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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 31, 2000
Casmyn Corp.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 0-14136 84-0987840
- --------------- ------------ ----------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
28720 Canwood Street, Suite 207, Agoura Hills, California 91301
--------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 879-6501
Not applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report.)
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP
On December 7, 1999, Casmyn Corp., a Colorado corporation (the
"Company"), filed for protection under Chapter 11 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the Central
District of California, San Fernando Valley Division (the "Bankruptcy Court").
On March 31, 2000, the Bankruptcy Court confirmed the Debtor's
Second Amended Chapter 11 Plan of Reorganization (the "Plan"), which is
attached hereto as Exhibit 2.1. The Order Confirming Debtor's Seconded
Amended Plan of Reorganization was entered by the Bankruptcy Court on March
31, 2000, and is attached hereto as Exhibit 2.2. Pursuant to Bankruptcy Court
order, the effective date for the Plan is April 11, 2000. The Company
operated as debtor-in-possession from December 7, 1999 through March 31, 2000.
All of the Company's 523,784 shares of First Convertible Preferred
Stock outstanding, representing substantially all of the Company's debt
obligations, with aggregate claims in excess of $27,000,000, were converted
into common stock under the Plan. Each share of preferred stock was converted
into 5.27 shares of common stock under the Plan. In accordance with the Plan,
creditors and preferred shareholders received 85% of the common equity and
common shareholders received 15% of the common equity, subject to certain
Plan-authorized adjustments. It is currently estimated that a total of
approximately 3,500,000 shares of common stock will be issued and outstanding
once the Plan is fully implemented.
In conjunction with the shares of common stock being issued to
preferred and common shareholders pursuant to the Plan, the Company will also
issue certain common stock purchase warrants to such recipients in accordance
with the terms of the Plan.
Pursuant to Bankruptcy Court order, the record date to determine the
distribution of cash and securities to common and preferred shareholders
entitled to receive consideration under the Plan is April 11, 2000. Only
persons and entities that were holders of record of the Company's common
stock and preferred stock at the close of business on April 11, 2000 are
entitled to receive the cash to be paid and the new securities to be issued
pursuant to the Plan.
In accordance with the Plan, on April 11, 2000, the Company effected
a 1-for-500 reverse split of its 243,578,142 shares of common stock
outstanding. The Articles of Amendment of Articles of Incorporation of Casmyn
Corp. filed with the State of Colorado are attached hereto as Exhibit 3.1.
Shareholders owning less than 50,000 shares of common stock on April 11, 2000
will receive a cash payment of $1.00 per share after adjusting for the
1-for-500 reverse stock split.
In order to receive the cash or new securities to be issued pursuant
to the Plan, all persons and entities are required to turn in certificates
evidencing ownership of the Company's old common stock and old preferred
stock to the Company's transfer agent for cancellation, as well as comply
with certain other conditions specified in the Plan. Any certificates for old
securities that are not presented to the
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transfer agent by the close of business on April 10, 2001, one year after the
record date, will be automatically cancelled without any further notice or
action by the Company. Accordingly, after such date, the holders of any old
securities will not be entitled to receive the cash or new securities to be
issued pursuant to the Plan.
Information as to the Company's assets and liabilities as of March
31, 2000, in the form as presented to the Bankruptcy Court, is attached
hereto as Exhibit 2.3.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(c) Exhibits:
Exhibit
Number Description
- ------ -----------
2.1 Debtor's Second Amended Chapter 11 Plan of Reorganization
2.2 Order Confirming Debtor's Second Amended Chapter 11 Plan of
Reorganization
2.3 Casmyn Corp. and Subsidiaries Unaudited Consolidated Balance Sheets at
March 31, 2000, estimated and as adjusted for confirmation of plan of
reorganization
3.1 Articles of Amendment of Articles of Incorporation of Casmyn Corp., as
filed with the State of Colorado
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Casmyn Corp.
------------------------
(Registrant)
Date: April 12, 2000 By: /s/ ROBERT N. WEINGARTEN
------------------------
Robert N. Weingarten
Chief Financial Officer
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EXHIBIT 2.1
RICHARD L. WYNNE (SBN 120349)
CHRISTOPHER W. COMBS (SBN 148389)
MICHELLE C. CAMPBELL (*Texas SBN 24001828)
WYNNE SPIEGEL ITKIN, A Law Corporation
1901 Avenue of the Stars, 16th Floor
Los Angeles, California 90067
Telephone: (310) 551-1015
Facsimile: (310) 551-3059
Proposed Attorneys for Debtor and
Debtor in Possession
* Admitted in Texas Only
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
SAN FERNANDO VALLEY DIVISION
In re Case No. SV 99-23968-AG
CASMYN CORP., a Colorado
corporation, Chapter 11
Debtor. DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION
DISCLOSURE STATEMENT HEARING
Date: February 3, 2000
Time: 3:00 p.m.
Place: Courtroom 302
21041 Burbank Blvd
Woodland Hills, CA 91367
PLAN CONFIRMATION HEARING
SEE DISCLOSURE STATEMENT FOR VOTING
AND OBJECTING PROCEDURES
Date: March 31, 2000
Time: 9:00 a.m.
Place: Courtroom 302
21041 Burbank Blvd
Woodland Hills, CA 91367
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<TABLE>
Page
<S> <C>
ARTICLE I - INTRODUCTION..........................................................................................1
ARTICLE 2 - DEFINITIONS, INTERPRETATION AND RULES OF CONSTRUCTION.................................................2
A. Definitions.....................................................................................2
B. Interpretation, Rules Of Construction, Computation Of Time, And Choice of Law..................19
ARTICLE 3 - DESIGNATION OF UNCLASSIFIED AND CLASSIFIED EXPENSES, CLAIMS AND INTERESTS; TREATMENT OF ALLOWED
CLAIMS AND ALLOWED INTERESTS, DISALLOWANCE OF INTEREST ON CLAIMS.................................................21
A. General Provisions.............................................................................21
B. Priority Claims................................................................................22
C. Unsecured Claims...............................................................................22
D. Equity Interests...............................................................................24
ARTICLE 4 - TREATMENT OF UNCLASSIFIED ALLOWED ADMINISTRATIVE EXPENSES AND PRIORITY TAX ALLOWED CLAIMS,
SUBORDINATION OF CLAIMS OF ANY CLASS.............................................................................30
A. Administrative Expenses........................................................................30
B. Priority Tax Claims............................................................................31
C. Other Provisions...............................................................................32
ARTICLE 5 - MEANS FOR PERFORMING THE PLAN........................................................................33
ARTICLE 6 - DISTRIBUTIONS UNDER THE PLAN.........................................................................43
ARTICLE 7 - EXECUTORY CONTRACTS AND UNEXPIRED LEASES.............................................................47
ARTICLE 8 - EFFECT OF CONFIRMATION OF THE PLAN..................................................................50
aRTICLE 9 - RETENTION OF JURISDICTION...........................................................................55
ARTICLE 10 - CONDITIONS TO THE EFFECTIVENESS OF THE PLAN.........................................................57
ARTICLE 11 - MISCELLANEOUS PROVISIONS............................................................................59
EXHIBIT "1" -PRESERVED AND RETAINED LITIGATION CLAIMS.............................................................1
EXHIBIT "2" -NON-DEBTOR AFFILIATES................................................................................1
EXHIBIT "3" -PARTIES SUBJECT TO RELEASE AND GOOD FAITH FINDING....................................................1
</TABLE>
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<TABLE>
Page
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EXHIBIT "4" -SCHEDULE OF REJECTED EXECUTORY CONTRACTS AND UNEXPIRED LEASES........................................1
EXHIBIT "5" -SCHEDULE OF ASSUMED EXECUTORY CONTRACTS AND UNEXPIRED LEASES.........................................1
</TABLE>
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ARTICLE I - INTRODUCTION
THE PLAN. Casmyn Corp. (the "Debtor", the "Company", or "Casmyn")
filed its Voluntary Petition for Relief under Chapter 11 of the United States
Code (the "Bankruptcy Code") on December 7, 1999. The Debtor has continued to
operate as debtor in possession during its Chapter 11 case. This document is
the Chapter 11 Plan of Reorganization (the "Plan") proposed in the Debtor's
Chapter 11 case. The Plan is a reorganization plan. The Debtor's proposed
Plan provides for the Debtor to reorganize by paying all unsecured priority
and trade creditors in full on the effective date of the plan, reorganizing
its 523,784 shares of preferred stock and its 243,578,142 shares of common
stock, continuing to operate its mining business, and asserting certain
potentially valuable litigation rights and claims against former management
and third parties that facilitated former management's misdeeds as described
in the Disclosure Statement. Pursuant to the Plan, Casmyn shall be
reorganized and will retain the name "Casmyn Corp." (until such time as it
elects to change its name as authorized by the Plan), though it will be
referred to from time to time, for the purposes of the Plan, as Holdco, and
will own, among other assets, a newly created company called Goldco Ltd., a
Nevada corporation ("Goldco"). Goldco shall be capitalized and shall hold
Casmyn's mining operations operated through Casmyn's current wholly owned
subsidiary, Casmyn Mining Zimbabwe (Private) Ltd. Holdco shall retain and
hold the Debtor's litigation rights and claims (except to the extent that any
other party is authorized to assert such rights and claims on behalf of the
Estate pursuant to Court order), its investment in Auromar Development
Corporation and initially, the entire equity interest in Goldco. The Debtor
will capitalize Goldco with sufficient cash to fund operations, with the
remaining cash and investments allocated to Holdco. Holdco shall own and
prosecute all Litigation Claims (except to the extent that any other party is
authorized to assert any Litigation Claims on behalf of the Estate pursuant
to Court order), several of which are expected to be initiated prior to
Confirmation of the Plan. Holdco shall be referred to as the Reorganized
Debtor.
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Payments to be made under the Plan will be made from the Debtor's Cash
on hand, and from proceeds received from the disposition of property and Claims,
including Litigation Claims, retained by and/or transferred to the Reorganized
Debtor. The New Securities to be issued pursuant to the Plan will be issued
pursuant to Section 1145 of the Bankruptcy Code, as approved by the Bankruptcy
Court.
IN ACCORDANCE WITH SECTION 1143 OF THE BANKRUPTCY CODE, IT SHALL BE A
CONDITION TO ANY DISTRIBUTION TO THE HOLDER OF AN ALLOWED CLAIM OR INTEREST THAT
ANY SECURITY ON WHICH THE ALLOWED CLAIM IS BASED, INCLUDING THE OLD PREFERRED
STOCK OR OLD COMMON STOCK, SHALL BE SURRENDERED TO THE REORGANIZED DEBTOR OR ITS
DESIGNATED REPRESENTATIVE FOR CANCELLATION WITHIN ONE YEAR AFTER THE
CONFIRMATION DATE OR THE HOLDER OF THE ALLOWED CLAIM OR ALLOWED INTEREST SHALL
BE FOREVER BARRED FROM RECEIVING ANY DISTRIBUTIONS FROM THE REORGANIZED DEBTOR
THE DISCLOSURE STATEMENT. The Disclosure Statement Describing Debtor's
Chapter 11 Plan of Reorganization (the "Disclosure Statement"), as approved by
the Bankruptcy Court by an order entered on February 3, 2000, contains a
discussion of the Debtor and its subsidiaries, their businesses, operations,
assets, liabilities and financial performance and a summary of the Plan. All
creditors and equity security holders should carefully review the Disclosure
Statement before voting to accept or reject the Plan. Creditors and Equity
Security Holders can also review the Debtor's Schedules of Assets and
Liabilities, and Statement of Financial Affairs, on file with the Bankruptcy
Court for the Central District of California.
ARTICLE 2 - DEFINITIONS, INTERPRETATION AND RULES OF CONSTRUCTION
A. DEFINITIONS
The following capitalized terms used in the Plan shall have the
following meaning:
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2.1.1 "ALLOWED ADMINISTRATIVE EXPENSE" means any cost or expense of
administration of the Case allowed under section 503(b) and 507(a)(1) of the
Bankruptcy Code, including any actual and necessary expense of preserving the
Estate, any actual and necessary expenses of operating any business of the
Debtor in Possession, all compensation and reimbursement of expenses to the
extent allowed by the Bankruptcy Court in a Final Order under section 330 or
503(b) of the Bankruptcy Code, any amounts payable pursuant to any Final
Order authorizing the assumption of an executory contract or unexpired lease
under section 365(b) of the Bankruptcy Code, and any fees or charges properly
assessed against the Estate under 28 U.S.C. section 1930, as to which no
objection has been interposed or filed with the Bankruptcy Court or, if a
timely objection has been interposed or filed with the Bankruptcy Court,
which has been Resolved as qualifying as an Allowed Administrative Expense.
2.1.2 "ALLOWED CLAIM" means a Claim, to the extent it has not been
withdrawn, expunged, paid or otherwise deemed satisfied, with regard to which
one of the following is true:
a. The Claim satisfies all of the following
requirements, in which event the Claim shall be
an Allowed Claim in the amount and of the
priority classification set forth on the
Schedules:
(i) No proof of claim for the Claim has
been timely filed or deemed timely
filed in the Case;
(ii) The Claim has been scheduled by a
Debtor as other than contingent,
unliquidated or disputed; and
(iii) The Claim is not a Disputed Claim
or is a Disputed Claim that has
been Resolved as qualifying as an
Allowed Claim; or
b. The Claim satisfies both of the following
requirements, in which event the Claim shall be
an Allowed Claim in the amount
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and of the priority classification set forth on
the proof of claim for such Claim:
(i) A proof of claim for the Claim has
been timely filed or deemed timely
filed in the Case; and
(ii) The Claim is not a Disputed Claim or
is a Disputed Claim that has been
Resolved as qualifying as an Allowed
Claim.
2.1.3 "ALLOWED INTEREST" means an Interest in the Debtor in the
amount and of the priority classification set forth in the proof of interest
for the Interest that has been timely filed or deemed timely filed in the
Case, or, in the absence of such proof of interest, as set forth in the list
of equity holders filed by the Debtor, unless:
a. The Interest has been or may be objected to
before or after the Effective Date, in which
case the Interest shall be allowed only in such
amount and of such classification as is allowed
by a Final Order; or
b. Such Interest has been paid in full, withdrawn
or otherwise deemed satisfied in full.
2.1.4 "AUTHORIZED OLD STOCK" means the current authorized capital
stock of the Company consisting of 300,000,000 shares of common stock and
20,000,000 shares of preferred stock. As of November 30, 1999 there are
243,578,142 shares of common stock issued and outstanding, and there are
523,784 shares of preferred stock issued and outstanding.
2.1.5 "AVAILABLE CASH" means all Cash in the Debtor's Estate on the
Effective Date.
2.1.6 "BANKRUPTCY CODE" means Title 11 of the United States Code, as
amended.
2.1.7 "BANKRUPTCY COURT" means the unit of the United States
District Court for the Central District of California known as the Bankruptcy
Court for that
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District, or such other court of competent jurisdiction as may exercise
jurisdiction over the Case.
2.1.8 "BANKRUPTCY RULES" means the Federal Rules of Bankruptcy
Procedure promulgated pursuant to 28 U.S.C. section 2075, as amended, and the
Local Bankruptcy Rules of the United States Bankruptcy Court for the Central
District of California, as amended.
2.1.9 "BUSINESS DAY" means any day other than a Saturday, a Sunday
or a Legal Holiday.
2.1.10 "CASE" means the Chapter 11 case for the Debtor filed on
December 7, 1999, and designated in the caption on the first page of the Plan.
2.1.11 "CASH" means lawful currency of the United States and
equivalents thereof, including bank deposits and immediately available funds
in the form of wire transfers, cashier's checks, cleared checks and similar
forms of payment.
2.1.12 "CLAIM" means (a) a right to payment, whether or not such
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured; or (b) a right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.
2.1.13 "CLAIMS REGISTER" means the list described in Article 6.12 of
the Plan.
2.1.14 "CLASS" means a class of Claims or Interests specified in
Article 3 of the Plan.
2.1.15 "COMPANY" means the Debtor or the Reorganized Debtor, as the
context requires.
2.1.16 "CONFIRMATION" means the entry of the Confirmation Order by
the Clerk of the Bankruptcy Court on the docket for the Case.
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2.1.17 "CONFIRMATION DATE" means the date on which the Confirmation
Order is entered by the Clerk of the Bankruptcy Court on the docket for the
Case.
2.1.18 "CONFIRMATION ORDER" means the Order of the Bankruptcy Court
confirming this Plan.
2.1.19 "CONTRACTUAL REDEMPTION AMOUNT" means the right of the
holders of the Old Preferred Stock to require redemption pursuant to the
Investment Agreements, at the adjusted Liquidation Preference if the
Delisting Charge is not paid within 30 days of when due. Pursuant to the
Resolution Establishing Preferences of First Convertible Preferred Stock, the
holders of Old Preferred Stock are entitled to a liquidation preference of
$25 per share, as adjusted pursuant to section 1.4(b)(iv) of the Investment
Agreements. The Contractual Redemption Amount, as of November 30, 1999 was
$21,466,516.
2.1.20 "CREDITORS' COMMITTEE" means the Committee of Creditors
Holding Unsecured Claims appointed by the United States Trustee in the Case,
if any.
2.1.21 "DEBTOR" means Casmyn Corp., a Colorado corporation.
2.1.22 "DEBTOR IN POSSESSION" means the Debtor acting in the
capacity of debtor in possession in this Case for the Debtor.
2.1.23 "DELISTING CHARGE" means the provision provided in Article
1.4(b)(iv) of the Investment Agreements that provides, among other matters,
that if the registrable securities as defined in the Investment Agreements
are not listed and traded on NASDAQ or on a national securities exchange, the
Company is obligated to pay to each investor in cash an amount equal to 3% of
the total purchase price of the Old Preferred Stock for each such 30 day
period. As of November 30, 1999, the accrued Delisting Charge totaled
$5,715,979.
2.1.24 "DISCLOSURE STATEMENT" means the Disclosure Statement to
accompany the Debtor's Plan of Reorganization, as approved by an order of the
Bankruptcy Court entered on February 3, 2000, pursuant to section 1125 of the
Bankruptcy Code.
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2.1.25 "DISPUTED ADMINISTRATIVE EXPENSE" means any alleged cost or
expense of administration of the Case claimed under section 503(b) and
507(a)(1) of the Bankruptcy Code, including any alleged actual and necessary
expenses of preserving the Estate, any alleged actual and necessary expenses
of operating any business of the Debtor in Possession, all compensation and
reimbursement of expenses claimed under section 330 or 503(b) of the
Bankruptcy Code, any amounts claimed in connection with the assumption of an
executory contract or unexpired lease under section 365(b) of the Bankruptcy
Code, and any fees or charges assessed against the Estate under section 28
U.S.C. section 1930, as to which the time set by the Bankruptcy Court, if
any, to interpose or file an objection has not expired or as to which an
objection has been interposed or filed with the Bankruptcy Court or which is
otherwise not an Allowed Administrative Expense.
2.1.26 "DISPUTED CLAIM" or "DISPUTED INTEREST" means a Claim or
Interest to the extent the Claim or Interest has not been withdrawn and with
respect to which an objection has been or may be filed with the Bankruptcy
Court before or after the Effective Date and:
a. If no objection to the Claim or Interest has
been filed with the Bankruptcy Court:
(i)a proof of claim for the Claim or
Interest has not been timely filed or
deemed timely filed, the Claim or
Interest has not been scheduled by
the Debtor and the Claim has not been
Resolved as qualifying as an Allowed
Claim; or
(ii) proof of claim for the Claim or
Interest has been timely filed or
deemed timely filed, the Claim or
Interest has been scheduled by the
Debtor as contingent, unliquidated or
disputed and the Claim or Interest
has
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not been Resolved as qualifying
as an Allowed Claim or Allowed
Interest; or
(iii) a proof of claim for the Claim or
Interest has been timely filed or
deemed timely filed, the Claim or
Interest has been scheduled by the
Debtor in an amount that is less than
or of a priority different from that
set forth in such proof of Claim or
Interest and the Claim or Interest
has not been Resolved as qualifying
as an Allowed Claim or Allowed
Interest; or
(iv) the Creditors' Committee, an Equity
Committee, or the Debtor, have
alleged, in a complaint or other
pleading or paper that has been
filed with the Bankruptcy Court, in
the Disclosure Statement or
anywhere else, that any transfer to
the holder of the Claim or Interest
is or may be avoidable, or any
property held by the holder of the
Claim is or may be recoverable,
under section 542, 543, 544, 545,
547, 548, 549, 550 or 553 of the
Bankruptcy Code, or that the
claimant or interest holder has
liability to the Debtor or the
Estate, unless such entity has paid
the amount or turned over the
property for which such entity is
liable; or
(v) the Claim or Interest is designated
as a Disputed Claim in the Plan or
Disclosure Statement; or
(vi) after written request, the clearing
house, brokerage, investment bank,
nominee or other holder or
representative of such claim or
interest has failed to identify the
beneficial holder of such claim or
interest
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b. If an objection to such Claim or Interest has
been filed with the Bankruptcy Court, the Claim
or Interest has not been Resolved as qualifying
as an Allowed Claim or Allowed Interest.
2.1.27 "DISTRIBUTION DATE" means the Business Day on which Cash or
New Securities to be distributed to the holders of Allowed Administrative
Claims or Allowed Claims or Allowed Interests pursuant to the Plan or as soon
as is practicable thereafter.
2.1.28 "DISTRIBUTION RECORD DATE" means a Business Day selected by
the Reorganized Debtor that is at least 30 days prior to the corresponding
Distribution Date, from time to time. The First Distribution Record Date, for
New Securities to be distributed on or after the Effective Date, shall be the
Petition Date.
