Case 1:07-cv-00621-GMS
Document 15
Filed 04/14/2008
Page 1 of 2
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
In re:
)
Chapter 11
)
EXAERIS, INC., and INYX USA, LTD.,I
Debtors.
DR. JACK KACHKAR,
) ) ) ) ) ) )
Case No. 07-10887 (KG) Case No. 07-10888 (KG)
Appellant
v.
) ) )
) )
Civil Action No. 07-621 (GMS)
WESTERNBANK PUERTO RICO, STEPHEN S. GRAY, Chapter 11 Trustee ofINYX USA, LTD.
Appellees.
) )
)
ADDENDUM OF STATUTES, RULES, UNREPORTED ORDERS, OR SIMILAR MATERIAL TO BRIEF OF APPELLEE. CHAPTER 11 TRUSTEE OF INYX USA. LTD.
Richard Pachulski
Bruce Grohsgal (DE Bar No. 3583) PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor
Wilmington, Delaware 19801
Telephone: (302) 652-4100
Facsimile: (302) 652-4400
Email: bgrohsgal(fpszjlaw.com
Attorneys for the Chapter 11 Trustee of Inyx USA, Ltd.
Dated: April 14, 2008
1 The Exaeris, Inc. and Inyx USA, Ltd. bankptcy cases were jointly administered for procedural purposes at the
commencement of
those cases, by order entered on July 12,2007 (Docket No. 39 in Bankptcy Case No. 07-
10887). On December 6, 2007 (Docket No. 421 in Bankptcy Case No. 07-10887), the Bankptcy Court vacated
the order for joint administration, and the bankptcy cases have been separately administered since the entr of that
order.
32268-001 \DOCS_DE: 136708. 1
Case 1:07-cv-00621-GMS
Document 15
Filed 04/14/2008
Page 2 of 2
INDEX
Tab No.
Unreported Orders
In re American Home Mortgage Holdings, Inc., Ch. 11 Case No. 07-11047 (CSS)
(Bankr. D. DeL. Nov. 28, 2007)..............................................................................................1
In re Buffets Holdings Inc., Ch. 11 Case No. 08-10141 (MFW) (Bankr. D. DeL.
Feb. 22, 2008) ........................................................................................................................2
In re Domain, Inc., Ch. 11 Case No. 08-10132 (PJW) (Ban. D. DeL. Feb 14,2008).........3
In re Foamex International, Inc., Ch. 11 Case No. 05-12685 (PJW) (Banr. D. DeL. Oct. 17, 2005)....................... .......................................................... ..............4
In re HomeBanc Mortgage Corp., Ch. 11 Case No. 07-11079 (KJC)...................................5
In re New Century TRS Holdings, Ch. 11 Case No. 07-10416 (KJC) (Bank. D. DeL.
May 7, 2007)..........................................................................................................................6
In re Sharper Image Corp., Ch. 11 Case No. 08-10322 (KG) (Bank. D. DeL. Mar. 7,
2008) .............................................................................................................................. ........7
In re Tweeter Home Entertainment Group, Ch. 11 Case No. 07-10787 (PJW)
(Bankr. D. DeL. June 29, 2007) ..............................................................................................8
Statutes and Rules
11 U.S .C. § 361 ................. .................................................... .................................................9
11 U . S.C. § 363.................................. ................................................................................ ....1 0
11 U. S. C. § 364..................................................................................................................... .11
11 U . S.C. § 506..................................................................................................................... .12
11 U .S.C. § 552.................................................................................................................... ..13
Fed. R. Bank. P. 8013........... ....................................... ......... .............................................. ..14
DeI.Bank.L.R. 4001-2.......................................................................................................... .15
32268-001 \DOCS _DE: 1 36708. 1
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 1 of 20
EXHIBIT 1
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 2 of 20
IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICl OJ¡' DELAWARE
In re
Chapter 11
AMERICAN HOME MORTGAGE HOLDINGS, INC., et al.,
Debtors.
Case No. 07-11047 (CSS)
Jointly Administered
Re: Docket
Nos. 1967 & 1999
FINAL ORDER PURSUANT TO SECTIONS i05(a), 362, AND 364 OF THE BANKRUPTCY CODE AND BANKRUPTCY RULES 2002, 4001 AND 9014: (A) APPROVING LIMITED RECOURSE DEBTOR-IN-POSSESSION FINANCING, (B) GRANTING LIENS. AND (C) GRANTING RELATED RELIEF
Upon the Motion for Interim and Final Orders (I) Authorizing Certain Debtors to Obtain
Postpctition Pinancing and Grant Security Interests Pursuant to 11 U.S.C. §§ 105,362,363, and
364(c); (TJ) ScheduJíng Final Hearng Pursuant to Bankl1ptcy Rule 4001(c); and (II) Granting
Related ReHef (the "Motion") dated November 12,2007 of American Home Mortgage
Jnvestment CO'P. ("AHMIC"), American Home Mortgage Corp. ("AHMC"), and American
Home Mortgage Servicing, Inc. ("AHMS"\ seeking, inter alia:
(i) authorization for debtors AHMIC, AHMC, and AHMS (collectively, the
"Borrowers") to obtain limited tec()urs~ postpetition financing (the "J ,imlted RecouTst: DJP
Facility") pursuant to section:: 1 05(a), 362, and 364 of title 11 of
the United States Code (the
"Daiiku.ptcy Code") and Rule 4001 of
the Federal Rules of
Bankruptcy Procedure (thc
"Bankruptcy Rules"), by enterÎiig into that certain $50,000,000 Debtor-in-Possessitm Loan and
St:clITily Agreement dated November 16, 2007 (as the same may be amended, supplemented, or
otherwí::e modi
lied lhnn time to time, the "Limited Recourse DIP Credit A~JTeement"l, a copy of
i CapÜalii-ed tetms \is~:d Ii~:ri:in but not othei'Wse defined herein shall have the meanings sr.t forth in the
J ,irnikd R~~çf.mrs~: i )1.1 Crt:dit Agrccmcnt.
Dß02:6399076.1
066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 3 of 20
which is annexed hereto as Exhibit UA") by andlamong the Borrowers, the several lenders from
i
limo 10 I;mo paty thereto (colleei;vely, the "Let'''.,,), AH Mortgage Acqoisii;on Co., Inc., ;n;!s
capacity as Lender and Administrative Agent (c, llectively, the Lenders and the Administrative
;
Agent, the "Secured Parties"), subjeet to the terms and conditions set forth in this order (the "Final Order"), the Limited Recourse DIP Credit Agreement, and all related security and other
agreements, documents, notes, and instruments executed or delivered pursuant hereto or in
connection herewith or therewith (collectively, with the Limited Recourse DIP Credit
Agreement, and as any of the same shall be amended, restateù, supplemented or otherwise
moditied from time to time in accordance with this Final Order, the "Limited Recourse DIP
Fínancing Doeuinents"); and
(ii) the granting of liens and security interests in favor of
the Administrative Agent for the
the Bankruptcy
benelÏt of
the Secured Parties pursuant to sections 364(c)(2) and 364(c)(3) of
Code.
