EXHIBIT 99.2
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INVESTMENT AGREEMENT
by and among
HIGH RIVER LIMITED PARTNERSHIP,
as Purchaser,
XXXXXX SERVICES CORPORATION,
as Company
and
CERTAIN SUBSIDIARIES OF XXXXXX SERVICES CORPORATION
as Subsidiaries
Dated as of July 29, 2003
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TABLE OF CONTENTS
RECITALS............................................................................. 1
ARTICLE I INVESTMENT................................................................. 2
SECTION 1.1 INVESTMENT............................................................ 2
SECTION 1.2 XXXXXXX MONEY DEPOSIT................................................. 2
SECTION 1.3 COMMITMENT FEE........................................................ 2
SECTION 1.4 DISTRIBUTION OF SHARES TO PIK/TERM CREDITORS; PARTICIPATION RIGHTS.... 2
SECTION 1.5 CLOSING............................................................... 3
SECTION 1.6 CLOSING DELIVERIES.................................................... 3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND ITS SUBSIDIARIES........ 4
SECTION 2.1 ORGANIZATION AND GOOD STANDING; CAPITALIZATION; SUBSIDIARIES.......... 5
SECTION 2.2 AUTHORIZATION AND EFFECT OF AGREEMENT................................. 5
SECTION 2.3 NO CONFLICTS.......................................................... 6
SECTION 2.4 NO THIRD PARTY OPTIONS................................................ 7
SECTION 2.5 CONSENTS.............................................................. 7
SECTION 2.6 PERMITS; COMPLIANCE WITH LAW.......................................... 7
SECTION 2.7 LITIGATION............................................................ 8
SECTION 2.8 CONDITION AND SUFFICIENCY OF ASSETS................................... 8
SECTION 2.9 NO CASUALTY........................................................... 8
SECTION 2.10 INSURANCE.......................................................... 8
SECTION 2.11 ENVIRONMENTAL MATTERS.............................................. 8
SECTION 2.12 TAXES.............................................................. 10
SECTION 2.13 LABOR MATTERS...................................................... 13
SECTION 2.14 EMPLOYEE MATTERS................................................... 14
SECTION 2.15 ERISA COMPLIANCE; ABSENCE OF CHANGES IN BENEFIT PLANS.............. 14
SECTION 2.16 INTELLECTUAL PROPERTY.............................................. 20
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SECTION 2.17 REAL PROPERTY...................................................... 21
SECTION 2.18 DISCLOSURE......................................................... 22
SECTION 2.19 NO VIOLATION OF LAW................................................ 23
SECTION 2.20 MATERIAL AGREEMENTS................................................ 23
SECTION 2.21 BANK ACCOUNTS...................................................... 23
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER.............................. 23
SECTION 3.1 ORGANIZATION.......................................................... 23
SECTION 3.2 AUTHORIZATION AND EFFECT OF AGREEMENT................................. 23
SECTION 3.3 NO CONFLICTS.......................................................... 24
SECTION 3.4 LITIGATION............................................................ 24
SECTION 3.5 INVESTMENT INTENT..................................................... 24
ARTICLE IV COVENANTS................................................................. 25
SECTION 4.1 ACCESS................................................................ 25
SECTION 4.2 CONDUCT OF BUSINESS................................................... 26
SECTION 4.3 NO INCONSISTENT ACTION................................................ 28
SECTION 4.4 FILINGS............................................................... 28
SECTION 4.5 ALL REASONABLE EFFORTS................................................ 28
SECTION 4.6 FURTHER ASSURANCES.................................................... 29
SECTION 4.7 PUBLICITY............................................................. 29
SECTION 4.8 COLLECTIVE BARGAINING AGREEMENTS...................................... 29
SECTION 4.9 BANKRUPTCY REORGANIZATION PROCESS..................................... 30
SECTION 4.10 ACCEPTED OR REJECTED CONTRACTS..................................... 34
SECTION 4.11 SPECIFIC ENFORCEMENT OF COVENANTS.................................. 35
SECTION 4.12 NO SOLICITATION.................................................... 35
SECTION 4.13 CONFIDENTIALITY.................................................... 37
SECTION 4.14 CANADIAN RESTRUCTURING............................................. 37
SECTION 4.15 PERFORMANCE ESCROW AGREEMENT....................................... 38
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SECTION 4.16 ICAHN DIP FACILITY................................................. 38
SECTION 4.17 TRANSFER OF OWNED REAL ESTATE...................................... 38
ARTICLE V CONDITIONS TO CLOSING...................................................... 38
SECTION 5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER.................. 38
SECTION 5.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY.................... 41
ARTICLE VI FURTHER AGREEMENTS AND TERMINATION........................................ 42
SECTION 6.1 TERMINATION PAYMENT................................................... 42
SECTION 6.2 BANKRUPTCY TERMINATION PAYMENT........................................ 42
SECTION 6.3 TERMINATION........................................................... 43
SECTION 6.4 PROCEDURE AND EFFECT OF TERMINATION................................... 45
ARTICLE VII MISCELLANEOUS PROVISIONS................................................. 46
SECTION 7.1 NOTICES............................................................... 46
SECTION 7.2 ACTIONS BY THE COMPANY AND ITS SUBSIDIARIES........................... 47
SECTION 7.3 EXPENSES.............................................................. 47
SECTION 7.4 SUCCESSORS AND ASSIGNS................................................ 47
SECTION 7.5 WAIVER................................................................ 47
SECTION 7.6 ENTIRE AGREEMENT; DISCLOSURE SCHEDULES................................ 47
SECTION 7.7 AMENDMENTS, SUPPLEMENTS, ETC.......................................... 48
SECTION 7.8 NO RIGHTS OF THIRD PARTIES............................................ 48
SECTION 7.9 APPLICABLE LAW........................................................ 48
SECTION 7.10 EXECUTION IN COUNTERPARTS.......................................... 48
SECTION 7.11 TITLES AND HEADINGS................................................ 48
SECTION 7.12 INVALID PROVISIONS................................................. 48
SECTION 7.13 BROKERS............................................................ 48
SECTION 7.14 EXCULPATION........................................................ 49
SECTION 7.15 PRINCIPLES OF INTERPRETATION....................................... 49
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ARTICLE VIII DEFINITIONS............................................................. 49
SECTION 8.1 DEFINITIONS........................................................... 49
SECTION 8.2 KNOWLEDGE............................................................. 62
Exhibits
Exhibit A Terms of Restructuring
Exhibit A-1 Terms Of Exit Loan Facility
Exhibit A-2 Competing Plan Requirements
Exhibit B-1 Timetable for Restructuring
Exhibit B-2 Timetable for Collective Bargaining Agreement Negotiations
Exhibit C-1 Bidding Procedures Order
Exhibit C-2 Icahn DIP Approval Order
Exhibit D Canadian Subsidiaries
Exhibit E Disclosure Schedule Responsibility Timetable
Exhibit F Form of Performance Escrow Agreement
Exhibit G Canadian Restructuring
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INVESTMENT AGREEMENT
This INVESTMENT AGREEMENT (this "Agreement") is made and entered into
as of July 29, 2003, by and among High River Limited Partnership, a Delaware
limited partnership ("Purchaser"), Xxxxxx Services Corporation, a Delaware
corporation (the "Company"), and the Subsidiaries of the Company (as defined
herein). The parties hereto shall be referred to collectively as the "Parties"
and individually, each as a "Party"). Capitalized terms used herein (and in the
Exhibits hereto) without definition shall have the meanings ascribed to such
terms in Article VIII hereof.
RECITALS
WHEREAS, the Company and its U.S. Subsidiaries (collectively, the "U.S.
Debtors") are debtors and debtors in possession under Chapter 11 of Title 11 of
the United States Code, 11 U.S.C. Sections 101-1330 (as amended, the "Bankruptcy
Code"), having each commenced voluntary cases (the case number for the Company
is 03-37718-H2-11) (together with all legal proceedings instituted in a United
States Bankruptcy Court in connection with the Restructuring (as defined below)
or otherwise involving the Company as debtor, the "U.S. Bankruptcy Case") on or
after June 2, 2003 (the "Petition Date") in the United States Bankruptcy Court
for the Southern District of Texas (the "U.S. Bankruptcy Court");
WHEREAS, subject to the terms and conditions hereof, the Company and
its Subsidiaries have agreed to file (i) a plan of reorganization supported and
approved by Purchaser with the U.S. Bankruptcy Court for the U.S. Debtors to
implement the transactions contemplated by this Agreement including the
Restructuring as described herein (the "U.S. Plan"), and (ii) to take such
action and to cause the U.S. Debtors' direct and indirect subsidiaries in
Canada, which subsidiaries are listed on Exhibit D (the "Canadian
Subsidiaries"), to take such action in the Canadian Court or otherwise that are
consistent with the U.S. Plan to implement the transactions contemplated by this
Agreement including the Canadian Restructuring as described herein (the
"Canadian Proceeding") and, together with the U.S. Plan, the "Bankruptcy Plan");
WHEREAS, the Company and its Subsidiaries desire to consummate and have
approved, subject to confirmation of the U.S. Plan by the U.S. Bankruptcy Court
and, if applicable, sanctioning of the Canadian Proceeding by the Canadian
Court, the transactions contemplated by this Agreement, including the investment
by Purchaser in the reorganized Company in connection with and upon giving
effect to the Restructuring as described herein ("Reorganized PSC"), and
consummation of the Bankruptcy Plan;
WHEREAS, in connection with the Bankruptcy Plan, Purchaser desires to
make a significant investment in Reorganized PSC and to consummate the
transactions contemplated by this Agreement, upon the terms and conditions
provided for herein; and
WHEREAS, subject to the terms and conditions hereof, the U.S. Debtors
have agreed to seek entry of an order of the U.S. Bankruptcy Court confirming
the U.S. Plan pursuant to Section 1129 of the Bankruptcy Code, and the Company
and its Subsidiaries have agreed, if applicable, to cause the Canadian
Subsidiaries, and the Canadian Subsidiaries have agreed to seek entry of such
order(s) of the Canadian Court as may be required to sanction the Canadian
Proceeding.
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NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements set forth in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as
follows:
ARTICLE I
INVESTMENT
Section 1.1 Investment. Subject to the participation rights of the
Qualified PIK/Term Creditors as contemplated by the Terms of Restructuring
attached hereto as Exhibit A (such terms and such description are collectively
referred to herein as the "Restructuring"), on the terms and subject to the
conditions hereinafter set forth, at the Closing (a) Reorganized PSC will issue
and sell to Purchaser, and Purchaser will purchase from Reorganized PSC, shares
of Common Stock representing 20% of the issued and outstanding shares of Common
Stock (the "Purchase Shares") in consideration of $10,000,000 (the "Purchase
Shares Purchase Price"), and (b) Purchaser will make available to Reorganized
PSC the $160,000,000 exit loan as further described in Exhibit A-1 (the "Exit
Loan Facility") (such purchase of the Purchase Shares and the making of the Exit
Loan Facility to be referred to herein, collectively, as the "Investment"). The
Qualified PIK/Term Creditors, including Purchaser and its Affiliates in their
capacity as PIK/Term Creditors, that elect to participate in the Investment
shall be referred to herein as the "Investors".
Section 1.2 Xxxxxxx Money Deposit. Upon execution of this Agreement,
Purchaser will deliver to the Escrow Agent the Performance Escrow Agreement
attached hereto as Exhibit F (the "Performance Escrow Agreement") executed by
Purchaser, together with the $6.0 million xxxxxxx money deposit contemplated
thereby, which deposit will be held in escrow to secure the obligations of
Purchaser hereunder in accordance with the provisions of the Performance Escrow
Agreement.
Section 1.3 Commitment Fee. In consideration of Purchaser's commitment
to make the Exit Loan Facility, at the Closing, Reorganized PSC will issue and
deliver to Purchaser, as the exclusive fee for the Exit Loan Facility, shares of
Common Stock representing 5.0% of the issued and outstanding shares of Common
Stock (such shares to be referred to as the "Exit Loan Commitment Shares").
Section 1.4 Distribution of Shares to PIK/Term Creditors; Participation
Rights.
Pursuant to the Bankruptcy Plan, and as set forth in Exhibit A, the
balance of the issued and outstanding shares of Common Stock (exclusive of
shares of Common Stock, if any, issued pursuant to the Reorganized PSC
Management Incentive Plan) will be issued to the PIK/Term Creditors, including
Purchaser and its Affiliates in their capacity as PIK/Term Creditors, that elect
to participate in such distribution in exchange for their PIK/Term Claims (the
"PIK/Term Shares"). In addition, as contemplated by Exhibit A, and as shall be
set forth in further detail in the U.S. Plan, each Qualified PIK/Term Creditor,
whether or not it has elected to participate in the distribution of the PIK/Term
Shares, will have the right to participate in the Investment.
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Section 1.5 Closing. The consummation of the Investment contemplated
hereby (the "Closing") shall take place at the offices of Xxxxxxxxxxxx Xxxx &
Xxxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 subject to the
satisfaction or waiver of the conditions set forth in Sections 5.1 and 5.2, as
soon as practicable after the confirmation of the U.S. Plan by the U.S.
Bankruptcy Court and sanctioning, if applicable, of the Canadian Proceeding by
the Canadian Court, and in any event not later than the Outside Closing Date, or
at such other time and place and on such other date as Purchaser and PSC for
itself and on behalf of all of the other Sellers shall agree (the "Closing
Date").
Section 1.6 Closing Deliveries.
(a) At the Closing, Purchaser and each other Investor
will deliver, or execute and deliver as applicable, to the Company:
(i) the Exit Loan Facility Agreements to which
such Investor is a party;
(ii) the Purchase Shares Purchase Price by wire
transfer of immediately available funds to the account
designated by the Company at least two business days prior to
the Closing Date; and
(iii) the initial advances and the initial letters
of credit contemplated by the Exit Loan Facility and the
Restructuring.
The Purchase Shares Purchase Price and the initial advances to be made under the
Exit Loan Facility may be paid in part from the release to the Company of the
Purchaser's xxxxxxx money deposit (together with earnings thereon) made pursuant
to Section 1.2 hereof.
(b) At the Closing, the Company, and to the extent
applicable, its Subsidiaries, will deliver, or execute and deliver as
applicable, to Purchaser and the other Investors:
(i) the Exit Loan Facility Agreements;
(ii) the Registration Rights Agreement;
(iii) one or more certificates representing the
Investors' allocable portion of the Purchase Shares free and
clear of any Liens;
(iv) the officers' certificates referenced in
Section 5.1(c);
(v) such other documentation as Purchaser may
reasonably request evidencing that all conditions to the
Closing contained in Section 5.1 hereof have been satisfied or
waived, including without limitation the exclusion of any
Excluded Assets from the assets of Reorganized PSC;
(vi) certified copies of the U.S. Bankruptcy
Court Confirmation Order, to the extent required, the
comparable order of the Canadian Court, and any other
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relevant orders of the U.S. Bankruptcy Court or the Canadian
Court in connection with the Restructuring;
(vii) all other documents, certificates,
instruments or writings reasonably requested by Purchaser in
connection herewith (together with the documents referred to
above and the notes issuable pursuant to the Restructuring as
described in Exhibit A, the "Ancillary Documents").
(c) At the Closing, the Company will deliver to Purchaser
one or more certificates representing the Exit Loan Commitment Shares
free and clear of any Liens.
(d) At the Closing, the Company and its Subsidiaries will
repay all amounts due under the Icahn DIP Facility and the Icahn DIP
Approval Order from the proceeds of the Exit Loan Facility or such
other sources as the Company may determine.
(e) At the Closing, the Company and its Subsidiaries
shall make such other distributions to their creditors as are
contemplated by the Bankruptcy Plan and the terms and conditions set
forth on Exhibit A.
(f) Certificates for shares of capital stock to be
delivered by the Company hereunder shall be made to the applicable
Investor or the nominee or designee as such Investor shall specify to
the Company prior to the Closing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND ITS SUBSIDIARIES
The Company and its Subsidiaries hereby, jointly and severally, make
the following representations and warranties to Purchaser, each of which shall
be true, complete and correct as of the date hereof (or, if such representation
or warranty is contemplated to be modified by a Schedule, as of the date of
delivery of such Schedule with respect thereto), and as of the time immediately
preceding and immediately following the Closing (it being understood that unless
the context otherwise requires, as of and immediately following the Closing, all
representations as to the Company and its Subsidiaries shall apply to
Reorganized PSC and its Subsidiaries), in each case, except to the extent the
context otherwise expressly requires and except to the extent that any such
representation or warranty expressly relates to a specific date or time, in
which case it shall be true and correct as of such date or time; provided,
however, that each of the representations and warranties of the Company set
forth in this Article II shall be unaffected by any investigation heretofore or
hereafter made by or on behalf of Purchaser; and further provided, however, that
the representations and warranties of the Company set forth in this Article II
are made and given subject to the disclosures in the disclosure schedule
attached hereto and made a part of this Agreement (the "Disclosure Schedule").
Each of the disclosures in the Disclosure Schedule shall be arranged in a
section(s) corresponding to the numbered and lettered section(s) contained in
this Article II to which it relates, and shall be considered a representation
and warranty as if made hereunder.
References to any particular "Schedule" or "Schedules" shall mean the
Disclosure Schedule. Any Schedule not delivered as of the date hereof shall be
completed by the Company
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on or by the dates set forth on Exhibit E and, upon acceptance by the
non-preparing Party (as contemplated by Section 6.3(c)(iv)), shall be made a
part of this Agreement as if such Schedule were originally attached hereto as of
the date hereof (unless the context requires otherwise).
Section 2.1 Organization and Good Standing; Capitalization;
Subsidiaries.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, has the
requisite power and authority to carry on its business as it is now
being conducted, and is qualified to do business in every jurisdiction
where the failure to be so qualified reasonably could be expected to
have a Material Adverse Effect.
(b) Other than as described on Schedule 2.1(b), each
Subsidiary is wholly-owned, directly or indirectly, by the Company, and
each Subsidiary is duly organized, validly existing and (other than
inactive Subsidiaries listed on Schedule 2.1(b) which do not own any
material or significant assets) in good standing under the laws of the
jurisdiction of its organization, has the requisite power and authority
to carry on its business as it is now being conducted, and is qualified
to do business in every jurisdiction where the failure to be so
qualified reasonably could be expected to have a Material Adverse
Effect.
(c) Set forth on Schedule 2.1(c) is a complete and
accurate description of the authorized Capital Stock of the Company, by
class or series, and a description of the number of shares of each such
class or series that are issued and outstanding. Other than options
that may have been granted under various incentive plans that, if
exercised in full, would not exceed 5% of the Company's outstanding
common stock in the aggregate, or as otherwise described on Schedule
2.1(c), there are no subscriptions, options, warrants, or calls
relating to any shares of the Capital Stock of the Company, including
any right of conversion or exchange under any outstanding security or
other instrument. Other than as described on Schedule 2.1(c), the
Company is not subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its Capital
Stock or any security convertible into or exchangeable for any of its
Capital Stock.
(d) Set forth on Schedule 2.1(d), is a complete and
accurate list of all of the Subsidiaries, showing: (i) the governing
jurisdiction of their incorporation or formation, as the case may be;
(ii) the jurisdictions in which they are qualified to conduct business;
(iii) the number of shares of each class or series of common or
preferred Capital Stock or other equity interest authorized for each of
the Subsidiaries; and (iv) the number and the percentage of the
outstanding shares of each such class or series, or other equity
interests, as the case may be, owned directly by the Company or any
other of its Subsidiaries and naming such other Subsidiaries, and there
are no subscriptions, options, warrants, or calls relating to any
shares of the Capital Stock or other equity interest of any Subsidiary,
including any right of conversion or exchange under any outstanding
security or other instrument.
Section 2.2 Authorization and Effect of Agreement. Subject to the
approval of the U.S. Bankruptcy Court, and with respect to the Canadian
Subsidiaries, if applicable, the Canadian Court, the Company, and to the extent
applicable each Subsidiary, has the requisite
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corporate power and authority to execute and to deliver this Agreement and the
Ancillary Documents to which it is or will be a party and to perform its
obligations hereunder and under any such Ancillary Documents. The execution and
delivery by the Company, and to the extent applicable each Subsidiary, of this
Agreement and the Ancillary Documents to which it is or will be a party, the
performance of its obligations hereunder and thereunder and the consummation by
it of the transactions contemplated hereby and thereby have been (or will be at
the time of execution thereof) duly authorized by all necessary corporate action
on the part of the Company (or if applicable, such Subsidiary), and no other
corporate action on the part of the Company or such Subsidiary is necessary to
authorize the execution and delivery of this Agreement, the Ancillary Documents
or the consummation of the transactions contemplated hereby or thereby. Subject
to the approval of the U.S. Bankruptcy Court, and with respect to the Canadian
Subsidiaries, if applicable, the Canadian Court, this Agreement has been duly
and validly executed and delivered by the Company and its Subsidiaries and
constitutes a valid and binding obligation of the Company and its Subsidiaries,
enforceable against the Company and its Subsidiaries in accordance with its
terms, subject (a) to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, including, without limitation, for purposes of the
representations and warranties being made as of the Closing Date, the discretion
of the Bankruptcy Courts for so long as the Bankruptcy Courts retain
jurisdiction over the applicable Bankruptcy Cases, and (b) as to enforceability,
to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity). Each of the Ancillary Documents,
when executed and delivered by the Company or any of its Subsidiaries, shall
constitute a valid and binding agreement of the Company or such Subsidiary,
enforceable against the Company or such Subsidiary in accordance with its terms,
subject (i) to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, including, without limitation, the discretion of the
Bankruptcy Courts for so long as the Bankruptcy Courts retain jurisdiction over
the applicable Bankruptcy Cases, and (ii) as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
Section 2.3 No Conflicts. Subject to confirmation and/or sanctioning of
the Bankruptcy Plans, and except as may be provided to the contrary in any
document, instrument or other agreement as set forth on Schedule 2.3, neither
the execution and delivery by the Company, or to the extent applicable any
Subsidiary, of this Agreement and any Ancillary Documents to which it will be a
party, nor the consummation of the transactions contemplated hereby or thereby,
does or will (a) conflict with, or result in any violation of, or constitute a
default under, or give rise to the creation of a Lien upon any of the Company's
or any Subsidiaries' assets or Capital Stock or to a right of termination,
cancellation or acceleration of any obligation or to a loss of a benefit under
(i) any provision of the certificate of incorporation or bylaws of the Company
or any Subsidiary (or any other charter documents of a Subsidiary), (ii) except
for Consents required to accept or reject Material Executory Contracts as
described on Schedule 2.5 hereto, any of the terms, conditions or provisions of
any Material Executory Contracts, including, without limitation, any Collective
Bargaining Agreements, by which the Company or any of its Subsidiaries is bound,
or (iii) any Law applicable to or binding on the Company or any of its
Subsidiaries of its respective assets, (b) affect the ability of Purchaser and
each other
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Investor to own the Purchase Shares, the PIK/Term Shares or the Exit Loan
Commitment Shares, as applicable (collectively, the "Shares"), (c) create any
Lien on or any right of any third party with respect to the Shares or with
respect to any of the assets or properties owned or used by the Company, or (d)
accelerate or trigger any right or obligation of any party under any Accepted
Contract.
Section 2.4 No Third Party Options. Except as contemplated by this
Agreement and any Ancillary Documents to which the Company or any Subsidiary is
or will be a party, and except as set forth in Section 2.1(c) or Schedule 2.4,
there are no existing agreements, options, rights of first refusal or
commitments granting to any Person the right to acquire any of the Company's, or
any of its Subsidiaries, Capital Stock or any of the Company's, or any of its
Subsidiaries', right, title or interest in or to any of their respective
properties or assets (whether real, personal, tangible or intangible), other
than the sale of assets in the ordinary course of business.
Section 2.5 Consents. Other than in connection with the commencement of
the Bankruptcy Cases, and the requisite approvals of the Bankruptcy Courts, the
execution and delivery by the Company, and to the extent applicable each
Subsidiary, of this Agreement and any Ancillary Documents to which they are or
will be a party, the performance by the Company or any of its Subsidiaries of
the transactions contemplated by this Agreement, or such Ancillary Documents and
the consummation by the Company and the Subsidiaries of the transactions
contemplated hereby and thereby (including without limitation the continuing
conduct of the business of the Company and its Subsidiaries, as currently
conducted, by Reorganized PSC and its Subsidiaries following the Closing), does
not and will not, require any Consent, including, without limitation, any
Consents under any Collective Bargaining Agreements or other Material Executory
Contracts, except (i) as disclosed on Schedule 2.5, and (ii) for compliance with
the XXX Xxx, xxx Xxxxxxxxxx Xxxxxx Xxx (Xxxxxx), the Competition Act (Canada),
applicable securities Laws and applicable requirements of any stock exchanges.
The parties acknowledge and agree that Schedule 2.5 is not an admission that any
consent to assignment or any contractual clause forbidding assignment that is
listed or cross referenced on Schedule 2.5 is enforceable under or is overridden
by Section 365 of the Bankruptcy Code or any other applicable law.
Section 2.6 Permits; Compliance with Law. To the Company's knowledge,
Schedule 2.6 sets forth a true, correct and complete list of all Permits. The
Company and each Subsidiary possess all Permits materially necessary for the
operation of their current businesses. All material Permits issued to the
Company and each of its Subsidiaries are in full force and effect. Except as set
forth in Schedule 2.6, to the Company's knowledge, no outstanding violations are
or have been recorded in respect of any of the Permits. To the Company's
knowledge, the conduct of the Company's and each Subsidiaries' business complies
in all material respects with all Laws and the requirements and conditions of
all Permits, including without limitation all applicable operating certificates
and authorities, and all other rules, regulations, directives and policies of
all Governmental Authorities having jurisdiction over the business conducted by
the Company and its Subsidiaries. No proceeding is pending or, to the Company's
knowledge, threatened to revoke, withdraw or limit any such Permit, and to the
Company's knowledge, there is no fact, error or admission relevant to any Permit
that would cause the violation of or permit revocation, withdrawal or limitation
or result in the threatened violation of or revocation, withdrawal or limitation
of any such Permit. Except as set forth on Schedule 2.5, after the
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Closing, each material Permit will continue in full force and effect and accrue
to the benefit of Reorganized PSC or its applicable Subsidiary without any
Consent, confirmation or modification required by or from any Governmental
Authority.
Section 2.7 Litigation. Except as set forth on Schedule 2.7, there is
no claim, action, suit, investigation or proceeding ("Litigation") pending or,
to the Company's knowledge, threatened before any court, arbitrator or other
Governmental Authority that (a) seeks to restrain, materially modify, prevent,
or materially delay the consummation of the transactions contemplated by this
Agreement and the Ancillary Documents, or that (b) questions the validity of
this Agreement or any of the Ancillary Documents, or any action taken or to be
taken by the Company or any Subsidiary in connection with this Agreement or any
of the Ancillary Documents. Other than the Bankruptcy Cases, there is no
Litigation (i) relating to the ownership or operation by the Company or any of
its Subsidiaries of any material portion of the Company's or any of its
Subsidiaries' business or assets, or (ii) otherwise affecting the Capital Stock
of the Company or any of its Subsidiaries pending, or, to the Company's
knowledge, threatened against the Company or any of its Subsidiaries or any of
their respective business or assets. Other than pursuant to the Bankruptcy
Cases, there are no judgments, orders or decrees of any Governmental Authority
binding on the Company or any of its Subsidiaries that relate to the ownership
or operation of the business of the Company or any of its Subsidiaries or that
otherwise affect its or their Capital Stock.
