Pg 1 of 8 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------------ x In re : Chapter 11 : WESTINGHOUSE ELECTRIC COMPANY : Case No. 17-10751 (MEW) LLC, et al., : : (Jointly Administered) Debtors. 1 : : ------------------------------------------------------------ x ORDER PURSUANT TO 11 U.S.C. 105(a), 363(b), 503(b), AND, 507(a)(2) AND FED. R. BANKR. P. 6004 AUTHORIZING AND APPROVING CERTAIN PLAN INVESTOR PROTECTIONS Upon the motion (the Motion ), dated January 10, 2018, [Docket No. 2111] of Westinghouse Electric Company LLC, Toshiba Nuclear Energy Holdings (UK) Limited, and their debtor affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the Debtors ), pursuant to sections 105(a), 363(b), 503(b), and 507(a)(2) of title 11 of the United States Code (the Bankruptcy Code ), and Rule 6004 of the Federal Rules of Bankruptcy Procedure (as amended from time to time, the Bankruptcy Rules ), for entry of an order (i) approving and authorizing the Debtors to pay to Brookfield Capital Partners LLC (the Plan Investor ) a fee of $75,000,000 (the Break-Up Fee ) when and if payable pursuant to the 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, if any, are: Westinghouse Electric Company LLC (0933), CE Nuclear Power International, Inc. (8833), Fauske and Associates LLC (8538), Field Services, LLC (2550), Nuclear Technology Solutions LLC (1921), PaR Nuclear Holding Co., Inc. (7944), PaR Nuclear, Inc. (6586), PCI Energy Services LLC (9100), Shaw Global Services, LLC (0436), Shaw Nuclear Services, Inc. (6250), Stone & Webster Asia Inc. (1348), Stone & Webster Construction Inc. (1673), Stone & Webster International Inc. (1586), Stone & Webster Services LLC (5448), Toshiba Nuclear Energy Holdings (UK) Limited (N/A), TSB Nuclear Energy Services Inc. (2348), WEC Carolina Energy Solutions, Inc. (8735), WEC Carolina Energy Solutions, LLC (2002), WEC Engineering Services Inc. (6759), WEC Equipment & Machining Solutions, LLC (3135), WEC Specialty LLC (N/A), WEC Welding and Machining, LLC (8771), WECTEC Contractors Inc. (4168), WECTEC Global Project Services Inc. (8572), WECTEC LLC (6222), WECTEC Staffing Services LLC (4135), Westinghouse Energy Systems LLC (0328), Westinghouse Industry Products International Company LLC (3909), Westinghouse International Technology LLC (N/A), and Westinghouse Technology Licensing Company LLC (5961). The Debtors principal offices are located at 1000 Westinghouse Drive, Cranberry Township, Pennsylvania 16066.
Pg 2 of 8 terms hereof; (ii) approving and authorizing reimbursement of up to $25,000,000 in reasonable and documented fees and expenses (including fees and expenses of legal, tax, accounting, insurance, nuclear regulatory, financial and other professionals) incurred by Plan Investor and its affiliates in connection with that certain Plan Funding Agreement, dated as of January 12, 2018 (as amended, restated, modified, superseded, or supplemented from time to time, the Plan Funding Agreement 2 ), by and among Toshiba Nuclear Energy Holdings (UK) Limited and TSB Nuclear Energy Services Inc. (together with their respective direct and indirect subsidiaries, the Company ), and the Plan Investor, and the Transaction (as defined below) contemplated thereby (the Expense Reimbursement ) when and if payable pursuant to the terms hereof; and (iii) approving certain Competing Transaction provisions of the Parties agreement (the No-Shop Provision, and together with the Break-Up Fee and the Expense Reimbursement, the Plan Investor Protections ); and upon consideration of the Motion and the Declaration of Mark Buschmann [Docket No. 2113] in support thereof and all of the pleadings related thereto; and due and sufficient notice of the Motion having been given; and it appearing that no other or further notice need be provided except as set forth herein; and the Court having held a hearing on the Motion on January 19, 2018 (the Hearing ); and the Court having considered the Motion and the record of the Hearing; and after due deliberation the Court having determined that the relief requested in the Motion is in the best interests of the Debtors, their estates and their creditors; and good and sufficient cause having been shown; it is therefore 2 For the avoidance of doubt, as used herein, the Plan Funding Agreement includes a Definitive SAPA (as defined in the Motion) in the event the structure of the transaction is converted to a sale under section 363 of the Bankruptcy Code according to the terms of the Plan Funding Agreement. 2
