Opinion
Case No. 04-33192 (Jointly Administered).
June 30, 2004.
Upon the motion, dated May 23, 2004 (the "Motion"), of Jillian's Entertainment Holdings, Inc. ("Holdings"), Jillian's Entertainment Corporation ("Entertainment"), as debtors in the above-referenced cases ("Jillians") and their domestic Subsidiaries (collectively, together with the other debtors in the above-captioned chapter 11 cases, the "Debtors"): (a) for the entry of Orders authorizing them to (i) obtain post-petition financing pursuant to sections 363 and 364 of title 11 of the United States Code, as amended (the "Bankruptcy Code"), by entering into that certain Debtor-in-Possession Credit Agreement, dated as of May 23, 2004, as the same may be amended, supplemented or otherwise modified from time to time (the "Post-Petition Credit Agreement") with Fleet National Bank, a national banking association organized under the laws of the United States (together with its successors and assigns, the "Post-Petition Lender"), subject to the terms and conditions set forth herein and therein, (ii) grant mortgages, security interests, liens and superpriority claims to the Post-Petition Lender (including, as specifically set forth herein and in the Post-Petition Credit Agreement, an administrative priority claim pursuant to section 364(c)(1) of the Bankruptcy Code, liens pursuant to sections 364(c)(2) and (3) of the Bankruptcy Code and priming liens pursuant to section 364(d) of the Bankruptcy Code), (iii) pending a final hearing on the Motion (the "Final Hearing"), obtain emergency post-petition loans under the Post-Petition Credit Agreement to and including the date on which the Final Order (as such term is defined herein) is entered (the "Interim Facility") and, in accordance with Rule 4001(c)(2) of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), requesting that this Court schedule the Final Hearing and approve notice with respect thereto; and this Court having entered, on May 26, 2004, its interim order (the "Interim Order") authorizing and approving the Interim Facility on an interim basis, and scheduling and establishing notice and hearing requirements for the Final Hearing; and based upon the evidence presented by the Debtors at the Final Hearing, and the Court having considered the Motion and the Exhibits attached thereto and he reto at the Final Hearing; and in accordance with Bankruptcy Rule 4001(c)(1) and (c)(3), due and proper notice of the Motion having been given, and the Final Hearing to consider approval of the facility (the "Facility") under the Post-Petition Financing Documents (as defined herein) having been held and concluded on the date hereof; and upon all of the pleadings filed with the Court and all of the proceedings held before the Court; and after due deliberation and consideration and good and sufficient cause appearing therefor,
Unless otherwise defined herein, all capitalized terms used herein have the meanings ascribed to such terms in the Post-Petition Credit Agreement, a copy of which is affixed to the Motion as Exhibit A., and are incorporated herein as if set forth at length and shall survive the Revolving Credit Termination Date.
THE DEBTORS AND THE LENDERS HERETO STIPULATE AS FOLLOWS:
A. Pursuant to that certain Credit Agreement, dated as of October 14, 1998, between Entertainment, as borrower, and the Pre-Petition Lenders (as amended, supplemented or otherwise modified from time to time, and together with all agreements, documents, notes, instruments and any other agreements delivered pursuant thereto or in connection therewith, the "Pre-Petition Credit Agreement"), Entertainment received loans and advances and/or was provided other financial accommodations to, inter alia, fund its operations (the "Loans"). The Pre-Petition Credit Agreement provides, inter alia, that Holdings (the "Parent Guarantor") and each and every Subsidiary of Entertainment (as set forth in Schedule I of the Post-Petition Credit Agreement), all of the same being Debtors herein, jointly, severally and unconditionally guarantee the obligations of Entertainment (the "Guaranty").
Hereinafter, the Pre-Petition Lenders and the Post-Petition Lender shall collectively be referred to as the "Lenders."
B. The Debtors acknowledge that, as of the Petition Date (as defined herein), approximately $40,570,000 was outstanding in respect of the Loans made pursuant to the Pre-Petition Credit Agreement. For purposes of this Order, each of the terms "Post-Petition Obligations" and "Pre-Petition Obligations," as defined herein, shall include the principal of, and, to the extent payable and allowable hereunder or under the Bankruptcy Code, all interest, fees and other charges owing in respect of such loans or indebtedness (including, without limitation, any reasonable attorneys', accountants', financial advisors' and other fees and expenses that are chargeable or reimbursable under the relevant agreements relating to such loans or other indebtedness).
C. Subject to paragraph 15 hereof, to secure the Pre-Petition Obligations and cash management obligations owed to the Pre-Petition Lenders, the Pre-Petition Credit Agreement provides that, inter alia, (a) Holdings pledges to the Pre-Petition Lenders all of its capital shares in Entertainment; (b) the Debtors pledge and grant to the Pre-Petition Lenders Leasehold Mortgages (as such term is defined in the Pre-Petition Credit Agreement) in certain leased properties and Mortgages (as such term is defined in the Pre-Petition Credit Agreement) for certain properties owned in fee; (c) the Debtors pledge and grant to the Pre-Petition Lenders first priority security interests in and to all of the Debtors' Intellectual Property (as such term is defined in the Pre-Petition Credit Agreement); (d) the Debtors collaterally assign to the Pre-Petition Lenders their liquor licenses; and (e) the Debtors pledge and grant to the Pre-Petition Lenders, subject to liens permitted under the Pre-Petition Credit Agreement, first priority security interests in substantially all of the Debtors' assets and property including all of their Equipment and fixtures, Inventory, Receivables, Related Contracts, interests in and to any Security Collateral and investment property (except as with regards to the Foreign Subsidiaries (as defined in the Pre-Petition Credit Agreement) as provided for in the Pre-Petition Credit Agreement), Assigned Agreements, Account Collateral (as such capitalized terms are defined in the Pre-Petition Credit Agreement), general intangibles and all of the proceeds, products, rents and profits of all of the foregoing (all of the foregoing collateral generally described above, together with all of the proceeds, products, rents and profits thereof shall be referred to herein collectively as the "Pre-Petition Collateral" and such liens shall be referred to herein as the "Pre-Petition Liens").