Section 2.8 Condition and Sufficiency of Assets. The Facilities and
other assets and property owned or used by the Company and its Subsidiaries and
which will be owned or used by Reorganized PSC and its Subsidiaries upon
Closing, taken as a whole, are sufficient for the continued conduct by the
Company and its Subsidiaries of the business of the Company and its Subsidiaries
as currently conducted.
Section 2.9 No Casualty. Except as set forth on Schedule 2.9, to the
Company's knowledge, none of the assets of the Company or any Subsidiary has
been affected by any fire, explosion, accident, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that could reasonably be expected to have
a Material Adverse Effect.
Section 2.10 Insurance. The Company and each of its Subsidiaries have
in place insurance policies with respect to the assets and businesses of the
Company that are listed on Schedule 2.10. Except as set forth on Schedule 2.10,
all such policies are in full force and effect. The Company has made available
to Purchaser a description of such policies and any applicable self-insurance
programs.
Section 2.11 Environmental Matters.
(a) Except as set forth on Schedule 2.11(a), to the
Company's knowledge, the conduct and operation of the business of the
Company and each of its Subsidiaries are in material compliance with
all applicable Environmental Laws. Except as set forth on Schedule
2.11(a), neither the Company nor any of its Subsidiaries has received
any written communication from any Person that alleges that the Company
or any of its Subsidiaries is not in such compliance, the subject
matter of which written
8
communication has not been resolved in a manner that has or could be
reasonably expected to give rise to an Environmental Claim. To the
Company's knowledge, Schedule 2.11(a) sets forth a true, correct and
complete list of all charges, directions, instructions, orders, decrees
or other agreements relating to the Company and its Subsidiaries, or
any of their properties, issued pursuant to or entered into under any
Environmental Law that has or could be reasonably expected to give rise
to an Environmental Claim.
(b) Except as set forth on Schedule 2.11(b), to the
Company's knowledge, there is no Environmental Claim relating to the
conduct or operation of the Company or any of its Subsidiaries pending
or threatened against the Company or any of its Subsidiaries, or
against any Person whose liability for such Environmental Claim the
Company or any of its Subsidiaries has retained or assumed either
contractually or by operation of law.
(c) Except as set forth on Schedule 2.11(c), to the
Company's knowledge, neither the Company nor any of its Subsidiaries
has received any written allegation or other information, the subject
matter of which allegation or information has not been resolved in a
manner that has or could be reasonably expected to give rise to an
Environmental Claim, that past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, spill, discharge, or disposal of any
Material of Environmental Concern, relating to the conduct or operation
of the business of the Company or any of its Subsidiaries could
reasonably be expected to give rise to an Environmental Claim relating
to the Company or any of its Subsidiaries, against the Company or any
of their Subsidiaries, or against any Person whose liability for such
Environmental Claim the Company or any of its Subsidiaries has retained
or assumed either contractually or by operation of law.
(d) Without in any way limiting the generality of the
foregoing, to the Company's knowledge, (i) known onsite and off-site
locations where the Company or any of its Subsidiaries or any other
occupant has stored, disposed or arranged for the disposal of Materials
of Environmental Concern are identified on Schedule 2.11(d), (ii) all
underground storage tanks, and the capacity and contents of such tanks,
located on the Real Estate are identified on Schedule 2.11(d), (iii)
except as set forth on Schedule 2.11(d), there is no damaged and
friable asbestos or lead based paint coatings in poor condition, or
urea formaldehyde foam insulation contained in or forming part of any
building, building component, structure or office space with respect to
any of the Real Estate and (iv) except as set forth on Schedule
2.11(d), no polychlorinated biphenyls (PCB's) are used at any of the
Real Estate in violation of Environmental Laws.
(e) For purposes of this Agreement, the following terms
shall have the following meanings with respect to the business of the
Company and its Subsidiaries:
(i) "Environmental Claim" means any written
notice by any Governmental Authority or Person alleging
potential liability (including, without limitation, potential
liability for investigatory costs, management costs, cleanup
costs, governmental response costs, natural resources damages,
property damages,
9
personal injuries or penalties) (A) which could have a
material and adverse effect on the conduct or operation of the
business of the Company or any of its Subsidiaries or the
consummation of the transactions contemplated hereby or, and
(B) arising out of, based on or resulting from (x) the
presence, emission, spill, discharge, deposit or release into
the environment, of any Material of Environmental Concern at
any location, whether or not owned by the Company or any of
its Subsidiaries or (y) any material violation, or alleged
violation, of any Environmental Law.
(ii) "Environmental Laws" means all Laws
applicable to the conduct and operation of the business of the
Company or any of its Subsidiaries relating to pollution,
contamination or protection of human health or safety or the
environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface
strata), including, without limitation, laws and regulations
relating to actual or threatened emissions, spills,
discharges, depositions or releases of Materials of
Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of
Environmental Concern, arising from or relating to the conduct
and operation of the business of the Company or any of its
Subsidiaries.
(iii) "Materials of Environmental Concern" means
dangerous goods, hazardous, toxic, prohibited or regulated
substances, materials or wastes, pollutants, contaminants,
special waste or hazardous waste as defined in any
Environmental Laws, except, however, such materials shall not
include incidental and de minimis uses of materials or
substances in the ordinary course of business in material
compliance with Environmental Laws.
Section 2.12 Taxes.
(a) All Tax Returns that are required to be filed on or
have been or will be duly filed on a timely basis, and all Tax Returns
of the Canadian Subsidiaries have been filed, or for those Tax Returns
that are not yet due, will be timely filed, taking into account any
valid extension of time in which to file such Tax Returns, and all such
Tax Returns were or will be true, correct and complete in all material
respects. All Taxes, including all installments on account of Taxes for
the current year, due with respect to any taxable period or partial
taxable period of the Company or any of its U.S. Subsidiaries ending on
or before the Closing Date have been or will be timely paid, collected
or withheld, and such Taxes with respect to the Canadian Subsidiaries
have been paid or, for Taxes not yet due and payable, will be timely
paid (whether or not shown or required to be shown on any Tax Return).
Except as set forth on Schedule 2.12 (a), neither the Company nor any
of its Subsidiaries has executed or filed with the Internal Revenue
Service or any other taxing authority any agreement or other
arrangement or executed any waiver (i) extending the period for filing
any Tax Return, election, designation or similar filing related to
Taxes, or (ii) extending the period to pay or remit any Taxes or
amounts on account of Taxes.
10
(b) Except as set forth in Schedule 2.12(b), no
unresolved claim for assessment or collection of Taxes has been
asserted against the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries is a party to any pending action,
proceeding or investigation by any Governmental Authority for the
assessment or collection of Taxes, nor does the Company have knowledge
of any such threatened action, proceeding or investigation.
(c) Except as set forth in Schedule 2.12(c), no waivers
of statutes of limitation or reassessment periods in respect of any Tax
Returns have been given or requested by the Company or any of its
Subsidiaries, nor has the Company or any of its Subsidiaries agreed to
any extension of time with respect to a Tax assessment, reassessment or
deficiency. Except as set forth in Schedule 2.12(c), no claim has been
made at any time during the ten-year period ending on the date hereof
by a Governmental Authority in a jurisdiction where the Company or any
of its Subsidiaries does not currently file Tax Returns that it is or
may be subject to taxation by that jurisdiction, nor is the Company
aware that any such assertion of jurisdiction is threatened. Except as
set forth in Schedule 2.12(c), no Liens have been imposed upon or
asserted against any of the Company's or any of its Subsidiaries'
assets as a result of or in connection with any failure, or alleged
failure, to pay any Tax.
(d) Except as set forth in Schedule 2.12(d), the Company
and its Subsidiaries have withheld and paid all Taxes required to be
withheld by them in connection with any amounts paid, credited or
deemed to be paid, owing or credited by it to any Person, including any
employees, creditors, independent contractors, non-resident Person or
other third parties, other than Taxes which are not material in the
aggregate.
(e) Since the consummation of the Company's prior
bankruptcy in April 2000, and to the knowledge of the Company prior to
that date, neither the Company nor any of its Subsidiaries has been a
member of an affiliated group filing consolidated U.S. federal income
tax returns (other than a group the common parent of which was the
Company) or has any liability for the taxes of any person under
Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local or foreign law), as a transferee or successor, by contract
or otherwise.
(f) Since the consummation of the Company's prior
bankruptcy in April 2000, and to the knowledge of the Company prior to
that date, none of the Company's or its Subsidiaries' assets are (i)
"tax-exempt use property" within the meaning of Section 168(h) of the
Code, (ii) "tax-exempt bond-financed property" within the meaning of
Section 168(g) of the Code, (iii) "limited use property" within the
meaning of Revenue Procedure 76-30 and (iv) except for assets held by
Subsidiaries that are not U.S. Subsidiaries, subject to Section
168(g)(1)(A) of the Code.
(g) Schedule 2.12(g) sets forth, as of December 31, 2002,
(i) the aggregate U.S. federal income tax basis of each category of
assets of the Company; (ii) the aggregate U.S. federal income tax basis
of each category of assets of the U.S. Subsidiaries; (iii) the Net
Operating Loss ("NOL") and excess interest deduction carryforwards,
under Section 163(j) of the Code, of the Company; (iv) the aggregate
11
NOL carryforward of the U.S. Subsidiaries; and (v) the aggregate income
tax basis of the assets of the Canadian Subsidiaries. Except as set
forth on Schedule 2.12(g), the NOL carryforwards of the Company and the
U.S. subsidiaries are not subject to restriction under Section 382 of
the Code (or any similar provision of state or local law) or subject to
a separate return limitation. Schedule 2.12(g) sets forth, to the
Company's knowledge and based on information available to the Company
as determined in good faith, the percentage of debt owned by each
PIK/Term Creditor as of May 31, 2003 that should qualify under Section
382(l)(5)(E)(i) of the Code), but the Company makes no representation
to Purchaser as to such percentage of PIK/Term Debt held by Purchaser
and its Affiliates that qualifies under Section 382(l)(5)(E)(i).
(h) With respect to Canadian tax matters, except as set
forth on Schedule 2.12 (h):
(i) Except pursuant to this Agreement, none of
Sections 78, 80, 80.01, 80.02, 80.03 or 80.04 of the Income
Tax Act (Canada), or any equivalent provision of the Tax
legislation of any province or any other jurisdiction, have
applied or will apply to the Company or any of its
Subsidiaries at any time up to and including the Closing Date.
(ii) None of the Company or any of its
Subsidiaries has acquired property from a non-arm's length
Person, within the meaning of the Income Tax Act (Canada), for
consideration, the value of which is less than the fair market
value of the property acquired in circumstances which could
subject it to a liability under Section 160 of the Income Tax
Act (Canada).
(iii) For all material transactions between the
Company or any of its Subsidiaries and any non-resident Person
with whom the Company or any of its Subsidiaries was not
dealing at arm's length during a taxation year commencing
after 1998 and ending on or before the Closing Date, each of
the Company and its Subsidiaries has made or obtained records
or documents that meet the requirements of paragraphs
247(4)(a) to (c) of the Income Tax Act (Canada).
(iv) The only reserves under the Income Tax Act
(Canada) or any equivalent provincial or territorial statute
to be claimed by the Company or any of its Subsidiaries for
the taxation year ended immediately prior to the acquisition
of control by the Purchaser are disclosed in Schedule 2.12(h).
(v) Except pursuant to this Agreement, no Person
or group of related Persons (as defined in the Income Tax Act
(Canada) has ever acquired or had the right to acquire control
of the Company or any of its Subsidiaries.
(vi) Schedule 2.12(h) sets forth, as of December
31, 2002 for Xxxxxx Services Inc. and as of March 31, 2003 for
Xxxxxx Analytical Services, Inc., complete and accurate
information relating to (A) the cost and adjusted cost base
(and V-Day value, if applicable) of the nondepreciable assets
of the Canadian Subsidiaries; (B) the undepreciated capital
cost of each class of depreciable assets
12
of the Canadian Subsidiaries; (C) the cumulative eligible
capital balances of the Canadian Subsidiaries; (D) the paid-up
capital of each class of shares of the Canadian Subsidiaries;
and (E) the non-capital losses available for carry over and
the net capital losses of the Canadian subsidiaries.
Section 2.13 Labor Matters.
(a) Schedule 2.13(a) identifies all collective bargaining
agreements (including any side letter, supplemental agreement or
memorandum of understanding that would materially alter a collective
bargaining agreement) covering employees of the Company or any of its
Subsidiaries (collectively, the "Collective Bargaining Agreements").
The Company made available to Purchaser copies of all such Collective
Bargaining Agreements. The Company has informed Purchaser of all
material communications and current written proposals of the Company or
any of its Subsidiaries, or any union in all ongoing negotiations with
representatives of any unions representing any organized employee
groups and all material matters on which any tentative agreements have
been reached in the course of such negotiations.
(b) The Company has made available to Purchaser a true,
correct and complete list of all the employees (including inactive
employees and employees on leave) and independent contractors of the
Company and each of its Subsidiaries who are members of an organized
labor unit or union covered by any of the Collective Bargaining
Agreements, their current respective positions or job classifications
and their current respective wage scales or salaries, as the case may
be.
(c) Except as set forth in Schedule 2.13(c):
(i) There are no material lawsuits,
administrative claims or charges, legal or administrative
proceedings pending or, to the knowledge of the Company,
expressly threatened, between the Company or any of its
Subsidiaries, and any of their respective employees or
organized labor units or Unions, which have or are reasonably
likely to have a Material Adverse Effect;
(ii) Neither the Company nor any of its
Subsidiaries has breached or otherwise failed to comply in any
material respect with any provision of any Collective
Bargaining Agreement or other labor union contract (or with
respect to Canadian employees, employment agreement)
applicable to persons employed by the Company or any of its
Subsidiaries (because of the transactions contemplated by this
Agreement or otherwise), and there are no material grievances
outstanding against the Company or any of its Subsidiaries
under any such agreement or contract;
(iii) To the knowledge of the Company, there is no
union organizing activity, petition or application pending
before the National Mediation Board or other labor relations
boards or tribunals seeking certification or any change in
certification of a labor representative or union with respect
to any craft or class of employees of the Company or any of
its Subsidiaries;
13
(iv) There is no strike, slowdown, work stoppage,
labor action or lockout, or, to the knowledge of the Company,
express threat thereof, by or with respect to any employees of
the Company or any of its Subsidiaries, other than a strike,
slowdown, work stoppage or lockout in response to any
modification demands under Section 1113(e) of the Bankruptcy
Code directed by Purchaser as set forth in Section 4.8(a); and
(v) Neither the Company nor any of its
Subsidiaries has received any written notice of any, and to
the Company's knowledge, there is no unfair labor practice or
analogous complaint, application or claim against the Company
or any of its Subsidiaries pending before the National
Mediation Board or any similar board or agency or before any
court of competent jurisdiction or any other forum.
Section 2.14 Employee Matters. The Company has made available to
Purchaser a true, correct and complete list of all the unrepresented,
non-unionized employees (including inactive employees and employees on leave)
and independent contractors of the Company or its Subsidiaries employed on June
30, 2003, their now or then current respective (i) positions or job
classifications, (ii) wage scales or salaries, as the case may be, (iii) annual
target bonus and/or annual target sales commissions, (iv) target long-term
incentive payments, (v) accrued vacation, (vi) accrued sick days, (vii)
entitlements to severance or notice under employment agreements apart from those
minimum entitlements mandated by Law, and (viii) service date or any adjusted
service date reflecting service credit for prior employment. With respect to the
foregoing clauses (ii) through (vii), disclosure may be in the form of either a
written description or copies of any applicable plan, policy or program with
regard to employees subject to company-wide policies; provided, however, that
disclosure shall be on an individual basis with regard to all exceptions from
such company-wide policies or from any other individual arrangements. Schedule
2.14 identifies those employees who, as of the date hereof, are on leave of
absence, short- or long-term disability leave, parental or maternity leave, or
who are otherwise not actively employed and the date on which each such employee
is expected to return to active employment, if known. The Company and each of
its Subsidiaries are in compliance in all material respects with all applicable
laws respecting employment and employment practices, discrimination, terms and
conditions of employment and wages and hours, and are not engaged in any unfair
labor practice.
Section 2.15 ERISA Compliance; Absence of Changes in Benefit Plans.
(a) Schedule 2.15(a) contains a true and complete list of
each "Employee Pension Benefit Plan" (as defined in Section 3(2) of
ERISA), "Employee Welfare Benefit Plan" (as defined in Section 3(1) of
ERISA), stock option, stock purchase, deferred compensation plan or
arrangement, severance arrangement or plan and any and all other
material, employee fringe benefit, plans or arrangements maintained,
whether written or unwritten, contributed to or required to be
maintained or contributed to by the Company or any of its Subsidiaries
for the benefit of any present or former employees of the Company or
any of its Subsidiaries, or their beneficiaries which are subject to
the Laws of the United States, excluding "multi-employer plans" within
the meaning of Section 3(37) of ERISA (all of the foregoing herein
defined as "Benefit Plans" and each, a "Benefit Plan"). The Company has
made available to Purchaser true and complete copies (or, in the case
of any unwritten Benefit Plans, a written description thereof) of each
of
14
the following documents: (i) each Benefit Plan and all amendments
thereto, and the latest written interpretation and description thereof
that has been distributed to the plan participants; (ii) all funding
arrangements with respect to the Benefit Plans; and (iii) each employee
or employment agreement. Except as set forth in Schedule 2.15(a), since
December 31, 2002, there has not been any adoption or amendment, or
agreement to adopt or amend, in any material respect by the Company or
any of its Subsidiaries of any Benefit Plan, nor has there been any
material change in any actuarial or other assumptions used to calculate
funding obligations with respect to any material Benefit Plan, or any
change in the manner in which such contributions are determined that,
individually or in the aggregate, could result in a material increase
in the Company's or any of its Subsidiaries' Liabilities thereunder.
(b) To the knowledge of the Company, with respect to the
Benefit Plans, no event has occurred and there exists no condition or
set of circumstances nor has the Company or any of its Subsidiaries
been notified of any event in connection with which the Company or any
of its Subsidiaries would reasonably be expected to be subject to any
Liability under ERISA or the Code that would reasonably be expected to
result in, individually or in the aggregate, a Material Adverse Effect.
(c) To the knowledge of the Company, each Benefit Plan
has been administered substantially in accordance with its terms, and
all the Benefit Plans have been operated in all material respects and
are in material compliance with the applicable provisions of ERISA, the
Code and all other applicable Laws. Except as set forth on Schedule
2.15(c), the IRS has issued a favorable determination letter or an
opinion letter with respect to the qualification of each Benefit Plan
that constitutes an "employee pension benefit plan" as defined in ERISA
that is intended to be qualified under Section 401(a) of the Code, and,
to the knowledge of the Company, the IRS has not notified the Company
that it has taken any action to revoke any such letter and no facts or
circumstances exist which could reasonably be expected to cause such
revocation.
(d) To the knowledge of the Company, neither the Company
nor any of its ERISA Affiliates has incurred, nor, as a result of the
consummation of the transactions contemplated hereby, will Reorganized
PSC or any of its ERISA Affiliates have incurred, any material
unsatisfied Liability under Title IV of ERISA in connection with any
Benefit Plan and, to the knowledge of the Company, no condition exists
that presents a material risk to the Company or any ERISA Affiliate of
incurring any such Liability. To the Company's knowledge, no Benefit
Plan has incurred an "accumulated funding deficiency" within the
meaning of Section 302 of ERISA or Section 412 of the Code, whether or
not waived. Except as set forth on Schedule 2.15(d) or as would not
reasonably be expected to result in a material Liability to the Company
or any of its Subsidiaries with respect to each Benefit Plan that is
subject to Title IV or Part 3 of Title I of ERISA or Section 412 of the
Code, to the knowledge of the Company (i) no reportable event (within
the meaning of Section 4043(c) of ERISA) has occurred or is expected to
occur; (ii) there is no "unfunded benefit liability" (within the
meaning of Section 4001(a)(18) of ERISA); (iii) the Company and its
ERISA Affiliates have made when due any and all "required installments"
within the meaning of Section 412(m) of the Code and Section 302(e) of
ERISA; (iv) neither the Company nor any of its ERISA
15
Affiliates is required to provide security under Section 401(a)(29) of
the Code; (v) all premiums (and interest charges and penalties for late
payment, if applicable) have been paid when due to the Pension Benefit
Guaranty Corporation ("PBGC"); and (vi) no filing has been made by the
Company or any of its ERISA Affiliates, with the PBGC and neither the
Company nor any of its Subsidiaries have received any notice that any
proceeding has been commenced by the PBGC to terminate any such Benefit
Plan and no condition exists which could reasonably be expected to
constitute grounds for the termination of any such Benefit Plan by the
PBGC.
(e) Except as set forth on Schedule 2.15(e), no Benefit
Plan (i) is subject to Title IV of ERISA; (ii) is a "multiple employer
plan" within the meaning of Section 413(c) of the Code; or (iii) is or
at any time was funded through a "welfare benefit fund" within the
meaning of Section 419(e) of the Code and, except as set forth on
Schedule 2.15(e), no benefits under a Benefit Plan are or at any time
have been provided through a voluntary employees' beneficiary
association within the meaning of Section 501(c)(9) of the Code or a
supplemental unemployment benefit plan within the meaning of Section
501(c)(17) of the Code. Except as set forth on Schedule 2.15(e), the
Company and its Subsidiaries do not have any obligations to contribute,
and are not otherwise parties, to a "multi-employer" plan within the
meaning of Section 3(37) of ERISA.
(f) Except as set forth on Schedule 2.15(f), no Benefit
Plan provides medical benefits coverage (whether or not insured), with
respect to current or former employees of the Company or any of its
Subsidiaries after retirement or other termination of service (other
than coverage mandated by statute).
(g) Except as set forth on Schedule 2.15(g), to the
knowledge of the Company, the consummation of the transactions
contemplated by this Agreement and the Ancillary Documents will not,
either alone or in combination with another event, (i) entitle any
current or former employee, agent, independent contractor or officer of
the Company or any of its Subsidiaries to severance pay, unemployment
compensation or any other payment, except as expressly provided in this
Agreement, (ii) accelerate the time of payment or vesting, or increase
the amount of compensation due any such employee, agent, independent
contractor or officer, (iii) constitute a "change in control" causing
an increase or acceleration of benefits under any Benefit Plan, or (iv)
result in any payment or benefit that could reasonably be characterized
as an "excess parachute payment" within the meaning of Section
280G(b)(1) of the Code.
(h) Except as set forth on Schedule 2.15(h), to the
knowledge of the Company, there is no pending (i) complaint,
proceeding, or investigation of any kind in any court or government
agency with respect to any Benefit Plans (other than routine claims for
benefits) or (ii) litigation relating to the employment or termination
of employment of any current of former employee of the Company or any
of its Subsidiaries, in each case that could result in any material
Liability.
(i) With respect to each Benefit Plan that is subject to
the Laws of any jurisdiction outside of the United States or Canada
("Non-U.S. Plans"), to the knowledge of the Company (i) such Non-U.S.
Plan has been maintained in all material respects in
16
accordance with all applicable requirements and all applicable Laws,
(ii) if such Non-U.S. Plan is intended to qualify for special tax
treatment, the Non-U.S. Plan meet all requirements for such treatment,
except as would not reasonably be expected to result in a material
Liability to the Company or any of its Subsidiaries, (iii) if such
Non-U.S. Plan is intended to be funded and/or book-reserved, the
Non-U.S. Plan is fully funded and/or book reserved, as appropriate,
based upon reasonable actuarial assumptions, except to the extent that
any shortfall in such funding or reserves would not result in any
material Liability to the Company or any of its Subsidiaries, and to
the extent that any shortfall in such funding or reserves would not
result in any material Liability to the Company or any of its
Subsidiaries and (iv) no material Liability exists or could reasonably
be expected to be imposed upon the assets of the Company or any of
their Subsidiaries by reason of such Non-U.S. Plan.
(j) To the knowledge of the Company, neither the Company
nor any of its ERISA Affiliates has engaged in, or has knowledge that a
"party in interest" (as defined in Section 3(14) of ERISA)or a
"disqualified person" (as defined in Section 4975(e) of the Code) has
engaged in, a "prohibited transaction," as defined in Section 4975 of
the Code or Section 406 of ERISA, or taken any actions, or failed to
take any actions, which would reasonably be expected to result in any
material Liability to the Company or any of its Subsidiaries, as the
case may be, under ERISA or the Code. No fiduciary has any Liability
for breach of fiduciary duty or any other failure to act or comply in
connection with the administration or investment of the assets of any
of the Benefit Plans, and to the knowledge of the Company, no facts
exist which could reasonably be expected to form the basis for any such
Liability.
(k) To the knowledge of the Company, neither the Company
nor any of its ERISA Affiliates has any material Liability under
Section 502 of ERISA and no circumstances exist which could reasonably
be expected to result in a material Liability thereunder.
(l) Canadian Benefit Plans
(i) Schedule 2.15(l)(i) sets forth a complete
list of the Canadian Benefit Plans.
(ii) Current and complete copies of all written
Canadian Benefit Plans or, where oral, written summaries of
the terms thereof, have been delivered or made available to
the Purchaser together with current and complete copies of all
material documents relating to the Canadian Benefit Plans,
including, as applicable,
(A) all documents establishing,
creating or amending any of the Canadian Benefit
Plans;
(B) all trust agreements and funding
agreements;
17
(C) all investment management
agreements, subscription and participation
agreements, benefit administration contracts, and any
financial administration contracts;
(D) the most recent financial
statements and actuarial reports whether or not such
statements or reports were filed with a Governmental
Authority;
(E) all reports, statements (including
audited financial statements), annual information
returns or other returns, filings and material
correspondence with any Governmental Authority in the
last three years;
(F) all booklets, summaries, manuals
and communications of a general nature distributed or
made available to any employees or former employees
concerning any Canadian Benefit Plans; and
(G) a copy of any statement of
investment policies and goals or statement of
investment policies and procedures prepared in
respect of the Canadian Pension Plans, whether or not
such statement has been filed with the applicable
Governmental Authority.
(iii) Each Canadian Benefit Plan is, and has at
all times been, established, registered (where required),
qualified, administered, amended, and invested, in compliance
with (i) the terms of such Canadian Benefit Plan, (ii) all
Laws and (iii) any applicable Collective Bargaining Agreement.
(iv) The Canadian Subsidiaries have complied with
all of their obligations in respect of the Canadian Benefit
Plans except where such non-compliance would not result in any
material Liability to any of the Canadian Subsidiaries.
(v) Except as disclosed in Schedule 2.15(l)(v),
there have been no improvements, increases or changes to, or
promised improvements, increases or changes to, the benefits
provided under any Canadian Benefit Plan, nor has any Canadian
Subsidiary made any commitment to establish any additional
Canadian Benefit Plans. None of the Canadian Benefit Plans
provide for payments, benefit increases, accelerated vesting,
or the acceleration of, or an increase in, funding obligations
that are contingent upon or will be triggered by the entering
into of this Agreement or the completion of the transactions
contemplated herein.
