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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: October 29, 1999
IMAGYN MEDICAL TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE
----------------------------------------------
(State or other jurisdiction of incorporation)
1-111150 98-0122944
------------ ----------------------
(Commission (IRS Employer
file number) Identification Number)
1 PARK PLAZA, SUITE 1100
IRVINE, CALIFORNIA 92614
- --------------------------------------------------------------------------------
(Address of principal executive offices) (zip code)
(949) 809-0800
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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ITEM 3. BANKRUPTCY.
As previously reported, the Registrant and its subsidiaries on May 18,
1999 filed a voluntary petition for reorganization under Chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court for the District of
Delaware (Case No. 99-1019(PJW)). Since that date, the Registrant has continued
managing its affairs as "debtor-in-possession," as defined in the Bankruptcy
Code.
On October 18, 1999, the United States Bankruptcy Court for the
District of Delaware issued an order confirming the Debtor's Joint Amended Plan
of Reorganization (the "Plan") dated September 10, 1999, as modified on October
18, 1999.
Prior to the effective date of the Plan, the Registrant had
approximately 38,694,000 shares of common stock outstanding. On the effective
date of the Plan, all of these outstanding shares will be canceled. The
reorganized Registrant will have 100,000,000 shares of New common stock
authorized and will issue 10,000,000 shares as required by the Plan and
described below.
The Registrant anticipates that the confirmed Plan will be effective
November 1, 1999. In connection with the effective date, trading in the
Registrant's Common Stock will cease and the Registrant will file to deregister
its securities and terminate its reporting obligations under the Securities
Exchange Act of 1934.
The Plan of Registrant and certain of its subsidiaries ("Debtors")
provides that on the effective date, creditors' claims will be satisfied through
(i) the restructuring of the Company's existing revolving credit facility with
B.T. Commercial Corporation (the "Revolving Credit Facility") and the secured
term loan with Credit Suisse First Boston (the "Secured Term Loan") and in the
case of the Secured Term Loan, the distribution of 200,000 shares of new common
stock (the "New Common Stock"); (ii) the issuance of approximately 8,600,000
shares of New Common Stock in exchange for the claims of the holders of the
company's 12.5% notes; (iii) the issuance of 200,000 shares of New Common Stock
and new warrants in exchange for the claims of the holders of the 8.75%
convertible debentures; (iv) the payment by cash or the issuance of a prorated
share of the 8,600,000 million shares of New Common Stock, (described above in
(ii)), to the holders of certain unsecured claims; and (v) the payment in full
over a three-year period of the claims of trade creditors from whom the Debtors
intend to continue to purchase goods or services after confirmation and who
agree to provide ongoing trade credit to the reorganized Debtors after the
effective date. In general, secured claims other than the Revolving Credit
Facility and the Secured Term Loan are not impaired by the Plan. Holders of
equity in the Registrant (including common stock and options, warrants and other
securities exchangeable or convertible for Registrant's common stock) and
holders of securities claims do not receive or retain any property under the
Plan on account of such claims or interests.
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Existing management of the Debtors will continue their employment on
terms generally similar to those existing prior to adoption of the Plan and will
participate in a long term incentive plan through the issuance of 1,000,000
shares of New Common Stock. In conjunction with the restructuring of the
Revolving Credit Facility and the Secured Term Loan, the Plan provides for a new
revolving credit facility which will provide working capital for the reorganized
Debtors' ongoing operations. Under the new revolving credit facility the Company
may borrow up to $10 million based upon a borrowing base consisting of eligible
accounts receivable and finished goods inventory.
The Registrant's and subsidiaries' unaudited September 30, 1999 monthly
report filed with the United States Trustee reported total assets of
approximately $95.7 million, post-petition liabilities of approximately $13.0
million and pre-petition liabilities of approximately $249.6 million.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.1 Order of the United States Bankruptcy Court for the
District of Delaware dated October 18, 1999 confirming
Debtor's Joint Amended Plan of Reorganization dated
September 10, 1999 as modified on October 18, 1999.
99.2 Debtor's Joint Amended Plan of Reorganization dated
September 10, 1999 as modified on October 18, 1999.
99.3 Text of Press Release dated October 21, 1999.
SIGNATURE
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.
Imagyn Medical Technologies, Inc.
Date: October 29, 1999 By /s/ Michael A. Montevideo
------------------------------
Michael A. Montevideo
Senior Vice President and
Chief Financial Officer
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EXHIBIT 99.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
)
IMAGYN MEDICAL TECHNOLOGIES, ) (Jointly Administered)
INC., et al., )
) Case No. 99-1019 (PJW)
Debtors. )
ORDER CONFIRMING
DEBTORS' JOINT AMENDED PLAN OF REORGANIZATION
DATED SEPTEMBER 10, 1999, AS MODIFIED ON OCTOBER 18, 1999
On October 18, 1999, a hearing was held before the Honorable Peter J.
Walsh, United States Bankruptcy Judge, to consider confirmation of the Debtors'
Joint Amended Plan of Reorganization Dated September 10, 1999 ("Plan") proposed
by Imagyn Medical Technologies, Inc., a Delaware corporation, Dacomed
Corporation, a Minnesota corporation, Allstate Medical Products, Inc., a
Minnesota corporation, Imagyn Medical Technologies California, a California
corporation, Imagyn Medical, Inc., a Delaware corporation, Osbon Medical
Systems, Ltd., a Georgia corporation, and Microsurge, Inc., a Delaware
corporation, each a debtor and debtor-in-possession herein (collectively, the
"Debtors"). Appearances were noted in the Court's records.
The Debtors' caused the Plan and the Amended Disclosure Statement in
Support of the Plan, along with other materials directed by the Court, to be
timely distributed to all creditors and equity holders, the office of the United
States Trustee, the Securities and Exchange Commission, the Internal Revenue
Service and all other parties in interest who requested notice. The Court
reviewed and considered the Plan and the
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Memorandum of Law in Support of Confirmation of the Plan, Including
Proposed Non-Material Modifications, along with its supportive affidavits. The
Court reviewed and considered all objections to the Plan, and provided an
opportunity for all parties in interest to be heard at the hearing.
The Court finds that (i) due, proper and adequate notice of the hearing
on confirmation of the Plan was given to all parties in interest; (ii) all
classes entitled to vote on the Plan voted to accept the Plan in accordance with
the voting procedures set forth in the Court's order entered September 8, 1999
and 11 U.S.C. Section 1126; (iii) all objections to confirmation of the Plan
have been withdrawn, resolved or are without merit; (iv) all the modifications
of the Plan proposed at the confirmation hearing are non-material and do not
adversely affect the treatment of any claims or interests and notice of the
proposed modifications to the Plan was, under the circumstances, good and
sufficient; (v) the Plan, as modified, and its confirmation comply with all the
applicable requirements and provisions of 11 U.S.C. Section 1129; (vi) all the
conditions precedent to the Plan's confirmation set forth in Section 5.1.1 of
the Plan have been satisfied or duly waived; (vii) the Debtors' decision to
reject the executory contracts and unexpired leases so listed in the Appendix to
the Plan, and to assume all other executory contracts and unexpired leases
between any of the Debtors and any other person, including the executory
contracts so listed in the Appendix to the Plan, are supported by sound business
reasons; and (viii) the Debtors' decision to resolve the following matters is in
the best interests of the Debtors' estate: (a) the settlement of the class
action claims and related derivative action, (b) the partial reclassification of
the claims of Morrison & Foerster LLP and the Los Angeles Athletic Club as set
forth in separate stipulations, (c) the estimation of the Timm Medical
Technologies, Inc. ("Timm") claims for voting purposes and the related matters
set forth in a separate stipulation, and (d) the settlements in the amendments
to the four Distributor Agreements being assumed as so modified.
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IT IS HEREBY ORDERED that:
1. The Plan, as modified on October 18, 1999 at the confirmation
hearing, is confirmed, and a true and correct copy of the Plan as so modified is
attached hereto as Exhibit "1." (Capitalized terms not otherwise defined herein
shall having the meaning ascribed to them in the Plan.)
2. All executory contracts and unexpired leases to which any Debtor is
a party that are listed as executory contracts to be rejected in the Appendix
are deemed rejected.
3. The Debtors' assumption of all executory contracts and unexpired
leases that are listed as executory contracts to be assumed in the Appendix and
all other executory contracts and unexpired leases to which any Debtor is a
party that are not deemed rejected pursuant to the preceding paragraph is
authorized and approved pursuant to Section 4.9 of the Plan. The Debtors'
assumption of the aforementioned executory contracts and unexpired leases shall
not require any cure or compensation payments except for those specific amounts
set forth in the Appendix in the list of executory contracts and unexpired
leases to be assumed.
4. The settlement of (i) the securities class action against Imagyn and
certain officers and former officers of Imagyn, and (ii) the related shareholder
derivative action against certain officers and directors of Imagyn, is hereby
approved.
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5. The settlements relating to the four Distributor Agreements that are
being assumed as modified, the terms of which are described in the Appendix in
the list of executory contracts to be assumed, are authorized and approved.
6. The stipulations relating to the claims of (i) Morrison & Foerster
LLP, (ii) the Los Angeles Athletic Club, and (iii) Timm are approved.
7. On or before November 1, 1999, the Debtors shall serve notice to all
holders of Class 6 claims advising them that the holders of Allowed Class 6
claims shall be deemed to have elected the cash distribution set forth in
Section 3.4.6 of the Plan unless the Debtors have received notice on or before
December 1, 1999 that a Class 6 claimant has elected to receive the stock
distribution set forth in Section 3.4.6 of the Plan.
8. In accordance with and subject to the limitations set forth in
Section 6.1 of the Plan, on the Effective Date, the Debtor shall be discharged
and released, pursuant to 11 U.S.C. Section 1141(d)(1), from any and all claims
that arose before the Effective Date, and such claims shall represent only the
right to receive the treatment provided for in the Plan. The effect of the
confirmation of the Plan and of the foregoing discharge shall be as set forth in
the Plan and 11 U.S.C. Sections 524(a) and 1141.
9. This Court shall retain jurisdiction over all the matters and
purposes relating to the Debtors' cases that are set forth in Section 6.5 of the
Plan.
10. All applications for final compensation of professionals must be
filed no later than sixty (60) days after the Effective Date.
11. In accordance with Section 6.2 of the Plan, objections to claims
must be filed on or before the date that is 120 days after the Effective Date or
120 days after such claim is filed, whichever is later.
12. The Debtors shall serve notice of entry of this Order, together
with a copy of this Order (excluding exhibits), on all parties entitled to
notice thereof, and the Debtors shall serve notice of the actual date of the
Effective Date of the Plan on all parties whose bar date for filing claims and
expenses pursuant to the Plan is determined by a designated period of time
following the Effective Date.
