FINAL ORDER (I) AUTHORIZING DEBTORS IN POSSESSION TO ENTER INTO POSTPETITION CREDIT AGREEMENT AND OBTAIN POSTPETITION FINANCING PURSUANT TO SECTIONS 363 AND 364 OF THE BANKRUPTCY CODE, (II) GRANTING LIENS, SECURITY INTERESTS AND SUPERPRIORITY CLAIMS AND (III) PROVIDING FOR THE PAYMENT OF SECURED PREPETITION INDEBTEDNESS
JOHN SQUIRES, United States Bankruptcy Judge
Upon the motion (the "Motion") dated March 6, 2002 of National Steel Corporation ("National") and its affiliated debtors, as debtors and debtors in possession (each individually a "Debtor" and, collectively, the "Debtors"), (a) for the entry of an Order for authorization to (i) obtain postpetition financing pursuant to sections 363 and 364 of title 11 of the United States Code (the "Bankruptcy Code") by entering into that certain Secured Super-Priority Debtor in Possession Credit Agreement, dated as of March 6, 2002 (as the same may be amended, supplemented or otherwise modified from time to time, the "Postpetition Credit Agreement"), a copy of which is annexed as Exhibit A to the order dated March 7, 2002, approving transactions provided for in the Postpetition Credit Agreement (the "Interim Order"), by and among National, as Borrower, the other Debtors, as Guarantors, the lenders and letter of credit issuers from time to time parties thereto (collectively, the "Postpetition Lenders"), Citicorp USA, Inc. ("CUSA"), as Administrative Agent (in such capacity, the "Postpetition Agent"), Heller Financial, Inc. ("Heller"), as Collateral Monitoring Agent (in such capacity, the "Postpetition Collateral Monitoring Agent"), Fleet Capital Corporation ("Fleet") and The CIT Group/Business Credit, Inc. ("CIT"), as Documentation Agents (in such capacity, the "Postpetition Documentation Agents"), Heller and GMAC Business Credit, LLC ("GMAC"), as Syndication Agents (in such capacity, the "Postpetition Syndication Agents"), The Fuji Bank, Limited ("Fuji"), as Co-Arranger (in such capacity, the "Postpetition Co-Arranger"), and Salomon Smith Barney Inc. ("Salomon"), as Sole Book Manager and Sole Lead Arranger (in such capacity, the "Postpetition Lead Arranger" and, together with the Postpetition Agent, the Postpetition Collateral Monitoring Agent, the Postpetition Documentation Agents, the Postpetition Syndication Agents and the Postpetition Co-Arranger, the "Postpetition Agents"), subject to the terms and conditions set forth therein, (ii) grant mortgages, security interests, liens and superpriority claims to the Postpetition Agent on behalf of and for the benefit of the Postpetition Agents and the Postpetition Lenders (including a priority 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) provide for the payment of the secured prepetition indebtedness owed to the Prepetition Agents and the Prepetition Lenders (each as hereinafter defined) as provided herein and in the Postpetition Credit Agreement, and (iv) pending a final hearing on the Motion (the "Final Hearing"), obtain emergency postpetition loans under the Postpetition Credit Agreement to and including the date on which an order granting final approval of the Postpetition Credit Agreement is entered, and (b) 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 the Court having considered the Motion and the Exhibits attached thereto, including, without limitation, the Postpetition Credit Agreement; and in accordance with Bankruptcy Rule 4001(c)(2) and (c)(3), due and proper notice of the Motion having been given; and a hearing to consider interim approval of the Postpetition Credit Agreement having been held on March 7, 2002 (the "Interim Hearing"); and the Interim Order having been entered; and the Final Hearing having been held and concluded on the date hereof; and upon all of the pleadings filed with the Court, the Interim Hearing 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 Postpetition Credit Agreement.
THE COURT HEREBY FINDS:
A. On March 6, 2002 (the "Petition Date") the Debtors each filed with this Court voluntary petitions 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. The official committee of unsecured creditors in the Debtors' chapter 11 cases (the "Creditors' Committee") was appointed on March 18, 2002.
B. 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, 362, 363 and 364 of the Bankruptcy Code and Bankruptcy Rule 4001(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.
