IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
)
In Re: ) Chapter 11
)
INNOVATIVE CLINICAL ) Case No. 00-3027 (PJW)
SOLUTIONS, LTD., et al., )
) (Jointly Administered)
Debtors )
)
________________________________________)
ORDER (A) APPROVING THE PREPETITION SOLICITATION AND DISCLOSURE
STATEMENT ASCONTAINING ADEQUATE INFORMATION,
AND (B) CONFIRMING PREPACKAGED PLAN OF REORGANIZATION
OF INNOVATIVE CLINICAL SOLUTIONS, LTD., ET AL.
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
Innovative Clinical Solutions, Ltd. and its affiliated debtor subsidiaries
(collectively, "ICSL," the "Debtors," or the "Company"), debtors and
debtors-in-possession herein, having filed voluntary petitions for relief under
chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") on July
14, 2000 (the "Petition Date") and simultaneously therewith having filed their
Joint Prepackaged Plan of Reorganization Under Chapter 11 of the Bankruptcy Code
(the "Prepackaged Plan"), a copy of which is attached hereto and incorporated
herein as Exhibit A, and their Prepetition Solicitation and Disclosure Statement
with Respect to the Joint Prepackaged Plan of Reorganization Under Chapter 11 of
the Bankruptcy Code (the "Disclosure Statement"); the Debtors having distributed
the Prepackaged Plan and the Disclosure Statement to all holders of Impaired
Claims1/ against and Impaired Interests in the Debtors, and the Debtors having
distributed ballots to record holders of Impaired Claims, for further
distribution to the beneficial holders thereof, by which such holders were asked
to vote to accept or reject the Prepackaged Plan, beginning on or about June 12,
2000; the Affidavit of William P. Fiske of Corporate Investor Communications,
[FN]
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1/ Unless otherwise specified, capitalized terms and phrases herein have
the meanings ascribed to them in the Prepackaged Plan.
</FN>
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Inc. certifying the (i) Procedures for Distribution of Solicitation Materials,
and (ii) Tabulation of the Ballots Received for the Debtors' Prepackaged Plan of
Reorganization having been filed with this Court on July 14, 2000 (the "Voting
Affidavit"); this Court upon motion of the Debtors, having entered an order
dated July 14, 2000 (the "Scheduling Order") fixing August 23, 2000 as the date
of the hearing pursuant to Rules 3017 and 3018 of the Federal Rules of
Bankruptcy Procedure (the "Bankruptcy Rules") and sections 1126 and 1128 of the
Bankruptcy Code to consider approval of the Disclosure Statement and
confirmation of the Prepackaged Plan (the "Combined Hearing"); the Affidavit of
Kathy Gerber of Bankruptcy Services, LLC having been filed with this Court on
July 24, 2000 with respect to the mailing of the Notice of Combined Hearing to
parties-in-interest in accordance with the Scheduling Order; the Affidavits of
Publication of The Wall Street Journal and The Providence Journal each having
been filed with this Court on August 21, 2000 with respect to the publication of
notice of Combined Hearing in the national edition of The Wall Street Journal on
July 19, 2000 and The Providence Journal on July 21, 2000, in accordance with
the Scheduling Order; this Court having reviewed the Prepackaged Plan and the
Disclosure Statement; this Court having heard the statements of counsel in
support of the relief requested herein at the Combined Hearing; and it appearing
to this Court that (a) notice of the Combined Hearing and the opportunity of any
party-in-interest to object to confirmation of the Prepackaged Plan were
adequate and appropriate as to all parties to be affected by the Prepackaged
Plan, and (b) this Court having determined that the legal and factual bases set
forth in the Prepackaged Plan and Disclosure Statement and presented at the
Combined Hearing establish just cause for the relief granted herein; this Court
hereby makes and issues the following Findings of Fact, Conclusions of Law and
Orders:2/
I. FINDINGS OF FACT AND CONCLUSIONS OF LAW:
[FN]
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2/ This Confirmation Order constitutes this Court's findings of fact and
conclusions of law under Fed. R. Civ. P. 52, as made applicable by
Bankruptcy Rules 7052 and 9014. Any and all findings of fact shall
constitute findings of fact even if they are stated as conclusions of
law, and any and all conclusions of law shall constitute conclusions
of law even if they are stated as findings of fact.
</FN>
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A. On the Petition Date, the Debtors commenced the Chapter 11 Cases by
filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code.
The Debtors were and are qualified to be debtors under section 109 of the
Bankruptcy Code. Venue of these proceedings and the Chapter 11 Cases is proper
pursuant to 28 U.S.C. sections 1408 and 1409. Consideration of the prepetition
solicitation of votes on the Prepackaged Plan (the "Prepetition Solicitation")
and the Disclosure Statement and confirmation of the Prepackaged Plan are core
proceedings pursuant to 28 U.S.C. section 157(b) and this Court has jurisdiction
to enter a final order with respect thereto pursuant to 28 U.S.C. sections 157
and 1334.
B. The Disclosure Statement complies with section 1125 of the Bankruptcy
Code, including the requirement of section 1125(a)(1) that it contain "
'adequate information' . . . that would enable a hypothetical reasonable
investor . . . to make an informed judgment about the [Prepackaged Plan] . . "
The Prepackaged Plan, the Disclosure Statement, the ballots and the notices were
transmitted and served in compliance with the Scheduling Order, the Bankruptcy
Code and the Bankruptcy Rules. The transmittal and service as described in,
among other things, the Voting Affidavit were good and sufficient under the
particular circumstances of these Chapter 11 cases. Good, proper and sufficient
notice of the Disclosure Statement and Confirmation Hearing, objection deadlines
and other matters described in the notices was given in compliance with the
Bankruptcy Code, the Bankruptcy Rules and the Scheduling Order, and no other or
further notice is or shall be required.