Dated: Wilmington, Delaware
October 18, 1999
/s/ Peter J. Walsh
------------------------------------
Peter J. Walsh
Chief Judge, United States
Bankruptcy Court
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EXHIBIT 99.2
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re ) Chapter 11
)
IMAGYN MEDICAL TECHNOLOGIES, INC., et al., ) (Jointly Administered)
)
) Case No. 99-1019 (PJW)
Debtors. )
)
_______________________________________ )
DEBTORS' JOINT AMENDED PLAN OF REORGANIZATION
DATED SEPTEMBER 10, 1999
AS MODIFIED ON OCTOBER 18, 1999
YOUNG, CONAWAY, STARGATT & TAYLOR
11th Floor - Rodney Square North
P.O. Box 391
Wilmington, Delaware 19899
Attn: Laura Davis Jones
Joel A. Waite
SIDLEY & AUSTIN
555 West Fifth Street, Suite 4000
Los Angeles, California 90013
Attn: Richard W. Havel
Thomas E. Patterson
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TABLE OF CONTENTS
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Article 1
INTRODUCTION............................................................................................2
1.1 Plan Defined Terms.....................................................................2
1.2 Bankruptcy Code Terms.................................................................12
1.3 Rules of Interpretation...............................................................12
1.4 Exhibits and Appendix.................................................................13
1.5 Time Periods..........................................................................13
Article 2
PROPERTY DISTRIBUTIONS.................................................................................14
2.1 New Common Stock......................................................................14
2.2 New Options...........................................................................14
2.3 New Warrants..........................................................................15
2.4 Drag-Along\Tag-Along Agreement........................................................17
Article 3
CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS........................................18
3.1 Summary...............................................................................18
3.2 Administrative Expenses...............................................................19
3.3 Priority Tax Claims...................................................................19
3.4 Classification, Treatment, and Voting.................................................19
3.4.1 Class 1 (Secured Revolving Credit Claims)...........................20
3.4.2 Class 2 (Secured Term Loan Claims)..................................20
3.4.3 Class 3. (Other Secured Claims).....................................21
3.4.3.1 Class 3A (Newhauser Associates)............................21
3.4.3.2 Class 3B (Financed Equipment Secured Claims)...............21
3.4.4 Class 4 (Priority Non-Tax Claims)..................................21
3.4.5A Class 5-A (Continuing Trade)........................................22
3.4.5B Class 5-B (Convenience Class).......................................22
3.4.6 Class 6 (Residual Unsecured Claims).................................23
3.4.7 Class 7 (Certain Indemnity Claims)..................................24
3.4.8 Class 8 (12.5% Notes)...............................................24
3.4.9 Class 9 (8.75% Convertible Subordinated Debentures).................25
3.4.10 Class 10 (Intercompany Claims and Equity Interests).................26
3.4.11 Class 11 (Old Common Stock Interests)...............................26
3.4.12 Class 12 (Old Stock Rights).........................................26
3.4.13 Class 13 (Securities Claims)........................................27
3.5 Disputed Administrative Expenses, Claims, and Equity Interests........................27
3.6 Allowance of Claims in Classes 1, 2, 8 and 9..........................................27
</TABLE>
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TABLE OF CONTENTS (Continued)
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Article 4
IMPLEMENTATION OF THE PLAN.........................................................................28
4.1 Issuance of New Securities............................................................28
4.2 Cancellation of Existing Securities and Agreements....................................29
4.3 Surrender of Existing Securities......................................................29
4.4 Waiver of Enforcement of Subordination................................................29
4.5 Imagyn Corporate Action...............................................................30
4.5.1 New Certificate of Incorporation and Bylaws.........................30
4.5.2 Board of Directors of Reorganized Imagyn............................30
4.5.3 Ownership and Management of Debtor Subsidiaries.....................31
4.6 Method of Distribution Under the Plan.................................................31
4.6.1 In General..........................................................31
4.6.2 Setoffs and Recoupments.............................................32
4.6.3 Distribution of Unclaimed Property -- Reserves for Disputed Claims..32
4.6.4 Saturday, Sunday, or Legal Holiday..................................33
4.6.5 Fractional Shares...................................................33
4.6.6 Record Ownership Date. Persons Deemed Holders of Registered
Securities......................................................... 33
4.7 Vesting of Assets.....................................................................34
4.8 Allocation of Consideration...........................................................34
4.9 Executory Contracts and Unexpired Leases..............................................34
4.9.1 General.............................................................34
4.9.2 Rejection Claims....................................................35
4.9.3 Cure and Compensation Claims........................................35
4.9.4 Bar Date For Assumption Objections And Cure Or Compensation Claims..36
4.10 Management Employment Agreements......................................................36
4.11 Employee Benefit Plans................................................................37
4.12 Long Term Incentive Plan..............................................................37
4.13 Limited Release.......................................................................37
4.14 Listing of New Common Stock; Registration of Securities...............................38
4.15 Exemption From Securities Registration................................................38
4.16 Restructure of the DIP Credit Facility................................................38
4.17 New Revolving Credit Loan.............................................................39
Article 5
EFFECTIVENESS OF THE PLAN..........................................................................41
5.1 Conditions Precedent..................................................................41
5.1.1 Condition Precedent to Plan Confirmation............................41
5.1.2 Condition Precedent to Effective Date...............................41
5.2 Waiver of Conditions..................................................................42
5.3 Effect of Failure of Conditions.......................................................43
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TABLE OF CONTENTS (Continued)
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Article 6
ADMINISTRATIVE PROVISIONS..........................................................................44
6.1 Discharge.............................................................................44
6.1.1 Scope...............................................................44
6.1.2 Injunction..........................................................44
6.2 Administrative Expense, Claim, and Equity Interest Objections.........................44
6.3 Preservation of Causes of Action......................................................45
6.4 Administrative Expenses Incurred After the Confirmation Date..........................46
6.5 Retention of Jurisdiction.............................................................45
6.6 Payment of Statutory Fees.............................................................47
6.7 Exculpation...........................................................................47
6.8 Binding Effect........................................................................48
6.9 Notices...............................................................................48
6.10 Governing Law.........................................................................49
6.11 Filing or Execution of Additional Documents...........................................49
6.12 Withholding and Reporting Requirements................................................49
6.13 Section 1125(e) of the Bankruptcy Code................................................49
6.14 Severability..........................................................................50
6.15 Cram Down.............................................................................51
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JOINT AMENDED PLAN OF REORGANIZATION OF
IMAGYN MEDICAL TECHNOLOGIES, INC.
DACOMED CORPORATION
ALLSTATE MEDICAL PRODUCTS, INC.
IMAGYN MEDICAL TECHNOLOGIES CALIFORNIA, INC.
IMAGYN MEDICAL, INC. OSBON MEDICAL SYSTEMS, LTD.
AND MICROSURGE, INC.
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
Imagyn Medical Technologies, Inc.; Dacomed Corporation;
Allstate Medical Products, Inc.; Imagyn Medical Technologies California, Inc.;
Imagyn Medical, Inc.; Osbon Medical Systems, Ltd.; and Microsurge, Inc., as
debtors, propose the following to amend and restate their Joint Plan dated June
25, 1999 that was and is hereby proposed pursuant to subsection 1121(a) of title
11 of the United States Code.
ARTICLE 1
INTRODUCTION INTRODUCTION
1.1 PLAN DEFINED TERMS..1 PLAN DEFINED TERMS. Unless the context
otherwise requires, the terms specified below have the following meanings:
8.75% SUBORDINATED DEBENTURE INDENTURE means the Indenture, dated
as of May 13, 1996, as amended from time to time in accordance with the
terms thereof, by and between Urohealth and Bankers Trust Company, as
trustee, pursuant to which the 8.75% Convertible Subordinated
Debentures were issued.
8.75% CONVERTIBLE SUBORDINATED DEBENTURES means the 8.75%
Convertible Subordinated Debentures due May 30, 2006 issued by
Urohealth, as amended from time to time in accordance with the terms
thereof.
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12.5% NOTE INDENTURE means the Indenture, dated as of April 10,
1997, as amended from time to time in accordance with the terms
thereof, by and between Urohealth, as issuer, The Bank of New York, as
trustee, and the Guarantors (as defined therein) pursuant to which the
12.5% Notes were issued.
12.5% NOTES means the 12.5% Senior Subordinated Notes due April 1,
2004 issued by Urohealth, as amended from time to time in accordance
with the terms thereof.
AFFILIATE means any entity that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with, a specified entity; for purposes of the definition of "Affiliate," any
entity that owns, controls, or holds with power to vote 20% or more of the
outstanding voting securities of, or controls or directs the management of, the
entity specified, is deemed to be an Affiliate of such entity.
AGREEMENT TO EXTEND TRADE CREDIT means an agreement in the form set
forth in the Appendix to be executed by creditors in class 5-A to provide
continuing credit to the Reorganized Debtors post-Effective Date.
ALLOWED means, with respect to any administrative expense, claim, or
Equity Interest, an administrative expense, claim, or Equity Interest, as the
case may be, to the extent it is allowed or deemed allowed pursuant to the Plan
or sections 502, 503, or 1111 of the Bankruptcy Code.
ALLSTATE MEDICAL means Allstate Medical Products, Inc., a Minnesota
corporation.
APPENDIX means those documents and information identified in the Master
Index (Exhibit A to the Plan) which are from time to time filed with the Court,
and which may be modified or amended by supplemental filings with the Court.
BANKRUPTCY CODE means title 11 of the United States Code, as amended
from time to time, as applicable to the Reorganization Cases.
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BANKRUPTCY RULES means the Federal Rules of Bankruptcy Procedure, as
amended from time to time, as applicable to the Reorganization Cases, including
the local rules of the Court.
BTCC means BT Commercial Corporation, or its successor in interest,
with respect to any claims it holds or asserts against any of the Debtors or
their estates.
BUSINESS DAY means any day other than a Saturday, Sunday or any other
day on which banking institutions in New York City are required or authorized to
close by law or executive order.
BYLAWS means the amended and restated bylaws of each of the Reorganized
Debtors in the form set forth in the Appendix.
CERTIFICATE OF INCORPORATION means the Restated Certificate of
Incorporation of each of the Reorganized Debtors in the form set forth in the
Appendix.
COURT means (a) the United States District Court for the District of
Delaware having jurisdiction over the Reorganization Case, (b) to the extent of
any reference made pursuant to section 157 of title 28 of the United States
Code, the unit of such District Court pursuant to section 151 of title 28 of the
United States Code, and (c) any other court having jurisdiction over the
applicable Reorganization Case.
CREDIT AGREEMENT means the Amended and Restated Credit Agreement, dated
as of August 24, 1998, by and among Imagyn California, Dacomed, Allstate
Medical, Osbon Medical, Microsurge, and Imagyn Medical, as borrowers, Imagyn as
guarantor, the financial institutions listed on the signature pages thereof, and
BTCC, as agent, as amended from time to time.
CSFB means Credit Suisse First Boston Management Corporation.
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CSFB SHARES shall have the meaning ascribed in section 2.3 of the Plan.
DACOMED means Dacomed corporation, a Minnesota corporation.
DEBTORS means Imagyn, Dacomed, Allstate Medical, Imagyn California,
Imagyn Medical, Osbon and Microsurge.
DEBTOR SUBSIDIARIES means each of the Debtors other than Imagyn.
DIP CREDIT FACILITY means, collectively, DIP Credit Facility I and II
and DIP Credit Facility III.
DIP CREDIT FACILITY I AND II means any and all advances made by BTCC,
as agent, under the Credit Agreement, on or after the Petition Date, together
with all interest, payable thereon, and any and all fees, costs and charges
incurred by BTCC and CSFB in connection therewith, all as provided in the Credit
Agreement, and as authorized pursuant to of the DIP I and II Orders.
DIP CREDIT FACILITY III means any and all advances made by BTCC, as
agent, under the Credit Agreement, on or after the Petition Date, together with
all interest payable thereon, and any and all fees, costs and charges incurred
by BTCC and CSFB in connection therewith, all as provided in the Credit
Agreement and as authorized pursuant to the DIP III Order.
DIP I AND II ORDERS means the following orders entered by the Court:
(1) Stipulation and Interim Order (I) Authorizing Secured Post-Petition
Financing on a Super Priority Basis Pursuant to 11 U.S.C. Sections 363 and 364,
(II) Authorizing Use of Cash Collateral, (III) Granting of Adequate Protection
Pursuant to 11 U.S.C. Sections 363 and 364 and (IV) Scheduling a Final Hearing
Pursuant to Bankruptcy Rule 4001(c), dated May 19,1999, (2) Supplemental Order
Regarding Post-Petition Financing, dated June 4, 1999, and (3) Second Interim
Order (I) Authorizing Secured Post-Petition Financing on a Super Priority
5
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Basis Pursuant to 11 U.S.C. Sections 363 and 364, (II) Authorizing Use of Cash
Collateral, (III) Granting of Adequate Protection Pursuant to 11 U.S.C. Sections
363 and 364 and (IV) Scheduling a Final Hearing Pursuant to Bankruptcy Rule
4001(c), dated July 20, 1999.
DIP III ORDER means the Third Interim Order (I) Authorizing Secured
Post-Petition Financing on a Super Priority Basis Pursuant to 11 U.S.C. Sections
363 and 364, (II) Authorizing Use of Cash Collateral, (III) Granting of Adequate
Protection Pursuant to 11 U.S.C. Sections 363 and 364 and (IV) Scheduling a
Final Hearing Pursuant to Bankruptcy Rule 4001(c), dated August 31, 1999.
DISPUTED means, with respect to an administrative expense, claim, or
Equity Interest, an administrative expense, claim, or Equity Interest, to the
extent (a) not Allowed pursuant to the Plan or a Final Order, and (b) (i) which
is listed on the Schedules as disputed, unliquidated, or contingent and as to
which a proof of such administrative expense, claim, or Equity Interest
designating such administrative expense, claim, or Equity Interest as liquidated
in amount and not disputed or contingent was not timely and properly filed, or
(ii) to the extent any party in interest has interposed a timely objection or
request for estimation in accordance with the Plan, the Bankruptcy Code and the
Bankruptcy Rules, which objection or request for estimation has not been
withdrawn or determined by a Final Order.
EFFECTIVE DATE means the first Business Day on which all the conditions
specified in section 5.1.2 hereof shall have been satisfied or waived in
accordance with section 5.2 hereof; provided, that if a stay of the order
confirming the plan is in effect on such date, the Effective Date shall be the
first Business Day after such stay is no longer in effect.