D. Subject to paragraph 15 hereof, the Debtors acknowledge, agree, waive and release any right that the Debtors may have to challenge: (a) the Pre-Petition Liens; (b) that the Pre-Petition Liens constitute valid, binding, enforceable and perfected first priority liens subject only to liens described in or otherwise permitted by the Pre-Petition Credit Agreement, and are not subject to avoidance or subordination (except insofar as such liens are subordinated to the Post-Petition Liens, the Adequate Protection Liens (as defined herein), the Carve-Out and the Fee Reserve in accordance with the provisions of this Order) pursuant to the Bankruptcy Code or applicable non-bankruptcy law; (c) that the Pre-Petition Obligations constitute legal, valid and binding obligations of the Debtors, enforceable in accordance with their terms (other than in respect of the stay of enforcement arising from section 362 of the Bankruptcy Code); (d) that the Debtors have no offsets, defenses or counterclaims to the Pre-Petition Obligations; (e) that no portion of the Pre-Petition Liens or the Pre-Petition Obligations is subject to avoidance or subordination pursuant to the Bankruptcy Code or applicable non-bankruptcy law; and (f) that, as of the Petition Date, the claim of the Pre-Petition Lenders is an allowed secured claim within the meaning of section 506 of the Bankruptcy Code in an amount that is not less than $40,570,000.
E. An immediate and critical need exists for the Debtors to obtain funds under the Facility and to use the Cash Collateral (as defined herein) in order to continue the operation of their businesses. Without the Facility and use of Cash Collateral, the Debtors will not be able to fund the continued operation of the Debtors' businesses and to repay the Pre-Petition Obligations in a manner that will avoid irreparable harm to the Debtors' estates. At this time, the ability of the Debtors to finance their operations and the availability to them of sufficient working capital and liquidity through the incurrence of new indebtedness and other financial accommodations are necessary to the confidence of the Debtors' vendors and suppliers of other goods and services, to their customers and employees and to the preservation and maintenance of the going concern value of the Debtors' estates. The Debtors are unable to obtain the required funds in the form of unsecured credit or unsecured debt allowable under section 503(b)(1) of the Bankruptcy Code as an administrative expense pursuant to section 364(a) or (b) of the Bankruptcy Code, unsecured debt having the priority afforded by section 364(c)(1) or debt secured only as described in section 364(c)(2) or (3) of the Bankruptcy Code.
F. The Post-Petition Lender is willing to lend pursuant to the Post-Petition Credit Agreement or otherwise, and is only willing to make the Facility available if, pursuant to section 364(d)(1) of the Bankruptcy Code, upon entry of the Final Order, the Post-Petition Lender is granted a fully perfected first priority priming security interest, senior to any and all liens or interests (other than any valid, perfected and non-avoidable liens and interests of the Equipment Creditors (as defined herein)), in all property and assets of the Debtors (other than Avoidance Actions and property subject to any valid, perfected and non-avoidable liens and interests of the Equipment Creditors) and the proceeds, products, rents, cash and profits of all the foregoing (including all Cash Collateral), including the Encumbered Collateral (but excluding any property subject to valid, perfected and non-avoidable liens and interests of the Equipment Creditors), subject only to the interests of holders of pre-Petition PACA claims (as defined in paragraph 25 hereinafter), the Carve-Out and the Fee Reserve.
G. The Debtors are jointly, severally and unconditionally guaranteeing the Post-Petition Obligations and all other obligations as set forth under the Post-Petition Financing Documents. Except for the purposes set forth herein, the Lenders have not consented or agreed to the use of the proceeds of the Post-Petition Obligations or the Collateral.
H. (a) General Electric Capital Corporation ("GE Capital") asserts that (i) there is approximately $3,133,000 in principal outstanding under that certain Loan and Security Agreement, dated as of October 5, 2000, among six Debtors as borrowers and Heller EMX, Inc., as a lender and agent for the lenders, (ii) GE Capital has since succeeded Heller EMX, Inc, and (iii) said senior secured term loan financed the purchase of various arcade items, audio and visual equipment, billiard tables and restaurant equipment, and is secured by all the equipment that is subject to the advances made under such loan and any proceeds thereof.
The borrowers under the Senior Secured Term Loan are: Jillian's of Houston, TX, Inc., Jillian's of Arundel, MD, Inc., Jillian's of Memphis, TN, Inc., Jillian's of Westbury, NY, Inc., Jillian's of Minneapolis, MN, Inc., River Vending, Inc. Jillian's Entertainment Holdings, Inc. serves as a guarantor of all the obligations under the Senior Secured Term Loan.
(b) Brunswick Bowling Billiards Corporation ("Brunswick") asserts that it sold or leased bowling equipment and supplies, which included lanes, ball returns, scoring equipment, pin setting equipment, furniture, intellectual property, billiards equipment and related items (all property acquired from Brunswick is collectively referred to as the "Bowling Equipment") to the Debtors in fourteen separate transactions between January 1999 and November 2001. The Debtors financed the transactions by incurring obligations in the approximate amount of $4.5 million to Deutsche Financial Services Corporation, which have now been assigned to Brunswick. Brunswick asserts that it is owed approximately $4.1 million, and asserts an interest in the Bowling Equipment as an equipment lessor or as the holder of purchase money security interests in all of the Bowling Equipment.
I. The Plan dated May 23, 2004 and filed with this Court on May 23, 2004 by the Debtors (the "May 23, 2004 Plan") is acceptable to the Lenders; provided, however, that it shall be a condition to the Lenders' support for a Plan and for any Sale (as defined in the May 23, 2004 Plan), that the allocation of Net Proceeds of all Sales as between the Lenders and the Holders of the Other Secured Claims (as defined in the May 23, 2004 Plan) and the treatment of and payment to those non-Debtor parties that are the defendants in Adversary Proceeding No. 04-3124, these creditors including Brunswick and G.E. Capital (collectively, the "Equipment Creditors"), in which the Debtors assert that the agreements set forth in such action are Capital Leases and the non-Debtor counterparties to such agreements may dispute the Debtors' characterization of such agreements as Capital Leases (the "Capital Lease Litigation") must be acceptable to the Lenders, and provided further, that any modifications, alterations and/or amendments to the Plan must be reasonably acceptable to the Lenders in form, content and substance; and provided further, that the Lenders reserve and retain the right to object to any modifications, alterations and/or amendments to the Plan and/or the confirmation of any modifications, alterations and/or amendments to the Plan.
THE COURT HEREBY FINDS THAT:
J. On May 23, 2004 (the "Petition Date"), each of the Debtors filed with this Court a voluntary petition for relief under chapter 11 of the Bankruptcy Code. The Debtors are operating their businesses and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No request has been made for the appointment of a trustee or examiner.
K. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). The statutory predicates for the relief sought herein are sections 105, 361, 362, 363 and 364 of the Bankruptcy Code and Bankruptcy Rules 4001(b) and (c). Venue of the Debtors' chapter 11 cases and this Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409.