C. Pursuant to that certain Credit Agreement, dated as of September 28, 2001 (as amended from time to time, the "Prepetition Credit Agreement", and together with all agreements, documents, notes, instruments and any other agreements (including Hedging Contracts) delivered pursuant thereto or in connection therewith, the "Prepetition Financing Documents"), among National, as Borrower, CUSA, as Administrative Agent (in such capacity, the "Prepetition Agent"), Fleet and CIT, as Documentation Agents, Heller and GMAC, as Syndication Agents, Fuji, as Co-Arranger, and Salomon, as Sole Book Manager and Sole Lead Arranger (collectively in such capacities, the "Prepetition Agents" and, together with the Postpetition Agents, the "Agents"), and the lenders and letter of credit issuers from time to time party thereto (the "Prepetition Lenders" and, collectively with the Postpetition Lenders, the "Lenders"), the Prepetition Lenders made loans and advances to, issued letters of credit for and/or provided other financial accommodations (collectively, the "Prepetition indebtedness") to National to, inter alia, fund the operations of National and its affiliates. National Steel Pellet Company, National Steel Funding Company, NS Holdings Corporation and Pro Coil Corporation (collectively, the "Prepetition Guarantors") have jointly and severally unconditionally guaranteed all of National's obligations under the Prepetition Financing Documents (the "Prepetition Guarantees"). The Debtors admit that as of the Petition Date the aggregate principal amount of approximately $310,000,000 was outstanding in respect of loans made and letters of credit issued by the Prepetition Lenders pursuant to the Prepetition Credit Agreement, plus interest thereon and fees and expenses incurred in connection therewith as provided in the Prepetition Financing Documents. For purposes of this Order, each of the terms Postpetition Indebtedness (as hereinafter defined) and Prepetition Indebtedness shall include the principal of, and all interest, fees and other charges owing in respect of, such loans or indebtedness (including any reasonable attorneys', accountants' and financial advisors' fees that are chargeable or reimbursable under the relevant agreements relating to such loans or other indebtedness relating to periods prior and subsequent to the Petition Date).
D. To secure the Prepetition indebtedness and the Prepetition Guarantees, each of National and the Prepetition Guarantors granted to the Prepetition Agent, on behalf of and for the benefit of the Prepetition Agents and the Prepetition Lenders liens on and security interests in (collectively, "Liens") substantially all of their personal property (other than the assets that secure the Public Bonds and Project Financings, each as defined in the Motion), wherever located, then owned or thereafter acquired or arising, and 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 "Prepetition Collateral" and such Liens shall be referred to herein as the "Prepetition Liens").
E. The Debtors acknowledge and agree that the Prepetition Liens constitute valid, binding, enforceable (other than in respect of the stay of enforcement arising from Bankruptcy Code section 362) and perfected first priority Liens on the Prepetition Collateral subject only to prior Liens expressly permitted by the Prepetition Credit Agreement, and are not subject to avoidance or subordination pursuant to the Bankruptcy Code or applicable non-bankruptcy law. The Debtors acknowledge and agree that the Prepetition Indebtedness and the obligations under the Prepetition Guarantees constitute legal, valid and binding obligations of National and the Prepetition Guarantors, enforceable in accordance with their terms (other than in respect of the stay of enforcement arising from Bankruptcy Code section 362), no offsets, defenses or counterclaims to the Prepetition Indebtedness or the obligations under the Prepetition Guarantees exist, and no portion of the Prepetition Indebtedness or the obligations under Prepetition Guarantees is subject to avoidance or subordination pursuant to the Bankruptcy Code or applicable non-bankruptcy law. Subject to the provisions of paragraph 12 of this Order, none of the Debtors' acknowledgements and agreements set forth in paragraphs C, D, E and F of this Order are or shall be imputed to the Creditors' Committee.
F. An immediate and critical need exists for the Debtors to obtain funds in order to continue the operation of their businesses. Without such funds, the Debtors will not be able to pay their payroll and other direct operating expenses and obtain goods and services needed to carry on their businesses during this sensitive period 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 for borrowed money and other financial accommodations are vital 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) of the Bankruptcy Code or debt secured only as described in section 364(c)(2) or (3) of the Bankruptcy Code.
G. The Debtors acknowledge and agree that substantially all of the personal property of the Debtors (other than the assets that secure the Public Bonds and Project Financings) is subject to the Prepetition Liens. The Prepetition Lenders have objected to (i) the use by the Debtors of their Prepetition Collateral, including their cash collateral, except to the extent that all cash held or received by the Debtors shall be applied in payment of the Prepetition Indebtedness, and (ii) the priming of any of their Liens by any lender.