EQUITY INTEREST means any capital stock or other ownership interest, or
right thereto, that falls within the scope of "interest" as used in section
1129(b)(2)(C) of the Bankruptcy Code.
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FINAL ORDER means an order of the Court that is in effect and is not
stayed, and as to which the time to appeal, petition for certiorari, or move for
reargument or rehearing has expired and as to which no appeal, petition for
certiorari, or other proceedings for reargument or rehearing shall then be
pending or as to which any right to appeal, petition for certiorari, reargue, or
rehear shall have been waived in writing in form and substance satisfactory to
Imagyn, or in the event that an appeal, writ of certiorari, or reargument or
rehearing thereof has been sought, such order of the Court shall have been
affirmed by the highest court to which such order was appealed, or certiorari,
reargument, or rehearing has been denied, and the time to take any further
appeal, petition for certiorari, or move for reargument or rehearing shall have
expired.
FUNDED DEBT means, collectively and without duplication, (i) the
Allowed amount of the class 1 claims, (ii) the Allowed amount of the class 2
claims, (iii) the outstanding amount of the DIP Credit Facility, and (iv) the
stated principal amount of the New Revolving Credit Loan, all measured as of,
and after giving effect to the transactions contemplated to take effect on, the
Effective Date; provided, however, notwithstanding the foregoing, the Funded
Debt for purposes of calculating the per share price for the New Options in
section 2.2 shall in no event be deemed to exceed $60.5 million.
IMAGYN means Imagyn Medical Technologies, Inc., a Delaware corporation.
IMAGYN CALIFORNIA means Imagyn Medical Technologies California, Inc., a
California corporation.
IMAGYN MEDICAL means Imagyn Medical, Inc., a Delaware corporation.
LONG TERM INCENTIVE PLAN means the long term incentive plan for Imagyn
in the form set forth in the Appendix pursuant to which the New Options and
1,000,000 shares of New Common Stock will be distributed to members of
management.
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MASTER INDEX means the list of the material Plan Related Documents
which will be included in the Appendix. The Master Index is to be attached as
Exhibit A to the Plan, and may be modified from time to time.
MICROSURGE means Microsurge, Inc., a Delaware corporation.
NEW COMMON STOCK means the common stock of Reorganized Imagyn as
described in section 2.1 of the Plan, and authorized and issued pursuant to
sections 2.1 and 4.1 of the Plan, with the par value and other rights,
limitations, privileges and restrictions as are set forth in the Imagyn
Certificate of Incorporation.
NEW OPTIONS means the options to purchase New Common Stock, as
described in section 2.2 of the Plan, governed by the Long Term Incentive Plan.
NEW REVOLVING CREDIT LOAN means the working capital loan described in
section 4.17 of the Plan to be obtained by the Debtors on the Effective Date and
to be evidenced by the New Revolving Credit Loan Documents.
NEW REVOLVING CREDIT LOAN DOCUMENTS means the instruments, guarantees,
promissory notes, loan agreements, security agreements and other documents and
certificates required to evidence, collateralize, and perfect the liens and
security interests securing the New Revolving Credit Loan, which shall be in the
form set forth in the Appendix and reasonably acceptable to BTCC and CSFB.
NEW SUBORDINATED TERM LOAN has the meaning ascribed in section 3.4.2 of
the Plan.
NEW SUBORDINATED TERM LOAN DOCUMENTS means the instruments, guarantees,
promissory notes, loan agreements, security agreements and other documents and
certificates required to evidence, collateralize, and perfect the liens and
security interests securing the New Subordinated Term Loan and to provide for
the treatment of the class 2 claims, which New Subordinated Term Loan Documents
shall be in the form set forth in the Appendix, and reasonably acceptable to
BTCC and CSFB.
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<PAGE> 12
NEW WARRANTS EXERCISE PRICE DENOMINATOR has the meaning ascribed in
section 2.3 of the Plan.
NEW WARRANTS, NEW WARRANTS-TIER I AND NEW WARRANTS-TIER II have the
respective meanings ascribed in section 2.3 of the Plan, and shall be in the
form set forth in the Appendix and reasonably acceptable to CSFB.
NEW WARRANTS SHARES means the total number of shares of New Common
Stock that may be purchased upon exercise of the New Warrants, as determined in
accordance with the formula set forth in section 2.3 of the Plan.
OLD COMMON STOCK means the authorized common stock, par value $0.01 per
share, issued by Imagyn, prior to the Petition Date.
OLD STOCK RIGHTS means any and all warrants, options, calls,
subscriptions, or other similar rights or other agreements or commitments,
contractual or otherwise, obligating Imagyn to issue, transfer, sell, or
register any shares of Old Common Stock.
OSBON means Osbon Medical Systems, Inc., a Georgia corporation.
PETITION DATE means, with reference to any Debtor, the date on which
the Reorganization Case of such debtor was commenced (May 3, 1999 as to Imagyn,
and May 18, 1999 as to the Debtor Subsidiaries).
PLAN means this chapter 11 plan of reorganization, either in its
present form or as it may be altered, amended, supplemented by the Plan Related
Documents or modified from time to time in accordance with the terms and
conditions hereof and of the Bankruptcy Code.
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<PAGE> 13
PLAN RELATED DOCUMENT means any document, instrument, or agreement
referred to in or contemplated by this Plan that is required to be executed or
delivered pursuant to this Plan or that is necessary to implement or to
consummate the Plan, including, without limitation, the Certificates of
Incorporation, the Bylaws of the Reorganized Debtors, the New Revolving Credit
Loan Documents, the New Subordinated Term Loan Documents, the Long Term
Incentive Plan, the New Options and the New Warrants, all in form and substance
reasonably satisfactory to CSFB.
PRIORITY TAX CLAIM means any unsecured claim held by a governmental
unit entitled to a priority in right of payment under subsection 507(a)(8) of
the Bankruptcy Code.
PRO RATA SHARE means a proportionate share, so that the ratio
(expressed as a percentage) of the amount of property distributed on account of
an Allowed claim or Allowed Equity Interest in a class is the same as the ratio
(expressed as a percentage) such claim or Equity Interest bears to the total
amount of all claims or Equity Interests (including disputed claims or disputed
Equity Interests until disallowed) in such class.
REFINANCED INDEBTEDNESS has the meaning ascribed in section 4.17 of the
Plan.
REORGANIZATION CASE means each of the above-captioned chapter 11 cases.
REORGANIZED IMAGYN OR REORGANIZED DEBTOR means any of the Debtors, or
any successor thereto by merger, consolidation, or otherwise, on and after the
Effective Date.
REVOLVING CREDIT FACILITY means the "Revolving Line of Credit", as
defined in the Credit Agreement.
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<PAGE> 14
SCHEDULES means the schedules of assets and liabilities, statements of
financial affairs, and lists of holders of claims and Equity Interests filed by
the Debtors as required by section 521 of the Bankruptcy Code and Bankruptcy
Rule 1007, in each case including any amendments and supplements thereto.
SECURED REVOLVING CREDIT CLAIM means the claims arising from and
related to the Revolving Credit Facility and Secured Term Loan B, respectively,
including, without limitation, any claims under the guaranty thereof by Imagyn,
excluding any amounts payable under the DIP Credit Facility.
SECURED TERM LOAN CLAIM means the claims arising under Secured Term
Loan A and Secured Term Loan C, including, without limitation, any claims under
the guaranty thereof by Imagyn, excluding any amounts payable under the DIP
Credit Facility.
SECURED TERM LOAN A means the term loan facility under the Credit
Agreement referred to therein as the A Term Loan.
SECURED TERM LOAN B means the term loan facility under the Credit
Agreement referred to therein as the B Term Loan.
SECURED TERM LOAN C means the term loan facility under the Credit
Agreement referred to therein as the C Term Loan.
SECURED TERM LOAN D means the term loan facility under the Credit
Agreement referred to therein as the D Term Loan, as authorized by the order of
the Court approving the DIP Credit Facility III.
SECURITIES CLAIM means all claims of the kind identified in section
510(b) of the Bankruptcy Code.
TRANCHE A AVAILABILITY and TRANCHE B AVAILABILITY have the respective
meanings ascribed in section 4.17 of the Plan.
UROHEALTH means Urohealth Systems, Inc., Imagyn's predecessor in
interest.
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<PAGE> 15
WARRANTHOLDER SHARES shall have the meaning ascribed in section 2.3 of
the Plan.
WARRANTHOLDERS means the holders of the New Warrants to be issued to
holders of Allowed class 9 claims pursuant to this Plan.
1.2 BANKRUPTCY CODE TERMS. Uncapitalized terms used in this Plan that
are not defined in this Plan but that are defined (either explicitly or
implicitly) in the Bankruptcy Code or the Bankruptcy Rules are used in this Plan
with such meanings.
1.3 RULES OF INTERPRETATION. For purposes of the Plan: (a) whenever it
appears appropriate from the context, each term, whether stated in the singular
or the plural, shall include both the singular and the plural; (b) any reference
in the Plan to a contract, instrument, release or other agreement or document
being in a particular form or on particular terms and conditions means such
document substantially in such form or substantially on such terms and
conditions; provided, however, that any change to such form, terms, or
conditions which is material to a party to such document will not be modified
without such party's consent; (c) any reference in the Plan to an existing
appendix, document or exhibit means such appendix, document or exhibit, as it
may have been or may be amended, modified or supplemented; (d) unless otherwise
specified in a particular reference, all references in the Plan to sections,
paragraphs, Articles and Exhibits are references to sections, paragraphs,
Articles and Exhibits of or to the Plan; (e) the words "herein," "hereof,"
"hereto," "hereunder" and others of similar import refer to the Plan in its
entirety rather than to only a particular portion of the Plan; (f) captions and
headings to Articles and paragraphs are inserted for convenience of reference
only and are not intended to be a part of or to affect the interpretations of
the Plan; (g) the rules of construction set forth in section 102 of the
Bankruptcy Code shall apply, except to the extent inconsistent with the express
provisions of this section; and (h) all Plan Related Documents are incorporated
into the Plan, and are
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<PAGE> 16
deemed to be included in the Plan, regardless of when they are filed provided;
however, that in the event of an inconsistency or conflict between this Plan and
the terms of any Plan Related Document, the terms of the Plan Related Document
shall control notwithstanding the conflicting provision in the Plan.
1.4 EXHIBITS AND APPENDIX. Exhibits to the Plan may be amended from
time to time, and current copies may be obtained by reference to the Court files
or shall be provided to parties in interest upon written request to Debtors.
Documents and other information to be included in the Appendix shall be filed
with the Court from time to time, but in no event later than five (5) Business
Days before the initial date set for the hearing on the confirmation of the Plan
or such other date as may be authorized by the Court. Such documents or
information may, from to time to time, be modified or supplemented by a
subsequent filing, but, as modified or supplemented, shall be reasonably
acceptable, in form and substance, to CSFB. Current copies may be obtained by
reference to the Court's files or shall be provided to parties in interest upon
written request to the Debtors.
1.5 TIME PERIODS. Bankruptcy Rule 9006(a) applies to the computation of
any period of time prescribed or allowed by the Plan, and Bankruptcy Rules
9006(b) and (c) apply respectively to the enlargement or reduction of any period
of time prescribed or allowed by the Plan.
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<PAGE> 17
ARTICLE 2
PROPERTY DISTRIBUTIONS
In addition to the cash distributions required by the Plan, each
Reorganized Debtor shall distribute (or cause the distribution of) the following
property to the holders of Allowed claims and Allowed Equity Interests (as set
forth herein):
2.1 NEW COMMON STOCK. The New Common Stock shall consist of 100,000,000
authorized shares of new common stock of Reorganized Imagyn, par value $0.01 per
share. 10,000,000 shares shall be issued on the Effective Date, to be
distributed as follows: 200,000 shares shall be distributed to the holders of
Allowed claims in class 2; 8,600,000 shares in the aggregate shall be
distributed to the holders of Allowed claims in class 6 and class 8
respectively; and 200,000 shares shall be distributed to the holders of Allowed
claims in class 9. In addition, 1,000,000 shares (the "Restricted Shares") shall
be distributed to certain members of management in accordance with the Long Term
Incentive Plan, to vest as follows: 500,000 shares on the first anniversary of
the Effective Date, and an additional 250,000 shares on each of the next two
anniversaries following the Effective Date, with such vesting to be subject to
acceleration, and such shares to be subject to forfeiture, as provided in the
Long Term Incentive Plan. The remaining authorized shares shall be reserved for
future corporate purposes as determined by the Board of Directors of Reorganized
Imagyn (but subject to the restrictions, if any, set forth in the Certificate of
Incorporation of Reorganized Imagyn).
