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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: February 26, 1998
APS HOLDING CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 0-22318 76-0306940
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation or Organization) Identification No.)
</TABLE>
15710 JOHN F. KENNEDY BLVD., SUITE 700
HOUSTON, TEXAS 77032-2347
(Address of Principal Executive Offices)
(713) 507-1100
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On February 26, 1998, the United States Bankruptcy Court for the District of
Delaware gave final approval to APS Holding Corporation and its direct and
indirect subsidiaries ("the Company") for the $100 million debtor in possession
(DIP) financing with a syndicate of bank lenders led by The Chase Manhattan
Bank. The bankruptcy case of the Company is assigned to the Honorable Peter J.
Walsh and designated as Case No. 98-197.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) EXHIBITS
99.4 Final Order authorizing secured postpetition financing on a
superpriority basis pursuant to 11 U.S.C. Section 364.
99.5 Press Release issued by the Company on February 27, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
APS HOLDING CORPORATION
Date: March 25, 1998 By: /s/ Bettina M. Whyte
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Bettina M. Whyte, President and
Chief Executive Officer
Date: March 25, 1998 By: /s/ John L. Hendrix
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John L. Hendrix, Senior Vice
President and Chief Financial Officer
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
99.4 Final Order authorizing secured postpetition financing on a
superpriority basis pursuant to 11 U.S.C. Section 364.
99.5 Press Release issued by the Company on February 27, 1998.
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EXHIBIT 99.4
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re ) Chapter 11 Cases
)
APS HOLDING CORPORATION, et al ) Case No. 98-197 (PJW)
)
) Jointly Administered
)
Debtors. )
FINAL ORDER AUTHORIZING SECURED
POSTPETITION FINANCING ON A SUPERPRIORITY
BASIS PURSUANT TO 11 U.S.C. SECTION 364
-----------------------------------------
Upon the motion (the "Motion") dated February 2, 1998 of A.P.S., Inc.
(the "Company"), APS Holding Corporation (the "Parent") and the following direct
and indirect subsidiaries of the Company (together with the Parent, the
"Guarantors"); American Parts Systems, Inc.; A.P.S. Management Services, Inc.;
Autoparts Finance Company, Inc.; Parts, Inc.; Installers' Service Warehouse,
Inc.; Big A Auto Parts, Inc.; APS Supply, Inc. and Presatt, Inc.; debtors and
debtors in possession (collectively, the "Debtors"), (a) seeking this Court's
authorization pursuant to Sections 363(c), 364(c)(1), 364(c)(2), 364 (c)(3) and
364(d)(1) of Title 11 of the United States Code, 11 U.S.C. Sections 101, et seq.
(as amended, the "Bankruptcy Code") and Rules 2002, 4001(c) and 9014 of the
Federal Rules of Bankruptcy Procedure (as amended, the "Bankruptcy Rules"), for
the Company, inter alia. (i) to obtain secured postpetition financing (the
"Postpetition Financing") up to an aggregate principal amount not to exceed
$328,000,000 allocated into a $100,000,000 revolving credit loan and letter of
credit facility (the "Tranche A Commitments") and a term loan facility not to
exceed $228,000,000 (the "Tranche B Commitments" and, collectively with the
Tranche A Commitments, the "Commitments") from The Chase Manhattan
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Bank ("Chase"), as agent (in its capacity as agent for the Lenders referred to
below, the "Agent"), and a syndicate of other financial institutions arranged by
Chase and Chase Securities, Inc. (including Chase, the "Lenders"), and for the
Company and the Guarantors to execute a Revolving Credit, Term Loan and
Guarantee Agreement with respect to the Postpetition Financing (as amended,
supplement or otherwise modified from time to time, the "Credit Agreement");
and for the Company to execute revolving credit and term notes (the "Notes");
and for each Guarantor to guarantee the Notes and all obligations of the
Company and each other Guarantor under the Credit Agreement (the Credit
Agreement, the Notes, and all ancillary documents at any time executed in
connection therewith, collectively, the "Loan Documents"); (ii) to grant the
Lenders, pursuant to Bankruptcy Code Section 364(c) and, pending the Final
Order Repayment Date (as defined below), Bankruptcy Code Section 364(d),
security interests in all of the Debtors' presently owned and after acquired
property to secure the Debtors' obligations under the Loan Documents and (iii)
to grant the Lenders priority in payment with respect to such obligations over
any and all administrative expenses of the kinds specified in Bankruptcy Code
Sections 503(b) and 507(b), other then as described below; (b) seeking this
Court's authorization, pursuant to Bankruptcy Code Section 363(c), to use Cash
Collateral (as defined below) and to provide adequate protection, pursuant to
Bankruptcy Code Sections 361, 363(e) and 364(d) to the secured lenders (the
"Prepetition Lenders") to the Company pursuant to the Amended and Restated
Credit Agreement dated as of January 25, 1996 (as amended supplemented or
otherwise modified prior to the commencement of these Chapter 11 cases, the
"Prepetition Credit Agreement"), among the Company, the Prepetition Lenders and
