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Exhibit 2.2
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
Chapter 11
In re: )
) Case No. 00-2969 (PJW)
PRIME SUCCESSION, INC., et al., )
-- --
) (Jointly Administered)
)
Debtors. )
JOINT PLAN OF REORGANIZATION OF PRIME
SUCCESSION HOLDINGS, INC. AND PRIME SUCCESSION, INC. AND
ITS SUBSIDIARIES UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
Alan W. Kornberg
Jeffrey D. Saferstein
1285 Avenue of the Americas
New York, New York 10019-6064
(212) 373-3000
-and-
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Pauline K. Morgan
Michael Nestor
1110 N. Market Street
P.O. Box 391
Rodney Square North, 11th Floor
Wilmington, Delaware 19801
(302) 571-6600
Attorneys for the Debtors
Dated: Wilmington, Delaware
July 12, 2000
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Prime Succession Holdings, Inc., Prime Succession, Inc., Aaron
Cremation & Burial Services, Inc., Aaron-Cremation & Burial Services, P.C.,
Buckner-Rush Enterprises, Inc., Bury-Pine Funeral Home, Inc., Pine Funeral Home,
Inc., Clary-Godwin Funeral Home, Inc., Clayton Frank & Sons, Inc., Comander
Funeral Home, Inc., Cremation Society of America, Incorporated, Fraser Funeral
Home, Inc., Fred Hunter Memorial Services, Inc., Grotewold Simi Valley Mortuary,
Inc., Hughes Funeral Chapel, J&W, Inc., John A. Beck Company, Lambert
Corporation, Inc., McWane Family Funeral Home, Inc., Neal-Tarpley, Inc., Prime
Business Solutions, Inc., Prime Business Solutions of Kentucky, Inc., Prime
Enterprises of California, Inc., Prime Holdings of Arkansas, Inc., Prime
Holdings of California, Inc., Prime Holdings of Minnesota, Inc., Prime Holdings
of Nebraska, Inc., Prime Holdings of Ohio, Inc., Prime Holdings of West
Virginia, Inc., Prime Indiana Limited Partnership, Prime Succession of Alabama,
Inc., Prime Succession of Arizona, Inc., Prime Succession of Arkansas, Inc.,
Prime Succession of California, Inc., Prime Succession of Florida, Inc., Prime
Succession of Georgia, Inc., Prime Succession of Illinois, Inc., Prime
Succession of Iowa, Inc., Prime Succession of Kentucky, Inc., Prime Succession
of Minnesota, Inc., Prime Succession of Missouri, Inc., Prime Succession of
Nebraska, Inc., Prime Succession of New York, Inc., Prime Succession of
Tennessee, Inc., Prime Succession of Texas, Inc., Prime Succession Partners,
Inc., Roselawn Memorial Gardens, Inc., Rostad Mortuary, Inc., Talisman
Enterprises, Inc., The Funeral Outlet Store, Inc., and Whitney & Murphy Funeral
Homes, Inc. propose the following joint plan of reorganization under section
1121(a) of the Bankruptcy Code.
I.
DEFINITIONS AND CONSTRUCTION OF TERMS
A. DEFINITIONS. Unless otherwise defined herein, or the
context otherwise requires, the following terms shall have the respective
meanings set forth below:
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ADMINISTRATIVE CLAIM means any right to payment constituting a
cost or expense of administration of the
Chapter 11 Cases of a kind specified under
section 503(b) of the Bankruptcy Code and
entitled to priority under section
507(a)(1), 507(b) or 1114(e)(2) of the
Bankruptcy Code, including, without
limitation, any actual and necessary costs
and expenses of preserving the Debtors'
estates, any actual and necessary costs and
expenses of operating the Debtors'
businesses, any indebtedness or obligations
incurred or assumed by the Debtors in
Possession in connection with the conduct of
their businesses, including, without
limitation, for the acquisition or lease of
property or an interest in property or the
rendition of services, all compensation and
reimbursement of expenses to the extent
awarded by the Court under sections 330, 331
or 503 of the Bankruptcy Code, any fees or
charges assessed against the Debtors'
estates under section 1930 of chapter 123 of
title 28 of the United States Code, and DIP
Facility Claims.
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ALLOWED CLAIM OR ALLOWED INTEREST means, with reference to any Claim or Equity
Interest, (a) any Claim against or Equity
Interest in the Debtors which has been
listed by the Debtors in their Schedules, as
such Schedules may be amended by the Debtors
from time to time in accordance with
Bankruptcy Rule 1009, as liquidated in
amount and not disputed or contingent, and
with respect to which no contrary proof of
claim or interest has been filed, (b) any
Claim or Equity Interest specifically
allowed under the Plan, (c) any Claim or
Equity Interest which is not Disputed or (d)
any Claim or Equity Interest the amount or
existence of which, if Disputed, (i) has
been determined by a Final Order of a court
of competent jurisdiction other than the
Court, or (ii) has been allowed by Final
Order of the Court; provided, however, that
any Claims or Equity Interests allowed
solely for the purpose of voting to accept
the Plan pursuant to an order of the Court
shall not be considered "Allowed Claims" or
"Allowed Equity Interests" hereunder.
AMENDED PRIME BY-LAWS means the Amended and Restated By-Laws of
Reorganized Prime, which shall be in
substantially the form contained in the
Plan Supplement.
AMENDED PRIME CERTIFICATE OF means the amended and restated Certificate
INCORPORATION of Incorporation of Reorganized Prime, which
shall be in substantially the form contained
in the Plan Supplement.
AMENDED PRIME HOLDINGS BY-LAWS means the Amended and Restated By-Laws of
Reorganized Prime Holdings, which shall be
in substantially the form contained in the
Plan Supplement.
AMENDED PRIME HOLDINGS CERTIFICATE means the amended and restated Certificate
OF INCORPORATION of Incorporation of Reorganized Prime
Holdings which shall be in substantially the
form contained in the Plan Supplement.
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AMENDED SUBSIDIARIES BY-LAWS means the Amended and Restated By-Laws of
the Reorganized Subsidiaries, which shall be
in substantially the form contained in the
Plan Supplement.
AMENDED SUBSIDIARIES CERTIFICATES means the amended and restated Certificates
OF INCORPORATION of Incorporation of the Reorganized
Subsidiaries, which shall be in
substantially the form contained in the Plan
Supplement.
AMENDED SUBSIDIARY LIMITED means the amended and restated Limited
PARTNERSHIP AGREEMENT Partnership Agreement of Prime Indiana
Limited Partnership, which shall be in
substantially the form contained in the Plan
Supplement.
BALLOTS means each of the ballot forms distributed
with the Disclosure Statement to each holder
of an Impaired Claim or Equity Interest
(other than to holders not entitled to vote
on the Plan) upon which is to be indicated,
among other things, acceptance or rejection
of the Plan.
BANKRUPTCY CODE means title 11 of the United States Code, 11
U.S.C. Section 101 et seq., as in effect
on the date hereof.
BANKRUPTCY COURT means the United States Bankruptcy Court for
the District of Delaware or such other court
as may have jurisdiction over the Chapter 11
Cases.
BANKRUPTCY RULES means the Federal Rules of Bankruptcy
Procedure as promulgated by the United
States Supreme Court under section 2075 of
title 28 of the United States Code, and
local rules of the Court, as the context may
require.
BUSINESS DAY means any day on which commercial banks are
open for business, and not authorized to
close, in the City of New York, New York,
except any day designated as a legal holiday
by Bankruptcy Rule 9006(a).
CASH means legal tender of the United States of
America.
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CAUSES OF ACTION means all claims, choses in action and
causes of action (including those assertable
derivatively), liabilities, obligations,
suits, debts, sums of money, damages,
demands, judgments, whether known or
unknown, now owned or hereafter acquired by
the Debtors, and the Cash and non-Cash
proceeds thereof, whether arising under the
Bankruptcy Code or other Federal, state or
foreign law, in equity or otherwise,
including, without limitation, any causes of
action arising under sections 510, 544, 547,
548, 549, 550, 551 or any other section of
the Bankruptcy Code.
CHAPTER 11 CASES means the chapter 11 cases commenced by the
Debtors.
COLLATERAL means any property or interest in property
of the Debtors' estates subject to a Lien to
secure the payment or performance of a
Claim, which Lien is not subject to
avoidance under the Bankruptcy Code or
otherwise invalid under the Bankruptcy Code
or applicable state law.
CONFIRMATION DATE means the date on which the Confirmation
Order is entered by the Court.
CONFIRMATION HEARING means the hearing to consider confirmation
of the Plan pursuant to section 1128 of the
Bankruptcy Code, as it may be adjourned or
continued from time to time.
CONFIRMATION ORDER means the order entered by the Court
confirming the Plan pursuant to section 1129
of the Bankruptcy Code.
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COURT means, (a) the United States Bankruptcy
Court for the District of Delaware, having
jurisdiction over the Chapter 11 Cases; (b)
to the extent there is no reference pursuant
to section 157 of title 28 of the United
States Code, the United States District
Court for the District of Delaware; and (c)
any other court having jurisdiction over the
Chapter 11 Cases.
CREDITORS COMMITTEE means the Official Committee of Unsecured
Creditors appointed by the United States
Trustee in the Chapter 11 Cases, as
constituted from time to time.
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DEBTORS means Prime Succession Holdings, Inc., Prime
Succession, Inc., Aaron Cremation & Burial
Services, Inc., Aaron-Cremation & Burial
Services, P.C., Buckner-Rush Enterprises,
Inc., Bury-Pine Funeral Home, Inc., Pine
Funeral Home, Inc., Clary-Godwin Funeral
Home, Inc., Clayton Frank & Sons, Inc.,
Comander Funeral Home, Inc., Cremation
Society of America, Incorporated, Fraser
Funeral Home, Inc., Fred Hunter Memorial
Services, Inc., Grotewold Simi Valley
Mortuary, Inc., Hughes Funeral Chapel, J&W,
Inc., John A. Beck Company, Lambert
Corporation, Inc., McWane Family Funeral
Home, Inc., Neal-Tarpley, Inc., Prime
Business Solutions, Inc., Prime Business
Solutions of Kentucky, Inc., Prime
Enterprises of California, Inc., Prime
Holdings of Arkansas, Inc., Prime Holdings
of California, Inc., Prime Holdings of
Minnesota, Inc., Prime Holdings of Nebraska,
Inc., Prime Holdings of Ohio, Inc., Prime
Holdings of West Virginia, Inc., Prime
Indiana Limited Partnership, Prime
Succession of Alabama, Inc., Prime
Succession of Arizona, Inc., Prime
Succession of Arkansas, Inc., Prime
Succession of California, Inc., Prime
Succession of Florida, Inc., Prime
Succession of Georgia, Inc., Prime
Succession of Illinois, Inc., Prime
Succession of Iowa, Inc., Prime Succession
of Kentucky, Inc., Prime Succession of
Minnesota, Inc., Prime Succession of
Missouri, Inc., Prime Succession of
Nebraska, Inc., Prime Succession of New
York, Inc., Prime Succession of Tennessee,
Inc., Prime Succession of Texas, Inc., Prime
Succession Partners, Inc., Roselawn Memorial
Gardens, Inc., Rostad Mortuary, Inc.,
Talisman Enterprises, Inc., The Funeral
Outlet Store, Inc., and Whitney & Murphy
Funeral Homes, Inc.
DEBTORS IN POSSESSION means the Debtors in their capacity as
debtors in possession in the Chapter 11
Cases pursuant to sections 1107(a) and 1108
of the Bankruptcy Code.
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DIP AGENTS means The Bank of Nova Scotia and Goldman
Sachs Credit Partners, L.P. in their
capacity as agents under the DIP Credit
Documents.
DIP CREDIT AGREEMENT means the Debtors in Possession Credit and
Guaranty Agreement dated as of July__, 2000
among Prime Succession, Inc., as borrower,
the parent and subsidiaries of the borrower
named therein, as guarantors, the DIP
Lenders and Goldman Sachs Credit Partners,
L.P., and The Bank of Nova Scotia, as DIP
Agents.
DIP CREDIT DOCUMENTS means the DIP Credit Agreement and any and
all documents executed in connection
therewith, including, without limitation,
all security agreements, pledge agreements
and mortgages.
DIP CREDIT FACILITY means the postpetition financing facility in
the committed amount of $10,000,000 provided
by the DIP Lenders.
DIP FACILITY CLAIMS means all Claims arising under or relating
to the DIP Credit Documents and/or the DIP
Credit Facility, which shall be paid in full
on the Effective Date in accordance with the
terms of the DIP Credit Facility.
DIP FACILITY ORDER means, collectively, the interim order
entered by the Bankruptcy Court on July __,
2000, and the final order entered by the
Bankruptcy Court on _______ __, 2000,
whereby the DIP Credit Facility was
authorized and approved.
DIP LENDERS means the Persons who are from time to time
lenders under the DIP Credit Documents.
