DEBTOR – CREDITOR AGREEMENT
DEBT RESTRUCTURING PROCESS
THIS AGREEMENT is made by and between
- Any corporate debtor that is a separate juristic person on the CDRAC list of 351 TDR cases and such other corporate debtors as CDRAC may agree, provided that such debtor agrees to be bound by the terms and conditions of this Agreement by supplying to CDRAC a duly executed Debtor Accession in the form attached hereto as Appendix I (the “Debtor”);
- The financial institutions set forth in Appendix II hereto or any other financial institution who otherwise at any time agrees in writing to the terms and conditions hereof by supplying to CDRAC a duly executed Creditor Accession in the form attached hereto as Appendix III (collectively the “Creditors under this Agreement” and individually a “Creditor under this Agreement”), provided such Creditors under this Agreement are also subject to the Inter-Creditor Agreement on Restructuring Plan Votes and Executive Decision Panel Procedures dated March 19, 1999.
This Agreement is acknowledged by:
- The Corporate Debt Restructuring Advisory Committee (hereinafter referred to as “CDRAC”), an unincorporated body consisting of the Associations, the Board of Trade, the Thai Federation of Industries and the Bank of Thailand and advising on corporate debt restructuring in Thailand pursuant to Joint Public - Private Consultative Committee (JPPCC) Resolution No. 1/2541 dated June 22, 1998 and the order of the Bank of Thailand No. 215/2541 dated June 25, 1998; and
- The Bank of Thailand (hereinafter referred to as “BOT”).
WHEREAS the Creditors under this Agreement have outstanding credits or other financial arrangements to one or more corporate debtors registered, domiciled or otherwise operating in Thailand.
WHEREAS the Debtor desires that its outstanding indebtedness to its creditors be efficiently and promptly restructured in order to minimize losses to the Debtor, such creditors and the Thai economy through a coordinated workout, thereby preserving assets, jobs and productive capacity.
WHEREAS in order to promote an efficient debt restructuring process, the parties wish to establish procedures, time limits and issue resolution mechanisms concerning the potential restructure of the outstanding indebtedness of the Debtor.
NOW, THEREFORE, it is agreed as follows:-
Section 1. Definitions
- "Affiliate" in relation to a party means any party which directly or indirectly controls, is controlled by, or is under common control with the party in question, but only so long as the control relationship persists. For the purpose of this definition, "direct control" of a company shall mean ownership of shares carrying at least fifty percent (50%) of the votes at a general meeting of the shareholders of the controlled company (or the equivalent of such a meeting), and "indirect control" of a company shall result if a series of companies can be specified, beginning with a "parent" company and ending with the affiliate in question, so related that each company of the series except the parent is directly controlled by one or (by aggregating shareholdings) more of the previous companies in the series.
- "Approved Restructuring Plan" means a Proposed Plan that receives Sufficient Plan Approval.
(c) “Business Day” means any day other than a Saturday or Sunday on which banks and finance companies in Bangkok, Thailand are allowed to conduct normal business.
(d) “Convening Creditor” shall have the meaning ascribed to it in section 2 (a).
(e) “Confidential Information” shall have the meaning ascribed to it in section 5.
- “Creditors under this Agreement” shall mean those financial institutions individually having outstanding Credit to a particular Debtor and that duly execute either this Agreement, a Creditor Accession or another document in order to be bound by the terms and conditions hereof in relation to the Credit they hold on their own behalf and not in a capacity as agent, trustee, fiduciary or advisor, provided such financial institutions are also subject to the Inter-Creditor Agreement on Restructuring Plan Votes and Executive Decision Panel Procedures dated March 19, 1999;
- “Credits” means loans, avals, advances, guarantees, trade credits extended by financial institutions, discount and acceptance facilities, contingent credits, foreign exchange agreements, forwards, swaps, derivatives and other forms of marked to market credit facilities, in accordance with generally accepted accounting principles and , for voting purposes only, converted to Thai Baht at the BOT reference rate on the date of the First Meeting of Creditors where necessary, and any other credit or financial arrangement in whatever form provided to a Debtor by a financial institution, including interest thereon accrued up to the date of the First Meeting of Creditors.
- “Debtor” means a corporate debtor on the CDRAC list of 351 TDR cases and such other corporate debtors as CDRAC may agree.
(i) “First Meeting of Creditors” shall have meaning ascribed to it in section 2(a).
(j) “Framework” shall mean the Framework for Corporate Debt Restructuring in Thailand, a copy of which is attached hereto as Appendix VI.
(k) “Lead Institution” shall mean a Creditor or Creditors under this Agreement or such other creditor as approved by CDRAC that have been appointed to manage and coordinate a Workout, substantially in accordance with Principle 6 of the Framework or section 3 of this Agreement.