The Chase Manhattan Bank (formerly known as Chemical Bank), as agent (in such
capacity, the "Prepetition Agent") for the Prepetition Lenders, on account of
their prepetition debt (the "Prepetition Obligations") under the Prepetition
Credit Agreement and all collateral and ancillary documents executed in
connection therewith (the "Prepetition Loan Documents") with
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respect to any diminution in the value of the Prepetition Lenders' interests in
the Prepetition Collateral (as defined below) pending the Final Order Repayment
Date resulting from (x) the priming liens and security interests granted in the
Interim Order referred to below pursuant to Bankruptcy Code Section 364(d) to
secure the Postpetition Financing and (y) the use, sale or lease of the
Prepetition Collateral or the imposition of the automatic stay pursuant to
Bankruptcy Code Section 362; (c) seeking a preliminary hearing (the
"Preliminary Hearing") on the Motion to consider entry of an interim order
pursuant to Bankruptcy Rule 4001 (the "Interim Order") authorizing the Company,
inter alia; to utilize the Tranche A, Commitments for up to an aggregate of
$40,000,000 of loans and up to an aggregate face amount of $5,000,000 of
letters of credit and to utilize the Tranche B Commitments for Tranche B Loans
equal to the amount of Cash Collateral used to repay the Prepetition
Obligations, all upon the terms and conditions set forth in the Loan Documents
and the Interim Order pending the Final Hearing referred to below; and (d)
requesting that a final hearing (the "Final Hearing"; together with the
Preliminary Hearing, the "Hearings") be scheduled, and that notice procedures in
respect of the Final Hearing be established, by this Court to consider entry of
a final order (this "Order") authorizing on a final basis, inter alia, the
Postpetition Financing; and due and sufficient notice of the Motion and the
Hearings having been given; and the Preliminary Hearing on the Motion having
been held before this Court on February 2, 1998; and the Court having entered
the Interim Order at the conclusion of the Preliminary Hearing; and the Final
Hearing on the Motion having been held before this Court on February 26, 1998;
and upon the entire record made at the Hearings (including the Affidavit dated
February 1, 1998 of John L. Hendrix, the Company's Chief Financial Officer,
submitted in support of approval of the Postpetition Financing) and this Court
having found good and sufficient cause appearing therefor.
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IT IS HEREBY FOUND that:
A. On February 2, 1998, (the "Filing Date"), the Debtors filed voluntary
petitions for relief with this Court under Chapter 11 of the Bankruptcy Code
(the "Chapter 11 Cases"). The Debtors are continuing in possession of their
property, and operating and managing their businesses, as debtors in possession
pursuant to Bankruptcy Code Sections 1107 and 1108.
B. This Court has jurisdiction over the Chapter 11 Cases and the Motion
pursuant to 28 U.S.C. Sections 157(b) and 1334. Consideration of the Motion
constitutes a core proceeding as defined in 28 U.S.C. Section 157(b)(2).
C. Without prejudice to the rights of any other party (but subject to
the limitations thereon described below in decretal paragraph 16), the Debtors
admit that, in accordance with the terms of the Prepetition Loan Documents, the
Debtors are truly and justly indebted to the Prepetition Lenders, without
defense, counterclaim or offset of any kind, and that as of the Filing Date (i)
the Company was liable to the Prepetition Lenders in the aggregate principal
amount of approximately $227,600,000 in respect of loans made by the
Prepetition Lenders to the Company pursuant to the Prepetition Credit Agreement,
(ii) the Company was contingently liable to the Prepetition Lenders in the
aggregate principal amount of approximately $3,500,000 in respect of letters of
credit issued pursuant to the Prepetition Credit Agreement and which remained
outstanding as of the Filing Date and (iii) each Debtor party to a guarantee
executed and delivered in respect of the Prepetition Obligations was
contingently liable to the Prepetition Lenders pursuant to such guarantee.
D. Without prejudice to the rights of any other party (but subject to
the limitations thereon described below in decretal paragraph 16), the Debtors
further admit that, (i) the Prepetition Obligations are secured by enforceable
liens and security interests granted by the applicable Debtors to the
Prepetition Agent, for the ratable benefit of the Prepetition Lenders,
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upon and in substantially all of the Company's and the other applicable Debtors'
assets and property (including the setoff rights described in the Prepetition
Loan Documents and arising by operation of law, the "Prepetition Collateral"),
including without limitation, inventory, certain real property, accounts
receivable, equipment, general intangibles, and other tangible and intangible
personal property and the proceeds thereof, and (ii) as of the Filing Date, the
aggregate value of the Prepetition Collateral on a liquidation basis exceeded
the aggregate amount of the Prepetition Obligations. All the Debtors' cash
constitutes proceeds of the Prepetition Collateral and, therefore, is cash
collateral of the Prepetition Lenders within the meaning of Bankruptcy Code
Section 363(a) (the "Cash Collateral").