DISCLOSURE STATEMENT means the written disclosure statement that
relates to this Plan, as approved by the
Court pursuant to section 1125 of the
Bankruptcy Code, as such disclosure
statement may be amended, modified or
supplemented from time to time.
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DISPUTED means any Claim, or Equity Interest, or any
portion thereof, that is not an Allowed
Claim or Allowed Interest, including, but
not limited to, Claims or Interests (a)(i)
that have not been Scheduled by the Debtors
or (ii) have been Scheduled at zero or as
contingent, unliquidated or disputed, or (b)
that are the subject of a proof of claim
that differs in nature, amount or priority
from the Debtors' Schedules, and (c) in
either case, the allowance or disallowance
of which is not yet the subject of a Final
Order.
EFFECTIVE DATE means the first Business Day on which all of
the conditions specified in Section XIII.B.1
of the Plan have been satisfied or waived in
accordance with Section XIII.B.2 of the
Plan; provided, however, that if a stay of
the Confirmation Order is in effect on such
date, the Effective Date will be the first
Business Day after such stay is no longer in
effect.
EQUITY INCENTIVE PLAN has the meaning assigned to such term in
Section V.E. of the Plan.
EQUITY INTEREST means Old Preferred Stock and Other Equity
Interests.
EXIT CREDIT FACILITY means the revolving credit and term loan
facility to be entered into as a means of
implementing the Plan, all as is more
specifically described in Article V.E. of
the Plan.
EXIT FACILITY DOCUMENTS means the documents to be entered into by
the Reorganized Debtors on the Effective
Date pursuant to which the Reorganized
Debtors will obtain financing to (i) fund
consummation of the Plan, (ii) pay in full
the DIP Financing Claims, (iii) pay in full
the Prepetition Lender Claims, and (iv) fund
certain working capital and general
corporate requirements of the Reorganized
Debtors.
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FINAL ORDER means an order or judgment of the Court, or
other court of competent jurisdiction, as
entered on the docket in the Chapter 11
Cases, the operation or effect of which has
not been stayed, reversed, vacated or
amended, and as to which order or judgment
(or any revision, modification, or amendment
thereof) the time to appeal, petition for
certiorari, or seek review or rehearing has
expired and as to which no appeal, petition
for certiorari, or petition for review or
rehearing was filed or, if filed, remains
pending.
GOVERNMENT has the meaning assigned to such term in
Section VIII.I.3 of the Plan.
IMPAIRED means, when used with reference to a Claim
or Equity Interest, a Claim or Equity
Interest that is impaired within the meaning
of section 1124 of the Bankruptcy Code.
INDENTURE TRUSTEE means United States Trust Company of New
York, in its capacity as trustee under the
Senior Subordinated Note Indenture.
INFORMAL COMMITTEE means the informal committee of certain
holders of Senior Subordinated Notes that
was formed prior to the Petition Date.
INITIAL DISTRIBUTION DATE means the Effective Date or as soon
thereafter as practicable.
INITIAL HOLDER means, (a) any person or entity who will
initially hold shares of New Common Stock on
the Effective Date, (b) any investment fund
for which any person thereof acts as
manager, (c) any partnership or other entity
for which any person thereof acts directly
or indirectly as a general partner, managing
member or controlling stockholder, and (d)
any person otherwise affiliated with any of
the foregoing individuals or entities.
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INTERCOMPANY CLAIMS means any Claim held by one of the Debtors
against any other Debtor, including, without
limitation, (a) any account reflecting
intercompany book entries by such Debtor
with respect to any other Debtor, (b) any
Claim not reflected in book entries that is
held by such Debtor, and (c) any derivative
Claim asserted or assertable by or on behalf
of such Debtor against any other Debtor.
LIEN has the meaning set forth in Section 101 of
the Bankruptcy Code.
NEW COMMON STOCK means the common stock of Reorganized Prime
Holdings, par value $.01 per share, to be
authorized and issued by Reorganized Prime
Holdings on the Effective Date pursuant to
the Plan.
NEW EXIT FINANCING FACILITY means the documents pursuant to which the
DOCUMENTS New Exit Financing Facility will be provided
to Reorganized Prime, and which shall be in
substantially the form contained in the Plan
Supplement.
NEW SENIOR MANAGEMENT EMPLOYMENT has the meaning assigned to such term in
CONTRACTS Section V.A.2. of the Plan.
NEW SENIOR SUBORDINATED NOTES means the promissory notes authorized and to
be issued pursuant to the Plan and the New
Senior Subordinated Notes Indenture, and
which shall be in substantially the form
contained in the Plan Supplement.
NEW SENIOR SUBORDINATED NOTES has the meaning assigned to such term in
INDENTURE Section V.C.2. of the Plan.
NEW SENIOR SUBORDINATED NOTES means the bank or trust company that will
INDENTURE TRUSTEE serve as trustee under the New Senior
Subordinated Notes Indenture.
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NEW WARRANTS means the warrants to purchase in the
aggregate 500,000 shares of New Common
Stock, which shall be issued pursuant to the
terms of the Warrant Agreement.
OLD PREFERRED STOCK means the 20,000 authorized shares of 10%
pay-in-kind cumulative preferred stock par
value $.01 issued by Prime Holdings and
outstanding on the Petition Date.
OTHER EQUITY INTEREST OR INTEREST means any share of common stock or other
instrument evidencing an ownership interest
in Prime Holdings, whether or not
transferable, and any option, warrant, or
right, contractual or otherwise, to acquire,
sell or subscribe for any such interest;
provided, however, that Other Equity
Interests shall not include Old Preferred
Stock.
OTHER GENERAL UNSECURED CLAIMS means an Unsecured Claim (other than a
Senior Subordinated Note Claim, Rejected
Former Owner Obligation, Other Rejected
Obligation or Trade Claim).
OTHER PRIORITY CLAIM means Claims entitled to priority pursuant
to section 507(a) of the Bankruptcy Code
(other than Administrative Claims and
Priority Tax Claims), including, without
limitation, certain allowed employee
compensation and benefit claims of the
Debtors' employees incurred within ninety
(90) and one hundred eighty (180) days,
respectively, prior to the Petition Date.
OTHER REJECTED OBLIGATIONS means any Unsecured Claim of any entity
against the Debtors arising from the
rejection pursuant to sections 365 or
1123(b) of the Bankruptcy Code of (a) a
lease of real or personal property entered
into with the Debtors, or any of them, or
(b) any other agreement with the Debtors, or
any of them.
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OTHER SECURED CLAIMS means any Claim, other than a DIP Financing
Claim, to the extent reflected in the
Schedules or a proof of claim as a Secured
Claim, which is secured by a Lien on
Collateral to the extent of the value of
such Collateral, as determined in accordance
with section 506(a) of the Bankruptcy Code,
or, in the event that such Claim is subject
to setoff under section 553 of the
Bankruptcy code, to the extent of such
setoff.
PETITION DATE means July __, 2000 the date on which the
Debtors filed their petitions for relief
commencing the Chapter 11 Cases.
PERSON means an individual, corporation,
partnership, joint venture, association,
joint stock company, limited liability
company, limited liability partnership,
trust, estate, unincorporated organization
or other entity.
PLAN means this Plan, as it may be amended or
modified from time to time, together with
all addenda, exhibits, schedules or other
attachments, if any.
PLAN DOCUMENTS means the documents to be included in the
Plan Supplement.
PLAN SUPPLEMENT means the forms of documents specified in
Section X.M. of the Plan.
PREPETITION CREDIT AGREEMENT means that certain Credit Agreement dated as
of August 26, 1996 among Prime, Prime
Holdings, the Prepetition Lenders, The Bank
of Nova Scotia, as administrative agent and
Goldman Sachs Credit Partners, L.P., as
syndication agent.
PREPETITION CREDIT DOCUMENTS means the Prepetition Credit Agreement and
any and all documents executed in connection
therewith, including, without limitation,
all security agreements, pledge agreements
and mortgages.
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PREPETITION CREDIT FACILITY AGENTS means The Bank of Nova Scotia and Goldman
Sachs Credit Partners, L.P. in their
capacity as agents under the Prepetition
Credit Documents.
PREPETITION LENDER CLAIMS means the claims of the Prepetition Lenders
arising under the Prepetition Credit
Agreement.
PREPETITION LENDERS means the Persons who are from time to time
lenders under the Prepetition Credit
Documents.
PRIME means Prime Succession, Inc.
PRIME EQUITY INTERESTS means any share of common stock or other
instrument evidencing a present ownership
interest in Prime, whether or not
transferrable, and any options, warrants or
rights contractual or otherwise, to acquire
any such interest.
PRIME HOLDINGS means Prime Succession Holdings, Inc.
PRO RATA means, at any time, the proportion that (x)
with respect to Claims, the amount of a
Claim in a particular Class bears to the
aggregate amount of all Claims (including
Disputed Claims) in such Class and (y) with
respect to Equity Interests, the number of
shares or other equity interests held by a
particular holder in a particular Class
bears to the aggregate number of all shares
and other equity interests in a particular
Class, unless in each case the Plan provides
otherwise.
PRIORITY TAX CLAIM means any unsecured Claim held by a
governmental unit entitled to a priority in
right of payment under section 507(a)(8) of
the Bankruptcy Code.
QUARTER means the period beginning on the Effective
Date and ending on the immediately
succeeding June 30, September 30, December
31 or March 31, and each three-month period
thereafter, as the context may require.
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RECORD DATE means the record date for purposes of making
distributions under the Plan on account of
Allowed Claims and Allowed Equity Interests,
which date shall be the Confirmation Date.
REJECTED FORMER OWNER OBLIGATIONS means any Unsecured Claim of an entity
against the Debtors arising from (a) the
rejection pursuant to sections 365 or
1123(b) of the Bankruptcy Code of (i) a
non-compete agreement with the Debtors, or
any of them, (ii) a consulting agreement
with the Debtors, or any of them, or (iii) a
lease of real or personal property entered
into by the Debtors, or any of them, with a
former owner of any of the Debtors'
property, or (b) a note or other financial
instrument entered into by the Debtors, or
any of them, in connection with the purchase
by the Debtors, or any of them, before the
Petition Date, of a funeral home or other
property.
RELEASED PARTIES has the meaning assigned to such term in
Section VIII.H. of the Plan.
REORGANIZED DEBTORS means the Debtors, or any successors thereto
by merger, consolidation or otherwise, on
and after the Effective Date.
REORGANIZED PRIME means Prime, or any successors thereto by
merger, consolidation, or otherwise, on and
after the Effective Date.
REORGANIZED PRIME HOLDINGS means Prime Holdings, or any successors
thereto by merger, consolidation or
otherwise, on and after the Effective Date.
REORGANIZED SUBSIDIARIES means the Subsidiaries, or any successors
thereto by merger, consolidation, or
otherwise, on and after the Effective Date.
RESERVE has the meaning assigned to such term in
Section VII.C.2(a)(i) of the Plan.
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SCHEDULES means the schedules of assets and
liabilities, statements of financial
affairs, and lists of holders of Claims and
Equity Interests filed with the Court by the
Debtors, including any amendments or
supplements thereto.
SCHEDULED means, with respect to any Claim or Equity
Interest, the status and amount, if any, of
such Claim or Equity Interest as set forth
in the Schedules.
SECURED CLAIM means a Claim that is secured by a Lien on
property or interests in property, in which
the Debtors have an interest, to the extent
of the value as of the Effective Date, or
such other date as may be established by the
Court, of such interest or Lien determined
by a Final Order of the Court pursuant to
section 506 of the Bankruptcy Code or as
otherwise agreed upon in writing by the
Debtors and the holder of such Claim.
SENIOR SUBORDINATED NOTES means the 10 3/4% Notes, due August 15,
2004, of Prime issued and outstanding under
the Senior Subordinated Note Indenture.
SENIOR SUBORDINATED NOTE CLAIMS means the unsecured Claims of the Senior
Subordinated Noteholders (excluding the fees
and expenses of the Indenture Trustee).
SENIOR SUBORDINATED NOTEHOLDERS means the holders of the Senior Subordinated
Notes.
SENIOR SUBORDINATED NOTE INDENTURE means that certain Indenture, dated as of
August 15, 1996, between Prime, as issuer,
and United States Trust Company of New York,
as Trustee, pursuant to which the Senior
Subordinated Notes were issued, together
with any amendments or supplements thereto.
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SUBSEQUENT DISTRIBUTION DATE means the twentieth day after the end of the
Quarter following the Quarter in which the
Initial Distribution Date occurs and the
twentieth day after the end of each such
subsequent Quarter.
