United States Bankruptcy Court Central District of California Riverside Division

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067 TELEPHONE: (310) 407-4000
LEE R. BOGDANOFF (State Bar No. 119542) JONATHAN S. SHENSON (State Bar No. 184250) DAVID M. GUESS (State Bar No. 238241) KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 Avenue of the Stars, 39th Floor Los Angeles, CA 90067 Telephone: (310) 407-4000 Facsimile: (310) 407-9090 Bankruptcy Counsel for Debtors and Debtors In Possession Debtors' Mailing Address 3411 N. Perris Blvd. Perris, CA 92571 National R.V. Holdings, Inc.'s Tax I.D. #XX-XXX-1079 National R.V., Inc.'s Tax I.D. #XX-XXX-5022
UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA RIVERSIDE DIVISION In re NATIONAL R.V. HOLDINGS, INC., a Delaware corporation; NATIONAL R.V., INC., a California corporation, Debtors. Case No.: 6:07-17941-PC Chapter 11 Jointly Administered with Case No.: 6:07-17937-PC NOTICE RE (I) SUBMISSION OF STATUS RE PROPOSED FINAL ORDER RE USE OF CASH COLLATERAL AND (II) EXTENSION OF TERM FOR USE OF CASH COLLATERAL Hearing Date: Time: Place: January 30, 2008 9:30 a.m. Courtroom 303 U.S. Bankruptcy Court 3420 Twelfth Street Riverside, CA 92501-3819
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TO THE HONORABLE PETER H. CARROLL, UNITED STATES BANKRUPTCY JUDGE, THE OFFICE OF THE UNITED STATES TRUSTEE, COUNSEL FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS, THE DEBTORS' SECURED LENDERS, AND OTHER PARTIES ENTITLED TO NOTICE:
National R.V. Holdings, Inc. and National R.V., Inc., the debtors and debtors in possession in the above-referenced cases (the "Debtors"), hereby file this "Notice re (I) Submission of Status re Proposed Final Order re Use of Cash Collateral and (II) Extension of Term for Use of Cash Collateral" (the "Notice") in advance of this Court's final hearing on the Debtors' use of cash collateral. On January 14, 2008, the Court entered that certain "Interim Order (I) Authorizing Debtors to Utilize Cash Collateral Pursuant to 11 U.S.C. 363, (II) Granting Adequate Protection Pursuant to 11 U.S.C. 361, 362 and 363, (III) Providing Other Relief, and (IV) Scheduling Final Hearing Pursuant to Bankruptcy Rule 4001" (the "Interim Order"). Pursuant to the Paragraph 26 of the Interim Order, if there are no objections by January 25, 2008 to the Interim Order or the underlying request for relief, then the Interim Order shall continue in effect in accordance with its terms subject to such modifications as this Court may make in the final order following the final hearing, and that are acceptable to Wells Fargo Bank, N.A. ("Wells Fargo"). Wells Fargo and the Debtors have reached an agreement on the form of a final order authorizing the Debtors to use cash collateral. Attached hereto as Exhibit "1" is the form of such order (the "Proposed Form of Final Order"). In order to facilitate the Court's review of the form of such order, attached hereto as Exhibit "2" is a redline of the Proposed Form of Final Order which is marked to show the changes made to the Interim Order. In addition, PLEASE TAKE NOTICE that, Paragraph 18 of the Interim Order also provides that: The Debtors and Wells Fargo are hereby authorized to extend the term of consensual use of Cash Collateral and to amend or modify the Budget, without further order of this Court upon three (3) days notice to the Committee. In the event that the Committee files an objection to any such amendment, the 1
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Debtors shall be authorized to continue to use Cash Collateral as agreed to by the Debtors and Wells Fargo in such amendment, and pursuant to the terms of this Final Order, until such time as the Committee's objection is resolved by Court order or agreement between the Debtors, the Committee, and Wells Fargo. Copies of the amendment or modification must be served by the Debtors upon counsel for the Committee and the U.S. Trustee. PLEASE TAKE FURTHER NOTICE that Wells Fargo and the Debtors have agreed to extend the term of consensual use of cash collateral to and through March 14, 2008, a copy of an updated budget is attached as Exhibit "A" (the "Budget") to the Draft Proposed Form of Final Order, and, by and through this Notice, the Debtors seek authority to use cash collateral through March 14, 2008 in accordance with Budget, with this Notice to serve as the "notice" to the Committee and Office of the United States Trustee contemplated in Paragraph 18 of the Interim Order.
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Respectfully Submitted,
DATED: January 29, 2008 /s/ David M. Guess DAVID M. GUESS, an Attorney with KLEE, TUCHIN, BOGDANOFF & STERN LLP Bankruptcy Counsel for Debtors and Debtors in Possession
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EXHIBIT 1 DRAFT PROPOSED FORM OF FINAL ORDER
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UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA RIVERSIDE DIVISION IN RE: ) ) ) ) ) ) )
CHAPTER 11 CASE NO. 6:07-17941 CASE NO. 6:07-17937
NATIONAL R.V. HOLDINGS, INC.; and NATIONAL R.V., INC. Debtors.
FINAL ORDER (I) AUTHORIZING DEBTORS TO UTILIZE CASH COLLATERAL PURSUANT TO 11 U.S.C. 363, (II) GRANTING ADEQUATE PROTECTION PURSUANT TO 11 U.S.C. 361, 362 AND 363 (III) PROVIDING OTHER RELIEF, AND (IV) SCHEDULING FINAL HEARING PURSUANT TO BANKRUPTCY RULE 4001 Upon the motion dated December 10, 2007 (the Motion) by National R.V. Holdings, Inc. (NRV Holdings) and National R.V., Inc. (NRV) as Debtors and Debtors-in-Possession (collectively, NRV Holdings and NRV shall be referred to as the Borrowers or Debtors), pursuant to Sections 105, 361, 362, 363, 503, 507(b) and 1146(a) of the United States Bankruptcy Code, 11 U.S.C. 101, et. seq. (the Bankruptcy Code), and Rules 2002, 4001 and 9014 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules), seeking, among other things: (a) authorization for the use by the Debtors of Cash Collateral (as such term is defined in Section 363(a) of the Bankruptcy Code) in which Wells Fargo Bank, National Association (Wells Fargo) has a security interest pursuant to (i) that certain Credit Agreement, dated as of August 12, 2005 by and among the Borrowers, Wells Fargo, and UPS Capital Corporation (UPS) as agent for various lenders from time to time party thereto (as
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amended and modified from time to time, the Pre-Petition Credit Agreement) and (ii) any other of the arrangements pursuant to which Wells Fargo has continued to make advances to the Borrower from and after August 12, 2005 to November 30, 2007 (the Petition Date) (each such document and arrangement as heretofore amended, supplemented or otherwise modified, collectively the Ancillary Pre-Petition Credit Agreements; the Pre-Petition Credit Agreement, the Ancillary PrePetition Credit Agreements, and the other loan documentation executed in connection therewith, each such document as heretofore amended, supplemented or otherwise modified, are collectively referred to herein as the Existing Credit Agreements), which Existing Credit Agreements created liens and security interests (the Pre-Petition Liens) in substantially all of the personal property assets of the Debtors, including, without limitation, all cash held in the securities account no. 12963450 maintained with Wells Fargo Institutional Securities, LLC (the Restricted Cash); (b) the granting of adequate protection to Wells Fargo, with respect to, inter alia, such use and disposition of its Cash Collateral; provided, however, that, without prejudice to the rights of Wells Fargo, the Debtors, or any other party, any such adequate protection will not apply to the extent proceeds received by the Debtors from the sale of certain Inland Zone Reactive Organic Gas Emission Reduction Credits (ERCs; such proceeds shall be referred to as the ERCs Proceeds) are spent by the
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Debtors unless and until such time as the Court determines that Wells Fargo has a valid perfected security interest in the ERCs and/or the ERCs Proceeds. (c) pursuant to Bankruptcy Rule 4001, that an interim hearing (hereinafter, the Interim Hearing) on the Motion be held for this Court to consider entry of this proposed interim order annexed to the Motion (the Interim Order) (i) authorizing the Borrower, on an interim basis, to immediately begin using Cash Collateral for the purposes set forth below and in compliance with the Budget (as defined below) pending the Final Hearing (as defined below), and (ii) granting to Wells Fargo the adequate protection described herein; (e) that this Court schedule a final hearing (the Final Hearing) to be held approximately fifteen (15) days after entry of the Interim Order (subject to the Courts calendar) to consider entry of a Final Order authorizing continued use of Cash Collateral on a final basis (the Final Order). The Court granted prior interim relief on a short-term basis pursuant Orders entered on December 12, 2007 and December 20, 2007. The Debtors and Wells Fargo had previously engaged in substantial discussions and negotiations regarding the possibility of the Debtors obtaining debtor-in-possession financing from Wells Fargo (the DIP Financing). DIP Financing documents have been drafted and substantially negotiated with the Debtors. However, at this time, the Debtors believe that they will have sufficient liquidity to properly fund their bankruptcy estates through the use of cash collateral.
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The Debtors filed their emergency motion dated January 4, 2008 seeking, among other things, emergency use of cash collateral, the scheduling of deadlines with respect to a final hearing on the use of cash collateral, and permanent use of cash collateral upon the conclusion of a final hearing (the Emergency Motion) in order to meet the Courts filing deadline to preserve the cash collateral issue for hearing on January 8, 2008 while Wells Fargo and the Debtors worked together on finalizing the terms of the consensual use of cash collateral. The Debtors sold approximately 77 finished recreational vehicles (RVs) to
Dennis Dillon RV, LLC dba Dennis Dillon RV Center ("Dillon") for approximately
$7,400,000 (the Bulk Sale; such proceeds from the Bulk Sale shall be defined as Bulk Sale Proceeds). This Court held the Interim Hearing on January 8, 2008. The Court entered its Interim Order (the Interim Order) on January 14, 2008 granting the interim relief requested in the Motion and resolving the Emergency Motion. The Court held the Final Hearing on January 30, 2008. Due and appropriate notice of the Motion and the Emergency Motion, the relief requested therein and the Interim Hearing was served by the Debtors on the Official Committee of Unsecured Creditors appointed in the Cases (the Committee), Wells Fargo, other parties in interest entitled to notice and on the United States Trustee for the Central District of California. Upon the Courts review of the Motion and the Emergency Motion and all the pleadings filed in connection with the Interim Hearing, including all responses and objections to the Motion; having considered all the evidence presented at the Interim
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Hearing and the Final Hearing, including the representations of counsel for the Debtors, Wells Fargo and other parties in interest; and the Court having noted the appearances of all parties in interest present at the Interim Hearing and the Final Hearing and in the record of the Court; and the objections, if any, to the relief requested in the Motion having been withdrawn, continued to the date of the Final Hearing, resolved or overruled by the Court; and after due deliberation and consideration and good and sufficient cause appearing therefor, IT IS FOUND, DETERMINED, ORDERED AND ADJUDGED, that: 1. Jurisdiction, Venue and Statutory Basis. This Court has jurisdiction over
the Debtors Chapter 11 cases (the Cases) and the parties and property affected hereby pursuant to 28 U.S.C. l57 (b) and 1334. Venue is proper in this District pursuant to 28 U.S.C. 1408 and 1409. Consideration of the Motion is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A), (D), (G), (M) and (O). The statutory basis for the relief granted herein is pursuant to 11 U.S.C. 105, 361, 362(d), 363, 503, 507(b), and 1146(a). 2. Notice. The notice given by the Debtors of the Motion and the Interim
Hearing and Final Hearing constitutes due and sufficient notice thereof within the requirements of Rule 4001. 3. Debtors Stipulations. Without prejudice to the rights of any other party
other than the Debtors (but subject to the limitations thereon contained in Paragraphs 12, 13, and 21 below), the Debtors stipulate and agree that: (a) (i) as of the Petition Date, the Debtors were indebted and liable to
Wells Fargo, without defense, counterclaim or offset of any kind, (A) in an aggregate
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amount exceeding $2,358,097.67 in respect of pre-petition loans and advances made to the Debtors by Wells Fargo pursuant to the Existing Credit Agreements including all fees and expenses due and owing thereunder, including, without limitation, a termination fee due, owing, and fully earned as of the Petition Date pursuant to the Pre-Petition Credit Agreement as a result of the termination of Wells Fargos commitment to make any further advances under the Pre-Petition Credit Agreement (collectively, all such amounts shall be referred to as the Pre-Petition Debt). In addition, there are potential