C. The Prepackaged Plan complies with all applicable provisions of the
Bankruptcy Code as required by section 1129(a)(1) of the Bankruptcy Code,
including, without limitation, sections 1122 and 1123. Pursuant to sections
1122(a) and 1123(a)(1) of the Bankruptcy Code, Articles II and III of the
Prepackaged Plan designate Classes of Claims and Interests, other than
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Administrative Claims and Priority Tax Claims.3/ As required by section 1122(a),
each Class of Claims and Interests contains only Claims or Interests that are
substantially similar to the other Claims or Interests within that Class.
D. The Prepackaged Plan contains all the contents made mandatory by section
1123(a) of the Bankruptcy Code. Pursuant to sections 1123(a)(1) through (3) of
the Bankruptcy Code, Articles II and III of the Prepackaged Plan designate all
required classes of Claims and Interests, specify all Claims and Interests that
are not Impaired, and specify the treatment of all Claims and Interests that are
Impaired. Pursuant to section 1123(a)(4) of the Bankruptcy Code, Article III of
the Prepackaged Plan also provides the same treatment for each Claim or Interest
within a particular Class.
E. Pursuant to section 1123(a)(5) of the Bankruptcy Code, the Prepackaged
Plan provides adequate means for the Prepackaged Plan's implementation. The
Debtors will have, immediately upon the effectiveness of the Prepackaged Plan,
sufficient Cash to make all payments required to be made on the Effective Date
pursuant to the terms of the Prepackaged Plan. Moreover, Article VII and various
other provisions of the Prepackaged Plan specifically provide adequate means for
the Prepackaged Plan's implementation, including, without limitation:
a. the issuance of the New ICSL Common Stock on the Effective Date;
b. the cancellation of the Debentures, the Old ICSL Common Stock and the
Old Other Interests, effective as of the Effective Date;
c. the adoption of the New ICSL By-Laws;
d. the adoption of the New ICSL Certificate of Incorporation;
e. the adoption of the New Subsidiary Debtors Certificate Amendments;
f. the adoption of the Option Plan on the Effective Date;
g. the revesting of the Debtors' property in the Reorganized Debtors;
[FN]
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3/ The Administrative Claims and the Priority Tax Claims, to the extent
that such claims exist, are Unimpaired under the Prepackaged Plan and,
in accordance with section 1123(a)(1) of the Bankruptcy Code, are not
designated as Classes of Claims for purposes of the Prepackaged Plan
and for purposes of sections 1123, 1124, 1126, and 1129 of the Bank
</FN>
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h. the payment of the Retention Payments;
i. the issuance of the Management and Director Options;
j. the execution of the Senior Management Contracts;
k. the execution of the Registration Rights Agreement; and
l. the execution and consummation by certain of the Debtors of the New
Credit Facility.
F. Section 7.02 of the Prepackaged Plan provides for the inclusion in the
New ICSL Certificate of Incorporation and the New Subsidiary Debtors Certificate
Amendments of all provisions required to be included under section 1123(a)(6) of
the Bankruptcy Code. Article X of the Prepackaged Plan and parallel provisions
in the Disclosure Statement collectively provide that (a) the pre-Effective Date
officers will continue to serve after confirmation of the Prepackaged Plan, and
(b) the Board of Directors of Reorganized ICSL shall consist of (i) Michael T.
Heffernan, Kevin E. Moley, Eric Moskow, M.D. and David M. Livingston, M.D., all
current directors, and (ii) those persons proposed for nomination to Reorganized
ICSL's Board of Directors by the Steering Committee, including William S.
Bernstein, Marvin Moser, M.D., and Yang Lie. As required by section 1123(a)(7)
of the Bankruptcy Code, ICSL's officers and directors have been selected in a
manner consistent with the interests of the holders of Claims and Interests and
public policy.
G. The Debtors, as proponents of the Prepackaged Plan, have complied with
all applicable provisions of the Bankruptcy Code as required by section
1129(a)(2) of the Bankruptcy Code, including, without limitation, sections 1125
and 1126 and Bankruptcy Rules 3017, 3018 and 3019. The solicitation of
acceptance or rejection of the Prepackaged Plan was made through disclosure to
Holders of Claims and Interests of adequate information as defined in section
1125(a) of the Bankruptcy Code.
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H. ICSL, its directors, officers, employees, agents, affiliates and
Professionals (acting in such capacity) have acted in "good faith," within the
meaning of section l125(e) of the Bankruptcy Code.
I. The Debtors proposed the Prepackaged Plan in good faith and not by any
means forbidden by law. Consistent with the overriding purpose of chapter 11 of
the Bankruptcy Code, the Prepackaged Plan is designed to allow the Debtors to
reorganize by providing it with a capital structure that will allow them to
satisfy their obligations with sufficient liquidity and capital resources to
continue to conduct business.
J. Pursuant to section 1129(a)(4) of the Bankruptcy Code, any payment made
or promised by the Debtors or by any person issuing securities or acquiring
property under the Prepackaged Plan, for services or for costs and expenses in,
or in connection with, the Chapter 11 Cases, or in connection with the
Prepackaged Plan and incident to the Chapter 11 Cases, has been, or will before
payment be, disclosed to this Court. Any such payment made before Confirmation
is reasonable. Any such payment to be made after Confirmation, including payment
of fees and expenses to the Professionals, is subject to the approval of this
Court as reasonable and as provided in the Bankruptcy Code.
K. Pursuant to section 1129(a)(5) of the Bankruptcy Code, the Debtors have
disclosed the identity and affiliations of the proposed directors and officers
of Reorganized ICSL following confirmation of the Prepackaged Plan. The officers
of ICSL shall continue as officers of Reorganized ICSL. The board of directors
of Reorganized ICSL as of the Effective Date shall consist of (a) William S.