(vi) Except as disclosed in Schedule 2.15(l)(vi),
all employer or employee payments, contributions or premiums
required to be remitted, paid to or in respect of each
Canadian Benefit Plan have been paid or remitted in a timely
fashion in accordance with its terms and all Laws, and no
Taxes, penalties or fees are owing or exigible under or in
relation to any Canadian Benefit Plan.
18
(vii) Except as disclosed in Schedule
2.15(l)(vii), there is no investigation by a Governmental
Authority, or claim, demand, complaint, action, suit, or cause
of action (other than routine claims for payment of benefits)
pending or, to the knowledge of the Company or Canadian
Subsidiaries, threatened involving any Canadian Benefit Plan
or their assets, and no facts exist which could reasonably be
expected to give rise to any such investigation or claim,
demand, complaint, action, suit, or cause of action (other
than routine claims for benefits).
(viii) No event has occurred respecting any
registered Canadian Benefit Plan which could reasonably be
expected to result in the revocation of the registration of
such Canadian Benefit Plan (where applicable) or entitle any
Person (without the consent of the Company or any of the
Canadian Subsidiaries) to wind up or terminate any Canadian
Benefit Plan, in whole or in part, or which could otherwise
reasonably be expected to adversely affect the tax status of
any such plan.
(ix) There are no unfunded liabilities in respect
of any Canadian Pension Plan including going concern unfunded
liabilities, solvency deficiencies, or wind-up deficiencies.
(x) Except as disclosed in Schedule 2.15(l)(x),
no changes have occurred in respect of any Canadian Benefit
Plan since the date of the most recent financial, accounting,
actuarial or other report, as applicable, issued in connection
with any Canadian Benefit Plan, which could reasonably be
expected to adversely affect the relevant report (including
rendering it misleading in any material respect).
(xi) Except as disclosed in Schedule 2.15(l)(x),
none of the Company or any of the Canadian Subsidiaries has
ever received, or applied for, any payment of surplus out of
any Canadian Benefit Plan or any payment in respect of the
demutualization of the insurer of any Canadian Benefit Plan.
(xii) Except as disclosed in Schedule 2.15(l)(xii)
(A) none of the Canadian Subsidiaries has taken any
contribution or premium holidays under any Canadian Benefit
Plan and, where so disclosed, the relevant Canadian Subsidiary
was entitled under the terms of the Canadian Benefit Plan,
applicable Collective Bargaining Agreements, and under all
Laws to take such contribution or premium holidays; and (B)
there have been no withdrawals or transfers of assets from any
Canadian Benefit Plan (other than withdrawals or transfers in
the normal course related to the payment of benefits to a
Person entitled to benefits under the plan) and where so
disclosed, such withdrawals or transfers of assets were in
accordance with the terms of such Canadian Benefit Plan,
applicable Collective Bargaining Agreements, and all Laws and
occurred with the consent of any applicable Governmental
Authority (where required).
19
(xiii) There are no entities other than the
Canadian Subsidiaries participating in any of the Canadian
Benefit Plans. None of the Canadian Benefit Plans is a union
plan (being a plan which is required to be established and
maintained pursuant to a Collective Bargaining Agreement and
which is not maintained or administered by any of the Canadian
Subsidiaries).
(xiv) To the knowledge of the Canadian
Subsidiaries, all employee data necessary to administer each
Canadian Benefit Plan is in the possession of the Canadian
Subsidiaries and is complete, correct and in a form which is
sufficient for the proper administration of the Canadian
Benefit Plan in accordance with its terms and all Laws.
(xv) Except as disclosed on Schedule 2.15(l)(xv)
none of the Canadian Benefit Plans, other than the Canadian
Pension Plans, provide benefits beyond retirement or other
termination of service to employees or former employees of a
Canadian Subsidiary or to the beneficiaries or dependants of
such employees, and where so disclosed liabilities in respect
of such benefits (as well as all liabilities under the
Canadian Pension Plans) have been properly and accurately
disclosed on the financial statements of the applicable
Canadian Subsidiary in accordance with Canadian generally
accepted accounting principles.
(xvi) None of the Canadian Benefit Plans, or any
insurance contract relating thereto, require or permit a
retroactive increase in premiums or payments or require
additional premiums or payments on termination of the Canadian
Benefit Plan, and the level of insurance reserves, if any,
under any insured Canadian Benefit Plan is reasonable and
sufficient to provide for all incurred but unreported claims.
Section 2.16 Intellectual Property. Schedule 2.16 contains an accurate
and complete list of all material Intellectual Property owned or used by the
Company and each of its Subsidiaries. Except as set forth on Schedule 2.16, the
Company and each of its Subsidiaries, as applicable, owns the entire right,
title and interest in and to the Intellectual Property (including, without
limitation, the right to use and license the same). Except as set forth in
Schedule 2.16, to the knowledge of the Company, there are no pending or
threatened actions, claims or proceedings of any nature affecting or relating to
the Intellectual Property owned or used by the Company or any of its
Subsidiaries. Schedule 2.16 lists all notices or claims currently pending or, to
the Company's knowledge, threatened in writing against the Company or any of its
Subsidiaries that claim infringement of any domestic or foreign letters patent,
patent applications, patent licenses, software licenses and know-how licenses,
trade names, trademark registrations and applications, service marks,
copyrights, copyright registrations or applications, trade secrets, technical
knowledge, know-how or other confidential proprietary information. Except as set
forth on Schedule 2.16, to the Company's knowledge, there is no reasonable basis
upon which any claim may be asserted against the Company or any of its
Subsidiaries for infringement or misappropriation of any domestic or foreign
letters patent, patents, patent applications, patent licenses, software
licenses, and know-how licenses, trade names, trademark registrations and
applications, trademarks, service marks, copyrights, copyright registrations or
applications, trade secrets, technical knowledge, know-how or other confidential
proprietary
20
information, to the Company's knowledge. To the Company's knowledge, all letters
patent, registrations and certificates issued by any Governmental Authority
relating to any of the Intellectual Property and all licenses and other
agreements pursuant to which the Company or any of its Subsidiaries uses any of
the Intellectual Property are valid and subsisting, have been properly
maintained and neither the Company nor any of its Subsidiaries, nor to the
knowledge of the Company, any other Person, is in material default or material
violation thereunder.
Section 2.17 Real Property.
(a) Except as set forth on Schedule 2.17(a), the Company
or a Subsidiary owns fee simple absolute title to all owned real
properties used in the conduct and operation of its respective business
as set forth on Schedule 2.17(a) (the "Owned Real Estate"), and, to the
Company's knowledge, the Company or a Subsidiary has a valid leasehold
interest in all other real properties used in the conduct and operation
of its business as set forth on Schedule 2.17(a) (the "Leased Real
Estate" and together with the Owned Real Estate, the "Real Estate").
Schedule 2.17(a) contains a true, correct and complete list of all the
Real Estate, including the name of the owner of record of the Owned
Real Estate and the name of the lessee of the Leased Real Estate, an
accurate street address, a brief description of the use of such Real
Estate and the lease, sublease or other agreement for all Leased Real
Estate. It is understood that certain of the Owned Real Estate may be
in the name of former subsidiaries of the Company that no longer exist
or may otherwise be in the name of a Person which is not the Company or
a Subsidiary. Purchaser acknowledges and agrees that so long as any
such Owned Real Estate is transferred to the Company or any of its
Subsidiaries prior to the Closing (unless such Owned Real Estate is
otherwise designated as an Excluded Asset, in which case such transfer
shall not be required), the ownership of such Real Estate by a Person
other than the Company or any of its Subsidiaries shall not constitute
a breach of the representations and warranties set forth in this
Section 2.17.
(b) To the Company's knowledge, except as set forth on
Schedule 2.17(b), all material components of all improvements included
within any Real Estate (collectively, the "Improvements", which term
with respect to Leased Real Estate, shall specifically exclude any
portion of any improvement that is not leased to the Company or its
Subsidiaries), including, without limitation, the roofs and structural
elements thereof and the heating, ventilation, air conditioning,
plumbing, electrical, mechanical, sewer, waste water, storm water,
paving and parking equipment, systems and facilities included therein
are adequate to conduct the business of the Company and its
Subsidiaries as currently conducted.
(c) Except as set forth on Schedule 2.17(c), all material
Permits required to have been issued to the Company or any of its
Subsidiaries to enable any Real Estate to be lawfully occupied and used
for all of the purposes for which they are currently occupied and used
have been lawfully issued and are in full force and effect. Except as
set forth on Schedule 2.17(c), neither the Company nor any of its
Subsidiaries has received any written notice of any pending, threatened
or contemplated condemnation proceeding affecting any Real Estate or
any part thereof or any proposed termination or
21
impairment of any parking at any such owned or leased real property or
of any sale or other disposition of any such Real Estate or any part
thereof in lieu of condemnation.
(d) Except as set forth on Schedule 2.17(d):
(i) to the Company's knowledge, no Improvement
fails to conform in any material respect with applicable
ordinances, regulations, zoning laws and restrictive covenants
nor encroaches upon real property of others, nor is any such
Real Estate encroached upon by structures of others in any
case in any manner that would have or would be reasonably
likely to have a Material Adverse Effect;
(ii) to the Company's knowledge, no charges or
violations have been received by, made or threatened against
the Company or any of its Subsidiaries, against or relating to
any such Real Estate or Improvements or any of the operations
conducted at any Real Estate, as a result of any violation or
alleged violation of any applicable ordinances, requirements,
regulations, zoning laws or restrictive covenants or as a
result of any encroachment on the property of others, where
the effect of same would have or would be reasonably likely to
have a Material Adverse Effect;
(iii) other than pursuant to applicable laws,
rules, regulations or ordinances, or pursuant to any leases or
subleases of Leased Real Estate, or pursuant to any mortgages,
deeds of trust or other security instruments listed on
Schedule 2.17(d) affecting any Real Estate, covenants that run
with the land or provisions in any agreement listed on
Schedule 2.17(d), to the Company's knowledge, there exists no
restriction on the use, transfer or mortgaging of any Real
Estate;
(iv) to the Company's knowledge, the Company and
each of its Subsidiaries have adequate permanent rights of
ingress to and egress from any such property used by it for
the operations conducted thereon; and
(v) to the knowledge of the Company, except as
may otherwise be provided in Schedule 2.17(d), there are no
developments specifically related to any of the Real Estate or
interests of the Company or its Subsidiaries therein, or the
use or operation thereof, pending or threatened that might
reasonably be expected to have a Material Adverse Effect.
Section 2.18 Disclosure. (a) No representation or warranty of the
Company or any of its Subsidiaries contained in this Agreement, (b) no statement
contained in any document or other instrument furnished or to be furnished by
the Company or any of its Subsidiaries to Purchaser in connection with the
transactions contemplated hereby, and (c) no statement or other information
contained in any Schedules or Statements of Affairs filed by the Company or any
of its Subsidiaries with the U.S. Bankruptcy Court or similar filings by the
Company or its Canadian Subsidiaries with the Canadian Court, contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the representation, warranty or statement so
made not misleading.
22
Section 2.19 No Violation of Law. Except as set forth on Schedule 2.19,
neither the Company nor any of its Subsidiaries has violated or is in violation
of any Law applicable to it which violation could reasonably be expected to have
a Material Adverse Effect.
Section 2.20 Material Agreements. Schedule 2.20 hereto sets forth all
material agreements and contracts to which the Company or any of its
Subsidiaries is a party or is bound. For purposes of this Section 2.20 a
material agreement shall be an agreement or contract requiring payments by the
Company in excess of $50,000 in any year or lease of any Real Estate, and shall
exclude any agreements or contracts for sales of goods or services by the
Company or any of its Subsidiaries entered in the ordinary course of business.
Schedule 2.20 shall be in such tabular or other form setting forth (a) the name
of the agreement or contract, (b) the parties thereto, (c) the term of the
Agreement, (d) the payment terms thereof, (e) to the knowledge of the Company,
the Prepetition amounts due thereunder, (f) whether such agreement or contract
contains any restriction on the conduct of business by the Company or any of its
Subsidiaries, (g) whether any consent is required with respect to the acceptance
of such agreement or contract in connection with the Restructuring, and (h)
whether the Company recommends acceptance or rejection of the agreement or
contract in connection with the Restructuring.
Section 2.21 Bank Accounts. Schedule 2.21 hereto sets forth a complete
and accurate list of all bank accounts with the respective balances therein
maintained by the Company and each of its Subsidiaries with any bank or other
financial institution (as of a recent date indicated on the Schedule), which
Schedule shall be updated as of a recent date to the Closing.
Section 2.22 Signatories. All of the Subsidiaries of the Company, other
than the Excluded Subsidiaries, are signatories to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby makes the following representations and warranties to
the Company each of which shall be true and correct as of the date hereof and as
of the Closing Date (except to the extent expressly relating to a specific date,
in which event it shall be true and correct as of such date) and shall be
unaffected by any investigation heretofore or hereafter made.
Section 3.1 Organization. Purchaser is a Person duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the requisite power and authority to own, lease or otherwise hold its properties
and assets and to carry on its business as presently conducted.
Section 3.2 Authorization and Effect of Agreement. Purchaser has the
requisite power and authority to execute and deliver this Agreement and the
Ancillary Documents to which it will be a party and to perform its obligations
hereunder and thereunder. The execution and delivery by Purchaser of this
Agreement and the performance by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of
Purchaser. This Agreement has been duly executed and delivered by Purchaser and
its
23
Subsidiaries and constitutes a valid and binding agreement of Purchaser and its
Subsidiaries, enforceable against Purchaser and its Subsidiaries in accordance
with its terms, subject to applicable bankruptcy, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and subject, as
to enforceability, to general principles of equity. Each of the Ancillary
Documents to which Purchaser will be a party, when executed and delivered by
Purchaser, will constitute a valid and binding agreement of Purchaser,
enforceable against Purchaser in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, and similar laws affecting
creditors' rights and remedies generally and subject, as to enforceability, to
general principles of equity.
Section 3.3 No Conflicts. The execution and delivery of this Agreement,
and the Ancillary Documents to which Purchaser will be a party, by Purchaser
does not or will not (as applicable), and the performance by Purchaser of the
transactions contemplated by this Agreement and such Ancillary Documents will
not, conflict with, or result in any violation of, or constitute a default under
(a) any provision of the organizational documents of Purchaser, (b) any of the
terms, conditions, or provisions of any material agreement or other material
document by which Purchaser or any of its Affiliates is bound, or (c) any Law or
order applicable to or binding on Purchaser. Except as set forth in Schedule
3.3, and except for the Confirmation Orders and the expiration of the waiting
period under the HSR Act, no Consent is required to be obtained, made or given
in connection with the execution and delivery of this Agreement by Purchaser or
the performance by Purchaser of its obligations hereunder.
Section 3.4 Litigation. As of the date of this Agreement, there are no
judicial or administrative actions, proceedings or investigations pending
against the Purchaser or any of its Affiliates or, to Purchaser's knowledge,
threatened that question the validity of this Agreement or any action taken or
to be taken by Purchaser in connection with this Agreement.
Section 3.5 Investment Intent. The Purchaser:
(a) meets the definition of an "Accredited Investor";
(b) is acquiring the Purchase Shares and the Exit Loan
Commitment Shares for investment for its own account and without the
intention of participating, directly or indirectly, in a distribution
of the Purchase Shares or the Exit Loan Commitment Shares and not with
a view to resale or any distribution of the Purchase Shares or the Exit
Loan Commitment Shares, or any portion thereof;
(c) has (i) sufficient knowledge and experience in
financial and business matters to be capable of evaluating the merits
and risks of purchase and ownership of the Purchase Shares and the Exit
Loan Commitment Shares, (ii) is experienced in making investments that
involve a high degree of risk, (iii) is sophisticated in making
investment decisions, and (iv) can bear the economic risk of an
investment in the Purchase Shares and the Exit Loan Commitment Shares,
including the total loss of such investment;
(d) has, to its knowledge, been given full access to
information regarding the Company and has been provided the opportunity
to ask questions of the Company;
24
(e) acknowledges (i) that an investment in the Purchase
Shares and the Exit Loan Commitment Shares is speculative and the
Purchaser may have to continue to bear the economic risk of the
investment in the Purchase Shares and the Exit Loan Commitment Shares
for an indefinite period; (ii) that the Purchase Shares and the Exit
Loan Commitment Shares are being sold to the Purchaser without
registration under any state or federal law requiring the registration
of securities for sale; and that (iii) the transferability of the
Purchase Shares and the Exit Loan Commitment Shares may be restricted
by applicable federal and state securities laws and under the laws of
other jurisdictions.
(f) represents that its and its Affiliates' holdings in
PIK/Term Claims does not fail to qualify under Section 382(l)(5)(E)(i)
solely as a result of the application of Treasury Regulation Section
1.382-9(d)(4).
ARTICLE IV
COVENANTS
Section 4.1 Access. Prior to the Closing, upon reasonable notice from
Purchaser, and subject to the provisions of any applicable lease or sublease
(whether the Company or any of its Subsidiaries is a lessor/sublessor or
lessee/sublessee), the Company shall afford to the officers, attorneys,
accountants or other authorized representatives of Purchaser reasonable access
during normal business hours to the business, employees, Real Estate, facilities
and books and records of the Company and each of its Subsidiaries relating to
the business then conducted and/or operated or previously conducted and/or
operated by the Company and its Subsidiaries for all or any portion of its
business (including without limitation all Tax Returns and communications with
any Governmental Authority relating to Taxes), so as to afford Purchaser full
opportunity to make such review, examination and investigation of such
businesses as Purchaser determines are reasonably necessary in connection with
the consummation of the transactions contemplated hereby and shall execute such
contracts as may be required to access information held by third parties or
cause an inspection by a Governmental Authority; provided, however, that the
foregoing right of access shall not be exercisable in such a manner as to
interfere unreasonably with the normal operations and business of such Person.
Purchaser shall be permitted to make extracts from or to make copies of such
books and records as may be reasonably necessary in connection therewith. Prior
to the Closing, the Company shall, and shall cause each of its Subsidiaries to,
and each of its Subsidiaries shall, promptly furnish Purchaser with access to
such maintenance records, operating data and other information relating to the
business then owned and/or operated by the Company and each of its Subsidiaries
as Purchaser may reasonably request. The Company shall promptly deliver to
Purchaser such copies of all pleadings, motions, notices, statements, schedules,
applications, reports and other papers filed by the Company or any of its
Subsidiaries, or by any Person in connection with or related to the Company's
and its Subsidiaries' businesses, and after the consummation of the
Restructuring, in each case in the Bankruptcy Cases. The Company shall promptly
provide to Purchaser all documents and materials relating to the Restructuring,
the proposed transfer of the Shares, the Accepted Contracts or any portion
thereof, and otherwise cooperate with Purchaser, to the extent reasonably
necessary in connection with Purchaser's preparation for or participation in any
part of the Bankruptcy Cases in which Purchaser's participation is necessary,
required or reasonably
25
appropriate. The Company shall promptly deliver to Purchaser all pleadings,
motions, notices, statements, schedules, applications, reports and other papers
filed in any other judicial or administrative proceeding as Purchaser may
reasonably request. In addition, the Company shall, and shall cause each of its
Subsidiaries to consult with Purchaser with respect to any press release or
public statement outside the Bankruptcy Court concerning, in whole or in part,
the transactions contemplated by this Agreement. Without limiting the generality
of this Section 4.1, if requested by Purchaser, the Company, upon reasonable
notice, shall provide access to the Real Estate to Purchaser and its
representatives and agents for purposes of conducting unintrusive environmental
assessments, including Phase I analyses or further analyses if Purchaser deems
such analyses are warranted as a result of a Phase I analysis or otherwise. To
the extent that any applicable lease or sublease (whether the Company or any of
its Subsidiaries is a lessor/sublessor or lessee/sublessee) restricts the
ability of the Company's or any of its Subsidiaries to grant access to any
property, the Company and its Subsidiaries shall use all reasonable best efforts
to provide for such access as Purchaser may reasonably request hereunder. For
the avoidance of doubt, the Company shall not be required to provide Purchaser
access to information regarding bids or expressions of interest received by the
Company, before the Bid Deadline Date.
Section 4.2 Conduct of Business. Except as expressly contemplated by
this Agreement (including, without limitation, the commencement and prosecution
of the Bankruptcy Cases) or as otherwise consented to by Purchaser in writing,
during the period from the date of this Agreement and continuing until the
Closing, the Company shall, and shall cause each of its Subsidiaries to, in
respect of the business then owned and/or operated by the Company or each such
Subsidiary, as the case may be:
(a) (i) use reasonable efforts to conduct its business in
the usual, regular and ordinary course as presently conducted and
consistent with past practice, (ii) keep its assets intact, and (iii)
maintain its assets in at least as good a condition as their current
condition (reasonable wear and tear excepted);
(b) not take or omit to take any action as a result of
which any representation or warranty of the Company made in Article II
would be rendered untrue or incorrect if such representation or
warranty were made immediately following the taking or failure to take
such action;
(c) not mortgage, pledge, sell or dispose of any its
assets, and not waive, release, grant, transfer or permit to lapse any
rights of material value, other than sales of assets and services in
the ordinary course as presently conducted and consistent with past
practice, or sales of Excluded Assets;
(d) not incur any Indebtedness other than in the ordinary
course of its business;
(e) not assign, modify, cancel, otherwise impair or
permit to lapse any Accepted Contract;
26
(f) perform in all material respects its post-petition
obligations under any Accepted Contract to the extent arising after the
commencement date of the Bankruptcy Cases;
(g) comply in all material respects with all applicable
Laws that relate to or affect its assets and business or such Person's
ownership and/or use or operation thereof, including but not limited to
the timely, complete and correct filing of all reports and maintenance
of all records required by any Governmental Authority to be filed or
maintained;
(h) except to the extent necessary to comply with
applicable Laws, not adopt or amend any bonus, profit-sharing,
compensation, severance, termination, stock option, pension,
retirement, deferred compensation, employment or employee benefit plan,
agreement, trust, plan, fund or other arrangement for the benefit and
welfare of any director, officer or employee, or increase in any manner
the compensation or fringe benefits of any director, officer or
employee or pay any benefit not required by any existing plan or
arrangement (including, without limitation, the removal of existing
restrictions in any benefit plans or agreements);
(i) except with Purchaser's approval or as specifically
required by Section 4.8 or Section 4.10, not enter into any new or
amended contract, agreement, side letter or memorandum of understanding
with any unions representing employees of the Company or any of its
Subsidiaries which would reasonably be likely to have a Material
Adverse Effect;
(j) continue to use and operate all assets and all
aspects of its business used and operated by the Company or any of its
Subsidiaries as of the date hereof in a manner consistent with prior
practice and in accordance with all applicable Laws, and not enter into
any contract nor otherwise act, nor suffer or permit any other Person
to act, to restrict, interfere with or prevent the use or operation of
such assets or business;
(k) notify Purchaser in writing of any incidents or
accidents occurring on or after the date hereof involving any property
owned or operated by the Company or any of its Subsidiaries that
resulted or could reasonably be expected to result in damages or losses
to any portion of the business of the Company or any of its
Subsidiaries, as the case may be, in excess of $50,000;
(l) notify Purchaser in writing of the commencement of
any material litigation against the Company or any of its Subsidiaries,
as the case may be, or of the existence of any adverse business
conditions arising on or after the date hereof threatening the
continued, normal business operations of the Company or any of its
Subsidiaries, as the case may be, or of any agreement, consent or order
of any Governmental Authority involving the Company or any of its
Subsidiaries, as the case may be;
27
(m) notify Purchaser of any litigation, arbitration or
administrative proceeding pending or, to their knowledge, threatened
against the Company or any of its Subsidiaries that challenges or would
materially affect the transactions contemplated hereby; and
(n) provide prompt written notice to Purchaser (i) of any
warranties made by the Company in Article II hereof or any exhibits or
schedules referred to herein or attached hereto, including without
limitation any Disclosure Schedules (with respect to representations
and warranties qualified or limited by materiality or Material Adverse
Effect), or (ii) of any material change in (with respect to
representations and warranties not so qualified or limited), and shall
promptly furnish any information that Purchaser may reasonably request
in relation to such change; provided, however, that such notice shall
not operate to cure any breach of the representations and warranties
made by the Company in Article II or any exhibits or schedules referred
to herein or attached hereto, including without limitation any
Disclosure Schedules.
Section 4.3 No Inconsistent Action. The Company shall not, and shall
cause each of its Subsidiaries not to, take any action that is materially
inconsistent with the Company's obligations under this Agreement.
Section 4.4 Filings. As promptly as practicable after the execution of
this Agreement, each Party shall use its reasonable best efforts to obtain, and
to cooperate with the other Party in obtaining, or to the extent applicable
causing its Subsidiaries to obtain, all authorizations, Consents, orders and
confirmations of any Governmental Authority that may be or become necessary in
connection with the consummation of the transactions contemplated by this
Agreement, and to take all reasonable actions to avoid the entry of any order or
decree by any Governmental Authority prohibiting the consummation of the
transactions contemplated hereby, including without limitation, the
notifications required to be filed by it under the HSR Act, Investment Canada
Act and the Canadian Competition Act, and shall furnish to the other all such
information in its possession as may be necessary for the completion of the
notifications to be filed by the other; provided that, in complying with this
Section 4.4, neither Purchaser nor any of its Affiliates shall be required to
(i) divest any assets or discontinue or modify any of its operations or (ii)
accept or become subject to any condition or requirement unacceptable to
Purchaser in its sole discretion. No Party shall withdraw any such filing or
submission prior to the termination of this Agreement without the written
consent of the other Party.
Section 4.5 All Reasonable Efforts. Prior to the Closing, each of the
Parties shall use reasonable efforts with due diligence and in good faith to (i)
satisfy promptly all conditions required hereby to be satisfied by such Party in
order to expedite the consummation of the transactions contemplated hereby; (ii)
take, or cause to be taken, all action, and to do, or cause to be done as
promptly as practicable, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including, without
limitation, the prompt preparation by the Company of all pleadings, motions,
notices, statements, schedules, applications, reports and other papers
reasonably necessary to commence and consummate the Bankruptcy Case in Canada.
28
Section 4.6 Further Assurances. From time to time from and after the
date of this Agreement, including, without limitation, following the Closing,
Purchaser, the Company and its Subsidiaries shall execute, acknowledge and
deliver such additional documents or instruments and take such other action as
Purchaser or the Company, as the case may be, may reasonably request to more
effectively accomplish the transactions contemplated by this Agreement and the
Bankruptcy Plan, as reasonably determined by such Party in good faith and with
the acknowledgement and agreement that the execution and delivery of certain
documents and instruments may not be able to be accomplished prior to the
confirmation of the U.S. Plan by the U.S. Bankruptcy Court, or, if applicable,
the Canadian Proceeding by the Canadian Court.