2.1.29 "EFFECTIVE DATE" means the first Business Day that is more
than ten (10) days after the Confirmation Date on which all of the conditions
to effectiveness of the Plan set forth in Article 10 of the Plan have been
satisfied or waived in accordance with Article 10.7 of the Plan; provided,
however, that the Debtor, with the approval of the Official Committee of
Creditors Holding Unsecured Claims, may waive the ten (10) day requirement,
in which event the Effective Date shall be the date specified in a Notice of
Effective Date filed with the Bankruptcy Court and served on the Special
Notice Entities.
2.1.30 "EMPLOYEE STOCK OPTION PLAN" means a new employee stock
option plan for the employees of the Reorganized Debtor and its subsidiaries
that provides for the granting of options for up to 10% of the total
outstanding shares of the common stock in the Reorganized Debtor, after
confirmation of the Plan and the implementation of all matters contemplated
or allowed under the Plan, including the Reverse Stock Split and conversion
of the Old Preferred Stock and Old Common Stock into New Holdco Common Stock.
If Goldco is spun-out to the Holdco shareholders, then a mirror-image
employee stock option plan shall be authorized and adopted by Goldco.
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2.1.31 "ESTATE" means the estate of the Debtor created upon the
commencement of the Case under section 541 of the Bankruptcy Code.
2.1.32 "FINAL ORDER" means an order or judgment of the Bankruptcy
Court entered by the Clerk of the Bankruptcy Court on the appropriate docket
in the Case, or an order or judgement of another court of competent
jurisdiction that the Bankruptcy Court has specifically permitted to proceed
to such order or judgment, as entered by the clerk of such court on an
appropriate docket, the effect of which has not been stayed and as to which
the time to appeal, petition for review or rehearing or certiorari has
expired and from which no appeal, petition for review or rehearing or
certiorari was filed, or from which any appeal, petition for review or
rehearing or certiorari has been finally determined, dismissed, withdrawn or
denied.
2.1.33 "FRACTIONAL SHARE ROUNDING" means, after the Reverse Split
has been effectuated of the Old Common Stock and the number of shares of New
Common Stock has been calculated, all fractional shares shall be rounded up
to the nearest whole number.
2.1.34 "GOLDCO" means Goldco Ltd., a Nevada corporation, which will
hold the Debtor's mining operations through its subsidiary, Casmyn Mining
Zimbabwe (Private) Ltd.
2.1.35 "HOLDCO" means the existing Casmyn Corp., which will be
reorganized and will retain the name "Casmyn Corp." (until such time as its
Board of Directors elects to change its name as authorized by the Plan),
though it will be referred to from time to time, for the purposes of the
Plan, as Holdco, and which may change its state of incorporation as provided
in the Plan, and which will hold all of the Debtor's Litigation Claims except
to the extent that any other party is authorized to assert any Litigation
Claims on behalf of the Estate pursuant to Court order, as well as certain
other assets, including without limitation, the Debtor's investment in
Auromar Development Corporation, and initially the entire equity interest in
Goldco.
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2.1.36 "INTERCOMPANY" means, in connection with an Allowed Claim or
a Disputed Claim against any Debtor, an Allowed Claim or a Disputed Claim
held by a Debtor or a Non-Debtor Affiliate.
2.1.37 "INTEREST" means an equity interest in the Debtor, including
(a) an interest in the form of one or more shares of any common stock or any
preferred stock issued by the Debtor including, without limitation, the Old
Common Stock and Old Preferred Stock, and (b) any warrants, rights, options,
puts, calls, escrows or other arrangements or agreements with respect to any
common stock or any preferred stock, including, without limitation, the Old
Warrants.
2.1.38 "INVESTMENT AGREEMENTS" means the contractual agreements
dated as of April 11, 1997 and September 2, 1997, between Casmyn Corp. and
those investors who purchased Old Preferred Stock at a purchase price of $25
per share.
2.1.39 "LEGAL HOLIDAY" means New Year's Day, Martin Luther King's
Birthday, Washington's Birthday, Memorial Day, Independence Day, Labor Day,
Columbus Day, Veteran's Day, Thanksgiving Day, Christmas Day and any other
day appointed as a holiday by the President, Congress, Governor of California
or Legislature of California.
2.1.40 "LIQUIDATION PREFERENCE" means the priority amount that the
holders of the Old Preferred Stock are owed in a liquidation. The dividend on
the Old Preferred Stock is 8% per annum, which has been paid in additional
shares of Old Preferred Stock, not cash. Pursuant to the Resolution
Establishing Preferences of First Convertible Preferred Stock, the holders of
the Old Preferred Stock are entitled to a Liquidation Preference of $25 per
share, as adjusted pursuant section 1.4(b)(iv) of the Investment Agreements.
2.1.41 "LITIGATION CLAIMS" means all Claims, rights, causes of
action, counterclaims, objections and defenses of the Debtor, its Estate or
the Non-Debtor Affiliates against any entity, whether in law or equity,
including all Claims, rights, causes of action, counterclaims, objections and
defenses arising under sections 541 through
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558, inclusive, of the Bankruptcy Code, including all claims for equitable
subordination, and including all litigation rights and causes of action
transferred to the Debtor pursuant to Articles 3.14, 3.16, and 3.19 of the
Plan, all of which Claims are expressly preserved herein, and shall be vested
in Holdco and pursued for the benefit of the Debtor, its Estate and
Reorganized Holdco except to the extent that any other party is authorized to
assert any Litigation Claims on behalf of the Estate pursuant to Court order.
The known Litigation Claims are listed on Exhibit "1" hereto, "Preserved and
Retained Litigation Claims." Holdco expects that in the course of its
investigation of potential Litigation Claims that it will discover additional
facts, legal theories, and even defendants, and fully intends to pursue all
such new Litigation Claims against any and all responsible parties, on any
and all available theories of recovery, within the sole discretion of Holdco
as the Reorganized Debtor except to the extent that any other party is
authorized to assert any Litigation Claims on behalf of the Estate pursuant
to Court order.
2.1.42 "MANAGEMENT INCENTIVE STOCK OPTION PLAN" means a new or
restated management incentive stock option plan that provides for granting of
options for up to 7% of the total outstanding shares of common stock in the
Reorganized Debtor after confirmation of the Plan and the implementation of
all matters contemplated or allowed under the Plan, including the Reverse
Stock Split and the conversion of the Old Preferred Stock and Old Common
Stock into New Holdco Common Stock, to senior management and the Board of
Directors upon duly noticed and authorized Board resolutions. If Goldco is
spun-out to the Holdco shareholders, then a mirror-image management incentive
stock option plan shall be authorized and adopted by Goldco.
2.1.43 "MANAGEMENT OPTIONS" means the stock option issued effective
January 18, 1999 to Mark S. Zucker for 75,807 shares of Old Preferred Stock.
As of September 30, 1999, the Management Options represented the right to
acquire 84,130 shares of Old Preferred Stock.
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2.1.44 "NEW GOLDCO COMMON STOCK" means the new common stock to be
issued with respect to Goldco, all of which will initially be issued to
Holdco upon the Effective Date. The New Goldco Common Stock will be issued
pursuant to section 1145 of the Bankruptcy Code.
2.1.45 "NEW GOLDCO WARRANTS" means new warrants to be issued on the
Effective Date to each Holder of New Holdco Common Stock, one New Goldco
Warrant for each share of New Holdco Common Stock. The New Goldco Warrants
shall not be tradeable or transferable in any manner separately, but will be
tradeable solely in combination with the New Holdco Common Stock. The New
Goldco Warrants shall be callable by the Holdco Board of Directors upon the
terms and conditions determined by the Board of Directors of Holdco, at which
time they will be exchanged for all or a portion of New Goldco Common Stock,
at the sole discretion of the Board of Directors of Holdco. The New Goldco
Warrants will be issued pursuant to section 1145 of the Bankruptcy Code.
2.1.46 "NEW GOLDCO SERIES 2 WARRANTS" means new warrants issuable as
determined by the Board of Directors of Goldco within two years after
confirmation of the Plan, and which may be issued and exercised to generate
additional capital to fund operations or litigation as necessary. The New
Goldco Series 2 Warrants will not be issued pursuant to section 1145 of the
Bankruptcy Code.
2.1.47 "NEW HOLDCO COMMON STOCK" means the new common stock to be
issued with respect to Holdco. The New Holdco Common Stock will be issued
pursuant to section 1145 of the Bankruptcy Code.
2.1.48 "NEW HOLDCO WARRANTS" means new warrants to be issued by
Holdco on the Effective Date to each holder of New Holdco Common Stock, one
New Holdco Warrant for each share of New Holdco Common Stock. The New Holdco
Warrants will be exercisable at $6 each for a term of one year after the
Effective Date and will be detachable from and independently tradeable from
shares of New Holdco
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Common Stock after six months from the Effective Date. The New Holdco
Warrants will be issued pursuant to section 1145 of the Bankruptcy Code.
2.1.49 "NEW PREFERRED STOCK" means up to 10,000,000 shares of new
preferred stock issued by Holdco, by Goldco, or by both in one or more series
with such rights, preferences, privileges, and restrictions as their
respective Boards of Directors shall determine, with the par value to be
determined pursuant to applicable law by the Board of Directors. The New
Preferred Stock will not be issued pursuant to section 1145 of the Bankruptcy
Code.
2.1.50 "NEW PREFERRED WARRANTS" means any warrants that the Board of
Directors of Holdco issues for shares of Holdco preferred stock convertible
into shares of Holdco common stock pursuant to the provisions of the By-Laws
and Articles of Incorporation, as amended by the Plan, to prevent unfair
attempts to take over Holdco. The New Preferred Warrants will not be issued
pursuant to section 1145 of the Bankruptcy Code.
.1.51 "NEW SECURITIES" means New Goldco Common Stock, New Holdco
Common Stock, New Goldco Warrants, New Goldco Series 2 Warrants, New Holdco
Warrants, New Preferred Stock and any options or warrants issued pursuant to
the Management Incentive Stock Option Plan or the Employee Stock Option Plan,
but does not include New Preferred Warrants.
2.1.52 "NEW WARRANTS" means the New Holdco Warrants, the New Goldco
Warrants and the New Goldco Series 2 Warrants, but does not include the New
Preferred Warrants.
2.1.53 "NON-DEBTOR AFFILIATES" means any entity, other than the
Debtor, 20% or more of whose outstanding voting securities are directly or
indirectly owned, controlled, or held with power to vote, by the Debtor, and
any entity created pursuant to or in connection with the performance of the
Plan, as reflected on Exhibit "2" hereto.
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2.1.54 "OLD COMMON STOCK" means all of the shares of Casmyn common
stock issued and outstanding. As of October 31, 1999, 243,578,142 shares were
issued and outstanding.
2.1.55 "OLD PREFERRED STOCK" means the Casmyn Corp. First
Convertible Preferred Stock initially issued on or about April 14, 1997,
pursuant to a Resolution Establishing Preferences of First Convertible
Preferred Stock and the accompanying Preferred Stock Investment Agreements
dated as of April 11, 1997 and September 2, 1997 ("Investment Agreements"),
and includes any warrants, rights, options, puts, calls, escrows or other
arrangements or agreements with respect to any Preferred Stock, except for
the Management Options. Paragraph 4 of the Preferred Stock Resolution
provides for the Old Preferred Stock to be convertible into Old Common Stock
at a discount to the price of the Old Common Stock ranging from 8.5% to 39%,
depending on the date on which such shares were converted after issuance. The
holders of the Old Preferred Stock also have a right to require redemption
pursuant to the Investment Agreements, at the adjusted Liquidation Preference
price ("Contractual Redemption Amount") if the Delisting Charge is not paid
within 30 days of when due. The Contractual Redemption Amount, as of October
31, 1999 was $21,466,516.
2.1.56 "OLD SECURITIES" means Old Common Stock, Old Preferred Stock,
and Old Warrants.
2.1.57 "OLD WARRANTS" means all existing and outstanding but
unexercised stock options and warrants, including without limitation the
stock options issued in connection with the 1995 Incentive Stock Option Plan,
the 1995 Non-Qualified Stock Option Plan and the 1997 Directors Stock Option
Plan, but excluding the Management Options.
2.1.58 "PETITION DATE" means December 7, 1999, the date on which
this Chapter 11 case was commenced.
2.1.59 "PLACEMENT AGENT PARTIES" means the Cappello Group, Inc.,
Cappello Capital Corp., Alexander L. Cappello, Linda Cappello, Gerald K.
Cappello,
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Lawrence K. Fleischman, and Navigator Investment, Ltd., as well as their
affiliated and controlled entities and any transferees of the Placement Agent
Warrants.
2.1.60 "Placement Agent Warrants" means warrants to purchase 172,725
shares of First Convertible Preferred Stock which were issued to the
Placement Agent Parties in conjunction with the sale of the First Convertible
Preferred Stock during the fiscal year ended September 30, 1997, and which
are now held by various individuals and entities.
2.1.61 "PLAN" means this Plan of Reorganization, including all
addenda, exhibits, schedules, releases, and other attachments hereto, in its
present form or as it may be altered, amended, modified or supplemented from
time to time in accordance with the Bankruptcy Code, the Bankruptcy Rules and
orders of the Bankruptcy Court.
2.1.62 "PLAN PROPONENT" means the Debtor.
2.1.63 "PRIORITY TAX ALLOWED CLAIMS" means Allowed Claims of a kind
specified in section 507(a)(8) of the Bankruptcy Code.
2.1.64 "PRIORITY TAX DISPUTED CLAIMS" means Disputed Claims of a
kind specified in section 507(a)(8) of the Bankruptcy Code which, if Resolved
as qualifying as a Priority Tax Allowed Claims, would constitute Priority Tax
Allowed Claims.
2.1.65 "REORGANIZED DEBTOR" means Holdco.
2.1.66 "RESERVE FOR UNCLAIMED DISTRIBUTIONS" has the meaning set
forth in Article 6.7 of the Plan.
2.1.67 "RESOLVED" means, with reference to a Disputed Administrative
Expense or a Disputed Claim or Disputed Interest:
a. The withdrawal of the Disputed
Administrative Expense or Disputed Claim or
Disputed Interest;
b. The estimation of the Disputed Administrative
Expense or the Disputed Claim or Disputed
Interest for purposes of distribution under the
Plan pursuant to a Final Order or the Plan;
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c. The allowance of the Disputed Administrative
Expense or the Disputed Claim or Disputed
Interest pursuant to a Final Order or the Plan;
d. The disallowance of the Disputed
Administrative Expense or the Disputed Claim or
Disputed Interest pursuant to a Final Order or
the Plan;
e. The withdrawal of all objections that caused
the Disputed Administrative Expense or the
Disputed Claim or Disputed Interest to qualify as
a Disputed Claim;
f. If the Disputed Administrative Expense,
Disputed Claim, or Disputed Interest qualified as
a Disputed Administrative Expense, Disputed
Claim, or Disputed Interest solely because any
deadline set by the Bankruptcy Court to object to
the underlying Expense Claim or Interest has not
expired, the expiration of any deadline set by
the Bankruptcy Court to object to the underlying
Administrative Expense, Claim, or Interest;
g. If the Disputed Administrative Expense,
Disputed Claim, or Disputed Interest qualified as
a Disputed Administrative Expense, Disputed
Claim, or Disputed Interest solely because the
holder of the underlying Claim or Interest was an
entity from which property is or may be
recoverable or a transfer is or may be avoidable
under section 542, 543, 544, 545, 547, 548, 549,
550 or 553 of the Bankruptcy Code, such entity
has paid the amount or turned over the property
for which the entity is liable; and
h. If the Disputed Administrative Expense,
Disputed Claim, or Disputed Interest qualified as
a Disputed Administrative Expense, Disputed
Claim, or Disputed Interest solely because
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the underlying Administrative Expense, Claim, or
Interest was related to a Litigation Claim, the
entry of a Final Order determining or
compromising the Litigation Claim or authorizing
the withdrawal or abandonment of the Litigation
Claim.
2.1.68 "REVERSE STOCK SPLIT" means for each 500 shares of the
Debtor's Old Common Stock outstanding, the exchange, combination, conversion
and change into one share of New Holdco Common Stock, subject to Fractional
Share Rounding, which shall create 487,156 shares of New Holdco Common Stock
as of the Effective Date for the holders of Old Common Stock.
2.1.69 "SCHEDULES" means the schedule of assets and liabilities and
lists of equity security holders, and any amended schedules and lists, or any
supplements or amendments thereto, filed with the Bankruptcy Court by the
Debtor in the Case pursuant to section 521 of the Bankruptcy Code and any
applicable Bankruptcy Rules.
2.1.70 "SECURED" means, with reference to an Allowed Claim or a
Disputed Claim, as the case may be, an Allowed Claim or a Disputed Claim
secured by a perfected, unavoidable and enforceable lien, security interest
or other charge against property in which the Estate has an interest, or
which is subject to setoff under section 553 of the Bankruptcy Code, to the
extent of the value of the interest of the holder of such Allowed Claim or
Disputed Claim in such property, or to the extent of the amount subject to
such setoff, as the case may be, determined in accordance with section 506 of
the Bankruptcy Code.
2.1.71 "SPECIAL NOTICE ENTITIES" means the United States Trustee,
the United States Securities and Exchange Commission, the United States
Internal Revenue Service, the California Franchise Tax Board, the California
State Board of Equalization and the entities set forth on the list of
entities that have delivered to the attorneys for the Debtor, whether before
or after the Effective Date, requests for copies of all notices required to
be served under Bankruptcy Rule 2002, unless an entity requests in writing to
be removed from the list of Special Notice Entities.
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2.1.72 "STEPDOWN PAYMENT" means the amount by which the holders of
the Old Preferred Stock have agreed to reduce the amount of New Holdco Common
Stock they will receive pursuant to the provisions in Article 3.11, in
exchange for having the holders of Class 6 Claims vote to accept the Plan
without undue delay, i.e. without any member of Class 6's seeking to delay
the Court's approval of the Disclosure Statement or confirmation of the Plan.
In the event of such undue delay, the Official Committee of Creditors Holding
Unsecured Claims has the right to notify the Debtor and the Court that undue
delay has occurred; and, as a result of such notification, the "Voluntary
Stepdown" described in Article 3.13 of the Plan shall not be made or, if the
Court nevertheless requires the "Voluntary Stepdown" described in Article
3.13 of the Plan to be made, all holders of Old Preferred Stock shall be
entitled to rescind their votes on the Plan and shall be entitled to cast new
votes for or against the Plan.
2.1.73 "TREASURY STOCK" means all Old Common Stock or Old Preferred
Stock held by or for the account of Casmyn, or held by or for the account of
any Casmyn subsidiary.
B. INTERPRETATION, RULES OF CONSTRUCTION, COMPUTATION OF TIME, AND CHOICE
OF LAW.
2.1.74 The provisions of the Plan shall control over any
descriptions thereof contained in the Disclosure Statement.
2.1.75 Any term used in the Plan that is not defined in the Plan but
that is used or defined in the Bankruptcy Code or the Bankruptcy Rules, has
the meaning assigned to that term in (and shall be construed in accordance
with the rules of construction under) the Bankruptcy Code or the Bankruptcy
Rules, as the case may be.
2.1.76 The words "herein," "hereof," "hereto," "hereunder," and
others of similar import refer to the Plan as a whole and not to any
particular Article, section, subsection, or clause contained in the Plan.
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2.1.77 Unless specified otherwise in a particular reference, all
references in the Plan to Articles, Exhibits and Schedules are references to
Articles, Exhibits and Schedules of or to the Plan.
2.1.78 Any reference in the Plan to a contract, document,
instrument, release, bylaw, certificate, indenture, or other agreement or
document being in a particular form or on particular terms and conditions
means that such document shall be substantially in such form or substantially
on such terms and conditions.
2.1.79 Any reference in the Plan to an existing document, Exhibit or
Schedule means such document, Exhibit or Schedule as it may have been
amended, restated, modified or supplemented as of the Effective Date.
2.1.80 Captions and headings to Articles and sections in the Plan
are inserted for convenience of reference only and shall neither constitute a
part of the Plan nor in any way affect the interpretation of any provisions
hereof.
2.1.81 Whenever from the context it is appropriate, each term stated
in either the singular or the plural shall include both the singular and the
plural.
2.1.82 In computing any period of time prescribed or allowed by the
Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.
2.1.83 All Exhibits and Schedules to the Plan are incorporated into
the Plan and shall be deemed to be included in, and made a part of, the Plan.
2.1.84 Subject to the provisions of the Plan, the Confirmation Order
and any contract, certificate, bylaw, instrument, release, indenture, or
other agreement or document entered into in connection with the Plan, and
except to the extent the Bankruptcy Code, the Bankruptcy Rules or other
federal law may apply, the rights and obligations arising under the Plan
shall be governed by, and construed and enforced in accordance with, the laws
of the State of California, without giving effect to the principles of
conflict of laws of the State of California.
2.1.85 The Plan supersedes all negotiations which preceded the Plan.
The Plan is intended as a final expression of the provisions set forth in the
Plan and
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may not be contradicted by evidence of prior or contemporaneous oral or other
agreements. The Plan is also intended as a complete and exclusive statement
of the provisions of the Plan.
ARTICLE 3 - DESIGNATION OF UNCLASSIFIED AND CLASSIFIED EXPENSES, CLAIMS AND
INTERESTS; TREATMENT OF ALLOWED CLAIMS AND ALLOWED INTERESTS, DISALLOWANCE OF
INTEREST ON CLAIMS
A. GENERAL PROVISIONS
3.0 (a) CLASSIFICATION. As required by section 1123(a)(1) of
the Bankruptcy Code, the Plan leaves Allowed Administrative Expenses and
Priority Tax Allowed Claims unclassified. The remainder of all Allowed Claims
and Allowed Interests are classified according to their right to priority of
payments as provided in the Bankruptcy Code.
(b) DESIGNATION OF IMPAIRED AND UNIMPAIRED CLASSES.