2.2 NEW OPTIONS. As provided for more particularly in the Long Term
Incentive Plan, the New Options shall consist of 10-year options to purchase New
Common Stock as follows: (i) New Options A 500,000 shares at a per share price
equal to (a) a total enterprise value of $150 million less the amount of Funded
Debt, divided by (b) the number of shares of New Common Stock to be issued under
the Plan, plus the 500,000 New Option A shares; (ii) New Options B 525,000
shares at a per share price equal to (a) a total enterprise value of $225
million less the amount of Funded Debt, divided by (b) the number of shares used
to calculate Option A, plus the 525,000 New Option B shares, and (iii) New
Options C 551,250 shares at a per share price equal to (a) a total enterprise
value of $300 million less
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<PAGE> 18
the amount of Funded Debt, divided by (b) the number of shares used to calculate
Option B, plus the 551,250 New Option C shares. Based upon the foregoing
formula, assuming the amount of Funded Debt equals $60.5 million, and for
illustrative purposes only, the per share exercise price for the New Options
shall be as follows: $8.52 for the New Options A, $14.92 for the New Options B,
and $20.69 for the New Options C. The New Options shall be issued to certain
members of management to be selected by the board of Reorganized Imagyn and
shall vest and be exercisable in accordance with the terms of the Long Term
Incentive Plan.
2.3 NEW WARRANTS. The New Warrants shall grant the Warrantholders the
right to purchase the New Warrants Shares. The number of New Warrants Shares
shall be calculated by the following formula: NWS = .10 (NWS + NCS), wherein NWS
is the number of New Warrant Shares and NCS is the number of shares of New
Common Stock to be issued under the Plan (excluding the number of shares that
may be purchased under the New Options). The sum of NWS + NCS is referred to
herein as the NEW WARRANTS EXERCISE PRICE DENOMINATOR. The New Warrants shall
have a 7 year term commencing on the Effective Date. The exercise price per
share for one half (1/2) of the New Warrants Shares (the "NEW WARRANTS-TIER I")
shall be $31.0 million divided by the New Warrants Exercise Price Denominator.
The exercise price per share for the other half (1/2) of the shares subject to
the New Warrants (the "NEW WARRANTS-TIER II") shall be $133.0 million divided by
the New Warrants Exercise Price Denominator. The actual strike price and number
of New Warrants Shares will be based on the number of shares of New Common Stock
to be issued under the Plan. By way of illustration, the Plan currently proposes
to issue 10,000,000 shares of New Common Stock, and based thereon the total
number of New Warrants Shares is 1,111,111, with an exercise price per share of
$2.79 for 555,556 shares under the New Warrants-Tier I and an exercise price per
share of $11.97 for 555,555 shares under the New
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<PAGE> 19
Warrants-Tier II. The exercise price of the New Warrants must be paid in cash;
however, if (i) the fair market value of a share of the New Common Stock is
greater than the exercise price in respect of a share of New Common Stock issued
pursuant to the New Warrants and (ii) the New Common Stock is either listed or
admitted to trading on any national securities exchange or on NASDAQ, then the
holders of the New Warrants (the "Warrantholders") may elect at the time of
exercise to exchange the New Warrants for shares of New Common Stock. Fair
market value per share of the New Common Stock will be determined by using, as
of any date of determination, the arithmetic mean of the daily closing prices
for the twenty (20) consecutive trading days before such date of determination.
Closing price for this purpose would mean, with respect to any day (A) the last
sale price, regular way, on such date or, if no such sale takes place on such
date, the average of the closing bid and asked prices on such date, in each case
as officially reported on the principal national securities exchange on which
any New Common Stock is then listed or admitted to trading or (B) the last
trading price of any New Common Stock on such date as reported by NASDAQ, or if
there shall have been no trading on such date, the average of the reported
closing bid and asked prices on such date as shown by NASDAQ. The number of
shares of New Common Stock to be issued on any such exchange of the New Warrants
will be determined as follows:
CS = WCS x (FMV - EP)
----------------
FMV
Where
CS - equals the number of shares of New Common Stock to be issued to
the holder of the New Warrants
WCS - equals the number of shares of New Common Stock purchasable under
the New Warrants being exercised
FMV - equals the fair market value of one share of the New Common Stock
EP - equals the exercise price.
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<PAGE> 20
2.4 DRAG-ALONG/TAG-ALONG AGREEMENT. On the Effective Date, Reorganized
Imagyn, CSFB and (if and to the extent such persons so elect) the Warrantholders
and those members of management holding Restricted Shares and/or New Options
will enter into a Drag-Along/Tag-Along Agreement (such Warrantholders and
members of management collectively the "Holders") that provides that in the
event that any time CSFB proposes to sell to an unaffiliated party such number
of the CSFB Shares as, together with all prior sales of CSFB Shares, shall equal
at least 51% of the shares of New Common Stock then outstanding, at the option
of the Holders or CSFB there shall be included in such proposed sale (on the
same terms and subject to the same conditions as applicable to the shares to be
sold by CSFB) such number of Holder Shares (as defined herein) as shall cause
the Holders to have sold upon completion of such sale the same percentage of the
Holder Shares as the percentage of CSFB Shares (as defined herein) sold (in the
proposed sale or previous sales) by CSFB. As used in this paragraph, "CSFB
Shares" means the shares of New Common Stock originally issued to CSFB pursuant
to the Plan and "Holder Shares" means the shares of New Common Stock that at the
time of the sale are held of record by, or are issuable on exercise or exchange
of New Warrants or exercise of New Options held of record by, any of Holders.
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<PAGE> 21
ARTICLE 3
CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS
3.1 SUMMARY. The categories of claims and Equity Interests listed below
classify Allowed claims and Allowed Equity Interests for all purposes, including
voting, confirmation, and distribution pursuant to the Plan. Except as otherwise
provided in the Plan, the order of the Court confirming the Plan, or required by
subsection 506(b) or section 1124 of the Bankruptcy Code, Allowed claims do not
include interest on such claims after the Petition Date.
<TABLE>
<CAPTION>
Description Status
------------------------------ ---------------------------------------------
<S> <C> <C>
Unclassified Administrative Expenses Paid in full
Unclassified Priority Tax Claims Paid in full over time; Not entitled to vote
Class 1 Secured Revolving Credit Claim Impaired; Entitled to vote
Class 2 Secured Term Loan Claim Impaired; Entitled to vote
Class 3 Other Secured Claims Unimpaired; Not entitled to vote
Class 4 Priority Non-Tax Claims Unimpaired; Not entitled to vote
Class 5A Unsecured--Continuing Trade Impaired; Entitled to vote
Class 5B Unsecured--Convenience Impaired; Entitled to vote
Class 6 Residual Unsecured Claims Impaired; Entitled to vote
Class 7 Certain Indemnity Claims Impaired; Entitled to vote
Class 8 12.5% Notes Impaired; Entitled to vote
Class 9 8.75% Convertible Subordinated Impaired; Entitled to vote
Debentures
Class 10 Intercompany Claims Impaired; Deemed to accept
Class 11 Common Stock Interest Impaired; Deemed to reject
Class 12 Old Warrants and Options Impaired; Deemed to reject
Class 13 Securities Claims Impaired; Deemed to reject
</TABLE>
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<PAGE> 22
3.2 ADMINISTRATIVE EXPENSES. Each Reorganized Debtor shall pay its
applicable Allowed administrative expenses in full, in cash, on the Effective
Date (or as soon thereafter as is practicable), except to the extent that the
holder of an Allowed administrative expense agrees to a different treatment
(which is to include the DIP Credit Facility I and II that will be included in
the New Revolving Credit Loan); provided, however, that Allowed administrative
expenses representing obligations incurred in the ordinary course of business,
consistent with past practice, or assumed by the applicable Reorganized Debtor,
shall be paid in full or performed by the Debtor or the Reorganized Debtor in
the ordinary course of business, consistent with past practice.
3.3 PRIORITY TAX CLAIMS. The applicable Reorganized Debtor shall pay to
each holder of an Allowed Priority Tax Claim deferred cash payments, over a
period not exceeding six years from the date of assessment of such claim, an
aggregate amount equal to the Allowed amount of such Priority Tax Claim, plus
interest from and after the Effective Date on the unpaid amount at the rate
prescribed below until such Allowed Priority Tax Claim is paid in full. Payment
shall be made in equal quarterly installments payable on each December 31, March
31, June 30 and September 30. Notwithstanding any provision of applicable
nonbankruptcy law, pursuant to section 1129(a)(9) of the Bankruptcy Code, from
and after the Effective Date, Allowed Priority Tax Claims shall accrue interest
at eight and fifty one-hundredths percent (8.50%) per annum and shall incur no
other penalties, and any remaining balance shall be payable in full at any time
without premium or penalty of any kind.
3.4 CLASSIFICATION, TREATMENT, AND VOTING. The Allowed claims against
and Equity Interests in the Debtors shall be classified and receive the
treatment specified below.
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<PAGE> 23
3.4.1 CLASS 1 (SECURED REVOLVING CREDIT CLAIMS). Class 1 consists
of all Secured Revolving Credit Claims. On the Effective Date, in full
satisfaction thereof, the Allowed Secured Revolving Credit Claims shall be
restructured by including in the stated principal amount of the Refinanced
Indebtedness in the New Revolving Credit Loan the then outstanding amount of the
Debtors' obligations under the Secured Revolving Credit Claims. Class 1 is
impaired and the holders of claims in class 1 are entitled to vote to accept or
reject the Plan.
3.4.2 CLASS 2 (SECURED TERM LOAN CLAIMS). Class 2 consists of all
Allowed Secured Term Loan Claims. On the Effective Date, the Reorganized Debtor
Subsidiaries will issue and deliver, and Reorganized Imagyn will guarantee, in
full satisfaction of the Allowed Secured Term Loan Claims, the New Subordinated
Term Loan, which shall provide for the following: (i) the principal amount of
the New Subordinated Term Loan shall include the Allowed amount of the class 2
claims as of the Effective Date; (ii) interest shall accrue at the rate of
fifteen percent (15%) per annum, payable in kind annually until June 30, 2003,
and thereafter payable quarterly in cash in arrears; (iii) the New Subordinated
Term Loan and guaranties thereof shall be subordinate to the New Revolving
Credit Loan and the corresponding guaranties thereof; (iv) the obligations
evidenced by the New Subordinated Term Loan shall be secured by liens upon and
security interests in all assets of the Reorganized Debtors that secure the
obligations evidenced by the New Revolving Credit Loan, which liens and security
interests shall be junior only to the liens and security interests that secure
the obligations evidenced by the New Revolving Credit Loan and any lien or
security interest that is senior to the liens and security interests granted
under the New Revolving Credit Loan Documents; (v) the New Subordinated Term
Loan shall mature on June 30, 2005; and (vi) the New Subordinated Term Loan
shall be prepayable in
20
<PAGE> 24
whole or in part at any time with no prepayment premium. In accordance with
section 4.16 of the Plan, the stated principal amount of the New Subordinated
Term Loan will also include the outstanding amount of the Debtors' obligations
under the DIP Credit Facility III as of the Effective Date. In addition, on the
Effective Date the holders of Allowed class 2 claims shall receive their Pro
Rata Share of 200,000 shares of New Common Stock. Class 2 is impaired and is
entitled to vote to accept or to reject the Plan.
3.4.3 CLASS 3. (OTHER SECURED CLAIMS)
3.4.3.1 CLASS 3A (NEWHAUSER ASSOCIATES). Class 3A consists of
all Allowed secured claims of Newhauser Associates. On the Effective Date, the
Allowed claims of each holder of a claim in class 3A shall be rendered
unimpaired in accordance with section 1124 of the Bankruptcy Code, except to the
extent that such holder agrees to a different treatment. Class 3A is not
impaired and the holders of claims in class 3A are not entitled to vote to
accept or reject the Plan.
3.4.3.2 CLASS 3B (FINANCED EQUIPMENT SECURED CLAIMS). Class 3B
consists of all secured claims for furniture, fixtures or equipment used in the
operation of one or more of the Debtors businesses. On the Effective Date, the
Allowed claims in class 3B shall be rendered unimpaired in accordance with
section 1124 of the Bankruptcy Code, except to the extent that such holder
agrees to a different treatment. The holders of claims in class 3B are not
entitled to vote to accept or reject the Plan.