(l) “Majority Creditors” means Creditors under this Agreement holding at least fifty-one percent (51%) of the outstanding Credit owed by the Debtor to all Creditors under this Agreement.
(m) “Plan Term” means the period from the date of Sufficient Plan Approval until all the obligations under an Approved Restructuring Plan have been fulfilled or waived and all restructured debt has been paid in full.
n. "Process Schedule" means the schedule set forth in Appendix IV hereto.
O. "Proposed Plan" means a plan for the business and financial restructuring of a Debtor, submitted under step 8 or 10 of the Process Schedule, provided always:
(i) such plan provides for a inancial return to creditors greater than that which would be achieved by liquidation of the Debtor;
- all creditors are treated reasonably and fairly under such plan, taking into account the rankings of creditors in the event of bankruptcy proceedings and the creditor's likely respective contributions to the Debtor's survival as a going concern; and
- such plan is in substantial compliance with the Framework
n. "Required Creditors" means Creditors under this Agreement holding at least twenty-six percent (26%) of all the outstanding Credits owed by the Debtor to all Creditors under this Agreement.
O. "Steering Committee" means the committee of representatives of creditors formed substantially in accordance with Principle 7 of the Framework and section 4 of this Agreement.
P. "Sufficient Plan Approval" means approval, by a vote at a creditors meeting, of a Proposed Plan by such percentage of all voting creditors with such percentage of aggregate Credits sufficient to meet the definition of a “Special Resolution” under section 6 of the Bankruptcy Act B.E. 2483 as amended (or any amended or succeeding definition of “Special Resolution” under the Bankruptcy Act).
(s) "Transferee" shall have the meaning ascribed to it in section 8.
(t) "Workout" means multilateral efforts to restructure the outstanding Credits and the business of the Debtor.
(u) "Workout Schedule" shall have the meaning ascribed to it in Section 3.
Section 2. Convening of First Meeting of Creditors under this Agreement
(a) By a Creditor: Any Creditor under this Agreement (the “Convening Creditor”) may call a meeting of all creditors (the “First Meeting of Creditors”) to commence a Workout. The Convening Creditor shall give the Debtor written notice at least fifteen Business Days prior to the scheduled date of the First Meeting of Creditors. Within five Business Days of receipt of the notice for the First Meeting of Creditors, the Debtor must provide in writing to the Convening Creditor a complete current list of all its outstanding Credits including the name, address, telefax and telephone numbers of each creditor, as well as a copy of the Debtor Accession duly executed by the Debtor. Within three Business Days of receipt of the creditor list from the Debtor, the Convening Creditor shall notify each creditor whose name appears on the list of creditors of the Debtor or who is otherwise known to the Convening Creditor of the time and place of the First Meeting of Creditors.
(b) By a Debtor: A Debtor may call the First Meeting of Creditors by giving all its creditors at least ten Business Days notice prior to the scheduled date of the First Meeting of Creditors, as well as a copy of a Debtor Accession duly executed by the Debtor.
(c) By CDRAC: CDRAC may call the First Meeting of Creditors by giving the Debtor written notice at least fifteen Business Days prior to the scheduled date of the First Meeting of Creditors. Within five Business Days of receipt of the notice for the First Meeting of Creditors, the Debtor must provide in writing to CDRAC a complete current list of all its outstanding Credits including the name, address, telefax and telephone numbers of each creditor, as well as a copy of the Debtor Accession duly executed by the Debtor. Within three Business Days of receipt of the creditor list from the Debtor, CDRAC shall notify each creditor whose name appears on the list of creditors of the Debtor or who is otherwise known to CDRAC of the time and place of the First Meeting of Creditors.
Section 3. Lead Institution
At the First Meeting of Creditors, all the attending Creditors under this Agreement agree to vote to elect as the Lead Institution(s) a Creditor(s) under this Agreement, or such other creditor as approved by CDRAC, having restructuring experience, a significant exposure to the Debtor, and a professional working relationship with the senior management of the Debtor. The Lead Institution or the Debtor shall notify all known creditors, the Debtor and CDRAC of the Lead Institution’s appointment within five Business Days thereof. Such notice shall contain the name, telephone and telefax numbers of an individual at the Lead Institution that will manage the Workout. The Lead Institution shall establish goals and schedules, organize inter-creditor discussions, help resolve inter-creditor issues, liaise with financial and other advisors, calculate the amount of Credits outstanding for voting purposes, lead negotiations with the Debtor, and ensure the distribution of information to, and timely responses from, other creditors. Expenses and fees of the Lead Institution shall be borne by the Debtor and taken into account in any Approved Restructuring Plan.