L. The Post-Petition Lender is willing to provide the financing contemplated herein, and the Lenders are willing to consent to the use of Cash Collateral, all subject to the terms and conditions set forth in the Post-Petition Financing Documents and the provisions of this Order, assuring that the Post-Petition Liens, the Adequate Protection Liens (each as defined herein) and the various claims, super-priority claims, pre-Petition PACA claims, the Carve-Out and other protections granted pursuant to this Order and the Post-Petition Financing Documents will not be affected by any subsequent reversal or modification or appeal of this Order or any other order, as provided in section 364(e) of the Bankruptcy Code, which is applicable to the post-petition financing arrangements contemplated by this Order. The Lenders have acted in good faith and at arm's-length in consenting to and/or in agreeing to provide the financing and consent to the use of Cash Collateral contemplated by this Order, the Post-Petition Financing Documents and the Post-Petition Credit Agreement and the reliance of the Lenders on the assurances referred to above is in good faith.
M. Notice of the Final Hearing on the Motion and this Order has been provided (by hand, facsimile, overnight mail or courier) to: (i) the Post-Petition Lenders; (ii) the Pre-Petition Lenders; (iii) counsel for the Lenders; (iv) the United States Trustee, (v) the holders of the thirty (30) largest unsecured claims against the Debtors; (vi) Bridge East Capital, L.P.; (vii) Heller EMX, Inc.; (viii) FleetBoston Robertson Stephens; (x) J.W. Childs Associates L.P.; (ix) G.E. Capital Corporation and (x) known holders of liens in and on the Collateral. Such notice constitutes sufficient notice under Bankruptcy Rule 4001 and pursuant to the Interim Order, and no other notice need be given.
N. Good and sufficient cause has been shown for the entry of this Order. Among other things, entry of this Order will minimize disruption of the Debtors' businesses and operations. The financing and adequate protection arrangements authorized hereunder are necessary to avoid immediate and irreparable harm to the Debtors' estates. Consummation of such financing arrangements therefore are in the best interests of the Debtors' estates.
O. The financing and adequate protection arrangements authorized hereunder have been negotiated in good faith and at arm's length among the Debtors and the Lenders and the terms of such financing and adequate protection arrangements are fair and reasonable under the circumstances, reflect the Debtors' exercise of prudent business judgment consistent with their fiduciary duties and are supported by reasonably equivalent value and fair consideration.
P. The Debtors have requested immediate entry of this Order pursuant to Bankruptcy Rule 4001(b)(2) and (c)(2). The permission granted herein to enter into the Post-Petition Financing Documents and obtain funds, incur indebtedness and other financial accommodations thereunder and use Cash Collateral and other Lender Funds (as defined herein) are necessary to avoid immediate and irreparable harm to the Debtors. This Court concludes that entry of this Order is in the best interests of the Debtors and their estates and creditors as its implementation will, among other things, allow for the continued operation and rehabilitation of the Debtors' existing businesses.
Q. The terms, conditions and provisions of the Post-Petition Credit Agreement (as such term is defined herein) are incorporated herein as if set forth at length and shall survive, for the benefit of the Lenders, the Revolving Credit Termination Date.
NOW, THEREFORE, IT HEREBY IS ORDERED, THAT:
1. The Debtors be, and hereby are, authorized to enter into the Post-Petition Credit Agreement (the Post-Petition Credit Agreement, together with all agreements, documents, notes and instruments delivered pursuant hereto or thereto or in connection herewith or therewith, including, the Budget, as defined in the Post-Petition Credit Agreement and attached to the Interim DIP Order as Exhibit A (which Budget is hereby ame nded such that the aggregate fees and expenses to be paid to the Committee throughout the pendancy of these chapter 11 cases shall equal the amount of the Committee Fee Carve-Out (as defined herein) without regard to the weekly limits contained in the Budget attached asExhibit A to Interim DIP Order), and this Order are hereinafter collectively referred to as the "Post-Petition Financing Documents") in substantially the form annexed to the Motion (except as expressly modified by this Order), and to borrow money, incur indebtedness and perform their obligations hereunder and thereunder in accordance with, and subject to, the terms of this Order and the other Post-Petition Financing Documents, including, without limitation, the applicable Budget, subject to the variance as set forth in Section 6.08 of the Post-Petition Credit Agreement (the "Variance"). The Debtors are authorized to enter into such modifications and amendments to the Post-Petition Financing Documents without further order of this Court which do not substantively affect the rights of creditors, as may be agreed upon in writing by the Debtors and the Post-Petition Lenders. The Post-Petition Financing Documents constitute valid and binding obligations of the Debtors, enforceable against the Debtors in accordance with their respective terms.
2. From and after the Petition Date through the Revolving Credit Termination Date, and subject to the terms and conditions of this Order and the Post-Petition Financing Documents, the Debtors are authorized to borrow and reborrow funds, and incur indebtedness pursuant to the terms and provisions of this Order and the Post-Petition Financing Documents. From and after the Petition Date through the Termination Date (as defined herein), subject to the terms and conditions of this Order, the Budget, the Post-Petition Credit Agreement, the Carve-Out and the Fee Reserve, the Debtors are authorized to use cash collateral (as defined in section 363(a) of the Bankruptcy Code) in their possession or control arising from, or constituting proceeds of, the Collateral (the "Cash Collateral"). For purposes of this Order, "proceeds" of any collateral shall mean proceeds (as defined in the Uniform Commercial Code) of such Collateral as well as: (x) any and all proceeds of any insurance, indemnity or warranty or guaranty payable to the Debtors from time to time with respect to any of such Collateral; (y) any and all payments (in any form whatsoever) made or due and payable to the Debtors in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of such collateral by any governmental body, authority, bureau or agency (or any person under color of governmental authority); and (z) any other payments, dividends, interest or other distribut ions on or in respect of any of such Collateral; provided, however, that "proceeds" shall not include any recoveries under sections 506, 510, 542, 543, 544, 545, 547, 548, 550, 551, 552(b) and 553 of the Bankruptcy Code (collectively, the "Avoidance Actions").