Section 4.7 Publicity. The Parties hereto shall consult with each other
and shall mutually agree (the agreement of each Party not to be unreasonably
withheld or delayed) upon the content and timing of any press release or other
public statements with respect to the transactions contemplated by this
Agreement and shall not issue any such press release or make any such public
statement prior to such consultation and agreement, except as may be required by
applicable law or in connection with the Bankruptcy Cases or by obligations
pursuant to any listing agreement with any securities exchange or any stock
exchange regulations as advised by counsel; provided, however, that to the
extent reasonably possible, each Party shall give prior notice to the other
Party of the content and timing of any such press release or other public
statement required by applicable law or in connection with the Bankruptcy Cases
or by obligations pursuant to any listing agreement with any securities exchange
or any stock exchange regulations.
Section 4.8 Collective Bargaining Agreements.
(a) The Company shall, and shall cause each of its
Subsidiaries, and each of its Subsidiaries shall provide Purchaser with
notification and description of all material written proposals of the
Company or any of its Subsidiaries or any union with representatives of
any union representing any organized employee groups and of all
matters, other than matters arising in the ordinary course of business,
related to any Collective Bargaining Agreements, including without
limitation, any expressed threats of strikes, slowdowns, work
stoppages, labor actions or lock-outs in response to any modification
demands under Section 1113(e) of the Bankruptcy Code or otherwise. The
Company shall, and shall cause each of its Subsidiaries, and each of
its Subsidiaries shall, as directed by the Purchaser in Purchaser's
sole discretion, (i) enter into negotiations with any union
representing any organized employee group to modify the terms,
conditions, wages, benefits or work rules of any Collective Bargaining
Agreement, (ii) file one or more motions to implement interim changes
to the Collective Bargaining Agreements under Bankruptcy Code Section
1113(e), (iii) file one or more motions to reject those Collective
Bargaining Agreements designated by Purchaser in accordance with
Bankruptcy Code Section 1113(c), (iv) reject those single employer
pension plans designated by Purchaser in accordance with Section 4.10
of this Agreement, and (v) otherwise take such action as may be
reasonably requested by Purchaser to effect the intent of this Section
4.8. The Company and its Subsidiaries shall use their reasonable best
efforts, in accordance with the time tables set forth on Exhibits B-1
and B-2, to obtain such modifications, interim changes, rejections as
contemplated in
29
clauses (i) though (v) above. The Company and its Subsidiaries shall
allow Purchaser to observe any negotiations initiated pursuant to this
Section 4.8(a).
(b) The Company and each of its Subsidiaries shall, as
required by ERISA, the Code, Bankruptcy Code or other Laws, provide
timely (i) all legally required notices or other disclosure to
employees and their beneficiaries, parties in interest, any union,
collective bargaining unit or other organized employee group and
government agencies, including but not limited to the Department of
Labor, Pension Benefit Guaranty Corporation or Internal Revenue
Service; and (ii) file all forms, reports, submissions or other
instruments with the Department of Labor, Pension Benefit Guaranty
Corporation, Internal Revenue Service or any other federal or state
agency or department required as a result of the actions contemplated
by Section 4.8(a). Without limiting the foregoing, the Company and each
of its Subsidiaries shall provide timely notice of the bar date(s)
fixing the last day to file proofs of claims against the Debtors as
established per order of the Bankruptcy Courts, to all holders of
claims, as defined in Bankruptcy Code Section 101(5), claimants,
parties in interest, parties having filed notice of appearance in the
Bankruptcy proceedings hereunder, including, without limitation, to the
extent applicable, employees and their beneficiaries, any union,
collective bargaining unit or other organized employee group, the
Department of Labor, Pension Benefit Guaranty Corporation,
Environmental Protections Agency, Department of Justice, Internal
Revenue Service, and comparable, state, local and Canadian (federal,
provincial and local) Governmental Authorities.
(c) The Company shall (i) use reasonable efforts to
obtain from each of the multiemployer plans (as defined in ERISA
Section 3(37)) that is subject to Title IV of ERISA and in which the
Company or its Subsidiaries participate, or for which they could be
subject to withdrawal liability that is not subject to discharge in
accordance with the Bankruptcy Code, and provide to Purchaser an
estimate of the potential total withdrawal liability payable by the
Company and its ERISA Affiliates (the "Multiemployer Withdrawal
Liability") assuming a complete withdrawal of the Company and its ERISA
Affiliates from each such multiemployer plan or (ii) at the election of
Purchaser in its sole discretion, authorize Purchaser or Purchaser's
representative to obtain such information from each of the
multiemployer plans so as to permit Purchaser or Purchaser's
representative to calculate the amount of such Multiemployer Withdrawal
Liability.
Section 4.9 Bankruptcy Reorganization Process.
(a) The Company shall, and shall cause the other U.S.
Debtors to, and each of the U.S. Debtors shall, in accordance with the
timetable for the Restructuring set forth in Exhibit B-1 attached
hereto, file a motion or motions with the U.S. Bankruptcy Court seeking
entry of an order in the form attached hereto as Exhibit C-1 (with such
changes thereto as Purchaser shall approve or request in its sole
discretion, the "Bidding Procedures Order") and an order in the form
attached hereto as Exhibit C-2 (with such changes thereto as Purchaser
shall approve or request in its sole discretion, the "Icahn DIP
Approval Order"). The Bidding Procedures Order, inter alia, shall (i)
approve this Agreement, subject to higher and better offers as provided
herein, (ii) approve the
30
Termination Amount, the Bankruptcy Termination Amount and the
reimbursement of Purchaser's Expenses as set forth herein, providing
that, in the event the obligation of the Company and the U.S. Debtors
to pay Purchaser either the Termination Amount or the Bankruptcy
Termination Amount, or the Purchaser's Expenses, arises, such
obligation (A) shall constitute a super-priority administrative expense
under sections 503(b) and 507(a)(1) of the Bankruptcy Code (subject to
the Carveout), (B) shall be secured by a pari passu lien priority with
the Icahn DIP Facility (except to the extent paid out of funds provided
to the Company or any of its Subsidiaries by a Competing Bidder,
through an escrow deposit or otherwise, or paid from the Icahn DIP
Facility (including, without limitation, as may have been reserved
thereunder) in which case the Purchaser shall have an immediate right
to receipt thereof ahead of all other parties and shall have or shall
be deemed to have a Lien therein with priority over any and all other
Liens whatsoever) and (C) shall be payable in accordance with the
provisions of Section 6.1 or Section 6.2 without further order of the
U.S. Bankruptcy Court, and (iii) establish procedures and deadlines for
the submission of Competing Offers consistent with the terms of this
Agreement, including, without limitation, that (A) a Competing Offer
shall not be considered to be a higher and better offer unless it is a
Superior Proposal, (B) Purchaser shall be entitled at its option to
make a revised offer following such Competing Offer and (C) Purchaser
shall be entitled to a credit bid in the amount of the Bankruptcy
Termination Amount and/or the amount of any senior secured debt owed by
the Company to Purchaser or any of its Affiliates under the Senior Loan
Agreement towards any revised offer Purchaser may make following such
Competing Offer. The Company agrees to make promptly any filings, to
take all actions and to use its reasonable best efforts to obtain
timely entry of the Bidding Procedures Order and any and all other
approvals and orders necessary or appropriate for the consummation of
the transactions contemplated hereby.
(b) The Company shall, in accordance with the timetable
set forth in Exhibit B-1, prepare and file with the U.S. Bankruptcy
Court and/or the Canadian Court, as applicable: (i) a Disclosure
Statement with respect to the Bankruptcy Plan meeting the requirements
of Bankruptcy Code Section 1125(b) (the "Disclosure Statement"); (ii) a
motion to approve the Disclosure Statement; and (iii) the Bankruptcy
Plan; and as soon as practicable thereafter, such similar filings as
may be required by the Canadian Court (items (i) through (iii)
collectively, the "Confirmation Motions"). The Bankruptcy Plan, any and
all exhibits and attachments to the Bankruptcy Plan, the Disclosure
Statement, and the other Confirmation Motions and the orders approving
the same (including the Confirmation Orders) shall be acceptable in
form and substance to the Purchaser, in its sole discretion, and shall
not be filed until consented to by the Purchaser. Prior to Closing, the
Confirmation Motions, the Investment by the Investors and the other
transactions contemplated by this Agreement, including the
Restructuring, shall have been approved by order of the U.S. Bankruptcy
Court (the "U.S. Confirmation Order"), and, if applicable, by order of
the Canadian Court (the "Sanction Order" and, together with the U.S.
Confirmation Order, the "Confirmation Orders") (each with such changes
thereto as Purchaser shall approve or request in its sole discretion),
and the Confirmation Orders shall have become Final Orders.
31
(c) Without limiting the foregoing, Purchaser and the
Company agree to use their reasonable best efforts to cause the
Bankruptcy Courts to enter Confirmation Orders, as applicable and
relevant, in each respective jurisdiction (U.S. and Canada) that
contain, among other provisions requested by Purchaser, in its sole
discretion, the following provisions (it being understood that certain
of such provisions may be contained in either the findings of fact or
conclusions of law to be made by the Bankruptcy Courts as part of the
Confirmation Orders): (i) the Restructuring of the Company shall occur
in accordance with the terms set forth on Exhibit A; (ii) except as
otherwise contemplated by this Agreement, on and after the Closing
Date, all Persons shall be permanently enjoined from commencing or
continuing in any manner, any Litigation on account or in respect of
any of the pre-petition Liabilities or other Liabilities satisfied
pursuant to the Bankruptcy Plan; such injunctive relief shall be in
addition to the relief afforded under Section 1141(d) of the Bankruptcy
Code; (iii) on the Closing Date, except as otherwise specifically
approved by Purchaser in its sole discretion and included in the
Bankruptcy Plan, the assets and business of Reorganized PSC and its
Subsidiaries shall be free and clear of all Liens, other than
Post-Closing Permitted Liens, and all pre-petition liabilities; (iv)
except as otherwise expressly provided in the Icahn DIP Facility, all
amounts to be paid to Purchaser or its Affiliates, if any, pursuant to
this Agreement constitute super-priority administrative expenses under
sections 503(b) and 507(a)(1) of the Bankruptcy Code (subject to the
Carveout) and are immediately payable if and when the obligations of
the Company or any of its Subsidiaries arise under this Agreement,
which obligations shall be secured by a lien on all of the U.S.
Debtors' property and shall be secured by a pari passu lien priority
with the Icahn DIP Facility (except to the extent paid out of funds
provided to the Company or any of its Subsidiaries by a Competing
Bidder, through an escrow deposit or otherwise, or paid from the Icahn
DIP Facility (including, without limitation, as may have been reserved
thereunder) in which case the Purchaser shall have an immediate right
to receipt thereof ahead of all other parties and shall have or shall
be deemed to have a Lien therein with priority over any and all other
Liens whatsoever) and shall be payable in accordance with the
provisions of Section 6.1 or Section 6.2 without further order of the
U.S. Bankruptcy Court; provided, however, that the Company shall have
the right to contest the validity and amount of such asserted claims
(other than the Termination Amount or the Bankruptcy Termination
Amount); (v) all Persons are enjoined from taking any action against
Purchaser or Purchaser's Affiliates (as they existed immediately prior
to the Closing) or the Company to recover any claim which such Person
has solely against the Company or any of the Company's Affiliates (as
they existed immediately following the Closing); (vi) the respective
Bankruptcy Courts retain exclusive jurisdiction through the effective
date of the Bankruptcy Plan (or later as may be provided in the
Bankruptcy Plans) to interpret, construe and enforce the provisions of
this Agreement, the Bidding Procedures Order, the Icahn DIP Approval
Order and the Confirmation Orders in all respects; provided, however,
that in the event the Bankruptcy Courts abstain from exercising or
decline to exercise jurisdiction with respect to any matter provided
for in the Bankruptcy Plans or this clause (vi) or is without
jurisdiction, such abstention, refusal or lack of jurisdiction shall
have no effect upon and shall not control, prohibit or limit the
exercise of jurisdiction of any other court having competent
jurisdiction with respect to any such matter; (vii) the provisions of
the Confirmation Orders are nonseverable and mutually
32
dependent; (viii) provides for the retention of jurisdiction by the
respective Bankruptcy Courts to resolve any and all disputes that may
arise under this Agreement as between the Company and Purchaser, and
further to hear and determine any and all disputes between the Company
and/or Purchaser, as the case may be, and any non-Company party to,
among other things, any Accepted Contracts, concerning inter alia, the
assumption thereof by Reorganized PSC under this Agreement; (ix)
pursuant to Section 1146(c) of the Bankruptcy Code, provides for the
exemption of the transactions contemplated herein from certain taxes,
provides for the waiver of so-called "bulk-sale" laws in all necessary
jurisdictions, and provides that the transactions contemplated herein
are deemed to be under or in contemplation of a plan to be confirmed
under section 1129 of the Bankruptcy Code; (x) Purchaser and its
Affiliates, directors, shareholders, partners, representatives,
employees, attorneys, and agents are released (and have corresponding
injunctive relief) from any and all claims, demands, liabilities causes
of action and obligations, of every type, in any way relating to or in
connection with the Company and its Subsidiaries, their business, the
Bankruptcy Cases, such release and injunctive relief to be in form and
substance (including without limitation scope) acceptable to Purchaser
as determined in Purchaser's good faith discretion; (xi) post-petition
directors, representatives, employees, attorneys and agents of the
Company and its Subsidiaries are exculpated from any claims, except for
those claims that relate to the gross negligence or intentional
misconduct of any such parties, that (A) arise post-petition, (B)
relate to the period beginning on the Petition Date and ending on the
Closing Date, and (C) are in connection with the Bankruptcy Cases;
(xii) the issuance of Common Stock under the Bankruptcy Plan is exempt
from registration under the Securities Act, and (xiii) except to the
extent expressly agreed to in writing by Purchaser, to the extent of
any conflict between the Bankruptcy Plan and this Agreement (including
the Exhibits hereto), the terms of this Agreement shall control.
(d) The Company shall not, and shall not permit any
Subsidiary to, without the prior consent of Purchaser, which may be
withheld in its sole discretion, seek or consent to the conversion of
the Bankruptcy Case to a case under Chapter 7 of the Bankruptcy Code or
the appointment of a trustee or examiner with managerial powers under
Bankruptcy Code Section 1104 or any Canadian bankruptcy, insolvency
legislation or similar laws, or, except as otherwise expressly
contemplated by this Agreement and the Bidding Procedures Order
(including with respect to the Company's acceptance of a Superior
Proposal in accordance with the Bidding Procedures Order and this
Agreement), do any of the following:
(i) consent to any relief from the automatic
stay under Section 362 of the Bankruptcy Code or any similar
stay provided for in respect of the Canadian Restructuring,
that would reasonably be likely to result in, individually or
in the aggregate, a Material Adverse Effect;
(ii) file any plan of reorganization other than
the Bankruptcy Plan, file any material amendment to the
Bankruptcy Plan, consent to the reduction of the exclusivity
period under Bankruptcy Code Section 1121 for the filing of a
plan of reorganization or fail timely to file motions seeking
to obtain orders of the U.S. Bankruptcy Court extending the
exclusivity period;
33
(iii) sell or abandon, or file any motion to sell
or abandon, any material Assets, other than sales to customers
in the ordinary course of business;
(iv) authorize, or commit or agree to take, any
of the foregoing actions except as excepted herein.
(e) Prior to entry of the Confirmation Orders, the
Company and Purchaser shall, and the Company shall cause each of its
Subsidiaries to, and its Subsidiaries shall, accurately inform the
Bankruptcy Courts of all material facts of which they are aware
relating to this Agreement and the transactions contemplated hereby.
(f) If the Bidding Procedures Order, the Icahn DIP
Approval Order or the Confirmation Orders, or any other orders of the
Bankruptcy Courts relating to this Agreement shall be appealed by any
Person (or a petition for certiorari or motion for rehearing or
reargument shall be filed with respect thereto), the Company agrees to,
and shall cause its Subsidiaries to, and its Subsidiaries shall, take
all steps as may be reasonable and appropriate to defend against such
appeal, petition or motion, and the Purchaser agrees to cooperate in
such efforts, and each Party hereto agrees to use its reasonable best
efforts to obtain an expedited resolution of such appeal; provided,
however, that nothing herein shall preclude the Parties hereto from
consummating the transactions contemplated herein if the Confirmation
Orders shall have been entered and have not been stayed and Purchaser,
in its sole discretion, waives in writing the requirement that the
Confirmation Orders be Final Orders.
(g) The Company shall, and shall cause its Subsidiaries
to, and its Subsidiaries shall consult with the Purchaser prior to
taking any material action with respect to the Bankruptcy Cases, and
shall cooperate with Purchaser and its representatives in connection
with the Bidding Procedures Order, the Icahn DIP Approval Order and the
Confirmation Orders, and the bankruptcy proceedings in connection
therewith. Such cooperation shall include, but not be limited to,
consulting with Purchaser at Purchaser's reasonable request concerning
the status of such proceedings and providing Purchaser with copies of
requested pleadings, notices, proposed orders and other documents
relating to such proceedings as soon as reasonably practicable prior to
any submission thereof to the Bankruptcy Court. The Company further
covenants and agrees that the terms of any plan submitted by the
Company to the Bankruptcy Courts for confirmation shall not conflict
with, supersede, abrogate, nullify, modify or restrict the terms of
this Agreement and the rights of Purchaser hereunder, or in any way
prevent or interfere with the consummation or performance of the
transactions contemplated by this Agreement including, without
limitation, any transaction that is contemplated by or approved
pursuant to the Bidding Procedures Order, the Icahn DIP Approval Order
and the Confirmation Orders. The Purchaser shall provide the Company
with all information concerning the Purchaser required to be included
in the Disclosure Statement.
Section 4.10 Accepted or Rejected Contracts.
(a) The Company shall list, on the date hereof and/or in
accordance with the timetable set forth in Exhibit E, as applicable, on
Schedule 4.10, a true, correct and
34
complete list of all executory contracts that are material to the
operation of the business of the Company or any of its Subsidiaries
(the "Material Executory Contracts"). For each Material Executory
Contract listed from time to time thereon, the Company shall timely
indicate to Purchaser whether or not, in connection with the Bankruptcy
Cases, the Company or any of its Subsidiaries, as the case may be,
desires to accept or reject such Material Executory Contract. The
Purchaser, in its sole discretion, shall direct the Company to cause
each such Material Executory Contract to be either accepted or
rejected, and the Company shall, and it shall cause its Subsidiaries
to, accept or reject each such Material Executory Contract in
accordance with the Purchaser's direction effective as of the Closing,
unless the Company and/or its Subsidiaries elect in their discretion to
seek an earlier effective date (any Material Executory Contracts so
accepted hereby are referred to herein as the "Accepted Contracts" and
any Material Executory Contracts so rejected hereby are referred to
herein as the "Rejected Contracts"). Notwithstanding anything to the
contrary in the foregoing, neither the Company nor any of its
Subsidiaries shall accept any executory contract (whether or not a
Material Executory Contract) without the consent of Purchaser, in its
sole discretion. For all purposes of this Agreement the term
"rejection" of a contract shall include, without limitation, with
respect to the Canadian Subsidiaries and/or the Canadian Proceeding,
the disclaimer, termination or breach of such contract.
(b) Any motions filed with, and the proposed orders
submitted to, the Bankruptcy Courts seeking authorization to, or any
proceedings undertaken to, accept or reject any one or more of the
Material Executory Contracts shall be satisfactory in form and
substance to the Purchaser in its sole discretion. The Purchaser's
written consent shall be required prior to the Company compromising or
commencing Litigation with respect to any Material Executory Contract,
or any material payments required to be made under the Bankruptcy Code
in connection therewith.
Section 4.11 Specific Enforcement of Covenants. The Company
acknowledges that irreparable damage may occur in the event that any of the
covenants and agreements of the Company or any of its Subsidiaries set forth in
this Article IV or in any other part of this Agreement were not timely performed
in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that Purchaser shall be entitled to an injunction or
injunctions to prevent or cure any breach of Section 4.12 or any material breach
of such other covenants and agreements of the Company (to the extent not
qualified by materiality) or any breach of such other covenants and agreements
(to the extent qualified by materiality), and its Subsidiaries and to enforce
specifically the terms and provisions thereof, this being in addition to any
other remedy to which it may be entitled at law or in equity, it being
understood that, after commencement of the Bankruptcy Cases, the Bankruptcy
Courts shall have exclusive jurisdiction over such matters; provided, however,
that in the event the Bankruptcy Courts abstains from exercising or declines to
exercise jurisdiction with respect to any matter provided for in this sentence
or is without jurisdiction, such abstention, refusal or lack of jurisdiction
shall have no effect upon and shall not control, prohibit or limit the exercise
of jurisdiction of any other court having competent jurisdiction with respect to
any such matter.
Section 4.12 No Solicitation.
35
(a) Upon the earlier to occur of the approval of this
Agreement or the Icahn DIP Facility, the U.S. Debtors agree to withdraw
their motion to sell assets of the U.S. Debtors under Section 363 of
the U.S. Bankruptcy Code, and further agree not to refile any such
motion except as permitted by the Icahn DIP Facility and not to file
any similar motion with respect to the Canadian Subsidiaries in the
Canadian Court except as permitted by this Agreement and the Icahn DIP
Facility. Nothing in this Section 4.12(a) shall preclude the Company
from soliciting or proposing Competing Offers prior to the
Determination Date, as may otherwise be permitted hereunder.
(b) Prior to the Determination Date the Company shall not
take any efforts in connection with developing a competing plan of
reorganization or soliciting a Superior Proposal, except in accordance
with the terms of this Agreement, including, without limitation,
Section 4.9, Exhibit A-2, and the Bidding Procedures Order.
(c) After the Determination Date, the Company shall
advise Purchaser of any request for information with respect to any
Acquisition Proposal or of any Acquisition Proposal, or any inquiry,
proposal, discussions or negotiation with respect to any Acquisition
Proposal, the terms and conditions of such request, Acquisition
Proposal, inquiry, proposal, discussion or negotiation and the Company
shall, within one (1) calendar day of the receipt thereof, promptly
provide to Purchaser copies of any written materials received by the
Company or any of its Subsidiaries in connection with any of the
foregoing, and the identity of the Person making any such Acquisition
Proposal or such request, inquiry or proposal or with whom any
discussions or negotiations are taking place. The Company shall keep
Purchaser fully informed of the status and material details (including
amendments or proposed amendments) of any such request or Acquisition
Proposal and keep Purchaser fully informed as to the material details
of any information requested of or provided by the Company and as to
the details of all discussions or negotiations with respect to any such
request, Acquisition Proposal, inquiry or proposal, and shall provide
to Purchaser within one (1) calendar day of receipt thereof all written
materials received by the Company with respect thereto. The Company
shall promptly provide to Purchaser any non-public information
concerning the Company provided to any other Person in connection with
any Acquisition Proposal, which was not previously provided to
Purchaser.
(d) Notwithstanding anything herein to the contrary, if,
on the Determination Date, the Company and the other U.S. Debtors
select this Agreement from among any or all Competing Offers, then
beginning on the Determination Date, and until the earlier of (i) the
Closing Date or (ii) termination of this Agreement in accordance with
its terms, the Company shall not, without the prior written consent of
the Purchaser, and shall not permit any of its Subsidiaries, nor any of
its or their officers, directors, shareholders, employees, investment
bankers, attorneys, or any other representative to, and none of them
shall, without the prior written consent of the Purchaser, directly or
indirectly, (A) solicit, engage in discussions or negotiate with any
Person (whether or not such discussions or negotiations are initiated
by the Company), or take any other action intended or designed to
facilitate the efforts of any Person, other than Purchaser or its
Affiliates, relating to an Acquisition Proposal, (B) provide
information with respect to the Company to any Person, other than
Purchaser or its Affiliates, relating to a possible
36
Acquisition Proposal by any Person, other than Purchaser or its
Affiliates, (C) enter into an agreement with any Person, other than
Purchaser or its Affiliates, providing for a possible Acquisition
Proposal, or (D) make or authorize any statement, recommendation or
solicitation in support of any possible Acquisition Proposal by any
Person, other than by Purchaser or its Affiliates.
Section 4.13 Confidentiality. Each Party hereto acknowledges that the
other Party has legitimate and continuing proprietary interests in the
protection of its confidential information and that the Parties have invested
substantial sums and will continue to invest substantial sums to develop,
maintain and protect such confidential information. Prior to and after the
Closing, each Party agrees not to disclose, furnish or make accessible to anyone
or use for its own benefit (other than as contemplated hereby) any trade secrets
or other confidential or proprietary information of another party relating to
the Company, Purchaser and/or their respective businesses or the other parties
including, but not limited to, information obtained by or revealed to such Party
during any investigations, negotiations or review relating to this Agreement and
any other document contemplated hereby or thereby or any past or future actions
taken in connection with, pursuant to, in accordance with, or under this
Agreement, including without limitation any business plans, marketing plans,
financial information, strategies, systems, programs, methods and computer
programs; provided, however, that such protected information shall not include
(i) information required to be disclosed by law, legal or judicial process
(including a court order, subpoena or order of a Governmental Authority) or the
rules of any stock exchange, (ii) information that is or becomes available to
the disclosing Party on a non- confidential basis from a source other than the
other Party and not obtained in violation of this Agreement and (iii)
information known to the public or otherwise in the public domain without
violation of this Section 4.13; provided, further, that this Section 4.13 shall
not in any way limit the disclosure of information by the Company (a) in
connection with the commencement and prosecution of the Bankruptcy Cases or (b)
regarding the Company (i) to other bidders or potential bidders that are
currently or become parties to confidentiality agreements with the Company or
(ii) following the termination of this Agreement. Except as required by law, the
schedules annexed hereto shall not be disclosed to the public without the prior
consent of the Company. Notwithstanding the foregoing, any Party (and each
employee, representative or other agent of such party) may disclose to any and
all Persons, without limitation of any kind, the tax treatment and tax structure
(in each case, within the meaning of Treasury Regulation Section 1.6011-4) of
the Transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to such Party relating to such tax treatment and tax
structure; provided that, with respect to any document or similar item that
contains information concerning the tax treatment or tax structure of the
Transaction as well as other information, this authorization shall only apply to
such portions of the document or similar item that relate to the tax treatment
or tax structure of the Transaction.
Section 4.14 Canadian Restructuring. The Company shall, and shall cause
the Canadian Subsidiaries to, and the Canadian Subsidiaries shall, effect a
restructuring of the Canadian Subsidiaries on terms substantially similar to the
Restructuring of the Company and its Subsidiaries contemplated hereby, as more
fully described in Exhibit G.
37
Section 4.15 Performance Escrow Agreement. Purchaser's $6.0 million
xxxxxxx money deposit made with the Escrow Agent pursuant to Section 1.2 hereof
(exclusive of any interest or other earnings thereon, the "Escrow Deposit")
shall be distributed as directed by Purchaser or as otherwise provided for in
the Performance Escrow Agreement; provided, however that the Company may object
to any distribution of the Escrow Deposit if, and only if, (a) Purchaser is
requesting release of the Escrow Deposit to a person other than the Company
prior to the earlier to occur of (i) termination of this Agreement, (ii) the
date Company shall become obligated to pay Purchaser or any of its Affiliates
the Termination Amount, the Bankruptcy Termination Amount or Purchaser Expenses,
(iii) December 31, 2003 or (iv) the Closing, or (b) Purchaser has materially
breached its obligations to consummate the transactions contemplated by this
Agreement in a manner for which the Company would be entitled to damages
pursuant to Section 6.4 hereof. Any objection by the Company must specify the
reason for the objection, cross referencing the appropriate provision (and/or
sub-provisions hereof) and detail the amount of distributions for which the
objection is being made. The Company shall not object to any withdrawal of funds
except as expressly provided herein, and if the Company so improperly objects,
the Company shall promptly file a notice of withdrawal of its objection to the
Escrow Agent in accordance with the terms of the Performance Escrow Agreement.