Bernstein, Marvin Moser, M.D. and Yang Lie (those persons proposed for
nomination by the Steering Committee) and (b) current directors Michael T.
Heffernan, Eric Moskow, M.D., Kevin E. Moley, and David M. Livingston, M.D. The
appointment or continuance of the proposed directors and officers of the
Reorganized Debtors is consistent with the interests of the holders of Claims
and Interests and public policy.
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L. Section 1129(a)(6) of the Bankruptcy Code is inapplicable to the
Prepackaged Plan as there are no proposed rate changes in the Prepackaged Plan
to the extent that any rates of the Debtors are regulated by governmental
entities to be implemented through the plan confirmation process.
M. With respect to each Impaired Class of Claims or Interests of the
Debtors, each Holder of a Claim or Interest in such Class has accepted the
Prepackaged Plan or will receive or retain under the Prepackaged Plan on account
of such Claim or Interest property of a value, as of the Effective Date, that is
not less than the amount such Holder would receive or retain if the Debtors were
liquidated on the Effective Date under chapter 7 of the Bankruptcy Code.
N. Pursuant to sections 1126 and 1129(a)(8) of the Bankruptcy Code, (a) as
indicated in Article III of the Prepackaged Plan, Classes 1, 2, 3, 5 and 8 are
unimpaired, and (b) as indicated in the Voting Affidavit, all Impaired Classes,
other than Classes 6 and 7, have accepted the Prepackaged Plan, pursuant to
sections 1126(c) and (d) of the Bankruptcy Code. Notwithstanding the rejection
of the Prepackaged Plan by Classes 6 and 7, the Prepackaged Plan is confirmable
because, as more fully set forth herein, the Prepackaged Plan does not
discriminate unfairly and satisfies the fair and equitable requirements of
section 1129(b)(1) of the Bankruptcy Code with respect to Classes 6 and 7.
O. The Prepackaged Plan provides for treatment of Administrative Claims,
Priority Tax Claims and Priority Claims entitled to priority pursuant to
sections 507(a)(1), (a)(3), and (a)(8) of the Bankruptcy Code in the manner
required by section 1129(a)(9) of the Bankruptcy Code. Administrative Expense
Claims incurred in the ordinary course of business shall be paid or performed in
accordance with the terms and conditions of the parties' agreements.
P. As required by section 1129(a)(10) of the Bankruptcy Code and as
indicated in the Voting Affidavit, through the acceptance by Class 4 of the
Prepackaged Plan, at least one Class of Claims or Interests that is Impaired
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under the Prepackaged Plan has accepted the Prepackaged Plan, excluding votes
cast by any insider.
Q. The Prepackaged Plan is feasible. The Debtors have demonstrated that on
and after the Effective Date, all conditions to the effectiveness of the
Prepackaged Plan shall have been satisfied and the Debtors will have the ability
to meet their financial obligations under the Prepackaged Plan and continue
their businesses in the ordinary course. As required by section 1129(a)(11),
confirmation of the Prepackaged Plan is not likely to be followed by the
liquidation, or the need for further financial reorganization of the Debtors,
the Reorganized Debtors or any successors to the Reorganized Debtors under the
Prepackaged Plan.
R. As required by section 1129(a)(12) of the Bankruptcy Code, all fees
payable under 28 U.S.C. section 1930, which are unpaid and due to be paid as of
the Effective Date, shall be paid in Cash on or before the Effective Date.
S. In accordance with section 1129(a)(13) of the Bankruptcy Code, Section
6.08 of the Prepackaged Plan provides for the continuation after the Effective
Date of all retiree benefits, as that term is defined in section 1114 of the
Bankruptcy Code, if any, maintained or established by the Debtors prior to the
Confirmation Date.
T. Pursuant to sections 1129(b)(1) and (b)(2)(C) of the Bankruptcy Code,
the Prepackaged Plan is fair and equitable with regard to Classes 6 and 7, which
are deemed to have rejected the Prepackaged Plan, because: (i) Holders of
Interests in Classes 6 and 7 will receive or retain under the Prepackaged Plan
on account of such Interest property of a value, as of the Effective Date, that
is not less than the amount such Holder would receive or retain if the Debtors
were liquidated on the Effective Date under chapter 7 of the Bankruptcy Code,
and (ii) no Holder of a Claim or Interest junior to the Interests in Classes 6
and 7 will receive or retain any property under the Prepackaged Plan on account
of such junior Claim or Interest.
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U. The provisions of the Prepackaged Plan with respect to the Holders of
the Unimpaired Claims are fair and appropriate, and the Prepackaged Plan does
not require the Holders of the Unimpaired Claims to file proofs of claim with
this Court and does not discharge such Unimpaired Claims.
V. Each of the conditions precedent to the entry of this Confirmation
Order, as set forth in Section 9.02 of the Prepackaged Plan, have been satisfied
or waived in accordance with the Prepackaged Plan.
W. Pursuant to section 1125(e) of the Bankruptcy Code, the Debtors and the
Releasees shall not be liable (a) on account of their solicitation of
acceptances of the Prepackaged Plan and Reorganized ICSL's issuance of the New
ICSL Common Stock pursuant to the Prepackaged Plan in good faith and in
compliance with the applicable provisions of the Bankruptcy Code, or (b) for any
violation of applicable law, rule or regulation governing the solicitation of
acceptances of a plan of reorganization or the offer, issuance, sale or purchase
of securities.
X. The offer and distribution of the New ICSL Common Stock to Holders of
Class 4 Claims and Class 6 Interests are exempt from Section 5 of the Securities
Act of 1933 and any state or local law requiring registration for offer or sale
of a security or registration or licensing of an issuer, underwriter, broker or
dealer in such security. With regard to the options to be granted under the
Option Plan, ICSL intends either to register such options under a Form S-8
registration statement or to assert an exemption from such registration under
Section 4(2) of the Securities Act of 1933 or any other applicable statute, rule
or regulation.