3. As security for the Debtors' repayment of the Post-Petition Obligations hereunder and under the Post-Petition Financing Documents, and, subject to paragraph 15 below, as adequate protection for the Pre-Petition Obligations and the use of the Cash Collateral and the other Collateral, the Lenders are granted the following (each as more fully described in the Post-Petition Credit Agreement):
(i) subject only to the pre-Petition PACA claims, the Carve-Out and the Fee Reserve (as hereinafter defined), pursuant to section 364(c)(1) of the Bankruptcy Code, the Post-Petition Lender is granted an administrative expense claim with priority over any and all administrative expenses of the kind specified in sections 105, 326, 328, 503(b), 507(a), 507(b) and 762 of the Bankruptcy Code, provided, however, that such claim shall not be satisfied from the proceeds of the Avoidance Actions;
(ii) subject only to the pre-Petition PACA claims, the Carve-Out and the Fee Reserve, pursuant to section 364(c)(2) of the Bankruptcy Code, the Post-Petition Lender is granted a perfected first priority security interest in and lien upon all Unencumbered Collateral, other than Avoidance Actions;
(iii) subject only to the pre-Petition PACA claims, the Carve-Out and the Fee Reserve, pursuant to section 364(d)(1) of the Bankruptcy Code, the Post-Petition Lender is granted a fully perfected first priority priming security interest, senior to any and all liens or interests of the Pre-Petition Lenders, in all property and assets of the Debtors (other than Avoidance Actions and property subject to valid liens and interests of the Equipment Creditors) and the proceeds, products, rents, cash and profits of all the foregoing (including all Cash Collateral), including the Encumbered Collateral (but excluding property subject to valid liens and interests of the Equipment Creditors);
(iv) as adequate protection pursuant to section 364(d)(1)(B) and section 363 of the Bankruptcy Code, in order to further secure the Pre-Petition Obligations, the Pre-Petition Lenders are granted as to the total Pre-Petition Obligations, including, without limitation, any Pre-Petition Obligations arising from or related to that certain Consent and Acknowledgement by and among Houlihan Lokey Howard Zukin Capital ("HLHZ"), Fleet, as Administrative Agent and Entertainment as approved by the Court, without prejudice to the rights of the official unsecured creditors' committee appointed in these cases (the "Committee") to object to the retention of or allowance of fees and expenses of HLHZ (subject to the Carve-Out and the Fee Reserve) (subject to the pre-Petition PACA claims, the Carve-Out and the Fee Reserve): (x) additional duly perfected first priority security interests in all Collateral (other than Avoidance Actions and property subject to valid perfected and non-avoidable liens and interests of the Equipment Creditors) in which they do not currently have a lien; (y) to the extent that there is a diminution in the value of the Pre-Petition Collateral, including, but not limited to the Cash Collateral, resulting from any loss in market value, use by the Debtors and/or otherwise subsequent to the Petition Date (the "Adequate Protection Obligations"), replacement security interests in all the property and assets of the Debtors (both real and personal (other than with respect to Avoidance Actions), but subject to any valid perfected and non-avoidable liens and interests of the Equipment Creditors) (the liens granted pursuant to subsections (x) and (y) of this paragraph shall collectively be referred to as the "Adequate Protection Liens"); and (z) to the extent that there is a diminution in the value of the Pre-Petition Collateral, a super-priority administrative expense claim (other than Avoidance Actions) junior only to the claims of the Post-Petition Lender under the Post-Petition Financing Documents and pari passu with the Adequate Protection Liens. The Adequate Protection Liens are subject and subordinate only to the Post-Petition Liens, the Carve-Out, the Fee Reserve and the valid perfected and nonavoidable pre-petition liens and interests of the Equipment Creditors (excluding any adequate protection liens, security interests and claims granted herein to the Equipment Creditors); and
(v) Notwithstanding anything herein, in the Interim Order, or in the Post-Petition Financing Documents to the contrary: (a) any valid existing pre-petition liens and security interests of any Equipment Creditor shall be senior to the Adequate Protection Liens granted hereunder; and (b) any priming liens granted to the Post-Petition Lender shall not prime any valid existing pre-petition liens and security interests of any Equipment Creditor. Any valid existing pre-petition liens and security interests of any Equipment Creditor shall not be subordinated to or made pari passu with any other lien under section 364(d) of the Bankruptcy Code or otherwise. As adequate protection pursuant to section 363 of the Bankruptcy Code each of the Equipment Creditors is granted, to the extent of any diminution in value to its respective collateral resulting from any loss in market value, use by the Debtors and/or otherwise subsequent to the Petition Date, a junior replacement security interest in all property of the Debtors (both real and personal (other than with respect to Avoidance Actions)) and a superpriority administrative expense claim (other than with respect to Avoidance Actions) junior only to: (i) the claims of the Post-Petition Lender under the Post-Petition Financing Documents, (ii) the Adequate Protection Liens and the super-priority administrative expense claim granted to the Pre-Petition Lenders, (iii) the Carve-Out and (iv) the Fee Reserve. For purposes of clarification, the adequate protection granted herein to each Equipment Creditor does not involve any current or periodic cash payment and is junior in all respects to the liens and claims of the Post Petition Lender and the Pre-Petition Lender and any liens and claims to which the liens and claims of the Post Petition Lender and the Pre-Petition Lender are subject pursuant to the terms of this Order. This Order is without prejudice to the rights of any Equipment Creditor to seek any further order of this Court granting adequate protection or relief from the automatic stay, provided, however, that the entry of an Order of this Court granting to any Equipment Creditor relief from the automatic stay or adequate protection that involves any current or periodic cash payment and is not junior in all respects to the liens and claims of the Post Petition Lender and the Pre-Petition Lender shall constitute an additional Event of Default pursuant to section 7.01 of the Post-Petition Credit Agreement, and shall entitle the Post-Petition Lender to exercise any and all rights and remedies pursuant to the Post-Petition Financing Documents and this Order.
4. As additional adequate protection for the Debtors' use of the Lenders' Cash Collateral, (i) the Lenders may, at such time and at such intervals as the Post-Petition Lender (prior to the Revolving Credit Termination Date) and/or the Pre-Petition Lenders (subsequent to the Revolving Credit Termination Date) deem appropriate, apply such amount of any Excess Cash Balance first, to reduce the Post-Petition Obligations, and thereafter, in accordance with paragraph 7 hereof.
5. Except as expressly set forth in this Order or any of the Post-Petition Financing Documents, the liens granted in this Order shall not be: (a) subject to any lien which is avoided and preserved for the benefit of the Debtors' estates under section 551 of the Bankruptcy Code, with the exception of any recoveries under section 549 of the Bankruptcy Code; or (b) subordinated to or made pari passu with any other lien under section 364(d) of the Bankruptcy Code or otherwise. Neither the Carve-Out, nor the Fee Reserve, may be used for the payment of the fees and expenses of any professional persons incurred, directly or indirectly, in respect of, arising from or relating to, the initiation or prosecution of any action for preferences, fraudulent conveyances, other avoidance power claims or any other claims or causes of action against the Lenders or with respect to the Post-Petition Obligations or the Pre-Petition Obligations, without prejudice to the Committee's ability to conduct an investigation of Claims and Defenses (as defined below) pursuant to paragraph 15. Prior to the Termination Date, the Debtors shall be permitted to use the Lenders' Cash Collateral solely to pay such expenses and make such disbursements in such amounts as allowed pursuant to the Post-Petition Financing Documents, the Budget, subject to the Variance, and this Order, including payment of compensation and reimbursement of expenses allowed and payable under sections 330 and 331 of the Bankruptcy Code, as the same may be due and payable pursuant the Court's Orders. The failure of the Lenders to object to the Budget or the consent or agreement of the Lenders to the Budget shall not constitute an admission, nor shall it be deemed an admission, that any such budgeted expense(s) constitute reasonable, necessary costs and expense(s) of preserving or disposing of the Collateral. Notwithstanding any relief granted in any other order entered by the Court, but subject to the other terms and conditions of this Order, the Debtors shall not make any expenditures authorized by such orders unless, and to the extent that, such expenditures are encompassed and included in the Budget, subject to the Variance. The Lenders have no further commitments or obligations to extend credit or make further financial accommodations under the Pre-Petition Credit Agreement. The Pre-Petition Credit Agreement is hereby ratified and affirmed (without prejudice to the limited rights of the Committee pursuant to paragraph 15 hereof), and the Debtors shall perform all of their obligations under the Post-Petition Financing Documents and this Order.