SUBSIDIARIES means Aaron Cremation & Burial Services,
Inc., Aaron-Cremation & Burial Services,
P.C., Buckner-Rush Enterprises, Inc.,
Bury-Pine Funeral Home, Inc., Pine Funeral
Home, Inc., Clary-Godwin Funeral Home, Inc.,
Clayton Frank & Sons, Inc., Comander Funeral
Home, Inc., Cremation Society of America,
Incorporated, Fraser Funeral Home, Inc.,
Fred Hunter Memorial Services, Inc.,
Grotewold Simi Valley Mortuary, Inc., Hughes
Funeral Chapel, J&W, Inc., John A. Beck
Company, Lambert Corporation, Inc., McWane
Family Funeral Home, Inc., Neal-Tarpley,
Inc., Prime Business Solutions, Inc., Prime
Business Solutions of Kentucky, Inc., Prime
Enterprises of California, Inc., Prime
Holdings of Arkansas, Inc., Prime Holdings
of California, Inc., Prime Holdings of
Minnesota, Inc., Prime Holdings of Nebraska,
Inc., Prime Holdings of Ohio, Inc., Prime
Holdings of West Virginia, Inc., Prime
Indiana Limited Partnership, Prime
Succession of Alabama, Inc., Prime
Succession of Arizona, Inc., Prime
Succession of Arkansas, Inc., Prime
Succession of California, Inc., Prime
Succession of Florida, Inc., Prime
Succession of Georgia, Inc., Prime
Succession of Illinois, Inc., Prime
Succession of Iowa, Inc., Prime Succession
of Kentucky, Inc., Prime Succession of
Minnesota, Inc., Prime Succession of
Missouri, Inc., Prime Succession of
Nebraska, Inc., Prime Succession of New
York, Inc., Prime Succession of Tennessee,
Inc., Prime Succession of Texas, Inc., Prime
Succession Partners, Inc., Roselawn Memorial
Gardens, Inc., Rostad Mortuary, Inc.,
Talisman Enterprises, Inc., The Funeral
Outlet Store, Inc. and Whitney & Murphy
Funeral Homes, Inc.
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SUBSIDIARY EQUITY INTERESTS means any share of common stock or other
instrument evidencing a present ownership
interest in any of the Subsidiaries, whether
or not transferable, and any options,
warrants or rights, contractual or
otherwise, to acquire any such interest.
TRADE CLAIM means an Unsecured Claim (other than a
Senior Subordinated Note Claim, Rejected
Former Owner Obligation, Other Rejected
Obligation or Other General Unsecured Claim)
of any entity against the Debtors for goods
and services provided to the Debtors in the
ordinary course of the Debtors' business;
provided, however, that such entity has
continued to provide goods and services to
the Debtors before and after the Petition
Date on customary terms and credit or as
otherwise acceptable to the Debtors
TRANSFER AGENT means the transfer agent for the New Common
Stock.
UNSECURED CLAIM means any Claim that is not a Secured Claim,
Administrative Claim, Priority Tax Claim or
Other Priority Claim.
WARRANT AGENT means the agent for the New Warrants.
WARRANT AGREEMENT means a warrant agreement pursuant to which
the New Warrants will be issued, which shall
be in substantially the form contained in
the Plan Supplement.
B. INTERPRETATION, APPLICATION OF DEFINITIONS AND RULES
OF CONSTRUCTION.
Wherever from the context it appears appropriate, each term
stated in either the singular or the plural shall include both the singular and
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter, such meanings to be applicable to
both the singular and plural forms of the terms defined. Capitalized terms in
the Plan that are not defined herein shall have the same meaning assigned to
such terms by the Bankruptcy Code or Bankruptcy Rules, as the case may be. The
words "herein," "hereof," and "hereunder" and other words of similar import
refer to the Plan as a
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whole and not to any particular section or subsection in the Plan unless
expressly provided otherwise. All gender references shall be deemed to refer to
both genders. The words "includes" and "including" are not limiting and mean
that the things specifically identified are set forth for purposes of
illustration, clarity or specificity and do not in any respect qualify,
characterize or limit the generality of the class within which such things are
included. Captions and headings to articles, sections and exhibits are inserted
for convenience of reference only, are not a part of this Plan, and shall not be
used to interpret this Plan. The rules of construction set forth in section 102
of the Bankruptcy Code shall apply to this Plan. In computing any period of time
prescribed or allowed by this Plan, the provisions of Bankruptcy Rule 9006(a)
shall apply.
II.
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
A. INTRODUCTION.
All Claims and Equity Interests, except Administrative Claims
and Priority Tax Claims, are placed in the Classes set forth below. In
accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims
and Priority Tax Claims, as described below, have not been classified.
A Claim or Equity Interest is placed in a particular Class
only to the extent that the Claim or Equity Interest falls within the
description of that Class, and is classified in other Classes to the extent that
any portion of the Claim or Equity Interest falls within the description of such
other Classes. A Claim is also placed in a particular Class for the purpose of
receiving distributions pursuant to the Plan only to the extent that such Claim
is an Allowed Claim in that Class and such Claim has not been paid, released, or
otherwise settled prior to the Effective Date.
1. UNCLASSIFIED CLAIMS (NOT ENTITLED TO VOTE ON
THE PLAN).
(a) Administrative Claims.
(b) Priority Tax Claims.
2. UNIMPAIRED CLASSES OF CLAIMS (DEEMED TO HAVE
ACCEPTED THE PLAN AND, THEREFORE, NOT
ENTITLED TO VOTE ON THE PLAN).
(a) Class 1: Other Priority Claims.
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Class 1 consists of all Other Priority
Claims.
(b) Class 2: Other Secured Claims.
Class 2 consists of all Other Secured
Claims.
(c) Class 3: Trade Claims.
Class 3 consists of all Trade Claims.
3. IMPAIRED CLASSES OF CLAIMS AND EQUITY
INTERESTS (ENTITLED TO VOTE ON THE PLAN).
(a) Class 4: Prepetition Lender Claims.
Class 4 consists of all Prepetition Lender
Claims.
(b) Class 5: Senior Subordinated Note
Claims, Rejected Former Owner
Obligations, Other Rejected
Obligations and Other General
Unsecured Claims.
Class 5 consists of all Senior Subordinated
Note Claims, Rejected Former Owner
Obligations, Other Rejected Obligations and
Other General Unsecured Claims.
(c) Class 6: Old Preferred Stock.
Class 6 consists of all Old Preferred Stock.
(d) Class 7: Other Equity Interests.
Class 7 consists of all Other Equity
Interests.
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III.
TREATMENT OF ADMINISTRATIVE
EXPENSE CLAIMS AND PRIORITY TAX CLAIMS
A. ADMINISTRATIVE CLAIMS.
Except to the extent that any entity entitled to payment of
any Allowed Administrative Claim agrees to a different treatment, each holder of
an Allowed Administrative Claim shall receive Cash in an amount equal to such
Allowed Administrative Claim on the later of the Effective Date and the date
such Administrative Claim becomes an Allowed Administrative Claim, or as soon
thereafter as is practicable; provided, however, that Allowed Administrative
Claims representing liabilities incurred in the ordinary course of business by
the Debtors in Possession or liabilities arising under loans or advances to or
other obligations incurred by the Debtors in Possession (to the extent
authorized and approved by the Court if such authorization and approval was
required under the Bankruptcy Code) shall be paid in full and performed by the
Reorganized Debtors, as the case may be, in the ordinary course of business in
accordance with the terms and subject to the conditions of any agreements
governing, instruments evidencing, or other documents relating to, such
transactions. On the Effective Date, all obligations of the Debtors in
Possession to the DIP Lenders under the DIP Credit Documents shall be paid in
full in cash in immediately available funds or otherwise satisfied in a manner
acceptable to the DIP Lenders in their sole discretion in accordance with the
terms of the DIP Credit Documents. Such payment shall be made to the DIP Agents
for further distribution to the holders of the DIP Facility Claims. Upon
compliance with the foregoing sentence, all Liens granted to secure such
obligations shall be deemed canceled and shall be of no further force and effect
without the necessity of any further action on behalf of the DIP Lenders or the
Debtors.
B. PROFESSIONAL COMPENSATION AND REIMBURSEMENT CLAIMS.
All entities seeking an award by the Court of compensation for
services rendered or reimbursement of expenses incurred through and including
the Confirmation Date under sections 503(b)(2), 503(b)(3), 503(b)(4) or
503(b)(5) of the Bankruptcy Code (a) shall file their respective final
applications for allowance of compensation for services rendered and
reimbursement of expenses incurred through the Confirmation Date by the date
that is 30 days after the Effective Date or such other date as may be fixed by
the Court and (b) if granted, such an award by the Court shall be paid in full
in such amounts as are awarded by the Court (i) on the date such Administrative
Claim becomes an Allowed Administrative Claim, or as soon thereafter as is
practicable or (ii) upon such other terms as may be mutually agreed upon between
such holder of an Administrative Claim and the Debtors in Possession or, on and
after the Effective Date, the Reorganized Debtors. In the
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event that the professionals representing the Informal Committee are not
retained by the Official Creditors Committee, if one is appointed, the fees and
expenses of the Informal Committee's professionals shall satisfy the
requirements of sections 503(b) of the Bankruptcy Code.
C. PRIORITY TAX CLAIMS.
Except to the extent that a holder of an Allowed Priority Tax
Claim has been paid by the Debtors prior to the Effective Date or agrees to a
different treatment, each holder of an Allowed Priority Tax Claim shall receive,
at the sole option of the Reorganized Debtors, (a) Cash in an amount equal to
such Allowed Priority Tax Claim on the later of the Effective Date and the date
such Priority Tax Claim becomes an Allowed Priority Tax Claim, or as soon
thereafter as is practicable, or (b) equal quarterly Cash payments in an
aggregate amount equal to such Allowed Priority Tax Claim, together with
interest at a fixed annual rate equal to the statutory rate provided for under
applicable federal, state or local law, over a period through the sixth
anniversary of the date of assessment of such Allowed Priority Tax Claim. Each
Priority Tax Claim which is not payable on or before the Effective Date will
survive confirmation of the Plan, remain unaffected thereby, and be paid as and
when due, except to the extent that a holder of such Claim agrees to a different
treatment.
IV.
TREATMENT OF CLAIMS AND
EQUITY INTERESTS
A. CLASS 1 - OTHER PRIORITY CLAIMS.
1. DISTRIBUTIONS. Except to the extent that a
holder of an Allowed Other Priority Claim agrees to a different treatment, in
full and final satisfaction of such claim, each holder of an Allowed Other
Priority Claim shall receive payment in full in Cash on the later of the
Effective Date and the date when such Other Priority Claim becomes an Allowed
Claim, or as soon thereafter as practicable.
2. IMPAIRMENT AND VOTING. Class 1 shall be
unimpaired under the Plan. Holders of Allowed Claims in Class 1 are presumed to
accept the Plan and are not entitled to vote to accept or reject the Plan.
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B. CLASS 2 - OTHER SECURED CLAIMS.
1. DISTRIBUTIONS. Except to the extent that a
holder of an Allowed Other Secured Claim agrees to a different treatment, at the
sole option of the Debtors, in full and final satisfaction of such Claim, (i)
each Allowed Other Secured Claim shall be reinstated and rendered unimpaired in
accordance with section 1124(2) of the Bankruptcy Code, notwithstanding any
contractual provision or applicable nonbankruptcy law that entitles the holder
of an Allowed Other Secured Claim to demand or receive payment of such Allowed
Other Secured Claim prior to the stated maturity of such Allowed Other Secured
Claim from and after the occurrence of a default, (ii) each holder of an Allowed
Other Secured Claim shall receive Cash in an amount equal to such Allowed Other
Secured Claim, including any interest on such Allowed Other Secured Claim
required to be paid pursuant to section 506(b) of the Bankruptcy Code, on the
later of the Effective Date and the date such Allowed Other Secured Claim
becomes an Allowed Other Secured Claim, or as soon thereafter as is practicable,
or (iii) each holder of an Allowed Other Secured Claim shall receive the
collateral securing its Allowed Other Secured Claim and any interest on such
Allowed Other Secured Claim required to be paid pursuant to section 506(b) of
the Bankruptcy Code, in full and complete satisfaction of such Allowed Other
Secured Claim on the later of the Effective Date and the date such Allowed Other
Secured Claim becomes an Allowed Other Secured Claim, or as soon thereafter as
is practicable.
2. IMPAIRMENT AND VOTING. Class 2 shall be
unimpaired under the Plan. The holders of Allowed Claims in Class 2 are presumed
to accept the Plan and are not entitled to vote to accept or reject the Plan.
C. CLASS 3 - TRADE CLAIMS.
1. DISTRIBUTIONS. To the extent not satisfied
by the Debtors in the ordinary course of business, in full and final
satisfaction of such claims, the legal, equitable and contractual rights to
which such Allowed Trade Claim entitles the holder thereof shall be left
unaltered and, accordingly, shall be satisfied on the latest of (i) the
Effective Date, (ii) the date such Trade Claim becomes an Allowed Claim, (iii)
the date an Allowed Trade Claim becomes due and payable in the ordinary course
of business consistent with the Debtors' ordinary payment practices, and (iv)
the date on which the Debtors and the holder of such Allowed Trade Claim agree
in writing.
