Claims
Except as otherwise provided for herein, and subject to the
requirements of Section XIV.A hereof, on, or as soon as reasonably practicable
after, the latest of (i) the Distribution Date, (ii) the date such
Administrative Claim becomes an Allowed Administrative Claim, or (iii) the date
such Administrative Claim becomes payable pursuant to any agreement between a
Debtor and the holder of such Administrative Claim, each holder of an Allowed
Administrative Claim shall receive in full satisfaction, settlement, release and
discharge of and in exchange for such Allowed Administrative Claim (a) Cash
equal to the unpaid portion of such Allowed Administrative Claim or (b) such
other treatment as to which the applicable Debtor, with the consent of the
Required Lenders, and such holder shall have agreed upon in writing; provided,
however, that Administrative Claims with respect to liabilities incurred by a
Debtor in the ordinary course of business during the Chapter 11 Cases shall be
paid in the ordinary course of business in accordance with the terms and
conditions of any agreements relating thereto.
3. Priority Tax Claims
On, or as soon as reasonably practicable after, the later of (i) the
Distribution Date or (ii) the date such Priority Tax Claim becomes an Allowed
Priority Tax Claim, each holder of an Allowed Priority Tax Claim shall receive
in full satisfaction, settlement, release and discharge of and in exchange for
such Allowed Priority Tax Claim (a) with the consent of the Required Lenders,
Cash equal to the unpaid portion of such Allowed Priority Tax Claim, (b) Cash
payments over time in an aggregate principal amount equal to the amount of such
Allowed Priority Tax Claim plus simple interest on the unpaid portion thereof at
the rate of seven percent (7%) per annum from the Effective Date through the
date of payment thereof, or (c) such other treatment as to which a Debtor, with
the consent of the Required Lenders, and such holder shall have agreed upon in
writing. Cash payments of principal shall be made in annual installments, each
such installment amount being equal to ten percent (10%) of such Allowed
Priority Tax Claim plus accrued and unpaid interest, with the first payment to
be due on or before the first anniversary of the Effective Date, or as soon
thereafter as is practicable, and subsequent payments to be due on the
anniversary of the first payment date or as soon thereafter as is practicable;
provided, however, that any installments remaining unpaid on the date that is
six years after the date of assessment of the tax that is the basis for the
Allowed Priority Tax Claim shall be paid on the first Business Day following
such date, or as soon thereafter as is practicable, together with any accrued
and unpaid interest to the date of payment; and provided further that the
Debtors reserve the right to pay any Allowed Priority Tax Claim, or any
remaining balance of any Allowed Priority Tax Claim, in full at any time on or
after the Distribution Date without premium or penalty; and provided further
that no holder of an Allowed Priority Tax Claim shall be entitled to any
payments on account of any pre-Effective Date interest accrued on or penalty
arising after the Petition Date with respect to or in connection with such
Allowed Priority Tax Claim.
B. UNIMPAIRED CLASSES OF CLAIMS AND INTERESTS
1. Class 1: Other Priority Claims
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On, or as soon as reasonably practicable after, the latest of (i) the
Distribution Date, (ii) the date such Class 1 Other Priority Claim becomes an
Allowed Class 1 Other Priority Claim, or (iii) the date such Class 1 Other
Priority Claim becomes payable pursuant to any agreement between a Debtor and
the holder of such Class 1 Other Priority Claim, each holder of an Allowed Class
1 Other Priority Claim shall receive in full satisfaction, settlement, release
and discharge of and in exchange for such Allowed Class 1 Other Priority Claim
(a) Cash equal to the unpaid portion of such Allowed Class 1 Other Priority
Claim or (b) such other treatment as to which a Debtor, with the consent of the
Required Lenders, and such holder shall have agreed upon in writing.
2. Class 2: Other Secured Claims
Each holder of a Class 2 Other Secured Claim shall be treated as a
separate class for all purposes under this Plan, and each holder of an Allowed
Class 2 Other Secured Claim shall receive the treatment set forth below in
Option A or B. Except as to the Account Intermediaries, the Debtors specifically
reserve all rights to challenge the validity, nature and perfection of any
purported Liens and security interests.
Option A: Allowed Class 2 Other Secured Claims with respect to which
the applicable Debtor or the applicable Reorganized Debtor selects Option A
will, subject to the consent of the Required Lenders, be paid in cash, in full,
by the Reorganized Debtors, unless the holder of such Claim agrees to less
favorable treatment.
Option B: Allowed Class 2 Other Secured Claims with respect to which
the applicable Debtor or Reorganized Debtor selects Option B will be Reinstated.
The applicable Debtor or Reorganized Debtor will be deemed to have
elected Option B as to Allowed Class 2 Other Secured Claims except those with
respect to which the applicable Debtor, with the consent of the Required
Lenders, elects Option A in writing prior to the Confirmation Hearing.
3. Class 3: General Unsecured Claims
Each holder of an Allowed Class 3 General Unsecured Claim shall, at the
option of PSC, (a) have its Claim Reinstated or (b) receive such other treatment
as to which the applicable Debtor or Reorganized Debtor, with the consent of the
Required Lenders, and such holder shall have agreed upon in writing.
4. Class 4: Intercompany Claims of Non-Debtors
Except as provided herein, each holder of an Allowed Class 4
Intercompany Claim, in full satisfaction, settlement, release and discharge of
and in exchange for such Allowed Class 4 Intercompany Claim, shall, in the sole
discretion of the applicable Debtor or Reorganized Debtor, (a) have its Claim
Reinstated or (b) receive such other treatment as the applicable Debtor or
Reorganized Debtor, with the consent of the Required Lenders, and such holder
have agreed upon in writing. The Intercompany Claim of Phencorp against PSI,
Luntz Acquisition (Delaware) Corporation, and RESI Acquisition (Delaware)
Corporation shall be deemed released and discharged on the Effective Date, and
Phencorp shall not receive or retain any property under the Plan on account of
such Intercompany Claims. Phencorp has agreed to accept the Plan.
5. Class 5: Subsidiary Interests
Subject to the Restructuring Transactions, all Class 5 Subsidiary
Interests will be deemed Allowed Interests and Reinstated on the Effective Date,
but the holders of the Class 5 Subsidiary Interests shall receive no
distribution under the Plan on account of such Interests.
C. IMPAIRED CLASSES OF CLAIMS AND INTERESTS
1. Class 6: Secured Lender Claims
On the Effective Date, the Pre-Petition Credit Facility Agreements
shall be amended and restated by the Amended and Restated Term Credit Agreement
without any further action by any party. Each holder of an Allowed Class 6
Secured Lender Claim, in full satisfaction, settlement, release and discharge of
and in exchange for such Allowed Class 6 Secured Lender Claim, shall receive on
or as soon as practicable after the Distribution Date its Pro Rata share of (a)
the Net Asset Sale Proceeds Pool, (b) the New Secured PIK Debt, (c) the New
Senior Secured Term Debt and (d) (i) if Class 7 votes to accept the Plan and the
class of holders of Canadian Impaired Unsecured Claims votes to accept the
Canadian Plan, 5,967,052,592
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shares of the New Common Shares which shall be ninety-one percent (91%) or
21,840,000 shares of the PSC Common Shares issued and outstanding as of the
Effective Date, after giving effect to the Reverse Stock Split, subject to
Dilution, (ii) if Class 7 votes to reject the Plan and the class of holders of
Canadian Impaired Unsecured Claims votes to reject the Canadian Plan, 24 million
shares of New Common Shares which shall be one hundred percent (100%) of the PSC
Common Shares issued and outstanding as of the Effective Date, subject to
Dilution, (iii) if Class 7 votes to reject the Plan, but the class of holders of
Canadian Impaired Unsecured Claims votes to accept the Canadian Plan, 22,800,000
shares of the New Common Shares which shall be ninety-five percent (95%) of the
PSC Common Shares issued and outstanding as of the Effective Date plus an amount
of PSC Common Shares equal to the aggregate number of the PSC Common Shares that
would have been available for distribution to Class 7 had Class 7 voted to
accept the Plan (based on the Debtors' estimate of the aggregate amount of
Allowed Class 7 Claims), subject to Dilution, and an amount of New Unsecured PIK
Notes equal to the amount that would have been distributed to Class 7 had Class
7 voted to accept the Plan (based on the Debtors' estimate of the aggregate
amount of Allowed Class 7 Claims), or (iv) if Class 7 votes to accept the Plan,
but the class of holders of Canadian Impaired Unsecured Claims votes to reject
the Canadian Plan, 5,967,052,592 shares of the New Common Shares which shall be
ninety-one percent (91%) or 21,840,000 shares of the PSC Common Shares issued
and outstanding as of the Effective Date, after giving effect to the Reverse
Stock Split, plus an amount of New Common Shares equal to the aggregate number
of New Common Shares that would have been distributed to the class of holders of
Canadian Impaired Unsecured Claims (based on the Debtors' estimate of the
allowed amount of such Claims), subject to Dilution, and an amount of New
Unsecured PIK Notes equal to the amount that would have been distributed to the
class of holders of Canadian Impaired Unsecured Claims had such class voted to
accept the Canadian Plan (based on the Debtors' estimate of the Allowed amount
of such claims). The Secured Lender Claims shall be deemed Allowed Class 6
Claims in the aggregate amount of $______.
On the Effective Date, Reorganized PSC shall record such holders of
Allowed Class 6 Lender Claims as holders of record of such New Common Shares.
Each holder of an Allowed Class 6 Secured Lender Claim shall vote the New Common
Shares distributed to it under the Plan in favor of each of the matters set
forth in Section IV.B.6 hereof.
2. Class 7: Impaired Unsecured Claims
On, or as soon as reasonably practicable after, the later of (i) the
Class 7 Distribution Date or (ii) the date such Class 7 Claim becomes an Allowed
Class 7 Claim,
(a) if the holders of Allowed Class 7 Claims vote to accept
the Plan then each holder of an Allowed Class 7 Claim shall receive in full
satisfaction, settlement, release and discharge of and in exchange for such
Allowed Class 7 Claim, its Pro Rata share of (i) subject to the Class 7
Election, $60 million of New Unsecured PIK Notes to be issued pursuant to
Section IV.C.1 of the Plan (to be shared with the class of holders of Canadian
Impaired Unsecured Claims under the Canadian Plan) and (ii) 327,860,033 shares
of the New Common Shares which shall be five percent (5%) or 1,200,000 shares of
the PSC Common Shares issued and outstanding as of the Effective Date, after
giving effect to the Reverse Stock Split, subject to Dilution (to be shared with
the class of holders of Canadian Impaired Unsecured Claims under the Canadian
Plan), and the holders of Unsecured Lender Claims shall be deemed to have waived
any and all distributions and benefit of any and all contractual subordination
provisions in respect of the Old Debentures; or
(b) if the holders of Allowed Class 7 Claims vote to reject
the Plan, then the holders of such Claims shall not receive or retain any
property on account of such Claims.
Qualifying Class 7 Creditors shall have the right to make the Class 7
Election if Class 7 votes to accept the Plan. The Class 7 Election shall entitle
Qualifying Class 7 Creditors to elect to forgo their Pro Rata distribution of
New Unsecured PIK Notes. If Class 7 votes to accept the Plan, Qualifying Class 7
Creditors electing New Unsecured Convertible Notes shall receive, in exchange
for every $1.00 in face amount of New Unsecured PIK Notes that such Qualifying
Class 7 Creditor would have received under the Plan, $1.50 in face amount of New
Unsecured Convertible Notes. The aggregate of New Unsecured Convertible Notes
shall not exceed $18 million.
If Qualifying Class 7 Creditors elect to convert more than $12 million
in aggregate face amount of New Unsecured PIK Notes into New Unsecured
Convertible Notes, then each Qualifying Class 7 Creditor shall be entitled to
its Pro Rata share of $18 million in face amount of New Unsecured Convertible
Notes (with such Pro Rata determination to include only Claims of the Qualifying
Class 7 Creditors electing the New Unsecured Convertible Notes), and such
holders shall be deemed not to have made the Class 7 Election with respect to
the balance of their Class 7 Claims.
On the Effective Date, the Old Debentures, the Old Indenture and any
agreement with respect to Impaired Unsecured Claims shall be terminated
automatically without any further action by any party and shall no longer be of
any force or effect.
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For purposes of distributions to holders of Class 7 Claims, except as
otherwise set forth above, the Pro Rata calculations shall include in the
determination of the Face Amount of all Claims in Class 7, (i) if the class of
holders of Canadian Impaired Unsecured Claims votes to accept the Canadian Plan,
the aggregate amount of all allowed Canadian Impaired Unsecured Claims or (ii)
if the class of holders of Canadian Impaired Unsecured Claims votes to reject
the Canadian Plan, the Debtors' estimate of the aggregate amount of all allowed
Canadian Impaired Unsecured Claims. Canadian dollar ("CDN") Claims under the
Canadian Plan will be converted to United States dollars ("USD") for purposes of
distributions at a rate of $1. CDN per $1.0 USD.
The Unsecured Lender Claims shall be deemed Allowed Class 7 Claims in
the aggregate amount of $_______ plus accrued interest through the Petition
Date.
3. Class 8A: Old Common Shares
On the Effective Date, in full satisfaction, settlement, release and
discharge of and in exchange for Class 8A Interests, holders of Allowed Class 8A
Interests shall be entitled to retain their existing shares of Old Common
Shares, which after giving effect to the New Common Shares to be issued pursuant
to the Plan shall be two percent (2.0%) or 480,000 shares of the PSC Common
Shares issued and outstanding as of the Effective Date, after giving effect to
the Reverse Stock Split, subject to Dilution.
Notwithstanding any provision contained herein to the contrary, if
Class 7 votes to reject the Plan, then the holders of Class 8A Interests shall
not receive or retain any property on account of such Interests. In such case,
Reorganized PSC will take all such corporate actions as may be required on and
after the Effective Date to cancel such Interests.
4. Class 8B: Securities Claims in the Securities Actions
On or as soon as reasonably practicable after the later of the
Distribution Date or the date such Class 8B Claim becomes an Allowed Class 8B
Claim, in full satisfaction, settlement, release and discharge and in exchange
for Class 8B Claims, each holder of an Allowed Class 8B Claim will receive its
Pro Rata share of 98,358,010 shares of the New Common Shares, which
shall be in the aggregate, one and one-half percent (1.5%) or 360,000 shares of
the PSC Common Shares issued and outstanding as of the Effective Date, after
giving effect to the Reverse Stock Split, subject to Dilution.
Notwithstanding any provision contained herein to the contrary, if
Class 7 votes to reject the Plan, then the holders of Class 8B Claims shall not
receive or retain any property on account of such Claims.
5. Class 8C: Other Securities Claims
On the Effective Date, in full satisfaction, settlement, release and
discharge of and in exchange for Class 8C Claims, each holder of an Allowed
Class 8C Claim shall receive its Pro Rata share of 32,786,003 shares of the New
Common Shares, which shall be one-half of one percent (0.5%) or 120,000 shares
of the PSC Common Shares issued and outstanding as of the Effective Date, after
giving effect to the Reverse Stock Split, subject to Dilution.
Notwithstanding any provision contained herein to the contrary, if
Class 7 votes to reject the Plan, then the holders of Class 8C Claims shall not
receive or retain any property on account of such Claims.
6. Class 9: Other Equity Securities
The holders of Other Equity Securities shall not receive or retain any
property under the Plan on account of such Interests. On the Effective Date, all
of the Other Equity Securities shall be deemed cancelled and extinguished.
D. SPECIAL PROVISION REGARDING UNIMPAIRED CLAIMS
Except as otherwise provided in the Plan, nothing shall affect the
Debtors' or Reorganized Debtors' rights and defenses, both legal and equitable,
with respect to any Unimpaired Claims, including, but not limited to, all rights
with respect to legal and equitable defenses to setoffs or recoupments against
Unimpaired Claims. Notwithstanding the substantive consolidation of the Debtors,
the Unimpaired Claims of any particular Debtor shall remain the obligations
solely of such Debtor and shall not become obligations of any other Debtor or
Reorganized Debtor.
E. ACCRUAL OF POST-PETITION INTEREST
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Interest on and fees and expenses, if any, with respect to Allowed
Class 2 Other Secured Claims, shall be paid when due under the contract,
agreement, or other instrument governing the terms and conditions of the
obligation comprising such Allowed Claim, together with any additional amounts
required to be paid with respect to Unimpaired Claims pursuant to section 1124
of the Bankruptcy Code. Except as otherwise provided above, elsewhere in this
Plan, or in an order of the Bankruptcy Court, no holder of an Allowed Claim that
is not an Other Secured Claim shall be entitled to the accrual of post-petition
interest or the payment by the Debtors or Reorganized Debtors of post-petition
interest on account of such Claim for any purpose.
ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN
A. CONTINUED CORPORATE EXISTENCE
Subject to the Restructuring Transactions, the Reorganized Debtors
shall continue to exist after the Effective Date as separate corporate entities,
in accordance with the applicable law in the respective jurisdictions in which
they are incorporated and pursuant to their respective certificates or articles
of incorporation and bylaws in effect prior to the Effective Date, except (i) to
the extent such certificates or articles of incorporation and bylaws are amended
by this Plan or (ii) Reorganized PSC, with the consent of the Required Lenders,
continues under the laws of the Province of New Brunswick, which continuance is
hereby expressly authorized by this Plan. Notwithstanding anything to the
contrary in this Plan, including Section IV.J hereof as to substantive
consolidation, subject to the Restructuring Transactions, the Unimpaired Claims
of a particular Debtor or Reorganized Debtor shall remain the obligations solely
of such Debtor or Reorganized Debtor and shall not become obligations of any
other Debtor or Reorganized Debtor by virtue of the Plan, the Chapter 11 Cases
or otherwise.
B. CORPORATE ACTION
1. Cancellation of Old Securities and Agreements
On the Effective Date, except as otherwise provided for herein, (i) the
Old Debentures, Other Equity Securities, any other note, bond, indenture or
other instrument or document evidencing or creating any indebtedness or
obligation of a Debtor and, if Class 7 votes to reject the Plan and the class of
holders of Canadian Impaired Unsecured Claims votes to reject the Canadian Plan,
the Old Common Shares, except such notes or other instruments evidencing
indebtedness or obligations of a Debtor that are Reinstated or amended and
restated under the Plan, shall be canceled, and (ii) the obligations of the
Debtors under any agreements, indentures or certificates of designations
governing the Old Debentures and Other Equity Securities and any other note,
bond, indenture or other instrument or document evidencing or creating any
indebtedness or obligation of a Debtor and, if Class 7 votes to reject the Plan
and the class of holders of Canadian Impaired Unsecured Claims votes to reject
the Canadian Plan, the Old Common Shares, except such notes or other instruments
evidencing indebtedness or obligations of a Debtor that are Reinstated or
amended and restated under the Plan, as the case may be, shall be discharged. As
of the Effective Date, all Old Common Shares that have been authorized to be
issued but that have not been issued shall be deemed cancelled and extinguished
without any further action of any party.
2. Certificate of Incorporation and Bylaws
The certificate or articles of incorporation and bylaws of each Debtor
shall be amended as necessary to satisfy the provisions of the Plan and the
Bankruptcy Code and shall include, among other things, pursuant to section
1123(a)(6) of the Bankruptcy Code, a provision prohibiting the issuance of
nonvoting equity securities, but only to the extent required by section
1123(a)(6) of the Bankruptcy Code.
3. Restructuring Transactions
On or after the Effective Date, the applicable Reorganized Debtors with
the consent of the Required Lenders (to the extent such actions are taken on the
Effective Date) may enter into such transactions and may take such actions as
may be necessary or appropriate to effect a corporate restructuring of their
respective businesses, to simplify otherwise the overall corporate structure of
the Reorganized Debtors, or to reincorporate certain of the Subsidiary Debtors
under the laws of jurisdictions other than the laws of which the applicable
Subsidiary Debtors are presently incorporated. Such restructuring is
contemplated to include one or more mergers, consolidations, restructures,
dispositions, liquidations, or dissolutions, as may be determined by the Debtors
or Reorganized Debtors to be necessary or appropriate (collectively, the
"Restructuring Transactions"). The actions to effect the Restructuring
Transactions may include: (i) the execution and delivery of appropriate
agreements or other documents of merger, consolidation, restructuring,
disposition, liquidation or dissolution containing terms
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that are consistent with the terms of the Plan and that satisfy the applicable
requirements of applicable state law and such other terms to which the
applicable entities may agree; (ii) the execution and delivery of appropriate
instruments of transfer, assignment, assumption or delegation of any asset,
property, right, liability, duty or obligation on terms consistent with the
terms of the Plan and having such other terms to which the applicable entities
may agree; (iii) the filing of appropriate certificates or articles of merger,
consolidation or dissolution pursuant to applicable state law; and (iv) all
other actions that the applicable entities determine to be necessary or
appropriate, including making filings or recordings that may be required by
applicable state law in connection with such transactions. The Restructuring
Transactions may include one or more mergers, consolidations, restructurings,
dispositions, liquidations or dissolutions, as may be determined by the
Reorganized Debtors to be necessary or appropriate to result in substantially
all of the respective assets, properties, rights, liabilities, duties and
obligations of certain of the Reorganized Debtors vesting in one or more
surviving, resulting, or acquiring corporations. In each case in which the
surviving, resulting or acquiring corporation in any such transaction is a
successor to a Reorganized Debtor, such surviving, resulting or acquiring
corporation will perform the obligations of the applicable Reorganized Debtor
pursuant to the Plan to pay or otherwise satisfy the Allowed Claims against such
Reorganized Debtor, except as provided in any contract, instrument or other
agreement or document effecting a disposition to such surviving, resulting or
acquiring corporation, which may provide that another Reorganized Debtor will
perform such obligations.
4. Shareholder Rights Plan
On the Effective Date, Reorganized PSC shall implement the Shareholder
Rights Plan.
5. Reverse Stock Split
On the Effective Date, if Class 7 has voted to accept the Plan,
Reorganized PSC shall take all steps necessary to implement the Reverse Stock
Split.
6. Shareholder Approval
On or immediately after the Effective Date and the distribution of New
Common Shares to the holders of Allowed Class 6 Secured Lender Claims,
Reorganized PSC shall hold a meeting of its shareholders for the purposes of:
(i) ratifying and approving the Shareholder Rights Plan; (ii) electing the
directors of Reorganized PSC set out in the Plan Supplement; (iii) amending the
articles of incorporation of Reorganized PSC to allow for the implementation of
the Reverse Stock Split; (iv) authorizing the continuance of Reorganized PSC
under the laws of New Brunswick; and (v) if Class 7 votes to reject the Plan,
canceling the Old Common Shares.
C. PLAN TRANSACTIONS
1. New Securities
(a) Authorization
As of the Effective Date, the issuance by Reorganized PSC of $100
million in principal amount of New Secured PIK Debt, up to $60 million in
principal amount of New Unsecured PIK Notes, up to $18 million in principal
amount of New Unsecured Convertible Notes, up to 6,426,056,637 shares of New
Common Shares, and Management Options to purchase the PSC Common Shares
according to the terms of the Management Option Plan to be adopted by the Board
of Directors of Reorganized PSC on or after the Effective Date, subject to
Dilution (except with respect to the New Secured PIK Debt), is hereby authorized
without further act or action under applicable law, regulation, order or rule.
(b) Issuance
The New Securities authorized pursuant to Section IV.C.1 hereof shall
be issued pursuant to the Plan without further act or action under applicable
law, regulation, order or rule other than the application for and receipt of
discretionary rulings of certain of the applicable Canadian provincial
securities regulatory authorities for the issuance of New Securities.
2. New Senior Secured Debt
On the Effective Date, Reorganized PSC and Reorganized PSI shall
execute and deliver the Amended and Restated Term Credit Agreement to govern the
New Secured PIK Debt and the New Senior Secured Term Debt.
3. New Guaranties
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On the Effective Date, the Reorganized Subsidiary Debtors (in existence
after giving effect to the Restructuring Transactions) and the other Restricted
Subsidiaries shall enter into the New Guaranties and related security documents.
4. Exit Facility
The Debtors, together with the Subsidiaries, expect to enter into a
post-confirmation loan facility, the Exit Facility, in order to (a) refinance
amounts outstanding on the Effective Date under the DIP Facility, (b) make other
payments required to be made on the Effective Date or the Distribution Date, and
(c) provide the additional borrowing capacity required by the Reorganized
Debtors and the Subsidiaries following the Effective Date to maintain their
operations.
D. DIRECTORS AND OFFICERS
Subject to the requirements of section 1129(a)(5) of the Bankruptcy Code, the
Debtors intend to announce prior to the Confirmation Date the identities of the
individuals proposed to serve as officers of the Reorganized Debtors and the
directors of Reorganized PSC and PSI. To the extent possible, the identities of
such individuals will be announced by inclusion of a list of proposed directors
and/or officers in the Plan Supplement, which will be filed with the Bankruptcy
Court at least five (5) Business Days prior to the commencement of the
Confirmation Hearing. The new board of directors for Reorganized PSC will
consist of nine (9) directors, who will be nominated by holders of Lender
Claims. The nominees of the holders of Lender Claims shall include two (2)
members of the existing PSC board of directors and will include two (2) members
nominated by High River Limited Partnership ("High River") provided that High
River and any holders of Lender Claims acting in concert with it beneficially
own at least 25% of the Lender Claims. If one or both of the nominees from the
existing board is a nominee on that board of High River or persons acting in
concert with it, that person will be counted as a High River nominee on the
slate for the new board of directors. The boards of directors of the Reorganized
Debtors shall have the responsibility for the management, control, and operation
of the Reorganized Debtors on and after the Effective Date.
E. REVESTING OF ASSETS; RELEASES OF LIENS
The property of each Debtor's Estate, together with any property of
each Debtor that is not property of its Estate and that is not specifically
disposed of pursuant to the Plan, shall revest in the applicable Debtor on the
Effective Date. Thereafter, each Debtor may operate its business and may use,
acquire and dispose of property free of any restrictions of the Bankruptcy Code,
the Bankruptcy Rules and the Bankruptcy Court. As of the Effective Date, all
property of each Debtor shall be free and clear of all Claims and Interests,
except as specifically provided in the Plan or the Confirmation Order. Without
limiting the generality of the foregoing, each Debtor may, without application
to or approval by the Bankruptcy Court, pay fees that it incurs after the
Effective Date for professional fees and expenses.
F. PRESERVATION OF RIGHTS OF ACTION
Except as otherwise provided in this Plan (Section IV.I.1) or the
Confirmation Order, or in any contract, instrument, release, indenture or other
agreement entered into in connection with the Plan, in accordance with section
1123(b) of the Bankruptcy Code, the Reorganized Debtors shall retain and may
enforce, ▇▇▇ on, settle or compromise (or decline to do any of the foregoing)
all claims, rights or causes of action, suits and proceedings, whether in law or
in equity, whether known or unknown, that the Debtors or the Estates may hold
against any Person or entity. Each Debtor or its successor(s) may pursue such
retained claims, rights or causes of action, suits or proceedings as
appropriate, in accordance with the best interests of the Reorganized Debtor or
its successor(s) who hold such rights.
G. EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS
The chairman of the board of directors, president, chief financial
officer, or any other appropriate officer of PSC or any applicable Debtor, as
the case may be, shall be authorized to execute, deliver, file, or record such
contracts, instruments, releases, indentures, and other agreements or documents,
and take such actions as may be necessary or appropriate to effectuate and
further evidence the terms and conditions of the Plan. The secretary or
assistant secretary of PSC or any applicable Debtor, as the case may be, shall
be authorized to certify or attest to any of the foregoing actions.
H. EXEMPTION FROM CERTAIN TRANSFER TAXES
Pursuant to section 1146(c) of the Bankruptcy Code, any transfers from
a Debtor to a Reorganized Debtor or any other Person or entity pursuant to the
Plan in the United States shall not be subject to any document recording tax,
stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, stamp act,
real estate transfer tax, mortgage recording tax or other
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similar tax or governmental assessment, and the Confirmation Order shall direct
the appropriate state or local governmental officials or agents to forgo the
collection of any such tax or governmental assessment and to accept for filing
and recordation any of the foregoing instruments or other documents without the
payment of any such tax or governmental assessment.
I. RELEASES AND RELATED MATTERS
1. Releases by Debtors
As of the Effective Date, for good and valuable consideration, the adequacy of
which is hereby confirmed, the Debtors and Reorganized Debtors will be deemed to
release forever, waive and discharge all claims, obligations, suits, judgments,
damages, demands, debts, rights, causes of action and liabilities whatsoever in
connection with or related to the Debtors and the Subsidiaries, the Chapter 11
Cases or the Plan (other than the rights of the Debtors or Reorganized Debtors
to enforce the Plan and the contracts, instruments, releases, indentures and
other agreements or documents delivered thereunder) whether liquidated or
unliquidated, fixed or contingent, matured or unmatured, known or unknown,
foreseen or unforeseen, then existing or thereafter arising, in law, equity or
otherwise that are based in whole or part on any act, omission, transaction,
event or other occurrence taking place on or prior to the Effective Date in any
way relating to the Debtors, the Reorganized Debtors or their Subsidiaries, the
parties released pursuant to this Section IV.I.1, the Chapter 11 Cases, the
Lender Lock-up Agreement or the Plan, and that may be asserted by or on behalf
of the Debtors or their Estates or the Reorganized Debtors against (i) the
directors, officers and employees of the Debtors or the Subsidiaries in each
case as of the Petition Date and the Debtors' or Subsidiaries' agents and
professionals (excluding Deloitte & Touche and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.,
Incorporated), (ii) the holders of Lender Claims, (iii) the ad hoc steering
committee and any other committee of holders of Lender Claims, (iv) CIBC, as
administrative agent and co-arranger under the Pre-Petition Credit Agreement,
(v) BTCo as syndication agent and co-arranger under the Pre- Petition Credit
Agreement, (vi) any official committees appointed in the Chapter 11 Cases, (vii)
the DIP Agent, the DIP Co- Arrangers and the holders of DIP Facility Claims,
(viii) the Security Agent, (ix) the Account Intermediaries and (x) the
respective current and former professionals (excluding Deloitte & Touche and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Incorporated) (including the current and former officers,
directors, employees, shareholders and professionals of the released
professionals) of the entities released in subclauses (ii)-(ix) of this Section
IV.I.1 acting in such capacity; provided, however, that the releases provided to
any director, officer or employee of the Debtors described in clause (i) of this
Section IV.I.1. of the Plan may be revoked by the Reorganized Debtors by written
notice to such director, officer or employee in the event that the Reorganized
Debtors reasonably determine that such director, officer or employee has failed
to provide assistance as the Reorganized Debtors reasonably request in
connection with any claim against Deloitte & Touche arising out of the same
nucleus of operative facts alleged as of the Petition Date in the Securities
Actions, the ▇▇▇▇▇▇ Actions or the ▇▇▇▇ Actions, including, without limitation,
providing information and documents, attendance at meetings and interviews,
assisting counsel, attendance at discoveries, if required, assistance in
pre-trial preparation and attendance at trial, including as a witness, but
subject in the case of any person who is at the relevant time no longer a
director, officer or employee of any of the Reorganized Debtors, to
reimbursement of that person's foregone income and reasonable expenses.
2. Releases by Holders of Lender Claims, Claims and Interests
(a) Holders of Lender Claims. As of the Effective Date, in
consideration for the obligations of the Debtors and the Reorganized Debtors
under the Plan and the Lender Lock-up Agreement and the Cash, securities,
contracts, instruments, releases and other agreements or documents to be
delivered in connection with the Plan, each of the holders of Lender Claims, the
ad hoc steering committee and any other committee of holders of Lender Claims,
CIBC as administrative agent and co- arranger under the Pre-Petition Credit
Agreement, BTCo as syndication agent and co-arranger under the Pre-Petition
Credit Agreement, the DIP Agent, the DIP Co-Arrangers, the holders of DIP
Facility Claims, the Security Agent, the Account Intermediaries, and any
individual, corporation or other entity that was at any time formerly one of the
foregoing releasing parties will be deemed to forever release, waive and
discharge all claims, obligations, suits, judgments, damages, demands, debts,
rights, causes of action and liabilities (other than the rights to enforce the
Debtors' or the Reorganized Debtors' obligations under the Plan and the
securities, contracts, instruments, releases and other agreements and documents
delivered thereunder), whether liquidated or unliquidated, fixed or contingent,
matured or unmatured, known or unknown, foreseen or unforeseen, then existing or
thereafter arising, in law, equity or otherwise that are based in whole or in
part on any act, omission, transaction, event or other occurrence taking place
on or prior to the Effective Date in any way relating to the Debtors or
Subsidiaries, the Reorganized Debtors, the Chapter 11 Cases, the Lender Lock-up
Agreement or the Plan against (i) the Debtors, Subsidiaries and Reorganized
Debtors, (ii) the directors, officers and employees of the Debtors or
Subsidiaries in each case as of the Petition Date, or (iii) their respective
current and former professionals (excluding Deloitte & Touche and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& Co., Incorporated) (including the current and former officers, directors,
employees, shareholders and professionals of the released professionals), acting
in such capacity; provided, however, that the releases provided to any director,
officer or employee of the Debtors described in clause (ii) of this Section
IV.I.2(a) of the Plan may be revoked by CIBC, as Administrative Agent and
co-arranger under the Pre-Petition Credit Agreement, or its successor, by
written notice to such
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director, officer or employee, in the event that CIBC or its successor
reasonably determines that any such director, officer or employee has failed to
provide assistance as CIBC or its successor reasonably requests in connection
with any claim against Deloitte & Touche arising out of the same nucleus of
operative facts alleged as of the Petition Date in the Securities Actions, the
▇▇▇▇▇▇ Actions or the ▇▇▇▇ Actions, including, without limitation, providing
information and documents, attendance at meetings and interviews, assisting
counsel, attendance at discoveries, if required, assistance at pre-trial
preparation and attendance at trial, including as a witness, but subject in the
case of any person who is at the relevant time no longer a director, officer or
employee of any of the Reorganized Debtors, to reimbursement of that person's
foregone income and reasonable expenses.
(b) Holders of Claims and Interests. As of the Effective Date,
to the fullest extent permitted under applicable law, in consideration for the
obligations of the Debtors and the Reorganized Debtors under the Plan and the
Cash, securities, contracts, instruments, releases and other agreements or
documents to be delivered in connection with the Plan, and the benefits provided
by the Lenders and the Account Intermediaries under the Plan, each present and
former holder of a Claim or Interest will be deemed to release forever, waive
and discharge all claims, obligations, suits, judgments, damages, demands,
debts, rights, causes of action and liabilities (other than the rights to
enforce the Debtors' or the Reorganized Debtors' obligations under the
Plan and the securities, contracts, instruments, releases and other agreements
and documents delivered thereunder), whether liquidated or unliquidated, fixed
or contingent, matured or unmatured, known or unknown, foreseen or unforeseen,
then existing or thereafter arising, in law, equity or otherwise that are based
in whole or in part on any act, omission, transaction, event or other occurrence
taking place on or prior to the Effective Date in any way relating to the
Debtors or Subsidiaries, the Reorganized Debtors, the Chapter 11 Cases, the
Lender Lock-up Agreement or the Plan against (i) the Debtors, Subsidiaries and
Reorganized Debtors, (ii) the holders of Lender Claims, the ad hoc steering
committee or any other committee of holders of Lender Claims, CIBC as
Administrative Agent and co-arranger under the Pre-Petition Credit Agreement,
BTCo as Syndication Agent and co- arranger under the Pre-Petition Credit
Agreement, any official committees appointed in the Chapter 11 Cases, the DIP
Agent, the DIP Co-Arrangers and the holders of DIP Facility Claims, the Security
Agent, and the Account Intermediaries, (iii) the directors, officers and
employees of the Debtors or Subsidiaries in each case as of the Petition Date,
or (iv) their respective current and former professionals (excluding Deloitte &
Touche and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Incorporated) (including the current and former
officers, directors, employees, shareholders and professionals of the released
professionals), acting in such capacity.
3. Injunction Related to Releases
As further provided in Section XIV. F, the Confirmation Order will
enjoin the prosecution, whether directly, derivatively or otherwise, of any
claim, obligation, suit, judgment, damage, demand, debt, right, cause of action,
liability or interest released, discharged or terminated pursuant to the Plan.
4. Revocation of Certain Releases
The revocation of any release of any director, officer or employee
pursuant to Sections IV.I. 1 or 2(a) hereof shall void ab initio to the extent
that a court of competent jurisdiction, including, but not limited to the
Bankruptcy Court, determines that such director, officer or employee has
provided the assistance reasonably requested by the Reorganized Debtors pursuant
to Section IV.I.1 or CIBC or its successor pursuant to Section IV.I.2(a).
J. SUBSTANTIVE CONSOLIDATION FOR PURPOSES OF TREATING IMPAIRED CLAIMS
The Plan is premised upon the substantive consolidation of the Debtors
only for purposes of treating Class 6, 7 or 8 Claims under the Plan, including
for voting, confirmation and distribution purposes. The Plan does not
contemplate the substantive consolidation of the Debtors with respect to the
other Classes of Claims or Interests set forth in the Plan. On the Effective
Date, (a) all guaranties of any Debtor of the payment, performance or collection
of another Debtor with respect to Class 6, 7 or 8 Claims shall be deemed
eliminated and cancelled; (b) any obligation of any Debtor and all guaranties
with respect to Class 6, 7 or 8 Claims thereof executed by one or more of the
other Debtors shall be treated as a single obligation and any obligation of two
or more Debtors, and all multiple Impaired Claims against such entities on
account of such joint obligations, shall be treated and Allowed only as a single
Impaired Claim against the consolidated Debtors; and (c) each Class 6, 7 or 8
Claim filed in the Chapter 11 Cases of any Debtor shall be deemed filed against
the consolidated Debtors and shall be deemed one Class 6, 7 or 8 Claim against
and obligation of the consolidated Debtors. Except as set forth in this Section
IV.J, such substantive consolidation shall not (other than for purposes related
to the Plan) (a) affect the legal and corporate structures of the Reorganized
Debtors, subject to the right of the Debtors or Reorganized Debtors to effect
the Restructuring Transactions as provided in Section IV.B.3 hereof, (b) cause
any Debtor to be liable for any Impaired Claim or Unimpaired Claim under the
Plan, for which it otherwise is not liable, and the liability of any Debtor for
any such Claim shall not be
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affected by such substantive consolidation, (c) affect Intercompany Claims of
Debtors against Debtors, and (d) affect Interests in the Subsidiary Debtors. On
the Effective Date, the Intercompany Claims of Debtors against Debtors shall be
Reinstated or discharged and satisfied, at the option of PSC with the consent of
the Required Lenders, by contributions, distributions or otherwise as determined
by PSC. On the Effective Date, to the extent a Subsidiary Debtor is not
dissolved or merged as part of the Restructuring Transactions, the Interests in
such Subsidiary Debtor shall remain outstanding.
K. CONTRIBUTION AND INDEMNITY CLAIMS OTHER THAN ASSUMED INDEMNIFICATION
OBLIGATIONS
Any Claim (including any Excluded Indemnification Obligations) other than the
Assumed Indemnification Obligations that are not Excluded Indemnification
Obligations against any Debtor for reimbursement, contribution or indemnity on
account of a Claim that is subject to section 510(b) of the Bankruptcy Code
shall be deemed rejected for all purposes under the Plan and shall be deemed
disallowed under the Plan upon entry of the Confirmation Order pursuant to
section 502(e)(1)(B) of the Bankruptcy Code to the fullest extent permitted by
law; provided, however, to the extent that any such Claim is not so disallowed
and becomes an Allowed Claim against any Debtor, then such Allowed Claim shall
be treated as an Allowed Class 8C Claim pursuant to sections 510(b) and/or
510(c) of the Bankruptcy Code.
L. ASSUMED INDEMNIFICATION OBLIGATIONS
The Assumed Indemnification Obligations (other than Excluded
Indemnification Obligations) shall be deemed assumed as of the Effective Date
without any further action by any party.
ARTICLE V.
ACCEPTANCE OR REJECTION OF THE PLAN
A. CLASSES ENTITLED TO VOTE
Classes 6 and 7 are entitled to vote to accept or reject the Plan. If
the Class 8 Solicitation Order is entered, Classes 8A, 8B and 8C will be deemed
to have rejected the Plan and therefore will not be entitled to vote. If the
Class 8 Solicitation Order is not entered, then Classes 8A, 8B and 8C will be
entitled to vote to accept or reject the Plan. By operation of law, each
Unimpaired Class of Claims is deemed to have accepted the Plan and, therefore,
is not entitled to vote to accept or reject the Plan. By operation of law, Class
9 is deemed to have rejected the Plan and therefore is not entitled to vote to
accept or reject the Plan.
B. ACCEPTANCE BY IMPAIRED CLASSES
An Impaired Class of Claims shall have accepted the Plan if (i) the
holders (other than any holder designated under section 1126(e) of the
Bankruptcy Code) of at least two-thirds in amount of the Allowed Claims actually
voting in such Class have voted to accept the Plan and (ii) the holders (other
than any holder designated under section 1126(e) of the Bankruptcy Code) of more
than one-half in number of the Allowed Claims actually voting in such Class have
voted to accept the Plan. An Impaired Class of Interests shall have accepted the
Plan if the holders (other than any holder designated under section 1126(e) of
the Bankruptcy Code) of at least two-thirds in amount of the Allowed Interests
actually voting in such Class have voted to accept the Plan.