H. The Prepetition Agents and the Prepetition Lenders have indicated a willingness to consent and agree to the Debtors' entering into the financing arrangements contemplated by this Order and the Postpetition Financing Documents (as hereinafter defined), and the Postpetition Agents and Postpetition Lenders are willing to provide the additional financing contemplated herein, all subject to the terms and conditions set forth herein and in the other Postpetition Financing Documents and the provisions of this Order assuring that the Postpetition Indebtedness, the Postpetition Liens and the various other claims, super-priority claims and other protections granted pursuant to this Order and the other Postpetition Financing Documents will not be affected by any subsequent reversal or modification of this Order or any other order, as provided in section 364(e) of the Bankruptcy Code, which is applicable to the postpetition financing arrangements contemplated by this Order. Each of the Postpetition Agents, each of the Postpetition Lenders, each of the Prepetition Agents and each of the Prepetition Lenders has acted in good faith in consenting to and in agreeing to provide the postpetition financing contemplated by this Order and the other Postpetition Financing Documents and the reliance of each of the Postpetition Agents, each of the Postpetition Lenders, each of the Prepetition Agents and each of the Prepetition Lenders on the assurances referred to above is in good faith.
I. The treatment requested by the Debtors for the Lenders and provided by this Order will minimize disputes and litigation over collateral values, priming) use of cash collateral, and the need to segregate the Prepetition Collateral and the proceeds thereof from the Postpetition Collateral (as hereinafter defined) and the proceeds thereof.
J. In accordance with the Bankruptcy Code, Bankruptcy Rule 4001(c) and the Interim Order, notice of the Final Hearing on the Motion and this Order has been provided to counsel to the Prepetition Agents, counsel to the Prepetition Lenders, counsel to the Postpetition Lenders, counsel to NUF LLC, counsel to the Creditors' Committee, members of the Creditors' Committee, the United States Trustee, the fifty largest unsecured creditors of the Debtors and all persons requesting service of papers pursuant to Bankruptcy Rule 2002. Such notice constitutes sufficient notice under Bankruptcy Rule 4001 and no other notice need be given.
K. Good 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 and permit them to meet payroll and other operating expenses, obtain needed supplies and retain customer and supplier confidence by demonstrating an ability to maintain normal operations. The financing arrangements authorized hereunder are vital to avoid immediate and irreparable harm to the Debtors' estates. Consummation of such financing arrangements is therefore in the best interests of the Debtors' estates.
L. The financing and other arrangements authorized hereunder have been negotiated in good faith and at arm's length among the Debtors, the Postpetition Agents, each of the Postpetition Lenders and each of the Prepetition Agents on behalf of themselves and the Prepetition Lenders, and the terms of such financing 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.
M. The permission granted herein to (i) enter into the Postpetition Financing Documents and obtain funds, incur indebtedness and other financial accommodations thereunder and (ii) repay the Prepetition Indebtedness is 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.
N. The Debtors (other than National) are jointly and severally unconditionally guaranteeing the Postpetition Indebtedness and all other obligations under the Postpetition Financing Documents.
THEREFORE, IT IS HEREBY ORDERED AND ADJUDGED THAT:
1. The Debtors entry into the Postpetition Credit Agreement (the Postpetition Credit Agreement, together with all agreements (including those related to Letters of Credit and Hedging Contracts), documents, notes and instruments delivered pursuant hereto or thereto or in connection herewith or therewith, including the Projections, the Interim Order and this Order, are hereinafter referred to as the "Postpetition Financing Documents") is, on a final basis, ratified, authorized and approved, and the Debtors are, on a final basis, authorized 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 Postpetition Financing Documents, including, without limitation, all borrowings made or authorized by the Interim Order. The Debtors are authorized to enter into such modifications and amendments to the Postpetition Financing Documents (including, without limitation, the Projections), without further order of this Court, as may be agreed upon in writing by the Debtors, the Postpetition Agents and all of the Postpetition Lenders (or a majority or supermajority subgroup thereof, as applicable under the terms of the Postpetition Financing Documents), except for (i) any increase in the aggregate of the Postpetition Lenders' Commitments, (ii) any increase in the applicable interest rates on or fees charged in connection with the Revolving Loans, (iii) any modification of the maturity of the Revolving Loans or (iv) any other modification which imposes any additional material burden on the Debtors; provided, however, except as to amendments or modifications approved by the Court, that the Debtors shall provide written notice to counsel to the Creditors' Committee of any modifications and amendments to the Postpetition Financing Documents permitted hereunder at least five (5) business days prior to the same becoming effective. Upon execution and delivery of the Postpetition Financing Documents, the Postpetition Financing Documents shall constitute valid and binding obligations of the Debtors, enforceable against the Debtors in accordance with their terms. Effective immediately on the occurrence of the Effective Date under the Postpetition Credit Agreement, (i) all letters of credit outstanding pursuant to the Prepetition Credit Agreement were deemed to be, and have become, for all purposes Letters of Credit issued or outstanding under the Postpetition Financing Documents, and all obligations thereunder or relating thereto were deemed to be Postpetition Indebtedness and (ii) all obligations owed, or that become owed, by the Debtors to the Prepetition Agent or any Prepetition Lenders under or relating to, or any other claims held by the Prepetition Agent or any Prepetition Lenders with respect to, Hedging Contracts in effect as of the Petition Date were deemed to be Postpetition Indebtedness.