Pg 3 of 8 FOUND AND DETERMINED THAT: A. The Break-Up Fee and Expense Reimbursement are: (1) actual and necessary costs of preserving the Debtors estates, within the meaning of sections 503(b) and 507(a)(2) of the Bankruptcy Code; (2) commensurate to the real and substantial benefits conferred upon the Debtors estates by the Plan Investor; (3) reasonable and appropriate in light of the size and nature of the transaction proposed in and contemplated by the Plan Funding Agreement (the Transaction ) and the efforts that have been and will be expended by the Plan Investor in connection therewith; and (4) a condition to and necessary to induce the Plan Investor to continue to pursue the Transaction and to be bound by the Plan Funding Agreement. B. Unless it is assured that the Plan Investor Protections will be available, the Plan Investor is unwilling to remain obligated to consummate the Transaction or otherwise be bound by the Plan Funding Agreement. The Plan Investor Protections induced the Plan Investor to execute the Plan Funding Agreement on which the Debtors and their creditors and other stakeholders rely, and which encourages and facilitates the Transaction. Accordingly, the Plan Investor Protections are reasonable and appropriate and represent the best method for maximizing value for the benefit of the Debtors estates. C. The findings and conclusions set forth herein constitute the Court s findings of fact and conclusions of law. To the extent any of the foregoing findings of fact constitute conclusions of law, they are adopted as such. To the extent any of the following conclusions of law constitute findings of fact, they are adopted as such. IT IS HEREBY ORDERED THAT: 1. The Motion is GRANTED as set forth herein. 3
Pg 4 of 8 2. The Break-Up Fee and Expense Reimbursement each constitute, pursuant to sections 503(b)(1)(A) and 507(a)(2) of the Bankruptcy Code, an allowed administrative expense claim in these chapter 11 cases. The Debtors are required to pay the Break-Up Fee and the Expense Reimbursement when and as set forth herein or in the Plan Funding Agreement as administrative claims of the estates, which shall survive termination of the Plan Funding Agreement and shall be binding and enforceable against each Debtor and its respective estate, and any trustee, examiner or other representative of the Debtors estates. Any Break-Up Fee and Expense Reimbursement payable pursuant to the terms hereof shall be payable without any further order of the Court. 3. The Debtors are authorized and directed to pay the Expense Reimbursement in cash upon termination of the Plan Funding Agreement by the Plan Investor based on the following conditions: a) if Companies (as defined in the Plan Funding Agreement) breached any representation or warranty or failed to comply with any covenant or agreement applicable to Companies that would cause any condition to the Plan Investor s closing obligations not to be satisfied, and (x) such breach is not waived by Plan Investor or, (y) if such breach has not been waived by Plan Investor but is curable and is not cured prior to the earlier to occur of (A) thirty (30) days after receipt of Plan Investor s notice of its intent to terminate and (B) by the Outside Date; provided, however, that Plan Investor is not then in breach of the Plan Funding Agreement; b) if any of the events set forth in the milestones schedule below has not occurred by the date specified in respect of such event (unless such milestone has been extended by mutual agreement of the Parties): Filing of the Plan, Disclosure Statement and Solicitation Motion Entry of the order approving the Disclosure Statement and related procedures (which shall include mutually agreeable procedures for the assumption or rejection of executory contracts, the establishment of cure costs and the designation of executory contracts for January 29, 2018 February 27, 2018 4
Pg 5 of 8 assumption or rejection) (the Disclosure Statement Order ) Entry of an order confirming the Plan or approving the standalone section 363 sale approving a standalone sale pursuant to section 363 of the Bankruptcy Code (the Transaction Approval Order ) April 16, 2018 c) following entry hereof, this order is (x) amended, modified, or supplemented in a manner not reasonably satisfactory to Plan Investor or (y) voided, reversed, or vacated; d) following entry of either the Disclosure Statement Order or the Transaction Approval Order, either order is (x) amended, modified, or supplemented in a manner not reasonably satisfactory to Plan Investor or (y) voided, reversed, or vacated; e) Companies seek (or do not reasonably oppose) an order dismissing the bankruptcy case or converting to a case under chapter 7 of the Bankruptcy Code, or the Bankruptcy Court enters such an order; or f) Companies seek (or do not reasonably oppose) an order appointing a chapter 11 trustee, or an officer or an examiner with enlarged powers relating to the Debtors operations, or such an order is entered. 4. In the event the Plan Investor terminates the Plan Funding Agreement based on the Company s willful or intentional breach of the No-Shop Provision (as modified herein) or entry into a definitive agreement with respect to a Competing Transaction, 3 the Debtors are authorized and directed to pay in cash (a) the Expense Reimbursement upon the occurrence of 3 As used herein, the term Competing Transaction means (i) any merger, acquisition, divestiture, sale, business combination, recapitalization, joint venture, or other transaction directly or indirectly involving the equity, voting power or all or a material portion of the Company or any other similar transaction (in each case, whether under a sale under Section 363 of the Bankruptcy Code, a chapter 11 plan or any other transaction) that would serve as an alternative to the Transaction; (ii) any plan of reorganization or liquidation that does not contemplate, or that would be reasonably expected to impede or delay the implementation or consummation of, the Transaction; or (iii) any proposal that by its terms requires the Company to abandon, terminate or fail to consummate the Transaction; provided, that in no event shall a 363 Sale to Plan Investor constitute a Competing Transaction. 5