E. The Debtors do not have sufficient available sources of working
capital and financing to carry on the operation of their businesses without
the Postpetition Financing. The Debtors' ability to maintain business
relationships with their vendors, suppliers and customers, to pay their
approximately 5,400 employees, to purchase and supply new inventory and
otherwise finance their operations, is essential to the Debtors' continued
viability. In addition, the Debtors' critical need for financing is immediate.
In the absence of the Postpetition Financing, the continued operation of the
Debtors' businesses would not be possible, and serious and irreparable harm to
the Debtors and their estates would occur. The preservation, maintenance and
enhancement of the going concern value of the Company and the other Debtors are
of the utmost significance and importance to a successful reorganization of the
Debtors under Chapter 11 of the Bankruptcy Code.
F. Given the Debtors' current financial condition, financing
arrangements and capital structure, the Debtors cannot obtain unsecured credit
allowable under Bankruptcy Code Section 503(b)(l) as an administrative expense.
Financing on a postpetition basis is not otherwise available without the
Debtors (i) granting, pursuant to Bankruptcy Code Section 364(c)(1), claims
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having priority over any and all administrative expenses of the kinds specified
in Bankruptcy Code Sections 503(b) and 507(b), other than as described below,
and (ii) securing, pursuant to Bankruptcy Code Section 364(c) and, pending the
Final Order Repayment Date, Bankruptcy Code Section 364(d), such indebtedness
and obligations with security interests in and liens upon the property described
below, all in accordance with and subject to the terms of this Order and the
Loan Documents.
G. Notice of the Final Hearing and the relief requested in the Motion
has been given to (i) the Office of the United States Trustee, (ii) counsel to
the Prepetition Agent, (iii) the creditors holding the 20 largest unsecured
claims against each Debtor, (iv) counsel to the Official Committee of Unsecured
Creditors (the "Committee") appointed in the Chapter 11 Cases and (v) any party
who filed a request for notices in the Chapter 11 Cases pursuant to Bankruptcy
Rule 2002 prior to the date set forth in the Interim Order for service of
notice of the Final Hearing. Sufficient and adequate notice of the Final
Hearing and the relief requested in the Motion has been given pursuant to
Bankruptcy Code Sections 102(l), 364(c) and 364(d), Bankruptcy Rules 2002 and
4001(c) and the notice procedures established pursuant to the Interim Order.
H. The Postpetition Financing has been negotiated in good faith and at
arm's length between the Debtors and the Lenders, and any credit extended,
letters of credit issued and loans made to the Debtors pursuant to the Credit
Agreement shall be deemed to have been extended, issued or made, as the case
may be, in good faith as required by, and within the meaning of, Bankruptcy
Code Section 364(c).
I. The terms of the Postpetition Financing are fair and reasonable,
reflect the Debtors' exercise of prudent business judgment consistent with
their fiduciary duties, and are supported by reasonably equivalent value and
fair consideration.
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J. The Debtors have requested immediate entry of this Order pursuant to
Bankruptcy Rule 4001(c)(2). The permission granted herein to enter into the
Postpetition Financing and obtain funds thereunder is necessary to avoid
immediate and irreparable harm to the Debtors. This Court concludes that entry
of this Order is in the best interest of the Debtors' respective estates and
creditors as its implementation will, among other things, allow for the
continued flow of goods to the Company necessary to sustain the operation of
the Debtors' existing businesses and enhance the Debtors' prospects for
successful reorganization.
Based upon the foregoing findings and conclusions, and upon the record
made before this Court at the Hearings, and good and sufficient cause appearing
therefor;
IT IS HEREBY ORDERED that:
1. The Motion is granted, subject to the terms and conditions set forth
in this Order.
2. The Debtors are expressly authorized and empowered to execute and
deliver the Credit Agreement, the Notes and any other Loan Document to be
executed and delivered in connection therewith. The terms and conditions of the
Loan Documents are approved, and the Company and the Guarantors are authorized
to comply with and perform all of the terms and conditions contained therein,
and the Company is directed to repay amounts borrowed, and each Guarantor is
further directed to repay amounts guaranteed, with interest to the Lenders in
accordance with and subject to the terms and conditions set forth in the Loan
Documents and this Order. The Debtors are further authorized and directed to pay
all facility, commitment and other fees and expenses, including, without
limitation, all reasonable fees and expenses of professionals engaged by the
Agent and the Lenders, in accordance with the terms of the Credit Agreement.
All loans made under the Credit Agreement (the "Loans") and interest thereon,
together with all reimbursement and other obligations in respect of letters of
credit issued under the Credit Agreement ("Letters of Credit"), and all fees,
costs, expenses, indebtedness, obligations and
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liabilities of the Company and each Guarantor to the Agent and the Lenders under
the Loan Documents and this Order, together with any obligations at any time
incurred by any Debtor to Chase in its capacity as the principal concentration
bank in the Debtors' cash management system, are hereinafter referred to as the
"Obligations."