obligations in the amount of $5,155,000 under the Existing Credit Agreements in connection with certain letters of credit issued by Wells Fargo on behalf of the Debtors pursuant to the Existing Credit Agreements which are payable by Wells Fargo as advances under the Pre-Petition Credit Agreement (each, an Outstanding Letter of Credit) (pursuant to Court order, Wells Fargo previously used to $2,000,000 of the Restricted Cash to pay an obligation owed by the Debtors as a result of the draw down of one of the Outstanding Letters of Credit) plus fees, accruing interest, costs, and expenses, including, without limitation, reasonable attorneys fees; (ii) no portion of the PrePetition Debt is subject to avoidance, recharacterization or subordination pursuant to the Bankruptcy Code, or applicable nonbankruptcy law, and (iii) Debtors do not have, and hereby forever release, any claims, counterclaims, causes of action, defenses or offset rights, whether arising under the Bankruptcy Code or otherwise, against Wells Fargo and its respective affiliates, agents, officers, directors, employees and attorneys relating to the Pre-Petition Debt or the Existing Credit Agreements; (b) the Pre-Petition Liens granted to Wells Fargo pursuant to the Pre-
Petition Credit Agreement and all other documents executed by the Debtors in favor of
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Wells Fargo relating to the Existing Credit Agreements are valid, perfected, enforceable, first-priority liens and security interests in the property described in such agreement and security documents, including, without limitation, the Restricted Cash (collectively, the Pre-Petition Collateral) which property constitutes substantially all of the Debtors assets, (i) and are not subject to avoidance, recharacterization or subordination pursuant to the Bankruptcy Code, or applicable nonbankruptcy law, (ii) but are subject only to valid, perfected and unavoidable liens as of the Petition Date to the extent such liens are senior to or pari passu with the liens of Wells Fargo on the Pre-Petition Collateral; provided, however, the Debtors do not stipulate that Wells Fargo has a valid perfected security interest in the ERCs, the ERC Proceeds, or any interest of the Debtors in real property or leasehold interests; (c) (d) As of the Petition Date, Wells Fargo is oversecured; The Debtors are expressly seeking to provide adequate protection
to Wells Fargo for the use of Wells Fargos Cash Collateral; and (e) Any and all use of Wells Fargos Cash Collateral constitutes an
actual and necessary cost and expense of preserving the Debtors estates for the benefit of creditors other than Wells Fargo. 4. Preliminary Findings. (a) (b) Good cause has been shown for the entry of this Final Order. The Debtors have an immediate need to obtain use of Cash
Collateral in order to permit, inter alia, the orderly liquidation of their businesses. The ability of the Debtors to obtain sufficient working capital and liquidity through the use and turnover of Cash Collateral is vital to an orderly liquidation of the Debtors assets.
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(c)
Wells Fargo is unwilling to allow the Debtors to use its Cash
Collateral on different terms than are contained herein. (d) Based upon the limited record before the Court and the Debtors
representations, the Court concludes that the terms of the use of Cash Collateral on an interim basis are fair and reasonable, and reflect the Debtors exercise of prudent business judgment consistent with their fiduciary duties. (e) (f) As of the Petition Date, Wells Fargo is oversecured. The Debtors have expressly sought to provide adequate protection
to Wells Fargo for the use of Wells Fargos Cash Collateral. (g) Any and all use of Wells Fargos Cash Collateral constitutes an
actual and necessary cost and expense of preserving the Debtors estates for the benefit of creditors other than Wells Fargo. (h) The Debtors have requested entry of this Final Order pursuant to
Bankruptcy Rule 4001(b). Absent entry of this Final Order, the Debtors estates will be immediately and irreparably harmed. 5. Authorization of the Use of Cash Collateral. (a) The Debtors are hereby authorized to use Cash Collateral pursuant
the budget attached as Exhibit A hereto (the Budget) and in accordance with the terms and conditions of this Final Order, which shall be used for, inter alia, providing the Debtors with liquidity to proceed with an orderly disposition of their assets and liquidation of the Debtors business. (b) Wells Fargo shall not have any obligation or responsibility to
monitor the Debtors use of Cash Collateral and may rely on the Debtors reporting and
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representations that the use thereof, is in accordance with the requirements of the Budget and this Final Order. (c) Cash Collateral may be used by the Debtors through and including
March 14, 2008 or such later date as may be agreed to by the Debtors and Wells Fargo pursuant to Paragraph 18 of this Final Order, or such time as the Debtors fail to comply with the Budget as reasonably determined by Wells Fargo (the Termination Date). (d) During the term of this Final Order, the Debtors shall comply with
the terms of the Budget (including all line items regarding payments to Wells Fargo) such that in no event shall the Debtors use any of Wells Fargos Cash Collateral to pay any expenses in excess of 110% of the sums reflected for each such expense on the line item of the Budget therefor nor shall the aggregate amount of expenses paid at any given time exceed 110% of the total amount of expenses shown on the Budget through such date without prior written consent of Wells Fargo.
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6.
Emissions Credits. Notwithstanding anything to the contrary contained in
this Final Order, no adequate protection lien or security interest granted to Wells Fargo in this Final Order shall attach to the ERCs or the ERC Proceeds unless and until the Court enters an order finding that Wells Fargo has a perfected security interest in the ERCs or the ERC Proceeds or the Debtors and Wells Fargo agree that Wells Fargo has a perfected security interest in the ERCs or the ERC Proceeds. This Final Order is entered
specifically without prejudice to the rights of Wells Fargo to claim a perfected security interest in the ERCs or the ERC Proceeds. 7. Protection of Wells Fargos Rights. (a) The Debtors right use Cash Collateral shall terminate
automatically on the Termination Date unless otherwise expressly agreed to by Wells Fargo. Additionally, Wells Fargo shall have no obligation to pay any unfunded or underfunded item in the Budget following the Termination Date. (b) Nothing herein shall preclude Wells Fargo from credit bidding its
Pre-Petition Debt pursuant to Section 363(k) of the Bankruptcy Code at any sale of the Pre-Petition Collateral. 8. Definition of Cash Collateral. All cash and investment securities of the
Debtors, including, without limitation, all proceeds of the Pre-Petition Collateral (including funds on deposit in any bank, including the Restricted Cash) are Cash Collateral of Wells Fargo within the meaning of section 363(a) of the Bankruptcy Code; provided, however, that this Final Order is entered: (i) without prejudice to the rights of Wells Fargo to claim that it has a perfected security interest in the ERCs or the ERC Proceeds, and (ii) to the rights of the Debtors to dispute that Wells Fargo has a perfected
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security interest in the ERCs or the ERC Proceeds. All such cash and investment securities are referred to herein as Cash Collateral. Adequate Protection. Wells Fargo is entitled, pursuant to Sections 361 and 363 of the Bankruptcy Code, to adequate protection of its interest in the Pre-Petition Collateral, including Cash Collateral, for any diminution in value of Wells Fargos interests in the Pre-Petition Collateral (collectively, the Adequate Protection Obligations). As adequate protection, Wells Fargo is hereby granted the following:Adequate Protection Liens. Wells Fargo is hereby granted (effective and perfected as of the date of the Interim Order was entered) a security interest in and lien (the Adequate Protection Liens) upon all subsequently generated collateral of the same type Wells Fargo held a valid and perfected security interest in prior to the Petition Date without regard to whether such assets were acquired prior or subsequent to the Petition Date (the Adequate Protection Collateral) to the extent that the Debtors' use of Cash Collateral results in any diminution, following the Petition Date, in the value of the collateral securing Wells Fargo's claims; provided, however, the Adequate Protection Liens shall not attach to any causes of action, claims, or rights of the Debtors bankruptcy estates or recovery thereof under sections 506(c), 544, 547, 548, 549, 550, and/or 553 of the Bankruptcy Code (the Avoidance Actions). The Adequate Protection Liens shall not prime any valid and perfected pre-petition security interests and liens of any person in the Adequate Protection Collateral. The Adequate Protection Liens shall be deemed valid and perfected notwithstanding the requirements of nonbankruptcy law with respect to perfection. The Adequate Protection Liens shall be supplemental of, and in addition to, any security interest which Wells Fargo possesses
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pursuant to the Existing Credit Agreements, including, without limitation, the PrePetition Liens. (b) Full Force and Effect. The Adequate Protection Liens shall remain
in full force and effect until Wells Fargo has been paid in full on all obligations under the Existing Credit Agreements and this Final Order. (c) No Consent to Claims Against Collateral. Nothing contained in
this Final Order shall be deemed to be consent by Wells Fargo to any claims against any of the Adequate Protection Collateral under sections 105, 506(c), or 552 of the Bankruptcy Code. (d) Adequate Protection Payments. As further adequate protection,
pursuant to the Interim Order, the Debtors were authorized to remit a portion of the Bulk Sale Proceeds to Wells Fargo (the Wells Fargo Paydown) in an amount equal to the amount of the Pre-Petition Debt plus all interest accrued on Pre-Petition Debt through the date of the Wells Fargo Paydown, but not obligations incurred by the Debtors in connection with Wells Fargos payment on any of the Outstanding Letters of Credit. To the extent that the Debtors have not yet paid the Wells Fargo Paydown to Wells Fargo, the Debtors are hereby authorized and directed to pay the entire amount of the Wells Fargo Paydown to Wells Fargo upon the entry of this Final Order; provided, however, that notwithstanding Wells Fargos receipt of the Wells Fargo Paydown, the Debtors remain obligated to pay any additional amounts that remain or may become due and owing to Wells Fargo under the Existing Credit Agreements and/or this Final Order after Wells Fargos receipt of the Wells Fargo Paydown.
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(e)
Administrative Claim. If and to the extent the Adequate Protection
Collateral, the Pre-Petition Collateral, and the adequate protection granted to Wells Fargo hereunder are insufficient to compensate Wells Fargo for any diminution in value caused by the use of cash and non-cash collateral pursuant to this Final Order, Wells Fargo shall have an allowed administrative expense claim under section 503(b) of the Bankruptcy Code which shall, pursuant to section 507(b) of the Bankruptcy Code, have priority over all claims entitled to priority under sections 105, 326, 330, 331, 503(b), 507(a), 507(b), 546(c) and 1114 of the Bankruptcy Code (the Superpriority Claim); provided, however, that to the extent Wells Fargo received the Wells Fargo Paydown by February 1, 2008, the Superpriority Claim shall not attach to the Avoidance Actions so long as Wells Fargo is permitted to retain the full amount of the Wells Fargo Paydown and the Restricted Cash is not used for any purpose other than to reimburse Wells Fargo for any payments made by Wells Fargo in connection with the Outstanding Letters of Credit or to make payments on any other obligations owed to Wells Fargo. 10. Reservation of Wells Fargos and Debtors Rights. Neither the terms of
this Final Order nor any provision contained herein shall be deemed to preclude Wells Fargo from seeking any additional adequate protection under the Bankruptcy Code or otherwise whether before or after any Termination Date. Neither the terms of this Final Order nor any provision contained herein shall be deemed to preclude the Debtors from seeking authority from the Court for further use of Cash Collateral and/or the cash proceeds of any of the Debtors assets whether before or after any Termination Date.
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11.
Preservation of Liens and Rights Granted Under the Final Order. (a) Unless all obligations and indebtedness owing to Wells Fargo
under the Existing Credit Agreements, shall theretofore have been paid in full, the Debtors shall not seek an order dismissing the Cases. If an order dismissing the Cases under Section 1112 of the Bankruptcy Code or otherwise is at any time entered, such order, to the extent permissible under applicable law, shall provide (in accordance with Sections 105 and 349 of the Bankruptcy Code) that (i) Adequate Protection Liens and other security interests and liens granted to Wells Fargo pursuant to the Interim Order shall continue in full force and effect and shall maintain their priorities as provided in the Interim Order until all Pre-Petition Debt shall have been paid and satisfied in full in cash (and that such Adequate Protection Liens and other security interests and replacement 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 liens and security interests referred to in (i) above. (b) If any or all of the provisions of this Final Order are hereafter