Y. Pursuant to section 1146(c) of the Bankruptcy Code, the issuance,
transfer or exchange of the New ICSL Common Stock or a security under the
Prepackaged Plan, or the making or delivery or recording of any instrument of
transfer under the Prepackaged Plan, shall not be taxed under any law imposing a
stamp tax or similar tax. Consistent with the foregoing, each recorder of deeds
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or similar official for any county, city or governmental unit in which any
instrument hereunder is to be recorded shall, pursuant to this Confirmation
Order, be ordered and directed to accept such instrument, without requiring the
payment of any stamp tax or similar tax.
Z. No non-Debtor party to any executory contract or unexpired lease assumed
pursuant to Section 6.01 of the Prepackaged Plan has objected to such
assumption. The Debtors have (A) cured, or provided adequate assurance that the
Reorganized Debtors will cure, defaults (if any) under or relating to each
executory contract or unexpired lease assumed under the Prepackaged Plan and
(B) pursuant to Section 6.03 of the Prepackaged Plan, provided a reasonable and
appropriate procedure for resolving disputes, if any, to cure amounts.
AA. Because (A) the Prepackaged Plan does not provide for the liquidation
of all or substantially all of the property of Debtors' Estates and (B) the
Reorganized Debtors will engage in business following consummation of the
Prepackaged Plan, section 1141(d)(3) of the Bankruptcy Code is inapplicable.
BB. The principal purpose of the Prepackaged Plan is not the avoidance of
taxes or the avoidance of the application of Section 5 of the Securities Act of
1933 (15 U.S.C. section 77e). Accordingly, section 1129(d) of the Bankruptcy
Code is inapplicable.
CC. The conditions to the Effective Date set forth in Section 9.02 of the
Prepackaged Plan will be satisfied or authorized by entry of the Confirmation
Order and the Solicitation and Disclosure Statement Order.
DD. This Court may properly retain jurisdiction over the matters set forth
in Article XII of the Prepackaged Plan.
II. ORDER
THEREFORE, THE COURT HEREBY ORDERS, ADJUDGES AND DECREES THAT:
A. Adequacy of the Prepetition Solicitation and Disclosure Statement.
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1. Pursuant to Bankruptcy Rule 3018(c), the forms of ballots, master
ballots and balloting instructions, substantially in the form of the sample
ballots annexed to the Scheduling Motion (collectively, the "Ballots"), are
approved. The procedures by which the Ballots to accept or reject the
Prepackaged Plan were distributed and tabulated were fair, properly conducted
and in accordance with the Bankruptcy Code, the Bankruptcy Rules and the local
rules of Bankruptcy Code. The establishment of May 18, 2000 as the record date
for determining which holders of Debentures are entitled to vote on the
Prepackaged Plan is approved. The establishment of July 12, 2000 as the
termination date for the solicitation period is approved.
2. The Disclosure Statement filed by the Debtors on the Petition Date is
approved as containing "adequate information" pursuant to section 1125(a) of
Bankruptcy Rule 3017(b).
B. Confirmation of the Prepackaged Plan.
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3. The Prepackaged Plan and each of its provisions shall be, and hereby
are, confirmed in accordance with sections 1129(a) and (b) of the Bankruptcy
Code; provided, however, that if there is any direct conflict between the terms
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of the Prepackaged Plan and the terms of this Confirmation Order, the terms of
this Confirmation Order shall control. All objections and responses to, and
statements and continents regarding the Prepackaged Plan, to the extent not
already withdrawn, shall be, and hereby are, overruled.
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C. Effects of Confirmation of the Prepackaged Plan.
4. Pursuant to section 1141(a) of the Bankruptcy Code, from and after the
Confirmation Date, the Prepackaged Plan shall be binding upon and inure to the
benefit of the Reorganized Debtors, all Holders of Claims against, and Interests
in, the Debtors and any other parties-in-interest in the Chapter 11 Cases and
their respective successors and assigns.
5. Except as otherwise provided in the Prepackaged Plan, all distributions
under the Prepackaged Plan shall be received and retained free of and from any
obligations to hold or transfer the same to any other Creditor, and shall not be
subject to levy, garnishment, attachment or other legal process by any Holder by
reason of claimed contractual subordination rights whether arising under general
principles of equitable subordination, section 510(b) of the Bankruptcy Code or
otherwise and this Confirmation Order shall constitute an injunction enjoining
any Person from enforcing or attempting to enforce any contractual, legal or
equitable subordination rights to Property distributed under the Prepackaged
Plan.
D. Continued Corporate Existence; Revesting Of Assets.
6. The Debtors shall, as Reorganized Debtors, continue to exist after the
Effective Date as separate corporate entities, each with all of the powers of
corporations under the laws of each Debtor's respective state of incorporation
and without prejudice to any right to alter or terminate such existence, whether
by merger or otherwise, under applicable state law.
7. Except as otherwise expressly provided in the Prepackaged Plan, pursuant
to sections 1123(a)(5), 1123(b)(3) and 1141(b) of the Bankruptcy Code, all
Property comprising the Estates of each Debtor, including, but not limited to,
all Causes of Action, shall automatically be retained and revest in the relevant
Reorganized Debtor or its respective successor, free and clear of all Claims,
Liens, contractually-imposed restrictions, charges, encumbrances and Interests
of Creditors and equity security holders on the
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Effective Date, except as specifically set forth in the Prepackaged Plan and in
this Confirmation Order, with all such Claims, Liens, contractually-imposed
restrictions, charges, encumbrances and Interests, being extinguished except as
otherwise provided in the Prepackaged Plan and this Confirmation Order or in
connection with the New Credit Facility. As of the Effective Date, each
Reorganized Debtor may operate its business and use, acquire and dispose of
Property and settle and compromise Claims or Interests without supervision of
the Bankruptcy Court free of any restrictions of the Bankruptcy Code or
Bankruptcy Rules, other than those restrictions expressly imposed by the
Prepackaged Plan and Confirmation Order. Without limiting the foregoing, each
Reorganized Debtor may pay the charges it incurs for professional fees,
disbursements, expenses, or related support services incurred after the
Effective Date without any application to the Bankruptcy Court.