3. The Company is expressly authorized to obtain Loans and Letters of
Credit from the Lenders, and the Guarantors are expressly authorized to
guarantee all Obligations in respect of such Loans and Letters of Credit, all
on the terms and subject to the conditions set forth in the Loan Documents and
this Order, as follows; (a) under the Tranche A Commitments, a total of
$100,000,000 of Tranche A Loans (inclusive of up to an aggregate face amount of
$20,000,000 of Letters of Credit) and (b) under the Tranche B Commitments,
Tranche B Loans in a total amount equal to the remaining balance of the
Prepetition Obligations after giving effect to the repayment of a portion
thereof with the Tranche B Loans authorized to be made pursuant to the Interim
Order. The Company is authorized to use the proceeds of the Loans and to
request the issuance of Letters of Credit in the operation of the Debtors'
businesses, provided, that (i) the proposed Loan or Letter of Credit is
consistent with the terms of the Credit Agreement and this Order, (ii) on the
date of entry of this Order (the "Final Order Repayment Date") the Company
shall utilize the remaining Tranche B Commitments to obtain Tranche B Loans and
immediately repay in full the remaining balance of the Prepetition Obligations
and (iii) the proposed Tranche A Loan is necessary after the Company's use of
all available cash (other than cash permitted to be retained pursuant to the
Credit Agreement).
4. If an Event of Default (as defined in the Credit Agreement) occurs,
the Agent, acting at the direction of the Required Tranche A Lenders (as
defined in the Credit Agreement) or the Required Tranche B Lenders (when
applicable as set forth and as defined in the Credit Agreement) may, subject to
the requirement contained in the Credit Agreement with respect to
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specified remedies to provide five business days' prior written notice to the
Company, the United States Trustee and the Committee, terminate the Postpetition
Financing (the date of any such termination, the "Termination Date") and declare
the Loans to be due and payable, and the automatic stay pursuant to Bankruptcy
Code Section 362(a) shall be deemed lifted and modified, without further order
of this Court, to permit the Agent and the Lenders to exercise any and all of
their rights and remedies under the Credit Agreement, the other Loan Documents
and this Order. Notwithstanding anything herein to the contrary, no Loans,
Letters of Credit, Cash Collateral or any portion of the Carve-Out (as defined
below) may be used to object to or contest in any manner, or raise any defenses
to, the validity, perfection, priority or enforceability of the Prepetition
Obligations, the Obligations, the liens securing the Prepetition Obligations or
the liens securing the Obligations, or to assert any claims or causes of action
against the Prepetition Lenders, the Prepetition Agent, the Lenders or the
Agent.
5. In accordance with Bankruptcy Code Section 364(c)(1), subject to
Paragraph 7 below, the Obligations shall constitute claims (the "Superpriority
Claims") with priority in payment over any and all administrative expenses of
the kinds specified or ordered pursuant to any provision of the Bankruptcy Code,
including but not limited to, Bankruptcy Code Sections 105, 326, 328, 330, 331,
503(b), 506(c), 507(a), 507(b) and 726, and shall at all times be senior to the
rights of the Debtors, and any successor trustee or any creditor, in the Chapter
11 Cases or any subsequent proceedings under the Bankruptcy Code. Subject only
to the Carve-Out, no cost or expense of administration under Bankruptcy Code
Sections 105, 364(c)(1), 503(b), 506(c), 507(b) or otherwise, including those
resulting from the conversion of any of the Chapter 11 Cases pursuant to
Bankruptcy Code Section 1112, shall be senior to, or pari passu with, the
Superpriority Claims of the Lenders arising out of the Obligations. As long as
no Default or Event of Default (as each such term is defined in the Credit
Agreement) shall have occurred and be continuing, the Company and
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the Guarantors shall be permitted to pay compensation and reimbursement of
expenses, allowed and payable under Bankruptcy Code Sections 330 and 331, as
the same may be payable, and the amount so paid shall not reduce the Carve-Out.
6. As security for the Obligations, the Agent and the Lenders
shall have and are hereby granted (effective upon the date of this Order and
without the necessity of the execution by the Debtors of mortgages, security
agreements, pledge agreements, financing statements or otherwise), valid and
perfected, security interests in, and liens upon (the "Liens"), all present and
after-acquired property of the Debtors of any nature whatsoever, including,
without limitation, all cash contained in any account maintained by the Debtors
and the proceeds of all causes of action (other than causes of action arising
under the Bankruptcy Code, whether pursuant to federal law or applicable state
law) existing as of the Filing Date (collectively with all proceeds and
products of any or all of the foregoing, the "Collateral"):
(a) pursuant to Bankruptcy Code Section 364(c)(2), a first
priority, perfected Lien upon all of the Debtors' right, title and
interest in, to and under all Collateral (including the Prepetition
Collateral after the Final Order Repayment Date) that is not otherwise
encumbered by a validly perfected security interest or lien on the
Filing Date; and
(b) pursuant to Bankruptcy Code Section 364(c)(3), a second
priority, junior, perfected Lien upon all of the Debtors' right, title
and interest in, to and under all Collateral (including the Prepetition
Collateral after the Final Order Repayment Date) which is subject to a
Permitted Lien, including without limitation, a validly perfected
security interest or lien in existence as of the Filing Date, or a
valid lien perfected (but not granted) after the Filing Date to the
extent such perfection in respect of a pre-Filing Date claim is
expressly permitted under the Bankruptcy Code, provided that the Liens
granted in favor of the Agent and the Lenders shall be senior to any
Permitted Lien which is expressly stated in the Credit Agreement to be
junior to the Liens in favor of the Agent and the Lenders.