reversed, modified, vacated or stayed, such reversal, stay, modification or vacation shall not affect (i) the validity of any Adequate Protection Obligations incurred prior to the actual receipt of written notice by Wells Fargo and/or Wells Fargo of the effective date of such reversal, stay, modification or vacation or (ii) the validity and enforceability of any lien or priority authorized or created hereby or pursuant to this Final Order with respect to the Pre-Petition Debt or Adequate Protection Obligations. Notwithstanding any such reversal, stay, modification or vacation, any use of Cash Collateral prior to the effective date of such reversal, stay, modification or vacation shall be governed in all respects by
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the original provisions of this Final Order, and Wells Fargo shall be entitled to all the rights, remedies, privileges and benefits granted in this Final Order with respect to all uses of Cash Collateral and the Adequate Protection Obligations. 12. Effect of Stipulations on Third Parties. The stipulations and admissions
contained in this Final Order, including, without limitation, those in Paragraph 3 of this Final Order, and the protections furnished in the Final Order with respect to the PrePetition Debt or the Pre-Petition Liens, including, without limitation, the Adequate Protection Obligations, shall be immediately binding on the Debtors, and thereafter binding upon all other parties in interest, including the Committee, unless (a) the Committee has timely filed an adversary proceeding or contested matter (subject to the limitations contained herein, including, inter alia, those in Paragraph 13 below) by no later than March 7, 2008 (the Challenge Deadline) (or such later date as has been agreed in writing to by Wells Fargo, or ordered by this Court after notice and a hearing), (i) challenging the validity, enforceability, priority or extent of the Pre-Petition Debt or the Pre-Petition Liens, or (ii) otherwise asserting any claims or causes of action against Wells Fargo, and (b) there is a final order or judgment in favor of the Committee in any such timely filed adversary proceeding or contested matter. If no such adversary
proceeding or contested matter is timely filed by a party in interest other than the Debtors by the Challenge Deadline, (x) the Pre-Petition Debt, the Pre-Petition Liens and all related obligations of the Debtors (the Pre-Petition Obligations) shall constitute allowed claims, not subject to counterclaim, offset, subordination, recharacterization, defense or avoidance, for all purposes in the Cases and any subsequent Chapter 7 cases, (y) the Pre-Petition Liens shall be deemed to have been, as of the Petition Date, legal,
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valid, binding, perfected, not subject to recharacterization, subordination or avoidance, and (z) the Pre-Petition Obligations shall not be subject to any other or further challenge by any party in interest seeking to exercise the rights of the Debtors estates, including, without limitation, any successor(s) thereto. If any such adversary proceeding or contested matter is timely filed, the stipulations and admissions contained in Paragraph 3 shall nonetheless remain binding and preclusive (as provided in the second sentence of this Paragraph) except to the extent that such findings and admissions were successfully challenged in such adversary proceeding or contested matter. 13. Limitation on Use of Financing Proceeds and Collateral.
Notwithstanding anything herein to the contrary, no Cash Collateral or proceeds of the Pre-Petition Collateral may be used to (a) object, contest or raise any defense to, the validity, perfection, priority, extent or enforceability of any amount due under the Existing Credit Agreements, or the liens or claims granted under this Final Order or the Existing Credit Agreements (including without limitation, the Pre-Petition Liens), (b) assert any claims, counterclaims, defenses or causes of action against Wells Fargo or its affiliates, (c) prevent, hinder or otherwise delay Wells Fargos assertion, enforcement or realization on the Cash Collateral, the Pre-Petition Collateral or the Adequate Protection Collateral in accordance with the Existing Credit Agreements or this Final Order, or (d) seek to modify any of the rights granted to Wells Fargo hereunder, under the Existing Credit Agreements, in each of the foregoing cases without Wells Fargos prior written consent, provided that the Committee may utilize up to $25,000 of the Cash Collateral or the Pre-Petition Collateral to investigate same, but not commence or prosecute an adversary proceeding or contested matter.
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14.
Limited Authorization to Use Cash Collateral Pending Final Hearing.
Notwithstanding anything contained in this Final Order to the contrary, the Debtors are authorized to use Cash Collateral solely for the purposes authorized by this Final Order and the Budget. As a result of the preliminary authorization contained herein, no
transfer of property of Debtors estates made in accordance with the provisions of this Final Order shall be avoidable as an unauthorized transfer under Section 549 of the Bankruptcy Code. 15. No Surcharge Without Consent. As a condition to and as consideration for
the obligation of Wells Fargo to consent to the use of its Cash Collateral, no costs or expenses of any kind incurred in the Cases by any party during any time that Wells Fargo has consented to the use of its Cash Collateral may be imposed upon Wells Fargo or any of the Pre-Petition Collateral pursuant to Section 506(c) of the Bankruptcy Code or otherwise without Wells Fargos prior written consent, which Wells Fargo may grant or deny in its sole and absolute discretion, and that no such consent be implied or imposed based on any action or inaction of Wells Fargo. 16. Debtors Obligations and Transfers to Wells Fargo Not Avoidable. None
of the Debtors obligations, grants of security interests, liens or superpriority claim status or payments or other transfers to Wells Fargo under this Final Order shall be avoidable or recoverable as a fraudulent, ultra vires, or unlawful transfer under any applicable law, including, without limitation, the Bankruptcy Code.Fees and Expenses Chargeable to Debtors. The Debtors shall be authorized to pay in the ordinary course, without further Court order and not subject to Court review or application prior to payment, and within ten (10) days of Debtors receipt of any request from Wells Fargo (which request shall be
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submitted simultaneously to the Committee), all (i) reasonable out of pocket costs and expenses incurred by Wells Fargo (including all reasonable fees, expenses and disbursements of outside counsel and consultants) in connection with the Existing Credit Agreements, (ii) reasonable out of pocket costs and expenses incurred by Wells Fargo (including reasonable fees, expenses and disbursements of counsel and financial advisors) in connection with the enforcement or protection of any of its rights and remedies under this Final Order and (iii) reasonable fees and expenses of Wells Fargos counsel and financial advisors in connection with the Cases, including, without limitation, all fees, costs, and expenses incurred in connection with the Debtors use of cash collateral and the potential DIP Financing; and all such fees, commissions, costs and expenses shall be and are included as part of the principal amount owed under the Existing Credit Agreements, shall be secured by the Pre-Petition Collateral and Adequate Protection Collateral and afforded all of the rights, priorities and protections afforded to Wells Fargo in respect of the Adequate Protection Obligations under this Final Order. Notwithstanding the foregoing, the Committee and the Debtors shall have ten (10) days to file an objection with the Court to any pending Wells Fargo request for fees stating the specific portions of the request to which the Committee and/or the Debtors object and the reason(s) for said objection (which reason(s) are not subject to limitation of any kind and may include that the Debtors lack liquidity to pay any or all of such fee request), and the Debtors shall pay any portion of any such fee request that is not subject to any such objection. 18. Amendments or Modifications. The Debtors and Wells Fargo are hereby
authorized to extend the term of consensual use of Cash Collateral and to amend or
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modify the Budget, without further order of this Court upon three (3) days notice to the Committee. In the event that the Committee files an objection to any such amendment, the Debtors shall be authorized to continue to use Cash Collateral as agreed to by the Debtors and Wells Fargo in such amendment, and pursuant to the terms of this Final Order, until such time as the Committees objection is resolved by Court order or agreement between the Debtors, the Committee, and Wells Fargo. Copies of the
amendment or modification must be served by the Debtors upon counsel for the Committee and the U.S. Trustee. 19. Reporting Requirements. On Tuesday of each week, Debtors shall submit
a weekly variance report to Wells Fargo showing the difference between projected and actual collections and the difference between expenditures in as shown in the Budget and actual expenditures for the immediately preceding week. 20. Inspection Rights. Representatives of Wells Fargo shall be authorized to
visit and remain on any of the business premises of the Debtors on any business day and during normal business hours to inspect any Adequate Protection Collateral, the PrePetition Collateral or other assets of the Debtors to verify or to obtain supporting details concerning the financial information to be provided to Wells Fargo hereunder or compliance with the Budget. 21. Survivability; Binding Effect. The provisions of this Final Order shall be
binding upon the Debtors and their buyers, successors and assigns. In the event that these Cases are dismissed, superseded, substantively consolidated with another Chapter 11 case or entity, or either of the Debtors merges into any other entity under any plan of reorganization, neither the entry of this Final Order, the dismissal of either of the Cases,
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nor such consolidation or merger shall affect the rights of Wells Fargo under this Final Order or the Existing Credit Agreements, and all of Wells Fargos rights and remedies thereunder and hereunder shall remain in full force and effect. As a condition to the obligation of Wells Fargo to continue to consent to the use of its Cash Collateral after the Final Hearing, the provisions of this Final Order shall survive and be binding upon any successor trustee appointed in the Cases or any Chapter 7 case to which any of the Cases may subsequently be converted. 22. Remedies Cumulative. The rights, remedies, powers and privileges
conferred upon Wells Fargo pursuant to this Final Order shall be in addition to and cumulative with those contained in the Existing Credit Agreements. Nothing in this Final Order is intended to limit, restrict, eliminate or modify any rights or remedies provided to Wells Fargo under the Existing Credit Agreements. 23. No Admissions or Waiver. Nothing in this Final Order shall be deemed to
be a waiver by Wells Fargo of its right to request any other relief or additional and further protection of its interests in any property of the Debtors or property of the estate, to move for relief from the automatic stay with respect to the Adequate Protection Obligations or the enforcement of its Pre-Petition Liens on the Pre-Petition Collateral, to seek the appointment of a trustee or examiner in any of the Cases or the dismissal of the any of Cases, or to request any other relief in this case, nor shall anything in this Final Order or the Existing Credit Agreements constitute an admission by Wells Fargo of the quantity, quality or value of the Adequate Protection Collateral or Pre-Petition Collateral or constitute a finding of adequate protection with respect to the interest of Wells Fargo in any of the Adequate Protection Collateral or Pre-Petition Collateral. Wells Fargo shall be
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deemed to have reserved all rights to assert entitlement to the protections and benefits of Section 507(b) of the Bankruptcy Code in connection with any use, sale or other disposition of any of the Pre-Petition Collateral. 24. Release of Claims. Subject to the Committees rights under this Final
Order, the Debtors hereby (i) release and discharge Wells Fargo, together with its respective affiliates, agents, attorneys, members, officers, directors and employees (collectively, the Protected Parties) from any and all claims and causes of action arising out, based upon or related to, in whole or in part, Existing Credit Agreements, any aspect of the pre-petition relationship between, or among, the Protected Parties and the Debtors or any other acts or omissions of the Protected Parties in connection with any of the Existing Credit Agreements or its pre-petition relationship with the Debtors, including, without limitation, any avoidance action available under Chapter 5 of the Bankruptcy Code (or under Section 502(d) of the Bankruptcy Code); (ii) waive any and all claims and/or defenses (including, without limitation, offsets and counterclaims of any nature or kind) as to the validity, perfection, priority, enforceability and avoidability (under the Bankruptcy Code or otherwise) of the indebtedness under the Existing Credit Agreements and the security interests in and liens on the collateral securing such indebtedness; and (iii) agree, without further Court order and without the need for filing of any proof of claim, to the allowance of the pre-petition claims of Wells Fargo pursuant to Sections 502 and 506 of the Bankruptcy Code on account of such indebtedness as fully secured claims for principal, plus accrued pre-petition and post-petition interest, fees, expenses and other amounts chargeable under the Existing Credit Agreements.Binding Effect; Successors and Assigns. The provisions of this Final Order shall be binding upon all parties in