E. Discharge.
8. To the fullest extent permitted by applicable law (including, without
limitation, section 105 of the Bankruptcy Code), and except as otherwise
provided in the Prepackaged Plan or in this Confirmation Order, (A) all
consideration distributed under the Prepackaged Plan shall be in exchange for,
and in complete satisfaction, settlement, discharge and release of, all Claims
and Interests of any nature whatsoever against the Debtors or any of their
assets or properties, and regardless of whether any Property shall have been
distributed or retained pursuant to the Prepackaged Plan on account of such
Claims or Interests, upon the Effective Date, the Debtors, and each of them,
shall (i) be deemed discharged and released under section 1141(d)(1)(A) of the
Bankruptcy Code from any and all Claims, including, but not limited to, demands
and liabilities that arose before the Confirmation Date, debts (as such term is
defined in section 101(12) of the Bankruptcy Code), Liens, security interests,
and encumbrances of and against all Property of the respective Estates, the
Debtors and their Affiliates, that arose before Confirmation, as more fully set
forth in the Prepackaged Plan; and (B) as of the Confirmation Date, all
entities, including, without
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limitation, all Holders of Claims or Interests, shall be barred and enjoined
from asserting against the Debtors or the Reorganized Debtors, their successors
or their property any other or further Claims, debts, rights, Causes of Action,
liabilities or Interests relating to the Debtors, as more fully set forth in the
Prepackaged Plan. In accordance with the foregoing, except as provided in the
Prepackaged Plan or this Confirmation Order, this Confirmation Order shall be a
judicial determination of discharge of all such Claims and other debts and
liabilities against the Debtors and termination of all Interests of the Holders
of Old ICSL Common Stock and Old Other Interests, pursuant to sections 524 and
1141 of the Bankruptcy Code, and such discharge and termination shall void any
judgment obtained against the Debtors at any time, to the extent that such
judgment relates to a discharged Claim or terminated Interest.
F. Injunction
(a) Discharged Claims and Terminated Interests.
9. Except as otherwise expressly provided for in the Prepackaged Plan or
this Order and to the fullest extent authorized or provided by the Bankruptcy
Code, including sections 524 and 1141 thereof, the entry of this Order shall,
provided that the Effective Date occurs, permanently enjoin all Persons that
have held, currently hold or may hold a Claim or other debt or liability that is
discharged or an Interest or other right of an equity security holder that is
Impaired or terminated pursuant to the terms of the Prepackaged Plan from taking
actions against the Debtors, the Reorganized Debtors or their property on
account of any such discharged Claims, debts or liabilities or such terminated
Interests or rights, as more fully set forth in the Prepackaged Plan.
(b) Released Claims.
10. As of the Effective Date, this Order shall constitute an injunction
permanently enjoining any Person that has held, currently holds or may hold a
Claim, demand, debt, right, Cause of Action or liability that is released
pursuant to Section 11.04 of the Prepackaged Plan from enforcing or attempting
to enforce
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any such Claim, demand, debt, right, Cause of Action or liability against any
(i) Debtor, (ii) Reorganized Debtor, (iii) Releasee, (iv) director, officer or
employee of any Debtor who continues in such position subsequent to the
Effective Date, or (v) former director, officer or employee of any Debtor, or
any of their respective property based on, arising from or relating to, in whole
or in part, any act, omission, or other occurrence taking place on or prior to
the Effective Date with respect to or in any way relating to the Chapter 11
Cases, all of which Causes of Action will be deemed released on the Effective
Date; provided, however, that with respect to the former directors, officers and
employees of the Debtors, this injunction shall apply only to the enforcement of
Claims, demands, debts, rights, Causes of Action or liabilities with respect to
which such former directors, officers and employees would be entitled to
indemnification from the Debtors or the Reorganized Debtors under contract or
law; and, provided further, however, that this injunction shall not apply to (a)
any claims Creditors may assert under the Prepackaged Plan to enforce their
rights thereunder to the extent permitted by the Bankruptcy Code or (b) any
claims Creditors or other third parties may have against each other, which
claims are not related to the Debtors and the Reorganized Debtors, it being
understood, however, that any defenses, offsets or counterclaims of any kind or
nature whatsoever which the Debtors may have or assert in respect of any of the
claims of the type described in (a) or (b) of this paragraph are fully
preserved.
G. Releases.
(a) Releases By Debtors.
11. Pursuant to Section 11.04(a) of the Prepackaged Plan, effective as of
the Confirmation Date, but subject to the occurrence of the Effective Date, and
except as otherwise provided in the Prepackaged Plan or this Confirmation Order,
for good and valuable consideration, the adequacy of which is hereby confirmed,
the Debtors and the Reorganized Debtors in their individual capacities and as
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debtors in possession are deemed to release forever, waive and discharge those
parties set forth in the Prepackaged Plan for those items set forth in the
Prepackaged Plan.
(b) Releases by Holders of Claims and Interests.
