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.
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a. Section 1.1 of the Investment Agreement is hereby amended and restated
such that it reads in its entirety as follows:
"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.
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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
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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.
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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
5
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]
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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:
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
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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
8
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
9
THERMALKEM, INC., a Delaware corporation,
debtor-in-possession
By:
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:
Xxxxxxx X. Xxxx
Vice President
of each of the foregoing companies
10
XXXXXX SERVICES INC., an Ontario corporation
By:
Name:
Title:
XXXXXX ANALYTICAL SERVICES INC., an Ontario
corporation
By:
Name:
Title:
ALLIES STAFFING LTD., an Ontario corporation
By:
Name:
Title:
XXXXXX INTERNATIONAL DEVELOPMENT INC., a Barbados
corporation
By:
Name:
Title:
11
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.
12
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:
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CLASS TREATMENT
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Administrative Claims and Priority Tax Claims are not Administrative and Priority Tax Claims paid in full. Priority
classified Tax Claims paid over 6 years from date of assessment.
Debtors are working-up estimate of cure costs and
related items
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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.
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2. DIP Paid in full on Effective Date.
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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.
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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.
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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.
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14
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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.
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15
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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.
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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.
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16
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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.
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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.
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17
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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.
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6. Convenience Class $200,000 to be shared pro rata among class.
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7. Equity $ 0
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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.
18