3.4.4 CLASS 4 (PRIORITY NON-TAX CLAIMS). Class 4 consists of claims
entitled to priority pursuant to subsection 507(a) of the Bankruptcy Code, other
than administrative expenses, claims arising under 28 U.S.C. Section 1930 and
Priority Tax Claims. On the Effective Date, the Allowed claims in class 4 shall
be paid in full and rendered unimpaired in accordance with section 1124 of the
Bankruptcy Code, except to the extent that any holder of such Allowed claim
agrees to a different treatment. Holders of claims in class 4 are not entitled
to vote to accept or reject the Plan.
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<PAGE> 25
3.4.5A CLASS 5-A (CONTINUING TRADE). Class 5-A consists of all
Allowed, nonpriority, unsecured claims against the estates arising out of the
provision of goods and services to a Debtor held by creditors who (i) are
identified by the Debtors as continuing providers of goods and services to a
Debtor after the Effective Date on the exhibit to the Disclosure Statement or in
the Appendix, (ii) agree that the Allowed amount of its claim does not exceed
the amount, if any, that the Debtors have listed for the Creditor in the exhibit
to the Disclosure Statement or in the Appendix, and (iii) agree to execute and
deliver to the Debtors the Agreement to Extend Trade Credit prior to the
deadline for voting on the Plan. Provided, however, that with respect to any
creditor who is identified on the exhibit to the Disclosure Statement or in the
Appendix, but does not agree to limit the Allowed amount of its claim or to
enter into the Agreement to Extend Trade Credit, and with respect to any
creditor who otherwise is eligible to be a member of class 5-A, but the Court
determines that including such creditor in class 5-A will violate provisions of
the Bankruptcy Code such that the Plan is not confirmable, then any such
creditor will no longer be included in class 5-A, and instead will be deemed a
member of class 6. In accordance with the terms and conditions in the Agreement
to Extend Trade Credit, each Allowed class 5-A claim shall be paid in full by 36
equal monthly installments commencing on January 31, 2000. Such payments will
not include any post-Effective Date interest. Class 5-A is impaired, and the
holders of Class 5-A claims are entitled to vote to accept or reject the Plan.
3.4.5B CLASS 5-B (CONVENIENCE CLASS). Class 5-B consists of all
Allowed, nonpriority, unsecured claims against the estates in an amount less
than or equal to $1,000
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<PAGE> 26
(and all Allowed claims for which the creditor has voluntarily agreed in writing
on or before the last day creditors may vote on the Plan to reduce the Allowed
amount of the claim to $1,000). For purposes of this classification a single
creditor may not disaggregate its claims in order to hold and assert multiple
claims, and a creditor may not transfer its claims to affiliated entities or to
third parties for the purposes creating multiple claims. The legal, equitable
and contractual rights of Class 5-B claims will be unaltered and will be paid in
cash in full on the later of (x) a date as soon as practicable after the
Effective Date; (y) the date such payment normally comes due; and (z) a date as
soon as practicable after the date the claim is Allowed by Final Order. Class
5-B is impaired, and the holders of Class 5-B claims are entitled to vote to
accept or reject the Plan.
3.4.6 CLASS 6 (RESIDUAL UNSECURED CLAIMS). Class 6 consists of all
Allowed, nonpriority, unsecured claims against the estates not classified in any
other class. Class 6 claims will receive, on the Effective Date, at each
holder's election, in full satisfaction of each such class 6 Allowed claim, (i)
cash equal to the lesser of (x) 20% of the amount of each Allowed class 6 claim,
and (y) a Pro Rata Share of $1,000,000, or (ii) a Pro Rata Share, aggregated
with the holders of Allowed class 8 claims, of 8,800,000 shares New Common
Stock. For purposes of calculating the Pro Rata Share of New Common Stock to be
received by holders of Allowed class 6 claims who elect to receive New Common
Stock, the respective Allowed claims in class 6 and class 8 shall be aggregated
together and it shall be assumed that all class 6 creditors elect to receive New
Common Stock. The timing and procedures for the creditors in class 6 to elect
between the alternative treatments provided for herein shall be set forth in the
order confirming the Plan. Class 6 is impaired, and the holders of class 6
claims are entitled to vote to accept or reject the Plan.
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<PAGE> 27
3.4.7 CLASS 7 (CERTAIN INDEMNITY CLAIMS). Class 7 consists of the
pre-petition indemnity claims of directors and officers of a Debtor who served
as of March 31, 1999, that arise under the articles of incorporation or by-laws
of the applicable Debtor. Holders of class 7 claims will receive the benefit of
the use of proceeds of pre-petition insurance to make any payment on or
settlement of litigation against such officers and directors that might be the
basis for an indemnification claim, or they may be paid from the proceeds of
such insurance, if any. The Reorganized Debtors shall secure in connection with
future Directors & Officers liability insurance a tail coverage of up to $10.0
million to cover claims against the directors and officers in class 7 based on
actions within one year before the Petition Date. To the extent such proceeds
are inadequate, the class 7 claims will receive no distribution to the extent
such claims are Securities Claims, and will be treated as class 6 claims to the
extent they are not Securities Claims. The foregoing treatment is in full
satisfaction of class 7 claims. The Plan's provisions with respect to class 7
claims shall not affect the entitlement to insurance coverage or proceeds of any
directors or officers of the Debtors whose indemnification claims are not
included in class 7. Class 7 is impaired, and the holders of class 7 claims are
entitled to vote to accept or reject the Plan.
3.4.8 CLASS 8 (12.5% NOTES). Class 8 consists of all claims arising
under the 12.5% Notes and all claims under the 12.5% Note Indenture. In full
satisfaction of the 12.5% Notes, holders of Allowed class 8 claims (excluding
the Indenture Trustee under the 12.5% Note Indenture) will receive their Pro
Rata Share of the remainder of (a) the 8,800,000 shares of New Common Stock
available after distribution to Class 6 claims, minus (b) 200,000 shares of New
Common Stock for distribution to class 9 claims. All distributions required to
be made pursuant to this section 3.4.8 on account of the 12.5% Notes shall be
made, on behalf of the beneficial holders of such Notes, to the indenture
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<PAGE> 28
trustee under the 12.5% Note Indenture, who shall make the distributions to the
holders of the 12.5% Notes as such holders surrender such securities in
accordance with section 4.3 of the Plan. The distributions for class 8 shall be
free of any lien or claim asserted by the indenture trustee under the 12.5% Note
Indenture for compensation or reimbursement of fees and expenses, and, in lieu
thereof the Debtors shall pay to the indenture trustee the sum of $63,700, which
sum shall be paid concurrently with the Debtors' delivery to the indenture
trustee of the shares of the New Common Stock to be distributed to class 8 in
accordance with the Plan and Bankruptcy Rule 3021. Such payment shall be in
consideration of the indenture trustee distributing the New Common Stock to the
class 8 claims, and in satisfaction of all claims by the indenture trustee for
compensation or reimbursement of fees and expenses under the 12.5% Note
Indenture, or related to or incurred in connection with the indenture trustee's
distribution of the New Common Stock to the class 8 claims. Holders of class 8
claims are impaired and are entitled to vote to accept or reject the Plan.
3.4.9 CLASS 9 (8.75% CONVERTIBLE SUBORDINATED DEBENTURES). Class 9
consists of all claims arising under the 8.75% Convertible Subordinated
Debentures and all claims arising under the 8.75% Subordinated Debenture
Indenture. In full satisfaction of all claims under the 8.75% Convertible
Subordinated Debentures holders of Allowed class 9 claims will receive their Pro
Rata Share of 200,000 shares of New Common Stock, and the New Warrants. All
distributions required to be made pursuant to this section 3.4.9 on account of
the 8.75% Convertible Subordinated Debentures shall be made, on behalf of the
beneficial holders of such Debentures, to the indenture trustee under the 8.75%
Subordinated Debenture Indenture, who shall make the distributions to the
holders of the 8.75% Convertible Subordinated Debentures as such holders
surrender such securities in accordance with section 4.3. The distributions for
class 9 shall be free of any liens or claims
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asserted by the indenture trustee under the 8.75% Subordinated Debenture
Indenture, and, in lieu thereof and in full satisfaction of any claim under the
8.75% Subordinated Debenture Indenture, the Debtors shall pay on the Effective
Date to the indenture trustee under the 8.75% Subordinated Debenture Indenture
an amount, not to exceed $35,000 or such higher amount that the Debtors find
acceptable, for reasonable, actual and necessary fees and expenses (including
attorneys' fees) that are reimbursable under the 8.75% Subordinated Debenture
Indenture. Holders of class 9 claims are impaired and are entitled to vote to
accept or reject the Plan.
3.4.10 CLASS 10 (INTERCOMPANY CLAIMS AND EQUITY INTERESTS). Class
10 consists of all the secured and unsecured claims of all Affiliates of a
Debtor, and all Equity Interests of any Debtor that are held by any other Debtor
or any Affiliate of any Debtor. Holders of claims in class 10 shall not receive
or retain any property under the Plan, and holders of Equity Interests in class
10 shall be canceled or retained as necessary to implement the Plan under
Section 4.5.3. Class 10 is impaired, but as insiders the holders of such claims
shall be deemed to accept the Plan.
3.4.11 CLASS 11 (OLD COMMON STOCK INTERESTS). Class 11 consists of
the Equity Interests evidenced by all the issued and outstanding Old Common
Stock. Holders of Equity Interests in class 11 shall not receive or retain any
property under the Plan. Class 11 is impaired and the holders of Equity
Interests in class 11 are deemed to reject the Plan.
3.4.12 CLASS 12 (OLD STOCK RIGHTS). Class 12 consists of all Equity
Interests evidenced by Old Stock Rights. Holders of Equity Interests in class 12
shall not receive or retain any property under the Plan. Class 12 is impaired
and the holders of Equity Interests in class 12 are deemed to reject the Plan.
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3.4.13 CLASS 13 (SECURITIES CLAIMS). Class 13 consists of all
Securities Claims. Holders of class 13 claims shall not receive or retain any
property under the Plan. Class 13 is impaired and the holders of claims or
Equity Interests in class 13 are deemed to reject the Plan.
3.5 DISPUTED ADMINISTRATIVE EXPENSES, CLAIMS, AND EQUITY INTERESTS. No
distributions shall be made with respect to administrative expenses, claims, or
Equity Interests which are disputed. The Disbursing Agent shall reserve for any
disputed administrative expense, claim or Equity Interest to provide for the
full amount as asserted by the creditor, or in such other amount as is
designated by the Court. Except as otherwise ordered by the Court, each
distribution to be made on a specific date shall be deemed to have been made on
such date if made as soon as practicable on or after the later of such date or
the date on which such administrative expense, claim, or Equity Interest is
Allowed.
3.6 ALLOWANCE OF CLAIMS IN CLASSES 1, 2, 8 AND 9. The class 1 Secured
Revolving Credit Claims shall be Allowed in the amount of $38,297,708.53 as of
May 18, 1999, plus interest for each day from and including May 18, 1999 through
and including the date immediately preceding the Effective Date at the rate
specified in the Credit Agreement on the unpaid balance on each such day, plus
any and all fees, charges and costs incurred by the holders of the class 1
Secured Revolving Credit Claims that are Allowed by the Court pursuant to
section 506(b) of the Bankruptcy Code, less (i) any amounts paid on account of
the Secured Revolving Credit Claims during the Reorganization Case, and (ii) the
interest accrual on such amounts paid from the date of such payment until the
Effective Date. The class 2 Secured Term Loan Claims shall be Allowed in the
amount of $14,546,816.96 as of May 18, 1999, plus $7,460.72 in per diem interest
for each day from and including May 18,
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1999 through and including the date immediately preceding the Effective Date,
plus any and all fees, costs and charges incurred by the holder of the class 2
claims that are Allowed by the Court pursuant to section 506(b) of the
Bankruptcy Code. The class 8 claims shall be Allowed in the amount of
$118,708,317.09 as of May 18, 1999. The indenture trustee under the 12.5% Note
Indenture may file a proof of claim with respect to the claims arising under the
12.5% Notes in class 8, but is not required to file such a proof of claim in
order for such claims to be Allowed pursuant to the Plan. Any proof of claim
filed by an entity with respect to class 8 claims arising under the 12.5% Notes
shall be disallowed as duplicative of the proof of claim filed by the indenture
trustee, but only to the extent such a proof of claim is in fact filed by the
indenture trustee. The class 9 claims shall be Allowed in the amount of
$52,554,635.29 as of May 3, 1999. The indenture trustee under the 8.75%
Subordinated Debenture Indenture may file a proof of claim with respect to the
claims arising under the 8.75% Convertible Subordinated Debentures in class 9,
but is not required to file such a proof of claim in order for such claims to be
Allowed pursuant to the Plan. Any proof of claim filed by an entity with respect
to class 9 claims arising under the 8.75% Convertible Subordinated Debentures
shall be disallowed as duplicative of the proof of claim filed by the indenture
trustee, but only to the extent such a proof of claim is in fact filed by the
indenture trustee.