Section 4.16 Icahn DIP Facility. The Company and its Subsidiaries shall
comply with their representations, warranties and agreements contained in any
and all instruments, agreements and other documents entered into in connection
with the Icahn DIP Facility.
Section 4.17 Transfer of Owned Real Estate. Prior to the Closing, the
Company and its Subsidiaries shall cause the transfer of all the Owned Real
Estate to them (to the extent not so owned of record by them as of the date
hereof) as contemplated by Section 2.17.
Section 4.18 U.S. Debtors. The Company and each of its Subsidiaries
shall ensure that all of the Company's U.S. Subsidiaries are U.S. Debtors (i.e.
debtors and debtors in possession under Chapter 11 of Title 11 of the United
States Code) under the U.S. Bankruptcy Case.
ARTICLE V
CONDITIONS TO CLOSING
Section 5.1 Conditions Precedent to Obligations of the Purchaser. The
obligations of Purchaser under this Agreement to consummate the transactions
contemplated hereby to be consummated at the Closing shall be subject to the
satisfaction, at or prior to the Closing, of all of the following conditions,
any one or more of which may be waived in writing at the option of Purchaser in
its sole discretion:
(a) All representations and warranties of the Company and
its Subsidiaries in this Agreement or in any exhibit, schedule or
document delivered pursuant hereto shall be true, complete and correct
in all respects (with respect to representations and warranties
qualified or limited by materiality or Material Adverse Effect) or in
all material respects (with respect to representations and warranties
not so qualified or limited), in each case when made and on and as of
the Closing Date as if made on and as of the Closing Date,
38
other than any such representations or warranties that expressly speak
only as of an earlier date, which shall be true, complete and correct
in all respects (with respect to representations and warranties
qualified or limited by materiality or Material Adverse Effect) or in
all material respects (with respect to representations and warranties
not so qualified or limited), as of such earlier date.
(b) All of the terms, covenants and conditions to be
complied with and performed by the Company or its Subsidiaries on or
prior to the Closing Date shall have been complied with or performed in
all material respects.
(c) Purchaser shall have received a certificate or
certificates, dated as of the Closing Date, executed on behalf of the
Company, by an authorized executive officer thereof, certifying in such
detail as Purchaser may reasonably request that the conditions
specified in this Section 5.1 have been fulfilled.
(d) The waiting period under the HSR Act, Investment
Canada Act, the Canadian Competition Act or any other applicable
competition, merger, control, antitrust Law or similar Law shall have
expired or terminated, and any other Governmental Authorities whose
consent is required for consummation of the transactions contemplated
hereby (including without limitation the applicable regulatory body of
Canada or any province or other territorial unit thereof) shall have
issued all Consents required for the transactions contemplated hereby,
and no condition or requirement unacceptable to Purchaser in its sole
discretion shall be imposed on or required of Purchaser or any of its
Affiliates as a result of or as a condition to any of the foregoing.
(e) All material Consents described on Schedule 2.5 shall
have been obtained without any material limitation, restriction or
condition not otherwise applicable to the Company or its Subsidiaries
being imposed on Reorganized PSC or its Subsidiaries, to the extent the
need for such consent is not overridden by Section 365 of the
Bankruptcy Code or other applicable law.
(f) No action, suit or proceeding (including, without
limitation, any proceeding over which the U.S. Bankruptcy Court has
jurisdiction under 28 U.S.C. (S) 157(b) and (c)) shall be pending or
overtly threatened by or before any Governmental Authority or pending
or overtly threatened by any other party to enjoin, restrain, prohibit
or obtain substantial damages or significant equitable relief in
respect of or related to any of the transactions contemplated by this
Agreement, or that would be reasonably likely to prevent or make
illegal the consummation of any transactions contemplated by this
Agreement or that, if adversely determined, could be materially adverse
to Reorganized PSC or any of its Subsidiaries or the Investment, and
any such actions, suits or proceedings that have theretofore been
brought and determined shall have become Final Orders.
(g) There shall not be in effect any Law of any
Governmental Authority of competent jurisdiction restraining, enjoining
or otherwise preventing consummation of the transactions contemplated
by this Agreement or the Bankruptcy Plan.
39
(h) There shall not be in effect any strike, slowdown,
work stoppage, labor action or lockout relating to the Company or any
of its Subsidiaries.
(i) No loss or modification of or limitation on any
Accepted Contract, which results in a loss to the Company or any of its
Subsidiaries in excess of $65,000,000 in the aggregate, shall have
occurred since the date hereof without the written consent of Purchaser
in its sole discretion, including without limitation any forfeiture,
expiration without renewal, termination or other loss thereof.
(j) The Bidding Procedures Order and the Icahn DIP
Approval Order shall have each become a Final Order, the Confirmation
Orders shall have been entered in form and substance reasonably
satisfactory to Purchaser, and shall have become a Final Order, and any
other orders of the Bankruptcy Courts with respect to this Agreement
and the transactions contemplated hereby shall be in form and substance
reasonably satisfactory to Purchaser.
(k) The assets of Reorganized PCS and its Subsidiaries
shall not include any Excluded Assets, and all Phase I environmental
assessments and additional unintrusive due diligence on Real Estate
conducted by or on behalf of Purchaser shall have been completed with
results reasonably satisfactory to Purchaser in its sole discretion
that no material expenditures, other than as may be agreed to by the
Purchaser in its sole discretion, shall be required to remediate or
otherwise cure any actual or potential Environmental Claim. Provided
that Purchaser receives the disclosure Schedules timely from the
Company and its Subsidiaries, as contemplated by Exhibit E, and is able
to obtain the access that it may reasonably request to complete its
environmental surveys and due diligence, including without limitation
as contemplated by Section 4.1, on or before August 15, 2003, Purchaser
will provide the Company on such date with a schedule of assets that it
desires to include as Excluded Assets (the "Excluded Asset Schedule"),
together with a schedule of the maximum amount of material expenditures
that Purchaser shall deem material for purposes of this Section 5.1(k)
(the "Environmental Liability Schedule"). Except to the extent
otherwise agreed to by Purchaser in the Excluded Asset Schedule, if the
Company and its Subsidiaries are not permitted to abandon any property
listed in the Excluded Asset Schedule, after using all reasonable
efforts to do so, Purchaser shall have the right either to terminate
this Agreement, or to remove the subject property from the Excluded
Asset Schedule such that it shall no longer be deemed to be an Excluded
Asset; provided, however, that nothing herein shall be deemed to modify
the maximum amount of expenditures set forth in the Environmental
Liability Schedule without the written consent of Purchaser, in its
sole discretion.
(l) No event, events or circumstance shall have occurred
since the date of the initial Schedules delivered pursuant to Exhibit E
which, independently or together with any other event, events or
circumstance that have occurred or are reasonably likely to occur, have
or are reasonably likely to have a Material Adverse Effect.
(m) The issuance of the Shares under the Bankruptcy Plan
shall be exempt from registration under the Securities Act of 1933, as
amended.
40
(n) The Company shall have executed and delivered the
documents required to be executed and delivered by it pursuant to
Section 1.6 hereof.
(o) The Company shall have, and shall have caused each of
the other U.S. Debtors, and each of the U.S. Debtors shall have,
obtained (i) the modifications of the terms, conditions, wages,
benefits or work rules of any Collective Bargaining Agreement, or (ii)
the rejection of the Collective Bargaining Agreements, in each case as
directed by Purchaser in accordance with Section 4.8(a) hereof, in form
and substance satisfactory to Purchaser in its sole discretion.
(p) The Company shall have provided Purchaser with
evidence reasonably satisfactory to Purchaser that the total aggregate
amount of Multiemployer Withdrawal Liability, (the calculation of
which, for each multiemployer plan, shall be made as of each plan's
last plan year end), shall not exceed the Maximum Permitted
Multiemployer Withdrawal Liability Amount as of the Effective Date, and
the Company and its Subsidiaries shall have rejected all single
employer pension plans as contemplated by Section 4.8 and Section 4.10.
(q) The transactions underlying the Canadian
Restructuring shall have been completed substantially on the terms
contemplated hereby, including without limitation, as set forth in
Exhibit G, such that the effective date of the Canadian Restructuring
may be scheduled to be contemporaneous with the effective date of the
U.S. Plan.
(r) The aggregate amount of all Exit Costs shall not
exceed the Exit Cost Threshold.
Section 5.2 Conditions Precedent to Obligations of the Company. The
obligations of the Company under this Agreement to consummate the transactions
contemplated hereby to be consummated at the Closing shall be subject to the
satisfaction, at or prior to the Closing, of all the following conditions, any
one or more of which may be waived in writing at the option of the Company:
(a) The waiting period under the HSR Act or any other
applicable competition, merger, control, antitrust Law or similar Law
shall have expired or terminated, and any other Governmental
Authorities whose consent is required for consummation of the
transactions contemplated hereby (including without limitation the
applicable regulatory body of Canada or any province or other
territorial unit thereof) shall have issued all Confirmations required
for the transactions contemplated hereby.
(b) There shall not be in effect any Law of any
Governmental Authority of competent jurisdiction restraining, enjoining
or otherwise preventing consummation of the transactions contemplated
by this Agreement or the Bankruptcy Plan.
(c) The Confirmation Orders shall have been entered and
become Final Orders.
(d) Purchaser shall have (i) executed and delivered the
agreements to be executed and delivered by it pursuant to Section 1.6
hereof, (ii) delivered the Xxxxxxxx
00
Xxxxxx Xxxxxxxx Price to be paid by it and (iii) made available to
Reorganized PSC the Exit Loan Facility in accordance with its terms,
all as contemplated by Section 1.6 hereof.
ARTICLE VI
FURTHER AGREEMENTS AND TERMINATION
Section 6.1 Termination Payment.
(a) In the event this Agreement is terminated pursuant to
Section 6.3(c)(iii) (in a case in which the Company or any of its
Subsidiaries is in material default or material breach of this
Agreement, or where a representation or warranty made as of the date
hereof, or as of the date of delivery of any schedule with respect
thereto, is shown to have been inaccurate as of such date, subject to
the other terms and conditions of Section 6.3(c)(iii) regarding such
inaccuracy, and subject further, in the case of a breach of a
representation or warranty (but not a covenant or agreement), such
breach was either intentional or arose from the Company's or any of its
Subsidiaries' recklessness), or Section 6.3(c)(vii) of this Agreement,
then in any such case the Company and its Subsidiaries shall be jointly
and severally obligated to pay Purchaser, in cash, the sum of
$5,000,000 plus an amount (not to exceed $1,000,000) on account of the
Purchaser Expenses.
(b) In the event that this Agreement is terminated
pursuant to Section 6.3(a), Section 6.3(b)(ii), Section 6.3(c)(iii)
(not otherwise provided for in Section 6.1(a)), Section 6.3(c)(iv),
Section 6.3(c)(v), Section 6.3(c)(vi) or Section 6.3(c)(x) of this
Agreement, then in any such case the Company and its Subsidiaries shall
be jointly severally obligated to pay Purchaser, in cash, an amount
(not to exceed $1,000,000) on account of the Purchaser Expenses.
(c) Any amount payable pursuant to this Section 6.1 shall
referred to as the "Termination Amount". The Termination Amount shall
be paid within one Business Day after Purchaser provides Company notice
of a termination with respect to which such payment is to be made.
Section 6.2 Bankruptcy Termination Payment.
(a) In the event this Agreement is terminated pursuant to
Section 6.3(b)(i), Section 6.3(c)(ii), Section 6.3(c)(viii) or Section
6.3(c)(ix) of this Agreement, the Company and its Subsidiaries shall be
jointly and severally obligated to pay to Purchaser, in cash, the sum
of $5,000,000 plus an amount (not to exceed $1,000,000) on account of
the Purchaser Expenses. Any amount payable pursuant to this Section 6.2
shall be referred to as the "Bankruptcy Termination Amount." The
Bankruptcy Termination Amount shall be payable no later than one
Business Day after a Party is provided with notice of such termination.
42
Section 6.3 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual consent of each of the Company and
Purchaser;
(b) by either of the Company or Purchaser (provided that
such Party is not then in material breach of any provision of this
Agreement):
(i) if the Board of Directors of the Company
authorizes the Company, subject to complying with the terms of
this Agreement and the Bidding Procedures Order, to enter into
a binding written agreement concerning a transaction that
constitutes a Superior Proposal and the Company notifies
Purchaser in writing that it intends to enter into such an
agreement; provided, that no termination under this Section
6.3(b)(i) shall be effective as to the Company's and its
Subsidiaries' obligations, and Purchaser's rights, hereunder
(but shall be effective immediately as to Purchaser's
obligations hereunder, unless Purchaser otherwise elects)
until the Bankruptcy Termination Amount shall have been paid
to Purchaser; or
(ii) if a Governmental Authority shall have
issued an order, decree or ruling or taken any other action
(which order, decree or ruling the Parties hereto shall use
their reasonable best efforts to lift), in each case
permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final
and nonappealable.
(c) by Purchaser (provided that Purchaser is not then in
material breach of any provision of this Agreement):
(i) [intentionally omitted];
(ii) if the Confirmation Orders have not been
entered by the Bankruptcy Courts on or before November 3,
2003, have not become Final Orders on or before the Outside
Closing Date and, as of the time of such termination of this
Agreement, the Confirmation Orders have not been entered by
the Bankruptcy Court or become Final Orders, as applicable, or
if the Company otherwise has failed to adhere to any deadline
in the timetable for the Restructuring set forth on Exhibit
B-1, and the subject action continues to be unfulfilled; or
(iii) if a material default or material breach
shall be made by the Company or any of its Subsidiaries with
respect to the due and timely performance of any of their
respective covenants or agreements contained herein (other
than with respect to the covenant regarding non-solicitation
contained Section 4.12 hereof), or if their respective
representations or warranties contained in the Agreement shall
have become inaccurate (without giving effect to any
materiality or Material Adverse Effect qualifications or
exceptions contained therein) and such inaccuracy has had or
would be reasonably likely to have a
43
Material Adverse Effect, if such default, breach or inaccuracy
has not been cured or waived within five Business Days after
written notice to the Company specifying, in reasonable
detail, such claimed default, breach or inaccuracy and
demanding its cure or satisfaction;
(iv) if Purchaser is not satisfied in its sole
discretion, with the results of its review of the initial
completed Schedules provided to it after the execution of this
Agreement upon notice to the Company specifying its
dissatisfaction; provided however that Purchaser's failure to
object to any Schedule so completed and provided by the later
of (i) August 15, 2003, or (ii) ten days after the delivery of
such Schedule shall be deemed to constitute its acceptance of
such Schedule; and provided further that the Company shall
have a period of five Business Days to address any
dissatisfaction of the Purchaser, and, if applicable, to
modify such Schedule.
(v) if there shall continue to exist an Event of
Default under the Icahn DIP Facility, after the expiration of
the applicable grace periods set forth in the Icahn DIP
Facility;
(vi) if an event or events or circumstance shall
have occurred since the date of this Agreement which,
independently or together with any other event, events or
circumstance that have occurred or are reasonably likely to
occur, have or are reasonably likely to have, in the sole
judgment of Purchaser, a Material Adverse Effect;
(vii) if there is a breach of the covenant
regarding non-solicitation contained in Section 4.12 hereof;
(viii) upon the conversion of the U.S. Bankruptcy
Case to a case under chapter 7 of the Bankruptcy Code, or any
similar commencement of liquidation proceedings relating to
the Company, or upon the commencement of any similar actions
or proceedings in or by the Canadian Court or otherwise with
respect to the Canadian Subsidiaries, other than as
contemplated herein, including without limitation, Exhibit G
hereto; or
(ix) upon the approval of the U.S. Bankruptcy
Court of any action commenced by any other Person to liquidate
the Company or any of its Subsidiaries or any of their
respective assets or for the appointment of a trustee or
examiner with managerial powers, other than at the request of
Purchaser or any of its Affiliates, under Bankruptcy Code
Section 1104 and such trustee or examiner takes any action to
interfere or impair the plan process, or if any similar event
occurs in the Canadian Court.
(x) if any event , circumstance, condition,
fact, effect or other matter has occurred or exists which
would or would be reasonably likely to, give rise to the
failure of any of the conditions to the obligations of
Purchaser set forth in
44
Section 5.1 and cannot be cured within five Business Days
after the giving of notice to the Company.
(d) By the Company (provided that the Company is not then
in material breach of any provision of this Agreement or otherwise in
breach of this Agreement in a manner that would give rise to
Purchaser's termination right) if a material default or material breach
shall be made by Purchaser with respect to the performance of any of
its covenants or agreements contained herein, or if Purchaser's
representations or warranties contained in the agreement shall have
been false or inaccurate in any material respect when made, and such
default, breach or inaccuracy has had or would be reasonably likely to
have a Material Adverse Effect, and such default, breach or inaccuracy
has not been cured or waived within five Business Days after written
notice to Purchaser specifying, in reasonable detail, such claimed
default, breach or inaccuracy and demanding its cure or satisfaction.
Section 6.4 Procedure and Effect of Termination. The obligations of the
Company and its Subsidiaries, and the rights of Purchaser under this Agreement
shall in no event terminate (but shall be effective immediately as to
Purchaser's obligations hereunder, unless Purchaser otherwise elects) unless and
until any and all amounts payable to Purchaser or its Affiliates pursuant to
Section 6.1 or Section 6.2 hereof (without duplication, such that in no event
shall the aggregate amounts owed Purchaser, if any, pursuant to this Article VI
exceed $6.0 million), in connection with such proposed termination shall have
been indefeasibly paid in full in cash to Purchaser. In the event of termination
and abandonment of the transactions contemplated hereby pursuant to Section 6.3,
written notice thereof shall forthwith be given to the other Party to this
Agreement and this Agreement shall terminate (subject to the provisions of this
Section 6.4) and the transactions contemplated hereby shall be abandoned,
without further action by any of the Parties hereto. If this Agreement is
terminated as provided herein:
(a) upon request therefor, each Party shall redeliver all
documents, work papers and other material of any other party relating
to the transactions contemplated hereby, whether obtained before or
after the execution hereof, to the party furnishing the same; and
(b) no Party hereto shall have any liability or further
obligation to any other Party to this Agreement resulting from such
termination except (i) that the provisions of Section 4.13, Section
6.1, Section 6.2, this Section 6.4, Section 7.3, Section 7.14, and
Exhibit A-2 to this Agreement shall survive such termination and remain
in full force and effect and (ii) no Party waives any claim or right
against a breaching party to the extent that such termination results
from the breach by a Party hereto of any of its representations,
warranties, covenants or agreements set forth in this Agreement;
provided, however, that in the event Purchaser is entitled to receive
the Termination Amount or the Bankruptcy Termination Amount, the right
of Purchaser to receive such amount shall constitute Purchaser's sole
remedy for damages(and such amount shall constitute liquidated damages
in respect of) any breach by the Company or any of its Subsidiaries of
any of their respective representations, warranties, covenants or
agreements set forth in this Agreement.
45
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1 Notices. All notices and other communications required or
permitted hereunder shall be in writing and, unless otherwise provided in this
Agreement, will be deemed to have been duly given when delivered in person or
when dispatched by electronic facsimile transfer (confirmed in writing by mail
simultaneously dispatched) or one business day after having been dispatched by a
nationally recognized overnight courier service to the appropriate Party at the
address specified below:
(a) If to the Company, to:
0000 Xxx Xxxxxx, Xxxxx, 0000
Xxxxxxx, Xxxxx, 00000 XXX
Tel.: (000) 000-0000
Facsimile:
Attention: President and General Counsel
with copies to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Tel.:
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq. and Xxxxxx Xxxxxx, Esq.
(b) If to Purchaser, to:
Icahn Associates Corp.
and affiliated companies
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel.: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Xxxx Xxxxxxx, Esq., Xxxxxxx Xxxxxxx, Esq.
with copies to:
Xxxxx Xxxxxxx Xxxxxxx Israels LLP
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Tel.: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
46
or to such other address or addresses as any such Party may from time to time
designate as to itself by like notice. All deliverables, notices or any other
communications delivered by Purchaser to the Company pursuant to this Agreement
shall be deemed to have been so delivered to all of the Company.
Section 7.2 Actions by the Company and its Subsidiaries. Unless
otherwise expressly provided for in this Agreement, the obligations of the
Company and its Subsidiaries hereunder are joint and several. Where any
provision of this Agreement indicates that the Company shall take any specified
action (or refrain from taking any specified action) or requires the Company to
take any specified action (or to refrain from taking any specified action),
then, regardless of whether this Agreement specifically provides that the
Company shall do so, the Company shall cause its Subsidiaries to take such
action (or to refrain from taking such action, as applicable) and such
Subsidiaries hereby agree to do so. The Company shall, in addition to any such
Subsidiaries, be responsible for the failure of any such Subsidiaries to take
any such action (or to refrain from taking any such action, as applicable).
Without limiting the foregoing, the Company shall be jointly and severally
liable with each of its Subsidiaries with respect to any representation,
warranty, covenant or agreement of such Subsidiary set forth herein and each
Subsidiary shall be jointly and severally liable with respect to any
representation, warranty, covenant or agreement of the Company or any other
Subsidiary hereunder.
Section 7.3 Expenses. Except as otherwise expressly provided herein,
including without limitation Article VI hereof, each Party hereto shall pay any
expenses incurred by it incident to this Agreement and in preparing to
consummate and consummating the transactions provided for herein.
Section 7.4 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Parties hereto and their respective
successors (including, without limitation, any trustee, receiver,
receiver-manager, interim receiver or similar officer appointed for the Company
or any of the Company's Subsidiaries) and permitted assigns, but shall not be
assignable or delegable (i) by the Company or any of its Subsidiaries without
the prior written consent of Purchaser or by court order, (ii) by Purchaser
without the prior written consent of the Company or by court order; provided,
however, that upon notice to the Company, Purchaser may assign or delegate any
or all of its rights or obligations under this Agreement to any Affiliate of
Purchaser.
Section 7.5 Waiver. Any term or condition of this Agreement may be
waived at any time by the Party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the Party waiving such term or condition. No waiver
by any Party of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by Law or otherwise afforded, will be cumulative
and not alternative.
Section 7.6 Entire Agreement; Disclosure Schedules. This Agreement,
which includes the schedules and exhibits hereto, supercedes any other
agreement, whether written or oral, that may have been made or entered into by
any Party relating to the matters contemplated hereby and constitutes the entire
agreement by and among the Parties hereto. To the extent that any
47
provisions of this Agreement are inconsistent or conflict with the terms of the
Bidding Procedures Order, the terms of this Agreement shall control.
Section 7.7 Amendments, Supplements, Etc. This Agreement may be amended
or supplemented at any time by additional written agreements as may mutually be
determined by Purchaser and the Company to be necessary, desirable or expedient
to further the purposes of this Agreement or to clarify the intention of the
Parties.
Section 7.8 No Rights of Third Parties. Nothing expressed or implied in
this Agreement is intended or shall be construed to confer upon or give any
Person other than the Parties hereto any rights or remedies under or by reason
of this Agreement or any transaction contemplated hereby.
Section 7.9 Applicable Law. This Agreement and the legal relations
among the Parties hereto shall be governed by and construed in accordance with
the rules and substantive Laws of the State of New York, without regard to
conflicts of law provisions thereof.
Section 7.10 Execution in Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same agreement. Any counterpart
may be executed by facsimile signature and such facsimile signature shall be
deemed an original.
Section 7.11 Titles and Headings. Titles and headings to Sections
herein are inserted for convenience of reference only, and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement.
Section 7.12 Invalid Provisions. If any provision of this Agreement
(other than Section 5.1 or Article VI of this Agreement or any part or provision
thereof) is held to be illegal, invalid, or unenforceable under any present or
future Law, and if the rights or obligations under this Agreement of the Company
on the one hand and Purchaser on the other hand will not be materially and
adversely affected thereby, (a) such provision shall be fully severable; (b)
this Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part hereof; (c) the remaining
provisions of this Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid, or unenforceable provision or by its
severance from this Agreement; and (d) in lieu of such illegal, invalid, or
unenforceable provision, there shall be added automatically as a part of this
Agreement a legal, valid, and enforceable provision as similar in terms to such
illegal, invalid, or unenforceable provision as may be possible.
Section 7.13 Brokers. The Company and its Subsidiaries hereby, jointly
and severally, agree to indemnify and hold harmless Purchaser against any
liability, claim, loss, damage or expense incurred by the Company or any of its
Subsidiaries relating to any fees or commissions owed to any broker, finder or
financial advisor as a result of actions taken by the Company or any of its
Subsidiaries. Purchaser hereby agrees to indemnify and hold harmless the Company
against any liability, claim, loss, damage or expense incurred by Purchaser
relating to any fees or commissions owed to any broker, finder or financial
advisor as a result of actions taken by Purchaser.
48
Section 7.14 Exculpation. Subject to Section 6.4(b) hereof, the Company
and its Subsidiaries hereby release, discharge, and acquit Purchaser and its
respective Affiliates, officers, directors, agents, attorneys, predecessors in
interest, and successors and assigns of and from any and all claims, demands,
liabilities, responsibilities, disputes, remedies, causes of action,
indebtedness, and obligations, of every type, for any action heretofore or
hereafter taken or omitted to be taken by any of them in any way relating to or
in connection with this Agreement, and the transactions contemplated hereby.
Section 7.15 Principles of Interpretation. Whenever used in this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, any noun or pronoun shall be deemed to include the plural as
well as the singular and to cover all genders. Unless otherwise specified, the
terms "hereof," "herein," "hereby" and similar terms refer to this Agreement as
a whole (including the exhibits and schedules hereto), the term "after the
Restructuring" and similar terms mean through the Closing, the term "including"
and similar terms mean including without limitation, and references herein to
Articles or Sections refer to Articles or Sections of this Agreement. This
Agreement is the product of negotiations among the parties hereto represented by
counsel and any rules of construction relating to interpretation against the
drafter of an agreement shall not apply to this Agreement and are expressly
waived.
ARTICLE VIII
DEFINITIONS
Section 8.1 Definitions. As used in this Agreement, unless the context
otherwise requires, capitalized terms used in this Agreement shall have the
meanings set forth below.
"AGREEMENT" shall have the meaning ascribed to such term in the
Preamble to this Agreement.
"ACCEPTED CONTRACTS" shall have the meaning ascribed to such term in
Section 4.10(a) of this Agreement.
"ACCREDITED INVESTOR" shall have the meaning ascribed thereto in
Regulation D under the Securities Act of 1933, as amended.