To the extent set forth in the Credit Agreement and the other Loan Documents,
the Liens and Superpriority Claims granted to secure the Obligations under the
Tranche A Commitments shall be senior and prior to the Liens and Superpriority
Claims granted to secure the Obligations under the Tranche B Commitments.
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7. Any provision of this Order or the Credit Agreement to the contrary
notwithstanding, the Liens and Superpriority Claims granted to the Agent and
the Lenders pursuant to the Credit Agreement and this Order shall be subject
and subordinate to a carve-out (the "Carve-Out") for (a) following the
occurrence and during the pendency of a Default or an Event of Default, the
payment of allowed professional fees and disbursements incurred by the
professionals retained, pursuant to Bankruptcy Code Sections 327 or 1103(a), by
the Debtors and the Committee and any disbursements of any member of the
Committee in an aggregate amount not to exceed $3,000,000 (in addition to
compensation previously awarded whether or not paid) and (b) quarterly fees
required to be paid pursuant to 28 U.S.C. Section 1903(a)(6) and any fees
payable to the Clerk of the Bankruptcy Court; provided, however, (x) following
the Termination Date, amounts in the L/C Cash Collateral Account (as defined in
the Credit Agreement) shall not be subject to the Carve-Out and (y) the
Carve-Out shall not include professional fees and disbursements incurred in
connection with the commencement and prosecution of any adversary proceeding or
contested matter in which any party asserts any claims or causes of action
against the Prepetition Lenders, the Prepetition Agent, the Lenders or the
Agent, and/or challenges or raises any defense to the Prepetition Obligations,
the Obligations, any lien of the Prepetition Agent or the Prepetition lenders or
the Liens securing the Obligations.
8. Pursuant to the Interim Order, the Debtors were authorized and
directed, pending the Final Hearing and the occurrence of the Final Order
Repayment Date, to use the proceeds of all Prepetition Collateral (including
the Cash Collateral) received by the Debtors to repay the Prepetition
Obligations in accordance with the terms of the Credit Agreement. As more fully
set forth in paragraph 8 of the Interim Order, pending the Final Hearing and
the repayment in full of the Prepetition Obligations on the Final Order
Repayment Date, the Prepetition Agent and the Prepetition Lenders were granted
the following adequate protection for any diminution in the
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value of the Prepetition Lenders' interests in the Prepetition Collateral
resulting from (a) the priming of the Prepetition Agent's and the Prepetition
Lenders' liens on the Prepetition Collateral by the Liens granted in the Interim
Order and the Loan Documents pursuant to Bankruptcy Code section 364(d) to
secure the Obligations and (b) the imposition of the automatic stay pursuant to
Bankruptcy Code Section 362:
(i) the Prepetition Agent and the Prepetition Lenders were granted
valid and perfected, replacement security interests in, and liens upon (the
"Replacement Liens"), all of the Debtors' right, title and interest in, to
and under the Collateral, subject only to (x) the Carve-Out, (y) the Liens
granted to the Agent and the Lenders to secure the Obligations and (z) any
validly perfected liens which remained senior (after giving effect to the
Interim Order) to the Liens granted to secure the Obligations:
(ii) the Prepetition Agent and the Prepetition Lenders were granted
Superpriority Claims, junior only to (x) the Superpriority Claims granted
to the Agent and the Lenders in respect of the Obligations and (y) the
Carve-Out; and
(iii) the Debtors were authorized and directed to (x) make certain
adequate protection payments to the Prepetition Agent, for the ratable
benefit of the Prepetition Lenders, in cash in an amount equal to interest
accrued and unpaid on the Prepetition Obligations at the nondefault rate
set forth in the Prepetition Credit Agreement and (y) pay all reasonable
out-of-pocket costs and expenses incurred by the Prepetition Agent and the
Prepetition Lenders (including without limitation, the reasonable fees and
disbursements of counsel and any financial consultants advising the
Prepetition Agent and the Prepetition Lenders) in connection with the
enforcement and protection of the rights of the Prepetition Agent and the
Prepetition Lenders
In view of the authorization and direction contained in this Order for the
Company to repay in full on the Final Order Repayment Date the remaining
balance of the Prepetition Obligations (and the simultaneous release of the
Replacement Liens and all of the Prepetition Agent's and the Prepetition
Lenders' liens on the Prepetition Collateral), it is not necessary to continue
pursuant to this Order the provisions contained in the Interim Order with
respect to (A) the use of the Cash Collateral, (B) the grant of priming Liens
pursuant to Bankruptcy code Section 364(d) on the Prepetition Collateral to
secure the Obligations or (C) the grant of adequate protection to the
Prepetition agent and the Prepetition Lenders in respect of the Prepetition
Obligations, provided
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that the adequate protection granted pursuant to paragraph 8 of the Interim
Order shall continue in effect so long as the Prepetition Obligations are
outstanding.