6. Except as expressly set forth herein, and subject and subordinate only to the pre-Petition PACA claims, the Carve-Out and the Fee Reserve, no costs or administrative expenses which have been or may be incurred in the Debtors' chapter 11 cases, in any conversion of the Debtors' chapter 11 cases pursuant to section 1112 of the Bankruptcy Code, or in any other proceeding related thereto, and no priority claims, including, without limitation, any other superpriority claims, are or will be prior to or on a parity with the claims of the Post-Petition Lender against the Debtors arising, as applicable, out of the Post-Petition Obligations or any provision of this Order or with the Liens granted herein and in the Post-Petition Financing Documents in and to the Collateral.
7. Upon the closing of the sale(s) or other disposition, approved and authorized by an Order of this Court, of all or substantially all of the Lenders' Collateral, not in the ordinary course of the Debtors' business, the Net Proceeds derived therefrom shall be applied: (i) first, to reduce the Post-Petition Obligations in full; (ii) second, to fund on a pro rata basis the Carve-Out and the Reserve (as defined herein) with respect to the secured claims of the Equipment Creditors, in such amounts as determined, and ultimately as allowed, pursuant to a further order of the Court or by agreement; (iii) third, to fund the balance of the Reserve; and (iv) fourth, to make the Interim Distribution (as defined herein) to the Lenders. Upon the closing of any sale or other disposition, approved and authorized by an Order of this Court, of substantially less than all of the Lenders' Collateral, not in the ordinary course of the Debtors' business, the Net Proceeds derived therefrom shall be applied: (i) first, to reduce the Post-Petition Obligations in full; (ii) second, to fund on a pro rata basis the Carve-Out and the Reserve (as defined herein) with respect to the secured claims of the Equipment Creditors, with respect to such E.C. Equipment that is actually sold, in such amounts as determined, and ultimately as allowed, pursuant to a further order of the Court or by agreement; (iii) third, to fund the balance of the Reserve, except with respect to the Equipment Creditors, to the extent such E.C. Equipment was not sold pursuant to such sale or disposition; and (iv) fourth, to make the Interim Distribution (as defined herein) to the Lenders. The "Reserve" shall mean such sums as are reasonably acceptable to the Lenders to: (x) fund the Debtors' Plan (which Plan must be reasonably acceptable to the Lenders in form, content and substance), including an amount equal to the proceeds of the sale of the E.C. Equipment as determined, and ultimately allowed, pursuant to a further order of the Court or by agreement (this includes an amount equal to the sale proceeds attributable to the sale of E.C. Equipment that has not previously been set aside for such Equipment Creditor); (y) pay the expenses set forth in the Budget from after the date of closing on such sale or other disposition of assets; and (z) fund the KERP. Notwithstanding any other provision of this Order, the Lenders retain the right to object to and/or contest the allowance and payment of claims comprising any portion of the Reserve, or the amount of the Reserve in the aggregate, which aggregate sum must be in an amount reasonably acceptable to the Lenders. The "Interim Distribution" shall mean the sum equal to the Net Proceeds, less the unpaid Post-Petition Obligations, the unfunded Carve-Out (if any), and the unfunded Reserve (if any). The Debtors or Fleet shall give the Committee ten (10) Business Days' prior written notice of the payment of an Interim Distribution, and the Debtors and the Lenders agree to an expedited hearing on any motion brought by the Committee with respect thereon. The Interim Distribution, when and on each occasion funded, shall be applied by the Post-Petition Lender, upon receipt, towards the Pre-Petition Obligations. The Reserve shall be held in a segregated account maintained at Fleet in the Debtors' name, free and clear of all liens, claims and encumbrances other than those of the Lenders and other secured creditors, which liens of the Lenders shall, and do hereby, attach to the Reserve; provided, however, that although the Lenders' liens shall, and do hereby, attach to the Reserve, the Lenders shall not be entitled to exercise or otherwise enforce such liens with respect to the funds held in the Reserve (except as otherwise provided herein and in the Post-Petition Credit Agreement), unless and until the earlier of: (i) the occurrence of the Termination Date, or (ii) the obligations for which the Reserve has been created have been satisfied in full.
To the extent that valid PACA claims have not been paid in full prior to the closing of the sales or other disposition, such valid PACA claims shall be paid in full along with the reduction of the Post-Petition Obligations and the funding of the Carve-Out.
In the event a sale(s) or disposition of substantially less than all of the Lenders' collateral (the "Lesser Sale") occurs which includes the sale or disposition of certain of the Equipment Creditors' collateral (the "E.C. Equipment") and there are insufficient proceeds from such Lesser Sale to fund the Reserve with respect to the agreed or ordered secured claims of the Equipment Creditors with respect to such E.C. Equipment that is actually sold (the "E.C. Claims") after reducing the Post-Petition Obligations in full, then upon a subsequent Lesser Sale, at such time that the Post-Petition Obligations have been reduced in full, the Reserve with respect to the E.C. Claims shall be funded on a pro-rata basis along with the Carve-Out for the E.C. Equipment that was sold in such previous Lesser Sale, but which otherwise remained un-funded, regardless of whether such subsequent Lesser Sale included any of the E.C. Equipment. By way of example, if a Lesser Sale closed in the amount of $3.0 million that included $500,000 of E.C. Equipment, then the $3.0 million shall first be applied to reduce the Post-Petition Obligations. Next, assuming the Post-Petition Obligations have been funded in full, if a subsequent Lesser Sale closed in the amount of $1.0 million that included no E.C. Equipment, the proceeds would first fund, on a pro-rata basis, a $500,000 reserve on account of such E.C. Claims resulting from the prior Lesser Sale and the remaining proceeds would fund the Carve-Out.
To the extent that valid PACA claims have not been paid in full prior to the closing of the sales or other disposition, such valid PACA claims shall be paid in full along with the reduction of the Post-Petition Obligations and the funding of the Carve-Out.