"ACQUISITION PROPOSAL" means any proposal or offer, including without
limitation a Company Plan, but not a proposal or offer by Purchaser or any of
its Affiliates, for (a) any merger, consolidation, share exchange, business
combination or other similar transaction with the Company or any of its
Subsidiaries, (b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of 10% or more of the assets and liabilities of the Company and its
Subsidiaries taken as a whole in a single transaction or series of transactions
(whether related or unrelated), (c) any tender offer or exchange offer for 20%
or more of the outstanding shares of the Company's common stock or any class of
the Company's debt securities or the filing of a registration statement under
the Securities Act of 1933, as amended, in connection therewith, (d) the
acquisition of beneficial ownership or a right to acquire beneficial ownership
of, or the formation of any "group" (as defined under Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended) which beneficially owns or has the
right to acquire beneficial ownership of
49
20% or more of the then outstanding shares of any class of the Company's common
stock or any class of the Company's debt securities or any class of any of the
Company's Subsidiaries' common stock or any class of any of the Company's
Subsidiaries' debt securities, or (e) any public announcement of a proposal,
plan or intention to do any of the foregoing or any agreement to engage in any
of the foregoing.
"AFFILIATE" shall mean with respect to any Person, any other person
who, directly or indirectly, controls, is controlled by, or is under common
control with that Person.
"AGREEMENT" shall have the meaning ascribed to such term in the
Preamble to this Agreement.
"ALTERNATIVE OFFER" shall have the meaning set forth in Exhibit A-2.
"APA" shall have the meaning ascribed to such term in Section (a)(i) of
Exhibit G.
"ANCILLARY DOCUMENTS" shall have the meaning ascribed to such term in
Section 1.6(b) of this Agreement.
"BANKRUPTCY CASES" shall mean the U.S. Bankruptcy Case and the Canadian
Restructuring, collectively.
"BANKRUPTCY CODE" shall have the meaning ascribed to such term in the
Recitals of this Agreement.
"BANKRUPTCY COURTS" shall mean the U.S. Bankruptcy Court and the
Canadian Court, collectively.
"BANKRUPTCY PLAN" shall have the meaning ascribed to such term in the
Recitals to this Agreement.
"BANKRUPTCY TERMINATION AMOUNT" shall have the meaning ascribed to such
term in Section 6.2(a) of this Agreement.
"BENEFIT PLAN" and "BENEFIT PLANS" shall have the meanings ascribed to
such terms in Section 2.15(a) of this Agreement.
"BID DEADLINE DATE" shall mean August 29, 2003, or such other date as
mutually agreed to by the Company and Purchaser.
"BIDDING PROCEDURES ORDER" shall have the meaning ascribed to such term
in Section 4.9(a) of this Agreement.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in New York City, New York are authorized or
required by Law to close.
50
"CANADIAN ASSETS" shall have the meaning ascribed to such term in
Section (a)(i) of Exhibit G.
"CANADIAN ASSETS PURCHASE PRICE" shall mean the purchase price for the
Canadian Assets.
"CANADIAN BENEFIT PLANS" means plans, arrangements, agreements,
programs, policies, practices or undertakings, whether oral or written, funded
or unfunded, registered or unregistered to which any of the Canadian
Subsidiaries is a party or by which any of the Canadian Subsidiaries is bound or
under which any of the Canadian Subsidiaries has any liability or contingent
liability, relating to:
(a) Canadian Pension Plans;
(b) plans in the nature of insurance plans, providing for
employment benefits relating to disability or wage or benefits
continuation during periods of absence from work (including,
short term disability, long term disability, and maternity and
parental leave), and any and all employment benefits relating
to hospitalization, healthcare, medical or dental treatments
or expenses, life insurance, accidental death and
dismemberment insurance, death or survivor's benefits and
supplementary employment insurance, in each case regardless of
whether or not such benefits are insured or self-insured; or
(c) plans in the nature of compensation plans, which means all
employment benefits relating to bonuses, incentive pay or
compensation, performance compensation, deferred compensation,
profit sharing or deferred profit sharing, share purchase,
share option, stock appreciation, phantom stock, vacation or
vacation pay, sick pay, severance or termination pay, employee
loans or separation from service benefits, or any other type
of arrangement providing for compensation or benefits
additional to base pay or salary;
with respect to any employees or former employees or directors or officers of a
Canadian Subsidiary (or any spouses, dependants, survivors or beneficiaries of
any such employees or former employees), excluding Canadian Statutory Plans.
"CANADIAN COURT" shall have the meaning ascribed to such term in
Exhibit G to this Agreement.
"CANADIAN PENSION PLANS" means all plans providing benefits relating to
retirement or retirement savings including pension plans, or supplemental
pensions, "registered retirement savings plans" (as defined in the Income Tax
Act (Canada)), "registered pension plans" (as defined in the Income Tax Act
(Canada)) and "retirement compensation arrangements" (as defined in the Income
Tax Act (Canada)).
"CANADIAN PROCEEDING" shall have the meaning ascribed to such term in
the Recitals to this Agreement.
51
"CANADIAN RECEIVER" shall have the meaning ascribed to such term in
Section (a)(i) of Exhibit G.
"CANADIAN RESTRUCTURING" shall mean the restructuring described in
Exhibit G.
"CANADIAN STATUTORY PLANS" means statutory benefit plans which any of
the Canadian Subsidiaries are required to comply with, including the Canada and
Quebec Pension Plans and plans administered pursuant to applicable Canadian
(provincial or federal) health tax, workers' compensation and unemployment
insurance legislation.
"CANADIAN SUBSIDIARIES" shall have the meaning ascribed to such term in
the Recitals to this Agreement.
"CANADIAN TRANSFER" shall have the meaning ascribed to such term in
Section (a)(i) of Exhibit G.
"CAPITAL LEASE" shall mean a lease that is required to be capitalized
for financial reporting purposes in accordance with GAAP.
"CAPITAL STOCK" of any Person shall means any and all shares,
interests, participations, or other equivalents (however designated) of, or
rights, warrants, or options to purchase, corporate stock or any other equity
interest (however designated) of or in such Person.
"CARVEOUT" shall have the meaning set forth in the U.S. Bankruptcy
Court's Order approving the Icahn DIP Facility.
"CCAA" shall mean the Companies' Creditors Arrangement Act (Canada).
"CCAA PROCEEDING" shall have the meaning ascribed to such term in
Section (a)(ii) of Exhibit G.
"CLOSING" shall have the meaning ascribed to such term in Section 1.5
of this Agreement.
"CLOSING DATE" shall have the meaning ascribed to such term in Section
1.5 of this Agreement.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and
all regulations promulgated thereunder.
"COLLECTIVE BARGAINING AGREEMENTS" shall have the meaning ascribed to
such term in Section 2.13(a) of this Agreement.
"COMMON STOCK" shall mean the newly-issued shares of common stock of
Reorganized PSC.
52
"COMPANY" shall have the meaning ascribed to such term in the Preamble
to this Agreement.
"COMPANY PLAN" shall mean an offer made by the Company in the form of a
competing plan of reorganization, other than the Bankruptcy Plan, provided,
however, that in order to qualify as a Company Plan, (i) such offer must
aggregate the highest and best bids the Company shall have received for
individual business units of the Company and its Subsidiaries, (ii) such covered
business units must collectively represent virtually all of the business and
assets of the Company and its Subsidiaries, other than the Excluded Assets and
(iii) and such offer must otherwise satisfy the requirements of a Superior
Proposal at the time when made, including, without limitation, the provisions of
Section 4.9(a), Exhibit A-2 and the Bidding Procedures Order.
"COMPETING BIDDER" and "Competing Bidders" shall mean the proponent or
proponents of a Competing Offer, including without limitation any parties making
bids that are aggregated in a Company Plan or combined in a Superior Proposal.
"COMPETING OFFER" shall be (a) an offer in the form of a competing plan
of reorganization by a party other than Purchaser or its Affiliates covering all
of the assets of the Company and its Subsidiaries, other than the Excluded
Assets, as contemplated by the Restructuring, and may include a Company Plan or
(b) a combination of the highest and best offers received by the Company for
purchases of individual business units of the Company and its Subsidiaries
pursuant to Bankruptcy Code Section 363, which offers need not be aggregated in
a Company Plan (but rather shall be consummated through Bankruptcy Code Section
363 sales), provided that such covered business units collectively represent
virtually all of the business and assets of the Company and is Subsidiaries.
"CONFIRMATION MOTIONS" shall have the meaning ascribed to such term in
Section 4.9(b) of this Agreement.
"CONFIRMATION ORDERS" shall have the meaning ascribed to such term in
Section 4.9(b) of this Agreement.
"CONSENT" shall mean any consent, confirmation or authorization of,
notice to, or designation, registration, declaration or filing with, any Person.
"CREDIT AGREEMENT" shall mean that Credit Agreement, dated March 31,
2000, among the Company, Canadian Imperial Bank of Commerce, as Administrative
Agent, and various lenders from time to time parties thereto.
"DETERMINATION DATE" shall mean the date, to be determined in
accordance with the Bidding Procedures Order, after the submission of all
Competing Offers and counter-offers and the expiration of the period to submit
the same, upon which the U.S. Debtors select a plan of reorganization, which
date shall not be later than September 5, 2003.
53
"DISCLOSURE SCHEDULE" shall have the meaning ascribed to such term in
the first introductory paragraph to Article II.
"DISCLOSURE STATEMENT" shall have the meaning ascribed to such term in
Section 4.9(b) of this Agreement.
"EMPLOYEE WELFARE BENEFIT PLAN" shall have the meaning ascribed to such
term in Section 2.15(a) of this Agreement.
"ENVIRONMENTAL CLAIM" shall have the meaning ascribed to such term in
Section 2.11(e) of this Agreement.
"ENVIRONMENTAL LAWS" shall have the meaning ascribed to such term in
Section 2.11(e) of this Agreement.
"ENVIRONMENTAL LIABILITY SCHEDULE" shall have the meaning ascribed to
such term in Section 5.1(k) of this Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA AFFILIATE" shall mean any entity (whether or not incorporated)
other than the Company that, together with the Company is a member of (i) a
controlled group of corporations within the meaning of Section 414(b) of the
Code; (ii) a group of trades or businesses under common control within the
meaning of Section 414(c) of the Code; or (iii) an affiliated service group
within the meaning of Section 414(m) of the Code.
"ESCROW AGENT" shall mean Fleet National Bank, a national banking
association created and existing under the laws of the United State of America.
"EVENT OF DEFAULT" as it relates to the Icahn Dip Facility shall have
the meaning set forth in the loan agreement for the Icahn Dip Facility.
"EXCLUDED ASSETS" shall mean the capital stock and assets of the
Excluded Subsidiaries and any other assets, if any, to be excluded from the
assets of Reorganized PSC and its Subsidiaries as contemplated by the
Restructuring.
"EXCLUDED ASSET SCHEDULE" shall have the meaning ascribed to such term
in Section 5.1(k) of this Agreement.
"EXCLUDED SUBSIDIARIES" shall mean RMF Industrial Contracting, Inc.,
Total Refractory Systems, Inc. and Delta Maintenance, Inc.; provided, however
that no assets or business of the Company or any of its other subsidiaries shall
have been or be transferred to any such Excluded Subsidiaries on or after
December 31, 2002. There shall be no Excluded Subsidiaries other than those set
forth above, except as permitted or designated by Purchaser, in its sole
discretion.
54
"EXIT COSTS" means as of the Effective Date the aggregate of all (i)
Administrative Claims, cure costs for all Accepted Contracts, and Priority Tax
Claims (including, without limitation, any of the foregoing which may relate to
the Canadian Restructuring) and (ii) other costs incurred in connection with the
Restructuring (including without limitation any and all Tax liabilities with
respect thereto, but shall exclude Taxes resulting from application of Section
956 of the Code); provided however, that (A) trade payables (other than
professional fees incurred in connection with the Bankruptcy Plan or the
Restructuring), (B) payroll (other than retention payments) and (C) accrued
insurance expenses, shall each be excluded from both clauses (i) and (ii) above
to the extent such costs are incurred in the ordinary course of business and are
not yet due and payable.
"EXIT COST THRESHOLD" shall mean the lesser of (a) $40 million less all
amounts of principal, interest and other costs then outstanding under the Icahn
DIP facility or (b) $25 million (in which case the Exit Cost Threshold shall
mean $15 million as to Exit Costs incurred in connection with the U.S. Plan and
$10 million as to Exit Costs incurred in connection with the Canadian
Restructuring).
"EXIT LOAN FACILITY" shall have the meaning ascribed to such term in
Section 1.1 to this Agreement.
"EXIT LOAN FACILITY AGREEMENTS" shall mean the Agreement or Agreements,
dated as of the Closing Date, pursuant to which the Purchaser and the other
Investors extend the Exit Loan Facility to Reorganized PSC and its Subsidiaries.
"EXIT LOAN COMMITMENT SHARES" shall have the meaning ascribed to such
term in Section 1.3 to this Agreement.
"FACILITIES" shall mean any real property, leaseholds or other
interests currently or formerly owned or operated by the Company or any of its
Subsidiaries and any buildings, plants, structures or equipment (including motor
vehicles) currently or formerly owned or operated by the Company or any of its
Subsidiaries.
"FINAL ORDER" shall mean an order or judgment the operation or effect
of which is not stayed, 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
motion for rehearing or reargument has been taken or been made and is pending
for argument.
"FOREIGN SUBSIDIARIES" shall mean all of the Subsidiaries of the
Company that are domiciled outside of the United States.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States, consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean any supernational, national,
federal, state, local or foreign government or any subdivision, agency,
instrumentality, authority, department,
55
commission, board or bureau thereof or any federal, state, local or foreign
court, tribunal or arbitrator (including, without limitation, the Bankruptcy
Courts).
"HSR ACT" shall mean Xxxx-Xxxxx-Xxxxxx Act of 1976, as amended.
"ICAHN DIP FACILITY" shall mean the Debtor-In-Possession line of credit
financing facility, as it may be amended from time to time, provided to the
Company by an Affiliate of Xxxx Xxxxx in connection with the Restructuring
contemplated hereby.
"ICAHN DIP APPROVAL ORDER" shall have the meaning set forth in Section
4.9(a).
"IDENTIFIED SUPERIOR PROPOSAL" shall have the meaning set forth in
Exhibit A-2.
"IMPROVEMENTS" shall have the meaning ascribed to such term in Section
2.17(b) of this Agreement.
"INDEBTEDNESS" shall mean, as to any Person and without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes, or other similar instruments
and all reimbursement or other obligations of such Person in respect of letters
of credit, bankers acceptances, interest rate swaps, or other financial
products, (c) all obligations of such Person under Capital Leases, (d) all
obligations or liabilities of the types described in clauses (a) through (c)
above of others secured by a Lien on any property or asset of such Person,
irrespective of whether such obligation or liability is assumed, and (e) any
obligation of such Person guaranteeing or intended to guarantee (whether
guaranteed, endorsed, co-made, discounted, or sold with recourse to such Person)
any obligation or liability of the types described in clauses (a) through (c)
above of any other Person; provided, however, that Indebtedness shall not
include trade payables and accrued expenses, in each case arising in the
ordinary course of business or any reimbursement obligations of such Person
under any performance bond issued for the account of such Person.
"INTELLECTUAL PROPERTY" shall mean (i) all inventions (whether
patentable or not patentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, divisions, continuations,
continuations-in-part, revisions, renewals, extensions, and reexaminations
thereof, (ii) all registered and unregistered trademarks, service marks, trade
dress, logos, trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations and renewals in
connection therewith, (iii) all works of authorship, including, without
limitation, all copyrightable works, all copyrights, and all applications,
registrations and renewals in connection therewith, and all moral rights, (iv)
all databases, data compilations and data collections, (v) all trade secrets and
confidential information (including, without limitation, ideas, research and
development, know-how, processes, methods, techniques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information, and business, technical and marketing plans and proposals), (vi)
all domain names, web addresses and websites, (vii) all computer software,
source code and object code, whether embodied in software, firmware or otherwise
(including related data and documentation), (viii) all other
56
intellectual property and proprietary rights, and (ix) all copies and tangible
embodiments of all of the foregoing (i) through (ix) in any form or medium.
"INVESTMENT" shall have the meaning ascribed to such term in Section
1.1 to this Agreement.
"INVESTORS" shall have the meaning ascribed to such term in Section 1.1
to this Agreement.
"LAWS" shall mean all federal, state, provincial, territorial, local or
foreign laws, including common law, orders, writs, injunctions, decrees, codes,
guidelines, policies, ordinances, awards, stipulations, judgments, directions,
requirements, statutes, judicial or administrative doctrines, rules or
regulations enacted, promulgated, issued or entered by a Governmental Authority,
including without limitation, the Bankruptcy Code, the Code and any
Environmental Laws.
"LEASED REAL ESTATE" shall have the meaning ascribed to such term in
Section 2.17(a) of this Agreement.
"LIABILITIES" shall mean any and all direct and indirect liabilities,
debts and obligations of every kind, nature and description, whether accrued,
absolute, contingent, unliquidated or otherwise, whether known or unknown,
whether due or to become due and regardless of when asserted.
"LIENS" shall mean all title defects or objections, mortgages, liens,
claims, charges, pledges, or other encumbrances of any nature whatsoever,
including without limitation licenses, leases, chattel or other mortgages,
collateral security arrangements, hypothecs, hypothecations, trusts, deemed
trusts, pledges, title imperfections, defect or objection liens, security
interests, conditional and installment sales agreements, easements,
encroachments or restrictions, of any kind and other title or interest retention
arrangements, reservations or limitations of any nature.
"LITIGATION" shall have the meaning ascribed to such term in Section
2.7 of this Agreement.
"MATERIAL ADVERSE EFFECT" shall mean (a) a material adverse effect on
(x) the business, results of operations, condition (financial or otherwise) or
prospects of the business operated by the Company and its Subsidiaries taken as
a whole or (y) the Shares, or (b) a material adverse effect on (x) the
transactions contemplated by this Agreement, (y) the legality, validity or
enforceability of this Agreement and the agreements and instruments to be
entered into in connection herewith, or the realization of the rights and
remedies thereunder, or (z) the ability of the Company to perform its
obligations under this Agreement; provided, however that with respect to Section
6.3(d), "Material Adverse Effect" shall mean a material adverse effect on (x)
the transactions contemplated by this Agreement, (y) the legality, validity or
enforceability of this Agreement and the agreements and instruments to be
entered into in connection herewith, or the realization of the rights and
remedies thereunder, or (z) the ability of Purchaser to perform its obligations
under this Agreement.
57
"MATERIAL EXECUTORY CONTRACTS" shall have the meaning ascribed to such
term in Section 4.10(a) of this Agreement.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall have the meaning ascribed to
such term in Section 2.11(e) of this Agreement.
"MAXIMUM PERMITTED MULTIEMPLOYER WITHDRAWAL LIABILITY AMOUNT" shall
mean $10,000,000; provided, however, that such amount shall exclude
Multiemployer Withdrawal Liability (i) for work performed by employees in the
building and construction industry under a multiemployer plan that primarily
covers employees in the building and construction industry; (ii) for which any
multiemployer plan has adopted the building and construction industry exception
as set forth in ERISA Section 4203(b); (iii) that relate solely to plans for
which Excluded Subsidiaries currently are the sole participating Subsidiaries,
but only to the extent that withdrawal liability of the Company and its
Subsidiaries for such plans will be fully discharged pursuant to the Bankruptcy
Plan, or (iv) any withdrawal liability which has been triggered as a result of a
withdrawal prior to the Closing and will be fully discharged pursuant to the
Bankruptcy Plan.
"MAXIMUM PURCHASER EXPENSES" shall mean $1,000,000.
"MULTIEMPLOYER WITHDRAWAL LIABILITY" shall have the meaning ascribed to
such term in Section 4.8(c) of this Agreement.
"NEW CANADIAN SUBSIDIARIES" shall have the meaning ascribed to such
term in Section (a)(i) of Exhibit G.
"NOL" shall have the meaning ascribed to such term in Section 2.12(g)
of this Agreement.
"NON-U.S. PLANS" shall have the meaning ascribed to such term in
Section 2.15(i) of this Agreement.
"OUTSIDE CLOSING DATE" shall mean November 15, 2003, provided that
Purchaser may, by written notice to the Company, extend the Outside Closing Date
to such later date as Purchaser in its sole discretion may determine but in all
events within 30 days after satisfaction or waiver of all conditions set forth
in Section 7.1 and Section 7.2.
"OWNED REAL ESTATE" shall have the meaning ascribed to such term in
Section 2.17(a) of this Agreement.
"PARTY " and "PARTIES" shall have the meanings ascribed to such terms
in the Preamble to this Agreement.
"PAYMENT DATE" shall have the meaning set forth in Exhibit A-2.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
58
"PERFORMANCE ESCROW AGREEMENT" shall have the meaning ascribed to such
term in Section 1.2 of this Agreement.
"PERMITS" shall mean all permits, licenses, confirmations, franchises,
notices and authorizations issued by any Governmental Authority that relate to
or otherwise are used or are necessary in connection with the Company's business
or any of its Subsidiaries' businesses.
"PERSON" shall mean any individual, general partnership, limited
partnership, limited liability company, joint venture, corporation, trust,
unincorporated organization, Governmental Authority or other entity.
"PETITION DATE" shall have the meaning ascribed to such term in the
Recitals to this Agreement.
"PIK NOTES" shall have the meaning ascribed to such term in Exhibit A
to this Agreement.
"PIK/TERM CLAIMS" shall mean all claims of the PIK/Term Creditors
arising under or in connection with the Credit Agreement, whether secured or
unsecured.
"PIK/TERM CREDITORS" shall mean the lenders party to the Credit
Agreement as of the Closing Date.
"PIK/TERM SHARES" shall have the meaning ascribed to such term in
Section 1.4 to this Agreement.
"POST-CLOSING PERMITTED LIENS" shall mean any Liens permitted pursuant
to the Confirmation Orders.
"PURCHASE PRICE" shall have the meaning ascribed to such term in
Section 1.1 of this Agreement.
"PURCHASE SHARES" shall have the meaning ascribed to such term in
Section 1.1 of this Agreement.
"PURCHASE SHARES PURCHASE PRICE" shall have the meaning ascribed to
such term in Section 1.1 of this Agreement.
"PURCHASER" shall have the meaning ascribed to such term in the
Preamble to this Agreement.
"PURCHASER EXPENSES" shall mean Purchaser's reasonable out of pocket
expenses (including but not limited to reasonable financial advisor's account's
or attorney's fees and expenses and filing fees, including without limitation
those paid in connection with filings under the HSR Act) incurred in connection
with the negotiation and/or performance of this Agreement
59
and its due diligence investigation of the Company in connection with this
Agreement; provided, however, that Purchaser Expenses reimbursable under this
Agreement shall in no case exceed in aggregate amount the Maximum Purchaser
Expenses.
"QUALIFIED PIK/TERM CREDITORS" shall mean those PIK/Term Creditors that
are Accredited Investors.
"REAL ESTATE" shall have the meaning ascribed to such term in Section
2.17(a) of this Agreement.
"REGISTRATION RIGHTS AGREEMENT" shall mean the registration rights
agreement in form and substance reasonably satisfactory to the Purchaser
regarding the registration of the Common Stock under the Securities Act.
"REJECTED CONTRACTS" shall have the ascribed to such term in Section
4.10(a) of this Agreement.
"REORGANIZED PSC" shall have the meaning ascribed to such term in the
Recitals to this Agreement.
"REORGANIZED PSC MANAGEMENT INCENTIVE PLAN" shall mean a management
stock incentive plan adopted by Reorganized PSC as of the Closing Date in a form
acceptable to the Purchaser in its reasonable discretion, which shall provide
for grants of options and other stock-based awards to qualified employees,
directors and consultants of Reorganized PSC and its Subsidiaries pursuant to
which up to seven percent (7%) of the Common Stock is reserved.
"RESTRUCTURING" shall have the meaning ascribed to such term in Section
1.1 of this Agreement.
"SALE PROCESS" shall have the meaning ascribed to such term in Exhibit
G to this Agreement.
"SANCTION ORDER" shall have the meaning ascribed to such term in
Section 4.9(b) of this Agreement.
"SCHEDULE" and "SCHEDULES" shall have the meanings ascribed to such
terms in the second introductory paragraph to Article II.
"SENIOR LENDERS" shall mean the lenders party to the Senior Loan
Agreement as of the Closing Date.
"SENIOR LOAN AGREEMENT" shall mean that certain Loan Agreement dated as
of March 31, 2000, as amended, by and among the Company, its Subsidiaries
signatories thereto, Foothill Capital Corporation, as Administrative Agent, and
certain lenders from time to time party thereto.
60
"SHARES" shall mean the Purchase Shares, the PIK/Term Shares and the
Exit Loan Commitment Shares, collectively.
"SUBSIDIARY" shall mean, with respect to a specified Person, any other
Person of which at least 50% of the outstanding shares, limited liability
company interests or other equity interests having ordinary voting power for the
election of directors or comparable governing body of such Person are owned,
directly or indirectly, by such specified Person. Notwithstanding anything to
the contrary in the foregoing, the term "Subsidiary", as it relates to the
Company or any of its Subsidiaries, shall not include the Excluded Subsidiaries.
"SUPERIOR PROPOSAL" shall mean a Competing Offer or combination of
Competing Offers that satisfies the competing plan requirements as set forth in
Exhibit A-2 and the Bidding Procedures Order, and, if in the form of a plan or
reorganization, provides for compliance with the Timetable for Restructuring as
set forth in Exhibit B-1, which the Board of Directors of the Company has
determined in good faith, if accepted, is reasonably likely to be consummated
taking into account all legal, financial, regulatory and other aspects of the
proposal and the person making the proposal, and that the Board of Directors of
the Company believes in good faith, after consultation with an outside financial
advisor would, if consummated, result in a transaction more favorable from a
financial point of view than the transaction proposed by this Agreement.
"TAX" and "TAXES" shall mean all federal, state, local, foreign or
provincial income, payroll, employee withholding, unemployment insurance, social
security, sales, goods and services, harmonized sales, use, service, service
use, leasing, leasing use, excise, franchise, gross receipts, value added,
alternative or add-on minimum, estimated, occupation, real and personal
property, stamp, transfer, workers' compensation, severance, windfall profits,
withholding, environmental (including taxes under Section 59A(1) of the Code),
all surtax or other tax of the same or of a similar nature, including any
interest, penalty, or addition thereto, whether disputed or not.
"TAX RETURN" shall mean any return, declaration, report, claim for
refund, or information return, statement or other document (whether in tangible,
electronic or other form)relating to Taxes or any amendment thereto, and
including any schedule or attachment thereto.
"TERMINATION AMOUNT" shall have the meaning ascribed to such term in
Section 6.1(c) of this Agreement.
"TRANSACTION" means all of the factual elements relevant to the
expected tax treatment of any investment, entity, plan or arrangement
contemplated pursuant to this Agreement, and includes any series of steps
carried out as part of a plan.
"U.S. BANKRUPTCY CASE" shall have the meaning ascribed to such term in
the Recitals to this Agreement.
61
"U.S. BANKRUPTCY COURT" shall have the meaning ascribed to such term in
the Recitals of this Agreement.
"U.S. PLAN" shall have the meaning ascribed to such term in the
Recitals to this Agreement.
"U.S. CONFIRMATION ORDER" shall have the meaning ascribed to such term
in Section 4.9(b) of this Agreement.
"U.S. DEBTORS" shall have the meaning ascribed to such term in the
Recitals to this Agreement.
"U.S. SUBSIDIARIES" shall mean all of the Subsidiaries of the Company
or, after the consummation of the Restructuring, all of the Subsidiaries of
Reorganized PSC, that are domiciled in the United States.