The First Meeting of Creditors shall also draw up an action plan and a time frame for the debt restructuring process. The Lead Institution shall submit the same to all known creditors, the Debtor and CDRAC within ten (10) Business Days of the First Meeting of Creditors. Such action plan and time frame shall contain at a minimum the restructuring steps and a schedule meeting at least the deadlines of Appendix IV (the “Workout Schedule”) unless otherwise agreed by CDRAC.
Section 4. Steering Committee
At the request of the Lead Institution or at least two Creditors under this Agreement, all the Creditors under this Agreement agree to decide on the need to vote to appoint a steering committee.
The Lead Institution shall be considered as the chairman of the Steering Committee.
Neither the Lead Institution nor any member of the Steering Committee will be deemed under any circumstances to be an agent of any creditor or third party.
Section 5. Provision and Confidentiality of Information
- Within the time frames set forth in the Workout Schedule (or Appendix IV hereto in the absence of a Workout Schedule), the Debtor shall provide, and the Lead Institution and the Steering Committee shall collect and gather the fullest possible information on all relevant matters (including but not limited to all information required under applicable Bank of Thailand regulations) for the analysis of the current condition of the Debtor, an indication of its future viability in the form of a comprehensive business plan, and therefore the feasibility of debt restructuring. Such information should include but not be limited to the items specified in Appendix V.
To ensure transparency in the process, relevant information is to be shared amongst creditors, Debtors and other concerned parties in the Workout that execute this Agreement or an appropriate confidentiality agreement.
(b) The executive (decision making) officers of the Debtor must make themselves immediately available upon request of the Lead Institution or the Steering Committee to answer all questions during a Workout.
(c) A Debtor’s executive management must provide all required information in a timely manner, including but not limited to all the information set forth in Appendix V hereto. Such executive management or persons expressly authorized to act on their behalf in all matters related to a Workout must attend all meetings as requested by the Lead Institution or the Steering Committee.
(d) The Debtor, after consultation with professional advisors and creditor representatives, must submit to the Lead Institution a comprehensive, transparent and achievable business plan including industry analysis and reasonable cash-flow projections within the Workout Schedule (or within the timeframe set forth in Appendix IV hereto in the absence of a Workout Schedule).
(e) At the request of the Lead Institution or the Steering Committee, the Debtor shall promptly on behalf of all creditors appoint for the benefit of all creditors an independent and reputable accounting and/or law firm or other expert nominated by the creditors to undertake appropriate duties, including, if requested, the preparation of audited financial statements. The Debtor must cooperate fully with such firm and promptly provide all requested information. All debtor expenses under this clause will be taken into account in any Approved Restructuring Plan.
(f) Each recipient shall protect in strict confidence and shall refrain from disclosing any non-public information (“Confidential Information”) provided by the Debtor or any other party and not use any Confidential Information except in the debt restructuring process. Each recipient shall refrain from disclosing Confidential Information except to its employees and advisors (including mediators and executives) who have a need to know such Confidential Information for the sole purpose of restructuring the Debtor’s business and its financial obligations, and to potential Transferees that duly execute prior to disclosure a confidentiality agreement having terms corresponding to sections 5(f) and 5(g).
Notwithstanding the foregoing, no receipient shall have any obligation to preserve the confidentiality or restrict the use of any information which
(i) was previously known to the receipient without breach of this Agreement, or
(ii) is disclosed to third parties by the owner thereof without restriction, or
(iii) is or becomes available to any member of the public by other than unauthorized disclosure by the recipient seeking to use such Information, or
(iv) was or is independently developed by the recipient, or
(v) is by agreement of the owner released for disclosure by a third party.
(g) Disclosure of Confidential Information shall not be precluded if disclosure is:
(i) in response to a valid order of a court, other governmental body or any political subdivision thereof or any regulatory agency;
(ii) otherwise required by the applicable law of any jurisdiction;
(iii) of information provided by the Debtor in judicial proceedings; or
(iv) done to allow Creditors under this Agreement to share information with regards to their claims on the Debtor.
Section 6. Covenants
(a) From the date of its execution of a Debtor Accession, the Debtor must not without the consent of all creditors:
(i) create or assume additional indebtedness;
(ii) make any investments or incur any expenses outside the ordinary course of its business;
(iii) dispose of any assets outside the ordinary course of its business;
- lend money or guarantee any other person’s obligations;
- enter into any transactions with related parties other than in the ordinary course of business and in such a manner that would be conducted with an unrelated party;
- create any additional security interests on or in the Debtor’s assets (including but not limited to assignments of accounts receivable);
- make any preferential payments including preferential debt repayments to creditors;
- enter into any foreign exchange, swap, or derivative transactions except in the ordinary course of their business to cover existing commercial exposures;
- demand or take any action to recover from any creditor any amounts related to any creditor or otherwise seek to enforce any right or remedy relating to any creditor;
- directly or indirectly engage in any activity not engaged in by the Debtor as of the First Meeting of Creditors;
- make any payments to shareholders, whether in the form of dividends, redemption of equity, repayment of subordinated loans or otherwise; or
- removed any non-trade assets from thejurisdiction of the Thai courts.