Classes 3, 4, 5, 6 and 8 are impaired under the Plan. Classes 1, 2, and 7 are
unimpaired under the Plan.
(c) INTEREST. Any Claim for interest accrued after or
attributable to a period following the Petition Date with respect to an Allowed
Claim shall be disallowed in accordance with section 502 of the Bankruptcy Code.
Any Claim for interest accrued after or attributable to a period following the
Petition Date or for reasonable fees, costs or charges provided for under the
agreement with respect to a Secured Allowed Claim in Class 2 shall be allowed or
disallowed in accordance with sections 502 and 506 of the Bankruptcy Code.
(d) INCLUSION IN CLASSES. A Claim or Interest is classified
in a particular Class only to the extent that the Claim or Interest qualifies
within the description of that Class and is classified in a different Class to
the extent that any remainder of the Claim or Interest qualifies within the
description of the different Class. A Claim or Interest is in a particular Class
only to the extent that the Claim or Interest is
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an Allowed Claim or Allowed Interest in that Class and has not been paid,
released or otherwise satisfied before the Effective Date. For purposes of
the Plan, Claims and Interests are classified and treated as follows:
B. PRIORITY CLAIMS
3.2 CLASS 1 (NON-TAX PRIORITY CLAIMS). Class 1 consists of all
Allowed Claims of the kind specified in section 507(a)(3), 507(a)(4) or
507(a)(6) of the Bankruptcy Code.
3.3 All Allowed Class 1 Claims shall be paid in full on the
Effective Date, or ten days after entry of a Final Order allowing such claim.
C. UNSECURED CLAIMS
3.4 CLASS 2 (UNSECURED CLAIMS). Class 2 consists of all Allowed
Unsecured Claims against Casmyn Corp. not classified in any other class. This
Class will include any claims arising out of the rejection of any executory
contract.
3.5 All Allowed Class 2 Claims shall be paid in full on the
Effective Date or as soon as such Claim becomes an Allowed Claim pursuant to
a Final Order.
3.6 CLASS 3 (ALLOWED DELISTING CHARGE CLAIMS). Class 3 consists of
all Allowed Delisting Charge Claims in the amount of $5,715,979 as of
November 30, 1999 (subject to reconciliation and claims objections).
3.7 Class 3 claims shall be treated pursuant to the exercise of the
conversion rights provided for in the Investment Agreements as modified by
this Plan and as provided for in Paragraph 3.14 of the Plan. In lieu of
payment of the Allowed Class 3 Claims and the Allowed Class 4 Unsecured
Contractual Redemption Amount and all claims associated with each share of
Old Preferred Stock, each holder of a share of Old Preferred Stock will
exercise their conversion rights, but agree to receive their reduced pro rata
amount of 95% of the New Holdco Common Stock, estimated to be 17.67 shares of
New Holdco Common Stock for each share of Old Preferred Stock held, along
with one New Goldco Warrant and one New Holdco Warrant for each share of New
Holdco Common Stock. The Old Preferred Stock, the right to a Delisting
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Charge, and any other related rights pursuant to the Investment Agreements or
otherwise shall therefore be waived, canceled, rejected, and extinguished as
of the Effective Date. To the extent that Class 6 votes to accept the Plan
without undue delay, i.e. without any member of Class 6's seeking to delay
the Court's approval of the Disclosure Statement or confirmation of the Plan,
Allowed Class 5 Interest Holders, on account of their Allowed Class 5
Interests, their Allowed Class 3 and Class 4 Claims, shall reduce their
distribution to be received hereunder by allocating a portion of their
distribution to the Holders of Allowed Class 6 Interests, so that each holder
of Old Preferred Stock will receive their reduced pro rata amount of 85% of
the New Holdco Common Stock plus the associated New Goldco Warrants and New
Holdco Warrants. The Debtor estimates that each share of Old Preferred Stock
shall therefore only be converted into 5.27 shares of New Holdco Common
Stock, effectively increasing the distribution to holders of Old Common Stock
to 15% of the New Holdco Common Stock.
3.8 CLASS 4 (ALLOWED UNSECURED CLAIMS FOR CONTRACTUAL REDEMPTION
AMOUNT). Class 4 consists of all Allowed Claims for Contractual Redemption
Amounts, in the amount of $21,466,516 as of October 31, 1999 (subject to
reconciliation and the Debtor's claims objections).
3.9 Class 4 claims shall be treated pursuant to the exercise of the
conversion rights provided for in the Investment Agreements as modified by
this Plan and as provided for in Paragraph 3.14 of the Plan. In lieu of
payment of the Allowed Class 3 Claims and the Allowed Class 4 Unsecured
Contractual Redemption Amount and all claims associated with each share of
Old Preferred Stock, each holder of a share of Old Preferred Stock will
exercise their conversion rights, but agree to receive their reduced pro rata
amount of 95% of the New Common Stock for each share of Old Preferred Stock
held, estimated to be 17.67 shares of New Holdco Common Stock, along with one
New Goldco Warrant and one New Holdco Warrant for each share of New Holdco
Common Stock. The Old Preferred Stock, the right to a Delisting Charge, and
any other related rights pursuant to the Investment Agreements or otherwise
shall
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therefore be waived, canceled, rejected, and extinguished as of the Effective
Date. To the extent that Class 6 votes to accept the Plan without undue
delay, i.e. without any member of Class 6's seeking to delay the Court's
approval of the Disclosure Statement or confirmation of the Plan, Allowed
Class 5 Interest Holders, on account of their Allowed Class 5 Interests,
their Allowed Class 3 and Class 4 Claims, shall reduce their distribution to
be received hereunder by allocating a portion of their distribution to the
Holders of Allowed Class 6 Interests, so that each holder of Old Preferred
Stock will receive their reduced pro rata amount of 85% of the New Holdco
Common Stock plus the associated New Goldco Warrants and New Holdco Warrants.
The Debtor estimates that each share of Old Preferred Stock shall therefore
only be converted into 5.27 shares of New Holdco Common Stock, effectively
increasing the distribution to holders of Old Common Stock to 15% of the New
Holdco Common Stock.
D. EQUITY INTERESTS
3.10 CLASS 5 (OLD PREFERRED STOCK). Class 5 consists of all Allowed
Interests of the Old Preferred Stock. As of October 31, 1999, there were
523,784 shares of Old Preferred Stock issued and outstanding.
3.11 By the exercise of the conversion rights in the Investment
Agreements, as modified herein, each share of Old Preferred Stock will be
combined, converted, and changed into its pro rata share of 95% of the New
Holdco Common Stock, which is estimated to be 17.67 shares of New Holdco
Common Stock, and one New Goldco Warrant and one New Holdco Warrant for each
share of New Holdco Common Stock.
3.12 All Old Common Stock held by holders of Old Preferred Stock
shall be automatically deemed to vote for the Plan if Class 5 votes to accept
the Plan pursuant to 11 U.S.C. Section 1126(d).
3.13 VOLUNTARY STEPDOWN. To the extent that Class 6 votes to accept
the Plan without undue delay, i.e. without any member of Class 6's seeking to
delay the Court's approval of the Disclosure Statement or confirmation of the
Plan, Allowed Class 5 Interest Holders, on account of their Allowed Class 5
Interests, their Allowed Class 3
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and Class 4 Claims, shall reduce their distribution to be received hereunder
by allocating a portion of their distribution to the Holders of Allowed Class
6 Interests, so that each holder of Old Preferred Stock will receive their
reduced pro rata amount of 85% of the New Holdco Common Stock plus the
associated New Goldco Warrants and New Holdco Warrants. The Debtor estimates
that each share of Old Preferred Stock shall therefore only be converted into
5.27 shares of New Holdco Common Stock, effectively increasing the
distribution to holders of Old Common Stock to 15% of the New Holdco Common
Stock. In the event any member of Class 6 seeks to delay the Court's approval
of the Disclosure Statement or confirmation of the Plan, the Official
Committee of Creditors Holding Unsecured Claims has the right to notify the
Debtor and the Court that undue delay has occurred; and, as a result of such
notification, the "Voluntary Stepdown" described in Article 3.13 of the Plan
shall not be made or, if the Court nevertheless requires the "Voluntary
Stepdown" described in Article 3.13 of the Plan to be made, all holders of
Old Preferred Stock shall be entitled to rescind their votes on the Plan and
shall be entitled to cast new votes for or against the Plan.
3.14 Under the Plan, holders of Old Common Stock will receive,
pursuant to the Reverse Stock Split, 5% of the New Holdco Common Stock if
Class 6 votes to accept the Plan without undue delay, i.e. without any member
of Class 6's seeking to delay the Court's approval of the Disclosure
Statement or confirmation of the Plan, Classes 5, 4, and 3 Holders have
agreed to allocate a portion of their distribution of New Holdco Common Stock
to Class 6 Holders, so that Holders of Old Preferred Stock shall only receive
their pro rata share of 85% of the New Holdco Common Stock, estimated to be
5.27 shares of New Holdco Common Stock instead of 17.67 shares of New Holdco
Common Stock for each share of Old Preferred Stock plus the associated New
Goldco Warrants and New Holdco Warrants, thus resulting in Class 6 Holders
receiving 15% of the New Holdco Common Stock. These calculations do not take
into account the treatment of odd-lot shareholders or the exercise of any of
the options or warrants issued or exercised pursuant to the Plan, or the
cancellation or surrender to the
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company of any equity interest. If they vote to accept the Plan, the Debtor's
common and preferred shareholders, individually and as classes, will be
deemed to have transferred any and all rights that they may have, known and
unknown, to sue the former or present officers, directors, professionals, and
agents of the Company for any causes of action whatsoever relating to their
acts, conduct or responsibilities with respect to the Company and arising
from 1994 forward, all of which causes of action shall be transferred to,
held by, prosecuted, released, or settled solely by the Debtor or Reorganized
Debtor, as the case may be, and all of the proceeds of which, if any, shall
be retained by the Reorganized Debtor. At any time after one year from the
Effective Date, if the Reorganized Debtor has not initiated prosecution of,
released, or settled any such litigation right or cause of action, such
litigation right or cause of action will be deemed to have been transferred,
if the Creditors' Committee so specifies, to a litigation trust for the
benefit of all holders of New Holdco Common Stock or, if the Creditors'
Committee does not so specify, directly to all holders of New Holdco Common
Stock. The Debtor will seek Court approval of the composition of the
litigation trust and the identity or identities of its litigation trustee or
trustees by Confirmation.
3.15 CLASS 6 (OLD COMMON STOCK). Class 6 consists of all Allowed
Interests of the Old Common Stock. As of October 31, 1999, there were
243,578,142 shares of Old Common Stock issued and outstanding.
3.16 Pursuant to the Reverse Stock Split, each 500 shares of Old
Common Stock will be combined, converted, and changed into one share of New
Holdco Common Stock, rounded up to the nearest integer. Pursuant to the
Voluntary Stepdown described in Article 3.13 of the Plan, Class 6 will
receive a distribution of either 5% or 15% of the New Holdco Common Stock,
along with one New Goldco Warrant and one New Holdco Warrant for each share
of New Holdco Common Stock. These calculations do not take into account the
treatment of odd-lot shareholders or the exercise of any of the options or
warrants issued or exercised pursuant to the Plan, or the cancellation or
surrender to the company of any equity interest. If they vote to
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accept the Plan, the Debtor's common and preferred shareholders, individually
and as classes, will be deemed to have transferred any and all rights that
they may have, known and unknown, to sue the former or present officers,
directors, professionals, and agents of the Company for any causes of action
whatsoever relating to their acts, conduct or responsibilities with respect
to the Company and arising from 1994 forward, all of which causes of action
shall be transferred to, held by, prosecuted, released, or settled solely by
the Debtor or Reorganized Debtor, as the case may be, and all of the proceeds
of which, if any, shall be retained by the Reorganized Debtor. At any time
after one year from the Effective Date, if the Reorganized Debtor has not
initiated prosecution of, released, or settled any such litigation right or
cause of action, such litigation right or cause of action will be deemed to
have been transferred, if the Creditors' Committee so specifies, to a
litigation trust for the benefit of all holders of New Holdco Common Stock
or, if the Creditors' Committee does not so specify, directly to all holders
of New Holdco Common Stock. The Debtor will seek Court approval of the
composition of the litigation trust and the identity or identities of its
litigation trustee or trustees by Confirmation.
3.17 All Old Common Stock held by holders of Old Preferred Stock
shall be automatically deemed to vote for the Plan if Class 5 votes to accept
the Plan pursuant to 11 U.S.C.section 1126(d).
3.18 CLASS 7 (OLD COMMON STOCK CONVENIENCE CLASS: ODD LOT HOLDERS).
Shareholders that hold fewer than 50,000 shares of Old Common Stock, together
with all shareholders holding at least 50,000 shares of Old Common Stock that
elect to be treated as holders of 49,999 shares of Old Common Stock, shall be
separately classified and treated as an administrative convenience class.
3.19 All holders of Allowed Class 7 Interests shall receive a cash
payment equal to the quotient of the common shares in the Debtor that such
shareholder owns divided by 500, rounded up to the next highest integer and
multiplied by $1.00 if Class 5 makes the voluntary stepdown described in
Article 3.13 of the Plan and multiplied by
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$0.30 if Class 5 does not make this voluntary stepdown; provided, however,
that all such cash payments in the aggregate shall not exceed $100,000 and
shall be made first to common shareholders automatically qualifying for
membership in Class 7 and then to common shareholders electing to become
members of Class 7 in the order that their elections are received. The ballot
for Class 6 shall have an election option and shall inform each Class 6
holder of its right to elect to be treated as a Class 7 Holder and receive a
cash payment to the extent total cash payments do not exceed $100,000. To the
extent that Class 6 holders electing to be treated as Class 7 holders would
result in payments of more than $100,000, such elections shall be honored in
the order received. To the extent that the Bankruptcy Court does not approve
of the treatment of this Class of Interests as an administrative convenience
class, then such interests shall be treated as Class 6 Interests. If they
vote to accept the Plan, the Debtor's common and preferred shareholders,
individually and as classes, will be deemed to have transferred any and all
rights that they may have, known and unknown, to sue the former or present
officers, directors, professionals, and agents of the Company for any causes
of action whatsoever relating to their acts, conduct or responsibilities with
respect to the Company and arising from 1994 forward, all of which causes of
action shall be transferred to, held by, prosecuted, released, or settled
solely by the Debtor or Reorganized Debtor, as the case may be, and all of
the proceeds of which, if any, shall be retained by the Reorganized Debtor.
At any time after one year from the Effective Date, if the Reorganized Debtor
has not initiated prosecution of, released, or settled any such litigation
right or cause of action, such litigation right or cause of action will be
deemed to have been transferred, if the Creditors' Committee so specifies, to
a litigation trust for the benefit of all holders of New Holdco Common Stock
or, if the Creditors' Committee does not so specify, directly to all holders
of New Holdco Common Stock. The Debtor will seek Court approval of the
composition of the litigation trust and the identity or identities of its
litigation trustee or trustees by Confirmation.
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3.20 CLASS 8 (LATE FILED OR DISALLOWED CLAIMS AND INTERESTS RECONSIDERED
AND DETERMINED TO BE ALLOWED CLAIMS AND INTERESTS. Class 8 Claims consist of
all claims and interests that arose prior to the Effective Date and either
(1) were not timely filed, but were determined by the Bankruptcy Court on
noticed motion, in a Final Order, based on principles of excusable neglect or
otherwise, to be an Allowed Claim or Allowed Interest, or (2) have been
Disallowed by Final Order but are reconsidered pursuant to Section 502(j) of
the Bankruptcy Code and are determined by Final Order to be Allowed Claims or
Interests; provided, however, that for all such claims and interests under
either subsection (1) or (2) hereof, the holder or claimant must file a
noticed motion with the Bankruptcy Court seeking Allowance or Reconsideration
of its Claim or Interest not later than four years after the Effective Date,
or such holder or claimant will be forever barred from receiving any and all
distributions, of any kind, from the Reorganized Debtor or the Estate,
notwithstanding any other provisions of applicable law.
3.21 The Reorganized Debtor shall set aside a pool of 100,000 shares of
New Holdco Common Stock for distribution to holders of Class 8 Claims, if
any. Each holder of an Allowed Class 8 Claim or Interest shall receive,
within ninety days of the Fourth Anniversary of the Effective Date (or such
later time as the Bankruptcy Court determines is appropriate if motions for
allowance are still then pending), shares of New Holdco Common Stock equal in
value to the amount of such holder's Class 8 Allowed Claim. For purposes of
distributions of shares of New Holdco Common Stock to holders of Class 8
Claims, shares of New Holdco Common Stock will be valued at the greater of
$5.00 per share or the market value of the shares of New Holdco Common Stock
on the Fourth Anniversary of the Effective Date if the shares of New Holdco
Common Stock are then publicly traded, including on a national or
international securities exchange, or such other value as the Court
determines at the Confirmation Hearing is appropriate. Notwithstanding the
foregoing, if total Class 8 Claims exceed the value, calculated in the manner
described herein, of the 100,000 shares of New Holdco Common Stock
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available for distributions to holders of Class 8 Claims, each holder of a
Class 8 Claim shall receive its pro rata share of the 100,000 shares of New
Holdco Common Stock.
ARTICLE 4 - TREATMENT OF UNCLASSIFIED ALLOWED ADMINISTRATIVE EXPENSES AND
PRIORITY TAX ALLOWED CLAIMS, SUBORDINATION OF CLAIMS OF ANY CLASS
A. ADMINISTRATIVE EXPENSES
4.1 ALLOWED ADMINISTRATIVE EXPENSES PAID ON THE EFFECTIVE DATE. Section
1129(a)(9)(A) of the Bankruptcy Code requires that all Allowed Administrative
Expenses be paid on the Effective Date, unless a particular claimant agrees
to a different treatment. The holder of an Allowed Administrative Expense
shall receive on the Effective Date, on account of and in full satisfaction
of the Allowed Administrative Expense, Cash equal to the amount of the
Allowed Administrative Expense, unless the holder agrees to a different
treatment, or the payment by New Securities, as agreed to by the Reorganized
Debtor and the holder.
4.2 PROFESSIONALS; BAR DATE FOR FINAL APPLICATIONS. All professionals or
other entities requesting compensation or reimbursement of expenses pursuant
to sections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy Code for
services performed before the Effective Date, including any compensation or
reimbursement of expenses requested by any entity for making a substantial
contribution in the Case, shall file with the Bankruptcy Court and deliver to
the attorneys for the Debtor or Reorganized Debtor an application for final
allowance of compensation and reimbursement of expenses no later than 30 days
after the Effective Date. The Bankruptcy Court shall calendar a hearing on
the applications for approximately 30 days thereafter and the attorneys for
the Debtor or Reorganized Debtor shall give notice of the hearing in
accordance with the Bankruptcy Rules. Objections to the applications must be
filed with the Bankruptcy Court and served on the attorneys for the Debtor or
Reorganized Debtor and the professional to whom the objections are addressed
in
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accordance with the Bankruptcy Rules. Professionals may agree with the Debtor
or Reorganized Debtor to receive payment in New Securities.
4.3 BAR DATE FOR ALL OTHER ADMINISTRATIVE EXPENSES. All requests for
payment of any other Allowed Administrative Expenses or Disputed
Administrative Expenses, if not previously delivered to the Debtor, shall be
filed with the Bankruptcy Court and delivered to the attorneys for the
Reorganized Debtor on or before 30 days after the Effective Date or they
shall be forever barred from payment by the Debtor, its Estate, the
Reorganized Debtor or otherwise. The Reorganized Debtor shall be required to
file any objection to any such request for payment within 180 days after the
Effective Date, unless otherwise ordered by the Bankruptcy Court.
4.4 U.S. TRUSTEE QUARTERLY FEES. The Reorganized Debtor shall be
responsible for timely payment of fees incurred pursuant to 28 U.S.C. section
1930(a)(6). After Confirmation, the Reorganized Debtor shall file with the
Court and serve on the United States Trustee a quarterly Post-Confirmation
Status Report for each quarter (or portion thereof) the Case remains open.
B. PRIORITY TAX CLAIMS
4.5 PRIORITY TAX ALLOWED CLAIMS. Priority Tax Allowed Claims are certain
unsecured income, employment and other taxes of the kind described in section
507(a)(8) of the Bankruptcy Code. In accordance with section 1129(a)(9)(C) of
the Bankruptcy Code, the holder of a Priority Tax Allowed Claim shall
receive, on account of and in full satisfaction of the Priority Tax Allowed
Claim, payment in full plus simple interest at 8% per year, amortized over
six years, in 24 equal payments, the first payment due on the first day of
the first full month after the Effective Date, and the remaining payments due
every three months thereafter, or, at the Reorganized Debtor's option, Cash
on the Effective Date equal to the amount of the Priority Tax Allowed Claim,
unless the holder agrees to a different treatment.
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C. OTHER PROVISIONS
4.6 MODIFICATION OF TREATMENT OF CLAIMS. The Debtor reserves for itself
and the Reorganized Debtor the right to modify the treatment of any Allowed
Claim or Interest in any manner adverse only to the Holder of such Claim or
Interest at any time after the Effective Date upon the consent of the
creditor or interest holder whose Allowed Claim or Interest, as applicable,
is being adversely affected.
4.7 SUBORDINATION PROVISIONS. The right or Claim of any entity to
enforce a legal, equitable, contractual or other subordination provision,
including any subordination provision contained in the Old Common Stock or
Old Preferred Stock, and the right or Claim of any entity to receive, recover
or be paid from or by the legal or beneficial holder of any Claim the Cash
distributed under the Plan to such holder on account of any legal, equitable,
contractual or other right, Claim or subordination provision, shall terminate
on the Effective Date except to the extent such right or Claim is enforced
pursuant to a specific provision in the Plan. The distribution of Cash or New
Securities to the holder of an Allowed Claim in any Class on account of any
legal, equitable, contractual or other right, Claim or subordination
provision shall be in full satisfaction of such legal, equitable, contractual
or other right, Claim or subordination provision.