C. CRAMDOWN
The Debtors will seek confirmation of the Plan under section 1129(b) of
the Bankruptcy Code in view of the deemed rejection by Class 9. The Debtors
reserve the right to request Confirmation of the Plan, as it may be modified
from time to time, under section 1129(b) of the Bankruptcy Code. Subject to
Article XI hereof, the Debtors reserve the right to modify the Plan to the
extent, if any, that Confirmation pursuant to section 1129(b) of the Bankruptcy
Code requires modification.
ARTICLE VI.
SECURITIES TO BE ISSUED IN CONNECTION WITH THE PLAN
On the Effective Date, Reorganized PSC shall issue for distribution in
accordance with the provisions of the Plan all of the New Secured PIK Debt, New
Unsecured PIK Notes, New Unsecured Convertible Notes and New Common Shares
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pursuant to the provisions of the Plan. All securities to be issued will be
deemed issued as of the Effective Date regardless of the date on which they are
actually distributed. The form of the Amended and Restated Credit Agreement
governing the New Secured PIK Debt shall be in substantially the form attached
in the Plan Supplement. The form of indenture governing the New Unsecured PIK
Notes shall be in substantially the form attached to the Plan Supplement. The
form of the New Convertible Notes Indenture governing the New Unsecured
Convertible Notes shall be substantially in the form attached to the Plan
Supplement.
ARTICLE VII.
PROVISIONS GOVERNING DISTRIBUTIONS
A. DISTRIBUTIONS FOR CLAIMS ALLOWED AS OF THE EFFECTIVE DATE
Except as otherwise provided herein or as ordered by the Bankruptcy
Court, distributions to be made on account of Claims that are Allowed Claims as
of the Effective Date shall be made not later than the applicable Distribution
Date. Distributions on account of Claims that first become Allowed Claims after
the Effective Date shall be made pursuant to Articles III, VII and IX of this
Plan. Notwithstanding the date on which any distribution of securities is
actually made to a holder of a Claim or Interest that is an Allowed Claim or
Allowed Interest on the Effective Date, as of the date of the distribution such
holder shall be deemed to have the rights of a holder of such securities
distributed as of the Effective Date.
B. INTEREST ON CLAIMS
Unless otherwise specifically provided for in this Plan or the
Confirmation Order, or required by applicable bankruptcy law, post-petition
interest shall not accrue or be paid on Claims, and no holder of a Claim shall
be entitled to interest accruing on or after the Petition Date on any Claim.
Interest shall not accrue or be paid upon any Disputed Claim in respect of the
period from the Petition Date to the date a final distribution is made thereon
if and after such Disputed Claim becomes an Allowed Claim.
C. DISTRIBUTIONS BY DISBURSING AGENT AND THE INDENTURE TRUSTEE
The Disbursing Agent shall make all distributions required under this
Plan (subject to the provisions of Articles III, VII and IX hereof).
Distributions provided for in the Plan on account of Allowed Old Debenture
Claims shall be made to the indenture trustee, as Disbursing Agent for Old
Debenture Claims, for further distribution to holders of Allowed Old Debenture
Claims. Any such distributions shall be made pursuant to the Old Indenture.
If the Disbursing Agent is an independent third party designated by the
Reorganized Debtors to serve in such capacity, such Disbursing Agent shall
receive, without further Bankruptcy Court approval, reasonable compensation for
distribution services rendered pursuant to the Plan and reimbursement of
reasonable out-of-pocket expenses incurred in connection with such services from
the Reorganized Debtors on terms acceptable to the Reorganized Debtors. No
Disbursing Agent shall be required to give any bond or surety or other security
for the performance of its duties unless otherwise ordered by the Bankruptcy
Court.
D. RECORD DATE FOR DISTRIBUTIONS TO HOLDERS OF LENDER CLAIMS AND OLD
DEBENTURES
At the close of business on the Distribution Record Date, the transfer
records for the Old Debentures and Lender Claims shall be closed, and there
shall be no further changes in the record holders of the Old Debentures or
Lender Claims. Reorganized PSC, the Disbursing Agent, and the Administrative
Agent for the Lenders shall have no obligation to recognize any transfer of such
Old Debentures or Lender Claims occurring after the Distribution Record Date and
shall be entitled instead to recognize and deal for all purposes hereunder with
only those record holders as of the close of business on the Distribution Record
Date.
E. MEANS OF CASH PAYMENT
Cash payments made pursuant to this Plan shall be in U.S. funds for
creditors located in the United States and in Canadian funds for creditors
located in Canada, unless such creditors in Canada have previously agreed, or
contracted for, payment in U.S. funds, by the means agreed to by the payor and
the payee, including by check or wire transfer or, in the absence of an
agreement, such commercially reasonable manner as the payor shall determine in
its sole discretion.
F. CALCULATION OF DISTRIBUTION AMOUNTS
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1. New Common Shares
No fractional shares of New Common Shares shall be issued or distributed under
the Plan or by Reorganized PSC or the Disbursing Agent. Each Person entitled to
receive New Common Shares will receive the total number of whole shares of New
Common Shares to which such Person is entitled. Whenever any distribution to a
particular Person would otherwise call for distribution of a fraction of a share
of New Common Shares, the actual distribution of shares of such stock shall be
rounded to the next higher or lower whole number as follows: (a) fractions 1/2
or greater shall be rounded to the next higher whole number, and (b) fractions
of less than 1/2 shall be rounded to the next lower whole number. The total
number of shares of New Common Shares to be distributed to a Class of Claims or
Interests shall be adjusted as necessary to account for the rounding provided
for in this Section VII.F. No consideration shall be provided in lieu of
fractional shares that are rounded down.
2. New Debt Securities
Notwithstanding any other provision of the Plan, New Debt Securities
other than the New Secured PIK Debt will be issued in denominations of $1,000
and integral multiples thereof. In the event a Person is entitled to an amount
of such New Debt Securities that is not an integral multiple of $1,000, the
principal amount of such New Debt Securities such holder is entitled to receive
shall be rounded up or down to the nearest integral multiple of $1,000.
G. DELIVERY OF DISTRIBUTIONS
Distributions to holders of Allowed Claims shall be made by the
Disbursing Agent (a) at the addresses set forth on the proofs of Claim filed by
such holders (or at the last known addresses of such holders if no Proof of
Claim is filed or if the Debtors have been notified of a change of address), (b)
at the addresses set forth in any written notices of address changes delivered
to the Disbursing Agent after the date of any related Proof of Claim, (c) at the
addresses reflected in the Schedules if no Proof of Claim has been filed and the
Disbursing Agent has not received a written notice of a change of address, (d)
in the case of the holder of an Allowed Old Debenture Claim, at the addresses
contained in the official records of the indenture trustee under the Old
Indenture, or (e) at the addresses set forth in a properly completed letter of
transmittal accompanying securities properly remitted to the Debtors. If any
holder's distribution is returned as undeliverable, no further distributions to
such holder shall be made unless and until the Disbursing Agent is notified of
such holder's then current address, at which time all missed distributions shall
be made to such holder without interest. Amounts in respect of undeliverable
distributions made through the Disbursing Agent, shall be returned to the
Reorganized Debtors until such distributions are claimed. All claims for
undeliverable distributions must be made on or before the second anniversary of
the Effective Date, after which date all unclaimed property shall revert to the
Reorganized Debtors free of any restrictions thereon and the claim of any holder
or successor to such holder with respect to such property shall be discharged
and forever barred, notwithstanding any federal or state escheat laws to the
contrary. Nothing contained in the Plan shall require the Debtors, Reorganized
Debtors, any Disbursing Agent or the indenture trustee to attempt to locate any
holder of an Allowed Claim or Allowed Interest.
H. SURRENDER OF SECURITIES AND INSTRUMENTS
1. Notes and Old Debentures
Except as provided in Section VII.H.2 for lost, stolen, mutilated or
destroyed Old Debentures, each holder of an Allowed Claim evidenced by a note or
Old Debenture shall tender such note or Old Debenture to the Disbursing Agent in
accordance with written instructions to be provided in a letter of transmittal
to such holders by the Disbursing Agent as promptly as practicable following the
Effective Date. Such letter of transmittal shall specify that delivery of such
notes or Old Debentures will be effected, and risk of loss and title thereto
will pass, only upon the proper delivery of such notes or Old Debentures with
the letter of transmittal in accordance with such instructions. Such letter of
transmittal shall also include, among other provisions, customary provisions
with respect to the authority of the holder of the applicable note or Old
Debenture to act and the authenticity of any signatures required on the letter
of transmittal. All surrendered notes and Old Debentures shall be marked as
canceled and delivered to Reorganized PSC.
2. Lost, Mutilated or Destroyed Notes or Old Debentures
In addition to any requirements under the applicable certificate or
articles of incorporation or bylaws of the applicable Debtor, any holder of a
Claim or an Interest evidenced by a note or Old Debenture that has been lost,
stolen, mutilated or destroyed shall, in lieu of surrendering such note or Old
Debenture, deliver to the Disbursing Agent (a) evidence satisfactory to the
Disbursing Agent of the loss, theft, mutilation or destruction; and (b) such
indemnity as may be required by the Disbursing Agent to hold the Disbursing
Agent harmless from any damages, liabilities or costs incurred in treating such
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individual as a holder of a note or Old Debenture. Upon compliance with this
Section VII.H.2 by a holder of a Claim or an Interest evidenced by a note or Old
Debenture, such holder shall, for all purposes under the Plan, be deemed to have
surrendered a note or Old Debenture, as applicable.
3. Failure to Surrender Canceled Note or Old Debentures
Any note or Old Debenture holder that fails to surrender or be deemed
to have surrendered such note or Old Debenture within the second anniversary
after the Effective Date shall have its claim for a distribution pursuant to the
Plan on account of such note or Old Debenture discharged and shall be forever
barred from asserting any such claim against any Reorganized Debtor or its
respective property.
I. WITHHOLDING AND REPORTING REQUIREMENTS
In connection with this Plan and all distributions hereunder, the
Disbursing Agent shall, to the extent applicable, comply with all tax
withholding and reporting requirements imposed by any federal, state,
provincial, local or foreign taxing authority, and all distributions hereunder
shall be subject to any such withholding and reporting requirements. The
Disbursing Agent shall be authorized to take any and all actions that may be
necessary or appropriate to comply with such withholding and reporting
requirements. Notwithstanding any other provision of the Plan (i) each holder of
an Allowed Claim or Interest that is to receive a distribution of New Securities
pursuant to the Plan shall have sole and exclusive responsibility for the
satisfaction and payment of any tax obligations imposed by any governmental
unit, including income, withholding and other tax obligations, on account of
such distribution, and (ii) no distribution shall be made to or on behalf of
such holder pursuant to the Plan unless and until such holder has made
arrangements satisfactory to the Disbursing Agent for the payment and
satisfaction of such tax obligations. Any New Securities to be distributed
pursuant to the Plan shall, pending the implementation of such arrangements, be
treated as an undeliverable distribution pursuant to Section VII.▇.
▇. SETOFFS
The Reorganized Debtors may, but shall not be required to, set off
against any Claim, and the payments or other distributions to be made pursuant
to the Plan in respect of such Claim, claims of any nature whatsoever that the
Debtors or Reorganized Debtors may have against the holder of such Claim;
provided, however, that neither the failure to do so nor the allowance of any
Claim hereunder shall constitute a waiver or release by the Reorganized Debtors
of any such claim that the Debtors or Reorganized Debtors may have against such
holder. Notwithstanding anything to the contrary, the Debtors and Reorganized
Debtors will not exercise any right of setoff against any Lender, any agents
under the Pre-Petition Credit Agreement or the DIP Facility Agreement, the
Account Intermediaries or the DIP Lenders.
ARTICLE VIII.
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
A. ASSUMED CONTRACTS AND LEASES
Except as otherwise provided in the Plan, or in any contract,
instrument, release, indenture or other agreement or document entered into in
connection with the Plan, as of the Effective Date each Debtor shall be deemed
to have assumed each executory contract and unexpired lease to which it is a
party, unless such contract or lease (i) was previously assumed or rejected by
such Debtor, (ii) previously expired or terminated pursuant to its own terms, or
(iii) is otherwise set forth in the schedule to be filed in the Plan Supplement
as being an executory contract or unexpired lease to be rejected, provided,
however, that the Debtors reserve their right, at any time prior to the
Confirmation Date, to amend the schedule to be filed in the Plan Supplement to
delete any unexpired lease or executory contract therefrom or add any unexpired
lease or executory contract thereto. The Confirmation Order shall constitute an
order of the Bankruptcy Court under section 365 of the Bankruptcy Code approving
the contract and lease assumptions described above, as of the Effective Date.
Each executory contract and unexpired lease that is assumed and relates
to the use, ability to acquire or occupancy of real property shall include (a)
all modifications, amendments, supplements, restatements or other agreements
made directly or indirectly by any agreement, instrument or other document that
in any manner affect such executory contract or unexpired lease and (b) all
executory contracts or unexpired leases appurtenant to the premises, including
all easements, licenses, permits, rights, privileges, immunities, options,
rights of first refusal, powers, uses, usufructs, reciprocal easement
agreements, vaults,
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494
tunnel or bridge agreements or franchises, and any other
interests in real estate or rights in rem related to such premises, unless any
of the foregoing agreements has been rejected pursuant to an order of the
Bankruptcy Court.
B. PAYMENTS RELATED TO ASSUMPTION OF CONTRACTS AND LEASES
Any monetary amounts by which each executory contract and unexpired
lease to be assumed pursuant to the Plan is in default shall be satisfied, under
section 365(b)(1) of the Bankruptcy Code, at the option of the Debtor party to
the contract or lease or the assignee of such Debtor party assuming such
contract or lease, by Cure. If there is a dispute regarding (i) the nature or
amount of any Cure, (ii) the ability of any Reorganized Debtor or any assignee
to provide "adequate assurance of future performance" (within the meaning of
section 365 of the Bankruptcy Code) under the contract or lease to be assumed,
or (iii) any other matter pertaining to assumption, Cure shall occur following
the entry of a Final Order resolving the dispute and approving the assumption or
assumption and assignment, as the case may be.
C. REJECTED CONTRACTS AND LEASES
Except as otherwise provided in the Plan and subject to Section VIII.A
hereof or as otherwise provided in any contract, instrument, release, indenture
or other agreement or document entered into in connection with the Plan, none of
the executory contracts and unexpired leases to which the Debtors, or any of
them, are a party shall be rejected under the Plan.
D. COMPENSATION AND BENEFIT PROGRAMS
Except and to the extent previously assumed by an order of the
Bankruptcy Court on or before the Confirmation Date, all employee compensation
and benefit programs of the Debtors, including programs subject to sections 1114
and 1129(a)(13) of the Bankruptcy Code, entered into before or after the
Petition Date and not since terminated, shall be deemed to be, and shall be
treated as though they are, executory contracts that are assumed under Section
VIII.A of the Plan, except for (i) executory contracts or plans specifically
rejected pursuant to the Plan (to the extent such rejection does not violate
sections 1114 and 1129(a)(13) of the Bankruptcy Code) and (ii) executory
contracts or plans as have previously been rejected, are the subject of a motion
to reject, or have been specifically waived by the beneficiaries of any plans or
contracts; provided, however, that the Debtors' obligations, if any, to pay all
"retiree benefits" as defined in section 1114(a) of the Bankruptcy Code shall
continue.
ARTICLE IX.
PROCEDURES FOR RESOLVING DISPUTED,
CONTINGENT, AND UNLIQUIDATED CLAIMS AND DISPUTED INTERESTS
A. PROSECUTION OF OBJECTIONS
After the Confirmation Date, only the Debtors and the Reorganized
Debtors shall have the authority to file objections, settle, compromise,
withdraw or litigate to judgment objections to Claims and Interests. From and
after the Effective Date, the Reorganized Debtors may settle or compromise any
Disputed Claim or Disputed Interest without approval of the Bankruptcy Court.
B. NO DISTRIBUTIONS PENDING ALLOWANCE
Notwithstanding any other provision of the Plan, no payments or
distributions shall be made with respect to all or any portion of a Disputed
Claim unless and until all objections to such Disputed Claim have been settled
or withdrawn or have been determined by Final Order, and the Disputed Claim, or
some portion thereof, has become an Allowed Claim.
C. DISPUTED CLASS 7 DISTRIBUTION RESERVE
On the Effective Date (or as soon thereafter as is practicable) if
holders of Allowed Class 7 Claims are to receive distributions in accordance
with Section III.C, the Disbursing Agent shall establish the Disputed Class 7
Distribution Reserve by withholding from distribution an amount of New Unsecured
PIK Notes, New Unsecured Convertible Notes, and New Common Shares equal to 100%
of distributions (i) to which holders of Disputed Class 7 Claims would be
entitled under the Plan as of such date if such Disputed Class 7 Claims were
Allowed Claims in their Disputed Class 7 Claim Amount and (ii) to which holders
of disputed Canadian Impaired Unsecured Claims would be entitled if such
disputed Canadian Impaired Unsecured Claims were allowed under the Canadian Plan
in their maximum potential amounts.
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D. DISTRIBUTIONS AFTER ALLOWANCE OF CLASS 7 CLAIM
The Disbursing Agent shall make payments and distributions from the
Disputed Class 7 Distribution Reserve to each holder of a Disputed Class 7 Claim
that has become an Allowed Class 7 Claim in accordance with the provisions of
the Plan. On the next succeeding interim distribution date after the date that
the order or judgment of the Bankruptcy Court allowing such Claim becomes a
Final Order, the Disbursing Agent shall distribute to the holder of such Claim
any New Unsecured PIK Notes, New Unsecured Convertible Notes, and New Common
Shares in the Disputed Class 7 Distribution Reserve that would have been
distributed on the Class 7 Distribution Date had such Claim been an Allowed
Class 7 Claim on the Class 7 Distribution Date. After a Final Order has been
entered, or other final resolution has been reached, with respect to each
Disputed Class 7 Claim (i) any New Unsecured PIK Notes, New Unsecured
Convertible Notes, and New Common Shares held in the Disputed Class 7
Distribution Reserve shall be distributed Pro Rata to holders of Allowed Class 7
Claims entitled thereto under the terms of this Plan and (ii) any Cash or other
property remaining in the Disputed Class 7 Distribution Reserve shall become
property of the Reorganized Debtors. All distributions made under this Section
IX.D of the Plan on account of an Allowed Class 7 Claim shall be made together
with any payments or other distributions made on account of, as well as any
obligations arising from, the distributed property, as if such Allowed Class 7
Claim had been an Allowed Class 7 Claim on the Class 7 Distribution Date.
Notwithstanding the foregoing, the Disbursing Agent shall not be required to
make distributions under Section IX.D more frequently than once every 180 days
or to make any individual payments in an amount less than $25.00.
E. DISTRIBUTION PROCEDURES FOR CLASS 8 CLAIMS AND INTERESTS
A description of the procedure for the distribution to holders of Class
8 Claims and Interests, as well as the procedure for the establishment of a
reserve for the benefit of holders of Disputed Class 8 Claims and Interests, if
any, and the procedure for distribution to holders of Disputed Class 8 Claims
and Interests, if any, after such Claims or Interests become Allowed Claims or
Interests will be included in the Plan Supplement.
ARTICLE X.
CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN
A. CONDITIONS TO CONFIRMATION
The following are conditions precedent to the occurrence of the
Confirmation Date: (i) the entry of an order finding that the Disclosure
Statement contains adequate information pursuant to section 1125 of the
Bankruptcy Code and (ii) the proposed Confirmation Order shall be in form and
substance acceptable to the Debtors and the Required Lenders.
B. CONDITIONS TO EFFECTIVE DATE
The following are conditions precedent to the occurrence of the
Effective Date, each of which must be (i) satisfied or (ii) waived in accordance
with Section X.C below:
1. The Confirmation Order confirming the Plan, as such Plan
may have been modified, shall have been entered and become a Final Order in form
and substance reasonably satisfactory to the Debtors and the Required Lenders
and shall provide that:
(a) the Debtors and Reorganized Debtors are
authorized and directed to take all actions
necessary or appropriate to enter into, implement
and consummate the contracts, instruments,
releases, leases, indentures and other agreements
or documents created in connection with the Plan
or the Restructuring Transactions;
(b) the provisions of the Confirmation Order are
nonseverable and mutually dependent;
(c) Reorganized PSC or Reorganized PSI, or both, as
applicable is authorized to issue the New
Unsecured PIK Notes, New Unsecured Convertible
Notes, New Common Shares and Management Options
and incur the New Senior Secured Term Debt and
New Secured PIK Debt; and
▇▇
▇▇▇
(▇) the New Secured PIK Debt, New Unsecured PIK
Notes, New Unsecured Convertible Notes and New
Common Shares issued under the Plan in exchange
for Claims against the Debtors are exempt from
registration under the Securities Act of 1933
pursuant to section 1145 of the Bankruptcy Code,
except to the extent that holders of the New
Secured PIK Debt, New Unsecured PIK Notes, New
Unsecured Convertible Notes and New Common Shares
are "underwriters," as that term is defined in
section 1145 of the Bankruptcy Code.
2. The Reorganized Debtors shall have credit availability
under the Exit Facility, in amount, form and substance acceptable to PSC and the
Required Lenders, to provide the Reorganized Debtors and the Subsidiaries with
sufficient working capital to meet ordinary and peak requirements and additional
borrowings to support future projects.
3. The following agreements, in form and substance
satisfactory to the Debtors and the Required Lenders, shall have been executed
and delivered, and all conditions precedent thereto shall have been satisfied:
(a) Amended Certificates of Incorporation and Bylaws
of the Reorganized Debtors and the other
Restricted Subsidiaries;
(b) New Unsecured PIK Notes Indenture;
(c) New Unsecured Convertible Notes Indenture;
(d) Amended and Restated Term Credit Agreement;
(e) New Guaranties and related security documents;
(f) Registration Rights Agreement;
(g) Management Option Plan and Management Option
Agreements;
(h) Exit Facility;
(i) Shareholder Rights Plan; and
(j) Agreements evidencing sufficient bonding to meet
the Debtors' projected bonding requirements.
4. The Amended Certificates of Incorporation and Bylaws of the
Reorganized Debtors, as necessary, shall have been filed with the applicable
authority of each entity's jurisdiction of incorporation in accordance with such
jurisdiction's corporation laws.
5. All actions, documents and agreements necessary to
implement the Plan shall have been effected or executed.
6. (a) The Canadian Bankruptcy Court shall have entered a
final order under the CCAA sanctioning the Canadian Plan and all conditions to
the effectiveness of the Canadian Plan shall have been satisfied other than the
condition that this Plan shall have become effective or (b) the Lenders shall
have realized on security they hold over some or all the Canadian Debtors, with
such approvals by the Required Lenders and the Canadian Court as the Required
Lenders may require, in a manner consistent with the implementation of this Plan
on substantially the terms set forth herein.
7. The new Board of Directors of Reorganized PSC shall have
been appointed.
C. WAIVER OF CONDITIONS
Each of the conditions set forth in Section X.B above may be waived in whole or
in part by the Debtors with the written consent of the Required Lenders, without
any other notice to parties in interest or the Bankruptcy Court and without a
hearing. The failure to satisfy or waive any condition to the Effective Date may
be asserted by the Debtors or Reorganized Debtors regardless of the
circumstances giving rise to the failure of such condition to be satisfied
(including any action or inaction by a Debtor or Reorganized Debtor). The
failure of a Debtor or Reorganized Debtor to exercise any of the foregoing
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rights shall not be deemed a waiver of any other rights, and each such right
shall be deemed an ongoing right that may be asserted at any time.
ARTICLE XI.
MODIFICATIONS AND AMENDMENTS
Subject to the consent of the Required Lenders, the Debtors may alter,
amend or modify the Plan or any Exhibits thereto under section 1127(a) of the
Bankruptcy Code at any time prior to the Confirmation Date. After the
Confirmation Date and prior to substantial consummation of the Plan, as defined
in section 1101(2) of the Bankruptcy Code, the Debtors may, under section
1127(b) of the Bankruptcy Code, institute proceedings in the Bankruptcy Court to
remedy any defect or omission or reconcile any inconsistencies in the Plan, the
Disclosure Statement or the Confirmation Order, and such matters as may be
necessary to carry out the purposes and effects of the Plan so long as they have
obtained the prior approval of the Required Lenders and such proceedings do not
materially adversely affect the treatment of holders of Claims or Interests
under the Plan; provided, however, that prior notice of such proceedings shall
be served in accordance with the Bankruptcy Rules or order of the Bankruptcy
Court.
ARTICLE XII.
RETENTION OF JURISDICTION
1. Under sections 105(a) and 1142 of the Bankruptcy Code, and
notwithstanding entry of the Confirmation Order and occurrence of the Effective
Date, subject to the Protocol, the Bankruptcy Court shall retain exclusive
jurisdiction over all matters arising out of, and related to, the Chapter 11
Cases and the Plan to the fullest extent permitted by law, including, among
other things, jurisdiction to:
A. Allow, disallow, determine, liquidate, classify, estimate
or establish the priority or secured or unsecured status of any Claim or
Interest not otherwise Allowed under the Plan, including the resolution of any
request for payment of any Administrative Claim and the resolution of any
objections to the allowance or priority of Claims or Interests;
B. Hear and determine all applications for compensation and
reimbursement of expenses of Professionals under the Plan or under sections 330,
331, 503(b), 1103 and 1129(a)(4) of the Bankruptcy Code; provided, however, that
from and after the Effective Date the payment of the fees and expenses of the
retained Professionals of the Reorganized Debtors shall be made in the ordinary
course of business and shall not be subject to the approval of the Bankruptcy
Court;
C. Hear and determine all matters with respect to the
assumption or rejection of any executory contract or unexpired lease to which a
Debtor is a party or with respect to which a Debtor may be liable, including, if
necessary, the nature or amount of any required Cure or the liquidation or
allowance of any Claims arising therefrom;
D. Effectuate performance of and payments under the
provisions of the Plan;
E. Hear and determine any and all adversary proceedings,
motions, applications and contested or litigated matters arising out of, under,
or related to, the Chapter 11 Cases;
F. Enter such orders as may be necessary or appropriate to
execute, implement or consummate the provisions of the Plan and all contracts,
instruments, releases and other agreements or documents created in connection
with the Plan, the Disclosure Statement or the Confirmation Order;
G. Hear and determine disputes arising in connection with the
interpretation, implementation, consummation or enforcement of the Plan,
including disputes arising under agreements, documents or instruments executed
in connection with the Plan;
H. Consider any modifications of the Plan, cure any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy Court,
including, without limitation, the Confirmation Order;
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I. Issue injunctions, enter and implement other orders, or
take such other actions as may be necessary or appropriate to restrain
interference by any entity with implementation, consummation or enforcement of
the Plan or the Confirmation Order;
J. Enter and implement such orders as may be necessary or
appropriate if the Confirmation Order is for any reason reversed, stayed,
revoked, modified or vacated;
K. Hear and determine any matters arising in connection with
or relating to the Plan, the Disclosure Statement, the Confirmation Order or any
contract, instrument, release or other agreement or document created in
connection with the Plan, the Disclosure Statement or the Confirmation Order;
L. Enforce all orders, judgments, injunctions, releases,
exculpations, indemnifications and rulings entered in connection with the
Chapter 11 Cases;
M. Except as otherwise limited herein, recover all assets of
the Debtors and property of the Debtors' Estates, wherever located;
N. Hear and determine matters concerning state, local and
federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy
Code;
O. Hear and determine all disputes involving the existence,
nature or scope of the Debtors' discharge;
P. Hear and determine such other matters as may be provided in
the Confirmation Order or as may be authorized under, or not inconsistent with,
provisions of the Bankruptcy Code; and
Q. Enter a final decree closing the Chapter 11 Cases.
2. Notwithstanding the jurisdiction retained in this Article XII, from
and after the Confirmation Date, the Bankruptcy Court shall not have the power
to issue any order in the Chapter 11 Cases which modifies the provisions of the
Amended and Restated Term Credit Agreement or the rights of holders of the New
Senior Secured Term Debt, the New Secured PIK Debt or the New Common Shares.
ARTICLE XIII.
COMPROMISES AND SETTLEMENTS
Pursuant to Fed. R. Bankr. P. 9019(a), the Debtors may compromise and
settle various Claims against them and/or claims that they may have against
other Persons. The Debtors, subject to the prior approval of the Required
Lenders, expressly reserve the right (with Bankruptcy Court approval, following
appropriate notice and opportunity for a hearing) to compromise and settle
Claims against the Debtors and claims that they may have against other Persons
up to and including the Effective Date. After the Effective Date, such right
shall pass to the Reorganized Debtors pursuant to Sections IV.E and IV.F of the
Plan.
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
A. BAR DATES FOR CERTAIN POST-PETITION CLAIMS
1. Administrative Claims; Substantial Contribution Claims
The Confirmation Order will establish an Administrative Claims Bar Date
for filing of Administrative Claims that have not been paid, released or
otherwise settled (excluding Administrative Claims arising from the sale of
goods or services to a Debtor, after the Petition Date, in the ordinary course
of business), including Substantial Contribution Claims (but not including
claims for Professional Fees or the expenses of the members of any creditors'
committee), which date will be 45 days after the
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499
Confirmation Date. Holders of asserted Administrative Claims, other than claims
for Professional Fees or the expenses of the members of any creditors'
committee, not paid prior to the Confirmation Date must submit proofs of
Administrative Claim on or before such Administrative Claims Bar Date or forever
be barred from doing so. The notice of Confirmation to be delivered pursuant to
Fed. R. Bankr. P. 3020(c) and 2002(f) will set forth such date and constitute
notice of this Administrative Claims Bar Date. The Debtors or Reorganized
Debtors, as the case may be, shall have 45 days (or such longer period as may be
allowed by order of the Bankruptcy Court) following the Administrative Claims
Bar Date to review and object to such Administrative Claims before a hearing for
determination of allowance of such Administrative Claims.
2. Professional Fee Claims
All final requests for compensation or reimbursement of Professional
Fees pursuant to section 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy
Code for services rendered to the Debtors or any creditors' committee prior to
the Effective Date (other than Substantial Contribution Claims under section
503(b)(4) of the Bankruptcy Code) must be filed and served on the Reorganized
Debtors and their counsel no later than 45 days after the Effective Date, unless
otherwise ordered by the Bankruptcy Court. Objections to applications of such
Professionals or other entities for compensation or reimbursement of expenses
must be filed and served on the Reorganized Debtors and their counsel and the
requesting Professional or other entity no later than 45 days (or such longer
period as may be allowed by order of the Bankruptcy Court) after the date on
which the applicable application for compensation or reimbursement was served.
B. PAYMENT OF STATUTORY FEES
All fees payable pursuant to Section 1930 of title 28 of the United
States Code, as determined by the Bankruptcy Court at the Confirmation, shall be
paid on or before the Effective Date.
C. SEVERABILITY OF PLAN PROVISIONS
If, prior to Confirmation, any term or provision of the Plan is held by
the Bankruptcy Court to be invalid, void or unenforceable, the Bankruptcy Court,
at the request of any Debtor, shall have the power to alter and interpret such
term or provision to make it valid or enforceable to the maximum extent
practicable, consistent with the original purpose of the term or provision held
to be invalid, void or unenforceable, and such term or provision shall then be
applicable as altered or interpreted. Notwithstanding any such holding,
alteration or interpretation, the remainder of the terms and provisions of the
Plan shall remain in full force and effect and shall in no way be affected,
impaired or invalidated by such holding, alteration or interpretation. The
Confirmation Order shall constitute a judicial determination and shall provide
that each term and provision of the Plan, as it may have been altered or
interpreted in accordance with the foregoing, is valid and enforceable pursuant
to its terms.
D. SUCCESSORS AND ASSIGNS
The rights, benefits and obligations of any entity named or referred to
in the Plan shall be binding on, and shall inure to the benefit of, any heir,
executor, administrator, successor or assign of such entity.
E. RELEASES AND SATISFACTION OF SUBORDINATION RIGHTS
All Claims of the holders of the Lender Claims and the Old Debentures
against the Debtors and all rights and claims between or among such holders
relating in any manner whatsoever to any claimed subordination rights shall be
deemed satisfied by the distributions under, described in, contemplated by
and/or implemented in Section III.C of this Plan. Distributions under, described
in, contemplated by and/or implemented by this Plan to the various Classes of
Claims hereunder shall not be subject to levy, garnishment, attachment or like
legal process by any holder of a Claim, including, but not limited to, holders
of Lender Claims and Old Debenture Claims, by reason of any claimed
subordination rights or otherwise, so that each holder of a Claim shall have and
receive the benefit of the distributions in the manner set forth in the Plan.
F. DISCHARGE OF THE DEBTORS; INJUNCTION
1. Discharge
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Except as otherwise provided herein or in the Confirmation Order, all
consideration distributed under the Plan shall be in exchange for, and in
complete satisfaction, settlement, discharge, and release of, all Claims of any
nature whatsoever against the Debtors or any of their assets or properties, and
regardless of whether any property shall have been distributed or retained
pursuant to the Plan on account of such Claims, upon the Effective Date, the
Debtors, and each of them, shall (i) be deemed discharged and released under
section 1141(d)(1)(A) of the Bankruptcy Code from any and all Claims, including,
but not limited to, demands and liabilities that arose before the Confirmation
Date, and all debts of the kind specified in section 502(g), 502(h) or 502(i) of
the Bankruptcy Code, whether or not (a) a proof of Claim based upon such debt is
filed or deemed filed under section 501 of the Bankruptcy Code, (b) a Claim
based upon such debt is Allowed under section 502 of the Bankruptcy Code, or (c)
the holder of a Claim based upon such debt accepted the Plan, and (ii) terminate
all Interests of the holders of (A) Other Equity Securities and (B) if Class 7
votes to reject the Plan, Old Common Shares.
As of the Confirmation Date, except as provided in the Plan or the
Confirmation Order, all entities shall be precluded from asserting against the
Debtors, Reorganized Debtors, those individuals who were directors, officers and
employees of the Debtors as of the Petition Date and the professionals of the
Debtors (excluding Deloitte & Touche and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Incorporated)
their successors or their property any other or further claims, debts, rights,
causes of action, liabilities or equity interests relating to the Debtors based
upon any act, omission, transaction or other activity of any nature that
occurred prior to the Confirmation Date. In accordance with the foregoing,
except as provided in the Plan or the Confirmation Order, the Confirmation Order
shall be a judicial determination of discharge of all such Claims and other
debts and liabilities against the Debtors and termination of all Interests of
the holders of (i) Other Equity Securities and (ii) if Class 7 votes to reject
the Plan, Old Common Shares, pursuant to sections 524 and 1141 of the Bankruptcy
Code, and such discharge shall void any judgment obtained against the Debtors at
any time, to the extent that such judgment relates to a discharged Claim or
terminated Interest.
2. Injunction
(a) Injunction Related to Discharged Claims and Terminated
Interests
Except as provided in the Plan or the Confirmation Order, as of the
Confirmation Date, all entities that have held, currently hold or may hold a
Claim or other debt or liability that is discharged or an Interest or other
right of an equity security holder that is Impaired or terminated pursuant to
the terms of the Plan are permanently enjoined from taking any of the following
actions against the Debtors, Reorganized Debtors or their property on account of
any such discharged Claims, debts or liabilities or terminated interests or
rights: (a) commencing or continuing, in any manner or in any place, any action
or other proceeding; (b) enforcing, attaching, collecting or recovering in any
manner any judgment, award, decree or order; (c) creating, perfecting or
enforcing any lien or encumbrance; (d) asserting a setoff, right of subrogation
or recoupment of any kind against any debt, liability or obligation due to the
Debtors and (e) commencing or continuing any action in any manner, in any place
that does not comply with or is inconsistent with the provisions of the Plan.
(b) Released Claims
As of the Effective Date, all entities that have held, currently hold
or may hold a claim, demand, debt, right, cause of action or liability that is
released pursuant to Section IV.I or Section XIV.H are permanently enjoined from
taking any of the following actions on account of such released claims,
obligations, suits, judgments, damages, demands, debts, rights, causes of action
or liabilities: (a) commencing or continuing in any manner any action or other
proceeding; (b) enforcing, attaching, collecting or recovering in any manner any
judgment, award, decree or order; (c) creating, perfecting or enforcing any lien
or encumbrance: (d) asserting a setoff, right of subrogation or recoupment of
any kind against any debt, liability or obligation due to any released entity;
and (e) commencing or continuing any action, in any manner, in any place that
does not comply with or is inconsistent with the provisions of the Plan.
(c) Consent of Injunction
By accepting a distribution pursuant to the Plan, each holder of an
Allowed Claim or Allowed Interest receiving distributions pursuant to the Plan
will be deemed to have specifically consented to the injunctions set forth in
this Section XIV.F.
G. COMMITTEES
Effective on the Effective Date, the duties of the Creditors' Committee
shall terminate.
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501
H. EXCULPATION AND LIMITATION OF LIABILITY; INDEMNITY
Neither the Debtors, the Subsidiaries, the Reorganized Debtors, the
holders of Lender Claims, the ad hoc steering committee or any other committee
of holders of Lender Claims, CIBC as Administrative Agent and co-arranger under
the Pre- Petition Credit Agreement, BTCo as Syndication Agent and co-arranger
under the Pre-Petition Credit Agreement, any official committees appointed in
the Chapter 11 Cases, the DIP Agent, the DIP Co-Arrangers and the holders of DIP
Facility Claims, the Security Agent, and the Account Intermediaries, or any of
their respective present or former members, officers, directors, employees,
advisors, attorneys, or agents, shall have or incur any liability to any holder
of a Claim or an Interest, or any other party in interest, or any of their
respective agents, employees, representatives, financial advisors, attorneys, or
affiliates, or any of their successors or assigns, for any act or omission in
connection with, relating to, or arising out of, the Chapter 11 Cases,
formulating, negotiating or implementing the Plan or the Lender Lock-up
Agreement, the solicitation of acceptances of the Plan or the Lender Lock-up
Agreement, the pursuit of confirmation of the Plan, the confirmation of the
Plan, the consummation of the Plan, or the administration of the Plan or the
property to be distributed under the Plan, except for their willful misconduct,
and in all respects shall be entitled to rely reasonably upon the advice of
counsel with respect to their duties and responsibilities under the Plan.
Notwithstanding any other provision of this Plan, no holder of a Claim
or Interest, no other party in interest, none of their respective agents,
employees, representatives, financial advisors, attorneys, or affiliates, and no
successors or assigns of the foregoing, shall have any right of action against
any Debtor, Subsidiary or Reorganized Debtor, the holders of Lender Claims, the
ad hoc steering committee or any other committee of holders of Lender Claims,
CIBC as Administrative Agent and co- arranger under the Pre-Petition Credit
Agreement, BTCo as Syndication Agent and co-arranger under the Pre-Petition
Credit Agreement, any official committees appointed in the Chapter 11 Cases, the
DIP Agent, the DIP Co-Arrangers and the holders of DIP Facility Claims, the
Security Agent, and the Account Intermediaries, or any of their respective
present or former members, officers, directors, employees, advisors, attorneys,
affiliates, or agents, for any act or omission in connection with, relating to,
or arising out of, the Chapter 11 Cases, formulating, negotiating or
implementing the Plan or the Lender Lock-up Agreement, the solicitation of
acceptances of the Plan or the Lender Lock-up Agreement, the pursuit of
confirmation of the Plan, the consummation of the Plan, the confirmation of the
Plan, or the administration of the Plan or the property to be distributed under
the Plan, except for their willful misconduct.
The foregoing exculpation and limitation on liability shall not,
however, limit, abridge or otherwise affect the rights, if any, of the
Reorganized Debtors to enforce, ▇▇▇ on, settle or compromise the Litigation
Claims retained pursuant to Section IV.F hereof.
The Reorganized Debtors and the Subsidiaries hereby jointly and
severally fully indemnify each of the holders of Lender Claims, the ad hoc
steering committee or any other committee of holders of Lender Claims, CIBC as
Administrative Agent and co-arranger under the Pre-Petition Credit Agreement,
BTCo as Syndication Agent and co-arranger under the Pre-Petition Credit
Agreement, the DIP Agent, the DIP Co-Arrangers and the holders of DIP Facility
Claims, the Security Agent, and the Account Intermediaries, and their respective
agents, affiliates, directors, officers, employees, and representatives,
including counsel (collectively, the "Indemnitees") against any manner of
actions, causes of action, suits, proceedings, liabilities and claims of any
nature, costs and expenses (including reasonable legal fees) which may be
incurred by such Indemnitee or asserted against such Indemnitee arising out of
or during the course of, or otherwise in connection with or in any way related
to, the negotiation, preparation, formulation, solicitation, dissemination,
implementation, confirmation and consummation of the Plan, other than any
liabilities to the extent arising from the gross negligence or willful or
intentional misconduct of any Indemnitee as determined by a final judgment of a
court of competent jurisdiction. If any claim, action or proceeding is brought
or asserted against an Indemnitee in respect of which indemnity may be sought
from any of the Reorganized Debtors or any of the Subsidiaries, the Indemnitee
shall promptly notify Reorganized PSC in writing, and Reorganized PSC may assume
the defense thereof, including the employment of counsel reasonably satisfactory
to the Indemnitee, and the payment of all costs and expenses. The Indemnitee
shall have the right to employ separate counsel in any such claim, action or
proceeding and to consult with Reorganized PSC in the defense thereof and the
fees and expenses of such counsel shall be at the expense of Reorganized PSC
unless and until Reorganized PSC shall have assumed the defense of such claim,
action or proceeding. If the named parties to any such claim, action or
proceeding (including any impleaded parties) include both the Indemnitee and any
of the Reorganized Debtors or Subsidiaries, and the Indemnitee reasonably
believes that the joint representation of such entity and the Indemnitee may
result in a conflict of interest, the Indemnitee may notify Reorganized PSC in
writing that it elects to employ separate counsel at the expense of Reorganized
PSC, and Reorganized PSC shall not have the right to assume the defense of such
action or proceeding on behalf of the Indemnitee. In addition, PSC shall not
effect any settlement or release from liability in connection with any matter
for which the Indemnitee would have the right to indemnification from
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502
Reorganized PSC, unless such settlement contains a full and unconditional
release of the Indemnitee, or a release of the Indemnitee satisfactory in form
and substance to the Indemnitee.