(b) From the date Debtor executes a Debtor Accession, the Creditors under this Agreement agree to temporarily suspend payment of default interest on any of their Credits. Upon the Debtor achieving Sufficient Plan Approval, the Creditors under this Agreement agree to waive any default interest accrued up to the date the Debtor receives Sufficient Plan Approval. If Sufficient Plan Approval is not achieved by the end of the Workout Schedule, all suspended default interest and other Credits of the Creditors under this Agreement shall become immediately due and payable.
Section 7. Mediation
(a) To assist in the settlement of any material issues arising between the Debtor and one or more Creditors under this Agreement, at any time or times during a Workout, the Debtor jointly with the Lead Institution or the Steering Committee may request CDRAC to appoint a mediator (the “Approved Mediator”) from the list of mediators complied by CDRAC and approved by the Association of Finance Companies, the Board of Trade, the Federation of Thai Industries, the Foreign Banks’ Association and the Thai Bankers’ Association. The parties making a written request for mediation shall provide to CDRAC a statement of the issues requiring mediation and any relevant documents.
(b) Upon receipt of a request for mediation, CDRAC shall within three (3) Business Days inform all other relevant persons affected by such issue of the name of the Approved Mediator and invite them to submit a statement of issues and any relevant documents within five (5) Business Days. CDRAC shall provide the Approved Mediator with all statements of issues and related documents within three (3) Business Days of CDRAC’s receipt thereof.
- Upon appointment, each Approved Mediator shall disclose to CDRAC any circumstances likely to give rise to justifiable doubts as to his or her impartiality and independence.
- Any Creditor under this Agreement may challenge any Approved Mediator as to the impartiality and independence of the Approved Mediator.
The challenge shall be made in writing notifying the grounds for challenge and submitted to CDRAC within five (5) Days from the date of the notification by CDRAC of the name of the Approved Mediator.
- If CDRAC agrees with the grounds for challenge or the Approved Mediator withdraws after the challenge, the procedure provided in Section 7(b) shall apply for appointment of the substitute Approved Mediator, otherwise the challenged Approved Mediator will stand appointed.
- Subject to this Agreement, the Approved Mediator may conduct mediation in such manner as he or she considers appropriate, provided that all Creditors under this Agreement and the Debtor are treated with equality and fairness, all Creditors under this Agreement and the Debtor are given a fair opportunity of presenting their position prior to any final proposal of the Approved Mediator, the mediation shall commence within ten (10) Business Days of the later of appointment of the Approved Mediator or CDRAC rejection of any challenge under section 7(e) , and any proposal is in accordance with all sections of the Framework.
- Unless otherwise agreed upon, the presentation of positions shall be in the following manner:
- All documents in support of a position of a Creditor under this Agreement or a Debtor shall be submitted to the Approved Mediator with a copy to CDRAC within ten (10) Business Days of the appointment of the Approved Mediator. In cases where the Approved Mediator deems appropriate, the Approved Mediator may request additional documents as reasonably required that are not restricted from disclosure by any law, regulation, agreement or fiduciary obligation.
- Any Creditor under this Agreement or the Debtor may request to appear before the Approved Mediator to explain its position, in which case the Approved Mediator must meet with such person. A Creditor under this Agreement or the Debtor must appear for a mediation session if requested by the Approved Mediator.
- All mediation efforts shall be held in private and no mediator nor other person shall make any public statement nor disclose any Confidential Information except as provided in Section 5.
(h) The proposal of the Approved Mediator shall be given within twenty (20) Business Days from the submission of documents under section 7(g)(i), unless an extension of time is deemed necessary by the Approved Mediator.
- Proposals of the Approved Mediator shall be made in writing, signed by the Approved Mediator and state a proposed resolution to any specific issue presented or an overall potential structure for a Workout.
- The Approved Mediator shall inform CDRAC of its proposal. CDRAC shall inform the Creditors under this Agreement and the Debtor of the Approved Mediator'sproposal.
- Except as expressly provided herein, nothing that transpires in or results from any mediation efforts shall in any manner affect or alter any legal rights or remedies of any person unless such person executes a binding agreement as to such affected or altered rights or remedies or such legal rights or remedies are otherwise altered or affected by operation of law.
- The fees and expenses of the Approved Mediator shall be born by the Debtor and taken into account under any Approved Restructuring Plan.
Section 8. Debt Trading
Any Creditor electing to sell some or all of its Credits to a third party (the “Transferee”) during the Workout must
- inform the Transferee in writing of the current status of the Workout and that previously decided issues are not subject to renegotiation; and
(b) for sale to Affiliates only, have the intended Transferee execute a binding agreement to accept and be governed by the terms of this Agreement.