ARTICLE 4
IMPLEMENTATION OF THE PLAN
4.1 ISSUANCE OF NEW SECURITIES. The issuance of the New Common Stock,
the New Options and the New Warrants by Reorganized Imagyn is hereby authorized
without the need for any further corporate action, other than with respect to
the execution and delivery of the Long Term Incentive Plan.
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4.2 CANCELLATION OF EXISTING SECURITIES AND AGREEMENTS. On the
Effective Date, the 12.5% Notes, the 8.75% Convertible Subordinated Debentures,
the Old Common Stock, and the Old Stock Rights, and any other capital stock of
Imagyn shall be canceled. Except for purposes of effectuating the distributions
under the Plan, on the Effective Date, the 12.5% Note Indenture and the 8.75%
Subordinated Debenture Indenture shall be canceled.
4.3 SURRENDER OF EXISTING SECURITIES. As a condition to receiving any
distribution under the Plan, each holder of a promissory note, share
certificate, or other instrument evidencing a claim or Equity Interest must
surrender such promissory note, share certificate, or other instrument to
Reorganized Imagyn or its designee. Reorganized Imagyn appoints the indenture
trustee under the 12.5% Note Indenture as its designee to receive the 12.5%
Notes. Reorganized Imagyn appoints the indenture trustee under the 8.75%
Subordinated Debenture Indenture as its designee to receive the 8.75%
Convertible Subordinated Debentures. Any holder of a claim or Equity Interest
that fails to (a) surrender such instrument, or (b) execute and deliver an
affidavit of loss and/or indemnity reasonably satisfactory to Reorganized Imagyn
and furnish a bond in form, substance, and amount reasonably satisfactory to
Reorganized Imagyn before the later to occur of (i) the second anniversary of
the Effective Date, and (ii) six months following the date such holder's claim
becomes an Allowed claim, shall be deemed to have forfeited all rights, claims,
and/or Equity Interests and may not participate in any distribution under the
Plan.
4.4 WAIVER OF ENFORCEMENT OF SUBORDINATION. The Plan takes into account
the relative priority of the claims in each class in connection with any
contractual subordination provisions relating thereto. Accordingly, any right of
a creditor of any Debtor to enforce a
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contractual subordination provision, and any right to receive from the legal or
beneficial holder of a claim the property distributed to such holder on account
thereof under this Plan, will terminate on the Effective Date.
4.5 IMAGYN CORPORATE ACTION.
4.5.1 NEW CERTIFICATE OF INCORPORATION AND BYLAWS. On the Effective
Date or as soon thereafter as is practicable, Reorganized Imagyn shall file with
the Secretary of State of the State of Delaware, in accordance with sections 103
and 303 of the Delaware General Corporation Law, the Certificate of
Incorporation and such certificate shall be the certificate of incorporation for
Reorganized Imagyn. The Certificate of Incorporation, provides, among other
things, for the authorization of 100,000,000 shares of the New Common Stock and
a prohibition on the issuance of nonvoting equity securities, in accordance with
section 1123(a)(6) of the Bankruptcy Code. The Bylaws provide, among other
things, that the Board of Directors of Reorganized Imagyn shall initially
consist of eight members (five of whom shall be selected by CSFB) and, on the
Effective Date, the Bylaws shall become the bylaws of Reorganized Imagyn.
4.5.2 BOARD OF DIRECTORS OF REORGANIZED IMAGYN. On the Effective
Date, the operation of Reorganized Imagyn shall become the general
responsibility of its Board of Directors, subject to, and in accordance with,
the Certificate of Incorporation and the Bylaws. The initial Board of Directors
shall consist of the individuals set forth in the Appendix. Such directors shall
be deemed elected or appointed, as the case may be, pursuant to the order
confirming the Plan, but shall not take office and shall not be deemed to be
elected or appointed until the occurrence of the Effective Date. Those directors
and officers not continuing in office shall be deemed removed therefrom as of
the Effective Date
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pursuant to the order confirming the Plan. Should Reorganized Imagyn after the
Effective Date propose to take an action that would require shareholder
approval, but such approval may not be readily solicited because the
distribution of the New Common Stock under the Plan has not been completed,
then, in lieu of shareholder approval, Reorganized Imagyn may seek Court
approval of the action upon notice to all creditors who are entitled to a
distribution of New Common Stock under the Plan, and upon Court approval
Reorganized Imagyn shall be authorized to take such action.
4.5.3 OWNERSHIP AND MANAGEMENT OF DEBTOR SUBSIDIARIES. From and
after the Effective Date, each Debtor shall retain its Equity Interests in any
other Debtor. The boards of directors of the Debtor Subsidiaries shall be
established by Reorganized Imagyn. The initial boards of directors for the
Debtor Subsidiaries are set forth in the Appendix. Imagyn, at its option, may
after confirmation of the Plan and on or prior to the Effective Date of the
Plan, merge in accordance with Delaware Corporate Law all of the Debtor
Subsidiaries into Imagyn.
4.6 METHOD OF DISTRIBUTION UNDER THE PLAN.
4.6.1 IN GENERAL. Distributions under the Plan shall be made (i) by
Reorganized Imagyn or its designee to the holders of claims or interests at
addresses set forth on the Schedules unless superseded by proofs of claims or
transfers of claims pursuant to Bankruptcy Rule 3001 (or at the last known
addresses of such holders if the applicable Debtor has been notified in writing
of a change of address), (ii) by the indenture trustee under the 12.5% Note
Indenture to the holders of class 8 claims at the addresses last known to the
indenture trustee, and (iii) by the indenture trustee under the 8.75%
Subordinated Debenture Indenture to the holders of class 9 claims at the
addresses last known to the indenture trustee.
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4.6.2 SETOFFS AND RECOUPMENTS. Except for distributions to holders
of class 1, class 2, class 8 and class 9 claims, respectively, the Debtors and
the Reorganized Debtors may, but shall not be required to, set off against or
recoup from any claim and the payments to be made pursuant to the Plan in
respect of such claim, any claims of any nature whatsoever the applicable Debtor
or Reorganized Debtor may have against such holder, but neither the failure to
do so nor the allowance of any claim hereunder shall constitute a waiver or
release by the Debtor or Reorganized Debtor may have against such claimant.
4.6.3 DISTRIBUTION OF UNCLAIMED PROPERTY -- RESERVES FOR DISPUTED
CLAIMS. Any distribution of property (cash or otherwise) under the Plan which is
unclaimed after the later to occur of (a) two years following the Effective
Date, or (b) six months after the date on which such holder's claim is Allowed
shall be transferred to Reorganized Imagyn, notwithstanding state or other
escheat or similar laws to the contrary. In the event that any securities are
returned to Reorganized Imagyn as unclaimed property, then such securities shall
be canceled. For purposes of distributions under the Plan a reserve of New
Common Stock shall be established for Disputed class 6 claims to set aside
sufficient shares of New Common Stock to make a distribution on the full amount
asserted by the creditor, or such other amount as the Court may authorize. With
respect to the New Common Stock not set aside in the reserve, Reorganized Imagyn
may obtain Court authorization to make interim distributions to the claims in
class 6 that had not been Disputed, and to the class 8 claims, upon such terms
as the Court deems just and proper. When all Disputed claims in class 6 are
Allowed, shares of New Common Stock in the reserve shall be distributed so as to
provide to the previously Disputed class 6 claims a pro rata share with all
claims in class 6. Any shares of New Common Stock in the reserve not used for
distribution to the previously Disputed class 6 claims shall be distributed to
the class 8 claims as contemplated by sections 3.4.6 and 3.4.8 of the Plan.
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4.6.4 SATURDAY, SUNDAY, OR LEGAL HOLIDAY. If any payment or act
under the Plan is required to be made or performed on a date that is not a
Business Day, then the making of such payment or the performance of such act may
be completed on the next succeeding Business Day, and shall be deemed to have
been completed as of the required date.
4.6.5 FRACTIONAL SHARES. No fractional shares of New Common Stock
or cash in lieu thereof shall be distributed. For purposes of distribution,
fractional shares of New Common Stock shall be rounded up to the next whole
number of stock.
4.6.6 RECORD OWNERSHIP DATE. PERSONS DEEMED HOLDERS OF REGISTERED
SECURITIES. Distributions to the holders of claims in class 8 and class 9 shall
be made to the owner of record on the date the Court has entered its order
approving the Debtors' Disclosure Statement. Except as otherwise provided
herein, Reorganized Imagyn and any transfer or distribution agent shall be
entitled to treat the record holder of a registered security as the sole holder
of any claim or Interest evidenced thereby for purposes of all notices, payments
or other distributions under the Plan. No notice of any transfer of any such
security shall be binding on Reorganized Imagyn or any transfer or distribution
agent, unless such transfer has been properly registered in accordance with the
provisions of the governing indenture or agreement at least ten (10) Business
Days prior to the day on which any such notice is given or any such payment or
other distribution is made. If there is any dispute regarding the identity of
the person entitled to receive payment or distribution in respect of a claim or
interest under the Plan, no payment or distribution need be made in respect of
such claim or interest until the Court resolves the dispute pursuant to a Final
Order.
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4.7 VESTING OF ASSETS. On the Effective Date, the estate of each Debtor
shall vest in the applicable Reorganized Debtor free and clear of all claims,
security interests, liens, and Equity Interests, except as provided in this Plan
and in the order confirming the Plan. As of the Effective Date, each Reorganized
Debtor may operate its businesses, and may use, acquire, and dispose of property
free of any restrictions of the Bankruptcy Code or the Bankruptcy Rules, subject
to the terms and conditions of the Plan, and the order confirming the Plan.
4.8 ALLOCATION OF CONSIDERATION. The aggregate consideration to be
distributed to the holders of Allowed claims in each class under the Plan shall
be allocated, first, to satisfy an amount equal to the stated principal amount
of the Allowed claim for such holders, second, to satisfy accrued, but unpaid
interest, if any, included in such Allowed claim and, third, to satisfy any
fees, costs and charges included in such Allowed claim.
4.9 EXECUTORY CONTRACTS AND UNEXPIRED LEASES.
4.9.1 GENERAL. As of the Effective Date, all executory contracts
and unexpired leases that exist between a Debtor and any person are hereby
expressly assumed, except for any executory contracts or unexpired leases which
are the subject of a motion to reject which is pending on the date the Plan is
confirmed and the executory contracts and unexpired leases listed on an exhibit
C to the Disclosure Statement and in the Appendix, which are specifically to be
rejected pursuant to the Plan. Without limiting the generality of the foregoing,
the Debtors shall also file as exhibit B to the Disclosure Statement and in the
Appendix a schedule of those executory contracts that will be assumed pursuant
to the
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foregoing procedure, with an indication for each contract as to the amount, if
any, that the Debtors contend is needed to cure and compensate the non-debtor
party under section 365(b) of the Bankruptcy Code. Entry of the order confirming
the Plan shall constitute approval, pursuant to subsection 365(a) of the
Bankruptcy Code, of such assumptions and such rejections pursuant to the Plan.
4.9.2 REJECTION CLAIMS. Proofs of claims in respect of claims
created by the rejection of executory contracts or unexpired leases must be
filed with the Court no later than thirty (30) days after the entry of an order
authorizing such rejection. Any claims not filed within such time will be
forever barred from assertion against the applicable Debtor and its estate. All
Allowed claims arising from the rejection of executory contracts or unexpired
leases shall be classified in class 6 of the Plan.
4.9.3 CURE AND COMPENSATION CLAIMS. The Debtors in exhibit B to the
Disclosure Statement and in the Appendix shall set forth the amount the Debtors
propose to pay on account of the cure and compensation requirements of section
365(b) of the Bankruptcy Code. Unless there is a specific amount designated in
the Disclosure Statement, the Debtors have determined that there are no amounts
or defaults that must be paid or cured as a condition to assumption of the
executory contracts and unexpired leases set forth in the Disclosure Statement
under section 365(b) of the Bankruptcy Code. Any unpaid amounts or uncured
defaults that must be paid or cured as a condition of assumption under section
365(b), as set forth in the Disclosure Statement, will be paid by the Debtors on
or prior to the Effective Date, or by the applicable Reorganized Debtor promptly
after the Effective Date.