I. BINDING EFFECT
The Plan shall be binding upon and inure to the benefit of the Debtors,
all present and former holders of Claims against and Interests in the Debtors,
their respective successors and assigns, including, but not limited to, the
Reorganized Debtors and all other parties-in-interest in these Chapter 11 Cases.
J. REVOCATION, WITHDRAWAL OR NON-CONSUMMATION
Subject to the approval of the Required Lenders, the Debtors reserve
the right to revoke or withdraw the Plan at any time prior to the Confirmation
Date and to file subsequent plans of reorganization. If the Debtors revoke or
withdraw the Plan, or if Confirmation or Consummation does not occur, then (i)
the Plan shall be null and void in all respects, (ii) any settlement or
compromise embodied in the Plan (including the fixing or limiting to an amount
certain any Claim or Class of Claims), assumption or rejection of executory
contracts or leases effected by the Plan, and any document or agreement executed
pursuant to the Plan shall be deemed null and void, and (iii) nothing contained
in the Plan, and no acts taken in preparation for consummation of the Plan,
shall (a) constitute or be deemed to constitute a waiver or release of any
Claims by or against, or any Interests in, any Debtor or any other Person, (b)
prejudice in any manner the rights of any Debtor or any Person in any further
proceedings involving a Debtor, or (iii) constitute an admission of any sort by
any Debtor or any other Person.
K. PLAN SUPPLEMENT
Any and all exhibits, lists or schedules not filed with the Plan shall
be contained in the Plan Supplement and filed with the Clerk of the Bankruptcy
Court at least five (5) Business Days prior to date of the commencement of the
Confirmation Hearing. Upon its filing with the Bankruptcy Court, the Plan
Supplement may be inspected in the office of the Clerk of the Bankruptcy Court
during normal court hours. Holders of Claims or Interests may obtain a copy of
the Plan Supplement upon written request to the Debtors in accordance with
Section XIV.K of the Plan.
L. NOTICES
Any notice, request, or demand required or permitted to be made or
provided to or upon a Debtor or Reorganized Debtor under the Plan shall be (i)
in writing, (ii) served by (a) certified mail, return receipt requested, (b)
hand delivery, (c) overnight delivery service, (d) first class mail, or (e)
facsimile transmission, and (iii) deemed to have been duly given or made when
actually delivered or, in the case of notice by facsimile transmission, when
received and telephonically confirmed, addressed as follows:
▇▇▇▇▇▇ SERVICES (DELAWARE), INC., et al.
▇▇▇ ▇▇▇▇ ▇▇. ▇.
P. O. Box 2440, LCD #1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Att'n: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
SKADDEN, ARPS, SLATE, ▇▇▇▇▇▇▇ & ▇▇▇▇ (ILLINOIS)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Att'n: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
M. PAYMENT OF CERTAIN FEES AND EXPENSES
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503
On the Effective Date, the Reorganized Debtors shall reimburse (a)
First Union National Bank for its reasonable legal fees (determined on an hourly
basis) and expenses in connection with the Debtors' restructuring and the
Chapter 11 Cases, (b) the Indenture Trustee's reasonable fees and expenses as
trustee, paying agent, registrar and authentication agent as to the Old
Debentures, (c) the reasonable fees of Chanin, Kirkland & ▇▇▇▇▇▇▇ (i) not to
exceed $75,000 per month plus expenses for the two-month period commencing on
April 25, 1999, and then (ii) not to exceed $37,500 per month for the period
commencing on June 25, 1999 and ending on the earliest of (1) October 25, 1999,
(2) the date on which Chanin, Kirkland & ▇▇▇▇▇▇▇ is retained as financial
advisor to the creditors' committee and (3) the occurrence of a "Termination
Event" as defined in the Lender Lock-up Agreement and (d) unreimbursed travel
expenses of the holders of Old Debentures serving on the ad-hoc committee of
holders of Old Debentures not to exceed $2,500 prior to June 25, 1999 and $2,500
subsequent to June 25, 1999.
N. PREPAYMENT
Except as otherwise provided in this Plan, any ancillary documents
entered into in connection herewith, or the Confirmation Order, the Debtors,
with the consent of the Required Lenders, shall have the right to prepay,
without penalty, all or any portion of an Allowed Claim at any time; provided,
however, that any such prepayment shall not be violative of, or otherwise
prejudice, the relative priorities and parities among the classes of Claims.
O. TERM OF INJUNCTIONS OR STAYS
Unless otherwise provided herein or in the Confirmation Order, all
injunctions or stays provided for in the Chapter 11 Cases under sections 105 or
362 of the Bankruptcy Code or otherwise, and extant on the Confirmation Date
(excluding any injunctions or stays contained in this Plan or the Confirmation
Order), shall remain in full force and effect until the Effective Date.
P. GOVERNING LAW
Unless a rule of law or procedure is supplied by federal law (including
the Bankruptcy Code and Bankruptcy Rules), the laws of (i) the State of Delaware
shall govern the construction and implementation of the Plan and any agreements,
documents and instruments executed in connection with the Plan and (ii) the laws
of the state of incorporation of each Debtor shall govern corporate governance
matters with respect to such Debtor, in either case without giving effect to the
principles of conflicts of law thereof.
Dated:
▇▇▇▇▇▇ SERVICES CORP.
(for itself and on behalf of the Debtors)
By:
Name:
Title:
36
504
SKADDEN, ARPS, SLATE, ▇▇▇▇▇▇▇ & ▇▇▇▇ (ILLINOIS)
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
-and-
SKADDEN, ARPS, SLATE, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
By:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (I.D. #2991)
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Attorneys for ▇▇▇▇▇▇ Services (Delaware), Inc., et al.
37
505
EXHIBIT A
LIST OF SUBSIDIARY DEBTORS
506
EXHIBIT B
LIST OF IMPAIRED UNSECURED CLAIMS
507
EXHIBIT C
SUMMARY OF TERMS OF NEW UNSECURED CONVERTIBLE NOTES
508
EXHIBIT N
JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
- 1 -
▇▇▇▇▇▇ Services Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇, LCD #1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
June 21, 1999
Lenders under a Credit Agreement dated as of
August 11, 1997, as amended
c/o Canadian Imperial Bank of Commerce, as
Administrative Agent for the Lenders
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Dear Sirs:
RE: ▇▇▇▇▇▇ SERVICES CORP.
This letter agreement (this "Agreement") sets out the revised agreement
among ▇▇▇▇▇▇ Services Corp ("PSC") on behalf of itself and each of its
Affiliates, and each of the lenders which is a signatory hereto (individually, a
"Consenting Lender" and collectively the "Consenting Lenders") in its capacity
as a lender under a credit agreement dated as of August 11, 1997 among PSC, as
borrower in Canada, ▇▇▇▇▇▇ Services (Delaware) Inc., as borrower in the United
States, the persons from time to time parties to such agreement as lenders,
Canadian Imperial Bank of Commerce ("CIBC"), as administrative agent for the
lenders (the "Administrative Agent"), Bankers Trust Company ("BTCo"), as
syndication agent, CIBC and BTCo, as co-arrangers, as amended by amending
agreements dated as of October 31, 1997, February 19, 1998, June 24, 1998,
October 20, 1998 and December 4, 1998 (the "Existing Credit Agreement")
regarding the principal terms and conditions of a prearranged plan of
reorganization or arrangement (the "Plan") involving PSC and its Affiliates
under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code")
and under the Companies' Creditors Arrangement Act (Canada) (the "CCAA").
509
JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
- 2 -
Capitalized terms used herein and not otherwise defined shall have the
meaning ascribed thereto in the Term Sheet (as defined in Section 1 below) or
the Existing Credit Agreement, as applicable. The Consenting Lenders, PSC and
its Affiliates are collectively referred to as the "Parties".
1. RESTRUCTURING AND SOLICITATION
(a) The principal terms and conditions of the Plan as agreed among the
Parties are set forth in the term sheet attached hereto as Schedule A
(the "Term Sheet"), which is incorporated herein and made a part of
this Agreement. In the case of a conflict between the provisions
contained in the text of this Agreement and Schedule A, the provisions
of this Agreement shall govern. References in this Agreement to the
term "Plan" include revisions thereto approved by the Consenting
Lenders in accordance with the terms of Section 4(a) hereof.
(b) Acceptances of the Plan from holders of claims arising out of the
Existing Credit Agreement and from holders (or representatives of such
holders) of all other classes of impaired claims and interests will be
solicited after the commencement of the Cases.
2. REPRESENTATIONS AND COVENANTS OF EACH PARTY
Each of the Parties hereto represents and warrants to the other Parties
hereto that: (i) it is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with all requisite power
and authority to carry on the business in which it is engaged, to own its
property, to execute this Agreement and, subject to requisite approvals from the
Bankruptcy Courts in which the Cases are commenced, to consummate the
transactions contemplated hereby; (ii) the execution, delivery and performance
hereof has been duly authorized by all necessary corporate or other actions; and
(iii) no proceeding, litigation or adversary proceeding before any court,
arbitrator or administrative or governmental body is pending against it which
would adversely affect its ability to enter into this Agreement or to perform
its obligations hereunder.
3. CONSENTING LENDER REPRESENTATIONS
Each Consenting Lender represents severally and not jointly to each of the
other Parties that, as of the date of this Agreement:
(a) it is a lender under the Existing Credit Agreement and in that
capacity is owed the principal amount set forth next to such
Consenting Lender's name on Schedule B attached hereto (the
"Consenting Lender's Debt"). The amount of the Consenting Lender's
Debt has been determined without reference to any Participations
granted by such Consenting Lender;
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JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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(b) it holds its Consenting Lender's Debt free and clear of all liens,
security interests and other encumbrances of any kind and it has not
assigned or transferred, in whole or in part, any portion of its
right, title or interests in the Consenting Lender's Debt other than
by way of Participation in accordance with Section 12.01 of the
Existing Credit Agreement; and
(c) it is a sophisticated party with sufficient knowledge and experience
to evaluate properly the terms and conditions of this Agreement; it
has made its own analysis and decision to enter in this Agreement and
has obtained such independent advice in this regard as it deemed
appropriate; it qualifies as an "accredited investor" as such term is
defined in Rule 501(a) of Regulation D under the Securities Act of
1933, as amended; and it has not relied in such analysis or decision
on the Administrative Agent or any other person other than its own
independent advisors.
4. CONSENTING LENDER COVENANTS AND CONSENTS
Each Consenting Lender agrees that, subject to Section 6 hereof and, as to
Sections 4(a) and 4(b) hereof, subject to the filing of the Plan and its receipt
of solicitation materials in respect of the Plan that are consistent with this
Agreement:
(a) it will vote both its secured and unsecured claims in respect of the
Consenting Lender's Debt and any claims under the Existing Credit
Agreement it acquires after the date hereof in favour of the Plan at
or prior to the deadline to be established for voting on the Plan and
will not change or withdraw (or cause to be changed or withdrawn) such
vote(s), provided that the terms of the Plan are consistent with the
terms of the Plan described in the Term Sheet, as modified by any
revisions thereto that have been agreed to in writing by such
Consenting Lender after the date hereof;
(b) it will not oppose the confirmation of the Plan, provided that the
terms of the Plan are consistent with the terms of the Plan described
in the Term Sheet, as modified by any revisions thereto referred to in
Section 4(a);
(c) it will not sell, transfer, pledge, participate or assign any of the
Consenting Lender's Debt or any voting interest therein during the
term of this Agreement, except in accordance with Section 12.01 of the
Existing Credit Agreement and then only to an Assignee that agrees in
writing prior to such acquisition, pledge or participation to be bound
by all the terms of this Agreement as if such Assignee had originally
executed this Agreement with respect to the Consenting Lender's Debt
being acquired by such Assignee;
(d) it consents to the incurrence of the debtor-in-possession financing
(the "DIP Financing") on the terms described in the draft Term Sheet
attached hereto as
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JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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Schedule C hereto (the "DIP Term Sheet") and the granting of the
security for the DIP Financing described under the heading "Security"
in the DIP Term Sheet;
(e) it consents to the entry of orders in the Cases effecting the
subordination of any Security delivered pursuant to the Existing
Credit Agreement to the DIP Security as provided in the DIP Term
Sheet, and in particular to the entry of orders in the Cases effecting
the subordination of the Security to:
(i) a priming lien pursuant to Section 364(d)(1) of the Bankruptcy
Code on all of the existing and after-acquired assets of the
Borrowers and the Guarantor Subsidiaries located in the United
States constituting collateral (the "Pre-Petition Collateral")
securing obligations to the Agents and the lenders under the
Existing Credit Agreement;
(ii) a security interest and charge in the Pre-Petition Collateral
located in Canada; and
(iii) the other liens and security interests referred to in the DIP
Term Sheet; and
all as provided in the DIP Term Sheet;
(f) it consents to the subordination of the security for the Senior
Secured Debt to the security for the exit/working capital financing
having the terms disclosed in Section 5 of the Term Sheet.
This Agreement relates only to the rights of the Consenting Lenders in their
capacity as the holders of the Consenting Lender's Debt and does not affect or
limit any rights or claims any Consenting Lender may have in any other capacity.
For greater certainty, nothing in the Term Sheet or this Agreement affects or
limits the priorities of the security of the Bank Account Service Providers, the
security for the Permitted LC Facility or the security held by the Cdn. LC
Issuer pursuant to section 5.06 of the Existing Credit Agreement, which will
rank in priority to the DIP Security and the security for the exit/working
capital facility.
5. PSC COVENANTS
PSC agrees on behalf of itself and its Affiliates that:
(a) it will use its best efforts to (i) comply with the Plan Timetable set
out in the Term Sheet (ii) obtain written agreements, to the extent
legally permissible, from holders (or representatives of such holders)
of claims of all classes of impaired claims in terms of amount of
claims and number of holders as required for the approval of the Plan
by the relevant classes of claims under the Bankruptcy Code and the
CCAA; and (iii) to identify to the satisfaction of the Consenting
Lenders,
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JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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prior to commencing the Cases, those unsecured creditors whose claims
will be reinstated under or unaffected by the Plan and those executory
contracts that will be assumed;
(b) PSC and its Affiliates will cooperate fully with the Lenders' advisors
and permit them complete access to PSC, its subsidiaries and their
books and records, officers and personnel throughout the restructuring
process; and
(c) subject to the provisions of the Bankruptcy Code, at least 90% of the
cash balances and other near-cash financial instruments of the
Restricted Parties including term deposits and marketable securities
will be maintained with one or more Lenders (subject to exclusions
acceptable to the Majority Lenders (as defined below)).
6. TERMINATION
(a) Upon the occurrence of any Termination Event (as defined below) this
Agreement may be terminated upon the election to do so by Consenting
Lenders holding in the aggregate at least 51% of the aggregate amount
of claims under the Existing Credit Agreement held by the Consenting
Lenders (the "Majority Lenders").
For the purposes hereof, a "Termination Event" shall occur if:
(i) any of the events described under "Plan Timetable" in the
Term Sheet have not occurred within 15 days of the deadline
specified for such event;
(ii) the Bankruptcy Courts have not granted final approval of the
DIP Financing within 30 days following commencement of the
Cases;
(iii) in the opinion of the Majority Lenders PSC has disclaimed
its intention or otherwise acted in a manner materially
inconsistent with an intention to pursue the Plan or has
otherwise breached the Term Sheet or this Agreement;
(iv) in the opinion of the Majority Lenders there is any material
adverse change in the terms or the feasibility of the Term
Sheet or the Plan not previously consented to by the
Majority Lenders, or in the confirmability of the Plan in
the United States or in the likelihood of its approval by
the required creditor majorities in Canada; or
(v) PSC or any of its Affiliates is the subject of a voluntary
or involuntary petition or other proceedings under any
insolvency statute in any jurisdiction (other than the Cases
contemplated by the Term Sheet and
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JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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the chapter 11 case of RESI Acquisition Corporation);
provided, however, that the filing of an involuntary
petition under an insolvency statute shall not be deemed to
be a Termination Event if the deadlines referred to in the
Plan Timetable are met within the time permitted by Section
6(a)(i) above.
(b) Upon termination of this Agreement, each Consenting Lender, in its
sole discretion and without limiting its other rights, may change or
withdraw any votes previously cast by it in favour of the Plan. PSC
and its Affiliates will not contest any such decision by a Consenting
Lender to change or withdraw its vote or to oppose confirmation of the
Plan by reason of such termination, and will consent to any motion
filed by a Consenting Lender under Federal Rule of Bankruptcy
Procedure 3018(a) in the U.S. Cases.
(c) This Agreement may be terminated by PSC if one or more Consenting
Lenders have withdrawn or changed their votes pursuant to Section 4(a)
or Section 6(b) or have breached the Term Sheet or this Agreement, and
as a result there are no longer sufficient Lenders holding claims
under the Existing Credit Agreement which have agreed to vote in
favour of the Plan to ensure that the majorities of Lenders in number
and amounts of claims required under section 1126(c) of the Bankruptcy
Code and section 6 of the CCAA will be satisfied.
(d) None of the Parties shall have any liability to any other Party in
respect of any termination of this Agreement in accordance with the
terms hereof.
7. CONDITIONS
The respective obligations of the Parties to consummate each of the
transactions contemplated by the Plan are also subject to the satisfaction of
each of the following conditions:
(a) negotiation, preparation and execution of mutually satisfactory
definitive transaction agreements and other documents including
without limitation the Plan and the Disclosure Statement,
incorporating the terms and conditions of each of the transactions
contemplated by the Plan set forth herein and in the Term Sheet and
such other terms and conditions as the Parties may mutually agree;
(b) all authorizations, consents and regulatory approvals required, if
any, in connection with Plan Implementation and the continuation of
the businesses of PSC and its Affiliates as currently conducted shall
have been obtained; and
(c) PSC shall have received commitments from bonding companies which are
sufficient for the reasonable operating requirements of PSC and its
Affiliates both prior to and following Plan Implementation.
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JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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8. AMENDMENTS
Except as otherwise provided herein, this Agreement may not be modified,
amended or supplemented except in writing signed by each of the signing Parties
or their Assignees.
9. OTHER PROPOSALS
Notwithstanding anything in this Agreement or the Term Sheet to the
contrary, PSC and its Affiliates may at all times (both before and after the
execution of this Agreement and the filing of the Plan) respond to unsolicited
offers (but for greater certainty may not, directly or indirectly, seek,
solicit, encourage or initiate any discussions respecting any offers) relative
to potential transactions which (i) restructure substantially all of the equity
and debt of PSC and its Affiliates, and (ii) are demonstrably more favourable to
the Consenting Lenders and the other stakeholders in PSC than the transactions
set forth in the Term Sheet or in the Plan. Nothing in this Agreement binds any
of the Consenting Lenders to agree to or vote in favour of any such alternate
proposal.
10. INDEMNIFICATION OBLIGATIONS
PSC and its Affiliates jointly and severally agree to fully indemnify each
Consenting Lender, the Administrative Agent, the Other Agents, and their
respective Affiliates, directors, officers, employees, agents or representatives
including counsel (collectively, the "Indemnitees") against any manner of
actions, causes of action, suits, proceedings, liabilities and claims of any
nature, costs or expenses (including reasonable legal fees) which may be
incurred by such Indemnitee or asserted against such Indemnitee arising out of
or during the course of, or otherwise in connection with or in any way related
to, the negotiation, preparation, formulation, solicitation, dissemination,
implementation, confirmation and consummation of the Plan, other than any
liabilities to the extent arising from the gross negligence or wilful or
intentional misconduct of any Indemnitee as determined by a final judgment of a
court of competent jurisdiction. If any claim, action or proceeding is brought
or asserted against an Indemnitee in respect of which indemnity may be sought
from PSC, the Indemnitee shall promptly notify PSC in writing, and PSC may
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnitee, and the payment of all costs and expenses. The
Indemnitee shall have the right to employ separate counsel in any such claim,
action or proceeding and to consult with PSC in the defense thereof, and the
fees and expenses of such counsel shall be at the expense of PSC unless and
until PSC shall have assumed the defense of such claim, action or proceeding. If
the named parties to any such claim, action or proceeding (including any
impleaded parties) include both the Indemnitee and PSC, and the Indemnitee
reasonably believes that the joint representation of PSC and the Indemnitee may
result in a conflict of interest the Indemnitee may notify PSC in writing that
it elects to employ separate counsel at the expense of PSC, and PSC shall not
have the right to assume the defense of such action or proceeding on behalf of
the Indemnitee. In addition, PSC shall not effect any settlement or release from
liability in connection with any matter for which the Indemnitee
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JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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would have the right to indemnification from PSC, unless such settlement
contains a full and unconditional release of the Indemnitee, or a release of the
Indemnitee satisfactory in form and substance to the Indemnitee.
11. SEVERAL AND NOT JOINT
Notwithstanding anything herein to the contrary, or in any document or
instrument executed and delivered in connection herewith, the Parties agree that
the representations, warranties, obligations, liabilities and indemnities of
each Consenting Lender hereunder shall be several and not joint, and no
Consenting Lender shall have any liability hereunder for any breach by any other
Consenting Lender of any obligation of such Consenting Lender set forth herein.
12. PUBLICITY
The Parties agree that all public announcements of the entry into or the
terms and conditions of this Agreement shall be mutually acceptable to the
Administrative Agent and PSC.
13. NO THIRD PARTY BENEFICIARIES; SEPARATE RESPONSIBILITIES
This Agreement is only for the benefit of the undersigned Parties and
nothing in this Agreement, expressed or implied, is intended or shall be
construed to confer upon any person or entity, other than such persons or
entities, any rights or remedies under or by reason of, and no person or entity,
other than such persons or entities, is entitled to rely in any way upon, this
Agreement.
14. GOVERNING LAW; JURISDICTION
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to any conflicts of law provision
which would require the application of the law of any other jurisdiction. By its
execution and delivery of this Agreement, each of the Parties hereby irrevocably
and unconditionally agrees for itself that, subject to the following sentence,
any legal action, suit or proceeding against it with respect to any matter under
or arising out of or in connection with this Agreement or for the recognition or
enforcement of any judgment rendered in any such action, suit or proceeding, may
be brought in any state or federal court of competent jurisdiction in New York
County, State of New York, and, by execution and delivery of this Agreement,
each of the Parties hereby irrevocably accepts and submits itself to the
nonexclusive jurisdiction of such court, generally and unconditionally, with
respect to any such action, suit or proceeding. Nothing in this section shall
limit the authority of the Bankruptcy Courts to hear any matter arising in the
Cases.
15. WAIVER OF JURY TRIAL
THE PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY JURISDICTION IN
ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE
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JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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ANY DISPUTE BETWEEN THE PARTIES UNDER THIS AGREEMENT, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE.
16. SPECIFIC PERFORMANCE
It is understood and agreed by the Parties that money damages would not be
a sufficient remedy for any breach of this Agreement by any of the Parties and
the non-breaching Party shall be entitled to specific performance and injunctive
or other equitable relief as a remedy of any such breach.
17. EFFECT
This Agreement shall become effective and enforceable against each
Consenting Lender and against PSC and its Affiliates when it has been executed
by PSC and by Consenting Lenders in number and holding an aggregate amount of
claims outstanding under the Existing Credit Agreement sufficient to satisfy the
requirements of Section 1126(c) of the Bankruptcy Code and Section 6 of the CCAA
in respect of such claims.
18. CONFIRMATION
Notwithstanding this Agreement, PSC, on behalf of itself and its
Affiliates, acknowledges and agrees that the Existing Credit Agreement and all
of the Security delivered by PSC or any of its Affiliates to any one or more of
the Administrative Agent, the Security Agent, the LC Issuers or the Lenders in
connection with, or otherwise applicable to, the debts or liabilities of PSC or
any of its Affiliates to any one or more of the Administrative Agent, the
Lenders, the Other Agents and their Eligible Affiliates under the Existing
Credit Agreement, are hereby ratified and confirmed and remain in full force and
effect.
19. SURVIVAL
Notwithstanding any assignment or transfer of all or any part of the
Consenting Lender's Debt in accordance with Section 4(c), or the termination of
each Consenting Lender's obligations hereunder in accordance with Section 6
hereof, the agreements and obligations of PSC and its Affiliates in Sections
6(b), 10, 13, 15, 16 and 18 shall survive such termination (other than the
indemnification provided for in Section 10, which shall terminate if this
Agreement is terminated by the Majority Lenders under Section 6) and shall
continue in full force and effect for the benefit of such Consenting Lender in
accordance with the terms hereof.
20. PLAN RELEASES
The Plan shall include releases by PSC and each of its Affiliates which is
included in the Cases, in their individual capacities and as debtors in
possession (collectively, the "Debtors"), the Consenting Lenders, and to the
fullest extent allowed by applicable law, all other creditors and shareholders
of the Debtors:
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JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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(a) in favour of each of the respective present officers, directors,
employees, agents and professionals (other than the Debtor's auditors)
of each of the Debtors ("Debtor Releasees") in form and substance and
on terms satisfactory to PSC and the Consenting Lenders; and
(b) in favour of each of the Consenting Lenders, the LC Issuers, the
Administrative Agent, the Security Agent and the Other Agents, and
their respective Affiliates, officers, directors, employees, agents
and professionals (the "Lender Releasees") from any and all claims or
causes of action existing as of Plan Implementation against any of the
Lender Releasees, including without limitation, statutory claims and
causes of action under the Bankruptcy Code or under similar laws of
any state, of Canada or of any province, and claims and causes of
action relating to, arising out of or in connection with the subject
matter of, or the transaction or event giving rise to the claims of
the releasing party affected by the Plan, the business and affairs of
the Debtors, the Plan and the Cases, including any act, occurrence or
event in any manner related to the claim of the releasing party, any
activities of the members of the informal Lender steering committee,
and any activities prior or subsequent to the filing of the Cases
leading to the promulgation and confirmation of the Plan.
The Plan shall also require the delivery to the Debtor Releasees and the Lender
Releasees of releases to the same effect from each of PSC's Restricted
Subsidiaries which is not a Debtor.
21. HEADINGS
The headings of the Sections, paragraphs and subsections of this Agreement
are inserted for convenience only and shall not affect the interpretation
hereof.
22. SUCCESSORS AND ASSIGNS
This Agreement shall bind and enure to the benefit of the Parties and their
respective successors, assigns, heirs, executors, administrators and
representatives.
23. PRIOR NEGOTIATIONS
This Agreement (including the Term Sheet) amends and restates the letter
agreement dated April 5, 1999, which as amended and restated hereby constitutes
the entire agreement between the Parties with respect to the subject matter
hereof except as otherwise expressly agreed in writing executed by or on behalf
of PSC and the Consenting Lenders. All references in any other agreement to the
Letter Agreement dated April 5, 1999 shall be deemed to be references to this
agreement. There are no promises, undertakings, representations or warranties by
any of the Parties not expressly set forth or referred to herein or therein.
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JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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24. COUNTERPARTS
This Agreement (and any modifications, amendments, supplements or waivers
in respect hereof) may be executed in counterparts by manual or facsimile
signature of each undersigned Party, and all such counterparts shall be deemed
to constitute one and the same instrument.
25. NOTICE PROVISIONS
All notices, requests, claims, demands and other communications hereunder
shall be in writing and shall be given (and shall be deemed to have been duly
given upon receipt) by hand delivery, by confirmed facsimile, or by registered
or certified mail (postage prepaid, return receipt requested) to the respective
Parties as follows:
IF TO EACH CONSENTING LENDER:
To the address set forth
For each Consenting Lender on
Schedule B annexed hereto
with copies to:
Canadian Imperial Bank of Commerce
as Administrative Agent
Risk Management Division
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Vice-President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Case LLP
▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇, Commerce Court West 1155 Avenue of the Americas
Toronto, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇ 10036-2767 USA
Attention.: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
519
JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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IF TO PSC:
▇▇▇▇▇▇ Services Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇,
LCD #1
Hamilton, Ontario
L8N 4J6
Attention.: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Stikeman ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇
▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ 333 West ▇▇▇▇▇▇ Drive
Toronto, Ontario Chicago, Illinois
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇.▇.▇.
Attention.: ▇▇▇▇ ▇▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
26. FURTHER ASSURANCES
From and after the date hereof, each of the Parties covenants and agrees to
execute and deliver all such agreements, instruments and documents and to take
all such further actions as the Parties may reasonably deem necessary from time
to time (at the requesting Party's expense) to carry out the intent and purposes
of this Agreement and to consummate the transactions contemplated hereby.
520
JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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27. CONFIRMATION
Please confirm your agreement with the foregoing by signing and returning
the enclosed copy of this Agreement to the undersigned.
Very truly yours,
▇▇▇▇▇▇ SERVICES CORP.
By:_________________________________
Accepted and Agreed as
of the date first written above
CANADIAN IMPERIAL BANK OF
COMMERCE (in its capacity
as a Lender) CIBC INC.
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
BANKERS TRUST COMPANY BT BANK OF CANADA
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
521
JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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(Signatures continued from preceding page)
ABN AMRO BANK CANADA ACCORD FINANCIAL CORPORATION
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
AMERICAN REAL ESTATE HOLDINGS L.P. THE BANK OF EAST ASIA (CANADA)
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
BANCO CENTRAL HISPANOAMERICANO, S.A. BANQUE NATIONALE DE PARIS
MIAMI AGENCY
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
(Signatures continued on next following page)
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JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
- 15 -
(Signatures continued from preceding page)
BANQUE NATIONALE DE PARIS (CANADA) BEAR, ▇▇▇▇▇▇▇ & CO. INC.
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
CHASE BANK OF TEXAS, N.A. THE CHASE MANHATTAN BANK
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ CITIBANK, N.A.
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
(Signatures continued on next following page)
523
JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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(Signatures continued from preceding page)
COMERICA BANK CREDIT SUISSE FIRST BOSTON
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
CREDIT SUISSE FIRST BOSTON CANADA DAI-ICHI KANGYO BANK (CANADA)
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
THE DAI-ICHI KANGYO BANK, LTD. DEUTSCHE BANK AG, NEW YORK AND OR
CAYMAN ISLAND BRANCHES
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
(Signatures continued on next following page)
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JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
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(Signatures continued from preceding page)
DEUTSHCE BANK CANADA ▇▇▇▇▇ ▇▇▇▇▇-SENIOR DEBT PORTFOLIO
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
FERNWOOD ASSOCIATES L.P. FOOTHILL CAPITAL CORPORATION
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
▇▇▇▇▇▇▇ SACHS CANADA CREDIT ▇▇▇▇▇▇▇ ▇▇▇▇▇ CANADA CREDIT
PARTNERS CO. PARTNERS L.P.
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
(Signatures continued on next following page)
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(Signatures continued from preceding page)
HIGH RIVER LIMITED PARTNERSHIP KEYBANK NATIONAL ASSOCIATION
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
▇▇▇▇▇▇▇▇▇ CORP. ▇▇▇▇▇▇▇▇▇ LLC
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
MELLON BANK CANADA MELLON BANK, N.A.
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
(Signatures continued on next following page)
526
JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
- 19 -
(Signatures continued from preceding page)
THE MUTUAL LIFE ASSURANCE MUTUAL SHARES FUND, a series of
COMPANY OF CANADA FRANKLIN MUTUAL SERIES FUND INC.
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
NATIONSBANK, N.A. PARIBAS
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
PNC BANK NATIONAL ASSOCIATION THE ROYAL BANK OF SCOTLAND
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
(Signatures continued on next following page)
527
JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
- 20 -
(Signatures continued from preceding page)
SAKURA BANK (CANADA) THE SAKURA BANK, LIMITED
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
SOCIETE GENERALE SOCIETE GENERALE (CANADA)
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
SUMMIT BANK THE TORONTO-DOMINION BANK
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
(Signatures continued on next following page)
528
JUNE 21 AMENDMENT TO LOCKUP AGREEMENT
- 21 -
(Signatures continued from preceding page)
THE TORONTO-DOMINION (NEW YORK), INC. TRI-LINKS INVESTMENT TRUST
by:_________________________________ by:_________________________________
name: name:
title: title:
by:_________________________________ by:_________________________________
name: name:
title: title:
WACHOVIA BANK, N.A.
by:_________________________________
name:
title:
by:_________________________________
name:
title:
529
SCHEDULE A
▇▇▇▇▇▇ SERVICES CORP.
RESTRUCTURING TERMS
This term sheet sets forth the principal terms and conditions for the
restructuring of ▇▇▇▇▇▇ Services Corp. ("PSC") and its Affiliates under a
prearranged plan of reorganization (the "Plan") under Chapter 11 of the United
States Bankruptcy Code ("Bankruptcy Code") and under the Companies Creditors
Arrangement Act (Canada) ("CCAA").
This term sheet pertains only to the terms of a restructuring in the context of
the prearranged reorganization plan described in this term sheet and is not an
agreement or commitment to a restructuring on any other terms or in any other
context.
Capitalized terms used in this term sheet and not otherwise defined have the
meanings set forth in the Credit Agreement dated as of August 11, 1997 among PSC
and ▇▇▇▇▇▇ Services (Delaware) Inc., as borrowers, Canadian Imperial Bank of
Commerce ("CIBC") as Administrative Agent, Bankers Trust Company ("BTCo") as
Syndication Agent, CIBC and BTCo as Co-Arrangers, and the various lenders from
time to time parties thereto, including all amendments and modifications thereto
(the "Existing Credit Agreement"). All amounts shown are in US Dollars.
1. EXISTING SENIOR SECURED LENDERS:
The obligations of the Borrowers to the Lenders under the Existing Credit
Agreement (the "Existing Syndicate Debt") will be restructured as of Plan
Implementation as follows:
(a) SENIOR SECURED DEBT: Subject to (vi)(C), $350 million of the
Existing Syndicate Debt will be restructured
as senior secured debt (the "Senior Secured
Debt"), in two tranches. One tranche will be
$250 million of senior secured term debt
(the "Senior Secured Term Debt") and the
other tranche will be $100 million of
secured convertible payment in kind debt
("Secured PIK Debt"). PSC shall have the
right to prepay the Senior Secured Term Debt
at any time provided that at the time of
such prepayment PSC also pays all accrued
and unpaid interest, fees and other amounts
payable with respect to the amount prepaid,
and any call premium payable under (iv) (C)
below.
(i) BORROWERS: PSC as to the Secured PIK Debt and ▇▇▇▇▇▇
Services (Delaware) Inc. (the "US Borrower")
as to the Senior Secured Term Debt.
530
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(ii) SENIOR SECURED
TERM DEBT: The terms of the Senior Secured Term Debt
will be set forth in a restatement of the
Existing Credit Agreement (the "Senior Term
Credit Agreement") in form and substance
satisfactory to the Lenders and PSC.
(A) AMOUNT: $250 million.
(B) INTEREST: 9% per annum.
Interest on the Senior Secured Term Debt
will be payable in cash, quarterly in
arrears on the last business day of each
calendar quarter; provided, however, that
during the first 12 months subsequent to the
effective date of the Plan (such effective
date being "Plan Implementation"), the US
Borrower shall pay interest on the Senior
Secured Term Debt to the extent of the
lesser of 9% per annum and $20,000,000, and
accrue the balance thereof (subject to the
mandatory prepayment obligations described
below). Interest will also be payable at the
time of repayment of any Senior Secured Term
Debt and at maturity of such Senior Secured
Term Debt. All interest calculations shall
be based on a 360-day year and actual days
elapsed.
The Senior Term Credit Agreement shall
include protective provisions for such
matters as default interest, capital
adequacy, increased costs, funding losses,
illegality and withholding taxes.
(C) MATURITY: 5 years from Plan Implementation.
(D) COVENANTS: As in the Existing Credit Agreement on the
date hereof, with revisions as approved by
the Lenders and PSC. Financial covenants
will be as set out in Exhibit 1 hereto.
(iii) SECURED PIK DEBT: The Secured PIK Debt will be issued to the
Lenders pro rata in exchange for an equal
amount of the Existing Syndicate Debt.
(A) AMOUNT: $100 million.
531
-3-
(B) INTEREST: 10% per annum. Subject to (iv)(A) below,
interest will accrue and be compounded
quarterly in arrears. All interest
calculations shall be based on a 360-day
year and actual days elapsed.
(C) CONVERTIBILITY: The Secured PIK Debt exchanged for the
Existing Syndicate Debt will be convertible
until maturity at the option of the holders
into 25% of the common shares of the
restructured PSC, in the aggregate, on a
fully diluted basis as of Plan
Implementation. The Secured PIK Debt will
contain the usual anti-dilution provisions
applicable in a public offering of
convertible debt, including giving effect to
the issuance of any common shares under the
shareholder rights plan referred to below.
Any Secured PIK Debt issued in respect of
interest on Secured PIK Debt will not be
convertible.
(D) MATURITY: 5 years from Plan Implementation.
(E) REDEMPTION: The Secured PIK Debt will be redeemable by
PSC in the following circumstances:
(i) If (a) an offer is made to the
common shareholders of PSC to
acquire all of the common shares
of PSC, or, in the case of an
offer by an existing beneficial
owner or owners of PSC common
shares, to acquire all of the
common shares of PSC not already
owned by such owner(s) together
with persons acting in concert
(the shares already owned being
the "Offeror's Existing
Holdings"), (b) under the offer
the Offeror acquires (1) common
shares which together with the
Offeror's Existing Holdings amount
to 67% or more of the common
shares of PSC, or (2) a majority
of the common shares of PSC other
than the Offeror's Existing
Holdings, whichever is greater,
and (c) the person or persons
making the offer (the "Offeror")
notifies PSC that it requires PSC
to exercise such redemption right,
then, subject to the following
sentence, PSC will have the right
to redeem the Secured PIK Debt for
a price (the "Redemption Price")
equal to 115% of the face amount
of such
▇▇▇
-▇-
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ plus all accrued
interest on the Secured PIK Debt.
If the Offeror has notified PSC that
it requires PSC to exercise the
redemption right and the amount the
holders of the Secured PIK Debt
would have received by converting
the convertible Secured PIK Debt to
common shares of PSC and tendering
them to the Offeror under its offer
(the "Tender Price") would be
greater than the Redemption Price of
such Debt, any Secured PIK Debt
which has not been converted by the
close of business on the day prior
to the redemption date set out in
the redemption notice issued by PSC
will be deemed to have been
converted and tendered to the
Offeror's offer, and the holders of
the convertible Secured PIK Debt
will be entitled to receive the
Tender Price.
(ii) The Secured PIK Debt may not be
redeemed prior to the end of the
first full year after Plan
Implementation except as provided in
(i) above. Commencing in the second
year after Plan Implementation, PSC
may redeem the Secured PIK Debt upon
payment of the following percentage
of the face amount of the Secured
PIK Debt during the periods
following Plan Implementation
indicated below, plus all accrued
interest on the Secured PIK Debt:
Year 1 Not redeemable
Year 2 125%
Year 3 125%
Year 4 116 2/3%
Year 5 108 1/3%
Maturity 100%
(F) COVENANTS: To be the same as for the Senior Secured
Term Debt.
533
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(iv) MANDATORY PREPAYMENTS:
(A) 75% of Cash Flow Available for Debt
Service will be swept on an annual
basis for the first two years and
will be swept each quarter
thereafter based on cumulative
quarterly Cash Flow Available for
Debt Service in each subsequent
annual period. The first annual
period for the cash sweep will be
the period from Plan Implementation
until the end of the fourth full
Financial Quarter after Plan
Implementation, the second annual
period for the cash sweep will be
the next four Financial Quarters,
and so on.
The cash sweep will be applied in
the following manner: (i) first, to
pay any interest accrued during the
first 12 months subsequent to Plan
Implementation with respect to the
Senior Secured Term Debt, together
with accrued interest on any such
deferred interest at the rate of 9%
per annum; (ii) second, to pay
accrued but unpaid interest with
respect to the Secured PIK Debt; and
(iii) third, to repay the Senior
Secured Term Debt.
"Cash Flow Available for Debt
Service" will be defined as PSC's
consolidated EBITDA for the
applicable period (excluding asset
sale proceeds) less permitted
capital expenditures and mandatory
cash payments of principal and
interest on other permitted fixed
obligations as such amounts become
due and owing pursuant to applicable
agreements, cash taxes and interest
on the Senior Secured Term Debt and
on the exit/working capital
financing. "Permitted capital
expenditures" will be defined to
mean capital expenditures paid in
cash during the period plus amounts
deposited to a reserve account to
pay known future capital
expenditures, in each case to the
extent of the capital expenditures
forecast for such period in the most
recent budget approved by the
Required Lenders.
(B) Subject to (vi)(C) below, the Senior
Secured Term Debt will be repaid
from 75% of Net Asset Sale Proceeds
(as defined below), subject to the
following: (i) this repayment
formula will apply to the extent
such Net Asset Sale Proceeds on a
534
-6-
cumulative basis, plus the
$68,500,000 proceeds of the sale of
PSC's Aluminum division less
required post-closing adjustments to
a maximum of $4,000,000, exceed
$93,000,000; and (ii) if PSC sells
its US Ferrous division the Net
Asset Sale Proceeds of such sale
will not be part of the $93,000,000
referred to in (i), and the Senior
Secured Term Debt will be repaid to
the extent of 66-2/3% of the first
$200,000,000 of Net Asset Sale
Proceeds of such division and then
to the extent of 75% of the balance
of the proceeds, if any.