Section 9. Voting on Proposed Plan; Implementation of Approved Restructuring Plan
Subject to due compliance by the Debtor with the terms and conditions hereof including but not limited to the Debtor’s submission of a Proposed Plan under item 8 of Appendix IV, all Creditors under this Agreement in any Workout agree to cast their votes in favor of or against any Proposed Plan within the schedule set forth in Appendix IV hereto and any other earlier deadlines in the Workout Schedule. Any vote cast against a Proposed Plan shall be accompanied by a written statement of substantive objections to specific portions of the Proposed Plan.
If a Debtor fails to submit a Proposed Plan under item 8 of Appendix IV, CDRAC will appoint at the Debtor's expense a qualified financial advisor to prepare a Proposed Plan within thirty calendar days of appointment and the terms hereof shall apply to such Proposed Plan.
If, after completion of step 10 or step 11 of the process set forth in Appendix IV, a Proposed Plan receives Sufficient Plan Approval, the plan shall be deemed an Approved Restructuring Plan binding on the Debtor and all creditors. Thereafter, unless otherwise determined by Creditors under this Agreement that hold a majority of all Credits of the Creditors under this Agreement voting in favor of the Proposed Plan, all Creditors under this Agreement shall vote at any creditors meeting or court proceeding only in favor of such Approved Restructuring Plan without modification. The Debtor and all Creditors under this Agreement shall use all reasonable efforts to implement the terms of the Approved Restructuring Plan, including where necessary by seeking approval of the Approved Restructuring Plan under Chapter 3/1 of the Bankruptcy Act from a court having jurisdiction.
Section 10. Releases
Each of the Creditors under this Agreement and the Debtor (the “Releasing Party”) on its own behalf and on behalf of any and all of its officers, directors, employees, and representatives (all such persons and entities are herein referred to as “the Releasing Party’s Related Parties”) does hereby irrevocably and absolutely:
(i) release, discharge and acquit and agree to hold harmless and indemnify BOT, CDRAC, Approved Mediators, Lead Institutions and any member of a Steering Committee serving under this Agreement (the “Released Party”) and each of their officers, directors, employees, advisors, representatives, heirs and successors (all such persons are hereinafter referred to as “the Released Party’s Related Parties”) collectively and individually from any and all claims, suits, demands, causes of action, liabilities, debts, expenses, obligations or damages of whatever nature, whether in contract or tort or pursuant to statute, at law or in equity, whether matured or unmatured, known or unknown, foreseen or unforeseen, including but not limited to claims, suits, demands, causes of action, liabilities, debts, agreements, expenses, obligations or damages arising out of or in any way related to this Agreement; and
(ii) covenant and agree never to sue, bring, commence, prosecute, institute, maintain, continue, aid, or join in any lawsuit, action at law, arbitration or other proceeding against or involving any of the Released Party or the Released Party’s Related Parties based upon any claims, demands, liabilities, causes of action, obligations, expenses or damages arising from or in any way related to this Agreement.
Section 11. Breach of Agreement
The occurrence of any of the following events shall constitute a breach of this Agreement :
- the Debtor for any reason fails to perform or observe any of its obligations under this Agreement and, if such failure is capable of remedy, the Debtor does not effect a full remedy within five Business Days;
- any representation or warranty given, made or deemed made by the Debtor is or becomes or proves to have been untrue, incorrect or misleading in any material respect and, if capable of remedy, the Debtor does not effect a full remedy within five Business Days;
- this Agreement or any part hereof shall at any time for any reason cease to be in full force and effect or shall be declared to be void or shall be repudiated or frustrated or the validity or enforceability hereof shall at any time be contested by the Debtor or any person, or the Debtor shall deny that it has any or further liability or obligations hereunder;
- any action or proceeding of or before any court or authority shall be commenced to enjoin or restrain the performance of and compliance with the obligations expressed to be assumed by the Debtor hereunder, or in any manner to question the legality, validity, binding effect or enforceability of this Agreement;
- Any governmental authority or any person acting or purporting to act under governmental authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the property of the Debtor or shall have taken any action to displace the management of the Debtor to curtail its authority in the conduct of the business of the Debtor; or
- the Kingdom of Thailand or any legislative, executive or judicial body thereof (whether by a general suspension of payments or a moratorium on the payment of indebtedness or otherwise), or any treaty, law, regulation, communiqu?, decree, ordiance or policy of Kingdom of Thailand shall purport to render any provision of this Agreement invalid or unenforceable or shall purport to prevent or materially delay the performance or observance by the Debtor of its obligations hereunder.