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interest in these Cases, including, without limitation, Wells Fargo and the Debtors and their successors and assigns (including any Chapter 7 or Chapter 11 trustee hereinafter appointed or elected for the estates of the Debtors) and shall inure to the benefit of Wells Fargo, the Debtors and their successors and assigns.
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102236.1
LEE R. BOGDANOFF (State Bar No. 119542) JONATHAN S. SHENSON (State Bar No. 184250) DAVID M. GUESS (State Bar No. 238241) KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 Avenue of the Stars, 39th Floor Los Angeles, CA 90067 Telephone: (310) 407-4000 Facsimile: (310) 407-9090 Bankruptcy Counsel for Debtors and Debtors In Possession Debtors' Mailing Address 3411 N. Perris Blvd. Perris, CA 92571 National R.V. Holdings, Inc.'s Tax I.D. #XX-XXX-1079 National R.V., Inc.'s Tax I.D. #XX-XXX-5022UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA RIVERSIDE DIVISION
In re NATIONAL R.V. HOLDINGS, INC., a Delaware corporation; NATIONAL R.V., INC., a California corporation, Debtors. Case No.: 6:07-17941-PC Chapter 11 Jointly Administered with Case No.: 6:07-17937-PC INTERIM ORDER (I) AUTHORIZING DEBTORS TO UTILIZE CASH COLLATERAL PURSUANT TO 11 U.S.C. 363, (II) GRANTING ADEQUATE PROTECTION PURSUANT TO 11 U.S.C. 361, 362 AND 363 (III) PROVIDING OTHER RELIEF, AND (IV) SCHEDULING FINAL HEARING PURSUANT TO BANKRUPTCY RULE 4001 Date: Time: Place: Hearing January 8, 2008 10:30 a.m. Courtroom 303 U.S. Bankruptcy Court 3420 Twelfth Street Riverside, CA 92501
101777.1
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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 TELEPHONE: (310) 407-4000
IN RE:
NATIONAL R.V. HOLDINGS, INC.; and NATIONAL R.V., INC. Debtors.
) ) ) ) ) ) )
CHAPTER 11 CASE NO. 6:07-17941 CASE NO. 6:07-17937
FINAL ORDER (I) AUTHORIZING DEBTORS TO UTILIZE CASH COLLATERAL PURSUANT TO 11 U.S.C. 363, (II) GRANTING ADEQUATE PROTECTION PURSUANT TO 11 U.S.C. 361, 362 AND 363 (III) PROVIDING OTHER RELIEF, AND (IV) SCHEDULING FINAL HEARING PURSUANT TO BANKRUPTCY RULE 4001 Upon the motion dated December 10, 2007 (the Motion) by National R.V. Holdings, Inc. (NRV Holdings) and National R.V., Inc. (NRV) as Debtors and
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2 defined in Section 363(a) of the Bankruptcy Code) in which Wells Fargo Bank, National Association (Wells Fargo) has a security interest pursuant to (i) that certain Credit Agreement, dated as of August 12, 2005 by and among the Borrowers, Wells Fargo, and UPS Capital Corporation (UPS) as agent for various lenders from time to time party thereto (as amended and modified from time to time, the Pre-Petition Credit Debtors-in-Possession (collectively, NRV Holdings and NRV shall be referred to as the Borrowers or Debtors), pursuant to Sections 105, 361, 362, 363, 503, 507(b) and 1146(a) of the United States Bankruptcy Code, 11 U.S.C. 101, et. seq. (the Bankruptcy Code), and Rules 2002, 4001 and 9014 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules), seeking, among other things: (a) authorization for the use by the Debtors of Cash Collateral (as such term is
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Agreement) and (ii) any other of the arrangements pursuant to which Wells Fargo has continued to make advances to the Borrower from and after August 12, 2005 to November 30, 2007 (the Petition Date) (each
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the Existing Credit Agreements), which Existing Credit Agreements such document and arrangement as heretofore amended, supplemented or otherwise modified, collectively the Ancillary Pre-Petition Credit Agreements; the Pre-Petition Credit Agreement, the Ancillary PrePetition Credit Agreements, and the other loan documentation executed in connection therewith, each such document as heretofore amended, supplemented or otherwise modified, are collectively referred to herein as
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(b)
created liens and security interests (the Pre-Petition Liens) in substantially all of the personal property assets of the Debtors, including, without limitation, all cash held in the securities account no. 12963450 maintained with Wells Fargo Institutional Securities, LLC (the Restricted Cash); the granting of adequate protection to Wells Fargo, with respect to, inter alia, such use and disposition of its Cash Collateral; provided, however, that, without prejudice to the rights of Wells Fargo, the Debtors, or any other party, any such adequate protection will not apply to the extent proceeds received by the Debtors from the sale of certain Inland Zone Reactive Organic Gas Emission Reduction Credits (ERCs; such proceeds shall be referred to as the ERCs Proceeds) are spent by the Debtors unless and until such time as the Court determines that Wells
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(c)
Fargo has a valid perfected security interest in the ERCs and/or the ERCs Proceeds. pursuant to Bankruptcy Rule 4001, that an interim hearing (hereinafter, the Interim Hearing) on the Motion be held for this Court to consider entry of this proposed interim order annexed to the Motion (the Interim Order) (i) authorizing the Borrower, on an interim basis, to immediately begin using Cash Collateral for the purposes set forth below and in compliance with the Budget (as defined below) pending the Final Hearing (as defined below), and (ii) granting to Wells Fargo the adequate protection described herein;
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(de)
that this Court schedule a final hearing (the Final Hearing) to be held approximately fifteen (15) days after entry of the Interim Order (subject to the Courts calendar) to consider entry of a Final Order authorizing continued use of Cash Collateral on a final basis (the Final Order).
The Court having grantinggranted prior interim relief on a short-term basis pursuant Orders entered on December 12, 2007 and December 20, 2007;2007. The Debtors and Wells Fargo had previously engaged in substantial discussions and negotiations regarding the possibility of the Debtors obtaining debtor-in-possession financing from Wells Fargo (the DIP Financing). DIP Financing documents have been drafted and substantially negotiated with the Debtors. However, at this time, the Debtors believe that they will have sufficient liquidity to properly fund their bankruptcy estates through the use of cash collateral.
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The Debtors filed their emergency motion dated January 4, 2008 seeking, among other things, emergency use of cash collateral, the scheduling of deadlines with respect to a final hearing on the use of cash collateral, and permanent use of cash collateral upon
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the conclusion of a final hearing (the Emergency Motion) in order to meet the Courts filing deadline to preserve the cash collateral issue for hearing on January 8, 2008 while Wells Fargo and the Debtors worked together on finalizing the terms of the consensual use of cash collateral. The Debtors also propose to sellsold approximately 77 finished recreational vehicles (RVs) to an affiliated dealer in San Diego
Dennis Dillon RV, LLC dba
Dennis Dillon RV Center ("Dillon") for approximately $7,400,000 or, alternatively, an undetermined number of finished RVs to other authorized dealers for an aggregate amount of no less than $7,400,000 (any such sale shall be referred to as a Proposed Sale; any(the Bulk Sale; such proceeds from the Bulk Sale shall be defined as
ProposedBulk Sale Proceeds).
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TheThis Court held the Interim Hearing having been held by this Court on
January 8, 2008; and2008. The Court entered its Interim Order (the Interim Order) on January 14, 2008 granting the interim relief requested in the Motion and resolving the Emergency Motion. The Court held the Final Hearing on January 30, 2008. Due and appropriate notice of the Motion and the Emergency Motion, the relief
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5 requested therein and the Interim Hearing having beenwas served by the Debtors on the Official Committee of Unsecured Creditors appointed in the Cases (the Committee),
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Wells Fargo, other parties in interest entitled to notice and on the United States Trustee for the Central District of California; and. Upon the Courts review of the Motion and the Emergency Motion and all the
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pleadings filed in connection with the Interim Hearing, including all responses and objections to the Motion; having considered all the evidence presented at the Interim Hearing and the Final Hearing, including the representations of counsel for the Debtors, Wells Fargo and other parties in interest; and the Court having noted the appearances of all parties in interest present at the Interim Hearing and the Final Hearing and in the record of the Court; and the objections, if any, to the relief requested in the Motion having been withdrawn, continued to the date of the Final Hearing, resolved or overruled by the Court; and as Wells Fargo and the Debtors wish the issues raised in the
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Emergency Motion to be resolved by this Interim Order; and after due deliberation and
consideration and good and sufficient cause appearing therefor, IT IS FOUND, DETERMINED, ORDERED AND ADJUDGED, that: 1. Jurisdiction, Venue and Statutory Basis. This Court has jurisdiction over
the Debtors Chapter 11 cases (the Cases) and the parties and property affected hereby pursuant to 28 U.S.C. l57 (b) and 1334. Venue is proper in this District pursuant to 28 U.S.C. 1408 and 1409. Consideration of the Motion is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A), (D), (G), (M) and (O). The statutory basis for the relief granted herein is pursuant to 11 U.S.C. 105, 361, 362(d), 363, 503, 507(b), and 1146(a). 2. Notice. The notice given by the Debtors of the Motion and the Interim
Hearing and Final Hearing constitutes due and sufficient notice thereof within the
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6 requirements of Rule 4001.
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3.
Debtors Stipulations. Without prejudice to the rights of any other party
other than the Debtors (but subject to the limitations thereon contained in Paragraphs 12, 13, and 21 below), the Debtors stipulate and agree that:
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Agreement as a result of the termination of Wells Fargos commitment to make any (a) (i) as of the Petition Date, the Debtors were indebted and liable to Wells Fargo, without defense, counterclaim or offset of any kind, (A) in an aggregate amount exceeding $2,358,097.67 in respect of pre-petition loans and advances made to the Debtors by Wells Fargo pursuant to the Existing Credit Agreements including all fees and expenses due and owing thereunder, including, without limitation, a termination fee due, owing, and fully earned as of the Petition Date pursuant to the Pre-Petition Credit
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further advances under the Pre-Petition Credit Agreement (collectively, all such amounts shall be referred to as the Pre-Petition Debt). In addition, there are potential
obligations in the amount of $5,155,000 under the Existing Credit Agreements in connection with certain letters of credit issued by Wells Fargo on behalf of the Debtors pursuant to the Existing Credit Agreements which are payable by Wells Fargo as advances under the Pre-Petition Credit Agreement (each, an Outstanding Letter of Credit) (pursuant to Court order, Wells Fargo previously used to $2,000,000 of the Restricted Cash to pay an obligation owed by the Debtors as a result of the draw down of one of the Outstanding Letters of Credit) plus fees, accruing interest, costs, and expenses, including, without limitation, reasonable attorneys fees; (ii) no portion of the PrePetition Debt is subject to avoidance, recharacterization or subordination pursuant to the Bankruptcy Code, or applicable nonbankruptcy law, and (iii) Debtors do not have, and hereby forever release, any claims, counterclaims, causes of action, defenses or offset
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rights, whether arising under the Bankruptcy Code or otherwise, against Wells Fargo and its respective affiliates, agents, officers, directors, employees and attorneys relating to the Pre-Petition Debt or the Existing Credit Agreements;
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assets, (i) and are not subject to avoidance, recharacterization or subordination pursuant (b) the Pre-Petition Liens granted to Wells Fargo pursuant to the PrePetition Credit Agreement and all other documents executed by the Debtors in favor of Wells Fargo relating to the Existing Credit Agreements are valid, perfected, enforceable, first-priority liens and security interests in the property described in such agreement and security documents, including, without limitation, the Restricted Cash (collectively, the Pre-Petition Collateral) which property constitutes substantially all of the Debtors
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8