4.8 Any Allowed Claim by a present or former common shareholder of the
Debtor or a Non-Debtor Affiliate asserted on account of such shareholder's
purchase, sale, or ownership of securities of the Debtor or Non-Debtor
Affiliates shall be deemed to be included in a newly created Class that is
subordinated to all Allowed Claims or Allowed Interests that are senior or
equal to the Allowed Claim or Allowed Interest represented by such security,
except that if such security is Old Common Stock, such Allowed Claim shall
have the same priority as Old Common Stock. The holder of an Allowed Claim or
Allowed Interest in such Class shall not be entitled to any distributions
under the Plan, because not all the holders of Allowed Claims in certain
senior Classes, such as Classes 3 and 4, will be paid in full under the Plan.
In addition, any Allowed
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Claim for indemnification asserted by any person or entity that the Debtor
sues before Confirmation shall be deemed to be included in a newly created
Class that is subordinated to all other Allowed Claims and Allowed Interests.
The holder of an Allowed Claim in such Class shall not be entitled to any
distributions under the Plan, because not all the holders of Allowed Claims
in certain senior Classes, such as Classes 3 and 4, will be paid in full
under the Plan.
ARTICLE 5 - MEANS FOR PERFORMING THE PLAN
5.1 FROM THE CONFIRMATION DATE TO THE EFFECTIVE DATE. Although the Plan
will become effective only on the Effective Date, on and after the
Confirmation Date until the Effective Date, the Debtor shall take or cause to
be taken all actions which are necessary or appropriate to enable the Plan to
become effective on the Effective Date and to implement and perform the Plan
on and after the Effective Date.
5.2 CREATION OF GOLDCO AND HOLDCO. On the Effective Date, the Debtor
will be reorganized, and Goldco shall be capitalized, and shall be a wholly
owned subsidiary of Holdco. The Board of Directors of Holdco will be
authorized to change the place of incorporation of Holdco or Goldco and will
be authorized to change the name of Holdco or Goldco without shareholder
approval, as set forth in Article 5.18(b) of the Plan. The New Securities in
Goldco and Holdco shall be issued pursuant to the provisions of the Plan and,
except for the New Goldco Series 2 Warrants, the New Goldco Preferred Stock,
the New Preferred Warrants, and any options or warrants issued after
Confirmation pursuant to the Management Incentive Stock Option Plan and the
Employee Stock Option Plan, under 11 U.S.C.section 1145. Holdco shall own all
other subsidiaries not owned by Goldco and shall maintain the Debtor's other
assets including, without limitation, the Debtor's Litigation Claims except
to the extent that any other party is authorized to assert any Litigation
Claims on behalf of the Estate pursuant to Court order. Goldco and Holdco
will each have authorized 50,000,000 shares of New Goldco Common Stock and
New Holdco Common Stock, with such rights, preferences,
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privileges, and restrictions as the Boards of Directors shall determine, with
the par value to be determined pursuant to applicable law by the Board of
Directors, after the Effective Date. The Reorganized Debtor will use its best
efforts to have the New Holdco Common Stock listed for trading as
expeditiously as possible and to maintain that listing.
5.3 Goldco and Holdco shall be authorized to issue up to 10,000,000
shares of New Preferred Stock in one or more series with such rights,
preferences, privileges, and restrictions as the Boards of Directors shall
determine, with the par value to be determined pursuant to applicable law by
the Board of Directors.
5.4 APPOINTMENT OF NEW BOARD OF DIRECTORS. Effective on the Effective
Date, the Confirmation Order shall appoint an initial Board of Directors for
Holdco. The initial Board of Directors shall be classified with three classes
of Directors with staggered three-year terms. There will be three members on
the new Boards of Directors as follows:
Mark Zucker - Class 1
Divo Milan - Class 2
Selwyn Kossuth - Class 3
5.5 Class 1 Directors' terms will expire in 2001; Class 2 Directors'
terms will expire in 2002; and Class 3 Directors' terms will expire in 2003.
Upon all subsequent elections, each Class of Directors will be elected for a
three year term.
5.6 NEW HOLDCO AND GOLDCO WARRANTS. Upon the Effective Date, pursuant to
section 1145 of the Bankruptcy Code, the New Holdco Warrants shall be issued
to each Holder of New Holdco Common Stock, one New Holdco Warrant for each
share of New Holdco Common Stock. The New Holdco Warrants will be exercisable
at $6 each for a term of one year after the Effective Date and will be
detachable from and independently tradeable from shares of New Holdco Common
Stock within six months after the Effective Date. Upon the Effective Date,
pursuant to section 1145 of the Bankruptcy Code, the New Goldco Warrants will
be issued to each Holder of New Holdco Common
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Stock, one New Goldco Warrant for each share of New Holdco Common Stock. The
New Goldco Warrants shall not be tradeable or transferable in any manner
separately, but will be tradeable solely in combination with the New Holdco
Common Stock. The New Goldco Warrants shall be callable by the Holdco Board
of Directors within the two years after the Effective Date upon the terms and
conditions determined by the Board of Directors of Holdco, at which time they
will be exchanged for all or a portion of New Goldco Common Stock, at the
sole discretion of the Board of Directors of Holdco. The New Goldco Series 2
Warrants will be issued if necessary as determined by the Goldco Board of
Directors and will specifically be used to raise additional funds for the
operations of Goldco or for litigation if necessary. The Board of Directors
of Goldco shall have the authority to determine the rights, preferences,
privileges and restrictions granted to or imposed on the New Goldco Series 2
Warrants, which, if issued, shall not be issued pursuant to section 1145 of
the Bankruptcy Code.
5.7 IMPLEMENTATION OF EMPLOYEE STOCK OPTION PLAN AND MANAGEMENT
INCENTIVE STOCK OPTION PLAN, EXERCISE OF MANAGEMENT OPTIONS. Upon the
Effective Date, the Employee Stock Option Plan (a new employee stock option
plan for the employees of the Reorganized Debtor and its subsidiaries that
provides for the granting of options for up to 10% of the total outstanding
shares of the common stock in the Reorganized Debtor) and the Management
Incentive Stock Option Plan (a new or restated management incentive stock
option plan that provides for granting of options for up to 7% of the total
outstanding shares of common stock in the Reorganized Debtor) shall be
implemented. If Goldco is spun out to the Holdco shareholders, then a
mirror-image management incentive stock option plan and an employee stock
option plan shall be authorized and adopted by Goldco. All Stock Option Plans
will be administered by the appropriate Board of Directors or committee
thereof in conformance with all applicable rules of the Securities and
Exchange Commission and the Internal Revenue Service. The existing Management
Options shall be exercised prior to the
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Effective Date so that they are converted into Old Preferred Stock, and will
then be treated as provided for in Class 5.
5.8 TRANSFER OF PROPERTY TO THE REORGANIZED DEBTOR. On the Effective
Date, all property of the Debtor, its Estate and the Non-Debtor Affiliates,
including all property subject to options granted to third parties, all
Litigation Claims (except to the extent that any other party is authorized to
assert any Litigation Claims on behalf of the Estate pursuant to Court
order), all rights to acquire property, all contracts, leases and other
agreements entered into by the Debtor in Possession on or after the Petition
Date, which contracts, leases or other agreements have not expired or been
terminated or assigned, and including all Cash from the sales or dispositions
of property or Litigation Claims from the Petition Date to the Effective
Date, all of which were made in contemplation of the Plan, shall be
transferred to and vested in Holdco free and clear of all liens, Claims,
encumbrances and other interests, except as expressly provided in the Plan or
the Confirmation Order. Holdco shall receive all Cash and marketable
securities, 100% of the New Goldco Common Stock, the Litigation Claims
(except to the extent that any other party is authorized to assert any
Litigation Claims on behalf of the Estate pursuant to Court order), the
Debtor's interest in Auromar Development Corporation, and all other property
not transferred to Goldco. Neither the Debtor, its Estate, the Non-Debtor
Affiliates, nor any other person or entity shall retain any interest in the
property transferred to Holdco. Thereupon, except as provided in the Plan,
the Reorganized Debtor will own and manage such property without further
jurisdiction, restriction, or supervision of or by the Court, except to the
extent necessary to implement or consummate the provisions of the Plan.
5.9 TRANSFER OF STOCK OWNED BY REORGANIZED DEBTOR IN KIND. Pursuant to
the Plan, the Reorganized Debtor may distribute, in whole or in part, on a
pro rata basis, to the holders of New Holdco Common Stock the shares it holds
in the stock of other publicly traded companies. Any such distribution will
be made pursuant to all applicable securities laws and not pursuant to
section 1145 of the Bankruptcy Code.
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5.10 SALE OR OTHER DISPOSITION OF PROPERTY. After the Effective Date,
the Reorganized Debtor may use, acquire, sell or otherwise dispose of their
Assets in accordance with the Plan without supervision of or approval by the
Bankruptcy Court or the United States Trustee and free of any restrictions in
the Bankruptcy Code or the Bankruptcy Rules.
5.11 PRESERVATION AND RETENTION OF ALL LITIGATION CLAIMS. On the
Effective Date, all Litigation Claims shall be retained by, and/or
transferred to and vested in Holdco, free and clear of all liens, Claims,
encumbrances and other interests, except as expressly provided in the Plan or
the Confirmation Order, and except to the extent that any other party is
authorized to assert any Litigation Claims on behalf of the Estate pursuant
to Court order, and subject to all defenses and setoffs. Holdco shall have
all of the rights, Claims, powers, objections and actions of the Debtor and
its Estate under sections 363, 365, and sections 501 to 558, inclusive, of
the Bankruptcy Code, and of the Non-Debtor Affiliates. Except to the extent
that any other party is authorized to assert any Litigation Claims on behalf
of the Estate pursuant to Court order, the Litigation Claims retained shall
be all of those Litigation Claims initiated by the Debtor prior to the
Effective Date, as well as all Litigation Claims listed on Exhibit "1"
hereto, "Preserved and Retained Litigation Claims", as well as all Litigation
Claims subsequently discovered by Holdco.
5.12 INVESTIGATION AND PROSECUTION OF LITIGATION CLAIMS. Holdco shall
investigate the Litigation Claims and determine which, if any, should be
prosecuted in its sole discretion. Holdco intends to continue investigating
and pursuing all Litigation Claims listed on Exhibit "1". All Litigation
Claims of the Debtor, its Estate, and the Consolidated Non-Debtor Affiliates
are preserved by the Plan and Holdco shall have full power and authority to
prosecute, settle, adjust, retain, enforce or abandon any Litigation Claim as
representative of the Estate under section 1123(b) of the Bankruptcy Code or
otherwise in accordance with the Plan without supervision of or approval by
the Bankruptcy Court or the United States Trustee and free of any restriction
in the
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Bankruptcy Code or the Bankruptcy Rules. Holdco shall automatically be
substituted as a party in place of the Debtor, Non-Debtor Affiliate or any
Creditors' or Equity Committee in any Litigation Claims pending on the
Effective Date. After the Effective Date, all Litigation Claims shall be
filed and prosecuted in the name of Holdco. The consolidation, merger,
combination, winding-up, liquidation or dissolution of any of the Non-Debtor
Affiliates contemplated under the Plan shall not eliminate any Claim,
including any Litigation Claim, or any counterclaim, defense or objection
that existed prior to such substantive consolidation, merger, combination,
winding-up, liquidation or dissolution. Holdco expects that in the course of
its investigation of potential Litigation Claims that it will discover
additional facts, legal theories, and even defendants, and fully intends to
pursue all such new Litigation Claims against any and all responsible
parties, on any and all available theories of recovery, to the extent
economically practical, within the sole discretion of Holdco. To the extent
that any other party is authorized to assert any Litigation Claims on behalf
of the Estate pursuant to Court order, all provisions of this section on
"Investigation and Prosecution of Litigation Claims" shall be deemed to be
modified as necessary to conform to such Court order.
5.13 CANCELLATION OF OLD SECURITIES, SETTLEMENT AND WAIVER OF PLACEMENT
AGENT WARRANTS, MUTUAL GENERAL RELEASES WITH PLACEMENT AGENT PARTIES. On the
Effective Date, the Old Securities and all securities, debt instruments,
warrants, stock options and indentures and similar instruments issued by the
Debtor, along with all associated contractual or other rights, shall be
terminated, cancelled and rejected. On and after the Effective Date, all
indentures, notes, securities, certificates, warrants, stock options and
other evidence of any Claim or Interest shall represent only the right to
participate in distributions under the Plan, except as otherwise expressly
provided in the Plan. All Treasury Stock shall be cancelled as of the
Effective Date.
5.14 The Placement Agent Warrants shall be cancelled and terminated as
of the Effective Date, and the Placement Agent Parties and the Debtor shall
issue each other mutual general releases, including waivers under section
1542 of the California Civil
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Code, in exchange for the Placement Agent Parties' waiver of any and all
rights to receive any distributions, including but not limited to
distributions of cash, Old Preferred Stock, New Holdco Common Stock, New
Goldco Common Stock, New Holdco Warrants, New Goldco Warrants or New Goldco
Series 2 Warrants, on account of their interest in the Placement Agent
Warrants.
5.15 SETOFF. Holdco may, pursuant to sections 553 and 558 of the
Bankruptcy Code or applicable nonbankruptcy law, set off or recoup against an
Allowed Administrative Expense, Allowed Claim, or Interest, before any
distribution is made on account of the Allowed Administrative Expense,
Allowed Claim or Interest, and any and all of the Claims, rights, causes of
action, counterclaims, defenses and objections that the Debtor, its Estate,
or any Non-Debtor Affiliate may hold against the holder of an Allowed
Administrative Expense, Allowed Claim, or Allowed Interest. However, any
failure to effect such setoff or recoupment or the allowance of any Allowed
Administrative Expense, Allowed Claim, or Allowed Interest shall not
constitute any waiver or release of any Claim, right, cause of action,
counterclaim, defense or objection and full recovery of such Claim, right,
cause of action, counterclaim, defense or objection shall be allowed.
5.16 EMPLOYMENT OF OFFICERS, EMPLOYEES AND PROFESSIONALS. On and after
the Effective Date, the Reorganized Debtor may employ and compensate such
officers, employees, professionals, agents and representatives, including
disbursing agents, as the Reorganized Debtor determines is necessary or
appropriate under the Plan without any supervision of or approval by the
Bankruptcy Court or the United States Trustee. The Reorganized Debtor shall
act as the Disbursing Agent under the Plan. No other entity or individual
shall have any responsibility for consummating or ensuring consummation of
the Reorganized Debtor's obligations under the Plan, including the Debtor's
bankruptcy counsel.
5.17 REVIEW OF AND OBJECTIONS TO EXPENSES, CLAIMS AND INTERESTS. On and
after the Effective Date, the Reorganized Debtor, Holdco, shall be the sole
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representative of the Debtor's Estate entitled to review and, where necessary
or appropriate, object to Administrative Expenses, Claims and Interests,
which shall thereafter be Resolved in accordance with the Bankruptcy Code and
the Bankruptcy Rules. Unless otherwise ordered by the Bankruptcy Court,
objections to Administrative Expenses shall be filed and served within 180
days after the Effective Date and objections to Claims and Interests shall be
filed within 180 days after the Effective Date.
5.18 CORPORATE MATTERS
a. The Articles of Incorporation of Holdco and Goldco will be amended to
prohibit the issuance of non-voting equity securities to the extent required
by section 1123(a)(6) of the Bankruptcy Code. The Articles of Incorporation
and Bylaws for Holdco and Goldco shall be filed with the Bankruptcy Court.
b. The Board of Directors of Holdco will be authorized, without
shareholder approval, to change the place of incorporation of Holdco to any
state or territory of the United States and to change the place of
incorporation of Goldco to any state or territory of the United States or to
any foreign jurisdiction, provided that shareholders holding at least 60% of
the New Holdco Common Stock consent in writing to such change. The Board of
Directors of Holdco will also be authorized, without shareholder approval, to
change the name of Holdco or Goldco. The Board of Directors of Holdco shall
be authorized to determine the par value of the New Holdco Common Stock and
New Goldco Common Stock, as well as the New Preferred Stock of Holdco or
Goldco after the Effective Date.
c. The By-Laws and, if necessary, Articles of Incorporation of both
Holdco and Goldco shall be amended to provide that the vote of 60% of all
outstanding shares of New Common Stock will be required for the approval of
all matters which have not been previously approved by a majority of the
Board of Directors. The By-Laws and, if necessary, Articles of Incorporation
of both Holdco and Goldco shall be amended to provide that in the event the
Board of Directors has approved the proposed action and applicable state or
other corporate law requires that there be an affirmative vote of more
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than a majority of the outstanding class of stock entitled to vote thereon,
the proposed action shall be approved by the affirmative vote or written
consent of more than 50% of the outstanding class of stock.
d. The Board of Directors of Holdco shall be authorized to amend the
By-Laws and Articles of Incorporation of Holdco to include any and all
customary provisions to prevent unfair attempts to take over Holdco, such as
provisions for the issuance of the New Preferred Warrants or similar
securities, but shall not, without the written consent of the holders of 60%
of all outstanding shares of New Common Stock, (i) eliminate the right of 60%
of the holders of all outstanding shares of New Common Stock to call a
special meeting of shareholders, (ii) eliminate the right of 60% of the
holders of all outstanding shares of New Common Stock to act by written
consent, or (iii) create a second class of common stock with superior voting
rights to the New Common Stock.
e. The by-laws, and if necessary, the Articles of Incorporation of
Holdco and Goldco shall be amended to provide for the broadest
indemnification permissible under the applicable corporate law for Holdco and
Goldco.
f. The Board of Directors of Holdco shall be authorized, but not
required, to take any and all steps necessary to effectuate a
quasi-reorganization under applicable Generally Accepted Accounting
Principles.
g. After the Effective Date, the Reorganized Debtor shall cause each of
the non-operating Non-Debtor Affiliates listed on Exhibit "2" to cease all
business, and to be merged, combined or consolidated, as the case may be,
and/or to be wound-up, liquidated, dissolved and terminated. All property of
each Non-Debtor Affiliate shall become direct or indirect Assets of Holdco,
free and clear of all Liens, Claims, encumbrances or other interests, in a
manner satisfactory to the Reorganized Debtor through the enforcement of
intercompany Claims of the Debtor against one or more of the Non-Debtor
Affiliates, merger, combination, consolidation, liquidation or dissolution,
whichever method is most advantageous to the Reorganized Debtor under
applicable
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tax and creditors' rights laws. The Non-Debtor Affiliates shall retain no
interest in any property transferred to Holdco. Holdco may, but shall not be
obligated to, pay the expenses of merging, combining, consolidating, winding
up, liquidating, dissolving and terminating the Non-Debtor Affiliates,
including the preparation and filing of any tax reports or returns that may
be required before, during or after the winding up, liquidation, dissolution
and termination of the Non-Debtor Affiliates. Neither the Debtor, its Estate,
the Reorganized Debtor, nor any of their current officers, directors, owners,
partners, beneficiaries, employees, professionals, agents or representatives
shall have any liability or obligation on account of any Claim against any of
the Non-Debtor Affiliates.
h. Entry of the Confirmation Order on the dockets for the Case shall
constitute all approvals, consents and actions required by any governmental
units, applicable law, or stockholders, directors, partners, officers,
employees or representatives of the Debtor or Non-Debtor Affiliates under
applicable law or any documents, instruments or agreements to take all
corporate, partnership and other actions that are specified in the Plan or
the Confirmation Order or that are necessary or appropriate to perform the
Plan.
5.19 EXEMPTION FROM SECURITIES REGISTRATION. Pursuant to section 1145 of
the Bankruptcy Code, any New Securities that are distributed, offered or
sold, or deemed distributed offered or sold, under or pursuant to the Plan,
excluding the New Goldco Series 2 Warrants, the New Preferred Stock, the New
Preferred Warrants, and any options or warrants issued after Confirmation
pursuant to the Management Incentive Stock Option Plan and the Employee Stock
Option Plan, shall be exempt from the requirements of the Securities Act of
1933, 15 U.S.C. section 77e, and any State or local law requiring
registration for the offer or sale of securities.
5.20 CREDITORS' COMMITTEE OR EQUITY SECURITY HOLDERS' COMMITTEE. On the
Effective Date, any Creditors' Committee or any Equity Committee, if formed
by the
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United States Trustee, shall be automatically dissolved and terminated
without further action by the Court, the Debtor, or the Reorganized Debtor.
5.21 NO TRANSFERS OF CLAIMS OR INTERESTS AFTER THE CONFIRMATION DATE. On
and after the Confirmation Date, neither the Debtor nor the Reorganized
Debtor, the Bankruptcy Court or the Clerk of the Bankruptcy Court shall
honor, record or recognize, as against the Debtor, the Reorganized Debtor and
their representatives, successors and assigns, the transfer of any
Administrative Expense, Claim or Interest, including without limitation any
Claim or Interest based on the Old Preferred Stock, its associated Delisting
Charge or Redemption Rights, or any Interest based on the Old Common Stock.
ARTICLE 6 - DISTRIBUTIONS UNDER THE PLAN
6.1 BY THE REORGANIZED DEBTOR, HOLDCO. All distributions of Cash under
the Plan on and after the Effective Date shall be made by the Reorganized
Debtor, Holdco.
6.2 BY HOLDCO AND GOLDCO, All distributions of New Securities shall be
made by Holdco or Goldco, as the case may be.
6.3 ASSIGNABILITY OF DISTRIBUTIONS Each Holder of an Allowed Claim or
Allowed Interest may, within 60 days of the Effective Date notify the
Reorganized Debtor in writing that its distribution of cash or New
Securities, as the case may be, shall be disbursed to another entity or
person nominated or designated.