2. Except as expressly provided in the Postpetition Credit Agreement, from and after the Petition Date (as hereinafter defined) until (i) the indefeasible payment in full in cash of the Postpetition Indebtedness, including the Revolving Loans, all obligations constituting unreimbursed drawings under Letters of Credit (and the replacement or the cash collateralization of outstanding Letters of Credit) and all obligations owing under or relating to Hedging Contracts as in effect on or after the Petition Date, in accordance with the Postpetition Credit Agreement, (ii) the indefeasible payment in full of the Prepetition Indebtedness, and (iii) the termination of any commitments or obligations on the part of the Postpetition Lenders to make Revolving Loans and to issue Letters of Credit or with respect to outstanding Hedging Contracts, the Debtors are hereby authorized and required to remit to the Postpetition Agent immediately upon the Debtors' receipt thereof or otherwise in accordance with the Debtors' current practices, all cash in their possession or control or otherwise arising or collected in connection with their operations or business other than (a) that portion of the proceeds of the Prepetition Indebtedness that does not constitute the cash collateral of the Prepetition Agents and the Prepetition Lenders up to a maximum of $9,000,000, and (b) the proceeds of the Postpetition Indebtedness. Cash remitted to the Postpetition Agent shall be applied as provided in the Postpetition Credit Agreement, including to the payment of the Prepetition Indebtedness as provided therein.
3. Any and all payments or proceeds remitted to the Postpetition Agent pursuant to the provisions of paragraph 2 of this Order and paragraph 2 of the Interim Order shall be received by the Postpetition Agent for the benefit of the relevant Lenders or the other Secured Parties (as hereinafter defined) free and clear of any claim, charge, assessment or other liability including, without limitation, any such claim or charge arising out of or based on, directly or indirectly, sections 506(c) (whether asserted or assessed by, through or on behalf of the Debtors) or 552(b) of the Bankruptcy Code.
4. From and after the Petition Date through the Termination Date and subject to the terms and conditions of this Order, the Debtors are hereby authorized to borrow and reborrow funds and incur indebtedness pursuant to the terms and provisions of this Order and the other Postpetition Financing Documents.
5. As security for all loans, advances, letters of credit and any other indebtedness or obligations, contingent or absolute which may now or from time to time hereafter be owing by the Debtors to the Postpetition Agents, the Postpetition Lenders and any other parties as provided for under any of the other Postpetition Financing Documents (such parties, together with the Postpetition Agents and Postpetition Lenders, the "Secured Parties;" and all such loans, advances, letters of credit and other indebtedness or obligations, together with any obligations at any time incurred by the Debtors on or after the Petition Date to any of the Secured Parties in connection with Hedging Contracts or the Debtors' cash management system collectively, the "Postpetition Indebtedness"), the Postpetition Agent is hereby granted for the sole benefit of the Secured Parties valid, binding, enforceable and perfected Liens (the "Postpetition Liens") in the Collateral, including without limitation all currently owned or hereafter acquired property and assets of the Debtors of any kind or nature, whether real or personal, tangible or intangible, wherever located, now owned or hereafter acquired or arising and all proceeds, products, rents and profits thereof, including, without limitation, all cash (including all cash collateral, wherever held), goods, accounts receivable, inventory, cash-in-advance deposits, real estate, machinery, equipment, vehicles, trademarks, trade names, licenses, causes of action, rights to payment including tax refund claims, insurance proceeds and tort claims (including actions for preferences, fraudulent conveyances, and other avoidance power claims and any recoveries under sections 506(c), 542, 544, 545, 547, 548, 549, 550, 552(b) and 553 of the Bankruptcy Code) and the proceeds, products, rents and profits of all of the foregoing (all of the foregoing, the "Postpetition Collateral"), (i) subject only to the Carveout (as hereinafter defined), the Prepetition Liens and to any other valid, binding, enforceable, perfected and unavoidable Liens of record (other than the liens securing the obligations outstanding under the NUF Credit Agreement (as defined in the Motion)) existing in the Postpetition Collateral on the Petition Date (collectively, the "Senior Liens"), and (ii) senior and superior pursuant to section 364(d) of the Bankruptcy Code to the Liens securing the obligations outstanding under the NUF Credit Agreement (the "Primed Liens").