to the Bankruptcy Code, or applicable nonbankruptcy law, (ii) but are subject only to valid, perfected and unavoidable liens as of the Petition Date to the extent such liens are senior to or pari passu with the liens of Wells Fargo on the Pre-Petition Collateral; provided, however, the Debtors do not stipulate that Wells Fargo has a valid perfected security interest in the ERCs, the ERC Proceeds, or any interest of the Debtors in real property or leasehold interests; (c) (d) As of the Petition Date, Wells Fargo is oversecured; The Debtors are expressly seeking to provide adequate protection
to Wells Fargo for the use of Wells Fargos Cash Collateral; and (e) Any and all use of Wells Fargos Cash Collateral constitutes an
actual and necessary cost and expense of preserving the Debtors estates for the benefit of creditors other than Wells Fargo.
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Order.
4.
Preliminary Findings. (a) Good cause has been shown for the entry of this InterimFinal
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(b)
The Debtors have an immediate need to obtain use of Cash
Collateral in order to permit, inter alia, the orderly liquidation of their businesses. The ability of the Debtors to obtain sufficient working capital and liquidity through the use and turnover of Cash Collateral is vital to an orderly liquidation of the Debtors assets. (c) Wells Fargo is unwilling to allow the Debtors to use its Cash
Collateral on different terms than are contained herein. (d) Based upon the limited record before the Court and the Debtors
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representations, the Court concludes that the terms of the use of Cash Collateral on an interim basis are fair and reasonable, and reflect the Debtors exercise of prudent business judgment consistent with their fiduciary duties. (e) (f) As of the Petition Date, Wells Fargo is oversecured. The Debtors have expressly sought to provide adequate protection
to Wells Fargo for the use of Wells Fargos Cash Collateral.
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Debtors estates will be immediately and irreparably harmed. (g) Any and all use of Wells Fargos Cash Collateral constitutes an actual and necessary cost and expense of preserving the Debtors estates for the benefit of creditors other than Wells Fargo. (h) The Debtors have requested entry of this InterimFinal Order
pursuant to Bankruptcy Rule 4001(b)(2). Absent entry of this InterimFinal Order, the
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5.
Authorization of the Use of Cash Collateral. (a) The Debtors are hereby authorized to use Cash Collateral pursuant
the budget attached as Exhibit A hereto (the Budget) and in accordance with the
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terms and conditions of this InterimFinal Order, which shall be used for, inter alia, providing the Debtors with liquidity to proceed with an orderly disposition of their assets and liquidation of the Debtors business. (b) Wells Fargo shall not have any obligation or responsibility to
monitor the Debtors use of Cash Collateral and may rely on the Debtors reporting and representations that the use thereof, is in accordance with the requirements of the Budget and this InterimFinal Order. (c) Cash Collateral may be used by the Debtors through and including
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February 1, 2008,March 14, 2008 or such later date as may be agreed to by the Debtors
and Wells Fargo pursuant to Paragraph 18 of this Final Order, or such time as the Debtors fail to comply with the Budget as reasonably determined by Wells Fargo (the Termination Date). (d) During the term of this InterimFinal Order (and following any
final approval), the Debtors shall comply with the terms of the Budget (including all line
items regarding payments to Wells Fargo) such that in no event shall the Debtors use any of Wells Fargos Cash Collateral to pay any expenses in excess of 110% of the sums reflected for each such expense on the line item of the Budget therefor nor shall the aggregate amount of expenses paid at any given time exceed 110% of the total amount of expenses shown on the Budget through such date without prior written consent of Wells Fargo.
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6.
Emissions Credits. Notwithstanding anything to the contrary contained in
this InterimFinal Order, no adequate protection lien or security interest granted to Wells Fargo in this InterimFinal Order shall attach to the ERCs or the ERC Proceeds unless and until the Court enters an order finding that Wells Fargo has a perfected security interest in the ERCs or the ERC Proceeds or the Debtors and Wells Fargo agree that Wells Fargo has a perfected security interest in the ERCs or the ERC Proceeds. This InterimFinal Order is entered specifically without prejudice to the rights of Wells Fargo to claim a perfected security interest in the ERCs or the ERC Proceeds. 7. Protection of Wells Fargos Rights. (a) The Debtors right use Cash Collateral shall terminate
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automatically on the Termination Date unless otherwise expressly agreed to by Wells Fargo. Additionally, Wells Fargo shall have no obligation to pay any unfunded or underfunded item in the Budget following the Termination Date. (b) Nothing herein shall preclude Wells Fargo from credit bidding its
Pre-Petition Debt pursuant to Section 363(k) of the Bankruptcy Code at any sale of the Pre-Petition Collateral. 8. Definition of Cash Collateral. All cash and investment securities of the
Debtors, including, without limitation, all proceeds of the Pre-Petition Collateral (including funds on deposit in any bank, including the Restricted Cash) are Cash Collateral of Wells Fargo within the meaning of section 363(a) of the Bankruptcy Code; provided, however, that this InterimFinal Order is entered: (i) without prejudice to the rights of Wells Fargo to claim that it has a perfected security interest in the ERCs or the ERC Proceeds, and (ii) to the rights of the Debtors to dispute that Wells Fargo has a
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perfected security interest in the ERCs or the ERC Proceeds.
All such cash and
investment securities are referred to herein as Cash Collateral. Adequate Protection. Wells Fargo is entitled, pursuant to Sections 361 and 363 of the Bankruptcy Code, to
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adequate protection of its interest in the Pre-Petition Collateral, including Cash Collateral, for any diminution in value of Wells Fargos interests in the Pre-Petition Collateral (collectively, the Adequate Protection Obligations). As adequate protection, Wells Fargo is hereby granted the following: (a) Adequate Protection Liens. Wells Fargo is hereby granted
(effective and perfected as of the date of thisthe Interim Order was entered) a security interest in and lien (the Adequate Protection Liens) upon all subsequently generated collateral of the same type Wells Fargo held a valid and perfected security interest in prior to the Petition Date without regard to whether such assets were acquired prior or subsequent to the Petition Date (the Adequate Protection Collateral) to the extent that the Debtors' use of Cash Collateral results in any diminution, following the Petition Date, in the value of the collateral securing Wells Fargo's claims; provided, however, the Adequate Protection Liens shall not attach to any causes of action, claims, or rights of the
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Debtors bankruptcy estates or recovery thereof under sections 506(c), 544, 547, 548, 549, 550, and/or 553 of the Bankruptcy Code (the Avoidance Actions). The Adequate Protection Liens shall not prime any valid and perfected pre-petition security interests and liens of any person in the Adequate Protection Collateral. The Adequate Protection Liens shall be deemed valid and perfected notwithstanding the requirements of nonbankruptcy law with respect to perfection. The Adequate Protection Liens shall be supplemental of, and in addition to, any security interest which Wells Fargo possesses
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pursuant to the Existing Credit Agreements, including, without limitation, the PrePetition Liens. (b) Full Force and Effect. The Adequate Protection Liens shall remain
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the Bankruptcy Code. in full force and effect until Wells Fargo has been paid in full on all obligations under the Existing Credit Agreements and this InterimFinal Order. (c) No Consent to Claims Against Collateral. Nothing contained in
this InterimFinal Order shall be deemed to be consent by Wells Fargo to any claims against any of the Adequate Protection Collateral under sections 105, 506(c), or 552 of
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(d)
Adequate Protection Payments. As further adequate protection, in
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the event that the Debtors close the Proposed Sale and receive the Proposed Sale Proceedspursuant to the Interim Order, the Debtors shallwere authorized to remit a
portion of the ProposedBulk Sale Proceeds to Wells Fargo (the Wells Fargo Paydown) in an amount equal to the amount of the Pre-Petition Debt plus all interest accrued on Pre-Petition Debt through the date of the Wells Fargo Paydown, but not obligations incurred by the Debtors in connection with Wells Fargos payment on any of the Outstanding Letters of Credit. To the extent that the Debtors have not yet paid the Wells Fargo Paydown to Wells Fargo, the Debtors are hereby authorized and directed to pay the entire amount of the Wells Fargo Paydown to Wells Fargo upon the entry of this Final Order; provided, however, that notwithstanding Wells Fargos receipt of the Wells Fargo Paydown, the Debtors remain obligated to pay any additional amounts that remain or
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13 may become due and owing to Wells Fargo under the Existing Credit Agreements and/or this Final Order after Wells Fargos receipt of the Wells Fargo Paydown.
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(e)
Administrative Claim. If and to the extent the Adequate Protection
Collateral, the Pre-Petition Collateral, and the adequate protection granted to Wells Fargo hereunder are insufficient to compensate Wells Fargo for any diminution in value caused
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by the use of cash and non-cash collateral pursuant to this InterimFinal Order, Wells Fargo shall have an allowed administrative expense claim under section 503(b) of the Bankruptcy Code which shall, pursuant to section 507(b) of the Bankruptcy Code, have priority over all claims entitled to priority under sections 105, 326, 330, 331, 503(b), 507(a), 507(b), 546(c) and 1114 of the Bankruptcy Code (the Superpriority Claim); provided, however, that into the eventextent Wells Fargo receives payment of the Pre-
Petition Debtreceived the Wells Fargo Paydown by February 1, 2008, the Superpriority
Claim shall not attach to the Avoidance Actions so long as Wells Fargo is permitted to retain the full amount of the Wells Fargo Paydown and the Restricted Cash is not used for any purpose other than to reimburse Wells Fargo for any payments made by Wells Fargo in connection with the Outstanding Letters of Credit or to make payments on any other obligations owed to Wells Fargo. 9. Reservation of Wells Fargos and Debtors Rights. This InterimNeither
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the terms of this Final Order nor any provision contained herein shall notbe deemed to preclude Wells Fargo from seeking any additional adequate protection under the Bankruptcy Code or otherwise whether before or after any Termination Date. Neither the terms of this InterimFinal Order nor any provision contained herein shall be deemed to preclude the Debtors from seeking authority from the Court for further use of Cash
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14 Collateral and/or the cash proceeds of any of the Debtors assets whether before or after any Termination Date.
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10.
Preservation of Liens and Rights Granted Under the InterimFinal Order. (a) Unless all obligations and indebtedness owing to Wells Fargo
under the Existing Credit Agreements, shall theretofore have been paid in full, the
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shall continue in full force and effect and shall maintain their priorities as provided in Debtors shall not seek an order dismissing the Cases. If an order dismissing the Cases under Section 1112 of the Bankruptcy Code or otherwise is at any time entered, such order, to the extent permissible under applicable law, shall provide (in accordance with Sections 105 and 349 of the Bankruptcy Code) that (i) Adequate Protection Liens and other security interests and liens granted to Wells Fargo pursuant to thisthe Interim Order
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thisthe Interim Order until all Pre-Petition Debt shall have been paid and satisfied in full
in cash (and that such Adequate Protection Liens and other security interests and replacement 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 liens and security interests referred to in (i) above. (b) If any or all of the provisions of this InterimFinal Order are
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hereafter reversed, modified, vacated or stayed, such reversal, stay, modification or vacation shall not affect (i) the validity of any Adequate Protection Obligations incurred prior to the actual receipt of written notice by Wells Fargo and/or Wells Fargo of the effective date of such reversal, stay, modification or vacation or (ii) the validity and enforceability of any lien or priority authorized or created hereby or pursuant to this
InterimFinal Order with respect to the Pre-Petition Debt or Adequate Protection