6.4 DISTRIBUTION OF CASH. All distributions of Cash by Reorganized
Debtor, Holdco, shall be made in lawful currency of the United States, by
checks drawn on or, at the option of Holdco, wire transfers from one or more
United States banks selected by Holdco. Holdco may employ one or more
disbursing agents to make distributions of Cash pursuant to the Plan.
6.5 Any and all checks issued on account of Allowed Administrative
Expenses or Allowed Claims shall be null and void if not cashed within six
months of issuance. Thereafter, all Allowed Administrative Expenses and
Allowed Claims in respect of null
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and void checks shall be forever barred from any distributions from the
Reorganized Debtor and the Cash represented by the null and void checks shall
be the property of the Reorganized Debtor.
6.6 DELIVERY OF DISTRIBUTIONS. Unless otherwise agreed by the
Reorganized Debtor, each distribution of Cash or securities on each
Distribution Date shall be made by first class United States Mail, postage
prepaid, to the holder of an Allowed Administrative Expense or Allowed Claim
as of the corresponding Distribution Record Date to the latest address set
forth on a request for payment of an Allowed Administrative Expense, a Proof
of Claim filed with the Bankruptcy Court on account of an Allowed Claim or
Allowed Interest, the Schedules, or the most recent distribution list
provided by a holder of an Allowed Claim or Interest or a written notice of
change of address delivered to the Debtor or the Reorganized Debtor after the
Effective Date, or a notice delivered to the Debtor or the Reorganized Debtor
under Bankruptcy Rule 3001 identifying the name and address of the entity to
whom an Allowed Administrative Expense or an Allowed Claim or Interest has
been transferred, whichever is the most recent. The Reorganized Debtor shall
not be required to make any other effort to locate or ascertain any address
for any distribution.
6.7 UNCLAIMED DISTRIBUTIONS. Any distributions of Cash or securities
under the Plan that are returned as unclaimed or undeliverable shall be
allocated to a reserve administered by the Reorganized Debtor (the "Reserve
for Unclaimed Distributions") for one year after the distribution was first
attempted. If the Reorganized Debtor thereafter receives written notice of
the then current address to which the distribution should be made during the
one-year period after the distribution was first attempted, the Reorganized
Debtor shall make the distribution from the Reserve for Unclaimed
Distributions to the designated address without interest. Any and all Allowed
Administrative Expenses or Allowed Claims or Allowed Interests in respect of
distributions of Cash or Old Securities that remain unclaimed or
undeliverable one year after distribution was first attempted shall be
forever barred from any distributions from
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the Reorganized Debtor and the New Common Stock, New Warrants, and Cash
represented by the unclaimed or undeliverable distribution shall be the
property of the Reorganized Debtor.
6.8 SURRENDER OF SECURITIES. IN ACCORDANCE WITH SECTION 1143 OF THE
BANKRUPTCY CODE, IT SHALL BE A CONDITION TO ANY DISTRIBUTION TO THE HOLDER OF
AN ALLOWED CLAIM OR INTEREST THAT ANY SECURITY ON WHICH THE ALLOWED CLAIM IS
BASED, INCLUDING WITHOUT LIMITATION THE OLD PREFERRED STOCK AND OLD COMMON
STOCK, SHALL BE SURRENDERED TO THE REORGANIZED DEBTOR OR ITS DESIGNATED
REPRESENTATIVE FOR CANCELLATION WITHIN ONE YEAR AFTER THE CONFIRMATION DATE
OR THE HOLDER OF THE ALLOWED CLAIM OR ALLOWED INTEREST SHALL BE FOREVER
BARRED FROM RECEIVING ANY DISTRIBUTIONS FROM THE REORGANIZED DEBTOR.
6.9 If a security to be surrendered under the Plan is lost, stolen,
mutilated or destroyed, the security shall be deemed surrendered when the
Reorganized Debtor or its designated representative receives satisfactory
evidence of the loss, theft, mutilation or destruction of the security or an
affidavit from the holder of the security in accordance with Division 8 of
the California Uniform Commercial Code.
6.10 The Reorganized Debtor and transfer agent for the Old Securities,
and all other intermediaries, brokers or depositories, shall cooperate with
the Reorganized Debtor and the holders of Allowed Claims or Allowed Interests
in surrendering the securities to the Reorganized Debtor and shall cooperate
with Reorganized Debtor in facilitating the Reorganized Debtor's
distributions to the holders of the Allowed Claims and Allowed Interests. The
Reorganized Debtor shall be authorized to pay any reasonable costs or
expenses incurred by such entities in cooperating with the Reorganized Debtor.
6.11 PAYMENT OF RESOLVED DISPUTED ADMINISTRATIVE EXPENSES AND DISPUTED
CLAIMS. After a Disputed Administrative Expense or Disputed Claim or Disputed
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Interest is Resolved as qualifying as an Allowed Administrative Expense or
Allowed Claim, the Reorganized Debtor, Holdco, shall make the appropriate
distribution of Cash or New Securities to the holder of the Allowed
Administrative Expense, Allowed Claim, or Allowed Interest. If an entity
holds one or more Allowed Administrative Expenses, Allowed Claims, or Allowed
Interests and one or more Disputed Administrative Expenses or Disputed Claims
or Disputed Interests, no distribution of Cash or New Securities shall be
made to that entity until all Disputed Administrative Expenses, Disputed
Claims, and Disputed Interests held by that entity have been Resolved.
6.12 THE CLAIMS AND INTEREST REGISTER, REQUIREMENT OF IDENTIFICATION OF
BENEFICIAL INTEREST HOLDERS. The Reorganized Debtor shall maintain a Claims
and Interest Register which shall list (a) the current name and address of
the holder of each Allowed Administrative Expense, Disputed Administrative
Expense, Allowed Claim, Allowed Interest, and Disputed Claim or Disputed
Interest, based on written requests for payment of Allowed Administrative
Expenses or Disputed Administrative Expenses or proofs of Claims or Interests
filed with the Bankruptcy Court on account of Allowed Claims, Disputed Claims
or Interests, or the Schedules or the most recent distribution lists provided
by any Claim or Interest holder or a written notice of a change of address
delivered to the Reorganized Debtor after the Effective Date, or a notice
delivered to the Debtor or the Reorganized Debtor under Bankruptcy Code 3001
identifying the name and address of the entity to whom an Allowed
Administrative Claim, a Disputed Administrative Expense, an Allowed Claim,
Allowed Interest or a Disputed Claim or Disputed Interest has been
transferred, whichever is the most recent, (b) the amount of each claim and
Interest, (c) the Class of each Claim and Interest, and (d) the amount of
Cash or New Securities that has been distributed to the holder of each
Allowed Administrative Expense, Allowed Claim, or Allowed Interest.
6.13 The Claims and Interest Register shall be updated periodically. The
Reorganized Debtor shall establish the Claims and Interest Register that is
to be used to make distributions of Cash and Securities on any Distribution
Date on or before the
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corresponding Distribution Record Date. The Reorganized Debtor shall not be
required to revise the Claims and Interest Register during the period from
the Distribution Record Date to the corresponding Distribution Date.
6.14 The Reorganized Debtor shall be entitled, on written request to the
clearing house, brokerage, investment bank, nominee or other holder or
representative of a claim or interest, to require the identification of the
beneficial holder of such claim or interest on the Petition Date, the
Effective Date or any Distribution Record Date. If the identity of the
beneficial holder of such claim or interest is not provided within 90 days of
such written request, the Reorganized Debtor shall be entitled to treat such
claim or interest as disputed, and subject to the provisions of Article 6 of
the Plan shall be entitled to hold any distributions otherwise payable on
behalf of such claim or interest until such claim or interest becomes an
Allowed Claim or Allowed Interest.
6.15 TAX REQUIREMENTS. The Reorganized Debtor shall comply with all
payment, withholding and reporting requirements imposed by any federal, state
or local laws. All distributions of Cash by the Reorganized Debtor shall be
subject to all such payment, withholding and reporting requirements. The
Reorganized Debtor shall report and pay any taxes that may be imposed on the
Reorganized Debtor by any federal, state or local laws.
ARTICLE 7 - EXECUTORY CONTRACTS AND UNEXPIRED LEASES
7.1 REJECTION. All executory contracts and unexpired leases of the
Debtor, including but not limited to those executory contracts and unexpired
leases listed on Exhibit "4" to the Plan entitled "Schedule of Rejected
Executory Contracts and Unexpired Leases", shall be rejected as of the
Effective Date, unless:
7.2 Such executory contracts or unexpired leases were previously assumed
or rejected pursuant to a Final Order;
7.3 Such executory contracts or unexpired leases are listed on Exhibit
"5" to the Plan entitled "Schedule of Assumed Executory Contracts and
Unexpired Leases"; or
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7.4 Such executory contracts or unexpired leases expired or were
terminated in accordance with their terms prior to the Effective Date.
7.5 Rejection Of Preferred Stock Investment Agreements and Old Warrants.
As reflected on Exhibit "4", to the extent that the Investment Agreements
dated April 11, 1997 and September 2, 1997, are executory contracts, and upon
the conversion and exercise of rights pursuant to the Preferred Stock
Investment Agreements as described in the Plan, they are rejected pursuant to
the Plan. All Old Warrants shall be rejected pursuant to the Plan, except for
the Management Options.
7.6 APPROVAL OF REJECTION. The Confirmation Order shall constitute an
order approving the rejection of the executory contracts and unexpired leases
described above.
7.7 BAR DATE FOR REJECTION OBJECTIONS AND REJECTION CLAIMS. PROOFS OF
CLAIM BASED ON THE REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
REJECTED UNDER THE PLAN AS OF THE EFFECTIVE DATE AND ANY OBJECTION TO THE
REJECTION OF SUCH EXECUTORY CONTRACTS OR UNEXPIRED LEASES MUST BE FILED WITH
THE BANKRUPTCY COURT AND DELIVERED TO THE ATTORNEYS FOR THE DEBTOR ON OR
BEFORE THE DATE AND TIME SET BY THE BANKRUPTCY COURT AS THE LAST DATE AND
TIME ON WHICH TO FILE AND DELIVER OBJECTIONS TO THE CONFIRMATION OF THE PLAN
OR THEY SHALL BE FOREVER BARRED. ANY CLAIM ARISING FROM THE REJECTION OF AN
EXECUTORY CONTRACT OR UNEXPIRED LEASE SHALL BE TREATED AS A DISPUTED CLAIM
AND SHALL BE REVIEWED AND, WHERE NECESSARY OR APPROPRIATE, OBJECTED TO BY THE
DEBTOR OR REORGANIZED DEBTOR AND RESOLVED IN ACCORDANCE WITH THE BANKRUPTCY
CODE AND THE BANKRUPTCY RULES. ANY ALLOWED CLAIM ARISING FROM THE REJECTION
OF AN EXECUTORY CONTRACT OR UNEXPIRED LEASE SHALL QUALIFY FOR INCLUSION IN
CLASS
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2, UNLESS OTHERWISE DETERMINED BY THE BANKRUPTCY COURT IN A FINAL ORDER, OR
AS OTHERWISE PROVIDED IN THE PLAN.
7.8 ASSUMPTION. From and after the Effective Date, each executory
contract and unexpired lease of the Debtor listed on Exhibit "5" to the Plan
entitled "Schedule of Assumed Executory Contracts and Unexpired Leases"
shall, subject to the requirements of section 365(b) and (f) of the
Bankruptcy Code, be assumed and assigned to the Reorganized Debtor, Holdco,
on the Effective Date, unless (a) such executory contracts or unexpired
leases were previously assumed or rejected pursuant to a Final Order or (b)
such executory contracts or unexpired leases expired or were terminated in
accordance with their terms prior to the Effective Date.
7.9 ASSUMPTION CURE PAYMENTS. Unless there is a specific amount
designated on Exhibit "5" to the Plan for a particular executory contract or
unexpired lease to be assumed and assigned pursuant to the Plan, the Debtor
has determined that there are no unpaid amounts or defaults that must be paid
or cured as a condition to assumption and assignment under section 365(b) and
(f) of the Bankruptcy Code. Any unpaid amounts or defaults set forth on
Exhibit "5" that must be paid as a condition to assumption and assignment
under section 365(b) and (f) of the Bankruptcy Code will be paid by the
Debtor or Reorganized Debtor, Holdco, as Allowed Administrative Expenses on
the date the assumption and assignment becomes effective.
7.10 BAR DATE FOR ASSUMPTION OBJECTIONS AND ASSUMPTION CURE CLAIMS. ANY
OBJECTION TO THE ASSUMPTION AND ASSIGNMENT OF ANY EXECUTORY CONTRACT OR
UNEXPIRED LEASE AND ANY PROOF OF CLAIM TO ASSERT THAT THERE ARE UNPAID
AMOUNTS OR DEFAULTS THAT MUST BE PAID OR CURED IN ADDITION TO THOSE SET FORTH
ON EXHIBIT "5", IF ANY, AS A CONDITION TO THE ASSUMPTION AND ASSIGNMENT OF
ANY EXECUTORY CONTRACT OR UNEXPIRED LEASE ("CURE CLAIM") MUST BE FILED WITH
THE BANKRUPTCY COURT AND DELIVERED TO THE ATTORNEYS FOR THE DEBTOR ON OR
BEFORE THE DATE AND TIME SET BY THE
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BANKRUPTCY COURT AS THE LAST DATE AND TIME ON WHICH TO FILE AND DELIVER
OBJECTIONS TO THE CONFIRMATION OF THE PLAN OR THE HOLDER OF THE OBJECTIONS OR
CURE CLAIM SHALL BE FOREVER ESTOPPED FROM ASSERTING SUCH OBJECTION OR CURE
CLAIM. THE DEBTOR RESERVES THE RIGHT TO REJECT ANY EXECUTORY CONTRACT OR
UNEXPIRED LEASE WITH RESPECT TO WHICH ANY SUCH OBJECTION OR CURE CLAIM IS
FILED. THE DEBTOR WILL REQUEST THAT THE BANKRUPTCY COURT RESOLVE ANY SUCH
OBJECTION AT THE HEARING ON THE CONFIRMATION OF THE PLAN. ANY CURE CLAIM
SHALL BE TREATED AS A DISPUTED ADMINISTRATIVE EXPENSE UNDER THE PLAN AND
SHALL BE REVIEWED AND, WHERE NECESSARY OR APPROPRIATE, OBJECTED TO BY THE
DEBTOR OR REORGANIZED DEBTOR AND THEREAFTER RESOLVED IN ACCORDANCE WITH THE
BANKRUPTCY CODE AND THE BANKRUPTCY RULES.
7.11 APPROVAL OF ASSUMPTION AND ASSIGNMENT. The Confirmation Order shall
constitute an order approving the assumption and assignment of the executory
contracts and unexpired leases described above. Pursuant to section 365(k) of
the Bankruptcy Code, the assignment of the executory contracts and unexpired
leases described above to the Reorganized Debtor shall relieve the Debtor
from any liability for any breach of such contract or lease. Any executory
contract or unexpired lease that is inadvertently omitted from the Schedule
of Assumed Executory Contracts and Unexpired Leases may, subject to the
requirements of section 365(b) of the Bankruptcy Code, be assumed and
assigned to the Reorganized Debtor pursuant to Final Order entered after the
Effective Date upon motion and after notice and opportunity for hearing in
accordance with the Bankruptcy Code and the Bankruptcy Rules.
ARTICLE 8 - EFFECT OF CONFIRMATION OF THE PLAN
8.1 DISCHARGE. The Plan provides for the reorganization of all of the
Debtor's Assets, and the Discharge of the Debtor pursuant to 11 U.S.C.
Section 1141(d). The rights
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afforded in the Plan, and the treatment of all Claims and Interests therein,
will be in exchange for, and in complete satisfaction, discharge, and release
of, all Claims and Interests, including any interest accrued on such Claims
and Interests from and after the Petition Date, against the Debtor, the
Reorganized Debtor, and any of their assets.
8.2 Except as otherwise provided in the Plan or in the Confirmation
Order, on the Effective Date, the Debtor shall be deemed discharged and
released to the fullest extent permitted by section 1141 of the Bankruptcy
Code from all Claims and Interest that arose before the entry of the
Confirmation Order, including any interest accrued on such Claims from and
after the Petition Date, against the Debtor, the Reorganized Debtor, and any
of their assets, and all debts of the kind specified in sections 502(g),
502(h), and 502(i) of the Bankruptcy Code. The discharge and release shall be
effective in each case whether or not (a) a proof of Claim or Interest was
filed or deemed filed pursuant to section 501 of the Bankruptcy Code, (b) a
Claim or Interest is allowed pursuant to the Bankruptcy Code, or (c) the
Holder of a Claim or Interest has accepted the Plan.
8.3 Confirmation shall bind the Debtor, the Reorganized Debtor, any
entity acquiring property under the Plan, all Creditors and Interest Holders
and each of such Creditors' and Interest Holders' successors and assigns, and
other parties in interest to the provisions of the Plan, whether or not the
Claim or Interest of such Creditor or Interest Holder is impaired under the
Plan and whether or not such Creditor or Interest Holder has accepted the
Plan.
8.4 Except as otherwise provided in the Plan or in the Confirmation
Order, all parties shall be permanently enjoined by section 524 of the
Bankruptcy Code from asserting against the Debtor, the Reorganized Debtor,
their successors, and their assets and properties any other or further Claims
or Interests based upon any act or omission, transaction, or other activity
of any kind or nature that occurred before Confirmation. The discharge shall
void any judgment against the Debtor or the
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Reorganized Debtor at any time obtained to the extent that it relates to a
Claim or Interest discharged hereby.
8.5 On and after the Effective Date, all parties that have held,
currently hold, or may hold a Claim or Interest discharged pursuant to the
terms of the Plan shall be permanently enjoined by section 524 of the
Bankruptcy Code from taking any of the following actions on account of any
such discharged Claim or Interest: (a) commencing or continuing in any manner
any action or other proceeding against the Debtor, the Reorganized Debtor,
their successors, and their assets and properties; (b) enforcing, attaching,
collecting, or recovering in any manner any judgment, award, decree, or order
against the Debtor, the Reorganized Debtor, their successors, and their
assets and properties; (c) creating, perfecting, or enforcing any lien or
encumbrance against the Debtor, the Reorganized Debtor, their successors, and
their assets and properties; (d) asserting any setoff, right of subrogation,
or recoupment of any kind against any obligation due to the Debtor, the
Reorganized Debtor, their successors, and their assets and properties; and
(e) commencing or continuing any action, in any manner, in any place, that
does not comply with or is inconsistent with the provisions of the Plan or
the Confirmation Order. Any person violating such injunction may be liable
for actual damages, including costs and attorneys' fees and, in appropriate
circumstances, punitive damages.
8.6 To the extent that the terms of the Plan and Confirmation Order are
inconsistent with any prior Final Orders of the Bankruptcy Court, the terms
of the Plan and Confirmation Order shall control the terms of such
inconsistent Prior Orders.
8.7 Nothing contained in Article VIII of the Plan shall limit the effect
of Confirmation as described in section 1141 of the Bankruptcy Code.
8.8 REVESTING OF PROPERTY. Pursuant to Articles 5.8-5.12 of the Plan,
all property of the Debtor, its Estate, and certain Non-Debtor Affiliates
including, without limitation, all Litigation Claims (except to the extent
that any other party is authorized to
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assert any Litigation Claims on behalf of the Estate pursuant to Court order)
shall be transferred to and vested in the Reorganized Debtor on the Effective
Date.
8.9 MODIFICATION OF THE PLAN. The Plan Proponent may modify the Plan at
any time before Confirmation pursuant to section 1127 of the Bankruptcy Code.
The Bankruptcy Court may require a new disclosure statement and/or revoting
on the Plan if the Plan Proponent modifies the Plan before Confirmation,
unless the Bankruptcy Court finds that the proposed modification does not
adversely change the treatment of any Claim or Interest held by any entity
that has not accepted the modification in writing in accordance with
Bankruptcy Rule 3019. The Plan Proponent may also seek to modify the Plan at
any time after Confirmation pursuant to section 1127 of the Bankruptcy Code
so long as (1) the Plan has not been substantially consummated AND (2) if the
Bankruptcy Court authorizes the proposed modifications after notice and a
hearing.
8.10 CHANGES IN RATES SUBJECT TO REGULATORY COMMISSION APPROVAL. The
Debtor is not regulated by a governmental regulatory commission. Therefore,
the Debtor is not subject to governmental regulatory commission approval of
their rates within the meaning of section 1129(a)(6) of the Bankruptcy Code.
8.11 POST-CONFIRMATION STATUS REPORT. On the first Business Day that is
120 days after the Confirmation Date, the Reorganized Debtor shall file a
status report with the Bankruptcy Court explaining what progress has been
made toward consummation of the confirmed Plan. The status report shall be
served on the United States Trustee, the members of the Official Committee of
Creditors Holding Unsecured Claims and the Committee's bankruptcy counsel,
and the Special Notice Entities. Unless otherwise ordered by the Bankruptcy
Court, the Reorganized Debtor shall continue to file and serve status reports
on the first date that is a Business Day every 120 days after the first
status report is filed and served.
8.12 FINAL DECREE. After the Estate has been fully administered as
referred to in Bankruptcy Rule 3022, the Plan Proponent, or other such entity
as the Bankruptcy Court shall designate in the Confirmation Order, shall file
a motion with the Bankruptcy
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Court to obtain a final decree to close the Case in accordance with section
350 of the Bankruptcy Code.