2. IMPAIRMENT AND VOTING. Class 3 shall be
unimpaired under the Plan. The holders of Allowed Claims in Class 3 are presumed
to accept the Plan and are not entitled to vote to accept or reject the Plan.
D. CLASS 4 - PREPETITION LENDER CLAIMS.
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1. ALLOWANCE. The Prepetition Lender Claims are
deemed to be fully allowed in the aggregate amount of $108,500,000.
2. DISTRIBUTIONS. Except to the extent that the
holders of the Prepetition Lender Claims agree to different treatment, on the
Effective Date, or as soon thereafter as practicable, in full and final
satisfaction of such Claims, each holder of an allowed Prepetition Lender Claim
shall receive payment in full in Cash.
3. IMPAIRMENT AND VOTING. Class 4 is impaired
under the Plan. The holders of the Prepetition Lender Claims are entitled to
vote to accept or reject the Plan.
E. CLASS 5 - SENIOR SUBORDINATED NOTE CLAIMS, REJECTED
FORMER OWNER OBLIGATIONS, OTHER REJECTED OBLIGATIONS AND OTHER GENERAL UNSECURED
CLAIMS.
1. DISTRIBUTIONS. On the Effective Date, or as
soon thereafter as is practicable, in full and final satisfaction of such
Claims, each holder of an Allowed Senior Subordinated Note Claim, Rejected
Former Owner Obligation, Other Rejected Obligation and Other General Unsecured
Claims will receive its Pro Rata share of (i) $20 million of New Senior
Subordinated Notes; and (ii) 5,000,000 shares of New Common Stock. The Senior
Subordinated Note Claims shall be Allowed in the aggregate amount of
$109,854,000.
2. IMPAIRMENT AND VOTING. Class 5 is impaired
under the Plan. The holders of Allowed Claims in Class 5 are entitled to vote to
accept or reject the Plan.
F. CLASS 6 - OLD PREFERRED STOCK.
1. DISTRIBUTIONS. On the Effective Date or as
soon thereafter as practicable, each holder of Allowed Old Preferred Stock will
receive its Pro Rata share of New Warrants.
2. IMPAIRMENT AND VOTING. Class 6 is impaired
under the Plan. The holders of Allowed Old Preferred Stock are entitled to vote
to accept or reject the Plan.
G. CLASS 7 - OTHER EQUITY INTERESTS.
1. DISTRIBUTIONS. The holders of Class 7 Other
Equity Interests shall receive no distributions whatsoever on account of such
Other Equity Interests. All Other Equity Interests shall be canceled on the
Effective Date.
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2. IMPAIRMENT AND VOTING. Class 7 is impaired
under the Plan. As the holders of Other Equity Interests are receiving no
distributions they are conclusively presumed to have rejected the Plan and are
not entitled to vote to accept or reject the Plan.
V.
PROVISIONS REGARDING CORPORATE GOVERNANCE
AND MANAGEMENT OF THE REORGANIZED DEBTORS
A. DIRECTORS AND OFFICERS OF REORGANIZED PRIME HOLDINGS
AND REORGANIZED PRIME; AMENDED CERTIFICATES OF
INCORPORATION AND AMENDED BY-LAWS.
1. THE INITIAL BOARD OF DIRECTORS. The initial
boards of directors of Reorganized Prime Holdings and Reorganized Prime shall
consist of five (5) members, four (4) of whom shall be designated by the
Informal Committee whose names shall be disclosed on or before the date of the
Confirmation Hearing, and one (1) of whom shall be Gary Wright. The respective
Boards of Directors of Reorganized Prime Holdings and Reorganized Prime will
select a Chairman at their initial meeting.
2. MANAGEMENT OF REORGANIZED PRIME HOLDINGS AND
REORGANIZED PRIME. The officers of Prime Holdings and Prime immediately prior to
the Effective Date shall serve as the initial officers of Reorganized Prime
Holdings and Reorganized Prime, respectively, on and after the Effective Date.
Such officers shall serve in accordance with any employment agreement with
Reorganized Prime Holdings or Reorganized Prime and applicable nonbankruptcy
law, as the case may be. New employment agreements for Gary Wright, Prime's
President and Chief Executive Officer; Arthur Ansin, Prime's Chief Financial
Officer and Executive Vice President; Greg Hilgendorf, Prime's Senior Vice
President Funeral Operations; Brian Clary, Prime's Corporate Controller; and
Peter Cooper, Prime's General Counsel, to the extent such officers are to remain
employed by the Reorganized Debtors, shall be in the forms contained in the Plan
Supplement and shall become effective on the Effective Date (the "New Senior
Management Employment Contracts").
3. AMENDED PRIME HOLDINGS CERTIFICATE OF
INCORPORATION AND AMENDED PRIME HOLDINGS BY-LAWS. The adoption of the Amended
Prime Holdings Certificate of Incorporation and Amended Prime Holdings By-Laws
will be deemed to have occurred and be effective as of the Effective Date
without any further action by the directors or stockholders of the Debtors or
the Reorganized Debtors. The Amended Prime Holdings Certificate of Incorporation
will, among other things, contain appropriate provisions (i) governing the
authorization of up to 6,000,000
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shares of New Common Stock (up to 5,000,000 will be issued on the Effective
Date) that will be available for issuance and whose terms and conditions may be
established by the Board of Directors, (ii) prohibiting the issuance of
nonvoting equity securities as required by section 1123(a)(6) of the Bankruptcy
Code, and (iii) implementing such other matters as stockholders and directors of
Reorganized Prime Holdings believe are necessary and appropriate to effectuate
the terms and conditions of the Plan. On or prior to the Effective Date, Prime
Holdings will file with the Secretary of State of the State of Delaware, in
accordance with sections 103 and 303 of the Delaware General Corporation Law,
the Amended Prime Holdings Certificate of Incorporation and such certificate
shall be the certificate of incorporation for Reorganized Prime Holdings. The
Amended Prime Holdings Certificate of Incorporation shall be substantially in
the form contained in the Plan Supplement.
4. AMENDED PRIME CERTIFICATE OF INCORPORATION
AND AMENDED PRIME BY-LAWS. The adoption of the Amended Prime Certificate of
Incorporation and Amended Prime By-Laws will be deemed to have occurred and be
effective as of the Effective Date without any further action by the directors
or stockholders of the Debtors or the Reorganized Debtors. The Amended Prime
Certificate of Incorporation will, among other things, contain appropriate
provisions (i) prohibiting the issuance of nonvoting equity securities as
required by section 1123(a)(6) of the Bankruptcy Code, and (ii) implementing
such other matters as stockholders and directors of Reorganized Prime believe
are necessary and appropriate to effectuate the terms and conditions of the
Plan. On or prior to the Effective Date, Prime will file with the Secretary of
State of the State of Delaware, in accordance with sections 103 and 303 of the
Delaware General Corporation Law, the Amended Prime Certificate of Incorporation
and such certificate shall be the certificate of incorporation for Reorganized
Prime. The Amended Prime Certificate of Incorporation shall be substantially in
the form contained in the Plan Supplement.
B. DIRECTORS AND OFFICERS OF THE REORGANIZED
SUBSIDIARIES.
1. THE INITIAL BOARD OF DIRECTORS. The initial
board of directors of the Reorganized Subsidiaries shall be Gary Wright and
Arthur Ansin.
2. MANAGEMENT OF THE REORGANIZED SUBSIDIARIES.
The officers of the Subsidiaries immediately prior to the Effective Date shall
serve as the initial officers of the Reorganized Subsidiaries on and after the
Effective Date. Such officers shall serve in accordance with any employment
agreement with the Reorganized Subsidiaries and applicable nonbankruptcy law.
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3. AMENDED SUBSIDIARIES CERTIFICATES OF
INCORPORATION AND AMENDED SUBSIDIARIES BY-LAWS. The adoption of the Amended
Subsidiaries Certificates of Incorporation and Amended Subsidiaries By-Laws will
be deemed to have occurred and be effective as of the Effective Date without any
further action by the directors or stockholders of the Debtors, the Reorganized
Debtors, the Subsidiaries or the Reorganized Subsidiaries, as the case may be.
The Amended Subsidiaries Certificates of Incorporation will, among other things,
contain appropriate provisions (i) prohibiting the issuance of nonvoting equity
securities as required by section 1123(a)(6) of the Bankruptcy Code, and (ii)
implementing such other matters as stockholders and directors of the Reorganized
Subsidiaries believe are necessary and appropriate to effectuate the terms and
conditions of the Plan. On or prior to the Effective Date, the Subsidiaries will
file with the Secretary of State in the State in which they are incorporated,
the Amended Subsidiaries Certificate of Incorporation and such certificates
shall be the certificates of incorporation for the Reorganized Subsidiaries. The
Amended Subsidiaries Certificates of Incorporation shall be substantially in the
forms contained in the Plan Supplement.
C. SECURITIES TO BE ISSUED PURSUANT TO THE PLAN.
1. NEW COMMON STOCK. On the Effective Date,
Reorganized Prime Holdings will issue 5,000,000 shares of New Common Stock
without further act or action under applicable law, regulation, rule or order.
Each share of New Common Stock will entitle its holder to one vote. Holders of
New Common Stock will have the right to participate proportionately in any
dividends distributed by Reorganized Prime Holdings.
2. NEW SENIOR SUBORDINATED NOTES. The New
Senior Subordinated Notes will be issued by Reorganized Prime Holdings pursuant
to an indenture (the "New Senior Subordinated Notes Indenture"), which will be
qualified under the Trust Indenture Act of 1939, as amended. An indenture
trustee will be selected by Prime prior to the Confirmation Hearing. The New
Senior Subordinated Notes Indenture and the New Senior Subordinated Notes will
be in substantially the forms included in the Plan Supplement.
3. THE NEW WARRANTS. On the Effective Date,
Reorganized Prime Holdings will issue New Warrants to purchase 500,000 shares of
New Common Stock (without giving effect to any options that may be issued under
the Equity Incentive Plan) without further act or action under applicable law,
regulation, rule or order. The New Warrants will be in substantially the form
included in the Plan Supplement and will be issued pursuant to a Warrant
Agreement in substantially the form included in the Plan Supplement.
D. REORGANIZED PRIME HOLDINGS EQUITY INCENTIVE PLAN.
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On the Effective Date, Reorganized Prime Holdings will adopt a
stock plan (the "Equity Incentive Plan") which permits Reorganized Prime
Holdings to grant to its officers and directors shares of New Common Stock. Such
stock plan shall be in substantially the form contained in the Plan Supplement.
E. POSTPETITION FINANCING.
The Debtors anticipate entering into the Exit Credit Facility
in order to obtain the working capital and cash necessary to satisfy in full the
Debtors' obligations under the DIP Credit Facility, to make other payments
required to be made on the Effective Date and to maintain their operations. The
Exit Credit Facility, among other things, shall (a) be effective on the
Effective Date; (b) be a senior secured credit facility; (c) provide for
aggregate borrowings of up to $118.5 million, consisting of (i) a $10.0 million
revolving credit facility (including a $3.0 million sub-limit for letters of
credit and a $2.0 million cash management indemnity facility) and (ii) a 108.5
million term loan facility. The collateral for the revolving credit facility
will consist of a first priority perfected security interest in (a) the stock of
Prime and its subsidiaries and (b) all assets and properties of Prime Holdings,
Prime and its subsidiaries. The collateral for the term loan facility will
consist of a second priority perfected security interest in the collateral for
the revolving credit facility. The revolving credit facility shall bear an
interest rate equal to LIBOR (to be defined in the Exit Credit Facility
documents) plus 350 basis points or the Base Rate (to be defined in the Exit
Credit Facility documents) plus 250 basis points, at the option of the Debtors,
paid monthly in arrears. The term loan facility shall bear an interest rate
equal to LIBOR plus 400 basis points or the Base Rate plus 300 basis points, at
the option of the Debtors, paid monthly in arrears. The Exit Credit Facility's
maturity date will be the earlier of August 29, 2003 or three years from the
Effective Date.
The Exit Credit Facility documents, or a commitment letter
with respect thereto, shall be filed by the Debtors with the Bankruptcy Court no
later than a date which is five (5) days prior to the deadline for submitting
ballots accepting or rejecting the Plan. In the Confirmation Order, the
Bankruptcy Court shall approve the Exit Credit Facility in substantially the
form filed with the Bankruptcy court and authorize the Debtors to execute the
same together with such other documents as the Exit Credit Facility Agents may
reasonably require in order to effectuate the treatment afforded to the lenders
under the Exit Credit Facility.
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VI.
SUBSTANTIVE CONSOLIDATION OF THE DEBTORS
On the Confirmation Date, the Chapter 11 Cases shall be
substantively consolidated for all purposes related to the Plan, including,
without limitation, for purposes of voting, confirmation and distribution.