Obligations. Notwithstanding any such reversal, stay, modification or vacation, any use of Cash Collateral prior to the effective date of such reversal, stay, modification or
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vacation shall be governed in all respects by the original provisions of this InterimFinal Order, and Wells Fargo shall be entitled to all the rights, remedies, privileges and benefits granted in this InterimFinal Order with respect to all uses of Cash Collateral and the Adequate Protection Obligations. 11. Effect of Stipulations on Third Parties. The stipulations and admissions
contained in this InterimFinal Order, including, without limitation, those in Paragraph 3 of this InterimFinal Order, and the protections furnished in the Final Order with respect to the Pre-Petition Debt or the Pre-Petition Liens, including, without limitation, the Adequate Protection Obligations, shall be immediately binding on the Debtors, and thereafter binding upon all other parties in interest, including the Committee, unless (a) the Committee has timely filed an adversary proceeding or contested matter (subject to the limitations contained herein, including, inter alia, those in Paragraph 13 below) by no later than March 7, 2008 (the Challenge Deadline) (or such later date as has been agreed in writing to by Wells Fargo, or ordered by this Court after notice and a hearing), (i) challenging the validity,
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enforceability, priority or extent of the Pre-Petition Debt or the Pre-Petition Liens, or (ii) otherwise asserting any claims or causes of action against Wells Fargo, and (b) there is a final order or judgment in favor of the Committee in any such timely filed adversary proceeding or contested matter. If no such adversary proceeding or contested matter is timely filed by a party in interest other than the Debtors by the Challenge Deadline, (x) the Pre-Petition Debt, the Pre-Petition Liens and all related obligations of the Debtors (the Pre-Petition Obligations) shall constitute allowed claims, not subject to
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16 counterclaim, offset, subordination, recharacterization, defense or avoidance, for all
1 2 3
purposes in the Cases and any subsequent Chapter 7 cases, (y) the Pre-Petition Liens shall be deemed to have been, as of the Petition Date, legal, valid, binding, perfected, not subject to recharacterization, subordination or avoidance, and (z) the Pre-Petition
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adversary proceeding or contested matter. Obligations shall not be subject to any other or further challenge by any party in interest seeking to exercise the rights of the Debtors estates, including, without limitation, any successor(s) thereto. If any such adversary proceeding or contested matter is timely filed, the stipulations and admissions contained in Paragraph 3 shall nonetheless remain binding and preclusive (as provided in the second sentence of this Paragraph) except to the extent that such findings and admissions were successfully challenged in such
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13.
Limitation
on
Use
of
Financing
Proceeds
and
Collateral.
Notwithstanding anything herein to the contrary, no Cash Collateral or proceeds of the Pre-Petition Collateral may be used to (a) object, contest or raise any defense to, the validity, perfection, priority, extent or enforceability of any amount due under the Existing Credit Agreements, or the liens or claims granted under this InterimFinal Order or the Existing Credit Agreements (including without limitation, the Pre-Petition Liens),
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17 Wells Fargos prior written consent, provided that the Committee may utilize up to (b) assert any claims, counterclaims, defenses or causes of action against Wells Fargo or its affiliates, (c) prevent, hinder or otherwise delay Wells Fargos assertion, enforcement or realization on the Cash Collateral, the Pre-Petition Collateral or the Adequate Protection Collateral in accordance with the Existing Credit Agreements or this
InterimFinal Order, or (d) seek to modify any of the rights granted to Wells Fargo
hereunder, under the Existing Credit Agreements, in each of the foregoing cases without
1 2 3
$25,000 of the Cash Collateral or the Pre-Petition Collateral to investigate same, but not commence or prosecute an adversary proceeding or contested matter. 14. Limited Authorization to Use Cash Collateral Pending Final Hearing.
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Notwithstanding anything contained in this InterimFinal Order to the contrary, the Debtors are authorized to use Cash Collateral solely for the purposes authorized by this
InterimFinal Order and the Budget, pending the Final Hearing on the Motion. Wells Fargo has no obligation, and shall not be deemed to have consented to any additional use of Cash Collateral or perform any other obligations under the Existing Credit Agreements until entry of, and as set forth in, the Final Order..
As a result of the
preliminary authorization contained herein, no transfer of property of Debtors estates made in accordance with the provisions of this InterimFinal Order shall be avoidable as an unauthorized transfer under Section 549 of the Bankruptcy Code. 15. No Surcharge Without Consent. As a condition to and as consideration
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for the obligation of Wells Fargo to consent to the use of its Cash Collateral, no costs or expenses of any kind incurred in the Cases by any party during any time that Wells Fargo has consented to the use of its Cash Collateral may be imposed upon Wells Fargo or any of the Pre-Petition Collateral pursuant to Section 506(c) of the Bankruptcy Code or otherwise without Wells Fargos prior written consent, which Wells Fargo may grant or deny in its sole and absolute discretion, and that no such consent be implied or imposed based on any action or inaction of Wells Fargo. 16. Debtors Obligations and Transfers to Wells Fargo Not Avoidable. None
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18 of the Debtors obligations, grants of security interests, liens or superpriority claim status or payments or other transfers to Wells Fargo under this InterimFinal Order shall be
1 2 3
avoidable or recoverable as a fraudulent, ultra vires, or unlawful transfer under any applicable law, including, without limitation, the Bankruptcy Code.Fees and Expenses Chargeable to Debtors
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Agreements, (ii) reasonable out of pocket costs and expenses incurred by Wells Fargo . The Debtors shall be authorized to pay in the ordinary course, without further Court order and not subject to Court review or application prior to payment, and within ten (10) days of Debtors receipt of any request from Wells Fargo (which request shall be submitted simultaneously to the Committee), all (i) reasonable out of pocket costs and expenses incurred by Wells Fargo (including all reasonable fees, expenses and disbursements of outside counsel and consultants) in connection with the Existing Credit
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(including reasonable fees, expenses and disbursements of counsel and financial advisors) in connection with the enforcement or protection of any of its rights and remedies under this InterimFinal Order and (iii) reasonable fees and expenses of Wells Fargos counsel and financial advisors in connection with the Cases, including, without limitation, all fees, costs, and expenses incurred in connection with the Debtors use of cash collateral and the potential DIP Financing; and all such fees, commissions, costs and
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19 any pending Wells Fargo request for fees stating the specific portions of the request to expenses shall be and are included as part of the principal amount owed under the Existing Credit Agreements, shall be secured by the Pre-Petition Collateral and Adequate Protection Collateral and afforded all of the rights, priorities and protections afforded to Wells Fargo in respect of the Adequate Protection Obligations under this InterimFinal Order. Notwithstanding the foregoing, the
Committee and the Debtors shall have ten (10) days to file an objection with the Court to
1 2 3
which the Committee and/or the Debtors object and the reason(s) for said objection (which reason(s) are not subject to limitation of any kind and may include that the Debtors lack liquidity to pay any or all of such fee request), and the Debtors shall pay any
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Debtors and Wells Fargo in such amendment, and pursuant to the terms of this portion of any such fee request that is not subject to any such objection. 17. Amendments or Modifications. The Debtors and Wells Fargo are hereby
authorized to extend the term of consensual use of Cash Collateral and to amend or modify the Budget, without further order of this Court upon three (3) days notice to the Committee. In the event that the Committee files an objection to any such amendment, the Debtors shall be authorized to continue to use Cash Collateral as agreed to by the
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InterimFinal Order, until such time as the Committees objection is resolved by Court
order or agreement between the Debtors, the Committee, and Wells Fargo. Copies of the amendment or modification must be served by the Debtors upon counsel for the Committee and the U.S. Trustee. 18. Reporting Requirements. On the first business dayTuesday of each week,
Debtors shall submit a weekly variance report to Wells Fargo showing the difference
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20 between projected and actual collections and the difference between expenditures in as shown in the Budget and actual expenditures for the immediately preceding week. 19. Inspection Rights. Representatives of Wells Fargo shall be authorized to
visit and remain on any of the business premises of the Debtors on any business day and during normal business hours to inspect any Adequate Protection Collateral, the PrePetition Collateral or other assets of the Debtors to verify or to obtain supporting details
1 2 3
concerning the financial information to be provided to Wells Fargo hereunder or compliance with the Budget. 20. Survivability; Binding Effect. The provisions of this InterimFinal Order
4 5 6 7 8 9 10
under this InterimFinal Order or the Existing Credit Agreements, and all of Wells shall be binding upon the Debtors and their buyers, successors and assigns. In the event that these Cases are dismissed, superseded, substantively consolidated with another Chapter 11 case or entity, or either of the Debtors merges into any other entity under any plan of reorganization, neither the entry of this InterimFinal Order, the dismissal of either of the Cases, nor such consolidation or merger shall affect the rights of Wells Fargo
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Fargos rights and remedies thereunder and hereunder shall remain in full force and effect. As a condition to the obligation of Wells Fargo to continue to consent to the use of its Cash Collateral after the Final Hearing, the provisions of this InterimFinal Order shall survive and be binding upon any successor trustee appointed in the Cases or any Chapter 7 case to which any of the Cases may subsequently be converted. 21. Remedies Cumulative. The rights, remedies, powers and privileges
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conferred upon Wells Fargo pursuant to this InterimFinal Order shall be in addition to and cumulative with those contained in the Existing Credit Agreements. Nothing in this
InterimFinal Order is intended to limit, restrict, eliminate or modify any rights or