8.13 RELEASE AND GOOD FAITH FINDING. Confirmation of the Plan shall
constitute a finding that (i) the Plan has been proposed in good faith and in
compliance with all applicable provisions of the Bankruptcy Code and (ii) the
solicitation of acceptances or rejections of the Plan by all Persons (except
as set forth below) and the offer, issuance, sale, or purchase of a security
offered or sold under the Plan has been in good faith and in compliance with
all applicable provisions of the Bankruptcy Code. Accordingly, on the
Effective Date, each of the officers and directors and employees of the
Debtor and the Non-Debtor Affiliates, each of the members of the Committee,
and each of the advisors and attorneys of the Debtor and Committee listed on
Exhibit "3" to the Plan, but specifically excluding Amyn Dahya and every
other person or entity listed on Exhibit "1" to the Plan, will be deemed
exculpated by Holders of Claims against and Interests in the Debtor and other
parties in interest to the Case from any and all claims, causes of action,
and other assertions of liability (including breach of fiduciary duty)
arising out of or related to any act taken in good faith or omission made in
good faith and in compliance with all applicable provisions of the Bankruptcy
Code in connection with or related to the Debtor, the Case, acts taken with
respect to all Litigation Claims, the exercise by such entities of their
functions as members of or advisors to or attorneys for any such individuals
or Committee or otherwise under applicable law, and the formulation,
negotiation, preparation, dissemination, Confirmation, and consummation of
the Plan and Disclosure Statement and any agreement, instrument, or other
document issued under the Plan or related to the Plan or any distribution of
property pursuant to the Plan. Nevertheless, this provision will have no
effect on liability for any act or omission of the officers and directors and
employees of the Debtor and the Non-Debtor Affiliates, the members of the
Committee, and each of their advisors and attorneys to the extent that such
act or omission is ULTRA VIRES or constitutes actual fraud. Nothing contained
herein shall limit or restrict the right of the Debtor, Reorganized
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Debtor and/or any person or entity authorized by the Bankruptcy Court to
bring any Litigation Claims, and no such person or entity sued by the Debtor
or Reorganized Debtor, either before or after the Effective Date, shall have
the protections of this provision.
8.14 POST-CONFIRMATION CONVERSION/DISMISSAL. A creditor or party in
interest may bring a motion to convert or dismiss the Case under section
1112(b) of the Bankruptcy Code, after the Plan is confirmed, if there is a
default in performing the Plan. If the Court orders the Case converted to
Chapter 7 after the Plan is confirmed, then all property that had been
property of the Chapter 11 Estate, and that has not been disbursed pursuant
to the Plan, will revest in the Chapter 7 Estate, and the automatic stay will
be reimposed upon the revested property only to the extent that relief from
stay was not previously granted by the Court during this Case.
ARTICLE 9 - RETENTION OF JURISDICTION
9.1 The Bankruptcy Court shall retain jurisdiction until the Case is
closed in accordance with section 350 of the Bankruptcy Code, including
jurisdiction:
9.2 To insure that the purpose and intent of this Plan is carried out;
9.3 To consider any modification of this Plan under section 1127 of the
Bankruptcy Code and Bankruptcy Rule 3019 and/or modification of this Plan
after substantial consummation as defined in section 1101(2) of the
Bankruptcy Code;
9.4 To hear and determine all Claims, Litigation Claims, rights, causes
of action, counterclaims, objections and defenses by or against the Debtor,
the Estate, the Non-Debtor Affiliates, or the Reorganized Debtor.
9.5 To hear, determine and enforce all Claims, Litigation Claims,
rights, causes of action, counterclaims, objections and defenses that may
exist on behalf of the Debtor, the Estate, the Non-Debtor Affiliates, the
Reorganized Debtor, including any right of the Debtor, the Estate, the
Non-Debtor Affiliates, or the Reorganized Debtor to recover on account of the
Litigation Claims.
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9.6 To hear and determine all controversies, suits and disputes or other
matters requiring judicial determination that may arise in connection with
the interpretation or enforcement of this Plan or the Confirmation Order.
9.7 To hear and determine all disputes concerning requests for
compensation and/or reimbursement of expenses, pursuant to the Plan, the
Bankruptcy Code and the Bankruptcy Rules;
9.8 To hear and determine all objections to Claims, all Litigation
Claims and other controversies, suits and disputes that may be pending at or
initiated after the Effective Date;
9.9 To consider and act upon the compromise and settlement of any Claim
against or cause of action on behalf of the Debtor, the Estate, the
Non-Debtor Affiliates, pursuant to the Plan, the Bankruptcy Code and the
Bankruptcy Rules if requested to do so by the Reorganized Debtor;
9.10 To enforce and interpret by injunction or otherwise the terms and
conditions of the Plan and the Confirmation Order;
9.11 To correct any defect, cure any omission, or reconcile any
inconsistency in, between or among the Confirmation Order and the Plan that
may be necessary or helpful to carry out the purposes and intent of the Plan;
9.12 To enter the Final Decree pursuant to the Plan, the Bankruptcy Code
and the Bankruptcy Rules;
9.13 To determine all questions and disputes regarding titles to or
encumbrances against property and Litigation Claims of the Debtor, the
Estate, the Non-Debtor Affiliates, and the Reorganized Debtor;
9.14 To consider the assumption, assumption and assignment or rejection
of executory contracts and unexpired leases that have not been assumed or
rejected as of the Confirmation Date and to resolve Claims with respect to
such contracts and leases in accordance with the Plan, the Bankruptcy Code
and Bankruptcy Rules;
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9.15 To issue any order reasonably necessary to implement the
Confirmation Order or the Plan, including such declaratory and injunctive
orders as are appropriate to protect the Debtor, the Estate, the Non-Debtor
Affiliates, the Reorganized Debtor, and the holders of Claims or Interests;
9.16 To enforce, settle or adjust any rights arising under the
Bankruptcy Code and to hear and determine all matters provided for therein;
9.17 To determine classification, voting, treatment, allowance,
estimation, withdrawal, disallowance or reconsideration of Administrative
Expenses, Claims or Interests and any objections relating thereto;
9.18 To fix or liquidate Administrative Expenses, Claims or Interests;
9.19 To hear and determine all issues relating to tax Claims, tax
refunds, tax attributes and tax benefits and similar or related matters, with
respect to the Debtor, the Estate, the Non-Debtor Affiliates, or the
Reorganized Debtor, including to hear and determine proceedings to determine
the tax liability of the Reorganized Debtor under Bankruptcy Code section 505;
9.20 To hear and determine all issues, disputes, Claims, rights, causes
of action, counterclaims, defenses and objections relating or pertaining to
or arising in connection with (1) the administration of the Estate; or (2)
any act or omission of the Debtor, the Non-Debtor Affiliates, the Estate, any
Creditors' or Equity Interest Holders, or any officers, employees,
professionals, agents, representatives thereof; and
9.21 To hear, determine, consider and act on such other matters as may
be provided for under title 28 or any other title of the United States Code
and any reference to the Bankruptcy Court, the Bankruptcy Code, the
Bankruptcy Rules, other applicable law, the Plan or the Confirmation Order.
ARTICLE 10 - CONDITIONS TO THE EFFECTIVENESS OF THE PLAN
10.1 CONDITIONS. The following conditions must occur and be satisfied on
or before the Effective Date for the Plan to be effective on the Effective
Date:
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10.2 ENTRY OF CONFIRMATION ORDER. The Confirmation Order shall have been
signed by the Bankruptcy Court and duly entered on the docket for the Case by
the Clerk of the Bankruptcy Court in form and substance acceptable to the
Debtor. The Confirmation Order shall include provisions which, among other
things:
(a) Confirms and approves the Plan;
(b) Authorizes and approves all other documents,
instruments and agreements to be executed and
delivered in connection with the confirmation and
effectiveness of the Plan;
(c) Appoints or approves the appointment of the new Board
of Directors of Holdco and Goldco; and
(d) Orders that the transfers contemplated under the Plan
(i) are or will be legal, valid and effective
transfers of property for fair and reasonable
consideration, (ii) vest or will vest in the
transferee good title to such property free and clear
of all liens, claims, encumbrances and other
interests of any kind except those expressly provided
for under the Plan, (iii) do not and will not
constitute fraudulent conveyances or transfers or
unlawful distributions under any applicable law, and
(iv) do not and will not, except as expressly
contemplated by the Plan, subject the Debtor, the
Reorganized Debtor, the Non-Debtor Affiliates or any
of their current officers, directors, employees,
owners, partners, beneficiaries, members,
professionals, agents or representatives or any of
the property transferred to any liability by reason
of such transfer under any applicable law, including
any laws relating to fiduciary duty or successor or
transferee liability.
10.3 NO STAY. There shall not be any stay in effect with respect to the
Confirmation Order;
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10.4 FINAL ORDER. The Confirmation Order shall be a Final Order, unless
the requirement of finality is waived by the Debtor with the approval of the
Official Committee of Creditors Holding Unsecured Claims;
10.5 APPROVAL OF CERTAIN DOCUMENTS. The Plan and all documents,
instruments and agreements to be executed in connection therewith shall have
been approved by the Bankruptcy Court; and
10.6 EXECUTION OF CERTAIN DOCUMENTS. The Plan and all documents,
instruments and agreements to be executed in connection therewith shall have
been executed and delivered by all parties thereto.
10.7 WAIVER OF CONDITIONS. The conditions set forth above in Articles
10.3, 10.4, 10.5 and 10.6 of the Plan may be waived or modified in whole or
in part by the Debtor with the approval of the Official Committee of
Creditors Holding Unsecured Claims. The conditions set forth above in Article
10.2 of the Plan may not be waived or modified in whole or in part by any
entity.
ARTICLE 11 - MISCELLANEOUS PROVISIONS
11.1 BINDING EFFECT. The Plan and the Confirmation Order shall be
binding upon and inure to the benefit of the Debtor, the Non-Debtor
Affiliates, any Creditors' Committee or Equity Security Holders Committee,
the holders of all Claims and Interests, all parties in interest in the Case,
and their successors, assigns, heirs, executors, administrators and
representatives.
11.2 RETIREE BENEFITS. The Debtor is not obligated for any retiree
benefits within the meaning of sections 1114 and 1129(a)(13) of the
Bankruptcy Code.
11.3 REVOCATION OR WITHDRAWAL OF PLAN. The Plan Proponent reserves the
right to revoke or withdraw the Plan prior to the Confirmation Date. Until
the Effective Date occurs, nothing set forth in the Plan or the Confirmation
Order shall constitute a waiver or release of any Claim by or against the
Debtor or any other entity or prejudice in any
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manner the rights and Claims of the Debtor or any other entity in any
proceeding or otherwise.
11.4 EXEMPTION FROM TRANSFER TAXES. Pursuant to section 1146(c) of the
Bankruptcy Code, the issuance, transfer or exchange of a security, or the
making or delivery of an instrument of transfer under a plan confirmed under
section 1129 of the Bankruptcy Code, may not be taxed under any law imposing
a stamp tax or similar tax. Transfers under the Plan that are exempt from
taxes under section 1146(c) of the Bankruptcy Code include all transfers by
the Debtor after the Petition Date in contemplation of the Plan but prior to
the Effective Date, and all transfers to and by the Reorganized Debtor. The
taxes from which such transfers are exempt include stamp taxes, recording
taxes, sales and use taxes, transfer taxes, and other similar taxes.
11.5 SOLICITATIONS, OFFERS,. Pursuant to section 1125 of the Bankruptcy
Code, the confirmation of the Plan shall constitute a determination that the
Debtor, Non-Debtor Affiliates, any Creditors' or Equity Interest Holders
Committee and their current officers, directors, employees, agents,
professionals and members (a) solicited acceptance of the Plan in good faith
and in compliance with the applicable provisions of the Bankruptcy Code, (b)
participated in good faith and in compliance with the applicable provisions
of the Bankruptcy Code in any offer, issuance, sale or purchase of any
securities offered or sold under the Plan, including, without limitation, the
New Common Stock and New Warrants, and (c) are not liable, on account of such
solicitation or participation, for violation of any applicable law, rule or
regulation governing solicitation of acceptance or rejection of a plan or the
offer, issuance, sale, or purchase of securities.
11.6 REQUEST FOR CONFIRMATION. The Plan Proponent requests that the Plan
be confirmed pursuant to section 1129(a) or (b) of the Bankruptcy Code.
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DATED: January 26, 2000 CASMYN CORP.,
a Colorado corporation
By: __________/S/__________
ROBERT N. WEINGARTEN,
Chief Financial Officer
Presented By:
WYNNE SPIEGEL ITKIN, A LAW CORPORATION
By: _________/S/_______________________
RICHARD L. WYNNE
CHRISTOPHER W. COMBS
Proposed Attorneys for Debtor and
Debtor in Possession
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EXHIBIT 2.2
RICHARD L. WYNNE (SBN 120349)
CHRISTOPHER W. COMBS (SBN 148389)
WYNNE SPIEGEL ITKIN, A Law Corporation
1901 Avenue of the Stars, 16th Floor
Los Angeles, California 90067
Telephone: (310) 551-1015
Facsimile: (310) 551-3059
Attorneys for Debtor and
Debtor in Possession
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
SAN FERNANDO VALLEY DIVISION
In re Case No. SV 99-23968-AG
CASMYN CORP.,
a Colorado corporation, Chapter 11
ORDER CONFIRMING DEBTOR'S
Debtor. SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION
Date: March 31, 2000
Time: 9:00 a.m.
Place: Courtroom 302
21041 Burbank Blvd.
Woodland Hills, CA 91367
- ------------------------------------
At 9:00 a.m. on March 31, 2000, a hearing was held before the
undersigned United States Bankruptcy Judge to consider confirmation of the
DEBTOR'S SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION (the "Plan"), filed by
Casmyn Corp., a Colorado corporation, debtor and debtor in possession (the
"Debtor"). Richard L. Wynne and Christopher W. Combs, of Wynne Spiegel Itkin, A
Law Corporation, appeared for the Debtor. Howard J. Steinberg, of Irell &
Manella LLP, appeared for the Official Committee of Creditors Holding Unsecured
Claims (the "Committee"). J. Scott Bovitz, of Bovitz & Spitzer, appeared for
Firdosh Datoo. MaryAnne B. Wilsbacher, of the Office of the United States
Trustee, appeared for the United States Trustee. Other appearances were noted on
the record.
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Having considered the Plan, the MEMORANDUM OF POINTS AND AUTHORITIES IN
SUPPORT OF CONFIRMATION OF DEBTOR'S SECOND AMENDED CHAPTER 11 PLAN OF
REORGANIZATION (the "Confirmation Memorandum") and the Declarations and Exhibits
attached thereto, the AMENDED STIPULATION BY DEBTOR, FIRDOSH DATOO, AND
CREDITORS' COMMITTEE RE WITHDRAWAL OF FIRDOSH DATOO'S OBJECTIONS TO CONFIRMATION
(the "Datoo Stipulation to Withdraw"), the OBJECTION OF HANIF DAHYA TO SECOND
AMENDED CHAPTER 11 PLAN OF REORGANIZATION (the "Late-Filed Dahya Objection"),
the DEBTOR'S RESPONSE TO LATE CONFIRMATION OBJECTION BY HANIF DAHYA, the
DECLARATION OF SUSAN J. PERRY RE TABULATION OF BALLOTS IN CONNECTION WITH
DEBTOR'S SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION (the "Ballot
Analysis"), the DECLARATION OF CRAIG OLAH RE SERVICE OF PLAN SOLICITATION
PACKAGE, the SUPPLEMENTAL DECLARATION RE SERVICE OF PLAN SOLICITATION PACKAGE OF
SUSAN J. PERRY, the DEBTOR'S REQUEST FOR JUDICIAL NOTICE OF ITS OBJECTION TO
CLAIM FILED BY HANIF DAHYA, all other memoranda of points and authorities,
notices, declarations, exhibits, and other pleadings submitted by the Debtor in
support of confirmation of the Plan, the record in this case, and the arguments
and representations of counsel at the hearing on confirmation of the Plan, and
it appearing that confirmation of the Plan is in the best interests of the
estate and supported by sufficient evidence,
THE COURT HEREBY FINDS AND CONCLUDES AS FOLLOWS:
A. On December 7, 1999, Debtor filed a voluntary petition under chapter
11 of title 11 of the United States Code (the "Bankruptcy Code").
B. The Debtor is a proper debtor under section 109 of the Bankruptcy
Code and a proper proponent of the Plan under section 1121(a) of the Bankruptcy
Code.
C. Pursuant to sections 1107(a) and 1108 of the Bankruptcy Code, from
and after the commencement of this case, the Debtor has continued to operate its
business and manage its assets as a debtor in possession.
D. Pursuant to 28 U.S.C. Sections 157 and 1334, the Court has
jurisdiction to confirm the Plan. The confirmation hearing is a core proceeding
under 28 U.S.C. Section 157(b)(2)(1). Venue of this case is proper in this
district pursuant to 28 U.S.C. Section 1408.
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E. At a hearing held on February 3, 2000, and pursuant to an order
entered that day (the "Disclosure Statement Order"), the Court approved the
Debtor's SECOND AMENDED DISCLOSURE STATEMENT DESCRIBING DEBTOR'S SECOND AMENDED
CHAPTER 11 PLAN OF REORGANIZATION (the "Disclosure Statement") as containing
adequate information as required by section 1125 of the Bankruptcy Code, and
approved the transmittal of the Disclosure Statement for the solicitation of
votes on the Plan. The Plan and Disclosure Statement included many provisions
that the Debtor had incorporated to address various concerns and issues raised
by the Committee, the United States Trustee, and the Securities and Exchange
Commission, all of whom approved the final versions of the Plan and Disclosure
Statement.
F. On February 11, 2000, as authorized by the Disclosure Statement
Order and Bankruptcy Rules 2002(b) and 3017(d), and as evidenced by the
DECLARATION OF CRAIG OLAH RE SERVICE OF PLAN SOLICITATION PACKAGE, filed on
March 24, 2000, the Debtor sent to all holders of claims and interests, and to
all persons requesting special notice, the Plan, the Disclosure Statement, the
Disclosure Statement Order, the NOTICE OF: (1) APPROVAL OF DISCLOSURE STATEMENT,
(2) HEARING ON CONFIRMATION OF DEBTOR'S PLAN OF REORGANIZATION, (3) LAST DATE
FOR SUBMISSION OF BALLOTS ACCEPTING OR REJECTING DEBTOR'S PLAN OF
REORGANIZATION, AND (4) LAST DATE FOR FILING OBJECTIONS TO CONFIRMATION OF
DEBTOR'S PLAN OF REORGANIZATION, a letter from the Committee's bankruptcy
lawyers endorsing the Plan, and appropriate Ballots for voting on the Plan.
Thus, all known creditors of the Debtor and parties in interest in the Debtor's
chapter 11 case received timely and proper notice of the confirmation hearing
and of the last day to vote on and object to confirmation of the Plan.
G. On February 14, 2000, Firdosh Datoo served on the Debtor FIRDOSH
DATOO'S FIRST SET OF OBJECTIONS TO CONFIRMATION OF THE SECOND AMENDED PLAN,
which Mr. Datoo withdrew pursuant to the Datoo Stipulation to Withdraw.
H. By 5:00 p.m. on March 17, 2000, the deadline for voting on the Plan
and submitting objections to confirmation to the Debtor's bankruptcy counsel,
the Plan had
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been accepted by all impaired classes of claims and interests that voted on
the Plan, as set forth in the Ballot Analysis.
I. After the deadline for voting on the Plan, Hanif Dahya submitted his
vote to reject the Plan, as evidenced by the Declaration of Susan J. Perry and
Exhibits "1"-"3" attached to the DEBTOR'S RESPONSE TO LATE CONFIRMATION
OBJECTION BY HANIF DAHYA.
J. On March 20, 2000, after the deadline for objecting to confirmation,
Hanif Dahya submitted the Late-Filed Dahya Objection, as evidenced by the
Declaration of Susan J. Perry and Exhibits "1"-"3" attached to the DEBTOR'S
RESPONSE TO LATE CONFIRMATION OBJECTION BY HANIF DAHYA.
K. Mr. Dahya is represented by bankruptcy counsel, who received notice
of all confirmation deadlines, and who attended the hearing when the Court
approved the Disclosure Statement and set all confirmation deadlines. Thus,
Hanif Dahya was aware of the deadline for submitting ballots and confirmation
objections.
L. Based upon the findings and conclusions set forth in paragraphs M-Z,
below, the Plan complies with the applicable provisions of the Bankruptcy Code
and, therefore, satisfies the requirements of section 1129(a)(1) of the
Bankruptcy Code.
M. Article 3 of the Plan designates 5 classes of claims and 3 classes
of interests. All such classes contain claims or interests that are
substantially similar to other claims or interests in that class. Thus, the Plan
satisfies the requirements of section 1122(a) of the Bankruptcy Code.
N. Articles 3.2-3.3 of the Plan designate classes of claims other than
claims of a priority specified in paragraphs 1, 2, and 8 of section 507(a) of
the Bankruptcy Code and classes of interests. Thus, the Plan satisfies the
requirements of section 1123(a)(1) of the Bankruptcy Code.
O. Articles 3.2-3.3 of the Plan specify all classes of claims or
interests that are not impaired under the Plan. Thus, the Plan satisfies the
requirements of section 1123(a)(2) of the Bankruptcy Code.
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P. Articles 3.4-3.21 of the Plan specify the treatment of all
classes of claims or interests that are impaired under the Plan. Thus, the
Plan satisfies the requirements of section 1123(a)(3) of the Bankruptcy Code.
Q. Article 3 of the Plan provides for the same treatment for each claim
or interest of the particular class set forth in the Plan. In particular,
Article 3.5 of the Plan provides for the same treatment for each claim in Class
2, including the claim asserted by Hanif Dahya for indemnification, as follows:
"All Allowed Class 2 Claims shall be paid in full on the Effective Date or as
soon as such Claim becomes an Allowed Claim pursuant to a Final Order". Thus,
all Class 2 Claims are treated the same way - with full payment the moment they
become Allowed Claims. Mr. Dahya's indemnification claim is both contingent and
unliquidated, because, as Mr. Dahya concedes in the Late-Filed Dahya Objection,
the allowability of his claim will have to await the outcome of his litigation
with the Debtor and the amount of his claim is unknown. As a result, Mr. Dahya's
indemnification claim is not now an Allowed Class 2 Claim. The Debtor vigorously
disputes the legitimacy of Mr. Dahya's claim pursuant to an objection to claim,
together with a counterclaim, that the Debtor filed and served on March 24,
2000. The Debtor will make payment on Mr. Dahya's claim if it becomes an Allowed
Claim if the Court overrules the Debtor's objection and counterclaim to Mr.