'fhe Emergency Interim Healing having been held on November 14,2007, and an interim
ordcr (the "Interim Order") having been entered on such date; and notice having been given of
the final hearing with respect to the Motion (the uFinal Hearing") in accordance with the Interim Order; and the Final Hearing having been held on November 28, 2007 at 10:00 a.m. (ET); and
upøn all ølthe pleadings tìed with the Court and the evidence adduced at, and statements or
counsel on the record of~ the Emergency Interim Hearing and the Final IlearIng, and afLer due
deliberation and consideration and suflícienl cause appearing therefor;
THE COURT HEREBY MAKES THE l~OLLOWING FINDINGS PURSUANT TO
ßANKRUPTCY RUJ.E 7052:
DB02;6399076.1
- 2(Irjri5fl510(Ji
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 4 of 20
A. Commencement of Cases. On August 6, 2007 (the "Commencement Date"),
each of the debtors in the above-captioned cases (the "Debtors") fied voluntay petìtìons for
rc1icfunder chapter i 1 of
the Bankptcy Code. The Debtors continue to operate their
businesses and manage their assets as debtors in possession pursuant to sections 1107(a) and
i 108. On August 14, 2007, the United States Trustee for the Distrct of Delaware appointed The
Oft1cial Committee of Unsecurcd Creditors (the "Committee'') in these cases. Pursuant to order
of
the Cour, the Debtors' cases arc bcîngjointly administered under the case number above.
B. Jurisdiction and Venue. 'l'he Court has
jurisdiction over these proceedings and
the parties and property affected hereby pursuant to 28 V,S.C. §§ 157(b) and 1334 and this is a
core proceeding pursuant to 28 lJ.S.C. § 157(b). Venue tòr proceedings on the Motion is proper
in this Court pursuant to 28 U.S.C. § 1409.
C. Node.c. Notice of the Final Hearing and entry of' thís Final Order was provided
pursuant to the Interim Order, and constitutes good and suffeicnt notice.
D. Sale of ServicIne Business. On October 30, 2007, this Court entered its Order
Pursuant to Sections 105,363,364,365, and 503(b) of
the Banptcy Code and Rules 2002,
the Federal Rules of
400 1,6004,6006, 7062, 9007, and 9014 of
Banuptcy Procedure (A)
Approving (i) the Sale of
the Debtors' Mortgage Servicing Business Free and Clear of Liens,
Claím~ al1d Interests, and (ii) Assumption and Assignmcnt of
Certain Executory Contracts and
Unexpired Leases Related Thereto, and (B) Granting Certain Related Relief (D.I. 1711 J (the
"Sale Order"). Pursuant to the Sale Order, AH Home Mortgage Acquisition Co., Inc. (in such
capacity, the "Purchaser") has been granted a first priority security interest in and lien on
Purchaser's Collateral (as det1ned in the Sale Ordcr) cffcctive upon the Initial Closing (as
defined in the Purchase Agreement (defined below)) and the right to assign such security interest
-3nri02 :6399076. J
066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 5 of 20
, ¡ I
and lien in connection with a Financing. In conhection with the Purchase Agreement approved
puruant to the Sale Order, the Borrowers agree~ to tae certain actions in connecon with a
Financing. !
i
E. WiIinf!ess to Lend. The Lenders arc willing to make the Limited Recourse DIP
Facilíty available and to make the loans and advances pursuant to the terms of
the Limited
the
Recourse nip Financing Documents, but only ífthe Administrative Agent on behalf of
Lenders is granted a security interest in and liens on the Collateral (as defined in Paragraph 8
below), pursuant to seetions 364(c)(2) and 364(c)(3) of
the Bankptcy Code, in the priority set
fbrth herein.
F. Business Judi!ilcnt and Good Faith. Based on the record belbre the Court, the
tem1S 01' the Limited Recourse DIP Facitty are fairj just, at1d reasonable under the
circumstaces, are consistent with the Purchase Agreement approved by the Cour pursuaiit to
the Sale Order, are appropriate for secured financing to a debtor in possession, reflect the
Borrowers' exercise ofthcir prudent business judgment consistent with their fiduciary duties,
and are supported by reasonably equivalent value and fair consideration. Based On the record
before the Court, the terms of
the Limited Recourse DIP Facility have been negotiated in good
l11ith and at an's length by and among the parties, with all parties represented by counsel.
Based on the record before the Cour, any credit extended under the terms of the Limted
Recourse DIP Facilty is hereby found to be extended in good faith by the T ,enders as that tem1 is
used in section 364(e) of
the Bankruptcy Code. Bascd on the record before the Court, the
Secured PaTLíe~ are hereby round to be acting ín good faíth within the meaning of section 364(c)
of
the Bankruptcy Code in closíng the transactions conlemplated in the Limited Recourse DIP
Financing Agreements after the entry oftlie Interim Order. Based on the record beI(ire the
DB02:6399076. i
-4066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 6 of 20
Court, 110ne or the Seeured Parties is an "insider" or "aí11iate" of any of the Debtors (as such
terms are defined ín the Bankruptcy Code).
G. PrODcrtv of thc Estate. Each item of the Collateral constitutes propert of the
estate of at least one of the Borrowers.
II. Good Cause. Authol'Izíng the Liniíted Recourse DIP Facility and other rclìcf
granted herein is appropriate to provide the Borrowers wíth liquidity to support working capital
needs to the extent incurred in the Ordinary Course of
Business and as pennitted by the Limited
Recourse DIP Facilty tbr lhe purpose of operating the Servicing Business (as defined in the
Purchase Agreement) between the Initial Closing and the Final Closing (as defined Ín the
Purchase Agreement).
Based on the foregoing,
JT is HEREBY ORDERED, ADJUGED AND DECREED, that:
1. The Motion is granted in accordance with the terms of
this Pinal Order. Any
objections to the Motion. with respect to entry of
this Final Order that have not been withdrawn,
waived, or settled are hereby denied and overruled.
2. The Borrowers arc hereby authorized upon the Initíal Closing, pursuant to the
terms of
this Final Order and the terms and conditons (J('the Umited Recourse DIP Financing
Documents, to borrow funds under die Limited Recourse DIP Facilíly in such amount or
amounts as may be available to or for the benefit of
the Borrowers from the Secured Parties.
3. Except as otherwise expressly set forth in this Final Order, the terms and
conditions of the Limited Recourse DIP financing Documents are hereby approved in all
respects. The Limited Recourse DIP Financing Documents shall constitute vaHd and hinding
obligations of the Borruwers, enforceable against each of the Borrowers in accordance wíth their
DBOZ;Ú3Y9(71).1
-5066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 7 of 20
tenns. The Limited Ri;course DIP Financing Documents shall be suffîcient and conclusive
evidence of
the borrowing arrangements by and among the Borrowers and the Secured Parties.
All provisions in the Limited Recourse DIP Finfncing Documents arc binding and enforceable in
full even if not expressly rcfcrenced in this Final Order.
4. TIie Borrowers are hereby authorized and directed to do and perform all acts and
to make, execute, and deliver all instruments and documents (Including, without limitation, the
execution (,1' all seçuríty agreemt:nts, linancíng statemenls, and other filngs and regístrations)
which may be requirt:d or necessary tbr the Borrowers' performance LlIder the Limited ReeOUriie
DIP Financing Documcnts.
5. Each oflicer of
each Borrower, and each such other individual as may be so
Directol's of such Borrower, acting singly, is hereby authorized to
and all of
authorized by the Board of
execute and deliver any
the Limited Recourse DIP Pinaiicing Documents and related
documents, such execution and delivery to be conclusive of
their respective authority to act in
the name and on behalf of the Borrowers.
6. AHMS ís hereby authorized to act as tht: Administrative Borrower on behalf of
each other Borrower with respect to the Borrowers' rights and obligations under the Limited
Recourse DIP Finncing Documents, including, without limitation, requesting Loans thereunder.