Subject to the occurrence of the Effective Date, (i) all assets and liabilities
of the Subsidiaries and Prime Holding shall be deemed merged or treated as
though they were merged into and with the assets and liabilities of Prime, (ii)
no distributions shall be made under the Plan on account of Intercompany Claims
among the Debtors, (iii) no distributions shall be made under the Plan on
account of Subsidiary Equity Interests or Prime Equity Interests, (iv) all
guarantees of the Debtors of the obligations of any other Debtor shall be deemed
eliminated so that any Claim against any Debtor and any guarantee thereof
executed by any other Debtor and any joint or several liability of any of the
Debtors shall be deemed to be one obligation of the consolidated Debtors and (v)
each and every Claim filed or to be filed in the Chapter 11 Case of any of the
Debtors shall be deemed filed against the consolidated Debtors, and shall be
deemed one Claim against and obligation of the consolidated Debtors. Such
substantive consolidation shall not (other than for purposes related to the
Plan) affect (i) the legal and corporate structure of the Reorganized Debtors,
(ii) Subsidiary Equity Interests or Prime Equity Interests, or (iii) pre-and
post-Petition Date guarantees that are required to be maintained (a) in
connection with executory contracts or unexpired leases that were entered into
during the Chapter 11 Cases or that have been or will be assumed, (b) pursuant
to the Plan, or (c) in connection with any financing entered into by the
Reorganized Debtors on the Effective Date.
VII.
PROVISIONS REGARDING VOTING AND
DISTRIBUTIONS UNDER THE PLAN AND TREATMENT
OF DISPUTED, CONTINGENT AND UNLIQUIDATED
ADMINISTRATIVE CLAIMS, CLAIMS AND EQUITY INTERESTS
A. VOTING OF CLAIMS AND EQUITY INTERESTS. Each holder of an
Allowed Claim or an Allowed Equity Interest in an Impaired Class of Claims or
Equity Interests shall be entitled to vote separately to accept or reject the
Plan as provided in such order as may be entered by the Court establishing
certain procedures with respect to the solicitation and tabulation of votes to
accept or reject the Plan, or any other order or orders of the Court.
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B. NONCONSENSUAL CONFIRMATION. As the holders of Other
Equity Interests in Class 7 are deemed to reject the Plan, the Debtors will seek
to have the Court confirm the Plan under section 1129(b) of the Bankruptcy Code.
C. DISTRIBUTIONS.
1. METHOD OF DISTRIBUTIONS UNDER THE PLAN.
(a) Date and Delivery of Distributions.
Distributions under the Plan shall be made by the Reorganized Debtors or their
designee to the holders of Allowed Administrative Claims, Allowed Priority Tax
Claims, Allowed Other Priority Claims, Allowed DIP Financing Claims, Allowed
Other Secured Claims, Allowed Trade Claims and Allowed Old Preferred Stock at
the addresses set forth on the Schedules, unless such addresses are superseded
by proofs of claim or transfers of claim filed pursuant to Bankruptcy Rule 3001
(or at the last known addresses of such holders if the Debtors or the
Reorganized Debtors have been notified in writing of a change of address).
Distributions under the Plan to the holders of Allowed Senior Subordinated Note
Claims, Allowed Rejected Former Owner Obligations, Allowed Other Rejected
Obligations and Allowed Other General Unsecured Claims shall be made to the New
Senior Subordinated Notes Indenture Trustee who shall make the distributions to
the holders of Allowed Senior Subordinated Note Claims, Allowed Rejected Former
Owner Obligations, Allowed Other Rejected Obligations and Allowed Other General
Unsecured Claims. New Senior Subordinated Notes (including any interest earned
thereon) and New Common Stock (including dividends paid on account thereof) held
by the Reorganized Debtors for the benefit of holders of Disputed Other General
Unsecured Claims, Disputed Rejected Former Owner Obligations and Disputed Other
Rejected Obligations shall be held in trust by the Reorganized Debtors for the
benefit of the potential claimants of such securities and shall not constitute
property of the Reorganized Debtors.
(b) Distribution of Cash. Any payment of
Cash by the Reorganized Debtors pursuant to the Plan shall be made at the option
and in the sole discretion of the Reorganized Debtors by (i) a check drawn on,
or (ii) wire transfer from, a domestic bank selected by the Reorganized Debtors.
(c) Distribution of Unclaimed Property. Any
distribution of Cash under the Plan which is unclaimed after the later to occur
of (a) two years after distribution or (b) six months after the date on which
such claimant's Claim is Allowed shall be transferred to the Reorganized Debtors
notwithstanding state or other escheat or similar laws to the contrary.
Distributions under the Plan consisting of New Senior Subordinated Notes, New
Common Stock or New Warrants that are unclaimed for a period of two years after
distribution shall be cancelled and any dividends or interest which has been
paid with respect to such securities shall be transferred to the Reorganized
Debtors and entitlement by the
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holder of a Claim or Old Preferred Stock to such distribution shall be
extinguished and forever barred. The Debtors shall file with the Court a list of
holders of unclaimed distributions of Cash, New Senior Subordinated Notes and
New Common Stock on the first and second anniversaries of the Effective Date.
(d) Saturdays, Sundays, or Legal Holidays.
If any payment or act under the Plan is required to be made or performed on a
date that is not a Business Day, then the making of such payment or the
performance of such act may be completed on the next succeeding Business Day,
and shall be deemed to have been completed as of the required date.
(e) Fractional Notes and Fractional Shares
and Warrants.
(i) Fractional Notes. Whenever the
issuance of any New Senior Subordinated Note would otherwise call for
the issuance in an amount for a fraction of a denomination of a New
Senior Subordinated Note, the actual issuance of such New Senior
Subordinated Note shall reflect a rounding of such fraction to the
nearest whole denomination (up or down), with fifty percent being
rounded down.
(ii) Fractional Shares and
Warrants. Whenever any distribution of shares of New Common Stock or
New Warrants to a holder would otherwise call for the distribution of a
fractional share or warrant, the Transfer Agent or Warrant Agent shall
allocate one whole share or one whole warrant, as the case may be, to
holders in order of the fractional portion of their entitlements,
starting with the largest fractional portion until all remaining shares
and warrants have been allocated. Upon the allocation of a whole share
or a whole warrant to a holder in respect of the fractional portion of
its entitlement, such fractional portion shall be canceled. If two or
more holders are entitled to equal fractional entitlements and the
number of holders so entitled exceeds the number of whole shares or
whole warrants, as the case may be, which remain to be allocated, the
Transfer Agent or Warrant Agent shall allocate the remaining whole
shares or whole warrants to such holders by random lot or such other
impartial method as the Transfer Agent or Warrant Agent deems fair, in
the Transfer Agent's or Warrant Agent's sole discretion. Upon the
allocation of all of the whole shares or whole warrants authorized
under the Plan, all remaining fractional portions of the entitlements
shall be canceled and shall be of no further force and effect.
(f) Distributions to Holders as of the
Record Date. As at the close of business on the Record Date, the claims register
(for Claims) and transfer ledger (for Equity Interests) shall be closed, and
there shall be no further changes in the record holders of any Claims or Equity
Interests. The Debtors and the
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Reorganized Debtors shall have no obligation to recognize any transfer of any
Claims or Equity Interests occurring after the Record Date. The Debtor and the
Reorganized Debtors shall instead be entitled to recognize and deal for purposes
under the Plan (except as to voting to accept or reject the Plan pursuant to
Section VII.A) with only those record holders stated on the claims register (for
Claims) and transfer ledgers (for Equity Interests) as of the close of business
on the Record Date.
2. DISPUTED TRADE CLAIMS.
(a) Distributions Withheld For Disputed Trade
Claims.
(i) Establishment And Maintenance Of
Reserve. On the Effective Date, the Reorganized Debtors shall place
into a reserve an amount of Cash equal to 100% of the distributions to
which holders of Disputed Trade Claims would be entitled under the Plan
as of such date if such Disputed Trade Claims were Allowed Claims (the
"Reserve").
(ii) Property Held in Reserve. Cash held
in the Reserve, if any, shall be deposited in a segregated bank account
or accounts in the name of the Reorganized Debtors and designated as
held in trust for the benefit of holders of Allowed Trade Claims. Cash
held in the Reserve shall not constitute property of the Reorganized
Debtors. The Reorganized Debtors shall invest the Cash held in the
Reserve in a manner consistent with the investment guidelines set forth
in the Plan Supplement. The Reorganized Debtors shall pay, or cause to
be paid, out of the funds held in the Reserve, any tax imposed on the
Reserve by any governmental unit with respect to income generated by
the property held in the Reserve. The yield earned on such invested
Cash (net of applicable taxes) shall be distributed to the Reorganized
Debtors on the last Subsequent Distribution Date under the Plan.
(iii) Distributions Upon Allowance of
Disputed Trade Claims. The holder of a Disputed Trade Claim that
becomes an Allowed Claim subsequent to the Initial Distribution Date
shall receive a distribution of Cash from the Reserve on the next
Subsequent Distribution Date that follows the Quarter during which such
Disputed Trade Claim becomes an Allowed Claim pursuant to a Final
Order. Such distributions shall be made in accordance with the Plan
based upon the distributions that would have been made to such holder
under the Plan if the Disputed Trade Claim had been an Allowed Claim on
or prior to the Effective Date. Any Cash held in the Reserve after all
Trade Claims have been Allowed or disallowed shall be transferred to
and become the property of the Reorganized Debtors.
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3. OBJECTIONS TO AND RESOLUTION OF
ADMINISTRATIVE CLAIMS, CLAIMS AND EQUITY INTERESTS.
Objections To And Resolution of
Administrative Claims, Claims and Equity Interests. Except as to applications
for allowances of compensation and reimbursement of expenses under sections 330
and 503 of the Bankruptcy Code, the Debtors and the Reorganized Debtors shall
have the exclusive right to make and file objections to Administrative Claims,
Claims and Equity Interests subsequent to the Confirmation Date. All objections
shall be litigated to a Final Order; provided, however, that the Reorganized
Debtors shall have the authority to compromise, settle, otherwise resolve or
withdraw any objections, without approval of the Court. Unless otherwise ordered
by the Court, the Debtors and the Reorganized Debtors shall file all objections
to Administrative Claims, Claims and Equity Interests that are the subject of
proofs of claims, requests for payment filed with the Court (other than
applications for allowances of compensation and reimbursement of expenses) or
proofs of interest and serve such objections upon the holders of the
Administrative Claim, Claim or Equity Interest as to which the objection is made
as soon as is practicable, but in no event later than 60 days after the
Effective Date or such later date as may be set by the Court. Notwithstanding
anything contained herein to the contrary, the DIP Lenders shall not be required
to file proofs of claims with respect to the DIP Facility Claims. The Debtors
shall have no right to object to the DIP Facility Claims except as set forth in
the DIP Facility Order. The outstanding amount of the DIP Facility Claims shall
be paid in full on the Effective Date as provided herein.
4. ALLOCATION OF CONSIDERATION.
The aggregate consideration to be distributed to the
holders of Allowed Claims in each Class under the Plan (other than the Claims,
if any, of the Internal Revenue Service) shall be treated as first satisfying an
amount equal to the stated principal amount of the Allowed Claim for such
holders and any remaining consideration as satisfying accrued, but unpaid,
interest and costs, if any, and attorneys' fees, where applicable.
5. CANCELLATION AND SURRENDER OF EXISTING
SECURITIES AND AGREEMENTS.
On the Effective Date, the Senior Subordinated Notes
and all Equity Interests shall be deemed canceled and such agreements and
securities, including the Senior Subordinated Note Indenture, together with all
instruments issued pursuant thereto, shall have no further legal effect other
than as evidence of any right to receive distributions, fees and expenses under
the Plan. In addition, the Senior Subordinated Note Indenture shall be
terminated and the Indenture Trustee's obligations shall be discharged.
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Notwithstanding any other provision of the Plan, as a
condition precedent to receiving any distribution under the Plan, each holder of
a promissory note, share certificate, or other instrument or security evidencing
a Claim or Equity Interest must surrender such promissory note, share
certificate, or other instrument or security to the Reorganized Debtors or their
designee or must execute and deliver an affidavit of loss and furnish an
indemnity or bond in substance and amount reasonably satisfactory to the
Reorganized Debtors.
Any holder of a Claim or Equity Interest that fails
to surrender such instrument or security or to provide the affidavit and
indemnity or bond, before the later to occur of (i) the second anniversary of
the Effective Date and (ii) six months following the date such holder's Claim
becomes an Allowed Claim or Equity Interest, shall be deemed to have forfeited
all rights, Claims, and/or Equity Interests and may not receive or participate
in any distribution under the Plan.
VIII.