remedies provided to Wells Fargo under the Existing Credit Agreements. 22. No Admissions or Waiver. Nothing in this InterimFinal Order shall be
deemed to be a waiver by Wells Fargo of its right to request any other relief or additional
25 26 27 28
21 and further protection of its interests in any property of the Debtors or property of the estate, to move for relief from the automatic stay with respect to the Adequate Protection
1 2 3
Obligations or the enforcement of its Pre-Petition Liens on the Pre-Petition Collateral, to seek the appointment of a trustee or examiner in any of the Cases or the dismissal of the any of Cases, or to request any other relief in this case, nor shall anything in this
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InterimFinal Order or the Existing Credit Agreements constitute an admission by Wells

Fargo of the quantity, quality or value of the Adequate Protection Collateral or PrePetition Collateral or constitute a finding of adequate protection with respect to the interest of Wells Fargo in any of the Adequate Protection Collateral or Pre-Petition Collateral. Wells Fargo shall be deemed to have reserved all rights to assert entitlement to the protections and benefits of Section 507(b) of the Bankruptcy Code in connection with any use, sale or other disposition of any of the Pre-Petition Collateral. 23. Release of Claims. Subject to the Committees rights under this
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InterimFinal Order, the Debtors hereby (i) release and discharge Wells Fargo, together
with its respective affiliates, agents, attorneys, members, officers, directors and employees (collectively, the Protected Parties) from any and all claims and causes of action arising out, based upon or related to, in whole or in part, Existing Credit Agreements, any aspect of the pre-petition relationship between, or among, the Protected
19 20 21 22 23 24 25 26 27 28
22 and avoidability (under the Bankruptcy Code or otherwise) of the indebtedness under the Parties and the Debtors or any other acts or omissions of the Protected Parties in connection with any of the Existing Credit Agreements or its pre-petition relationship with the Debtors, including, without limitation, any avoidance action available under Chapter 5 of the Bankruptcy Code (or under Section 502(d) of the Bankruptcy Code); (ii) waive any and all claims and/or defenses (including, without limitation, offsets and counterclaims of any nature or kind) as to the validity, perfection, priority, enforceability
1 2 3
Existing Credit Agreements and the security interests in and liens on the collateral securing such indebtedness; and (iii) agree, without further Court order and without the need for filing of any proof of claim, to the allowance of the pre-petition claims of Wells
4 5 6 7 8 9 10 11 12
Fargo pursuant to Sections 502 and 506 of the Bankruptcy Code on account of such indebtedness as fully secured claims for principal, plus accrued pre-petition and postpetition interest, fees, expenses and other amounts chargeable under the Existing Credit Agreements.Binding Effect; Successors and Assigns. The provisions of this InterimFinal Order shall be binding upon all parties in interest in these Cases, including, without limitation, Wells Fargo and the Debtors and their successors and assigns (including any Chapter 7 or Chapter 11 trustee hereinafter appointed or elected for the estates of the Debtors) and shall inure to the benefit of Wells Fargo, the Debtors and their successors and assigns.
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23
26.
Final Hearing and Objections
. Notice is hereby given that the Final
Hearing on the Motion shall be held before the Honorable Peter H. Carroll, United States Bankruptcy Judge, Courtroom 303 at the United States Bankruptcy Court, 3420 Twelfth Street, Riverside, California at 9:30 a.m. on January 30, 2008 (the Final Hearing). If no objection to the Motion or this Interim Order is timely filed and prosecuted at the Final Hearing, then this Interim Order shall continue in effect in accordance with its terms subject to such modifications as the Court may make in the Final Order following the Final Hearing, and that are acceptable to Wells Fargo. If any or all of the provisions of this Interim Order are reversed, modified, or vacated or stayed as the result of any objection timely filed and asserted at the Final Hearing, then, without limiting any provisions hereof, all the rights, remedies, privileges and benefits, including, without limitation, the security interests, liens and priorities, granted to Wells Fargo in this Interim Order shall be deemed to remain in full force
1 2 3 4 5 6 7 8 9 10 11 12
and effect to the extent the Debtors used Wells Fargos Cash Collateral prior to the effective date of such reversal, modification, vacation or stay. The Debtors shall promptly mail copies of this Interim Order to the parties having been given notice of the Interim Hearing, and to any other party that has filed a request for notices with this Court and to Committee counsel. Any party in interest objecting to the relief sought at the Final Hearing shall serve and file a written objection; which objections shall be served so to be received no later than January __, 2008 at 5:00 p.m. (Pacific Time) upon (a) Jonathan S. Shenson, Esq., Klee, Tuchin, Bogdanoff & Stern LLP, 1999 Avenue of the Stars, 39th Floor, Los Angeles, California 90067, Telephone: (310) 407-4000, Facsimile: (310) 407-9090; (b) David B. Kurzweil, Esq., Greenberg Traurig, LLP, 3290 Northside Parkway, Suite 400, Atlanta, Georgia 30327, Telephone: (678) 553-2100, Facsimile: (678) 553-2681; and (c) Timothy J. Farris, Esq., Office of the United States Trustee, 3685 Main St., Suite 300, Riverside, CA 92501, Telephone: (951) 276-6977, Facsimile: (951) 276-6973, and shall be filed with the Clerk of the United States Bankruptcy Court, Central District of California.
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24
DATED: January __, 2008 THE HONORABLE PETER H. CARROLL UNITED STATES BANKRUPTCY JUDGE
Presented By:
_______________________________________ DAVID M. GUESS, an Attorney with KLEE, TUCHIN, BOGDANOFF & STERN LLP Bankruptcy Counsel for the Debtor and Debtor in Possession EXHIBIT "A"
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PROPOSED BUDGET (COVERING JANUARY 8, 2008 THROUGH FEBRUARY 1, 2008)
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Document comparison done by DeltaView on Tuesday, January 29, 2008 11:14:29 AM Input: Document 1 Document 2 Rendering set Legend: Insertion Deletion Moved from Moved to Style change Format change Moved deletion Inserted cell Deleted cell Moved cell Split/Merged cell Padding cell Statistics: Count Insertions Deletions Moved from Moved to Style change Format changed Total changes 91 144 1 1 0 0 237 interwovenSite://LADMS/iManage/101777/1 interwovenSite://LADMS/iManage/102204/4 Standard
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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-5061 (310) 407-4000
PROOF OF SERVICE I declare that I am over eighteen years of age and that I am not a party to this action. My business address is 1999 Avenue of the Stars, Thirty-Ninth Floor, Los Angeles, California 90067-6049. On January 29, 2008, I served a true and correct copy of the following document(s) on the parties indicated on the attached list by using the method indicated below:
NOTICE RE (I) SUBMISSION OF STATUS RE PROPOSED FINAL ORDER RE USE OF CASH COLLATERAL AND (II) EXTENSION OF TERM FOR USE OF CASH COLLATERAL
By Facsimile Machine: I personally caused the above-referenced document(s) to be transmitted to the person(s) and at the telecopy number(s) indicated on the attached list. I confirmed that the intended recipient received the transmission either: By reviewing the transmission report(s) that the facsimile machine generated; or By contacting the recipient(s) by telephone at the telephone number(s) number indicated on the attached list. By Electronic Mail: The above-referenced documents were transmitted to the persons at the email addresses indicated on the attached list. By First-Class Mail: I am readily familiar with the business practice of collection and processing of correspondence for mailing with the United States Postal Service. I know that the document(s) listed above was deposited with the United States Postal Service on the same day this declaration was executed in the ordinary course of business. I know that the above-referenced document(s) were placed into the envelopes, the envelopes were sealed and addressed as set forth on the attached list and, with postage thereon fully prepaid, the envelopes were placed for collection and mailing on this date, following ordinary business practices, in the United States mail at Los Angeles, California. By Overnight Courier: I caused the above-referenced document(s) to be delivered by overnight courier service for delivery as indicated on the attached list.\ I declare that I am a member of the bar of this Court and that this declaration was executed at Los Angeles, California on January 29, 2008. I declare under penalty of perjury that the foregoing is true and correct. /s/ David M. Guess David M. Guess
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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-5061 (310) 407-4000
SERVICE LIST
Office of the United States Trustee Office of the U.S. Trustee Attn: Timothy J. Farris, Esq. 3685 Main St. Suite 300 Riverside, CA 92501 Timothy.J.Farris@usdoj.gov
Counsel for the Creditors' Committee Pachulski Stang Ziehl & Jones LLP Attn: Hamid R. Rafatjoo, Esq. 10100 Santa Monica Boulevard, 11th Floor Los Angeles, CA 90067 hrafatjoo@pszjlaw.com
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United States Bankruptcy Court Central District of California Riverside Division