Subject in all cases to the limited recourse provisions set forth in Paragraph 7 of
the Interim
Order, Paragraph 7 below
and in Section 3.05 of
the Limited Recourse DIP Cri;dlt Agreement
(collectively, the "Limited Recourse Provisions"), each Borrower shall be j(linlly and severally
liable for all Obligations ofthe Borrowers arsing under the Limited Recourse DTP Financing
Documents (collectively, the "Limited Recourse DIP Obligations"). Any notice given to, or
demand made on, any Borrower by the Secured Parties, pursuant to this Final Order or the
- 6 M
Dn02:6399076. J
066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 8 of 20
Limited Recourse DIP Financing Ooeuments shall constitute notice to, or demand on, all
Borrowers without any requirement to provide any such notice or demand (or copy thercof) to
thc other Borrowers.
7. Notwithstanding anything contained herein, in thc Interim Order, in the Limited
Recourse DIP Credit Agreement or in any other Loan Document to the contrary, the liability of
the Borrowers is limited solely to the extent, but only to the extent, of the interest of each
Borrower in the CoJ1ateral only. Upon the occurence and during the continuance of an Event of
Default, any action taken by the Adniiníslrative Agent or any Lender against the Borrowers
under the Limited Recourse nip Creùí1 Agreement or any other Loan Document shall be limitcd
to the Collateral and no attachment, execution or other action or process shall be sought, issued
or levied UpOll any assets, properties or funds of the Borrowers other than the Collateral. In the
event of enforcement by the Adiuinistrative Agent or any Lender oltheir remedies under the
Limited Recourse DIP Credit Agreement, no judgment for any deflciency upon the Obligations
shall be obtained by the Secured Paries against the Borrowers. Any foreclosure on the
Collateral by the Administrative Agent under the Limited Recourse DIP Credit Agreement which results in the Administrative Agent obtaining possession or ownership of the Purchased Assets
(as ddined in the Purchase Agreement) shall be deemed to satisfy and relieve the Borrowers of
any requirement under the Purchase Agreement to deliver to thc Purchaser any such Purchased
Assets over which the Administrative Agent has obtained possession or ownership. Upon the
oCCurrence and during the continuancc of an Event of Default, the sole and exclusive remedy or
the Secured Parties with respect to the Collateral shall be limited to the collection by the Secured
Partíes olthe cash proceeds thereof
upon the receipt ofthc samc by the Borrowers and the
application of such cash proceeds to the repayment ofthe Oblígations. Neither the
D802:6399076.\
-7066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 9 of 20
Administrativt: Agt:nt nor any oihc:r Secured Party shall have the right to foreclose upon, or sell,
lease, transfer, assign Or otherwíse dispose or any of
the Collateral or otherwise enforce their
security interest or lien upon the Collateral other than wíth respect to the cash proceeds thereof in accordance WÎth Section 3.05(b) ofthc Limited Recourse DIP Credit Agreement.
LIENS AND COLLATERAL
8. Upon the payment of
the Purchase Price (as detlned Ìn the Purchase Agreement)
at the Initial Closing in accordance with the provisions of the Purchase Agreement and as furthcr protection to the Secured Parties and to .secure the repayment ofthc Limited Recourse DIP
Obligations, the Administrative Agent, for the benefi of
the Secured Parties, shall have and is
hereby granted (subject to the occurrence of
the Initial Closing): (a) pursuant to section 364(c)(2)
of the Banuptcy Code, a valid, binding, enforceable, and perfected securìty interest in and lien
on all (i) the Purchased Assets (as such term is detJned in that certain Asset Purchase Agreement
by and among thc Borrowers, as sellers, and AH Mortgage Acquisition Co., Inc., as purchaser, dated September 25, 2007 as amended, restated, supplemented or otherwise modificd from time
to time with the consent ofthe Admínístrative Agent, the "Purchase Agreement") of every kind
or type wha.tsoever, tangible, intangible, real, personal and mixed, whether now owned or
existing or h~reaner acquíred or arising and regardless of where located, whether within the Unitcd States or in other locations, and aU cash and cash equivalents eamed in connection with
the Servicing Business (as defined in the Purchase Agreement) from and after the Initial Closing
(as dcfined in the Purchase Agreement) until the later of
the Final Closing (as defined in the
the Reconcilation Pa.yment (as defined in the Purchase
Purchase Agreement) or the payment of
Agreement); and (ii) all proceeds, products, rents and protHs, whether tangible or intangible, of
any of the foregoing, including proceeds of insurance covering any or all of
the toregoing, and
D1302:6399076.1
- 8066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 10 of 20
any and all tagible or intagible property resulting from the sale, exchange, collection, or other
disposition of any of
the foregoing, or any portion thereof or interest therein, and the proceeds
thereof
(collcctivcly, (i) and (îi), the "Collateral") that is not encumbered by a Permitted Lien;
and (b) pursuant to section 364(e)(3) of
the Hanmptcy Code, a valid, binding, enforceable, and
perfected security interest in and lien on the Collateral that is immediately junior to any
Permitted Lien. The liens arising pursuant to the foregoing sentence shall not be released until
the earHest of (a) the Final Closing, (b) the Termination Date (as defined in the Purchase
Agreement) and (e) the Administrative Agent's written consent; except that with rcspcct to aiiy
Disputed Servicing Agreement (as defined in the Purchase Agreement) that is designated an
Excluded Contract (as defined in the Purchase Agreement) as provided in the Purchase
Agreement, the Hens arising pursuant to the tlm;~going sentence shall be a.utomatieally released
upon such designaiion, and Bank of America, N.A:s lien and security interest in such Excluded
Contract shall automatically reattach upon such designation without any further action, by the
Borrower, the Secured Pm1ies, Bank of America, N.A. or the Banptcy Court and wíthout the
need for the entry of aii order (with such liens to have the same priority and rights as existed prior to the Initial Closing). Notwithstanding the foregoing, if any Permitted Lìen is voided,
extinguished, or deterined not to be valid, the liens granted to the Administrative Agent
pursuant. to this paragraph shall, notwithstanding anything to the contrary in section 551 of
the
Bankruptcy Codc~ bc deemed first priority liens without any further action by the Borrowers, the
Secured Partics~ or the Bankruptcy Cour.
9. Notwithstanding anything to the contrary herein, the Secured Parties shall not
have, and nothing herein shall be constnicd as granting the Secured Paries a security interest in
or lien on any (i) proceeds of
the Sale (as defined in the Purchase Agreement), (ii) proceeds of
DB02:6399076.1
- 9066585.1 00 i
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 11 of 20
the D of A Collateral rcceived by the Sellers (as defined in the Purchase Agreement) on Or be/~)re
the Initial Closing Date (as deJ1ned in the Purchase Agreement) but not paid to Ban of America,
N.A. as of
the InÜial Closing Date (which proceeds ofthe B of A Collateral shall be held in trust
and segregated lilr the bene/it of the Bank of Aiberica, N.A. and paid to Bank of America, N.A.
in the maner set forth in that certin Final Order (i) Authorizing Debtors' Use of Cash
Collateral and (ii) Granting Replacement Liens and Adequate Protection to Certain Pre-Petition
Secured Credítors, dated September 4, 2007, entered by the Bankrptcy Court in the Banuptcy
Cases, as extended and amended by the (a) First Interim Stipulation and Order Extending
Limited Use of
Cash Collatcral Pursuant to the Final Order (1) Authorizing Debtors' Limited Use
of Cash Collateral, (IT) Granting Replacement Liens and Adequate Protection to Certain Pre-
Petition Secured Paries and (11) Scheduling Final Hearing Pursuant to Bankruptcy Rule 4001
entercd on October 31, 2007 and (b) First Final Stipulation and Orùer Extendíng Limited Use of
Cash Collateral Pursuant to the Final Order (I) Authorizing Debtors' Limited Use of
Cash
Collateral, und (II) Granting Replacemcnt Liens and Adequate Protection to Certail1 Pre~PetItion
Secured Parties entered on November 14, 2007 (the "Cacih Collatera.l Order"), regardli:si: 01'
whether the Termination Date (as defíneù in the Cash Collateral Order) has occured), (ií) assets
of
the Sellers that are not being purchased by AU Mortgage Acquisition Co., Inc. pursuant to the
the Debtors used in the Servicing Business not
the
Purchase Agrccment, or (iv) any other a"set~ of
beîng purchased by the AH MorLgage Acquisition Co., Inc., in accordance with the terms of
Purchase Agreement.