8. The definition of the term "Committee Fee Carve-Out" in the Pre-Petition Credit shall be, and hereby is, modified such that it shall be in an amount not to exceed $525,000. Subject to Paragraph 7 herein, the Carve-Out and the Fee Reserve, the Post-Petition Obligations shall become due and payable, without notice or demand, on the Revolving Credit Termination Date, as provided in the Post-Petition Financing Documents. Notwithstanding the occurrence of the Revolving Credit Termination Date or anything herein, (i) all of the rights, remedies, benefits and protections provided to the Lenders under this Order, and (ii) until the Termination Date, the Carve-Out and the Debtors' ability to use Cash Collateral, including the Cash Collateral held in the Reserve, through the applicable period covered by the Budget, shall survive the Revolving Credit Termination Date; provided, however, that upon the Termination Date, the Debtors shall transfer, from and as part of the Carve-Out, an amount not more than the total amount of: (x) the lesser of (i) $525,000.00, or (ii) the amount of the Fee Carve-Out, less such professional and committee fees and expenses allowed through the Termination Date; (y) the unpaid allowed amount of the Houlihan Lokey Transaction Fee; and (z) unpaid fees due pursuant to 28 U.S.C. § 1930 (collectively, the "Fee Reserve") into an escrow account maintained at Fleet (or another financial institution reasonably acceptable to, and on terms and conditions reasonably acceptable to, the Lenders), for the benefit of Houlihan Lokey, the United States Trustee (for unpaid fees due pursuant to 28 U.S.C. § 1930), all court approved professionals retained by the Debtors in these Chapter 11 Cases (in an amount not to exceed the lesser of: (i) $500,000.00; or (ii) the amount of the Debtor's Professional Fee Carve-Out, less such professional fees and expenses allowed through the Termination Date), and all court approved professionals retained by any statutory committee appointed in these Chapter 11 Cases together with any allowed reimbursable expenses of the members of any such committee (in an amount not to exceed the lesser of: (i) $25,000.00; or (ii) the amount of the Committee Fee Carve-Out, less such professional and committee fees and expenses allowed through the Termination Date) for the purpose of paying the fees and expenses of such professionals that are thereafter incurred and otherwise authorized to be paid by an order of the Bankruptcy Court; provided further that the Debtors are authorized to pay from the Lenders' Cash Collateral, any fees and expenses of the professionals retained by the Debtors and any statutory committee appointed in these Chapter 11 Cases that remain accrued but unpaid as of the Termination Date and are otherwise authorized to be paid by an order of the Bankruptcy Court, up to a maximum amount of the Debtors' Professional Fee Carve-Out and the Committee Fee Carve-Out (as the case may be) remaining at such time. The Lenders shall not have a lien on the Fee Reserve,provided, however, to the extent any funds remain in the Fee Reserve after all such professional fees and expenses have been satisfied in full, the balance of the Fee Reserve shall first be applied to reduce any Post-Petition Obligations then outstanding and then to reduce the Pre-Petition Obligations. At no time shall the aggregate of all fees and expenses paid out of the proceeds of any Collateral to court approved professionals and members of any statutory committee, including the Fee Reserve, exceed the aggregate amount of (i) the Debtor's Professional Fee Carve-Out and (ii), subject to paragraph 9 hereof, the Committee Fee Carve-Out. Upon the Revolving Credit Termination Date, subject to the Carve-Out and the Fee Reserve, the principal of, and all accrued and unpaid interest and fees and all other amounts owed to, the Post-Petition Lenders hereunder or under the other Post-Petition Financing Documents shall be immediately due and payable and the Post-Petition Lenders shall have all other rights and remedies provided in the Post-Petition Financing Documents and this Order.
9. The Post-Petition Credit Agreement shall be, and hereby is, amended to delete section 7.01(w) as an Event of Default under the Post-Petition Credit Agreement.
10. The Debtors may use the Collateral, the proceeds of the Collateral and the proceeds of the Post-Petition Obligations solely at the times and as provided in the Post-Petition Financing Documents, this Order and as specifically set forth in the Budget, subject to the Variance.
11. From and after the Petition Date, the proceeds of the Post-Petition Obligations, and the Collateral shall not, directly or indirectly, be used to pay expenses of the Debtors or otherwise disbursed except as permitted in the Post-Petition Financing Documents, this Order, the Budget, subject to the Variance, the Carve-Out and the Fee Reserve.
12. The automatic stay under section 362(a) of the Bankruptcy Code shall be, and it hereby is, modified to the extent necessary to permit the Lenders to receive, collect and apply payments and proceeds in respect of the Collateral in accordance with the terms and provisions of this Order, and the Post-Petition Financing Documents.
13. Notwithstanding anything herein or in the Post-Petition Financing Documents to the contrary, the Debtors shall no longer be authorized to borrow funds or incur indebtedness hereunder or under the Post-Petition Financing Documents, and any obligation of the Post-Petition Lender to make loans or advances under the Post-Petition Financing Documents or hereunder, shall be terminated upon the occurrence of the Revolving Credit Termination Date. The Debtors' use of the Cash Collateral shall terminate upon the occurrence of the following events (any such event shall be referred to as a "Termination Event" and the date of any such event shall be referred to as the "Termination Date"):
(i) material non-compliance by any of the Debtors with any of the terms or provisions of this Order and/or the Post-Petition Financing Documents (including but not limited to the Budget, subject to the Variance); provided, however, that, except with respect to an Event of Default pursuant to section 7.01(a) of the Post-Petition Credit Agreement, the Debtors shall have received not less than ten (10) days notice from the Lenders that such event shall constitute a Termination Event and the Debtors shall have not cured such material non-compliance within ten (10) days of receiving such notice;
(ii) any Event of Default shall have occurred and be continuing, and, to the extent applicable, any notice required pursuant to the Post-Petition Financing Documents to cause the Post-Petition Obligations to become due and payable shall have been given; provided, however, that, except with respect to an Event of Default pursuant to section 7.01(a) of the Post-Petition Credit Agreement, the Debtors shall have received not less than ten (10) days notice from the Post-Petition Lender that such event shall constitute a Termination Event and the Debtors sha ll have not cured such Event of Default within ten (10) days of receiving such notice;
(iii) the filing of any Plan with respect to the Debtors that is not reasonably satisfactory to Lenders; or
(iv) the failure by the Debtors to file an application with the Court, on terms and conditions satisfactory to the Lenders, seeking a sale of all or substantially all of the Debtors' property pursuant to 11 U.S.C. § 363 (the "Sale Motion") on or before the tenth (10th) day following the Petition Date, and the Debtors shall have received not less than five (5) days notice from the Lenders that such event shall constitute a Termination Event and the Debtors shall have not filed such Sale Motion within five (5) days of receiving such notice.