At any time after the occurrence of a breach of this Agreement and upon the receipt by the Debtor of written notice from the Required Creditors under this Agreement, this Agreement shall terminate immediately as to the Debtor without the requirement of any further notice or action. After three unremedied breaches by the Debtor under sections 11(a) and (b), or if any Debtor fails to timely execute and provide a Debtor Accession under section 2, the Creditors under this Agreement agree to seek collection of their Credits under judicial process and/or immediate liquidation or reorganization of the Debtor under new management pursuant to the Bankruptcy Act.
If any Creditor under this Agreement (a “Non-Complying Creditor”) fails to comply with Section 9 hereof (Voting on Proposed Plan; Implementation of Approved Restructuring Plan) any other Creditor under this Agreement may report the non-compliance to CDRAC.
Subject to the laws and regulations applicable to financial institutions in Thailand, by virtue of the provisions of this Agreement BOT may take any or all of the following measures with respect to any Non-Complying Creditor
- give a warning letter to the Non-Complying Creditor;
- impose a fine on the Non-Complying Creditor as a result of non-compliance. Such fine shall be payable to CDRAC against the operating expenses of CDRAC and its members and shall not exceed 10% of the Non-Complying Creditor’s claims against the Debtor but in no event be less than Baht 500,000.
In the event of any material breach of a provision of this Agreement other than section 9 by a Creditor under this Agreement, any other Creditor under this Agreement may report such breach to CDRAC and CDRAC may issue a warning letter to the breaching Creditor under this Agreement.
Section 12. Amendments to Framework
The Parties agree that the Framework shall be amended as follows:
(a) Principle 1 of the Framework is amended by adding the following as Implementing Policies 1(E) and 1(F)
“(E) Management of Debtor: Whenever possible, existing management of the Debtor should be retained in such positions, and with such duties and responsibilities, that such management will, in the opinion of a majority of all creditors, be able to fulfill with competence and at least at a level of performance equivalent to the management of the Debtor’s main competitors. Mutually agreed new executives shall be added to manage only those functions where existing management is currently non-competitive in terms of training, experience and performance with similar executives of the Debtor’s main competitors. Notwithstanding the foregoing, the appointment of the chief financial officer or other person having ultimate management responsibility for the financial affairs of the Debtor must receive the approval of a majority of all creditors throughout the Plan Term. In addition, where feasible creditors should have the option of being equitably represented on the board of directors of the Debtor throughout the Plan Term.
(F) Sales of Assets: Any assets of the Debtor scheduled to be sold by a plan approved by the creditors should be sold to yield the most immediate commercial return unless there is a strong probability in the opinion of a majority of all creditors that retention of such assets for a longer period will yield a greater overall return to the creditors when discounted to a present value. Such sales may be made to third parties or special purpose vehicles established for the benefit of the creditors, such as asset management companies or property mutual funds.”
(b) Implementing Policy 2(E) of the Framework is amended to read as follows:
(E) Debt-to-Equity Conversions: Under normal circumstances debt-to-equity conversions shall be a "last resort" in any Workout and used only in circumstances which result in greater than liquidation value for creditors. Debt-to-equity concessions should require only the conversion of such amount of debt as is necessary reasonably to ensure the continued financial and commercial viability of the Debtor. Absent fraud or willful default on their part, existing shareholders should retain some equity of the Debtor. Debt-to-equity conversions should be conducted at a fair and equitable price with regards to the independently appraised value of the Debtor as a going concern at the date of the conversion (assuming adequate working capital under an Approved restructuring plan). Creditors must be given a feasible exit strategy to dispose of such equity, either by sale on a recognized exchange or some other liquid process. Whenever feasible, existing shareholders should be given the first option to purchase such equity.”
Section 13. No Waiver
All Credits are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.
Except as otherwise expressly provided in this Agreement, the execution, delivery and effectiveness of this Agreement and the performance of obligations and exercise of rights hereunder shall not constitute a waiver by any of the Creditors under this Agreement, or a defense to, the exercise by any of the Creditors under this Agreement of any right, power of remedy which any of the Creditors under this Agreement may have under or in respect of any Credit or otherwise. Without limiting the foregoing, the execution, delivery and effectiveness of this Agreement shall not operate as a waiver of the right of any Creditor under this Agreement to the payment of any Credit, interest or default interest thereon, or as a waiver of any breach or default thereunder.
Section 14. Amendment
The amendment or waiver of any provision of this Agreement shall not be effective unless the same shall be in writing and signed by the Debtor and, with respect to Sections 3, 4, 8, 12, and 15 the Majority Creditors, and with respect to any other provision of this Agreement, all Creditors under this Agreement, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
Section 15. Notices
All notices and other communications provided for in, or effected pursuant to, this Agreement shall be in writing and shall be effective as of the following dates: (i) if delivered by hand, then at delivery; (ii) if mailed, first class postage prepaid, return receipt requested, then on the fifth Business Day after deposit in the mail; (iii) if sent by overnight courier, then on the third Business Day following the day on which it is delivered to the courier service; or (iv) if sent by facsimile transmission and followed by hand-delivery, mail or overnight courier copy, then upon confirmation of transmission by the sender’s facsimile machine.