10. The liens and security interests granted to the Admiistrative Agent herein and
pursuant to the Limited Recourse DIP Facilty in the Collateral shall not (a) be subject to any lien
or security interest that is avoided and preserved for the benefit of
the Borrowers' esttes as a
!)l:02:639907ú,1
- 10066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 12 of 20
result of any A voidance Actíons, or (h) be subordinated to or made pari passu with any other lien
or security interest pursuant section 364(d) of
the Banuptcy Code or otherwise.
the Final Closing and the
11. Aller the Initial Closing and prior to the earlier of
Termination Date (as defined in the Purchase Agreement), no other liens in or priority status with
respect to the Collateral, other than Pennitted Liens, shall have priorìty superior to or pari passu
with the liens granted by this Pinal Order to the Secured Paries, or shall be brrunted in the
Collateral while any portion of
the Limited Recourse DIP Obligations remains outstanding,
absent the express written consent of the Administrative Agent.
12. After the Initial Closing, this Final Order shall be suffcient and conclusive
evidence of
the validity, perfection, and priority of
the Administrative Agent's liens upon the
Collateral, without the necessity of fiUng or recording any financing statement or other
instrument or document which may otherwise be required iinder the law of any jurisdiction, or
the takíng or any other action to validate or perfect such liens or security interests in the
Collateral or to entitle the Administrative Agent to the prioritics granted herein. The
Administrative Agent shall not be required to fie any financing statements, notices of Hen or
similar instruments in any jurisdiction or fHing ollice, or to take any other action in order to
perfect the Administrative Agent's Hens and security interests granted by or pursuant to the
Interim Order, this Final Order or the Limited Recourse DIP Financing Documenls.
13. Any provision 0 l any lease or other license, contract, or other agreement that
requîres the consent or approval of one or more Persons, or requires the payment of any fees or
obligations to any Person, in ordcr tòr any of the Borrowers to pledge, grant, or otherwise perfèct
the Collateral, is and shall be deemed to be inconsistent with the provisions of the Bankruptcy
Code and shall have no force and effect.
- 11 -
f)H02;(,399076.1
066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 13 of 20
14. After the Initial Closing, should the Secured Paries, in their sole discretion (but
not as a requirement hereunder), from time to time choose to fie financing statements, notices of
i
lien or similar instruments, take possession of ~y Collateral as permitted by the Limited
Recourse DIP Financing Documents, or take any other action to validate or perfect any such
security interests or liens in the Collateral, the Borrowers and their offcers are hereby directed to
execute any such documents or instruents as the Secured Paries may reasonably requcst, and
all such documents and instruments shall be deemed to have been filed or recorded at the time
and on the date of
the Intial Closing.
15. Afer the Initial Closing, the Secured Parties may, in their discretion, tile a copy
of
this Final Order as a financing statement with any recording offcer designated to tile
financing statements or with any similar otlïce in any jurisdiction in which the Collateral is
located, and, in such event, the applicable fiing or recording officer or registrar is authorized to
file or record such copy of this Final Order.
i 6. Aller the Initial Closing and prior to the earlier of the Final Closing and the
Termination Date (as defined in the Purchase Agreement), until such time as all Limited
Recourse DIP Obligations are indefeasibly paid in lull in cash and (he commitments thereunder
are terminated in accordance with the Limited Recourse DIP Financing Documents, the
Borrowers shall not in any way prime or otherwse adversely affect the liens on the Collateral
granted under this Final Order by granting a subsequent lender or a pary-in-interest a. superior or
pari passu lien pursuant to sections 364 of
the Bankruptcy Code or otherwise.
17. After the Initial Closing and prior to the earlier of the Final Closíng and the
Termination Date (as defined in the Purchase Agreement), until such time as all Limited
Rccourse DIP Obligations arc indefeasibly paid in full in cash and the commitments thereunder
Dß02:6399076.1
- 12 -
066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 14 of 20
are tennInated in accordance with the Limited Recourse DIP Financing Documents, the
Borrowers shall not create, permit, or suffer to exist any liens on the Collateral othcr than
Permitted Liens.
18. After the Ttiitial Closing and prior to the earlier or the Final Closing and the
Termination Date (as defined in the Purchase Agreement)~ neither the Collateral nor the Secured
Parties shall be subject to surcharge, pursuant to sections lOS(a) or 506(c) of
the Bankruptcy
Code or otherwise, by
any of
the Borrowers or any other party, and no such consent shall be
implied fro11 any action, inaction, or acquiescence by the Secured Parties, provided. however.
that the Borrowers may use the Collateral to pay the disbursements set fort in the Budget (as
defined in the Purchase AgTeement) that were properly and actually incurred by the Borrowers
prior to the Final Closing Date; provided further. however. that all rights of B of A under the
Cash Collateral Order arc hereby prcserved.
19. in no evcnt shall the Secured Parties be subject to the equitable doctrine of
"marshallng" or any similar doctrine with respect to the CollateraL.
20. Notwithstanding anything in this Final Order to the contrary, the licns and
security interests granted to the Adminístrative Agent shall not extend to any assets that are not
CollateraL.
REMEDIES
21. Not withstanding the provisions of section 362 of the Bankruptcy Code and
without any further order of, or applicatíon or motion to, the Court, in the event of
the occurrence
or an Event ol'DelliuH, and at all times thereafter, and wlthout any restnetîon or restraint by
any
the liens and security
st.'lY under section 362 of
the Dankruptcy Code against the enforcement of
inter~sts or any other rights granted in the Collateral to the Secured Parties pursuant to the
Dß02:639976. i
& 13 0l'5~5.HI(¡1
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 15 of 20
I
Limited Recourse DlP Financing Documents, ~e Administrtive Agent ma, by writtn notice to
the Borrowers as provided in the Limited RecoJrse DIP Financing Documents, (a) terminate
forthwith all or any portion of
the Limitcd Recourse VIP Facilty and the Secured Parties'
Qbligatíol1 to make any further loans or advances) (b) declare the Limited Recourse DIP
ObJígations to be immedíate1y due and payable, and (c) subject to the Limited Recourse
Provisions, exercise the sole rights and remedies against the Collateral allowed under
Paragraph 7 of the Interim Order, Paragraph 7 of this Final Order and Section 3.05 of
the
T .1mited RecOUTse DIP Financing Documents.
22. The autumaIÍc stay ímposed under section 362(a) of
the Bankrptcy Code is
hereby lifted to grant the liens and security interests to the Secured Paries contemplated by the
Limited Recourse DIP Financing Documents and this Final Order, and subject to the Limited
Recourse Provisions, is further lifted to the extent of the exercise by the Secured Partíes of any
rights or remedies permitted under this Final Order and under the Linúted Recourse DIP
Financing Documents.
OTHER PROVISIONS
23. Use of Proceeds. From and after the Initial Closing, the Borrowers shall use the
proceeds of the Loans solely in accordance wÎth and subject to the conditions set forth in this
Final Order and the I ,ímited Recourse nip Financing Docuiients. Nothing in this Final Order
shall be construed to require the Lenders to make advances or extem;íons of credit or other
financial accommodations to pem1ît the Borrowers to makc any payments, except to the extent
expressly provided tor in this Final Order and the Limited Recourse DIP Financing Documents.