Pg 6 of 8 such termination and (b) the Break-Up Fee upon the earlier of (i) the closing of a Competing Transaction and (ii) the Outside Date (as defined in the Plan Funding Agreement). 5. Notwithstanding section 362 of the Bankruptcy Code, the Plan Investor is authorized to terminate the Plan Funding Agreement in accordance with, but subject to, the terms of Section 12.01 thereof, including, for the avoidance of doubt, the sending of any notice in connection therewith. 6. The proposed No-Shop Provisions of the Plan Funding Agreement are hereby deemed to have been modified as follows: a) Until the earlier to occur of (i) the Closing and (ii) the termination of the Plan Funding Agreement, the Company will not (and will not permit its affiliates or its respective Representatives to), directly or indirectly: (a) initiate contact with, or solicit or encourage submission of any inquiries, proposals, or offers by, any person (other than Plan Investor or its affiliates) with respect to a Competing Transaction, including, but not limited to, conducting or supporting any overbid or auction process; b) The Company, its directors, officers and representatives will not engage in, continue, or otherwise participate in any discussions or negotiations regarding, or provide any non-public information, data, due diligence information, or data room access (electronic or otherwise) to any person relating to, any Competing Transaction unless, in the good faith judgment of the Company, or its board of directors (or a committee thereof) or officers, after considering the advice of external counsel, the failure to take such action would be inconsistent with their fiduciary duties under applicable law; c) The Debtor will not (i) enter into or seek to enter into any agreement with respect to, make any filings with the Bankruptcy Court in furtherance of, or negotiate 6
Pg 7 of 8 in any respect, a Competing Transaction; (ii) propose or seek Bankruptcy Court approval of a bidding process with respect to a 363 sale; or (iii) publicly propose to do any of the actions prohibited by any of above clauses, other than in connection with a transaction with Plan Investor or its affiliates; and d) For the avoidance of doubt, if the Plan Investor exercises a right to terminate the Plan Funding Agreement by reason of a violation of the foregoing provisions, the Plan Investor shall in that event be entitled to payment of the Expense Reimbursement and Breakup Fee, but shall not be entitled to any other relief or remedy. 7. The Company will promptly (and, in any event, within 24 hours) notify and deliver a copy to Plan Investor if, with respect to all or a material portion of the Company, any bona fide written proposal or offer with respect to a Competing Transaction is received by the Company or its Representatives, and will provide notice of its entry into a binding definitive agreement for a Competing Transaction within two (2) business days after such entry. 8. Subject to the terms of the Plan Funding Agreement, the Debtors are authorized to take such actions as may be necessary or appropriate to implement and affect the terms and requirements of this Order, including, but not limited to, expending such funds or taking such action as may be necessary or appropriate to comply with the Plan Funding Agreement to the extent authorized by this Order. 9. Notwithstanding anything herein to the contrary, any rights or claims granted hereunder shall be junior to the liens and claims of the Lenders and Agents (as defined in the Final DIP Order) under the Final Order (I) Authorizing Debtors to Obtain Senior Secured, Superpriority, Postpetition Financing, (II) Granting Liens and Superpriority claims Pursuant to Bankruptcy code Sections 105, 363, 364 and 507, Bankruptcy Rules 2002, 4001, 6004 and 9014 7
Pg 8 of 8 and Local Rule 4001-2 and (III) Granting Related Relief [ECF No. 565] (the Final DIP Order ) and the loan and security documents evidencing the DIP Facility (as defined in the Final DIP Order). 10. The Court shall retain jurisdiction over all matters arising from or related to the interpretation and implementation of this Order. 11. Notwithstanding the possible applicability of Bankruptcy Rule 6004, or otherwise, the terms and conditions of this Order shall be immediately effective and enforceable. Dated: January 19, 2018 New York, New York s/michael E. Wiles HONORABLE MICHAEL E. WILES UNITED STATES BANKRUPTCY JUDGE 8