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4.9.4 BAR DATE FOR ASSUMPTION OBJECTIONS AND CURE OR COMPENSATION
CLAIMS. Any objection to the assumption of any executory contract or unexpired
lease and any proof of claim to assert that there are amounts or defaults that
must be paid or cured in addition to those set forth in the Disclosure
Statement, if any, as a condition to the assumption of any executory contract or
unexpired lease must be filed with the Court and delivered to the attorneys for
the Debtors on or before the date and time set by the Court as the last date and
time on which to file and deliver objections to the confirmation of the Plan,
failing which the holder of such objections or cure claim shall be forever
estopped from asserting such objection or claim. The Debtors reserve the right
to reject any executory contract or unexpired lease with respect to which any
such objection or claim is filed. The Debtors will request that the Court
resolve any such objection at the hearing on the confirmation of the Plan. Any
such claim shall be treated as a disputed administrative expense under the Plan
and shall be reviewed and, where appropriate, objected to by the Debtors and
thereafter resolved in accordance with the Bankruptcy Code and the Bankruptcy
Rules. Except as set forth in the Disclosure Statement, a determination by the
Court of the amount of such a claim will bar the assertion of any claim that was
or could have been asserted for defaults or unpaid amounts prior to the
Effective Date against the Debtors, their estates, the Reorganized Debtors, or
any of their successors.
4.10 MANAGEMENT EMPLOYMENT AGREEMENTS. Except as provided below, all
employment, severance, and retention bonus agreements between Imagyn and members
of its management shall be amended as hereinafter provided, and, as amended,
shall be assumed and reaffirmed as of the Effective Date. Nothing in the Plan,
the order confirming the Plan or the consummation of the transactions
contemplated by the Plan shall constitute a change of control under such
agreements or otherwise give rise to any rights or claims by the
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Debtors' management under such agreements. The annual compensation for the
Reorganized Debtors' Chief Executive Officer shall be adjusted so that annual
salary is reduced by $250,000 and performance incentives related to sale of
assets shall be given in place thereof. Confirmation of the Plan by the Court
shall constitute approval of such assumptions pursuant to section 365(a) of the
Bankruptcy Code, subject to the occurrence of the Effective Date.
4.11 EMPLOYEE BENEFIT PLANS. Subject to the occurrence of the Effective
Date, all employee benefit plans, policies, and programs of the Debtors, and the
Debtors' obligations thereunder, shall survive confirmation of the Plan, remain
unaffected thereby, and not be discharged. Employee benefit plans, policies, and
programs shall include, without limitation, all savings plans, retirement
pension plans, health care plans, disability plans, severance benefit plans,
life, accidental death, and dismemberment insurance plans (to the extent not
executory contracts assumed under the Plan) but shall exclude all employee
equity or equity-based incentive plans which shall be deemed rejected as of the
Effective Date.
4.12 LONG TERM INCENTIVE PLAN. On the Effective Date, the Long Term
Incentive Plan shall become effective, and shall provide for the issuance,
allocation, vesting, distribution and exercise of the New Options and the
1,000,000 shares of New Common Stock to be accorded management as described in
section 2.1 of the Plan.
4.13 LIMITED RELEASE. On the Effective Date, each Debtor, on behalf of
itself and any subsidiary, hereby releases the officers and directors of such
companies holding office at any time after the applicable Petition Date and its
and their respective agents, employees,
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advisors, and representatives from any and all claims or liability arising from
post-petition actions taken in their respective capacities described above.
4.14 LISTING OF NEW COMMON STOCK; REGISTRATION OF SECURITIES.
Reorganized Imagyn shall not maintain its status as a reporting company under
the Securities and Exchange Act of 1934. The shares of New Common Stock issued
hereunder will not be listed on a national securities exchange or quoted in the
national market system of the National Association of Securities Dealers'
Automated Quotation System. Imagyn does not currently intend to file a
registration statement to register the New Common Stock, the New Warrants, or
the New Options; provided, however, that two years after the Effective Date of
the Plan, Reorganized Imagyn shall use its best efforts to cause the shares of
the New Common Stock issued hereunder to be listed on a national securities
exchange or quoted in the national market system of the National Association of
Securities Dealer's Automated Quotation System.
4.15 EXEMPTION FROM SECURITIES REGISTRATION. Pursuant to section 1145
of the Bankruptcy Code, the issuance of the New Common Stock to Class 2, 6, 8
and 9, the issuance of the New Warrants to class 9 and the issuance of New
Common Stock on exercise or exchange of the New Warrants are exempt from the
requirements of the Securities Act of 1933 and any State or local law that
requires registration for the offer or sale of securities. The offer and sale of
the New Common Stock under this Plan is deemed to be a public offering of the
New Common Stock.
4.16 RESTRUCTURE OF THE DIP CREDIT FACILITY. On the Effective Date, all
obligations of the Debtors under the DIP Credit Facility I and II shall be
restructured by including in the stated principal amount of Refinanced
Indebtedness in the New Revolving
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Credit Loan the then outstanding amount of the Debtors' obligations under the
DIP Credit Facility I and II. On the Effective Date, all obligations of the
Debtors then outstanding under the DIP Credit Facility III shall be restructured
by including in the stated principal amount of the New Subordinated Term Loan
the then outstanding amount of the Debtor's obligations under the DIP Credit
Facility III.
4.17 NEW REVOLVING CREDIT LOAN. On the Effective Date, the Debtors
anticipate that they will enter into a New Revolving Credit Loan with BTCC, as
Agent for certain lenders, (a) to refinance the Secured Revolving Credit Claims
and the DIP Credit Facility I and II (collectively, the "Refinanced
Indebtedness"), (b) to provide working capital for their ongoing operations, and
(c) to finance the cash requirements to implement the Plan. The principal terms
of the New Revolving Credit Loan are expected to include the following: (i) a
three-year facility in the approximate amount of fifty-five million dollars
($55,000,000), limited by a borrowing base consisting of (A) advances of up to
85% of eligible receivables and up to 50% of eligible inventory, up to an
aggregate maximum of $10,000,000, plus (B) an amount equal to the Refinanced
Indebtedness. Loan availability against receivables and inventory is referred to
as the Tranche A Availability, and Loan availability against the Refinanced
Indebtedness is known as the Tranche B Availability; (ii) interest at a market
rate, payable monthly in arrears; (iii) revolving loans outstanding against
Tranche A Availability will be repaid from time to time by the normal
collections of the accounts receivables, and revolving loans outstanding against
Tranche B Availability will be immediately repaid (and Tranche B Availability
will be permanently reduced) by the application of 100% of the net proceeds of
any asset sales, equity offering proceeds, or permitted indebtedness ("Loan
Reductions"), and will otherwise be permanently reduced on the first day of each
calendar quarter commencing June 30, 2000 until the earlier of the
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maturity date or the date the Tranche B Availability is reduced to zero (0) by
an amount equal to one-twenty-eighth (1/28) of the Refinanced Indebtedness
unless such quarterly reductions of the Refinanced Indebtedness shall have been
previously made by prior Loan Reductions; (iv) in the event of a liquidation,
the revolving loans outstanding against Tranche A Availability shall be repaid
prior to the repayment of revolving loans outstanding against Tranche B
Availability; (v) the New Revolving Credit Loan and any guarantees thereof by
any of the Reorganized Debtors shall be senior to the New Subordinated Term Loan
and the and the corresponding guaranties thereof; (vi) the New Revolving Credit
Loan shall be secured by a lien upon and security interest in all assets of the
Reorganized Debtors that prepetition secured the obligations evidenced by the
Credit Agreement; (vii) the lien and security interest shall be senior in
priority to all other liens and security interests, except for the liens and
security interests of secured creditors who held prepetition liens or security
interests that (x) were senior to the liens and security interests held under
the Credit Agreement, (y) are valid, perfected and non-avoidable, and (z) are
unimpaired as a Class 3 secured creditor under the Plan.
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ARTICLE 5
EFFECTIVENESS OF THE PLAN
5.1 CONDITIONS PRECEDENT.
5.1.1 CONDITION PRECEDENT TO PLAN CONFIRMATION. The confirmation
of the Plan is subject to satisfaction of the following conditions precedent:
1. The Plan, the Plan-Related Documents and the order
confirming the Plan are reasonably satisfactory, in form and
substance, to CSFB.
2. The material Plan Related Documents shall have been
filed with the Court in the Appendix no later than five (5)
Business Days prior to the first-scheduled date for a hearing on
confirmation of the Plan.
3. The Debtors shall have obtained from BTCC a binding
commitment letter for the New Revolving Credit Loan on terms
reasonably acceptable to the Debtors and CSFB.
4. The Court shall have found that the aggregate of the
class 5 and class 6 claims Allowed and estimated to be Allowed
does not exceed $20 million.
5.1.2 CONDITION PRECEDENT TO EFFECTIVE DATE. The occurrence of the
Effective Date is subject to satisfaction of the following conditions precedent:
1. All conditions precedent to the confirmation of the
Plan have been satisfied and continue to be satisfied.
2. The New Revolving Credit Loan shall have closed, or
shall be closed concurrently with the Effective Date, on terms
reasonably acceptable to CSFB.
3. The order confirming the Plan shall have become a Final
Order.
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4. Except with respect to obligations specifically
contemplated by this Plan, the DIP Credit Facility and any
administrative expenses incurred by the Debtors on or after the
Petition Date in the ordinary course of their businesses or any
administrative expenses arising pursuant to postpetition
agreements or transactions entered into by the Debtors with
approval of the Court, the Court shall have entered a Final
Order decreeing that the Debtors are discharged effective on the
Effective Date in accordance with this Plan from any claims and
any debts, and the Debtors' liability in respect thereof is
extinguished completely, whether reduced to judgment or
noncontingent, asserted or unasserted, fixed or not, matured or
unmatured, disputed or undisputed, legal or equitable or known
or unknown that arose from any agreement of the Debtors entered
into or obligation of such Debtor incurred before the Effective
Date, or from any conduct of any of the Debtors prior to the
Effective Date or whether such liability or debt accrued before
or after the Petition Date.
5. The Plan Related Documents and all actions necessary to
implement the provisions of this Plan to be implemented on or
prior to the Effective Date shall be reasonably satisfactory to
the Debtors and CSFB, and the Plan Related Documents and such
actions shall have been implemented or executed and delivered,
as the case may be.
6. The Certificate of Incorporation for Reorganized Imagyn
shall have been filed with the Secretary of State.
7. All authorizations, consents, and regulatory approvals
required (if any) in connection with the Plan's effectiveness
shall have been obtained.
8. The Effective Date shall have occurred no later than
December 1, 1999.
5.2 WAIVER OF CONDITIONS. The conditions precedent to the
confirmation or the effectiveness of the Plan set forth in sections 5.1.1 and
5.1.2 may not be waived, in whole
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or in part, except by a writing signed by an authorized representative of Imagyn
and subsequently filed with the Court and consented to in writing by CSFB (such
consent to be granted or denied by CSFB in its sole discretion); provided,
however, that, notwithstanding the foregoing, if CSFB does not consent to a
waiver affecting clauses (3) or (4) of section 5.1.1 or clauses (3), (4) or (7)
of section 5.1.2, then such waiver shall become effective if the Court,
following a hearing held on reasonable notice to CSFB, approves such waiver or
modification after finding that CSFB's refusal to consent to such waiver was not
reasonable.
5.3 EFFECT OF FAILURE OF CONDITIONS. If each of the conditions
precedent to the occurrence of the Effective Date set forth in section 5.1.2 has
not been satisfied or duly waived on or before December 1, 1999, then upon
motion by Imagyn or any party in interest made before the time that each of the
conditions has been satisfied or duly waived, the order confirming the Plan may
be vacated by the Court; provided, however, that notwithstanding the filing of
such a motion, the order confirming the Plan shall not be vacated if each of the
conditions precedent to the Effective Date is either satisfied or duly waived
before the Court enters an order granting the relief requested in such motion.
If the order confirming the Plan is vacated pursuant to this section, the Plan
shall be null and void in all respects, and nothing contained in the Plan shall
(a) constitute a waiver or release of any claims against or Equity Interests in
the Debtors or any of them, or (b) prejudice in any manner the rights of the
holder of any claim against or Equity Interest in the Debtors or any of them.
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ARTICLE 6
ADMINISTRATIVE PROVISIONS
6.1 DISCHARGE
6.1.1 SCOPE. Except as otherwise expressly specified in the Plan or
in the order confirming the Plan, entry of the order confirming the Plan acts as
a discharge of all debts of, claims against, liens on, and Equity Interests in
each Debtor, its assets, and its properties, arising at any time before the
Effective Date regardless of whether a proof of claim or Equity Interest
therefor was filed, whether the claim or Equity Interest is Allowed, or whether
the holder thereof votes to accept the Plan or is entitled to receive a
distribution thereunder. On the date the Court enters an order confirming the
Plan, any holder of such discharged claim or Equity Interest shall be precluded
from asserting against each Debtor, each Reorganized Debtor, or any of their
respective assets or properties, any other or further claim or Equity Interest
based on any document, instrument, act, omission, transaction, or other activity
of any kind or nature that occurred before the Effective Date.