9. Except as set forth in paragraphs 6 and 7 above, the Liens shall be
prior and senior to all liens and encumbrances of all other secured creditors in
and to such collateral granted, or arising, after the Filing Date (including,
without limitation, liens and security interests, if any, granted in favor of
any federal, state, municipal or other governmental unit, commission, board or
court for any liability of the Debtors). Other than the Carve-Out, the Debtors
shall not assert a claim under Bankruptcy Code Section 506(c) for any costs and
expenses incurred in connection with the preservation, protection or enhancement
of, or realization by the Agent, the Lenders, the Prepetition Agent or the
Prepetition Lenders upon the Collateral or the Prepetition Collateral. The Liens
granted pursuant to this Order shall constitute valid and duly perfected
security interests and liens, and the Agent and the Lenders shall not be
required to file or serve financing statements, notices of lien or similar
instruments which otherwise may be required under federal or state law in any
jurisdiction, or take any action, including taking possession, to validate and
perfect such security interests and liens; and the failure by the Debtors to
execute any documentation relating to the Liens shall in no way affect the
validity, perfection or priority of such Liens. If, however, the Agent or any
Lender shall determine to file any such financing statements, notices of lien or
similar instruments, or to otherwise confirm perfection of such Liens, the
Debtors are directed to cooperate with and assist in such process, the stay
imposed by Bankruptcy Code Section 362(a) is hereby lifted to allow the filing
and recording of a certified copy of this Order or any such financing
statements, notices, of lien or similar instruments, and all such documents
shall be deemed to have been filed or recorded at the time of and on the date of
this Order.
10. As long as any portion of the Obligations remains unpaid, or any Loan
Document remains in effect, the Debtors shall not seek, and it shall constitute
an Event of Default; (and
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automatic occurrence of the Termination Date) if (a) there shall be entered any
order dismissing any of the Chapter 11 cases or (b) except as expressly
permitted under the Credit Agreement, there shall be entered in any of the
Chapter 11 Cases or any subsequent Chapter 7 case any order which authorizes
under any section of the Bankruptcy Code, including Bankruptcy Code Sections
105 or 364, (i) the granting of any lien or security interest in any property of
the Debtors in favor of any party other than the Agent and the Lenders or (ii)
the obtaining of credit or the incurring of indebtedness that is entitled to
superpriority administrative status equal or superior to that granted to the
Agent and the Lenders pursuant to this Order, unless, in connection with any
transaction cited in clause (i) or (ii) of this paragraph 10, such order
requires that the Obligations shall first be indefeasibly paid in full
(including cash collateralization of Letters of Credit in accordance with the
terms of the Credit Agreement).
11. Upon the occurrence of and during the continuance of an Event of
Default, the Agent, acting at the direction of the Required Tranche A Lenders or
the Required Tranche B Lenders (when applicable as set forth in the Credit
Agreement), may exercise rights and remedies and take all or any of the
following actions without further modification of the automatic stay pursuant to
Bankruptcy Code Section 362 (which is hereby deemed modified and vacated to the
extent necessary to permit such exercise of rights and remedies and the taking
of such actions) or further order of or application to this Court; (a) terminate
the Commitments and thereafter cease to issue Letters of Credit or make Loans to
the Company; (b) declare the principal of and accrued interest, fees and other
liabilities constituting the Obligations to be due and payable; (c) setoff
amounts in the Concentration Account (as defined in the Credit Agreement), the
L/C Cash Collateral Account (in the case of the Agent, acting at the direction
of the Required Tranche A Lenders) or any other accounts maintained with a
Lender, or otherwise enforce rights against any other Collateral in the
possession of the Agent or any Lender; and/or (d) take any other action or
exercise any other right
<PAGE> 15
15
or remedy permitted to the Lenders under the Loan Documents, this Order or by
operation of law; provided, however, the Agent and the Lenders may take the
actions described in clauses (c) or (d) above only after providing five
business days' prior written notice to the Company, the United States Trustee
and the Committee and provided that no order prohibiting such actions is
entered by this Court during such five business day period. The Debtors waive
any right to seek relief under the Bankruptcy Code, including without
limitation, under Bankruptcy Code Section 105, to the extent any such relief
would in any way restrict or impair the rights and remedies of the Agent and
the Lenders set forth in this Order and in the Loan Documents. All proceeds of
Collateral and any other payments received by the Agent or any Lender after the
Termination Date or pursuant to the exercise of any such rights and remedies
upon the occurrence and during the continuance of an Event of Default, shall be
applied to the Obligations in the manner set forth in the Credit Agreement.