24. Bank Accounts. Any prüceeds of
the sale, lease or other disposition oftlic
the Secured Parties, shall be used in accordance with
Collateral, including all Cash Collat.eral of
- 14 -
DD02:6399076.1
066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 16 of 20
the provisions ofthís Final Order and the Limited Recourse DIP Financing Documents and shall
be applied in payment olth~ BOTIowers' obligations under, and in the manner provided in, the
Limited Recourse DIP Financing Documents. The Borrowers are authorized and directed to
deposit such proceeds of
the Collateral into such account or accounts as the Administrative
Agent shall direct and as provided for in the Limited Recourse DIP Financing Documents, and
upon such deposit, such proceeds of
the Collateral shall become the sole and exclusive property
of
the Secured Parties and may be applied by the Administrative Agent against the Borrowers'
obligations as provided in the Limited Recourse DIP Financing Documents. The Borrowers are
deemed to have irrevocably waived any right to direct the manner of application or any payments
to the Secured Paries or any other receipts by the Secured Paries of proceeds of any of the
Collateral, includíng all of
the Lenders' Cash Collateral, other than as expressly set forth in this
Final Order and the Limited Recourse DIP Financing Documents. The Borrowers are hereby
directed to establish one or more bank accounts as provided in the Limited Recourse DIP
Financing Documents, into which all of
the Lenders' Cash Collateral shall be held.
25. Immediate Effectiveness. Notwithstanding Banuptcy Rules 6004(h), 6006(d),
7062, or 9014 of the Bankrptcy Rules or any other Bankniptcy Rule, or Rule 62(a) of
the
Federal Rules of
Civil Procedure, this Final Order shall be immcdiatcly effective and enforceable
execution or elTectiveness of
upon its entry and there shall be no stay of
this Final Order.
26. SurvivaL. (a) The terms and provisions of
this Final Order and the Limited
Recourse DIP Financing Documents, and the liens and security interests granted to the
Adminjstrat¡v~ Agent and payment provísíon¡; contained in thís Fínal Order and the Limited
Recourse DJP Financing Documtnls shall continue in full fbfce and eflect nntil the Limited
- 15 -
Dß02:6399076.1
066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 17 of 20
Recourse DIP Obligations are indefeasibly paidlin full in cash, and Limited Recourse DIP
Financing Documents are terminated.
i ,
I i
(b) The liens, security interests and other rights and remedies granted to the Secured
Parties by the provisions of
this Final Order, as well a'l the Borrowers' (ibligaHons pursuant 10
the Limited Recourse DIP Financing Documents and this Final Order, shall continue beyond and
survive ihe expiration of this Final Order, and, to the extent pemiitted by applicable law, shall
not be modified, altered or impaired in any maiier by (a) any other financing or extension of
credit Or incurrence olindebtedness by any of
the Borrowers under section 364 ofthe
Bankruptcy Code or otherwise (except as contemplated by the Limited Recourse DIP Financing
Documents), (b) the entry of an order or orders confim\ing any plan or plans of reorganization or
liquiùation in these cases, or (c) the entry of an order converting these cases to cases under
chapter 7 ofthe Bankuptcy Code, suspending, or dismissing these cases.
(c) This Final Order and DIP Pinancing Documents shall be valid, binding and
enforceable by the Secured Parties against the Borrowers, their respective successors and
assigns, including, without limitation, any chapter 11 or chapter 7 trustee appointed as a
representative of any of the Borrowers' estates;
provided, the Secured Paries shall have no
obligation to extend any Jinancing to any such chapter 11 or chapter 7 trustee or similar person.
(d) If
any provision ofthís Final Order is hereafter modified, vacated, reversed or
stayed by subsequent order of this or any other cour for any reason, such modification, vacation,
reven;al or stay shall not alfèct the validity and priority of any orihe Liniited Recourse DIP
Obligations incurred under. this Final Order and the Limited Recourse DIP Financing Documents, and, prior to the effective date of any such modification, vacatíon, reversal or stay,
the validity, enforceabilty or priority of
the LImited Recourse DIP Obligations shall be governed
DB02:6399076.1
- 160665115.1 nU¡
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 18 of 20
in all respects by the original provisions of
this Final Order, and the Secured Parties and Lender-
Related Paries shall be entitled to all the rights, privileges and benefits granted herein. The
transaclions contemplated by the Limited Recoure DIP Facilty have been entered into by the
Secured Partes in good faith, and, as a result, the Secured Parties are entitled to the protections
afforded by Section 364( c) of the Bankrptcy Code in the event of any reversal or modilícatíon
of
this Final Order.
(e) Under no circumstances, except with the written consent of
the Administrative
Agei"l, shall the liens, rights and remedies granted to the Secured Parties pursuant to or in
connecLíon with the I.ìmited Recourse DIP Financing Documents and this Final Order be
modí /led, altered or impaired in any manner by a chapter 11 plan or order of confirmation of a
chapter 11 plan for any of
the Borrowers.
27. No Waiver of Secured Parties' Rhihts. Notwithstanding anything to the
contrary herein, the entry of
this Pinal Order is without prejudice to, and does not constitute a
the rights of
waiver of, expressly or implicitly, or otherwise impair any of
the Secured Paries
under the Bankruptcy Code or under non-bankruptcy law.
28. Conflcts. To the extent of any conflct between or among the express tcrffS or
provisions of any of
the Limited Recourse DIP Financíng Documents and the Motion, the terms
and provisions of the Limited Recourse nip Fínuncing Documents shall govern. To the extent oj'
any conflct between or among the express terms or provisions of any of the Limited Recourse
DIP Financing Documents or the MotiOl"l on the one hand, and the terms and provisions of
this
Final Order on the other hand, the terms and provisions of this Final Order shall govem.
29. Amendments. The BOTTowers and the Secured Parties may lìnalize, amend,
modify, supplement or waive any provision of
the Limited Recourse DIP Financing Documents
DB02:6399Q76. i
- 17066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 19 of 20
if such amendment, modification, supplement or waiver is permitted under the terms of the
Limited Recourse DIP Pinancing Documents and is not material (in the good faith judgment of
the Secured Parties and the Borrowers) without any nccd to apply to, or receive furher approval
from, the Court.
30. No Third Part Beneficiaries. No third party is intended to be or shall be
deemed to be a third party benelíciary of
the provisions ofthìs Final Order or the Limited
Recourse DIP Pinancing Docmncnts.
31_ Purchaser A2:rccmcnt Obliliations. Notwithstading anything else in the
Interim Order, this Final Order or the Limited Recourse DIP Financing Documents to the
contrary, (a) in the event of any conflct between terms and provisions of
the Limited Recourse
DIP Financing Documents and thc Sale Order or the Purchase Agreement) the terms and
provisions of the Sale Order and the Purchase Agreements shall prevail, and (b) nothing in the
Interim Order, this i'Ïnal Order or the Limited Recourse DIP Financing Documents is intended
to, nor shall it 0) limit, modify or affect the obligations of AH Mortgage Acquisition as
"Purchaser" under the Purchase Agreement, including, without limitation the obligation of AH
Mortgage Acquisition to provided liquidity or working ca.pital in accorda.nce in Section 6.2 ofihe
Purchase Agreement, or (ii) expand or increase the obligations of the Borrowers under the
Purchase Agreement. Any failure or inabilty of
the Borrowers to perform or comply with their
obligations under the Purchase Agreement that is due to the exercise by the Secured Paries of
theír remedies pùrsuant to Paragraph 7 olthe Interim Order, Paragraph 7 of
this Final Order or
the Limited Recourse DIP Financing Documents shall not constitute a defàult or be deemed a
breach by the Borrowers oftlieir obligations to the Purchaser under the Purchase Agreement.
wLS~
D002:6399076.1
066585.1001
Case 1:07-cv-00621-GMS
Document 15-2
Filed 04/14/2008
Page 20 of 20
32. Retention of Jurisdiction. The Court shall retain jurisdiction to hear and
determine all matters arising from this Final Order and its implementation.