6.1.2 INJUNCTION. In accordance with section 524 of the Bankruptcy
Code, the discharge provided by section 6.1.1 of the Plan and section 1141 of
the Bankruptcy Code, inter alia, acts as an injunction against the commencement
or continuation of any action, employment of process, or act to collect, offset,
or recover the claims discharged hereby.
6.2 ADMINISTRATIVE EXPENSE, CLAIM, AND EQUITY INTEREST OBJECTIONS.
Unless otherwise ordered by the Court, all objections to administrative
expenses, claims, and Equity Interests shall be filed and served on the
applicable claimant or Equity Interest holder on or before the date that is 120
days after the Effective Date or 120 days after such administrative
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expense, claim, or Equity Interest is filed, whichever is later. On and after
the Effective Date, only the Reorganized Debtors shall have the authority to
file, settle, compromise. withdraw, or litigate to judgment objections to
administrative expenses, claims, or Equity Interests.
6.3 PRESERVATION OF CAUSES OF ACTION. Except as otherwise provided in
the Plan, or in any contract, instrument, release or other agreement entered
into in connection with the Plan, the Reorganized Debtors will, as expressly
provided in this Plan and in accordance with the section 1123(b) of the
Bankruptcy Code, retain and may enforce any claims, rights and causes of action
that the Debtors or the estates may hold against any entity including, without
limitation, any claims, rights or causes of action under sections 544 through
550 of the Bankruptcy Code or any similar provisions of state law, or any other
statute or legal theory.
6.4 ADMINISTRATIVE EXPENSES INCURRED AFTER THE CONFIRMATION DATE.
Administrative expenses incurred by a Debtor or Reorganized Debtor after the
date and time of the entry of the order confirming the Plan, including (without
limitation) claims for professionals' fees and expenses, shall not be subject to
application and may be paid by the Debtors or the Reorganized Debtors, as the
case may be, in the ordinary course of business and without further Court
approval.
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6.5 RETENTION OF JURISDICTION. The Court shall have exclusive
jurisdiction of all matters arising out of, and related to, the Reorganization
Case and the Plan pursuant to, and for the purposes of, subsection 105(a) and
section 1142 of the Bankruptcy Code and for, among other things, the following
purposes:
1. To hear and determine applications for the assumption or
rejection of executory contracts or unexpired leases, pending on the
date the Plan is confirmed, and the allowance of claims resulting
therefrom;
2. To determine any other applications, adversary proceedings, and
contested matters pending on the Effective Date;
3. To ensure that distributions to holders of Allowed claims and
Allowed Equity Interests are accomplished as provided herein;
4. To resolve disputes as to the ownership of any claim or Equity
Interest;
5. To hear and determine timely objections to administrative
expenses, claims and Equity Interests;
6. To enter and implement such orders as may be appropriate in the
event the order confirming the Plan is for any reason stayed, revoked,
modified or vacated;
7. To issue such orders in aid of execution of the Plan, to the
extent authorized by section 1142 of the Bankruptcy Code;
8. To consider any modifications of the Plan, to cure any defect or
omission, or to reconcile any inconsistency in any order of the Court,
including, without limitation, the order confirming the Plan;
9. To resolve disputes concerning nondebtor releases, exculpations.
and injunctions contained herein;
10. To hear and determine all applications for compensation and
reimbursement of expenses of professionals under sections 330, 331, and
503(b) of the Bankruptcy Code;
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11. To hear and determine disputes arising in connection with the
interpretation, implementation, or enforcement of the Plan and the
Plan-Related Documents;
12. To hear and determine any issue for which the Plan or any
Plan-Related Document requires a Final Order of the Court;
13. To hear and determine matters concerning state, local, and
federal taxes in accordance with sections 346, 505, and 1146 of the
Bankruptcy Code;
14. To hear any other matter not inconsistent with the Bankruptcy
Code; and
15. To enter a final decree closing the Reorganization Case.
6.6 PAYMENT OF STATUTORY FEES. All fees payable pursuant to section
1930 of title 28 of the United States Code, as determined by the Court at the
hearing pursuant to section 1128 of the Bankruptcy Code, shall be paid on or
before the Effective Date.
6.7 EXCULPATION. Each of the Debtors, the Reorganized Debtors, the
indenture trustees, the Creditors' Committee and its members, and their
respective officers, directors, employees, and agents (including any
professionals retained by such persons) shall have no liability to any holder of
an administrative expense, claim, or Equity Interest for any act or omission in
connection with, or arising out of, the pursuit of approval of the disclosure
statement for the Plan or the solicitation of votes for or confirmation of the
Plan, the consummation of the Plan, or the administration of the Plan or the
property to be distributed under the Plan, except for willful misconduct or
gross negligence as determined by a Final Order of the Court, and in all
respects, shall be entitled to rely upon the advice of counsel with respect to
their duties and responsibilities under the Plan.
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6.8 BINDING EFFECT. The Plan shall be binding upon and inure to the
benefit of the Debtors, their creditors, the holders of Equity Interests, and
their respective successors and assigns.
6.9 NOTICES. Any notice required or permitted to be provided under the
Plan shall be in writing and served by either (a) certified mail, return receipt
requested, postage prepaid, (b) hand delivery, or (c) reputable overnight
delivery service, freight prepaid, addressed as follows:
To the Debtors or Reorganized Debtors:
Imagyn Medical Technologies, Inc.
1 Park Plaza, Suite 1100
Irvine, California 92614-5925
Attention: Kevin M. Higgins, Esq.
with copies to:
Sidley & Austin
555 West Fifth Street, Suite 4000
Los Angeles, California 90013
Attention: Thomas E. Patterson, Esq.
Young Conaway Stargatt & Taylor, LLP
11th Floor - Rodney Square North
P.O. Box 391
Wilmington, Delaware 19899
Attention: Laura Davis Jones, Esq.
To CSFB:
Credit Suisse First Boston
Management Corporation
Eleven Madison Avenue
New York, New York 10010-3629
Attention: David Matlin
with copies to:
Bingham Dana LLP
One State Street
Hartford, Connecticut 06103-3178
Attention: Richard F. Casher, Esq.
Richards Layton & Finger, P.A.
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
Attention: Thomas L. Ambro, Esq.
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6.10 GOVERNING LAW. Unless a rule of law or procedure is supplied by
federal law (including the Bankruptcy Code and Bankruptcy Rules) or the Delaware
General Corporation Law, the laws of the State of California shall govern the
construction and implementation of the Plan and any agreements, documents, and
instruments executed in connection with the Plan.
6.11 FILING OR EXECUTION OF ADDITIONAL DOCUMENTS. On or before the
Effective Date, the Debtors or Reorganized Debtors shall file with the Court or
execute, as appropriate, such agreements and other documents as may be necessary
or appropriate to effectuate and further evidence the terms and conditions of
the Plan.
6.12 WITHHOLDING AND REPORTING REQUIREMENTS. In connection with the
Plan and all instruments issued in connection therewith and distributions
thereon, the Reorganized Debtors shall comply with all withholding and reporting
requirements imposed by any federal, state, local, or foreign taxing authority
and all distributions hereunder shall be subject to any such withholding and
reporting requirements.
6.13 SECTION 1125(E) OF THE BANKRUPTCY CODE. (i) The Debtors have, and
upon confirmation of the Plan shall be deemed to have, solicited acceptances of
the Plan in good faith and in compliance with the applicable provisions of the
Bankruptcy Code, and (ii) the Debtors (and each of their respective affiliates,
agents, directors, officers, employees, advisors, and attorneys) have
participated in good faith and in compliance with the applicable provisions of
the Bankruptcy Code in the offer, issuance, sale, and purchase of
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the securities offered and sold under the Plan, and therefore are not, and on
account of such offer, issuance, sale, solicitation, and/or purchase will not be
liable at any time for the violation of any applicable law, rule, or regulation
governing the solicitation of acceptances or rejections of the Plan or the
offer, issuance, sale, or purchase of the securities offered and sold under the
Plan.
6.14 SEVERABILITY. If, prior to confirmation, any term or provision of
the Plan is held by the Bankruptcy Court to be invalid, void or unenforceable,
the Bankruptcy Court shall have the power to alter or to interpret such term or
provision so as to make it enforceable to the fullest extent practicable,
consistent with the original purpose of such term or provision, and such term or
provision shall be applicable as so altered or interpreted. Notwithstanding any
such holding, alteration or interpretation, the remaining terms and provisions
of the Plan will remain in full force and effect and will in no way be affected,
impaired or invalidated by such holding, alteration or interpretation. The order
confirming the Plan shall constitute a judicial determination and shall provide
that each term and provision of the Plan, as it may have been altered or
interpreted in accordance with the foregoing, is valid and enforceable in
accordance with its terms. In addition, the Plan shall be modified, without
requirement of any further act, to delete any class in which there are no claims
or Equity Interests as of the hearing to confirm the Plan, and such class shall
not be counted for purposes of determining the acceptance or rejection of the
Plan pursuant to section 1129(a)(8) of the Bankruptcy Code.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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6.15 CRAM DOWN. The Debtors request confirmation of the Plan pursuant
to section 1129(b) of the Bankruptcy Code.
Dated: Irvine, California
October 18, 1999 Respectfully submitted,
IMAGYN MEDICAL TECHNOLOGIES, INC.,
a Delaware corporation, DACOMED
CORPORATION, a Minnesota
corporation, ALLSTATE MEDICAL
PRODUCTS, INC., a Minnesota
corporation, IMAGYN MEDICAL
TECHNOLOGIES CALIFORNIA, INC.,
a California corporation, IMAGYN
MEDICAL, INC., a Delaware
corporation, OSBON MEDICAL SYSTEMS,
LTD., a Georgia corporation, and
MICROSURGE, INC., a Delaware
corporation,
Debtors and debtors in possession
By: /s/ MICHAEL A. MONTEVIDEO
--------------------------------
Michael A. Montevideo
Senior Vice President and Chief
Financial Officer
YOUNG CONAWAY STARGATT & TAYLOR, LLP
11th Floor - Rodney Square North
P.O. Box 391
Wilmington, Delaware 19899
Laura Davis Jones
Joel A. Waite
-and-
SIDLEY & AUSTIN
555 West Fifth Street, Suite 4000
Los Angeles, California 90013
Richard W. Havel
Thomas E. Patterson
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<PAGE> 1
EXHIBIT 99.3
FOR: Imagyn Medical Technologies, Inc.
CONTACT: Charles A. Laverty
Chairman & Chief Executive Officer
Michael Montevideo
Chief Financial Officer
Imagyn Medical Technologies, Inc.
For Immediate Release (949) 809 0800
- ----------------------
IMAGYN MEDICAL TECHNOLOGIES, INC. ANNOUNCES
SUCCESSFUL EMERGENCE FROM CHAPTER 11
IRVINE, CA, October 21, 1999 - Imagyn Medical Technologies, Inc. today announced
that it has successfully completed its emergence from Chapter 11, following
confirmation on October 18, 1999 of its Plan of Reorganization by the U.S.
Bankruptcy Court for the District of Delaware. The Company filed a petition for
reorganization under Chapter 11 on May 18, 1999. As previously announced, the
Plan, which was supported by holders of the Company's debt and its trade
creditors, provides that all outstanding shares of common stock of Imagyn
Medical Technologies, Inc. will be cancelled.
Charles A. Laverty, Chairman & Chief Executive Officer of Imagyn,
stated, "Imagyn has emerged from the Chapter 11 process with a more stable
capital structure and stronger financial resources. Our business has made
significant progress during the past five months. We will intensify our efforts
to expand the market for our current line of innovative products. At the same
time we will also be focusing on completing the development of several
breakthrough products that are in various stages in the Company's R&D pipeline.
Our ability to complete the reorganization in such a relatively short time has
been a real positive and is a tribute to the dedication of our employees, the
support and cooperation of our suppliers and customers, and the commitment of
our financial investors."
Imagyn Medical Technologies, Inc. is a manufacturer and marketer of
products for the minimally invasive and general surgery market and of
brachytherapy seeds for the treatment of cancer.
This press release contains forward-looking statements that involve risks and
uncertainties. Such statements are based on management's current expectations
and are subject to a number of uncertainties and risks that could cause results
to differ materially from those described in the forward-looking statements.
Factors that may cause such differences include, but are not limited to, those
described in the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1999.
# # #