"Net Asset Sale Proceeds" will be
defined to mean the cash proceeds of
asset sales of PSC and its
Affiliates approved by the Lenders
after the date hereof, net only of
reasonable costs and expenses and of
payment of indebtedness secured by
such assets senior to the security
for the Existing Syndicate Debt or
the Senior Secured Term Debt, as the
case may be, on such assets.
(C) At the time of any optional
prepayment of any Senior Secured
Term Debt, PSC shall also pay the
Call Premium, if any, on the amount
prepaid. The "Call Premium" on any
such repayment under the Senior
Secured Term Debt shall be with
respect to any repayment made during
the periods following Plan
Implementation indicated below, the
corresponding percentage of the
amount repaid:
0-12 months 5%
13-24 months 4%
25-36 months 3%
37-48 months 2%
49-60 months 1%
(v) SECURITY: The Senior Secured Term Debt and the
Secured PIK Debt will be secured by
guarantees and charges over
substantially all of the assets of
PSC and its Affiliates, ranking in
priority to all claims other than
the exit/working capital financing,
and existing senior liens as may be
applicable to particular assets
(including without limitation the
liens for any Permitted LC Facility
and for the Bank Account Service
Liabilities). The guarantees and
security for the Existing Syndicate
Debt will be retained, with
535
-7-
any appropriate modifications so
that they secure the Senior Secured
Term Debt and the Secured PIK Debt.
The Senior Secured Term Debt and the
Secured PIK Debt shall rank pari
passu under such security.
(vi) OTHER TERMS:
(A) Events of default, remedies and
other terms acceptable to the
holders of Senior Secured Debt and
PSC.
(B) The $26,600,000 of cash collateral
held as part of the Permitted LC
Facility Cash Collateral Security
and as security for the benefit of
the Bank Account Service Providers
(the "Cash Collateral") will be
released to PSC as such Cash
Collateral is released by the issuer
of letters of credit under the
Permitted LC Facility and the Bank
Account Service Providers following
Plan Implementation.
(C) The treatment in the Plan of undrawn
letters of credit issued under the
Existing Credit Agreement (which for
greater certainty does not include
letters of credit issued under the
Permitted LC Facilities) will be as
set out in Exhibit 2 hereto.
(b) EQUITY: The balance of the Existing
Syndicate Debt will be exchanged for
a number of common shares to be
issued to the Lenders pro rata by
PSC representing (1) if the Voting
Requirement (as defined herein) is
met, 90% or (2) if the Voting
Requirement is not met, 100%, of the
common shares of the restructured
PSC, subject to dilution, inter
alia, upon the conversion of the
Secured PIK Debt.
All common shares issued will be
freely tradeable (subject to the
status of any Lender being an
"underwriter" or an "affiliate"
pursuant to Section 1145 of the
Bankruptcy Code). PSC will use its
best efforts to retain the listing
of its common shares on the Toronto,
Montreal and New York stock
exchanges.
There will be a shareholder rights
plan for the restructured PSC which
will give the shareholders (other
than the Acquiror, as defined below)
rights
536
-8-
("Rights") attached to the common
shares, but redeemable at the option
of PSC's board of directors, to
subscribe at 50% of the then current
trading price for one additional
common share of PSC for each common
share held, but only where a person
(together with those acting in
concert with such person)
(collectively, the "Acquiror")
acquires issued common shares which
would bring the Acquiror's
beneficial ownership to 20% or more
of the common shares of PSC (a)
through purchases from non-residents
of Canada or from persons whose PSC
shares are registered on PSC's books
with a non-Canadian address, or (b)
through purchases under the
exemptions from the takeover bid
requirements of the Securities Act
(Ontario) applicable to purchases
(i) from 5 or fewer persons, or (ii)
in transactions in any twelve months
which aggregate less than 5% of the
issuer's outstanding shares. These
Rights will not be triggered if the
acquisition is made through a
takeover bid made to all common
shareholders which must remain open
for at least 45 days and which
complies with Canadian takeover bid
regulations and policies. Holdings
of common shares as of Plan
Implementation will be
grandfathered. For greater
certainty, the Rights will not be
triggered by acquisitions of
authorized but unissued shares or
treasury shares. Apart from the
Rights, there will be no other
provisions of any charter, by-laws
or other agreement by which PSC is
bound (other than existing
agreements) which would provide for
or could permit shareholder rights
or rights to the other party to such
agreement as a result of the
ownership or proposed ownership of
PSC common shares by any person or
group of persons or the change of
ownership or proposed change of
ownership of PSC common shares or
control of PSC.
The Articles of the restructured PSC
will not limit the number of common
shares of PSC that may be issued
from time to time and will provide
that PSC could adopt no rights plan
or other poison pill device other
than as provided herein.
537
-9-
The distributions of debt and equity
to the Lenders may be allocated
between the US and Canadian Plans as
agreed between PSC and the Lenders.
2. EXISTING UNSECURED CLAIMANTS AND SENIOR SECURED CREDITORS:
Senior secured creditors shall be paid in full or have their claims and
liens preserved or reinstated. Furthermore, trade creditors who agree to
conduct ongoing business relationships with PSC in accordance with existing
trade terms shall have their claims paid in full in the ordinary course of
business. Subject to the Voting Requirements, certain other unsecured
creditors identified by PSC (as may be agreed by the Lenders in their sole
discretion) ("Impaired Unsecured Claims") shall have their claims exchanged
for a pro rata share of (a) up to $60 million in unsecured payment in kind
notes (the "Unsecured PIK Notes") and (b) up to 5% of the common shares of
the restructured PSC, subject to dilution, inter alia, upon the conversion
of the Secured PIK Debt. The Lenders will waive their right to receive
distributions in respect of their unsecured deficiency claims under the US
Plan if the Voting Requirement is satisfied in the US without regard to the
votes of the Lenders, and under the Canadian Plan if the Voting Requirement
is satisfied in Canada, without regard to the votes of the Lenders. The
"Voting Requirement" shall mean the acceptance of the US Plan or the
Canadian Plan, as the case may be, by the requisite holders of Impaired
Unsecured Claims in an amount and number sufficient to cause such class to
accept the Plan under the Bankruptcy Code, or the CCAA, as applicable.
UNSECURED PIK NOTES:
ISSUER: PSC
INTEREST: 6% per annum. Interest on the Unsecured PIK
Notes will accrue and compound. Provided the
Senior Secured Debt is not in default, cash
interest will be payable on the Unsecured
PIK Notes and on accrued unpaid interest
following repayment in full of the Secured
PIK Debt.
MATURITY: 10 years from Plan Implementation.
AMORTIZATION: Commencing 5 years from Plan Implementation
provided the Senior Secured Debt is not in
default, in equal instalments at the end of
years 6 to 10 after Plan Implementation.
SECURITY: None.
538
-10-
3. SECURITIES CLAIMS AND EXISTING EQUITY HOLDERS OF PSC:
The claims of the putative class action plaintiffs in the action previously
pending against PSC in the United States District Court for the Southern
District of New York and pending against PSC in the Ontario Court, General
Division (the "Securities Action") and all other claims against PSC and any
of its Affiliates arising out of securities fraud, recission and similar
claims will be discharged under the Plan and will share, together with the
existing shareholders of PSC, in 5% of the common shares of restructured
PSC, subject to paragraph 2 and subject to dilution. In addition, subject
to Bankruptcy Court approval, the settlement of the Securities Action may
include the payment on Plan Implementation of attorneys fees for counsel to
such plaintiffs in an amount not to exceed $575,000.
4. ALTERNATE PROPOSAL FOR IMPAIRED UNSECURED CLAIMS
In the alternative to the arrangements described in paragraphs 2 and 3
above, if prior to commencing the Cases PSC enters into an agreement with
representatives of the holders of the Allwaste 7 1/4% Convertible
Subordinated Debentures (the "Old Debentureholders") acceptable to the
Required Lenders on substantially the terms of this Term Sheet including
this paragraph 4, then, subject to the Voting Requirement, the treatment of
holders of Impaired Unsecured Claims will be as follows:
(a) subject to (b), distributions to holders of Impaired Unsecured Claims
in the US Plan and the Canadian Plan will be made on a pro rata basis
based on allowed Claims amounts from a pool of (i) $60 million of
Unsecured PIK Notes and (ii) 5% of the common shares of the
restructured PSC, subject to dilution;
(b) the holders of Impaired Unsecured Claims in the US Plan will have
their claims exchanged for a pro rata share of the equity referred to
in (a)(ii) above and either a pro rata share of
(i) the $60 million of Unsecured PIK Notes; or
(ii) $18 million of unsecured convertible debt described below (the
"Convertible Debt")
provided that
(iii) the $60 million pool of Unsecured PIK Debt shall be reduced by
$1.00 for every $1.50 of Convertible Debt issued; and
(iv) if holders of more than $27.5 million of such Impaired Unsecured
Claims elect to receive Convertible Debt, the Convertible Debt
shall be issued to the holders who make such election pro rata
and the balance of their claims shall be exchanged for Unsecured
PIK Notes;
539
-11-
(c) The distributions to Impaired Unsecured Claims in the Canadian Plan
will not be affected by this election, and such claims will continue
to be exchanged for a pro rata share of the equity and Unsecured PIK
Notes referred to above.
CONVERTIBLE DEBT:
(A) AMOUNT: $18 million
(B) INTEREST: no interest for the first 3 years after Plan
Implementation. Cash interest payable
commencing in Year 4 at 3% per annum.
(C) CONVERTIBILITY: The Convertible Debt will be convertible or
exchangeable until maturity at the option of
the holders into common shares of the
restructured PSC at a price of $30 of
Convertible Debt per share based on the
assumption that the outstanding equity of
restructured PSC immediately following
consolidation will be 24,000,000 common
shares.
(D) MATURITY: 20 years from Plan Implementation.
In such case:
(c) the balance of the Existing Syndicate Debt referred to in paragraph
1(b) above will be exchanged for a number of common shares issued to
the Lenders pro rata by PSC representing (i) if the Voting Requirement
is met, 91% or (ii) if the Voting Requirement is not met, 100%, of the
common shares of the restructured PSC, subject to dilution; and
(d) the holders of claims or interests referred to in paragraph 3 will
share in 4% of the equity of the restructured PSC, subject to
paragraph 4(b)(ii) and subject to dilution.
5. EXIT/WORKING CAPITAL FINANCING:
BORROWER: PSC and ▇▇▇▇▇▇ Services (Delaware) Inc.
(others to be determined).
AMOUNT: $100 million.
If the resolution of the letter of credit
issue described in item (vi)(D) under
"Senior Secured
540
-12-
Debt" above results in undrawn letters of
credit being transferred to the exit
facility, the exit lenders will give
consideration, in their sole discretion, to
increasing the facility to as much as $125
million to provide for such letters of
credit.
PURPOSE: To fund repayment of debtor-in-possession
financing provided to the Borrowers in the
Cases (as defined below), short-term working
capital needs and letters of credit within a
sub-limit of the credit.
SECURITY: Secured by guarantees and charges over the
accounts receivable and inventory and, if
required, substantially all of the other
assets, of PSC and its subsidiaries, senior
to all other security including the security
for the Senior Secured Debt, other than
existing senior liens applicable to
particular assets as provided in 1(a)(v)
above.
INTEREST RATE: To be discussed (intended to be a market
rate at the relevant time).
FEES: To be discussed.
MATURITY: Two years from Plan Implementation. The exit
facility may be refinanced in whole but not
in part by a replacement facility with the
same priority as, and in an amount equal to,
the exit facility, and having terms
substantially the same as the exit facility
to the extent commercially available.
OTHER TERMS: To be negotiated.
6. PLAN TIMETABLE:
PSC and its Affiliates will use their best efforts to achieve the following
Plan Timetable:
PSC and its Affiliates in the United States
and Canada will commence, in a venue
mutually agreeable to PSC and the Required
Lenders, voluntary insolvency proceedings in
the United States and Canada (the "Cases"),
including the filing of the Plan not later
than June 30, 1999.
The Disclosure Statement shall be approved
by the US and Canadian courts presiding over
the Cases
541
-13-
(the "Bankruptcy Courts") not later than
August 31, 1999.
The Bankruptcy Courts shall confirm the Plan
not later than October 31, 1999.
Plan Implementation shall occur not later
than November 30, 1999 (the "Plan
Implementation Date").
7. OTHER PLAN TERMS: (a) The Plan will include an employee and
management incentive plan acceptable to PSC
and the Lenders which may include the
granting of options, such incentive plan to
be consistent with customary practices
involving restructured companies.
(b) Notwithstanding anything in this term sheet
to the contrary, PSC and its Affiliates may
at all times (both before and after the
execution of the Lock-Up Agreement and the
filing of the Plan) respond to unsolicited
offers (but for greater certainty may not,
directly or indirectly, seek, solicit,
encourage or initiate any discussions
respecting any offers) relative to potential
transactions which (i) restructure
substantially all of the equity and debt of
PSC and its Affiliates, and (ii) are
demonstrably more favourable to the Lenders
and the other stakeholders in PSC than the
transactions set forth in this term sheet or
in the Plan.
(c) The board of directors of the reorganized
PSC will consist of 9 directors, who will be
nominated by the Lenders. The Lenders agree
that their nominees will include two members
of the existing PSC board and will include
two members nominated by High River Limited
Partnership ("High River") provided that
High River and Lenders acting in concert
with it beneficially own at least 25% of the
Existing Syndicate Debt. If one or both of
the nominees from the existing board is a
nominee on that board of High River or
persons acting in concert with it, that
person will be counted as a High River
nominee on the slate for the new board.
(d) It shall be a condition to confirmation of
the Plan that (i) the Lock-Up Agreement
shall not have been
542
-14-
terminated, and (ii) each of the conditions
set out in Section 7 of the Lock-Up
Agreement shall have been satisfied.
8. PUBLIC ANNOUNCEMENTS: The parties hereto agree that all public
announcements of the entry into or the terms
and conditions of this term sheet shall be
mutually acceptable to the Administrative
Agent and PSC.
DATED this 21st day of June, 1999.
543
EXHIBIT 1
(Financial Covenants)
1. the ratio of (x) current assets to (y) current liabilities, at all times
from and after the first day of the first Financial Quarter commencing
after Plan Implementation, must be equal to or greater than 1.5 to 1.0.*
2. aggregate EBITDA for the third and fourth Financial Quarters commencing
after Plan Implementation must not be less than 80% of budgeted EBITDA as
approved by the Lenders.
3. the ratio of (x) Non PIK Debt to (y) EBITDA, at all times from and after
December 31, 2000 [INTENDED TO BE END OF FIRST FULL FINANCIAL YEAR AFTER
PLAN IMPLEMENTATION], must be equal to or less than 3.75 to 1.0.
4. the ratio of (x) Total Debt to (y) EBITDA, at December 31, 2000 [INTENDED
TO BE END OF FIRST FULL FINANCIAL YEAR AFTER PLAN IMPLEMENTATION], and from
that date until March 31, 2001, must be equal to or less than 5.5 to 1.0,
and at all times thereafter must be equal to or less than 5.0 to 1.0.
5. the ratio of (x) EBITDA to (y) Cash Interest Expense, at all times from and
after December 31, 2000 [INTENDED TO BE END OF FIRST FULL FINANCIAL YEAR
AFTER PLAN IMPLEMENTATION], must be greater than 3.5 to 1.0.
6. the ratio of (x) EBITDA to (y) Total Interest Expense, at all times from
and after December 31, 2000 [INTENDED TO BE END OF FIRST FULL FINANCIAL
YEAR AFTER PLAN IMPLEMENTATION], must be greater than 2.25 to 1.0.
For the purpose of these financial covenants:
(a) EBITDA, Total Interest Expense and Cash Interest Expense are intended to be
calculated on a rolling 4 quarter basis. The calculations of these items
will exclude the periods prior to the commencement of the third full
Financial Quarter following Plan Implementation with EBITDA under covenants
3 and 4 being annualized until there are four full Financial Quarters of
EBITDA for such calculations.
(b) EBITDA will exclude any net extraordinary, unusual or non recurring gains
or net non cash extraordinary, unusual or non recurring losses, and will be
adjusted as provided in the definition of EBITDA in the Existing Credit
Agreement on any Sale approved by the Lenders.
(c) Total Interest Expense will be the existing definition of "Interest
Expense".
544
-2-
(d) Cash Interest Expense will be Total Interest Expense excluding any accrued
non-cash interest on the Senior Secured Term Debt and any interest on the
Secured PIK Notes or on the Unsecured PIK Notes.
(e) Total Debt will be the existing definition of Debt (which, for greater
certainty, includes contingent liabilities under letters of credit but
excludes contingent liabilities incurred in support of bonds or similar
arrangements delivered in support of goods or services provided by PSC in
the ordinary course of its business until such bonds or similar
arrangements are called upon or are required to be accrued as a charge
against income on PSC's financial statements).
(f) Non PIK Debt will be Total Debt other than Debt owing under the Secured PIK
Notes and the Unsecured PIK Notes.
[FN]
* If PSC (with the Lenders' approval) makes a significant asset disposition
in any Financial Year after Plan Implementation which could affect its
compliance with the working capital ratio requirements in covenant 1 above,
the Lenders in their sole discretion will consider such covenant.
545
EXHIBIT 2
TREATMENT OF LCS OUTSTANDING UNDER THE EXISTING CREDIT AGREEMENT
1. For the purposes of the Plan, the aggregate claim of the LC Issuers and the
LC Lenders against PSC and the US Borrower with respect to LCs issued under the
Existing Credit Agreement ("Existing LCs") will be deemed to be the greater of :
(a) $20 million; and
(b) the amount actually drawn under the Existing LCs on or before Plan
Implementation.
This amount will be the "Agreed LC Claim". (LCs issued under a Permitted LC
Facility are outside the Existing Credit Agreement and the claims of the
issuer(s) of such letters of credit will not be compromised.)
2. For greater certainty, references in this Exhibit to the claims of the LC
Lenders with respect to the Existing LCs are to the reimbursement claims the LC
Lenders would have against PSC or the US Borrower, as applicable, under section
2.06(3) of the Existing Credit Agreement for drawings under an Existing LC,
following the purchase of such claims by the LC Lenders from the LC Issuers
under section 2.06(4) of the Existing Credit Agreement. Each LC Lender's share
of the Agreed LC Claim and of any Unfunded LC Claim (as defined below) will be
its pro rata share of such Claim based on its respective Cdn. LC Commitment and
US LC Commitment as a proportion of the aggregate Cdn. LC Commitment and US LC
Commitment.
3. To the extent that the Agreed LC Claim is greater than the amount actually
drawn under the Existing LCs on or before Plan Implementation (such difference
being the "Unfunded LC Claim"), this amount will be funded by the LC Lenders.
Each LC Lender will fund its share of the Unfunded LC Claim either:
(a) in cash; or
(b) to the extent an LC Lender does not fund its share of the Unfunded LC
Claim in cash, by contributing distributions it receives in the Plan
equivalent to its share of the Unfunded LC Claim. This contribution
will be calculated by a formula reflecting these principles which will
be set out in the definitive documentation.
The contribution by the LC Lenders (whether in cash or as provided in (b) above)
will be included in calculating their share of the Existing Syndicate Debt and
in calculating the total amount of Existing Syndicate Debt, and will be
distributed to all of the Lenders on Plan Implementation pro rata as a
distribution on the Existing Syndicate Debt.
4. The arrangements described in this Exhibit will be the only effect of the
Plan on the respective rights and obligations of the LC Lenders, the LC Issuers,
PSC and the US Borrower in
546
2
connection with the Existing LCs. The obligations supported by the Existing LCs
will not be impaired or compromised in the Plan without the consent of the LC
Lenders and the LC Issuers. To the extent the Existing LCs are undrawn on Plan
Implementation, they will be transferred to the exit facility and will be deemed
to be outstanding under that facility on Plan Implementation. The obligations of
the PSC and the US Borrower to reimburse the LC Issuers and the LC Lenders under
section 2.06(3) of the Credit Agreement with respect to drawings made under
Existing LCs following Plan Implementation will be unimpaired and will be
included in the exit facility. On Plan Implementation, any cash collateral held
under section 5.06 of the Credit Agreement for the benefit of the LC Lenders in
respect of the Existing LCs will be paid to the LC Lenders.
5. These arrangements will not in any way limit or discharge any of the
present or future liabilities of the LC Lenders to the LC Issuers. The Plan and
the exit facility will include acknowledgements to this effect.
547
SCHEDULE B
All amounts stated in United States dollars. For the purposes of this schedule,
outstanding letters of credit and operating lines denominated in other
currencies have been converted to U.S. Dollars at the prevailing rate of
exchange.
The Debt of each LC Lender includes its non-LC Debt together with its rateable
share of the face value of outstanding letters of credit, less its rateable
share of all cash collateral held for application against outstanding letters of
credit.
CONSENTING LENDER ADDRESS CONSENTING LENDER'S DEBT
----------------- ------- ------------------------
ABN Amro Bank Canada 15th Floor $17,210,651
▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ Wimpeny
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Accord Financial Corporation ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $4,586,796
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
American Real Estate Holdings L.P. c/o Icahn Associates Corp. $76,638,787
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Banco Central HispanoAmericano, S.A. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. $6,334,755
Miami Agency ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
548
-2-
CONSENTING LENDER ADDRESS CONSENTING LENDER'S DEBT
----------------- ------- ------------------------
The Bank of East Asia (Canada) ▇▇▇▇▇ ▇▇▇-▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ $5,736,884
▇▇▇ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Bankers Trust Company ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $7,526,760
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇ ▇▇▇▇▇
& ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Mail Stop ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Banque Nationale de Paris ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇ ▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Banque Nationale de Paris (Canada) ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ $10,381,883
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇ ▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
549
-3-
CONSENTING LENDER ADDRESS CONSENTING LENDER'S DEBT
----------------- ------- ------------------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ $85,015,472
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BT Bank of Canada Royal Bank Plaza, North Tower $31,879,886
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Canadian Imperial Bank of Commerce Commerce Court West $45,877,648
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Chase Bank of Texas, N.A. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ $19,657,160
5 TCBE 78
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Chase Manhattan Bank c/o Chase Securities Inc. $4,291,285
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
Special Loan Department
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇/
▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
550
-4-
CONSENTING LENDER ADDRESS CONSENTING LENDER'S DEBT
----------------- ------- ------------------------
The Chase Manhattan Bank of Canada 1 First Canadian Place $12,907,988
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CIBC Inc. Cross Border $10,035,681
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Citibank, N.A. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $8,593,341
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Comerica Bank International Finance Department $34,700,407
One Detroit Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ Persons
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Credit Suisse First Boston Eleven Madison Avenue $0
New York, New York 10010-3629
Attention: ▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Credit Suisse First Boston Canada Credit Suisse Centre $13,842,511
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
551
-5-
CONSENTING LENDER ADDRESS CONSENTING LENDER'S DEBT
----------------- ------- ------------------------
Dai-Ichi Kangyo Bank (Canada) Commerce Court West $5,736,884
▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Dai-Ichi Kangyo Bank, Ltd. One World Trade Centre $15,836,889
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Deutsche Bank AG, New York and or ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ $0
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Deutsche Bank Canada ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ $24,224,394
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ - Senior Debt Portfolio ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $6,334,755
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Fernwood Associates L.P. c/o Intermarket Corp. $21,139,974
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇/▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Foothill Capital Corporation ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. $37,643,856
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇/
▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Credit Partners Co. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇. ▇▇▇ ▇▇▇▇▇ $1,683,888
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
552
-6-
CONSENTING LENDER ADDRESS CONSENTING LENDER'S DEBT
----------------- ------- ------------------------
▇▇▇▇▇▇▇ Sachs Credit Partners L.P. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ $3,139,757
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
High River Limited Partnership c/o Icahn Associates Corp. $199,887,471
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇/▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Keybank National Association ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $12,669,511
Mail Code: OH-01-27-0504
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇ Corp. c/o Cerberus Partners, L.P. $18,539,302
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇ LLC c/o Cerberus Partners, L.P. $28,506,401
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
553
-7-
CONSENTING LENDER ADDRESS CONSENTING LENDER'S DEBT
----------------- ------- ------------------------
Mellon Bank Canada One Mellon Bank Center $13,842,511
Suite 1525
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Mellon Bank, N.A. One Mellon Bank Centre $0
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Mutual Life Assurance Company ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ $14,342,209
of Canada ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Mutual Shares Fund, a series of 51 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Parkway $19,865,732
Franklin Mutual Series Fund Inc. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Nationsbank, N.A. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ $44,465
NC1-007-12-04
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇/▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
Special Assets Office, New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
- and -
Nationsbanc, ▇▇▇▇▇▇▇▇▇▇
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ $12,669,511
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
554
-8-
CONSENTING LENDER ADDRESS CONSENTING LENDER'S DEBT
----------------- ------- ------------------------
PNC Bank, National Association ▇▇▇ ▇▇▇ ▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇ $31,673,778
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Royal Bank of Scotland PLC Wall Street Plaza $12,669,511
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Sakura Bank (Canada) Commerce Court West $20,763,766
▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Sakura Bank, Limited Commerce Court West $0
Suite 3601
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Societe Generale Asset Recovery Management $0
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Societe Generale (Canada) Scotia Plaza $34,606,278
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Summit Bank ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $3,727,568
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇/
▇▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
555
-9-
CONSENTING LENDER ADDRESS CONSENTING LENDER'S DEBT
----------------- ------- ------------------------
The Toronto-Dominion Bank ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ $34,606,278
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Toronto Dominion (New York), Inc. ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Tri-Links Investment Trust 2 World Financial Center $4,292,382
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Wachovia Bank, N.A. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ $12,669,511
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇/
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
556
SCHEDULE C
CONFIDENTIAL
June 28, 1999
▇▇▇▇▇▇ Services Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Colin ▇▇▇▇▇
▇▇▇▇▇▇ Services (Delaware), Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
re Debtor-in-Possession Financing Letter
-----------------------------------------
Dear ▇▇. ▇▇▇▇▇:
At your request, Canadian Imperial Bank of Commerce ("CIBC") and Bankers
Trust Company ("BTCo") and/or its affiliates (together with CIBC, the "DIP
Co-Arrangers") have reviewed certain information provided to date in connection
with a possible debtor-in-possession financing (the "DIP Financing") in the
form of the credit facility described below for ▇▇▇▇▇▇ Services (Delaware),
Inc. (the "US Borrower") and ▇▇▇▇▇▇ Services Corp. (the "Canadian Borrower")
as borrowers thereunder on an individual basis (collectively, the "Borrowers")
in connection with the pre-arranged plan of reorganization (the "Pre-Arranged
Plan") contemplated in the Lock-Up Agreement and Restructuring Terms Sheet,
dated June 21, 1999, agreed to by the Canadian Borrower on behalf of itself and
each of its affiliates.
We understand that you have requested a revolving credit and letter of
credit facility (the "DIP Facility") of up to $100,000,000, which shall be
used (x) to pay all professional fees incurred by the DIP Agent (as defined
below) and the DIP Lenders (as defined
08/13/99 2:52 PM
[6HPXP01!.DOC]
-1-
557
below) in connection with the DIP Facility, (y) to provide for working capital
and general corporate requirements and payments of professional fees and
expenses (including professionals retained pursuant to Section 327 of the US
Bankruptcy Code) of the US Borrower and certain of its US affiliates
(collectively, the "US Credit Parties") and (z) to provide for working capital
and general corporate overhead requirements of the Canadian Borrower and the
other Canadian Credit Parties in an amount not to exceed the Canadian Loan
Amount (as defined below), during the continuance of pre-arranged bankruptcy
proceedings with respect to the Borrowers and certain of their subsidiaries
incorporated in the United States or Canada that may be commenced under Chapter
11 of the United States Code entitled "Bankruptcy" (the "Bankruptcy Code," and
the proceedings commenced thereunder, the "US Cases") and/or under the
Companies Creditors Arrangement Act (the "CCAA," and the proceedings commenced
thereunder, the "Canadian Cases" and, together with the US Cases, the "Cases").
The DIP Co-Arrangers are pleased to advise you of their agreement to
co-arrange the DIP Facility on the terms and subject to the conditions set
forth herein, in the "Summary of Certain Terms" attached hereto and in the
letter dated as of the date hereof regarding the payment of fees (the "Fee
Letter"). In addition, BTCo agrees to act as administrative agent (the "DIP
Agent") and as collateral agent for the collateral located in the United
States, and CIBC as collateral agent for the collateral located in Canada (the
"DIP Collateral Agents"), for the DIP Facility.
The DIP Facility may be provided by all or a sub-group of the lenders
parties to the existing Credit Agreement dated as of August 11, 1997 (the
"Existing Credit Agreement") among the Borrowers, CIBC, as Administrative
Agent, BTCo, as Syndication Agent, CIBC and BTCo, as Co-Arrangers, Dresdner
Bank Canada and Dresdner Bank AG New York Branch (collectively, "Dresdner"), as
Documentation Agent (CIBC, BTCo, and Dresdner, collectively, the "Pre-Petition
Agents"), and the various lenders from time to time parties thereto (in such
capacity, collectively, the "Pre-Petition Lenders"), which will have executed
an Addendum (in the form attached hereto as Exhibit A) evidencing such
Pre-Petition Lender's consent to and approval of the terms and conditions of
this letter and the term sheet and each such Pre-Petition Lender's commitment
to make loans and issue or participate in letters of credit under the DIP
Facility, subject to the negotiation, execution and delivery of definitive
documentation for the DIP Facility that is in form and substance satisfactory
to the DIP Agent (collectively, the "DIP Credit Documentation"). The DIP
Credit Documentation shall be prepared by White & Case LLP and Blake, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ and shall contain such covenants, representations and warranties,
events of default, conditions precedent, security arrangements, indemnities and
other terms and provisions as shall be satisfactory to the DIP Agent and the
lenders that agree to provide the DIP Financing (the "DIP Lenders").
The DIP Co-Arrangers shall manage all aspects of the syndication of the
DIP Financing and the Borrowers hereby agree to assist in such syndication
process. To assist the DIP Co-Arrangers in their syndication efforts, you
hereby agree (a) to provide and cause your advisors to provide the DIP
Co-Arrangers and the other syndicate members upon request with all reasonable
information deemed necessary by the DIP Co-Arrangers to complete syndication,
including but not limited to information and evaluations prepared by the
Borrowers and their advisors on their behalf relating to the transactions
contemplated hereby and (b) to assist the DIP
2
558
Co-Arrangers upon request in the preparation of an Information Memorandum to be
used in connection with the syndication of the DIP Financing, including making
available officers of the Borrowers from time to time and attending and making
presentations regarding the business and prospects of the Borrowers as
appropriate at a meeting or meetings of DIP Lenders or prospective DIP Lenders.
The Borrowers hereby confirm their understanding that the DIP
Co-Arrangers' agreement to co-arrange the DIP Facility is independent of their
agreement to participate as DIP Lenders in the proposed financing contemplated
by the DIP Facility, and that nothing contained herein shall be deemed a
commitment of the DIP Co-Arrangers to participate as DIP Lenders in the
proposed financing. The DIP Co-Arrangers shall not be responsible or liable for
damages which may be alleged as a result of their failure to arrange or
participate in the DIP Facility in the event that they decline to arrange or
participate in the proposed financing contemplated by the DIP Facility in
accordance with the terms outlined in this letter, the term sheet or any other
terms.
The Borrowers hereby represent, warrant and covenant that all information
(other than projections, if any) and data concerning the Borrowers and their
affiliates which has been or is hereafter furnished or otherwise made available
to the DIP Co-Arrangers, the DIP Agent and the DIP Lenders by the Borrowers was
at the time made, and will be, complete and correct in all material respects
and does not and will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances under which such
statements were or are made. Projections, if any, do and will constitute the
Borrowers' good faith estimates of the items projected.
The Borrowers further represent that prior to the filing of the Cases, (i)
the Borrowers shall have engaged in negotiations regarding the Pre-Arranged
Plan with the holders (or representatives of such holders) of claims against
the Borrowers and/or their subsidiaries entitled to vote on the Pre-Arranged
Plan, (ii) the Borrowers shall have used their best efforts to obtain written
agreements, to the extent legally permissible, from such holders of claims in
terms of amount of claims and number of holders as required for the approval of
the Pre-Arranged Plan by the relevant classes of claims and interests under the
Bankruptcy Code and the CCAA, committing such holders (a) to vote in favor of
the Pre-Arranged Plan and (b) not to sell or assign their claims or interests
except to an entity that agrees in writing to be bound by the terms of such
agreements, and (iii) the Pre-Arranged Plan shall be feasible and there shall
exist no known impediment to confirmation of the Pre-Arranged Plan and
consummation thereof by November 30, 1999.
To induce the DIP Co-Arrangers to issue this letter, the Borrowers hereby
agree that all reasonable fees and expenses (including syndication expenses and
the reasonable fees and expenses of counsel and consultants) of the DIP
Co-Arrangers, arising in connection with this letter and in connection with the
transactions described herein shall be for their joint and several account,
whether or not the DIP Financing is consummated or the DIP Credit Documentation
is executed. The Borrowers further agree, on a joint and several basis, to
indemnify and hold harmless the DIP Co-Arrangers, the DIP Agent, the DIP
Collateral Agents, each DIP Lender and each of the foregoing entities'
respective directors, officers, employees, agents, attorneys and affiliates
(all such persons and entities being referred to hereafter as "Indemnified
Persons") from
3
559
and against any and all actions, suits, proceedings (including any
investigations or inquiries), claims, losses, damages, liabilities or expenses
of any kind or nature whatsoever which may be incurred by or asserted against
or involve any Indemnified Person (whether asserted by you or any third party)
as a result of or arising out of or in any way related to or resulting from
this letter or any eventual extension of the DIP Financing, and, upon demand,
to pay and reimburse any Indemnified Person for any reasonable legal or other
out-of-pocket expenses incurred in connection with investigating, defending or
preparing to defend any such action, suit, proceeding (including any inquiry or
investigation) or claim (whether or not any Indemnified Person is a party to
any action or proceeding out of which any such expenses arise); provided,
however, the Borrowers shall not be obligated to indemnify pursuant to this
paragraph any Indemnified Person against any loss, claim, damage, expense or
liability to the extent it resulted from the gross negligence or willful
misconduct of such Indemnified Person as finally determined by a court of
competent jurisdiction. You also hereby agree to pay the amounts set forth in
the Fee Letter. This letter is issued for your benefit only and no other
person or entity may rely thereon.
Each DIP Co-Arranger reserves the right to employ the services of its
affiliates in providing the services contemplated by this letter and to
allocate to them, in whole or in part, certain fees payable to such DIP
Co-Arranger in such manner as they may agree in their sole discretion. You
acknowledge that each DIP Co-Arranger may share with any of its affiliates any
information (including information relating to creditworthiness) related to the
Borrowers or their affiliates or any of the other matters contemplated hereby.
Neither you nor your affiliates are authorized to show or circulate this
letter or disclose the existence or terms hereof to any other person or entity
(other than your legal and financial advisors in connection with your
evaluation hereof) until such time as you have accepted this letter as provided
in the final paragraph hereof and paid the amount set forth herein and in the
Fee Letter. In any event neither you nor your affiliates are authorized to
disclose the terms hereof (or file copies hereof) in any public filings made by
you other than filings made pursuant to the Bankruptcy Code and the CCAA and
shall not in any event disclose the terms of the Fee Letter, unless in either
case (and then only to the extent) required by law, without our prior written
consent.
The provisions of the four immediately preceding paragraphs, the sixth
immediately preceding paragraph, and the following two paragraphs shall survive
any termination of this letter.
This letter and the Fee Letter shall be construed in accordance with and
governed by the laws of the State of New York. Each party hereto waives all
rights to trial by jury such party may have with respect to the matters
hereunder and thereunder.
If you are in agreement with the foregoing, please sign and return to us
the enclosed copy of this letter no later than 5:00 p.m., New York time on
____, 1999. At such time, you must also wire to the DIP Agent the following:
(x) $300,000 as a deposit toward payment of our counsel's fees to be incurred
in connection with the preparation of the DIP Credit Documentation and (y) $
50,000 as a deposit toward payment of our consultant's fees to be incurred in
connection with our due diligence with respect to the DIP Facility. If you
decline to
4
560
take the foregoing actions, you are to return all copies of this letter to us
as promptly as possible and in such event you are not authorized to disclose
this letter or the contents thereof to any other party.
Very truly yours,
BANKERS TRUST COMPANY
not individually, but in its capacity as DIP
Administrative Agent, DIP Co-Arranger, DIP
Collateral Agent and L/C Issuing Lender under the
DIP Facility
By_________________________
Title:
CANADIAN IMPERIAL BANK OF COMMERCE
not individually, but in its capacity as DIP
Co-Arranger and DIP Collateral Agent under the
DIP Facility
By_________________________
Title:
Agreed and accepted this
____ day of ___, 1999:
▇▇▇▇▇▇ SERVICES CORP.
By________________________
Title:
▇▇▇▇▇▇ SERVICES (DELAWARE), INC.
By________________________
Title:
5
561
SUMMARY OF CERTAIN TERMS(1)
DIP Co-Arrangers: Bankers Trust Company ("BTCo") and /or its
affiliates and Canadian Imperial Bank of Commerce
("CIBC").
DIP Agent: BTCo.
L/C Issuing Lender: BTCo.
DIP Collateral Agents: BTCo for the collateral located in the United States
and CIBC for the collateral located in Canada.
Borrowers: ▇▇▇▇▇▇ Services (Delaware), Inc. (the "US
Borrower") and ▇▇▇▇▇▇ Services Corp. (the "Canadian
Borrower"), as debtors-in-possession in the Cases, on
an individual basis.
DIP Lenders: All or a sub-group of the lending institutions
parties to the existing Credit Agreement dated as of
August 11, 1997 (the "Existing Credit Agreement") among
the Borrowers, as Borrowers, CIBC, as Administrative
Agent, BTCo, as Syndication Agent, CIBC and BTCo, as
Co-Arrangers, Dresdner, as Documentation Agent, and the
various lenders from time to time parties thereto,
which will have executed an Addendum (in the form
attached hereto as Exhibit A) evidencing such
Pre-Petition Lender's consent to and approval of the
terms and conditions of the financing letter and this
term sheet and each such Pre-Petition Lender's
commitment to make loans and issue or participate in
letters of credit under the DIP Facility.
Guarantors: The obligations of each Borrower under the DIP
Facility shall be unconditionally guaranteed by the
other Borrower, all subsidiaries of the Borrowers
incorporated in the United States (together with the US
Borrower, the "US Credit Parties") as
debtors-in-possession in the US Cases, and all
subsidiaries of the Borrowers incorporated in Canada
(together with the Canadian Borrower, the "Canadian
Credit Parties" and, collectively with the US Credit
Parties,
------------------
(1) Capitalized terms used but not defined herein shall have the meanings
provided in the Existing Credit Agreement.
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562
the "Credit Parties"), on the same basis as such
entities guaranty the obligations under the Existing
Credit Agreement, provided, however, that the
Guarantors shall not include the subsidiaries of the
Borrowers incorporated in Canada until such time as the
Canadian Approvals (as described below) have been
obtained.
DIP Facility: Revolving credit and letter of credit facility
of $100,000,000. In addition to loans (the "Loans"), a
portion of the DIP Facility up to a sublimit of
$20,000,000 ( the "LC Sublimit") may be utilized by the
Borrowers for the issuance of standby or trade letters
of credit in support of certain obligations
satisfactory to the DIP Agent (collectively, the
"Letters of Credit"), subject in each case to the
limitations described below.
Maturity: The date (the "Maturity Date") which is the
earliest of (x) November 30, 1999, (y) the effective
date of a plan of reorganization in the US Cases (or
the equivalent occurrence in the Canadian Cases) and
(z) the date of substantial consummation of a confirmed
plan of reorganization in the US Cases (or the
equivalent occurrence in the Canadian Cases).
Availability: To the extent the interim order and/or final
order issued by the bankruptcy court (the "Bankruptcy
Court") hearing the US Cases is limited as to the
amount of credit covered by such order, availability
under the DIP Facility shall be limited to the amount
of credit covered by such order of the Bankruptcy
Court.
In addition, availability under the DIP Facility
will be subject to a borrowing base (the
"Borrowing Base") equal to, on the Closing Date
(defined below), the sum of up to 80% of the
value of the Eligible Accounts Receivable (to be
defined and to include a reserve in the amount of
the Carve-Out and, with respect to Canadian
accounts receivable, the amount of the Liens on
Canadian Accounts Receivable (as defined below))
of (i) the Credit Parties constituting part of
the Industrial Services Group plus (ii) the US
Credit Parties constituting part of the US
Ferrous division; provided, however, that (a) the
DIP Agent may determine or impose eligibility
requirements, impose reserves or reduce the
advance rates described above upon the exercise
of its Permitted Discretion (to be defined) and
(b) the Borrowing Base shall not include assets
of the Canadian
7
563
Credit Parties until the Canadian Approvals have been
obtained.
Availability in respect of the Borrowing Base shall be
determined on the basis of a Borrowing Base Certificate
delivered according to a schedule satisfactory to the
DIP Agent by the chief financial officer of the
Canadian Borrower.
Notwithstanding the above, the Canadian Borrower's
borrowings under the DIP Facility will be limited to an
amount to be determined by the DIP Agent from time to
time based on the corporate overhead requirements of
the Canadian Borrower, not to exceed $15,000,000
(the "Canadian Loan Amount")
Purpose: To pay all professional fees incurred by the DIP
Agent and the DIP Lenders in connection with the
DIP Facility and to provide for working capital
and general corporate requirements (or in the case
of Letters of Credit issued for the account of the US
Borrower, to support such general corporate
requirements), including, without limitation, in the
case of the US Borrower (a) to make
investments in and advances to direct and indirect
subsidiaries of the Canadian Borrower that are
not Credit Parties, subject to an aggregate limitation
of $10,000,000, and (b) after the Canadian
Approvals (as defined below) are obtained, to make
investments in and advances to the Canadian
Credit Parties, through the Maturity Date. Letters of
Credit under the DIP Facility may only be
issued as permitted under the DIP Facility, and only
in an aggregate amount not to exceed the LC
Sublimit.