33. Headinfls. Paragraph headings used herein are solely for a convenience and shall
convey no substantive import.
Dated: Novemberii, 2007
Wilmington, Delaware
¡J~S~JUÐGE
- 19 -
DHll2:t':l9907ó.l
066585.1001
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 1 of 48
EXHIBIT 2
~.
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 2 of 48
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWAR
Inre
BUFFETS HOLDINGS, INC.,
a Delaware corporation, et ai. i
) Chapter 11
)
) Case No. 08-10141 (MFW)
)
) Jointly Administered
Debtors.
)
) Related Docket Nos. 16,39,61
)
FINAL ORDER (I AUTHORIZING DEBTORS (A) TO OBTAIN POST-PETITION SENIOR SECURED SUPER.PRIORITY FINANCING PURSUANT TO 11 U.S.C. §§ 105,361,362, 363(c)(2), 364(c), 364(d)(1) AND 364(e) AND (B) TO UTILIZE CASH COLLATERAL OF PRE-PETITION LENDERS, AND (m GRATING ADEQUATE PROTECTION TO PREPETITION LENDERS PURSUANT TO 11 U.S.c. S§ 361. 362. 363 AND 364
Upon the motion (the "Motion") dated Janua 22, 2008 (the "Petition Date") of
Bufets, Inc. and its affliated debtors, each as debtor and debtor-in-possession
(collectively, the "Debtors"), in the above-captioned chapter 11 cases (the "Cases")
pursuat to sections 105,361,362, 363(c)(2), 364(c), 364(d)(1) and 364(e) of
title 11 of
the United States Code, 11 V.S.C. §§ 101 et seq. (as amended, the "Banptcy Code"),
C' C and Rules 2002, 4001 and 9014 of the Federal Rules of
Banptcy Procedure (the
"Banptcy Rules"), seeking, among other thgs:
(1) authorization for Buffets Inc. (the "Borrower") to obtain postpetition debtor-in-possession financing (the "Financing"), and for each of
the
i The Debtors in these cases, along with the last four digits of each Debtor's federal ta identification
number, are: Buffets Holdings, Inc. (4018); Buffets, Inc. (2294); HomeTown Buffet, Inc. (3002); QCB Restaurat Company, LLC (7607); aCB Puchasing Co. (7610); Buffets Leaing Company, LLC (8138);
Ryan's Restaurant Group, Inc. (7895); Buffets Frachise Holdigs, LLC (8749); Tahoe Joe's, Inc. (7129); HomeTown Leasing Company, LLC (8142); OCB Leasing Company, LLC(8147); Big R Procurement
Company, LLC (5198); Ryan's Restaurt Leasing Company, LLC (7405); Fire Mountain Restaurts,
LLC (8003); Ryan's Restaurant Management Group, LLC (6739): Tahoe Joe's Lesing Company, LLC (8145); Fire Mountain Leasing Company, LLC (7452); Fire Mountain Management Group, LLC (7299).
The address for all of
the Debtors is 1460 Buffet Way, Eagan, MN 55121.
NY\I374223.8
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 3 of 48
other Debtors (collectively, the "Guarantors") to guaanty the Borrower's
obligations in connection with the Financing, up to an aggregate principal amount
of $285,000,000 (the "Financing Amount") (the actu available principal amount
at any time being subject to those conditions set forth in tht certn Senior
Secured Super Priority Debtor In Possession Credit Agrement (the "DIP Credit
Agreement" and, together with tht certn Facilty Fee Letter dated Janua 22,
2008 and each of
the other Loan Documents (as defined in the DIP Credit
Agreement), the "DIP Documents"), from Credit Suisse, Cayman Islands Branch
("Credit Suisse"), as Administrative Agent (in such capacity, the "Agent") for
itself and the ban and other financial institutions or entities that may become
pares to the DIP Credit Agreement from time to time (together with Credit
Suisse and including the frontig and issuing ban for the letters of credit, and in
such capacities, the "DIP Lenders"), to be aranged by Credit Suisse Securties
(USA) LLC ("CS Securities"), as Sole Lead Aranger and Sole Bookrer, and,
at the option of CS Securities, one or more financial institutions as Syndicaton
Agent. The Financing consists of (i) an $85,000,000 New Money Facilty (as that
term is defined in the DIP Credit Agreement) and (ii) a $200,000,000 Rollover
Facilty (as that term is defined in the DIP Credit Agrement);
(2) authorization for the Debtors to execute and enter into the DIP
Documents and to perform such other and fuer acts as may be required in
connection with the DIP Documents;
2
NY\1374223.8
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 4 of 48
(3) the granting of adequae protection of
the securty interests and
liens (such securty interests and liens the "Pre-Petition Liens") of the lenders
(such lenders in such capacities, the "Pre-Petition Lenders") to that certai Credit
Agreement dated as of
November 1, 2006 as amended from time to time among
the Borrower, Bufets Holdings, Inc. ("Holdin&!s"), the lenders named therein,
Credit Suisse, as Administrative Agent, CS Securities and UBS Securties LLC,
as Joint Bookrers and Co-Lead Arrangers, UBS Securities LLC, as
Syndication Agent and Goldman Sachs Credit Parers L.P " as Documentation
Agent (the "Existing Credit Agreement"), which adequate protection is grated
until the DIP Pay-Out (as defied below);
(4) (a) authorization for the Debtors to use cash collateral (as defied
in the Banptcy Code) in which the Pre-Petition Lenders haye any interest and
(b) the granting of adequate protection to the Pre-Petition Lenders with respect to,
inter alia, such use of cash collateral and all use and diminution in the value of
the Pre-Petition Lenders' interest in the Debtors' interest in the Pre-Petition
Collateral (as defined in paragraph 16 herein);
(5) the granting of superpriority admsttive expense clais to the
Agent and the DIP Lenders payable from, and having recourse to, all pre-petition
and post-petition propert of
the Debtors' estates (including property tht
curently constitutes Pre-Petition Collatera) and all proceeds thereof, subject only
to the Care-Out (as defined in paragraph 6 herein) and the grantig offirst
priority priing liens for the benefit of
the Agent and the DIP Lenders in all DIP
3
NYI374223,g
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 5 of 48
Collateral (as defined in paragraph 7 herein) in accordance with the Securty
Docwnents (as defined in the DIP Credit Agreement) and this Final Order to
secure any and all of
the DIP Obligations (as defined in paragraph 4 herein);
(6) the granting to the Borrower of a superpriority claim agaist each
of the other Debtors tht is equal to the net amount of fuds trsferred by the
Borrower to the other Debtors afer the Petition Date, which claim shal be junior
in priority only to the Superpriority Clai (as defined in pargraph 6 herein) and
the Section 507(b) Claim (as defined in paragraph 14 herein);
(7) upon entr of ths Final Order, (a) the limtation of
the Debtors'
and their estates' right to surcharge against the DIP Collateral puruant to section
506(c) of the Banptcy Code and (b) the conversion of
up to $200,000,000 of
the Debtors' obligations under the Existing Credit Agreement into post-petition
debt under the DIP Credit Agreement (the "Roll-Up");
(8) pursuat to Banptcy Rule 4001, that an interim hearing (the
"Interim Hearing") on the Motion be held before ths Cour to consider entr of an
interim order (the "Interi Order") (a) authorizing the Borrower, on an interim
basis, to borrow in a single drawig under the DIP Documents up to an aggregate
principal or face amount not to exceed $30,000,000, subject to any limitations of
credit extensions under the DIP Documents (the "Maximum Interim Borrowing"),
(b) granting the DIP Liens (as defied in paragraph 7 herein) and the
Superpriority Clai to the DIP Lenders, (c) authorizing the Debtors' use of cash
4
NY\1374223.8
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 6 of 48
collateral of the Pre.Petition Lenders and (d) granting the adequae protection
described therein; and
(9) that this Cour schedule a final hearg (the "Final Hearng") to be
held within thirt days of the entr of the Interim Order to consider entr of a
final order (the "Final Order") authorig, inter alia, (a) the balance of
the
borrowigs under the DIP Documents on a final basis and (b) the Roll-Up, as set
fort in the Motion and the DIP Documents.