12. The Debtors are authorized to perform all acts, and execute
and comply with the terms of such other documents, instruments and agreements
in addition to the Loan Documents, as the Agent or the Lenders may reasonably
require, as evidence of and for the protection of the Obligations, or which
otherwise may be deemed reasonably necessary by the Agent or the Lenders to
effectuate the terms and conditions of this Order and the Loan Documents. The
Debtors, the Agent and the Lenders are hereby authorized to implement, in
accordance with the terms of the Credit Agreement, any non-material
modifications (including without limitation, any change in the number or
composition of the Lenders) of the Credit Agreement without further Order of
this Court.
13. Having been found to be extending credit, issuing Letters of
Credit and making Loans to the Debtors in good faith, the Agent and the Lenders
shall be entitled to the full protection of Bankruptcy Code Section 364(e) with
respect to the Obligations and the Liens created or
<PAGE> 16
16
authorized by this Order in the event that this Order or any authorization
contained herein is stayed, vacated, reversed or modified on appeal. Any stay,
modification, reversal or vacation of this Order shall not affect the validity
of any obligation of the Debtors to the Agent or the Lenders incurred pursuant
to this Order. Notwithstanding any such stay, modification, reversal or
vacation, all Loans made and all Letters of Credit issued pursuant to this Order
and the Credit Agreement and all Obligations incurred by the Debtors pursuant
hereto or the Loan Documents prior to the effective date of such stay,
modification, reversal or vacation, shall be governed in all respects by the
original provisions hereof and the Agent, the Lenders, the Prepetition Agent
and the Prepetition Lenders shall be entitled to all the rights, privileges and
benefits, including without limitation, the Liens and Superpriority Claims
granted herein.
14. The provisions of this Order and any actions taken pursuant
hereto shall survive entry of any order which may be entered (a) confirming any
plan of reorganization in any of the Chapter 11 Cases (and the Obligations shall
not be discharged by the entry of any such order or pursuant to Bankruptcy Code
Section 1141(d)(4), the Debtors having hereby waived such discharge); (b)
converting any of the Chapter 11 Cases to a Chapter 7 case; or (c) dismissing
any of the Chapter 11 cases, and the terms and provision of this Order as well
as the Superpriority Claims and Liens granted pursuant to this Order and the
Loan Documents shall continue in full force and effect notwithstanding the entry
of such order, and such Superpriority Claims and Liens shall maintain their
priority as provided by this Order until all of the Obligations are indefeasibly
paid in full and discharged.
15. Notwithstanding anything contained in this Order to the
contrary, on the date of entry of this Order (the Final Order Repayment Date)
(a) the Company is hereby authorized and directed to repay in full the
remaining balance of the Prepetition Obligations (which repayment will be
funded by the Company obtaining Tranche B Loans under the Credit Agreement),
<PAGE> 17
17
(b) simultaneously with such repayment in full of the Prepetition Obligations,
the Replacement Liens and Superpriority Claims granted as adequate protection,
and all of the Prepetition Agent's and the Prepetition Lenders' liens on and
security interests in the Prepetition Collateral, shall be deemed terminated
and released, and (c) the approximately $3,500,000 of letters of credit issued
and outstanding under the Prepetition Credit Agreement as of the Filing Date
shall be deemed to be Letters of Credit issued under the Credit Agreement.
16. The findings contained in paragraphs C and D shall be binding upon
all parties in interest, including but not limited to, the Debtors and the
Committee, unless (a) a party in interest (including the Committee) has
properly filed an adversary proceeding or contested matter (subject to the
limitation set forth in the last sentence of the decretal paragraph 4) no later
than the date that is ninety (90) days after the date of appointment of the
Committee (x) challenging the validity, enforceability, extent or priority of
the Prepetition Obligations or the Prepetition Agent's and the Prepetition
Lenders' liens on the Prepetition Collateral in respect thereof or (y)
otherwise asserting any claims or causes of action against the Prepetition
Agent or the Prepetition Lenders and (b) the Court rules (whether prior to or
after such ninety (90) day period) in favor of the plaintiff in any such
adversary proceeding or contested matter properly filed within such ninety (90)
day period after the date of appointment of the Committee. If no such adversary
proceeding or contested matter is properly commenced as of such date, (i) the
Prepetition Obligations shall constitute allowed claims for all purposes in the
Chapter 11 Cases and any subsequent Chapter 7 cases, (ii) the Prepetition
Agent's and the Prepetition Lenders' liens on the Prepetition Collateral shall
be deemed legal, valid, binding, perfected, not subject to subordination and
otherwise avoidable, (iii) the Prepetition Obligations and the Prepetition
Agent's and the Prepetition Lenders' liens on the Prepetition Collateral shall
not be subject to subordination, avoidance or any other or further challenge by
any party in interest seeking to exercise the rights of the Debtors' estate,
including,
<PAGE> 18
18
without limitation, any successor thereto, and (iv) as a result of the
foregoing, the repayment of the Prepetition Obligations in accordance with the
terms of the Interim Order, this Order and the Loan Documents shall constitute
an indefeasible payment and shall be final and binding for all purposes. If any
such adversary proceeding or contested matter is properly commenced as of such
date, nothing in the Interim Order, this Order or the Loan Documents shall
otherwise prevent the Court from granting any appropriate relief, including
without limitation, appropriate relief in respect of such repayment of the
Prepetition Obligations.