Section 8.2 Knowledge. For the purposes of this Agreement, unless
expressly provided otherwise, any reference to "knowledge of the Company" or
"knowledge of the Company or any of its Subsidiaries" or "knowledge of any
Subsidiary" or any similar expression shall be deemed to mean and include
"knowledge of any and all of the Company and its Subsidiaries in each case after
making a reasonable inquiry."
[SIGNATURE PAGE FOLLOWS]
62
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
HIGH RIVER LIMITED PARTNERSHIP
By: Barberry Corp., its General Partner
By: /s/ XXXXXX X. XXXXXXX
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
XXXXXX SERVICES CORPORATION, a
Delaware corporation, debtor-in-possession
By: ____________________________
Xxxxxxx X. Xxxxxxx,
Senior Vice President and CFO
PSC METALS, INC.,
an Ohio corporation, debtor-in-possession
By: ____________________________
Xxxxxxx X. Xxxxxxx
Vice President and Treasurer
Of each of the foregoing companies
CAPPCO TUBULAR PRODUCTS USA, INC.,
a Georgia corporation, debtor-in-possession
By: ____________________________
Xxxxxxx X. Xxxxxxx
Vice President
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
HIGH RIVER LIMITED PARTNERSHIP
By:
----------------------------
Name:
---------------------------
Title:
--------------------------
XXXXXX SERVICES CORPORATION, a
Delaware corporation, debtor-in-possession
By: /s/ XXXXXXX X. XXXXXXX
----------------------------
Xxxxxxx X. Xxxxxxx,
Senior Vice President and CFO
PSC METALS, INC.,
an Ohio corporation, debtor-in-possession
By: /s/ XXXXXXX X. XXXXXXX
----------------------------
Xxxxxxx X. Xxxxxxx
Vice President and Treasurer
Of each of the foregoing companies
CAPPCO TUBULAR PRODUCTS USA, INC.,
a Georgia corporation, debtor-in-possession
By: /s/ XXXXXXX X. XXXXXXX
----------------------------
Xxxxxxx X. Xxxxxxx
Vice President
S-1
21st CENTURY ENVIRONMENTAL
MANAGEMENT, INC. OF NEVADA, a
Nevada corporation, debtor-in-possession
21st CENTURY ENVIRONMENTAL
MANAGEMENT, INC. OF RHODE
ISLAND, a Rhode Island corporation,
debtor-in-possession
ALLWASTE TANK CLEANING, INC.,
a Georgia corporation, debtor-in-possession
ALLWORTH, INC., an Alabama
corporation, debtor-in-possession
BURLINGTON ENVIRONMENTAL
INC., a Washington corporation, debtor-in-
possession
CHEMICAL RECLAMATION
SERVICES, INC., a Texas corporation,
debtor-in-possession
CHEMICAL POLLUTION CONTROL,
INC. OF FLORIDA - A 21st CENTURY
ENVIRONMENTAL MANAGEMENT
COMPANY, a Florida corporation, debtor-
in-possession
CHEMICAL POLLUTION CONTROL,
INC. OF NEW YORK - A 21st
CENTURY ENVIRONMENTAL
MANAGEMENT COMPANY, a New
York corporation, debtor-in-possession
COUSINS WASTE CONTROL
CORPORATION, an Ohio corporation,
debtor-in-possession
CYANOKEM INC., an Ohio corporation,
debtor-in-possession
LUNTZ ACQUISITION (DELAWARE)
CORPORATION, a Michigan corporation,
debtor-in-possession
By: /s/ XXXXX X. XXXXXXX
----------------------------
Xxxxx X. Xxxxxxx
President of each of the
foregoing companies
S-2
NORTHLAND ENVIRONMENTAL,
INC., a Delaware corporation, debtor-in-
possession
NORTRU, INC., a Michigan corporation,
debtor-in-possession
XXXXXX ENVIRONMENTAL SERVICES
CORPORATION, a Missouri corporation,
debtor-in-possession
XXXXXX TRANSPORTATION AND
REMEDIATION, INC., a California
corporation, debtor-in-possession
XXXXXX RECLAMATION SERVICES,
HOUSTON, INC., a Texas corporation,
debtor-in-possession
PSC ENVIRONMENTAL SERVICES,
INC., a Delaware corporation, debtor-in-
possession
PSC INDUSTRIAL OUTSOURCING,
INC., a Delaware corporation, debtor-in-
possession
PSC INDUSTRIAL SERVICES, INC., a
Delaware corporation, debtor-in-possession
By: /s/ XXXXX X. XXXXXXX
----------------------------
Xxxxx X. Xxxxxxx
President of each of the
foregoing companies
S-3
REPUBLIC ENVIRONMENTAL
SYSTEMS (PENNSYLVANIA), INC., a
Pennsylvania corporation, debtor-in-
possession
REPUBLIC ENVIRONMENTAL
SYSTEMS (TRANSPORTATION
GROUP), INC., a Pennsylvania
corporation, debtor-in-possession
RESOURCE RECOVERY
CORPORATION, a Missouri
corporation, debtor-in-possession
RHO-CHEM CORPORATION, a
California corporation, debtor-in-
possession
SOLVENT RECOVERY CORPORATION,
a Missouri corporation, debtor-in-
possession
THERMALKEM, INC., a Delaware
corporation, debtor-in-possession
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Xxxxx X. Xxxxxxx
President of each of the foregoing
companies
S-4
ACE/ALLWASTE ENVIRONMENTAL
SERVICES OF INDIANA, INC., an
Illinois corporation, debtor-in-possession
INTERNATIONAL CATALYST, INC., a
Nevada corporation, debtor-in-possession
JESCO INDUSTRIAL SERVICE, INC.,
a Kentucky corporation, debtor-in-
possession
XXXXXX SERVICES/NORTH
CENTRAL, INC., an Iowa corporation,
debtor-in-possession
PSC RECOVERY SYSTEMS, INC., a
Georgia corporation, debtor-in-possession
RMF GLOBAL, INC., an Ohio
corporation, debtor-in-possession
By: /s/ XXXXXXX X. XXXX
----------------------------
Xxxxxxx X. Xxxx
Vice President of each of the
foregoing companies
S-5
XXXXXX SERVICES INC., an Ontario corporation
XXXXXX ANALYTICAL SERVICES INC., an Ontario
corporation
By: /s/ XXXXXXX X. XXXXXXX
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President of each of
the foregoing companies
ALLIES STAFFING LTD., an Ontario corporation
By:
----------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
XXXXXXX INTERNATIONAL DEVELOPMENT INC., a
Barbados corporation
By: /s/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
S-6
XXXXXX SERVICES INC., an Ontario corporation
XXXXXX ANALYTICAL SERVICES INC., an Ontario
corporation
By:
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President of each of
the foregoing companies
ALLIES STAFFING LTD., an Ontario corporation
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
XXXXXXX INTERNATIONAL DEVELOPMENT INC., a
Barbados corporation
By:
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
S-6
EXHIBIT A
TERMS OF RESTRUCTURING
The Restructuring, which shall be in form and substance reasonably satisfactory
to the Purchaser, in its sole discretion, shall include the following terms:
1. The Company will continue as Reorganized PSC and unless the
Parties otherwise agree or as otherwise provided below, each
of the Company's U.S. Subsidiaries will continue as
Subsidiaries of Reorganized PSC.
2. The assets and business of the Company's Canadian Subsidiaries
will be reorganized pursuant to the Canadian Restructuring as
more fully described in Exhibit G to this Agreement.
3. Any and all assets, properties and other assets (whether, real
or personal, tangible or intangible) of the Company and any of
its Subsidiaries which the Purchaser identifies as Excluded
Assets, shall be excluded from the assets of Reorganized PSC
and its Subsidiaries, including without limitation by way of
abandonment, as further contemplated by Section 5.1(k) of the
Agreement, sale(s) approved by Purchaser in its sole
discretion, and/or by way of utilizing one or more plans of
reorganization to effect such exclusion, if necessary or
desirable in Purchaser's sole discretion, such that,
notwithstanding the method(s) employed, upon consummation of
the Restructuring contemplated hereby, the excluded assets and
any liabilities associated therewith shall be excluded from
the assets and liabilities of Reorganized PSC and its
Subsidiaries.
4. As of the Closing, there shall be no capital stock or rights
to acquire capital stock outstanding other than the Shares and
such awards, if any, that may be granted under the Reorganized
PSC Management Incentive Plan.
5. The Company, its Subsidiaries and Purchaser intend (and will
take action consistent with such intent) that the
Restructuring, assuming an ownership change of the Company,
qualifies under Section 382(l)(5) of the Code.
6. If the Purchaser, pursuant to Section 4.14 hereof, elects to
cause the Canadian Transfer to occur, the Canadian Assets
Purchase Price shall be allocated from and funded by a portion
of the Investment and distributed, together with any other
distributions by the Company and its Subsidiaries, consistent
with the table set forth below.
7. The following classes of creditors of the U.S. Debtors shall
receive the following treatment:
CLASS TREATMENT
------------------------------------------------------------------------------------------------------------------------------
Administrative Claims and Priority Tax Administrative and Priority Tax Claims paid in full.
Exhibit A - Page 1
------------------------------------------------------------------------------------------------------------------------------
Claims are not classified Priority Tax Claims paid over 6 years from date of assessment.
Debtors are working-up estimate of cure costs
and related items
------------------------------------------------------------------------------------------------------------------------------
1. Senior Secured (Agent: Foothill) Paid in full on Effective Date, except for $3,000,000 senior
may have separate classes for Tranches A and B secured 1 yr. term loan, straight-line amortization, with a
cash-pay interest rate, and a PIK rate, and Reorganized PSC
can prepay with PIK interest discount.
------------------------------------------------------------------------------------------------------------------------------
2. DIP Paid in full on Effective Date.
------------------------------------------------------------------------------------------------------------------------------
3. PIK/Term As more fully described below, (a) PIK/Term Creditors may elect
(junior secured) to either: (i) receive their pro rata allocation of the PIK/Term
Shares or (ii) receive a pro-rata allocation of $30,000,000
non-transferable subordinated junior secured PIK note(s) and (b)
Qualified PIK/Term Creditors shall have the additional right to
participate in the Investment.
------------------------------------------------------------------------------------------------------------------------------
PIK/Term Shares The PIK/Term Shares, consisting of 75% of the shares of Fully
Diluted Common Stock outstanding at the Closing, shall be
allocated pro rata among the PIK/Term Claims which an electing
PIK/Tem Creditor designates to participate in the PIK/Term Share
distribution, based upon the proportion of the principal amount
of the PIK/Term Claims designated by each such electing PIK/Term
Claimholder to the total principal amounts of the PIK/Term Claims
designated by all such electing PIK/Term Claimholders.
------------------------------------------------------------------------------------------------------------------------------
PIK Note Each PIK/Term Creditor that does not elect to participate in the
PIK/Term Share distribution shall receive a pro-rata share of
$30 million non-transferable fully subordinated junior secured 7
yr., interest rate equal to applicable mid-term federal rate, PIK
note(s) (the "PIK Notes") as set forth below in proportion to the
principal amount of the PIK/Term Claims held by each such
nonelecting PIK/Term Claimholder to the total principal amounts
of the PIK/Term Claims held by all PIK/Term Claimholders. Any
PIK/Term Claims that are not designated to participate in the
PIK/Term Share distribution by an electing PIK/Term Creditor
shall be treated as held by a nonelecting PIK/Term Creditor.
The participation by a nonelecting PIK/Term Creditor shall be
determined by multiplying $30 million by the
------------------------------------------------------------------------------------------------------------------------------
Exhibit A - Page 2
------------------------------------------------------------------------------------------------------------------------------
quotient equal to the Prepetition principal amount of the PIK/Term
Claim held by such nonelecting PIK/Term Claimholder divided by the
total amount of principal due under all PIK/Term Claims, such that
if the holders of only 10% of the PIK Term Claims elect to receive
the PIK Notes, only $3.0 million of such notes will be issued.
------------------------------------------------------------------------------------------------------------------------------
Participation Right Prior to the Closing, each Qualified PIK/Term Creditor will have
the right to participate in up to its pro-rata share of the
Investment (which consists of $10 million for the purchase of 20%
of the outstanding capital stock of the Company and an Exit Loan
facility of $160 million). The maximum participation by a PIK
Term Creditor shall be determined by dividing the principal
amount of the PIK/Term Claim held by such Person by the total
amount of principal due under all PIK/Term Claims. A PIK/Term
Creditor's participation in the Purchase Shares and the Exit Loan
must be made in a proportionate basis, such that a person
acquiring $1 million (or 10%) of the Purchase Shares must
participate in $16 million (or 10%) of the Exit Loan.
The Purchaser may require PIK Term Creditors electing to
participate in the Investment to provide cash collateral, up to
their committed amount, to secure their obligation to participate
in the Exit Loan.
Purchaser and its Affiliates that hold PIK/Term Claims will have
the right and obligation to purchase any Purchase Shares not
purchased by the other PIK/Term Creditors.
------------------------------------------------------------------------------------------------------------------------------
4. Subordinated Debt $ 0
------------------------------------------------------------------------------------------------------------------------------
5. General Unsecured (Trade) Claims $1,500,000, if class accepts Plan, from Icahn entity's dividend
on Senior Secured claim in exchange for general release of Icahn
and affiliates
------------------------------------------------------------------------------------------------------------------------------
6. Equity $ 0
------------------------------------------------------------------------------------------------------------------------------
8. The Purchaser reserves the right, in its sole discretion, with the
consent of the Company, which will not be unreasonably withheld or delayed, to
amend or otherwise modify the terms
Exhibit A - Page 3
and/or structure of the Restructuring as described herein in order to facilitate
finalizing and effecting the Bankruptcy Plan and obtaining the Confirmation
Orders, provided, however, that (i) any such modification shall not result in a
reduction in the amount of Purchaser's committed Investment, and (ii) any such
modification shall not result in an increase of the aggregate consideration to
be received by Purchaser in connection with its Investment, as contemplated by
Article I of this Agreement.
Exhibit A - Page 4
EXHIBIT A-1
TERMS OF EXIT LOAN FACILITY
The Exit Loan Facility will be in the principal amount of $160 million and be
secured by all the assets of Reorganized PSC and its Subsidiaries.
Letter of Credit portion of exit loan: 1.75% interest.
Non-LOC portion of exit loan: 7 year term, with an interest rate equal to the
applicable federal rate (currently 3.1%).
The Exit Loan Facility will contain such other terms and conditions, including
representations, warranties and covenants, as are reasonably acceptable to
Purchaser.
Exhibit A-1 - Page 1
EXHIBIT A-2
COMPETING PLAN REQUIREMENTS
For the purposes of this Agreement, in order for a Competing Offer to be
considered a Superior Proposal, such Competing Offer must satisfy all of the
following conditions in addition to such other conditions as may be set forth in
the Bidding Procedures Order or elsewhere in this Agreement:
(a) The Company shall provide the Purchaser with all information relating
to the terms and conditions of a Competing Offer for which the Company has
received a $6.0 million xxxxxxx money deposit as contemplated below, including
without limitation all documents representing such offer provided to the Company
or any of its Subsidiaries or their respective representatives or advisors.
(b) Upon the determination that a Competing Offer or combination of
Competing Offers would be a Superior Proposal (the "Identified Superior
Proposal") to the Restructuring contemplated hereby (or any revised offer made
by Purchaser), the Company shall promptly notify Purchaser of such
determination, provide Purchaser with the reasons why the Identified Superior
Proposal would be considered to be a Superior Proposal (including, without
limitation, the value of the Restructuring as contemplated hereby, the value of
the Identified Superior Proposal, the minimum value as to which the
Restructuring must be increased to be a higher and better offer than the
Identified Superior Proposal pursuant to the Bidding Procedures and/or any other
modifications (and the value placed on each such modification) that could be
made to the Restructuring contemplated hereby to make the Restructuring a higher
and better offer than the Identified Superior Proposal, and provide Purchaser
the opportunity to provide a revised offer that would be a higher and better
offer as so described, to the Identified Superior Proposal. Purchaser shall
thereafter have three Business Days to submit a higher and better offer to the
Identified Superior Proposal. If Purchaser notifies the Company that it shall
not submit a revised offer or does not otherwise submit a higher and better
offer to the Identified Superior Proposal within the three Business Day period,
notwithstanding anything in this Agreement to the contrary, (i) Purchaser may
terminate this Agreement (which termination shall be deemed to be a termination
pursuant to Section 6.3(b)(i)), whether or not the Identified Superior Proposal
is ultimately approved by the U.S. Bankruptcy Court, (ii) the Company shall be
obligated to accept the Identified Superior Proposal and the Company and the
Competing Bidders shall be obligated to use all reasonable efforts to seek
approval of such Identified Superior Proposal by the U.S. Bankruptcy Court in
accordance with the time table set forth herein and the Bidding Procedures Order
(and failure of the Competing Bidders to comply with their obligation to so seek
approval shall result in a forfeiture of their $6.0 million deposit (see
below)), and (iii) upon such U.S. Bankruptcy Court approval of the Identified
Superior Proposal the Company shall be obligated to pay the Bankruptcy
Termination Amount or Termination Amount (as applicable, but not both) as
provided below. If (i) the Company does not thereafter immediately accept the
Identified Superior Proposal or (ii) the Company defaults on its obligation to
pay the Bankruptcy Termination Amount or Termination Amount, as applicable, in
each case time being of the essence the Company shall proceed to commence a
liquidation of its assets under Section 363 of
Exhibit A-2 - Page 1
the Bankruptcy Code as provided in the Icahn DIP Facility. In any circumstance
where the Company seeks to select a Competing Offer, other than the Identified
Superior Proposal (an "Alternative Offer"), the Purchaser shall again have the
right to revive or revise its offer to propose a higher and better offer to the
Alternative Offer in accordance with the procedures set forth above, regardless
of whether Purchaser has given notice of termination of this Agreement.
(c) [intentionally omitted]
(d) Notwithstanding anything to the contrary in this Agreement or the
Bidding Procedures Order, and notwithstanding any other claims or lien rights or
priorities whatsoever, no Identified Superior Proposal may be accepted by the
Company, and no such acceptance shall be valid, unless (i) the Company has
sufficient resources to pay the Bankruptcy Termination Amount or the Termination
Amount (as applicable) within one Business Day of Bankruptcy Court approval of
the Competing Offer (the "Payment Date"), (ii) the order approving the
Identified Superior Proposal requires the Company to so pay such amount, and
(iii) the Company so pays such amount on the Payment Date, time being of the
essence.
(e) On or before the Bid Deadline Date, the Competing Bidder shall execute
and deliver an escrow agreement with the Escrow Agent, in substantially the same
form as the Performance Escrow Agreement, and deposit the $6,000,000 xxxxxxx
money deposit with the Escrow Agent to secure its obligations as a Competing
Bidder in accordance with the provisions thereunder. If a Competing Bid is in
the form of an offer to purchase under Section 363 of the Bankruptcy Code, the
Bidding Procedures Order shall require the Competing Bidder to make an
additional good faith deposit upon the selection of the Competing Offer, such
that the total deposit of such a Section 363 Competing Bidder is no less than
10% of the total purchase price offered by the Competing Bidder.
(f) The Company's acceptance of a Competing Offer shall be conditional upon
the payments to Purchaser under the preceding paragraphs being made timely
hereunder, time being of the essence, and that failure of the Competing Bidder
or the Company to pay any such amounts on a timely basis shall result in the
disqualification of such Competing Offer but shall not relieve such Competing
Bidders from any liability to the Company with respect to its Competing Offer.
(g) [intentionally omitted]
(h) The Competing Offer shall provide for the payoff of the Senior Lenders
in full and in cash on the Effective Date of the competing plan.
(i) A Competing Offer to be a Superior Proposal shall satisfy an initial
minimum initial competing bid increment of $1,000,000, and $500,000 for any
subsequent bid increments.
(j) The Competing Offer must provide for a Timetable for Restructuring that
meets the requirements set forth in Exhibit B-1.
(k) The Competing Offer must otherwise satisfy the definition of Competing
Offer and Superior Proposal as provided in this Agreement.
Exhibit A-2 - Page 2
EXHIBIT G
CANADIAN RESTRUCTURING
(a) The Purchaser and Company shall consult with each other as to
the most effective means of completing a Canadian restructuring on terms
consistent with the U.S. Restructuring (as more fully described on this Exhibit
G, the "Canadian Restructuring"). Such Canadian Restructuring may include one or
more of the following actions described in paragraph (a)(i) or paragraph (a)(ii)
below, or such other actions as the Company and the Purchaser shall agree:
(i) The Canadian Subsidiaries, or such other appropriate
party, shall apply to and obtain from the Ontario Superior Court of
Justice (Commercial List) in Toronto (the "Canadian Court") an order
appointing a receiver or interim receiver (the "Canadian Receiver")
over all of the business, rights, property, assets and undertaking of
the Canadian Subsidiaries (the "Canadian Assets"), which order shall
(A) in form and substance be acceptable to Purchaser in Purchaser's
sole discretion and (B) require the Canadian Receiver to take such
steps as are required to: (x) conduct a sale process (the "Sale
Process") and enter into an agreement of purchase and sale (the "APA")
with one or more newly created Canadian corporations that are direct or
indirect wholly-owned Subsidiaries of the Company (collectively, the
"New Canadian Subsidiaries") to transfer the Canadian Assets to the New
Canadian Subsidiaries (the "Canadian Transfer"); and (y) obtain one or
more Canadian Court Final Order(s) approving the Sale Process and the
APA, and vesting title in the Canadian Assets in the New Canadian
Subsidiaries free and clear of all Liens and pre-filing indebtedness;
or
(ii) The Company shall, and shall cause the Canadian
Subsidiaries to, and the Canadian Subsidiaries shall, file a proceeding
under the CCAA (the "CCAA Proceeding"), which CCAA Proceeding shall (A)
be on terms acceptable to the Purchaser in its sole discretion and (B)
obtain a result similar to the Canadian Transfer, except that, upon
consummation of such CCAA Proceeding, all title in and to the Canadian
Assets shall remain vested in the Canadian Subsidiaries, free and clear
of all Liens other than Post-Closing Permitted Liens, assuming that all
distributions are made to the Senior Lenders as contemplated by the
Restructuring as set forth in Exhibit A.
(b) If the Purchaser elects to cause the Canadian Transfer to occur:
(i) the Parties shall cooperate prior to consummation of
the Canadian Transfer to determine the portion of the
Investment that shall be allocated to the Canadian Assets
Purchase Price, which portion shall be deemed to be shared pro
rata by each of the Investors; and
Exhibit G - Page 1
(ii) An order shall be obtained that all or substantially
all of the Canadian Assets Purchase Price shall be distributed
on Closing to the Senior Lenders in their capacity as senior
secured creditors of the Canadian Subsidiaries, which order
shall be approved by the Canadian Court and otherwise become a
Final Order prior to consummation of the Investment.
(iii) The Company will undertake to distribute the portion
of the Investment allocated to the Canadian Asset Purchase
Price in the amounts and in the manner consistent with the
Restructuring as approved by the Purchaser from time to time,
in the Purchaser's sole discretion.
(c) All steps in the Canadian Restructuring, including the APA and
all other agreements, instruments, orders, processes and the timing
thereof shall be subject to the prior approval of the Purchaser, and
shall be in form and substance acceptable to the Purchaser in the
Purchaser's sole discretion. The Company shall, and shall cause the
Canadian Subsidiaries to, and the Canadian Subsidiaries shall,
cooperate with the Purchaser in implementing the Canadian Restructuring
in a manner acceptable to the Purchaser, in its sole discretion. The
Parties agree to work together to achieve an effective date of the
Canadian Restructuring that is contemporaneous with the effective date
of the U.S. Plan.
(d) The Purchaser reserves the right, in its sole discretion, with
the consent of the Company, which will not be unreasonably withheld or
delayed, to amend or otherwise modify the terms and/or structure of the
Canadian Restructuring as described herein in order to facilitate
finalizing and effecting the Bankruptcy Plan and obtaining the
Confirmation Orders, provided, however, that (i) any such modification
shall not result in a reduction in the amount of Purchaser's committed
Investment, and (ii) any such modification shall not result in an
increase of the aggregate consideration to be received by Purchaser in
connection with its Investment, as contemplated by Article I of this
Agreement.
Exhibit G - Page 2
AMENDMENT TO INVESTMENT AGREEMENT
This Amendment (this "Amendment"), dated as of October 30, 2003, to the
Investment Agreement, dated as of July 29, 2003, is made by and among High River
Limited Partnership, a Delaware limited partnership ("Purchaser"), Xxxxxx
Services Corporation, a Delaware corporation (the "Company"), and certain
Subsidiaries of the Company (as defined therein). Reference is also made to that
certain letter, dated as of August 25, 2003, from the Purchaser to the Company
(the "Go Hard Letter") relating to the Investment Agreement. Unless otherwise
indicated, all capitalized terms used herein and not otherwise defined herein
shall have the respective meanings provided to such terms in the Investment
Agreement.
RECITALS
WHEREAS, in connection with the U.S. Bankruptcy Case and in accordance
with orders by the U.S. Bankruptcy Court relevant thereto, an auction for the
sale of assets and/or reorganization of the Company was held on the days of
September 3, 2003 and September 4, 2003 (the "Auction").
WHEREAS, as a result of the Auction, the Parties agreed to certain
changes to the Investment Agreement.
WHEREAS, Purchaser previously delivered to the Company a schedule of
assets that Purchaser desires to designate as Excluded Assets pursuant to
Section 5.1(k) of the Investment Agreement, which schedule was delivered as
Schedule 1 to the Go Hard Letter.
WHEREAS, the Disclosure Schedules required to be delivered by the
Company pursuant to the Investment Agreement were not completed by the date(s)
specified in the Investment Agreement, and the Company has delivered to
Purchaser, as of the date hereof, a revised set of such Disclosure Schedules.
WHEREAS, pursuant to Section 7.7 of the Investment Agreement, the
Parties may amend the Investment Agreement.