Dahya's claim. This is the same treatment afforded all other members of Class 2.
Thus, the Plan satisfies the requirements of section 1123(a)(4) of the
Bankruptcy Code.
R. As set forth in Article 5 of the Plan, the Plan provides adequate
means for its implementation. Thus, the Plan satisfies the requirements of
section 1123(a)(5) of the Bankruptcy Code.
S. Article 5.18(a) of the Plan requires the Debtor to include in its
corporate charter a provision prohibiting the issuance of nonvoting equity
securities and otherwise complying with section 1123(a)(6) of the Bankruptcy
Code. The Debtor's newly-drafted By-Laws and Articles of Incorporation,
copies of which are attached hereto as Exhibit
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"1", include such a provision. Thus, the Plan satisfies the requirements of
section 1123(a)(6) of the Bankruptcy Code.
T. The Plan contains only provisions that are consistent with the
interests of creditors, equity security holders and public policy with respect
to the manner of selection of any officer, director or trustee under the Plan
and any successor thereto. Thus, the Plan satisfies the requirements of section
1123(a)(7) of the Bankruptcy Code.
U. Article 3 of the Plan specifies the classes of claims and
interests impaired and unimpaired under the Plan, whether secured or
unsecured, and also describes the treatment of these classes. Thus, the Plan
conforms with the permissive provisions of section 1123(b)(1) of the
Bankruptcy Code.
V. Article 7 of the Plan and Exhibits "4" and "5" thereto provide for
the assumption or rejection of each of the Debtor's potential executory
contracts and unexpired leases. Thus, the Plan conforms with the permissive
provisions of section 1123(b)(2) of the Bankruptcy Code.
W. Article 8.8 of the Plan provides that on the Effective Date (as
defined in the Plan) the Debtor shall be revested with all property of the
bankruptcy estate, including all Litigation Claims, as defined in Article 2.1.41
of the Plan, except to the extent that any other party is authorized to assert
any Litigation Claims on behalf of the estate pursuant to Court order. Thus, the
Plan conforms with the permissive provisions of section 1123(b)(3) of the
Bankruptcy Code.
X. The Plan does not provide for the sale of all or substantially
all of the property of the estate. Thus, the permissive provisions of section
1123(b)(4) of the Bankruptcy Code are inapplicable to the Plan.
Y. As described in Article 3 of the Plan, the Debtor's treatment of the
claims of its unsecured creditors either modifies such creditors' rights or
leaves them unaffected. Thus, the Plan conforms with the permissive provisions
of section 1123(b)(5) of the Bankruptcy Code.
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Z. No provisions in the Plan are inconsistent with the applicable
provisions of title 11. Thus, the Plan conforms with the permissive
provisions of section 1123(b)(6) of the Bankruptcy Code.
AA. Based upon the findings and conclusions set forth in paragraphs
BB-CC, below, the Debtor has complied with the applicable provisions of the
Bankruptcy Code, including sections 1125 and 1127 thereof, and the Plan
therefore satisfies the requirements of section 1129(a)(2) of the Bankruptcy
Code.
BB. As evidenced by the DECLARATION OF CRAIG OLAH RE SERVICE OF PLAN
SOLICITATION PACKAGE and the SUPPLEMENTAL DECLARATION RE SERVICE OF PLAN
SOLICITATION PACKAGE OF SUSAN J. PERRY, the Debtor solicited votes to accept and
reject the Plan in accordance with the Disclosure Statement Order. Moreover, as
set forth in paragraphs 7-8 of the Declaration of Robert N. Weingarten attached
to the Confirmation Memorandum (the "Weingarten Declaration") and Exhibit "2"
thereto, the Debtor issued on February 10, 2000 a press release informing the
general public that the Court had approved the Disclosure Statement and set
deadlines for the Debtor's distribution of the Disclosure Statement and other
Plan materials to creditors and shareholders, and for creditors and shareholders
to vote on the Plan and/or to object thereto, and on February 11, 2000 the
Debtor filed with the Securities and Exchange Commission a Current Report on
Form 8-K noting the issuance of this press release and attaching a copy thereof.
As set forth in paragraphs 3-4 of the Declaration of Christopher W. Combs
attached to the Confirmation Memorandum, on or about February 11, 2000, the
Debtor also made available on its bankruptcy lawyers' web site, both for viewing
on line and for downloading, copies of the Notice, the Plan, the Disclosure
Statement, the Disclosure Statement Order, and the Committee's letter endorsing
the Plan. No solicitation of acceptances of the Plan occurred before the Debtor
mailed the documents described above or otherwise made them publicly available.
SEE paragraph 6 of the Weingarten Declaration. Thus, the Plan satisfies the
requirements of section 1125 of the Bankruptcy Code.
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CC. The Debtor has not sought to modify the Plan except to the extent
that any provision in this Order constitutes a non-material modification of the
Plan. Thus, the requirements of section 1127 of the Bankruptcy Code either are
not applicable or are satisfied.
DD. As evidenced by paragraphs 9-21 of the Weingarten Declaration and
by the record in this case, the totality of the circumstances in this case shows
that the Debtor proposed the Plan in good faith. In particular, the Debtor has
at all times under its new management sought to reorganize with the best
interests in mind of the Debtor's creditors, its preferred shareholders, and its
common shareholders. Accordingly, and in light of the Debtor's payment in full
of general unsecured creditors, the treatment of the preferred shareholders'
unsecured claims pursuant to arms'-length negotiations with the Committee, the
generous treatment of common shareholders, and the approval by the voting
creditors and shareholders, the Plan satisfies the requirements of section
1129(a)(3) of the Bankruptcy Code.
EE. As set forth in Articles 4.1-4.2 of the Plan and paragraph 22 of
the Weingarten Declaration, any payments made or to be made by the Debtor to
professional persons for services or for costs and expenses in, or in connection
with, the Debtor's chapter 11 case, have been and will be disclosed to the Court
in applications to employ and/or compensate the professionals, subject to
approval by the Court as reasonable, and professional persons employed at the
expense of the estate and persons entitled to an allowance of fees and expenses
from the estate pursuant to sections 503(b)(2) through (6) of the Bankruptcy
Code shall receive cash in amounts awarded by the Court as soon as practicable
after the entry of orders allowing such fees and expenses. Thus, the Plan
satisfies the requirements of section 1129(a)(4) of the Bankruptcy Code.
FF. As set forth in Article 5.4 of the Plan, Section 8.B.14 of the
Disclosure Statement, and paragraph 23 of the Weingarten Declaration, the Debtor
has disclosed the identity and affiliations of the individuals proposed to
serve, after confirmation of the
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Plan, as a director, officer, or voting trustee of the debtor, an affiliate
of the debtor participating in a joint plan with the debtor, or a successor
to the debtor under the plan, and the identity of all insiders to be employed
or retained by the reorganized Debtor and the nature of any compensation for
such insider. All such connections are consistent with the interests of
creditors and equity security holders and with public policy. In addition, as
set forth in paragraph 24 of the Weingarten Declaration, the Debtor has
disclosed its determination, with which the Committee concurs, that in light
of the services provided by Mark S. Zucker and Robert N. Weingarten in
facilitating the Debtor's rapid and successful reorganization, Mr. Zucker
should receive a reorganization bonus of 100% of his annual salary of
$250,000, or $250,000, and that Mr. Weingarten should receive a
reorganization bonus of 50% of his annual salary of $120,000, or $60,000.
Thus, the Plan satisfies the requirements of section 1129(a)(5) of the
Bankruptcy Code.
GG. As set forth in paragraph 25 of the Weingarten Declaration, the
Debtor is not subject to any governmental regulatory commission regarding
rates. Thus, section 1129(a)(6) of the Bankruptcy Code is inapplicable to the
Plan.
HH. As set forth in the extensive analysis provided in the
Declaration of Gregory J. Gosson attached to the Confirmation Memorandum,
together with Exhibits "A" through "J" thereto, and in paragraphs 26-30 of
the Weingarten Declaration, all creditors will receive at least as much under
the Plan as they would in a chapter 7 liquidation. Because all creditors have
either consented to their treatment under the Plan or will receive or retain
property with a value, as of the Effective Date, that is not less than the
amount that such creditors would receive or retain if the Debtor were
liquidated under chapter 7 of the Bankruptcy Code on the Effective Date, the
Plan satisfies the requirements of section 1129(a)(7) of the Bankruptcy Code.
II. As set forth in the Ballot Analysis, the Plan was accepted by at
least two thirds in amount and more than one half in number of the allowed
claims of each class of claims and by at least two thirds in amount of the
allowed interests of each class of
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interests. Thus, the Plan satisfies the requirements of section 1129(a)(8) of
the Bankruptcy Code.
JJ. Article 4.1 of the Plan provides that each holder of an allowed
administrative claim will receive cash equal to the then-unpaid portion of such
allowed administrative claim, unless the holder of the allowed administrative
claim agrees to a different treatment, or the payment of New Securities, subject
to agreement by the Reorganized Debtor and the holder of the allowed
administrative claim. Thus, the Plan satisfies the requirements of section
1129(a)(9)(A) of the Bankruptcy Code.
KK. Articles 3.2-3.3 of the Plan provide that each holder of an
allowed priority claim under section 507(a)(3), (4), (5), (6), or (7) of the
Bankruptcy Code will be paid in full on the Effective Date or 10 days after
the entry of a Final Order allowing such claim. Thus, the Plan satisfies the
requirements of section 1129(a)(9)(B) of the Bankruptcy Code.
LL. Article 4.5 of the Plan provides that each holder of a claim
entitled to priority pursuant to section 507(a)(8) of the Bankruptcy Code
will be paid in full within six years of the date of assessment plus interest
at a rate of 8% or, at the Reorganized Debtor's option, cash on the Effective
Date equal to the amount of the allowed claim, unless the holder agrees to a
different treatment. Thus, the Plan satisfies the requirements of section
1129(a)(9)(C) of the Bankruptcy Code.
MM. As set forth in the Ballot Analysis, excluding the acceptance of
any insider as defined in section 101(31) of the Bankruptcy Code, the following
classes of impaired claims entitled to vote have voted to accept the Plan: Class
2, Class 3, and Class 4. Class 1 is unimpaired, and Class 8 is not entitled to
vote. Thus, the Plan satisfies the requirements of section 1129(a)(10) of the
Bankruptcy Code.
NN. The Debtor has demonstrated that the Plan presents a workable plan
of reorganization and operation from which there may be a reasonable expectation
of success and that confirmation is not likely to be followed by the
liquidation, or the need for further financial reorganization, of the Debtor or
any successor to the Debtor under
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the Plan. First, the Debtor has reorganized approximately $27,000,000 in
unsecured obligations and will emerge from bankruptcy completely debt-free.
Second, as set forth in paragraph 31 of the Weingarten Declaration, the
Debtor will have more than enough cash on the Effective Date to pay all the
claims and expenses that are entitled to be paid. Third, as set forth in
paragraph 32 of the Weingarten Declaration, the Plan does not require the
Debtor to make any further payments to creditors after the Effective Date, so
the Debtor's performance after the Effective Date will not affect its ability
to comply with its obligations under the Plan. Fourth, as evidenced by
paragraphs 33-34 of the Weingarten Declaration and Exhibit "3" thereto, the
Debtor's financial projections for its operations after the Effective Date,
based on the assumptions and notes included therein, demonstrate that the
Debtor has more than a reasonable probability of operating as a financially
stable company for at least three years after it emerges from bankruptcy.
Thus, the Plan satisfies the requirements of section 1129(a)(11) of the
Bankruptcy Code.
OO. As set forth in paragraph 35 of the Weingarten Declaration, the
Debtor has paid or will pay all Court costs and all fees payable under section
1930 of title 28 in cash in full on or before the Effective Date. Thus, the Plan
satisfies the requirements of section 1129(a)(12) of the Bankruptcy Code.
PP. As set forth in paragraph 36 of the Weingarten Declaration, there
are no retiree benefits, as that term is defined in section 1114 of the
Bankruptcy Code, to be paid under the Plan. Thus, section 1129(a)(13) of the
Bankruptcy Code is inapplicable to the Plan.
QQ. Because all classes of creditors and interest holders entitled to
vote on the Plan have voted to accept the Plan, the Debtor need not attempt to
confirm the Plan under section 1129(b) of the Bankruptcy Code.
RR. Consistent with Article 5.14 of the Plan, the Debtor has entered
into mutual general releases with and, additionally, has received transfers of
rights from the Placement Agent Parties. A copy of the ASSIGNMENT AND ASSUMPTION
AGREEMENT AND
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MUTUAL RELEASE between the Debtor and the Placement Agent Parties is attached
as Exhibit "2" hereto.
SS. Consistent with Articles 3.14 and 3.16 of the Plan, the Debtor
has designated all of the members of the Committee, or in the alternative as
many of the members of the Committee as wish to serve, as litigation trustees
of the litigation trust referred to in those Articles.
TT. The Debtor has reasonably proposed that the list of released
persons and entities in Exhibit "3" to the Plan be deemed to include Paul
Abramowitz, whose name was inadvertently omitted from this Exhibit, and all
affiliated companies of all released parties.
UU. To the extent that any of the findings of fact contained herein
constitute conclusions of law, they shall be so deemed; and to the extent that
any of the conclusions of law herein constitute findings of fact, they shall be
so deemed.
In accordance with the foregoing findings of fact and conclusions of
law, and good cause appearing therefor,
THE COURT HEREBY ORDERS THAT:
1. The Plan does not violate section 1123(a)(4) of the Bankruptcy Code.
2. [Intentionally deleted.]
3. The Late-Filed Dahya Objection is overruled because Mr. Dahya's
contingent and unliquidated Class 2 claim for indemnification will be paid, if
it is paid at all, when all Allowed Class 2 Claims are paid, i.e. on the later
of the Effective Date and the date they become Allowed Claims. The fact that Mr.
Dahya's claim may not be allowed until after the Effective Date is irrelevant.
Creditors should not confuse equal treatment of claims under section 1123(a)(4)
with equal treatment of claimants. 7 COLLIER ON BANKRUPTCY, Section
1123.01[4][b] (15th ed. rev'd 1999). Because Mr. Dahya's claim is treated like
all other Class 2 Claims, Mr. Dahya is not entitled to interest on the allowed
claim and the Debtor need not establish a reserve to pay it in the event it is
eventually allowed.
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4. The Plan is confirmed pursuant to section 1129(a) of the Bankruptcy
Code.
5. The Effective Date of the Plan shall be the first Business Day
(as defined in the Plan) that is more than 10 days after the Confirmation
Date (as defined in the Plan) on which all of the conditions to effectiveness
of the Plan set forth in Article 10 of the Plan have been satisfied or waived
in accordance with Article 10.7 of the Plan; provided, however, that the
Debtor, with the approval of the Official Committee of Creditors Holding
Unsecured Claims, may waive the 10-day requirement, in which event the
Effective Date shall be the date specified in a Notice of Effective Date
filed with the Bankruptcy Court and served on the Special Notice Entities.
6. The provisions of the Plan and this Order are binding on the Debtor,
the Debtor's estate, the reorganized Debtor, any entity acquiring property under
the Plan, any creditor of the Debtor, and any interest holder in the Debtor,
whether or not the claim or interest of such creditor or interest holder is
impaired under the Plan and whether or not such creditor or interest holder has
accepted the Plan.
7. The Debtor is discharged as of the Effective Date from all debts
that arose or could have been asserted against the Debtor before the date of
entry of this Order and any debt of a kind specified in 11 U.S.C. Section
502(g), (h), and (i), whether or not a proof of claim based on such a debt is
filed or deemed filed under 11 U.S.C. Section 501, such claim is allowed
under 11 U.S.C. Section 502, or the holder of such claim has accepted the
Plan, except that the obligations of the Debtor under the Plan shall survive
the discharge provided by this Order.
8. Any judgment at any time obtained in any other court, to the extent
that such judgment is a determination of the liability of the Debtor with
respect to any discharged debt, is void.
9. The commencement or continuation of any action, the employment of
process, or any act to collect, recover, or offset from or against the Debtor,
the Debtor's
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estate, the reorganized Debtor, or the property of any of these entities any
debt, obligation, liability, or claim that has been discharged herein is
hereby forever enjoined.
10. Except as otherwise specifically provided in the Plan, on the
Effective Date, all property of the Debtor, its Estate and the Non-Debtor
Affiliates, including all property subject to options granted to third parties,
all Litigation Claims (except to the extent that any other party is authorized
to assert any Litigation Claims on behalf of the Estate pursuant to Court
order), all rights to acquire property, all contracts, leases and other
agreements entered into by the Debtor in Possession on or after the Petition
Date, which contracts, leases or other agreements have not expired or been
terminated or assigned, and including all Cash from the sales or dispositions of
property or Litigation Claims from the Petition Date to the Effective Date, all
of which were made in contemplation of the Plan, shall be transferred to and
vested in Holdco free and clear of all liens, Claims, encumbrances and other
interests. Holdco shall receive all Cash and marketable securities, 100% of the
New Goldco Common Stock, the Litigation Claims (except to the extent that any
other party is authorized to assert any Litigation Claims on behalf of the
Estate pursuant to Court order), the Debtor's interest in Auromar Development
Corporation, and all other property not transferred to Goldco. Neither the
Debtor, its Estate, the Non-Debtor Affiliates, nor any other person or entity
shall retain any interest in the property transferred to Holdco. Thereupon,
except as provided in the Plan, Holdco and Goldco will own and manage their
property without further jurisdiction, restriction, or supervision of or by the
Court and the United States Trustee, and free of any restrictions in the
Bankruptcy Code and the Bankruptcy Rules, except to the extent necessary to
implement or consummate the provisions of the Plan.
11. Except as otherwise specifically provided in the Plan, the
reorganized Debtor is authorized, without any additional Order of the Court, to
investigate, commence, enforce, compromise, adjust, and prosecute any and all
claims, causes of action, rights, or interests of Debtor or the estate to the
same extent the Debtor or the estate could do so immediately before the entry of
this Order, including but not limited to
14
<PAGE>
objections to claims and all other proceedings and matters over which the
Court retains jurisdiction. All Litigation Claims of the Debtor, its Estate,
and the Consolidated Non-Debtor Affiliates are preserved by the Plan and
Holdco shall have full power and authority to prosecute, settle, adjust,
retain, enforce or abandon any Litigation Claim as representative of the
Estate under section 1123(b) of the Bankruptcy Code or otherwise in
accordance with the Plan without supervision of or approval by the Bankruptcy
Court or the United States Trustee and free of any restriction in the
Bankruptcy Code or the Bankruptcy Rules.
12. The members of the Committee, or in the alternative as many of the
members of the Committee as wish to serve, shall be and they hereby are
authorized to serve as the litigation trustees of the litigation trust referred
to in Articles 3.14 and 3.16 of the Plan.
13. The Debtor is authorized to execute all documents, instruments, and
agreements required to make the Plan effective and to implement it, and to
perform all other acts that may be necessary and appropriate to effectuate the
terms of the Plan and to obey this Order.
14. Consistent with Article 5.18 of the Plan, the Debtor shall be and
it hereby is authorized to issue new By-Laws and Articles of Incorporation
substantially in the form of the documents attached as Exhibit "1" hereto.
15. The ASSIGNMENT AND ASSUMPTION AGREEMENT AND MUTUAL RELEASE
between the Debtor and the Placement Agent Parties, a copy of which is
attached as Exhibit "2" hereto, shall be and it hereby is approved. The
Debtor shall be and it hereby is entitled to seek at some later time this
Court's approval of the ASSIGNMENT AND ASSUMPTION AGREEMENT AND MUTUAL
RELEASE as a good-faith settlement if the Debtor should so desire.
16. On the Effective Date, the Old Securities and all securities,
debt instruments, warrants, stock options and indentures and similar
instruments issued by the Debtor, along with all associated contractual or
other rights, shall be terminated,
15
<PAGE>
cancelled and rejected. On and after the Effective Date, all indentures,
notes, securities, certificates, warrants, stock options and other evidence
of any Claim or Interest shall represent only the right to participate in
distributions under the Plan, except as otherwise expressly provided in the
Plan. All Treasury Stock shall be cancelled as of the Effective Date.
17. The first Distribution Record Date under the Plan shall be the
Effective Date. All New Securities and Cash to be distributed under the Plan
to Classes 3-7 shall be distributed only to persons and entities that are
holders of the Debtor's Old Securities as of the first Distribution Record
Date. The number of New Securities or the amount of Cash to be distributed to
each holder of Old Securities shall be calculated in accordance with the Plan
based upon the number of Old Securities that each such holder holds on the
first Distribution Record Date.
18. In accordance with section 1143 of the Bankruptcy Code, it shall be
a condition to any distribution to the holder of an Allowed Claim or Interest
that any of the Old Securities on which the Allowed Claim or Interest is based,
including without limitation the Old Preferred Stock and Old Common Stock, shall
be surrendered to the Reorganized Debtor or its designated representative for
cancellation within one year after the confirmation date or the holder of the
Allowed Claim or Allowed Interest shall be forever barred from receiving any
distributions from the Reorganized Debtor. The Reorganized Debtor shall use its
best efforts to provide written notice of this provision to all the Debtor's
shareholders of record and to all brokerage houses that hold the Debtor's shares
in street name for other parties.