17. Entry of this Order shall be without prejudice to any and all rights,
remedies, claims and causes of action which the Prepetition Agent or the
Prepetition Lenders may have against the Debtors or third parties, and without
prejudice to the right of the Prepetition Agent and the Prepetition Lenders to
seek relief from the automatic stay in effect pursuant to Bankruptcy Code
Section 362, or any other relief in the Chapter 11 Cases, and the right of the
Debtors to oppose any such relief. The provisions of this Order shall be
binding upon and inure to the benefit of the Agent, the Lenders, the
Prepetition Agent, the Prepetition Lenders, the Debtors, and their respective
successors and assigns, including any trustee or other fiduciary hereafter
appointed in the Chapter 11 Cases as a legal representative of the Debtors or
the Debtors' estates.
<PAGE> 19
19
18. Except as specifically amended, modified or supplemented hereby, all
of the provisions of the Interim Order shall remain in full force and effect
and are ratified by this Order. In the event of any inconsistency between the
terms of this Order and the terms of the Interim Order or the Loan Documents,
the terms of this Order shall control.
Dated: Wilmington, Delaware
February 26, 1998
/s/ PETER J. WALSH
-------------------------------------
UNITED STATES BANKRUPTCY JUDGE
<PAGE> 1
EXHIBIT 99.5
[APS LETTERHEAD]
APS HOLDING CORPORATION RECEIVES FINAL APPROVAL
OF $100 MILLION DEBTOR-IN-POSSESSION FINANCING
Houston, Texas, (February 27, 1998) - APS HOLDING CORPORATION (APS) (NASDAQ:
APSIQ) announced that on February 26, 1998, the U.S. Bankruptcy Court in the
District of Delaware gave final approval to the $100 million
debtor-in-possession (DIP) financing the Company has arranged with The Chase
Manhattan Bank, as agent, and a consortium of lenders. On February 3, 1998, the
Company received interim approval providing, for access to $45 million under
the $100 million DIP facility. This has enabled the Company to operate its
business as usual while it begins its reorganization process.
"With the final approval of the $100 million in additional financing, APS has
the financial resources necessary to continue normal business operations as it
develops and implements a restructuring plan aimed at returning the Company to
profitability." Said Bettina M. Whyte, Chief Executive Officer of APS Holding.
"Our goal is to make APS a stronger and better business partner for both our
vendors and customers."
Ms. Whyte added, "All of us at APS remain committed to providing our customers
with the same level of quality performance and service they have come to expect
and deserve from APS. I want to personally thank our vendors and customers for
their continued support over the past few weeks."
APS filed for a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code
in the District of Delaware on February 2, 1998. The Company has retained the
services of Willkie Farr & Gallagher of New York City to act as bankruptcy
counsel. APS Holding Corporation's Chapter 11 case is being heard before Judge
Peter Walsh in the District of Delaware (Case #98-197; ref: APS Holding
Corporation).
APS Holding Corporation is a national distributor of Big A(R) brand and
manufacturer branded automotive replacement parts, as well as tools, equipment,
supplies and accessories. It sells to more than 1,650 associated auto parts
stores through 27 distribution centers and operates approximately 270
company-owned Big A(R) stores and 210 Installers' Service Warehouse units. The
Company has annual sales in excess of $800 million. As of December 25, 1997,
the Company's total assets and liabilities (book value), on an unaudited
consolidated basis were approximately $560 million and $471 million,
respectively.
-more-
<PAGE> 2
This news release contains forward-looking statements that involve risks and
uncertainties. Actual results, events and performance could differ materially
from those contemplated by these forward-looking statements. Among the factors
that could cause actual results, events and performance to differ materially
are risks and uncertainties discussed in this news release and those detailed
from time to time in the Company's filings with the Securities and Exchange
Commission, including the Company's annual report on Form 10-K for the fiscal
year ended January 25, 1997 and the Company's quarterly report on Form 10-Q for
the quarterly periods ended April 25, July 25, and October 25, 1997, and in the
Company's other public reports and statements.
CONTACT:
BSMG WORLDWIDE
MEDIA: DAN CAHILL (212) 445-8216
INVESTORS: MARK VALENTA (212) 445-8263
###