IMPLEMENTATION AND EFFECT OF CONFIRMATION OF THIS PLAN
A. NEW SENIOR SUBORDINATED NOTES INDENTURE, THE AMENDED
PRIME CERTIFICATE OF INCORPORATION, THE AMENDED PRIME
BY-LAWS, THE AMENDED PRIME HOLDINGS BY-LAWS, THE
AMENDED PRIME HOLDINGS CERTIFICATE OF INCORPORATION,
THE AMENDED SUBSIDIARIES CERTIFICATES OF
INCORPORATION, THE AMENDED SUBSIDIARIES BY-LAWS, THE
AMENDED SUBSIDIARY LIMITED PARTNERSHIP AGREEMENT, THE
EQUITY INCENTIVE PLAN, THE WARRANT AGREEMENT, THE NEW
SENIOR MANAGEMENT EMPLOYMENT CONTRACTS, THE NEW EXIT
FINANCING FACILITY DOCUMENTS AND OTHER IMPLEMENTATION
DOCUMENTS.
On or before the Effective Date, the Reorganized Debtors will
execute the New Senior Subordinated Notes Indenture, the Amended Prime
Certificate of Incorporation, the Amended Prime By-Laws, the Amended Prime
Holdings By-Laws, the Amended Prime Holdings Certificate of Incorporation, the
Amended Subsidiaries Certificates of Incorporation, the Amended Subsidiaries
By-Laws, the Amended Subsidiary Limited Partnership Agreement, the Equity
Incentive Plan, the Warrant Agreement, the Senior Management Employment
Contracts, the New Exit Financing Facility Documents and all other documents
required and necessary to implement the Plan, without the requirement of any
further corporate action.
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B. CONTINUED CORPORATE EXISTENCE AND VESTING OF ASSETS
IN REORGANIZED DEBTORS.
The Debtors, as Reorganized Debtors, shall continue to exist
after the Effective Date with all powers of corporations under the laws of their
respective states of incorporation and without prejudice to any right to alter
or terminate such existence (whether by merger or otherwise) under such
applicable state law. Except as otherwise expressly provided in the Plan, on the
Effective Date, the Reorganized Debtors shall be vested with all of the property
of their estates free and clear of all claims, liens, encumbrances, charges and
other interests of creditors and equity security holders; and the Reorganized
Debtors may operate their businesses free of any restrictions imposed by the
Bankruptcy Code, the Bankruptcy Rules or by the Court, subject only to the terms
and conditions of the Plan.
C. DISCHARGE OF THE DEBTORS.
The rights afforded herein and the treatment of all Claims and
Equity Interests herein shall be in exchange for and in complete satisfaction,
discharge, and release of all Claims and Equity Interests of any nature
whatsoever, including any interest accrued on such Claims from and after the
Petition Date, against the Debtors, the Debtors in Possession, the Reorganized
Debtors or any of their assets or properties, arising prior to the Effective
Date. Except as otherwise expressly specified in the Plan, the Confirmation
Order shall act as of the Effective Date as a discharge of all debts of, Claims
against, liens on, and Equity Interests in the Debtors, their assets and
properties, arising at any time before the entry of the Confirmation Order,
regardless of whether a proof of Claim or Equity Interest with respect thereto
was filed, whether the Claim or Equity Interest is Allowed, or whether the
holder thereof votes to accept the Plan or is entitled to receive a distribution
thereunder. Except as otherwise expressly specified in the Plan, after the
Effective Date, any holder of such discharged Claim or Equity Interest shall be
precluded from asserting against the Debtors, Reorganized Debtors, or any of
their assets or properties, any other or further Claim or Equity Interest based
on any document, instrument, act, omission, transaction, or other activity of
any kind or nature that occurred before the entry of the Confirmation Order.
Except as set forth in this Plan or the Confirmation Order, nothing in the Plan
or the Confirmation Order (including without limitation any discharge of Claims
or cancellation of debts or Equity Interests or the instruments evidencing same)
is intended, or shall be construed, to alter or affect the liability or
obligation of any person or entity against any other person or entity (other
than the Debtors, the Debtors in Possession and the Reorganized Debtors) in
respect of such Claims, debts or Equity Interests.
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D. INJUNCTION.
Except as otherwise expressly provided in the Plan, the
Confirmation Order, or a separate order of the Court, all entities who have
held, hold, or may hold Claims against or Equity Interests in the Debtors which
arose before or were held as of the Effective Date, are permanently enjoined, on
and after the Effective Date, from (a) commencing or continuing in any manner
any action or other proceeding of any kind against the Debtors, with respect to
any such Claim or Equity Interest, (b) the enforcement, attachment, collection,
or recovery by any manner or means of any judgment, award, decree, or order
against the Debtors on account of any such Claim or Equity Interest, (c)
creating, perfecting, or enforcing any encumbrance of any kind against the
Debtors or against the property or interests in property of the Debtors on
account of any such Claim or Equity Interest and (d) asserting any right of
setoff, subrogation, or recoupment of any kind against any obligation due from
the Debtors or against the property or interests in property of the Debtors on
account of any such Claim or Equity Interest. Such injunction shall extend to
successors of the Debtors (including, without limitation, the Reorganized
Debtors) and their respective properties and interests in property.
E. RELEASE OF COLLATERAL.
Unless a particular Secured Claim is reinstated (i) each
holder of: (A) a Secured Claim and/or (B) a Claim that is purportedly secured
shall on or immediately before the Effective Date: (x) turn over and release to
the relevant Debtor (or its successor, as the case may be) any and all property
of the relevant Debtor that secures or purportedly secures such claim; and (y)
execute such documents and instruments as such Reorganized Debtor requires to
evidence such claimant's release of such property; and (ii) on the Effective
Date, all claims, right, title and interest in such property shall revert to the
relevant Reorganized Debtor (or the successor to any Debtor that does not
survive) free and clear of all Claims and Interests, including (without
limitation) liens, charges, pledges, encumbrances and/or security interests of
any kind. No distribution hereunder shall be made to or on behalf of any holder
of such Claim unless and until such holder executes and delivers to the relevant
Debtor or Reorganized Debtor such release of liens. Any such holder that fails
to execute and deliver such release of liens within 180 days of the Effective
Date shall be deemed to have no further Claim against the relevant Debtor,
Reorganized Debtor or their property in respect of such Claim and shall not
participate in any distribution hereunder. Notwithstanding the immediately
preceding sentence, any such holder of a Disputed Claim shall not be required to
execute and deliver such release of liens until the time such Claim is allowed
or disallowed.
F. PRESERVATION/WAIVER OF CAUSES OF ACTION.
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1. PRESERVATION OF RIGHTS. Pursuant to the
Plan, and sections 544, 548, 549, 550, 551, 553 and 1123(b)(3)(B) of the
Bankruptcy Code, the Debtors (and the Reorganized Debtors) shall retain all
rights and all Causes of Action accruing to the Debtors, their estates, or the
Reorganized Debtors, including, without limitation, (i) the avoidance of any
transfer of an interest of the Debtors in property or any obligation incurred by
the Debtors; or (ii) the turnover of any property to their estates, and except
as expressly provided in the Plan or Confirmation Order, nothing contained in
the Plan or the Confirmation Order shall be deemed to be a waiver or
relinquishment of any such rights or Causes of Action. Nothing contained in the
Plan or the Confirmation Order shall be deemed to be a waiver or relinquishment
of any Claim, Cause of Action, right of setoff, or other legal or equitable
defense which the Debtors had immediately prior to the Petition Date which is
not specifically waived or relinquished by the Plan. The Reorganized Debtors
shall have, retain, reserve and be entitled to assert all such Claims, Causes of
Action, rights of setoff and other legal or equitable defenses which the Debtors
had immediately prior to the Petition Date as fully as if the Chapter 11 Cases
had not been commenced; and all of the Reorganized Debtors' legal and equitable
rights respecting any Claim which is not specifically waived or relinquished by
the Plan may be asserted after the Effective Date to the same extent as if the
Chapter 11 Cases had not been commenced.
G. VOTES SOLICITED IN GOOD FAITH.
The Debtors have, and upon confirmation of the Plan shall be
deemed to have, solicited acceptances of the Plan in good faith and in
compliance with the applicable provisions of the Bankruptcy Code. The Debtors
(and each of their affiliates, agents, directors, officers, employees, advisors
and attorneys) 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 Plan and therefore have
not been, 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 the solicitation of acceptances or rejections
of the Plan or the offer, issuance, sale, or purchase of the securities offered
and sold under the Plan.
H. ADMINISTRATIVE CLAIMS INCURRED AFTER THE CONFIRMATION
DATE.
Administrative Claims incurred by the Reorganized Debtors
after the date and time of the entry of the Confirmation Order, including
(without limitation) Claims for professionals' fees and expenses incurred after
such date, shall not be subject to application and may be paid by the
Reorganized Debtors in the ordinary course of business and without application
for or Court approval.
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I. THE DEBTORS' RELEASE.
As of the Effective Date, the Debtors and the Reorganized
Debtors, on behalf of themselves and their estates, hereby release
unconditionally all of their respective officers, directors, employees,
advisors, attorneys, financial advisors, accountants, and other professionals,
the Indenture Trustee, the Prepetition Lenders, the DIP Lenders, counsel to the
Prepetition Lenders and the DIP Lenders and their counsel, the Creditors
Committee members, counsel to the Creditors Committee, the Informal Committee
members, counsel to the Informal Committee, financial advisors to the Creditors
Committee and Informal Committee and each of their representatives and agents
(including any professionals retained by such persons or entities) (the
"Released Parties") from any and all claims, obligations, suits, judgments,
damages, rights, Causes of Action and liabilities whatsoever, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity
or otherwise, based in whole or in part upon actions taken in their respective
capacities described above or any omission, transaction, event or other
occurrence taking place on or prior to the Effective Date in any way relating to
the Debtors, the Chapter 11 Cases or the Plan, except that (i) no individual
shall be released from any act or omission that constitutes gross negligence or
willful misconduct, and (ii) the Reorganized Debtors shall not relinquish or
waive the right to assert any of the foregoing as a legal or equitable defense
or right of set-off or recoupment against any Claims of any such persons
asserted against the Debtors.
J. EXCULPATION, RELEASE AND INJUNCTION OF RELEASED
PARTIES.
1. EXCULPATION. The Debtors and the
Reorganized Debtors and the Released Parties shall have no liability whatsoever
to any holder or purported holder of an Administrative Claim, Claim, or Equity
Interest for any act or omission in connection with, or arising out of, the
Plan, the Disclosure Statement, the negotiation of the Plan, the negotiation of
the instruments and documents included in the Plan Supplement, the pursuit of
approval of the Disclosure Statement or the solicitation of votes for
confirmation of the Plan, the Chapter 11 Cases, the consummation of the Plan,
the administration of the Plan or the property to be distributed under the Plan,
or any transaction contemplated by the Plan or Disclosure Statement or in
furtherance thereof (including, without limitation, the Equity Incentive Plan,
employment contracts, programs and arrangements adopted in connection with the
Plan or the Chapter 11 Cases), except for willful misconduct or gross negligence
as determined by a Final Order, and, in all respects, shall be entitled to rely
upon the advice of counsel with respect to their duties and responsibilities
under the Plan. This exculpation shall be in addition to, and not in limitation
of, all other releases, indemnities, exculpations and any other applicable law
or rules protecting such Released Parties from liability.
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2. INJUNCTION. Pursuant to section 105 of the
Bankruptcy Code, no holder or purported holder of an Administrative Claim, Claim
or Equity Interest shall be permitted to commence or continue any action,
employment of process, or any act to collect, offset, or recover any claim
against a Released Party that accrued on or prior to the Effective Date and has
been released or waived pursuant to Sections VIII.H and I.
3. LIMITATION OF GOVERNMENTAL RELEASES.
Notwithstanding Sections VIII.H. and I of the Plan, the Plan shall not release,
discharge, or exculpate any non-debtor party from any debt owed to the United
States Government and/or its agencies, including the Pension Benefit Guaranty
Corporation (the "Government"), or from any liability arising under the Internal
Revenue Code, the Employee Retirement Income Security Act of 1974, as amended,
or the environmental laws, securities laws or criminal laws of the United
States. In addition, notwithstanding Sections VIII.I.1. and 2 of the Plan, the
Plan shall not enjoin or prevent the Government from collecting any such
liability from any such non-debtor party.
K. TERM OF BANKRUPTCY INJUNCTION OR STAYS.
All injunctions or stays provided for in the Chapter 11 Cases
under sections 105 or 362 of the Bankruptcy Code, or otherwise, and in existence
on the Confirmation Date, shall remain in full force and effect until the
Effective Date.
L. PRESERVATION OF INSURANCE.
The Debtors' discharge and release from all Claims as provided
herein, except as necessary to be consistent with this Plan, shall not diminish
or impair the enforceability of any insurance policy that may cover Claims
against the Debtors, the Reorganized Debtors (including, without limitation, its
officers and directors) or any other person or entity.
M. OFFICERS' AND DIRECTORS' INDEMNIFICATION RIGHTS AND
INSURANCE.
Notwithstanding any other provisions of the Plan, the
obligations of the Debtors to indemnify their directors, officers, and employees
against any obligations, liabilities, costs or expenses pursuant to the articles
of incorporation or by-laws of the Debtors, applicable state law, specific
agreement, or any combination of the foregoing, shall survive the Effective
Date. In addition, the Reorganized Debtors shall obtain tail coverage under
their existing directors and officers liability insurance policy covering their
existing directors and officers for any and all Claims brought against them,
which coverage shall extend for a period of not less than six (6) years after
the Effective Date.