6. The Liens granted in this Order and the Interim Order shall not be (i) subject to any Lien which is avoided and preserved for the benefit of the Debtors' estates under section 551 of the Bankruptcy Code or (ii) subordinated to or made pari passu with any other Lien under section 364(d) of the Bankruptcy Code or otherwise. As used in this Order, "Carveout" means (i) the unpaid fees of the clerk of the Bankruptcy Court and of the United States Trustee pursuant to 28 U.S.C. § 1930 (a) and (b), and (ii) the aggregate allowed unpaid fees and expenses payable under sections 330 and 331 of the Bankruptcy Code to professional persons retained pursuant to an order of the Court by the Debtors or any statutory committee appointed in these chapter 11 cases (other than the fees and expenses, if any, of any such 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 Agents or the Lenders or with respect to the Postpetition Indebtedness or the Prepetition Indebtedness), paid after the occurrence and during the continuance of an Event of Default not to exceed $7,000,000 in the aggregate. So long as no Event of Default shall have occurred and be continuing, the Debtors shall be permitted to pay 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, and the same shall not reduce the Carveout.
7. In addition, the Postpetition Indebtedness shall have priority in all of these chapter 11 cases in accordance with the provisions of section 364(c)(1) of the Bankruptcy Code over all administrative expenses of the kind specified in section 503(b) or 507(b) of the Bankruptcy Code ("Superpriority"), subject only to the Carveout. Except for the Carveout, 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 (i) claims of the Agents, the Lenders or the other Secured Parties against the Debtors arising out of the Postpetition Indebtedness or any provision of this Order and of the Interim Order or (ii) Liens granted herein, in the Interim Order and in the other Postpetition Financing Documents in and to the Postpetition Collateral. Provided that (i) the Obligations under the Postpetition Financing Documents have not become due and payable and the Commitments have not been terminated pursuant to the provisions of Section 9.2 of the Postpetition Credit Agreement and (ii) all Prepetition Indebtedness has been paid in full, then notwithstanding the Superpriority claims and Liens granted or afforded pursuant to this Order and the Postpetition Financing Documents and further notwithstanding any other provision hereof, in the Postpetition Financing Documents or the Bankruptcy Code to the contrary, with respect to the amount of the Postpetition Indebtedness equal to the lesser of the amount of (a) Postpetition Indebtedness outstanding on the date of determination or (b) Prepetition Indebtedness repaid subsequent to the Petition Date (such lesser amount of the Postpetition Indebtedness, the "Repaid Prepetition Indebtedness"), all holders of such claims and Liens shall be bound by the agreement of such holders to the treatment of the Repaid Prepetition Indebtedness in any plan of reorganization proposed by the Debtors if (x) more than one-half of the number of holders of Repaid Prepetition Indebtedness actually voting on such plan and (y) holders of at least two-thirds in amount of Repaid Prepetition Indebtedness actually voting on such plan accept such plan. Under no circumstances shall any plan of reorganization in any of these cases be confirmed or become effective unless such plan is either (i) proposed by the Debtors and the Repaid Prepetition Indebtedness is treated in accordance with the foregoing sentence or (ii) provides that the Repaid Prepetition Indebtedness be paid in cash in full on the effective date of such plan. To the extent that the provisions of the preceding two sentences of this paragraph 7 conflict with the terms of the Postpetition Credit Agreement, the terms of the Postpetition Credit Agreement shall govern.
8. Interest on the Revolving Loans and other Postpetition Indebtedness shall accrue at the rates (including any default rates only after an Event of Default under the Postpetition Financing Documents) and shall be paid at the times as provided in the Postpetition Financing Documents. Interest on the Prepetition Indebtedness shall accrue at the rates (including any default rates only after an Event of Default under the Postpetition Financing Documents) as provided in the Prepetition Financing Documents.