12. Effective as of the Confirmation Date, but subject to the occurrence of
the Effective Date, and except as otherwise provided in the Prepackaged Plan or
this Confirmation Order, to the fullest extent permitted under applicable law,
in consideration for the obligations of the Persons set forth below under the
Prepackaged Plan, and, if applicable, a Forbearance Agreement and the Cash,
securities, contracts, releases and other agreements or documents to be
delivered in connection with the Prepackaged Plan, each Holder (as well as any
trustee or agent on behalf of each such Holder) of a Claim and any Affiliate of
any such Holder, shall be deemed to have forever waived, released and discharged
those parties set forth in the Prepackaged Plan for those items set forth in the
Prepackaged Plan.
H. Exculpation.
13. None of the Debtors, the Reorganized Debtors or Exculpated Persons
shall have or incur any liability to any Person for any act taken or omission
made in good faith in connection with, relating to, or arising out of, the
Chapter 11 Cases, the Prepackaged Plan, a Forbearance Agreement, or the Property
to be distributed under the Prepackaged Plan.
I. Unimpaired Claims.
14. All Administrative Claims, Priority Tax Claims and Class 1, 2, 3, 5 and
8 Claims are not impaired by the Prepackaged Plan in accordance with section
1124 of the Bankruptcy Code and shall survive confirmation of the Prepackaged
Plan except to the extent previously satisfied in full pursuant to the
Prepackaged Plan or the Order of this Court Granting Debtor Authority to Pay
Undisputed and Unimpaired Pre-Petition Claims in the Ordinary Course of Business
dated July 14, 2000. Neither the Prepackaged Plan nor this Confirmation Order
shall be construed as altering in any way the legal, equitable or contractual
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rights of the Holders of Unimpaired Claims. The Holders of Unimpaired Claims
shall not be required to file proofs of claim with this Court, and any dispute
with respect to any Unimpaired Claim may be determined, resolved or adjudicated,
as the case may be, with respect to the Reorganized Debtors in the manner in
which such dispute would have been determined, resolved or adjudicated if the
Chapter 11 Cases had not been commenced.
J. Effects of Prepackaged Plan and Injunction on Certain Claims.
15. Notwithstanding any provision of the Prepackaged Plan or this
Confirmation Order to the contrary, any police and regulatory rights and Claims
of governmental units shall not be discharged, impaired, or adversely affected
by the Prepackaged Plan and the Chapter 11 Cases, shall survive the Chapter 11
Cases as if the case had not been commenced, and shall be determined in the
manner and by the administrative or judicial tribunals in which such rights or
claims would have been resolved or adjudicated if the Chapter 11 Cases had not
been commenced.
16. Notwithstanding any provision in the Plan, Confirmation Order or any
Bar Date Order to the contrary, there shall be no bar date with respect to
claims of the United States, including, but not limited to, any claims that may
arise due to the transactions contemplated by the Plan or effected as a result
of the Plan, and all rights and claims of the United States shall not be
discharged, impaired or adversely affected by the Plan, Confirmation Order or
bankruptcy cases and shall survive the bankruptcy cases as if the cases had not
been commenced, and shall be determined in the manner and by the administrative
or judicial tribunals in which such rights or claims would have been resolved or
adjudicated had the bankruptcy cases not been commenced. The foregoing shall not
apply to claims classified as Class 4 Debentureholder claims held by the United
States, if any. The Debtors, however, are unaware of any Class 4 Debentureholder
claims held by the United States.
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17. All injunctions and stays pursuant to sections 105 and 362 of the
Bankruptcy Code or otherwise shall remain in full force and effect until the
Effective Date of the Prepackaged Plan, except that nothing herein shall bar the
filing of financing documents or the taking of such other actions as are
necessary to effectuate the transactions specifically contemplated by the
Prepackaged Plan or by this Confirmation Order, including but not limited to the
New Credit Facility.
K. Implementation of Prepackaged Plan.
18. Immediately upon the entry of this Confirmation Order, the terms of the
Prepackaged Plan shall be, and hereby are, deemed binding upon the Debtors, the
Reorganized Debtors, any and all Holders of Claims or Interests (irrespective of
whether such Claims or Interests are impaired under the Prepackaged Plan or
whether the Holders of such Claims or Interests accepted or are deemed to have
accepted the Prepackaged Plan), any and all non-Debtor parties to executory
contracts and unexpired leases with the Debtors and the respective heirs,
executors, administrators, successors or assigns, if any, of any of the
foregoing.
L. Executory Contracts and Unexpired Leases.
19. The executory contract and unexpired lease provisions of Article VI of
the Prepackaged Plan shall be, and hereby are, approved in their entirety.
Immediately prior to the Effective Date, all executory contracts and unexpired
leases of the Debtor will be deemed assumed in accordance with the provisions
and requirements of sections 365 and 1123 of the Bankruptcy Code, except those
executory contracts and unexpired leases, that (a) have been rejected by order
of this Court, or (b) are the subject of a motion to reject pending on the
Effective Date.
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M. Cancellation of Existing Securities.
22. On the Effective Date, the Debentures, the Old ICSL Common Stock
Interests (including any shares of Old ICSL Common Stock that have been
authorized to be issued but that have not been issued as of the Effective Date)
and the Old Other Interests shall be canceled and extinguished and the Holders
thereof shall have no rights and such instruments shall evidence no rights,
except the right to receive the distributions, if any, to be made to Holders of
such instruments under the Prepackaged Plan. Except with respect to the
performance by the Indenture Trustee or its agents of the Indenture Trustee's
obligations under the Prepackaged Plan or in connection with any distribution to
be made under the Prepackaged Plan, effective as of the Effective Date, the
Indenture Trustee and its agents, successors and assigns shall be discharged of
all of their obligations associated with the Indenture and related agreements
and released from all Claims arising in the Chapter 11 Cases and, effective as
of the Effective Date, such Indenture shall be deemed canceled, except that such
cancellation shall not impair the rights of the Holders of the Debentures to
received distributions under the Prepackaged Plan or the rights of the Indenture
Trustee under its charging lien pursuant to the Indenture to the extent that the
Indenture Trustee has not received payment and, to the extent applicable, a
reserve has not been established on account of the Indenture Trustee Claim
pursuant to Section 7.06 of the Prepackaged Plan.