Notwithstanding the above, the Loans made to the
Canadian Borrower may only be utilized to provide
for working capital and general corporate requirements
of the Canadian Borrower and the other
Canadian Credit Parties.
The Borrowers and the Guarantors shall waive any
right to commence or prosecute any defense,
action, objection or counterclaim with respect to
the claims, liens or security interests of the
DIP Lenders and/or the DIP Agent.
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564
Budget: The Borrowers shall provide to the DIP Agent and
each DIP Lender a copy of a budget (the "Budget"),
in form and substance satisfactory to the DIP Agent
and the Required DIP Lenders (as defined
below), reflecting the projected cash requirements
of the ▇▇▇▇▇▇ Entities (including, without
limitation, utilization of the Pre-Petition Lenders'
cash collateral) from the Closing Date through
the Maturity Date, calculated on a monthly basis.
The DIP Lenders shall not be obligated at any
time to advance funds in excess of the then
cumulative monthly projected cash borrowings indicated
in the Budget, plus $10,000,000.
Mandatory Repayments: Except (i) to the extent, if any, otherwise provided
in the DIP Credit Documentation (as defined
below) and (ii) (in the absence of an event of
default under the DIP Credit Documentation) to the
extent that Asset Sale Proceeds (as defined in
Proceeds Agreement dated April 5, 1999 (the
"Proceeds Agreement")) exceed $93,000,000 (after
post-closing adjustments of no more than
$4,000,000 with respect to the Aluminum Proceeds
(as defined in the Proceeds Agreement)), the Loans
will be repaid upon a sale of any assets of the
Borrowers or any of their subsidiaries, in an
amount equal to the cash proceeds (net of reasonable
costs, payment of senior obligations secured
by such assets, and, unless and until the Bank
Account Service Providers (as defined below) release
their security interests in such proceeds, the
amount of such cash proceeds constituting proceeds
of Canadian Accounts Receivable (as defined below))
received by the Borrowers or such subsidiary
with respect to such asset sale. In addition, if
the amount of the Loans and/or Letters of Credit
outstanding at any time is higher than the amount
permitted under the Borrowing Base, the Borrowers
will be required to make mandatory repayments,
and/or to cash-collateralize Letters of Credit, in
an amount equal to such excess.
Optional Commitment Reductions;
Voluntary Prepayments: At the Borrowers' option, the unutilized portion
of the Total Commitment may be reduced or
terminated at any time without penalty. Voluntary
prepayments may be made at any time, in whole or
in part (subject to specified minimum principal
amounts) without premium or penalty (limited to the
last day of the applicable interest period for
Eurodollar Loans, as defined below).
9
565
Termination of Commitment:The commitment hereunder shall terminate on June 30,
1999 unless a definitive credit agreement in
form and substance satisfactory to the DIP Agent
and related documentation (the "DIP Credit
Documentation") have been entered into and the
conditions to initial Loans and Letters of Credit
set forth therein have been satisfied on or prior
to such date (the date on which the DIP Credit
Documentation is executed and such conditions are
satisfied, the "Closing Date").
Super - Priority: All the obligations of the Borrowers and the
Guarantors incorporated in the United States under the
DIP Credit Documentation (the "DIP Obligations")
shall constitute an allowed administrative expense
claim in the US Cases pursuant to Section 364(c)(1)
of the Bankruptcy Code having priority over all
administrative expenses of the kind specified in
Sections 503(b) and 507(b) of the Bankruptcy Code,
subject only to (a) any allowed super-priority
administrative claim granted by the Bankruptcy Court
to the LC Issuers, the LC Lenders, issuers of
letters of credit under the Permitted LC Facility (as
defined below) and the Bank Account Service
Providers (as defined below), and (b) a $3,000,000
carve-out (the "Carve-Out") for the payment of (i)
allowed professional fees and disbursements
incurred by the professionals retained, pursuant
to Sections 327 or 1103(a) of the Bankruptcy Code
(or, after such time as the Canadian Approvals
have been obtained, authorized pursuant to any
equivalent orders in the Canadian Cases), by the
Borrowers and the Guarantors and any statutory
committee appointed in the Cases and (ii) 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 (or, after such time
as the Canadian Approvals have been obtained,
authorized pursuant to any equivalent orders in the
Canadian Cases); provided, however, the Carve-Out
shall not include professional fees and
disbursements incurred in connection with asserting
any claims or causes of action against the
Pre-Petition Lenders, the Pre-Petition Agents,
the security agent (the "Security Agent") under the
Security Agency Agreement dated as of March 16,
1998 among the Borrowers and CIBC as administrative
agent, the DIP Lenders, the DIP Agent, the DIP
Collateral Agents, the DIP Co-Arrangers, or any DIP
Lenders or Pre-Petition Lenders providing bank
10
566
account services for any of the Credit Parties in
their capacity as such bank account service
providers (the "Bank Account Service Providers")
and/or challenging or raising any defense,
objection or counterclaim to any of the obligations
of the Borrowers or the Guarantors under the
Pre-Petition Credit Agreement or the DIP Credit
Agreement or any claim, lien or security interest
of the Pre-Petition Agents, the Security Agent,
the Pre-Petition Lenders, the DIP Agent, the DIP
Collateral Agents, the DIP Co-Arrangers, the DIP
Lenders and/or the Bank Account Service Providers.
Security: Subject only to the Carve-Out, cash collateral
held under Section 5.06 of the Existing Credit
Agreement for the benefit of the LC Lenders under
the Existing Credit Agreement, and to liens on
Canadian accounts receivable (the "Canadian Accounts
Receivable") and the proceeds thereof (such
liens, collectively, the "Liens on Canadian Accounts
Receivable") and specified cash collateral
addressed in documentation entered into in con-
nection with the establishment of operating accounts
of certain of the Canadian Credit Parties at CIBC
and the maintenance of operating accounts of
certain of the US Credit Parties at Comerica Bank
and the establishment of the Permitted LC
Facility (the "Permitted LC Facility") under
Amending Agreement No. 3 to the Existing Credit
Agreement (which liens shall be senior to the
Carve-Out), and liens of the bonding companies, as
approved by the Required Lenders, all the DIP
obligations shall be secured by (i) an enforceable
first priority priming lien (the "Priming Lien")
pursuant to Section 364(d)(1) of the Bankruptcy
Code on all of the existing and after-acquired
assets of the Borrowers and the Guarantors located
in the US constituting collateral (the "US Pre-
Petition Collateral") securing obligations to the
Pre-Petition Agents and the Pre-Petition Lenders
under the Existing Credit Agreement, (ii) an
enforceable first priority lien pursuant to
Section 364(c)(2) of the Bankruptcy Code on all
unencumbered assets of the Borrowers and the
Guarantors located in the US, (iii) an enforceable
junior lien pursuant to Section 364(c)(3) of the
Bankruptcy Code on all previously encumbered
assets (excluding the US Pre-Petition Collateral),
existing and after-acquired, of the Borrowers
and the Guarantors located in the US, (iv) an
enforceable first priority security interest and
charge on all of the
11
567
existing and after-acquired assets of the Borrowers
and the Guarantors located in Canada (the
"Canadian Pre-Petition Collateral") securing
obligations to the Pre-Petition Agents and the
Pre-Petition Lenders under the Existing Credit
Agreement, ranking in priority to the security of
the Pre-Petition Agents and the Pre-Petition
Lenders in the Canadian Pre-Petition Collateral, (v)
an enforceable first priority security interest and
charge on all unencumbered assets of the
Borrowers and Guarantors located in Canada,
and (vi) an enforceable junior security interest and
charge on all previously encumbered assets (excluding
the Canadian Pre-Petition Collateral),
existing and after-acquired, of the Borrowers and
the Guarantors located in Canada (all foregoing
liens described in clauses (i) through (vi), the
"Facility Liens"), whether in existence at the time
of the filing of the Cases or acquired thereafter.
Interest Rates: All Loans under the DIP Facility shall be maintained
initially as Base Rate Loans, which shall bear
interest at the Applicable Margin in excess of the
Base Rate in effect from time to time; provided
that, commencing thirty days after the Closing Date,
at the Borrowers' option, Loans may be
maintained from time to time as (i) Base Rate Loans
or (ii) Eurodollar Loans, which shall bear
interest at the Applicable Margin in excess of the
Eurodollar Rate (adjusted for maximum reserves)
as determined by the DIP Agent for the respective
interest period.
"Applicable Margin" shall be 2.5% in the case of
Base Rate Loans and 3.5% in the case of
Eurodollar Loans.
"Base Rate" shall mean the higher of (x) 1/2 of
1% in excess of the Federal Reserve reported
certificate of deposit rate and (y) the rate that
the DIP Agent announces from time to time as its
prime lending rate, as in effect from time to
time.
An interest period of one month shall be
available in the case of Eurodollar Loans.
Interest in respect of Base Rate Loans shall be
payable monthly in arrears on the last business
day of each month. Interest in respect of
Eurodollar Loans shall be payable in arrears at
the end of the applicable interest period or, if
12
568
shorter, at the end of each monthly interval of
the first day thereof. Interest will also be
payable at the time of repayment of any Loans and
at maturity of such Loans. All interest and fee
calculations shall be based on a 360-day year and
actual days elapsed.
Upon the occurrence and continuance of any
default in the payment of principal or interest,
all Loans shall bear interest at a rate per annum
equal to the rate which is 2% in excess of the
rate then borne by such Loans, to the extent
permitted by law. Such interest shall be payable
on demand.
The DIP Credit Documentation shall include
protective provisions for such matters as capital
adequacy, increased costs, funding losses,
illegality and withholding taxes.
Fees:
Commitment Fee: 1/2 of 1% per annum on the
average unused portion of the DIP Facility
for the period commencing on the Closing
Date and ending on the date the Total
Commitment is terminated, to be owed by the
Borrowers on a joint and several basis.
Usage for such purpose shall include Letter
of Credit usage. Commitment Fee will be
payable monthly in arrears and on the date
the Total Commitment is terminated.
L/C Fees: 3.5% per annum on aggregate outstanding
stated amounts thereof, plus .25% per annum
for fronting fees, plus customary issuance
and drawing charges, in each case payable
monthly.
Covenants: Covenants applicable to the Borrowers, the Guarantors
and their subsidiaries shall include those customary
for debtor-in-possession financings (having reasonable,
customary and appropriate exceptions), including but
not limited to the following:
Affirmative
Covenants: The DIP Credit Documentation shall contain affirmative
covenants required by the DIP Agent, including, without
13
569
limitation: (i) delivery of financial statements and
reports, the Budget, Borrowing Base Certificates,
bi-weekly reports containing comparisons of actual to
projected cash flows, descriptions of proposed asset
divestitures and other significant events and rolling
fourteen (14) week cash flow forecasts, copies of
accountants' letters upon receipt thereof by the
Borrowers or the Guarantors, projections, officers
certificates, monthly reporting packages and other
information requested by the DIP Agent, (ii) payment of
all postpetition taxes and other obligations, (iii)
continuation of business and maintenance of existence
and material rights and privileges, (iv) compliance
with laws and material contractual obligations, (v)
maintenance of property and insurance, (vi) maintenance
of books and records, (vii) right of the DIP Agent and
the DIP Lenders to inspect property and books and
records, (viii) notice of defaults, litigation and
other material events, (ix) compliance with
environmental laws and (x) delivery of the consultants
reports necessary to determine the value of the
collateral of the Credit Parties, including, without
limitation, the receivables of the Credit Parties that
will be taken into account in the calculation of the
Borrowing Base as described under "Availability" above.
Negative Covenants: The DIP Credit Documentation shall contain negative
covenants required by the DIP Agent, with exceptions to
be permitted as necessary to comply with the provisions
of the Pre-Arranged Plan, including, without
limitation, limitations on (i) indebtedness, (ii)
liens, (iii) guarantee obligations, (iv) mergers,
consolidations, liquidations and dissolutions, (v)
sales of assets, (vi) leases, (vii) capital
expenditures, (viii) investments, loans and advances
(other than, in the case of the US Borrower (a)
investments in and advances to direct and indirect
subsidiaries of the Canadian Borrower that are not
Credit Parties, subject to an aggregate limitation of
$10,000,000, and (b) investments and advances to the
Canadian Credit Parties after the Canadian Approvals
(as defined below) have been obtained), (ix) payment of
prepetition claims or debt, or amendments thereto, (x)
the existence of any claims (other than any granted to
the LC Issuers, the LC Lenders, issuers of letters of
credit under the Permitted LC Facility, the Bank
Account Service Providers, the DIP Lenders and the
Pre-Petition Lenders) entitled to a superpriority under
Section 364(c)(1) of the Bankruptcy Code or in the
Canadian Cases, (xi)
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570
change in business, (xii) maintenance of financial
covenants satisfactory to the DIP Agent, (xiii)
dividends and other distributions on equity, (xiv)
transactions with affiliates, (xv) the filing of a plan
of reorganization, disclosure statement or plan of
arrangement, as applicable, in the Cases, other than
the Pre-Arranged Plan and the disclosure statement
approved by the Required DIP Lenders with respect
thereto, without the consent of the Required DIP
Lenders, (xvi) the amendment, modification or
withdrawal of the Pre-Arranged Plan, or the disclosure
statement approved by the Required DIP Lenders with
respect thereto, without the consent of the Required
DIP Lenders and (xvii) failure to comply with any
material applicable provisions of the Pre-Arranged
Plan.
Events of
Default: The DIP Credit Documentation shall contain Events of
Default required by the DIP Agent including, without
limitation: (i) the entry of an order dismissing any of
the Cases, converting any of the US Cases to a Chapter
7 case or lifting the stay in the Canadian Cases to
permit the enforcement of any security against any
Credit Party or the appointment of a receiver, or the
making of a receiving order against any Credit Party,
(ii) the entry of an order appointing a Chapter 11
trustee in any of the US Cases, (iii) the entry of an
order granting any other claim superpriority status or
a lien equal or superior to that granted to the DIP
Agent and the DIP Lenders, other than orders entered in
respect of (x) reclamation claims pursuant to Section
546(c) of the Bankruptcy Code or (y) the Bank Account
Service Providers, (iv) the entry of an order staying,
reversing, vacating or otherwise modifying the DIP
Credit Documentation, the Interim Order or the Final
Order (as defined below), or the entry of an order by
the Canadian Court having the equivalent effect,
without the prior written consent of the DIP Agent and
the Required DIP Lenders, (v) the entry of an order in
any of the US Cases appointing an examiner having
enlarged powers beyond those set forth under Section
1106(a)(3) and (4) of the Bankruptcy Code, or the entry
of an order by the Canadian Court having a similar
effect, (vi) failure of any Credit Party to pay (A)
interest or fees when due and such default shall
continue for two business days or (B) principal when
due, (vii) failure of any Credit Party to comply with
any negative covenants, (viii) failure of any Credit
Party to perform or comply with
15
571
any other term or covenant and such default shall
continue unremedied for a period of 20 days, (ix) any
representation or warranty by any Credit Party shall be
incorrect or misleading in any material respect when
made, (x) there shall occur a material disruption in
the senior management of either Borrower or a Change of
Control (to be defined) shall occur, (xi) the entry of
any order granting relief from the automatic stay in
the US Cases, or lifting the stay in the Canadian
Cases, so as to allow a third party to proceed against
any material asset of any Credit Party, (xii) the
filing of any pleading by any Credit Party, seeking any
of the matters set forth in clauses (i) through (v) or
(xi), (xiii) the entry of the Final Order shall not
have occurred within 30 days after the Closing Date and
(xiv) failure to obtain the confirmation of the
Pre-Arranged Plan and to consummate such plan by
November 30, 1999.
Remedies: Upon the occurrence of an Event of Default, the
Required DIP Lenders may terminate the Total Commitment
(the date of any such termination, the "Termination
Date"), declare the obligations in respect of the DIP
Credit Documentation to be immediately due and payable
and exercise all rights and remedies under the DIP
Credit Documentation and the Interim Order or Final
Order (and the equivalent Canadian orders), as
applicable. The DIP Agent and the DIP Lenders shall
have customary remedies under the DIP Credit
Documentation including, but not limited to, the right
to realize on all or part of the Facility Liens without
the necessity of obtaining further relief or order from
the Bankruptcy Court or the Canadian Court.
Notwithstanding the foregoing, other than with respect
to the termination of the Commitments, the acceleration
of the Loans, and the imposition of an administrative
freeze or administrative hold with respect to cash
collateral, the DIP Agent, the DIP Collateral Agents
and the DIP Lenders may only exercise other remedies
after providing three business days' prior written
notice to the Borrowers, the Guarantors, the United
States Trustee and any statutory committee or monitor
appointed in the Cases.
Interim
Advances: Upon entry of the Interim Order (described below) and
the occurrence of the Closing Date, the Total
Commitment
16
572
shall be limited to an interim amount of $30,000,000
pending entry of the Final Order (described below). If
the Final Order is not entered within 30 days after the
Closing Date, all interim advances made to the
Borrowers shall be due in full and immediately payable.
Canadian Approvals: The following orders of the Canadian Court (and
together with the consents from the Pre-Petition
Lenders described in paragraph (B) below, the "Canadian
Approvals") shall have been entered, shall be in full
force and effect and shall not have expired or been
stayed, reversed, vacated or rescinded, and all such
orders shall be satisfactory to the DIP Agent and the
DIP Lenders in order for (y) the assets of the Canadian
Credit Parties to be taken into account for the
calculation of the Borrowing Base as described under
"Availability" above and (z) the Canadian Credit
Parties to become Guarantors as described under
"Guarantors" above:
(A) The DIP Facility, including the
security interests and charges over
assets in Canada described under
"Security" above, with the priority
described therein, shall have been
approved by an order of the Canadian
Court in the Canadian Cases, in form
and substance satisfactory to the DIP
Agent and the DIP Lenders, which shall
also contain provisions:
1. authorizing the execution and
delivery by the Canadian Credit
Parties of all documents, and
the granting of all security,
required in connection with the
DIP Facility, and providing
that such documents or security
shall not be challengeable by
any present or future creditors
of the Canadian Credit Parties
(provided, however, that such
security shall be junior to the
security granted to the Bank
Account Service Providers),
2. providing that such documents
and security shall be effective
notwithstanding that the
execution of such documents and
the granting of
17
573
such security may result in a
breach of any contract or
restriction to which any of
the Canadian Credit Parties is
bound,
3. prohibiting the granting of
any additional security on the
assets of any of the Canadian
Credit Parties,
4. providing that the obligations
of the Canadian Credit Parties
to the DIP Agent, the DIP
Lenders and the Bank Account
Service Providers shall not be
subject to, or compromised or
affected in any way by, any
plan of compromise or
arrangement in the Canadian
Cases, and
5. granting relief from the stay
in the Canadian Cases to permit
enforcement by (a) the DIP
Agent, the DIP Collateral
Agents and the DIP Lenders of
the rights and remedies under
the DIP Facility and their
security and (b) the Bank
Account Service Providers of
their rights and remedies, upon
the occurrence of an event of
default under the DIP Facility;
(B) The Pre-Petition Lenders shall have
agreed, in a manner acceptable to the
DIP Agent and the DIP Lenders, to
postpone their security in the
Pre-Petition Collateral to the
Facility Liens, and such agreement and
postponement shall be in form and
substance satisfactory to the DIP
Agent and the DIP Lenders;
(C) All orders of the Canadian Court in
form and substance satisfactory to the
DIP Agent and the DIP Lenders,
authorizing the use by the Borrowers
and the Guarantors of (a) the
Pre-Petition Lenders' cash collateral
(other than the cash collateral of the
LC Issuers, the LC Lenders, issuers of
letters of credit under
18
574
the Permitted LC Facility and the Bank Account
Service Providers) and (b) the Asset Sale
Proceeds deposited in the Proceeds Account (as
defined in the Proceeds Agreement) prior to
the commencement of the Cases;
(D) All other "first day" orders in the Canadian
Cases necessary or appropriate in the judgment
of the DIP Agent and the DIP Lenders;
(E) The orders of the Canadian Court referred to
in clauses (A), (B), (C) and (D) above shall
not have expired or been stayed, reversed,
vacated or otherwise modified without the
prior written consent of the DIP Agent and the
Required DIP Lenders; and
(F) The DIP Agent and the DIP Lenders shall be
satisfied that all orders described above
shall be binding on all existing material
creditors (or other persons described therein)
of the Borrowers and the Guarantors, and shall
be effective to provide the stay of actions,
priorities, liens and other protections for
the Borrowers, the Guarantors, the DIP Agent,
the DIP Collateral Agents and the DIP Lenders
purported to be granted thereby.
Conditions Precedent
to Initial Loans and
L/Cs: Customary for debtor-in-possession financings including,
without limitation, accuracy of representations and
warranties, absence of defaults, evidence of authority,
legal opinions, compliance with laws, and receipt of
necessary consents and approvals, and shall also
include, without limitation:
(1) (i) The Borrowers shall have engaged in
negotiations regarding the Pre-Arranged Plan with
the holders (or representatives of such holders) of
claims and interests against the Borrowers and/or
their subsidiaries entitled to vote on the
Pre-Arranged Plan, (ii) the Borrowers shall
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575
have used their best efforts to obtain written
agreements, to the extent legally permissible, from
such holders of claims in terms of amount of claims
and number of holders as required for the approval
of the Pre-Arranged Plan by the relevant classes of
claims under the Bankruptcy Code and the CCAA,
committing such holders (a) to vote in favor of the
Pre-Arranged Plan and (b) not to sell or assign
their claims except to an entity that agrees in
writing to be bound by the terms of such
agreements, (iii) the Pre-Arranged Plan, and a
disclosure statement approved by the Required DIP
Lenders with respect thereto, shall have been
appropriately filed by the Borrowers in the Cases,
and the Borrowers shall have requested hearings in
respect of approval of such disclosure statement
and confirmation of the Pre-Arranged Plan, and
(iv) the Pre-Arranged Plan shall be feasible and
there shall exist no known impediment to
confirmation of the Pre-Arranged Plan and
consummation thereof by November 30, 1999;
(2) Execution of the DIP Credit Documentation in form
and substance satisfactory to the DIP Agent and the
DIP Lenders;
(3) Since the date of this letter there shall not have
occurred, and the DIP Agent shall not have
discovered the existence of, (i) facts (to the
extent not previously known) which constitute any
material adverse change in the business,
properties, assets, condition (financial or
otherwise) or prospects of the Borrowers or the
Guarantors, their affiliates and their
subsidiaries, as a whole, from that set forth in
their financial statements dated as of September
30, 1998, other than as set forth in their
financial statements dated as of March 31, 1999, or
(ii) litigation, which after giving effect to the
commencement of the Cases, is reasonably likely to
be material and adverse to the Borrowers, the
Guarantors, their affiliates and their
subsidiaries, as a whole;
(4) The following orders of the US Court shall have
been entered, shall be in full force and effect and
shall not have been stayed, reversed, vacated or
rescinded, and all such orders shall be
satisfactory to the DIP Agent and the DIP Lenders:
(A) All orders authorizing the DIP Facility (a
portion or all of which may be authorized by
entry of an initial
20
576
order to be followed by a final order) and the
Facility Liens. An initial order may be entered on
an emergency and/or interim basis in the US Cases
(the "Interim Order"), after notice given and a
hearing conducted in accordance with Bankruptcy
Rule 4001 (c) no later than 15 days after the date
of the commencement of the US Cases, authorizing
and approving the transactions contemplated in the
DIP Credit Documentation and finding that the DIP
Lenders are extending credit to the Borrowers and
their affiliates in good faith within the meaning
of Bankruptcy Code Section 364(e), which Interim
Order shall (i) approve the payment by the
Borrowers of the fees set forth in the Fee Letter
and the professional fees of the DIP Agent and DIP
Lenders referred to herein, (ii) otherwise be in
form and substance satisfactory to the DIP Agent
and the DIP Lenders and (iii) prior to the entry of
the Final Order, be in full force and effect and
not have expired or been stayed, reversed, vacated
or otherwise modified without the prior written
consent of the DIP Agent and the Required DIP
Lenders;
(B) All orders of the US Court (which may be combined
with the Interim Order), in form and substance
satisfactory to the DIP Agent and the DIP Lenders,
pursuant to Section 363(c)(2)(B) of the Bankruptcy
Code authorizing the use by the Borrowers and the
Guarantors incorporated in the United States of (a)
the Pre-Petition Lenders' cash collateral (other
than the cash collateral of the LC Issuers, the LC
Lenders, issuers of letters of credit under the
Permitted LC Facility and the Bank Account Service
Providers) and (b) the Asset Sale Proceeds
deposited in the Proceeds Account prior to the
commencement of the Cases, which orders shall not
have been stayed, reversed, vacated or otherwise
modified without the prior written consent of the
DIP Agent and the Required DIP Lenders; and
(C) All other "first day" orders in the US Cases
necessary or appropriate in the judgment of the DIP
Agent and the DIP Lenders, including without
limitation, as to the continued availability of bid
and performance bonding requirements;
21
577
(5) The DIP Agent shall be satisfied that all orders
described in paragraph (4) above shall be binding
on all existing material creditors (or other
persons described therein) of the Borrowers and the
Guarantors, and shall be effective to provide the
stay of actions, priorities, liens and other
protections for the Borrowers, the Guarantors, the
DIP Agent, the DIP Collateral Agents and the DIP
Lenders purported to be granted thereby;
(6) Cash management systems, including cash
concentration accounts subject to the Facility
Liens and collection requirements satisfactory to
the DIP Agent and the Bank Account Service
Providers, for the US Credit Parties shall have
been established to the reasonable satisfaction of
the DIP Agent and the Bank Account Service
Providers;
(7) Absence of any material adverse change or condition
with respect to the market for debtor-in-possession
financings, the bank syndication market or the
capital markets generally;
(8) Payment of all costs, fees and expenses (including,
without limitation, attorneys and other
professional fees) owing to the DIP Agent and the
DIP Lenders as referenced herein and in the Fee
Letter;
(9) Receipt by the DIP Agent and the DIP Lenders of the
Budget covering the period from the Closing Date
through the Maturity Date, and other cash flow and
financial information that the DIP Agent may
request, all in form and substance satisfactory to
the DIP Agent and, with respect to the Budget, the
Required DIP Lenders;
(10) Satisfactory completion by the DIP Agent and its
professionals of all due diligence deemed
necessary;
(11) Receipt by the DIP Agent of legal opinions of
counsel to the Borrowers and the Guarantors, in
form and substance satisfactory to the DIP Agent;
(12) Resolutions of the Boards of Directors of each of
the Borrowers and the Guarantors in form and
substance satisfactory to the DIP Agent,
authorizing and approving the commencement of the
Cases and the borrowings and other transactions
contemplated by the DIP Credit Agreement; and
22
578
(13) Receipt by the DIP Agent of satisfactory
consultants' reports and projections necessary to
determine advance rates and eligibility
requirements to substantiate and monitor the
Borrowing Base with respect to the Industrial
Services Group, the US Ferrous division, the US
Copper division and any other division of the
Borrowers, the accounts receivable of which are to
be included in the Borrowing Base on the Closing
Date.
Conditions
Precedent to
Each Loan and L/C: The DIP Credit Documentation shall contain
conditions precedent to each extension of credit
(including the initial extension of credit)
required by the DIP Agent, including, without
limitation:
(a) No Default or Event of Default exists.
(b) All representations and warranties shall be true
and correct in all material respects as of the date
of each extension of credit, including that there
shall not have occurred any material adverse change
since the Closing Date in the business, properties,
assets, condition (financial or otherwise) or
prospects of the Borrowers, the Guarantors and
their subsidiaries and affiliates taken as a whole.
(c) The Interim Order shall be in full force and effect
or, if the date of the requested extension of
credit is more than 30 days after the Closing Date,
or if the amount of such requested extension of
credit, together with the amount of all extensions
of credit under the DIP Credit Documentation then
outstanding, shall exceed the maximum amount
authorized pursuant to the Interim Order, an order
of the Bankruptcy Court granting final approval of
the DIP Loan Agreement (the "Final Order") shall
have been entered in form and substance
satisfactory to the DIP Agent, and shall be in full
force and effect and shall not have been stayed,
reversed, vacated or otherwise modified without the
prior written consent of the DIP Agent and the
Required DIP Lenders.
(d) Receipt by the DIP Agent of a certificate (a
"Borrowing Certificate") executed by an executive
officer of one of the Borrowers, to the effect that
(i) the proposed extension of credit and its
intended use are consistent with the terms of
23
579
the DIP Credit Documentation and the Budget and
is necessary, after utilization and application
of available cash, in order to satisfy the
obligations of the Borrowers and the Guarantors
in the ordinary course of business or as
otherwise permitted under the DIP Credit
Agreement, (ii) the Borrowers and the Guarantors
have observed or performed all of their covenants
and other agreements and have satisfied in all
material respects every condition contained in
the DIP Credit Documentation and the Interim
Order or the Final Order (as applicable) to be
observed, performed or satisfied by the Borrowers
or such Guarantor and (iii) such officer has no
knowledge of any Default or Event of Default.
(e) Payment of all fees, costs, expenses and other
amounts then due and payable.
(f) Prior to the first advance, if any, the proceeds of
which shall be used by any US Credit Party to make
a loan, dividend or any other advance to any
Canadian Credit Party (including any loan, dividend
or other advance to the Canadian Borrower in an
amount in excess of the corporate overhead
requirements of the Canadian Borrower), the
Canadian Approvals shall have been obtained, and
all appeal periods relating thereto shall have
expired.
(g) All funds remaining in the Proceeds Account on the
date that the Cases are commenced (other than funds
subject to the liens of the Bank Account Service
Providers that have not been released pursuant to
the Proceeds Agreement), shall have been released.
Voting and
Amendments: "Required DIP Lenders" shall mean, as of any date
of determination, the DIP Lenders who in the
aggregate hold at least a majority in amount of
the Total Commitment (which, if terminated, shall
be deemed outstanding in the amount outstanding
immediately prior to such termination), subject to
customary exceptions.
Assignments/
Participations: Assignments and participations by the DIP Lenders
to financial institutions and funds will be
permitted subject to such limitations (including
minimum amounts and maximum concentration limits)
to be imposed by the DIP Agent.
24
580
Governing Law: New York, except as governed by the Bankruptcy
Code or the CCAA.
25
581
EXHIBIT O
CANADIAN SECURITY AGREEMENT
---------------------------
FROM ▇▇▇▇▇▇ SERVICES CORP. AND ITS SUBSIDIARIES
-----------------------------------------------
THIS SECURITY AGREEMENT is made as of June 28, 1999 by each of the
Chargors in favour of CANADIAN IMPERIAL BANK OF COMMERCE, as Canadian DIP
Collateral Agent.
WHEREAS:
A. In order to induce the Lenders to make or to continue to make certain
financial accommodation to ▇▇▇▇▇▇, the Chargors are willing to execute and
deliver this Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged by each of the Chargors, each of the
Chargors severally (and not jointly or jointly and severally) covenants and
agrees with the Canadian DIP Collateral Agent as follows:
1. DEFINITIONS. Capitalized terms not otherwise defined in this Agreement
shall have the meanings given to them in the Credit Agreement, and the
following terms shall have the following meanings:
"ACCESSIONS", "ACCOUNT", "CHATTEL PAPER", "CONSUMER GOODS", "DOCUMENT OF
TITLE", "EQUIPMENT", "GOODS", "INSTRUMENT", "INTANGIBLE", "INVENTORY"
"PROCEEDS" and "SECURITY" shall have the meanings given to them in the PPSA.
"BOOKS AND RECORDS" shall mean, relative to any Chargor, all books,
records, files, papers, disks, documents and other repositories of data
recording in any form or medium, evidencing or relating to the Collateral of
such Chargor and in which such Chargor (or any Person on such Chargor's behalf)
at any time has any right, title or interest.
"CANADIAN DIP COLLATERAL AGENT" shall mean Canadian Imperial Bank of
Commerce in its capacity as Canadian DIP Collateral Agent on behalf of and for
the benefit of the Credit Providers in accordance with the Credit Agreement and
shall include its successors and assigns in such capacity.
"CHARGORS" shall mean the signatories to this Agreement other than the
Canadian DIP Collateral Agent together with each other Person which from time
to time becomes a Chargor under this Agreement by executing and delivering to
the Canadian DIP Collateral Agent a Supplement to this Agreement as provided
for in Section 22 of this Agreement, and "CHARGOR" shall mean any of the
Chargors.
"COLLATERAL" shall mean, relative to any Chargor, all of the present and
future undertaking, Personal Property (including any Personal Property that may
be described in any schedule to this Agreement or any schedules, documents or
listings that such Chargor may from
582
- 2 -
time to time sign and provide to the Canadian DIP Collateral Agent in
connection with this Agreement) and real property (including any real property
that may be described in any schedule to this Agreement or in any schedules,
documents or listings that such Chargor may from time to time sign and provide
to the Canadian DIP Collateral Agent in connection with this Agreement and
including all fixtures, improvements, buildings and other structures placed,
installed or erected from time to time on any such real property) of such
Chargor (including all such property now or in the future owned, leased,
licensed, possessed or acquired by such Chargor, or in which such Chargor now
or in the future has any interest or to which such Chargor is now or may in the
future become entitled) and all Accessions to, and all Proceeds of, all such
undertaking and property, wherever located.
"CONTRACTS" shall mean, relative to any Chargor, all contracts, licences
and agreements to which such Chargor is now or in the future a party or
pursuant to which such Chargor has acquired or in the future acquires rights,
as such contracts, licenses and agreements may from time to time be
supplemented, amended, restated or consolidated and includes:
(a) all rights, entitlements, privileges, benefits, powers,
licences and advantages of such Chargor to be derived from any
contract, licence or agreement and all covenants, obligations and
agreements of the respective parties to any contract, licence or
agreement under, in connection with or in respect of such contract,
licence or agreement and otherwise to exercise and enforce the
rights, entitlements, privileges, benefits, powers, licences and
advantages of such Chargor under, in connection with or in respect
of any contract, licence or agreement;
(b) all warranties and indemnities (contractual, statutory or
otherwise) of the respective parties to any contract, licence or
agreement under, in connection with or in respect of such contract,
licence or agreement and all rights, entitlements, privileges,
benefits, powers, licences and advantages of such Chargor to be
derived from all such warranties and indemnities and all covenants,
obligations and agreements of such parties with respect to all such
warranties and indemnities and otherwise to exercise and enforce the
rights, entitlements, privileges, benefits, powers, licences and
advantages of such Chargor in respect of all such warranties and
indemnities;
(c) all revenues and other Money now due and payable, or which
may in the future become due and payable, to such Chargor under or
in connection with or in respect of any contract, licence or
agreement or which are now, or may in the future become, receivable
by such Chargor pursuant to or in connection with or in respect of
any contract, licence or agreement; and
(d) all rights of such Chargor to perform and exercise all of its
rights, entitlements, privileges, benefits, powers, licences and
advantages under, in connection with or in respect of, and all
remedies under, in connection with or in respect of, any
583
- 3 -
contract, licence or agreement and all rights of such Chargor to
damages arising out of, or for, breach or default in respect of,
any contract, licence or agreement.
"CREDIT AGREEMENT" shall mean the June 28, 1999 credit agreement between
▇▇▇▇▇▇ and ▇▇▇▇▇▇ Services (Delaware), Inc., as debtors in possession and
borrowers, the Subsidiaries of such borrowers named in such agreement as
parties to such agreement, Bankers Trust Company, as DIP Agent, Bankers Trust
Company and Canadian Imperial Bank of Commerce, as DIP Co-Arrangers, and the
Persons from time to time parties to such agreement as lenders, as such credit
agreement may from time to time be supplemented, amended, restated or
consolidated.
"CREDIT PROVIDERS" shall mean the Canadian DIP Collateral Agent, the DIP
Agent, the DIP Co-Arrangers and the Lenders and "CREDIT PROVIDER" shall mean
any one of the Credit Providers.
"INTELLECTUAL PROPERTY RIGHTS" shall mean, relative to any Chargor, all
present and future: trade secrets and other proprietary information;
trademarks, service marks, business names, designs, logos, indicia, and/or
other source and/or business identifiers of or used by such Chargor and the
goodwill of the business relating thereto and all registrations or applications
for registrations now or in the future issued thereon throughout the world;
copyrights (including, without limitation, copyrights for computer programs) of
such Chargor or in which such Chargor has any right, title or interest and
copyright registrations or applications for registrations now or in the future
issued throughout the world and all tangible property embodying such
copyrights; unpatented inventions (whether or not patentable) of such Chargor
or in which such Chargor has any right, title or interest; patent applications
and patents of such Chargor or in which such Chargor has any right, title or
interest; industrial designs, industrial design applications and registered
industrial designs of such Chargor or in which such Chargor has any right,
title or interest; license agreements related to any of the foregoing and
income therefrom; books, records, writings, computer tapes or disks, flow
diagrams, specification sheets, source codes, object codes and other physical
manifestations, embodiments or incorporations of any of the foregoing; the
right to ▇▇▇ for all past, present and future infringements of any of the
foregoing; and all common law and other rights throughout the world in and to
all of the foregoing; for greater certainty, each Chargor agrees that such
Chargor's Intellectual Property Rights include those listed in Schedule A as
being Intellectual Property rights of such Chargor.
"LIABILITIES" shall mean, relative to any Chargor, all present and future
indebtedness, liabilities and obligations of any and every kind, nature or
description whatsoever and however incurred (whether direct or indirect, joint
or several, absolute or contingent, matured or unmatured and whether as
principal debtor, guarantor, surety or otherwise and, for greater certainty,
including interest that, but for any filing made relative to such Chargor under
the provisions of any applicable bankruptcy or insolvency statute, would accrue
on any such indebtedness, liabilities and obligations) of such Chargor to each
of the Credit Providers under, in connection with or with respect to each of
the Secured Credit Documents, and any unpaid balance thereof.
584
- 4 -
"MONEY" shall mean a medium of exchange authorized or adopted by the
Parliament of Canada as part of the currency of Canada or by any other
government as part of its currency.
"PERMITS" shall mean, relative to any Chargor, all permits, by-laws,
leases, licenses, waivers, exemptions, consents, certificates, authorizations,
approvals, rights, agreements, orders, franchises, rights-of-way, easements and
entitlements which are required from any Governmental Authority or any other
Person (including without limitation environmental permits and approvals) in
respect of, or which are in any way material to, the ownership, maintenance,
operation, use or enjoyment of all or any part of the Collateral of such
Chargor or the performance, exercise, enjoyment or enforceability of any
Contract of such Chargor or any of the rights, entitlements, privileges,
benefits, advantages, liabilities or obligations under or with respect to any
Contract of such Chargor.
"PERSONAL PROPERTY" shall mean, relative to any Chargor, all present and
future personal property of such Chargor including all present and future Books
and Records, Chattel Paper, Documents of Title, Equipment, Goods, Instruments,
Intangibles (including Intellectual Property Rights, Contracts and Permits),
Inventory, Money, Receivables and Securities of such Chargor, and includes all
Accessions to such property.
"▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇ Services Corp., a corporation existing under
the laws of the Province of Ontario, together with its successors by
amalgamation, merger or otherwise.
"PPSA" shall mean the Personal Property Security Act (Ontario), as such
legislation may be amended, renamed or replaced from time to time (and includes
all regulations from time to time made under such legislation).
"RECEIVABLES" shall mean, relative to any Chargor, all debts, claims and
choses in action (including without limitation Accounts and any amounts owing
under any Contract or any Chattel Paper) now or in the future due or owing to
or owned by such Chargor.
"RECEIVER" shall mean a receiver, a manager or a receiver and manager.
"SECURED CREDIT DOCUMENTS" shall mean (a) the Credit Agreement, and (b)
all other present and future DIP Credit Documents as the same may from time to
time be supplemented, amended, restated or consolidated.
"SECURITY INTERESTS" shall mean, relative to any Chargor, the Liens
created by such Chargor in favour of the Canadian DIP Collateral Agent under
this Agreement.
"SUPPLEMENT" shall have the meaning specified in Section 22 hereof.
2. CREATION OF SECURITY INTERESTS. As general and continuing security for
the due payment and performance of its Liabilities (including the payment of any
such Liabilities that would become due but for any automatic stay under the
provisions of the Bankruptcy and Insolvency Act (Canada), the United States
Bankruptcy Code or any analogous provisions of any other applicable law in
Canada, the United States of America or any other jurisdiction), each Chargor,
585
- 5 -
severally (and not jointly or jointly and severally), mortgages, charges and
assigns to the Canadian DIP Collateral Agent, and grants to the Canadian DIP
Collateral Agent a continuing security interest in, the Collateral of such
Chargor.