Due and appropriate notice of the Motion under the cÍrcmnstaces and in
accordance with section 102 of the Banptcy Code and Banptcy Rules 400 1
(b) and
(c), the relief
requested therein and the Final Hearng having been served by the Debtors
on the forty largest unsecured creditors of the Debtors on a consolidated basis as certified
by the Debtors or their noticing agent, counsel to the Agent, counsel to the adistrative
agent under the Existing Credit Agreement, counsel to the indentue trstee for the
Debtors' 12 1/2% senior notes (the "Notes"), counsel to the official committee of
unsecured creditors appointed in the Cases (the "Creditors' Commttee"), the Offce of
the United States Trustee for the Distrct of Delaware, and the other pares listed in the
Notice of Interim Order and Final Hearing of Debtors' Request for Post-Petition
Financing, Use of
Cash Collateral and Related Relief, fied with ths Cour on Janua
24, 2008 (Docket No. 62).
The Interim Hearing having been held by this Cour on Januar 23, 2008 and tls
Cour having entered the Interim Order on Janua 23, 2008. The Fina Hearng having
/
been held and concluded before this Cour on Febru 22, 2008.
5
NY\1374223,&
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 7 of 48
Upon the record made at the Interim Hearing and the Final Hearg, the record of
the Cases and the Affdavit of
Keith Wall in Support of
First Day Motions (the "Wal
Affdavit") and afer due deliberation and consideration and sufcient cause appearing
therefor;
IT is FOUND, DETERMIND, ORDERED AND ADJUGED, that:1
1. Disposition. The Motion hereby is granted on the terms set forth herein.
Any objections to the relief sought in the Motion tht have nút previously been resolved
or withdrawn hereby are overred on the merits. Ths Final Order shall be valid, binding
on all
paries in interest and fully effective immediately upon entr by this Cour.
2. Jurisdiction and Venue. Ths Cour ha core jursdiction over the Cases,
this Motion, and the paries and property affected hereby puruant to 28 U.S.C. §§ 157(b)
and 1334. Venue is proper before ths Cour pursuant to 28 U.S.C. §§ 1408 and 1409.
On Januar 29, 2008, the Offce of
the United States Trustee appointed the Creditors'
Committee pursuant to section 1l02(a)(1) of
the Banptcy Code.
3. Notice. Under the circumstaces, the notice given by the Debtors and .
their noticing agent of the Motion, the Interim Hearing and the Final Hearng eúnstitutes
due and sufficient notice thereof and complies with section 102 of the Banptcy Code
and Banptcy Rules 4001(b) and (c).
4. Findings Regarding the Financing.
ths Fina Order.
(a) Good cause has been shown for the entry of
i Findings of fact shall also constitute conclusíons of law, and conclusions of law shall also constitute
findings offact.
6
NY1374223.8
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 8 of 48
(b) The Debtors have an imedate need to obta the Financing and
use Cash Collatera (as defined in paragrph 12 herein) to permt, among other thngs, the
orderly continuation of the operation of their businesses, to maintain business
relationships with vendors, suppliers and customers, to make payroll, to make capita
expenditues, to pay the costs of adminstration of their esttes and t.o satisfy other
working capital and operational needs. The Debtots' access to sufficient working capitaI
and liquidity though the use of Cash Collateral, incurence of
new indebtedness and
other finacial accommodations is vital to the preservation and maitenance of the going
concern values of the Debtors and to a successful reorganization of
the Debtors.
( c) The Debtors are unable to obta financing on mote favorable
terms from sources other than the DIP Lenders under the DIP Documents and are unable
to obtain adequate unsecured credit allowable under section 503(b)(1) of
the Banptcy
Code as an adnistrtive expense. The Debtors also are unable to obtai secured credit
under sections 364(c) or 364(d) of
the Banptcy Code on equal or more favorable terms
than those set fort in the DIP Documents within the time frame required by their needs
to avoid imediate and irreparable har. A loan facilty in the amount and under the
terms provided by the DIP Docwnents is not avaiable without the Debtors granting to the
Agent and the DIP Lenders, subject to the Care-Out as provided for herein, the DIP
Liens and the Superpriority Clai under the terms and conditions set fort in the DIP
Docwnents.
(d) The tenns of the Financing and the use of Cash Collatera are fair
and reasonable, reflect the Debtors' exercise of prudent business judgment consistent
7
NY\1374223.8
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 9 of 48
with their fiduciar duties and constitute reasonably equivalent value and fair
consideration. For the avoidance of doubt, the signatue of any offcer of each one or
more of the Debtors, appearng on anyone or more of
the DIP Documents shall bind the
Debtors. No approval of
the board of directors or any other approval shall be necessar.
(e) The Financing has been negotiated in good faith and at ar's
lengt among the Debtors, the Agent, the DIP Lenders and their repective afliates. All
of
the Debtors' obligations and indebtedness arsing under, in respect of or in connection
with the Financing and the DIP Documents, including, but not limited to, (i) all loans
made to the Debtors pursuant to the DIP Documents and (ii) all Obligations incured (as
defined in the DIP Credit Agreement) (collectively, the "DIP Obligatons"), have been
extended by the Agent and the DIP Lenders in good faith, as that term is used in section
364(e) of
the Banptcy Code and in express reliance upon the protections offered by
the Banptcy Code. The Agent and the DIP Lenders shall be entitled
section 364(e) of
to the full protection of section 364(e) of
the Banptcy Code in the event that this Final
Order or any provision herein is vacated, reversed or modified, on appeal or otherwse.
(t) The Pre-Petition Lenders are entitled to rely upon the terms and
enforceabilty ofthís Fina Order inasmuch as the Pre-Petition Lenders' liens and security
interests shall be junior to the DIP Liens.
(g) The Debtors have requested entr of
ths Final Order pursuant to
Banptcy Rules 4001(b)(2) and 4001 (c)(2). Absént the relief
in this Final Order, the
the
Debtors' estates will be immediately and irreparably hared. Consumation of
Financing, therefore, is in the best interest of
the Debtors' estates.
8
NY\1374223.8
I
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 10 of 48
5. Authorization of
the Financing and the DIP Documents.
(a) The Debtors hereby are authorize to enter into the DIP
Documents. The Borrower hereby is authorized to borrow money pursuant to the DIP
Documents in the principal ammint of up to the Financing Amount. The Guarantors
hereby are authorized to guaranty such borrowigs in an aggregate principal or face
amount of up to the Financing Amount (plus interest, fees and other expenses provided
for in the DIP Documents), subject to any liitations of
borrowigs under the DIP
Documents. In accordance with the term of
ths Final Order and the DIP Documents,
the borrowings under the DIP Documents shall be used solely for purses pennitted
under the DIP Documents.