Section 16. Applicable Law
This Agreement shall be governed by, and shall be construed and enforced in accordance with, the laws of Thailand, without regard to conflicts of laws principles.
Section 17. Transitional Provisions
Within forty-five Business Days of the date of execution hereof, all Debtors and Creditors under this Agreement shall inform CDRAC in writing of the current status of any Workouts involving a Debtor hereunder. CDRAC shall notify in writing the Debtor and all affected Creditors under this Agreement of the step of the Process Schedule corresponding to such current status. Upon receipt of such notice from CDRAC, this Agreement shall apply to such Workout, provided that section 11 of this Agreement (Breach of Agreement) shall only apply to any breach occurring or continuing after the date a Debtor or Creditor under this Agreement has agreed to be bound to the terms hereof.
Section 18. Term
This Agreement shall bind all Creditors under this Agreement until December 31, 2000 and indefinitely thereafter provided, however, any Creditor under this Agreement may elect to terminate its individual obligations and rights under this Agreement effective on any date after December 31, 2000 by giving at least thirty days prior written notice to CDRAC. Notwithstanding the foregoing, this Agreement will bind each Debtor throughout the term of the Workout of such Debtor.
Section 19. Counterparts; Effectiveness
This Agreement and any Creditor Accession, Debtor Accession or amendments, waivers, consents, or supplements may be executed in counterparts, each of which when so executed and delivered shall be deemed an original and all of which, when taken together, shall constitute but one and the same instrument.
Section 20. Scope of Rights
In no event shall this Agreement confer, or be deemed to confer, any rights or privileges on any person not a party hereto other than as expressly provided in section 10 hereof.
Section 21. Good Faith
All parties shall in good faith comply with the provisions of this Agreement and the decisions made by a Steering Committee, CDRAC or the BOT pursuant to the provisions of this Agreement.
IN WITNESS WHEREOF, the parties after having read and understood all the terms and conditions hereof, execute this Agreement intending to be legally bound by all its provisions.
APPENDIX I – DEBTOR ACCESSION
[Letterhead of Debtor]
To: All Parties (as defined under the Debtor-Creditor Agreement on Debt Restructuring Process)
Reference is made to the Debtor-Creditor Agreement on Debt Restructuring Process (the “Agreement”) and made between certain financial institutions (the “Creditors under this Agreement”), the Corporate Debt Restructuring Advisory Committee (“CDRAC”) and the Bank of Thailand (“BOT”). Capitalized terms used herein shall have the meanings ascribed to them in the Agreement.
We, ________________________________ Limited (the “Debtor”), hereby agree to be bound by all the terms and conditions of the Agreement as an original party thereto for the proposed Workout of our Credits to the Creditors under this Agreement. We also agree to support and implement, and use our best efforts to cause our shareholders to support, any Proposed Plan or Approved Restructuring Plan.
We confirm that we have received a copy of the Agreement together with such other documents and information we require.
We hereby irrevocably and unconditionally undertake that we will perform in accordance with all the terms and conditions under the Agreement as a Debtor from the date hereof.
This Debtor Accession shall be governed by and construed in accordance with the laws of Thailand.
We execute this Accession by our authorized representative(s) intending to be fully and legally bound to all the terms and conditions hereof and of the Agreement.
Name(s): (corporate seal if required)
APPENDIX II - CREDITORS UNDER THIS AGREEMENT
[Letterhead of Financial Institution]
To: All Parties (as defined under the Debtor-Creditor Agreement on Debt Restructuring)
Reference is made to the Debtor-Creditor Agreement on Debt Restructuring Process (the “Agreement”) and made between certain financial institutions (the “Creditors under this Agreement”), the Corporate Debt Restructuring Advisory Committee (“CDRAC”) and the Bank of Thailand (“BOT”). Capitalized terms used herein shall have the meanings ascribed to them in the Agreement.
We, ________________________________ hereby agree to be bound by all the terms and conditions of the Agreement as well as all the terms and conditions of the Inter-creditor Agreement on Restructure Plan Votes and Executive Decision Panel Procedures dated March 19, 1999 as a “Creditor under this Agreement” and an original party thereto .
We confirm that we have received a copy of the Agreement and the Inter-creditor Agreement on Restructure Plan Votes and Executive Decision Panel Procedures together with such other documents and information we require.
We hereby irrevocably and unconditionally undertake that we will perform in accordance with all the terms and conditions under the Agreement and the Agreement on Restructure Plan Votes and Executive Decision Panel Procedures as a “Creditor under this Agreement” from the date hereof.