3. LIMITATIONS ON GRANT OF SECURITY INTERESTS. If the creation of any Security
Interest in respect of any Contract, Intellectual Property Right or Permit
forming part of the Collateral of any Chargor would result in the termination
of or a material default under such Contract, Intellectual Property Right or
Permit, then such Contract, Intellectual Property Right or Permit will not be
subject to such Security Interest but will be held in trust by such Chargor for
the benefit of the Canadian DIP Collateral Agent and, on the exercise by the
Canadian DIP Collateral Agent of any of its remedies under this Agreement at
such time as the Security Interests relative to the Collateral of such Chargor
shall be enforceable in accordance with Section 8, will, where possible, be
assigned by such Chargor as directed by the Canadian DIP Collateral Agent. In
addition, the Security Interests do not extend to the last day of the term of
any lease or agreement for lease of real property. Such last day will be held
by the applicable Chargor in trust for the Canadian DIP Collateral Agent and,
on the exercise by the Canadian DIP Collateral Agent of any of its remedies
under this Agreement at such time as the Security Interests relative to the
Collateral of any Chargor shall be enforceable in accordance with Section 8,
will be assigned by such Chargor as directed by the Canadian DIP Collateral
Agent.
4. ATTACHMENT; NO OBLIGATION TO ADVANCE. Each of the Chargors confirms that
value has been given to such Chargor by the Canadian DIP Collateral Agent and
the other Credit Providers, that such Chargor has rights in its Collateral
existing at the date of this Agreement and that such Chargor has not agreed
with the Canadian DIP Collateral Agent or any of the Credit Providers to
postpone the time for attachment of any of the Security Interests to any of the
Collateral of such Chargor. The Security Interests relative to the Collateral
of each Chargor will have effect and be deemed to be effective whether or not
all or any part of the Liabilities of such Chargor are owing or in existence
before or after or upon the date of this Agreement or the date of any
Supplement, as the case may be. The execution and delivery of this Agreement
or any Supplement by any Chargor shall not oblige any of the Credit Providers
to make any financial accommodation available to a Borrower.
5. REPRESENTATIONS AND WARRANTIES. Each of the Chargors represents and
warrants with respect to itself that:
(a) Authorization, Execution and Delivery. Upon the entry by the
US Bankruptcy Court of the US Interim Order and the entry by the
Canadian Court of the Canadian Approvals, each Chargor has duly
executed and delivered this Agreement, and this Agreement will be
the legal, valid and binding obligation of such Chargor enforceable
in accordance with its terms and the Orders.
(b) Places of Business, Name, Location of Collateral. Such
Chargor's principal place of business and chief executive office,
and the place where it keeps its Books and Records, is at the
applicable address specified in Schedule B to this Agreement, and
its full legal name, and any other name under which it conducts its
business,
586
- 6 -
is specified on the signature page of this Agreement. The location
of all other places where such Chargor presently carries on
business or keeps tangible Personal Property and the location of
all jurisdictions in which such Chargor's account debtors are
located, and the location of all real property in which such
Chargor has any right, title or interest, are set out in Schedule C
to this Agreement.
(c) No Consumer Goods. Such Chargor does not own any Consumer
Goods which are material in value or which are material to the
business, operations, property, condition or prospects (financial or
otherwise) of such Chargor.
(d) Intellectual Property Rights. All material Intellectual
Property Rights in which such Chargor has any right, title or
interest (and the nature of such right, title or interest), and all
rights of such Chargor to the use of any material Intellectual
Property Rights, are described in Schedule A to this Agreement. To
the best of such Chargor's knowledge, each such Intellectual
Property Right is valid, subsisting, unexpired, enforceable and has
not been abandoned. Except as set out in Schedule A to this
Agreement, none of such Chargor's Intellectual Property Rights has
been licensed or franchised by such Chargor to any Person.
6. COVENANTS. Each of the Chargors severally (and not jointly or jointly and
severally) covenants and agrees that:
(a) Further Documentation. Such Chargor will from time to time,
at its own expense, promptly and duly authorize, execute and deliver
such further instruments and documents, and take such further
action, as the Canadian DIP Collateral Agent may request for the
purpose of obtaining or preserving the full benefits of, and the
rights and powers granted by, this Agreement (including the filing
of any financing statements or financing change statements under any
applicable legislation with respect to the Security Interests
relative to the Collateral of such Chargor). Such Chargor
acknowledges that this Agreement has been prepared based on existing
applicable laws on the date of this Agreement and that a change in
such laws, or the laws of other jurisdictions, may require the
execution and delivery of different forms of security documentation.
Accordingly, such Chargor agrees that the Canadian DIP Collateral
Agent will have the right to require that this Agreement be amended,
supplemented or replaced, and that such Chargor will immediately on
request by the Canadian DIP Collateral Agent authorize, execute and
deliver any such amendment, supplement or replacement (i) to reflect
any changes in or in the interpretation of such laws, whether
arising as a result of statutory amendments, court decisions or
otherwise, (ii) to facilitate the creation and registration of
appropriate security in all appropriate jurisdictions, or (iii) if
such Chargor merges or amalgamates with any other Person or enters
into any corporate reorganization, in any such case in order to
confer on the Canadian DIP Collateral Agent Liens similar to, and
having the same effect and priority as, the Security Interests
relative to the Collateral of such Chargor.
587
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(b) Delivery of Certain Collateral. Promptly upon request from
time to time by the Canadian DIP Collateral Agent, such Chargor will
deliver (or cause to be delivered) to the Canadian DIP Collateral
Agent, endorsed and/or accompanied by such instruments of assignment
and transfer in such form and substance as the Canadian DIP
Collateral Agent may reasonably request, any and all Instruments,
Securities, Documents of Title and Chattel Paper included in or
relating to the Collateral of such Chargor as the Canadian DIP
Collateral Agent may specify in its request.
(c) Payment of Expenses; Indemnification. Such Chargor will pay
on demand, and will indemnify and save the Canadian DIP Collateral
Agent and the other Credit Providers harmless from, any and all
liabilities and reasonable costs and out-of-pocket expenses
(including reasonable legal fees and out-of-pocket expenses of
counsel for the Canadian DIP Collateral Agent and any sales, goods
and services, harmonized sales and goods and services or other
similar taxes payable to any governmental authority with respect to
any such liabilities, costs and expenses) incurred by the Canadian
DIP Collateral Agent (i) in the preparation, registration,
administration or enforcement of this Agreement, (ii) with respect
to, or resulting from, any failure or delay by such Chargor in
performing or observing any of its obligations under this Agreement,
or (iii) in performing or observing any of the other covenants of
such Chargor under this Agreement.
(d) Further Identification of Collateral. Such Chargor will
promptly furnish to the Canadian DIP Collateral Agent such
statements and schedules further identifying and describing the
Collateral of such Chargor, and such other reports in connection
with the Collateral of such Chargor, as the Canadian DIP Collateral
Agent may from time to time reasonably request.
(e) Notices. Such Chargor will advise the Canadian DIP
Collateral Agent promptly, in reasonable detail, of (i) any change
in the location of any of such Chargor's places of business
(including additional locations) or the principal place of business
or chief executive office of such Chargor, (ii) any change in the
jurisdiction of any of the material tangible Collateral of such
Chargor, (iii) any change in the name of such Chargor, (iv) any
merger or amalgamation of such Chargor, and (v) any additional
jurisdiction in which material account debtors of such Chargor are
located. Such Chargor agrees not to effect or permit any of the
changes referred to in clauses (i) to (iv) above unless, to the
extent required, all filings have been made and all other actions
taken that are required in order for the Canadian DIP Collateral
Agent to continue at all times following such change to have a valid
and perfected Security Interest in respect of all of the Collateral
of such Chargor.
(f) Delivery of Agreements re Intellectual Property Rights. Such
Chargor will promptly, following demand from time to time by the
Canadian DIP Collateral
588
- 8 -
Agent, authorize, execute and deliver any and all agreements,
instruments, documents and papers that the Canadian DIP Collateral
Agent may reasonably request to evidence the Security Interests in
any Intellectual Property Rights of such Chargor and, where
applicable, the goodwill of the business of such Chargor connected
with the use of, and symbolized by, any such Intellectual Property
Rights.
(g) Delivery of Agreements re Contracts. Such Chargor will
promptly, following demand from time to time by the Canadian DIP
Collateral Agent, authorize, execute and deliver any and all
agreements, instruments, documents and papers that the Canadian DIP
Collateral Agent may reasonably request to evidence the Security
Interests relative to any Contracts or Permits of such Chargor.
7. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All agreements,
representations, warranties and covenants made by each Chargor in this
Agreement are material, will be considered to have been relied on by the
Canadian DIP Collateral Agent and each of the other Credit Providers and will
survive the execution and delivery of this Agreement and any Supplement or any
investigation made at any time by or on behalf of the Canadian DIP Collateral
Agent or any other Credit Provider and any disposition or payment of the
Liabilities of such Chargor until payment and performance in full of the
Liabilities of such Chargor and termination of all obligations and liabilities
of such Chargor under the Secured Credit Documents.
8. RIGHTS ON DEFAULT. If any Event of Default shall have occurred and be
continuing, then and in every such case the Security Interests relative to each
Chargor shall become enforceable and, to the extent any such action is not
inconsistent with the Orders and Section 9 of the Credit Agreement, the
Canadian DIP Collateral Agent, in addition to any rights now or hereafter
existing under applicable law, and without application to or order of the
Bankruptcy Courts, may, personally or by agent, at such time or times as the
Canadian DIP Collateral Agent in its discretion may determine, do any one or
more of the following:
(a) Rights under PPSA, etc. Exercise against such Chargor and
any or all of the Collateral of such Chargor all of the rights and
remedies granted to secured parties under the PPSA and any other
applicable statute, or otherwise available to the Canadian DIP
Collateral Agent by contract, under statute, at law or in equity.
(b) Require Delivery. Demand possession of any or all of the
Collateral of such Chargor, in which event such Chargor will, at its
own expense, immediately cause the Collateral of such Chargor
designated by the Canadian DIP Collateral Agent to be assembled and
made available and/or delivered to the Canadian DIP Collateral Agent
at any place designated by the Canadian DIP Collateral Agent.
(c) Take Possession. Enter on any premises where any Collateral
of such Chargor is located and take possession of, disable or remove
such Collateral.
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(d) Deal with Collateral. Hold, store and keep idle, or operate,
lease or otherwise use or permit the use of, any or all of the
Collateral of such Chargor for such time and on such terms as the
Canadian DIP Collateral Agent may determine, and demand, collect and
retain all earnings and other sums due or to become due from any
Person in respect of any of the Collateral of such Chargor.
(e) Carry on Business. Carry on, or concur in the carrying on
of, any or all of the business or undertaking of such Chargor and
enter on, occupy and use (without charge by such Chargor) any of the
premises, buildings, plant and undertaking of, or occupied or used
by, such Chargor.
(f) Enforce Collateral. Seize, collect, receive, enforce or
otherwise deal with any Collateral of such Chargor in such manner,
on such terms and conditions and at such times as the Canadian DIP
Collateral Agent deems advisable.
(g) Dispose of Collateral. Realize on any or all of the
Collateral of such Chargor and sell, lease, assign, give options to
purchase, or otherwise dispose of and deliver any or all of the
Collateral of such Chargor (or contract to do any of the above), in
one or more parcels at any public or private sale, at any exchange,
broker's board or office of the Canadian DIP Collateral Agent or
elsewhere, with or without advertising or other formality (except as
required by applicable law), on such terms and conditions as the
Canadian DIP Collateral Agent may deem advisable and at such prices
as it may deem best, for cash or on credit or for future delivery.
(h) Court-Approved Disposition of Collateral. Obtain from any
court of competent jurisdiction an order for the sale or foreclosure
of any or all of the Collateral of such Chargor.
(i) Purchase by any Credit Provider. At any public sale, and to
the extent permitted by law on any private sale, bid for and
purchase, or permit any Credit Provider to bid for and purchase, any
or all of the Collateral of such Chargor offered for sale and, upon
compliance with the terms of such sale, hold, retain, sell or
otherwise dispose of such Collateral of such Chargor without any
further accountability to such Chargor or any other Person with
respect to such holding, retention, sale or other disposition,
except as required by law. In any such sale to the Canadian DIP
Collateral Agent or any other Credit Provider, the Canadian DIP
Collateral Agent or such Credit Provider may, for the purpose of
making payment for all or any part of the Collateral of such Chargor
so purchased, use any claim for any Liabilities of such Chargor then
due and payable to or for the benefit of such Person as a credit
against the purchase price.
(j) Collect Accounts. Notify the account debtors or obligors
under any Accounts of such Chargor of the assignment of such
Accounts to the Canadian DIP Collateral Agent and direct such
account debtors or obligors to make payment of all amounts due or to
become due to such Chargor in respect of such Accounts
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directly to the Canadian DIP Collateral Agent and, upon such
notification and at the expense of such Chargor, enforce collection
of any such Accounts, and adjust, settle or compromise the amount
or payment of such Accounts, in such manner and to such extent as
the Canadian DIP Collateral Agent deems appropriate in the
circumstances.
(k) Transfer of Securities. Transfer any Securities forming part
of the Collateral of such Chargor into the name of the Canadian DIP
Collateral Agent or its nominee, with or without disclosing that the
Securities are subject to the Security Interests granted by such
Chargor.
(l) Exercise of Rights. Exercise any and all rights (including
without limitation voting rights), privileges, entitlements and
options pertaining to any Securities forming part of the Collateral
of such Chargor as if the Canadian DIP Collateral Agent were the
absolute owner of such Securities.
(m) Dealing with Contracts and Permits.
(i) Enforce, realize, sell, assign, transfer,
require continued performance under or otherwise deal with
the Contracts and the Permits of such Chargor or any one
or more of them, upon such terms and conditions and at
such time or times as may seem advisable to the Canadian
DIP Collateral Agent;
(ii) renew, amend or otherwise deal with the
Contracts and the Permits of such Chargor or any one or
more of them (including, without limitation, the authority
to demand, ▇▇▇ for, recover, receive and give receipts for
all work, services and goods to be provided under the
Contracts and the Permits of such Chargor or any one or
more of them and to give consents or waivers with respect
to, or otherwise enter into agreements, understandings or
arrangements respecting, the Contracts and Permits of such
Chargor or any one or more of them);
(iii) exercise any of the rights,
entitlements, privileges, powers, benefits, licences,
advantages, authorities and discretions which under the
terms of the Contracts and the Permits of such Chargor, or
any one or more of them, could be exercised by such
Chargor;
(iv) perform at such Chargor's expense any and
all obligations or covenants of such Chargor under the
Contracts and the Permits of such Chargor or any one or
more of them or in respect thereof and enforce performance
by the parties thereto of their obligations, covenants and
agreements thereunder; and
(v) deal with the Contracts and the Permits
of such Chargor or any one or more of them to the same
extent as such Chargor could do,
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the whole without any liability or responsibility of any kind on
the part of the Canadian DIP Collateral Agent or the other Credit
Providers or their agents or any Receiver or its agents (other than
by reason of the gross negligence or wilful misconduct of such
Person).
(n) Payment of Liabilities. Pay any liability secured by any
Lien against any Collateral of such Chargor. Such Chargor will
immediately on demand reimburse the Canadian DIP Collateral Agent
for all such payments.
(o) Borrow and Grant Security Interests. Borrow money for the
maintenance, preservation or protection of any Collateral of such
Chargor or for carrying on any of the business or undertaking of
such Chargor and grant Liens on any Collateral of such Chargor (in
priority to the Security Interests or otherwise) as security for the
money so borrowed. Such Chargor will immediately on demand
reimburse the Canadian DIP Collateral Agent for all such borrowings.
(p) Appoint Receiver. Appoint by instrument in writing one or
more Receivers of such Chargor or any or all of the Collateral of
such Chargor with such rights, powers and authority (including any
or all of the rights, powers and authority of the Canadian DIP
Collateral Agent under this Agreement) as may be provided for in the
instrument of appointment or any supplemental instrument, and remove
and replace any such Receiver from time to time. To the extent
permitted by applicable law, any Receiver appointed by the Canadian
DIP Collateral Agent will (for purposes relating to responsibility
for the Receiver's acts or omissions) be considered to be the agent
of such Chargor and not of the Canadian DIP Collateral Agent or the
other Credit Providers.
(q) Court-Appointed Receiver. Obtain from any court of competent
jurisdiction an order for the appointment of a Receiver of such
Chargor or of any or all of the Collateral of such Chargor.
(r) Consultants. Require such Chargor to engage a consultant of
the Canadian DIP Collateral Agent's choice, or engage a consultant
on behalf of the Canadian DIP Collateral Agent, such consultant to
receive the full cooperation and support of such Chargor and its
employees and managers, including unrestricted access to the
premises and Books and Records of such Chargor; all reasonable fees
and expenses of such consultant shall be for the account of such
Chargor and such Chargor hereby authorizes any such consultant to
report directly to the Canadian DIP Collateral Agent and to disclose
to the Canadian DIP Collateral Agent any and all information
obtained in the course of such consultant's employment.
The Canadian DIP Collateral Agent may exercise any or all of the foregoing
rights and remedies without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except as required by applicable
law) to or on such Chargor or any other Person, and such Chargor waives each
such demand, presentment, protest, advertisement and notice to
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the extent permitted by applicable law. None of the above rights or remedies
will be exclusive of or dependent on or merge in any other right or remedy, and
one or more of such rights and remedies may be exercised independently or in
combination from time to time. Without prejudice to the ability of the
Canadian DIP Collateral Agent to dispose of the Collateral of such Chargor in
any manner which is commercially reasonable, each Chargor acknowledges that a
disposition of Collateral of such Chargor by the Canadian DIP Collateral Agent
which takes place substantially in accordance with the following provisions
will be deemed to be commercially reasonable:
(i) Collateral of such Chargor may be disposed of in whole or
in part;
(ii) Collateral of such Chargor may be disposed of by public auction,
public tender or private contract, with or without advertising and
without any other formality;
(iii) any purchaser or lessee of Collateral of such Chargor may be a
customer of the Canadian DIP Collateral Agent or any Credit
Provider or any Affiliate of the Canadian DIP Collateral Agent or
any Credit Provider;
(iv) a disposition of Collateral of such Chargor may be on such
terms and conditions as to credit or otherwise as the Canadian
DIP Collateral Agent, in its sole discretion, may deem
advantageous; and
(v) the Canadian DIP Collateral Agent may establish an upset or reserve
bid or price in respect of Collateral of such Chargor.
9. GRANT OF LICENCE. For the purpose of enabling the Canadian DIP Collateral
Agent to exercise its rights and remedies under Section 8 of this Agreement
when the Canadian DIP Collateral Agent is entitled to exercise such rights and
remedies, and for no other purpose, but subject however to the provisions of
Section 3 of this Agreement, each of the Chargors grants to the Canadian DIP
Collateral Agent an irrevocable, non-exclusive licence (exercisable without
payment of royalty or other compensation to such Chargor) to use, assign or
sub-licence any or all of the Intellectual Property Rights of such Chargor in
which such Chargor has any right, title or interest, including in such licence
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer programs used for the compilation or
printout of the same.
10. SALE OF SECURITIES. The Canadian DIP Collateral Agent is authorized, in
connection with any offer or sale of any Securities forming part of the
Collateral of a Chargor, to comply with any limitation or restriction as it may
be advised by counsel is necessary to comply with applicable law, including
compliance with procedures that may restrict the number of prospective bidders
and purchasers, requiring that prospective bidders and purchasers have certain
qualifications, and restricting prospective bidders and purchasers to Persons
who will represent and agree that they are purchasing for their own account or
investment and not with a view to the distribution or resale of such
Securities. Each Chargor further agrees that compliance with any such
limitation or restriction will not result in a sale being considered or deemed
not to
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have been made in a commercially reasonable manner, and neither the Canadian
DIP Collateral Agent nor any other Credit Provider will be liable or
accountable to such Chargor for any discount allowed by reason of the fact that
any Securities of such Chargor are sold in compliance with any such limitation
or restriction.
11. APPLICATION OF PROCEEDS. All Proceeds of Collateral of any Chargor
received by the Canadian DIP Collateral Agent or a Receiver shall be applied in
accordance with, and in the manner set forth in, the Orders.
12. CONTINUING LIABILITY OF CHARGORS. Each of the Chargors will remain liable
for any Liabilities of such Chargor that are outstanding following realization
of all or any part of the Collateral of such Chargor and the application of the
Proceeds thereof.
13. CANADIAN DIP COLLATERAL AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT. Each
Chargor hereby absolutely and irrevocably constitutes and appoints the Canadian
DIP Collateral Agent as such Chargor's true and lawful agent and
attorney-in-fact, with full power of substitution after the occurrence of and
during the continuation of an Event of Default (in the name of such Chargor):
(a) to act, require, demand, receive, compound and give acquittance for any and
all moneys and claims for monies due or to become due to such Chargor under or
arising out of the Collateral of such Chargor, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or take
any action or institute any proceedings which the Canadian DIP Collateral Agent
may reasonably deem to be necessary or advisable to protect the interests of
the Credit Providers; (b) to execute and do all such assurances, acts and
things which such Chargor is required to do but has failed to do under the
covenants and provisions contained in this Agreement; (c) to take any and all
such action as the Canadian DIP Collateral Agent or any of its sub-agents,
nominees or attorneys may, in their sole and absolute discretion, reasonably
determine as necessary or advisable for the purpose of maintaining, preserving
or protecting the Security Interests constituted by this Agreement or any of
the rights, remedies, powers or privileges of the Canadian DIP Collateral Agent
by or pursuant to this Agreement, and (without prejudice to the generality of
any of the foregoing) to seal and deliver or otherwise perfect any deed,
assurance, agreement, instrument or act as the Canadian DIP Collateral Agent
may deem proper in or for the purpose of exercising any of such powers,
authorities or discretions. Each Chargor hereby ratifies and confirms, and
hereby agrees to ratify and confirm, whatever lawful acts the Canadian DIP
Collateral Agent or any of the Canadian DIP Collateral Agent's sub-agents,
nominees or attorneys shall do or purport to do in the exercise of the power of
attorney granted to the Canadian DIP Collateral Agent pursuant to this Section,
which power of attorney, being given for security, is coupled with an interest
and is irrevocable.
14. PERFORMANCE BY CANADIAN DIP COLLATERAL AGENT OF CHARGORS' OBLIGATIONS. If
any Chargor fails to perform or comply with any of the obligations of such
Chargor under this Agreement, the Canadian DIP Collateral Agent may, but need
not, perform or otherwise cause the performance or compliance of such
obligation, provided that such performance or compliance will not constitute a
waiver, remedy or satisfaction of such failure. The expenses of the Canadian
DIP Collateral Agent incurred in connection with any such performance or
compliance will be payable by such Chargor to the Canadian DIP Collateral Agent
immediately
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on demand, and until paid, any such expenses will form part of the Liabilities
of such Chargor and will be secured by the Security Interests from such
Chargor.
15. INTEREST. If any amount payable by a Chargor to the Canadian DIP
Collateral Agent or any other Credit Provider under this Agreement is not paid
when due, to the extent that the Credit Agreement does not provide for interest
on such unpaid amount, such Chargor will pay to the Canadian DIP Collateral
Agent or such other Credit Provider, as the case may be, immediately on demand,
interest on such amount from the date due until paid, at a nominal rate per
annum equal at all times to the Base Rate in effect from time to time plus 2 %,
which rate per annum will change automatically without notice to such Chargor
as and when the Base Rate changes. All amounts payable by any Chargor to the
Canadian DIP Collateral Agent or any other Credit Provider under this
Agreement, and all interest on all such amounts, will form part of the
Liabilities of such Chargor and will be secured by the Security Interests
created by this Agreement over the Collateral of such Chargor.
16. SEVERABILITY. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction or against any Chargor will, as to that
jurisdiction and such Chargor, be ineffective to the extent of such prohibition
or unenforceability and will be severed from the balance of this agreement, all
without affecting the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction or
against any other Chargor.
17. RIGHTS OF CANADIAN DIP COLLATERAL AGENT; LIMITATIONS ON CANADIAN DIP
COLLATERAL AGENT'S OBLIGATIONS.
(a) Limitations on Liability. None of the Canadian DIP
Collateral Agent, the other Credit Providers, any Receiver or any
agent of any of the foregoing (including in Alberta or British
Columbia any sheriff) (i) will be liable to any Chargor or any other
Person for any failure or delay in exercising any of its rights
under this Agreement (including any failure to take possession of,
collect, sell, lease or otherwise dispose of any Collateral, or to
preserve rights against prior parties); (ii) is required to take, or
will have any liability for any failure to take or delay in taking,
any steps necessary or advisable to preserve rights against other
Persons under any Collateral of any Chargor in its possession; or
(iii) will be liable for any, and each Chargor will bear the full
risk of all, loss or damage to any and all of the Collateral of such
Chargor (including any Collateral of such Chargor in the possession
of any such Person) caused for any reason other than the gross
negligence or wilful misconduct of such Person.
(b) Chargors Remain Liable under Accounts, Contracts.
Notwithstanding any provision of this Agreement, each Chargor will
remain liable under any of the documents giving rise to the Accounts
of such Chargor and under all of the Contracts and Permits of such
Chargor to observe and perform all the conditions and obligations to
be observed and performed by such Chargor thereunder, all in
accordance with the terms of such documents, Contracts and Permits.
None of the Persons referred to in subsection 17(a) hereof will have
any obligation or
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liability under any Account of any Chargor (or any document giving
rise thereto) or under any Contract or Permit of any Chargor by
reason of or arising out of this Agreement or the receipt by such
Person of any payment relating to such Account or Contract or Permit
pursuant to this Agreement, and in particular (but without
limitation), will not be obligated in any manner to perform any of
the obligations of any Chargor under or pursuant to any Account of
such Chargor (or any document giving rise to any such Account) or
under or pursuant to any Contract or any Permit of such Chargor, to
make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of
any performance by any party under any such Account (or any document
giving rise to any such Account) or under any such Contract or
Permit, to present or file any claim, or to take any action to
enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at
any time. Nothing contained in this Agreement shall render any of
the Persons referred to in subsection 17(a) hereof liable for the
fulfilment or non-fulfilment of the obligations, covenants and
agreements (including the payment of any Money under or in respect of
any of such Contracts or Permits) of any Chargor under any of the
Contracts or Permits of such Chargor. Each of the Chargors hereby
severally (and not jointly or jointly and severally) indemnifies and
agrees to save and hold harmless the Persons referred to in
subsection 17(a) hereof from and against any and all claims, demands,
actions, causes of action, losses, suits, damages and costs
whatsoever arising directly or indirectly from or out of the
Accounts, the Contracts and the Permits of such Chargor or any of
them provided that, no such obligation to indemnify and save and hold
harmless shall exist with respect to any Person to the extent that
the claims, demands, actions causes of action, losses, suits, damages
and costs of such Person arise solely as a result of the gross
negligence or wilful misconduct of such Person in the exercise of its
rights and remedies under this Agreement.
(c) Collections on Accounts and Contracts. Except as otherwise
provided in the Credit Agreement, each of the Chargors may collect
the Accounts of such Chargor and payments under the Contracts of
such Chargor in the normal course of the business of such Chargor
and for the purpose of carrying on the same. If required by the
Canadian DIP Collateral Agent at any time during the continuance of
an Event of Default, any payments of Accounts of any Chargor or
under Contracts of such Chargor, when collected by such Chargor,
will be forthwith (and, in any event, within two Business Days)
deposited by such Chargor in the exact form received, duly endorsed
by such Chargor to the Canadian DIP Collateral Agent if required, in
a special collateral account maintained by the Canadian DIP
Collateral Agent on behalf of the Credit Providers, and until so
deposited, will be held by such Chargor in trust for the Canadian
DIP Collateral Agent on behalf of the Credit Providers, segregated
from the other funds of such Chargor. All such amounts while held
by the Canadian DIP Collateral Agent (or
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by a Chargor in trust for the Canadian DIP Collateral Agent) and all
income in respect thereof will continue to be collateral security for
the Liabilities of such Chargor and will not constitute payment
thereof until applied as herein provided. If an Event of Default has
occurred and is continuing, the Canadian DIP Collateral Agent may
apply all or any part of the amounts on deposit relative to such
Chargor in such special collateral account on account of the
Liabilities of such Chargor in such order as the Canadian DIP
Collateral Agent may elect. At the Canadian DIP Collateral Agent's
request, such Chargor will deliver to the Canadian DIP Collateral
Agent any documents evidencing and relating to the agreements and
transactions which gave rise to the Accounts and Contracts of such
Chargor, including all original orders, invoices and shipping
receipts.
(d) Analysis of Accounts. At any time during the continuance of
an Event of Default the Canadian DIP Collateral Agent may in its own
name or in the name of others (including any Chargor) communicate
with account debtors under any of the Accounts of any Chargor and
parties to any of the Contracts of such Chargor to verify with them
to its satisfaction the existence, status, amount and terms of any
such Account or any such Contract.
18. DEALINGS BY CANADIAN DIP COLLATERAL AGENT. The Canadian DIP Collateral
Agent will not be obliged to exhaust its recourse against any Chargor or any
other Person or against any other security it may hold in respect of the
Liabilities of such Chargor before realizing upon or otherwise dealing with the
Collateral of such Chargor in such manner as the Canadian DIP Collateral Agent
may consider desirable. The Canadian DIP Collateral Agent and the Credit
Providers may grant extensions of time and other indulgences, take and give up
security, accept compositions, grant releases and discharges and otherwise deal
with any Chargor and any other Person, and with any or all of the Collateral of
each Chargor, and with other security and sureties, as the Canadian DIP
Collateral Agent and the Credit Providers may see fit, all without prejudice to
the Liabilities of any Chargor or to the rights and remedies of the Canadian
DIP Collateral Agent under this Agreement. The powers conferred on the
Canadian DIP Collateral Agent under this Agreement are solely to protect the
interests of the Canadian DIP Collateral Agent and the Credit Providers in the
Collateral of each of the Chargors and will not impose any duty upon the
Canadian DIP Collateral Agent to exercise any such powers.
19. COMMUNICATION. All notices and other communications given under or with
respect to this Agreement will be in writing and may be sent by facsimile,
mailed or delivered to the Canadian DIP Collateral Agent at its address
Canadian Imperial Bank of Commerce, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, (facsimile (▇▇▇) ▇▇▇-▇▇▇▇) for the attention of the
Manager-Agency, or to any Chargor care of ▇▇▇▇▇▇ at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇ LCD 1, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ (facsimile (▇▇▇) ▇▇▇-▇▇▇▇))
attention General Counsel or, as to any such Person, at such other address or
facsimile number as may be designated by such Person in a notice to the others
given as required hereby. Except as
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otherwise provided in this Agreement, all such communications will be deemed to
have been duly given when (a) transmitted by facsimile if transmitted prior to
4:00 p.m. (local time at the place of delivery) on a Business Day and otherwise
on the Business Day following transmission, (b) personally delivered or (c) in
the case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
20. RELEASE OF INFORMATION. Each of the Chargors authorizes the Canadian DIP
Collateral Agent to provide a copy of this Agreement and such other information
as may be requested of the Canadian DIP Collateral Agent by any Credit Provider
or by any other Persons entitled thereto pursuant to any applicable law or
court order, and otherwise with the consent of such Chargor.
21. WAIVERS AND INDEMNITY. To the extent permitted by applicable law, each of
the Chargors unconditionally and irrevocably waives (i) all claims, damages and
demands (other than those attributable to the gross negligence or wilful
misconduct of the Canadian DIP Collateral Agent or such Credit Provider) it may
acquire against the Canadian DIP Collateral Agent or any Credit Provider
arising out of the exercise by the Canadian DIP Collateral Agent or any
Receiver of any rights or remedies under this Agreement or at law, (ii) all of
the rights, benefits and protections given by any present or future statute
that imposes limitations on the rights, powers or remedies of a secured party
or on the methods of, or procedures for, realization of security, including any
"seize or ▇▇▇" or "anti-deficiency" statute or any similar provision of any
other statute, and (iii) the benefits of the Limitation of Civil Rights Act
(Saskatchewan), and the Land Contracts (Action) Act (Saskatchewan) which acts
shall have no application to this Agreement. None of the Canadian DIP
Collateral Agent or any of the Credit Providers will, by any act or delay, be
deemed to have waived any right or remedy hereunder or to have acquiesced in
any Event of Default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of
the Canadian DIP Collateral Agent any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder will preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Canadian
DIP Collateral Agent of any right or remedy hereunder on any one occasion will
not be construed as a bar to any right or remedy which the Canadian DIP
Collateral Agent would otherwise have on any future occasion. Neither the
taking of any judgment nor the exercise of any power of seizure or sale will
extinguish the liability of any Chargor to pay the Liabilities of such Chargor,
nor will the same operate as a merger of any covenant contained in this
Agreement or of any other liability, nor will the acceptance of any payment or
other security constitute or create any novation. Each of the Chargors agrees
severally (and not jointly or jointly and severally) to indemnify the Canadian
DIP Collateral Agent and the Credit Providers from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(except by reason of the gross negligence or wilful misconduct of such Person)
which may be imposed on, incurred by, or asserted against the Canadian DIP
Collateral Agent or any Credit Provider and
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arising by reason of any action (including any action referred to in this
agreement) or inaction or omission to do any act legally required by such
Chargor. This indemnification will survive the satisfaction, release or
extinguishment of the Liabilities of such Chargor and the Security Interests
from such Chargor.
22. ADDITION OF NEW CHARGORS. Additional Persons may from time to time after
the date of this Agreement become Chargors under this Agreement by executing
and delivering to the Canadian DIP Collateral Agent a supplemental agreement (a
"SUPPLEMENT") to this Agreement in substantially the form attached as Schedule
D to this Agreement. Effective from and after the date of the execution and
delivery by any Person to the Canadian DIP Collateral Agent of a Supplement:
(a) such Person shall be, and shall be deemed for all purposes to
be, a Chargor under this Agreement with the same force and effect,
and subject to the same agreements, representations, indemnities,
liabilities, obligations and Security Interests, as if such Person
had been an original signatory to this Agreement as a Chargor; and
(b) all Collateral of such Person shall be, and shall be deemed
for all purposes to be, "Collateral" of such Person for the purposes
of this Agreement and subject to "Security Interests" from such
Person in accordance with the provisions of this Agreement as
security for the due payment and performance of the "Liabilities" of
such Person in accordance with the provisions of this Agreement.
The execution and delivery of a Supplement by any additional Person shall not
require the consent of any Chargor and all of the liabilities and obligations
of each Chargor under this Agreement, and all Security Interests of each
Chargor, shall remain in full force and effect notwithstanding the addition of
any new Chargor to this Agreement.
23. AMALGAMATION. If any Chargor is a corporation, such Chargor acknowledges
that if it amalgamates or merges with or into any other corporation or
corporations, then (i) the term "Chargor", where used in this Agreement, will
extend to and include the continuing corporation from such amalgamation or
merger, (ii) the term "Liabilities", where used in this Agreement in connection
with such Chargor, will extend to and include the Liabilities of each of the
amalgamating or merging corporations at the time of such amalgamation or merger
and the Liabilities of the continuing corporation from such amalgamation or
merger arising thereafter, and (iii) the Collateral of such Chargor and the
Security Interests created by this Agreement over the Collateral of such
Chargor will extend to and include all of the Collateral of each of the
amalgamating or merging corporations at the time of such amalgamation or merger
and any and all Collateral of the continuing corporation from such amalgamation
or merger thereafter owned or acquired by such continuing corporation.
24. RELEASE OF CHARGOR. Promptly following any release of any Chargor from all
of its Liabilities (including any such release effected by the operation of an
express provision of the
599
- 19 -
Secured Credit Documents providing for the release of such Liabilities in
specified circumstances), the Canadian DIP Collateral Agent, without affecting
in any manner whatsoever any of the Liabilities of any other Chargor or any of
the Security Interests created by this Agreement over the Collateral of any
other Chargor, will release such Chargor and the Collateral of such Chargor
then subject to the Security Interests created by this Agreement from this
Agreement and from the Security Interests created by this Agreement and such
release shall serve to terminate any licence granted pursuant to Section 9
hereof. Upon such release, and at the request and expense of such Chargor, the
Canadian DIP Collateral Agent shall execute and deliver to such Chargor such
releases and discharges as such Chargor may reasonably request.
25. ADDITIONAL SECURITY. This Agreement is in addition to, and not in
substitution of, any and all other security documents previously or
concurrently delivered by any Chargor to the Canadian DIP Collateral Agent or
to any Credit Provider, all of which other security documents shall remain in
full force and effect.
26. SEVERAL AGREEMENT; ALTERATION OR WAIVER. No provision of this Agreement
may be changed, discharged, waived or terminated except with the written
consent of each Chargor directly affected thereby and the written consent of
the Canadian DIP Collateral Agent. This Agreement shall be construed as a
separate agreement with respect to each Chargor and, subject to the first
sentence of this Section, may be amended, modified, supplemented, waived or
released with respect to any Chargor, or any representations, agreements,
contracts, indemnities, Liabilities or Collateral of, or any Security Interests
from, any Chargor, without the approval of any other Chargor and without
affecting the liabilities or obligations of any other Chargor under this
Agreement.
27. GOVERNING LAW; ATTORNMENT. This Agreement is a contract made under, and
will for all purposes be governed by and interpreted and enforced according to,
the laws of the Province of Ontario (including the laws of Canada applicable in
such Province), excluding any conflict of laws rule or principle that might
refer these matters to the laws of another jurisdiction, and without prejudice
to or limitation of any other rights or remedies available to the Canadian DIP
Collateral Agent under the laws of any other jurisdiction. Each of the
Chargors irrevocably submits to the jurisdiction of the courts of the Province
of Ontario and to the Supreme Court of Canada without prejudice to the right of
the Credit Providers to commence an action against such Chargor in any other
jurisdiction. Each of the Chargors agrees that service of all writs,
processes, statements, correspondence and summonses in any suit, action or
proceeding brought against such Chargor under or in respect of this Agreement
may be made upon such Chargor at such Chargor's address for notice as provided
in Section 19 of this Agreement, and each of the Chargors irrevocably appoints
▇▇▇▇▇▇ as such Chargor's true and lawful attorney-in-fact in such Chargor's
name, place and stead to accept such service of any and all writs, processes,
statements, correspondence and summonses, and agrees that the failure of ▇▇▇▇▇▇
to give any notice of any thereof to such Chargor shall not impair or affect
the validity of such service or of any judgment based thereon. Each of the
Chargors further irrevocably consents to the service of any and all writs,
processes, statements, correspondence and summonses in any suit, action or
600
- 20 -
proceeding in any court by the mailing thereof by registered or certified mail,
postage prepaid to such Chargor at such Chargor's address for notice as
provided for in Section 19 of this Agreement. Nothing in this Section shall be
deemed to in any way limit the ability of the Credit Providers to serve any
such writs, processes, statements, correspondence or summonses in any other
manner permitted by applicable law or to obtain jurisdiction over any Chargor
in such other jurisdictions, and in such manner, as may be permitted by
applicable law. Each of the Chargors irrevocably waives any objection which it
may now or in the future have based on lack of personal jurisdiction over such
Chargor or which it may have to the laying of venue of any such suit, action or
proceeding brought in the courts of the Province of Ontario or the Supreme
Court of Canada and further irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an improper
venue or in an inconvenient forum.
28. WAIVER OF JURY TRIAL. Because disputes arising in connection with complex
financial transactions of the nature provided for under this Agreement and the
other Secured Credit Documents are most quickly and economically resolved by an
experienced and expert person and the Chargors and the Credit Providers wish
applicable laws to apply (rather than arbitration rules), the parties desire
that their disputes be resolved by a judge applying such applicable laws.
Therefore, to achieve the best combination of the benefits of the judicial
system and of arbitration, each of the Chargors and the Credit Providers waive
all right to trial by jury in any action, suit, or proceeding brought to
resolve any dispute, whether in contract, tort, or otherwise, between such
Chargor and the Credit Providers arising out of, connected with, related to, or
incidental to the relationship established between them in connection with this
Agreement or any of the other Secured Credit Documents.
29. DELIVERY AND COMPLETENESS OF AGREEMENT. Upon this Agreement (or a
Supplement as provided for in Section 22 hereof), bearing the signature of a
Person claiming to have authority to bind a Chargor, coming into the possession
of the Canadian DIP Collateral Agent, and irrespective of whether this
Agreement (or any such Supplement) has been executed by any other Chargor, this
Agreement (and such Supplement) will be deemed to be finally and irrevocably
executed and delivered by, and be effective and binding on, and enforceable
against, such Chargor free from any promise or condition affecting or limiting
the liabilities or obligations of such Chargor under or in respect of this
Agreement. No statement, representation, agreement or promise by any officer,
employee or agent of the Canadian DIP Collateral Agent or any Credit Provider,
unless expressly set forth in this Agreement, forms any part of this Agreement
or has induced the making of this Agreement by any Chargor or in any way
affects any of the liabilities or obligations of any Chargor under this
Agreement. This Agreement constitutes the entire agreement between each of the
Chargors and the Canadian DIP Collateral Agent with respect to the subject
matter of this Agreement and cancels and supersedes any prior understandings
and agreements between the Canadian DIP Collateral Agent and each such Chargor
with respect to this Agreement (without affecting any other security previously
delivered by any Chargor to any of the Credit Providers).
601
- 21 -
30. ENFORCEMENT BY CANADIAN DIP COLLATERAL AGENT. The Credit Providers agree
that this Agreement and the Security Interests may be enforced only by the
action of the Canadian DIP Collateral Agent acting on behalf of the Credit
Providers and that no other Credit Provider shall have any rights individually
to seek to enforce or to enforce this Agreement or any of the Security
Interests, it being understood and agreed that such rights and remedies may be
exercised by the Canadian DIP Collateral Agent for the benefit of the Credit
Providers upon the terms of this Agreement.