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CHAPTER 11 CASE NO. 6:07-17941 CASE NO. 6:07-17937

NATIONAL R.V. HOLDINGS, INC.; and NATIONAL R.V., INC. Debtors.

Wells Fargo is unwilling to allow the Debtors to use its Cash

Emissions Credits. Notwithstanding anything to the contrary contained in

Administrative Claim. If and to the extent the Adequate Protection

Limited Authorization to Use Cash Collateral Pending Final Hearing.

NATIONAL R.V. HOLDINGS, INC.; and NATIONAL R.V., INC. Debtors.

CHAPTER 11 CASE NO. 6:07-17941 CASE NO. 6:07-17937

Dennis Dillon RV, LLC dba

Debtors Stipulations. Without prejudice to the rights of any other party

The Debtors have an immediate need to obtain use of Cash

to Wells Fargo for the use of Wells Fargos Cash Collateral.

Emissions Credits. Notwithstanding anything to the contrary contained in

perfected security interest in the ERCs or the ERC Proceeds.

All such cash and

Adequate Protection Payments. As further adequate protection, in

Administrative Claim. If and to the extent the Adequate Protection

InterimFinal Order with respect to the Pre-Petition Debt or Adequate Protection

InterimFinal Order is intended to limit, restrict, eliminate or modify any rights or

InterimFinal Order or the Existing Credit Agreements constitute an admission by Wells

Final Hearing and Objections

. Notice is hereby given that the Final

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