(b) In fuerance of the foregoing and without fuer approval of
this
Cour, each Debtor is authorized and directed to perform all acts, to make, execute and
deliver all instrents and documents (including the execution or recordation of securty
agreements, mortgages and financing statements), and to pay from the borrowigs under
the DIP Documents interest, fees and expense reimbursements, includig all fees
(including, but not limited to, an anual adinistrative agent fee of
$200,000 and an
arangement fee of $250,000) and expnse reimbursements of Credit Suisse and CS
Securities, and the reasonable fees and expense reimbursements oftheIr attorneys,
financial advisors and other professionals, and the reaonable fees and expenses of the
attorneys for each of the DIP Lenders; provided
that such attorneys, financial advisors
and other professionals shall issue invoices to the Debtors with copies to counsel to the
Creditors' Commttee, counsel to any other statutory committee, and the Office of the
9
NY\1374223.8
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 11 of 48
United States Trustee, and provided further that the Debtors shall promptly pay al
reasonable fees and expenses not subject to objection by the Creditors' Commttee or the
Offce of
the United States Trutee within ten business days afer receipt of such
invoices, and provided further that Blackstone shall be paid in accordance with that
certai agreement dated December 13,2007 (the "Blackstone Engagement Letter"),
which payment shall include the Restrctug Fee (as tht term is derined in the
Blackstone Engagement Lettr), that may be required or necessar for the Debtors'
performance of
the DIP Obligations, including:
(i) the execution, delivery and performance of
the DIP
Documents and any exhbits attached thereto;
(ii) with the express written consent of
the Agent and the DIP
Lenders in accordance with the DIP Credit Agreement, the execution,
delivery and performance of one or more amendments to the DIP
Documents for, among other things, the purose of (A) adding additional
financial institutions as DIP Lenders, (B) reallocatig the commtments for
the Financing among the DIP Lenders or (C) implementing this Order;
(iii) making the non-refudable payment to Credit Suisse, CS
Securities or the DIP Lenders, as the case may be, of all of the pricipal,
interest, charges, fees and the reimburement of expenses, all of which
unpaid principal, interest, chages, fees (including, but not liited to, an
administrtive agent fee of $200,000 and an arangement fee of $250,000
to Credit Suisse and CS Securities) and expenses shal be included in and
10
NY\1374223.8
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 12 of 48
constitute par of
the principal amount of
the DIP Obligations (subject
only to the Creditors' Committe's chalenge rights with respect to the
Roll-Up as set fort in pargraph 19 of
ths Final Order), be deemed a
Superpriority Claim and be secured by a first priority lien on and securty
interest in all of
the DIP Collateral as and to the extent provided for in ths
Final Order and the DIP Documents (for the avoidance of doubt, all fees
and expense reimburements of Credt Suisse or CS Securties shall be
deemed fully eared when paid by the Debtors, and shall not be subject to
disgorgement by Credit Suisse or CS Securties for any reason, including
as a result of a successfu Challenge or Excepted Challenge (as such tenns
are defined in paragraph 19 below));
(iv) the performance of all other acts requied under or in
connection with the DIP Documents; and
(v) with the express wrtten consent of
the administrative agent
under the Existing Credit Agreement, the execution, delivery and
performance of one or more amendments to the Existing Credit
Agreement for, among other thgs, the purose of implementing this
Final Order.
(c) The DIP Documents shall and hereby do constitute valid and
binding obligations of the Debtors, enforceable agait each Debtor par thereto in
accordance with the terms of
the DIP Documents. No DIP Obligation, payment, transfer
or grant of security under the DIP Documents or tlus Final Order shall be stayed,
11
NY\1374223.8
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 13 of 48
restrained, voidable or recoverable under the Banptcy Code or under any applicable
law (including under section S02(d) of
the Banptcy Code), or subject to any defense,
reduction, setoff, recoupment or counterclaim (subject only to the Creditors' Committee's
challenge rights with respect to the Roll-Up as set fort in paragraph 19 of
this Final
Order).
6. Superpriority Claim.
the Banptcy Code, all of
(a) Pursuat to section 364(c)(1) of
the
DIP Obligations (including the Roll-Up) shall constute an allowed claim, subject to
payment of
the Care-Out (the "Suoer,rioritv Claim") agaist each Borrower and each
Guarantor, with priority over any and all adminstative expenses, diinution clais
(including all Adequate Protection Obligations (as defined in paragraph 14 herein)), all
clais of any kid asserted by the Pre-Petition Lenders, and all other clais against the
Debtors, now existing or hereafter arsing, of any kind whatsoever, including all
administrative expenses of the kid specified in sections 503(b) and 507(b) of
the
Banptcy Code, and over any and all administrative expenses or other clais arsing
under sections 105, 326, 328, 330, 331, 503(b), 506(c), 507, 546(c), 726, 1113 or 1114 of
the Banptcy Code, whether or not Such expenses or claims may become secured by a
judgment lien or other non-consensua
lien, levy or attchment, and which Superpriority
Clai shall be payable from and have recourse to all pre- and post-petition property of
the Debtors and all proceeds thereof (including proceeds of all claims and causes of
action under sections S02(d), 544, 545, 547, 548,549 and 550 of
the Banptcy Code, or
any other avoidace actions under the Banptcy Code or other applicable law
12
NY\1374223.8
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 14 of 48
(collectively, the "Avoidance Actions")), subject only to the payment of
the Care-Out to
the extent specifically provided for herein. Prior to the DIP Pay-Out (as defined below),
the Debtors shall deposit in escrow all money and other propert recovered arsing out of,
relating to, or in connection with any Avoidance Action (whether or not an adversar
proceeding is conuenced), and no such money and other propert shall be distrbuted to
any par other than the DIP Lenders until the DIP Pay-Out. DIP Liens (as defined in
paragraph 7 hereof) shall attach to the escrow accounts into which any money and other
property recovered arising out of, relating to, or in connection with any Avoidace
Action are deposited.
(b) The term "Care-Out" mea (i) the unpaid fees due and payable
to the Clerk of the Cour and the Offce of the UlÛted States Trustee pursuant to 28
U.S.C. § 1930; (ii) the accrued and unpaid fees and expenses incured by professionals
retained pursuant to an order of
ths Cour until the earlier of (x) the occurence of an
Event of Default (as defined in the DIP Documents), provided that accred and unpaid
professional fees and expenses incured afer an Event of Default which is waived or
cured, shall also be included in the Care-Out (so long as an unwaived or uncured Event
of Default has not occured and is not continuing) or (y) the conversion of
the Cases to
cases under chapter 7 of the Banptcy Code, provided that such fees and expenses
incured pursuant to either (ii)(x) or (ii)(y) must be approved by ths Cour; and (ii) the
accrued and unpaid fees and expenses incured by professionals retaied puruant to an
order of ths Cour upon and afer the occurence of an Event of Default and during the
continuance of such an Event of Default which is not waived or cured, or upon and after
13
NY\1374223.8
Case 1:07-cv-00621-GMS
Document 15-3
Filed 04/14/2008
Page 15 of 48
the conversion of the Cases to cases under chapter 7 of the Banptcy Code, in an
aggrgate amount not to exceed $600,000, plus any allowed fees and expnses reasnably
incured by professionals retained pursuant to an order of ths Cour solely in connection
with responding to requests a chapter 7 trstee appointed by order of ths Cour for the
Cases makes of such professionals for tranmitt of documents in their possession. In no
event shal any of the Care-Out be used to pay any fees or expenses of any person
retained in a chapter 7 case under sections 326, 327 or 328 of
the Banptcy Code.
(c) No Loan (as defined