WHEREAS, the Parties desire to amend the Investment Agreement to
memorialize developments that occurred at the Auction and to reflect certain
other changes that the Parties deem necessary or desirable.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements set forth in this
Amendment and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Investment.
a. Section 1.1 of the Investment Agreement is hereby
amended and restated such that it reads in its entirety as follows:
1
"Section 1.1 Investment. Subject to the participation
rights of the Qualified PIK/Term Creditors as contemplated by
the Terms of Restructuring attached hereto as Exhibit A (such
terms and such description are collectively referred to herein
as the "Restructuring"), on the terms and subject to the
conditions hereinafter set forth, at the Closing (a)
Reorganized PSC will issue and sell to Purchaser, and
Purchaser will purchase from Reorganized PSC, shares of Common
Stock representing 20% of the issued and outstanding shares of
Common Stock (exclusive of shares of Common Stock, if any,
issued or issuable pursuant to the Reorganized PSC Management
Incentive Plan) (the "Purchase Shares") in consideration of
$20,000,000 (the "Purchase Shares Purchase Price"), and (b)
Purchaser will make available to Reorganized PSC the
$150,000,000 exit loan as further described in Exhibit A-1
(the "Exit Loan Facility") (such purchase of the Purchase
Shares and the making of the Exit Loan Facility to be referred
to herein, collectively, as the "Investment"). The Qualified
PIK/Term Creditors, including Purchaser and its Affiliates in
their capacity as PIK/Term Creditors, that elect to
participate in the Investment shall be referred to herein as
the "Investors"."
b. Exhibit A to the Investment Agreement is hereby
amended and restated such that it reads in its entirety as attached hereto as
Exhibit A.
c. The first sentence of Exhibit A-1 to the Investment
Agreement is hereby amended and restated such that it reads in its entirety as
follows:
"The Exit Loan Facility will be in the principal
amount of $150 million and be secured by all the assets of
Reorganized PSC and its Subsidiaries."
d. For the sake of clarity, any references in the
Investment Agreement to the Purchase Shares, the Purchase Shares Purchase Price,
the Exit Loan Facility and/or the Investment, and any accompanying references or
cross-references thereto, are hereby amended and restated to reflect the
amendments to the Investment Agreement contained in Sections 1(a)-(c) of this
Amendment, and to reflect the fact that, as amended (and subject to the terms
and conditions of the Investment Agreement, including but not limited to the
participation rights of the Qualified PIK/Term Creditors): (i) the Exit Loan
Facility shall be in the amount of $150,000,000; and (ii) Purchaser shall invest
$20,000,000 in Reorganized PSC in exchange for 20% of the issued and outstanding
shares of Common Stock of Reorganized PSC (exclusive of shares of Common Stock,
if any, issued or issuable pursuant to the Reorganized PSC Management Incentive
Plan).
2. Environmental and Other Excluded Asset Matters.
a. New Section 4.19 is hereby added to the Investment
Agreement, which Section shall read in its entirety as follows:
"Section 4.19 Environmental Excluded Assets. The
Company shall, and shall cause its Subsidiaries to, and its
Subsidiaries shall, use their reasonable best efforts to
exclude the Environmental Excluded Assets, by way of
abandonment,
lease rejection, sale, and/or otherwise through the equivalent
of claims bar/discharge; provided, however, that neither the
Company nor its Subsidiaries shall be required to exclude
those Environmental Excluded Assets that, after consultation
with Purchaser, Purchaser determines in its sole discretion
need not be excluded from the assets of Reorganized PSC and
its Subsidiaries.
b. Section 5.1(k) of the Investment Agreement is hereby
amended and restated such that it reads in its entirety as follows:
"(k) If the Company, together with its Subsidiaries,
shall not have discharged at least $30,000,000 of liability
associated with the U.S. facilities listed in the
Environmental Excluded Asset Schedule, through abandonment,
lease rejection, sale, and/or otherwise through the equivalent
of claims bar/discharge pursuant to Section 4.19 hereof,
Purchaser shall have the right to terminate this Agreement.
For the sake of clarity and for the purposes of this Section
5.1(k), the amount of liability discharged by the Company,
together with its Subsidiaries, shall be determined and
calculated by reference to the column of the TRC Report (as
defined in the Go Hard Letter) titled TRC Liability Cost
Estimate - Most Likely Case."
c. The following definition of "Environmental Excluded
Assets" is hereby added to Section 8.1 of the Investment Agreement in its proper
alphabetical order:
"ENVIRONMENTAL EXCLUDED ASSETS" shall mean the assets
listed in the Environmental Excluded Asset Schedule.
d. The definition of "Excluded Asset Schedule" in
Section 8.1 of the Investment Agreement is hereby deleted and replaced with the
following definition of "Environmental Excluded Asset Schedule" in its proper
alphabetical order:
"ENVIRONMENTAL EXCLUDED ASSET SCHEDULE" shall mean
the Schedule, which was originally delivered as Schedule 1 to
the Go Hard Letter, as subsequently amended and delivered by
Purchaser to the Company by separate letter on or before the
date hereof.
e. The definition of "Excluded Assets" in Section 8.1 of
the Investment Agreement is hereby amended and restated such that it reads in
its entirety as follows:
"EXCLUDED ASSETS" shall mean the capital stock and
assets of the Excluded Subsidiaries and any other assets, if
any, as may be designated from time to time by Purchaser to be
excluded from the assets of Reorganized PSC and its
Subsidiaries as contemplated by the Restructuring, including
but not limited to any properties being sold to third parties
pursuant to existing purchase and sale agreements as noted on
Schedule 2.4 and (subject to the provisions of Section 4.19
hereof) the Environmental Excluded Assets. Notwithstanding
anything to the contrary in the foregoing, the proceeds of the
sale or any other disposition of any Excluded Assets shall be
applied to fund distributions under the Bankruptcy Plan and
thereafter shall inure to the benefit of Reorganized PSC.
f. The definition of "Environmental Liability Schedule"
in Section 8.1 of the Investment Agreement is hereby deleted.
g. Purchaser hereby declares Schedule 2 to the Go Hard
Letter void and of no further force and effect.
3. Tax matters. Purchaser hereby confirms that, for purposes of
Sections 5.1(l) and 6.3(c)(vi) of the Investment Agreement, regulation section
1.1502-28T, promulgated by the Department of the Treasury on or about August 29,
2003, shall not constitute a Material Adverse Effect.
4. Canadian Benefit Plans.
a. Section 2.15(l)(ii)(C) of the Investment Agreement is
hereby amended and restated such that it reads in its entirety as follows: "all
insurance contracts and policies;".
b. Section 2.15(l)(xi) of the Investment Agreement is
hereby amended to change the reference therein to Schedule 2.15(l)(x) to
Schedule 2.15(l)(xi).
5. Closing Date.
a. Section 6.3(c)(ii) of the Investment Agreement is
hereby amended by changing the reference to November 3, 2003 therein to December
3, 2003, and the corresponding reference to November 3, 2003 in Exhibit B-1 is
hereby changed to December 3, 2003.
b. The definition of "Outside Closing Date" in Section
8.1 of the Investment Agreement is hereby amended by changing the reference to
November 15, 2003 therein to December 15, 2003, and the corresponding reference
to November 15, 2003 in Exhibit B-1 is hereby changed to December 15, 2003.
c. Nothing herein shall be deemed to extend the
Determination Date, which occurred on September 5, 2003, or extend or renew any
other deadline listed in Exhibit B-1.
6. General.
a. Purchaser hereby confirms that it has waived its
right to require Subsidiaries that do not have gross assets with a fair market
value or book value in excess of $50,000 to execute the Investment Agreement,
and hereby agrees that failure of the Company to do so will not constitute a
breach of the Company's representation and warranty set forth in Section 2.22.
b. Purchaser hereby confirms that, notwithstanding
anything to the contrary contained in the Investment Agreement, the
representations and warranties of the Company and the Subsidiaries and the
related information contained in the Disclosure Schedule, as they relate to
"Immaterial Foreign Subsidiaries" (as hereinafter defined) are limited to the
actual knowledge of the Company and its Subsidiaries, without further
investigation. The Company and its Subsidiaries hereby represent and warrant
that nothing has come to their attention to cause them
to believe that any occurrence, event, act or omission involving or in respect
of an Immaterial Foreign Subsidiary could reasonably be expected to have a
Material Adverse Effect. For purposes hereof, the term "Immaterial Foreign
Subsidiary" means a Subsidiary that (i) is organized in a jurisdiction other
than the United States or Canada; (ii) does not have gross assets with a fair
market value or book value in excess of $50,000 and (iii) has not accrued any
revenue in the last three (3) years.
c. New Section 4.20 is hereby added to the Investment
Agreement, which Section shall read in its entirety as follows:
"Section 4.20. Reference is made to the U.S. Plan
filed with the U.S. Bankruptcy Court on September 19, 2003 (as
amended by the First Amended and Restated Plan on October 10,
2003, the Second Amended and Restated Plan on October 24,
2003, and as may be further amended from time to time in
accordance with this provision, the "Original Plan").
Notwithstanding anything herein to the contrary, the Company
shall, and shall cause its Subsidiaries to, and its
Subsidiaries shall, not file or allow to be filed any
amendments or modifications to the Original Plan without first
obtaining Purchaser's written approval, such approval to be
within Purchaser's sole discretion."
d. The following definition of "Original Plan" is hereby
added to Section 8.1 of the Investment Agreement in its proper alphabetical
order:
"ORIGINAL PLAN" shall have the meaning ascribed to
such term in Section 4.20 of this Agreement.
e. On or before the date hereof, the Company has
delivered to Purchaser by separate letter a complete set of revised Disclosure
Schedules. The Parties agree and acknowledge that such Disclosure Schedules
shall be deemed to have been delivered as of July 29, 2003, shall be deemed to
be the "Disclosure Schedule" referenced in the introductory paragraph to Article
II of the Investment Agreement, and shall be deemed to satisfy the delivery
requirements of the fourth paragraph of the Go Hard Letter. Nothing herein shall
be deemed to be an acceptance, agreement or acknowledgment by Purchaser that
such Disclosure Schedules (i) are complete, correct or accurate, or (ii) do not
contain any errors or omissions, whether material or otherwise.
f. Purchaser hereby confirms that, notwithstanding
anything to the contrary contained in the Investment Agreement, (i) the Canadian
Assets shall not include any Excluded Assets and (ii) the Canadian Subsidiaries
shall comply with the covenant contained in Section 4.8(a) of the Investment
Agreement unless such compliance would, in the reasonable judgment of Purchaser,
result in a violation of, or be impossible under, applicable law as interpreted
through common law principles.
g. This Amendment and the legal relations among the
Parties shall be governed by and construed in accordance with the rules and
substantive Laws of the State of New York, without regard to conflicts of law
provisions thereof.
h. Except as specifically amended by this Amendment, the
Investment Agreement and the Go Hard Letter shall remain in full force and
effect. The Investment Agreement, as amended and modified by this Amendment and
the Go Hard Letter, embody the entire agreement and understanding of the parties
hereto with respect to the subject matter hereof, and supersede all prior and
contemporaneous agreements and understandings, oral or written, relative to said
subject matter.
i. No waiver by any Party of any term or condition of
the Investment Agreement, including without limitation by way of this Amendment,
in any one or more instances, shall be deemed to be or construed as a waiver of
the same or any other term or condition of the Investment Agreement on any
future occasion.
j. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement. Any counterpart may be
executed by facsimile signature and such facsimile signature shall be deemed an
original.
k. Titles and headings to Sections herein are inserted
for convenience of reference only, and are not intended to be a part of or to
affect the meaning or interpretation of this Amendment.
l. Notwithstanding anything contained herein, this
Amendment shall not become effective until the date it is approved by the U.S.
Bankruptcy Court.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first above written.
HIGH RIVER LIMITED PARTNERSHIP
By: Barberry Corp., its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
XXXXXX SERVICES CORPORATION, a
Delaware corporation, debtor-in-possession
By: /s/ XXXXXXX X. XXXXXXX
----------------------------------------
Xxxxxxx X. Xxxxxxx,
Senior Vice President and CFO
PSC METALS, INC.,
an Ohio corporation, debtor-in-possession
By: /s/ XXXXXXX X. XXXXXXX
----------------------------------------
Xxxxxxx X. Xxxxxxx
Vice President and Treasurer
Of each of the foregoing companies
CAPPCO TUBULAR PRODUCTS USA, INC.,
a Georgia corporation, debtor-in-possession
By: /s/ XXXXXXX X. XXXXXXX
----------------------------------------
Xxxxxxx X. Xxxxxxx
Vice President
21st CENTURY ENVIRONMENTAL
MANAGEMENT, INC. OF NEVADA, a
Nevada corporation, debtor-in-possession
21st CENTURY ENVIRONMENTAL
MANAGEMENT, INC. OF RHODE
ISLAND, a Rhode Island corporation,
debtor-in-possession
ALLWASTE TANK CLEANING, INC.,
a Georgia corporation, debtor-in-
possession
ALLWORTH, INC., an Alabama
corporation, debtor-in-possession
BURLINGTON ENVIRONMENTAL
INC., a Washington corporation, debtor-in-
possession
CHEMICAL RECLAMATION
SERVICES, INC., a Texas corporation,
debtor-in-possession
CHEMICAL POLLUTION CONTROL,
INC. OF FLORIDA - A 21st CENTURY
ENVIRONMENTAL MANAGEMENT
COMPANY, a Florida corporation,
debtor-in-possession
CHEMICAL POLLUTION CONTROL,
INC. OF NEW YORK - A 21st
CENTURY ENVIRONMENTAL
MANAGEMENT COMPANY, a New
York corporation, debtor-in-possession
COUSINS WASTE CONTROL
CORPORATION, an Ohio corporation,
debtor-in-possession
CYANOKEM INC., an Ohio corporation,
debtor-in-possession
LUNTZ ACQUISITION (DELAWARE)
CORPORATION, a Michigan
corporation, debtor-in-possession
NORTHLAND ENVIRONMENTAL,
INC., a Delaware corporation, debtor-in-
possession
NORTRU, INC., a Michigan corporation,
debtor-in-possession
XXXXXX ENVIRONMENTAL SERVICES
CORPORATION, a Missouri corporation,
debtor-in-possession
XXXXXX TRANSPORTATION AND
REMEDIATION, INC., a California
corporation, debtor-in-possession
XXXXXX RECLAMATION SERVICES,
HOUSTON, INC., a Texas corporation,
debtor-in-possession
PSC ENVIRONMENTAL SERVICES,
INC., a Delaware corporation, debtor-in-
possession
PSC INDUSTRIAL OUTSOURCING,
INC., a Delaware corporation, debtor-in-
possession
PSC INDUSTRIAL SERVICES, INC., a
Delaware corporation, debtor-in-possession
REPUBLIC ENVIRONMENTAL
SYSTEMS (PENNSYLVANIA), INC., a
Pennsylvania corporation, debtor-in-
possession
REPUBLIC ENVIRONMENTAL
SYSTEMS (TRANSPORTATION
GROUP), INC., a Pennsylvania corporation,
debtor-in-possession
RESOURCE RECOVERY
CORPORATION, a Washington
corporation, debtor-in-possession
RHO-CHEM CORPORATION, a
California corporation, debtor-in-possession
SOLVENT RECOVERY
CORPORATION, a Missouri corporation,
debtor-in-possession
THERMALKEM, INC., a Delaware
corporation, debtor-in-possession
By: /s/ XXXXX X. XXXXXXX
----------------------------------------
Xxxxx X. Xxxxxxx
President of each of the foregoing
companies
ACE/ALLWASTE ENVIRONMENTAL
SERVICES OF INDIANA, INC., an Illinois
corporation, debtor-in-possession
INTERNATIONAL CATALYST, INC., a
Nevada corporation, debtor-in-possession
JESCO INDUSTRIAL SERVICE, INC., a
Kentucky corporation, debtor-in-possession
XXXXXX SERVICES/NORTH CENTRAL,
INC., an Iowa corporation, debtor-in-
possession
PSC RECOVERY SYSTEMS, INC., a
Georgia corporation, debtor-in-possession
RMF GLOBAL, INC., an Ohio corporation,
debtor-in-possession
By: /s/ XXXXXXX X. XXXX
----------------------------------------
Xxxxxxx X. Xxxx
Vice President
of each of the foregoing companies
XXXXXX SERVICES INC., an Ontario corporation
By:
----------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
XXXXXX ANALYTICAL SERVICES INC., an Ontario
corporation
By:
----------------------------------------
Name: Xxxxx Xxxxx
Title: President
ALLIES STAFFING LTD., an Ontario corporation
By:
----------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
XXXXXX INTERNATIONAL
DEVELOPMENT INC., a Barbados corporation
By: /s/ XXXXX X. XXXXXXX
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXXX SERVICES INC., an Ontario corporation
By: /s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
XXXXXX ANALYTICAL SERVICES INC., an Ontario
corporation
By: /s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
ALLIES STAFFING LTD., an Ontario corporation
By: /s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
XXXXXX INTERNATIONAL
DEVELOPMENT INC., a Barbados corporation
By:
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
EXHIBIT A
TERMS OF RESTRUCTURING
The Restructuring, which shall be in form and substance reasonably satisfactory
to the Purchaser, in its sole discretion, shall include the following terms:
1. The Company will continue as Reorganized PSC and unless the
Parties otherwise agree or as otherwise provided below, each
of the Company's U.S. Subsidiaries will continue as
Subsidiaries of Reorganized PSC.
2. The assets and business of the Company's Canadian Subsidiaries
will be reorganized pursuant to the Canadian Restructuring as
more fully described in Exhibit G to this Agreement.
3. Subject to the terms of Sections 4.19 of the Agreement, any
and all assets, properties and other assets (whether, real or
personal, tangible or intangible) of the Company and any of
its Subsidiaries which the Purchaser designates from time to
time as Excluded Assets, shall be excluded from the assets of
Reorganized PSC and its Subsidiaries, including without
limitation by way of abandonment, as further contemplated by
Section 4.19 of the Agreement, sale(s) approved by Purchaser
in its sole discretion, and/or by way of utilizing one or more
plans of reorganization to effect such exclusion, if necessary
or desirable in Purchaser's sole discretion, such that,
notwithstanding the method(s) employed, upon consummation of
the Restructuring contemplated hereby, the excluded assets and
any liabilities associated therewith shall be excluded from
the assets and liabilities of Reorganized PSC and its
Subsidiaries.
4. As of the Closing, there shall be no capital stock or rights
to acquire capital stock outstanding other than the Shares and
such awards, if any, that may be granted under the Reorganized
PSC Management Incentive Plan.
5. The Company, its Subsidiaries and Purchaser intend that the
Restructuring, assuming an ownership change of the Company,
qualifies under Section 382(l)(5) of the Code.
6. If the Purchaser, pursuant to Section 4.14 hereof, elects to
cause the Canadian Transfer to occur, the Canadian Assets
Purchase Price shall be allocated from and funded by a portion
of the Investment and distributed, together with any other
distributions by the Company and its Subsidiaries under the
U.S. Plan, consistent with the table set forth below.
7. Subject to confirmation of the Original Plan in form and
substance satisfactory to Purchaser in its sole discretion,
the following classes of creditors of the U.S. Debtors shall
receive the treatment indicated in the Original Plan,
including without limitation as follows:
CLASS TREATMENT
-----------------------------------------------------------------------------------------------------------------------------
Administrative Claims and Priority Tax Claims are not Administrative and Priority Tax Claims paid in full. Priority Tax
classified Claims paid over 6 years from date of assessment.
Debtors are working-up estimate of cure costs and
related items
-----------------------------------------------------------------------------------------------------------------------------
1. Senior Secured (Agent: Foothill) Paid in full on Effective Date, except for $3,000,000 senior
may have separate classes for Tranches A and B secured 1 yr. term loan, straight-line amortization, with a
cash-pay interest rate, and a PIK rate, and Reorganized PSC can
prepay with PIK interest discount.
-----------------------------------------------------------------------------------------------------------------------------
2. DIP Paid in full on Effective Date.
-----------------------------------------------------------------------------------------------------------------------------
3. PIK/Term As more fully described below, (a) PIK/Term Creditors may elect
(junior secured) to: (i) receive their pro rata allocation of the PIK/Term Shares;
(ii) receive a pro-rata allocation of $30,000,000 fully
subordinated junior secured 7 yr., interest rate equal to
applicable mid-term federal rate, PIK note(s) (the "PIK Notes") or
(iii) receive a pro-rata combination of PIK/Term Shares and PIK
Notes based upon the portion of the PIK/Term Claim elected by the
PIK/Term Creditor to be converted into each, and (b) Qualified
PIK/Term Creditors shall have the additional right to participate
in the Investment.
-----------------------------------------------------------------------------------------------------------------------------
PIK/Term Shares The PIK/Term Shares, representing in the aggregate 75% of the
outstanding shares of New Common Stock of Reorganized Parent as
of the Effective Date (exclusive of shares of New Common Stock
that may be issued pursuant to the Management Incentive Plan),
shall be allocated pro rata among the PIK/Term Claims which an
electing PIK/Tem Creditor designates to participate in the
PIK/Term Share distribution, based upon the proportion of the
principal amount of the PIK/Term Claims designated by each such
electing PIK/Term Claimholder to the total principal amounts of
the PIK/Term Claims designated by all such electing PIK/Term
Claimholders.
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
PIK/Term Note Each PIK/Term Creditor that does not elect to participate in the
PIK/Term Share distribution shall receive a pro-rata share of PIK
Notes as set forth below in proportion to the principal amount of
the PIK/Term Claims held by each such nonelecting PIK/Term
Claimholder to the total principal amounts of the PIK/Term Claims
held by all PIK/Term Claimholders.
Any PIK/Term Claims that are not designated to participate in the
PIK/Term Share distribution by an electing PIK/Term Creditor shall
be treated as held by a nonelecting PIK/Term Creditor.
Transfers of the PIK Notes will be restricted substantially to the
same extent that transfers of the PIK Loans (as defined in the
Credit Agreement) were restricted under the Credit Agreement. Such
restrictions on transfer may include, among other restrictions,
prior approval by the applicable agent for the PIK Notes, if any,
and requirements as to the financial capacity of eligible
transferees. The participation by a nonelecting PIK/Term Creditor
shall be determined by multiplying $30 million by the quotient
equal to the Prepetition principal amount of the PIK/Term Claim
held by such nonelecting PIK/Term Claimholder divided by the total
amount of principal due under all PIK/Term Claims, such that if
the holders of only 10% of the PIK Term Claims elect to receive
the PIK Notes, only $3.0 million of such notes will be issued.
-----------------------------------------------------------------------------------------------------------------------------
PIK/Term Tax Matters Notwithstanding the foregoing, if one or more PIK/Term Creditors
elects to receive PIK/Term Shares in exchange for PIK/Term Claims
that do not constitute "qualified indebtedness" within the meaning
of Section 382(l)(5) of the Internal Revenue Code of 1986, as
amended ("Tax Code") as determined by the Company based on its
available information ("Elected Nonqualified PIK/Term Debt"), and
the issuance of the PIK/Term Shares to the PIK/Term Creditors
would fail to qualify under Section 382(l)(5) of the Tax Code
taking into account all transactions under the Plan, each such
PIK/Term Creditor shall be required to exchange all or a portion
of such Elected Nonqualified PIK/Term Debt for a Pro Rata share of
the PIK Notes
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
in an amount equal to the product of (i) the aggregate amount of
such Elected Nonqualified PIK/Term Debt that must be exchanged for
subordinated junior secured PIK note(s) in order for the issuance
of PIK/Term Shares to PIK/Term Creditors to qualify under Section
382(l)(5) of the Tax Code as determined by the Company times (ii)
the proportion of Elected Nonqualified PIK/Term Debt held by each
such PIK/Term Creditor bears to the aggregate amount of the
Elected Nonqualified PIK/Term Debt held by all PIK/Term Creditors.
The Purchaser shall provide such information as to it and its
affiliates and assistance to the Company as is necessary to
determine the amount of Elected Nonqualified PIK/Term Debt.
-----------------------------------------------------------------------------------------------------------------------------
PIK/Term Participation Right Prior to the Closing, each Qualified PIK/Term Creditor will have
the right to participate in up to its pro-rata share of the
Investment (which consists of $20 million for the purchase of 20%
of the outstanding capital stock of the Company and an Exit Loan
facility of $150 million). The maximum participation by a PIK Term
Creditor shall be determined by dividing the principal amount of
the PIK/Term Claim held by such Person by the total amount of
principal due under all PIK/Term Claims. A PIK/Term Creditor's
participation in the Purchase Shares and the Exit Loan must be
made in a proportionate basis, such that a person acquiring $2
million (or 10%) of the Purchase Shares must participate in $15
million (or 10%) of the Exit Loan.
The Purchaser may require PIK Term Creditors electing to
participate in the Investment to provide cash collateral, up to
their committed amount, to secure their obligation to participate
in the Exit Loan.
Purchaser and its Affiliates that hold PIK/Term Claims will have
the right and obligation to purchase any Purchase Shares not
purchased by the other PIK/Term Creditors.
-----------------------------------------------------------------------------------------------------------------------------
PIK/Term Cash At Closing, Purchaser shall pay to the PIK/Term Creditors the sum
of $10.7 million in cash in the aggregate (the "PIK/Term Cash").
The PIK/Term Cash shall be distributed among all of the PIK/Term
Creditors (including Purchaser and its affiliates in their
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
capacity as PIK/Term Creditors) pro rata in proportion to the
principal amount of the PIK/Term Claims held by each such PIK/Term
Creditor to the total principal amounts of the PIK/Term Claims
held by all PIK/Term Creditors.
-----------------------------------------------------------------------------------------------------------------------------
Alstom Litigation Any and all net proceeds received by Reorganized PSC in connection
with the lawsuit styled as Alstom Power v. RMF Industrial
Contracting, Inc., Case No. 03-06327, pending in the U.S. District
Court for the Western District of Pennsylvania (the "Alstom
Litigation") shall be promptly distributed to the PIK/Term
Creditors (including Purchaser and its affiliates in their
capacity as PIK/Term Creditors) pro rata in proportion to the
principal amount of the PIK/Term Claims held by each such PIK/Term
Creditor to the total principal amounts of the PIK/Term Claims
held by all PIK/Term Creditors.
-----------------------------------------------------------------------------------------------------------------------------
4. Allowed Parent Unsecured Claims (as described in the Holders of Subordinated Debt will receive from the Liquidating
Original Plan as Class 8) ("Subordinated Debt") Trust after fees (including contingency fees) and costs of the
Liquidating Trust, their pro rata share, based on their total
claim amounts together with certain other claims, of certain
recoveries made by the Liquidating Trust, as set forth in the
Original Plan.
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
5. General Unsecured (Trade) Claims Pro rata share of $3,600,000, less any amounts paid on account of
a Pro Rata (as defined in the Original Plan) distribution to
unsecured creditors of the Canadian Subsidiaries, from Icahn
entity's dividend on Senior Secured claim in exchange for general
release of Icahn and affiliates.
In addition to the distributions above, holders of General
Unsecured (Trade) Claims shall be entitled to receive from the
Liquidating Trust, after fees (including contingency fees) and
costs of the Liquidating Trust, their pro rata share, based on
their total claim amounts together with certain other claims, of
certain recoveries made by the Liquidating Trust, as set forth in
the Original Plan.
Critical vendor payments totaling $3.8 million will be made on
the Effective Date or earlier at the Purchaser's election. If
this Plan shall not be confirmed or become effective, the Debtors
and the Official Unsecured Creditors' Committee appointed by the
Office of the United States Trustee for the Southern District of
Texas in the U.S. Bankruptcy Case (the "Committee") have agreed to
support credit being given vis-a-vis unsecured creditors for such
$3.8 million in critical vendor payments in any future settlement
or plan, in a manner acceptable to the Committee and the
Purchaser.
-----------------------------------------------------------------------------------------------------------------------------
6. Convenience Class $200,000 to be shared pro rata among class.
-----------------------------------------------------------------------------------------------------------------------------
7. Equity $ 0
-----------------------------------------------------------------------------------------------------------------------------
8. The Purchaser reserves the right, in its sole discretion, with
the consent of the Company, which will not be unreasonably
withheld or delayed, to amend or otherwise modify the terms
and/or structure of the Restructuring as described herein in
order to facilitate finalizing and effecting the Bankruptcy
Plan and obtaining the Confirmation Orders, provided, however,
that any such modification shall not result in a reduction in
the amount of Purchaser's committed Investment.