19. If a security to be surrendered under the Plan is lost, stolen,
mutilated or destroyed, the security shall be deemed surrendered when the
Reorganized Debtor or its designated representative receives satisfactory
evidence of the loss, theft, mutilation or destruction of the security or an
affidavit from the holder of the security in accordance with Division 8 of the
California Uniform Commercial Code.
16
<PAGE>
20. The transfer agent for the Old Securities, and all other
intermediaries, brokers or depositories, shall cooperate with the Reorganized
Debtor and the holders of Allowed Claims or Allowed Interests in surrendering
the securities to the Reorganized Debtor and shall cooperate with Reorganized
Debtor in facilitating the Reorganized Debtor's distributions to the holders of
the Allowed Claims and Allowed Interests. The Reorganized Debtor shall be
authorized to pay any reasonable costs or expenses incurred by such entities in
cooperating with the Reorganized Debtor.
21. The Reorganized Debtor shall be entitled, on written request to
the clearing house, brokerage, investment bank, nominee or other holder or
representative of a claim or interest, to require the identification of the
beneficial holder of such claim or interest on the Petition Date, the
Effective Date or any Distribution Record Date. If the identity of the
beneficial holder of such claim or interest is not provided within 90 days of
such written request, the Reorganized Debtor shall be entitled to treat such
claim or interest as disputed, and subject to the provisions of Article 6 of
the Plan shall be entitled to hold any distributions otherwise payable on
behalf of such claim or interest until such claim or interest becomes an
Allowed Claim or Allowed Interest.
22. Pursuant to section 1145 of the Bankruptcy Code, any New
Securities that are distributed, offered or sold, or deemed distributed
offered or sold, under or pursuant to the Plan, excluding the New Preferred
Stock, the New Preferred Warrants, and any options or warrants issued after
Confirmation pursuant to the Management Incentive Stock Option Plan and the
Employee Stock Option Plan, shall be exempt from the requirements of the
Securities Act of 1933, 15 U.S.C. Section 77e, and any State or local law
requiring registration for the offer or sale of securities.
23. The Debtor is designated to act and serve as disbursing agent,
without compensation or bond, for the purposes of making all payments it is
obligated to make under the Plan.
24. In conjunction with the Debtor's assumption of its employment
contracts with Mark S. Zucker and Robert N. Weingarten pursuant to Article 7
of the Plan and
17
<PAGE>
Exhibit "5" thereto, the Debtor shall be and it hereby is authorized to pay,
on the Effective Date, Mark S. Zucker a reorganization bonus of $250,000 and
Robert N. Weingarten a reorganization bonus of $60,000 for their services in
facilitating the Debtor's rapid and successful reorganization.
25. Pursuant to section 1146(c) of the Bankruptcy Code, the issuance,
transfer, or exchange of any security under the Plan or the making or delivery
of any instrument of transfer under the Plan shall not be taxed under any state
or local law imposing a stamp tax or similar tax or fee, and all entities having
notice of this Order are hereby directed to accept for filing, recording, and
execution without payment of any tax all documents related to any such issuance,
transfer, exchange, making, or delivery.
26. The Court shall retain jurisdiction over this bankruptcy case for
all purposes provided by the Bankruptcy Code and Article 9 of the Plan,
including to hear and determine all Litigation Claims without prejudice to the
rights of the holder of any Litigation Claim to pursue such Litigation Claim in
another court.
27. The Plan has been proposed in good faith and in compliance with
all applicable provisions of the Bankruptcy Code, and the solicitation of
acceptances or rejections of the Plan by all Persons (except as set forth
below) and the offer, issuance, sale, or purchase of a security offered or
sold under the Plan has been in good faith and in compliance with all
applicable provisions of the Bankruptcy Code. Accordingly, on the Effective
Date, each of the officers and directors and employees of the Debtor and the
Non-Debtor Affiliates, each of the members of the Committee, and each of the
advisors and attorneys of the Debtor and Committee listed on Exhibit "3" to
the Plan, on which Paul Abramowitz and all affiliated companies of all
parties listed on Exhibit "3" to the Plan (including all affiliated companies
of Paul Abramowitz) shall be deemed to be listed, but specifically excluding
Amyn Dahya and every other person or entity listed on Exhibit "1" to the
Plan, will be deemed exculpated by Holders of Claims against and Interests in
the Debtor and other parties in interest to the Case from any and all claims,
causes of action, and other assertions of liability (including breach of
fiduciary duty)
18
<PAGE>
arising out of or related to any act taken in good faith or omission made in
good faith and in compliance with all applicable provisions of the Bankruptcy
Code in connection with or related to the Debtor, the Case, acts taken with
respect to all Litigation Claims, the exercise by such entities of their
functions as members of or advisors to or attorneys for any such individuals
or Committee or otherwise under applicable law, and the formulation,
negotiation, preparation, dissemination, Confirmation, and consummation of
the Plan and Disclosure Statement and any agreement, instrument, or other
document issued under the Plan or related to the Plan or any distribution of
property pursuant to the Plan. Nevertheless, this provision will have no
effect on liability for any act or omission of the officers and directors and
employees of the Debtor and the Non-Debtor Affiliates, the members of the
Committee, and each of their advisors and attorneys to the extent that such
act or omission is ULTRA VIRES or constitutes actual fraud. Nothing contained
herein shall limit or restrict the right of the Debtor, Reorganized Debtor
and/or any person or entity authorized by the Bankruptcy Court to bring any
Litigation Claims, and no such person or entity sued by the Debtor or
Reorganized Debtor, either before or after the Effective Date, shall have the
protections of this provision.
28. Notwithstanding any provision in the Plan to the contrary, the Plan
shall be deemed to incorporate the provisions in this paragraph. "The New Goldco
Series 2 Warrants" will mean new warrants to be issued by Goldco on the
Effective Date to each holder of New Holdco Common Stock, one New Goldco Series
2 Warrant for each share of New Holdco Common Stock. The New Goldco Series 2
Warrants will be exercisable at $6 each for a term of one year after the
Effective Date and will be detachable from and independently tradeable from
shares of New Holdco Common Stock after six months from the Effective Date. The
New Goldco Series 2 Warrants will be issued pursuant to section 1145 of the
Bankruptcy Code and, accordingly, will be exempt from the requirements of the
Securities Act of 1933, 15 U.S.C. Section 77e, and any State or local law
requiring registration for the offer or sale of securities.
19
<PAGE>
29. On June 30, 2000, the reorganized Debtor shall file a status report
explaining what progress has been made toward consummation of the Plan (the
"Report"). The Report shall be served on the United States Trustee, the 20
largest unsecured creditors, and those parties who have requested special
notice. The Report shall include at least the information particularly set forth
in Local Bankruptcy Rule 3020-1(2). A post-confirmation status conference shall
take place at 1:30 p.m. on July 19, 2000. If the above-referenced case is
converted to one under chapter 7, the property of the reorganized Debtor shall
be revested in the chapter 7 estate. DATED: ____3/31/2000_________
______________/S/____________________
THE HONORABLE ARTHUR M. GREENWALD
UNITED STATES BANKRUPTCY JUDGE
SUBMITTED BY:
Casmyn Corp., a Colorado corporation
_________/S/______________________________
By: Richard L. Wynne
Christopher W. Combs
WYNNE SPIEGEL ITKIN, A Law Corporation
Attorneys for the Debtor and Debtor in Possession
APPROVED:
Official Committee of Creditors Holding Unsecured Claims
_________/S/______________________________
By: Howard J. Steinberg
IRELL & MANELLA LLP
Attorneys for the Committee
20
<PAGE>
EXHIBIT 2.3
CASMYN CORP AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, 2000
As adjusted for
Confirmation of
Plan of
Estimated Reorganization
-------------------- ---------------------
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 1,500,000 $ 590,000
Investments
2,800,000 2,800,000
Account Receivable
125,000 125,000
Supplies inventory
500,000 500,000
Prepaid expenses and other current assets
10,000 10,000
-------------------- ---------------------
4,935,000 4,025,000
-------------------- ---------------------
PROPERTY AND EQUIPMENT 18,275,000 18,275,000
Less accumulated depreciation, depletion and
amortization (3,500,000) (3,500,000)
-------------------- ---------------------
Other Assets 14,775,000 14,775,000
-------------------- ---------------------
$ 19,710,000 $ 18,800,000
==================== =====================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARCH 31, 2000
As Adjusted for
Confirmation of
Plan of
Estimated Reorganization
-------------------- --------------------
<S> <C> <C>
LIABILITIES
CURRENT
Accounts payable $ 350,000 $ 350,000
Accrued liabilities 250,000 250,000
Preferred stock - delisting charge 6,122,000
-------------------- ---------------------
6,722,000 600,000
-------------------- ---------------------
Preferred stock - contractual redemption amount 21,467,000
-------------------- ---------------------
STOCKHOLDERS' EQUITY (DEFICIENCY)
Preferred stock
Common stock/additional paid-in capital 63,221,000 18,200,000
Accumulated deficit (68,000,000)
Accumulated foreign currency translation adjustment (3,700,000)
------------------- ---------------------
(8,479,000) 18,200,000
------------------- ---------------------
$ 19,710,000 $ 18,800,000
=================== =====================
</TABLE>
<PAGE>
Exhibit 3.1
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
CASMYN CORP.
The undersigned certifies that:
1. He is the Chief Financial Officer and Secretary of CASMYN CORP., a
Colorado corporation.
2. The following ARTICLES of the Articles of Incorporation of this
corporation are amended as follows:
A. ARTICLE FOURTH is amended to read in its entirety as follows:
"This corporation is authorized to issue an aggregate of 60,000,000
shares of stock in two classes, to be designated "Common Stock" and
"Preferred Stock". The total number of shares of Common Stock shall be
50,000,000, with a par value of $0.01 per share. There shall be only
one (1) class of Common Stock and all holders of Common Stock issued by
this corporation shall have equal voting rights per share of Common
Stock. The total number of shares of Preferred Stock shall be
10,000,000, with a par value of $0.01 per share.
Shares of Preferred Stock may be issued in such series and with such
voting powers, designations, preferences and relative, participating,
optional or other special rights, or qualification, limitations or
restrictions thereof, as shall be stated and expressed in any
resolution or resolutions providing for the issue of such Preferred
Stock adopted by the Board of Directors of this corporation pursuant to
the authority expressly vested in it by this ARTICLE FOURTH. The Board
of Directors of this corporation hereby is authorized and directed,
from time to time, to determine whether Preferred Stock may be issued,
with such voting powers, designations, preferences and relative,
participating, optional or other special rights, or qualifications,
limitations or restrictions thereof, as shall be stated and expressed
in the resolution or resolutions providing for the issuance of such
preferred stock adopted by the Board of Directors pursuant to the
authority expressly vested in it by the provisions of this ARTICLE
FOURTH. Any Preferred Stock may be made subject to redemption at such
time or times and at such price or prices, and may be issued in such
series, with such designations, preferences, and relative,
participating, optional or other special rights, qualifications,
limitations or restrictions thereof as shall be stated and expressed in
the resolution or resolutions providing for the issuance of such
Preferred Stock adopted by the Board of Directors of this corporation
as herein above provided. The holders of Preferred Stock, or any class
or series thereof, shall be entitled to receive dividends at such
rates, on such conditions and at such times as shall be expressed
2
<PAGE>
in the resolution or resolutions providing for the issuance of such
Preferred Stock adopted by the Board of Directors of this corporation
as herein above provided, payable in preference to, or in such relation
to, the dividends payable on any other class or classes of stock and
cumulative or non-cumulative, as shall so be expressed. The holders of
Preferred Stock, or any class or series thereof, shall be entitled to
such rights upon the dissolution of, or upon any distribution of the
assets of, this corporation as shall be stated and expressed in the
resolution or resolutions providing for the issue of such Preferred
Stock adopted by the Board of Directors of this corporation as herein
above provided. Any Preferred Stock or any class or series thereof, if
there are other classes or series, may be made convertible into, or
exchangeable for, shares of any other class or classes or of any other
series of the same or any class or classes of stock of this corporation
at such price or prices or at such rates of exchange and with such
adjustments as shall be stated and expressed in the resolution or
resolutions providing for the issuance of such preferred stock adopted
by the Board of Directors as herein above provided.
Notwithstanding any other provision of this ARTICLE FOURTH, this
corporation shall not issue any non-voting equity securities to the
extent required by Section 1123(a)(6) of the United States Bankruptcy
Code.
All shares of stock of this corporation shall be non-assessable and
shall be fully paid when issued."
B. ARTICLE FIFTH is amended to read in its entirety as follows:
"The members of the governing board of this corporation shall be styled
"Directors." The number of Directors shall be not less than three (3)
nor more than seven (7) until changed by amendment of the Articles of
Incorporation duly adopted by the stockholders according to ARTICLE
TWELFTH below. The exact number of Directors shall be fixed from time
to time, within the limits specified herein, pursuant to resolutions
adopted by the Board of Directors, except that no decrease in the
number of such Directors shall prevent any incumbent Director from
serving the balance of the term for which he was duly elected or
appointed unless he is removed from office in accordance with law. All
vacancies including those caused by an increase in the number of
Directors may be filled by a majority of the remaining Directors,
though less than a quorum. Directors so appointed to fill any vacancy
shall serve until their successors are elected and qualified. The
Directors shall be classified as to the duration of their respective
terms, or as to their election by one or more authorized classes or
series of shares, in accordance with the terms of the Bylaws of this
corporation."
2
<PAGE>
C. ARTICLE SIXTH is amended to read in its entirety as follows:
"Notwithstanding the provisions of ARTICLES ELEVENTH and TWELFTH below,
the stockholders of this corporation shall not have the right to
cumulative voting unless an amendment to this ARTICLE SIXTH permitting
such cumulative voting is approved by the affirmative vote of not less
than Sixty-Percent (60%) of the Directors of this corporation, and duly
adopted by the affirmative vote of a majority of the total voting power
of all issued and outstanding shares of stock entitled to vote on the
matter. Unless otherwise required by law, all such shares shall vote as
a single class."
D. ARTICLE TENTH, Paragraph 2, is amended to read in its entirety as follows:
"Except as provided below in this ARTICLE TENTH, no Director of this
corporation shall have personal liability to this corporation or any of
its stockholders for monetary damages for breach of fiduciary duty as a
Director.
The foregoing provision, however, shall not eliminate or limit
liability (i) for any breach of the Director's duty of loyalty to this
corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct, fraud or a knowing
violation of law, (iii) for the payment of dividends in violation of
the Colorado Business Corporation Act, or (iv) for any transaction from
which the Director derived an improper personal benefit. In the event
that the law of the State of Colorado is amended after approval of this
Paragraph 2 of ARTICLE TENTH so as to authorize corporate action
further eliminating or limiting the liability of directors, the
liability of a Director of this corporation shall thereupon be
eliminated or limited to the fullest extent permitted by the Colorado
Business Corporation Act, as so amended from time to time. The
provisions of this Paragraph 2 of ARTICLE TENTH shall not be deemed to
limit or preclude indemnification of a Director by this corporation for
any liability of a Director which has not been eliminated by the
provisions of this Paragraph 2 of ARTICLE TENTH."
E. ARTICLE TENTH is amended by adding the following new Paragraph 3 at the end
thereof:
"3. This corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (except an action by or in the right of
this corporation) by reason of the fact that he or she is or was a
Director or officer of this corporation, or is or was serving at the
request of this corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise
against expenses, including attorneys' fees, judgments, fines
3
<PAGE>
and amounts paid in settlement actually and reasonably incurred by
him or her in connection with the action, suit or proceeding if it is
determined by the Board of Directors that such Director acted in good
faith and in a manner which he or she reasonably believed to be in or
not opposed to the best interests of this corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause
to believe his or her conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction
or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith
and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of this corporation, and that, with
respect to any criminal action or proceeding, he or she had reasonable
cause to believe that his or her conduct was unlawful.
This corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of this corporation to procure a
judgment in its favor by reason of the fact that he or she is or was a
Director or officer of this corporation, or is or was serving at the
request of this corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise
against expenses, including, without limitation, attorneys' fees,
judgments, fines and amounts paid in settlement, actually and
reasonably incurred by him or her in connection with the action, suit
or proceeding, if it is determined by the Board of Directors that such
Director or officer acted in good faith and in a manner which he or she
reasonably believed to be in or not opposed to the best interests of
this corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, does not, of itself, create a presumption
that the person did not act in good faith and in a manner which he or
she reasonably believed to be in or not opposed to the best interests
of this corporation, and that, with respect to any criminal action or
proceeding, he or she had reasonable cause to believe that his or her
conduct was unlawful.
To the extent that a Director or officer of this corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in this Paragraph 3 of ARTICLE TENTH, or in
defense of any claim, issue or matter therein, this corporation shall
indemnify him or her against expenses actually and reasonably incurred
by him or her in connection with the defense, including, without
limitation, attorneys' fees, judgments, fines and amounts paid in
settlement. Furthermore, if it is determined by the Board of Directors
that such Director or officer acted in good faith and in a manner which
he or she reasonably believed to be in or not opposed to the best
interests of this corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct
was unlawful, such expenses of officers or Directors incurred in
defending a civil or criminal action,
4
<PAGE>
suit or proceeding, shall be paid by this corporation as they are
incurred and in advance of the final disposition of the action, suit
or proceeding, upon receipt of an undertaking by or on behalf of the
Director or officer to repay the amount if it ultimately is
determined by a court of competent jurisdiction that he or she is
not entitled to be indemnified by this corporation. The
indemnification and advancement of expenses authorized herein
continues for a person who has ceased to be a Director or officer of
this corporation, and inures to the benefit of the heirs, executors
and administrators of such a person.
This corporation may purchase and maintain insurance or make other
financial arrangements on behalf of any person who is or was a Director
or officer of this corporation (as provided for under the Colorado
Business Corporation Act), or is or was serving at the request of this
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, for
any liability and expenses incurred by him her or her in such capacity,
whether or not this corporation has the authority to indemnify him or
her against such liability and expenses. No financial arrangement made
pursuant to this Paragraph 3 of ARTICLE TENTH may provide protection
for a person adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable for intentional
misconduct, fraud or a knowing violation of law, except with respect to
the advancement of expenses or indemnification ordered by a court. Any
insurance or other financial arrangement made on behalf of a person
pursuant to this Paragraph 3 of ARTICLE TENTH may be provided by this
corporation or any other person approved by the Board of Directors,
even if all or part of the other person's stock or other securities is
owned by this corporation."
F. A new ARTICLE ELEVENTH is added after ARTICLE TENTH which shall read in its
entirety as follows:
"Any proposal duly brought before the stockholders of this corporation
that previously has not been approved by a majority of the Board of
Directors of this corporation, must be approved by the affirmative vote
of the holders of not less than Sixty-Percent (60%) of the total voting
power of all issued and outstanding shares of stock entitled to vote on
the matter. Unless otherwise required by law, all such shares shall
vote as a single class. Subject to the provisions of ARTICLE SIXTH
above regarding cumulative voting, any proposal duly brought before the
stockholders of this corporation that previously has been approved by a
majority of the Board of Directors of this corporation and that, under
applicable laws of the State of Colorado, requires the affirmative vote
of the stockholders entitled to vote thereon, must be approved by the
affirmative vote of the holders of a majority of the total voting power
of all issued and outstanding shares of stock entitled to vote on the
matter. Unless otherwise required by law, all such shares shall vote as
a single class."
5
<PAGE>
G. A new ARTICLE TWELFTH is added after new ARTICLE ELEVENTH which shall read in
its entirety as follows:
"Any amendment, alteration, change or repeal of any provisions
contained in these Articles of Incorporation duly brought before the
stockholders of this corporation that previously has not been approved
by a majority of the Board of Directors of this corporation, must be
approved by the affirmative vote of the holders of not less than
Sixty-Percent (60%) of the total voting power of all issued and
outstanding shares of stock entitled to vote on the matter. Unless
otherwise required by law, all such shares shall vote as a single
class. Subject to the provisions of ARTICLE SIXTH above regarding
cumulative voting, any proposal duly brought before the stockholders of
this corporation that previously has been approved by a majority of the
Board of Directors of this corporation and that, under applicable laws
of the State of Nevada, requires the affirmative vote of the
stockholders entitled to vote thereon, must be approved by the
affirmative vote of the holders of a majority of the total voting power
of all issued and outstanding shares of stock entitled to vote on the
matter. Unless otherwise required by law, all such shares shall vote as
a single class."
3. Pursuant to section 7-110-108 of the Colorado Business Corporation
Act, the foregoing amendments to the Articles of Incorporation of this
corporation are being made to carry out a plan of reorganization ordered by a
court of competent jurisdiction under a statute of the United States of America.
Specifically, the foregoing amendments are being made pursuant to an order (the
"Order"), dated, filed and entered March 1, 2000, of the United States
Bankruptcy Court, Central District of California, San Fernando Valley Division
(the "Court"), in Case No. SV 99-23968-AG, captioned "In re Casmyn Corp., a
Colorado corporation, Delaware," with respect to the corporation's voluntary
petition under chapter 11 of Title 11 of the United States Code.
4. The foregoing amendments were approved by the Court by its Order
dated, filed and entered March 31, 2000.
5. The Court had jurisdiction of the proceedings pursuant to 28 U.S.C
Sections 157 and 154.
6. Upon completion of the filing of these Articles of Amendment, the
address to which the Colorado Secretary of State may send a copy of this
document is as follows:
Fulbright & Jaworski L.L.P.
865 South Figueroa Street, Twenty-Ninth Floor
Los Angeles, California 90017-2576
Attn: Kevin J. Keenan, Esq.
6
<PAGE>
The undersigned further declares under penalty of perjury that
the matters set forth in this Certificate are true and correct of his own
knowledge.
Dated as of: April 11, 2000 /S/ ROBERT N. WEINGARTEN
------------------------
Robert N. Weingarten,
Chief Financial Officer and
Secretary
7