N. Issuance Of New ICSL Common Stock
23. The Reorganized Debtors are hereby authorized to issue the New ICSL
Common Stock.
24. On the Effective Date, all of the issued and outstanding Debentures and
Old ICSL Common Stock shall be canceled and exchanged for shares of New ICSL
Common Stock in accordance with Sections 3.09 and 3.11 of the Prepackaged Plan,
respectively. This exchange of the Debentures for the New ICSL Common Stock
shall be in full satisfaction, settlement, release and discharge of all Allowed
Debenture Claims, which Claims shall be Allowed in the aggregate amount of
$100,000,000, and all Old ICSL Common Stock Interests. The Debentures and the
Old
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ICSL Common Stock will be canceled and the New ICSL Common Stock will be
credited to the accounts maintained on behalf of the Holders thereof at the
applicable record holder.
O. New Credit Facility and Sources of Cash for Prepackaged Plan
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Distribution.
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25. On or prior to the Effective Date, ICSL shall enter into the New Credit
Facility, which has been approved by Order of this Court entered concurrently
herewith, which along with Cash in the possession of the Reorganized Debtors as
of the Effective Date, shall be the primary source of funds for distribution
under the Prepackaged Plan.
26. Most of the Debtors are obligated to Heller Healthcare Finance, Inc.,
f/k/a HCFP Funding, Inc. ("HHF") for the repayment of certain prepetition loans
made by HHF pursuant to a prepetition revolving credit facility. HHF's secured
claims against the Debtors (the "HHF Class 1 Claims") are classified in the
Class of Revolving Credit Facilities Claims, which is Class 1 under the Plan.
HHF has filed an objection to confirmation of the Plan, seeking clarification of
the treatment of the HHF Class 1 Claims, and objecting to the Plan if it is not
clarified. HHF's objection has been and is resolved by the agreed amendment to
the Plan set forth below in this paragraph. Section 3.06 of the Plan is hereby
amended to add the following after the last sentence: Notwithstanding the
foregoing, however, Heller Healthcare Finance, Inc., f/k/a HCFP Funding, Inc.
("HHF"), as the Holder of a Class 1 Revolving Credit Facilities Claim, shall
receive, in full satisfaction, settlement, release, extinguishment and discharge
of such Claim, payment in Cash by the Effective Date of the full amount of such
Claim and every element thereof payable under HHF's loan and security documents.
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P. Distributions.
27. The distribution provisions of Article V of the Prepackaged Plan shall
be, and hereby are, approved. The Reorganized Debtors shall make all
distributions required under the Prepackaged Plan.
28. All Property distributed on account of Claims must be claimed within
the later of (A) one (1) year after the Effective Date or (B) one (1) year after
such distribution is made to such Holder or, in the case of a distribution made
in the form of a check, must be negotiated and a request for reissuance be made
as provided for in Section 5.07 of the Prepackaged Plan. All Unclaimed Property
will be retained by and will revest in the Reorganized Debtors and will no
longer be subject to distribution. 29. In connection with each distribution with
respect to which the filing of an information return (such as an Internal
Revenue Service Form 1099 or 1042) or withholding is required, the Reorganized
Debtors shall file such information return with the Internal Revenue Service and
provide any required statements in connection therewith to the recipients of
such distribution or effect any such withholding and deposit all moneys so
withheld as required by law.
Q. Prosecution of Objections to Claims.
30. After the Confirmation Date, the Debtors and the Reorganized Debtors
shall have the exclusive authority to File objections to, settle, compromise,
withdraw or litigate to judgment objections to Claims. From and after the
Confirmation Date, the Debtors and the Reorganized Debtors may settle or
compromise any Disputed Claim without approval of this Court. Notwithstanding
any provision in the Prepackaged Plan to the contrary, the Prepackaged Plan does
not in any way alter the rights, if any, of any Holder of a Disputed Claim to
pursue resolution of its Claims in any appropriate non-bankruptcy forum, to the
extent and by such means as the Holder is entitled pursuant to non-bankruptcy
law, including through trial by jury (if applicable). The estimation and
Disputed Claim resolution procedures set forth in the
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Prepackaged Plan shall not be deemed to expand the jurisdiction of this Court
beyond the jurisdiction otherwise provided under the Bankruptcy Code and any
applicable, related statute, rule or order.
R. Corporate Action.
31. On the Effective Date, the adoption of the New ICSL Certificate of
Incorporation or similar constituent documents, the amendment of the By-laws,
the selection of directors and officers for the Reorganized Debtors, the
approval of the Option Plan and all actions contemplated by the Prepackaged Plan
shall be authorized and approved in all respects (subject to the provisions of
the Prepackaged Plan). All matters provided for in the Prepackaged Plan
involving the corporate structure of the Debtors or the Reorganized Debtors, and
any corporate action required by the Debtors or the Reorganized Debtors in
connection with the Prepackaged Plan, shall be, and hereby are, deemed to have
occurred and be effective as provided in the Prepackaged Plan, and shall be, and
hereby are, authorized and approved in all respects without any requirement of
further action by the security holders or directors of the Debtors or
Reorganized Debtors. On the Effective Date, the appropriate officers of the
Reorganized Debtors and members of the board of directors of the Reorganized
Debtors are authorized and hereby directed to issue, execute and deliver the
agreements, documents, securities and instruments contemplated by the
Prepackaged Plan in the name of, and on behalf of, each of the Reorganized
Debtors including, without limitation, the New ICSL Common Stock.