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IX.
RETENTION OF JURISDICTION
The Court shall have exclusive jurisdiction of all matters
arising out of, and related to, the Chapter 11 Cases and the Plan pursuant to,
and for the purposes of, section 105(a) and section 1142 of the Bankruptcy Code
and for, among other things, the following purposes: (1) to hear and determine
applications for the assumption or rejection of executory contracts or unexpired
leases pending on the Confirmation Date, and the allowance of Claims resulting
therefrom; (2) to determine any other applications, adversary proceedings, and
contested matters pending on the Effective Date; (3) to ensure that
distributions to holders of Allowed Claims and Allowed Old Preferred Stock are
accomplished as provided herein; (4) to resolve disputes as to the ownership of
any Claim or Equity Interest; (5) to hear and determine timely objections to
Administrative Claims, Claims and Equity Interests; (6) to enter and implement
such orders as may be appropriate in the event the Confirmation Order is for any
reason stayed, revoked, modified or vacated; (7) to issue such orders in aid of
execution of the Plan, to the extent authorized by section 1142 of the
Bankruptcy Code; (8) to consider any modifications of the Plan, to cure any
defect or omission, or to reconcile any inconsistency in any order of the Court,
including, without limitation, the Confirmation Order; (9) to hear and determine
all applications for compensation and reimbursement of expenses of professionals
under sections 330, 331, and 503(b) of the Bankruptcy Code; (10) to hear and
determine disputes arising in connection with the interpretation,
implementation, or enforcement of the Plan; (11) to hear and determine any issue
for which the Plan requires a Final Order of the Court; (12) to hear and
determine matters concerning state, local, and federal taxes in accordance with
sections 346, 505 and 1146 of the Bankruptcy Code; (13) to hear any other matter
not inconsistent with the Bankruptcy Code; (14) to hear and determine disputes
arising in connection with compensation and reimbursement of expenses of
professionals for services rendered during the period commencing on the
Confirmation Date through and including the Effective Date; and (15) to enter a
final decree closing the Chapter 11 Cases.
X.
MISCELLANEOUS PROVISIONS
A. PAYMENT OF STATUTORY FEES.
All fees payable on or before the Effective Date (i) pursuant
to section 1930 of title 28 of the United States Code, as determined by the
Court at the Confirmation Hearing, and (ii) to the United States Trustee, shall
be paid by the
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Debtors on or before the Effective Date and all such fees payable after the
Effective Date shall be paid by the Reorganized Debtors.
B. DISSOLUTION OF CREDITORS COMMITTEE.
The Creditors Committee shall terminate on the Effective Date.
C. MODIFICATION OF THE PLAN.
The Debtors reserve the right, in accordance with the
Bankruptcy Code, upon the consent of the DIP Agents, to amend or to modify the
Plan prior to the entry of the Confirmation Order. After entry of the
Confirmation Order, the Reorganized Debtors or the Debtors may amend or modify
the Plan, upon the consent of the DIP Agents, or remedy any defect or omission
or reconcile any inconsistency in the Plan in such a manner as may be necessary
to carry out the purpose and intent of the Plan.
D. GOVERNING LAW.
Unless a rule of law or procedure is supplied by Federal law
(including the Bankruptcy Code and Bankruptcy Rules) or the Delaware General
Corporation Law or such other corporate law that may apply to the Subsidiaries,
the laws of the State of New York (without reference to the conflicts of laws
provisions thereof) shall govern the construction and implementation of the Plan
and any agreements, documents, and instruments executed in connection with the
Plan.
E. FILING OR EXECUTION OF ADDITIONAL DOCUMENTS.
On or before the Effective Date, the Debtors or the
Reorganized Debtors, shall file with the Court or execute, as appropriate, such
agreements and other documents as may be necessary or appropriate to effectuate
and further evidence the terms and conditions of the Plan.
F. WITHHOLDING AND REPORTING REQUIREMENTS.
In connection with the Plan and all instruments issued in
connection therewith and distributions thereon, the Reorganized Debtors shall
comply with all withholding and reporting requirements imposed by any federal,
state, local, or foreign taxing authority and all distributions hereunder shall
be subject to any such withholding and reporting requirements.
G. EXEMPTION FROM TRANSFER TAXES.
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Pursuant to section 1146(c) of the Bankruptcy Code, the
issuance, transfer or exchange of New Senior Subordinated Notes, New Common
Stock or New Warrants under the Plan, the making or assignment of any lease or
sublease or the making or delivery of any other instrument whatsoever, in
furtherance of or in connection with the Plan shall not be subject to any stamp,
real estate transfer, recording or other similar tax.
H. SECTION 1145 EXEMPTION.
Pursuant to, in accordance with, and solely to the extent
provided under section 1145 of the Bankruptcy Code, the issuance of the New
Senior Subordinated Notes, New Common Stock and New Warrants under the Plan is
exempt from the registration requirements of Section 5 of the Securities Act, as
amended, and any State or local law requiring registration for offer or sale of
a security or registration or licensing of an issuer of, underwriter of, or
broker or dealer in such New Senior Subordinated Notes, New Common Stock or New
Warrants and is deemed to be a public offering of New Senior Subordinated Notes,
New Common Stock and New Warrants.
I. WAIVER OF FEDERAL RULE OF CIVIL PROCEDURE 62(a).
The Debtors may request that the Confirmation Order include
(a) a finding that Fed. R. Civ. P. 62(a) shall not apply to the Confirmation
Order and (b) authorization for the Debtors to consummate the Plan immediately
after entry of the Confirmation Order.
J. HEADINGS.
Headings used in the Plan are for convenience and reference
only and shall not constitute a part of the Plan for any purpose.
K. EXHIBITS/SCHEDULES.
All Exhibits and Schedules to the Plan are incorporated into
and constitute a part of the Plan as if set forth herein.
L. NOTICES.
All notices, requests, and demands hereunder to be effective
shall be in writing and unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when actually delivered or, in the case
of notice by facsimile transmission, when received and telephonically confirmed,
addressed as follows:
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To the Debtors: Prime Succession, Inc., 3940 Olympic Blvd.,
Suite 500, Erlanger, KY 41018, Attention: Arthur J. Ansin with a copy to Paul,
Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York, New
York 10019-6064, attention: Alan W. Kornberg, Tel.: (212) 373-3000/Fax: (212)
757-3990.
To the Creditors Committee:
To the Informal Committee: Munger, Tolles & Olson LLP, 355
South Grand Avenue, 35th Floor, Los Angeles, CA 90071, attention: Thomas B.
Walper, Esq., Tel.: (213) 683-9193/Fax: (213) 687-3702.
To the DIP Agents: Skadden, Arps, Slate, Meagher & Flom
(Illinois), 333 West Wacker Drive, Suite 2100, Chicago, Illinois, 60606,
attention: J. Eric Ivester, Tel.: (312) 407-0700/Fax: (312) 407-0411; and Mayer
Brown & Platt, 1675 Broadway, New York, New York 10019-5820, attention: Raniero
D'Aversa, Jr., Tel.: (212) 506-2595/Fax: (212) 849-5597.
M. PLAN SUPPLEMENT.
Forms of the documents relating to the Amended Prime
Certificate of Incorporation, the Amended Prime By-laws, the Amended Prime
Holdings By-Laws, the Amended Prime Holdings Certificate of Incorporation, the
Amended Subsidiaries Certificates of Incorporation, the Amended Subsidiaries
By-Laws, the Amended Subsidiary Limited Partnership Agreement, the New Senior
Subordinated Notes Indenture, the New Warrant Agreement, the form of the New
Warrants, investment guidelines referred to in Section VII.C.2.(a)(ii) and
C.3(b)(ii), Equity Incentive Plan, New Exit Financing Facility Documents and New
Senior Management Employment Contracts shall be contained in the Plan Supplement
which has been filed with the Clerk of the Court. The Plan Supplement may be
inspected in the office of the Clerk of the Court during normal court hours.
Holders of Claims or Equity Interests may obtain a copy of the Plan Supplement
upon written request to the Debtors in accordance with Section X.L. of the Plan.
The forms of documents to be included in the Plan Supplement shall be reasonably
acceptable to the Prepetition Agents, the DIP Agents and the Informal Committee.
N. CONFLICT.
The terms of this Plan shall govern in the event of any
inconsistency with the summaries of the Plan set forth in the Disclosure
Statement.
O. SETOFF BY THE UNITED STATES.
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The valid setoff rights, if any, of the United States of
America will be unaffected by this Plan or confirmation thereof.
XI.
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
Other than (i) executory contacts or unexpired leases which
(x) are the subject of a motion to reject pending on the Confirmation Date, (y)
were previously assumed or rejected by the Debtors, or (z) have expired or
terminated pursuant to their own terms during the pendency of the Chapter 11
Cases, and (ii) employment agreements, if any, terminated prior to or in
connection with the Plan, all of the executory contracts, unexpired leases and
employment agreements that exist between the Debtors and any person are
specifically assumed as of the Effective Date pursuant to the Plan. All Claims
for damages arising from the rejection of executory contracts or unexpired
leases must be filed with the Court in accordance with the terms of the order
authorizing such rejection. Any Claims not filed within such time will be
forever barred from assertion against the Debtors, their estates and the
Reorganized Debtors. All Allowed Claims arising from the rejection of executory
contracts or unexpired leases shall be treated as Class 5 Claims. The
Reorganized Debtors, except as otherwise agreed by the parties, will cure any
and all undisputed defaults within 60 days of the Effective Date under any
executory contract, unexpired lease or employment agreement assumed pursuant to
the Plan in accordance with section 365 of the Bankruptcy Code. All disputed
defaults that are required to be cured shall be cured either within 30 days of
the entry of a Final Order determining the amount, if any, of the Debtors or the
Reorganized Debtors' liability with respect thereto, or as may otherwise be
agreed to by the parties.
XII.
BENEFIT PLANS
All employment and severance agreements and policies, and all
employee compensation and benefit plans, policies, and programs of the Debtors
applicable generally to its employees, including agreements and programs subject
to section 1114 of the Bankruptcy Code, as in effect on the Effective Date,
including, without limitation, all savings plans, retirement plans, health care
plans, disability plans, severance benefit plans, incentive plans, and life,
accidental death, and dismemberment insurance plans, shall be deemed to be, and
shall be treated as though they are, executory contracts that are assumed under
the Plan, and the Debtors' obligations under such agreements and programs shall
survive the Effective Date of the Plan, without prejudice to the Reorganized
Debtors' rights under applicable non-bankruptcy law to modify, amend, or
terminate the foregoing
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arrangements, except for (i) such executory contracts or plans specifically
rejected pursuant to the Plan (to the extent such rejection does not violate
section 1114 of the Bankruptcy Code) and (ii) such executory contracts or plans
as have previously been terminated, or rejected, pursuant to a Final Order, or
specifically waived by the beneficiaries of such plans, contracts, or programs.
XIII.
EFFECTIVENESS OF THE PLAN
A. CONFIRMATION OF THE PLAN.
The Plan can be confirmed either under section 1129(a) of the
Bankruptcy Code or in a non-consensual manner under section 1129(b) of the
Bankruptcy Code so long as the conditions of Section XIII.B.1. have been
satisfied or waived pursuant to Section XIII.B.2.
B. EFFECTIVENESS OF THE PLAN.
1. CONDITIONS PRECEDENT TO EFFECTIVENESS
The Plan shall not become effective unless and until
it has been confirmed and the following conditions have been satisfied in full
or waived pursuant to Section XIII.B.2.: (1) the Confirmation Order in a form
satisfactory to the Debtors, the DIP Lenders and the Informal Committee, shall
have become a Final Order; (2) the Amended Prime Holdings and Prime Certificates
of Incorporation and Amended Subsidiaries Certificates of Incorporation shall
have been properly filed with the Secretary of State in their respective state
of incorporation; (3) all authorizations, consents and regulatory approvals
required (if any) for the Plan's effectiveness shall have been obtained; (4) the
Court shall have ordered the substantive consolidation of the Chapter 11 Cases
as provided in Section VI of the Plan; (5) on the Effective Date, the
Reorganized Debtors have entered into a senior secured credit facility
acceptable to the Informal Committee; (6) the Plan Documents shall be in a form
acceptable to the Debtors, the DIP Agents and the Informal Committee and shall
have been executed and delivered; (7) all of the Debtors' obligations owing to
any DIP Lender pursuant to the DIP Credit Documents shall have been paid in
full, in cash, in immediately available funds, and any commitments in respect of
the DIP Credit Documents shall have been terminated; and (8) the Reorganized
Debtors shall have sufficient cash on hand to make timely distributions as may
be required hereunder.