Notwithstanding any other provision hereof, the Debtors may continue to use the Collateral, including Cash Collateral, pursuant to the Budget and this Order for a period of not more than two (2) days after a Termination Event, solely in order to pay essential expenses of the Debtors' businesses incurred in the ordinary course thereof, to the extent such expenses are actually incurred and/or payable in such two (2) day period. Upon the occurrence of a Termination Event or default under the Post-Petition Credit Agreement, the Equipment Creditors may seek to lift the automatic stay of Section 362 of the Bankruptcy Code upon five (5) business days prior written notice to the Debtors, the Post-Petition Lender, the Pre-Petition Lenders and the Committee.
14. Until the Termination Date and for so long thereafter as the Debtors are authorized to use the Pre-Petition Lenders' Cash Collateral, and effective immediately upon this Court's approval of the Interim Facility, no cost or expense, including, but not limited to, any cost or expense of administration of these chapter 11 cases or any future proceeding that may develop out of such cases, including liquidation in chapter 7 under the Bankruptcy Code, but excluding: (i) the Carve-Out, (ii) the Fee Reserve, and (iii) any claims against the Debtors for goods, services or fees at their standard and customary invoiced prices provided in accordance with the Budget (including, without limit, timing and amount) and incurred prior to the Termination Date, but not paid by the Debtors (subject to the Lenders' rights to object to any such claims), shall be charged by the Debtors or their respective bankruptcy estates against the Collateral pursuant to section 506(c) of the Bankruptcy Code or otherwise, including, but not limited to, the collateral of the Eq uipment Creditors and including those obligations for which surcharge might arise prior to the Termination Date, that is not cured within the applicable time, without the prior written consent of the Lenders and the Equipment Creditors (the Equipment Creditors consent is required with respect to any surcharge on the Equipment Creditors' collateral only), and no such consent shall be implied from any action, inaction or acquiescence by the Lenders or the Equipment Creditors; provided, further, that no surcharge may be made to the extent the Debtors have materially misapplied funds from the amounts set forth in the Budget. No waiver of this provision shall be implied from any action, inaction or acquiescence by the Lenders or the Equipment Creditors, but shall exist only upon prior written consent of the Lenders or the Equipment Creditors.
15. Notwithstanding anything herein to the contrary, no advances made on the Revolving Credit Loans, Cash Collateral or any proceeds of the Collateral (collectively, "Lender Funds") may be used by any of the Debtors, any statutory committee or any other person or entity to object to or contest in any manner, or raise any defenses or contests to, the validity, perfection, priority or enforceability of the Pre-Petition Obligations or the Pre-Petition Liens, or to assert or prosecute any action for preferences, fraudulent conveyances, other avoidance power claims or any other claims or causes of action against the Lenders (collectively, "Claims and Defenses"); without limiting the foregoing: (i) at no time shall any such committee or other person or entity have the right to use Lender Funds to prosecute any such Claims and Defenses; (ii) the Committee shall have the right to assert only those Claims and Defenses of which the Committee provides written notice to the Lenders on or before September 17, 2004, in an action commenced in this Court on or before September 30, 2004, which Committee shall be, and hereby is, deemed to have standing to bring any such action provided that it is timely, provided, however, that in any such action the Lenders shall be entitled to the dismissal of any Claim or Defense as to which the Committee did not provide written notice to the Lenders on or before September 17, 2004; (iii) if no such action is commenced on or before such date, all Claims and Defenses shall be deemed, immediately and without further action by the Lenders, to have been forever relinquished and waived as to such committee and other person or entity with actual notice of these Chapter 11 cases (but without prejudice to Claims or Defenses of any Equipment Creditor under the Uniform Commercial Code, as applicable, solely to assert the priority of its liens and security interests, or any other pre-petition claims and defenses of Brunswick against any non-Debtor party); and (iv) the terms of this Order shall be without prejudice to the right of the Committee to commence and prosecute Claims and Defenses solely as set forth in (ii) above, or to investigate any Claims and Defenses, including its right obtain document discovery from the Pre-Petition Lenders in accordance with the schedule discussed on the record of the Final Hearing; and, provided, further, that, as to the Debtors, all such Claims and Defenses are hereby relinquished and waived as of the Petition Date. In addition to the foregoing and following the entry of this Order, no Lender Funds may be used by and of the Debtors, any statutory committee or any other entity, to object to or to contest in any manner, the Post-Petition Obligations or the Post-Petition Liens (other than objections raised by the Committee with respect to this Order prior to or at the Final Hearing) or to assert or prosecute any actions, claims, or causes of actions against the Post-Petition Lender. Notwithstanding anything to the contrary herein or in the Post-Petition Financing Documents, the entry of this Order is without prejudice to any Claims or Defenses arising out of any acts or omissions of the Lenders first occurring on or after the Petition Date.
16. Except as otherwise provided in this Order, any of the Lenders, in their sole discretion, shall have the right, without any further action or approval of this Court, at any time, to exercise any of its respective rights and remedies hereunder, under the Post-Petition Financing Documents, or under applicable law in order to effect repayment of the Post-Petition Obligations and/or Pre-Petition Obligations, or to receive any amounts or remittances due hereunder, subject to any notice required by the Post-Petition Financing Documents or otherwise. The Lenders shall be entitled to apply the payments or proceeds of the Collateral in accordance with the provisions of this Order, and, in no event shall the Lenders be subject to the equitable doctrine of marshalling or any other similar doctrine with respect to any of the Collateral or otherwise.
17. Except as provided in the Post-Petition Financing Documents and subject to the pre-Petition PACA claims, the Carve-Out and the Fee Reserve and otherwise in this Order, no order shall be entered at any time during these Chapter 11 cases that grants liens in the Collateral or any portion thereof to any other parties pursuant to section 364(d) of the Bankruptcy Code or otherwise, which liens are senior, and/or on a parity with liens of the Lenders. Except on the terms of this Order and of the Post-Petition Financing Documents, subject to the Orders of this Court, including, without limitation, Orders entered by this Court granting the Debtors various first day relief, the Debtors, absent the written consent of the Lenders, shall be enjoined and prohibited from at any time, until the Post-Petition Obligations (other than contingent indemnification obligations) have been or will be paid in full or will be as a result thereof, applying to the Court, the District Court or any Judge of any United States District Court or Court for an order authorizing the use of the Collateral, except as necessary to operate the Debtors' business in the ordinary course of the Debtors' business.
18. The Debtors shall execute and deliver to the Lenders all such agreements, financing statements, instruments and other documents as the Lenders may reasonably request to evidence, confirm, validate or perfect the liens granted pursuant hereto.