9. The Debtors shall use the proceeds of the Postpetition Indebtedness, including of the Letters of Credit, solely as provided in this Order, the Interim Order and in the Postpetition Financing Documents. From and after the Petition Date, the proceeds of the Postpetition Indebtedness, the issuance of the Letters of Credit and the Postpetition Collateral shall not, directly or indirectly, be used to pay expenses of the Debtors or otherwise disbursed except for (i) those expenses and/or disbursements that are expressly permitted under the Postpetition Financing Documents, (ii) compensation and reimbursement of expenses allowed by this Court to attorneys, accountants, investment bankers, financial advisors or other professional persons retained by the Debtors or any official committees that may be appointed in these chapter 11 cases and (iii) amounts due to the Agents, the Lenders and/or the other Secured Parties and their accountants, attorneys or other professionals hereunder, under the other Postpetition Financing Documents or under the Prepetition Financing Documents; provided that all cash (other than the proceeds of the Postpetition Indebtedness) shall be used solely as provided for in paragraph 2 of this Order and paragraph 2 of the Interim Order, and provided, further, that the foregoing shall not be construed as consent to the allowance of any of the amounts referred to in the preceding clause (ii) and shall not affect the right of the Agents or the Lenders to object to the allowance and payment of any such amounts. No administrative claims, including fees and expenses of professionals, shall be assessed against or attributed to any of the Agents, the Lenders or the other Secured Parties with respect to their interests in the Prepetition Collateral or the Postpetition Collateral pursuant to the provisions of section 506(c) of the Bankruptcy Code or otherwise by, through or on behalf of the Debtors, without the prior written consent of the Agents and the Lenders, and no such consent shall be implied from any action, inaction or acquiescence by the Agents or the Lenders or otherwise. Except as set forth in the second sentence of this paragraph 9, neither the Lenders nor the Agents have consented or agreed to the use of the proceeds of the Postpetition Indebtedness or the Postpetition Collateral.
10. The automatic stay extant under section 362(a) of the Bankruptcy Code (the "Automatic Stay") shall be, and it hereby is, modified to the extent necessary to permit the Agents for the sole benefit of the Lenders and the other Secured Parties to receive, collect and apply payments and proceeds in respect of the Prepetition Collateral and the Postpetition Collateral in accordance with the terms and provisions of this Order, the other Postpetition Financing Documents and the Prepetition Financing Documents.
11. Notwithstanding anything herein, in the Interim Order, or in the other Postpetition Financing Documents, on the Termination Date the Debtors (i) shall no longer, pursuant to this Order, the other Postpetition Financing Documents, or otherwise, be authorized to borrow funds or incur indebtedness hereunder or under the other Postpetition Financing Documents or to use any proceeds of the Postpetition Indebtedness already received (and any obligations of the Lenders to make loans or advances or issue Letters of Credit hereunder or under the other Postpetition Financing Documents shall be terminated) and (ii) shall cash collateralize all outstanding Letters of Credit.
12. Notwithstanding anything herein or in the Interim Order or the occurrence of the Termination Date, all of the rights, remedies, benefits and protections provided to the Agents, the Lenders and the other Secured Parties under this Order, the Interim Order and the other Postpetition Financing Documents shall survive the Termination Date. Upon the Termination Date, the principal of and all accrued interest and fees and all other amounts owed to the Agents, the Lenders or the other Secured Parties hereunder or under the other Postpetition Financing Documents shall be immediately due and payable and the Agents, the Lenders and the other Secured Parties shall have all other rights and remedies provided in the Postpetition Financing Documents and the Prepetition Financing Documents. Notwithstanding anything herein or in the Interim Order to the contrary, no Postpetition Indebtedness or any proceeds of Prepetition Collateral or Postpetition Collateral or Letters of Credit (collectively, "Lender Funds") may be used by any of the Debtors, any statutory committee or any other person or entity (x) to object to or contest in any manner, or raise any defenses to, the validity, perfection, priority or enforceability of the Prepetition Indebtedness or the Prepetition 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 any of the Prepetition Lenders or any of the Prepetition Agents or (y) to seek authorization for any party to use the cash collateral of the Agents or the Lenders without the consent of the Agents and the Lenders or to obtain Liens that are senior to, or on a parity with the Liens of the Agents, the Lenders or the other Secured Parties in the Prepetition Collateral, the Postpetition Collateral or any portion thereof; without limitation of 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, causes of action, objections, contests or defenses (collectively, "Claims and Defenses"), (ii) any such committee or other person or entity shall have the right to assert Claims and Defenses only in an action commenced in this Court on or before June 17, 2002, (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 Agents or the Lenders, to have been forever relinquished and waived as to such committee and other person or entity, (iv) if such an action is commenced on or before such date, all Claims and Defenses shall be deemed, immediately and without further action by the Agents or the Lenders, to have been forever relinquished and waived as to such committee and other person or entity, except with respect to Claims and Defenses that are expressly asserted in such action and (v) the terms of this Order and the Interim Order pertaining to the repayment of Prepetition Indebtedness shall be without prejudice to the right of any such committee or other person or entity to commence and prosecute Claims and Defenses as set forth above; provided, further, that as to the Debtors, all such Claims and Defenses are hereby relinquished and waived as of the Petition Date;provided, further, however, that said restrictions on the use of the Lender Funds shall not preclude the use of loan proceeds available under the Postpetition Loan Documents to pay such allowed fees and expenses of court approved professionals retained by the Creditors' Committee that relate to any analysis and investigation of potential Claims and Defenses. If any Claims and Defenses are asserted in accordance with the provisions above, and if a final, non-appealable order is entered upholding or granting any such Claims or Defenses, this Court may enter any order it determines is appropriate to restore the parties to the status quo as of the Petition Date, notwithstanding the payment of the Prepetition Indebtedness. In addition to the foregoing, no Lender Funds may be used by any of the Debtors, any statutory committee or any other entity to object to or contest in any manner the Postpetition Indebtedness, the Postpetition Liens or the payments made in respect of the Prepetition Indebtedness as authorized by this Order and the Interim Order, or to assert or prosecute any actions, claims or causes of action against any of the Agents, the Lenders or the other Secured Parties.