31. INTERPRETATION. Unless otherwise expressly provided in this Agreement, if
any matter in this Agreement is subject to the consent or approval of the
Canadian DIP Collateral Agent or is to be acceptable to the Canadian DIP
Collateral Agent, such consent, approval or determination of acceptability will
be in the sole discretion of the Canadian DIP Collateral Agent. If any
provision in this Agreement refers to any action taken or to be taken by any
Chargor, or which any Chargor is prohibited from taking, such provision will be
interpreted to include any and all means, direct or indirect, of taking, or not
taking, such action. The division of this Agreement into sections and
paragraphs, and the insertion of headings, is for convenience of reference only
and will not affect the construction or interpretation of this Agreement.
Unless the context otherwise requires, words importing the singular include the
plural and vice versa, and words importing gender include all genders. When
used in this Agreement, the word "including" or "includes" shall mean including
or includes "without limitation". Any reference in this Agreement to something
being permitted by the Secured Credit Documents is intended to be a reference
to such thing being permitted by all of the Secured Credit Documents. In the
event of any conflict between the provisions of this Agreement and the
provisions (other than Section 13) of the Credit Agreement, the provisions of
the Credit Agreement will prevail.
32. SUCCESSORS AND ASSIGNS. This Agreement will enure to the benefit of, and
be binding on, each of the Chargors and its successors and permitted assigns,
and will enure to the benefit of, and be binding on, the Canadian DIP
Collateral Agent and the Credit Providers and their respective successors and
assigns. No Chargor may assign this Agreement, or any of its rights or
obligations under this Agreement.
33. ACKNOWLEDGMENT OF RECEIPT/WAIVER. Each of the Chargors acknowledges
receipt of an executed copy of this Agreement and, to the extent permitted by
applicable law, waives the right to receive a copy of any financing statement,
financing change statement or verification statement registered or issued in
connection with this Agreement.
34. COUNTERPARTS AND FACSIMILE. This Agreement may be executed in
counterparts. Each executed counterpart shall be deemed to be an original and
all counterparts taken together shall constitute one and the same Agreement.
Delivery of an executed signature page to this Agreement by any Chargor by
facsimile transmission shall be as effective as delivery of a manually executed
copy of this Agreement by such Chargor.
35. LANGUAGE. The parties to this Agreement expressly request and require that
this Agreement and all related documents be drafted in English. Les parties
aux presentes
602
- 22 -
conviennent et exigent que cette Convention et tous les documents qui s'y
rattachent soient rediges en Anglais.
IN WITNESS OF WHICH each of the undersigned has executed this Agreement as
of the date shown on the first page of this Agreement.
CANADIAN IMPERIAL BANK OF COMMERCE, as
Canadian DIP Collateral Agent
by:___________________________________
name:
title:
▇▇▇▇▇▇ SERVICES CORP.
▇▇▇▇▇▇ ENTERPRISES INC./LES ENTREPRISES
▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ ANALYTICAL SERVICES CORPORATION
▇▇▇▇▇▇ ENVIRONMENTAL (ATLANTIC) LIMITED
▇▇▇▇▇▇ ENVIRONMENTAL (ELMIRA) INC.
▇▇▇▇▇▇ ENVIRONMENTAL SERVICES LIMITED
▇▇▇▇▇▇ INVESTMENT CORP.
PSC/IML ACQUISITION CORP.
RECYCLAGE D'ALUMINIUM QUEBEC INC./QUEBEC
ALUMINIUM RECYCLING INC.
1195613 ONTARIO INC.
1233793 ONTARIO INC.
842578 ONTARIO LIMITED
SABLIX INC.
▇▇▇
- ▇▇ -
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ LTD.
CALIGO RECLAMATION LTD.
ALLIES STAFFING LTD.
SERVTECH CANADA, INC.
ST DELTA CANADA, INC.
2766906 CANADA INC.
721646 ALBERTA LTD.
800151 ONTARIO INC.
912613 ONTARIO LTD.
▇▇▇▇▇▇ PLASMA METALS INC.
CALIGO PARTNERSHIP
BY ITS PARTNER ALLWASTE OF CANADA LTD.
DELSAN DEMOLITION LIMITED
NORTRU, LTD.
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ INC.
in each case by:
__________________________________________
____________________
Authorized Signatory
604
`SCHEDULE A TO CANADIAN SECURITY AGREEMENT
FROM ▇▇▇▇▇▇ SERVICES CORP. AND ITS SUBSIDIARIES
INTELLECTUAL PROPERTY RIGHTS
TRADEMARKS
TRADE ▇▇▇▇ APPLICATION NO. REGISTRATION NO. REGISTRATION DATE
========== =============== ================ =================
PSC 847,622
▇▇▇▇▇▇ Services Corp. &
Design 847,624
▇▇▇▇▇▇ Services 847,623
▇▇▇▇▇▇ & Design 475,422
▇▇▇▇▇▇ ENVIRONMENTAL 431,169
▇▇▇▇▇▇ ENVIRONMENTAL & 2,102,936
Design (U.S.) Oct. 7/97
2,059,355
▇▇▇▇▇▇ ENVIRONMENTAL (U.S.) May 6/97
==================== ========
605
SCHEDULE B TO CANADIAN SECURITY AGREEMENT
FROM ▇▇▇▇▇▇ SERVICES CORP. AND ITS SUBSIDIARIES
CHIEF PLACE OF BUSINESS AND PLACE OF BOOKS AND RECORDS
PRINCIPAL PLACE OF BUSINESS AND CHIEF EXECUTIVE OFFICE
Office at which
senior management
are located and
Office at which conduct their Office from which
Name of the books and records deliberations and Invoices and accounts
Chargor are located make their decisions Are issued
▇▇▇▇▇▇ Services Corp. Hamilton: Hamilton: Hamilton:
▇▇▇ ▇▇▇▇ ▇▇. ▇. ▇▇▇ ▇▇▇▇ ▇▇. ▇. ▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
LCD 1 LCD 1 LCD 1
Hamilton, Ontario Hamilton, Ontario Hamilton, Ontario
L8N 4J6 L8N 4J6 ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇: Hamilton: Hamilton:
▇▇▇ ▇▇▇▇ ▇▇. ▇. ▇▇▇ ▇▇▇▇ ▇▇. ▇. ▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇▇▇▇▇▇ Enterprises P.O. Box 2440, LCD 1 P.O. Box 2440, LCD 1 P.O. Box 2440, LCD 1
Inc./Les Entreprises Hamilton, Ontario Hamilton, Ontario Hamilton, Ontario
▇▇▇▇▇▇ Inc. L8N 4J6 L8N 4J6 ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇: Hamilton: Hamilton:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Ontario
L8L 7W2 L8L 7W2 ▇▇▇ ▇▇▇
Barrie: Barrie: Barrie:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ 1131 Snow Valley Road ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇.▇. #▇ R.R. #3 R.R. #3
Barrie, Ontario Barrie, Ontario Barrie, Ontario
L4M 4S5 ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
Delta: Delta: Delta:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ #▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ #▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ #▇
▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇ Delta, B.C. ▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
Montreal: Montreal: Montreal:
▇▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ - 3rd Avenue
Pointe-aux-Trembles Pointe-aux-Trembles Pointe-aux-Trembles
Montreal, Quebec Montreal, Quebec Montreal, Quebec
H1B 5M9 H1B 5M9 H1B 5M9
Stoney Creek: Stoney Creek: Stoney Creek:
500 Centennial Pk. 500 Centennial Pk. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ Stoney Creek, Ontario Stoney Creek, Ontario
606
- 2 -
PRINCIPAL PLACE OF BUSINESS AND CHIEF EXECUTIVE OFFICE
Office at which
senior management
are located and
Office at which conduct their Office from which
Name of the books and records deliberations and Invoices and accounts
Chargor are located make their decisions Are issued
▇▇▇▇▇▇ Analytical Burlington: Burlington: Burlington:
Services ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Burlington, Ontario Burlington, Ontario
L7L 5H7 ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
Halifax: Halifax:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
Mississauga: Mississauga:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
London: London:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. 921 Leathorne St.
London, Ontario London, Ontario
M5Z 3M7 M5Z 3M7
Montreal: Montreal:
10390 ▇▇▇▇▇ ▇. 10390 ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Anjou, Quebec Anjou, ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
Burnaby: Burnaby:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇ Dartmouth: Dartmouth: Dartmouth:
Environmental ▇▇▇ ▇▇▇▇▇▇ ▇▇▇. #▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇. #▇ 101 Ilsley Ave. #6
(Atlantic) Limited Dartmouth, Nova Scotia Dartmouth, Nova Scotia Dartmouth, Nova Scotia
B3B 1S8 B3B 1S8 B3B 1S8
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇: Hamilton: Hamilton:
Environmental ▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇.
(Elmira) Inc. Hamilton, Ontario Hamilton, Ontario Hamilton, Ontario
▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
LCD 1 LCD 1 LCD 1
L8N 4J6 L8N 4J6 ▇▇▇ ▇▇▇
607
- 3 -
PRINCIPAL PLACE OF BUSINESS AND CHIEF EXECUTIVE OFFICE
Office at which
senior management
are located and
Office at which conduct their Office from which
Name of the books and records deliberations and Invoices and accounts
Chargor are located make their decisions Are issued
▇▇▇▇▇▇ Environmental Etobicoke: Etobicoke: Etobicoke:
Services Limited ▇▇▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Etobicoke, Ontario Etobicoke, Ontario
M8W 1Z6 ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ Investment Corp. Hamilton: Hamilton: Hamilton:
▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇.
▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
LCD 1 LCD 1 LCD 1
PSC/IML Acquisition Corp. Hamilton, Ontario Hamilton, Ontario Hamilton, Ontario
L8N 4J6 L8N 4J6 ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇: Hamilton: Hamilton:
▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇.
▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
LCD 1 LCD 1 LCD 1
Hamilton, Ontario Hamilton, Ontario Hamilton, Ontario
L8N 4J6 L8N 4J6 ▇▇▇ ▇▇▇
Recyclage d'Aluminium Baie ▇▇▇▇▇▇: Baie ▇▇▇▇▇▇: Baie ▇▇▇▇▇▇:
Quebec Inc./Quebec ▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇
Aluminum Recycling Inc. Baie ▇▇▇▇▇▇, Quebec Baie ▇▇▇▇▇▇, Quebec Baie ▇▇▇▇▇▇, Quebec
G4Z 2L6 G4Z 2L6 G4Z 2L6
Beaconcour: Beaconcour: Beaconcour:
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Becancour, Quebec Becancour, Quebec
G0X 1B0 G0X 1B0 G0X 1B0
1195613 Ontario Inc. Hamilton: Hamilton: Hamilton:
▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇.
▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
LCD 1 LCD 1 LCD 1
Hamilton, Ontario Hamilton, Ontario Hamilton,Ontario
L8N 4J6 L8N 4J6 ▇▇▇ ▇▇▇
1233793 Ontario Inc. Hamilton: Hamilton: Hamilton:
▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇.
▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
LCD 1 LCD 1 LCD 1
Hamilton, Ontario Hamilton, Ontario Hamilton, Ontario
L8N 4J6 L8N 4J6 ▇▇▇ ▇▇▇
608
- 4 -
PRINCIPAL PLACE OF BUSINESS AND CHIEF EXECUTIVE OFFICE
Office at which
senior management
are located and
Office at which conduct their Office from which
Name of the books and records deliberations and Invoices and accounts
Chargor are located make their decisions Are issued
842578 Ontario Limited Hamilton: Hamilton: Hamilton:
▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇.
▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
LCD 1 LCD 1 LCD 1
Hamilton, Ontario Hamilton, Ontario Hamilton, Ontario
L8N 4J6 L8N 4J6 L8N 4J6
Allwaste of Canada Ltd. Richmond Hill: Atlanta: Atlanta:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇. Two Concourse Pkwy, Two Concourse Pkwy, Suite 750
Richmond Hill, Ontario Suite 750 Atlanta, GA 30328
L4C 3G7 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlanta:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Caligo Reclamation Ltd. Richmond Hill: Richmond Hill: Richmond Hill:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ Richmond Hill, Ontario Richmond Hill, Ontario
L4C 3G7 L4C 3G7 L4C 3G7
Allies Staffing Ltd. Hamilton: Hamilton: Hamilton:
▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇. ▇▇▇ ▇▇▇▇ ▇▇.▇.
▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
LCD 1 LCD 1 LCD 1
Hamilton, Ontario Hamilton, Ontario Hamilton, Ontario
L8N 4J6 L8N 4J6 ▇▇▇ ▇▇▇
ServTech Canada, Inc. Michigan: Michigan: Houston, Texas
▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Inc. Michigan: Michigan: Winfield, MO
▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ 48214
2766906 Canada Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, Ontraio ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, Ontraio Hamilton, Ontraio
609
- 5 -
PRINCIPAL PLACE OF BUSINESS AND CHIEF EXECUTIVE OFFICE
Office at which
senior management
are located and
Office at which conduct their Office from which
Name of the books and records deliberations and Invoices and accounts
Chargor are located make their decisions Are issued
721646 Alberta Ltd. ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, Ontraio Hamilton, Ontraio
800151 Ontario Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, Ontraio ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, Ontraio Hamilton, Ontraio
912613 Ontario Ltd. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, Ontraio ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, Ontraio Hamilton, Ontraio
▇▇▇▇▇▇ Plasma Metals Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, Ontraio ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, Ontraio Hamilton, Ontraio
Caligo Partnership ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, Ontraio ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, Ontraio Hamilton, Ontraio
Delsan Demolition Limited ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, Ontraio ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, Ontraio Hamilton, Ontraio
Nortru, Ltd. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, Ontraio ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, Ontraio Hamilton, Ontraio
2842-7979 Quebec Inc.
Sablix Inc.
610
SCHEDULE C TO CANADIAN SECURITY AGREEMENT
FROM ▇▇▇▇▇▇ SERICES CORP. AND ITS SUBSIDIARIES
LOCATION OF JURISDICTIONS OF ASSETS
Jurisdictions in which Jurisdictions in which
Name of Personal Property is Chargor Carries On
Chargor located Business
▇▇▇▇▇▇ Services Corp. Ontario Ontario
--------------------- ------- -------
▇▇▇▇▇▇ Enterprises Inc./▇▇▇ ▇▇▇▇▇▇▇▇, Ontario Hamilton, Ontario
Entreprises ▇▇▇▇▇▇ Inc. Barrie, Ontario Barrie, Ontario
Delta, British Columbia Delta, British Columbia
Montreal, Quebec Montreal, Quebec
Stoney Creek, Ontario Stoney Creek, Ontario
Halifax, Nova Scotia Halifax, Nova Scotia
Toronto, Ontario Toronto, Ontario
Guelph, Ontario Guelph, Ontario
Whitby, Ontario Whitby, Ontario
▇▇▇▇▇▇ Analytical Services Burlington, Ontario
Corporation Halifax, Nova Scotia
Mississauga, Ontario
London, Ontario
Montreal, Quebec
Burnaby, British Columbia
▇▇▇▇▇, ▇▇▇▇▇▇▇
St. ▇▇▇▇▇, Newfoundland
▇▇▇▇▇▇ Environmental (Atlantic) Nova Scotia Nova Scotia
Limited New Brunswick New Brunswick
▇▇▇▇▇▇ Environmental (Elmira) Inc. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Environmental Services Ontario Ontario
Limited British Columbia British Columbia
Pueblo, Texas Pueblo, Texas
Baton Rouge, Louisiana Baton Rouge, Louisiana
Pittsburgh, PA Pittsburgh, PA
▇▇▇▇▇▇ Investment Corp. Ontario Ontario
PSC/IML Acquisition Corp. Ontario
611
- 2 -
Jurisdictions in which Jurisdictions in which
Name of Personal Property is Chargor Carries On
Chargor located Business
Baie ▇▇▇▇▇▇ Baie ▇▇▇▇▇▇
Recyclage d'Aluminium Quebec Quebec Quebec
Inc./Quebec Aluminum Recycling Inc. Beaconcour, Quebec Beaconcour, Quebec
1195613 Ontario Inc. Ontario
1233793 Ontario Inc. Ontario
842578 Ontario Limited Ontario Ontario
Allwaste of Canada Ltd. Sarnia, Ontario Ontario
Mississauga, Ontario
Toronto, Ontario
Caligo Reclamation Ltd. ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Allies Staffing Ltd.
ServTech Canada, Inc.
ST Delta Canada, Inc.
2766906 Canada Inc. Canada
721646 Alberta Ltd. Alberta
800151 Ontario Inc. Ontario
912613 Ontario Ltd. Ontario
▇▇▇▇▇▇ Plasma Metals Inc. Ontario
Caligo Partnership
by its partner Allwaste of Canada Ltd. Ontario
Delsan Demolition Limited Ontario
Nortru, Ltd. Ontario
2842-7979 Quebec Inc. Quebec
Sablix Inc.
612
SCHEDULE D TO CANADIAN SECURITY AGREEMENT
FROM ▇▇▇▇▇▇ SERVICES CORP. AND ITS SUBSIDIARIES
SUPPLEMENT NO.
TO
CANADIAN SECURITY AGREEMENT
This Supplement is made as of , in favour of
Canadian Imperial Bank of Commerce, as Canadian DIP Collateral Agent.
WHEREAS:
A. Reference is made to the Canadian Security Agreement dated as of June ,
1999 from ▇▇▇▇▇▇ Services Corp. and certain of its Subsidiaries in favour of
the Canadian DIP Collateral Agent for the benefit of the Credit Providers (the
"SECURITY AGREEMENT").
B. Capitalized terms used but not otherwise defined in this Supplement have the
respective meanings given to such terms in the Security Agreement including the
definitions of terms incorporated in the Security Agreement by reference to
other agreements.
C. Section 22 of the Security Agreement provides that additional Persons may
from time to time after the date of the Security Agreement become Chargors
under the Security Agreement by executing and delivering to the Canadian DIP
Collateral Agent a supplemental agreement to the Security Agreement in the form
of this Supplement.
D. Each of the undersigned (each a "NEW CHARGOR") is a Subsidiary of ▇▇▇▇▇▇ and
a condition to the Credit Providers continuing to make certain financial
accommodation available to ▇▇▇▇▇▇ under the Secured Credit Documents is that
each of the undersigned become a Chargor under the Security Agreement by
executing and delivering this Supplement to the Canadian DIP Collateral Agent.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which are acknowledged by each of the New Chargors, each of the New Chargors
severally (and not jointly or jointly and severally) covenants and agrees with
the Canadian DIP Collateral Agent for the benefit of the Credit Providers as
follows:
1. Each of the New Chargors has received a copy of, and has reviewed, the
Security Agreement and is executing and delivering this Supplement to the
Canadian DIP Collateral Agent pursuant to Section 22 of the Security Agreement.
2. Effective from and after the date this Supplement is executed and
delivered to the Canadian DIP Collateral Agent by any one of the New Chargors
(and irrespective of whether this Supplement or the Security Agreement has been
executed and delivered by any other Person):
613
- 2 -
(a) such New Chargor shall be, and shall be deemed for all purposes to
be, a Chargor under the Security Agreement with the same force and
effect, and subject to the same agreements, representations,
indemnities, liabilities, obligations and Security Interests, as if
such New Chargor had been an original signatory to the Security
Agreement as a Chargor; and
(b) all Collateral of such New Chargor shall be, and shall be deemed for
all purposes to be, 'Collateral' of such New Chargor for the
purposes of the Security Agreement and subject to Security Interests
from such New Chargor in accordance with the provisions of the
Security Agreement as security for the due payment and performance
of the Liabilities of such New Chargor in accordance with the
provisions of the Security Agreement.
In furtherance of the foregoing each New Chargor severally (and not
jointly or jointly and severally), as security for the payment and performance
of the Liabilities (including the payment of any such Liabilities that would
become due but for any automatic stay under the provisions of the Bankruptcy
and Insolvency Act (Canada), the United States Bankruptcy Code or any analogous
provisions of any other applicable law in Canada, the United States of America
or any other jurisdiction) of such New Chargor charges and assigns to the
Canadian DIP Collateral Agent, and grants to the Canadian DIP Collateral Agent
a continuing security interest in, the Collateral of such New Chargor. Each
reference to a Chargor in the Security Agreement shall be deemed to include
each New Chargor. The terms and provisions of the Security Agreement are
incorporated by reference in this Supplement.
3. Each of the New Chargors represents and warrants with respect to itself
to the Canadian DIP Collateral Agent and the Credit Providers that (a) this
Supplement has been duly authorized, executed and delivered by such Chargor and
constitutes a legal, valid and binding obligation of such Chargor enforceable
against such Chargor in accordance with its terms, and (b) each of the
representations and warranties made or deemed to have been made by it under the
Security Agreement as a Chargor are true and correct on the date of this
Supplement.
4. Each New Chargor's principal place of business and chief executive
office, and the place where it keeps its Books and Records, is at the address
specified in Schedule A to this Supplement, and its full legal name, and any
other name under which it conducts its business, is specified on the signature
page of this Supplement. The location of all other places where such New
Chargor presently carries on business or keeps tangible Personal Property and
the location of all jurisdictions in which such New Chargor's account debtors
are located, and the location of all real property in which such New Chargor
has any right, title and interest are set out in Schedule B to this Supplement.
All material Intellectual Property Rights in which each New Chargor has any
right, title or interest (and the nature of such right, title or interest), and
all rights of such New Chargor to the use of any material Intellectual Property
Rights, are described in Schedule C to this Supplement.
614
- 3 -
5. Upon this Supplement bearing the signature of any Person claiming to
have authority to bind any New Chargor coming into the possession of the
Canadian DIP Collateral Agent, and irrespective of whether this Supplement or
the Security Agreement has been executed by any other New Chargor, this
Supplement and the Security Agreement will be deemed to be finally and
irrevocably executed and delivered by, and be effective and binding on, and
enforceable against, such New Chargor free from any promise or condition
affecting or limiting the liabilities of such New Chargor and such New Chargor
shall be, and shall be deemed for all purposes to be, a Chargor under the
Security Agreement. No statement, representation, agreement or promise by any
officer, employee or agent of the Canadian DIP Collateral Agent or any other
Credit Provider, unless expressly set forth in this Supplement, forms any part
of this Supplement or has induced any New Chargor to enter into this Supplement
and the Security Agreement or in any way affects any of the agreements,
obligations or liabilities of any of the New Chargors under the Security
Agreement.
6. This Supplement may be executed in counterparts. Each executed
counterpart shall be deemed to be an original and all counterparts taken
together shall constitute one and the same Supplement. Delivery of an
executed signature page to this Supplement by any New Chargor by facsimile
transmission shall be as effective as delivery of a manually executed copy of
this Supplement by such New Chargor.
7. This Supplement is a contract made under, and will for all purposes be
governed by and interpreted and enforced according to, the laws of the Province
of Ontario (and the laws of Canada applicable in such Province) excluding any
conflict of laws rule or principle which might refer these matters to the laws
of another jurisdiction.
8. This Supplement and the Security Agreement shall be binding upon each
of the New Chargors and the successors of each of the New Chargors. None of
the New Chargors shall assign its rights and obligations under this Supplement
or the Security Agreement or any interest in this Supplement or the Security
Agreement.
9. The parties to this Supplement expressly request and require that this
Agreement and all related documents be drafted in English. Les parties aux
presentes conviennent et exigent que cette Convention et tous les documents qui
s'y rattachent soient rediges en Anglais.
IN WITNESS OF WHICH this Supplement has been duly executed and delivered
by each of the New Chargors as of the date indicated on the first page of this
Supplement.
[SIGNATURES ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇]
▇▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: )
) Chapter 11
▇▇▇▇▇▇ SERVICES (DELAWARE) INC. )
et al., ) Case No. 99-02385 (MFW)
)
Debtors. )
) Jointly Administered
STIPULATION AND ORDER AUTHORIZING DEBTORS
TO OBTAIN POST-PETITION SURETY BONDS AND
TO ENTER INTO INDEMNITY AGREEMENT
AND INTERCREDITOR AGREEMENT
This Stipulation and Order is made by and among (a) ▇▇▇▇▇▇ Services Corp.
("PSC"), its wholly-owned subsidiary, ▇▇▇▇▇▇ Services (Delaware), Inc. ("PSI")
and certain of PSC's subsidiaries incorporated in the United States, each as a
debtor and debtor in possession (each a "Debtor" and collectively, the
"Debtors"), (b) the lenders party to the Credit Agreement dated as of August 11,
1997, as amended from time to time through the Petition Date, as defined below
(as amended, the "Pre-Petition Credit Agreement") among the Debtors, Canadian
Imperial Bank of Commerce ("CIBC"), as Administrative Agent (in such capacity,
the "Pre-Petition Administrative Agent"), Bankers Trust Company ("BTCo"), as
Syndication Agent, and CIBC and BTCo, as Co-Arrangers (CIBC and BTCo
collectively, the "Pre-Petition Agents") and the various lenders from time to
time parties thereto (collectively, the "Pre-Petition Lenders"), (c) BTCo, as
agent (in such capacity, the "DIP Agent") and a syndicate of financial
institutions arranged by CIBC and BTCo (including the DIP Agent, the "DIP
Lenders"); (d) CIBC, as a holder of Account Intermediary Receivable Liens and
Other Account Intermediary Liens and
616
Comerica, as a holder as a holder of Account Intermediary Receivable Liens and
Other Account Intermediary Liens and (e) London Guarantee Insurance Company, CNA
Surety Corporation, Continental Casualty Company, National Fire Insurance
Company of Hartford, American Casualty Company of Reading, Pennsylvania, The
Continental Insurance Company, Commercial Insurance Company of Newark, New
Jersey and Firemen's Insurance Company of Newark, New Jersey (with their
respective co-sureties and reinsurers, collectively the "Surety Participants").
Findings of Fact and Conclusions of Law
THE COURT HEREBY FINDS:
A. This Court has jurisdiction over this matter pursuant to 28 U.S.C.
Section Section 157(b) and 1334. Consideration of this matter constitutes a core
proceeding as defined in 28 U.S.C. Section 157(b)(2). The statutory predicates
for the relief sought herein are Sections 105, 362 and 364 of title 11 of the
United States Code, 11 U.S.C. Section Section 101 et seq. (the "Bankruptcy
Code") and Rule 4001 of the Federal Bankruptcy Rules (the "Bankruptcy Rules").
Venue of the Chapter 11 Cases (as defined below) and the motion seeking approval
of this Order in this District is proper pursuant to 28 U.S.C. Section Section
1408 and 1409.
B. On June 25, 1999 (the "Petition Date"), PSC and certain of its direct
and indirect subsidiaries incorporated in the United States, including PSI
(collectively, the "Debtors") filed petitions for relief (the "Chapter 11
Cases") pursuant to Chapter 11 of the Bankruptcy Code with the Clerk of the
United States Bankruptcy Court for the District of Delaware. The Chapter 11
Cases have been consolidated for procedural purposes only. On June 25, 1999, PSC
and the direct and indirect subsidiaries of PSC incorporated in Canada (the
"Canadian Entities") filed insolvency proceedings in the Superior Court of
Ontario (the "Canadian Court") under the
-2-
617
Companies' Creditors Arrangement Act (the "CCAA"). The proceedings commenced
under the CCAA are hereinafter referred to as the "Canadian Cases", and
collectively with the Chapter 11 Cases, the "Cases".
C. The Debtors have continued in the management and operation of their
business and property as debtors in possession pursuant to Sections 1107 and
1108 of the Bankruptcy Code. No trustee, examiner or creditors committee has
been appointed in the Chapter 11 Cases, nor has any request for the appointment
of a trustee or examiner been made.
D. PSC and its direct and indirect subsidiaries are an integrated metals
recovery and industrial services company which provides metals recovery and
processing services, by-products recovery and industrial outsourcing services to
major industry sectors of over 230 locations in the United States, Canada and
Europe. PSC's primary base of operations is in the United States, PSC is
organized into two operating divisions, the Metals Services Group and the
Industrial Services Group. The Metals Services Group is one of the largest
ferrous scrap processors in North America and the United Kingdom and has
approximately 2,000 employees. The Industrial Services Group is an integrated
provider of by-products recovery and industrial outsourcing with a network of
over 200 facilities and approximately 11,000 employees. For the year ended
December 31, 1998, PSC had revenue of $2.0 billion.
E. Prior to the Petition Date, from time to time the Surety Participants
issued Bonds, as defined in the Inter-Creditor Agreement dated June 21, 1999
between the Pre-Petition Administrative Agent, PSC and certain of the Debtors
and Canadian Entities and London Guarantee Insurance Company (the
"Inter-Creditor Agreement", a copy of which is attached as Exhibit A) at the
request of and on behalf of the Debtors and the Canadian Entities in respect of
-3-
618
their obligations under certain pre-petition contracts, in respect of which
Bonds the Surety Participants hold, inter alia, indemnity agreements from the
Debtors and the Canadian Entities, and certain other rights under applicable law
(the "Surety Rights").
F. The Surety Participants have agreed to issue new Bonds post-petition
only if they receive indemnification and security for such new Bonds and unless
all of their common law, statutory and equitable rights as sureties in respect
of such Bonds are expressly preserved. With such protections, the Surety
Participants are prepared to provide an interim surety bond facility during the
restructuring process providing for bonds in the maximum amount of $10,000,000
U.S. per contract and $75,000,000 U.S. in aggregate contract value for new bonds
and renewals of existing bonds.
G. The Debtors, the Canadian Entities, the Pre-Petition Lenders, the
holders of the Account Intermediary Receivable Liens, and the DIP Lenders have
agreed to permit the Surety Participants to have a first priority lien on all
Bonded Contracts, Bonded Contract Receivables and Bonded Contract Assets, as
those terms are defined in the Inter-Creditor Agreement in respect of all Bonds
issued post-petition to secure the Debtors' obligations in respect of such
Bonds. The Pre-Petition Lenders, the holders of the Account Intermediary
Receivable Liens and the DIP Lenders have also agreed to subordinate their
recovery on their claims (but only to the extent of their interests in the
Bonded Contracts, Bonded Contract Receivables and Bonded Contract Assets), both
pre-petition and post-petition, to the Surety Participants' claims in respect of
all Bonds whether issued pre- or post-petition, pursuant to the Inter-Creditor
Agreement.
-4-
619
H. An immediate and critical need exists for the Philips Entities to obtain
Bonds post-petition in respect of their contractual obligations. Without such
Bonds the Philips Entities literally cannot operate. The availability of Bonds
going forward is therefore of paramount importance to the preservation and
maintenance of the going concern value of the Philips Entities, and thus to
their successful reorganization pursuant to the provisions of Chapter 11 of the
Bankruptcy Code and the CCAA. The entry of this Order (i) will minimize the
disruption to the business of the Debtors and the Canadian Entities which would
otherwise result without the Bonds that the Surety Participants will, in their
sole discretion, make available, (ii) will increase the likelihood that the
Debtors and the Canadian Entities will be reorganized pursuant to the Bankruptcy
Code and the CCAA, (iii) is in the best interest of the Debtors and the Canadian
Entities and their estates and (iv) is necessary to avoid immediate and
irreparable harm to the Debtors and the Canadian Entities, and their creditors,
businesses, goodwill, reputation, employees and franchises.
I. The provisions of (i) this Order, the Inter-Creditor Agreement and the
Indemnity Agreement, a copy of which is attached as Exhibit B, have been
negotiated in good faith and at arms' length among the Debtors, the Canadian
Entities and the Surety Participants, (ii) this Order and the Inter-Creditor
Agreement have been negotiated in good faith and at arms' length among the
Pre-Petition Agents, the Pre-Petition Lenders and the Surety Participants, and
(iii) this Order has been negotiated in good faith and at arms length among the
DIP Agent, the DIP Lenders, the holders of the Account Intermediary Receivable
Liens and the Other Account Intermediary Liens, and the Surety Participants,
with all parties represented by counsel, and any Bonds issued for or on behalf
of the Debtors and the Canadian Entities by the Surety Participants
-5-
620
shall be deemed to have been issued in good faith, as that term is used in
Section 364(e) of the Bankruptcy Code, and the liens and priorities granted to
the Surety Participants pursuant to this Order and the Indemnity Agreement
shall be entitled to the protections of Section 364(e) of the Bankruptcy Code.
J. Notice of this Stipulation and the Motion for a preliminary hearing
(the "Preliminary Hearing") in connection herewith (the "Motion") has been
provided to (i) the Office of the United States Trustee; (ii) the Pre-Petition
Agents; (iii) the DIP Agent; (iv) the holders of the Account Intermediary
Receivable Liens and the Other Account Intermediary Liens; (v) the known
holders of material Senior Liens; and (vi) the twenty largest unsecured
creditors of the Debtors. Appropriate notice of the Preliminary Hearing and the
relief requested in the Motion has been given pursuant to Sections 102(1) and
363 of the Bankruptcy Code and Bankruptcy Rules 2002, 4001(b), 4001(c) and 4001
(d).
K. Good cause has been shown for the entry of this Order, which will
minimize disruption of the Debtors' business and operations, as it will enable
the Debtors to obtain post-petition Bonds as needed and thereby to continue to
operate their businesses.
Base on the foregoing,
IT IS HEREBY STIPULATED, CONSENTED, AGREED AND ORDERED as follows:
1. The Motion is granted, subject to the terms and conditions set forth
herein.
2. The Debtors and the Canadian Entities are expressly authorized and
empowered to execute and deliver the Inter-Creditor Agreement in the form
attached as Exhibit A and the Indemnity Agreement in the form attached as
Exhibit B. The terms and conditions of
-6-
621
the Inter-Creditor Agreement and of the Indemnity Agreement (to the extent
consistent with the Inter-Creditor Agreement) are approved, and the Debtors and
the Canadian Entities are authorized and directed to comply with and perform
all of the terms and conditions contained therein in accordance with and
subject to the terms and conditions set forth in the Inter-Creditor Agreement
and in the Indemnity Agreement (to the extent consistent with the
Inter-Creditor Agreement) and this Order. PSC is further expressly authorized
and directed to pay all expenses incurred after the Petition Date by the Surety
Participants in connection with the Cases, including, without limitation, all
reasonable fees and expenses of professionals engaged by the Surety
Participants, in accordance with the terms of the Indemnity Agreement.
3. The Surety Participants hereby agree that the obligations of a Debtor
or Debtors under any indemnity agreement entered into by a Debtor prior to the
Petition Date shall be deemed to be amended in the same manner and to the same
extent as provided in the Inter-Creditor Agreement.
4. The Debtors and the Canadian Entities are authorized to make, execute,
deliver and perform any and all modifications and amendments to the Indemnity
Agreement which are not inconsistent with the Inter-Creditor Agreement, not
material and as may be agreed upon in writing by the Debtors, the Canadian
Entities and Surety Participants (pursuant to the Indemnity Agreement) without
further order of this Court. Material modifications and amendments to the
Indemnity Agreement may not be made without the prior written consent of the
Pre-Petition Administrative Agent, the DIP Agent, the holders of Account
Intermediary Receivable Liens, the Other Account Intermediary Liens and the
further order of this Court. The obligations of the Debtors under the Indemnity
Agreement (to the extent consistent with the
-7-
622
Inter-Creditor Agreement) are legal, valid and binding and are enforceable
against the Debtors in accordance with their terms.
5. As security for the obligations of the Debtors and the Canadian
Entities under the Bonds and the Indemnity Agreement, the Surety Participants
shall have and are hereby granted (effective upon the date of this Order and
without the necessity of the execution by the Debtors or the Canadian Entities,
or the filing, of security agreements, pledge agreements, mortgages, financing
statements or otherwise) pursuant to Section 364(d)(1) of the Bankruptcy Code,
first priority liens and security interests on all Bonded Contracts, Bonded
Contract Receivables and Bonded Contract Assets, as those terms are defined in,
and to the extent provided in, the Inter-Creditor Agreement, subject to
Pre-petition Senior Liens as defined in the Cash Collateral Order (as defined
herein). To the extent not inconsistent with the Inter-Creditor Agreement, the
liens and security interests provided to the Surety Participants in this
paragraph are hereafter collectively referred to as the "Bonding Liens".
Notwithstanding anything herein to the contrary, unless this Order shall become
a final order, the proceeds of any Chapter 5 avoidance actions shall not be
included in the Bonding Liens.
6. The Surety Participants may at any time, but shall not be required to,
file or record financing statements, mortgages, notices of lien or similar
instruments in any jurisdiction or take any other action in order to validate
the Bonding Liens granted to them pursuant to this Order. If the Surety
Participants shall file or record such financing statements, mortgages, notices
of lien or similar instruments or otherwise confirm perfection of Bonding Liens,
the Debtors shall cooperate and comply with the requests of the Surety
Participants and all such documents shall be deemed to have been filed or
recorded on the date of commencement of
-8-
623
the Cases, and the automatic stay provisions of Section 362 of the Bankruptcy
Code are modified to permit the execution, delivery and filing of such
documents.
7. The Surety Participants shall have remedies permitted under this Order
and the Indemnity Agreement (to the extent consistent with the Inter-Creditor
Agreement) and upon their exercise of any such rights thereunder or hereunder,
the Debtors shall cooperate and comply with any requests of the Surety
Participants relating thereto.
8. In issuing Bonds under the Indemnity Agreement, or in exercising any
rights or remedies as and when permitted under the Indemnity Agreement or this
Order, the Surety Participants shall not be deemed to be in control of the
operations of any Debtor or to be acting as a "responsible person" or "owner or
operator" with respect to the operation or management of any Debtor (as such
terms, or any similar terms, are used in the United States Comprehensive
Environmental Response, Compensation and Liability Act, as amended, or any
similar federal or state statute).
9. The Debtors are authorized to do and perform all acts, to make,
execute and deliver all instruments and documents (including, without
limitation, the execution of additional security agreements, mortgages and
financing statements) and to pay fees and reimburse expenses which may be
required pursuant to the terms of the Indemnity Agreement (to the extent
consistent with the Inter-Creditor Agreement), without further application to or
order of this Court, including, without limitation: (i) the execution and
performance of the Indemnity Agreement, and (ii) the payment by PSC to the
Surety Participants, on a non-refundable basis, of the fees set forth in all
documentation relating to the Indemnity Agreement (including, without
limitation, reasonable attorneys' fees and disbursements).
-9-
624
10. The Surety Participants shall be entitled to all rights and remedies
as and when permitted under, and upon such notice as expressly required in, this
Order and the Indemnity Agreement (to the extent consistent with the
Inter-Creditor Agreement), and shall have expressly preserved to them all of
their rights under the Bonding Liens and the Surety Rights as well as the rights
of third parties under the Bond Contracts to which the Surety Participants may
be subrogated with respect to Bonds issued after, as well as before, the
Petition Date, and in connection with their exercise of any such rights and
remedies thereunder or hereunder in accordance with the terms of the Indemnity
Agreement, the Debtors shall cooperate and comply with the requests of the
Surety Participants with respect to the enforcement thereof.
11. Upon three Business Days' notice to counsel to the Debtors, counsel to
the Pre-Petition Lenders, counsel to the DIP Agent and the DIP Lenders, counsel
to the holders of the Account Intermediary Receivable Liens and the Order
Account Intermediary Liens, counsel for any official committee that may be
appointed in the Cases and the United States Trustee of the occurrence of any
Triggering Event as that term is defined in the Inter-Creditor Agreement, the
automatic stay provisions of Section 362 of the Bankruptcy Code shall be deemed
vacated and modified to the extent necessary so as to permit the Surety
Participants to pursue any and all remedies and rights referred to in paragraph
7.1(b) of the Inter-Creditor Agreement, unless the Court orders otherwise.
12. The provisions of this Order shall be binding upon and inure to the
benefit of the Surety Participants, the Debtors and their respective successors
and assigns, including but not limited to, any trustee in bankruptcy or other
fiduciary hereinafter appointed as a legal representative of any of the Debtors
or the Debtors' estates or the Canadian Entities or the
-10-
625
Canadian Entities' estates, to the fullest extent permitted by law. Such binding
effect is an integral part of this transaction and the Indemnity Agreement.
13. If and to the extent that there are any inconsistencies between the
provisions of this Order and the provisions of the Stipulation and Order
Authorizing and Restricting Use of Cash Collateral and Granting Adequate
Protection of Secured Claims (the "Cash Collateral Order") or the Interim Order
Authorizing Debtors to Obtain Post-petition Financing Pursuant to 11 U.S.C.
Sections 364(c) and 364(d), the provisions of this Order shall govern.
14. This Order is entered in a "core" proceeding as defined in, inter alia,
28 U.S.C. Section 157(b)(2)(A),(M), and (O), is a final order, and is valid and
fully effective upon its entry.
15. Any actions taken pursuant to this Order shall survive entry of, and
shall govern with respect to any conflict with, any order which may be entered
confirming any plan of reorganization or which may be entered dismissing the
Chapter 11 Cases or converting the Chapter 11 Cases to Chapter 7 liquidations or
the Debtors or any of them are petitioned into bankruptcy in Canada to the
fullest extent permitted by law, including notice issues. The terms and
provisions of this Order as well as the Bonding Liens and the Surety Rights and
all rights of the Surety Participants and the obligations created or arising
pursuant hereto and pursuant to the Bonds and the Indemnity Agreement (to the
extent the Bonds and the Indemnity Agreement are consistent with the
Inter-Creditor Agreement), shall continue in the Chapter 11 Cases and in any
superseding proceedings under the Bankruptcy Code or the Bankruptcy and
Insolvency Act, and the Bonding Liens shall maintain their priority as provided
by this Order and the Indemnity Agreement (to the extent consistent with the
Inter-Creditor Agreement), until satisfied and
-11-
626
discharged in accordance with the terms of the Indemnity Agreement (to the
extent consistent with the Inter-Creditor Agreement) or otherwise modified in
accordance with the terms thereof. If any or all of the provisions in this Order
are hereafter modified, vacated or stayed, such stay, modification or vacation
shall not affect the validity of any of the Obligations incurred prior to the
effective date of such stay, modification or vacation, or the validity and
enforceability of the Bonding Liens. Notwithstanding any such stay, modification
or vacation, the Obligations incurred prior to the effective date of such stay,
modification or vacation shall be governed in all respects by the original
provisions of this Order, and the Surety Participants shall be entitled to all
the rights, remedies, privileges and benefits, including the security interests,
liens and priorities granted herein and pursuant to the Indemnity Agreement (to
the extent consistent with the Inter-Creditor Agreement), with respect to such
Obligations. All of the Surety Participants' Surety Rights and security and
claims in respect of all Bonds are issued in reliance upon this Order and until
the date of any stay, modification or vacation of this Order cannot (i) be
subordinated, or (ii) be deprived of the benefit of the status of the liens
granted to the Surety Participants in this Order, as a result of any subsequent
order in the Cases.