This Creditor Accession shall be governed by and construed in accordance with the laws of Thailand.
We execute this Accession by our authorized representative(s) intending to be fully and legally bound to all the terms and conditions hereof, of the Agreement, and the Inter-creditor Agreement on Restructure Plan Votes and Executive Decision Panel Procedures.
Name(s): (corporate seal if required)
APPENDIX IV - PROCESS SCHEDULE
||Call First Meeting of Creditors
||Anytime by CDRAC, Debtor or any Creditor under this Agreement |
||Debtor executes Debtor Accession;
First Creditors Meeting, appointment of
Steering Committee/Lead Institution;
Establishment of Workout Schedule
|Within fifteen Business Days of #1|
||Creditors submit claims in writing
to Steering Committee/
|Within fifteen days of #2|
||At any creditors meeting or Steering Committee meeting a debtor representative with decision-making authority must appear and answer any and all questions
(i.e. directors or
must submit at a minimum the
a) assets, liabilities and
obligations the Debtor owes to
b) property given by the Debtor as
security to creditors and the date given;
c) property of other parties in
the Debtor's possession;
d) the Debtor's shareholdings in
other companies or juristic persons;
e) names, businesses and addresses
of all creditors;
f) names, businesses and addresses
of the Debtor's debtors;
g) details of the property including payments which the Debtor expects to receive in the future.
|Within 7 days of #2|
||The appointment of an independent accountant and/or other experts shall be carried out as requested by the creditors based on the agreed terms of reference
||Within 7 days of #2|
||Debtor submits information set forth in Appendix V, draft business plan and all further information requested by creditors or independent accountant
||Within two months of #2, extendable by CDRAC up to one month maximum|
||Proposed Plan submission to all Creditors by Creditors Committee, Debtor and independent accountant, along with written approval of the Proposed Plan by the Debtor
||Within three months of #2, extendable up to two months maximum with consent of CDRAC
If no timely Proposed Plan is submitted, CDRAC will appoint at Debtor’s expense a qualified financial advisor to prepare a Proposed Plan within thirty calendar days.
||Creditors propose amendments to Proposed Plan
||Within 10 Business Days of # 8|
||Creditor Meeting to vote on plan, dissenting creditors may submit an alternative Proposed Plan
||15 Business Days after # 9|
||Second vote on Proposed Plan or vote on Alternate Proposed Plan (if necessary)
||10 Business Days after # 10 (if Sufficient Plan Approval is not achieved under # 10). |
INFORMATION REQUIRED FROM DEBTOR
- GROUP AND CORPORATE STRUCTURE
- All subsidiaries and associated companies, percentage shareholding, and country of incorporation.
- Business reporting and management structure
- Legal ownership of all major assets
- Summary of senior management/board experience and qualifications
- Summary of corporate governance policies, standards and procedures
- Summary of management information systems
- Summary of accounting policies, standards and procedures
- All related inter-company transactions or other inter-company revenue-earning agreements (trading and non-trading) and the basis and terms and conditions thereof
- Shareholder and director remuneration and agreements
- All liabilities (including contingent and off-balance sheet) with current utilizations, original maturities and purpose of each separate utilization
- Legal claims or potential legal claims
- RECOURSE STRUCTURE
- Specific details of lender, borrower, secured party, guarantors/letters of comfort and any limitations thereon
- Details of any security, negativepledge and subordination arrangements
- List of all tangible and non-tangible assets(current or long term)
(2) Any existing assets registers
- Latest internal or independent appraisals of assets
- Aging reports of accounts receivable
E. BUSINESS PLAN
- Industry analysis and Debtor profile
- Brief summary of the Debtor’s industry outlook over the forecast period, forecasted industry profitability and growth rates, supply and demand forecasts for industry inputs and outputs, regulatory and taxation aspects
- Description of the Debtor’s business operations, identification of core business, non-core businesses and surplus assets
- Analysis of the Debtor’s competitive position within the (core) industry. This analysis should include market share analysis and profitability/cost benchmarking.
- Historical Results and Present Financial Position
- Brief analysis of results over the previous 12 months (cashflow, profit and loss and balance sheet)
(1) Trading forecasts (cashflow, profit and loss and balance sheet) for the next 12 months on a month by month basis, and for the next  years on an annual basis.
- Sensitivity analysis of major assumptions.
- Identification of future working capital requirements
- Planned cost-cutting and revenue enhancementinitiatives
- Planned sale of non-strategic assets and anticipated proceeds
The analysis in parts B and C should identify the major business lines or product groups and classify them according to whether they are likely to be profitable or unprofitable during the forecast period. If unprofitable, indicate what reasons, if any, exist to justify their continued existence.
- MAJOR AGREEMENTS FOR LAST THREE YEARS
FRAMEWORK FOR CORPORATE DEBT RESTRUCTURING