13. If it shall be necessary for the Agents, the Lenders or the other Secured Parties, at any time, to exercise any of their respective rights and remedies hereunder, under the Postpetition Financing Documents, under the Prepetition Financing Documents or under applicable law in order to effect repayment of the Postpetition Indebtedness or to receive any amounts or remittances due hereunder, including without limitation, foreclosing upon and selling all or a portion of the Prepetition Collateral or the Postpetition Collateral, the Agents, the Lenders and the other Secured Parties shall have the right without any further action or approval of this Court to exercise such rights and remedies as to all or such part of the Prepetition Collateral and the Postpetition Collateral as the Agents, the Lenders and the other Secured Parties shall elect in their sole discretion, subject to the Agents, Lenders or the other Secured Parties, as applicable, having provided the Debtors, the Creditors' Committee and HSBC Bank USA, as the successor indenture trustee under the Bond Indentures, with at least five business days' advance written notice; provided, however, that if the Agents, the Lenders or the other Secured Parties exercise their rights and remedies upon a portion of the Prepetition Collateral or the Postpetition Collateral that is subject to Senior Liens then the Automatic Stay shall, at that time, be deemed modified to the extent necessary to allow holders of such Senior Liens to exercise any rights or remedies that they may have under nonbankruptcy law with respect to said portion of the Prepetition Collateral or Postpetition Collateral. The Agents, the Lenders and the other Secured Parties shall be entitled to apply the payments or proceeds of the Prepetition Collateral and the Postpetition Collateral in accordance with the provisions of this Order and the other Postpetition Financing Documents, and in no event shall any of the Agents, the Lenders or the other Secured Parties be subject to the equitable doctrine of "marshaling" or any other similar doctrine with respect to any of the Prepetition Collateral or Postpetition Collateral or otherwise.
14. Except as provided in the Postpetition Financing Documents, the Debtors shall be enjoined and prohibited from at any time during their chapter 11 cases (and any trustee in any superseding chapter 7 cases shall be enjoined and prohibited) granting claims or Liens in the Prepetition Collateral, the Postpetition Collateral or any portion thereof to any other parties pursuant to sections 364(c) and (d), 503 (b) or 507(b) of the Bankruptcy Code or otherwise, which claims or Liens are senior to, or on a parity with, the claims of the Agents, the Lenders or the other Secured Parties granted herein or the Liens of the Agents, the Lenders or the other Secured Parties in the Prepetition Collateral, the Postpetition Collateral or any portion thereof. The Debtors shall be enjoined and prohibited from at any time (i) using the Agents', the Lenders' or the other Secured Parties' cash collateral, except as provided in paragraph 2 of this Order, (ii) using the Postpetition Collateral, except on the terms of this Order and the other Postpetition Financing Documents, and (iii) applying to any court for an order authorizing the use of the Agents', the Lenders' or the other Secured Parties' cash collateral (except as provided in paragraph 2 of this Order) or, except on the terms of this Order and the other Postpetition Financing Documents, the Postpetition Collateral.
15. The Debtors shall execute and deliver to the Agents and the Lenders all such agreements, financing statements, instruments and other documents as the Agents or any of the Lenders may reasonably request to evidence, confirm, validate or perfect the Liens granted pursuant hereto.
16. Without limiting the rights of access and information afforded the Agents and the Lenders under the Postpetition Financing Documents, the Debtors shall permit representatives, agents and/or employees of the Agents or the Lenders to have reasonable access to their premises and their records during normal business hours (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.
17. All Liens granted herein and in the other Postpetition Financing Documents to secure repayment of the Postpetition Indebtedness 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, if the Agents 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 the Interim Order.
18. The provisions of this Order shall be binding upon and inure to the benefit of each of the Agents, the Lenders and the other Secured Parties and the Debtors and 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).