45
<PAGE> 47
2. WAIVER OF CONDITIONS
The Debtors with the written consent of the DIP
Agents and the Informal Committee (which consent shall not be unreasonably
withheld) may waive any or all of the conditions set forth in Section XIII.B.1.
above at any time, without leave of or order of the Court and without any formal
action.
3. EFFECT OF FAILURE OF CONDITIONS
In the event that the Effective Date does not occur
on or before one hundred and twenty (120) days after the Confirmation Date, upon
notification submitted by the Debtors to the Court: (a) the Confirmation Order
shall be vacated, (b) no distributions under the Plan shall be made, (c) the
Debtors and all holders of Claims and Equity Interests shall be restored to the
status quo ante as of the day immediately preceding the Confirmation Date as
though the Confirmation Date had never occurred, and (d) the Debtors'
obligations with respect to the Claims and Equity Interests shall remain
unchanged and nothing contained in the Plan shall constitute or be deemed a
waiver or release of any Claims or Equity Interests by or against the Debtors or
any other person or to prejudice in any manner the rights of the Debtors or any
person in any further proceedings involving the Debtors.
4. VACATUR OF PLAN
If an order denying confirmation of the Plan is
entered, then the Plan shall be null and void in all respects, and nothing
contained in the Plan shall (a) constitute a waiver or release of any Claims
against or Equity Interests in the Debtors; (b) prejudice in any manner the
rights of the holder of any Claim against, or Equity Interest in, the Debtors;
(c) prejudice in any manner any right, remedy or claim of the Debtors; or (d) be
deemed an admission against interest by the Debtors.
Dated: July 12, 2000
PRIME SUCCESSION HOLDINGS, INC.
By:__________________________
Name:
Title:
PRIME SUCCESSION, INC.
46
<PAGE> 48
By:__________________________
Name:
Title:
AARON CREMATION & BURIAL
SERVICES, INC.
By:__________________________
Name:
Title:
AARON CREMATION & BURIAL
SERVICES, P.C.
By:__________________________
Name:
Title:
BUCKNER-RUSH ENTERPRISES, INC.
By:__________________________
Name:
Title:
BURY-PINE FUNERAL HOME, INC.
By:__________________________
Name:
Title:
PINE FUNERAL HOME, INC.
By:__________________________
Name:
Title:
47
<PAGE> 49
CLARY-GODWIN FUNERAL HOME, INC.
By:__________________________
Name:
Title:
CLAYTON FRANK & SONS, INC.
By:__________________________
Name:
Title:
COMANDER FUNERAL HOME, INC.
By:__________________________
Name:
Title:
CREMATION SOCIETY OF AMERICA,
INCORPORATED
By:__________________________
Name:
Title:
FRASER FUNERAL HOME, INC.
By:__________________________
Name:
Title:
FRED HUNTER MEMORIAL SERVICES, INC.
By:__________________________
Name:
Title:
48
<PAGE> 50
GROTEWOLD SIMI VALLEY
MORTUARY, INC.
By:__________________________
Name:
Title:
HUGHES FUNERAL CHAPEL
By:__________________________
Name:
Title:
J&W, INC.
By:__________________________
Name:
Title:
JOHN A. BECK COMPANY
By:__________________________
Name:
Title:
LAMBERT CORPORATION, INC.
By:__________________________
Name:
Title:
McWANE FAMILY FUNERAL HOME, INC.
By:__________________________
Name:
Title:
49
<PAGE> 51
NEAL-TARPLEY, INC.
By:__________________________
Name:
Title:
PRIME BUSINESS SOLUTIONS, INC.
By:__________________________
Name:
Title:
PRIME BUSINESS SOLUTIONS OF
KENTUCKY, INC.
By:__________________________
Name:
Title:
PRIME ENTERPRISES OF CALIFORNIA,
INC.
By:__________________________
Name:
Title:
PRIME HOLDINGS OF ARKANSAS, INC.
By:__________________________
Name:
Title:
PRIME HOLDINGS OF CALIFORNIA, INC.
By:__________________________
Name:
Title:
50
<PAGE> 52
PRIME HOLDINGS OF MINNESOTA, INC.
By:__________________________
Name:
Title:
PRIME HOLDINGS OF NEBRASKA, INC.
By:__________________________
Name:
Title:
PRIME HOLDINGS OF OHIO, INC.
By:__________________________
Name:
Title:
PRIME HOLDINGS OF WEST VIRGINIA,
INC.
By:__________________________
Name:
Title:
PRIME INDIANA LIMITED PARTNERSHIP
By:__________________________
Name:
Title:
PRIME SUCCESSION OF ALABAMA, INC.
By:__________________________
Name:
Title:
51
<PAGE> 53
PRIME SUCCESSION OF ARIZONA, INC.
By:__________________________
Name:
Title:
PRIME SUCCESSION OF ARKANSAS, INC.
By:__________________________
Name:
Title:
PRIME SUCCESSION OF CALIFORNIA,
INC.
By:__________________________
Name:
Title:
PRIME SUCCESSION OF FLORIDA, INC.
By:__________________________
Name:
Title:
PRIME SUCCESSION OF GEORGIA, INC.
By:__________________________
Name:
Title:
PRIME SUCCESSION OF ILLINOIS, INC.
By:__________________________
Name:
Title:
52
<PAGE> 54
PRIME SUCCESSION OF IOWA, INC.
By:__________________________
Name:
Title:
PRIME SUCCESSION OF KENTUCKY, INC.
By:__________________________
Name:
Title:
PRIME SUCCESSION OF MINNESOTA, INC.
By:__________________________
Name:
Title:
PRIME SUCCESSION OF MISSOURI, INC.
By:__________________________
Name:
Title:
PRIME SUCCESSION OF NEBRASKA, INC.
By:__________________________
Name:
Title:
PRIME SUCCESSION OF NEW YORK, INC.
By:__________________________
Name:
Title:
53
<PAGE> 55
PRIME SUCCESSION OF TENNESSEE, INC.
By:__________________________
Name:
Title:
PRIME SUCCESSION OF TEXAS, INC.
By:__________________________
Name:
Title:
PRIME SUCCESSION PARTNERS, INC.
By:__________________________
Name:
Title:
ROSELAWN MEMORIAL GARDENS, INC.
By:__________________________
Name:
Title:
ROSTAD MORTUARY, INC.
By:__________________________
Name:
Title:
TALISMAN ENTERPRISES, INC.
By:__________________________
Name:
Title:
54
<PAGE> 56
THE FUNERAL OUTLET STORE, INC.
By:__________________________
Name:
Title:
WHITNEY & MURPHY FUNERAL
HOMES, INC.
By:__________________________
Name:
Title:
55
<PAGE> 57
Table of Contents
Page
----
I. DEFINITIONS AND CONSTRUCTION OF TERMS.................................1
A. Definitions......................................................1
B. Interpretation, Application of Definitions and Rules of
Construction....................................................17
II. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS........................18
A. Introduction....................................................18
1. Unclassified Claims (not entitled to vote on the Plan)......18
2. Unimpaired Classes Of Claims (deemed to have accepted the
Plan and, therefore, not entitled to vote on the Plan)......18
3. Impaired Classes of Claims and Equity Interests (entitled
to vote on the Plan)........................................19
III. TREATMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND
PRIORITY TAX CLAIMS..................................................19
A. Administrative Claims. .........................................19
B. Professional Compensation And Reimbursement Claims..............20
C. Priority Tax Claims.............................................20
IV. TREATMENT OF CLAIMS AND EQUITY INTERESTS.............................21
A. Class 1 - Other Priority Claims.................................21
1. Distributions...............................................21
2. Impairment and Voting.......................................21
B. Class 2 - Other Secured Claims..................................21
1. Distributions...............................................21
2. Impairment and Voting.......................................22
C. Class 3 - Trade Claims..........................................22
1. Distributions...............................................22
2. Impairment and Voting.......................................22
D. Class 4 - Prepetition Lender Claims.............................22
E. Class 5 - Senior Subordinated Note Claims, Rejected Former
Owner Obligations, Other Rejected Obligations and Other General
Unsecured Claims................................................22
1. Distributions...............................................22
2. Impairment and Voting.......................................23
F. Class 6 - Old Preferred Stock...................................23
1. Distributions...............................................23
2. Impairment and Voting.......................................23
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Page
----
G. Class 7 - Other Equity Interests................................23
1. Distributions...............................................23
2. Impairment and Voting.......................................23
V. PROVISIONS REGARDING CORPORATE GOVERNANCE
AND MANAGEMENT OF THE REORGANIZED DEBTORS............................23
A. Directors and Officers of Reorganized Prime Holdings and
Reorganized Prime; Amended Certificates of Incorporation and
Amended By-Laws.................................................23
1. The Initial Board of Directors..............................23
2. Management of Reorganized Prime Holdings and Reorganized
Prime.......................................................24
3. Amended Prime Holdings Certificate of Incorporation and
Amended Prime Holdings By-Laws..............................24
4. Amended Prime Certificate of Incorporation and Amended
Prime By-Laws...............................................24
B. Directors and Officers of the Reorganized Subsidiaries..........25
1. The Initial Board of Directors..............................25
2. Management of the Reorganized Subsidiaries..................25
3. Amended Subsidiaries Certificates of Incorporation and
Amended Subsidiaries By-Laws................................25
C. Securities to Be Issued Pursuant to the Plan....................25
1. New Common Stock............................................25
2. New Senior Subordinated Notes...............................26
3. The New Warrants............................................26
D. Reorganized Prime Holdings Equity Incentive Plan................26
E. Postpetition Financing..........................................26
VI. SUBSTANTIVE CONSOLIDATION OF THE DEBTORS.............................27
VII. PROVISIONS REGARDING VOTING AND DISTRIBUTIONS
UNDER THE PLAN AND TREATMENT OF DISPUTED,
CONTINGENT AND UNLIQUIDATED ADMINISTRATIVE
CLAIMS, CLAIMS AND EQUITY INTERESTS..................................28
A. Voting of Claims and Equity Interests...........................28
B. Nonconsensual Confirmation......................................28
C. Distributions...................................................28
1. Method of Distributions Under the Plan......................28
2. Disputed Trade Claims.......................................30
(a) Distributions Withheld For Disputed Trade Claims........30
3. Objections To And Resolution Of Administrative Claims,
Claims and Equity Interests.................................31
4. Allocation of Consideration.................................31
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Page
----
5. Cancellation and Surrender of Existing Securities and
Agreements..................................................32
VIII. IMPLEMENTATION AND EFFECT OF CONFIRMATION OF
THIS PLAN............................................................32
A. New Senior Subordinated Notes Indenture, the Amended Prime
Certificate of Incorporation, the Amended Prime By-Laws, the
Amended Prime Holdings By-Laws, the Amended Prime Holdings
Certificate of Incorporation, the Amended Subsidiaries
Certificates of Incorporation, the Amended Subsidiaries
By-Laws, the Amended Subsidiary Limited Partnership Agreement,
the Equity Incentive Plan, the Warrant Agreement, the New
Senior Management Employment Contracts, the New Exit Financing
Facility Documents and Other Implementation Documents...........32
B. Continued Corporate Existence and Vesting of Assets in
Reorganized Debtors.............................................33
C. Discharge of the Debtors........................................33
D. Injunction......................................................34
E. Release of Collateral...........................................34
F. Preservation/Waiver of Causes of Action.........................35
1. Preservation of Rights......................................35
G. Votes Solicited in Good Faith...................................35
H. Administrative Claims Incurred after the Confirmation Date......35
I. The Debtors' Release............................................36
J. Exculpation, Release and Injunction of Released Parties.........36
1. Exculpation.................................................36
2. Injunction..................................................36
3. Limitation of Governmental Releases.........................37
K. Term of Bankruptcy Injunction or Stays..........................37
L. Preservation of Insurance.......................................37
M. Officers' and Directors' Indemnification Rights and Insurance...37
IX. RETENTION OF JURISDICTION............................................38
X. MISCELLANEOUS PROVISIONS.............................................38
A. Payment of Statutory Fees.......................................38
B. Dissolution of Creditors Committee..............................39
C. Modification of the Plan........................................39
D. Governing Law...................................................39
E. Filing or Execution of Additional Documents.....................39
F. Withholding and Reporting Requirements..........................39
G. Exemption From Transfer Taxes...................................39
iii
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Page
----
H. Section 1145 Exemption..........................................40
I. Waiver of Federal Rule of Civil Procedure 62(a).................40
J. Headings........................................................40
K. Exhibits/Schedules..............................................40
L. Notices.........................................................40
M. Plan Supplement.................................................41
N. Conflict........................................................41
O. Setoff by the United States.....................................41
XI. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.............................42
XII. BENEFIT PLANS........................................................42
XIII. EFFECTIVENESS OF THE PLAN............................................43
A. Confirmation of the Plan........................................43
B. Effectiveness of the Plan.......................................43
1. Conditions Precedent to Effectiveness.......................43
2. Waiver of Conditions........................................43
3. Effect of Failure of Conditions.............................44
4. Vacatur of Plan.............................................44
iv