S. Retention Of Jurisdiction.
(a) Exclusive Jurisdiction of Bankruptcy Court.
32. Notwithstanding the entry of this Order and the occurrence of the
Effective Date, the Bankruptcy Court shall retain after the Effective Date
exclusive jurisdiction of all matters arising out of, arising in or related to,
the Chapter 11 Cases to the fullest extent permitted by applicable law,
including, without limitation, jurisdiction to all such matters set forth in
Section 12.01 of the Prepackaged Plan.
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(b) Non-Exclusive Jurisdiction of Bankruptcy Court.
33. Following the Effective Date, the Bankruptcy Court will retain
non-exclusive jurisdiction of the Chapter 11 Cases to the fullest extent
permitted by applicable law, including, without limitation, jurisdiction to all
such matters set forth in Section 12.02 of the Prepackaged Plan.
T. Miscellaneous.
34. On or prior to the Effective Date, the Debtors shall pay all fees
payable pursuant to 28 U.S.C. section 1930.
35. The failure to reference or discuss any particular provision of the
Prepackaged Plan in this Order shall have no effect on the validity, binding
effect, or enforceability of such provision and such provision shall have the
same validity, binding effect, and enforceability as every other provision of
the Prepackaged Plan.
36. Pursuant to section 1125 of the Bankruptcy Code, the Debtors and the
Releasees have, and upon Confirmation of the Prepackaged Plan shall be deemed to
have, transmitted the solicitation materials and solicited acceptances and
rejections of the Prepackaged Plan in good faith and in compliance with the
applicable provisions of the Bankruptcy Code and the Debtors and the Releasees
(and each of their respective Affiliates, officers, directors, employees,
consultants, agents, advisors, members, attorneys, accountants, financial
advisors, other representatives and Professionals), have participated in good
faith and in compliance with the applicable provisions of the Bankruptcy Code in
the offer, issuance, sale, and purchase of the securities offered and sold under
the Prepackaged Plan, and, to the fullest extent permitted under section 1125 of
the Bankruptcy Code, are not, and on account of such offer, issuance, sale,
solicitation, and/or purchase will not be, liable at any time for the violation
of any applicable law, rule, or regulation governing
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the solicitation of acceptances or rejections of the Prepackaged Plan or the
offer, issuance, sale, or purchase of the securities offered and sold under the
Prepackaged Plan.
37. To the fullest extent permitted under section 1146(c) of the Bankruptcy
Code, the issuance, transfer or exchange of a security under the Prepackaged
Plan or the making or delivery or recording of an instrument of transfer under
the Prepackaged Plan shall not be taxed under any law imposing a stamp tax or
similar tax. Consistent with the foregoing, each recorder of deeds or similar
official for any county, city or governmental unit in which any instrument
hereunder is to be recorded is hereby ordered and directed to accept such
instrument, without requiring the payment of any stamp tax or similar tax.
38. The offering, issuance and distribution of the New ICSL Common Stock to
Holders of Class 4 Claims and Class 6 Interests are exempt from the registration
requirements of Section 5 of the Securities Act of 1933, as amended, and any and
all federal, state and local laws requiring the registration of an offer or sale
of such securities or the registration or licensing of an issuer, underwriter,
broker or dealer in such security.
U. Notice of Entry of Confirmation Order.
39. Pursuant to Bankruptcy Rules 2002(f)(7) and 3020(c), the Debtors shall
be, and hereby are, directed to serve a notice of the entry of this Confirmation
Order on all Holders of Claims or Interests to whom the notice of the
Confirmation Hearing was mailed, the United States Trustee, and the Indenture
Trustee no later than 30 days after the Confirmation Date; provided, however, if
within 30 days after the Confirmation Date this Court has entered a final decree
closing the Chapter 11 Cases pursuant to Rule 3022, the Reorganized Debtors are
authorized, in their discretion, to serve on the Persons and Entities identified
in this Paragraph above, a combined
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notice of entry of this Confirmation Order and entry of the final decree, in
lieu of separate notices, no later than 35 days after the Confirmation Date.
40. The Debtors shall be, and hereby are, directed to serve copies of this
Confirmation Order on each party that has filed a notice of appearance in the
Chapter 11 Cases and on each party who filed an objection or response to, or
statement or comment regarding the Prepackaged Plan, no later than 14 days after
the Confirmation Date.
41. No further notice of the entry of this Confirmation Order shall be
required.
V. Bar Date for Professionals.
42. Applications for compensation for services rendered and reimbursement
of expenses incurred by Professionals (A) from the latter of the Petition Date
or the date on which retention was approved through the Effective Date or (B) at
any time during the Chapter 11 Cases when such compensation is sought pursuant
to sections 503(b)(3) through (b)(5) of the Bankruptcy Code, shall be Filed no
later than forty-five (45) days after the Effective Date or such later date as
the Bankruptcy Court approves, and shall be served on (i) the Debtors, at the
addresses set forth in Section 13.10 of the Prepackaged Plan, (ii) counsel to
the Debtors, (iii) counsel to the Official Committee of Unsecured Creditors and
(iv) the Office of the United States Trustee, 601 Walnut Street, Curtis Center,
Suite 95ons that are not timely Filed will not be considered by the Court. The0
West, Philadelphia, Pennsylvania 19106. Applications that are not timely Filed
will not be considered by the Court. The
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Reorganized Debtors may pay any Professional fees and expenses incurred after
the Effective Date without any application to the Bankruptcy Court.
IT IS SO ORDERED.
Wilmington, Delaware
Dated: August 25, 2000
/s/ Peter J. Walsh ________________
THE HONORABLE PETER J. WALSH, CHIEF JUDGE
UNITED STATES BANKRUPTCY COURT
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