16. The DIP Lenders, the holders of Account Intermediary Receivable Liens
and the Surety Participants agree that their respective rights and obligations
will be as set out in the Inter-Creditor Agreement as if the DIP Lenders and the
holders of Account Intermediary Receivable Liens were originally parties to that
agreement so that all of the references to the Lenders, the Lender Obligation
and the Lender Security shall refer to the claims and liens of the DIP Lenders
and of the holders of Account Intermediary Receivable Liens.
-12-
627
17. No waiver, modification or amendment of any of the provisions hereof
shall be effective unless set forth in writing, signed by the parties hereto,
and approved by the Court.
18. Unless otherwise defined in this Order, all capitalized terms used
herein shall have those meanings ascribed to them in the Inter-Creditor
Agreement or the Interim DIP Order, except as the context otherwise requires. In
the event of any express conflict between the terms of this Order and the terms
of the Indemnity Agreement, the terms of this Order shall control.
19. The provisions of this Order shall immediately be binding upon and
inure to the benefit of the Pre-Petition Lenders, the DIP Lenders, the holders
of the Account Intermediary Receivable Liens and the Other Account Intermediary
Liens, the Surety Participants, the Debtors, and their respective successors and
assigns, including any trustee or other fiduciary hereafter appointed as a
legal representative of the Debtors or the Debtors' estates or the Canadian
Entities or the Canadian Entities' estates.
20. The Debtors shall within three (3) days subsequent to the date hereof
mail notice of the approval of this Order, together with a copy of this Order,
to the parties having been given notice of the Preliminary Hearing and to any
other party which has filed a request for notices with the Court and to counsel
for any committee, appointed pursuant to Section 1102 of the Bankruptcy Code.
The notice of approval of this Order shall state that any party in interest
objecting to this Order as a final Order shall file written objections with the
Clerk of the United States Bankruptcy Court for the District of Delaware no
later than July 22, 1999 (the "Objection Deadline"), which objections shall be
served so that the same are received on or before such date
-13-
628
by (a) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.,
▇▇▇▇▇▇ & Elliot, Scotia Plaza, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq, and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇▇▇▇, Esq., attorneys for the Surety Participants; (b) Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Stikeman, Elliott, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., attorneys for the Debtors;
(c) White & Case LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., and
Young, Conaway, Stargatt & ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: S. ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., attorneys for the
Pre-Petition Agents and the Pre-Petition Lenders; (d) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇, PLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., attorneys for Comerica Bank in its capacity as a
holder of Account Intermediary Receivable Liens and Other Account Intermediary
Liens, (e) Sidley & Austin, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn. J.
▇▇▇▇▇▇ ▇▇▇▇▇, Esq. And Osler, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇, 1 First ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., attorneys for
CIBC in its capacity as a holder of Account Intermediary Receivable Liens and
Other Account Intermediary Liens, and (f) the Office of the United States
Trustee.
-14-
629
21. If no written objection is timely served and filed by the Objection
Deadline, this Order shall be deemed the Final Order and this Order shall
continue on a final basis and remain in full force and effect and shall
constitute final authority for the balance of the Indemnity Agreement Financing,
and any objection by any party in interest to the terms of this Order and the
relief requested in the Motion shall be deemed forever waived. If a timely
-15-
630
objection is served and filed, a final hearing to consider the Meeting will be
held on _________________ 1999 at ________________.
Dated: Wilmington, Delaware
June __, 1999
Judge ▇. ▇▇▇▇▇▇▇
------------------------------
UNITED STATES BANKRUPTCY JUDGE
The terms of this Stipulation and Order are hereby agreed and consented to by
the following:
PHILIPS SERVICES CORP.
On its own behalf and on behalf
of each of the other Debtors and
the Canadian Entities
By:
----------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice-President
CANADIAN IMPERIAL BANK OF COMMERCE,
As a holder of Account Intermediary Receivable
Liens and Other Account Intermediary Liens
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice-President
-16-
631
BANKERS TRUST COMPANY,
as Syndication Agent
By: ____________________
Name:
Title:
BANKERS TRUST COMPANY,
as DIP Agent
By: ____________________
Name:
Title:
COMERICA BANK
as a holder of Account Intermediary
Receivable Liens and
Other Account Intermediary Liens
By: ____________________
Name:
Title:
-17-
632
LONDON GUARANTEE INSURANCE COMPANY,
for and on behalf of itself
and the Surety Participants
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
-18-
633
SCHEDULE I
----------
LENDER COMMITMENTS
Except as otherwise defined herein, the capitalized terms used in this schedule
shall have the respective meanings set forth in the Credit Agreement, dated as
of June 28, 1999, among ▇▇▇▇▇▇ Services Corp., a corporation existing under the
laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), ▇▇▇▇▇▇ Services (Delaware), Inc., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower"
and, together with the Canadian Borrower, the "Borrowers"), the Subsidiary
Guarantors (together with the Borrowers, the "Credit Parties"), Bankers Trust
Company, ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
634
SCHEDULE II
-----------
DIRECT AND INDIRECT SUBSIDIARIES OTHER THAN THE
SUBSIDIARY GUARANTORS
Except as otherwise defined herein, the capitalized terms used in this schedule
shall have the respective meanings set forth in the Credit Agreement, dated as
of June 28, 1999, among ▇▇▇▇▇▇ Services Corp., a corporation existing under the
laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), ▇▇▇▇▇▇ Services (Delaware), Inc., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower"
and, together with the Canadian Borrower, the "Borrowers"), the Subsidiary
Guarantors (together with the Borrowers, the "Credit Parties"), Bankers Trust
Company, ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
1125443 Ontario Inc.
2884216 Canada Inc.
Allied Metals Limited
Allwaste Servicios Industriales de Control Ecologico S.A. de C.V.
Allwaste Tank Services S.A. de C.V.
Arc Dust Processing (Barbados) Limited
B.M. Metals (Recycling) Ltd.
Bath Reclamation (Avonmouth) Co. Limited
Blackbushe Limited
Blackbushe Metals (Western) Limited
▇. ▇▇▇▇▇▇▇ and Sons (Bristol) Limited
Caligo de Mexico, S.A. de C.V.
Caligo Partnership
Caligo Reinigungages m.b.H.
Cecatur Holdings
Chemisolv Limited
D & L, Inc.
Delta Maintenance, Inc.
Dotspec Ltd.
1
635
▇. ▇▇▇▇▇▇ (Holdings) Limited
▇. ▇▇▇▇▇▇ & Co. Limited
▇▇▇▇▇▇▇ Metal Company Limited
▇.▇. ▇▇▇▇▇▇▇▇ & Associates, Inc.
International Catalyst, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ Limited
Nutrisolv Ireland Ltd.
Petrochem Field Services de Venezuela, S.A.
Phencorp International B.V.
Phencorp International Finance Inc.
Phencorp Reinsurance Company Inc.
▇▇▇▇▇▇ Cardiff Facility Company Limited
▇▇▇▇▇▇ ▇▇▇▇ Landfill Inc.
▇▇▇▇▇▇ Industries (Europe) Limited
▇▇▇▇▇▇ Industrial Services (Europe) Limited
▇▇▇▇▇▇ International Development Inc.
▇▇▇▇▇▇ Metals (Europe) Limited
▇▇▇▇▇▇ MPS Industrial Services, L.L.C.
▇▇▇▇▇▇ Services (Delaware), L.L.C.
▇▇▇▇▇▇ Services (Europe) Limited
▇▇▇▇▇▇ Services (Netherlands) B.V.
▇▇▇▇▇▇ Servicos Industriais Do Brasil Ltda
PSC (Europe) Limited
P.S.C. ▇▇▇▇▇▇ Services Iberica, S.L.
Refinery Maintenance International Limited
Serv-Tech de Mexico, S. de ▇.▇.
Serv-Tech Europe GMBH
Serv-Tech Mexicana, s. de ▇.▇.
Serv-Tech Sudamericana, ▇.▇.
▇▇▇▇▇, S.A. de C.V.
Societe D'Elimination Selenco, Inc.
Southern Hauliers Limited
▇.▇. ▇▇▇▇▇▇ Metals Limited
Tiger Wrecking Inc.
Widsite Limited
2
636
SCHEDULE III
------------
INSURANCE MAINTAINED BY BORROWERS AND SUBSIDIARIES
Except as otherwise defined herein, the capitalized terms used in this schedule
shall have the respective meanings set forth in the Credit Agreement, dated as
of June 28, 1999, among ▇▇▇▇▇▇ Services Corp., a corporation existing under the
laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), ▇▇▇▇▇▇ Services (Delaware), Inc., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower"
and, together with the Canadian Borrower, the "Borrowers"), the Subsidiary
Guarantors (together with the Borrowers, the "Credit Parties"), Bankers Trust
Company, ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
1
637
SCHEDULE IV
-----------
EXISTING PERMITTED LIENS
Except as otherwise defined herein, the capitalized terms used in this schedule
shall have the respective meanings set forth in the Credit Agreement, dated as
of June 28, 1999, among ▇▇▇▇▇▇ Services Corp., a corporation existing under the
laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), ▇▇▇▇▇▇ Services (Delaware), Inc., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower"
and, together with the Canadian Borrower, the "Borrowers"), the Subsidiary
Guarantors (together with the Borrowers, the "Credit Parties"), Bankers Trust
Company, ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
The following is a list of all Liens of the Borrowers and the Subsidiaries
existing as of the Effective Date other than certain Liens permitted by Sections
8.01(ii) through (xiv) of the Credit Agreement.
Liens on Canadian intellectual property with an aggregate value not exceeding
$10,000,000.
1
638
SCHEDULE V
----------
EXISTING INDEBTEDNESS
Except as otherwise defined herein, the capitalized terms used in this schedule
shall have the respective meanings set forth in the Credit Agreement, dated as
of June 28, 1999, among ▇▇▇▇▇▇ Services Corp., a corporation existing under the
laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), ▇▇▇▇▇▇ Services (Delaware), Inc., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower"
and, together with the Canadian Borrower, the "Borrowers"), the Subsidiary
Guarantors (together with the Borrowers, the "Credit Parties"), Bankers Trust
Company, ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
The following is a list of all Indebtedness of the Borrowers and the
Subsidiaries existing as of the Effective Date other than certain Indebtedness
permitted by Sections 8.04(i) and 8.04 (iii) through (xiii) of the Credit
Agreement.
1
639
SCHEDULE VI
-----------
BORROWING BASE DATES SCHEDULE
Except as otherwise defined herein, the capitalized terms used in this schedule
shall have the respective meanings set forth in the Credit Agreement, dated as
of June 28, 1999, among ▇▇▇▇▇▇ Services Corp., a corporation existing under the
laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), ▇▇▇▇▇▇ Services (Delaware), Inc., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower"
and, together with the Canadian Borrower, the "Borrowers"), the Subsidiary
Guarantors (together with the Borrowers, the "Credit Parties"), Bankers Trust
Company, ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
Cutoff Date Due Date to Agent
----------- -----------------
Jun-30 Jul-22
Jul-16 Jul-30
Jul-31 Aug-20
Aug-20 Sep-03
Aug-31 Sep-22
Sep-17 Oct-01
Sep-30 Oct-22
Oct-15 Oct-29
Oct-30 Nov-19
Nov-19 Dec-03
Nov-30 Dec-21
1
640
SCHEDULE VII
------------
CHIEF EXECUTIVE OFFICES, RECORDS LOCATIONS, AND
EQUIPMENT AND INVENTORY LOCATIONS
Except as otherwise defined herein, the capitalized terms used in this schedule
shall have the respective meanings set forth in the Credit Agreement, dated as
of June 28, 1999, among ▇▇▇▇▇▇ Services Corp., a corporation existing under the
laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), ▇▇▇▇▇▇ Services (Delaware), Inc., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower"
and, together with the Canadian Borrower, the "Borrowers"), the Subsidiary
Guarantors (together with the Borrowers, the "Credit Parties"), Bankers Trust
Company, ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
[FN]
* = State in which motor vehicles may
be located, although corporation
has no actual physical presence
in state
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
1195613 Ontario Inc. Hamilton:
▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇.▇. ▇▇▇ ▇▇▇▇
LCD 1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
1233793 Ontario Inc. Hamilton:
▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇.▇. ▇▇▇ ▇▇▇▇
LCD 1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
21st Century Rhode Island: ▇▇▇▇▇▇▇▇: Rhode Island
Environmental ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇. ▇. ▇▇▇▇▇▇▇
Management, Inc. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
LCD 1
1
641
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
21st Century Rhode Island: Hamilton: Rhode Island
Environmental ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 651 Burlington St. E.
Management, Inc. of ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
21st Century Nevada: Rhode Island: Nevada
Environmental ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Management, Inc. of ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Nevada
21st Century Rhode Island: Hamilton: Puerto Rico
Environmental ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 651 Burlington St. E.
Management, Inc. of ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
2766906 Canada Inc. Hamilton:
▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇.▇. ▇▇▇ ▇▇▇▇
LCD 1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Ltd. Hamilton: Edmonton:
▇▇▇ ▇▇▇▇ ▇▇. ▇. ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
LCD 1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
800151 Ontario Inc. Hamilton:
▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇.▇. ▇▇▇ ▇▇▇▇
LCD 1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
842578 Ontario Limited Hamilton: Ontario
▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇.▇. ▇▇▇ ▇▇▇▇
LCD 1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
912613 Ontario Ltd. Hamilton:
▇▇▇ ▇▇▇▇ ▇▇. ▇.
P.O. Box 2440
2
642
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
LCD 1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Ace/Allwaste Texas: Illinois *
Environmental Services ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
of Indiana, Inc. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Kentucky *
Louisiana *
New York *
Ohio *
Oklahoma *
Wisconsin *
Advanced Energy Texas: Texas:
Corporation ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Advanced Environmental Texas: Denver:
Systems, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
All Safety and Supply, Texas: Texas
Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Allies Staffing, Inc. Texas: Alabama *
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ California
Colorado *
Georgia *
Hawaii *
Illinois
Louisiana
Maine *
Michigan *
Missouri *
Montana *
North Carolina *
Ohio *
Oklahoma *
Pennsylvania *
Tennessee *
Texas
Utah *
Washington *
3
643
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
Allies Staffing Ltd. Hamilton:
▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇.▇. ▇▇▇ ▇▇▇▇
LCD 1
Hamilton, Ontario
L8N 4J6
Allquest Capital, Inc. Texas:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AllScaff, Inc. Texas:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Allwaste Railcar Texas:
Cleaning, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Allwaste Environmental Texas:
▇▇▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Inc. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Allwaste Asbestos Texas:
Abatement Holdings, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Allwaste Texquisition, Texas:
Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Allwaste of Canada Ltd. Atlanta: Richmond Hill: Ontario
Two Concourse Pkwy. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ L4C 3G7
Allwaste Tank Cleaning, Texas: California
Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Georgia
Illinois
Kentucky
Louisiana
Maryland
Michigan
Montana
North Carolina
New Jersey
New York
Ohio
Pennsylvania
4
644
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
South Carolina Texas
Allwaste Recovery Texas: Colorado
Systems, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Texas
Allwaste Services of El Texas: ▇▇▇▇▇▇▇▇:
Paso, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Allwaste Asbestos Texas:
Abatement, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Allwaste Asbestos Texas:
Abatement of New 5151 San ▇▇▇▇▇▇
▇▇▇▇▇▇▇, Inc. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Allworth, Inc. Michigan: Alabama: Alabama
▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ALRC, Inc. Texas:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
APLC, Inc. Texas:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
BEC/▇▇▇▇▇▇, Inc. Texas: Alabama
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Georgia *
Kentucky *
Louisiana
Mississippi *
North Carolina *
Pennsylvania *
South Carolina *
Tennessee *
Texas *
Virginia *
Wisconsin *
Burlington Washington:
Environmental Inc. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.
[Washington] S.W.
5
645
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Burlington Washington: Texas:
Environmental Inc. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇. 5151 San ▇▇▇▇▇▇
[Delaware] S.W. Houston, TX 77056
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Michigan:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Butco Inc. Hamilton: New York
▇▇▇ ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Caligo Reclamation Ltd. Richmond Hill: Ontario
▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Caligo Partnership Hamilton:
▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇.▇. ▇▇▇ ▇▇▇▇
LCD 1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Cappco Tubular Products Georgia: Georgia
USA, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇. #▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇
Chem-Fab, Inc. Texas: Texas:
5151 San ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Chem-Freight Inc. Pennsylvania: Ohio
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇
Chemical Pollution Florida: Rhode Island: Florida
Control, Inc. of ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ - A 21st Deerfield Beach, FL ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Century Environmental 33442
Management Company
Chemical Reclamation Michigan: Texas: Texas
6
646
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
Services, Inc. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Chemical Pollution New York: Rhode Island: New York
Control, Inc. of New ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ - A 21st Century Bayshore, NY 11706 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Environmental
Management Company
Cousins Waste Control Ohio: Ohio
Corporation ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Pennsylvania
CyanoKEM Inc. Michigan: Michigan
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
D & L, Inc. Pennsylvania: N/A
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Deep Clean, Inc. Texas: Hamilton:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Delsan Demolition Hamilton:
Limited ▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇.▇. ▇▇▇ ▇▇▇▇
LCD 1
Hamilton, Ontario
L8N 4J6
Delta Maintenance, Inc. Texas: N/A
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DM Acquisition Texas:
Corporation ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇▇ & Hamilton: Texas: N/A
Associates, Inc. ▇▇▇ ▇▇▇▇ ▇▇. ▇. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
7
647
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
Gasoline Tank Service Washington:
Company, Inc. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇.▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Georgia Recovery Systems Texas:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GRS/Lake ▇▇▇▇▇▇▇, Ltd. Texas:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Corporation Texas:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Hydro-Engineering & Texas: Denver: Colorado
Service, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Industrial Construction Texas:
Services Co., Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Industrial Services Texas: Denver:
Technologies, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Intermetco U.S., Inc. Hamilton: Colorado
▇▇▇ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Intermetco U.S.A. Ltd. Hamilton: New York
▇▇▇ ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
International Catalyst, Texas: Texas: N/A
Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
IST Holding Corp. Texas: Denver:
8
648
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ & Luther Texas:
Services, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Jesco Industrial Texas: Alabama *
Service, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Illinois *
Kentucky
Louisiana *
Michigan *
Mississippi *
Ohio *
Pennsylvania *
South Carolina *
Tennessee *
Texas *
Luntz Acquisition Hamilton:
(Delaware) Corporation ▇▇▇ ▇▇▇▇ ▇▇. ▇.
P.O. Box 2440
LCD 1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Luntz Corporation Ohio: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Mac-Tech, Inc. Texas:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Northland Rhode Island: Hamilton: Rhode Island
Environmental, Inc. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ ▇▇▇ ▇▇▇
Nortru, Ltd. Hamilton:
▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇.▇. ▇▇▇ ▇▇▇▇
LCD 1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Nortru, Inc. Michigan: Michigan
9
649
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Indiana
Kentucky
Oneida Asbestos Texas:
Removal, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Oneida Asbestos Texas:
Abatement, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Services/North Texas: Colorado *
Atlantic, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware *
Illinois *
Massachusetts
Maryland *
Maine
Michigan *
New Hampshire *
New York
Rhode Island *
Vermont *
▇▇▇▇▇▇ Mechanical Texas: Louisiana
Services of Louisiana, 5151 San ▇▇▇▇▇▇
Inc. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Metals (New New York: New York
York), Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
▇▇▇▇▇▇ Metals Recovery Hamilton:
(Delaware), Inc. ▇▇▇ ▇▇▇▇ ▇▇. ▇.
P.O. Box 2440 LCD1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇ Metals (USA), Hamilton:
Inc. ▇▇▇ ▇▇▇▇ ▇▇. ▇.
P.O. Box 2440 LCD1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇ Metals Inc. Ohio: Alabama
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Michigan
Missouri
10
650
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
Ohio
Tennessee
▇▇▇▇▇▇ Metals Recovery Hamilton: Arizona
(USA), Inc. ▇▇▇ ▇▇▇▇ ▇▇. ▇. Kansas
P.O. Box 2440 LCD 1 New York
Hamilton, Ontario Ohio
L8N 4J6 Pennsylvania
West Virginia
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Industrial Hamilton:
Services (USA), Inc. ▇▇▇ ▇▇▇▇ ▇▇. ▇.
P.O. Box 2440 LCD1
Hamilton, Ontario
L8N 4J6
Records Located In
Texas:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ MPS Industrial Hamilton: N/A
Services, L.L.C. ▇▇▇ ▇▇▇▇ ▇▇. ▇.
P.O. Box 2440 LCD1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇ Oil Recycling, Texas: California *
Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Louisiana *
Minnesota
North Dakota *
New Jersey *
Ohio *
Texas *
Wyoming *
▇▇▇▇▇▇ ▇▇▇▇▇ Recovery Texas:
Systems, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Plant Services, Texas: Arkansas *
Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Colorado *
Idaho *
Michigan *
Minnesota *
Montana
Nevada *
11
651
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
Texas *
Utah
Washington *
Wyoming *
▇▇▇▇▇▇ Reclamation Texas: Texas
Services, Houston, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Refractory and Sugarland, TX Texas: California
Corrosion Corporation ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ New Jersey
Texas
▇▇▇▇▇▇ Refractory Texas:
Services, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Scaffold Texas: Colorado
Corporation ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Texas *
Utah *
Wyoming *
▇▇▇▇▇▇/SECO Industries, Texas: California
Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Texas
▇▇▇▇▇▇ Texas: Alabama *
Services/Atlanta, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Florida
Georgia
Iowa *
Indiana *
Louisiana *
Michigan *
Missouri *
North Carolina *
Ohio *
Pennsylvania *
South Carolina *
Tennessee *
Texas *
▇▇▇▇▇▇ Services Hamilton: N/A
(Delaware), L.L.C. ▇▇▇ ▇▇▇▇ ▇▇. ▇.
P.O. Box 2440 LCD1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
12
652
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
▇▇▇▇▇▇ Services Hamilton:
(Delaware), Inc. ▇▇▇ ▇▇▇▇ ▇▇. ▇.
P.O. Box 2440 LCD1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇ Services Hawaii, Texas: California *
Ltd. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Hawaii
Missouri *
New Jersey *
New York *
Ohio *
Texas *
Virginia *
Washington *
▇▇▇▇▇▇ Texas: Alabama *
Services/Louisiana, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Arizona *
California *
Colorado *
Georgia *
Illinois *
Kansas *
Louisiana
Massachusetts *
Maryland *
Michigan *
Missouri *
Mississippi *
New Hampshire *
New Jersey *
New York *
Ohio *
Pennsylvania *
South Carolina *
Tennessee *
Texas
Utah *
Virginia *
Wisconsin *
▇▇▇▇▇▇ Texas: Colorado *
Services/Missouri, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Maryland *
Mississippi
Missouri
Oklahoma *
13
653
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
Tennessee *
Texas *
▇▇▇▇▇▇ Services/Mobile, Texas: Alabama
Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Georgia *
Louisiana *
Mississippi *
Tennessee *
Texas
▇▇▇▇▇▇/▇.▇. ▇▇▇▇▇▇▇, Hamilton: Massachusetts
Inc. ▇▇▇ ▇▇▇▇ ▇▇. ▇. ▇▇▇▇▇▇▇▇ *
▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ *
Hamilton, Ontario Tennessee *
▇▇▇ ▇▇▇
▇▇▇▇▇▇ Services/North Texas: Alabama *
Central, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware *
Georgia *
Iowa
Illinois *
Indiana
Massachusetts *
Michigan *
Minnesota *
Missouri *
Nebraska *
New Jersey *
Ohio *
Pennsylvania *
Texas *
Wisconsin *
▇▇▇▇▇▇ Services/Ohio, Texas: Illinois *
Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Kentucky *
Michigan *
Ohio
▇▇▇▇▇▇ Texas: Arkansas *
Services/Oklahoma, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Kansas *
Michigan *
Missouri *
Oklahoma
Texas *
Washington *
14
654
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
▇▇▇▇▇▇ Services ▇▇▇▇▇▇▇▇: Pennsylvania:
(Pennsylvania), Inc. ▇▇▇ ▇▇▇▇ ▇▇. ▇. One Mellon Bank Center
P.O. Box 2440 LCD 1 ▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 53rd Floor
L8N 4J6 ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Services/South Texas: Alaska *
Central, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Colorado
Connecticut *
Illinois *
Iowa *
Kansas *
Michigan *
Missouri *
Nebraska *
New Jersey *
New Mexico *
Nevada *
Oklahoma *
South Carolina *
Texas
Utah
Wyoming *
▇▇▇▇▇▇ Texas: Arizona
Services/Southwest, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ California *
Colorado *
Illinois *
Kansas *
North Carolina *
New Mexico *
Nevada *
Ohio *
Texas *
Utah *
▇▇▇▇▇▇ ST, Inc. Texas: California
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Louisiana
Missouri
New Jersey
Texas
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ST Piping, Inc. Texas: California
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
15
655
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Technical Texas: Georgia
Services, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Transportation Texas: Arizona
and Remediation, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Washington
▇▇▇▇▇▇ ▇▇▇▇ Industrial Texas: Alabama *
Services, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ California
Hawaii *
Idaho *
Louisiana *
Michigan *
Missouri *
Montana *
New Jersey *
Nevada *
New York *
Oregon
Pennsylvania *
Tennessee *
Texas *
Utah *
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇/▇▇▇▇▇▇▇, Inc. Texas: Illinois *
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Ohio *
Texas *
West Virginia *
▇▇▇▇▇▇ Industrial Texas: Arizona
Services of Texas, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ California *
Georgia *
Illinois *
Kansas *
Louisiana *
Michigan *
Missouri *
Mississippi *
New Jersey *
Oklahoma *
Pennsylvania *
Tennessee *
16
656
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
Texas
▇▇▇▇▇▇ Industrial Texas: Hamilton:
Services Group, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇ Industrial Hamilton:
Services (Delaware), ▇▇▇ ▇▇▇▇ ▇▇. ▇.
Inc. ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇ Environmental Washington: Texas:
Washington Inc. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Michigan:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Environmental Texas: California
Services, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Texas
▇▇▇▇▇▇ Environmental Texas: Pennsylvania: All states except:
Services Corporation ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Fort Washington, PA ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇ Maryland, Minnesota,
North Dakota,
Nevada, Utah and
Vermont
▇▇▇▇▇▇ Environmental of ▇▇▇▇▇▇▇▇:
Idaho Corporation ▇▇▇ ▇▇▇▇ ▇▇. ▇.
▇.▇. ▇▇▇ ▇▇▇▇ LCD 1
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇ Enterprise Texas: North Carolina
Service Corporation 5151 San Felipe
Houston, TX 77056
Philip Corrosion Texas: Texas
Services, Inc. 5151 San Felipe
Houston, TX 77056
Philip Chemisolv Texas: N/A
Holdings, Inc. 5151 San Felipe
17
657
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
Houston, TX 77056
Philip Chemi-Solv, Inc. Texas:
5151 San Felipe
Houston, TX 77056
Philip Automotive, Ltd. Texas: California *
5151 San Felipe Delaware *
Houston, TX 77056 Iowa *
Illinois *
Kansas *
Kentucky *
Michigan *
Missouri *
New York *
Virginia *
Philip Mid-Atlantic, Texas: Connecticut *
Inc. 5151 San Felipe District of Columbia *
Houston, TX 77056 Delaware
Florida *
Georgia *
Illinois *
Indiana *
Massachusetts *
Maryland
Maine *
Michigan *
Minnesota *
Mississippi
North Carolina *
New Jersey *
New York *
Pennsylvania *
South Carolina *
Virginia *
Washington *
West Virginia *
Philip Environmental Hamilton: Ontario
(Elmira) Inc. 100 King St. W.
P.O. Box 2440
LCD 1
Hamilton, Ontario
L8N 4J6
Philip Environmental Etobicoke: Ontario
Services Limited 345 Horner Ave. British Columbia
Etobicoke, Ontario Texas
Louisiana
18
658
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
M8W 1Z6 Pennsylvania
Philip Enterprises Hamilton: Hamilton: Ontario
Inc./Les Entreprises 100 King St. W. 651 Burlington St. British Columbia
Philip Inc. P.O. Box 2440, LCD 1 Hamilton, Ontario Quebec
Hamilton, Ontario L8L 7W2 Nova Scotia
L8N 4J6
Barrie:
1131 Snow Valley Rd.
R.R. #3
Barrie, Ontario
L4M 4S5
Delta:
7483 Progress Way #9
Delta, B.C.
V4G 1E1
Montreal:
1705 - 3rd Ave.
Pointe-aux-Trembles
Montreal, Quebec
H1B 5M9
Stoney Creek:
500 Centennial Pk.
Stoney Creek, Ontario
Philip Environmental Dartmouth: Nova Scotia
(Atlantic) Limited 101 Ilsley Ave., #6 New Brunswick
Dartmouth, Nova
Scotia B3B 1S8
Philip Investment Corp. Hamilton: Ontario
100 King St. W.
P.O. Box 2440
LCD 1
Hamilton, Ontario
L8N 4J6
Philip Plasma Metals Hamilton:
Inc. 100 King St. W.
P.O. Box 2440
LCD 1
Hamilton, Ontario
L8N 4J6
Philip Analytical Burlington: Halifax: Ontario
Services Corporation 5555 North Service Rd. 5595 Fenwick St. Nova Scotia
Burlington, Ontario Suite 200 Quebec
19
659
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
L7L 5H7 Halifax, Nova Scotia British Columbia
B3H 4Ms Alberta
Newfoundland
Mississauga:
5735 McAdam Rd.
Mississauga, Ontario
London:
921 Leathorne St.
London, Ontario
M5Z 3M7
Montreal:
10390 Louis H.
LaFontaine
Anjou, Quebec
H1J 2T3
Burnaby:
8577 Commerce Crt.
Burnaby, British
Columbia
V5A 4N5
Piping Mechanical Texas: Sand Springs: California
Corporation 5151 San Felipe 1520 South 129th Ave.
Houston, TX 77056 Sand Springs, OK 74063
Piping Holdings Corp. Texas: Sand Springs:
5151 San Felipe 1520 South 129th Ave.
Houston, TX 77056 Sand Springs, OK 74063
Piping Companies, Inc. Texas: Sand Springs: California
5151 San Felipe 1520 South 129th Ave.
Houston, TX 77056 Sand Springs, OK 74063
PRS Holding, Inc. Texas:
5151 San Felipe
Houston, TX 77056
PSC Enterprises, Inc. Texas: Alabama *
5151 San Felipe California *
Houston, TX 77056 Colorado *
Florida *
Illinois *
Indiana *
Louisiana *
20
660
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
Massachusetts *
Michigan
Missouri *
North Carolina *
New Jersey *
Oklahoma *
Pennsylvania *
Texas
Utah *
Washington *
Wisconsin *
PSC/IML Acquisition Hamilton:
Corp. 100 King St. W.
P.O. Box 2440
LCD 1
Hamilton, Ontario
L8N 4J6
Recyclage d'Aluminium Baie Comeau: Beaconcour: Quebec
Quebec Inc./Quebec 128 Boul. Comeau 695 rue Duford
Aluminum Recycling Inc. Baie Comeau, Quebec Becancour, Quebec
G4Z 2L6 G0X 1B0
Republic Environmental Pennsylvania: Hamilton: Pennsylvania
Systems (Pennsylvania), 2337 North Penn Road 100 King St. W.
Inc. Hatfield, PA P.O. Box 2440 LCD1
19440-1908 Hamilton, Ontario
L8N 4J6
Republic Environmental New Jersey: Pennsylvania: New Jersey
Systems (Technical Cenco Blvd. 2337 North Penn Road Pennsylvania
Services Group), Inc. P.O. Box 275 Hatfield, PA North Carolina
Clayston, NJ 08312 19440-1908 Virginia
Ohio
Republic Environmental New Jersey: Pennsylvania: New Jersey
Recycling (New Jersey), Cenco Blvd. 2337 North Penn Road
Inc. P.O. Box 275 Hatfield, PA
Clayston, NJ 08312 19440-1908
Republic Environmental Pennsylvania: Hamilton: Delaware
Systems (Transportation 21 Church Road 100 King St. W. Pennsylvania
Group), Inc. Hatfield, PA 19440 P.O. Box 2440 LCD1 New Jersey
Hamilton, Ontario New York
L8N 4J6
RESI Acquisition Hamilton:
(Delaware) Corporation 100 King St. W.
P.O. Box 2440 LCD 1
21
661
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
Hamilton, Ontario
L8N 4J6
Resource Recovery Washington: Texas: Washington
Corporation 100 Oakesdale Ave. 5151 San Felipe
S.W. Houston, TX 77056
Renton, WA 98055
Michigan:
515 Lycaste Rd.
Detroit, MI 48214
Rho-Chem Corporation Washington: California: California
100 Oakesdale Ave. 425 Isis Ave.
S.W. Inglewood, CA 90301
Renton, WA 98055
RMF Global, Inc. Ohio: Ohio
671 Spencer Street Michigan
Toledo, OH 43609
RMF Industrial Ohio: Ohio
Contracting, Inc. 671 Spencer Street
Toledo, OH 43609
RMF Environmental, Inc. Ohio: Ohio
671 Spencer Street
Toledo, OH 43609
Sablix Inc. Hamilton:
100 King St. W.
P.O. Box 2440 LCD1
Hamilton, Ontario
L8N 4J6
Serv-Tech EPC, Inc. Hamilton: Texas: California
100 King St. W. 5151 San Felipe Louisiana
P.O. Box 2440 LCD1 Houston, TX 77056 Texas
Hamilton, Ontario
L8N 4J6
Serv-Tech Engineers, Hamilton: Texas:
Inc. 100 King St. W. 5151 San Felipe
P.O. Box 2440 LCD1 Houston, TX 77056
Hamilton, Ontario
L8N 4J6
Serv-Tech Services, Inc. Texas: California
5151 San Felipe Georgia
Houston, TX 77056 Louisiana
Tennessee
22
662
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
Texas
Serv-Tech International Texas:
Sales, Inc. 5151 San Felipe
Houston, TX 77056
Serv-Tech of New Texas:
Mexico, Inc. 5151 San Felipe
Houston, TX 77056
Serv-Tech Construction Hamilton: Texas: Louisiana
and Maintenance, Inc. 100 King St. W. 5151 San Felipe Texas
P.O. Box 2440 LCD1 Houston, TX 77056
Hamilton, Ontario
L8N 4J6
ServTech Canada, Inc. Michigan:
515 Lycaste Rd.
Detroit, MI 48214
Solvent Recovery Missouri: Texas: Missouri
Corporation 700 Mulberry St. 5151 San Felipe
Kansas, MO 64101 Houston, TX 77056
Southeast Environmental Texas: Texas
Services, Inc. 4050 Homestead Road
Houston, TX 77028
ST Delta Canada, Inc. Michigan:
515 Lycaste Rd.
Detroit, MI 48214
Termco Corporation Washington: Texas: Washington
100 Oakesdale Ave. 5151 San Felipe
S.W. Houston, TX 77056
Renton, WA 98055
Michigan:
515 Lycaste Rd.
Detroit, MI 48214
Terminal Technologies, Texas: Florida
Inc. 5151 San Felipe Georgia
Houston, TX 77056 Louisiana
Texas
ThermalKEM Inc. Michigan: South Carolina: South Carolina
515 Lycaste Rd. 2324 Vernadale Rd.
Detroit, MI 48214 Rock Hill, SC 29731
TIPCO Acquisition Texas:
23
663
Equipment
and Inventory
Debtor Name Chief Executive Office Additional Locations Locations
----------- ---------------------- -------------------- ---------
Corp. 5151 San Felipe
Houston, TX 77056
Total Refractory Texas: California
Systems, Inc. 5151 San Felipe Louisiana
Houston, TX 77056 New Jersey
Texas
United Industrial Texas: Texas
Materials, Inc. 5151 San Felipe
Houston, TX 77056
United Drain Oil Washington: Texas: Washington
Service, Inc. 1629 E. Alexander Ave. 5151 San Felipe
Tacoma, WA 98421 Houston, TX 77056
Michigan:
515 Lycaste Rd.
Detroit, MI 48214
24
664
SCHEDULE VIII
-------------
EXISTING DISBURSEMENT ACCOUNTS
Except as otherwise defined herein, the capitalized terms used in this schedule
shall have the respective meanings set forth in the Credit Agreement, dated as
of June 28, 1999, among Philip Services Corp., a corporation existing under the
laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), Philip Services (Delaware), Inc., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower"
and, together with the Canadian Borrower, the "Borrowers"), the Subsidiary
Guarantors (together with the Borrowers, the "Credit Parties"), Bankers Trust
Company, ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
1
665
SCHEDULE IX
-----------
EXISTING INVESTMENTS
Except as otherwise defined herein, the capitalized terms used in this schedule
shall have the respective meanings set forth in the Credit Agreement, dated as
of June 28, 1999, among Philip Services Corp., a corporation existing under the
laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), Philip Services (Delaware), Inc., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower"
and, together with the Canadian Borrower, the "Borrowers"), the Subsidiary
Guarantors (together with the Borrowers, the "Credit Parties"), Bankers Trust
Company, ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
The following is a list of all Investments of the Borrowers and the Subsidiaries
existing as of the Effective Date other than certain Investments permitted by
Section 8.05(i) through (v) and 8.05(vii) through (viii) of the Credit
Agreement.
Investments by Philip Services Corp. in its subsidiaries (the "Philips
Subsidiaries") existing as of the Effective Date and investments by the Philips
Subsidiaries in their respective subsidiaries existing as of the Effective Date.
Investments by Phencorp Reinsurance Company Inc. of insurance reserves in
marketable securities in amounts not more than $60 million.
1
666
SCHEDULE X
----------
LITIGATION
Except as otherwise defined herein, the capitalized terms used in this schedule
shall have the respective meanings set forth in the Credit Agreement, dated as
of June 28, 1999, among Philip Services Corp., a corporation existing under the
laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), Philip Services (Delaware), Inc., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower"
and, together with the Canadian Borrower, the "Borrowers"), the Subsidiary
Guarantors (together with the Borrowers, the "Credit Parties"), Bankers Trust
Company, ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
None.
1
667
SCHEDULE XI
-----------
TAX RETURNS
Except as otherwise defined herein, the capitalized terms used in this schedule
shall have the respective meanings set forth in the Credit Agreement, dated as
of June 28, 1999, among Philip Services Corp., a corporation existing under the
laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), Philip Services (Delaware), Inc., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower"
and, together with the Canadian Borrower, the "Borrowers"), the Subsidiary
Guarantors (together with the Borrowers, the "Credit Parties"), Bankers Trust
Company, ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
1
668
SCHEDULE XII
------------
WAIVERS
Except as otherwise defined herein, the capitalized terms used in this schedule
shall have the respective meanings set forth in the Credit Agreement, dated as
of June 28, 1999, among Philip Services Corp., a corporation existing under the
laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), Philip Services (Delaware), Inc., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower"
and, together with the Canadian Borrower, the "Borrowers"), the Subsidiary
Guarantors (together with the Borrowers, the "Credit Parties"), Bankers Trust
Company, ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
1
669
SCHEDULE XIII
-------------
CREDIT PARTIES NOT IN GOOD STANDING
Except as otherwise defined herein, the capitalized terms used in this schedule
shall have the respective meanings set forth in the Credit Agreement, dated as
of June 28, 1999, among Philip Services Corp., a corporation existing under the
laws of Ontario and a debtor-in-possession, as a borrower (the "Canadian
Borrower"), Philip Services (Delaware), Inc., a corporation existing under the
laws of Delaware and a debtor-in-possession, as a borrower (the "US Borrower"
and, together with the Canadian Borrower, the "Borrowers"), the Subsidiary
Guarantors (together with the Borrowers, the "Credit Parties"), Bankers Trust
Company, ("BTCo"), as administrative agent (in such capacity, the "DIP Agent")
for the Lenders from time to time parties hereto, Canadian Imperial Bank of
Commerce ("CIBC") and BTCo, as co-arrangers (in such capacity, the "DIP
Co-Arrangers"), and the Lenders.
Allwaste Tank Cleaning Inc.
Burlington Environmental Inc. (a Delaware corporation)
Cappco Tubular Products USA, Inc.
Republic Environmental Recycling (New Jersey), Inc.
21st Century Environmental Management, Inc.
Ace/Allwaste Environmental Services of Indiana, Inc.
Allwaste Asbestos Abatement Holdings, Inc.
Allwaste Asbestos Abatement, Inc.
Allwaste Asbestos Abatement of New England, Inc.
Allwaste Texquisition, Inc.
Hydro Engineering & Services, Inc.
Industrial Services Technologies, Inc.
IST Holding Corp.
Oneida Asbestos Removal Inc.
Piping Holdings Corp.
Piping Mechanical Corporation
Republic Environmental Systems (Technical Services Group), Inc.
2842-7979 Quebec, Inc.
Serv-Tech International Sales, Inc.
1