19. Without limiting the rights of access and information afforded the Post-Petition Lender under the Post-Petition Financing Documents, the Debtors shall permit representatives, agents and/or employees of the Lenders to have reasonable access to their premises and their records during normal business hours upon reasonable notice (without unreasonable interference with the proper operation of the Debtors' businesses) and shall cooperate, consult with, and provide to such persons all such non-privileged information as they may reasonably request.
20. The Debtors shall promptly reimburse the Post-Petition Lender for its reasonable costs and expenses provided for in the Post-Petition Credit Agreement and in a manner consistent with section 9.03 of the Post-Petition Credit Agreement. None of such costs and expenses shall be subject to the approval of this Court, and no recipient of any such payment shall be required to file with respect thereto any interim or final fee application with this Court, provided, however, the Post-Petition Lender must file a monthly statement of fees with the Court and serve such monthly statement of fees on the Debtors, the counsel to the Debtors, the United States Trustee and the Committee, such that such statement is provided at least 5 business days' prior to the date of reimbursement. All liens granted herein and in the Post-Petition Financing Documents to secure repayment of the Post-Petition Obligations, and all liens granted herein to secure repayment of the Adequate Protection Obligations shall, pursuant to this Order, be, and they hereby are, deemed perfected effective as of the Petition Date, and no further notice, filing or other act shall be required to effect such perfection;provided, however, that if Lenders shall, in their sole discretion, choose to file such mortgages, financing statements, notices of liens and security interests and other similar documents, all such mortgages, financing statements or similar instruments shall be deemed to have been filed or recorded at the time and on the date of entry of this Order.
21. The provisions of this Order shall be binding upon and inure to the benefit of each of the Lenders and the Debtors, together with their respective successors and assigns (including any trustee or other fiduciary hereafter appointed as a legal representative of the Debtors or with respect to the property of the estates of the Debtors).
22. Based upon the findings set forth in this Order and in accordance with section 364(e) of the Bankruptcy Code, which is applicable to the post-petition financing arrangements contemplated by this Order, in the event any or all of the provisions of this Order or any other Post-Petition Financing Documents are hereafter modified, amended or vacated by a subsequent order of this or any other Court, no such modification, amendment or vacature shall affect the validity, enforceability or priority of any lien or claim authorized or created hereby or thereby. Notwithstanding any such modification, amendment or vacature, any claim granted to the Lenders hereunder or under the other Post-Petition Financing Documents arising prior to the effective date of such modification, amendment or vacation shall be governed in all respects by the original provisions of this Order and the other Post-Petition Financing Documents, and the Lenders, as the case may be, shall be entitled to all of the rights, remedies, privileges and benefits, including the liens and priorities granted herein and therein, with respect to any such claim.
23. The Debtors are authorized to do and perform all acts, to make, execute and deliver all instruments and documents (including, without limitation, the execution of additional security agreements, mortgages and financing statements) and to pay fees and expenses which may be required or necessary for the Debtors' performance under the Post-Petition Financing Documents and this Order, including, without limitation: (i) the execution by the Debtors of the Post-Petition Financing Documents; and (ii) the payment by the Debtors of the fees and other expenses described in the Post-Petition Financing Documents as such become due and payable, including, without limitation, the Post-Petition Lender's fees, commitment fees, facility fees and reasonable attorneys', financial advisers', appraisers' and accountants' fees and disbursements as provided for in the Post-Petition Financing Documents, in a manner consistent with the Post-Petition Credit Agreement, including, without limitation, section 9.03 of the Post-Petition Credit Agreement.
24. The obligations of the Debtors under this Order or in respect of the Post-Petition Obligations (other than contingent indemnification obligations), unless otherwise paid in full in accordance with this Order or as otherwise agreed upon in a Plan or otherwise, shall not be discharged by the entry of an order dismissing any or all of the Debtors' chapter 11 cases.
25. Any creditors asserting priority claims against the Debtors as trust beneficiaries pursuant to Section 5(c)(4) of the Perishable Agricultural Commodities Act, 7 U.S.C. 499e(c)(4) ("PACA") shall have their claims paid to the extent such claims are determined to be valid claims under PACA. Any creditor asserting a PACA claim must submit sufficient documentation and information to support its claim to the Debtors, who shall have thirty (30) days from receipt of such claim and documentation to object in writing with specificity to any PACA claim, or portion thereof. Any party filing an objection shall request that the Court set a hearing on the matter within fifteen (15) days after the filing of such objection. PACA claimants whose PACA claim is the subject of a timely objection may, within ten (10) days of the date such objection is filed, serve on counsel for the Debtors a written response to such objection. If no timely objection has been filed with respect to a valid PACA claim, the Debtors shall pay such PACA claim within seven (7) business days after the objection deadline. If an objection has been filed with respect to a portion of a PACA claim, the Debtors shall pay any undisputed portion of the subject PACA claim within seven (7) business days after the objection deadline. The Debtors shall pay the disputed portion of any PACA claim within seven (7) business days of the resolution of said claim in favor of the PACA claimant of any objection. No Order entered in this case or order confirming a plan of reorganization shall conflict with the rights of the pre-Petition PACA claimants as determined by the Court.
26. Notwithstanding anything herein, the entry of this Order is without prejudice to, and does not constitute a waiver of, expressly or implicitly, or otherwise impair: (a) any of the rights of the Lenders or the Equipment Creditors under the Bankruptcy Code or under nonbankruptcy law, including, without limitation, the right of the Lenders or the Equipment Creditors to: (i) subject to paragraphs 3(v) and 13 hereof, request additional adequate protection of their interests in the Collateral or relief from or modification of the automatic stay under section 362 of the Bankruptcy Code; (ii) upon the occurrence of a Termination Event, request conversion of any of the Debtors' chapter 11 cases to cases under chapter 7 of the Bankruptcy Code; (iii) upon the occurrence of a Termination Event, propose, subject to the provisions of section 1121 of the Bankruptcy Code, a chapter 11 plan or plans; and (iv) object to any application for leave to sell any of the Collateral; or (b) any of the rights, claims or privileges (whether legal, equitable or otherwise) of the Lenders.
27. In addition to the parties specified in the Post-Petition Credit Agreement, notice to the Post-Petition Lender and the Pre-Petition Lenders in these Chapter 11 cases also shall be given to counsel to the Lenders, Proskauer Rose LLP, 1585 Broadway, New York, NY 10036 (attn: Michael E. Foreman, Esq. and Vincenzo Paparo, Esq.).
28. Based upon the record presented to the Court, this Order shall constitute findings of fact and conclusions of law and shall take effect immediately upon execution hereof.
29. To the extent of any inconsistency between the terms of this Order and the Post-Petition Credit Agreement, the terms and provisions of this Order shall govern.
30. To the extent not otherwise withdrawn or deemed to be moot, any Objections are hereby overruled with prejudice and without costs.