19. Based on the findings set forth in this Order and in accordance with section 364(e) of the Bankruptcy Code, which is applicable to the postpetition financing arrangements contemplated by this Order, in the event that any or all of the provisions of this Order or any other Postpetition Financing Documents are hereafter modified, amended or vacated by a subsequent order of this or any other Court, no such modification, amendment or vacation shall affect the validity, enforceability or priority of any Lien or claim authorized or created hereby or thereby. Notwithstanding any such modification, amendment or vacation, any claim granted to the Agents, the Lenders or the other Secured Parties hereunder or under the other Postpetition 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 Postpetition Financing Documents, and the Agents, the Lenders and the other Secured Parties, 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.
20. 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 shall pay fees and expenses which may be required or necessary for the Debtors' performance under the Postpetition Financing Documents, including, without limitation: (i) the execution of the Postpetition Financing Documents, and (ii) the payment of the fees and other expenses described in the Postpetition Financing Documents as such become due, including, without limitation, agent fees, commitment fees, letter of credit fees and facility fees and reasonable attorneys', financial advisers' and accountants' fees and disbursements as provided for in the Postpetition Financing Documents. None of such reasonable attorneys', financial advisers' and accountants' fees and disbursements 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.
21. The obligations of the Debtors in respect of the Postpetition Indebtedness, including the Revolving Loans, all obligations in respect of the Letters of Credit and all obligations owing under or relating to Hedging Contracts in effect on or after the Petition Date, subject to the last three sentences of paragraph 7 hereof, and the Liens granted pursuant to this Order and the Interim Order shall not be discharged by the entry of an order confirming a plan of reorganization in any of the Debtors' chapter 11 cases and, pursuant to section 1141(d)(4) of the Bankruptcy Code, the Debtors having hereby waived such discharge. Under no circumstances shall any plan of reorganization in this case be confirmed or become effective unless such plan provides that the Postpetition Indebtedness (other than that portion thereof which is Repaid Prepetition Indebtedness the treatment of which shall be as provided for in paragraph 7 of this Order) is paid in full in cash on or before the effective date of such plan or as may otherwise be agreed by the Postpetition Lenders in the manner provided in the Postpetition Financing Documents.
22. Until all obligations and indebtedness owing to the Postpetition Agents, the Postpetition Lenders and the other Secured Parties shall have been indefeasibly paid in full (and, with respect to outstanding Letters of Credit, cash collateralized), neither National nor any Prepetition Guarantor shall seek an order dismissing any of the chapter 11 cases of National or any Prepetition Guarantor. If an order dismissing any of the Debtors' chapter 11 cases under section 1112 of the Bankruptcy Code or otherwise is at any time entered, such order shall provide (in accordance with sections 105 and 349(b) of the Bankruptcy Code) that (i) the Superpriority claims and Liens granted pursuant to this Order and the Interim Order shall continue in full force and effect and shall maintain their priorities as provided in this Order until all obligations in respect thereof shall have been indefeasibly satisfied and paid in full in cash (and that such Superpriority claims and Liens shall, notwithstanding such dismissal, remain binding on all parties in interest) and (ii) this Court shall retain jurisdiction, notwithstanding such dismissal, for the purposes of enforcing the Superpriority claims and Liens referred to in (i) above.
23. Notwithstanding anything herein, but subject only to the last three sentences of paragraph 7 hereof, the entry of this Order is without prejudice to, and does not constitute a waiver of, expressly or implicitly, or otherwise impair, (x) any of the rights of the Agents, the Lenders or the other Secured Parties under the Bankruptcy Code or under non-bankruptcy law, including, without limitation, the right of the Agents, the Lenders or the other Secured Parties to (i) request adequate protection of their interests in the Prepetition Collateral or the Postpetition Collateral or relief from or modification of the Automatic Stay, (ii) request conversion of any of the Debtors' chapter 11 cases to cases under chapter 7 of the Bankruptcy Code, and (iii) propose, subject to the provisions of section 1121 of the Bankruptcy Code, a chapter 11 plan or plans or (y) any of the rights, claims or privileges (whether legal, equitable or otherwise) of the Agents, the Lenders or the other Secured Parties.
24. Except as to Double G Coatings Company, L.P., any Debtor's Affiliate that hereafter becomes a debtor in a case under chapter 11 of the Bankruptcy Code in this Court shall automatically, immediately upon the filing of a petition for relief for such Affiliate, be deemed to be one of the "Debtors" hereunder in all respects, and all of the terms and provisions of this Order, including, without limitation, those provisions granting Liens and security interests in all assets and properties of each of the Debtors and Superpriority claims in each of the Debtors' chapter 11 cases, shall immediately be applicable in all respects to such Affiliate and its chapter 11 estate.
25. This Order shall constitute findings of fact and conclusions of law and shall take effect immediately upon execution hereof.